Goodwill and other Intangible Assets

9 Months Ended

Jun. 26, 2011

Goodwill And Other Intangible Assets [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill in the 39 weeks ended June 26, 2011 are as follows:



	(Thousands of Dollars)	June 26 2011

	Goodwill, gross amount	1,536,000
	Less accumulated impairment losses	1,102,448
	Goodwill, beginning of period	433,552
	Less current period impairment	174,125
	Goodwill, end of period	259,427

Identified intangible assets consist of the following:



(Thousands of Dollars)	June 26 2011	September 26 2010

Nonamortized intangible assets:
Mastheads	31,554	44,754
Amortizable intangible assets:
Customer and newspaper subscriber lists	885,713	885,713
Less accumulated amortization	405,858	372,337
	479,855	513,376
Noncompete and consulting agreements	28,658	28,658
Less accumulated amortization	28,658	28,648
	—	10
	511,409	558,140

In assessing the recoverability of goodwill and other nonamortized intangible assets, we make a determination of the fair value of our business. Fair value is determined using a combination of an income approach, which estimates fair value based upon future revenue, expenses and cash flows discounted to their present value, and a market approach, which estimates fair value using market multiples of various financial measures compared to a set of comparable public companies in the publishing industry. A non-cash impairment charge will generally be recognized when the carrying amount of the net assets of the business exceeds its estimated fair value.

The required valuation methodology and underlying financial information that are used to determine fair value require significant judgments to be made by us. These judgments include, but are not limited to, long term projections of future financial performance and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly different results.

We analyze goodwill and other nonamortized intangible assets for impairment on an annual basis, or more frequently if impairment indicators are present. Such indicators of impairment include, but are not limited to, changes in business climate and operating or cash flow losses related to such assets.

We review our amortizable intangible assets for impairment when indicators of impairment are present. We assess recoverability of these assets by comparing the estimated undiscounted cash flows associated with the asset or asset group with their carrying amount. The impairment amount, if any, is calculated based on the excess of the carrying amount over the fair value of those assets.

Due primarily to the difference between our stock price and the per share carrying value of our net assets, we analyzed the carrying value of our net assets as of June 26, 2011. Continued deterioration in our revenue and the weak economic environment were also factors in the timing of the analysis. We concluded the fair value of our business did not exceed the carrying value of our net assets as of June 26, 2011.

As a result, we recorded estimated pretax, non-cash charges to reduce the carrying value of goodwill and nonamortized intangible assets by $174,125,000 and $13,200,000, respectively, in the 13 weeks ended June 26, 2011. Additional pretax, non-cash charges of $12,000,000 were recorded to reduce the carrying value of TNI. We recorded $37,524,000 of income tax benefits related to these charges.

We have determined that an impairment of our customer and newspaper subscriber lists is probable. However, because of the timing of the determination of impairment and complexity of the calculations required, we have not completed the required determination of fair value of amortizable and nonamortized intangible assets and real property. Accordingly, we are not able to estimate the impairment loss related to these asset groups and we have recorded an estimated impairment loss as a reduction of goodwill, nonamortized intangible assets and our investment in TNI as of June 26, 2011. The final determination of reductions in the amounts of goodwill and other assets included in the June 26, 2011 Consolidated Balance Sheet, including any additional impairment losses and the related tax impact, could change significantly. Such changes would not impact our cash flows. Definitive amounts will be included in our Annual Report on Form 10-K for the year ending September 25, 2011.

We also periodically evaluate our determination of the useful lives of amortizable intangible assets. Any resulting changes in the useful lives of such intangible assets will not impact our cash flows. However, a decrease in the useful lives of such intangible assets would increase future amortization expense and decrease future reported operating results and earnings per common share. We tested such assets for impairment as of June 26, 2011, as noted above, but have not yet concluded whether adjustments to the useful lives of such assets are required.

Subject to the final determination of impairment charges, annual amortization of intangible assets for the 52 week period ending June 2012, 53 week period ending June 2013 and for each of the 52 week periods ending June 2014, June 2015 and June 2016 is estimated to be $43,797,000, $39,347,000, $39,023,000, $38,827,000 and $37,697,000, respectively.

- 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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