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Debt | 12 Months Ended
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Sep. 29, 2013
Debt [Abstract] |
Debt Disclosure [Text Block] | DEBT As discussed more fully below (and certain capitalized terms used below defined), in January 2012, in conjunction with the effectiveness of the Plan, we refinanced all of our debt. The Plan refinanced our then-existing credit agreement and extended the April 2012 maturity in a structure of first and second lien debt with the existing lenders ("Lenders"). We also amended the Pulitzer Notes, and extended the April 2012 maturity with the existing Noteholders. In May 2013, we again refinanced the remaining balance of the Pulitzer Notes. 1 st Lien Agreement In January 2012, we entered into a credit agreement (the “1 st Lien Agreement”) with a syndicate of lenders (the “1 st Lien Lenders”). The 1 st Lien Agreement consists of a term loan of $689,510,000, and a new $40,000,000 revolving credit facility under which we have not drawn. The revolving credit facility also supports issuance of letters of credit. Interest Payments Debt under the 1 st Lien Agreement bears interest, at our option, at either a base rate or an adjusted Eurodollar rate (“LIBOR”), plus an applicable margin. The base rate for the facility is the greater of (a) the prime lending rate of Deutsche Bank Trust Company Americas at such time; (b) 0.5% in excess of the overnight federal funds rate at such time; or (c) 30 day LIBOR plus 1.0%. LIBOR loans are subject to a minimum rate of 1.25%. The applicable margin for term loan base rate loans is 5.25%, and 6.25% for LIBOR loans. The applicable margin for revolving credit facility base rate loans is 4.5%, and is 5.5% for LIBOR loans. At September 29, 2013, all borrowing under the 1 st Lien Agreement is based on LIBOR at a total rate of 7.5%. Principal Payments At September 29, 2013, the balance outstanding under the term loan is $609,500,000. We may voluntarily prepay principal amounts outstanding or reduce commitments under the 1 st Lien Agreement at any time, in whole or in part, without premium or penalty, upon proper notice and subject to certain limitations as to minimum amounts of prepayments. We are required to repay principal amounts, on a quarterly basis until maturity, under the 1st Lien Agreement. Principal payments are required quarterly beginning in June 2012, and total $12,750,000 in 2014, $13,500,000 in 2015 and $3,375,000 in 2016, prior to the final maturity. In addition to the scheduled payments, we are required to make mandatory prepayments under the 1 st Lien Agreement under certain other conditions, such as from the net proceeds from asset sales. The 1 st Lien Agreement also requires us to accelerate future payments in the amount of our quarterly excess cash flow, as defined. The acceleration of such payments due to future asset sales or excess cash flow does not change the due dates of other 1 st Lien Agreement payments prior to the December 2015 maturity. 2013 payments made under the 1 st Lien Agreement, are summarized as follows:
|  | 13 Weeks Ended |
(Thousands of Dollars) | December 30 2012 |  | March 31 2013 |  | June 30 2013 |  | September 29 2013 |
Mandatory | 2,500 |  | 2,500 |  | 3,000 |  | 3,000 |
Voluntary | 9,750 |  | 15,350 |  | 2,260 |  | 6,000 |
Asset sales | 7,750 |  | — |  | 240 |  | — |
Excess cash flow | — |  | — |  | — |  | — |
| 20,000 |  | 17,850 |  | 5,500 |  | 9,000 |
2012 payments made under the 1st Lien Agreement are summarized as follows:
|  | 13 Weeks Ended |  | 14 Weeks Ended |
(Thousands of Dollars) |  | March 25 2012 |  | June 24 2012 |  | September 30 2012 |
Mandatory |  | — |  | 2,500 |  | 2,500 |
Voluntary |  | 12,600 |  | 3,850 |  | 3,000 |
Asset sales |  | 2,410 |  | 150 |  | 650 |
Excess cash flow |  | — |  | — |  | — |
|  | 15,010 |  | 6,500 |  | 6,150 |
There were no net principal payments made in 2012 under the previous credit agreement. Security The 1 st Lien Agreement is fully and unconditionally guaranteed on a joint and several basis by all of our existing and future, direct and indirect subsidiaries in which we hold a direct or indirect interest of more than 50% (the “Credit Parties”); provided however, that our wholly-owned subsidiary Pulitzer Inc. (“Pulitzer”) and its subsidiaries are not Credit Parties. The 1 st Lien Agreement is secured by first priority security interests in the stock and other equity interests owned by the Credit Parties in their respective subsidiaries. The Credit Parties have also granted a first priority