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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 19931994 COMMISSION FILE NUMBER 1-5837
THE NEW YORK TIMES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-1102020
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
229 WEST 43D STREET, NEW YORK, N. Y. 10036
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 556-1234
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
Class A Common Stock of $.10 par value American Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Not Applicable
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes. X. No. ....
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of Class A Common Stock held by non-affiliates as
of February 28, 1994,27, 1995, was approximately $2.14$1.46 billion. As of such date,
non-affiliates held 55,59754,094 shares of Class B Common Stock. There is no active
market for such stock.
The number of outstanding shares of each class of the registrant's common
stock as of February 28, 1994,27, 1995, was as follows: 106,461,86397,454,012 shares of Class A
Common Stock and 431,681430,178 shares of Class B Common Stock.
DOCUMENT INCORPORATED BY REFERENCE PART
Proxy Statement for the 19941995 Annual Meeting of Stockholders . .................. III
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INDEX TO THE NEW YORK TIMES COMPANY
19931994 FORM 10-K
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PART I
ITEM NO. PAGE
1. Business......................................................................... 1
Introduction................................................................. 1
Summary of Segment Information............................................ 1
Newspapers................................................................... 2
The New York Times........................................................ 2
Circulation............................................................ 2
Advertising............................................................ 3
Production............................................................. 3
The Boston Globe.......................................................... 4
Circulation............................................................ 4
Advertising............................................................ 5
Production............................................................. 5
Regional Newspapers....................................................... 5
International Herald Tribune S.A.......................................... 6
Magazines.................................................................... 6
Women's Magazines......................................................... 6
Sports/Leisure Magazines.................................................. 7
Broadcasting/Information Services............................................ 7
Broadcasting.............................................................. 7
Information Services...................................................... 8
Forest Products Companies.................................................... 8
Competition.................................................................. 9
Employees.................................................................... 10
2. Properties....................................................................... 10
3. Legal Proceedings................................................................ 11
4. Submission of Matters to a Vote of Security Holders.............................. 11
Executive Officers of the Registrant................................................ 11
PART II
5. Market for the Registrant's Common Equity and Related Stockholder Matters........ 13
6. Selected Financial Data.......................................................... 13
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 13
8. Financial Statements and Supplementary Data...................................... 13
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.......................................................................... 13
PART III
10. Directors and Executive Officers of the Registrant.............................. 13
11. Executive Compensation.......................................................... 13
12. Security Ownership of Certain Beneficial Owners and Management.................. 13
13. Certain Relationships and Related Transactions.................................. 13
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.................ITEM NO. PAGE
1. Business......................................................... 1
Introduction.................................................. 1
Summary of Segment Information.............................. 1
Newspapers.................................................... 2
The New York Times.......................................... 2
Circulation............................................... 2
Advertising............................................... 2
Production................................................ 3
The Boston Globe............................................ 4
Circulation............................................... 4
Advertising............................................... 5
Production................................................ 5
Regional Newspapers......................................... 6
International Herald Tribune................................ 6
Magazines..................................................... 7
Broadcasting/Information Services............................. 7
Broadcasting................................................ 7
Information Services........................................ 8
Forest Products Companies..................................... 8
Competition................................................... 9
Employees..................................................... 10
2. Properties....................................................... 10
3. Legal Proceedings................................................ 11
4. Submission of Matters to a Vote of Security Holders.............. 11
Executive Officers of the Registrant.......................... 11
PART II
5. Market for the Registrant's Common Equity and Related Stockholder
Matters........................................................ 13
6. Selected Financial Data.......................................... 13
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 13
8. Financial Statements and Supplementary Data...................... 13
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure........................................... 13
PART III
10. Directors and Executive Officers of the Registrant.............. 13
11. Executive Compensation.......................................... 13
12. Security Ownership of Certain Beneficial Owners and Management.. 13
13. Certain Relationships and Related Transactions.................. 13
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form
8-K........................................................... 14
PART I
ITEM 1. BUSINESS.
INTRODUCTION
The New York Times Company (the "Company") was incorporated on August 26,
1896, under the laws of the State of New York. The Company is engaged in
diversified activities in the communications field. The Company also has
substantial equity interests in twoa Canadian newsprint companiescompany and a Maine
supercalendered paper manufacturing partnership.
On October 1, 1993, a wholly owned subsidiary of the Company was merged
with Affiliated Publications, Inc. ("API"), the parent company of The Boston
Globe, which became a wholly owned subsidiary of the Company. (See Note 2 of
Notes to Consolidated Financial Statements and "Newspapers--The Boston Globe".)
The Company currently classifies its businesses into the following segments:
Newspapers: The New York Times ("The Times"); The Boston Globe, a daily
newspaper, and the Boston Sunday Globe (both editions, "The Globe"); 23
other daily and five non-daily newspapers in Alabama, California, Florida,
Kentucky, Louisiana, Maine, Mississippi, North Carolina, South Carolina and
Tennessee ("Regional Newspapers"); a newspaper wholesalerwholesalers in the New York
City and Boston metropolitan area;areas; and a one-half interest in the
International Herald Tribune.
Magazines: Family Circle, McCall's, American HomeStyle, Child,
Fitness, Custom Builder, Golf Digest, Golf World, (U.S.), Golf World (U.K.),
Golf Shop Operations, Golf World Industry News (U.K.), Golf Weekly (U.K.), Tennis, Tennis
Buyer's Guide, Cruising World, Sailing World, Sailing Business, Snow Country
and SkiSnow Country Business.
Broadcasting/Information Services: television stations WREG-TV in
Memphis, Tennessee, WNEP-TV in Wilkes-Barre/Scranton, Pennsylvania, WHNT-TV
in Huntsville, Alabama, WQAD-TV in Moline, Illinois, and KFSM-TV in Fort
Smith, Arkansas; radio stations WQXR (FM) and WQEW (AM) in New York City;
NYT Video Productions; news, photo and graphics services and news and
features syndication; TimesFax; The New York Times Index; and licensing of
electronic data bases and microform, CD-ROM products and the trademarks and
copyrights of The Times.
SUMMARY OF SEGMENT INFORMATION
In 19931994 the Company's consolidated revenues increased to $2,357,563,000 from
$2,019,654,000 from $1,773,535,000 in 1992,1993, due principally to the October 1, 1993 acquisitioninclusion of the revenues of The
Globe the June 1992 acquisitionfor all of two wholesale newspaper distribution
businesses and1994, higher advertising and circulation revenues.revenues in the
Newspaper Group and increased local and national television advertising revenues
in the Broadcasting/Information Services Group offset, in part, by decreased
revenues resulting from the sales of the Company's Women's Magazines Division
and its U.K. golf publications. The Company's net income in 19931994 was
$213,349,000, or $2.05 per share, compared with $6,123,000, or $.07 per share,
compared with a net loss of
$44,709,000, or $.57 per share, in 1992.1993. The 19931994 net income includes net pre-tax charges aggregating $35,400,000,gains of approximately
$200,873,000, or $.23$.99 per share, to cover severance and
related costs resulting from anticipated white-collar and composing room staff
reductions at The Times and an after-tax noncash chargethe sales of $47,000,000, or $.56
per share, to write down the Company's
investment in its Forest Products Group
to reflect current operating conditions and economic factors in the industry.
The 1992 loss includes an after-tax charge of $33,437,000, or $.43 per share,
related to the net cumulative effect of adopting three accounting changes in
1992 and a pre-tax loss of $53,768,000, or $.47 per share, due to the closing of
The Gwinnett (Georgia) Daily News, the sale of its residual assetsWomen's Magazines Division and its 1992
operations.U.K. golf publications and the divestiture of
the Company's minority interest in a Canadian newsprint mill. A summary of
segment information for the three years ended December 31, 1993,1994, is set forth on
pages F-2 and F-3 of this Form 10-K. Also see "Management's Discussion and
Analysis" on pages F-4 through F-7F-8 of this Form 10-K.
As part of the API merger, the Company acquired a one-third interest in BPI
Communications, L.P. ("BPI"), a publisher of speciality magazines including
Billboard and Hollywood Reporter. In February 1994 BPI was sold and the Company
received approximately $53,000,000 for its interest. The Company expects to
receive additional payments of approximately $2,000,000 later in the year. (See
Note 2 of Notes to Consolidated Financial Statements.)
The Company's largest source of revenues is advertising, which influences
the pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that which occurs in the first quarter. Advertising volume tends to
be lower in the third quarter primarily because of the summer slow-down in many
areas of economic activity. In addition, quarterly trends are affected by the
overall economy and economic conditions that may exist in specific markets
served by the Company's business segments.
NEWSPAPERS
The Newspaper Group had revenues of $1,968,252,000 in 1994, compared with
$1,537,934,000 in 1993, compared with
$1,306,952,000 in 1992, and an operating profit of $114,332,000$196,067,000 in 1993,1994,
compared with $81,173,000 in 1992. Exclusive of the$114,332,000 (this amount includes certain special items for 1993
which are discussed in more detail in "Management's Discussion and Analysis" on
pagespage F-4 and F-5 of this Form 10-K, operating profit of the Newspaper Group increased to
$150,832,000 in 1993 from $129,073,000 in 1992.10-K). Improvements in operating profit were mainly due to
the inclusion of the results of The Globe since the October 1,
1993 acquisition date,for an entire year and higher
advertising and circulation revenues, cost
controls throughout the Group and cost savings related to The Times's Edison
facility. Advertising weakness at the Company's two California regional
newspapers and higher depreciation and newsprint prices partially offset the
higher results.revenues.
THE NEW YORK TIMES
CIRCULATION
The Times, a standard-size weekday and Sunday newspaper which commenced
publication in 1851, is circulated in each of the 50 states, and the District of
Columbia and worldwide. Approximately 64% of the weekday (Monday through Friday)
circulation is sold in the 31 counties that make up the greater New York City
area which includes New York City, Westchester and parts of upstate New York,
Connecticut and New Jersey; 36% is sold elsewhere. On Sundays, approximately 63%
of the circulation is sold in the greater New York City area and 37% elsewhere.
According to reports of the Audit Bureau of Circulations ("ABC"), an independent
agency that audits the circulation of most U.S. newspapers and magazines on an
annual basis, for the semi-annual period ended September 30, 1993,1994, of all
seven-day United States newspapers, The Times's daily and Sunday circulations
were the largest.
The Times's average weekday and Sunday circulations for the five 12-month
periods ended September 30, 1993,1994, as audited by ABC (except as indicated), are
shown in the table below.
Weekday Sunday
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(Thousands of copies)
1989............................................................. 1,091.9 1,644.1
1990............................................................. 1,128.3 1,695.9
1991............................................................. 1,160.0 1,730.0
1992............................................................. 1,175.9 1,757.0
1993 (unaudited)................................................. 1,185.0 1,785.0
Weekday Sunday
(Thousands of copies)
1990................................................ 1,128.3 1,695.9
1991................................................ 1,160.0 1,730.0
1992................................................ 1,175.9 1,757.0
1993................................................ 1,183.1 1,783.9
1994 (unaudited).................................... 1,149.7 1,746.7
During the year ended December 31, 1993,1994, the average weekday circulation of
The Times increaseddecreased by approximately 1,70036,200 copies to 1,179,0001,142,800 copies and the
average Sunday circulation of The Times increaseddecreased by approximately 17,10037,300 copies
to 1,781,2001,743,900 copies. Approximately 52% of the weekday circulation and 42% of the
larger Sunday circulation were sold through home and office delivery; the
remainder were sold primarily on newsstands.
The weekly rate charged to subscribers for home-delivered copies of The
Times in the New York City metropolitan area is $6.10. The suggested newsstand
price of The Times within the New York City metropolitan area is $.50$.60 on
weekdays and $2.00 on Sunday. The suggested newsstand price in the New
England-Middle Atlantic states outside the New York City metropolitan area is
$.75$1.00 on weekdays and $2.00$2.50 on Sundays. The suggested newsstand price of the
National Edition, distributed throughout the rest of the country, is $.75$1.00 on
weekdays and $3.50$4.00 on Sundays, except that, effective
January 10, 1994, the suggested
2
newsstand price of the National Edition in 11 southwest and southeast states and
the Caribbean is $1.00 on weekdays.Sundays.
ADVERTISING
The Times published 77,787,000 lines3,733,600 inches of advertising in 1993,1994, compared with
77,012,000 lines3,608,900 inches in 1992.1993. Both figures include part-run linage,volume, which totaled
21,728,000 lines925,600 inches in 1993,1994, compared with 20,574,000 lines854,600 inches in 1992.1993.
2
Total linagevolume in The Times for the five years ended December 31, 1993,1994, as
measured by Leading National Advertisers Incorporated ("LNA"), an independent
agency that measures advertising volume,The Times, is shown in the table below. The "National" heading in
the table below includes such categories as automotive,entertainment, financial, magazine
and general advertising.
Retail National Classified
---------------------- ---------------------- ---------------------- Total
Weekday Sunday Weekday Sunday Weekday Sunday
----------- --------- ----------- --------- ----------- --------- ---------
(Thousands of lines)
1989 21,365 29,267 13,527 15,581 9,612 18,681 108,033
1990 19,542 25,983 11,823 13,920 7,434 14,341 93,043
1991 17,344 22,318 10,173 12,134 5,661 10,988 78,618
1992 18,082 21,528 9,696 12,811 4,721 10,174 77,012
1993 18,377 23,172 9,494 12,463 4,030 10,251 77,787
Full Run
------------------------------- Preprint
Retail National Classified Zoned Total* Copies
Inches Inches Inches Inches Inches Distributed
------ -------- ---------- ------ ------- -----------
(Inches and Preprints in Thousands)
1990 805.6 1,273.8 1,490.2 906.2 4,475.8 235,794
1991 732.1 1,117.9 1,061.6 760.9 3,672.5 279,273
1992 700.7 1,106.3 970.6 819.8 3,597.4 269,007
1993 701.2 1,142.5 910.6 854.6 3,608.9 294,906
1994 693.3 1,166.6 948.1 925.6 3,733.6 294,985
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* All totals exclude preprint inches.
The table includes linagevolume for The New York Times Magazine, which published 2,8572,781
pages of advertising in 1993,1994, compared with 2,7422,857 pages in 1992.1993.
Advertising rates for The Times increased an average of 5% in January 19931994
and in January 1994.1995.
PRODUCTION
Except for The New York Times Magazine, the Television section, the
National Edition and certain supplements,Generally, The Times is currently produced at its New York City production facility
and aat its newly-operational production and distribution facility in Edison, New
Jersey.
The Times is fully photocomposed, and all news is processed through
electronic editing terminals and photocomposition equipment that produce text at
a rate of up to 3,000 lines per minute.equipment. Page images are
reproduced on lightweight printing plates through the use of negatives that are
produced by laser beams scanninglaser-scanned paste-ups. The page images are transmitted by direct
wire to the platemaking room in the Manhattan facility and by a combination of
microwave and satellite transmission from the composing room in the Manhattan
facility to the platemaking room in Edison and each of the eight National
Edition printing sites around the country.
The newTimes initiated a pagination program in the first quarter of 1994, which
enables editors to electronically design a newspaper page, including news text,
graphics and ads, thereby avoiding all or part of the manual paste-up of the
page before it is converted into a printing plate. By the end of 1994, three
Sunday sections and a small number of daily pages were paginated. The Times's
goal is to paginate the entire newspaper by the end of 1996.
The Edison facility which recently replaced an older production
facility in Carlstadt, New Jersey, prints all the advance sections of the Sunday newspaper
(except The New York Times Magazine and the Television section) and
approximately one-third of the weekday New York edition. The Edison facility
houses six 10-unit Goss Colorliner presses as well as modern, automated
packaging and distribution equipment. No decision has been made as to the
disposition of the Carlstadt plant, which was closed in February 1993. During
1993 The Times began printing someprints four of its advance
Sunday sections at Edison in color; it expects to add at least two color sections in 1994.color.
The National Edition of The Times is distributed from eight printing sites:
in the Midwest from printing sites in Chicago, Illinois, and Warren, Ohio; in
the West from printing sites in Torrance and Walnut Creek, California, and
Tacoma, Washington; in the Southwest from a printing site in Austin, Texas; and
in the Southeast from printing sites in Atlanta, Georgia, and Ft. Lauderdale,
Florida. Satellite transmission of page images to the National Edition printing
sites permits early-morning delivery to homes and newsstands in many major
markets.
3
In June 1992 the Company acquired two wholesale newspaper distribution
businesses that distribute The Times and other newspapers and periodicals in New
York City and central and northern New Jersey. (See Note 2 of Notes to
Consolidated Financial Statements.) These wholesalers operate under the name of
City & Suburban Delivery Systems. Approximately 46% of The Times's daily
3
circulation and 40% of its Sunday circulation in the New York City metropolitan
area are delivered to retail outlets and home delivery depots through these
wholesale operations.
The Times has an agreementagreements with R.R. Donnelley & Sons Companytwo commercial printing companies to print The
New York Times Magazine through December 1999 and an agreement with KTB
Associates, Inc. to print theits Television section through February 1998.section.
In 19931994 The Times used approximately 301,000295,200 metric tons of newsprint, which
was purchased primarily under long-term contracts from both related and
unrelated suppliers (see "Forest
Products Companies"). and unrelated suppliers. The New York Times Magazine used
approximately 21,000 metric tons of supercalendered paper, an intermediate grade
of magazine quality paper, in 1993.1994. This supercalendered paper was purchased
under long-term contracts from both related (see "Forest Products Companies")
and unrelated suppliers. The Times and The New York Times Magazine are not
dependent on any one supplier.
THE BOSTON GLOBE
The Company acquired The Globe on October 1, 1993, pursuant to a merger of a
wholly owned subsidiary of the Company into API.Affiliated Publications, Inc.
("API"). The Globe is owned and published by an API subsidiary, Globe Newspaper
Company (as used herein, "The Globe" may also be used to refer to Globe
Newspaper Company).
CIRCULATION
The Globe is distributed throughout New England, thoughalthough its circulation is
concentrated in the Boston metropolitan area. According to ABC reports, as of
September 30, 1993,25, 1994, the daily circulation of The Globe was the 12th13th largest of
any daily newspaper, and circulation of the Sunday edition was the 9th8th largest
of any Sunday newspaper published in the United States; and its daily and Sunday
circulation was the largest of all newspapers published in either Boston or New
England.
During the year ended December 26, 1993,31, 1994, the average weekday circulation of
The Globe decreased bywas approximately 3,300 copiesequal to 504,6001993 with 504,500 copies and the average
Sunday circulation increaseddecreased by approximately 2,7009,700 copies to 814,500804,800 copies.
Approximately 68%69% of The Globe's total daily circulation and 54%55% of The
Globe's total Sunday circulation were sold through home or office delivery; the
remainder were sold primarily on newsstands. Virtually all of The Globe's
home-delivered circulation is delivered through The Globe's distribution
subsidiary, Community Newsdealers Inc.
Within the 30-mile-radius30-mile radius of Boston, the newsstand price of the daily
edition of The Globe during 19931994 was $.35. The newsstand price for copies sold
more than 30 miles from Boston was $.50. The newsstand price of the Sunday
edition of The Globe was $1.50.increased from $1.50 to $1.75, effective April 3, 1994,
for copies sold more than 30 miles from Boston, and effective October 2, 1994,
within that radius. The seven-day home delivery price for the newspaper was
$4.00.$4.00 throughout 1994 within the 30-mile radius, but was increased to $4.50,
effective September 26, 1994, beyond that area.
4
The following table shows the average weekday and Sunday paid circulation of
The Globe for the editions and the periods indicated.
PERIOD WEEKDAY SUNDAY
- ---------------------------------------------------------------------- --------- ---------
52 Weeks ended March 28, 1993*........................................ 506,996 811,743
26 Weeks ended September 26, 1993**................................... 507,647 814,036
indicated, as audited by ABC (except
as indicated).
Period Weekday Sunday
- ---------------
* Per audit report of ABC.
** As submitted by The Globe to ABC.
4
----------------------------------------------- --------- -------
52 Weeks ended March 27, 1994.................. 504,069 814,664
26 Weeks ended September 26, 1994 (unaudited).. 506,545 811,100
ADVERTISING
The Globe's total advertising volume by category of advertising for the yeartwo
years ended December 31, 19931994, for all editions, as measured by The Globe, is
set forth below:
Run of Press inches, Daily & Sunday
Retail............................................................................... 816,911
National............................................................................. 510,973
Classified........................................................................... 1,158,163
Zone advertising inches................................................................ 252,408
Preprint distribution in pieces........................................................ 637,670,000
Full Run
------------------------------ Preprint
Retail National Classified Zoned Total* Copies
Inches Inches Inches Inches Inches Distributed
------ -------- ---------- ------- ------- -----------
(Inches and Preprints in Thousands)
1993 816.9 547.9 1,121.3 252.4 2,738.5 640,241
1994 830.7 562.4 1,217.5 273.6 2,884.2 702,757
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* All totals exclude preprint inches.
