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Fair value measurement | 12 Months Ended
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Dec. 29, 2013
Fair Value Disclosures [Abstract] |
Fair value measurement | Fair value measurement The company measures and records in the accompanying consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820, “Fair Value Measurement,” establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the company’s own assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 – Quoted market prices in active markets for identical assets or liabilities; Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 – Unobservable inputs developed using estimates and assumptions developed by the company, which reflect those that a market participant would use. The financial instruments measured at fair value in the accompanying consolidated balance sheets consist of the following:
Company Owned Assets
In thousands of dollars
Fair value measurement as of Dec. 29, 2013
| Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |
Employee compensation related investments | $ | 28,117 |  | $ | — |  | $ | — |  | $ | 28,117 |
Sundry investments | 34,227 |  | — |  | — |  | 34,227 |
Total Assets | $ | 62,344 |  | $ | — |  | $ | — |  | $ | 62,344 |
Liabilities: |  |  |  |
Contingent consideration payable | $ | — |  | $ | — |  | $ | 32,267 |  | $ | 32,267 |
Total Liabilities | $ | — |  | $ | — |  | $ | 32,267 |  | $ | 32,267 |
In thousands of dollars
Fair value measurement as of Dec. 30, 2012
| Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |
Employee compensation related investments | $ | 23,043 |  | $ | — |  | $ | — |  | $ | 23,043 |
Sundry investments | 29,090 |  | — |  | — |  | 29,090 |
Total Assets | $ | 52,133 |  | $ | — |  | $ | — |  | $ | 52,133 |
Liabilities: |  |  |  |
Contingent consideration payable | $ | — |  | $ | — |  | $ | 26,170 |  | $ | 26,170 |
Total Liabilities | $ | — |  | $ | — |  | $ | 26,170 |  | $ | 26,170 |
Under certain acquisition agreements, the company has agreed to pay the sellers earn-outs based on the financial performance of the acquired businesses. Contingent consideration payable in the table above represents the estimated fair value of future earn-outs payable under such agreements. The fair value of the contingent payments was measured based on the present value of the consideration expected to be transferred. The discount rate is a significant unobservable input in such present value computations. Discount rates ranged between 10% and 30% depending on the risk associated with the cash flows. For the year ended Dec. 29, 2013, the contingent consideration was increased by $12.9 million as a result of new acquisitions and adjustments to fair value. The increase was partially offset by payments of $6.8 million. The following tables set forth by level within the fair value hierarchy the fair values of the company’s pension plans assets:
Pension Plan Assets/Liabilities
In thousands of dollars
Fair value measurement as of Dec. 29, 2013(a)
| Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |
Fixed income |  |  |  |
U.S. government-related securities | $ | — |  | $ | 3,313 |  | $ | — |  | $ | 3,313 |
Mortgage backed securities | — |  | 3,975 |  | — |  | 3,975 |
Other government bonds | — |  | 72,748 |  | — |  | 72,748 |
Corporate bonds | — |  | 29,834 |  | 1,253 |  | 31,087 |
Corporate stock | 892,883 |  | 158,667 |  | — |  | 1,051,550 |
Real estate | — |  | — |  | 98,909 |  | 98,909 |
Interest in common/collective trusts |  |  |  |
Equities | — |  | 750,006 |  | — |  | 750,006 |
Fixed income | — |  | 145,897 |  | — |  | 145,897 |
Interest in reg. invest. companies | 281,029 |  | 42,610 |  | — |  | 323,639 |
Interest in 103-12 investments | — |  | 28,691 |  | — |  | 28,691 |
Partnership/joint venture interests | — |  | 36,402 |  | 148,550 |  | 184,952 |
Hedge funds | — |  | 22,685 |  | 249,991 |  | 272,676 |
Derivative contracts | 22 |  | 10,956 |  | 163 |  | 11,141 |
Total | $ | 1,173,934 |  | $ | 1,305,784 |  | $ | 498,866 |  | $ | 2,978,584 |
Liabilities: |  |  |  |
Derivative liabilities | $ | (8 | ) | $ | (9,486 | ) | $ | (2,008 | ) | $ | (11,502 | )
Total | $ | (8 | ) | $ | (9,486 | ) | $ | (2,008 | ) | $ | (11,502 | )
Cash and other | 60,271 |  | 1,114 |  | — |  | 61,385 |
Total net fair value of plan assets | $ | 1,234,197 |  | $ | 1,297,412 |  | $ | 496,858 |  | $ | 3,028,467 |
(a) | The company uses a Dec. 31 measurement date for its retirement plans.