security interest on substantially all of their tangible and intangible assets, and granted mortgages covering certain real estate, as collateral for the payment and performance of their obligations under the 1 st Lien Agreement. Assets of Pulitzer and its subsidiaries, TNI and our ownership interest in, and assets of, MNI are excluded. The revolving credit facility has a super-priority security interest over all of the collateral securing the term loan under the 1 st Lien Agreement, superior to that of the term loan lenders. Covenants and Other Matters The 1 st Lien Agreement contains customary affirmative and negative covenants for financing of its type. These financial covenants include a maximum total leverage ratio, as defined. The total leverage ratio is designed to assess the leverage of the Company, excluding Pulitzer, and does not reflect our overall leverage position due to the lower leverage of Pulitzer. It is based primarily on the sum of the principal amount of debt under the 1 st Lien Agreement, plus debt under the 2 nd Lien Agreement, as discussed more fully below, which totals $784,500,000 at September 29, 2013, plus letters of credit and certain other factors, divided by a measure of trailing 12 month operating results, which includes distributions from MNI and other elements, but excludes the operating results of Pulitzer. Our actual total leverage ratio at September 29, 2013 under the 1 st Lien Agreement was 6.21:1. Our maximum total leverage ratio covenant will decrease, in stages, from 10.0:1 at September 29, 2013 to 9.1:1 in December 2015. On a consolidated basis, using the definitions in the 1 st Lien Agreement, our leverage ratio is 5.02:1 at September 29 2013. This consolidated measure is not the subject of a covenant in any of our debt agreements. The 1 st Lien Agreement also includes a minimum interest expense coverage ratio, as defined, which is based on the sum of interest expense, as defined, incurred under the 1 st Lien Agreement and 2 nd Lien Agreement, divided by the same measure of trailing 12 month operating results discussed above. The interest expense coverage ratio is similarly designed to assess the interest coverage of the Company, excluding Pulitzer, and does not reflect our overall interest coverage position. Our actual interest expense coverage ratio at September 29, 2013 was 1.71:1. Our minimum interest expense coverage ratio covenant is 1.08:1 at September 29, 2013. The 1 st Lien Agreement requires us to suspend stockholder dividends and share repurchases through December 2015. The 1 st Lien Agreement also limits capital expenditures to $20,000,000 per year, with a provision for carryover of unused amounts from the prior year. Further, the 1st Lien Agreement restricts our ability to make additional investments, acquisitions, dispositions and mergers without the consent of the 1 st Lien Lenders and limits our ability to incur additional debt. Such covenants require that substantially all of our future cash flows are required to be directed toward debt reduction or accumulation of cash collateral and that the cash flows of the Credit Parties are largely segregated from those of Pulitzer. 2 nd Lien Agreement In January 2012, we entered into a second lien term loan (the “2 nd Lien Agreement”) with a syndicate of lenders (the “2 nd Lien Lenders”). The 2 nd Lien Agreement consists of a term loan of $175,000,000. The 2 nd Lien Agreement bears interest at 15.0%, payable quarterly. Principal Payments and Redemption The 2 nd Lien Agreement requires no principal amortization, except in March 2017 if required for income tax purposes. From January 30, 2013 until January 30, 2014, the 2 nd Lien Agreement may be redeemed at 102% of the principal amount, at 101% thereafter until January 30, 2015 and at 100% thereafter until the April 2017 final maturity. Terms of the 1st Lien Agreement also restrict principal payments under the 2nd Lien Agreement. Security The 2 nd Lien Agreement is fully and unconditionally guaranteed on a joint and several basis by the Credit Parties and by Pulitzer and its subsidiaries, other than TNI (collectively, the "2 nd Lien Credit Parties"). The 2 nd Lien Agreement is secured by second priority security interests in the stock and other equity interests owned by the 2 nd Lien Credit Parties. The 2 nd Lien Credit Parties have also granted a second priority security interest on substantially all of their tangible and intangible assets, and granted second lien mortgages or deeds of trust covering certain real estate, as collateral for the payment