Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2017 | Jan. 31, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | MEREDITH CORP | |
Entity Central Index Key | 65,011 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Company Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 39,626,226 | |
Class B Shares [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 5,108,980 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Current assets | ||
Cash and cash equivalents | $ 34,976 | $ 22,287 |
Accounts receivable, net | 297,388 | 289,052 |
Inventories | 21,410 | 21,890 |
Current portion of subscription acquisition costs | 141,155 | 144,896 |
Current portion of broadcast rights | 16,453 | 7,853 |
Other current assets | 31,531 | 19,275 |
Total current assets | 542,913 | 505,253 |
Property, plant, and equipment | 555,265 | 549,536 |
Less accumulated depreciation | (354,395) | (359,670) |
Net property, plant, and equipment | 200,870 | 189,866 |
Subscription acquisition costs | 77,384 | 79,740 |
Broadcast rights | 23,397 | 21,807 |
Other assets | 69,056 | 69,616 |
Intangible assets, net | 926,809 | 955,883 |
Goodwill | 907,558 | 907,458 |
Total assets | 2,747,987 | 2,729,623 |
Current liabilities | ||
Current portion of long-term debt | 65,625 | 62,500 |
Current portion of long-term broadcast rights payable | 16,847 | 9,206 |
Accounts payable | 83,919 | 66,598 |
Accrued expenses and other liabilities | 105,087 | 116,907 |
Current portion of unearned subscription revenues | 202,249 | 204,459 |
Total current liabilities | 473,727 | 459,670 |
Long-term debt | 631,552 | 635,737 |
Long-term broadcast rights payable | 24,623 | 22,454 |
Unearned subscription revenues | 107,901 | 106,506 |
Deferred income taxes | 263,242 | 384,726 |
Other noncurrent liabilities | 100,104 | 124,558 |
Total liabilities | 1,601,149 | 1,733,651 |
Shareholders' equity | ||
Additional paid-in capital | 58,926 | 54,726 |
Retained earnings | 1,060,614 | 915,703 |
Accumulated other comprehensive loss | (17,436) | (19,009) |
Total shareholders' equity | 1,146,838 | 995,972 |
Total liabilities and shareholders' equity | 2,747,987 | 2,729,623 |
Series Preferred Stock [Member] | ||
Shareholders' equity | ||
Series preferred stock | 0 | 0 |
Common Stock [Member] | ||
Shareholders' equity | ||
Common stock | 39,625 | 39,433 |
Common Class B [Member] | ||
Shareholders' equity | ||
Common stock | $ 5,109 | $ 5,119 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | ||||
Advertising | $ 231,815 | $ 267,129 | $ 441,064 | $ 493,018 |
Circulation | 67,672 | 66,805 | 136,599 | 135,473 |
All other | 118,211 | 108,708 | 232,806 | 214,030 |
Total revenues | 417,698 | 442,642 | 810,469 | 842,521 |
Operating expenses | ||||
Production, distribution, and editorial | 158,746 | 148,625 | 314,548 | 298,853 |
Selling, general, and administrative | 189,384 | 170,643 | 357,005 | 345,636 |
Depreciation and amortization | 12,458 | 13,549 | 25,008 | 27,445 |
Impairment of long-lived assets | 19,765 | 0 | 19,765 | 0 |
Total operating expenses | 380,353 | 332,817 | 716,326 | 671,934 |
Income from operations | 37,345 | 109,825 | 94,143 | 170,587 |
Interest expense, net | (5,171) | (4,679) | (10,249) | (9,428) |
Earnings before income taxes | 32,174 | 105,146 | 83,894 | 161,159 |
Income tax benefit (expense) | 127,134 | (33,341) | 108,855 | (55,381) |
Net earnings | $ 159,308 | $ 71,805 | $ 192,749 | $ 105,778 |
Basic earnings per share (in usd per share) | $ 3.55 | $ 1.61 | $ 4.30 | $ 2.38 |
Basic average shares outstanding (in shares) | 44,857 | 44,511 | 44,818 | 44,535 |
Diluted earnings per share (in usd per share) | $ 3.49 | $ 1.58 | $ 4.23 | $ 2.33 |
Diluted average shares outstanding (in shares) | 45,601 | 45,378 | 45,603 | 45,385 |
Dividends paid per share (in usd per share) | $ 0.520 | $ 0.495 | $ 1.040 | $ 0.990 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Comprehensive income | ||||
Net earnings | $ 159,308 | $ 71,805 | $ 192,749 | $ 105,778 |
Other comprehensive income, net of income taxes | ||||
Pension and other postretirement benefit plans activity | 326 | 537 | 653 | 1,075 |
Unrealized gains on interest rate swaps | 664 | 2,354 | 920 | 3,822 |
Other comprehensive income, net of income taxes | 990 | 2,891 | 1,573 | 4,897 |
Comprehensive income | $ 160,298 | $ 74,696 | $ 194,322 | $ 110,675 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Common Class B [Member] | Common Stock [Member]Common Stock [Member] | Common Stock [Member]Common Class B [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member]Common Stock [Member] | Retained Earnings [Member]Common Class B [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning balance at Jun. 30, 2017 | $ 995,972 | $ 39,433 | $ 5,119 | $ 54,726 | $ 915,703 | $ (19,009) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net earnings | 192,749 | 192,749 | ||||||||
Other comprehensive income, net of income taxes | 1,573 | 1,573 | ||||||||
Shares issued under incentive plans, net of forfeitures | 17,812 | 584 | 17,228 | |||||||
Purchases of Company stock | (24,532) | (402) | (24,130) | |||||||
Share-based compensation | 10,060 | 10,060 | ||||||||
Conversion of Class B to common stock | 0 | 10 | (10) | |||||||
Dividends paid | $ (41,877) | $ (5,319) | $ (41,877) | $ (5,319) | ||||||
Ending balance at Dec. 31, 2017 | 1,146,838 | 39,625 | 5,109 | 58,926 | 1,060,614 | (17,436) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Cumulative effect adjustment for adoption of Accounting Standards Update 2016-09 | 400 | 1,042 | $ (642) | |||||||
Net earnings | 159,308 | |||||||||
Other comprehensive income, net of income taxes | 990 | |||||||||
Ending balance at Dec. 31, 2017 | $ 1,146,838 | $ 39,625 | $ 5,109 | $ 58,926 | $ 1,060,614 | $ (17,436) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Shareholders' Equity (Parenthetical) - Common Stock [Member] - $ / shares | Sep. 30, 2017 | Jun. 30, 2017 |
Common Stock [Member] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Common Class B [Member] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | ||
Net earnings | $ 192,749 | $ 105,778 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation | 15,799 | 17,885 |
Amortization | 9,209 | 9,560 |
Share-based compensation | 10,060 | 9,408 |
Deferred income taxes | (122,065) | 21,879 |
Amortization of broadcast rights | 9,643 | 8,740 |
Payments for broadcast rights | (10,584) | (8,346) |
Gain on disposition of assets | (3,282) | 0 |
Provision for write-down of impaired assets | 19,815 | 1,838 |
Fair value adjustments to contingent consideration | (1,316) | (17,961) |
Excess tax benefits from share-based payments | 0 | (2,883) |
Changes in assets and liabilities | (18,456) | (28,617) |
Net cash provided by operating activities | 101,572 | 117,281 |
Cash flows from investing activities | ||
Acquisitions of and investments in businesses | (3,000) | (11,819) |
Additions to property, plant, and equipment | (28,809) | (10,949) |
Proceeds from disposition of assets, net of cash sold | 2,193 | 0 |
Net cash used in investing activities | (29,616) | (22,768) |
Cash flows from financing activities | ||
Proceeds from issuance of long-term debt | 60,000 | 270,000 |
Repayments of long-term debt | (61,250) | (288,125) |
Dividends paid | (47,196) | (44,823) |
Purchases of Company stock | (24,532) | (26,453) |
Proceeds from common stock issued | 17,812 | 16,988 |
Payment of acquisition-related contingent consideration | (4,000) | (4,000) |
Excess tax benefits from share-based payments | 0 | 2,883 |
Other | (101) | (1,465) |
Net cash used in financing activities | (59,267) | (74,995) |
Net increase in cash and cash equivalents | 12,689 | 19,518 |
Cash and cash equivalents, at beginning of period | 22,287 | 24,970 |
Cash and cash equivalents, at end of period | $ 34,976 | $ 44,488 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation —The condensed consolidated financial statements include the accounts of Meredith Corporation and its wholly owned subsidiaries (Meredith or the Company), after eliminating all significant intercompany balances and transactions. Meredith does not have any off-balance sheet arrangements. The Company's use of special-purpose entities is limited to Meredith Funding Corporation, whose activities are fully consolidated in Meredith's condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (U.S. GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements, which are included in Meredith's Annual Report on Form 10-K for the year ended June 30, 2017 , filed with the SEC. The condensed consolidated financial statements as of December 31, 2017 , and for the three and six months ended December 31, 2017 and 2016 , are unaudited but, in management's opinion, include all normal, recurring adjustments necessary for a fair presentation of the results of interim periods. The year-end condensed consolidated balance sheet data as of June 30, 2017 , were derived from audited financial statements, but do not include all disclosures required by U.S. GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. Adopted Accounting Pronouncements — ASU 2016-07—In March 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) simplifying the transition to the equity method of accounting. The new guidance eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The Company adopted this standard effective July 1, 2017. The adoption of this guidance did not have an impact on our results of operations, cash flows, or disclosures. ASU 2016-09—In March 2016, as a part of its simplification initiative, the FASB issued guidance on the accounting for employee share-based payments. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax treatment, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this standard effective July 1, 2017. The adoption of this guidance resulted in the prospective recognition of realized excess tax benefits related to the exercise or vesting of share-based awards in our Condensed Consolidated Statements of Earnings instead of in additional paid-in capital within our Condensed Consolidated Balance Sheets. See Note 7 for discussion of the credits to income tax expense recorded in our Condensed Consolidated Statements of Earnings. Using a modified retrospective application, the Company has elected to recognize forfeitures as they occur and recorded a $1.0 million increase to additional paid-in capital, a $0.6 million reduction to retained earnings, and a $0.4 million reduction to deferred taxes to reflect the incremental share-based compensation expense, net of the related tax impacts, that would have been recognized in prior years under the modified guidance. Presentation requirements for cash flows related to employee taxes paid using withheld shares had no impact to all periods presented as such cash flows have historically been presented as financing activities. We no longer classify excess tax benefits related to share-based awards as a financing cash inflow and an operating cash outflow. This classification requirement was adopted prospectively and, as such, our Condensed Consolidated Statement of Cash Flows has not been retrospectively adjusted. Pending Accounting Pronouncements — ASU 2017-12—In August 2017, the FASB issued guidance amending hedge accounting requirements. The purpose of this guidance is to better align a company's risk management activities and financial reporting requirements, and to simplify the application of hedge accounting. The effective date is the first quarter of fiscal 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our results of operations, cash flows, or disclosures. ASU 2014-09—In May 2014, the FASB issued an accounting standards update that replaces existing revenue recognition guidance. The new guidance requires a company to recognize revenue for the transfer of promised goods or services equal to the amount it expects to receive in exchange for those goods or services. The guidance includes a five-step framework to determine the timing and amount of revenue to recognize related to contracts with customers. Additionally, the guidance requires new and significantly enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows from customer contracts as well as judgments made by a company when following the framework. The FASB continues to issue amendments to further clarify provisions of this guidance. These amendments will be effective upon adoption of the standard. The Company will adopt the standard beginning July 1, 2018 (fiscal 2019). The two permitted transition methods are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized in the earliest period shown; or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. While a final decision has not been made, we currently anticipate adopting the standard using the modified retrospective method. We are in the process of assessing and documenting the impact of the guidance on our current accounting policies and practices to identify material differences, if any, that would result from applying the new requirements to our revenue contracts. We continue to make progress on our revenue recognition analyses and are currently evaluating the impact, if any, on changes to our business processes, systems, and controls to support recognition and disclosure requirements under the new guidance. As these analyses are completed, the Company will be better able to quantify the anticipated impact, if any, to our consolidated financial statements. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions On December 7, 2016, Meredith acquired the assets of a digital lead-generation company in the home services market, which has been rebranded Meredith Performance Marketing by the Company. During the first quarter of fiscal 2018, the provisional amount of goodwill was increased by $0.1 million , with a corresponding decrease to intangible assets. On April 21, 2017, Meredith acquired WPCH-TV, an independent television station in Atlanta, Georgia, which was operated by Meredith prior to its acquisition. Effective July 1, 2017, Meredith's national media group sold a 70 percent interest in Charleston Tennis LLC, which operates the Family Circle Tennis Center, to an unrelated third party. In return, Meredith received $0.6 million in cash and a note receivable for $8.5 million . The note receivable is due in annual installments over a period of 8 years . At December 31, 2017, there was $3.6 million in unamortized discount and an allowance of $2.8 million recorded against the note. This transaction generated a gain of $3.3 million , which was recorded in the selling, general, and administrative line of the Condensed Consolidated Statements of Earnings. Of this gain, $1.0 million related to the remeasurement of the retained investment. As Meredith retains a 30 percent interest, has a seat on the board, and has approval rights over certain limited matters, Meredith now accounts for this investment under the equity method of accounting. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Major components of inventories are summarized below. Of total net inventory values shown, 67 percent are under the last-in first-out (LIFO) method at December 31, 2017 , and 65 percent at June 30, 2017 . (In thousands) December 31, 2017 June 30, 2017 Raw materials $ 10,161 $ 13,404 Work in process 11,351 8,665 Finished goods 1,188 1,111 22,700 23,180 Reserve for LIFO cost valuation (1,290 ) (1,290 ) Inventories $ 21,410 $ 21,890 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets consisted of the following: December 31, 2017 June 30, 2017 (In thousands) Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization National media Advertiser relationships $ 13,810 $ (12,772 ) $ 1,038 $ 18,610 $ (15,514 ) $ 3,096 Customer lists 4,200 (525 ) 3,675 7,280 (3,395 ) 3,885 Other 21,325 (10,387 ) 10,938 22,325 (9,850 ) 12,475 Local media Network affiliation agreements 229,309 (145,431 ) 83,878 229,309 (142,216 ) 87,093 Retransmission agreements 27,923 (12,808 ) 15,115 27,923 (10,700 ) 17,223 Other 1,670 (643 ) 1,027 1,680 (472 ) 1,208 Total $ 298,237 $ (182,566 ) 115,671 $ 307,127 $ (182,147 ) 124,980 Intangible assets not subject to amortization National media Internet domain names 7,827 7,827 Trademarks 128,150 147,915 Local media FCC licenses 675,161 675,161 Total 811,138 830,903 Intangible assets, net $ 926,809 $ 955,883 Amortization expense was $9.2 million and $9.6 million for the six months ended December 31, 2017 and 2016 , respectively. Annual amortization expense for intangible assets is expected to be as follows: $17.1 million in fiscal 2018 , $14.6 million in fiscal 2019 , $13.7 million in fiscal 2020 , $9.7 million in fiscal 2021 , and $7.3 million in fiscal 2022 . During the second quarter of fiscal 2018, Meredith made the strategic decision to no longer publish Fit Pregnancy and Baby magazine as a standalone title, rather including it as a feature within Parents magazine. This decision was determined to be a triggering event requiring Meredith to evaluate the trademarks within our Parents Network for impairment. The fair value of the trademarks are determined based on significant inputs not observable in the market. The reduction in advertising revenue caused by the change to Fit Pregnancy and Baby magazine, as well as updated revenue projections for the Parents Network resulted in an impairment to the trademarks. As such, during the quarter, the national media segment recorded a non-cash impairment charge of $19.8 million to partially impair the trademarks within our Parents Network. This impairment charge is recorded in the impairment of long-lived assets line in the Condensed Consolidated Statements of Earnings. Changes in the carrying amount of goodwill were as follows: Six months ended December 31, 2017 2016 (In thousands) National Local Total National Local Total Balance at beginning of period Goodwill $ 943,803 $ 80,604 $ 1,024,407 $ 931,303 $ 68,775 $ 1,000,078 Accumulated impairment losses (116,949 ) — (116,949 ) (116,949 ) — (116,949 ) Total goodwill 826,854 80,604 907,458 814,354 68,775 883,129 Activity during the period Acquisition adjustments 100 — 100 12,260 — 12,260 Balance at end of period Goodwill 943,903 80,604 1,024,507 943,563 68,775 1,012,338 Accumulated impairment losses (116,949 ) — (116,949 ) (116,949 ) — (116,949 ) Total goodwill $ 826,954 $ 80,604 $ 907,558 $ 826,614 $ 68,775 $ 895,389 |
Restructuring Accrual
Restructuring Accrual | 6 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Accrual | Restructuring Accrual During the second quarter of fiscal 2018, management committed to a performance improvement plan including the strategic decision to no longer publish Fit Pregnancy and Baby magazine as a standalone title, rather including it as a feature within Parents magazine and other restructurings. These actions resulted in selected workforce reductions primarily in our national media group. In connection with this plan, the Company recorded pre-tax restructuring charges totaling $3.1 million including $3.0 million for severance and related benefit costs related to the involuntary termination of employees and other write-downs of $0.1 million . The majority of severance costs are being paid out over a 12 -month period. The plan affects approximately 90 employees. The severance and related benefit costs are recorded in the selling, general, and administrative line of the Condensed Consolidated Statements of Earnings. The other write-downs are recorded in the production, distribution, and editorial line of the Condensed Consolidated Statements of Earnings. During the second quarter of fiscal 2017, management committed to a performance improvement plan that included selected workforce reductions primarily in our national media group. In connection with this plan, the Company recorded pre-tax restructuring charges totaling $8.1 million including $7.6 million for severance and related benefit