In thousands of dollars
Fair value measurement as of Dec. 30, 2012(a)
| Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |
Fixed income |  |  |  |
U.S. government-related securities | $ | — |  | $ | 100,140 |  | $ | — |  | $ | 100,140 |
Mortgage backed securities | — |  | 71,641 |  | — |  | 71,641 |
Other government bonds | — |  | 30,317 |  | — |  | 30,317 |
Corporate bonds | — |  | 136,640 |  | 797 |  | 137,437 |
Corporate stock | 722,619 |  | 818 |  | — |  | 723,437 |
Real estate | — |  | — |  | 97,385 |  | 97,385 |
Interest in common/collective trusts |  |  |  |
Equities | — |  | 604,003 |  | — |  | 604,003 |
Fixed income | — |  | 193,620 |  | — |  | 193,620 |
Interest in reg. invest. companies | 104,196 |  | 24,222 |  | — |  | 128,418 |
Interest in 103-12 investments | — |  | 84,956 |  | — |  | 84,956 |
Partnership/joint venture interests | — |  | — |  | 130,995 |  | 130,995 |
Hedge funds | — |  | 77,520 |  | 158,924 |  | 236,444 |
Derivative contracts | 33 |  | 54,924 |  | 500 |  | 55,457 |
Total | $ | 826,848 |  | $ | 1,378,801 |  | $ | 388,601 |  | $ | 2,594,250 |
Liabilities: |  |  |  |
Derivative liabilities | $ | (21 | ) | $ | (56,339 | ) | $ | (2,008 | ) | $ | (58,368 | )
Liability to purchase U.S. government and other securities | — |  | (26,882 | ) | — |  | (26,882 | )
Total | $ | (21 | ) | $ | (83,221 | ) | $ | (2,008 | ) | $ | (85,250 | )
Cash and other | 36,295 |  | 7,021 |  | — |  | 43,316 |
Total net fair value of plan assets | $ | 863,122 |  | $ | 1,302,601 |  | $ | 386,593 |  | $ | 2,552,316 |
(a) | The company uses a Dec. 31 measurement date for its retirement plans.
Items included in “Cash and other” in the table above primarily consist of amounts categorized as cash and cash equivalents and pending purchases and sales of securities. Valuation methodologies used for assets and liabilities measured at fair value are as follows: U.S. government-related securities are treasury bonds, bills and notes that are primarily obligations to the U.S. Treasury. Values are obtained from industry vendors who use various pricing models or quotes for identical or similar securities. Mortgage-backed securities are typically not actively quoted. Values are obtained from industry vendors who use various pricing models or use quotes for identical or similar securities. Other government and corporate bonds are mainly valued based on institutional bid evaluations using proprietary models, using discounted cash flow models or models that derive prices based on similar securities. Corporate bonds categorized in Level 3 are primarily from distressed issuers for whom the values represent an estimate of recovery in a potential or actual bankruptcy situation. Corporate stock classified as level 1 is valued primarily at the closing price reported on the active market on which the individual securities are traded. The investments in level 2 are primarily commingled funds recorded at fair value as determined by the sponsor of the respective funds based upon closing market quotes of the underlying assets. Investments in direct real estate have been valued by an independent qualified valuer in the U.K. using a valuation approach that capitalizes any current or future income streams at an appropriate multiplier. Investments in real estate funds are mainly valued utilizing the net asset valuations provided by the underlying private investment companies. Interest in common/collective trusts and interest in 103-12 investments are valued using the net asset value as provided monthly by the fund family or fund company. Shares in the common/collective trusts are generally redeemable upon request. Three of these investments in collective trusts are fixed income funds which use individual subfunds to efficiently add a representative sample of securities in individual market sectors to the portfolio. Two funds in the collective trust fund are equity funds which use individual subfunds to efficiently add a representative sample of securities in individual market sectors to the portfolio. These funds are generally redeemable with a short-term written or verbal notice. Also included is a fund that invests in a select