Advertising rates in each category of advertising, except for classified
real estate, were adjusted in 1993.1994. The latest increase in retail advertising
rates occurred on January 1, 1994.1995. Increases in national and classified
advertising rates occurred effective July 1, 19931994, and August 1, 1993,1994,
respectively. These increases ranged from 2.1%3.5% to 4.5%4.8%.
PRODUCTION
All editions of The Globe are printed and prepared for delivery at its main
Boston plant or its Billerica, Massachusetts, satellite plant. Both of the
plants use Goss Metroliner offset presses. The Boston plant has a comprehensive
computerized information system utilizing terminals for entering news and
advertising copy into its phototext setting equipment. The data for printing The
Globe at the Billerica plant are delivered by dedicated telephone lines. In June 1992, The
Globe purchased a 126,000 square foot building in
Westwood, Massachusetts, which became operational asalso owns a Sunday pre-print storage, inserting and packaging plant in
the fall of 1993.
Virtually allWestwood, Massachusetts.
The Globe's pagination project, which started in 1989, continued according
to plan as full-page output doubled in 1994 to approximately 700 pages per week,
or almost 50% of The Globe's home-delivered circulation is delivered
throughpages produced weekly. The Globe's distribution subsidiary, Community Newsdealers Inc.pagination process
outputs all page elements, including text, graphics, images and advertising
(both classified agate as well as display), thus eliminating the need for manual
paste-up of the pages. The Globe plans to paginate most of the remaining
portions of the newspaper by early 1996.
In 1993,1994 The Globe used approximately 128,000136,600 metric tons of newsprint. The
major portion was purchased under long-term contracts with related (see "Forest
Product Companies") and unrelated suppliers; The Globe is not dependent on any
one supplier.
5
REGIONAL NEWSPAPERS
The Company currently owns 23 daily and five non-daily smaller-city
newspapers.
Daily Newspapers Non-Daily Newspapers
---------------- --------------------
Sarasota Herald-Tribune The Courier (Houma, La.) York County Coast Star
(Fla.) Daily Commercial (Kennebunk, Me.)
The Press Democrat (Santa (Leesburg, Fla.) The News-Sun (Sebring/
Rosa, Cal.) Times-News Avon Park, Fla.)
The Ledger (Lakeland, Fla.) (Hendersonville, N.C.) Marco Island Eagle
The Gainesville Sun (Fla.) Daily World (Opelousas, La.) (Fla.)
Santa Barbara The Dispatch (Lexington, N.C.) News-Leader
News-Press (Cal.) Lenoir News-Topic (N.C.) (Fernandina Beach, Fla.)
Spartanburg Daily Comet (Thibodaux, La.) The Banner-Independent
Herald-Journal (S.C.) Palatka Daily News (Fla.) (Booneville, Miss.)
Wilmington Morning Star The Messenger
(N.C.) (Madisonville, Ky.)
Ocala Star-Banner (Fla.) The Daily Corinthian
Times Daily (Corinth, Miss.)
(Florence, Ala.) Lake City Reporter (Fla.)
The Tuscaloosa News (Ala.) State Gazette (Dyersburg,
The Gadsden Times (Ala.) Tenn.)
5
Non-Daily Newspapers
--------------------
York County Coast Star
(Kennebunk, Me.)
The News-Sun (Sebring/
Avon Park, Fla.)
Marco Island Eagle
(Fla.)
News-Leader
(Fernandina Beach, Fla.)
The Banner-Independent
(Booneville, Miss.)
The regional daily newspapers achievednewspapers' weekday circulation gains for the year ended
December 31, 1993, as weekday circulation increased 4,5001994 decreased 7,500 copies to 851,000843,500 copies, and Sunday
circulation increased 9,200decreased 2,300 copies to 853,700851,400 copies; the circulation of the
non-dailies decreased 50019,600 copies to 72,70053,100 copies. The decrease in
circulation of the non-dailies was attributable primarily to the sale of two
weekly Georgia newspapers, The Forsyth County News (Cumming) and The Winder News
(Winder). Advertising volume, stated on the basis of six columns per page, was
35,163,70017,086,800 inches in 1993,1994, compared with 33,854,00016,378,900 inches in 1992. The circulation gains
and the advertising volume exclude the 1992 circulation and advertising volume
of The Gwinnett (Georgia) Daily News, which the Company closed1993. Preprints
distributed in September
1992. The circulation and advertising volume include the two weekly Georgia
newspapers sold at year-end, The Forsyth County News (Cumming) and The Winder
News (Winder). (See Note 2 of Notes to Consolidated Financial Statements.)1994 were 962,867,000, compared with 930,390,000 in 1993.
All of the Regional Newspapers are produced by photocomposition and offset
printing. In 19931994 the Regional Newspapers used approximately 99,000103,600 metric tons
of newsprint, which was purchased under long-term contracts from both related
(see "Forest Products Companies") and unrelated suppliers. The Regional
Newspapers are not dependent on any one supplier.
INTERNATIONAL HERALD TRIBUNE
S.A.
The Company owns a one-half interest in the International Herald Tribune
S.A., which publishes the International Herald Tribune. The newspaper is edited
in Paris and printed simultaneously in Paris, London, Zurich,Frankfurt, Hong Kong, London, Marseille,
New York, Paris, Rome, Singapore, The Hague, Marseille, Tokyo Rome, Frankfurt and New York.Zurich. The other
one-half interest is owned by The Washington Post Company.
6
MAGAZINES
The Company's Magazine Group had revenues of $280,061,000 in 1994, compared
with $394,463,000 in 1993, compared
with $386,120,000 in 1992, and operating profit of $19,204,000 in 1994, compared
with $12,330,000 in 1993, compared
with $9,929,0001993. The decrease in 1992. Exclusiverevenues is primarily due to the sale
of the amortization costs associatedWomen's Magazines Division in the third quarter of 1994.
On July 26, 1994, the Company sold its Women's Magazines Division to
Gruner+Jahr Printing and Publishing Co. On August 12, 1994, the Company sold
Golf World (U.K.), Golf Illustrated Weekly and Golf Industry News to EMAP plc.
The net after-tax proceeds to the Company from these sales, inclusive of a
four-year $40,000,000 non-competition agreement entered into in connection with
the acquisitionsWomen's Magazines sale, were approximately $160,000,000. (See Note 2 of
McCall's and Golf World (U.S.), which were structuredNotes to maximize cash flow, the Group's operating profit was $25,400,000 in 1993, which
is equal to 1992. Continuing softness in advertising in the consumer packaged
goods category in the women's magazines field continues to affect the Group
adversely.Consolidated Financial Statements.)
All of the Company's magazines are printed under long-term contracts with
unrelated printers. In 19931994 the magazines used approximately 78,00018,000 metric tons
of coated paper, all of which was purchased from unrelated suppliers under
long-term contracts.
WOMEN'S MAGAZINES
As of December 31, 1993, NYT Women's Magazines1994, the Company published the magazines listed in the
chart below:
PERCENTAGE
INCREASE
(DECREASE) IN
AVERAGE
PUBLICATION SUBJECT/ AVERAGE CIRCULATION ADVERTISING
MAGAZINE CYCLE AUDIENCE RATEBASE CIRCULATION(1) OVER 1992 PAGES(4)
- -------------------------- ----------------- ------------------ ---------- ----------- --------------- -----------
Family Circle............. 17 issues per Women's Service 5,000,000 5,092,000 (1.3) 1,570
year
McCall's.................. Monthly Women's Service 4,600,000 4,604,000 (1.6) 1,138
American HomeStyle(2)..... 8 issues per year Home decorating 700,000(2) 712,000 7.4 469
Child(3).................. 10 issues per Parents of 650,000(3) 612,000 13.3 872
year children under 12
Fitness................... 6 issues per year Health and fitness 500,000(5) 408,000 40.9 237
Custom Builder............ 7 issues per year Trade publication Not 28,000 4.7 357
for the shelter Applicable
field
PERCENTAGE
INCREASE
(DECREASE) IN
ADVERTISING
MAGAZINE PAGES OVER 1992
- -------------------------- ---------------
Family Circle............. (8.9)
McCall's.................. (5.2)
American HomeStyle(2)..... 3.3
Child(3).................. 5.1
Fitness................... 91.3
Custom Builder............ 42.2
PUBLICATION
MAGAZINE CYCLE SUBJECT/AUDIENCE RATE BASE
- ---------------
(1)----------------- ------------------ -------------------- ---------
Golf Digest...... Monthly Golf 1,450,000
Tennis........... Monthly Tennis 800,000
Snow Country..... 8 issues per year Skiing/mountain 465,000
lifestyle
Cruising World... Monthly Recreational sailors 143,000
Golf World ...... 45 issues per year Golf 140,000
Sailing World.... Monthly Racing sailors 61,000
Golf Shop
Operations..... 10 issues per year Golf trade 16,900
Snow Country
Business....... 6 issues per year Ski trade 12,900
Tennis Buyer's
Guide.......... 6 issues per year Tennis trade 10,200
Sailing Business. 6 issues per year Sailing trade 8,500
PERCENTAGE PERCENTAGE
INCREASE INCREASE
(DECREASE) IN (DECREASE) IN
AVERAGE ADVERTISING
AVERAGE CIRCULATION ADVERTISING PAGES
MAGAZINE CIRCULATION1 OVER 1993 PAGES2 OVER 1993
- ------------------ ------------ ------------- ----------- -------------
Golf Digest....... 1,467,000 (0.5) 1,321 (1.7)
Tennis............ 803,000 (0.1) 823 3.5
Snow Country...... 471,000 8.6 818 22.3
Cruising World.... 148,000 0.1 1,320 12.9
Golf World ....... 143,000 0.8 1,780 9.7
Sailing World..... 70,000 8.5 579 4.3
Golf Shop
Operations...... 17,000 (1.1) 1,450 (1.3)
Snow Country
Business.......... 14,000 (12.7) 343 13.6
Tennis Buyer's
Guide........... 11,000 8.6 263 (19.3)
Sailing Business.. 9,000 5.9 93 0.0
- ------------
1 As reported by the publisher to ABC or the Business Publications Association ("BPA").
(2) Formerly called Decorating Remodeling. Six ancillary publications were
published in 1993: Home Plans (four times a year), Kitchen Plans (two
times a year), Build It, Build It Ultra, Weekend Decorator, Weekend
Remodeler. The Ratebase for American HomeStyle increased from 675,000
to 700,000 in January 1994.
(3) Four ancillary publications were published in 1993: Organized Parent,
Organized Pregnancy, Having a Baby, Child's Guide to Baby Products. The
Ratebase for Child increased from 600,000 to 650,000 in January 1994.
(4)Association.
2 As reported by the publisher to Publisher's Information Bureau ("PIB");
or, in the case of Custom Builder, as calculated by the publisher using
the same methodology as for PIB.
(5) The Ratebase increased from 400,000 to 500,000 in January 1994.
In 1993, NYT Women's Magazines also published 14 Special Interest
Publications on such topics as Christmas, food and shelter.
6
SPORTS/LEISURE MAGAZINES
As of December 31, 1993, NYT Sports/Leisure Magazines published the
magazines listed in the chart below:
PERCENTAGE PERCENTAGE
INCREASE INCREASE
(DECREASE) IN (DECREASE) IN
AVERAGE ADVERTISING
PUBLICATION AVERAGE CIRCULATION ADVERTISING PAGES
MAGAZINE CYCLE SUBJECT/AUDIENCE RATEBASE CIRCULATION(1) OVER 1992 PAGES(2) OVER 1992
- ----------------------- ----------------- ------------------- --------- ----------- ------------- ----------- -------------
Golf Digest............ Monthly Golf 1,450,000 1,459,000 2.8 1,344 0.9
Tennis................. Monthly Tennis 800,000 804,000 5.8 795 3.5
Snow Country........... 8 issues per year Skiing market 460,000 428,000 14.9 669 24.6
Recreational
Cruising World......... Monthly sailors 143,000 148,000 0.9 1,169 10.3
44 issues per
Golf World (U.S.)...... year Golf 135,000 141,000 2.0 1,622 (1.9)
Golf World (U.K.)...... Monthly Golf 94,500 95,000 3.0 1,180 5.9
Sailing World.......... Monthly Racing sailors 61,000 64,000 1.5 555 13.0
10 issues per
Golf Shop Operations... year Golf trade 16,500 17,000 1.3 1,469 (2.1)
Ski Business........... 6 issues per year Ski trade 11,500 12,000 (8.1) 302 62.4
Tennis Buyer's Guide... 6 issues per year Tennis trade 10,100 10,000 (0.9) 326 (9.9)
Sailing Business....... 6 issues per year Sailing trade 8,500 8,000(3) 17.7 93 3.3
Golf Weekly (U.K.)..... Weekly Golf 8,250 8,000 (21.6) 651 8.7
Golf World Industry
News (U.K.)............ Monthly Golf trade 5,000 5,000 0 231 20.3
- ---------------
(1) As reported by the publisher to ABC or BPA.
(2) As reported by the publisher to PIB; or,
in the case of trade publications, as calculated by the publisher using the
same methodology as for PIB.
(3) As provided by publisher.
BROADCASTING/INFORMATION SERVICES
The Broadcasting/Information Services Group had revenues of $109,250,000 in
1994, up from $87,257,000 in 1993, up
from $80,463,000 in 1992, and an operating profit of $25,048,000 in
1994, compared with $19,403,000 in 1993,
compared with $14,766,000 in 1992.1993. Higher national and local advertising
revenues at the Company's television stations accounted for the improved
results.
BROADCASTING
The Company's television and radio stations are operated under licenses from
the Federal Communications Commission ("FCC") and are subject to FCC
regulations. Each television station's license is for a five-year term. The
licenses for WREG-TV (Memphis, Tenn.), WHNT-TV (Huntsville, Ala.), WQAD-TV
(Moline, Ill.) and KFSM-TV (Fort Smith, Ark.) will expire in 1997. The license
of WNEP-TV (Wilkes-Barre/Scranton, Pa.) will expire on August 1, 1994. The
Company expects this license to be renewed.in 1999.
All of the television stations have three principal sources of revenue:
local advertising sold to advertisers in the immediate geographic areas of the
stations, national spot advertising and compensation paid by the networks for
carrying commercial network programs. WREG-TV, WHNT-TV and KFSM-TV are
affiliated with the CBS Television Network and WNEP-TV and WQAD-TV are
affiliated with the ABC Television Network.
7
WREG-TV, WQAD-TV and KFSM-TV are in the VHF band; WNEP-TV and WHNT-TV are in
the UHF band, as are all other stations in their markets. According to A. C.
Nielsen Company, Memphis is the 42nd largest television market in the United
States, Wilkes-Barre/Scranton is the 47th largest market, Huntsville is the 87th83rd
largest market, Moline is part of the Quad Cities market, the 88th largest, and
Fort Smith is the 118th largest market.
The Broadcasting/Information Services Group produces high quality commercial
video and television programming through NYT Video Productions.
The Company's two radio stations serve the New York City metropolitan area.
WQXR (FM) is currently the only commercial classical music station serving this
market. WQEW (AM) is the only station that offers a format of American popular
standards for the market. Applications for renewalThe licenses of the FCC licenses for both
stations for the seven-year terms starting JuneWQEW(AM) and WQXR(FM) were renewed
during 1994 and will expire on February 1, 1991, are pending. Although
the National Hispanic Media Coalition has filed an opposition to the radio
stations' license renewals, the Company expects its licenses to be renewed.
7
1998.
INFORMATION SERVICES
The New York Times Syndication Sales Corporation ("Syndication Sales")
operates The New York Times News Service, Special Features and the licensing and
reprint permission operations of The Times. The News Service transmits articles,
graphics and photographs from The Times to approximately 650 newspapers and
magazines in the United States and in 53 countries worldwide. Special Features
markets other supplemental news services and feature material, graphics and
photographs from The Times and other leading news sources to newspapers and
magazines around the world.
In 19931994 the Company continued to expand its distribution of TimesFax, a six-
to eight-page synopsis of The Times delivered to customers' facsimile machines
or personal computers in markets where The Times is not easily available. In
addition to distribution by satellite to cruise ships and U.S. Navy vessels,
TimesFax is distributed to hotels, governments and corporations in over 50
countries and territories. In 19931994 the Company launchedalso continued to expand its
distribution of its first industry specificindustry-specific fax product:product, The Monday Media
edition, a weekly six-page synopsis of media-related news is produced weekly and distributed to media
and advertising executives.
ThroughNYT New Media/New Products develops and markets new services, including
CD-ROM disks for consumers, database marketing and multimedia education
services. In 1994, New Media created and introduced @TIMES, an online service
which carries information from The Times on America Online and is one of its
most frequently accessed services. NYT Custom Publishing designs, writes, edits,
produces, sells and markets magazines for clients under contract.
NYT Business Information Services, through the group's Index department and
Times On-Line Services, Inc., the Company creates The New York Times Index and
computer-retrievable data bases. The Company licenses Mead Data Central, Inc.LEXIS/NEXIS and DataTimes
to store, market and distribute its on-line computer data bases and University
Microfilms, Inc. to produce and sell The New York Times Index and The Times on
microform and CD-ROM. The Company has
entered into license agreements which will makealso makes material from The Times available
online on the day of publication through a license agreement with Dow Jones Business Information Services and America Online beginning in the first half of 1994.Services.
FOREST PRODUCTS COMPANIES
In December 1994 the Company divested its minority interest in Gaspesia Pulp
& Paper Company Ltd. ("Gaspesia"), a Canadian newsprint mill. The Company
transferred its interest to Abitibi-Price, Inc. ("Abitibi"), the majority owner.
The Company purchased 144,000 metric tons of newsprint in 1994 from Abitibi, and
in connection with the divestiture of its interest in Gaspesia, the Company
entered into a new long-term agreement to purchase newsprint from Abitibi.
The Company has equity interests in twoa Canadian newsprint companies,company, Donohue
Malbaie Inc. ("Malbaie"), and Gaspesia Pulp and Paper Company Ltd.
("Gaspesia"), and in a partnership operating a supercalendered paper
mill in Maine, Madison Paper Industries ("Madison") (collectively, the "Forest
Products Companies"). NoneNeither of these companies'
8
debt is guaranteed by the Company. Exclusive of the $47,000,000 noncash charge to write down the Company's
investment in the Forest Products Group (see "Summary of Segment Information"),
theThe Company's equity in operations (an
after-tax amount) of these businesses in 19931994 was a lossprofit of $4,852,000$3,264,000
compared with a loss of $8,718,000$4,852,000 in 1992.
Softness due1993, exclusive of a $47,000,000 non-cash
charge to oversupply is continuing.write down the Company's investment in Gaspesia to its expected net
realizable value. The improved year over year results are due principally to lower newsprint discounts and athe
fact that the Company did not record operating losses for Gaspesia in 1994
following the 1993 write-down of the Company's investment in Gaspesia. Higher
sales prices in 1994 also improved the Forest Products Companies' results. The
Company believes that this favorable Canadian
exchange rate.trend will continue in 1995.
The Company has a 49% equity interest in Malbaie. The other 51% is owned by
Donohue, Inc. ("Donohue"), a publicly tradedpublicly-traded Canadian company whose voting
shares are controlled by Quebecor, a Canadian publishing company. Malbaie
purchases pulp from Donohue and manufactures newsprint from this raw material on
the paper machine it owns within the Donohue paper mill at Clermont, Quebec.
Malbaie is wholly dependent upon Donohue for its pulp. The production capacity
for 1993 of Malbaie in 1994 was 196,000 metric tons. In 19931994 Malbaie produced 192,000194,000
metric tons of newsprint, 82,00084,000 tons of which were sold to the Company with the
balance sold to Donohue for resale.
The Company has a 49% equity interest in Gaspesia. The other 51% is ownedprimary raw material used by Abitibi-Price Inc. ("Abitibi"), a publicly traded Canadian company. Gaspesia
produces newsprint at Chandler, Quebec, on the southern coast of the Gaspe
Peninsula. Gaspesia has cutting rights on approximately 2,500 square miles of
forest under a license from the Province of Quebec. It also purchases wood from
local jobbers and farmers. The production capacity for 1993 of Gaspesia was
256,000 metric tons. Under the terms of the Company's agreement with Abitibi,
all of Gaspesia's production is purchased by Abitibi for resale to the Company and other customers. Theis newsprint. In 1994 the
Company has a long-term newsprint purchase agreement
with Abitibi, pursuant to which it purchased 133,000consumed approximately 535,400 metric tons of newsprint purchased from Abitibia
number of suppliers in 1993.addition to Gaspesia and Malbaie. The Company includes allbelieves it
has an adequate supply of this newsprint as affiliated
tonnage when calculating how much newsprint the Company purchasesavailable through contracts at market prices
from affiliated companies.
8
its various suppliers.
Madison is a partnership between Northern SC Paper Corporation ("Northern")
and a subsidiary of Myllykoski Oy, a Finnish papermaking company. The Company
owns 80% of Northern, and Myllykoski Oy, through a subsidiary, owns the
remaining 20%. Madison produces supercalendered paper at its facility in
Madison, Maine. Madison purchases all its wood from local suppliers, mostly
under long-term contracts. Madison's production capacity for 1993 was 170,000In 1994 Madison produced 173,000 metric tons, 10,05011,000
tons of which were sold to the Company. In 19941995 Madison's five largest
customers one of which is(which do not include the Company,Company) are expected to purchase
approximately 68%49% of Madison's budgeted production.