costs related to the involuntary termination of employees and other accruals of $0.3 million . The majority of severance costs have been paid out. The plan affected approximately 125 employees. The severance and related benefit costs and other accruals are recorded in the selling, general, and administrative line of the Condensed Consolidated Statements of Earnings. The Company also wrote down manuscript and art inventory by $0.2 million , which is recorded in the production, distribution, and editorial line of the Condensed Consolidated Statements of Earnings. Details of changes in the Company's restructuring accrual are as follows: Six months ended December 31, 2017 2016 (In thousands) Balance at beginning of period $ 8,674 $ 7,388 Severance accruals 2,956 7,578 Cash payments (4,946 ) (3,484 ) Reversal of excess accrual (242 ) (13 ) Balance at end of period $ 6,442 $ 11,469 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt consisted of the following: (In thousands) December 31, 2017 June 30, 2017 Variable-rate credit facilities Asset-backed bank facility of $100 million, due 10/18/2019 $ 75,000 $ 75,000 Revolving credit facility of $200 million, due 11/30/2021 90,000 85,000 Term loan due 11/30/2021 234,375 240,625 Private placement notes 3.04% senior notes, due 3/1/2018 50,000 50,000 Floating rate senior notes, due 12/19/2022 100,000 100,000 Floating rate senior notes, due 2/28/2024 150,000 150,000 Total long-term debt 699,375 700,625 Unamortized debt issuance costs (2,198 ) (2,388 ) Current portion of long-term debt (65,625 ) (62,500 ) Long-term debt $ 631,552 $ 635,737 In connection with the asset-backed bank facility, Meredith entered into a revolving agreement to sell all of its rights, title, and interest in the majority of its accounts receivable related to advertising and miscellaneous revenues to Meredith Funding Corporation, a special-purpose entity established to purchase accounts receivable from Meredith. At December 31, 2017 , $174.9 million of accounts receivable net of reserves was outstanding under the agreement. Meredith Funding Corporation in turn may sell receivable interests to a major national bank. In consideration of the sale, Meredith receives cash and a subordinated note, bearing interest at the prime rate of 4.50 percent at December 31, 2017 , from Meredith Funding Corporation. The agreement was structured as a true sale under which the creditors of Meredith Funding Corporation will be entitled to be satisfied out of the assets of Meredith Funding Corporation prior to any value being returned to Meredith or its creditors. The accounts of Meredith Funding Corporation are fully consolidated in Meredith's condensed consolidated financial statements. In October 2017, we renewed our asset-backed bank facility for an additional two-year period on terms substantially similar to those previously in place. The renewed facility was scheduled to expire in October 2019. The Company held interest rate swap agreements to hedge variable interest rate risk on the $250.0 million floating rate senior notes and on $50.0 million of the term loan. The expiration of the swaps was as follows: $50.0 million in August 2018, $100.0 million in March 2019, and $150.0 million in August 2019. Under the swaps the Company paid fixed rates of interest ( 1.36 percent on the swap maturing in August 2018, 1.53 percent on the swap maturing in March 2019, and 1.76 percent on the swaps maturing in August 2019) and received variable rates of interest based on the one to three-month London Interbank Offered Rate (LIBOR) ( 1.51 percent on the swap maturing in August 2018, 1.64 percent on the swap maturing in March 2019, and 1.48 percent on the swaps maturing in August 2019 as of December 31, 2017 ) on the $300.0 million notional amount of indebtedness. The swaps were designated as cash flow hedges. The Company evaluates the effectiveness of the hedging relationships on an ongoing basis by recalculating changes in fair value of the derivatives and related hedged items independently. Unrealized gains or losses on cash flow hedges are recorded in other comprehensive income to the extent the cash flow hedges are effective. The amount of the swap that offsets the effects of interest rate changes on the related debt is subsequently reclassified into interest expense. Any ineffective portions on cash flow hedges are recorded in interest expense. No material ineffectiveness existed at either December 31, 2017 or 2016 . The fair value of the interest rate swap agreements is the estimated amount the Company would pay or receive to terminate the swap agreements. At December 31, 2017 , the swaps were in a $1.1 million asset position. The Company is exposed to credit-related losses in the event of nonperformance by counterparties to the swap agreements. The Company strives to manage this exposure through diversification and monitoring of the creditworthiness of the counterparties. There was $1.1 million potential loss that the Company would incur on the interest rate swaps if the counterparties were to fail to meet their obligations under the agreements at December 31, 2017 . Given the strong creditworthiness of the counterparties, management does not expect any of them to fail to meet their obligations. Additionally, the concentration of risk with any individual counterparty is not considered significant at December 31, 2017 . On January 31, 2018, in connection with the Company's acquisition of Time Inc. (Time), the Company repaid and terminated our existing indebtedness detailed above. Also on January 31, 2018, in connection with the Company's acquisition of Time, the Company entered into new debt facilities as described in Note 12, Subsequent Events. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the second quarter and first six months of fiscal 2018, Meredith recorded a tax benefit of $127.1 million and $108.9 million , respectively. This compares to tax expense recorded by the Company of $33.3 million and $55.4 million for the second quarter and first six months of fiscal 2017, respectively. The "Tax Cuts and Jobs Act of 2017" (the Tax Reform Act) was signed into law on December 22, 2017. The Tax Reform Act significantly changed the United States (U.S.) corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35 percent to 21 percent effective for taxable years beginning on or after January 1, 2018, while also repealing the deduction for domestic production activities. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. Under the Tax Reform Act, a blended federal rate of 28 percent applies retroactive to the beginning of Meredith's fiscal 2018. This reduced rate had the effect of lowering fiscal 2018 tax expense by $4.4 million for amounts previously recognized in our first fiscal quarter. Meredith recorded this adjustment in its fiscal 2018 second quarter. In addition, absent the Tax Reform Act, Meredith estimates that second quarter tax expense on second quarter earnings would have been $3.7 million higher. Also as a result of the Tax Reform Act, Meredith remeasured its deferred tax assets, deferred tax liabilities, and tax reserves during its second fiscal quarter, resulting in a net tax benefit of $133.0 million . Deferred tax assets and liabilities expected to be recognized after June 30, 2018, were remeasured using the 21 percent U.S. corporate tax rate. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, which provides guidance regarding how a company is to reflect provision amounts when necessary information is not yet available, prepared, or analyzed sufficiently to complete its accounting for the effect of the changes in the Tax Reform Act. The tax benefits described above, which represent all known and estimable impacts of the Tax Reform Act, reflect provisional amounts based on the Company’s current best estimates. These provisional amounts incorporate assumptions made based upon the Company’s current interpretations of the Tax Reform Act and may change as the Company receives additional clarification and implementation guidance, and as data becomes available allowing a more precise scheduling of the deferred tax assets and liabilities including those related to intangible assets, fixed assets, and employee compensation. Adjustments to these provisional amounts through December 22, 2018, will be included in income from operations as an adjustment to tax expense in future periods. Effective July 1, 2017, the Company adopted new accounting guidance related to share-based compensation. Under this new guidance, excess tax benefits and deficiencies are to be recognized as a discrete component of the income tax provision in the period they occur and not as an adjustment to additional paid-in capital. As such, we recognized an excess tax benefit of $2.1 million as a credit to income tax expense in our Condensed Consolidated Statements of Earnings in the first quarter of fiscal 2018 as the majority of the Company's annual share-based grants vest in the first quarter of each fiscal year. In the second quarter of fiscal 2018, an additional $1.0 million was recorded as a credit to income tax expense primarily for options exercised during the quarter. However, as a result of the change in the federal corporate tax rate due to the Tax Reform Act, these amounts were reduced in the aggregate by $0.6 million in the second quarter of fiscal 2018. Additionally during the second quarter of fiscal 2018, the Company incurred $12.1 million of investment banking, legal, accounting, and other professional fees and expenses related to the acquisition of Time Inc. Approximately 40 percent of these acquisition-related expenses have been determined to be currently tax deductible. For further discussion of the acquisition, refer to Note 12. These costs are included in the selling, general, and administrative line in the Condensed Consolidated Statements of Earnings. |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 6 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans The following table presents the components of net periodic benefit costs: Three Months Six Months Periods ended December 31, 2017 2016 2017 2016 (In thousands) Pension benefits Service cost $ 3,251 $ 3,136 $ 6,502 $ 6,273 Interest cost 1,470 1,225 2,940 2,450 Expected return on plan assets (2,616 ) (2,298 ) (5,232 ) (4,596 ) Prior service cost amortization 72 49 144 97 Actuarial loss amortization 513 897 1,026 1,794 Net periodic benefit costs $ 2,690 $ 3,009 $ 5,380 $ 6,018 Postretirement benefits Service cost $ 19 $ 23 $ 38 $ 46 Interest cost 82 80 164 160 Prior service credit amortization (85 ) (98 ) (170 ) (196 ) Actuarial gain amortization (81 ) (77 ) (162 ) (155 ) Net periodic benefit credit $ (65 ) $ (72 ) $ (130 ) $ (145 ) The amortization of amounts related to unrecognized prior service costs and net actuarial gain/loss was reclassified out of other comprehensive income as components of net periodic benefit costs. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table presents the calculations of earnings per share: Three Months Six Months Periods ended December 31, 2017 2016 2017 2016 (In thousands except per share data) Net earnings $ 159,308 $ 71,805 $ 192,749 $ 105,778 Basic average shares outstanding 44,857 44,511 44,818 44,535 Dilutive effect of stock options and equivalents 744 867 785 850 Diluted average shares outstanding 45,601 45,378 45,603 45,385 Earnings per share Basic earnings per share $ 3.55 $ 1.61 $ 4.30 $ 2.38 Diluted earnings per share 3.49 1.58 4.23 2.33 For the three months ended December 31, 2017 and 2016 , antidilutive options excluded from the above calculations totaled 0.2 million (with a weighted average exercise price of $66.44 ) and 0.8 million (with a weighted average exercise price of $53.64 ), respectively. For the six months ended December 31, 2017 and 2016 , antidilutive options excluded from the above calculations totaled 0.4 million (with a weighted average exercise price of $63.18 ) and 0.5 million (with a weighted average exercise price of $53.98 ), respectively. In the six months ended December 31, 2017 and 2016 , options were exercised to purchase 0.5 million and 0.4 million common shares, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We estimated the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts we would realize upon disposition. The fair value hierarchy consists of three broad levels of inputs that may be used to measure fair value, which are described below: • Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable ; • Level 3 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. The following table sets forth the carrying value and the estimated fair value of the Company's financial instruments not measured at fair value on a recurring basis: December 31, 2017 June 30, 2017 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Broadcast rights payable $ 41,470 $ 39,609 $ 31,660 $ 30,544 Total long-term debt 699,375 699,391 700,625 700,714 The fair value of broadcast rights payable was determined using the present value of expected future cash flows discounted at the Company's current borrowing rate with inputs included in Level 3. The fair value of total long-term debt was determined using the present value of expected future cash flows using borrowing rates currently available for debt with similar terms and maturities with inputs included in Level 2. The following table sets forth the assets and liabilities measured at fair value on a recurring basis: (In thousands) December 31, 2017 June 30, 2017 Other current assets Interest rate swaps $ 480 $ — Property, plant, and equipment Corporate airplanes, held for sale — 1,927 Other assets Interest rate swaps 621 158 Accrued expenses and other liabilities Contingent consideration 24,815 4,000 Interest rate swaps — 602 Other noncurrent liabilities Contingent consideration 4,080 30,211 The fair value of interest rate swaps was determined using discounted cash flows derived from market observable inputs including swap curves that are included in Level 2. The fair values of contingent consideration are significant unobservable inputs and thus represent Level 3 measurements. The key inputs used to determine the fair value of contingent consideration included projected financial performance of acquisitions and a probability-weighted discounted cash flow model. Estimated financial performance is based upon internally developed estimates based on industry knowledge and historical performance. The corporate airplanes fair value was also based on significant inputs not observable in the market and thus represents a Level 3 measurement. The following table sets forth the assets measured at fair value on a non-recurring basis: (In thousands) December 31, 2017 June 30, 2017 Trademarks 1 $ 35,900 $ — 1 Represents the fair value of trademarks that were partially impaired during fiscal 2018. Not considered to be measured at fair market value as of June 30, 2017. For further discussion, refer to Note 4. The fair value of the trademarks are determined based on significant inputs not observable in the market and thus represents a Level 3 measurement. The key assumptions used to determine the fair value includes discount rates, estimated cash flows, royalty rates, and revenue growth rates. The discount rate used is based on several factors including market interest rates, a weighted average cost of capital analysis based on the target capital structure, and includes adjustments for market risk and company specific risk. Estimated cash flows are based upon internally developed estimates and the revenue growth rates are based on industry knowledge and historical performance. Details of changes in the fair value of Level 3 contingent consideration, corporate airplanes, and trademarks are as follows: Six months ended December 31, 2017 2016 (in thousands) Contingent consideration Balance at beginning of period $ 34,211 $ 56,631 Additions due to acquisitions — 7,681 Payments (4,000 ) (4,000 ) Change in present value of contingent consideration 1 (1,316 ) (17,961 ) Balance at end of period $ 28,895 $ 42,351 Corporate airplanes, held for sale Balance at beginning of period $ 1,927 $ 2,800 Sale of corporate airplanes (1,927 ) — Balance at end of period $ — $ 2,800 Trademarks 2 Balance at beginning of year $ 55,665 $ — Impairment (19,765 ) — Balance at end of period $ 35,900 $ — 1 Change in present value of contingent consideration is recorded in the selling, general, and administrative expense line on the Condensed Consolidated Statements of Earnings and is comprised of changes in estimated earn out payments based on projections of performance and the accretion of the present value discount. 2 Represents the fair value of trademarks, which were partially impaired during fiscal 2018. Not considered to be measured at fair market value as of June 30, 2017. For further discussion, refer to Note 4. |
Financial Information about Ind
Financial Information about Industry Segments | 6 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Financial Information about Industry Segments | Financial Information about Industry Segments Meredith is a diversified media company focused primarily on the home and family marketplace. On the basis of products and services, the Company has established two reportable segments: national media and local media. There have been no changes in the basis of segmentation since June 30, 2017 . There have been no material intersegment transactions. There are two principal financial measures reported to the chief executive officer (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are operating profit and earnings before interest, taxes, depreciation, and amortization (EBITDA). Operating profit for segment reporting, disclosed below, is revenues less operating costs excluding unallocated corporate expenses. Segment operating expenses include allocations of certain centrally incurred costs such as employee benefits, occupancy, information systems, accounting services, internal legal staff, and human resources administration. These costs are allocated based on actual usage or other appropriate methods, primarily number of employees. Unallocated corporate expenses are corporate overhead expenses not directly attributable to the operating groups. In accordance with authoritative guidance on disclosures about segments of an enterprise and related information, EBITDA is not presented below. The following table presents financial information by segment: Three Months Six Months Periods ended December 31, 2017 2016 2017 2016 (In thousands) Revenues National media $ 247,441 $ 259,345 $ 486,401 $ 506,638 Local media 170,257 183,297 324,068 335,883 Total revenues $ 417,698 $ 442,642 $ 810,469 $ 842,521 Segment profit National media $ 12,247 $ 46,757 $ 40,503 $ 70,868 Local media 50,515 76,815 91,457 127,437 Unallocated corporate (25,417 ) (13,747 ) (37,817 ) (27,718 ) Income from operations 37,345 109,825 94,143 170,587 Interest expense, net (5,171 ) (4,679 ) (10,249 ) (9,428 ) Earnings before income taxes $ 32,174 $ 105,146 $ 83,894 $ 161,159 Depreciation and amortization National media $ 3,789 $ 4,330 $ 7,776 $ 8,848 Local media 7,886 8,865 15,824 17,855 Unallocated corporate 783 354 1,408 742 Total depreciation and amortization $ 12,458 $ 13,549 $ 25,008 $ 27,445 |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events | 6 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 31, 2018, Meredith completed its acquisition of all outstanding shares of Time Inc. (Time) for $18.50 per share, for a total purchase price of approximately $2.8 billion , including the repayment of Time's outstanding debt. This transaction creates a premier media and marketing company serving 200 million American consumers. Meredith's brands will now have a readership of more than 135 million and paid circulation of nearly 60 million . The acquisition