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Debt | 3 Months Ended
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Dec. 30, 2012
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. We also amended the Pulitzer Notes, and extended the April 2012 maturity with the existing Noteholders. 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 December 30, 2012, all borrowing under the 1 st Lien Agreement is based on LIBOR at a total rate of 7.5%. Principal Payments At December 30, 2012, the balance outstanding under the term loan is $641,850,000. 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 $11,000,000 in 2013, $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, and required to be made for the remainder of the year, are summarized as follows:
|  | 13 Weeks Ended |  | 13 Weeks Ending |
| (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 |  | — |  | — |  | — |
| Asset sales | 7,750 |  | — |  | — |  | — |
| Excess cash flow | — |  | — |  | — |  | — |
|  | 20,000 |  | 2,500 |  | 3,000 |  | 3,000 |
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, our ownership interest in, and assets of, MNI and certain employee benefit plan assets 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 $816,850,000 at December 30, 2012, 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 December 30, 2012 under the 1 st Lien Agreement was 6.6:1 Our maximum total leverage ratio covenant will decrease, in stages, from 10.0:1 at December 30, 2012 to 9.1:1 in December 2015. On a consolidated basis, using the definitions in the 1 st Lien Agreement, our leverage ratio is 5.7:1 at December 30, 2012. 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 December 30, 2012 was 1.67:1. Our minimum interest expense coverage ratio covenant is 1.1:1 at December 30, 2012. 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, our ownership interest in, and assets of, MNI and certain employee benefit plan assets are excluded. 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 bear interest at 10.55%, increasing 0.75% in January 2013 and in January of each year thereafter. Due to the increasing interest rate, interest on the Pulitzer Notes is charged to expense using a calculated effective interest rate during the period. This method increased financial expense from the amount actually payable to the Noteholders by $263,000 in the 13 weeks ended December 30, 2012. Principal Payments At December 30, 2012, the balance of the Pulitzer Notes is $100,000,000. We may voluntarily prepay principal amounts outstanding under the Pulitzer Notes 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. The Pulitzer Notes provide for mandatory scheduled annual prepayments totaling $1,400,000 in 2012 and $6,400,000 annually thereafter. In addition to the scheduled payments, we are required to make mandatory prepayments under the Pulitzer Notes under certain other conditions, such as from the net proceeds from asset sales. The 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 Pulitzer Notes payments prior to the final maturity in December 2015. 2013 payments made under the Pulitzer Notes, and required to be made for the remainder of the year, are summarized as follows:
|  | 13 Weeks Ended |  | 13 Weeks Ending |
| (Thousands of Dollars) | December 30 2012 |  | March 31 2013 |  | June 30 2013 |  | September 29 2013 |
| Mandatory | 3,800 |  | — |  | 600 |  | 2,000 |
| Voluntary | — |  | — |  | — |  | — |
| Asset sales | 5,200 |  | — |  | — |  | — |
| Excess cash flow | — |  | — |  | — |  | — |
|  | 9,000 |  | — |  | 600 |  | 2,000 |
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 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 The Guaranty Agreement provides that obligations under the Pulitzer Notes are fully and unconditionally guaranteed on a joint and several basis by Pulitzer's existing and future subsidiaries other than TNI. The Pulitzer Notes are also secured by first priority security interests in the stock and other equity interests owned by Pulitzer in its subsidiaries other than TNI. Also, Pulitzer and each of its subsidiaries granted a first priority security interest on substantially all of its tangible and intangible assets, and granted first lien mortgages or deeds of trust covering certain real estate, as collateral for the payment and performance of their obligations under the Pulitzer Notes. Our ownership interest in TNI and certain employee benefit plan assets are excluded. Covenants and Other Matters The Pulitzer Notes contain certain covenants and conditions including the maintenance, by Pulitzer, of minimum trailing 12 month EBITDA (minimum of $25,400,000 at December 30, 2012), as defined in the Guaranty Agreement, and limitations on capital expenditures and the incurrence of other debt. Further, the 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 Pulitzer Notes 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 Pulitzer Notes contain cross-default provisions tied to each of the various agreements. Intercreditor agreements and an intercompany subordination agreement are 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 financial expense over the terms of the related debt. Such amounts totaled $4,085,000 in 2012 and are estimated to total $5,418,000 in 2013, $5,359,000 in 2014, $5,293,000 in 2015, $2,429,000 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 nonoperating expense |  | 720 |
Debt is summarized as follows:
|  |  |  | Interest Rates (%)
| (Thousands of Dollars) | December 30 2012 |  | September 30 2012 |  | December 30 2012
| Revolving credit facility | — |  | — |  | 6.75
| 1 st Lien Agreement | 641,850 |  | 661,850 |  | 7.50
| 2 nd Lien Agreement | 175,000 |  | 175,000 |  | 15.00
| Pulitzer Notes | 100,000 |  | 109,000 |  | 10.55
| Unamortized present value adjustment | (18,265 | ) | (19,624 | ) |
|  | 898,585 |  | 926,226 |  |
| Less current maturities of debt | 14,900 |  | 17,400 |  |
| Current amount of present value adjustment | (5,404 | ) | (5,418 | ) |
| Total long-term debt | 889,089 |  | 914,244 |  |
At December 30, 2012, our weighted average cost of debt was 9.3%. Aggregate maturities of debt total $11,100,000 for the remainder of 2013, $19,150,000 in 2014, $19,900,000 in 2015, $691,700,000 in 2016 and $175,000,000 in 2017. Liquidity At December 30, 2012, 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 December 30, 2012 totals $50,226,000. 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 February 8, 2013, the principal amount of our outstanding debt totals $903,500,000. This amount is already less than the $938,700,000 amount projected in the Plan for September 2013 and is approaching the $893,100,000 amount projected for September 2014. 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 Note and Guaranty Agreements related to the 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 the Noteholders, to exercise their remedies under the 1 st Lien Agreement, 2 nd Lien Agreement, and the Note and Guaranty Agreements, 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 December 30, 2012. In 2010, we filed a Form S-3 shelf registration statement ("Shelf") with the SEC, which has been declared effective. The Shelf gives us the flexibility to issue and publicly distribute various types of securities, including preferred stock, common stock, secured or unsecured debt securities, purchase contracts and units consisting of any combination of such securities, from time to time, in one or more offerings, up to an aggregate amount of $750,000,000. In July 2011, the SEC announced changes to the issuer eligibility rules which will require us to have a public float of at least $75,000,000 in order to use the Shelf. Subject to maintenance of the minimum level of equity market float and the conditions of our existing debt agreements, the Shelf may enable us to sell securities quickly and efficiently when market conditions are favorable or financing needs arise. Net proceeds from the sale of any securities must be used generally to reduce debt.

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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 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 Reference 2: 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 3: 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 4: 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. + Details
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