Discontinued Operations

12 Months Ended

Dec. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

About Group

On September 24, 2012, we completed the sale of the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses, to IAC/InterActiveCorp. for $300.0 million in cash, plus a net working capital adjustment of approximately $17 million. The sale resulted in a pre-tax gain of $96.7 million ($61.9 million after-tax). The net after-tax proceeds from the sale were approximately $291 million.

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 as of December 25, 2011.

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. The sale resulted in an after-tax gain of $23.6 million (including post-closing adjustments recorded in the second and fourth quarters of 2012 totaling $6.6 million).

The results of operations 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 2012.

	Year Ended December 30, 2012
(In thousands)	About Group			Regional Media Group			Total
Revenues	$	74,970		$	6,115		$	81,085
Total operating costs	51,140			8,017			59,157
Impairment of goodwill	194,732			—			194,732
Pre-tax loss	(170,902		)	(1,902		)	(172,804		)
Income tax benefit	(60,065		)	(736		)	(60,801		)
Loss from discontinued operations, net of income taxes	(110,837		)	(1,166		)	(112,003		)
Gain/(loss) on sale, net of income taxes:
Gain/(loss) on sale	96,675			(5,441		)	91,234
Income tax expense/(benefit)(1)	34,785			(29,071		)	5,714
Gain on sale, net of income taxes	61,890			23,630			85,520
(Loss)/income from discontinued operations, net of income taxes	$	(48,947	)	$	22,464		$	(26,483	)

(1) The income tax benefit for the Regional Media Group included a tax deduction for goodwill, which was previously non-deductible, triggered upon the sale of the Regional Media Group.

Goodwill is not amortized but tested for impairment annually or in an interim period if certain circumstances indicate a possible impairment may exist. 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 non-cash charge in the second quarter of 2012 for the impairment of goodwill at the About Group. The impairment charge reduced the carrying value of goodwill to its fair value. See Note 10 for information regarding the fair value of goodwill and the related impairment charge.

The results of operations for the About Group and the Regional Media Group presented as discontinued operations are summarized below for 2011.

	Year Ended December 25, 2011
(In thousands)	About Group		Regional Media Group			Total
Revenues	$	110,826	$	259,945		$	370,771
Total operating costs	67,475		235,032			302,507
Impairment of assets	3,116		152,093			155,209
Pre-tax income/(loss)	40,235		(127,180		)	(86,945		)
Income tax expense/(benefit)(1)	15,453		(10,879		)	4,574
Income/(loss) from discontinued operations, net of income taxes	$	24,782	$	(116,301	)	$	(91,519	)

(1) The income tax benefit for the Regional Media Group was unfavorably impacted because a portion of the goodwill impairment charge was non-deductible.

Due to certain impairment indicators at the Regional Media Group, including lower-than-expected operating results, we performed an interim impairment test of goodwill as of June 26, 2011. The interim test resulted in an impairment of goodwill of $152.1 million mainly from lower projected long-term operating results and cash flows of the Regional Media Group, primarily due to the continued decline in print advertising revenues. These factors resulted in the carrying value of the net assets being greater than their fair value, and therefore a write-down to fair value was required. The impairment charge reduced the carrying value of goodwill at the Regional Media Group to $0. See Note 10 for information regarding the fair value of goodwill and the related impairment charge.

Our 2011 annual impairment test, which was completed in the fourth quarter, resulted in a non-cash impairment charge of $3.1 million relating to the write-down of an intangible asset at ConsumerSearch, Inc., which was part of the About Group. The impairment was driven by lower cost-per-click advertising revenues. The impairment charge reduced the carrying value of the ConsumerSearch trade name to its fair value of approximately $3 million. See Note 10 for information regarding the fair value of the ConsumerSearch trade name and the related impairment charge.

The results of operations for the About Group and the Regional Media Group presented as discontinued operations are summarized below for 2010.

	Year Ended December 26, 2010
(In thousands)	About Group		Regional Media Group		WQXR-FM(1)		Total
Revenues	$	136,077	$	276,659	$	—	$	412,736
Total operating costs	74,570		249,354		—		323,924
Pre-tax income	61,507		27,305		—		88,812
Income tax expense	24,416		10,783		—		35,199
Income from discontinued operations, net of income taxes	37,091		16,522		—		53,613
Gain on sale, net of income taxes:
Gain on sale	—		—		16		16
Income tax expense	—		—		3		3
Gain on sale, net of income taxes	—		—		13		13
Income from discontinued operations, net of income taxes	$	37,091	$	16,522	$	13	$	53,626

(1) In October 2009, we completed the sale of WQXR-FM, a New York City classical radio station. In 2010, we recorded post-closing adjustments to the gain on the sale of WQXR-FM.

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

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

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