TRIBUNE PUBLISHING CO, 10-Q filed on 8/21/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 29, 2014
Aug. 19, 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
Jun. 29, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
25,427,585 
COMBINED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Dec. 30, 2012
Predecessor
Operating revenue
 
 
 
 
 
Advertising
$ 242,131 
$ 260,538 
$ 475,166 
$ 512,517 
$ 0 
Circulation
109,010 
106,518 
216,317 
213,632 
0 
Other
78,782 
79,804 
154,962 
161,224 
0 
Total operating revenues
429,923 
446,860 
846,445 
887,373 
0 
Operating expenses
 
 
 
 
 
Cost of sales (exclusive of items shown below)
246,281 
253,628 
493,804 
513,576 
0 
Selling, general and administrative
154,116 
146,823 
297,998 
282,775 
0 
Depreciation
2,894 
5,694 
5,634 
10,970 
0 
Amortization
1,621 
1,616 
3,227 
3,300 
0 
Total operating expenses
404,912 
407,761 
800,663 
810,621 
0 
Income from operations
25,011 
39,099 
45,782 
76,752 
0 
Loss on equity investments, net
(294)
(297)
(629)
(648)
0 
Gain on investment transaction
1,484 
0 
1,484 
0 
0 
Interest income (expense), net
(53)
(1)
(55)
12 
0 
Reorganization items, net
0 
(261)
(9)
(203)
2,754,553 
Income Before Income Taxes
26,148 
38,540 
46,573 
75,913 
2,754,553 
Income tax expense (benefit)
10,945 
16,614 
19,598 
32,794 
(87,773)
Net Income
15,203 
21,926 
26,975 
43,119 
2,842,326 
Unrecognized benefit plan gains and losses:
 
 
 
 
 
Change in unrecognized benefit plan gain arising during the period, net of taxes of $866
(1,326)
0 
(1,326)
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
(1,326)
0 
(1,326)
0 
(27,158)
Comprehensive Income
$ 13,877 
$ 21,926 
$ 25,649 
$ 43,119 
$ 2,815,168 
Net Income per share - basic and diluted (usd per share)
$ 0.60 
$ 0.86 
$ 1.06 
$ 1.70 
$ 0.00 
Weighted average shares outstanding - basic and diluted (shares)
25,424 
25,424 
25,424 
25,424 
25,424 
COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Dec. 30, 2012
Predecessor
Taxes on change in unrecognized benefit plan gain arising during the period
$ 866 
$ 0 
$ 866 
$ 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 
COMBINED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2014
Dec. 29, 2013
Current assets
 
 
Cash
$ 12,538 
$ 9,694 
Accounts receivable (net of allowances of $11,865 and $12,856)
210,210 
251,636 
Inventories
16,074 
14,222 
Deferred income taxes
33,800 
37,371 
Prepaid expenses and other
13,927 
13,570 
Total current assets
286,549 
326,493 
Property, plant and equipment
 
 
Property, plant and equipment
87,935 
83,901 
Accumulated depreciation
(21,611)
(15,973)
Property, plant and equipment, net
66,324 
67,928 
Other Assets
 
 
Goodwill
35,444 
15,331 
Intangible assets, net
74,264 
60,482 
Investments
1,921 
2,799 
Deferred income taxes
33,698 
39,587 
Other
4,328 
1,746 
Total other assets
149,655 
119,945 
Total assets
502,528 
514,366 
Current Liabilities
 
 
Accounts payable
46,126 
36,329 
Employee compensation and benefits
89,716 
103,351 
Deferred revenue
78,025 
67,934 
Other
19,926 
20,866 
Total current liabilities
233,793 
228,480 
Non-Current Liabilities
 
 
Deferred revenue
6,139 
7,015 
Postretirement medical, life and other benefits
39,973 
45,373 
Other obligations
11,480 
8,673 
Total non-current liabilities
57,592 
61,061 
Total Equity
211,143 
224,825 
Total liabilities and equity
$ 502,528 
$ 514,366 
COMBINED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2014
Dec. 29, 2013
Statement of Financial Position [Abstract]
 
 
Allowances for doubtful accounts
$ 11,865 
$ 12,856 
COMBINED STATEMENT OF EQUITY (USD $)
In Thousands, unless otherwise specified
Total
Parent Company Investment
Accumulated Other Comprehensive Income (Loss)
Beginning balance at at Dec. 29, 2013
$ 224,825 
$ 225,135 
$ (310)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
Transactions with Tribune Media Company and Tribune Affiliates, net
(39,331)
(39,331)
0 
Comprehensive income (loss)
25,649 
26,975 
(1,326)
Ending balance at at Jun. 29, 2014
$ 211,143 
$ 212,779 
$ (1,636)
COMBINED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Dec. 30, 2012
Predecessor
Operating Activities
 
 
 
Net income
$ 26,975 
$ 43,119 
$ 2,842,326 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
Depreciation
5,634 
10,970 
0 
Amortization of intangible assets
3,227 
3,300 
0 
Amortization of contract intangible liabilities
(84)
(109)
0 
Loss on equity investments, net
629 
648 
0 
Gain on fixed asset sales
(1,242)
(100)
0 
Non-cash gain on investment transaction
(1,484)
0 
0 
Non-cash reorganization items, net
0 
(98)
(2,756,494)
Changes in working capital items, excluding effects from acquisitions:
 
 
 
Accounts receivable, net
44,376 
61,624 
0 
Inventories
1,920 
3,052 
0 
Prepaid expenses and other current assets
(2,589)
2,388 
0 
Accounts payable, employee compensation and benefits, deferred revenue and other current liabilities
(2,254)
(20,058)
8,381 
Non-current deferred revenue
(877)
(1,802)
0 
Deferred income taxes
9,461 
11,682 
(94,213)
Postretirement medical, life and other benefits
(6,726)
(284)
0 
Other, net
106 
2,284 
0 
Net cash provided by operating activities
77,072 
116,616 
0 
Investing Activities
 
 
 
Capital expenditures
(3,189)
(12,651)
0 
Acquisitions, net of cash acquired
(32,282)
0 
0 
Proceeds from sale of fixed assets
1,583 
0 
0 
Investments
(1,500)
(106)
0 
Distributions from equity investments
491 
0 
0 
Net cash used for investing activities
(34,897)
(12,757)
0 
Financing Activities
 
 
 