The Forest Products Companies are subject to comprehensive environmental
protection laws, regulations and orders of provincial, federal, state and local
authorities of Canada or the United States (the "Environmental Laws"). The
Environmental Laws impose effluent and emission limitations and require the
Forest Products Companies to obtain, and operate in compliance with the
conditions of, permits and other governmental authorizations ("Governmental
Authorizations"). The Forest Products Companies follow policies and operate
monitoring programs to ensure compliance with applicable Environmental Laws and
Governmental Authorizations and to minimize exposure to environmental
liabilities. Various regulatory authorities periodically review the status of
the operations of the Forest Products Companies. Based on the foregoing, the
Company believes that the Forest Products Companies are in substantial
compliance with such Environmental Laws and Governmental Authorizations.
COMPETITION
The Times competes with newspapers of general circulation in New York City
and its suburbs. The Times also competes in varying degrees with national
publications such as The Wall Street Journal and USA Today and with television,
radio and other media. Based on a specially prepared LNA report by Leading National
Advertisers Incorporated, an independent agency that measures advertising
revenue, and The Times's own internal analysis, The Times believes that it ranks
first in advertising revenue in the general weekday and Sunday newspaper field
in the New York City metropolitan area. The Regional Newspapers and the
International Herald Tribune compete with a variety of other advertising media
in their respective markets.
The Globe competes with other newspapers distributed in Boston and its
neighboring suburbs. However, the only major daily metropolitan newspaper in
direct competition with The Globe is The
9
Boston Herald (daily and Sunday), whose publisher and sole stockholder (through
Herald Media, Inc.) is Patrick J. Purcell. The Globe also competes with other
communications media, such as direct mail, magazines, radio, television
(including cable television), and nationally-distributedweekly, suburban and nationally distributed
newspapers. Based on information supplied by major daily newspapers published in
New England and assembled by the New England Newspaper Association, Inc., for
the 12-month period ending December 31, 1993,1994, The Globe ranked first in
advertising inches among all newspapers published in Boston and New England.
All the magazines published by the Company compete directly with comparable
publications as well as with general interest magazines and other media, such as
newspapers and broadcasting.
All of the Company's television stations compete directly with other
television stations in their respective markets and with other video services
such as cable network programming carried on local cable systems. WQXR (FM)
competes in New York City with WNYC (a non-commercial station) for the classical
music audience, and it and WQEW (AM) compete with many adult-audience commercial
radio stations and other media in New York City and surrounding suburbs.
Syndication Sales's operations compete with several other syndicated
features and supplemental news services.
The Forest Products Companies are in a highly-competitive industry.
9
EMPLOYEES
As of December 31, 1993,1994, the Company had approximately 13,00012,800 full-time
employees.
Approximately 4,2903,355 full-time employees of The Times and City & Suburban
Delivery Systems, which operates its newspaper wholesaler business, are represented by 14
unions. The Times has collective bargaining agreements effective through March
30, 2000 with all of its six production unions and with sevenall of its eight
non-production unions. The production agreements enabled The Times to begin full
operation of its Edison production and distribution facility in February 1993.
The Times is in the process of negotiating the remaining
agreement with the Newspaper Guild of New York; this agreement expired on March
30, 1993; The Times cannot predict the timing or the outcome of the
negotiations. Three other entities owned by the Company (The Press Democrat, WQXR and WQEW)
also have collective bargaining agreements covering certain of their employees.
Approximately 2,103 full-time employees ofAPI and its subsidiaries, including The Globe, and Wilson Tisdale
Company, its subsidiary which owns the truck fleet used in delivery of The
Globe,employ approximately 3,100
employees full-time. Of these, approximately 2,100 are represented by 12 unions.
As of December 31, 1993,1994, labor agreements with fournine of its 11 mechanical unions
were in effect with expiration dates ranging from December 31, 1995 to December
31, 1998.2001. Labor agreements with sixtwo of the other mechanical unions expired on
December 31, 1992, and one expired on
December 31, 1993;1992; negotiations are proceeding with respect to these new
agreements, allboth of which The Globe expects to be completed during 1994. A newearly 1995.
The agreement with The Boston Globe Employees' Association, covering the period from
January 1, 1991, throughan affiliate of The
Newspaper Guild, expired December 31, 1994, was recently approved by the union
membership. On March 10, 1994, the membership of that union voted1994. Negotiations have commenced and The
Globe expects them to affiliate
with The Newspaper Guild.be successfully completed.
ITEM 2. PROPERTIES.
The Times: The Company owns its headquarters at 229 West 43d Street, New
York, New York. The building has 15 stories and approximately 714,000 square
feet of floor space and serves as a publishing facility for The Times.
The other publishing facility is located in Edison, New Jersey. This
1,300,000 square foot facility is occupied pursuant to a long-term lease with
renewal and purchase options. The Edison production and distribution facility
began producing newspapers in September 1992, and produces all of the advance
Sunday sections of The Times (except The New York Times Magazine and the
Television section) and approximately one-third of the weekday and Sunday New
York edition. (See Notes 3, 8 and 13 of Notes to Consolidated Financial
Statements.)
10
The Edison facility replaced an older production facility in Carlstadt, New
Jersey, which was closed in February 1993. The Company completed removal of
equipment from the facility in September 1994 and has commenced marketing of the
Carlstadt facility for lease.
The Edison facility is the first step in a plan to modernize the production
facilities of The Times, giving the Company the ability to add color, increase
paging and sections and improve quality.Times. To complete this upgrade in capability
and capacity,modernization, the Company plans to
replace the production facility housed in the basement at its 43d Street
facility.
OnIn December 17, 1993 the Company executed a lease agreement and related
agreements with the City of New York under which the Company will leaseis leasing a
31-acre site for this replacement facility in College Point, Queens New York. The agreements
include a package of tax benefits and energy cost reductions valued at
approximately $29 million. The Company has ten years in which to begin
construction, andreplace the lease will run for 25 years from the start of
construction.43d Street production
facility. The Company has the option to purchase the property at any time prior
to the end of the lease. Constructionlease in 2019. In August 1994 the Company began construction,
and it expects the 515,000 square-foot printing and distribution plant to be
operational in the second half of 1997. Together with the Edison plant, the
College Point facility is subject to
approvalwill provide a number of benefits, including later
deadlines, color in the Company's Board of Directors.daily paper, increased flexibility in paging and
sectioning the paper and daily advertising inserts. (See Note 38 of Notes to
Consolidated Financial Statements.)
The Globe owns its printing plants in Boston and Billerica, Massachusetts,
as well as its new Sunday pre-print storage, inserting and packaging plant in
Westwood, Massachusetts. The Globe and its subsidiaries own or lease office and
other facilities that are suitable and adequate for their current activities.
The Regional Newspapers own their printing facilities. The Company's
regional newspapers,Regional Newspapers, magazines, broadcast stations and information businesses
own or lease office facilities that are suitable and adequate for their current
activities.
10
ITEM 3. LEGAL PROCEEDINGS.
There are various legal actions that have arisen in the ordinary course of
business and are now pending against the Company. Such actions are usually for
amounts greatly in excess of the payments, if any, that may be required to be
made. It is the opinion of management after reviewing such actions with legal
counsel to the Company that the ultimate liability which might result from such
actions will not have a material adverse effect on the consolidated financial
position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Employed
By
Registrant Position(s) As Of
Name Age Since March 21, 1994(1)
- ------------------------------------ ----------- ---------- -----------------------------------------------------------
CORPORATE OFFICERS
Arthur Ochs Sulzberger.............. 68 1951 Chairman (since 1973); Chief Executive Officer; Director;
Publisher of The New York Times ("The Times") (1963 to
1992)
Lance R. Primis..................... 47Employed
By
Registrant Position(s) As Of
Name Age Since March 9, 1995(1)
- --------------------- --- ---------- --------------------------------------
CORPORATE OFFICERS
Arthur Ochs Sulzberger.. 69 1951 Chairman (since 1973); Chief Executive
Officer; Director; Publisher of The
New York Times ("The Times") (1963
to 1992)
Lance R. Primis......... 48 1969 President and Chief Operating Officer
(since 1992); President and General
Manager of The Times (1988 to 1992)
Katharine P. Darrow................. 50 1970 Senior Vice President (since 1993), Broadcasting, Corporate
Development and Human Resources; Vice President,
Broadcasting/Information Services and Corporate
Development (1989 to 1993); Vice President, Information
Services (1988 to 1989); General Counsel (1981 to 1989)
David L. Gorham..................... 61 1974 Senior Vice President and Chief Financial Officer (since
1980); Treasurer (1988 to 1992)
Michael E. Ryan..................... 55 1956 Senior Vice President (since 1980), Law, Forest Products
and Special Projects
Frank R. Gatti...................... 47 1974 Vice President (since 1988); Corporate Controller
Leslie A. Mardenborough............. 45 1981 Vice President, Human Resources (since 1990); Director,
Corporate Personnel (1987 to 1990)
Gordon Medenica..................... 42 1982 Vice President, Operations and Planning (since 1993); Vice
President, Corporate Planning (1990 to 1993); Director,
Planning (1986 to 1990)
Thomas H. Nied...................... 51 1977 Vice President, Taxation (since 1990); Tax Director (1977
to 1990)
Elise J. Ross....................... 50 1973 Vice President and Chief Information Officer (since 1992);
Senior Vice President of Systems and Technology of The
Times (1992); Senior Vice President of Systems of The
Times (1988 to 1992)
Solomon B. Watson IV................ 49 1974 Vice President (since 1990); General Counsel (since 1989);
Secretary (1979 to 1989)
11
Employed
By
Registrant Position(s) As Of
Name Age Since March 21, 1994(1)
- ------------------------------------ ----------- ---------- -----------------------------------------------------------
Laura J. Corwin..................... 49 1980 Secretary (since 1989) and Corporate Counsel (since January
1993); Assistant Secretary (1983 to 1989)
Richard G. Thomas................... 45 1977 Treasurer (since 1992); Assistant Treasurer (1983 to 1992)
OPERATING UNIT EXECUTIVES
James W. FitzGerald................. 55 1968 President, Sports/Leisure Division of the Company's
Magazine Group (since 1985)
Stephen Golden...................... 47 1974 Vice President, Forest Products, Health, Safety and
Environmental Affairs (since 1992); President and General
Manager of the Company's Forest Products Group (since
January 1994); Vice President, Forest Products (1990 to
1992); Director, Forest Products Group (1987 to 1990)
C. Frank Roberts.................... 50 1970 Vice President, Broadcasting (since 1986)
Arthur O. Sulzberger, Jr............ 42 1978 Publisher of The Times (since 1992); Deputy Publisher of
The Times (1988 to 1992)
William O. Taylor................... 61 1993 Publisher of The Boston Globe (since 1978) and Chairman and
Chief Executive Officer of Globe Newspaper Company (since
1982)
James C. Weeks......................Employed
By
Registrant Position(s) As Of
Name Age Since March 9, 1995(1)
- ------------------------ --- ---------- -------------------------------------
Katharine P. Darrow..... 51 1970 Senior Vice President (since 1993),
Broadcasting, Corporate Development
and Human Resources; Vice President
(1988-1993), Broadcasting/Informa-
tion Services and Corporate
Development
David L. Gorham......... 62 1974 Senior Vice President and Chief
Financial Officer (since 1980);
Treasurer (1988 to 1992)
Frank R. Gatti.......... 48 1974 Vice President (since 1988);
Corporate Controller
Leslie A. Mardenborough. 46 1981 Vice President, Human Resources
(since 1990); Director, Corporate
Personnel (1987 to 1990)
Gordon Medenica......... 43 1982 Vice President, Operations and
Planning (since 1993); Vice
President, Corporate Planning (1990
to 1993); Director, Planning (1986
to 1990)
Thomas H. Nied.......... 52 1977 Vice President, Taxation (since
1990); Tax Director (1977 to 1990)
Solomon B. Watson IV.... 50 1974 Vice President (since 1990); General
Counsel (since 1989)
Laura J. Corwin......... 49 1980 Secretary (since 1989) and Corporate
Counsel (since January 1993)
Richard G. Thomas....... 46 1977 Treasurer (since 1992); Assistant
Treasurer (1983 to 1992)
OPERATING UNIT EXECUTIVES
James W. FitzGerald..... 56 1968 President, Sports/Leisure Division of
the Company's Magazine Group (since
1985)
Stephen Golden.......... 47 1974 Vice President, Forest Products,
Health, Safety and Environmental
Affairs (since 1992); President and
General Manager of the Company's
Forest Products Group (since
January 1994); Vice President,
Forest Products (1990 to 1992);
Director, Forest Products Group
(1987 to 1990)
C. Frank Roberts........ 51 1970 Vice President, Broadcasting (since
1986)
Arthur O. Sulzberger, Jr 43 1978 Publisher of The Times (since 1992);
Deputy Publisher of The Times (1988
to 1992)
William O. Taylor....... 62 1993 Publisher of The Boston Globe (since
1978) and Chairman and Chief
Executive Officer of Globe
Newspaper Company (since 1982)
James C. Weeks.......... 52 1971 President, Regional Newspaper Group
of the Company (since 1993); Senior
Vice President, Operations,
Regional Newspaper Group (1988 to
1993)
- ---------------------------
(1) During the past five years, all of the executive officers listed above have
held positions which were the same or substantially similar to those they
currently hold except as indicated above.
12
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information required by this item appears at page F-26F-27 of this Form
10-K.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item appears at page F-28F-1 of this Form 10-K.
ITEM 7.MANAGEMENT'S7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this item appears at pages F-4 to F-7F-8 of this
Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item appears at pages F-2, F-3, pages F-9
to F-26 and F-8 to
F-27page F-28 of this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
In addition to the information set forth under the caption "Executive
Officers of the Registrant" in Part I of this Form 10-K, the information
required by this item is incorporated by reference to pages 69 to 1413 of the
Company's Proxy Statement for the 19941995 Annual Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated by reference to pages
14 to 20 (but only up to and not including the paragraph entitled "Performance
Presentation") of the Company's Proxy Statement for the 19941995 Annual Meeting of
Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is incorporated by reference to pages
1 to 8 of the Company's Proxy Statement for the 19941995 Annual Meeting of
Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated by reference to pagespage
14 to 15 and pages 17 to 20 (but only up to and not including the paragraph
entitled "Performance Presentation") of the Company's Proxy Statement for the 19941995 Annual
Meeting of Stockholders.
13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A)(a) DOCUMENTS FILED AS PART OF THIS REPORT
(1) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
(a) The consolidated financial statements of the Company are filed as
part of this Form 10-K and are set forth on pages F-2, F-3 and F-8F-9 to
F-25.F-26. The report of Deloitte & Touche LLP, Independent Public
Accountants, dated February 10, 1994,9, 1995, is set forth on page F-26F-27 of this
Form 10-K.
(b) The following additional consolidated financial information is
filed as part of this Form 10-K and should be read in conjunction with
the consolidated financial statements set forth on pages F-2, F-3 and F-8F-9
to F-25.F-26. Schedules not included with this additional consolidated
financial information have been omitted either because they are not
applicable or because the required information is shown in the
consolidated financial statements at the aforementioned pages.
Page
----
Consent of Independent Public Accountants......................................... 18
Consolidated Schedules for the Three Years Ended December 31, 1993:
V--Property, Plant and Equipment.............................................Page
----------
Independent Auditors' Consent............................... Exhibit 23
Consolidated Schedules for the Three Years Ended December
31, 1994:
II--Valuation and Qualifying Accounts........................ S-1
VI--Accumulated Depreciation of Property, Plant and Equipment................ S-2
VIII--Valuation and Qualifying Accounts...................................... S-3
IX--Short-term Borrowings.................................................... S-4
X--Supplementary Income Statement Information................................ S-5
Separate financial statements and supplemental schedules of
associated companies accounted for by the equity method are omitted in
accordance with the provisions of Rule 3-09 of Regulation S-X.
(2) EXHIBITS
(2.1) Agreement and Plan of Merger dated as of June 11, 1993, as
amended by the First Amendment dated as of August 12, 1993, by and among
the Company, Sphere, Inc. and Affiliated Publications, Inc. (filed as
Exhibit 2 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex I to the Joint Proxy
Statement/Prospectus included in such Registration Statement (schedules
omitted--the Company agrees to furnish a copy of any schedule to the
Commission upon request), and incorporated by reference herein).
(2.2) Stockholders Agreement dated as of June 11, 1993, by and
between the Company and the other parties signatory thereto (filed as
Exhibit 2.1 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex II to the Joint Proxy
Statement/Prospectus included in such Registration Statement, and
incorporated by reference herein).
(2.3) Asset Purchase Agreement between the Company, The Family
Circle, Inc., Retail Magazines Marketing Company, Inc. and Gruner + Jahr
Printing and Publishing Co., dated as of June 17, 1994 (filed as an
Exhibit to the Company's Form 10-Q dated August 10, 1994, (Exhibits
omitted - The Company agrees to furnish a copy of any exhibit to the
Commission upon request), and incorporated by reference herein).
(2.4) Fulfillment Agreement between the Company, The Family Circle,
Inc. and Gruner + Jahr Printing and Publishing Co., dated as of July 26,
1994 (filed as an Exhibit to the Company's Form 10-Q dated August 10,
1994, and incorporated by reference herein).
14
(3.1) Certificate of Incorporation as amended by the Class A and
Class B stockholders and as restated on September 29, 1993.1993 (filed as an
Exhibit to the Company's Form 10-K dated March 21, 1994, and incorporated
by reference herein).
(3.2) By-laws as amended through February 17, 1994.1994 (filed as an
Exhibit to the Company's Form 10-K dated March 21, 1994, and incorporated
by reference herein).
(4) The Company agrees to furnish to the Commission upon request a
copy of any instrument with respect to long-term debt of the Company and
any subsidiary for which consolidated or unconsolidated financial
statements are required to be filed, and for which the 14
amount of
securities authorized thereunder does not exceed 10% of the total assets
of the Company and its subsidiaries on a consolidated basis.
(9.1) Globe Voting Trust Agreement, dated as of October 1, 1993.1993
(filed as an Exhibit to the Company's Form 10-K dated March 21, 1994, and
incorporated by reference herein).
(9.2) Jordan Voting Trust Agreement, dated as of January 29, 1987, as
amended through May 15, 1987 (filed as Exhibit 9.2 to API's Form 10-K for
fiscal year ended December 31, 1989, and incorporated by reference
herein).
(10.1) The Company's Executive Incentive Compensation Plan as amended
through December 20, 1990 (filed as an Exhibit to the Company's Form 10-K
dated March 1, 1991, and incorporated by reference herein).
(10.2) The Company's 1991 Executive Stock Incentive Plan, as amended
through April 13, 1993.December 15, 1994.
(10.3) The Company's 1991 Executive Cash Bonus Plan, adopted on April
16, 1991 (filed as an Exhibit to the Company's Proxy Statement dated
March 1, 1991, and incorporated by reference herein).
(10.4) The Company's Non-Employee Directors' Stock Option Plan,
adopted on April 16, 1991 (filed as an Exhibit to the Company's Proxy
Statement dated March 1, 1991, and incorporated by reference herein).
(10.5) The Company's Supplemental Executive Retirement Plan as
amended through May 5, 1989 (filed as an Exhibit to the Company's Form
10-K dated March 29, 1990, and incorporated by reference herein).
(10.6) Lease (short form) between the Company and Z Edison Limited
Partnership dated April 8, 1987 (filed as an Exhibit to the Company's
Form 10-K dated March 27, 1988, and incorporated by reference herein).
(10.8)(10.7) Agreement of Lease, dated as of December 15, 1993, between The
City of New York, Landlord, and the Company, Tenant (as successor to New
York City Economic Development Corporation (the "EDC"), pursuant to an
Assignment and Assumption of Lease With Consent, made as of December 15,
1993, between the EDC, as Assignor, to the Company, as Assignee) (filed
as an Exhibit to the Company's Form 10-K dated March 21, 1994, and
incorporated by reference herein).
(10.9)(10.8) Funding Agreement #1, dated as of December 15, 1993, between
the EDC and the Company.
(10.10)Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.9) Funding Agreement #2, dated as of December 15, 1993, between
the EDC and the Company.
(10.11)Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.10) Funding Agreement #3, dated as of December 15, 1993, between
the EDC and the Company.
(10.12)Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
15
(10.11) Funding Agreement #4, dated as of December 15, 1993, between
the EDC and the Company.
(10.13)Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.12) New York City Public Utility Service Power Service Agreement,
made as of May 3, 1993, between The City of New York, acting by and
through its Public Utility Service, and The New York Times Newspaper
Division of the Company.
(10.14)Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.13) Employment Agreement, dated May 19, 1993, between API, Globe
Newspaper Company and William O. Taylor.
(10.15)Taylor (filed as an Exhibit to the
Company's Form 10-K dated March 21, 1994, and incorporated by reference
herein).
