Discontinued Operations

9 Months Ended

Sep. 23, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

About Group

On August 26, 2012, we announced our plan to sell the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses, to IAC/InterActiveCorp. The results of operations of the About Group, which had previously been presented as a reportable segment, have been classified as discontinued operations for all periods presented and certain assets are classified as held for sale for all periods presented.

On September 24, 2012, we completed the sale of the About Group. See Note 16 for additional information regarding this sale.

Regional Media Group

On January 6, 2012, we completed the sale of the Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses, to Halifax Media Holdings LLC for approximately $140 million in cash. The net after-tax proceeds from the sale, including a tax benefit, were approximately $150 million, which we are using for general corporate purposes. The sale resulted in an after-tax gain of $25.7 million (including post-closing adjustments recorded in the second quarter of 2012 totaling $4.5 million).

The results for the Regional Media Group, which had previously been included in the News Media Group reportable segment, have been classified as discontinued operations for all periods presented and certain assets and liabilities are classified as held for sale as of December 25, 2011.

The results of operations for the About Group and the Regional Media Group presented as discontinued operations are summarized below.

	For the Quarters Ended
	September 23, 2012						September 25, 2011
(In thousands)	About Group		Regional Media Group		Total		About Group		Regional Media Group			Total
Revenues	$	25,616	$	—	$	25,616	$	25,724	$	59,942		$	85,666
Total operating costs	16,687		—		16,687		16,302		57,368			73,670
Pre-tax income	8,929		—		8,929		9,422		2,574			11,996
Income tax expense/(benefit)	2,903		—		2,903		3,619		(697		)	2,922
Income from discontinued operations, net of income taxes	$	6,026	$	—	$	6,026	$	5,803	$	3,271		$	9,074

	For the Nine Months Ended
	September 23, 2012									September 25, 2011
(In thousands)	About Group			Regional Media Group			Total			About Group		Regional Media Group			Total
Revenues	$	74,970		$	6,115		$	81,085		$	84,710	$	190,496		$	275,206
Total operating costs	51,140			8,017			59,157			49,666		176,243			225,909
Impairment of goodwill	194,732			—			194,732			—		152,093			152,093
Pre-tax (loss)/income	(170,902		)	(1,902		)	(172,804		)	35,044		(137,840		)	(102,796		)
Income tax (benefit)/expense(1)	(60,065		)	(736		)	(60,801		)	13,459		(16,815		)	(3,356		)
(Loss)/income from discontinued operations, net of income taxes	(110,837		)	(1,166		)	(112,003		)	21,585		(121,025		)	(99,440		)
(Loss)/gain on sale, net of income taxes:
Loss on sale	—			(4,717		)	(4,717		)	—		—			—
Income tax benefit(2)	—			(30,448		)	(30,448		)	—		—			—
Gain on sale, net of income taxes	—			25,731			25,731			—		—			—
(Loss)/income from discontinued operations, net of income taxes	$	(110,837	)	$	24,565		$	(86,272	)	$	21,585	$	(121,025	)	$	(99,440	)

(1) The income tax benefit in the first nine months of 2011 was unfavorably impacted because a portion of the charge for the impairment of the Regional Media Group’s goodwill was non-deductible.

(2) The income tax benefit for the first nine months of 2012 includes a tax deduction for goodwill, which was previously non-deductible, triggered upon the sale of the Regional Media Group.

Our policy is to perform our annual goodwill impairment test in the fourth quarter of our fiscal year. However, due to certain impairment indicators at the About Group, we performed an interim impairment test as of June 24, 2012. The interim impairment test resulted in a $194.7 million estimated non-cash charge in the second quarter of 2012 for the impairment of goodwill at the About Group. Our expectations for future operating results and cash flows at the About Group in the long-term were lower than our previous estimates driven by a reassessment of the sustainability of our estimated long-term growth rate for display advertising. The reduction in our estimated long-term growth rate resulted in the carrying value of the net assets being greater than their fair value, and therefore a write-down of goodwill to its fair value was required. The fair value of the About Group’s goodwill was the residual fair value after allocating the total fair value of the About Group to its other assets, net of liabilities. See Note 8 for information regarding the fair value of goodwill.

The assets and liabilities classified as held for sale for the About Group and the Regional Media Group are summarized below.

	September 23, 2012						December 25, 2011
(In thousands)	About Group		Regional Media Group		Total		About Group		Regional Media Group		Total
Accounts receivable, net	$	19,179	$	—	$	19,179	$	14,369	$	26,550	$	40,919
Property, plant and equipment, net	5,340		—		5,340		1,763		146,287		148,050
Goodwill	172,544		—		172,544		367,276		—		367,276
Other intangible assets acquired	13,616		—		13,616		17,210		330		17,540
Other assets	13,208		—		13,208		11,203		5,014		16,217
Total assets held for sale	223,887		—		223,887		411,821		178,181		590,002
Total liabilities(1)	—		—		—		—		19,568		19,568
Net assets	$	223,887	$	—	$	223,887	$	411,821	$	158,613	$	570,434

(1) Included in “Accrued expenses” in our Condensed Consolidated Balance Sheet as of December 25, 2011.