Repayments of capital lease obligations
0 
(138)
0 
Transactions with Tribune Media Company and Tribune Affiliates, net
(39,331)
(102,257)
0 
Net cash used for financing activities
(39,331)
(102,395)
0 
Net increase in cash
2,844 
1,464 
0 
Cash, beginning of period
9,694 
13,768 
13,768 
Cash, end of period
$ 12,538 
$ 15,232 
$ 13,768 
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Business Operations-The accompanying combined financial statements include the accounts of Tribune Publishing Company (collectively, the “Company” or “Tribune Publishing”), a business representing the principal publishing operations of Tribune Media Company, formerly Tribune Company, (collectively “Tribune”) prior to the August 4, 2014 separation of the Company from Tribune, as described below. Tribune Publishing’s operations are comprised of the direct and indirect subsidiaries of Tribune Publishing Company, LLC (“TPC”), a wholly-owned subsidiary of Tribune prior to the separation, and certain other assets of Tribune and its non-Tribune Publishing subsidiaries (“Tribune Affiliates”) as further described below. TPC, formerly known as Tribune Publishing Company, was converted into a limited liability company in connection with the restructuring transactions described below. In addition, certain direct and indirect subsidiaries were formed or became owned by TPC as a result of these restructuring transactions.
Tribune Publishing’s operations are located in eight major-markets and consist of ten daily newspapers and related businesses, distribution of preprinted insert advertisements, commercial printing and delivery services to other newspapers, distribution of syndicated content and management of the websites of Tribune’s daily newspapers, along with other branded products that target specific areas of interest. 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 Tribune and its subsidiaries, including the subsidiaries of Tribune Publishing; a 50% equity interest in CIPS Marketing Group, Inc. (“CIPS”); a 33% equity interest in Homefinder.com, LLC (“Homefinder”); and a 35% equity interest in Locality Labs, LLC (“Locality Labs”), formerly known as Journatic, LLC, which Tribune retained following the separation of Tribune Publishing from Tribune (see “Separation from Tribune Media Company" and "Basis of Presentation” discussion below). In May 2014, Tribune Publishing acquired the outstanding 50% interest in McClatchy/Tribune Information Services ("MCT"). See Note 5 for additional information on the acquisition.
Separation from Tribune Media Company-On July 10, 2013, Tribune announced its plan to spin-off its principal publishing operations into an independent company, Tribune Publishing. The spin-off was completed on August 4, 2014. The transaction was in the form of a pro rata distribution of 98.5% of the common stock of Tribune Publishing to holders of Tribune common stock and warrants. In 2013, Tribune also contributed to Tribune Publishing its interests in Blue Lynx Media, LLC, formerly a wholly-owned subsidiary of Tribune which operates a shared service center for the benefit of Tribune and its subsidiaries, including the subsidiaries of Tribune Publishing, and its equity interests in Homefinder. See Note 14 for further information.
Basis of Presentation-Tribune Publishing’s operations are conducted through the following wholly-owned subsidiaries (including each subsidiary’s respective direct wholly-owned subsidiaries) of TPC: The Morning Call, LLC; Chicago Tribune Company, LLC; The Baltimore Sun Company, LLC; Orlando Sentinel Communications Company, LLC; Los Angeles Times Communications LLC; The Daily Press, LLC; The Hartford Courant Company, LLC; Sun-Sentinel Company, LLC; Tribune Washington Bureau, LLC; Hoy Publications, LLC; Tribune Interactive, LLC; Tribune 365, LLC; Tribune Content Agency, LLC; forsalebyowner.com, LLC; Builder Media Solutions, LLC; and BLM. Certain assets of Tribune and Tribune Affiliates that are not directly owned by TPC which are otherwise specifically identifiable or attributable to Tribune Publishing and are necessary to present these combined financial results on a stand-alone basis have also been included in these combined financial statements.
Historically, separate financial statements have not been prepared for Tribune Publishing. The accompanying combined financial statements are derived from the historical accounting records of Tribune and present Tribune Publishing’s combined financial position, results of operations and cash flows as of and for the periods presented as if Tribune Publishing was a separate entity and as it was historically managed. Management believes that assumptions and methodologies underlying the allocation of general corporate expenses are reasonable. However, such expenses 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 combined 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 Tribune.
Tribune and Tribune Affiliates 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 Tribune’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,” preclude Tribune Publishing from derecognizing those properties from its 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 properties in its combined balance sheet. Rent payments under the related party leases were accounted for as dividends to Tribune and Tribune Affiliates. 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 properties and a corresponding reduction to the net parent company investment component of equity in its 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.
In connection with the spin-off, Tribune Publishing has and may enter into various agreements with Tribune and other third parties that may be on different terms than the terms of the arrangements or agreements that existed prior to the spin-off. For instance, Tribune Publishing utilized the services of Tribune and Tribune Affiliates for certain functions such as legal, finance, human resource and information technology services, as well as various corporate-wide employee benefit programs. The costs of Tribune services that are specifically identifiable to Tribune Publishing are included in these combined financial statements. The costs of Tribune services that are incurred by Tribune but are not specifically identifiable to Tribune Publishing have been allocated to Tribune Publishing and included in these 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 Tribune 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 Tribune through the parent company investment in the period the related income taxes were recorded.
All intercompany accounts within Tribune Publishing have been eliminated in consolidation. All significant intercompany transactions between either (i) Tribune Publishing and Tribune or (ii) Tribune Publishing and Tribune Affiliates have been included within the 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 either Tribune Publishing and Tribune or Tribune Publishing and Tribune Affiliates 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 are reflected in the combined statements of cash flows as financing activities.
These combined financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited 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 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 June 29, 2014, the results of operations for the three months and six months ended June 29, 2014 and June 30, 2013, the results of cash flows for the six months ended June 29, 2014 and June 30, 2013 and the results of operations and cash flows for Dec 31, 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. These unaudited combined financial statements should be read in conjunction with Tribune Publishing’s audited combined financial statements and related notes for the year ended December 29, 2013, including in the Company's registration statement on Form 10, as amended, filed with the SEC on July 21, 2014.
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 Financial Accounting Standard Board ("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. Tribune Publishing is currently evaluating which adoption method we will use. 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”), Tribune, 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 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”). References to the Debtors herein include the Tribune Publishing Debtors unless otherwise indicated. Other legal entities included in the accompanying combined financial statements of Tribune Publishing did not file petitions for relief under Chapter 11 of the Bankruptcy Code as of or subsequent to the Petition Date, and were, therefore, not Debtors, and are not successors to legal entities that were Debtors (each a “Non-Debtor Subsidiary” and, collectively, the “Non-Debtor Subsidiaries”) as of December 31, 2012. For all periods presented herein, the Non-Debtor Subsidiaries included in the combined financial statements of Tribune Publishing are Tribune Interactive, LLC (as the successor legal entity to Tribune Interactive, Inc.); Riverwalk Center I Joint Venture; Tribune Hong Kong Limited, a foreign subsidiary; BLM; and Local Pro Plus Realty, LLC, a legal entity established subsequent to the Petition Date.
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”). Where appropriate, Tribune Publishing and its business operations as conducted on or after December 31, 2012 are herein referred to as “Reorganized Tribune Publishing”, “Reorganized Tribune Publishing Debtors,” “Successor Tribune Publishing” or “Successor.” Tribune and its business operations conducted on or after December 31, 2012 are herein referred to as “Reorganized Tribune Company” and such references include Reorganized Tribune Publishing and Reorganized Tribune Publishing Debtors unless otherwise indicated. Where appropriate, Tribune Publishing and its business operations as conducted on or prior to December 30, 2012 are herein referred to as “Predecessor Tribune Publishing” or “Predecessor.”
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. In general, as debtors-in-possession, the Debtors were authorized under Chapter 11 of the Bankruptcy Code to continue to operate as ongoing businesses, but could not engage in transactions outside the ordinary course of business without the prior approval 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. A plan of reorganization addresses, among other things, prepetition obligations, sets forth the revised capital structure of the newly-reorganized entities and provides for their corporate governance subsequent to emergence from court supervision under Chapter 11. The disclosures below relate to the joint plan of reorganization for the Debtors and not to any individual plan of reorganization for the Tribune Publishing Debtors unless otherwise indicated.
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 Tribune prepetition debt facilities, Angelo, Gordon & Co. L.P. (“AG”), a creditor under certain Tribune prepetition debt facilities, and JPMorgan Chase Bank, N.A. (“JPMorgan”), an administrative agent and a creditor under certain Tribune 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.
The Plan was the product of extensive negotiations and contested proceedings before the Bankruptcy Court due, in part, to certain claims and causes of action related to a series of transactions, collectively referred to as the “Leveraged ESOP Transactions,” that were undertaken by Tribune in 2007. These transactions resulted in Tribune becoming wholly-owned by an employee stock ownership plan (the “ESOP”) on December 20, 2007. At the Debtors’ request, on September 1, 2010, the Bankruptcy Court appointed a mediator to conduct a non-binding mediation concerning the terms of a plan of reorganization, including the appropriate resolution of claims and causes of action related to the Leveraged ESOP Transactions (the “Mediation”). The Mediation began on September 26, 2010 and ultimately resulted in a settlement agreement (the “Settlement Agreement”) between the Debtors, the Creditors’ Committee, AG, Oaktree, JPMorgan and a group of funds and managed accounts represented by King Street Acquisition Company, LLC, King Street Capital, LP and Marathon Asset Management, LP that were lenders under certain Tribune prepetition debt facilities. The Settlement Agreement provided for the settlement of certain causes of action arising in connection with the Leveraged ESOP Transactions, other than certain causes of action predefined as preserved. The terms of the Settlement Agreement, with certain modifications, were incorporated into the Plan filed with the Bankruptcy Court on April 12, 2012.
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. See “Terms of the Plan” section below for a description of the terms and conditions of the confirmed Plan as the Plan pertains to the Tribune Publishing Debtors.
Notices of appeal of the Confirmation Order were filed in August 2012 by certain Tribune 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 Company 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, Tribune 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 Tribune’s subsidiaries into limited liability companies or merging certain of Tribune’s subsidiaries into newly-formed limited liability companies, (ii) consolidating and reallocating certain operations, entities, assets and liabilities within the organizational structure of Tribune and (iii) establishing a number of real estate holding companies. Among other things, the restructuring transactions resulted in 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 Tribune and the initiation of distributions to creditors. As a result, the ownership of Tribune changed from the ESOP to certain of Tribune’s creditors on the Effective Date. In connection with the Debtors’ emergence from Chapter 11, on the Effective Date and in accordance with and subject to the terms of the Plan, (i) all of Tribune’s $0.01 par value common stock held by the ESOP was canceled and (ii) new shares of Reorganized Tribune Company were issued to shareholders who did not meet the necessary criteria to qualify as a subchapter S corporation shareholder. As a result, Reorganized Tribune Company converted from a subchapter S corporation to a C corporation under the Internal Revenue Code (“IRC”). This conversion also affected Tribune subsidiaries that were treated as qualified subchapter S subsidiaries, including certain legal entities included in the accompanying combined financial statements of Tribune Publishing.
Terms of the Plan-The following is a summary of the material settlements and other agreements entered into, distributions made and transactions consummated by Reorganized Tribune Publishing on or about the Effective Date pursuant to, and in accordance with, the terms of the Plan. The following summary only highlights certain of the substantive provisions of the Plan as it relates to Reorganized Tribune Publishing and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Plan and the agreements and other documents related thereto, including those described below.
•
Cancellation of certain prepetition obligations: On the Effective Date, the Tribune Publishing Debtors’ prepetition debt and certain other obligations were cancelled, terminated and/or extinguished, including (i) cancellation of the $2.8 billion promissory demand notes due to Tribune Finance LLC (“Tribune Finance”), a subsidiary of Tribune, and (ii) the cancellation of guarantee obligations by certain Tribune Publishing Debtors under certain of Tribune’s prepetition credit facilities (other than for purposes of allowing creditors thereunder to receive distributions under the Plan and allowing the administrative agent for such facilities to exercise certain limited rights).
•
Assumption of prepetition executory contracts and unexpired leases: On the Effective Date, any prepetition executory contracts or unexpired leases of the Tribune Publishing Debtors that were not previously assumed or rejected pursuant to Section 365 of the Bankruptcy Code or rejected pursuant to the Plan were deemed assumed by the applicable Reorganized Tribune Publishing Debtors or their successors-in-interest.
•
Distributions to Tribune Creditors: On the Effective Date (or as soon as practicable thereafter), (i) holders of allowed senior loan claims against Tribune and allowed senior loan guarantee claims against the subsidiary guarantors received approximately $2.9 billion in cash, approximately 98.2 million shares of Class A and Class B common stock in Reorganized Tribune Company (“New Common Stock”) and warrants to purchase New Common Stock (“New Warrants”) with an aggregate fair value determined pursuant to the Plan of approximately $4.5 billion as of the Effective Date, plus interests in a litigation trust formed pursuant to the Plan (the “Litigation Trust”), (ii) holders of allowed claims against Tribune related to Tribune’s prepetition $1.6 billion twelve-month bridge loan facility and allowed bridge loan facility guarantee claims against the subsidiary guarantors received a pro rata share of $64.5 million in cash (equal to approximately 3.98% of their allowed claim) plus interests in the Litigation Trust, (iii) holders of allowed general unsecured claims against the Tribune Publishing Debtors received cash in an amount equal to 100% of their allowed claim, and (iv) holders of unclassified claims, priority non-tax claims and certain other secured claims received cash in an amount equal to 100% of their allowed claim. All allowed priority tax and non-tax claims and other secured claims not paid on the Effective Date were reinstated and allowed administrative expense claims will be paid in full when due. All distributions to creditors related to the Tribune Publishing Debtors’ prepetition liabilities classified as liabilities subject to compromise were made by Tribune on behalf of the Tribune Publishing Debtors pursuant to Tribune’s centralized cash management system as described in Note 4.
•
Ownership Interests in the Tribune Publishing Debtors and Non-Debtor Subsidiaries: All ownership interests of Tribune in the Tribune Publishing Debtors and Non-Debtor Subsidiaries, after giving effect to the restructuring transactions described earlier, were reinstated on the Effective Date.
•
Other Plan provisions: The Plan and Confirmation Order also contain various discharges, injunctive provisions and releases that became operative on the Effective Date.
Since the Effective Date, Reorganized Tribune Company has substantially consummated the various transactions contemplated under the Plan, including those provisions relating to the Tribune Publishing Debtors. In particular, Reorganized Tribune Company made all distributions of cash, including cash distributions made on behalf of the Tribune Publishing Debtors, 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 the Tribune Publishing Debtors’ 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 March 23, 2009, the Tribune Publishing Debtors filed schedules with the Bankruptcy Court setting forth the assets and liabilities of the Tribune Publishing Debtors as of the Petition Date (as subsequently amended from time to time, the “Schedules of Assets and Liabilities”). These Schedules of Assets and Liabilities contain information identifying the Tribune Publishing Debtors’ executory contracts and unexpired leases, the creditors that may hold claims against the Tribune Publishing Debtors and the nature of such claims. On March 25, 2009, the Bankruptcy Court set June 12, 2009 as the general bar date, which was the final date by which most entities that wished to assert a prepetition claim against the Tribune Publishing Debtors were required to file a proof of claim in writing.
Pursuant to the terms of the Plan and subject to certain specified exceptions, on the Effective Date, all executory contracts or unexpired leases of the Tribune Publishing Debtors were deemed assumed in accordance with, and subject to, the provisions and requirements of Section 365 and 1123 of the Bankruptcy Code. However, certain executory contracts and leases were previously assumed or rejected pursuant to Section 365 of the Bankruptcy Code.
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. For information regarding the discharge of liabilities subject to compromise, see the “Terms of the Plan” section above.
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 combined statements of comprehensive income. 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 Tribune and other non-debtor Tribune Affiliates that related to all Debtors have not been allocated to Tribune Publishing as professional advisory fees are Tribune 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 combined statement of comprehensive income for the three and six months ended June 29, 2014 and June 30, 2013 and in the Predecessor’s combined statements of comprehensive income for December 31, 2012 and consisted of the following (in thousands):
 