(10.14) API's 1989 Stock Option Plan (filed as Annex F-1 to API's
Proxy Statement-Joint Prospectus, dated as of April 28, 1989, contained
in API's Registration Statement on 15
Form S-4 (Registration Statement No.
33-28373) declared effective April 28, 1989, and incorporated by
reference herein).
(10.16)(10.15) API's Supplemental Executive Retirement Plan, as amended
effective September 15, 1993.
(10.17)1993 (filed as an Exhibit to the Company's Form
10-K dated March 21, 1994, and incorporated by reference herein).
(10.16) API's 1990 Stock Option Plan (Restated 1991) (filed as
Exhibit 1 to API's Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1991 (Commission File No. 1-10251), and incorporated by
reference herein).
(10.18)(10.17) Form of Substituted Stock Option Option Agreement/Incentive 86 among
API, its predecessor company and certain employees (filed as Exhibit
10.27 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.19)(10.18) Form of Substituted Stock Option Option Agreement/Incentive 87 among
API, its predecessor company and certain employees (filed as Exhibit
10.29 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.20)(10.19) Form of Substituted Stock Option Option Agreement/Incentive 88 among
API, its predecessor company and certain employees (filed as Exhibit
10.31 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(21) Subsidiaries of the Company.
(B)Company
(23) Consent of Deloitte & Touche LLP
(27) Financial Data Schedule
(b) REPORTS ON FORM 8-K
During the quarter ended December 31, 1993,1994, no reports on Form 8-K were
filed. On January 6, 1995, the Company filed a report on Form 8-K dated December
12, 1994 relating to the disposition of the Company's interest in Gaspesia Pulp
& Paper Company Ltd., a Canadian newsprint mill. On March 1, 1995, the Company
filed a report on Form 8-K dated February 24, 1995 relating to the Company's
announcement of an agreement with Narragansett Television, Inc. to purchase
WTKR-TV, Norfolk, Virginia.
16
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Date: March 21, 19949, 1995
(Registrant)
THE NEW YORK TIMES COMPANY
By: LAURA J. CORWIN
.................................
Laura J. Corwin, Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- --------------------------------------------------- -------------------------------------- --------------------
ARTHUR OCHS SULZBERGER Chairman (Chief March 21, 1994
(Arthur Ochs Sulzberger) Executive Officer),
Director
JOHN F. AKERS Director March 21, 1994
(John F. Akers)
FRANK R. GATTI Vice President, March 21, 1994
(Frank R. Gatti) Corporate Controller
(Principal Accounting
Officer)
RICHARD L. GELB Director March 21, 1994
(Richard L. Gelb)
LOUIS V. GERSTNER, JR. Director March 21, 1994
(Louis V. Gerstner, Jr.)
DAVID L. GORHAM Senior Vice President and Chief March 21, 1994
(David L. Gorham) Financial Officer (Principal
Financial Officer)
MARIAN S. HEISKELL Director March 21, 1994
(Marian S. Heiskell)
A. LEON HIGGINBOTHAM, JR. Director March 21, 1994
(A. Leon Higginbotham, Jr.)
RUTH S. HOLMBERG Director March 21, 1994
(Ruth S. Holmberg)
ROBERT A. LAWRENCE Director March 21, 1994
(Robert A. Lawrence)
WALTER E. MATTSON Director March 21, 1994
(Walter E. Mattson)
GEORGE B. MUNROE Director March 21, 1994
(George B. Munroe)
CHARLES H. PRICE II Director March 21, 1994
(Charles H. Price II)
LANCE R. PRIMIS President (Chief Operating Officer) March 21, 1994
(Lance R. Primis)
GEORGE L. SHINN Director March 21, 1994
(George L. Shinn)
DONALD M. STEWART Director March 21, 1994
(Donald M. Stewart)
JUDITH P. SULZBERGER Director March 21, 1994
(Judith P. Sulzberger)
WILLIAM O. TAYLOR Director March 21, 1994
(William O. Taylor)
CYRUS R. VANCE Director March 21, 1994
(Cyrus R. Vance)
SIGNATURE TITLE DATE
- -------------------------- -------------------------------- --------------
ARTHUR OCHS SULZBERGER Chairman (Chief March 9, 1995
Executive Officer),
Director
JOHN F. AKERS Director March 9, 1995
FRANK R. GATTI Vice President, March 9, 1995
Corporate Controller
(Principal Accounting
Officer)
RICHARD L. GELB Director March 9, 1995
LOUIS V. GERSTNER, JR. Director March 9, 1995
DAVID L. GORHAM Senior Vice President and Chief March 9, 1995
Financial Officer (Principal
Financial Officer)
MARIAN S. HEISKELL Director March 9, 1995
A. LEON HIGGINBOTHAM, JR. Director March 9, 1995
RUTH S. HOLMBERG Director March 9, 1995
ROBERT A. LAWRENCE Director March 9, 1995
GEORGE B. MUNROE Director March 9, 1995
CHARLES H. PRICE II Director March 9, 1995
LANCE R. PRIMIS President (Chief Operating March 9, 1995
Officer)
GEORGE L. SHINN Director March 9, 1995
DONALD M. STEWART Director March 9, 1995
JUDITH P. SULZBERGER Director March 9, 1995
WILLIAM O. TAYLOR Director March 9, 1995
CYRUS R. VANCE Director March 9, 1995
17
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
THE NEW YORK TIMES COMPANY:
We consent to the incorporation by reference in Registration Statements No.
2-91826, 33-31538, 33-43210, 33-43211, 33-50461, 33-50465, 33-50457, 33-50467
and 33-50459 on Forms S-8 of our report dated February 10, 1994, appearing in
this Annual Report on Form 10-K of The New York Times Company (the "Company")
for the year ended December 31, 1993.
We also consent to the Company extending the reference to us under the
heading "Experts" in Registration Statement No. 33-31538 to comprehend our
report, dated February 10, 1994, on the consolidated balance sheets of the
Company as of December 31, 1993 and 1992, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1993 included in the aforementioned
Form 10-K.
DELOITTE & TOUCHE
New York, New York
March 21, 1994
18
THE NEW YORK TIMES COMPANY
19931994 Consolidated Financial Statements
- ------------------------------------------------------------------------------------------------------------------------------------------------------
Contents Page
- ------------------------------------------------------------------------------------------------------------------------------------------------------
Financial Highlights .............................................. F-1
Segment Information ............................................... F-2
Management's Discussion and Analysis .............................. F-4
Consolidated Statements of Operations F-8............................. F-9
Consolidated Balance Sheets F-9....................................... F-10
Consolidated Statements of Cash Flows F-11............................. F-12
Consolidated Statements of Stockholders' Equity F-13................... F-14
Notes to Consolidated Financial Statements F-14........................ F-15
Independent Auditors' Report F-26...................................... F-27
Management's Responsibilities Report F-26.............................. F-27
Market Information F-26................................................ F-27
Quarterly Information F-27............................................. F-28
Ten-Year Supplemental Financial Data F-28.............................. F-29
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------
Dollars in thousands except per share data Year Ended December 31
1993 1992 1991 1990 1989
- --------------------------------------------------------------------------------------------------------------------
REVENUES AND INCOME
Revenues $2,019,654 $1,773,535 $1,703,101 $1,776,761 $1,768,893
Operating profit 126,581 88,408 93,639 129,779 169,044
Income from continuing operations before income
taxes and equity in operations of forest
products group 101,206 8,525 63,053 110,190 148,364
Income (Loss) from continuing operations before
equity in operations of forest products group 57,975 (2,554) 41,293 60,871 84,097
Equity in operations of forest products group (51,852) (8,718) 5,700 3,965 (15,922)
Income (Loss) from continuing operations before
net cumulative effect of accounting changes 6,123 (11,272) 46,993 64,836 68,175
Income from discontinued operations, net of taxes - - - - 198,448
Net cumulative effect of accounting changes - (33,437) - - -
Net income (loss) 6,123 (44,709) 46,993 64,836 266,623
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and equipment - net 1,112,024 902,755 966,593 1,013,430 972,474
Total assets 3,215,204 1,994,974 2,127,981 2,149,623 2,187,520
Long-term debt and capital lease obligations 460,063 206,911 213,487 319,449 337,417
Common stockholders' equity 1,598,883 999,630 1,073,442 1,055,785 1,064,446
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Continuing operations before net cumulative
effect of accounting changes .07 (.14) .61 .85 .87
Discontinued operations - - - - 2.52
Net cumulative effect of accounting changes - (.43) - - -
Net income (loss) .07 (.57) .61 .85 3.39
Dividends .56 .56 .56 .54 .50
Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63
- --------------------------------------------------------------------------------------------------------------------
KEY RATIOS (See notes below)
Operating profit to revenues 6% 5% 5% 7% 10%
Income from continuing operations before equity in
operations of forest products group to revenues 3% 2% 2% 3% 5%
Return on average stockholders' equity - 2% 4% 6% 27%
Return on average total assets - 1% 2% 3% 13%
Long-term debt and capital lease obligations to
total capitalization 22% 17% 17% 23% 24%
Current assets to current liabilities .89 1.08 .89 .81 .86
- --------------------------------------------------------------------------------------------------------------------
EMPLOYEES 13,000 10,100 10,100 10,400 10,600
- --------------------------------------------------------------------------------------------------------------------
Amounts for 1993 have been- --------------------------------------------------------------------------------
Dollars in thousands except per Year Ended December 31
share data
1994 1993 1992
- --------------------------------------------------------------------------------
REVENUES AND INCOME
Revenues $ 2,357,563 $ 2,019,654 $ 1,773,535
Operating profit 211,242 126,581 88,408
Income before income taxes and
equity in operations of forest
products group 383,953 101,206 8,525
Income (Loss) before equity
in operations of forest
products group 210,085 57,975 (2,554)
Equity in operations of
forest products group 3,264 (51,852) (8,718)
Income (Loss) before net
cumulative effect of
accounting changes 213,349 6,123 (11,272)
Net cumulative effect of
accounting changes -- -- (33,437)
Net income (loss) 213,349 6,123 (44,709)
- --------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and
equipment - net 1,158,751 1,112,024 902,755
Total assets 3,137,631 3,215,204 1,994,974
Long-term debt and capital
lease obligations 523,196 460,063 206,911
Common stockholders' equity 1,543,539 1,598,883 999,630
- --------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Income (Loss) before net
cumulative effect of accounting
changes 2.05 .07 (.14)
Net cumulative effect of
accounting changes -- -- (.43)
Net income (loss) 2.05 .07 (.57)
Dividends .56 .56 .56
Common stockholders' equity
(end of year) 15.71 14.96 12.54
- --------------------------------------------------------------------------------
KEY RATIOS (See notes below)
Operating profit to revenues 9% 6% 5%
Income before equity in operations
of forest products group to revenues 5% 3% 2%
Return on average stockholders' equity 7% -- 2%
Return on average total assets 3% -- 1%
Long-term debt and capital lease
obligations to total capitalization 25% 22% 17%
Current assets to current liabilities .91 .89 1.08
- --------------------------------------------------------------------------------
EMPLOYEES 12,800 13,000 10,100
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Dollars in thousands except per share data Year Ended December 31
1991 1990
- --------------------------------------------------------------------------------
REVENUES AND INCOME
Revenues $ 1,703,101 $ 1,776,761
Operating profit 93,639 129,779
Income before income taxes and equity in
operations of forest products group 63,053 110,190
Income (Loss) before equity
in operations of forest products group 41,293 60,871
Equity in operations of forest products group 5,700 3,965
Income (Loss) before net cumulative effect
of accounting changes 46,993 64,836
Net cumulative effect of accounting changes -- --
Net income (loss) 46,993 64,836
- --------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and equipment - net 966,593 1,013,430
Total assets 2,127,981 2,149,623
Long-term debt and capital lease obligations 213,487 319,449
Common stockholders' equity 1,073,442 1,055,785
- --------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Income (Loss) before net cumulative
effect of accounting changes .61 .85
Net cumulative effect of accounting changes -- --
Net income (loss) .61 .85
Dividends .56 .54
Common stockholders' equity (end of year) 13.70 13.68
- --------------------------------------------------------------------------------
KEY RATIOS (See notes below)
Operating profit to revenues 5% 7%
Income before equity in operations
of forest products group to revenues 2% 3%
Return on average stockholders' equity 4% 6%
Return on average total assets 2% 3%
Long-term debt and capital lease obligations
to total capitalization 17% 23%
Current assets to current liabilities .89 .81
- --------------------------------------------------------------------------------
EMPLOYEES 10,100 10,400
- --------------------------------------------------------------------------------
In 1994, the Company sold its Women's Magazines Division and U.K. golf
publications, and divested a minority interest in a Canadian paper mill
("Gaspesia") (see Note 2). As a result of these transactions, the Company
recorded a net pre-tax gain of approximately $200.9 million ($103.3 million
after taxes or $.99 per share). These transactions are not reflected in the 1994
income amounts used in the applicable key ratio calculations presented above.
Amounts for 1993 were affected by the October 1, 1993 acquisition of The Boston
Globe (see Note 2).
For 1993, return on average stockholders' equity and return on average total
assets are less than 1 percent due to several factors which lowered net income
for the year. See Management's Discussion and Analysis on page F-4.
In September 1992, the Company closed The Gwinnett (Ga.) Daily News and sold the
residual assets. The closing and related sale resulted in a pre-tax loss of
$53.8 million ($37.1 million after taxes or $.47 per share). This transaction is
not reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
Net cumulative effect of accounting changes reflects the 1992 adoption of the
change in methods of accounting for income taxes, postretirement benefits other
than pensions and postemployment benefits. The net cumulative effect is not
reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
For 1993, return on average stockholders' equity and return on average total
assets are less than 1 percent due to several factors which lowered net income
for the year. See Management's Discussion and Analysis on page F-4.
F-1
SEGMENT INFORMATION
- ------------------------------------------------------------------------------
The Company has classified its business into the following segments and equity
interests:
NEWSPAPERS: The New York Times, The Boston Globe, 28 regional newspapers,
a
wholesale newspaper distribution business in the New York City metropolitan
areawholesalers and a one-half interest in the International Herald
Tribune S.A.
MAGAZINES: Numerous publications and related activities in the
women's
publishing and sports/leisure fields.field.
BROADCASTING/INFORMATION SERVICES: Five network-affiliated television stations,
two radio stations, a news service, a features syndicate, TimesFax and licensing
operations of The New York Times databases and microfilm.
FOREST PRODUCTS: Equity interests in twoa newsprint companiescompany and a partnership in a
supercalendered paper mill that together supply the majora portion of the Newspaper
Group's annual paper requirements.
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1994 1993 1992
1991
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Newspapers $1,968,252 $1,537,934 $1,306,952
$1,274,435
Magazines 280,061 394,463 386,120 352,686
Broadcasting/Information services 109,250 87,257 80,463 75,980
- -------------------------------------------------------------------------------
Total $2,357,563 $2,019,654 $1,773,535 $1,703,101
- -------------------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Newspapers $ 196,067 $ 114,332 $ 81,173
$ 93,578
Magazines 19,204 12,330 9,929
(492)
Broadcasting/Information services 25,048 19,403 14,766 13,957
Unallocated corporate expenses (29,077) (19,484) (17,460) (13,404)
- -------------------------------------------------------------------------------
Total 211,242 126,581 88,408 93,639
Interest expense, net of
interest income 28,162 25,375 26,115
30,586
LossNet gain (loss) on disposition of Gwinnett Daily News - 53,768 -dispositions 200,873 -- (53,768)
- -------------------------------------------------------------------------------
Income before income taxes
and equity in operations of
forest products group 383,953 101,206 8,525
63,053
Income taxes 173,868 43,231 11,079 21,760
- -------------------------------------------------------------------------------
Income (Loss) before equity in
operations of forest products
group 210,085 57,975 (2,554) 41,293
Equity in operations of forest
products group 3,264 (51,852) (8,718) 5,700
- -------------------------------------------------------------------------------
INCOME (LOSS) BEFORE
NET CUMULATIVE
EFFECT OF ACCOUNTING CHANGES $ 213,349 $ 6,123 $ (11,272) $ 46,993
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-2
SEGMENT INFORMATION
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1994 1993 1992
1991
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspapers $ 135,507 $ 98,957 $ 74,495
$ 77,090
Magazines 7,593 18,616 20,628
26,683
Broadcasting/Information services 10,373 10,731 12,424
12,621
Corporate 784 528 385
446
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
Total $ 154,257 $ 128,832 $ 107,932
$ 116,840
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Newspapers $ 185,616 $ 71,746 $ 42,675
$ 21,867
Magazines 906 3,059 1,888
1,467
Broadcasting/Information services 5,619 3,323 1,863
2,697
Corporate 794 1,491 903
169
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
Total $ 192,935 $ 79,619 $ 47,329
$ 26,200
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
IDENTIFIABLE ASSETS AT DECEMBER 31
Newspapers $2,717,945 $2,676,779 $1,321,667
$1,444,462
Magazines 91,797 247,723 255,777 272,323
Broadcasting/Information services 115,882 113,675 117,679
122,436
Corporate 126,574 101,007 160,459 125,760
Investment in forest products group 85,433 76,020 139,392
163,000
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
Total $3,137,631 $3,215,204 $1,994,974
$2,127,981
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
NewspaperMagazine Group amounts for 19931994 have been affected by the dispositions of the
Women's Magazines Division and the U.K. golf publications (see Note 2).
Newspaper Group amounts for 1994 have been affected by the inclusion of The
Boston Globe's operations for the entire year, while the 1993 amounts only
include its operations from the October 1, 1993 acquisition of The Boston Globedate (see Note 2).
Newspaper Group operating profit for 1993 1992 and 19911992 includes charges of $35.4
million $28.0 million and $20.0$28.0 million, respectively, for costs related to staff reductions
at The New York Times newspaper.
Equity in operations of Forest Products Group and investment in Forest Products
Group for 1993 reflect an after-tax noncash charge of $47.0 million to write
down the Company's investment in this Group to reflect current operating
conditions and economic factors in the industry.Gaspesia.
Newspaper Group operating results for 1992 were negatively affected by $21.4
million for labor disruptions and training and start-up costs related to the new
production and distribution facility located in Edison, New Jersey ("Edison")
for The New York Times newspaper.
F-3
MANAGEMENT'S DISCUSSION AND ANALYSIS
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Per share amounts in the following Management's Discussion and Analysis are
computed on an after-tax basis.
ResultsRESULTS OF OPERATIONS: 1994 COMPARED WITH 1993
In 1994, the Company reported net income of Operations:$213.3 million, or $2.05 per share,
compared with $6.1 million, or $.07 per share, in 1993.
Exclusive of the special factors described in detail below, annual earnings
would have been $1.06 per share in 1994 compared with $.91 per share in 1993.
Operating profit for 1994, after excluding the special factors, rose to $211.2
million from $163.1 million in 1993. The improvement in ongoing operations in
1994's annual earnings was due to higher revenues at The New York Times,
Regional Newspapers and Broadcasting and the inclusion of The Boston Globe's
("The Globe") operations for the entire year compared with one quarter in 1993.
Revenues for 1994 increased to $2.36 billion from $2.02 billion in 1993. The
1994 annual revenues included The Globe for an entire year, but the Women's
Magazines and U.K. golf publications only through the first six months. Annual
revenues for 1993 Comparedincluded an entire year of revenues from the magazines sold in
1994, but only the fourth-quarter revenues from The Globe. On a comparable
basis, excluding revenues attributable to The Globe and the magazines sold, 1994
annual revenues increased by approximately 6 percent over 1993. The growth in
1994 revenues was due to higher revenues in the Newspaper Group and
Broadcasting.
The Company's costs and expenses after excluding special factors increased to
$2.15 billion from $1.86 billion in 1993. The increase was due to the inclusion
of The Globe's operations and acquisition amortization expense for the entire
year, as well as higher wages and benefits costs throughout the Company offset,
in part, by the reduction in expenses associated with the magazines sold.
Earnings for 1994 were affected by the following special factors:
- $200.9 million net pre-tax gain ($.99 per share) relating to the
divestitures of the Women's Magazines Division, U.K. golf publications
and a minority interest in Gaspesia Pulp & Paper Company Ltd.
("Gaspesia"), a Canadian newsprint mill.
Earnings for 1993 were affected by the following special factors:
- $47.0 million after-tax charge ($.56 per share) against equity in
operations of the Forest Products Group to write down the Company's
investment in Gaspesia.
- $35.4 million pre-tax charges ($.23 per share) for severance and related
costs resulting from staff reductions at The New York Times newspaper
("The Times").
- $4.4 million unfavorable tax adjustment ($.05 per share) due to a
federal corporate income tax rate increase which required the
remeasurement of deferred tax balances.
- $3.7 million pre-tax costs ($.02 per share) due to a severe snowstorm
that disrupted delivery of The Times.
- $2.6 million pre-tax gain ($.02 per share) on the sale of assets.
Operating profit before depreciation, amortization, interest and income
taxes, excluding the net proceeds from the 1994 dispositions, rose significantly
to $365.5 million in 1994 from $255.4 million in 1993. The increase was due to
improved operating results and the inclusion of The Globe's operations for an
entire year in 1994.