also increased Meredith's digital position with approximately 170 million monthly unique visitors in the United States. Meredith's results of operations will include Time beginning on February 1, 2018. The acquired business will be reported primarily within the national media segment. Currently, Time continues its efforts to finalize its consolidated financial statements for its year ended December 31, 2017, and such amounts are not yet available. As a result, we are unable to make disclosures required for business combinations related to pro forma revenue and earnings for the periods presented herein. In addition, due to the limited time since the date of the acquisition, the Company’s initial accounting for the business combination is incomplete as information regarding the assets and liabilities acquired as of January 31, 2018, is similarly not yet available. As a result, we are unable to make disclosures for such assets and liabilities, and contingencies acquired or other acquisition date fair value disclosures. The Company plans to provide this information in its Quarterly Report on Form 10-Q for the quarter ending March 31, 2018. The purchase price was financed through a combination of debt, preferred equity and cash on hand. The debt financing consists of $1.8 billion of senior secured term loans (Term Loan B) maturing in 2025 and priced at LIBOR plus 3.00 percent ; $1.4 billion of senior unsecured notes maturing in 2026 and priced at 6.875 percent ; and a five-year senior secured revolving credit facility for $350.0 million that is currently undrawn. The preferred equity represents a $650.0 million investment from a private equity firm. In exchange for the preferred equity investment, Meredith issued 650,000 shares of perpetual convertible redeemable non-voting Series A preferred stock (Series A preferred stock) as well as detachable warrants to purchase up to 1,625,000 shares of Meredith's common stock with an exercise price of $1.00 per share and options to purchase up to 875,000 shares of Meredith's common stock with an exercise price of $70.50 per share. From and after the seventh anniversary of the issuance date, the holders of the Series A preferred stock may elect to convert some or all of the Series A preferred stock into Meredith common stock at a ratio based on its Accrued Stated Value (as defined below) divided by the volume weighted average price of Meredith common stock for the 30 trading days immediately preceding the written notice of conversion. The Accrued Stated Value is an amount equal to: (i) the Stated Value ($1,000 multiplied by the number of shares of Series A preferred stock outstanding); plus (ii) any accrued and unpaid dividends thereof (including any accumulated dividends). The Series A preferred stock ranks senior to any other class or series of equity. These proceeds were used to finance the acquisition, refinance certain existing debt of Time, refinance certain existing debt of Meredith, and pay transaction-related costs including $12.1 million which were incurred in the second quarter of fiscal 2018. These costs are included in the selling, general, and administrative line in the Condensed Consolidated Statements of Earnings. The Meredith debt refinanced with the proceeds included $75.0 million outstanding under the asset-backed bank facility, $90.0 million outstanding under the revolving credit facility, $234.4 million under the term loan, $50.0 million under the 3.04 percent fixed rate unsecured senior notes, and $250.0 million under floating rate unsecured senior notes. These amounts are based on our debt balances as of December 31, 2017. In conjunction with these prepayments of debt, the Company also settled the associated interest rate swaps with a notional amount of $300.0 million , and discontinued cash flow hedge accounting treatment for such swaps. The related unrealized gain on the swaps of $1.1 million will be recorded in income in the third quarter of fiscal 2018. In addition, $2.2 million of unamortized debt issuance costs will be expensed in the third quarter of fiscal 2018. These amounts are based on our debt balances as of December 31, 2017. Refer to Note 6 for further discussion on these balances. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements include the accounts of Meredith Corporation and its wholly owned subsidiaries (Meredith or the Company), after eliminating all significant intercompany balances and transactions. Meredith does not have any off-balance sheet arrangements. The Company's use of special-purpose entities is limited to Meredith Funding Corporation, whose activities are fully consolidated in Meredith's condensed consolidated financial statements. |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (U.S. GAAP) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements, which are included in Meredith's Annual Report on Form 10-K for the year ended June 30, 2017 , filed with the SEC. The condensed consolidated financial statements as of December 31, 2017 , and for the three and six months ended December 31, 2017 and 2016 , are unaudited but, in management's opinion, include all normal, recurring adjustments necessary for a fair presentation of the results of interim periods. The year-end condensed consolidated balance sheet data as of June 30, 2017 , were derived from audited financial statements, but do not include all disclosures required by U.S. GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. |
Adopted and Pending Accounting Pronouncements | Adopted Accounting Pronouncements — ASU 2016-07—In March 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) simplifying the transition to the equity method of accounting. The new guidance eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The Company adopted this standard effective July 1, 2017. The adoption of this guidance did not have an impact on our results of operations, cash flows, or disclosures. ASU 2016-09—In March 2016, as a part of its simplification initiative, the FASB issued guidance on the accounting for employee share-based payments. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax treatment, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this standard effective July 1, 2017. The adoption of this guidance resulted in the prospective recognition of realized excess tax benefits related to the exercise or vesting of share-based awards in our Condensed Consolidated Statements of Earnings instead of in additional paid-in capital within our Condensed Consolidated Balance Sheets. See Note 7 for discussion of the credits to income tax expense recorded in our Condensed Consolidated Statements of Earnings. Using a modified retrospective application, the Company has elected to recognize forfeitures as they occur and recorded a $1.0 million increase to additional paid-in capital, a $0.6 million reduction to retained earnings, and a $0.4 million reduction to deferred taxes to reflect the incremental share-based compensation expense, net of the related tax impacts, that would have been recognized in prior years under the modified guidance. Presentation requirements for cash flows related to employee taxes paid using withheld shares had no impact to all periods presented as such cash flows have historically been presented as financing activities. We no longer classify excess tax benefits related to share-based awards as a financing cash inflow and an operating cash outflow. This classification requirement was adopted prospectively and, as such, our Condensed Consolidated Statement of Cash Flows has not been retrospectively adjusted. Pending Accounting Pronouncements — ASU 2017-12—In August 2017, the FASB issued guidance amending hedge accounting requirements. The purpose of this guidance is to better align a company's risk management activities and financial reporting requirements, and to simplify the application of hedge accounting. The effective date is the first quarter of fiscal 2020, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on our results of operations, cash flows, or disclosures. ASU 2014-09—In May 2014, the FASB issued an accounting standards update that replaces existing revenue recognition guidance. The new guidance requires a company to recognize revenue for the transfer of promised goods or services equal to the amount it expects to receive in exchange for those goods or services. The guidance includes a five-step framework to determine the timing and amount of revenue to recognize related to contracts with customers. Additionally, the guidance requires new and significantly enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows from customer contracts as well as judgments made by a company when following the framework. The FASB continues to issue amendments to further clarify provisions of this guidance. These amendments will be effective upon adoption of the standard. The Company will adopt the standard beginning July 1, 2018 (fiscal 2019). The two permitted transition methods are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized in the earliest period shown; or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. While a final decision has not been made, we currently anticipate adopting the standard using the modified retrospective method. We are in the process of assessing and documenting the impact of the guidance on our current accounting policies and practices to identify material differences, if any, that would result from applying the new requirements to our revenue contracts. We continue to make progress on our revenue recognition analyses and are currently evaluating the impact, if any, on changes to our business processes, systems, and controls to support recognition and disclosure requirements under the new guidance. As these analyses are completed, the Company will be better able to quantify the anticipated impact, if any, to our consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Major