and performance of their obligations under the 2 nd Lien Agreement. Assets of TNI and our ownership interest in, and assets of, MNI are excluded. However, assets of Pulitzer and its subsidiaries, excluding TNI, become subject to a first priority security interest of the 2 nd Lien Lenders upon repayment in full of the Pulitzer Notes and any successor debt. The 2 nd Lien Lenders were granted a second priority security interest in our ownership interest in TNI under the New Pulitzer Notes, as discussed more fully below. Covenants and Other Matters The 2 nd Lien Agreement has no affirmative financial covenants. Restrictions on capital expenditures, permitted investments, indebtedness and other provisions are similar to, but generally less restrictive than, those provisions under the 1st Lien Agreement. 2 nd Lien Lenders shared in the issuance of 6,743,640 shares of our Common Stock valued at $9,576,000 based on the closing stock price of $1.42 on the date of issuance, an amount equal to 13% of outstanding shares on a pro forma basis as of January 30, 2012. 2 nd Lien Lenders also received $8,750,000 in the form of non-cash fees, which were added to and included in the principal amount of the second lien term loan. Pulitzer Notes In conjunction with its formation in 2000, St. Louis Post-Dispatch LLC ("PD LLC") borrowed $306,000,000 (the “Pulitzer Notes”) from a group of institutional lenders (the “Noteholders”). The Pulitzer Notes were guaranteed by Pulitzer pursuant to a Guaranty Agreement with the Noteholders. The aggregate principal amount of the Pulitzer Notes was payable in April 2009. In February 2009, the Pulitzer Notes and the Guaranty Agreement were amended (the “Notes Amendment”). Under the Notes Amendment, PD LLC repaid $120,000,000 of the principal amount of the debt obligation. The remaining debt balance of $186,000,000 was refinanced by the Noteholders until April 2012. In January 2012, in connection with the Plan, we entered into an amended Note Agreement and Guaranty Agreement, which amended the Pulitzer Notes and extended the maturity with the Noteholders. After consideration of unscheduled principal payments totaling $15,145,000 ($10,145,000 in December 2011 and $5,000,000 in January 2012), offset by $3,500,000 of non-cash fees paid to the Noteholders in the form of additional Pulitzer Notes debt, the amended Pulitzer Notes had a balance of $126,355,000 in January 2012. The Pulitzer Notes carried an interest rate at 10.55%, which increased 0.75% to 11.3% in January 2013 and was to increase in January of each year thereafter. Due to the increasing interest rate, interest on the Pulitzer Notes was charged to expense using a calculated effective interest rate during the period. In May 2013, we refinanced the $94,000,000 remaining balance of the Pulitzer Notes (the “New Pulitzer Notes”) with BH Finance LLC ("Berkshire") a subsidiary of Berkshire Hathaway Inc. The New Pulitzer Notes bear interest at a fixed rate of 9.0%, payable quarterly. Pulitzer is a co-borrower under the the New Pulitzer Notes, which eliminates the former Guaranty Agreement made by Pulitzer under the Pulitzer Notes. Principal Payments At September 29, 2013, the balance of the New Pulitzer Notes is $63,000,000. We may voluntarily prepay principal amounts outstanding under the New Pulitzer Notes at any time, in whole or in part, without premium or penalty (except as noted below), upon proper notice, and subject to certain limitations as to minimum amounts of prepayments. The New Pulitzer Notes provide for mandatory scheduled prepayments totaling $6,400,000 annually, beginning in 2014. In addition to the scheduled payments, we are required to make mandatory prepayments under the New Pulitzer Notes under certain other conditions, such as from the net proceeds from asset sales. The New Pulitzer Notes also require us to accelerate future payments in the amount of our quarterly excess cash flow, as defined. The acceleration of such payments due to future asset sales or excess cash flow does not change the due dates of other New Pulitzer Notes payments prior to the final maturity in April 2017. The New Pulitzer Notes are subject to a 5% redemption premium if 100% of the remaining balance of the New Pulitzer Notes is again refinanced by lenders, the majority of which are not holders of the New Pulitzer Notes at the time of such refinancing. This redemption premium is not otherwise applicable to any of the types of payments noted above. 2013 payments made under the New Pulitzer Notes and Pulitzer Notes are summarized below.