 
Successor  
 
 
Predecessor
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
 
 
December 31, 2012
Reorganization costs, net:
 
 
 
 
 
 
 
 
 
 
 
Contract rejections and claim settlements
 
$
—

 
$
12

 
$
(7
)
 
$
123

 
 
$
—

Other, net
 
—

 
(273
)
 
(2
)
 
(326
)
 
 
—

Total reorganization costs, net
 
—

 
(261
)
 
(9
)
 
(203
)
 
 
—

Reorganization adjustments, net
 
—

 
—

 
—

 
—

 
 
2,862,039

Fresh-start reporting adjustments, net
 
—

 
—

 
—

 
—

 
 
(107,486
)
Total reorganization items, net
 
$
—

 
$
(261
)
 
$
(9
)
 
$
(203
)
 
 
$
2,754,553


The Predecessor’s 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 Company 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 Company on the Effective Date as (i) the ESOP, the holder of all of Tribune’s voting shares immediately before confirmation of the Plan, did not receive any voting shares of Reorganized Tribune Company or any other distributions under the Plan, and (ii) the reorganization value of Tribune’s assets was less than the postpetition liabilities and allowed prepetition claims. 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 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 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 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 combined statements of comprehensive income 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, Reorganized 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 Company and allocation of such reorganization value to the fair value of Reorganized Tribune Company’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 Company 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 Company before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets of Reorganized Tribune Company 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 Company’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 Company 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 were 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, Tribune’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 Tribune’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 Tribune’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, Tribune’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 Tribune’s broadcasting segment. The precedent transactions valuation methodology was not used for Tribune’s publishing segment due to the lack of relevant transactions.
Tribune’s financial advisor applied a weighted average of the above enterprise valuation methodologies to calculate the estimated ranges of enterprise values for Tribune’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, Tribune’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 Tribune’s equity investments. The ranges of enterprise values for Tribune’s publishing and broadcasting segments and estimated fair values of Tribune’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 Combined Balance Sheet-The table below summarizes the Predecessor’s December 30, 2012 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 combined balance sheet as of December 31, 2012.
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 Tribune 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 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 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 173 and 198 positions in the three and six months ended June 29, 2014, respectively and 39 and 104 positions in the three and six months ended June 30, 2013, respectively. Tribune Publishing recorded pretax charges of $2.2 million and $2.3 million for the three and six months ended June 29, 2014, respectively, and $1.1 million and $2.6 million for the three and six months ended June 30, 2013, respectively. A summary of the activity with respect to Tribune Publishing’s severance accrual for the six months ended June 29, 2014 is as follows (in thousands):
Balance at December 29, 2013
 