components of inventories are summarized below. Of total net inventory values shown, 67 percent are under the last-in first-out (LIFO) method at December 31, 2017 , and 65 percent at June 30, 2017 . (In thousands) December 31, 2017 June 30, 2017 Raw materials $ 10,161 $ 13,404 Work in process 11,351 8,665 Finished goods 1,188 1,111 22,700 23,180 Reserve for LIFO cost valuation (1,290 ) (1,290 ) Inventories $ 21,410 $ 21,890 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following: December 31, 2017 June 30, 2017 (In thousands) Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization National media Advertiser relationships $ 13,810 $ (12,772 ) $ 1,038 $ 18,610 $ (15,514 ) $ 3,096 Customer lists 4,200 (525 ) 3,675 7,280 (3,395 ) 3,885 Other 21,325 (10,387 ) 10,938 22,325 (9,850 ) 12,475 Local media Network affiliation agreements 229,309 (145,431 ) 83,878 229,309 (142,216 ) 87,093 Retransmission agreements 27,923 (12,808 ) 15,115 27,923 (10,700 ) 17,223 Other 1,670 (643 ) 1,027 1,680 (472 ) 1,208 Total $ 298,237 $ (182,566 ) 115,671 $ 307,127 $ (182,147 ) 124,980 Intangible assets not subject to amortization National media Internet domain names 7,827 7,827 Trademarks 128,150 147,915 Local media FCC licenses 675,161 675,161 Total 811,138 830,903 Intangible assets, net $ 926,809 $ 955,883 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following: December 31, 2017 June 30, 2017 (In thousands) Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization National media Advertiser relationships $ 13,810 $ (12,772 ) $ 1,038 $ 18,610 $ (15,514 ) $ 3,096 Customer lists 4,200 (525 ) 3,675 7,280 (3,395 ) 3,885 Other 21,325 (10,387 ) 10,938 22,325 (9,850 ) 12,475 Local media Network affiliation agreements 229,309 (145,431 ) 83,878 229,309 (142,216 ) 87,093 Retransmission agreements 27,923 (12,808 ) 15,115 27,923 (10,700 ) 17,223 Other 1,670 (643 ) 1,027 1,680 (472 ) 1,208 Total $ 298,237 $ (182,566 ) 115,671 $ 307,127 $ (182,147 ) 124,980 Intangible assets not subject to amortization National media Internet domain names 7,827 7,827 Trademarks 128,150 147,915 Local media FCC licenses 675,161 675,161 Total 811,138 830,903 Intangible assets, net $ 926,809 $ 955,883 |
Schedule of Goodwill | Changes in the carrying amount of goodwill were as follows: Six months ended December 31, 2017 2016 (In thousands) National Local Total National Local Total Balance at beginning of period Goodwill $ 943,803 $ 80,604 $ 1,024,407 $ 931,303 $ 68,775 $ 1,000,078 Accumulated impairment losses (116,949 ) — (116,949 ) (116,949 ) — (116,949 ) Total goodwill 826,854 80,604 907,458 814,354 68,775 883,129 Activity during the period Acquisition adjustments 100 — 100 12,260 — 12,260 Balance at end of period Goodwill 943,903 80,604 1,024,507 943,563 68,775 1,012,338 Accumulated impairment losses (116,949 ) — (116,949 ) (116,949 ) — (116,949 ) Total goodwill $ 826,954 $ 80,604 $ 907,558 $ 826,614 $ 68,775 $ 895,389 |
Restructuring Accrual (Tables)
Restructuring Accrual (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | Details of changes in the Company's restructuring accrual are as follows: Six months ended December 31, 2017 2016 (In thousands) Balance at beginning of period $ 8,674 $ 7,388 Severance accruals 2,956 7,578 Cash payments (4,946 ) (3,484 ) Reversal of excess accrual (242 ) (13 ) Balance at end of period $ 6,442 $ 11,469 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: (In thousands) December 31, 2017 June 30, 2017 Variable-rate credit facilities Asset-backed bank facility of $100 million, due 10/18/2019 $ 75,000 $ 75,000 Revolving credit facility of $200 million, due 11/30/2021 90,000 85,000 Term loan due 11/30/2021 234,375 240,625 Private placement notes 3.04% senior notes, due 3/1/2018 50,000 50,000 Floating rate senior notes, due 12/19/2022 100,000 100,000 Floating rate senior notes, due 2/28/2024 150,000 150,000 Total long-term debt 699,375 700,625 Unamortized debt issuance costs (2,198 ) (2,388 ) Current portion of long-term debt (65,625 ) (62,500 ) Long-term debt $ 631,552 $ 635,737 |
Pension and Postretirement Be25
Pension and Postretirement Benefit Plans (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Costs | The following table presents the components of net periodic benefit costs: Three Months Six Months Periods ended December 31, 2017 2016 2017 2016 (In thousands) Pension benefits Service cost $ 3,251 $ 3,136 $ 6,502 $ 6,273 Interest cost 1,470 1,225 2,940 2,450 Expected return on plan assets (2,616 ) (2,298 ) (5,232 ) (4,596 ) Prior service cost amortization 72 49 144 97 Actuarial loss amortization 513 897 1,026 1,794 Net periodic benefit costs $ 2,690 $ 3,009 $ 5,380 $ 6,018 Postretirement benefits Service cost $ 19 $ 23 $ 38 $ 46 Interest cost 82 80 164 160 Prior service credit amortization (85 ) (98 ) (170 ) (196 ) Actuarial gain amortization (81 ) (77 ) (162 ) (155 ) Net periodic benefit credit $ (65 ) $ (72 ) $ (130 ) $ (145 ) |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculations of earnings per share: Three Months Six Months Periods ended December 31, 2017 2016 2017 2016 (In thousands except per share data) Net earnings $ 159,308 $ 71,805 $ 192,749 $ 105,778 Basic average shares outstanding 44,857 44,511 44,818 44,535 Dilutive effect of stock options and equivalents 744 867 785 850 Diluted average shares outstanding 45,601 45,378 45,603 45,385 Earnings per share Basic earnings per share $ 3.55 $ 1.61 $ 4.30 $ 2.38 Diluted earnings per share 3.49 1.58 4.23 2.33 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table sets forth the carrying value and the estimated fair value of the Company's financial instruments not measured at fair value on a recurring basis: December 31, 2017 June 30, 2017 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Broadcast rights payable $ 41,470 $ 39,609 $ 31,660 $ 30,544 Total long-term debt 699,375 699,391 700,625 700,714 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the assets and liabilities measured at fair value on a recurring basis: (In thousands) December 31, 2017 June 30, 2017 Other current assets Interest rate swaps $ 480 $ — Property, plant, and equipment Corporate airplanes, held for sale — 1,927 Other assets Interest rate swaps 621 158 Accrued expenses and other liabilities Contingent consideration 24,815 4,000 Interest rate swaps — 602 Other noncurrent liabilities Contingent consideration 4,080 30,211 |
Fair Value Measurements, Nonrecurring [Table Text Block] | The following table sets forth the assets measured at fair value on a non-recurring basis: (In thousands) December 31, 2017 June 30, 2017 Trademarks 1 $ 35,900 $ — 1 Represents the fair value of trademarks that were partially impaired during fiscal 2018. Not considered to be measured at fair market value as of June 30, 2017. For further discussion, refer to Note 4. |
Changes in Fair Value of Level 3 Contingent Consideration and Corporate Airplanes | Details of changes in the fair value of Level 3 contingent consideration, corporate airplanes, and trademarks are as follows: Six months ended December 31, 2017 2016 (in thousands) Contingent consideration Balance at beginning of period $ 34,211 $ 56,631 Additions due to acquisitions — 7,681 Payments (4,000 ) (4,000 ) Change in present value of contingent consideration 1 (1,316 ) (17,961 ) Balance at end of period $ 28,895 $ 42,351 Corporate airplanes, held for sale Balance at beginning of period $ 1,927 $ 2,800 Sale of corporate airplanes (1,927 ) — Balance at end of period $ — $ 2,800 Trademarks 2 Balance at beginning of year $ 55,665 $ — Impairment (19,765 ) — Balance at end of period $ 35,900 $ — 1 Change in present value of contingent consideration is recorded in the selling, general, and administrative expense line on the Condensed Consolidated Statements of Earnings and is comprised of changes in estimated earn out payments based on projections of performance and the accretion of the present value discount. 2 Represents the fair value of trademarks, which were partially impaired during fiscal 2018. Not considered to be measured at fair market value as of June 30, 2017. For further discussion, refer to Note 4. |
Financial Information about I28
Financial Information about Industry Segments (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents financial information by segment: Three Months Six Months Periods ended December 31, 2017 2016 2017 2016 (In thousands) Revenues National media $ 247,441 $ 259,345 $ 486,401 $ 506,638 Local media 170,257 183,297 324,068 335,883 Total revenues $ 417,698 $ 442,642 $ 810,469 $ 842,521 Segment profit National media $ 12,247 $ 46,757 $ 40,503 $ 70,868 Local media 50,515 76,815 91,457 127,437 Unallocated corporate (25,417 ) (13,747 ) (37,817 ) (27,718 ) Income from operations 37,345 109,825 94,143 170,587 Interest expense, net (5,171 ) (4,679 ) (10,249 ) (9,428 ) Earnings before income taxes $ 32,174 $ 105,146 $ 83,894 $ 161,159 Depreciation and amortization National media $ 3,789 $ 4,330 $ 7,776 $ 8,848 Local media 7,886 8,865 15,824 17,855 Unallocated corporate 783 354 1,408 742 Total depreciation and amortization $ 12,458 $ 13,549 $ 25,008 $ 27,445 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Jun. 30, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for adoption of ASU, increase (decrease) | $ 400 | |||
Deferred income taxes | $ (263,242) | $ (384,726) | ||
Accounting Standards Update 2016-09, Forfeiture Rate Component [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred income taxes | $ 400 | |||
Additional Paid-in Capital [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for adoption of ASU, increase (decrease) | $ 1,042 | |||
Additional Paid-in Capital [Member] | Accounting Standards Update 2016-09, Forfeiture Rate Component [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for adoption of ASU, increase (decrease) | 1,000 | |||