Interest expense, net of interest income, rose to $28.2 million in 1994 from
$25.4 million in 1993. The increase was a result of higher borrowings in
connection with stock repurchases and the October 1993 acquisition of The Globe.
Exclusive of the taxes related to the 1994 magazine sales and the disposition
of Gaspesia, the Company's effective income tax rate for 1994 was 41.7 percent
compared with 42.7 percent in 1993. The rates in both years reflect the
utilization of capital tax loss carryforwards.
A discussion of the Company's financial performance, exclusive of the special
factors noted above, follows:
Operating profit of the Newspaper Group in 1994 was $196.1 million compared
with $150.8 million in 1993. Revenues increased to $1.97 billion in 1994 from
$1.54 billion in the prior year. The improvements in 1994 revenues and operating
profit were due to a combination of higher advertising and circulation rates,
increased advertising volume, and the inclusion of the operations of The Globe
for an entire year. The Group was affected by higher newsprint prices in the
fourth quarter of 1994, as a result of increased demand for newsprint in the
market. These price increases are expected to continue into 1995 and will have
an adverse impact on the Group's future operating results.
Advertising volume at The Times increased 3.5 percent over 1993 to 3.7
million inches. National, classified and zoned advertising categories
experienced increases of 2.1 percent, 4.1 percent and 8.3 percent, respectively.
However, retail advertising decreased by 1.1 percent. Circulation of The Times
for the year ended December 31, 1994 was 1,142,800 copies weekdays, down 36,200
copies. Sunday circulation for the year was 1,743,900 copies, down 37,300 copies
from the prior year.
At The Globe, advertising volume for the year 1994 increased 5.3 percent over
1993 to 2.9 million inches. Advertising increased in all categories, especially
classified which was up 8.6 percent over 1993. Circulation of The Globe for the
year ended December 31, 1994 was 504,500 copies weekdays, approximately equal to
the 1993 period, and 804,800 copies Sundays, down 9,700 copies.
At the 28 regional newspapers that were in the Group for the entire 1994 and
1993 periods (two weekly newspapers were sold at the end of 1993), advertising
volume increased 4.3 percent to 17.1 million inches. Advertising increased in
all categories over 1993. Circulation for the daily regional newspapers for the
year ended December 31, 1994 was 843,500 copies weekdays, down 7,500 copies, and
851,400 copies Sundays, down 2,300 copies. Circulation for the year was 53,100
copies, down 2,400 copies for the non-dailies.
Average circulation for 1994 throughout the Newspaper Group was adversely
affected by newsstand and home delivery price increases.
F-4
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
Operating profit for the Magazine Group was $19.2 million in 1994, compared
with $12.3 million in 1993, on revenues of $280.1 million and $394.5 million,
respectively. The decrease in revenues for the year was primarily due to the
lack of revenues attributable to the Women's Magazines Division and the U.K.
golf publications, which were sold in the third quarter of 1994.
In connection with the sale of the Women's Magazines Division, the Company
entered into a four-year non-compete agreement for which it received $40.0
million. This amount is being recognized as income, on a straight-line basis,
over a four-year period commencing with the closing of the sale on July 26,
1994. The 1994 revenues for the Group included $4.2 million relating to this
agreement.
Excluding the 1993 and 1994 operations of the Women's Magazines Division, the
U.K. golf publications and the non-compete income arising from the Women's sale
in 1994, both the revenues and the operating profit of the Sports/Leisure
Magazines for 1994 were down somewhat from the comparable period in 1993. This
was due primarily to softness in advertising at Golf Digest and Tennis magazines
and higher subscription promotion costs.
Advertising pages as reported to Publisher's Information Bureau ("PIB") for
Golf Digest decreased 2 percent from 1993 to 1,321 pages and for Tennis
increased 4 percent from 1993 to 823 pages.
The Broadcasting/Information Services Group's operating profit was $25.0
million in 1994, compared with $19.4 million in 1993 on revenues of $109.3
million and $87.3 million, respectively. Higher national and local advertising
revenues at the television stations accounted for the improved operating
results.
Equity in operations of the Forest Products Group (an after-tax amount) was
$3.3 million in 1994, compared with a loss of $4.9 million in 1993. The 1994
improvements resulted from the Company no longer needing to record its share of
operating losses for Gaspesia as a result of the 1993 write-down. In addition,
higher sales prices improved the Group's operating results during the second
half of the year and this favorable trend should continue into 1995.
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS: 1993 COMPARED WITH 1992
In 1993, the Company reported net income of $6.1 million, or $.07 per
share, compared with a net loss of $44.7 million, or $.57 per share, in 1992.
Earnings for 1993 were affected by the following factors:
- $47.0 million after-tax charge ($.56 per share) against equity in
operations of the Forest Products Group to write down the Company's
investment in the GroupGaspesia to reflect current operating
conditions and economic factors in the industry.its net realizable value.
- $30.0$35.4 million pre-tax charge ($.20.23 per share) to cover severance and
related costs resulting from anticipated white-collar staff reductions,
at The New York Times newspaper ("The Times").
- $5.4 million pre-tax charge ($.03 per share) to cover severance
and related costs resulting from voluntary early retirements from the composing room ofat The Times.New York
Times newspaper.
- $2.6 million pre-tax gain ($.02 per share) on the sale of assets.
- $5.6$1.2 million tax expense ($.07.02 per share) due to the enactment of the
Omnibus Budget Reconciliation Act of 1993 ("Tax Act") which increased
the Federalfederal corporate income tax rate from 34 percent to 35 percent
retroactively to January 1, 1993,1993.
- $4.4 million tax expense ($.05 per share) due to the Tax Act, which
affected the deductibility of certain costs and caused the Company to
remeasure its year-end 1992 deferred tax balances to reflect the higher
tax rate.
- $3.7 million pre-tax ($.02 per share) in unfavorable advertising and
circulation rate adjustments due to a severe snowstorm in March that
disrupted delivery of The Times.
Earnings for 1992 were affected by the following factors:
- $33.4 million after-tax charge ($.43 per share) for the adoption as of
January 1, 1992, of three mandated non-cash accounting changes related
to income taxes, postretirement benefits and postemployment benefits.
- $3.1 million pre-tax gain ($.02 per share) on the sales of assets.
- $28.0 million pre-tax charge ($.20 per share) to cover severance and
related costs for production unions at The Times.
- $53.8 million pre-tax loss ($.47 per share) due to the closing of The
Gwinnett (Ga.) Daily News, the sale of its residual assets and its 1992
operations.
- $10.4 million pre-tax ($.07 per share) for training and start-up costs
related to The Times's new production and distribution facility located
in Edison, N.J. ("Edison").
- $11.0 million pre-tax ($.08 per share) due to labor disruptions arising
from a dispute between independent distributors of The Times and its
Drivers' Union.
Exclusive of the factors described above for the 1993 and 1992 periods,
earnings would have been $.93 per share in 1993 compared with $.66 per share in
1992.
Consolidated revenues for 1993 increased to $2.02 billion from $1.77 billion
in 1992, due principally to the October 1, 1993 acquisition of The Boston Globe,
("The Globe"), the June 1992 acquisition of two wholesale newspaper distribution businesses and
higher advertising and circulation revenues. Costs and expenses after excluding
special items increased to $1.86 billion from $1.64 billion in 1992. The
increase was due principally to the October 1993 Globe acquisition, the June
1992 wholesale distribution business acquisition and higher newsprint,
depreciation, and payroll and benefit costs.
Operating profit after excluding the special factors rose to $163.1 million
from $134.7 million in 1992 due principally to higher advertising and
circulation revenues in the Newspaper
F-5
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
Group, which included the operations of The Globe subsequent to October 1, 1993
and a strong performance by the Company's television stations, which was
partially offset by higher newsprint prices and increased depreciation.
Interest expense, net of interest income, declined to $25.4 million in 1993
from $26.1 million in 1992. Lower levels of borrowings through the first half of
1993 were partiallypartly offset by increased borrowings in connection with the Company's
stock repurchase program (see Note 13)(Note 12) and the utilization of cash balances in
connection with the October 1, 1993 acquisition of The Globe.
The Company's effective income tax rate for 1993 was 42.7 percent compared
with 44.5 percent in 1992, exclusive of the effect of the Gwinnett transaction.
The lower rate is due principally to the recognition of capital loss
carryforwards and state operating loss carryforwards, which were partially
offset by the negative impact of the Tax Act.
A discussion of the operating results of the Company's segments and equity
interests follows:
Exclusive of the special pre-tax items ($36.5 million in 1993 and $47.9
million in 1992), operating profit of the Newspaper Group was $150.8 million
compared with $129.1 million in 1992 on revenues of $1.54 billion and $1.31
billion, respectively. Improvements in revenues were due to higher advertising
and circulation rates, principally at The Times, the June 1992 acquisition of
two wholesale newspaper distribution businesses and the October 1, 1993
acquisition of The Globe. The higher operating profit resultsresulted principally from
the inclusion of the results of The Globe since the October 1, 1993
acquisition date, higher advertising and circulation revenues, cost controls
throughout the Group and cost savings related to Edison, which were partiallypartly
offset by advertising weakness at the Company's two California regional
newspapers, increased depreciation and start-up and redesign costs related to
certain sections of The Times.
F-4
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- -------------------------------------------------------------------------------
Advertising linage at The Times increased 1.0 percent over 1992 to 77.8
million lines. Retail advertising rose 4.9 percent over 1992 while national and
classified advertising declined 2.4 percent and 4.1 percent, respectively.
Circulation of The Times for the year ended December 31, 1993 was 1,179,000
copies weekdays, approximately equal to the 1992 period. Sunday circulation of
1,781,200 copies reached a record high, up 17,100 copies over the prior year.
At The Globe, full-run advertising volume for the year 1993 increased 4.0
percent over 1992 to 2.5 million inches. Retail and classified advertising
increased 9.9 percent and 2.6 percent, respectively, over 1992, but national
advertising declined 1.6 percent. Circulation of The Globe for the year ended
December 31, 1993 was 504,600 copies weekdays, down 3,300 copies, and 814,500
copies Sundays, up 2,700 copies.
At the 30 regional newspapers that were in the Group for the entire 1993 and
1992 periods (two weekly newspapers were sold at the end of 1993), advertising
volume increased 3.9 percent to 35.2 million inches. The 1993 amount includes a
significantly higher volume of advertising inserts. Circulation for the daily
regional newspapers for the year ended December 31, 1993 was 851,000 copies
weekdays, up 4,500 copies, and 853,700 copies Sundays, up 9,200 copies.
Circulation for the non-dailies was 72,700 copies, down 500 copies.
The Magazine Group's operating profit was $12.3 million in 1993 compared with
$9.9 million in 1992 on revenues of $394.5 million and $386.1 million,
respectively. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), the Group's operating profit was
$25.4 million in both years. Results for 1993 were adversely affected by an
August 1993 lawsuit settlement of $1.5 million. In addition, continuing softness
in the consumer packaged goods category in the women's magazines field
continues to affectaffected the Group adversely.adversely in 1994.
Advertising pages as reported to Publications Information Bureau ("PIB")PIB for Golf Digest increased 1 percent from
1992 to 1,344 pages; for Tennis, increased 4 percent from 1992 to 795 pages; for
Family Circle, decreased 9 percent from 1992 to 1,570 pages,pages; and for McCall's,
decreased 5 percent from 1992 to 1,138 pages.
The Broadcasting/Information Services Group operating profit was $19.4
million compared with $14.8 million in 1992 on revenues of $87.3 million and
$80.5 million, respectively. Higher local advertising revenues at the Company's
television stations accounted for the improved results.
Exclusive of the $47.0 million noncash charge to write down the Company's
investment in its Forest Products Group,Gaspesia, equity in operations (an after-tax amount) of the Forest
Products Group was a loss of $4.9 million compared with a loss of $8.7 million
in 1992. The 1993 results have beenwere adversely affected by $0.6 million resulting from
the impact of the Tax Act. Lower newsprint discounts and a favorable Canadian
exchange rate accounted for the improved results. Higher newsprint discounts,
which were effective October 1, 1993, negatively affected the Group during the
fourth quarter and into 1994.
The Forest Products Group write-down resulted principally from the softening
of paper prices due to continuing oversupply, as well as high costs and
projected environmental expenditures at one mill.
All of the Company's paper mills were affected by pricing difficulties in
1993. Newsprint prices showed some strengthening during the second and third
quarters, but they resumed their decline in October and were at their lowest
point at year-end. This trend continued into the first quarter of 1994 as prices
fell further in January. A modest March 1, 1994, newsprint priceJanuary, where they remained stable until mid-1994. Newsprint
prices began to increase has been announced throughoutin the industry. However, other recently
announced increases have not become effective becausethird and fourth quarters of 1994.
The Forest Products Group write-down resulted from the softening of paper
prices due to continuing oversupply, as well as high costs and it is
uncertain whether this increase will be realized. In addition to pricing
difficulties, one of the Company's two newsprint mills has been unable to fully
overcome high cost disadvantages. This mill also requires a capital expenditurerequired
regulatory environmental expenditures (estimated to be $25.0 million) to comply with environmental regulations which
become effective in 1995. This expenditure, if it is made, will not lower the
mill's costs.at
Gaspesia. In measuring the write-down, the Company projected the future cash
flows of the mills, including the required capital expenditure,expenditures, and determined
that the value of thoseGaspesia's cash flows was less than the carrying value of its investment in
the
Forest Products Group.Company's investment. Due in part to this write-down, the Company currently expects to reportreported an
improvement in 19941994's equity in operations, since it willwas not be recording operating losses for onerequired to record
its interest in the operations of its mills.
- -------------------------------------------------------------------------------
Results of Operations: 1992 Compared with 1991
In 1992, the Company reported a net loss of $44.7 million, or $.57 per share,
compared with net income of $47.0 million, or $.61 per share, in 1991. The 1992
year was adversely affected by $33.4 million, or $.43 per share, resulting from
the net cumulative effect of adopting three mandated noncash accounting changes
related to postretirement and postemployment benefits (see Note 11) and income
taxes (see Note 7) as of January 1, 1992.
Exclusive of the net cumulative effect of the accounting changes, the net loss
for 1992 was $11.3 million or $.14 per share. Earnings for 1992 and 1991 have
also been affected by the following factors:
- $3.1 million pre-tax gains ($.02 per share) in 1992 on the sale
of assets.
- $28.0 million pre-tax charge ($.20 per share) in 1992 to cover
severance and related costs resulting from labor agreements for
various production unions at The Times.
- $53.8 million pre-tax loss ($.47 per share) in 1992 due to the
closing of The Gwinnett (Ga.) Daily News, the sale of its
residual assets and its 1992 operations.
F-5Gaspesia.
F-6
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- ------------------------------------------------------------------------------
- $10.4 million pre-tax ($.07 per share) in 1992 for training and
start-up costs related to commencement of operations at Edison.
- $11.0 million pre-tax ($.08 per share) in 1992 due to labor
disruptions arising from a dispute between inde-pendent
distributors of The Times and its Drivers' Union.
- $7.8 million pre-tax ($.05 per share) in 1992 for the annual
charge related to postretirement benefits.
- $20.0 million pre-tax charge ($.15 per share) in 1991 to cover
severance and related costs resulting from a voluntary early
retirement program for 160 employees, mainly Newspaper Guild at
The Times.
- $10.0 million ($.13 per share) in 1991 for the reversal of a
provision for income taxes which related to a settlement with the
Internal Revenue Service for tax years 1980 through 1984.
Exclusive of these factors, 1992 earnings would have been $.71 per share
compared with $.63 per share for 1991.
Excluding the factors mentioned above, the principal reason for the increase
in net income is higher advertising and circulation revenues in the Newspaper
and Magazine Groups and lower newsprint costs due to increased price discounting
offset, in part, by the adverse effect such discounting had on equity in
earnings of the Forest Products Group.
Consolidated revenues increased to $1.77 billion from $1.70 billion in 1991.
The increase was due principally to higher advertising rates, higher
circulation revenues in the Newspaper and Magazine Groups and the June 1992
acquisition of two wholesale newspaper distribution businesses, which distribute
The Times and other publications in New York City and parts of New Jersey.
Excluding the special factors, costs and expenses increased to $1.63 billion
in 1992 from $1.59 billion in 1991 due principally to higher payroll and benefit
costs and operating expenses of two wholesale distribution businesses acquired
in June 1992 offset, in part, by lower newsprint prices.
Interest expense, net of interest income, declined to $26.1 million compared
with $30.6 million in 1991 due to lower levels of borrowings.
The nondeductibility of a portion of the loss on the closedown and sale of The
Gwinnett (Ga.) Daily News significantly increased the Company's tax rate.
Exclusive of the Gwinnett transaction and the 1991 favorable IRS settlement, the
effective income tax rate in 1992 declined to 44.5 percent compared with 50.4
percent in 1991. The lower rate is due principally to a decrease in the
relationship of amortization expense for intangible assets to 1992's pre-tax
income, which was significantly higher than that of 1991.
A discussion of the operating results of the Company's segments and equity
interests follows:
Exclusive of the special pre-tax items ($47.9 million in 1992 and $20.0
million in 1991), operating profit of the Newspaper Group increased to $129.1
million in 1992 from $113.6 million in 1991 on revenues of $1.31 billion and
$1.27 billion respectively.
Improvements in revenues and operating profit were due to higher advertising
and circulation rates and increased circulation. Lower newsprint costs also
favorably affected the Group. The June 1992 acquisition of wholesale newspaper
distribution businesses also increased the Group's revenues.
Advertising linage at The Times declined 2.0 percent to 77.0 million lines
compared with 1991. Retail advertising was flat compared with 1991 and national
advertising rose 0.9 percent. However, classified advertising declined 10.5
percent from last year. Circulation of The Times for the year ended December
31, 1992, reached record highs. Circulation was 1,181,500 copies weekdays and
1,763,800 copies Sundays, up 21,600 copies and 29,800 copies, respectively, over
the prior year.
Depreciation of the building portion of Edison amounted to $14.0 million per
year beginning in 1990. Depreciation of the facility's equipment has begun and
will increase as each element is placed in service. Production commenced in
September 1992 and depreciation of related equipment began in the fourth
quarter.
Full operation of the facility began during the first quarter of 1993. The
Company estimates that depreciation of the building and equipment will total
$33.0 million in 1993 increasing to $35.0 million in 1994 when the facility is
operational for a full year.
At the 30 regional newspapers that were in the Group for the entire 1992 and
1991 periods, advertising volume increased 2.5 percent to 33.8 million inches.
The 1992 amount includes a significantly higher volume of advertising inserts.
Circulation for the daily regional newspapers for the year ended December 31,
1992, was 844,500 copies Sundays, up 13,800 copies, and 846,500 copies weekdays,
up 10,400 copies. Circulation for the non-dailies was 73,200 copies, up 3,100
copies.
The Magazine Group's operating profit was $9.9 million in 1992 compared with a
loss of $0.5 million in 1991 on revenues of $386.1 million and $352.7 million
respectively. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), which were structured to
maximize cash flow, the Group's operating profit was $25.4 million in 1992
compared with $21.2 million in 1991. The better 1992 results were primarily due
to increased advertising pages at most of the Group's magazines and lower
magazine paper prices. Most of the Group's magazines increased their market
share compared with 1991.
Advertising pages as reported to PIB for Golf Digest increased 10 percent from
1991 to 1,332 pages; for Tennis increased 4 percent from 1991 to 768 pages; for
Family Circle increased 12 percent from 1991 to 1,723 pages, and for McCall's
increased 11 percent from 1991 to 1,201 pages.
Broadcasting/Information Services Group operating profit was $14.8 million in
1992 compared with $14.0 million in 1991 on revenues of $80.5 million and $76.0
million respectively. The higher operating profit was due to higher local
advertising revenues at the Company's television stations offset, in part, by
costs related to a format change for the AM radio station WQEW, formerly WQXR-
AM.
Equity in operations of the Forest Products Group (an after-tax amount) was a
loss of $8.7 million compared with income of $5.7 million in 1991. Higher paper
discounts due to oversupply continue to have a negative impact.
F-6
MANAGEMENT'S DISCUSSION--------------------------------------------------------------------------------
LIQUIDITY AND ANALYSIS (CONCLUDED)
- -------------------------------------------------------------------------------
Liquidity and Capital ResourcesCAPITAL RESOURCES
Net cash provided by operating activities of $175.3$181.6 million was used
primarily
to modernize facilities and equipment, to pay dividends to stockholders, to repurchase shares of the Company's Class A Common Stock, to
modernize facilities and equipment, and to pay dividends to stockholders. The
decrease in part,net cash provided by operating activities from 1993 is due primarily
to purchase The Globe.an increase in estimated income taxes paid, which were associated with the
gains on the sales of the magazines in 1994. Exclusive of the estimated taxes
paid related to the magazine sales, the net cash provided by operating
activities would have been $295.1 million. The ratio of current assets to
current liabilities was 0.89.91 at December 31, 19931994, compared with 1.08.89 at December
31, 1992,1993, and long-term debt and capital lease obligations as a percentage of
total capitalization was 25 percent at December 31, 1994, compared with 22
percent at December 31, 1993 compared with 17 percent at December 31,1992. The
increase was due principally to1993.