$
9,336

Provision
 
2,260

Payments
 
(6,124
)
Balance at June 29, 2014
 
$
5,472


Charges for severance and related expenses are included in selling, general and administrative expense in the accompanying combined statements of comprehensive income. The severance and related expenses above exclude severance and related expenses incurred by Tribune and Tribune Affiliates and allocated to Tribune Publishing. See Note 4 for further discussion of allocated charges from Tribune and Tribune Affiliates.
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES
Prior to the separation and distribution, Tribune Publishing participated in a number of corporate-wide programs administered by Tribune and Tribune Affiliates. These included participation in Tribune’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 Tribune, the services provided and how transactions with Tribune and Tribune Affiliates have been accounted for in the combined financial statements.
Equity-Equity in the combined balance sheets includes the accumulated balance of transactions between Tribune Publishing and Tribune and Tribune Affiliates, Tribune Publishing’s paid-in-capital, and Tribune’s interest in Tribune Publishing’s cumulative retained earnings, and are presented within parent company investment and combined with accumulated other comprehensive income to total equity (deficit). The amounts comprising the accumulated balance of transactions between Tribune Publishing and Tribune and Tribune Affiliates include (i) the cumulative net assets attributed to Tribune Publishing by Tribune and Tribune Affiliates, (ii) the cumulative net advances to Tribune representing the cumulative Tribune Publishing funds swept (net of funding provided by Tribune and Tribune Affiliates to Tribune Publishing) as part of the centralized cash management program described further below, (iii) the cumulative charges (net of credits) allocated by Tribune and Tribune Affiliates 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-Tribune utilized a centralized approach to cash management and the financing of its operations. Under this centralized cash management program, Tribune and Tribune Publishing advanced funds to each other. Accordingly, none of Tribune’s cash and cash equivalents has been assigned to Tribune Publishing in the combined financial statements. Cash in the combined balance sheets represents either cash not yet advanced to Tribune or cash held locally by Tribune Publishing. These transactions were recorded in equity (deficit) when advanced.
Support Services Provided and Other Amounts with Tribune and Tribune Affiliates-Tribune Publishing received allocated charges from Tribune and Tribune Affiliates for certain corporate support services, which were recorded within selling, general and administrative expense in Tribune Publishing’s combined statements of comprehensive income. Management believes that the basis used for the allocations was reasonable and reflect 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
 
Six Months Ended
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
Corporate management fee
 
$
8,960

 
$
6,656

 
$
18,020

 
$
12,383

Allocated depreciation
 
5,195

 
4,266

 
9,976

 
7,646

Service center support costs
 
23,099

 
20,765

 
43,384

 
42,135

Other
 
2,202

 
1,698

 
3,235

 
3,285

Total
 
$
39,456

 
$
33,385

 
$
74,615

 
$
65,449


Medical and Workers’ Compensation Benefit Plans-Tribune Publishing participated in Tribune-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 $11.5 million and $23.1 million in the three and six months ended June 29, 2014 and $13.6 million and $25.7 million in the three and six months ended June 30, 2013, respectively, and were recorded in cost of sales and selling, general and administrative expense, as appropriate, in the combined statements of comprehensive income. 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 Tribune defined benefit pension plans have historically been and will continue to be an obligation of Tribune. Therefore, Tribune Publishing accounts 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 Tribune-sponsored pension plans, which totaled credits of $5.0 million and $10.4 million in the three and six months ended June 29, 2014, respectively, and credits of $6.0 million and $11.9 million in the three and six months ended June 30, 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 the Company’s proportional share of the pension liability. Tribune-sponsored pension plan income allocated to Tribune Publishing is recorded in cost of sales and selling, general and administrative expense, as appropriate, in the combined statements of income and comprehensive income. While management believes the allocation methods utilized for the Tribune-sponsored pension plans were reasonable and reflected the portion of such income 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 Contribution Plans-Tribune Publishing’s employees have historically participated in various Tribune 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 Tribune 401(k) savings plans totaled $2.5 million and $5.9 million in the three and six months ended June 29, 2014, respectively, and $3.2 million and $6.7 million in the three and six months ended June 30, 2013, respectively, and are recorded in cost of sales and selling, general and administrative expense, as appropriate, in the 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 Tribune’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 Tribune 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 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 Tribune and Tribune Affiliates. During the three and six months ended June 30, 2013, Tribune Publishing recorded $1.4 million and $2.7 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 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 combined financial statements by recording a $337.6 million reduction to net properties and a corresponding reduction to the parent company investment component of equity (deficit) in its 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 $9.6 million and $19.1 million of rent expense for the three and six months ended June 29, 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 Tribune to lease the portions of the shared Tribune corporate office space that Tribune Publishing continues to occupy for an initial 5-year term. 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 expands 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 operations for the six months ended June 29, 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 six months ended June 29, 2014 were not significant; the Company made no acquisitions in the three and six months ended June 30, 2013. The results of the other acquired companies and the related transaction costs were not material to the Company’s unaudited combined financial statements and were included in the unaudited combined statements of comprehensive income since their respective dates of acquisition.
Information for other acquisitions made in the six months ended June 29, 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 McClatchy/Tribune Information Services (“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 combined statements of comprehensive income 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):
 
 
June 29, 2014
 
December 29, 2013
Newsprint
 
$
15,642

 
$
13,831

Supplies and other
 
432

 
391

Total inventories
 
$
16,074

 
$
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 June 29, 2014 and December 29, 2013 consisted of the following (in thousands):
 
 
June 29, 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

 
$
(1,378
)
 
$
4,816

 
 
$
3,694

 
$
(919
)
 
$
2,775

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

 
(3,069
)
 
18,097

 
 
14,332

 
(2,032
)
 
12,300

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

 
(4,473
)
 
7,456

 
 
11,929

 
(2,982
)
 
8,947

Other (useful life of 1 to 20 years)
 
12,807

 
(712
)
 
12,095

 
 
5,132

 
(472
)
 
4,660

Total
 
$
52,096

 
$
(9,632
)
 
$
42,464

 
 
$
35,087

 
$
(6,405
)
 
$
28,682

Goodwill and other intangible assets not subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
35,444

 
 
 
 
 
 
15,331

Newspaper mastheads
 
 
 
 
 
31,800

 
 
 
 
 
 
31,800

Total goodwill and other intangible assets
 
 
 
 
 
$
109,708

 
 
 
 
 
 
$
75,813

Intangible liabilities subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease contract intangible liabilities
 
(545
)
 
302

 
(243
)
 
 
(545
)
 
218

 
(327
)
Total intangible liabilities subject to amortization
 
$
(545
)
 
$
302

 
$
(243
)
 
 
$
(545
)
 
$
218

 
$
(327
)


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

Acquisitions
 
17,009

Amortization
 
(3,227
)
Balance at June 29, 2014
 
$
42,464


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

 
 
 
Goodwill
 
 
Balance at December 29, 2013
 
$
15,331

Acquisitions
 
20,113

Balance at June 29, 2014
 
$
35,444


As disclosed in Note 4 to Tribune Publishing's audited 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 $1.9 million and $2.8 million at June 29, 2014 and December 29, 2013, respectively, in the following private companies:
Company
 
% Owned

CIPS Marketing Group, Inc.
 
50
%
Homefinder.com, LLC
 
33
%
Locality Labs, LLC
 
35
%

Tribune Publishing recorded losses of $0.3 million and $0.6 million in the three and six months ended June 29, 2014, respectively, and $0.3 million and $0.6 million in the three and six months ended June 30, 2013, respectively, relating to its equity method investments. Tribune 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 McClatchy/Tribune Information Services ("MCT") which had previously been accounted for as an equity method investment. See Note 5 for additional information on the MCT acquisition.
FAIR VALUE MEASUREMENTS (Notes)
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
Tribune Publishing measures and records in its 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.
INCOME TAXES
INCOME TAXES
INCOME TAXES
Subchapter S Corporation Election and Subsequent Conversion to C Corporation-On March 13, 2008, Tribune 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 Tribune’s 2008 fiscal year. Tribune 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), Tribune and Tribune Publishing were not subject to federal income tax. Although most states in which Tribune 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, Tribune 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, Tribune’s S corporation election was terminated and Tribune, 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. Current income taxes payable are settled with Tribune through the equity (deficit) account. For the six months ended June 30, 2013, Tribune Publishing’s operations are included in Tribune’s federal and state C Corporation income tax returns. For the purposes of these combined financial statements, Tribune Publishing has computed its income taxes for the six months ended June 30, 2013 as if it were filing separate returns.
For the three and six months ended June 29, 2014, Tribune Publishing recorded income tax expense of $10.9 million and $19.6 million, respectively. The effective tax rate on pretax income was 41.9% and 42.1% in the three and six months ended June 29, 2014, respectively. 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 six months ended June 30, 2013, Tribune Publishing recorded income tax expense of $16.6 million and $32.8 million, respectively. The effective tax rate on pretax income was 43.1% and 43.2% in the three and six months ended June 30, 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 Tribune-sponsored pension plans.
Postretirement Benefits Other Than Pensions-Retirement benefits are provided to eligible employees of Tribune Publishing through defined benefit pension plans sponsored by Tribune. 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
 
Six Months Ended
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
Service cost
 