Retained Earnings [Member] | Accounting Standards Update 2016-09, Forfeiture Rate Component [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for adoption of ASU, increase (decrease) | $ (600) |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Gain on disposition of assets | $ 3,282 | $ 0 | ||
FY 2017 Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Increase in goodwill | $ 100 | |||
Decrease in intangible assets | $ 100 | |||
Charleston Tennis LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership percentage sold | 70.00% | |||
Proceeds from divestiture of business | $ 600 | |||
Noncash or part noncash divestiture, amount of consideration received | $ 8,500 | |||
Noncash or part noncash divestiture, consideration installment period | 8 years | |||
Note receivable, discount | 3,600 | |||
Note receivable, allowance | 2,800 | |||
Remeasurement gain on disposition of assets | $ 1,000 | |||
Equity method investment, ownership percentage | 30.00% | |||
Charleston Tennis LLC [Member] | Selling, General, and Administrative Expenses [Member] | ||||
Business Acquisition [Line Items] | ||||
Gain on disposition of assets | $ 3,300 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Percentage of LIFO Inventory | 67.00% | 65.00% |
Raw materials | $ 10,161 | $ 13,404 |
Work in process | 11,351 | 8,665 |
Finished goods | 1,188 | 1,111 |
Subtotal | 22,700 | 23,180 |
Reserve for LIFO cost valuation | (1,290) | (1,290) |
Inventories | $ 21,410 | $ 21,890 |
Intangible Assets and Goodwil32
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | $ 298,237 | $ 298,237 | $ 307,127 | |
Intangible assets subject to amortization, accumulated amortization | (182,566) | (182,566) | (182,147) | |
Intangible assets subject to amortization, net amount | 115,671 | 115,671 | 124,980 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets not subject to amortization | 811,138 | 811,138 | 830,903 | |
Intangible assets, net | 926,809 | 926,809 | 955,883 | |
Amortization expense | 9,209 | $ 9,560 | ||
Future amortization expense for intangible assets [Abstract] | ||||
Future amortization expense, fiscal 2018 | 17,100 | 17,100 | ||
Future amortization expense, fiscal 2019 | 14,600 | 14,600 | ||
Future amortization expense, fiscal 2020 | 13,700 | 13,700 | ||
Future amortization expense, fiscal 2021 | 9,700 | 9,700 | ||
Future amortization expense, fiscal 2022 | 7,300 | 7,300 | ||
Internet domain names [Member] | National media [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets not subject to amortization | 7,827 | 7,827 | 7,827 | |
Trademarks [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Impairment of long-lived assets | 19,800 | |||
Trademarks [Member] | National media [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets not subject to amortization | 128,150 | 128,150 | 147,915 | |
FCC licenses [Member] | Local media [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets not subject to amortization | 675,161 | 675,161 | 675,161 | |
Advertiser relationships [Member] | National media [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | 13,810 | 13,810 | 18,610 | |
Intangible assets subject to amortization, accumulated amortization | (12,772) | (12,772) | (15,514) | |
Intangible assets subject to amortization, net amount | 1,038 | 1,038 | 3,096 | |
Customer lists [Member] | National media [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | 4,200 | 4,200 | 7,280 | |
Intangible assets subject to amortization, accumulated amortization | (525) | (525) | (3,395) | |
Intangible assets subject to amortization, net amount | 3,675 | 3,675 | 3,885 | |
Other [Member] | National media [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | 21,325 | 21,325 | 22,325 | |
Intangible assets subject to amortization, accumulated amortization | (10,387) | (10,387) | (9,850) | |
Intangible assets subject to amortization, net amount | 10,938 | 10,938 | 12,475 | |
Other [Member] | Local media [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | 1,670 | 1,670 | 1,680 | |
Intangible assets subject to amortization, accumulated amortization | (643) | (643) | (472) | |
Intangible assets subject to amortization, net amount | 1,027 | 1,027 | 1,208 | |
Network affiliation agreements [Member] | Local media [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | 229,309 | 229,309 | 229,309 | |
Intangible assets subject to amortization, accumulated amortization | (145,431) | (145,431) | (142,216) | |
Intangible assets subject to amortization, net amount | 83,878 | 83,878 | 87,093 | |
Retransmission agreements [Member] | Local media [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets subject to amortization, gross amount | 27,923 | 27,923 | 27,923 | |
Intangible assets subject to amortization, accumulated amortization | (12,808) | (12,808) | (10,700) | |
Intangible assets subject to amortization, net amount | $ 15,115 | $ 15,115 | $ 17,223 |
Intangible Assets and Goodwil33
Intangible Assets and Goodwill - Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 1,024,407 | $ 1,000,078 |
Accumulated impairment loss | (116,949) | (116,949) |
Total goodwill | 907,458 | 883,129 |
Acquisition adjustments | 100 | 12,260 |
Goodwill, ending balance | 1,024,507 | 1,012,338 |
Accumulated impairment loss | (116,949) | (116,949) |
Total goodwill | 907,558 | 895,389 |
National media [Member] | ||
Goodwill [Line Items] | ||
Goodwill, purchase accounting adjustments | 100 | 12,260 |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 943,803 | 931,303 |
Accumulated impairment loss | (116,949) | (116,949) |
Total goodwill | 826,854 | 814,354 |
Goodwill, ending balance | 943,903 | 943,563 |
Accumulated impairment loss | (116,949) | (116,949) |
Total goodwill | 826,954 | 826,614 |
Local media [Member] | ||
Goodwill [Line Items] | ||
Goodwill, purchase accounting adjustments | 0 | 0 |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 80,604 | 68,775 |
Accumulated impairment loss | 0 | 0 |
Total goodwill | 80,604 | 68,775 |
Goodwill, ending balance | 80,604 | 68,775 |
Accumulated impairment loss | 0 | 0 |
Total goodwill | $ 80,604 | $ 68,775 |
Restructuring Accrual - Narrati
Restructuring Accrual - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017USD ($)employees | Dec. 31, 2016USD ($)employees | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2,956 | $ 7,578 | ||
Restructuring Related To 2018 Performance Improvement Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 3,100 | |||
Severance payment period | 12 months | |||
Number of employees affected | employees | 90 | |||
Restructuring Related To 2017 Performance Improvement Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 8,100 | |||
Number of employees affected | employees | 125 | |||
Selling, General, and Administrative Expenses [Member] | Restructuring Related To 2018 Performance Improvement Plan [Member] | Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 3,000 | |||
Selling, General, and Administrative Expenses [Member] | Restructuring Related To 2017 Performance Improvement Plan [Member] | Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 7,600 | |||
Selling, General, and Administrative Expenses [Member] | Restructuring Related To 2017 Performance Improvement Plan [Member] | Other Restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 300 | |||
Production, distribution, and editorial [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Inventory write-down | $ 200 | |||
Production, distribution, and editorial [Member] | Restructuring Related To 2018 Performance Improvement Plan [Member] | Other Restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 100 |
Restructuring Accrual - Changes
Restructuring Accrual - Changes in Restructuring Accrual (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 8,674 | $ 7,388 |
Severance accruals | 2,956 | 7,578 |
Cash payments | (4,946) | (3,484) |
Reversal of excess accrual | (242) | (13) |
Balance at end of period | $ 6,442 | $ 11,469 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 699,375,000 | $ 700,625,000 |
Unamortized debt issuance costs | (2,198,000) | (2,388,000) |
Current portion of long-term debt | (65,625,000) | (62,500,000) |
Long-term debt | $ 631,552,000 | 635,737,000 |
Subordinated note receivable, interest rate | 4.50% | |
Line of Credit [Member] | Asset Backed Bank Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 75,000,000 | 75,000,000 |
Line of credit facility, maximum borrowing capacity | 100,000,000 | 100,000,000 |
Accounts receivable outstanding under the revolving agreement | 174,900,000 | |
Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 90,000,000 | 85,000,000 |
Line of credit facility, maximum borrowing capacity | 200,000,000 | 200,000,000 |
Term Loan Facility [Member] | Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 234,375,000 | 240,625,000 |
Senior Notes [Member] | Senior Notes 3.04% due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 50,000,000 | $ 50,000,000 |
Debt instrument, stated interest rate | 3.04% | 3.04% |
Senior Notes [Member] | Senior Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 100,000,000 | $ 100,000,000 |
Senior Notes [Member] | Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 150,000,000 | $ 150,000,000 |
Long-term Debt - Derivative (De
Long-term Debt - Derivative (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |
Subordinated note receivable, interest rate | 4.50% |
Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative asset | $ 1.1 |
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Notional amount of derivative | 300 |
Maximum loss on counterparties failure to meet obligations | 1.1 |
Cash Flow Hedging [Member] | Interest Rate Swap Expiring August 2018 [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 50 |
Fixed interest rate of derivative | 1.36% |
Variable interest rate of derivative | 1.51% |
Cash Flow Hedging [Member] | Interest Rate Swap Expiring March 2019 [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 100 |
Fixed interest rate of derivative | 1.53% |
Variable interest rate of derivative | 1.64% |
