Intangible Assets And Impairment

12 Months Ended

Dec. 25, 2011

Intangible Assets And Impairment [Abstract]

Note 2: Intangible Assets and Impairment

For impairment tests, the Company compares the carrying value of the reporting unit or asset tested to its estimated fair value. The estimated fair value is determined using a combination of the income approach and the market approach. The income approach utilizes the estimated discounted cash flows expected to be generated by the assets. The market approach employs comparable company information, and where available, recent transaction information for similar assets. The determination of fair value requires the use of significant judgment and estimates about assumptions that management believes are appropriate in the circumstances although it is reasonably possible that actual performance will differ from these assumptions. These assumptions include those relating to revenue growth, compensation levels, newsprint prices, capital expenditures, discount rates and market trading multiples for broadcast and newspaper assets.

The Company performs its annual impairment test on the first day of the fourth quarter each year. Additionally, it performs interim impairment tests whenever there are indicators of impairment during the year. As noted above, the Company early adopted ASU 2011-08 and applied the guidance when it conducted its annual impairment testing as of the first day of the fourth quarter. As a result, impairment testing for three reporting units, principally broadcast reporting units, was not required. All other reporting units were tested on an interim basis in August 2011 and/or annually in September 2011 as described below.

In 2011, the effects of the weakening economic recovery on certain of the Company's geographic markets, combined with the stock market's perception of the value of media company stocks, including Media General's, led the Company to perform an interim goodwill impairment test during the third quarter of 2011. It resulted in a non-cash pretax goodwill impairment charge of $26.6 million related to one reporting unit comprised of certain print properties in the Virginia/Tennessee Market. While these print properties are profitable, certain regulatory changes and the overall economy had challenged their ability to achieve historically strong levels of cash flow. Later in 2011, DealTaker.com (a reporting unit) failed its annual impairment test, resulting in a pretax impairment charge totaling $6 million. This non-cash impairment charge was comprised of $3.7 million related to goodwill and $2.3 million related to other intangibles. Similar to many other e-commerce businesses, DealTaker.com has suffered the adverse effects of a significant change in the way Internet search results are delivered by Google.

During 2009, it became clear that the anticipated economic recovery would be delayed, leading the Company to perform a second-quarter interim impairment test, with no impairment indicated. Several developments in the third quarter of 2009 had relevance for purposes of impairment testing. First, at the beginning of the quarter the Company changed its structure from one organized by division (media platform) to one organized primarily by geographic market. At the same time, the Company reallocated goodwill in accordance with its revised market structure. Second, the market's perception of the value of media stocks rose considerably, which contributed to an increase of approximately $50 million in the estimated fair value of all of the Company's reporting units in total. Third, there were signs of the economy bottoming out. However, continued lackluster consumer spending in the quarter resulted in further advertising revenue erosion, and the Company's expectation regarding a recovery in advertising spending was delayed. These factors, together with the more granular testing required by accounting standards as a result of the Company's new reporting structure, resulted in a third-quarter impairment test in 2009. As a result, the Company recorded non-cash impairment charges related to goodwill totaling approximately $66 million and FCC licenses, network affiliation and other intangibles of approximately $18 million. All previously discussed impairment charges were recorded on the "Goodwill and other asset impairment" line on the Consolidated Statements of Operations and their associated tax benefits are subject to limitations as discussed more fully in Note 3.

The Company has recorded pretax cumulative impairment losses related to goodwill approximating $715 million through December 25, 2011. The following table shows the gross carrying amount and accumulated amortization for intangible assets as of December 25, 2011 and December 26, 2010:


	December 26, 2010				Change					December 25, 2011
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Amortization Expense		Impairment charge			Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets (including network affiliation, advertiser, programming and subscriber relationships):
Virginia/Tennessee	$	55,326	$	43,088	$	711	$	—		$	55,326	$	43,799
Florida		1,055		1,055		—		—			1,055		1,055
Mid-South		84,048		66,057		4,287		—			84,048		70,344
North Carolina		11,931		10,316		147		—			11,931		10,463
Ohio/Rhode Island		9,157		5,222		358		—			9,157		5,580
Advert. Serv. & Other		6,614		3,847		427		(1,462	)		5,152		4,274

Total	$	168,131	$	129,585	$	5,930	$	(1,462	)	$	166,669	$	135,515


Indefinite-lived intangible assets:
Goodwill:
Virginia/Tennessee	$	96,725					$	(26,617	)	$	70,108
Florida		43,123						—			43,123
Mid-South		118,153						—			118,153
North Carolina		20,896						—			20,896
Ohio/Rhode Island		61,408						—			61,408
Advert. Serv. & Other		14,712						(3,712	)		11,000

Total goodwill		355,017						(30,329	)		324,688
FCC licenses
Virginia/Tennessee		20,000						—			20,000
Mid-South		93,694						—			93,694
North Carolina		24,000						—			24,000
Ohio/Rhode Island		36,004						—			36,004

Total FCC licenses		173,698						—			173,698
Other		2,172						(854	)		1,318

Total	$	530,887					$	(31,183	)	$	499,704

The fair value measurements determined for purposes of performing the Company's impairment tests are considered to be Level 3 under the fair value hierarchy because they required significant unobservable inputs to be developed using estimates and assumptions determined by the Company and reflecting those that a market participant would use. As a result of the 2011 impairment tests described above, goodwill was written down to an implied fair value of approximately $35 million for the reporting unit within the Virginia/Tennessee market and approximately $9 million for DealTaker.com as of the dates of the applicable impairment tests. In addition, other intangibles at DealTaker.com were written down to their fair value of approximately $1 million as of the date of the impairment test.

Intangibles amortization expense is projected to be approximately $3 million in 2012, decreasing to $2 million in each of the years 2013 through 2016.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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