$
71

 
$
111

 
$
176

 
$
222

Interest cost
 
366

 
387

 
816

 
774

Amortization of gain
 
(14
)
 
—

 
(14
)
 
—

Net periodic benefit cost
 
$
423

 
$
498

 
$
978

 
$
996


Expected Future Benefit Payments-For 2014 Tribune Publishing expects to contribute $5 million to its other postretirement plans.
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
On March 1, 2013, Tribune adopted the 2013 Equity Incentive Plan (“Tribune Equity Incentive Plan”) for the purpose of granting stock awards to directors, officers, and employees of Tribune. Stock awarded pursuant to the Tribune Equity Incentive Plan is limited to five percent of the outstanding Tribune common stock on a diluted basis. Tribune began issuing awards under the Tribune Equity Incentive Plan in the second quarter of 2013.
The Tribune Equity Incentive Plan provides for the granting of non-qualified stock options (“NSO”), restricted stock units (“RSU”), performance share units (“PSU”) and restricted and unrestricted stock 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 Equity Incentive Plan allows employees to surrender to Tribune shares of vested common stock upon vesting of their stock awards or at the time they exercise their NSOs in lieu of their payment of the required withholdings for employee taxes. Tribune does not withhold taxes in excess of minimum required statutory requirements.
NSO and RSU awards generally vest 25% on each anniversary of the date of the grant. Under the Tribune Equity Incentive Plan, the exercise price of an NSO award cannot be less than the market price of Tribune common stock at the time the NSO award is granted and has a maximum contractual term of 10 years.
Tribune estimates the fair value of NSO awards using the Black-Scholes option-pricing model, which incorporates various assumptions including the expected term of the awards, volatility of the stock price, risk-free rate of return and dividend yield. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility was based on the actual historical volatility of a select peer group of entities operating in similar industry sectors as Tribune. Expected life was calculated using the simplified method, as described under Staff Accounting Bulletin Topic 14, “Share-Based Payment,” as the Equity Incentive Plan was not in existence for a sufficient period of time for the use of Tribune-specific historical experience in the calculation.
Tribune determines the fair value of RSUs by reference to the quoted market price of the Tribune common stock on the date of the grant.
Stock-based compensation expense for participants in the Tribune Equity Incentive Plan who are solely dedicated to Tribune Publishing have been included within selling, general and administrative expense within these combined financial statements. Stock-based compensation expense for participants in the Tribune 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. Stock-based compensation expense related to Tribune Publishing’s employees during the three and six months ended June 29, 2014 totaled $0.6 million and $1.3 million, respectively. Stock-based compensation expense related to Tribune Publishing's employees totaled $0.9 million for the three and six months ended June 30, 2013. In the three and six months ended June 29, 2014, the Company was allocated $1.5 million and $4.1 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 $0.5 million in the three and six months ended June 30, 2013.
As of June 29, 2014, Tribune Publishing had not yet recognized compensation cost of $6.2 million on nonvested awards with a weighted average remaining recognition period of 2.5 years.
On April 1, 2014, Tribune's compensation committee, acting for Tribune 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. As of June 29, 2014, no awards have been issued under the Tribune Publishing Equity Plan.
The Tribune Publishing Equity Plan provides for the granting of stock options, stock appreciation rights, RSUs, PSUs, 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 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 has a maximum contractual term of 10 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. There were no equity-based awards of Tribune Publishing at June 29, 2014 .
On August 4, 2014, approximately 25.4 million shares of the Company's common stock were distributed to Tribune and Tribune stockholders and warrantholders who held shares as of the recorded date of July 28, 2014. This share amount is being utilized for the calculation of both basic and diluted earnings per common share for the three and six months ended June 29, 2014 and June 30, 2013, as no equity-based awards were outstanding prior to August 4, 2014.
For the three and six months ended June 29, 2014 and June 30, 2013, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
Net income attributable to Tribune Publishing stockholders
 
$
15,203

 
$
21,926

 
$
26,975

 
$
43,119

 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding - basic and diluted
 
25,424

 
25,424

 
25,424

 
25,424

 
 
 
 
 
 
 
 
 
Net income per common share - basic and diluted
 
$
0.60

 
$
0.86

 
$
1.06

 
$
1.70

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
Spin-off transaction
On August 4, 2014, Tribune completed the spin-off of its principal publishing operations into an independent company, Tribune Publishing, by distributing 98.5% of the outstanding shares of Tribune Publishing common stock to holders of Tribune common stock and warrants. In the distribution, each holder of Tribune Class A common stock, Class B common stock and warrants received 0.25 of a share of Tribune Publishing common stock for each share of common stock or warrant held as of the record date of July 28, 2014. Based on the number of shares of Tribune common stock and warrants outstanding as of 5:00 P.M. Eastern time on July 28, 2014 and the distribution ratio, 25,042,263 shares of Tribune Publishing common stock were distributed to the Tribune stockholders and holders of warrants and Tribune retained 381,354 shares of Tribune Publishing common stock, representing 1.5% of outstanding common stock of Tribune Publishing. Subsequent to the distribution, 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 spin-off, Tribune Publishing paid a $275 million cash dividend to Tribune from a portion of the proceeds of the Senior Term Facility, as defined and described below, entered into by Tribune Publishing. Tribune also settled or assigned intercompany indebtedness between and among Tribune and its subsidiaries, which prior to the spin-off included Tribune Publishing and Tribune Publishing's subsidiaries.
In connection with the separation and distribution, Tribune entered into a transition services agreement (the "TSA") and certain other agreements with Tribune Publishing that will govern the relationships between Tribune Publishing and Tribune following the separation and distribution. Pursuant to the TSA, Tribune will provide 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. In addition, the TSA outlines the services that Tribune Publishing will provide Tribune 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, and other areas where Tribune may need assistance and support following the separation and distribution. The charges for the transition services generally allow the providing company 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.
Tribune has received a private letter ruling ("PLR") from the Internal Revenue Service ("IRS") which provides that the distribution of Tribune Publishing stock and certain related transactions will qualify as tax-free to Tribune, Tribune Publishing and Tribune's stockholders and warrantholders for U.S. federal income tax purposes. Although a PLR from the IRS generally is binding on the IRS, the PLR does not rule that the distribution satisfies every requirement for a tax-free distribution, and the parties will rely solely on the opinion of the Tribune's special tax counsel that such additional requirements have been satisfied.
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 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 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.
The Senior Term Facility will mature on August 4, 2021 (the “Term Loan Maturity Date”). The Term Loans amortize in equal quarterly installments in aggregate annual amounts 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 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; 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 Term Loan 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 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 million of availability under the Senior ABL Facility is available for letters of credit and up to $15 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 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 August 4, 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 either, at Tribune Publishing Company’s option (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 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 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 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 August 4, 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.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)
Basis of Presentation 
Basis of Presentation-Tribune Publishing’s operations are conducted through the following wholly-owned subsidiaries (including each subsidiary’s respective direct wholly-owned subsidiaries) of TPC: The Morning Call, LLC; Chicago Tribune Company, LLC; The Baltimore Sun Company, LLC; Orlando Sentinel Communications Company, LLC; Los Angeles Times Communications LLC; The Daily Press, LLC; The Hartford Courant Company, LLC; Sun-Sentinel Company, LLC; Tribune Washington Bureau, LLC; Hoy Publications, LLC; Tribune Interactive, LLC; Tribune 365, LLC; Tribune Content Agency, LLC; forsalebyowner.com, LLC; Builder Media Solutions, LLC; and BLM. Certain assets of Tribune and Tribune Affiliates that are not directly owned by TPC which are otherwise specifically identifiable or attributable to Tribune Publishing and are necessary to present these combined financial results on a stand-alone basis have also been included in these combined financial statements.
Historically, separate financial statements have not been prepared for Tribune Publishing. The accompanying combined financial statements are derived from the historical accounting records of Tribune and present Tribune Publishing’s combined financial position, results of operations and cash flows as of and for the periods presented as if Tribune Publishing was a separate entity and as it was historically managed. Management believes that assumptions and methodologies underlying the allocation of general corporate expenses are reasonable. However, such expenses 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 combined 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 Tribune.
Tribune and Tribune Affiliates 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 Tribune’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,” preclude Tribune Publishing from derecognizing those properties from its 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 properties in its combined balance sheet. Rent payments under the related party leases were accounted for as dividends to Tribune and Tribune Affiliates. 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 properties and a corresponding reduction to the net parent company investment component of equity in its 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.
In connection with the spin-off, Tribune Publishing has and may enter into various agreements with Tribune and other third parties that may be on different terms than the terms of the arrangements or agreements that existed prior to the spin-off. For instance, Tribune Publishing utilized the services of Tribune and Tribune Affiliates for certain functions such as legal, finance, human resource and information technology services, as well as various corporate-wide employee benefit programs. The costs of Tribune services that are specifically identifiable to Tribune Publishing are included in these combined financial statements. The costs of Tribune services that are incurred by Tribune but are not specifically identifiable to Tribune Publishing have been allocated to Tribune Publishing and included in these 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 Tribune 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 Tribune through the parent company investment in the period the related income taxes were recorded.
All intercompany accounts within Tribune Publishing have been eliminated in consolidation. All significant intercompany transactions between either (i) Tribune Publishing and Tribune or (ii) Tribune Publishing and Tribune Affiliates have been included within the 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 either Tribune Publishing and Tribune or Tribune Publishing and Tribune Affiliates 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 are reflected in the combined statements of cash flows as financing activities.
These combined financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited 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 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 June 29, 2014, the results of operations for the three months and six months ended June 29, 2014 and June 30, 2013, the results of cash flows for the six months ended June 29, 2014 and June 30, 2013 and the results of operations and cash flows for Dec 31, 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. These unaudited combined financial statements should be read in conjunction with Tribune Publishing’s audited combined financial statements and related notes for the year ended December 29, 2013, including in the Company's registration statement on Form 10, as amended, filed with the SEC on July 21, 2014.
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 Financial Accounting Standard Board ("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. Tribune Publishing is currently evaluating which adoption method we will use. 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 (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 combined statement of comprehensive income for the three and six months ended June 29, 2014 and June 30, 2013 and in the Predecessor’s combined statements of comprehensive income for December 31, 2012 and consisted of the following (in thousands):
 