Cash Flow Hedging [Member] | Interest Rate Swaps Expiring August 2019 [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 150 |
Fixed interest rate of derivative | 1.76% |
Variable interest rate of derivative | 1.48% |
Senior Notes Due 2022 and 2024 [Member] | Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | $ 250 |
Term Loan Facility [Member] | Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative, amount of hedged items | 50 |
Line of Credit [Member] | Asset Backed Bank Facility [Member] | |
Derivative [Line Items] | |
Accounts receivable outstanding under the revolving agreement | $ 174.9 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Income Tax Contingency [Line Items] | ||||||
Income tax expense (benefit) | $ 127,134 | $ (33,341) | $ 108,855 | $ (55,381) | ||
Results of change in federal tax rate | 600 | |||||
Provisional income tax benefit from remeasurement of deferred tax assets and liabilities | 133,000 | |||||
Excess tax benefits from share-based payments | $ 1,000 | $ 2,100 | ||||
Scenario, Forecast [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Blended federal tax rate | 28.00% | |||||
Restatement Adjustment [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Results of change in federal tax rate | (4,400) | |||||
Pro Forma [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Results of change in federal tax rate | $ (3,700) | |||||
Time, Inc. [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Percent of acquisition-related expenses determined to be tax deductible | 40.00% | |||||
Selling, General, and Administrative Expenses [Member] | Time, Inc. [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Acquisition-related expenses | $ 12,100 |
Pension and Postretirement Be39
Pension and Postretirement Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Plans [Member] | ||||
Components of Net Periodic Benefit Costs [Abstract] | ||||
Service cost | $ 3,251 | $ 3,136 | $ 6,502 | $ 6,273 |
Interest cost | 1,470 | 1,225 | 2,940 | 2,450 |
Expected return on plan assets | (2,616) | (2,298) | (5,232) | (4,596) |
Prior service cost (credit) amortization | 72 | 49 | 144 | 97 |
Actuarial loss (gain) amortization | 513 | 897 | 1,026 | 1,794 |
Net periodic benefit costs (credit) | 2,690 | 3,009 | 5,380 | 6,018 |
Postretirement Benefit Plans [Member] | ||||
Components of Net Periodic Benefit Costs [Abstract] | ||||
Service cost | 19 | 23 | 38 | 46 |
Interest cost | 82 | 80 | 164 | 160 |
Prior service cost (credit) amortization | (85) | (98) | (170) | (196) |
Actuarial loss (gain) amortization | (81) | (77) | (162) | (155) |
Net periodic benefit costs (credit) | $ (65) | $ (72) | $ (130) | $ (145) |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 159,308 | $ 71,805 | $ 192,749 | $ 105,778 |
Basic average shares outstanding (in shares) | 44,857 | 44,511 | 44,818 | 44,535 |
Dilutive effect of stock options and equivalents (in shares) | 744 | 867 | 785 | 850 |
Diluted average shares outstanding (in shares) | 45,601 | 45,378 | 45,603 | 45,385 |
Earnings per share | ||||
Basic earnings per share (in usd per share) | $ 3.55 | $ 1.61 | $ 4.30 | $ 2.38 |
Diluted earnings per share (in usd per share) | $ 3.49 | $ 1.58 | $ 4.23 | $ 2.33 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Option exercise purchases | 500 | 400 | ||
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive options excluded from calculation of earnings per share, number of options | 200 | 800 | 400 | 500 |
Antidilutive options excluded from calculation of earnings per share, weighted average exercise price (in usd per share) | $ 66.44 | $ 53.64 | $ 63.18 | $ 53.98 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Broadcast rights payable | $ 41,470 | $ 31,660 |
Total long-term debt | 699,375 | 700,625 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Broadcast rights payable | 39,609 | 30,544 |
Total long-term debt | $ 699,391 | $ 700,714 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Level 3 Contingent Consideration (Details) - Measured at fair value on recurring basis [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Contingent Consideration [Member] | ||
Contingent consideration [Roll Forward] | ||
Additions due to acquisitions | $ 0 | $ 7,681 |
Level 3 [Member] | Corporate airplanes [Member] | ||
Corporate airplanes and trademarks [Roll Forward] | ||
Balance at beginning of period | 1,927 | 2,800 |
Sale of corporate airplanes | (1,927) | 0 |
Balance at end of period | 0 | 2,800 |
Level 3 [Member] | Trademarks [Member] | ||
Corporate airplanes and trademarks [Roll Forward] | ||
Balance at beginning of period | 55,665 | 0 |
Impairment | (19,765) | 0 |
Balance at end of period | 35,900 | 0 |
Level 3 [Member] | Contingent Consideration [Member] | ||
Contingent consideration [Roll Forward] | ||
Balance at beginning of period | 34,211 | 56,631 |
Payments | (4,000) | (4,000) |
Change in present value of contingent consideration | (1,316) | (17,961) |
Balance at end of period | $ 28,895 | $ 42,351 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Trademarks [Member] | Measured at fair value on a nonrecurring basis [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trademarks | $ 35,900 | $ 0 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - Measured at fair value on recurring basis [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Other Current Assets [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 480 | $ 0 |
Property, Plant and Equipment [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate airplanes, held for sale | 0 | 1,927 |
Other assets [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 621 | 158 |
Accrued expenses and other liabilities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 24,815 | 4,000 |
Accrued expenses and other liabilities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 0 | 602 |
Other noncurrent liabilities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 4,080 | $ 30,211 |
Financial Information about I45
Financial Information about Industry Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($)measuresegment | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Number of principal financial measures | measure | 2 | |||
Total revenues | $ 417,698 | $ 442,642 | $ 810,469 | $ 842,521 |
Income from operations | 37,345 | 109,825 | 94,143 | 170,587 |
Interest expense, net | (5,171) | (4,679) | (10,249) | (9,428) |
Earnings before income taxes | 32,174 | 105,146 | 83,894 | 161,159 |
Depreciation and amortization | 12,458 | 13,549 | 25,008 | 27,445 |
National media [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 247,441 | 259,345 | 486,401 | 506,638 |
Income from operations | 12,247 | 46,757 | 40,503 | 70,868 |
Depreciation and amortization | 3,789 | 4,330 | 7,776 | 8,848 |
Local media [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 170,257 | 183,297 | 324,068 | 335,883 |
Income from operations | 50,515 | 76,815 | 91,457 | 127,437 |
Depreciation and amortization | 7,886 | 8,865 | 15,824 | 17,855 |
Unallocated corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations | (25,417) | (13,747) | (37,817) | (27,718) |
Depreciation and amortization | $ 783 | $ 354 | $ 1,408 | $ 742 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Thousands | Jan. 31, 2018USD ($)consumerreadervisitorcopy$ / sharesshares | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||
Subsequent Event [Line Items] | ||||
Notional amount of derivative | $ 300,000 | |||
Selling, General, and Administrative Expenses [Member] | Time, Inc. [Member] | ||||
Subsequent Event [Line Items] | ||||
Acquisition-related expenses | 12,100 | |||
Senior Notes [Member] | Floating Rate Unsecured Senior Notes [Member] | ||||
Subsequent Event [Line Items] | ||||
Long-term debt, gross | 250,000 | |||
Line of Credit [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Long-term debt, gross | $ 90,000 | $ 85,000 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Investment from private equity firm | $ 650,000 | |||
Subsequent Event [Member] | Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||
Subsequent Event [Line Items] | ||||
Unrealized gain on interest rate swaps | $ 1,100 | |||
Unamortized debt issuance costs | $ 2,200 | |||
Subsequent Event [Member] | Time, Inc. [Member] | ||||
Subsequent Event [Line Items] | ||||
Total purchase price per share (in usd per share) | $ / shares | $ 18.50 | |||
Total purchase price | $ 2,800,000 | |||
Number of american consumers | consumer | 200,000,000 | |||
Readership (more than) | reader | 135,000,000 | |||
Circulation | copy | 60,000,000 | |||
Monthly unique visitors | visitor | 170,000,000 | |||
Subsequent Event [Member] | Stock Options [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares of common stock called by warrants | shares | 875,000 | |||
Exercise price (in usd per share) | $ / shares | $ 70.50 | |||
Subsequent Event [Member] | Warrant [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares of common stock called by warrants | shares | 1,625,000 | |||
Exercise price (in usd per share) | $ / shares | $ 1 | |||
Subsequent Event [Member] | Senior Secured Term Loan Due 2025 [Member] | LIBOR [Member] | ||||
Subsequent Event [Line Items] | ||||
Basis spread on variable rate | 3.00% | |||
Subsequent Event [Member] | Secured Debt [Member] | Senior Secured Term Loan Due 2025 [Member] | ||||
Subsequent Event [Line Items] | ||||
Face amount of debt | $ 1,800,000 | |||
Subsequent Event [Member] | Senior Notes [Member] | Senior Unsecured Notes Due 2026 [Member] | ||||
Subsequent Event [Line Items] | ||||
Face amount of debt | $ 1,400,000 | |||
Debt instrument, stated interest rate | 6.875% | |||
Subsequent Event [Member] | Line of Credit [Member] | Five-Year Senior Secured Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Face amount of debt | $ 350,000 | |||
Private Placement [Member] | Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Preferred stock issued (in shares) | shares | 650,000 |