|  | 13 Weeks Ended |
(Thousands of Dollars) | December 30 2012 |  | March 31 2013 |  | June 30 2013 |  | September 29 2013 |
Mandatory | 3,800 |  | 2,600 |  | — |  | — |
Voluntary | — |  | 1,500 |  | 14,000 |  | 17,000 |
Asset sales | 5,200 |  | 1,900 |  | — |  | — |
Excess cash flow | — |  | — |  | — |  | — |
| 9,000 |  | 6,000 |  | 14,000 |  | 17,000 |
2012 payments made under the Pulitzer Notes are summarized as follows:
|  | 13 Weeks Ended |  | 14 Weeks Ended |
(Thousands of Dollars) | December 25 2011 |  | March 25 2012 |  | June 24 2012 |  | September 30 2012 |
Prior to 2012 refinancing | 500 |  | — |  | — |  | — |
Pursuant to the Plan, net | 10,145 |  | 1,500 |  | — |  | — |
Mandatory | — |  | 1,400 |  | — |  | — |
Voluntary | — |  | 8,955 |  | 3,000 |  | 4,000 |
Asset sales | — |  | — |  | — |  | — |
Excess cash flow | — |  | — |  | — |  | — |
| 10,645 |  | 11,855 |  | 3,000 |  | 4,000 |
Security Obligations under the New Pulitzer Notes are fully and unconditionally guaranteed on a joint and several basis by Pulitzer's existing and future subsidiaries other than PD LLC and TNI. The New Pulitzer Notes are also secured by first priority security interests in the stock and other equity interests owned by Pulitzer's subsidiaries including the 50% ownership interest in TNI. Also, Pulitzer, certain of its subsidiaries and PD LLC granted a first priority security interest on substantially all of its tangible and intangible assets, excluding the assets of Star Publishing leased to, or used in the operations or business of, TNI and granted deeds of trust covering certain real estate in the St. Louis area, as collateral for the payment and performance of their obligations under the New Pulitzer Notes. Covenants and Other Matters The New Pulitzer Notes contain certain covenants and conditions including the maintenance, by Pulitzer, of minimum trailing 12 month EBITDA (minimum of $25,100,000 beginning September 29, 2013), as defined in the New Pulitzer Notes Agreement, and limitations on capital expenditures and the incurrence of other debt. Our actual trailing 12 month EBITDA at September 29, 2013 is $46,470,000. The determination of this amount is not the same as the comparable amount under the 1st Lien Agreement. Further, the New Pulitzer Notes have limitations or restrictions on distributions, loans, advances, investments, acquisitions, dispositions and mergers. Such covenants require that substantially all future cash flows of Pulitzer are required to be directed first toward repayment of the New Pulitzer Notes, interest due under the 2nd Lien Agreement, or accumulation of cash collateral and that cash flows of Pulitzer are largely segregated from those of the Credit Parties. Intercreditor Agreements The 1st Lien Agreement, 2 nd Lien Agreement and New Pulitzer Notes contain cross-default provisions tied to each of the various agreements. Intercreditor agreements and an intercompany subordination agreement are also in effect. Other Cash payments to the Lenders, Noteholders and legal and professional fees related to the Plan totaled $38,628,000, of which $6,273,000 was paid in 2011, and the remainder of which was paid in 2012. $720,000 of such costs were charged to expense in 2011. In addition, previously capitalized financing costs of $4,514,000 at September 25, 2011 were charged to expense in 2012 as debt financing costs prior to consummation of the Plan, with the remainder classified as reorganization costs in the Consolidated Statements of Operations and Comprehensive Income (Loss) upon consummation of the Plan. Debt under the Plan was considered compromised. As a result, the 1 st Lien Agreement, 2 nd Lien Agreement and Pulitzer Notes were recorded at their respective present values, which resulted in a discount to the stated principal amount totaling $23,709,000. We used the effective rates of the respective debt agreements to discount the debt to its present value. In determining the effective rates, we considered all cash outflows of the respective debt agreements including: mandatory principal payments, interest payments, fees paid to lenders in connection with the refinancing as well as, in the case of the 2 nd