In 1994, the impactCompany fully expended all of the Company's$150.0 million authorized
under the stock repurchase program discussed below, which was partially offset by the acquisition of The
Globe onannounced in October 1, 1993. In October 1993,1994,
the Company announced additional authorized expenditures of up to $150.0$100.0 million
for repurchases of its Class A Common Stock. Under the program,these programs, purchases may
be made from time to time either in the open market or through private
transactions. The number of shares that may be purchased in market transactions
may be limited as a result of The Globe transaction. Purchases may be suspended
from time to time or discontinued. To dateThrough December 31, 1994, under the two
programs, the Company has repurchased approximately 30,00010,074,000 shares of its
Class A Common Stock at an average effective price of $24.78$23.42 per share under this program.
Under a previously announced program that expired at the close of The Globe
transaction, the Company expended approximately $254.0 million. Under this
program,share.
In January 1995, the Company repurchased approximately 10,231,000397,000 shares of its
Class A Common Stock at an average effective price of $24.87$22.32 per share.share under the
$100.0 million authorization. The Company has expended substantially all of this
authorization. In December 1993February 1995, the CompanyCompany's Board of Directors authorized
additional expenditures of up to $50.0 million for repurchases of its Class A
Common Stock.
In July 1994, the Company's Board of Directors approved the construction of a
new production and the City ofdistribution facility in College Point, New York, executed a lease
agreement and related agreements, under whichfor the
Company will lease 31 acresproduction of City-owned land in Queens, New York, on which The Times plans to build a state-
of-the-art printing and distribution facility.Times. The Company estimates that the cost of the new facility
will be approximately $280.0$315.0 million, with constructionexclusive of capitalized interest
currently projected to beginbe $45.0 million. Construction began in the summer ofAugust 1994 and
completion is expected in the second half of 1997. ConstructionWhile the new facility will
replace The Times's Manhattan production and distribution facility, business and
news operations will remain at the Manhattan building. No write-down is
anticipated as a result of the facility is subject to approvaldiscontinuance of production at the Company's Board of Directors.Manhattan
facility.
The Company currently estimates that, exclusive of the QueensCollege Point
facility, capital expenditures for 19941995 will range from $90.0$120.0 million to $110.0$150.0
million.
In February 1994, the sale of a partnership (BPI Communications, L.P.) in
which the Company had a one-third interest was completed. In 1994, the Company
received approximately $55.0 million, which was primarily utilized to repay
notes payable.
During the 1994 third quarter, the Company completed the sale of its Women's
Magazines Division and U.K. golf publications (See Note 2). The net after-tax
proceeds, including transaction costs and payments received under a non-compete
agreement, totaling approximately $160.0 million, were used for general
corporate purposes, including the repayment of debt and the repurchase of the
Company's Class A Common Stock.
In connection with the 1991 divestiture of a jointly-owned affiliate, Spruce
Falls Power and Paper Company Limited, the Company committedhas fulfilled its commitment
to lend up to $26.5 million (C$30.0 million) to the new owners of the mill.
Such loans will take
place over aUnder the terms of the loan, the five-year repayment period endingis not scheduled to
commence until December 1996. To date1997. The Company expects the Company has
loaned approximately U.S. $20.5 million underformer affiliate to
fulfill its contractual obligation as stipulated in the commitment.
In October 1993 the Company issued notes totaling $200.0 million to an
insurance company with interest payable semi-annually. $100.0 million of five-
year notes were issued at a rate of 5.50 percent, and the remaining $100.0
million were issued as six and one-half year notes at a rate of 5.77 percent.loan agreement.
In connection with the previously announced1993 charges totaling $35.4 million for white-collar and production union staff
reductions (see Note 4)3), approximately $16.5 million has been disbursed. The
Company has committed the Company
currently anticipates thatremaining funds. As a result of the staff reductionstiming of certain
union pension and related expenditures willwelfare fund contributions, the remaining cash outflows
associated with these charges are expected to occur during 1994 and thatover the cost of this program will be recovered through
reduced costs over a two-year period. The charges cover approximately 300
employees with an average annual wage and benefit cost of $110,000 per employee.next two years. The
Company does not anticipate that its ongoing business operations will be
affected by this reduction of staff and expects to fund this chargethese charges through
internally generatedinternally-generated funds.
In JanuaryMay 1993, the Financial Accounting Standards Board ("FASB") issued
Statement No. 114 - Accounting by Creditors for Impairment of a Loan ("SFAS
114"). SFAS 114 requires that impaired loans be measured based on the present
value of expected future cash flows discounted at the loans' effective interest
rate. In October 1994, the FASB issued Statement No. 118 - Accounting by
Creditors for Impairment of a definitiveLoan-Income Recognition and Disclosures ("SFAS
118"). SFAS 118 amends SFAS 114 and allows a creditor to use existing methods
for recognizing interest income on an impaired loan. These statements are
effective for fiscal years ended after December 15, 1994. The Company does not
believe operations will be affected by the adoption of SFAS 114 and SFAS 118.
The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. The Company has an
interest rate swap agreement was reached regardingwith a major financial institution to manage
interest costs on $50.0 million of notes due in July 1995. The swap agreement
converted a 9.34 percent fixed interest rate to an effective interest rate of
7.73 percent in 1994.
The Company has on file a shelf registration with the Securities and Exchange
Commission that permits the issuance of up to $400.0 million of unsecured senior
debt securities. The Company intends to use the net proceeds from the sale of
a
partnership (BPI Communications, L.P.) inany of these securities for general corporate purposes, which the Company has a one-third
interest.may include
repayment of debt and possible future acquisitions.
In FebruaryDecember 1994, the Company received approximately $53.0 million,
which will primarily be utilizedentered into forward interest rate swaps to
repay notes payable, which totaled $62.3
million athedge against interest rate increases for the period prior to the issuance of
debt. Gains or losses on these transactions are deferred and amortized as an
adjustment to interest expense
F-7
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONCLUDED)
- --------------------------------------------------------------------------------
commencing with the issuance of debt. At December 31, 1993.1994, the Company had
hedged approximately $20.0 million of anticipated first-quarter borrowings. The
carrying value of such swap agreements approximated the year-end fair value and,
accordingly, no deferred gains or losses were recorded. Subsequent to year-end,
the Company entered into forward interest rate swaps which hedged an additional
$130.0 million of first-quarter anticipated borrowings. In total, these swaps
fix the ten-year treasury rate used to determine the Company's interest rate at
7.8 percent on $150 million of anticipated borrowings.
In December 1994, the Company established a $200.0 million commercial paper
program. Borrowings are in the form of unsecured notes sold at a discount with
maturities of up to 270 days. As of December 31, 1994, $60.7 million of such
notes were outstanding.
In addition to cash provided from operating activities, the Company has
several established sources for future liquidity purposes, including several
revolving credit and term loan agreements. At December 31, 1993, $150.01994, $170.0 million
was available for borrowing by the Company under these agreements.
These revolving credit and term loan agreements and the unsecured senior debt
securities available under the shelf registration allow for the Company's
classification of $273.5 million of debt as long-term. The Company intends to
refinance these obligations on a long-term basis through the issuance of debt.
The Company anticipates that during 19941995, cash for operating, investing and
financing activities will continue to come from a combination of
internally generatedinternally-generated funds and external financing.
F-7F-8
CONSOLIDATED STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands
except per share data Year Ended December 31
per share data1994 1993 1992
1991
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Advertising $1,656,999 $1,399,042 $1,254,764
$1,254,365
Circulation 545,854 473,971 419,454
390,600
Other 154,710 146,641 99,317
58,136
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Total 2,357,563 2,019,654 1,773,535
1,703,101
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs:costs
Raw materials 304,360 280,531 250,575 288,618
Wages and benefits 529,701 437,528 388,403
361,660
Other 428,663 418,554 365,651
341,105
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Total 1,262,724 1,136,613 1,004,629 991,383
Selling, general and administrative
expenses 883,597 756,460 680,498
618,079
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Total 2,146,321 1,893,073 1,685,127
1,609,462
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
OPERATING PROFIT 211,242 126,581 88,408 93,639
Interest expense, net of interest
income 28,162 25,375 26,115
30,586
LossNet gain (loss) on disposition of Gwinnett Daily Newsdispositions 200,873 -- (53,768)
- 53,768 -
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products
group 383,953 101,206 8,525
63,053
Income taxes 173,868 43,231 11,079
21,760
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) before equity in
operations of forest products group 210,085 57,975 (2,554) 41,293
Equity in operations of forest
products group 3,264 (51,852) (8,718)
5,700
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) before net cumulative
effect of accounting changes 213,349 6,123 (11,272) 46,993
Net cumulative effect of accounting
changes --- -- (33,437)
- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 213,349 $ 6,123 $ (44,709)
$ 46,993
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Average number of common shares
outstanding 104,070 84,459 78,534 77,299
Per share of common stock
BeforeIncome (Loss) before net cumulative
effect of accounting changes $ 2.05 $ .07 $ (.14) $ .61
Net cumulative effect of
accounting changes --- -- (.43) -
Net income (loss) 2.05 .07 (.57) .61
Dividends .56 .56 .56
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-8F-9
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------
December 31
1994 1993 1992
- -------------------------------------------------------------------------------
ASSETS Dollars in thousandsthousand
- -------------------------------------------------------------------------------
CURRENT ASSETS
Cash and short-term investments (at cost which
approximates market:
1994, $14,255,000; 1993, $27,744,000; 1992, $91,685,000)$27,744,000) $ 41,419 $ 42,058 $ 118,503
Accounts receivable (net of allowances:
1994, $28,157,000; 1993, $43,507,000; 1992, $33,300,000)$43,507,000) 247,750 264,218
192,233
Inventories 30,545 47,271 51,551
Deferred subscription costs 10,659 32,597 32,830
Other current assets 81,401 107,009 37,661
- -------------------------------------------------------------------------------
Total current assets 411,774 493,153 432,778
- -------------------------------------------------------------------------------
INVESTMENT IN FOREST PRODUCTS GROUP 85,433 76,020 139,392
- -------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT (at cost)
Land 62,945 65,839 61,961
Buildings, building equipment and improvements 629,152 650,186
597,597
Equipment 908,630 874,479 751,186
Construction and equipment installations
in progress 218,041 93,007 47,842
- -------------------------------------------------------------------------------
Total 1,818,768 1,683,511 1,458,586
Less accumulated depreciation 660,017 571,487 555,831
- -------------------------------------------------------------------------------
Total property, plant and equipment - net 1,158,751 1,112,024 902,755
- -------------------------------------------------------------------------------
INTANGIBLE ASSETS ACQUIRED
Costs in excess of net assets acquired 1,391,250 1,383,582 554,014
Other intangible assets acquired 160,747 227,377 63,200
- -------------------------------------------------------------------------------
Total 1,551,997 1,610,959 617,214
Less accumulated amortization 172,531 190,006 160,991
- -------------------------------------------------------------------------------
Total intangible assets acquired - net 1,379,466 1,420,953 456,223
- -------------------------------------------------------------------------------
MISCELLANEOUS ASSETS 102,207 113,054 63,826
- -------------------------------------------------------------------------------
Total $3,137,631 $3,215,204 $1,994,974
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-9F-10
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
December 31
1994 1993
1992
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY Dollars in thousands
- -------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts and notes payable $ 115,402 $ 139,115
Notes payable 62,340 -$121,504 $177,742
Payrolls 67,012 71,256 47,820
Accrued expenses 182,338 171,515 90,063
Unexpired subscriptions 77,697 130,627
119,508
Short-term debtCurrent portion of capital lease
obligations 2,681 2,590 2,643
- -------------------------------------------------------------------------------
Total current liabilities 451,232 553,730 399,149
- -------------------------------------------------------------------------------
OTHER LIABILITIES
Long-term debt 473,530 413,581 158,131
Capital lease obligations 49,666 46,482 48,780
Deferred income taxes 176,588 196,875
187,701
Other 441,323 403,869 199,799
- -------------------------------------------------------------------------------
Total other liabilities 1,141,107 1,060,807 594,411
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
5 1/2% Cumulative2 percent cumulative prior preference stock
of $100 par value - authorized
110,000 shares; outstanding: 19931994, 17,530
shares and 1992,1993, 17,837 shares 1,7841,753 1,784
Serial preferred stock of $1 par value -
authorized 200,000 shares - none issued - --- --
Common stock of $.10 par value
Class A - authorized 200,000,000 shares; issued:
1994, 108,052,347 shares; 1993, 107,678,024 shares; 1992, 88,047,623
shares (including treasury shares: 1994,
10,242,381; 1993, 1,251,573; 1992,
8,773,419)1,251,573) 10,805 10,768 8,805
Class B, convertible - authorized 600,000
shares; issued: 1994, 570,121 shares;
1993, 571,624 shares; 1992, 571,804 (including treasury shares:
19931994 and 1992,1993, 139,943) 57 57
Additional capital 597,860 599,758 164,928
Earnings reinvested in the business 1,179,715 1,022,958 1,065,347
Common stock held in treasury, at cost (244,898) (34,658) (239,507)
- -------------------------------------------------------------------------------
Total stockholders' equity 1,545,292 1,600,667 1,001,414
- -------------------------------------------------------------------------------
Total $3,137,631 $3,215,204
$1,994,974
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-10F-11
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------------
CASH PROVIDED (USED):
OPERATING ACTIVITIES
Income (loss) before net cumulative effect of accounting changes $ 6,123 $ (11,272) $ 46,993
Adjustments to reconcile income (loss) before net cumulative effect of
accounting changes to net cash provided by operating activities
Depreciation 89,274 69,880 72,441
Amortization 39,558 38,052 44,399
Equity in operations of forest products group - net 52,311 943 (6,406)
Cash distributions and dividends from forest products group - 6,775 775
Loss on closing and disposition of Gwinnett Daily News - 53,768 -
Deferred income taxes (37,901) (18,216) 8,729
(Increase) Decrease in receivables - net (21,636) 430 (2,375)
Decrease (Increase) in inventories 10,799 (10,707) 5,471
Decrease (Increase) in deferred subscription costs and other current assets 4,749 1,078 (13,963)
(Decrease) Increase in accounts payable (41,429) 15,216 9,120
Increase (Decrease) in payrolls and accrued expenses 46,758 (12,474) 9,377
Increase in unexpired subscriptions 11,196 4,342 6,666
Other - net 15,491 290 4,944
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 175,293 138,105 186,171
- --------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Businesses acquired, net of cash acquired (134,384) (23,091) -
Proceeds on sale of residual assets of Gwinnett Daily News - 68,000 -
Additions to property, plant and equipment (75,738) (47,068) (39,708)
Purchases of marketable securities (65,077) - -
Proceeds from sales of marketable securities 65,077 - -
Decrease in investment in forest products group - - 46,234
Loans to former affiliate (15,000) - (5,000)
Other investing proceeds 944 4,985 1,495
Other investing payments (1,986) (8,629) (16,354)
- --------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (226,164) (5,803) (13,333)
- --------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Short-term borrowing - net 62,340 - (11,971)
Long-term obligations and notes payable
Increase 200,000 - 76,963
Reduction (5,510) (63,847) (167,477)
Capital shares
Issuance 19,894 19,785 15,121
Repurchase (255,222) - (9)
Dividends paid to stockholders (47,076) (54,935) (32,580)
- --------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (25,574) (98,997) (119,953)
- --------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in Cash and short-term investments (76,445) 33,305 52,885
Cash and short-term investments at the beginning of the year 118,503 85,198 32,313
- --------------------------------------------------------------------------------------------------------------------
Cash and short-term investments at the end of the year $ 42,058 $ 118,503 $ 85,198
- --------------------------------------------------------------------------------------------------------------------CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1994 1993 1992
- --------------------------------------------------------------------------------
CASH PROVIDED (USED):
OPERATING ACTIVITIES
Income (Loss) before net cumulative effect
of accounting changes $213,349 $6,123 $(11,272)
Adjustments to reconcile income (loss)
before net cumulative effect of accounting
changes to net cash provided by operating
activities
Depreciation 104,624 89,274 69,880
Amortization 49,633 39,558 38,052
Equity in operations of forest
products group - net (3,240) 52,311 943
Cash distributions and dividends from
forest products group 8,224 -- 6,775
Net (gain) loss on dispositions (200,873) -- 53,768
Proceeds from non-compete agreement 40,000 -- --
Deferred income taxes (33,732) (37,901) (18,216)
(Increase) Decrease in receivables - net (18,573) (21,636) 430
(Increase) Decrease in inventories (4,035) 10,799 (10,707)
(Increase) Decrease in deferred subscription
costs and other current assets (17,820) 4,749 1,078
Increase (Decrease) in accounts payable 17,481 (41,429) 15,216
(Decrease) Increase in payrolls and
accrued expenses (6,359) 64,823 5,405
Increase in unexpired subscriptions 18,027 11,196 4,342
Other - net 14,879 15,491 290
- --------------------------------------------------------------------------------
Net cash provided by operating activities 181,585 193,358 155,984
- --------------------------------------------------------------------------------
INVESTING ACTIVITIES
Net proceeds on sale of BPI Communications,
L.P. 55,367 -- --
Net proceeds from dispositions 243,776 -- 68,000
Businesses acquired, net of cash acquired -- (134,384) (23,091)
Additions to property, plant and equipment (186,203) (75,738) (47,068)
Purchases of marketable securities (88,358) (65,077) --
Proceeds from sales of marketable securities 88,358 65,077 --
Other investing proceeds 7,725 944 4,985
Other investing payments (8,505) (16,986) (8,629)
- --------------------------------------------------------------------------------
Net cash provided by (used in) investing
activities 112,160 (226,164) (5,803)
- --------------------------------------------------------------------------------
FINANCING ACTIVITIES
Short-term borrowing - net (1,935) 62,340 --
Long-term obligations
Increase -- 200,000 --
Reduction (5,113) (5,510) (63,847)
Capital shares
Issuance 2,577 1,829 1,906
Repurchase (232,815) (255,222) --
Dividends paid to stockholders (58,287) (47,076) (54,935)
Other financing proceeds 1,189 -- --
- --------------------------------------------------------------------------------
Net cash used in financing activities (294,384) (43,639) (116,876)
- --------------------------------------------------------------------------------
Net (decrease) increase in Cash and
short-term investments (639) (76,445) 33,305
Cash and short-term investments at
the beginning of the year 42,058 118,503 85,198
- --------------------------------------------------------------------------------
Cash and short-term investments at
the end of the year $ 41,419 $ 42,058 $ 118,503
- --------------------------------------------------------------------------------
See notes to consolidated financial statements and supplemental
disclosures to consolidated statements of cash flows.
F-11F-12
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1994 1993 1992
1991
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
NONCASH INVESTING AND FINANCING
TRANSACTIONS
Capital lease assets and
obligations incurred $ 5,990 $ 338 $ 668
$ 311
========== ===================== =========== ==========
Businesses acquired
Fair value of assets acquired $1,237,029 $ 34,462$1,257,029 $34,462
Liabilities assumed (209,000)(229,000) (11,371)
Liabilities incurred, net of
payments (18,744) ---
Common stock issued (874,901) -
--------- ------------
----------- -----------
Net cash paid $ 134,384 $ 23,091
========= ==========
Valuation reserve (investment in
forest products group) $ (26,927)
==========$134,384 $23,091
=========== ===========
Issuance of common shares $21,723 $18,188 $17,965
=========== =========== ===========
CASH FLOW INFORMATION
Cash payments during the
year for
Interest (net of amount
capitalized) $ 26,861 $ 28,486 $ 31,367
========= ======== =========$36,320 $26,861 $28,486
=========== =========== ===========
Income taxes $ 55,327 $ 36,776 $ 25,620
========= ======== =========$220,973 $55,327 $36,776
=========== =========== ===========
- -------------------------------------------------------------------------------
F-12--------------------------------------------------------------------------------
The increase in income taxes paid (and corresponding decrease in net cash
provided by operating activities) is in large part due to an increase in
estimated income tax payments of approximately $113,500,000 related to the net
gain on dispositions in 1994. Under Financial Accounting Standards Board
("FASB") Statement No. 95, "Statement of Cash Flows," all income tax payments
are included in determining net cash flow from operating activities, but the net
cash received from the dispositions must be reported as an investing cash flow.