 
Successor  
 
 
Predecessor
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
 
 
December 31, 2012
Reorganization costs, net:
 
 
 
 
 
 
 
 
 
 
 
Contract rejections and claim settlements
 
$
—

 
$
12

 
$
(7
)
 
$
123

 
 
$
—

Other, net
 
—

 
(273
)
 
(2
)
 
(326
)
 
 
—

Total reorganization costs, net
 
—

 
(261
)
 
(9
)
 
(203
)
 
 
—

Reorganization adjustments, net
 
—

 
—

 
—

 
—

 
 
2,862,039

Fresh-start reporting adjustments, net
 
—

 
—

 
—

 
—

 
 
(107,486
)
Total reorganization items, net
 
$
—

 
$
(261
)
 
$
(9
)
 
$
(203
)
 
 
$
2,754,553

Schedule of Fresh-Start Adjustments 
The table below summarizes the Predecessor’s December 30, 2012 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 combined balance sheet as of December 31, 2012.
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 Tribune 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 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 six months ended June 29, 2014 is as follows (in thousands):
Balance at December 29, 2013
 
$
9,336

Provision
 
2,260

Payments
 
(6,124
)
Balance at June 29, 2014
 
$
5,472

RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES (Tables)
Schedule of Related Party Transactions
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
Corporate management fee
 
$
8,960

 
$
6,656

 
$
18,020

 
$
12,383

Allocated depreciation
 
5,195

 
4,266

 
9,976

 
7,646

Service center support costs
 
23,099

 
20,765

 
43,384

 
42,135

Other
 
2,202

 
1,698

 
3,235

 
3,285

Total
 
$
39,456

 
$
33,385

 
$
74,615

 
$
65,449

ACQUISITIONS (Tables)
Schedule of Acquisitions
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

Information for other acquisitions made in the six months ended June 29, 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

INVENTORIES (Tables)
Schedule of Inventory
Inventories consisted of the following (in thousands):
 
 
June 29, 2014
 
December 29, 2013
Newsprint
 
$
15,642

 
$
13,831

Supplies and other
 
432

 
391

Total inventories
 
$
16,074

 
$
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 June 29, 2014 and December 29, 2013 consisted of the following (in thousands):
 
 
June 29, 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

 
$
(1,378
)
 
$
4,816

 
 
$
3,694

 
$
(919
)
 
$
2,775

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

 
(3,069
)
 
18,097

 
 
14,332

 
(2,032
)
 
12,300

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

 
(4,473
)
 
7,456

 
 
11,929

 
(2,982
)
 
8,947

Other (useful life of 1 to 20 years)
 
12,807

 
(712
)
 
12,095

 
 
5,132

 
(472
)
 
4,660

Total
 
$
52,096

 
$
(9,632
)
 
$
42,464

 
 
$
35,087

 
$
(6,405
)
 
$
28,682

Goodwill and other intangible assets not subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
35,444

 
 
 
 
 
 
15,331

Newspaper mastheads
 
 
 
 
 
31,800

 
 
 
 
 
 
31,800

Total goodwill and other intangible assets
 
 
 
 
 
$
109,708

 
 
 
 
 
 
$
75,813

Intangible liabilities subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease contract intangible liabilities
 
(545
)
 
302

 
(243
)
 
 
(545
)
 
218

 
(327
)
Total intangible liabilities subject to amortization
 
$
(545
)
 
$
302

 
$
(243
)
 
 
$
(545
)
 
$
218

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

Acquisitions
 
17,009

Amortization
 
(3,227
)
Balance at June 29, 2014
 
$
42,464

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 six months ended June 29, 2014 were as follows (in thousands):
Other intangible assets not subject to amortization
 
 
Balance as of June 29, 2014 and December 29, 2013
 
$
31,800

 
 
 
Goodwill
 
 
Balance at December 29, 2013
 
$
15,331

Acquisitions
 
20,113

Balance at June 29, 2014
 
$
35,444

INVESTMENTS (Tables)
Equity Method Investments
Investments consisted of equity method investments totaling $1.9 million and $2.8 million at June 29, 2014 and December 29, 2013, respectively, in the following private companies:
Company
 
% Owned

CIPS Marketing Group, Inc.
 
50
%
Homefinder.com, LLC
 
33
%
Locality Labs, LLC
 
35
%
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
 
Six Months Ended
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
Service cost
 
$
71

 
$
111

 
$
176

 
$
222

Interest cost
 
366

 
387

 
816

 
774

Amortization of gain
 
(14
)
 
—

 
(14
)
 
—

Net periodic benefit cost
 
$
423

 
$
498

 
$
978

 
$
996

EARNINGS PER SHARE (Tables)
Schedule of Earnings Per Share
For the three and six months ended June 29, 2014 and June 30, 2013, basic and diluted earnings per common share were as follows (in thousands, except per share amounts):
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2014
 
June 30, 2013
 
June 29, 2014
 
June 30, 2013
Net income attributable to Tribune Publishing stockholders
 
$
15,203

 
$
21,926

 
$
26,975

 
$
43,119

 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding - basic and diluted
 
25,424

 
25,424

 
25,424

 
25,424

 
 
 
 
 
 
 
 
 
Net income per common share - basic and diluted
 
$
0.60

 
$
0.86

 
$
1.06

 
$
1.70

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Business Operations) (Details)
Jun. 29, 2014
business
market
Jun. 29, 2014
CIPS Marketing Group, Inc.
Jun. 29, 2014
Homefinder.com, LLC
Jun. 29, 2014
Locality Labs, LLC
Aug. 4, 2014
Parent Company
Common Stock
Subsequent Event
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Number of major-markets in which entity operates (major-markets)
8 
 
 
 
 
Number of major-market daily newspapers and related businesses
10 
 
 
 
 
Equity interest percentage
 
50.00% 
33.00% 
35.00% 
 
business combination, step acquisition, equity interest acquired (percent)
50.00% 
 
 
 
 
Outstanding shares distributed (percent)
 
 
 
 
98.50% 
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Separation from Tribune Company and Basis of Presentation) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended 0 Months Ended
Jun. 29, 2014
segment
Dec. 1, 2013
Real Estate Holding Companies
Dec. 1, 2013
Affiliated Entity
Segment Reporting Information [Line Items]
 
 
 
Net book value
 
 
$ 337.6 
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 
 
 
PROCEEDINGS UNDER CHAPTER 11 (Details Textual) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
0 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended
Dec. 8, 2008
subsidiary
Dec. 30, 2012
Dec. 30, 2012
Minimum
Dec. 30, 2012
Maximum
Dec. 30, 2012
Predecessor
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Dec. 30, 2012
Successor
Dec. 30, 2012
Discharge of Debt
Promissory Demand Notes
Dec. 30, 2012
Guaranteed Claims
Discharge of Debt
Bridge Loan Facility
Dec. 30, 2012
General Unsecured Claims
Discharge of Debt
Dec. 30, 2012
Other Secured Claims
Discharge of Debt
Reorganization [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct and indirect wholly-owned subsidiaries
110 
 
