GANNETT CO INC /DE/ | 2013 | FY | 3


Facility consolidation and asset impairment charges
For the years 2011-2013, the company recognized charges related to facility consolidation efforts. The company also recorded non-cash impairment charges to reduce the book value of goodwill, other intangible assets and long-lived assets. Impairment charges for certain minority-owned investments accounted for under the equity or cost methods were also recorded. In addition, the company recorded charges to write off certain publishing assets that were donated during 2013.
A summary of these charges by year is presented below:
In thousands, except per share amounts
2013
Pre-Tax
Amount (a)
After-Tax
Amount
(a)
Per Share Amount(a)
Facility consolidation and asset impairment charges:
Goodwill:
 
 
 
Publishing
$
8,430

$
4,930

$
0.02

Digital
11,614

6,914

0.03

Total goodwill
20,044

11,844

0.05

Other intangible assets - Publishing
12,952

7,852

0.03

Property, plant and equipment - Publishing
14,756

8,856

0.04

Other:
 
 
 
Broadcasting
1,033

533


Publishing
9,454

5,754

0.02

Total other
10,487

6,287

0.03

Total facility consolidation and asset impairment charges against operations
58,240

34,840

0.15

Non-operating charges:
 
 
 
Equity method investments
731

431


Other - Publishing
2,774

1,774

0.01

Total charges
$
61,745

$
37,045

$
0.16

 (a) Total amounts may not sum due to rounding.
In thousands, except per share amounts
2012
Pre-Tax
Amount
After-Tax
Amount 
Per Share Amount(a)
Facility consolidation and asset impairment charges:
Goodwill - Digital
$
90,053

$
86,553

$
0.37

Property, plant and equipment - Publishing
29,520

17,920

0.08

Other - Publishing
2,556

1,656

0.01

Total facility consolidation and asset impairment charges against operations
122,129

106,129

0.45

Non-operating charges:
 
 
 
Equity method investments
7,036

4,336

0.02

Total charges
$
129,165

$
110,465

$
0.47

(a) Total amounts may not sum due to rounding.

In thousands, except per share amounts
2011
Pre-Tax
Amount
After-Tax
Amount
Per  Share
Amount
Facility consolidation and asset impairment charges:
Property, plant and equipment:
 
 
 
Publishing
$
17,085

$
10,282

$
0.04

Total property, plant and equipment
17,085

10,282

0.04

Other:
 
 
 
Publishing
10,158

7,261

0.03

Total other
10,158

7,261

0.03

Total facility consolidation and asset impairment charges against operations
27,243

17,543

0.07

Non-operating charges:
 
 
 
Equity method investments
15,739

9,539

0.04

Other investments
14,529

8,729

0.04

Total charges
$
57,511

$
35,811

$
0.15



In connection with the required annual impairment test of goodwill and indefinite-lived intangibles, potential impairments were indicated in 2012 and 2013 for certain reporting units in the company’s Publishing and Digital Segments. The fair value of the reporting units was determined based on a multiple of earnings technique and/or a discounted cash flow technique. The company then undertook the next step in the impairment testing process by determining the fair value of assets and liabilities within these reporting units. The implied value was less than the carrying value and therefore the impairment charges were taken.
The impairment charges in 2013 for other intangible assets, principally trade names and a masthead, were required because revenue results from the underlying business had softened from what was expected. Fair value was determined using a relief-from-royalty method. Carrying values were reduced to fair value for these assets.
Facility consolidation plans led the company to recognize charges associated with revising the useful lives of certain assets over a shortened periods as well as shutdown costs. Charges were recognized in the years 2011-2013. Certain assets classified as held-for-sale in accordance with ASC Topic 360 resulted in charges being recognized in 2012 and 2013 as the carrying values were reduced to equal the fair value less cost to dispose. These fair values were based on estimates of prices for similar assets.
During 2011-2013, carrying values of certain investments in which the company owns noncontrolling interests were written down to fair value because the businesses underlying the investments had experienced significant and sustained operating losses, leading the company to conclude that they were other than temporarily impaired.
In addition, the company recorded non-operating charges to write off certain publishing assets that were donated during 2013.

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