Lien Agreement, Common Stock issued. The present value is being amortized as a non-cash component of interest expense over the terms of the related debt. The refinancing of the Pulitzer Notes with the New Pulitzer Notes resulted in the acceleration of $1,565,000 of the present value adjustment discussed above, which was partially offset by eliminating deferred interest expense of $1,189,000, and the net amount of which was recognized in the 13 weeks ended June 30, 2013. Expenses related to the issuance of the New Pulitzer Notes are capitalized as debt issuance costs and will be amortized until April 2017. Amortization of the present value adjustment and other costs totaled $6,681,000 in 2013. Amortization of such costs is estimated to total $4,779,000 in 2014, $4,742,000 in 2015, $2,297,000 in 2016 and $1,125,000 in 2017. As a result of the Plan, we recognized $37,765,000 of reorganization costs in the 2012 Consolidated Statements of Operations and Comprehensive Income (Loss). The components of reorganization costs are summarized as follows:
(Thousands of Dollars) |  |
Fees paid in cash to lenders, attorneys and others |  | 38,628 |
Unamortized loan fees from previous debt agreements |  | 1,740 |
Fair value of stock granted to 2 nd Lien Lenders |  | 9,576 |
Noncash fees paid in the form of additional debt |  | 12,250 |
Present value adjustment |  | (23,709 | )
|  | 38,485 |
Charged to expense in 2012 |  | 37,765 |
Charged to expense in 2011 as other non-operating expense |  | 720 |
Debt is summarized as follows:
|  |  | Interest Rates (%)
(Thousands of Dollars) | September 29 2013 |  | September 30 2012 |  | September 29 2013
Revolving credit facility | — |  | — |  | 6.75
1 st Lien Agreement | 609,500 |  | 661,850 |  | 7.50
2 nd Lien Agreement | 175,000 |  | 175,000 |  | 15.00
New Pulitzer Notes | 63,000 |  | — |  | 9.00
Pulitzer Notes | — |  | 109,000 |  |
Unamortized present value adjustment | (12,942 | ) | (19,624 | ) |
| 834,558 |  | 926,226 |  |
Less current maturities of long-term debt | 19,150 |  | 17,400 |  |
Current amount of present value adjustment | (4,779 | ) | (5,418 | ) |
Total long-term debt | 820,187 |  | 914,244 |  |
At September 29, 2013, our weighted average cost of debt was 9.2%. Aggregate maturities of debt total $19,150,000 in 2014, $19,900,000 in 2015, $589,650,000 in 2016 and $218,800,000 in 2017. Liquidity At September 29, 2013, after consideration of letters of credit, we have approximately $29,942,000 available for future use under our revolving credit facility. Including cash, our liquidity at September 29, 2013 totals $47,504,000. This liquidity amount excludes any future cash flows. We expect all interest and principal payments due in the next twelve months will be satisfied by our continuing cash flows, which will allow us to maintain an adequate level of liquidity. At September 29, 2013, the principal amount of our outstanding debt totals $847,500,000, achieving the amount projected for September 2015 under the Plan two years early. Lower cash balances and asset sales have contributed to the improvement in debt repayment compared to the Plan. There are numerous potential consequences under the 1 st Lien Agreement, 2 nd Lien Agreement, and the New Pulitzer Notes, if an event of default, as defined, occurs and is not remedied. Many of those consequences are beyond our control. The occurrence of one or more events of default would give rise to the right of the 1 st Lien Lenders, 2 nd Lien Lenders and/or Berkshire, to exercise their remedies under the 1 st Lien Agreement, 2 nd Lien Agreement, and the New Pulitzer Notes, respectively, including, without limitation, the right to accelerate all outstanding debt and take actions authorized in such circumstances under applicable collateral security documents. Our ability to operate as a going concern is dependent on our ability to remain in compliance with debt covenants and to refinance or amend our debt agreements as they become due, or earlier if available liquidity is consumed. We are in compliance with our debt covenants at September 29, 2013.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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