portfolio of large cap domestic stocks perceived to have superior growth characteristics. Shares in this fund are generally redeemable on any business day, upon two-day notice. There are no unfunded commitments related to these types of funds. Interest in registered investment companies is valued using the published net asset values as quoted through publicly available pricing sources. The investments in Level 2 are proprietary funds of the individual fund managers and are not publicly quoted. Investments in partnerships and joint venture interests classified in level 3 are valued based on an assessment of each underlying investment, considering items such as expected cash flows, changes in market outlook and subsequent rounds of financing. These investments are included in Level 3 of the fair value hierarchy because exit prices tend to be unobservable and reliance is placed on the above methods. Most of the partnerships are general leveraged buyout funds, others include a venture capital fund, a fund formed to invest in special credit opportunities, an infrastructure fund and a real estate fund. Interest in partnership investments cannot be redeemed. Instead, distributions are received as the underlying assets of the funds are liquidated. It is estimated that the underlying assets of the funds will be liquidated within approximately the next 9 to 11 years. There are future funding commitments of $27.7 million as of Dec. 29, 2013 and $39.8 million as of Dec. 30, 2012. Investments in partnerships and joint venture interests classified as level 2 represents a limited partnership commingled fund valued using the net asset value as reported by the fund manager. Investments in hedge funds are valued at the net asset value as reported by the fund managers. Within this category is a fund of hedge funds whose objective is to produce a return that is uncorrelated with market movements. Other funds categorized as hedge funds were formed to invest in mortgage and credit trading opportunities. Shares in the hedge funds are generally redeemable twice a year or on the last business day of each quarter with at least 60 days written notice subject to potential 5% holdback. There are no unfunded commitments related to the hedge funds. Derivatives primarily consist of forward and swap contracts. Forward contracts are valued at the spot rate, plus or minus forward points between the valuation date and maturity date. Swaps are valued at the mid-evaluation price using discounted cash flow models. Items in Level 3 are valued based on the market values of other securities for which they represent a synthetic combination. Liability to purchase U.S. government and other securities relates to buying and selling contracts in federal agency securities that have not yet been opened up for public trading. In these instances the investment manager has sold the securities prior to owning them, resulting in a negative asset position. These securities are valued in the same manner as those noted above in U.S. government-related securities. The company reviews appraised valued, audited financial statements and additional information to evaluate fair value estimates from its investment managers or fund administrator. The tables below set forth a summary of changes in the fair value of the company’s pension plan assets and liabilities, categorized as Level 3, for the fiscal year ended Dec. 29, 2013 and Dec. 30, 2012:
Pension Plan Assets/Liabilities |  |  |  |  |  |
In thousands of dollars |  |  |  |  |  |
For the year ended Dec. 29, 2013 |  |  |  |  |  |
|  | Actual Return on Plan Assets |  |  |
| Balance at beginning of year | Relating to assets still held at report date | Relating to assets sold during the period | Purchases, sales, and settlements | Transfers in and/or out of Level 3(1) | Balance at end of year
Assets: |  |  |  |  |  |
Fixed income |  |  |  |  |  |
Corporate bonds | $ | 797 |  | $ | 199 |  | $ | (7 | ) | $ | 264 |  | $ | — |  | $ | 1,253 |
Real estate | 97,385 |  | 1,865 |  | — |  | (341 | ) | — |  | 98,909 |
Partnership/joint venture interests | 130,995 |  | 11,972 |  | 13,327 |  | (9,576 | ) | 1,832 |  | 148,550 |
