REVENUE

October 1, 2018,

we adopted the New Revenue Standard, using the modified retrospective method applied to those contracts which were

not

completed as of that date. Results for reporting periods beginning after

October 1, 2018

are presented under the new guidance while prior period amounts are

not

adjusted and continue to be reported in accordance with legacy accounting under the old guidance. We did

not

record any adjustments to beginning retained earnings at

October 1, 2018

as a result of adopting the new guidance.

The following table presents our revenue disaggregated by source:

	13 Weeks Ended				39 Weeks Ended
(Thousands of Dollars)	June 30, 2019		June 24, 2018		June 30, 2019		June 24, 2018

Advertising and marketing services revenue		65,754		73,538		204,651		229,751
Subscription Revenue		46,620		48,165		137,965		142,405
TownNews and other digital services revenue		5,087		3,826		14,507		11,302
Other revenue		9,823		7,089		29,066		20,750
Total operating revenue		127,284		132,618		386,189		404,208

Recognition principles:

Revenue is recognized when a performance obligation is satisfied by the transfer of control of the contracted goods or services to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

Advertising and marketing services revenue:

Advertising and marketing services revenue include amounts charged to customers for retail or classified advertising space purchased in our newspapers, retail or classified advertisements placed on our digital platforms, and other print advertising products such as preprint inserts and direct mail. Advertising and marketing services revenue also include amounts charged to customers for digital marketing services which include: audience extension, Search Engine Optimization ("SEO"), Search Engine Marketing ("SEM"), web and mobile production, social media services and reputation monitoring and management. The following define the timing of revenue recognition for each general revenue category:

•

Print advertising revenue is recognized at the point in time the associated publication has been delivered.

•

Digital advertising revenue is recognized at the point in time that impressions are delivered.

•

Digital marketing services revenue is recognized over the period of time which the service is performed.

Advertising and marketing services contract transaction prices consist of fixed consideration. We recognize revenue when control of the related performance obligation transfers to the customer.

Payments for advertising revenue is due upon completion of our performance obligations at previously agreed upon rates. In instances where the timing of revenue recognition differs from the timing of invoicing, such timing differences are

not

large. As a result, we have determined that our contracts do

not

include a significant financing component.

Subscription revenue:

Subscription revenue includes revenue for content delivered to consumers via print and digital products purchased by readers or distributors. Single copy revenue is also included in subscription revenue. Subscription revenue from single-copy and home delivery subscriptions is recognized at the point in time the publications are delivered. Digital subscription revenue is recognized over time as performance obligations are met via on-demand availability of online content made available to customers throughout the contract term. Payments for subscription revenue is typically collected in advance, are for contract periods of

one

year or less and result in an unearned revenue liability that is reduced when revenue is recognized.

Other revenue:

Other revenue primarily consists of digital services, Management Agreement revenue, commercial printing and delivery of

third

party products. Digital services revenues, which are primarily delivered through TownNews, are primarily comprised of contractual agreements to provide webhosting and content management services. As such, digital services revenue is recognized over the contract period. Prices for digital services are agreed upon in advance of the contract beginning and are typically billed in arrears on a monthly basis, with the exception of implementation fees which are recognized as deferred revenue and amortized over the contract period. Management Agreement revenue consists of fixed and variable fees collected from our Management Agreement. Fixed fee revenue from the Management Agreement is recognized over time and paid quarterly and variable fees are paid annually. Variable fees are recognized when the fees are deemed earned and it is probable that a significant reversal in the amount of cumulative revenue recognized will

not

occur when the uncertainty associated with the variable consideration is subsequently resolved. Commercial printing and delivery revenue is recognized when the product is delivered to the customer.

Arrangements with multiple performance obligations:

We have various advertising and subscription agreements which include both print and digital performance obligations. Revenue from sales agreements that contain multiple performance obligations are allocated to each obligation based on the relative standalone selling price. We determine standalone selling prices based on observable prices charged to customers.

Contract Assets and Liabilities:

The Company’s primary source of unearned revenue is from subscriptions paid in advance of the service provided. The Company expects to recognize the revenue related to unsatisfied performance obligations over the next

twelve

months in accordance with the terms of the subscriptions and other contracts with customers. The unearned revenue balances described herein are the Company's only contract liability. Unearned revenue was $

22,970,000

as of

June 30, 2019

and $

23,895,000

as of

September

30,

2018.

Revenue recognized in the

weeks and the

weeks ended

June 30, 2019

that was included in the contract liability as of

September 30, 2018

was

$2,262,000

and

$22,475,000,

respectively.

Contract asset balances relate to our Management Agreement revenue and were $

5,506,000

as of

June 30, 2019

and $

as of

September 30, 2018

and consisted solely of the variable portion of the contract. The contract asset balance recorded as of

June 30, 2019

reflects the final approved Management Agreement variable fee for the contract year ended

June 30, 2019.

The entire balance was collected in

July 2019.

These contract asset balances are included in accounts receivable and contract assets, net. There are

other contract assets recorded. Accounts receivable, excluding allowance for doubtful accounts and contract assets, was $

47,909,000

and $

48,517,000

as of

June 30, 2019

and

September

30,

2018,

respectively. Allowance for doubtful accounts was $

5,643,000

and $

4,806,000

as of

June 30, 2019

and

September

30,

2018,

respectively.

Practical expedients:

Sales commissions are expensed as incurred as the associated contractual periods are

one

year or less. These costs are recorded within compensation. The vast majority of our contracts have original expected lengths of

one

year or less and revenue is earned at a rate and amount that corresponds directly with the value to the customer.