F-13
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
except per share data Capital Stock
------------------------------------ Common
5 1/2%2 % Class A Class B Earnings Stock
Preference Common Common Reinvested Held in
------------------------------------ Additional in the Treasury,
Capital Business at cost
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 1, 1991 $1,798 $ 8,755 $58 $178,826 $1,157,045 $(288,899)1992 $1,784 $8,770 $57 $178,080 $1,158,977 $(272,442)
- ------------------------------------------------------------------------------------------------------------------------
Net income 46,993
- ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (43,306)
- ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 26,544 Class A
shares from treasury 348 370
Employee stock purchase plan - 1,041,858
Class A shares 1 (2,062) 16,978
Stock options - 95,125 Class A shares 13 963 (891)
Stock conversions - 8,572 shares 1 (1)
- ------------------------------------------------------------------------------------------------------------------------
Purchase of company stock -
143 preference shares (14) 5
- ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,657)
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1991 1,784 8,770 57 178,080 1,158,977 (272,442)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net loss (44,709)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (43,987)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 19,576 Class A
shares from treasury (491) 524
Employee stock purchase plan - 1,069,743
Class A shares 1 (16,432) 34,311
Stock options - 252,435 Class A shares 34 3,771 (1,900)
Stock conversions - 600 shares -- --
- -
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (4,836)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1992 1,784 8,805 57 164,928 1,065,347 (239,507)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net income 6,123
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (47,003)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
The Globe acquisition - 36,397,313 Class
A shares 1,940 432,624 440,337
Retirement units, etc. - 10,877 Class A
shares from treasury 123 339
Employee stock purchase plan - 819,166
Class A shares (2,612) 20,329
Stock options - 185,611 Class A shares 23 4,695 (934)
Stock conversions - 180 shares -- --
- -
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Purchase of company stock -stock:
10,260,900 Class A shares (255,222)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,411)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1993 $1,784 $10,768 $57 $599,758 $1,022,958 $1,784 10,768 57 599,758 1,022,958 (34,658)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net income 213,349
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (97)
Dividends, common - $.56 per share (58,190)
- ------------------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 10,889 Class A
shares from treasury (128) 271
Employee stock purchase plan - 1,191,323
Class A shares 2 (7,237) 29,119
Stock options - 223,700 Class A shares 35 6,928 (3,385)
Stock conversions - 1,503 shares -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Purchase of company stock:
10,043,900 Class A shares (236,245)
307 5 1/2 percent preference shares (31) 10
Proceeds from the sale of put options 1,189
Equity put option obligations (2,660)
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign currency translation 1,695
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1994 $1,753 $10,805 $57 $597,860 $1,179,715 $(244,898)
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-13F-14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation.PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
accounts of The New York Times Company and all subsidiaries (the "Company")
after elimination of intercompany items.
Inventories.INVENTORIES. Inventories are stated at the lower of cost or current market
value. Inventory cost generally is based on the last-in, first-out ("LIFO")
method for newsprint and magazine paper and the first-in, first-out ("FIFO")
method for other inventories.
Investments.INVESTMENTS. Investments in which the Company has at least a 20 percent but
not more than 50 percent interest are accounted for under the equity method.
Property, Plant and Equipment.PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is stated at cost,
and depreciation is computed by the straight-line method over estimated service
lives. The Company capitalizes interest costs as part of the cost of
constructing major facilities and equipment.
Intangible Assets Acquired.INTANGIBLE ASSETS ACQUIRED. Costs in excess of net assets acquired consist of
excess costs of businesses acquired over values assigned to their net tangible
assets and other intangible assets. The Company evaluates periodically whether
there has been a permanent impairment in any of its intangible assets, inclusive
of goodwill. The major factors which are considered in such valuation include
the cash flow and operating profit from the operations of the acquired business,
and any contemplated long-term strategies which might affect the viability of
such business. The excess costs which arose from acquisitions after October 31,
1970 are being amortized by the straight-line method principally over 40 years.
The remaining portion of such excess, which arose from acquisitions before
November 1, 1970 (approximately $13,000,000), is not being amortized since in
the opinion of management there has been no diminution in value. Other
intangible assets acquired consist principally of advertiser and subscriber
relationships which are being amortized over the remaining lives, ranging from
5 to 40 years. Subscription RevenuesThe general policy of 5 to 40 years relates to all intangible
assets with the life of 5 years used for various software licenses and Costs.lives
of 40 years used for mastheads on various acquired properties.
SUBSCRIPTION REVENUES AND COSTS. Proceeds from subscriptions and related costs,
principally agency commissions, are deferred at the time of sale and are
included in the Consolidated Statements of Operations on a pro rata basis over
the terms of the subscriptions.
Foreign Currency Translation.FOREIGN CURRENCY TRANSLATION. The assets and liabilities of foreign companies
are translated at the year-end exchange rates. Results of operations are
translated at the average rates of exchange in effect during the year. The
resultant translation adjustment is included as a component of stockholders'
equity.
Earnings Per Share.EARNINGS PER SHARE. Earnings per share is computed after preference dividends
and is based on the weighted average number of shares of Class A and Class B
Common Stock outstanding during each year. The effect of shares issuable under
the Company's Incentive Plans (see Note 12)11), including stock options, is not
material and therefore excluded from the computation.
Cash and Short-Term Investments.CASH AND SHORT-TERM INVESTMENTS. For purposes of the Consolidated Statements of
Cash Flows, the Company considers all highly liquid debt instruments purchased
with maturities of three months or less to be cash equivalents. The Company has
overdraft positions at certain banks caused by outstanding checks. These
overdrafts have been reclassified to accounts payable.
DERIVATIVES. The Company has interest rate swap agreements with major financial
institutions that are used to manage exposure to fluctuations in interest rates.
The Company is exposed to credit losses in the event of nonperformance by the
counterparties to its interest rate swap agreements. The credit standings of
counterparties are monitored and the Company does not anticipate nonperformance.
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
2. ACQUISITIONS/DIVESTITURES
In December 1994, the Company divested its minority interest in Gaspesia Pulp &
Paper Company Ltd. ("Gaspesia"), a Canadian newsprint mill. The Company's 49
percent interest was transferred to Abitibi-Price, Inc., the majority owner. In
connection with the transfer, a pre-tax charge of approximately $3,100,000 ($.02
per share) was recorded. In 1993, the Company wrote down its investment in
Gaspesia by $47,000,000 ($.56 per share) to reflect its net realizable value.
In July and August 1994, the Company completed the sales of its Women's
Magazines Division and U.K. golf publications, respectively. These transactions
resulted in a pre-tax gain of approximately $204,000,000 ($1.01 per share). In
connection with the sale of the Women's Magazines Division, the Company entered
into a four-year non-compete agreement, for which it received
$40,000,000. This amount is being recognized as operating income, on a
straight-line basis, over a four-year period commencing with the closing of the
sale on July 26, 1994.
On October 1, 1993, pursuant to an Agreement and Plan of Merger dated June
11, 1993, as amended as of August 12, 1993 (the "Merger Agreement""Agreement"), a wholly-owned
subsidiary of the Company was merged with Affiliated Publications, Inc., the
parent company of The Boston Globe ("The Globe"), which became a wholly-owned
subsidiary of the Company.
The transaction was accounted for as a purchase and, accordingly, the results
of The Globe's
operations have been included in the Company's consolidated financial statements
beginning October 1, 1993, the date the transaction closed. The acquisition had
a net cost of approximately $1,028,000,000. Under the Merger
F-15
Agreement the Company exchanged cash of approximately $160,000,000 for 15
percent of The Globe's common stock with the remainder of the consideration paid
by the exchange of approximately 36,400,000 shares of the Company's Class A
Common Stock valued at $24.03 per share. The purchase resulted in increases in
costs in excess of net assets acquired of approximately $830,000,000$850,000,000 (which will
beis
being amortized by the straight-line method over 40 years); other intangible
assets acquired of $161,000,000 (which consist principally of advertiser and
subscriber relationships which are being amortized by the straight-line method
over an average period of 33 years); and property, plant and equipment of
$246,000,000. Net liabilities assumed as a result of the transaction totaled
approximately $209,000,000.
The following pro$229,000,000.
Pro forma supplemental financial information is presented as ifoperating results for the enterprisesyear ended December 31, 1993, had combinedthe
transaction occurred at the beginning of that period are as follows: revenues of
$2,335,985,000; net income of $1,178,000; and net income per share of $.01.
Pro forma operating results for the respective periods. It isyear ended December 31, 1994, had the
magazines sales occurred as of January 1, 1993 are as follows: revenues of
$2,231,942,000; net income of $115,518,000; and net income per share of $1.11.
Pro forma operating results for the year ended December 31, 1993, had the
magazine sales and The Globe transaction occurred at the beginning of that
period are as follows: revenues of $2,097,828,000; net income of $14,009,000;
and net income per share of $.13.
The above pro forma results are not necessarily indicative of the combined
results that would have occurred had the sales and the merger taken place as of
the beginning of the periods provided, nor necessarily indicative of results
that may be achieved in the future:
(Dollarsfuture. The gain on the sales is not included in thousands Year Endedthe
above pro forma operating results.
In February 1994, the sale of BPI Communications, L.P.("BPI"), a partnership
in which the Company acquired a one-third interest through the 1993 acquisition
of The Globe, was completed. The Company received approximately $55,000,000 in
1994 from the sale. For financial reporting purposes, no gain or loss was
recognized on the sale. The investment in BPI of $55,000,000 was included in
other current assets on the accompanying Consolidated Balance Sheets at December
31, except per share data) 1993 1992
- ----------------------------------------------------------------------------
Revenues $ 2,335,985 $2,187,490
Income (loss)
before net cumulative
effect of accounting changes 1,380 (14,237)
Net income (loss) 1,380 (61,783)
Income (loss)
per share before net
cumulative effect of
accounting changes .01 (.13)
Net income (loss) per share .01 (.54)
F-14
Pro forma depreciation and amortization expense for the year ended December 31,
1993 and 1992 was approximately $166,816,000 and $158,363,000 respectively.1993.
On December 31, 1993, the Company sold two weekly newspapers and recognized a
pre-tax gain of $2,600,000, or $.02 per share, on the transaction.
In January 1994, a definitive agreement was announced regarding the sale of
BPI Communications, L.P. ("BPI"), a partnership in which the Company acquired a
one-third interest through its October 1993 merger with The Globe. The Company
received approximately $53,000,000 when the transaction was completed in
February 1994 with additional payments of approximately $2,000,000 expected
later in the year. For financial reporting purposes, no gain or loss will be
recognized on the transaction. The Company's investment in BPI of $55,000,000
has been included in other current assets on the accompanying Consolidated
Balance Sheet at December 31, 1993.
In September 1992, the Company closed The Gwinnett (Ga.) Daily News and sold
the residual assets. The closing, related sale and its 1992 operations resulted
in a pre-tax loss of approximately $53,768,000 ($37,113,000 after taxes or
$.47 per share). The newspaper had not earned a profit since its acquisition in
1987, but its annual operating losses were not material.
In June 1992, the Company acquired two wholesale newspaper distribution
businesses that distribute The New York Times and other newspapers and
periodicals in New York City and central and northern New Jersey. The
acquisition was accounted for as a purchase; accordingly, the operating results
have been included in the consolidated financial statements from the date of the
acquisition. The cost of the acquisition was approximately $34,500,000, of which
$23,091,000 was paid in cash with the remainder representing net liabilities
assumed. The purchase resulted in an increase in intangible assets acquired of
$34,462,000.
In Aprilconnection with the divestiture of a newsprint mill in 1991, the Company
increased its interest in the International Herald
Tribune S.A.made a loan commitment of up to 50 percent.
- -------------------------------------------------------------------------------
3. CAPITAL INVESTMENT PROJECTS
Depreciation of the building portion of the Company's Edison facility, amounting
to approximately $14,000,000 per year, began in 1990 when the facility was
substantially completed. Due to the resolution of various labor issues,
commencement of production at the facility was delayed until late in 1992.
Depreciation of the equipment began during the fourth quarter and was phased in
as each element was placed in service with full operation of the facility
beginning in the first quarter of 1993. Depreciation of the building and
equipment totaled $33,000,000 in 1993 and will increase to $35,000,000 in 1994
when the facility is operational for a full year.
In February 1993 the Company announced that The Times closed its printing
plant in Carlstadt, New Jersey, and transferred production and distribution$26,500,000 (C$30,000,000) to the new Edison facility. The carrying valueowners of
the facility (approximately
$24,000,000) has been includedmill. At December 31, 1994, the commitment was fully funded. Interest on the
outstanding balance is payable quarterly at annual rates ranging from 4 to 10
percent. Commencing in miscellaneous assetsDecember 1997, the borrowings outstanding at December
31, 1993
pending the Company's determination of the future of the facility. The closing
of the plant and decision related to its future is not expected to result1996 are payable annually over a five-year period in a
writedown.
In December 1993 the Company and the City of New York executed a lease
agreement and related agreements, under which the Company will lease 31 acres of
City-owned land in Queens, New York, on which The Times plans to build a state-
of-the-art printing and distribution facility. Such agreement will not commence
until certain provisions relating to site preparation have been met and,
accordingly, the transaction has not yet been recorded on the Company's
financial statements.20 percent increments. The
Company estimates thatexpects the cost of the new facility
willobligation to be approximately $280,000,000 with construction to beginsatisfied as stipulated in the summer of
1994 and completion expected in 1997. The new facility will replace presses and
distribution facilities now located at The Times's facility in Manhattan. The
lease will continue for 25 years after the start of construction with an option
ultimately to purchase the property. Under the terms of the agreement, The
Times would receive various tax and energy cost reductions. Construction of the
facility is subject to approval of the Company's Board of Directors.loan
commitment.
- -------------------------------------------------------------------------------
4.--------------------------------------------------------------------------------
3. VOLUNTARY STAFF REDUCTIONS
AND PRODUCTION UNION NEGOTIATIONS
The Company announced two fourth quarter 1993has completed its negotiations of long-term labor agreements with
all of its unions at The New York Times ("The Times") and they extend to the
year 2000. These agreements encompass wages, payments to the unions' benefits
and pension funds, job security and financial incentives. The agreements apply
to all of The Times's current and new production and distribution facilities.
In connection with these agreements, the Company recorded pre-tax charges in
1993 totaling $35,400,000, or $.23 per share, for severance and related costs
resulting from anticipated white-collar staff reductions (approximately
$30,000,000) and voluntary early retirements from the composing room
(approximately $5,400,000) at The Times.
In 1993 the Company completed the negotiations of long-term labor agreements
with all of its production unions, which extend to the year 2000. These
agreements include wages, payments to the unions' benefit and pension funds, job
security and financial incentives. The agreements extend to all of The Times's
production and distribution facilities and to any new facilities which the
Company might utilize (see Note 3).
In connection with these agreements, the Company recorded two pre-tax charges $28,000,000,($28,000,000, or $.20 per share, in
1992 and $30,000,000, or $.22 per share, in 1989) for voluntary production union
staff reductions at The Times related to the opening of Edison (see Note 3)8), the
further automation of newspaper production in the composing room and the
announced closing of Carlstadt.
In 1991 the Company recorded a $20,000,000 before-tax charge ($.15 per share)
for severance and related costs resulting from a voluntary termination benefits
program for approximately 160 employees at The Times, most of whom were members
of The Newspaper Guild of New York.
At December 31, 1994 and 1993, approximately $23,700,000 and 1992, approximately $40,000,000, and $29,000,000,
respectively, are included in accrued expenses in the accompanying Consolidated
Balance Sheets, which represents the unpaid balance of the pre-tax charges. F-15The
Company has committed the remaining funds. The remaining cash flows associated
with these charges are expected to occur over the next two years due to the
timing of certain union pension and welfare fund contributions.
F - 16
- -------------------------------------------------------------------------------
5.--------------------------------------------------------------------------------
4. INVESTMENT IN FOREST PRODUCTS GROUP
The Company has equity interests in twoa Canadian newsprint companies and a paper
manufacturing company, operating as a partnership. The equity interests in the
newsprint companies are: Donohue
Malbaie, Inc. -("Malbaie"), and in a partnership operating a supercalendered
paper mill in Maine, Madison Paper Industries ("Madison"). The equity interest
in Malbaie represents a 49 percent; and Gaspesia Pulp
and Paper Company Ltd. - 49 percent.
In 1993 the Company recorded an after-tax noncash charge of $47.0 million
($.56 per share) against equity in operations to write down the Company's
investment in the Forest Products Group to reflect current operating conditions
and economic factors in the industry.
In December 1991 the Company and Kimberly-Clark Corporation announced the
completion of the divestiture of their jointly-owned affiliate, Spruce Falls
Power and Paper Company, Limited ("Spruce Falls"). Spruce Falls is a producer
of newsprint in which the Company held a 49.5 percent equityownership interest.
In connection with the divestiture, the Company committed to lend up to
$26,500,000 (C$30,000,000) to the new owners of the mill. Such loans will take
place over a five-year period ending December 1996. At December 31, 1993 and
1992 the Company had loaned Spruce Falls approximately $20,515,000 and
$5,515,000, respectively, under the loan commitment. Interest on the
outstanding balance is payable quarterly at annual rates ranging from 4 to 10
percent. Commencing in December 1997, the borrowings outstanding at the end of
the commitment (December 1996) are payable annually over a 5 year period in 20
percent increments.
The Company and Myllykoski Oy, a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison Paper Industries ("Madison").
Loans and contributions to Madison by an 80 percent-owned subsidiary of the
Company totaled $1,279,000, $1,337,000 and $1,806,000, respectively, in 1993,
1992 and 1991.Madison. The partners' interests in the
net assets of Madison at any time will depend on their capital accounts, as
defined, at such time. Through thean 80 percent-owned subsidiary, the Company's
share of Madison's profits and losses is 40 percent.
In December 1994, the Company divested its minority interest in Gaspesia,
which was written down to its net realizable value in 1993 (see Note 2).
Loans and contributions to Madison by the 80 percent-owned subsidiary of the
Company totaled $1,523,000, $1,279,000 and $1,337,000, respectively, in 1994,
1993 and 1992.
At December 31, 1993, the Company recorded a distribution receivable from
Donohue Malbaie Inc. of $8,224,000. Such amount$8,224,000, which is included in other current assets inon the
Company's consolidated balance sheetConsolidated Balance Sheets at such date. The Company received payment
of the receivable in 1994. No other distributions were received from the Canadian newsprint companiesMalbaie in
1994, 1993 1992
or 1991.1992. The Company's share of undistributed earnings of these companiesMalbaie
aggregated approximately $3,975,000$4,882,000 and $24,551,000$3,975,000 at December 31, 1994 and
1993, and
1992, respectively.
Loans and contributions to the Canadian newsprint companies by the Company
totaled $171,000 in 1991.
No loans andor contributions were made to Malbaie in 1994, 1993 or 1992.
Condensed combined balance sheets of the Forest Products Group, which exclude
Gaspesia at December 31, 1994, are as follows:
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Condensed Combined Balance Sheets
of Forest Products Group
- --------------------------------------------------------------------------------
Dollars in thousands
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
December 31 1994 1993
1992
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Current assets $ 87,984 $ 76,317$66,280 $87,984
Less current liabilities 33,027 75,073
65,026
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Working capital 33,253 12,911 11,291
Fixed assets, net etc.236,961 345,413 372,554
Long-term debt (62,355) (71,528) (77,025)
Deferred income taxes etc.(103,756) (102,752)
(86,755)
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Net assets $104,103 $184,044
$220,065
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
At December 31, 19931994, long-term debt of the Forest Products Group (exclusive
of $10,275,000$11,300,000 due within one year) matures as follows: 1995, $10,335,000; 1996, $46,085,000;$47,347,000; 1997,
$500,000; 998, $14,408,000; and 1997, $15,108,000.1999, $100,000. The maturities of a substantial
portion of the debt may be accelerated if cash flow, as defined, exceedexceeds certain
levels. None of the Forest Products Group's debt is guaranteed by the Company.
Condensed combined statements of operations of the Forest Products Group,
which exclude the operations of Gaspesia subsequent to the write-down at
December 31, 1993, are as follows:
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Condensed Combined Statements of Operations
of Forest Products Group
- --------------------------------------------------------------------------------
Dollars in thousands
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1992
1991
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Net sales and other
income $189,805 $254,324 $266,451 $287,924
Costs and expenses 180,860 269,845 297,117
276,062
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) before
taxes 8,945 (15,521) (30,666)
11,862
Income tax benefitexpense
(benefit) 1,136 (2,700) (11,680)
(544)
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $7,809 $(12,821) $(18,986)
$ 12,406
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
The condensed combined financial information of the Forest Products Group
excludes the income tax effects related to Madison. Such tax effects (see Note
7)6) have been included in the Company's consolidated financial statements.
The accumulated translation adjustment (included in earnings reinvested in the
business) decreased stockholders' equity by $2,628,000 and $1,217,000 at
December 31, 1993 and 1992 respectively. Upon the disposition of Spruce Falls
in 1991, stockholders' equity was reduced by $3,506,000 to reflect the
accumulated translation adjustment for such company.
Adjustments from translating certain balance sheet accounts, principally of
the Canadian newsprint companies, for each of the three years in the period
ended December 31, 1993,1994, are set forth in the Consolidated Statements of
Stockholders' Equity.
The accumulated translation adjustment (included in earnings reinvested in
the business) decreased stockholders' equity by $933,000 and $2,628,000 at
December 31, 1994 and 1993, respectively. Upon the disposition in 1994,
stockholders' equity was increased by $3,000,000, net of tax, to reflect the
accumulated translation adjustment related to Gaspesia.