 
 
 
 
 
 
 
 
 
 
 
 
Par value common stock
 
 
 
 
$ 0.01 
 
 
 
 
 
 
 
 
 
Cancellation of debt
 
 
 
 
 
 
 
 
 
 
$ 2,800,000,000 
$ 1,600,000,000 
 
 
Amount paid to settle claims
 
2,900,000,000 
 
 
 
 
 
 
 
 
 
64,500,000 
 
 
Number of shares paid to settle claims (shares)
 
98.2 
 
 
 
 
 
 
 
 
 
 
 
 
Value of shares outstanding
 
4,500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Percent of allowed claim paid (percent)
 
 
 
 
 
 
 
 
 
 
 
3.98% 
100.00% 
100.00% 
Reorganization items, net
 
 
 
 
2,754,553,000 
0 
(261,000)
(9,000)
(203,000)
 
 
 
 
 
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 6 Months Ended 12 Months Ended
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Dec. 30, 2012
Predecessor
Fresh-Start Adjustment [Line Items]
 
 
 
 
 
Contract rejections and claim settlements
$ 0 
$ 12 
$ (7)
$ 123 
$ 0 
Other, net
0 
(273)
(2)
(326)
0 
Total reorganization costs, net
0 
(261)
(9)
(203)
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
$ 0 
$ (261)
$ (9)
$ (203)
$ 2,754,553 
PROCEEDINGS UNDER CHAPTER 11 (Fresh-Start Balance Sheet) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2014
Dec. 29, 2013
Dec. 30, 2012
Reorganization Adjustments
Dec. 30, 2012
Fresh-Start Adjustments
Dec. 30, 2012
Predecessor
Dec. 25, 2011
Predecessor
Jun. 29, 2014
Successor
Dec. 29, 2013
Successor
Jun. 30, 2013
Successor
Dec. 30, 2012
Successor
Current assets
 
 
 
 
 
 
 
 
 
 
Cash
$ 12,538 
$ 9,694 
$ 0 
$ 0 
$ 13,768 
$ 13,768 
$ 12,538 
$ 9,694 
$ 15,232 
$ 13,768 
Accounts receivable, net
210,210 
251,636 
0 
0 
256,985 
 
 
 
 
256,985 
Inventories
16,074 
14,222 
0 
5,810 1
12,537 
 
 
 
 
18,347 
Deferred income taxes
33,800 
37,371 
42,228 2 3
(2,272)1
1,147 
 
 
 
 
41,103 
Prepaid expenses and other
13,927 
13,570 
0 
(18)1
14,733 
 
 
 
 
14,715 
Total current assets
286,549 
326,493 
42,228 
3,520 
299,170 
 
 
 
 
344,918 
Property, plant and equipment
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
87,935 
83,901 
0 
(1,527,106)1
1,938,208 
 
 
 
 
411,102 
Accumulated depreciation
(21,611)
(15,973)
0 
1,322,830 1
(1,322,830)
 
 
 
 
0 
Property, plant and equipment, net
66,324 
67,928 
0 
(204,276)
615,378 
 
 
 
 
411,102 
Other Assets
 
 
 
 
 
 
 
 
 
 
Goodwill
35,444 
15,331 
0 
15,331 1
0 
 
 
 
 
15,331 
Intangible assets, net
74,264 
60,482 
0 
37,976 1
28,911 
 
 
 
 
66,887 
Investments
1,921 
2,799 
0 
0 
3,986 
 
 
 
 
3,986 
Deferred income taxes
33,698 
39,587 
0 
54,188 1
0 
 
 
 
 
54,188 
Other
4,328 
1,746 
0 
(2,402)1
3,787 
 
 
 
 
1,385 
Total other assets
149,655 
119,945 
0 
105,093 
36,684 
 
 
 
 
141,777 
Total assets
502,528 
514,366 
42,228 
(95,663)
951,232 
 
 
 
 
897,797 
Current Liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable
46,126 
36,329 
2,528 2 4
0 1
37,710 
 
 
 
 
40,238 
Employee compensation and benefits
89,716 
103,351 
322 2 4
0 
103,077 
 
 
 
 
103,399 
Deferred revenue
78,025 
67,934 
0 
(171)1
66,835 
 
 
 
 
66,664 
Other
19,926 
20,866 
(879)2 4
0 
26,359 
 
 
 
 
25,480 
Total current liabilities
233,793 
228,480 
1,971 
(171)
233,981 
 
 
 
 
235,781 
Other Non-Current Liabilities
11,480 
8,673 
11,679 2 3 4
(16,192)1
66,300 
 
 
 
 
61,787 
Liabilities Subject to Compromise
 
 
(2,865,890)2 4
0 
2,865,890 
 
 
 
 
0 
Total Equity
211,143 
224,825 
2,894,468 2
(79,300)1
(2,214,939)
 
 
 
 
600,229 
Total liabilities and equity
$ 502,528 
$ 514,366 
$ 42,228 
$ (95,663)
$ 951,232 
 
 
 
 
$ 897,797 
[1] The Predecessor’s 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)
[2] Reflects adjustments arising from implementation of the Plan, including the gain on the settlement of prepetition liabilities, distributions of cash by Tribune 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 6 Months Ended
Jun. 29, 2014
position
Jun. 30, 2013
position
Jun. 29, 2014
position
Jun. 30, 2013
position
Restructuring and Related Activities [Abstract]
 
 
 
 
Reductions in staffing levels in operations
173 
39 
198 
104 
Severance Accrual
 
 
 
 
Balance
 
 
$ 9,336 
 
Provision
2,200 
1,100 
2,260 
2,600 
Payments
 
 
(6,124)
 
Balance
$ 5,472 
 
$ 5,472 
 
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 6 Months Ended
Jun. 29, 2014
Jun. 30, 2013
Jun. 29, 2014
Jun. 30, 2013
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
$ 39,456 
$ 33,385 
$ 74,615 
$ 65,449 
Corporate management fee
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
8,960 
6,656 
18,020 
12,383 
Allocated depreciation
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
5,195 
4,266 
9,976 
7,646 
Service center support costs
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
23,099 
20,765 
43,384 
42,135 
Other
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Selling, general and administrative expenses
$ 2,202 
$ 1,698 
$ 3,235 
$ 3,285 
RELATED PARTY TRANSACTIONS WITH TRIBUNE AND AFFILIATES (Details Textual) (USD $)
12 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Dec. 29, 2013
Jun. 29, 2014
Dec. 1, 2013
Affiliated Entity
Dec. 21, 2012
Affiliated Entity
Jun. 29, 2014
Affiliated Entity
Lease Agreements
Jun. 29, 2014
Affiliated Entity
Lease Agreements
Dec. 29, 2013
Affiliated Entity
Lease Agreements
renewal_term
Dec. 21, 2012
Affiliated Entity
Lease Agreements
Dec. 29, 2013
Affiliated Entity
Lease Agreements
Minimum
Dec. 29, 2013
Affiliated Entity
Lease Agreements
Maximum
Jun. 29, 2014
Affiliated Entity
Medical And Workers' Compensation Benefit Plan
Jun. 30, 2013
Affiliated Entity
Medical And Workers' Compensation Benefit Plan
Jun. 29, 2014
Affiliated Entity
Medical And Workers' Compensation Benefit Plan
Jun. 30, 2013
Affiliated Entity
Medical And Workers' Compensation Benefit Plan
Jun. 29, 2014
Affiliated Entity
Pension Plan, Defined Benefit
Jun. 30, 2013
Affiliated Entity
Pension Plan, Defined Benefit
Jun. 29, 2014
Affiliated Entity
Pension Plan, Defined Benefit
Jun. 30, 2013
Affiliated Entity
Pension Plan, Defined Benefit
Jun. 29, 2014
Affiliated Entity
Defined Contribution Pension
Jun. 30, 2013
Affiliated Entity
Defined Contribution Pension
Jun. 29, 2014
Affiliated Entity
Defined Contribution Pension
Jun. 30, 2013
Affiliated Entity
Defined Contribution Pension
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost (credit)
 
 
 
 
 
 
 
 
 
 
$ 11,500,000 
$ 13,600,000 
$ 23,100,000 
$ 25,700,000 
$ (5,000,000)
$ (6,000,000)
$ (10,400,000)
$ (11,900,000)
 
 
 
 
Employer contributions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,500,000 
3,200,000 
5,900,000 
6,700,000 
Carrying value of land and buildings
67,928,000 
66,324,000 
 
28,500,000 
 
 
 
294,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of lease agreement renewal terms
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
 
 
 