Hedge funds | 158,924 |  | 17,613 |  | 803 |  | 74,483 |  | (1,832 | ) | 249,991 |
Derivative contracts | 500 |  | (376 | ) | — |  | 39 |  | — |  | 163 |
Total | $ | 388,601 |  | $ | 31,273 |  | $ | 14,123 |  | $ | 64,869 |  | $ | — |  | $ | 498,866 |
Liabilities: |  |  |  |  |  |
Derivative liabilities | $ | (2,008 | ) | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | (2,008 | )
(1) | The company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
Pension Plan Assets/Liabilities (continued) |  |  |  |  |
In thousands of dollars |  |  |  |  |  |
For the year ended Dec. 30, 2012 |  |  |  |  |  |
|  | Actual Return on Plan Assets |  |  |
| Balance at beginning of year | Relating to assets still held at report date | Relating to assets sold during the period | Purchases, sales, and settlements | Transfers in and/or out of Level 3(1) | Balance at end of year
Assets: |  |  |  |  |  |
Fixed income |  |  |  |  |  |
Mortgage-backed securities | $ | 1,271 |  | $ | — |  | $ | — |  | $ | — |  | $ | (1,271 | ) | $ | — |
Other government bonds | 1,441 |  | — |  | — |  | — |  | (1,441 | ) | — |
Corporate bonds | 2,070 |  | 83 |  | (589 | ) | — |  | (767 | ) | 797 |
Real estate | 93,620 |  | (4,788 | ) | — |  | 8,553 |  | — |  | 97,385 |
Partnership/joint venture interests | 128,121 |  | (1,817 | ) | (20,781 | ) | 25,472 |  | — |  | 130,995 |
Hedge funds | 156,016 |  | 9,590 |  | (8,271 | ) | 1,589 |  | — |  | 158,924 |
Derivative contracts | 235 |  | 265 |  | — |  | — |  | — |  | 500 |
Total | $ | 382,774 |  | $ | 3,333 |  | $ | (29,641 | ) | $ | 35,614 |  | $ | (3,479 | ) | $ | 388,601 |
Liabilities: |  |  |  |  |  |
Derivative liabilities | $ | (2,517 | ) | $ | 16 |  | $ | (4 | ) | $ | — |  | $ | 497 |  | $ | (2,008 | )
(1) | The company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
The fair value of the company’s total long-term debt, determined based on the bid and ask quotes for the related debt (Level 2), totaled $3.93 billion and $1.62 billion at Dec. 29, 2013 and Dec. 30, 2012, respectively. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). The following tables summarize the non-financial assets measured at fair value on nonrecurring basis in the accompanying consolidated balance sheet as of Dec. 29, 2013 and Dec. 30, 2012:
Non-Financial Assets
In thousands of dollars
Fair value measurement as of Dec. 29, 2013
| Level 1 | Level 2 | Level 3 | Total
Asset held for sale - Quarter 4 | $ | — |  | $ | — |  | $ | 395,851 |  | $ | 395,851 |
Goodwill - Quarter 4 | $ | — |  | $ | — |  | $ | 21,790 |  | $ | 21,790 |
Non-Financial Assets
In thousands of dollars
Fair value measurement as of Dec. 30, 2012
| Level 1 | Level 2 | Level 3 | Total
Asset held for sale - Quarter 4 | $ | — |  | $ | — |  | $ | 17,508 |  | $ | 17,508 |
Goodwill - Quarter 4 | $ | — |  | $ | — |  | $ | 29,610 |  | $ | 29,610 |
The quantitative test of goodwill during 2013 for both impaired assets was based on a valuation that considered discounted cash flows and market-based information. Significant unobservable inputs in the discounted cash flows method included the ending year growth rate of 3% and the discount rate applied to the cash flows of 16.0% for the impaired asset in the company’s Digital Segment. For the impaired asset in the company’s Publishing Segment, the ending year growth rate of 3% and discount rate of 20.5% were significant unobservable inputs in the discount cash flow method. If the growth rate and discount rate were to change by 1%, the combined impact to the valuations would have been approximately $1.4 million and $2.7 million, respectively. The quantitative test of goodwill during 2012 was based on a valuation that considered discounted cash flows and market-based information. Significant unobservable inputs in the discounted cash flows method included the ending year growth rate of 2% and the discount rate applied to the cash flows of 15.5%. If the growth rate and discount rate were to change by 1%, the impact to the valuation would have been approximately $2.3 million and $3.5 million, respectively.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
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