 
1,400,000 
2,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction to net properties
 
 
337,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rent expense
 
 
 
 
$ 9,600,000 
$ 19,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management agreement term
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management agreement cancellation notice period
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease period
5 years 
 
 
 
 
 
 
 
5 years 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
ACQUISITIONS (Details Textual) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended
Jun. 29, 2014
business
Jun. 30, 2013
business
May 1, 2014
Landmark Acquisition
Jun. 29, 2014
Landmark Acquisition
Jun. 29, 2014
Landmark Acquisition
Trade names and trademarks
Jun. 29, 2014
Landmark Acquisition
Advertiser relationships
Jun. 29, 2014
Landmark Acquisition
Other customer relationships
May 7, 2014
McClatchy/Tribune Information Services
Jun. 29, 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 6 Months Ended
Jun. 29, 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
Jun. 29, 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
35,444 
15,331 
 
12,940 
 
 
 
 
Total net assets acquired
 
 
 
$ 28,981 
 
 
 
 
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2014
Dec. 29, 2013
Inventory Disclosure [Abstract]
 
 
Newsprint
$ 15,642 
$ 13,831 
Supplies and other
432 
391 
Total inventories
$ 16,074 
$ 14,222 
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES (Summary of Goodwill and Other Intangibles) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2014
Dec. 29, 2013
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
$ 52,096 
$ 35,087 
Accumulated Amortization
(9,632)
(6,405)
Net Amount
42,464 
28,682 
Goodwill
35,444 
15,331 
Newspaper mastheads
31,800 
31,800 
Total goodwill and other intangible assets
109,708 
75,813 
Intangible liabilities subject to amortization
 
 
Gross Amount
(545)
(545)
Accumulated Amortization
302 
218 
Net Amount
(243)
(327)
Subscribers
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
6,194 
3,694 
Accumulated Amortization
(1,378)
(919)
Net Amount
4,816 
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
(3,069)
(2,032)
Net Amount
18,097 
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
(4,473)
(2,982)
Net Amount
7,456 
8,947 
Useful life
4 years 
 
Other
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Gross Amount
12,807 
5,132 
Accumulated Amortization
(712)
(472)
Net Amount
$ 12,095 
$ 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
6 Months Ended
Jun. 29, 2014
Intangible assets subject to amortization
 
Beginning balance
$ 28,682 
Acquisitions
17,009 
Amortization
(3,227)
Ending balance
$ 42,464 
GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES (Intangible Assets Not Subject to Amortization) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 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
20,113 
 
Ending balance
$ 35,444 
 
INVESTMENTS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2014
Jun. 30, 2013
Jun. 29, 2014
Jun. 30, 2013
Dec. 29, 2013
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Investments
$ 1,921 
 
$ 1,921 
 
$ 2,799 
Amortization of contract intangible liabilities
$ 300 
$ 300 
$ 600 
$ 600 
 
CIPS Marketing Group, Inc.
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Equity method investment, ownership percentage
50.00% 
 
50.00% 
 
 
Homefinder.com, LLC
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Equity method investment, ownership percentage
33.00% 
 
33.00% 
 
 
Locality Labs, LLC
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Equity method investment, ownership percentage
35.00% 
 
35.00% 
 
 
McClatchy/Tribune Information Services
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
Equity method investment, ownership percentage
50.00% 
 
50.00% 
 
 
INCOME TAXES (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2014
Jun. 30, 2013
Jun. 29, 2014
Jun. 30, 2013
Effective tax rate
41.90% 
43.10% 
42.10% 
43.20% 
U.S. Federal Statutory Rate
 
 
35.00% 
35.00% 
Successor
 
 
 
 
Income tax expense (benefit)
$ 10,945 
$ 16,614 
$ 19,598 
$ 32,794 
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) (Other Postretirement Plans, USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2014
Jun. 30, 2013
Jun. 29, 2014
Jun. 30, 2013
Other Postretirement Plans
 
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
 
Service cost
$ 71,000 
$ 111,000 
$ 176,000 
$ 222,000 
Interest cost
366,000 
387,000 
816,000 
774,000 
Amortization of gain
(14,000)
0 
(14,000)
0 
Net periodic benefit cost
423,000 
498,000 
978,000 
996,000 
Expected plan contribution
 
 
$ 5,000,000 
 
STOCK-BASED COMPENSATION (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 6 Months Ended
Apr. 1, 2013
Mar. 1, 2013
Jun. 29, 2014
Jun. 30, 2013
Jun. 29, 2014
Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Percentage of outstanding common stock authorized for stock award plan
10.00% 
5.00% 
 
 
 
 
Share-based compensation expense
 
 
$ 0.6 
$ 0.9 
$ 1.3 
$ 0.9 
Costs not yet recognized
 
 
6.2 
 
6.2 
 
Costs not yet recognized, period for recognition
 
 
 
 
2 years 6 months 
 
Stock-based compensation plan expenses
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Share-based compensation expense
 
 
$ 1.5 
$ 0.5 
$ 4.1 
$ 0.5 
NSO
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Annual vesting percentage
 
 
 
 
25.00% 
 
Vesting period
 
 
 
 
10 years 
 
Expiration period
 
 
 
 
10 years 
 
RSU
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Annual vesting percentage
 
 
 
 
25.00% 
 
EARNINGS PER SHARE (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Jun. 29, 2014
Successor
Jun. 30, 2013
Successor
Jul. 28, 2014
Tribune Publishing
Subsequent Event
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
Common stock issued (shares)
 
 
 
 
25,042,263 
Net income attributable to Tribune Publishing stockholders
$ 15,203 
$ 21,926 
$ 26,975 
$ 43,119 
 
Weighted average number of common shares outstanding - basic and diluted (shares)
25,424,000 
25,424,000 
25,424,000 
25,424,000 
 
Net income per common share - basic and diluted (usd per share)
$ 0.60 
$ 0.86 
$ 1.06 
$ 1.70 
 
SUBSEQUENT EVENTS (Spin-off Transaction) (Details) (Subsequent Event, USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended
Jul. 28, 2014
Aug. 4, 2014
Tribune Publishing
 
 
Subsequent Event [Line Items]
 
 
Common stock issued (shares)
25,042,263 
 
Tribune Media Company
 
 
Subsequent Event [Line Items]
 
 
Payments of dividends
$ 275 
 
Tribune Media Company |
Common Stock
 
 
Subsequent Event [Line Items]
 
 
Outstanding shares distributed (percent)
 
98.50% 
Conversion ratio
0.25 
 
Percentage of outstanding shares retained (percent)
 
1.50% 
Tribune Media Company |
Tribune Publishing
 
 
Subsequent Event [Line Items]
 
 
Common stock outstanding (shares)
381,354 
 
SUBSEQUENT EVENTS (Senior Term Facility) (Details) (Subsequent Event, USD $)
0 Months Ended
Aug. 4, 2014
Aug. 4, 2014
Senior Term Facility
 
 
Subsequent Event [Line Items]
 
 
Principal amount
 
$ 350,000,000 
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
 
 
Subsequent Event [Line Items]
 
 
Variable interest rate basis (percent)
1.00% 
 
Borrowing margin on variable rate (percent)
4.75% 
 
Senior Term Facility |
Alternate Base Rate
 
 
Subsequent Event [Line Items]
 
 
Borrowing margin on variable rate (percent)
3.75% 
 
Senior Term Facility |
Option One
 
 
Subsequent Event [Line Items]
 
 
Mandatory prepayment, percent of annual excess cash flow (percent)
50.00% 
 
Senior Term Facility |
Option Two
 
 
Subsequent Event [Line Items]
 
 
Secured leverage ratio requirement
 
1.25 
Mandatory prepayment, percent of annual excess cash flow (percent)
25.00% 
 
Senior Term Facility |
Option Three
 
 
Subsequent Event [Line Items]
 
 
Secured leverage ratio requirement
 
0.75 
Mandatory prepayment, percent of annual excess cash flow (percent)
0.00% 
 
Senior ABL Facility
 
 
Subsequent Event [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 
19,300,000 
Letter of Credit
 
 
Subsequent Event [Line Items]
 
 
Principal amount
30,000,000 
30,000,000 
Maximum borrowing capacity
50,000,000 
50,000,000 
Amount outstanding
27,500,000 
27,500,000 
Letter of Credit
 
 
Subsequent Event [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
 
 
Subsequent Event [Line Items]
 
 
Borrowing margin on variable rate (percent)
0.50% 
 
Letter of Credit |
LIBOR
 
 
Subsequent Event [Line Items]
 
 
Borrowing margin on variable rate (percent)
1.50% 
 
Commitment fee (percent)
0.25%