During 1994, 1993 1992 and 1991,1992, the Company's Newspaper Group purchased newsprint
and supercalendered paper from the Forest Products Group (including Gaspesia
through the disposal date) at competitive prices. Such purchases aggregated
approximately $107,000,000, $102,000,000, and $112,000,000, and
$127,000,000 respectively.
F-16F - 17
- --------------------------------------------------------------------------------
6.5. INVENTORIES
Inventories as shown in the accompanying Consolidated Balance Sheets are
composed of the following:
- ----------------------------------------------------------------------------------------------------
Dollars in thousands
- ----------------------------------------------------------------------------------------------------
December 31 1994 1993
1992
- ----------------------------------------------------------------------------------------------------
Newsprint and magazine paper $24,783 $38,691
$44,570
Work-in-process, etc.etc 5,762 8,580
6,981
- ----------------------------------------------------------------------------------------------------
Total $30,545 $47,271
$51,551
- ----------------------------------------------------------------------------------------------------
Utilization of the LIFO method reduced inventories as calculated on the FIFO
method by approximately $2,263,000$2,694,000 and $1,765,000$2,263,000 at December 31, 19931994 and 19921993,
respectively.
- --------------------------------------------------------------------------------
7.6. INCOME TAXES
The Company adoptedIncome tax expense for each of the years presented is determined in
accordance with Statement of Financial Accounting StandardsStandard No. 109 -
Accounting109-Accounting
for Income Taxes ("SFAS 109"). The Company adopted SFAS 109 in 1992 and
reflected a credit of $13,414,000 as of January 1, 1992, which changed its
method of accounting for income taxes fromrepresenting the deferred method (Accounting
Principles Board Opinion No. 11 - "APB 11") to an asset and liability approach.
The
cumulative effect of this change in accounting methodchange on net income was a
credit of $13,414,000 ($.17 per share) and was reflected as of January 1, 1992.
Income taxes for 1991 are measured under APB 11.income.
SFAS 109 requires recognition of deferred tax liabilities and assets for the
estimated future tax consequences attributable to temporary differences. Such
temporary differences exist when the tax basis differs from the financial
reporting amount of assets or liabilities. All tax liabilities and tax assets
are measured using current tax law and applicable rates. A valuation allowance
is recorded to reduce deferred tax assets to amounts which, in management's
judgment, are most likely to be realized.
SFAS 109 further requires adjustment of tax balances to reflect enacted
changes in tax law or rates in the period of enactment. Accordingly, 1993
results include increased tax expense resulting from the enactment of the Tax
Act in August. The Tax Act increased the statutory corporate income tax rate
one percent (to 35 percent) retroactive to January 1, 1993, and made other
changes concerning the deductibility of certain costs in determining taxable
income.
Income tax expense as shown in the Consolidated Statements of Operations is
composed of the following:
- -----------------------------------------------------------------------------------------------------------------
Dollars in thousands 1994 1993 1992
1991
- -----------------------------------------------------------------------------------------------------------------
Current tax expense
Federal $60,178$159,779 60,178 $8,970 $21,666
State, local, foreign 49,651 17,612 1,413
695
- -----------------------------------------------------------------------------------------------------------------
209,430 77,790 10,383
22,361
- -----------------------------------------------------------------------------------------------------------------
Deferred tax expense
Federal (20,955) (26,982) (1,157) (2,335)
State, local, foreign (13,088) (8,919) 1,302
4,941
- -----------------------------------------------------------------------------------------------------------------
(34,043) (35,901) 145
2,606
- -----------------------------------------------------------------------------------------------------------------
Income tax expense including the
tax effects of
equity infrom
continuing operations 175,387 41,889 10,528 24,967
Less income tax expense
(benefit) expense related to
equity in operations 1,519 (1,342) (551)
3,207
- -----------------------------------------------------------------------------------------------------------------
Income tax expense $173,868 $43,231 $11,079
$21,760
- -----------------------------------------------------------------------------------------------------------------
Tax expense in 1994 was reduced by approximately $10,000,000 and $3,000,000,
respectively, relating to a decrease in valuation allowance and recognition of
federal capital loss tax benefits. The decrease in valuation allowance is
associated with federal capital loss tax benefits. An increase in valuation
allowance associated with state and local capital loss carryforward tax benefits
added approximately $1,058,000 to 1994 tax expense.
Tax expense in 1993 was reduced by approximately $7,000,000 and $2,485,000,
respectively, relating to a decrease in valuation allowance and recognition of
federal tax benefits of capital loss carryforwards. Of the decrease in valuation
allowance, $4,390,000 was associated with federal tax benefits of capital loss
carryforwards; with the remainder attributable to state and local tax benefits
of net operating loss carryforwards. Adjustment of the Company's deferred tax
balances for the one percent rate increase provided in the Tax Reform Act of
1993 added $4,359,000 to deferred tax expense, inclusive of $600,000 of
expense reported in equity in operations of the forest products group. In accordance
with the provisions of SFAS 109, approximately $1,600,000 of additional
reduction in valuation allowance, which was established against acquired
deferred tax assets, was recorded as a reduction of goodwill. No such amounts
affected 1992 tax expense.Forest Products Group.
In connection with the Gwinnett transaction in 1992 (see Note 2), the Company
had a net tax benefit of $16,655,000 on a pre-tax loss of $53,768,000. The
difference of $1,626,000 between the tax benefit and such benefit calculated at
the federal statutory rate is mainly attributable to an unrecognized capital
loss (which increased tax expense by $3,405,000), net of the impact of
previously amortized intangibles (which decreased tax expense by $1,779,000).
In 1991 the Company reversed a provision for income tax contingencies of
$10,000,000 related to a settlementaccordance with the Internal Revenue Service for tax
years 1980 through 1984.
The componentsprovisions of deferred income tax expense for 1991,SFAS 109, approximately $1,600,000 of
additional reduction in valuation allowance, which totaled
$2,606,000, are as follows: depreciation $13,288,000; tax certificate
$(10,409,000); tax settlement $(10,000,000); subscription expenses $7,969,000;
and other netwas established against
acquired deferred tax expenseassets, was recorded as a reduction of $1,758,000.goodwill in 1993.
No such amounts affected 1994 or 1992 tax expense.
Income tax benefits credited directly to stockholders' equity totaled
$2,434,000, $3,595,000 and $3,735,000 during 1994, 1993 and $707,000 during 1993, 1992, and 1991 respectively.
Foreign taxes included in income tax expense in each1994 of $4,979,000 were
principally attributable to the disposition of the years presentedCompany's U.K. golf
publications. Foreign taxes included in income tax expense in 1993 and 1992 were
not significant.
Equity in operations of the Forest Products Group (see Note 4) includes the
income tax effects of the Company's interest in Madison and its equity in the
operations of the Canadian newsprint companies. Of such amounts, tax benefits of
$117,000 in 1994, $585,000 in 1993 and $1,219,000 in 1992 are applicable to the
Canadian newsprint companies. Deferred taxes attributable to the Company's
interest in Madison were a benefit of $(39,000) in 1994, and expense of
$1,562,000 and $265,000, respectively, for 1993 and 1992. These deferred taxes
relate principally to differences between financial reporting and tax
depreciation. The Company's consolidated federal income tax returns include the
income tax effects of its interest in Madison.
F - 1718
The reasons for the variance between the effective tax rate on income before
income taxes and equity in operations of the Forest Products Group and the
federal statutory rate (exclusive in 1992 of the net gain on dispositions in 1994 and
loss on the disposition of
Gwinnett)dispositions in 1992) are as follows:
- --------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1992
1991
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
% of % of % of
Dollars in thousands Amount Pretax Amount Pretax Amount Pretax
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
Tax at federal statutory
rate $64,078 35.0% $35,422 35.0% $21,180 34.0% $21,438 34.0%
Increase (decrease)
resulting from State and
local taxes - - net 5,177 2.8 6,883 6.8 2,294 3.7
3,507 5.6
Capital loss carryforwardstax benefits (10,000) (5.4) (6,875) (6.8) - - - --- --
Amortization of intangible
assets acquired 11,139 6.1 5,602 5.5 4,033 6.5 6,970 11.1
Change in enacted tax rate -- -- 3,759 3.7 - - - -
Tax settlement - - - - (10,000) (15.9)-- --
Other - net 5,920 3.2 (1,560) (1.5) 227 0.3
(155) (0.3)
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal 76,314 41.7% 43,231 42.7% 27,734 44.5%
21,760 34.5%
- ------------------------------------------------------------------------------
Gwinnett disposition ---------------------------------------------------------------------------------
Dispositions 97,554 -- (16,655)
- - --------------------------------------------------------------------------------------------------------------------------------------------------------------
Income tax expense $173,868 $43,231 $11,079
$21,760
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
Federal income taxes currently refundable totaled $2,992,000$28,109,000 and $4,842,000$2,992,000 at
December 31, 19931994 and 1992,1993, respectively, and are included in other current
assets on the Consolidated Balance Sheets. The components of the net deferred
tax liabilities recognized on the respective Consolidated Balance Sheets are
as follows:
- -------------------------------------------------------------------------------------------------
Dollars in thousands
December 31 1994 1993
1992
- -------------------------------------------------------------------------------------------------
Deferred Tax Assets
Intangible assets acquired $10,425 $23,568 $ 23,504
Accrued state and local taxes 14,996 19,890 18,522
Postretirement and
postemployment benefits 81,707 78,655 40,177
benefits
Other accrued employee
benefits 110,218 25,370
and compensation 89,569 110,218
Allowance for doubtful
23,557 24,077
accounts AMT credit - 4,033
carryforward26,305 23,557
Tax loss carryforwards 20,260 23,595
26,741
carryforwardsUnearned Income 21,848 --
Other 20,151 6,5214,578 22,860
- -------------------------------------------------------------------------------------------------
Total deferred tax 299,634 168,945
assets 269,688 302,343
Valuation allowance (25,064) (19,851)(19,774) (27,773)
- -------------------------------------------------------------------------------------------------
Net deferred tax assets $249,914 $274,570
$149,094
assets
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Dollars in thousands
December 31 1994 1993
1992
- -------------------------------------------------------------------------------------------------
Deferred Tax Liabilities
Property, plant and
equipment $121,617 $131,189 $ 127,691
Tax certificate 125,664 137,343
145,631
Nontaxable acquisition 125,782 145,298 -
acquisition
Deferred subscription
expenses 8,627 21,743 21,361
expenses
Safe harbor tax lease 19,717 20,376
24,433
leaseUnremitted earnings 833 --
Investment in Forest
Products Group 13,324 --
Other 2,641 18,446
20,703
- ------------------------------------------------------------------------------------------------
Total deferred tax liabilities 418,205 474,395
339,819
liabilities
- -------------------------------------------------------------------------------------------------
Net deferred tax assets (249,914) (274,570)
(149,094)
assets
- -------------------------------------------------------------------------------------------------
Net deferred tax liability 168,291 199,825
190,725
liability
- -------------------------------------------------------------------------------------------------
Less amounts included in:
Other current assets (9,296) (4,812) -
assets
Accrued expenses 999 7,762
3,024
- -------------------------------------------------------------------------------------------------
Deferred income taxes $176,588 $196,875
$187,701
taxes
- -------------------------------------------------------------------------------------------------
At December 31, 1993,1994, there were no federal net operating loss carryforwards.
Benefits from state and local loss carryforwards are attributable mainly to tax
operating losses. Such loss carryforwards expire in accordance with provisions
of applicable tax lawlaws and have remaining lives ranging from 1 to 15 years. At
December 31, 19931994, the tax benefits relating to these carryforwards expire as
follows: 1996, $4,829,000;$4,015,000; 1997, $7,984,000;$2,678,000; 1998, $3,017,000;$3,018,000; 1999 through
2003, $6,540,000$10,442,000; and 2004 through 2008, $1,225,000.$107,000.
In connection with the sale in 1989 of its cable television system, the
Federal Communications Commission granted the Company a tax certificate. This
certificate enabled the Company to defer income taxes on the gain on the
transaction and pay such taxes over a number of years. Under the provisions of
the Internal Revenue Code, this is accomplished through a reduction in the tax
bases of various assets. As a result, $10,508,000, $10,820,000 $10,388,000 and $10,409,000$10,388,000
of income taxes that were so deferred became currently payable in 1994, 1993
1992 and 19911992, respectively. Additional income taxes that were deferred will become
currently payable over the remaining lives of those assets with reduced tax
bases.
Federal income tax returns for all years through 1989 have been examined by
the Internal Revenue Service. TentativeService, for which tentative agreements have been reached for all
years through 1989.
F - 18
reached.
Examinations of the tax returns for the years 1990 through 19921993 have not
commenced. Management is of the opinion that any assessments resulting from
these examinations will not have a material effect on the consolidated financial
statements.
EquityF - 19
- --------------------------------------------------------------------------------
7. DEBT
In February 1995, the Company filed a shelf registration statement with the
Securities Exchange Commission that permits the issuance of up to $400,000,000
in operations ofunsecured senior debt securities. The unsecured senior debt securities
available under the Forest Products Group (see Note 5) includes the
income tax effects ofshelf registration allow for the Company's interest in Madison and its equity in the
operationsclassification of
the Canadian newsprint companies. Of such amounts, tax benefits
of $585,000 in 1993, $1,219,000 in 1992 and $120,000 in 1991 are applicable to
the Canadian newsprint companies. Deferred taxes attributable to the Company's
interest in Madison were $1,562,000, $265,000, and $(561,000), respectively,
for 1993, 1992 and 1991. These deferred taxes relate principally to
differences between financial reporting and tax depreciation. The Company's
consolidated federal income tax returns include the income tax effects of its
interest in Madison.
- --------------------------------------------------------------------------------
8. DEBTcertain current obligations as long-term debt.
Long-term debt consisted of the following:
- -------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
- --------------------------------------------------------------------------------
December 31 1994 1993
1992
- -------------------------------------------------------------------------------------------------------------------------
Notes due 1998-2000 (a) $200,000 $ -$200,000
Notes due 1995 net of
unamortized discount:
1994, $511; 1993, $2,444; 1992,
$4,169$2,444 (b) 161,789 159,856 158,131
Notes due 1995 net ofincluding
unamortized premium ofpremium:
1994, $1,336; 1993, $3,725 in 1993(c)(c) 51,336 53,725
Commercial Paper (d) 60,405 --
- Other notes, due in
1993 at a weighted
average interest
rate of 7.80%
in 1992 - 22
- -------------------------------------------------------------------------------------------------------------------------
Total 473,530 413,581 158,153
Less current portion -- --
- 22
- -------------------------------------------------------------------------------------------------------------------------
Total long-term portion $473,530 $413,581
$158,131
- -------------------------------------------------------------------------------------------------------------------------
(a) In October 1993, the Company issued senior notes totaling $200,000,000 to
an insurance company with interest payable semi-annually. Five-year notes
totaling $100,000,000 were issued at a rate of 5.50 percent, and the remaining
$100,000,000 were issued as six and one-half year notes at a rate of 5.77
percent.
(b) In connection with the 1985 acquisition of certain newspapers, the
Company issued 10-year notes with an aggregate stated value of $162,300,000
which have been discounted at an interest rate of 11.85 percent for financial
reporting purposes. Interest on certain of the notes is payable semi-annually.
The original difference of $12,600,000 between the stated value of the notes and
the amount that results from discounting the notes at 11.85 percent is being
amortized as interest expense over the term of the notes. Based on the
borrowing rates currently available toThe December 31, 1994
amount is included in long-term debt since the Company has the intent and the
ability, supported by the new shelf registration, to refinance these obligations
for bank loans with similar
terms and average maturities, the fair value of these notes is $179,000,000.at least one year.
(c) In connection with the 1993 acquisition of The Globe (see Note 2), the
Company assumed $50,000,000 of 9.34 percent fixed-rate notes maturing July 1995,
which have been valued for financial reporting purposes using a discount rate of
4.25 percent. Interest on the notes is payable semi-annually. The excess of the
fair value of the notes at the acquisition date over the stated value of such
notes was $4,303,000, which is being amortized as a reduction of interest
expense over the remaining term of the notes. The December 31, 1994 amount is
included in long-term debt since the Company has the intent and the ability,
supported by the new shelf registration, to refinance these obligations for at
least one year.
The Company has an interest rate swap agreement (the "Agreement") with a
major financial institution to manage interest costs. The Agreement matures in
1995 and effectively converts the 9.34 percent interest rate to a variable rate
which is semi-annually indexed to the six-month LIBORLondon interbank ("LIBOR") rate.
Based on quoted market prices, the Agreement was valued at $1,800,000 atas of the
acquisition date and is being amortized as interest expense over its term. Such amount has been
included in miscellaneous assets inAs
of December 31, 1994, the accompanying balance sheetcarrying value of the Agreement was $600,000. The
difference of the carrying value and the estimated fair value at December 31,
1993.1994 was not significant. During the 1993 fourth quarter and on December 31, 1993,1994, the Company's effective interest rate
on these unsecured notes was 6.427.70 percent.
As(d) In December 1994, the Company established a $200,000,000 commercial paper
program. Borrowings are in the form of unsecured notes sold at a discount with
maturities ranging up to 270 days. The $60,700,000 in aggregate face value of
such notes outstanding at December 31, 1994 were issued at a weighted average
interest rate of 6.06 percent. The outstanding commercial paper was supported by
the Company's revolving credit and term loan agreements. Commercial paper is
classified as long-term debt as the Company intends to refinance these
obligations for at least one year either through continued short-term borrowings
or the issuance of long-term debt supported by the new shelf registration.
Based on borrowing rates currently available for debt with similar terms and
average maturities, the fair value of long-term debt, excluding the current
portion, was $455,100,000 and $432,725,000 at December 31, 1994 and 1993,
the recorded amounts for these unsecured notes and
the Agreement approximate fair value.respectively.
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
In May 1992October 1994, the Company entered into an $80,000,000a $93,300,000 revolving credit and
term loan agreement with a group of banks, which replaced the previous
$100,000,000$80,000,000 revolving credit and term loan agreement which would have terminated
in July
1992.May 1995. The new agreement, as amended, terminates in May 1995.October 1998. At such
time, then outstanding borrowings would be payable semi-annually aggregating 5
percent, 20 percent, 45 percent and 30 percent annually from 1995 to 1998.in equal
installments over one year. At the Company's discretion, this facility may be
converted into term loans at any time. The agreement provides for an annual
commitment fee of 0.11 percent on the unused commitment.
The Company also has a $40,000,000$46,700,000 revolving credit agreement with the same
group of banks, which replaces a previous $40,000,000 revolving credit agreement
that terminated in October 1994. This agreement expires Mayin October 1995. The
agreement provides for an annual commitment fee of 0.08 percent on the unused
commitment. A previous $50,000,000 revolving credit agreement was terminated in
October 1994 at which time, any
outstanding borrowings would be payable.and the underlying bank was included in the two new aforementioned
revolving credit agreements.
The agreements permit borrowings which bear interest, at the Company's
option, (i) for domestic borrowings: based on the certificates of deposit rate,
the Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar
borrowings: based on the London interbankLIBOR rate. Borrowings under these agreements may be
prepaid without penalty.
In October 1992, the Company entered into a new $20,000,000 revolving credit
and term loan agreement with a bank and its affiliate, which replaced a previous
$30,000,000 revolving credit agreement with the same bank. The new agreement, as
amended, terminates in May 1995.1996. At such time, then outstanding
F - 20
borrowings would be payable semi-annually aggregating 5 percent, 20 percent, 45
percent and 30 percent annually from 19951996 to 1998.1999. At the Company's discretion,
this facility may be converted into term loans at any time. The Company also has
entered into a $10,000,000 revolving credit agreement with the same bank and its
affiliate that expires May 1994,1995, at which time, any outstanding borrowings would
be payable. Both agreements provide for an annual commitment fee of 1/8th of 1
percent on the unused commitment.
The agreements permit borrowings which bear interest, at the Company's
option, (i) for domestic borrowings: based on the certificates of deposit rate,
a prime rate or a quoted rate; or (ii) for F - 19
Eurodollar borrowingsborrowings: based on the
London interbankLIBOR rate. Borrowings under these agreements may be prepaid without penalty.
No borrowings under any of the above agreements were outstanding during 1993.
Both agreements provide for an annual commitment fee of 1/8th of 1 percent on
the unused commitment.1994.
Certain of the agreements also include provisions which require, among other
matters, specified levels of stockholders' equity. At December 31, 19931994,
approximately $1,148,000,000$795,000,000 of stockholders' equity was unrestricted.
In December 1994, the Company entered into a forward interest rate swap to
hedge against possible interest rate increases during the period prior to the
planned issuance of long-term debt. Gains or losses on these hedging
transactions are deferred and amortized as adjustments of interest expense
commencing on the date of issuance of debt. At December 31, 1994, the swaps
entered into by the Company hedged approximately $20,000,000 of anticipated
borrowings during the first quarter of 1995. At December 31, 1994, the carrying
amount of such swaps approximated the fair value. Accordingly, no deferred gains
or losses were recorded on the accompanying balance sheet. Subsequent to
year-end, the Company entered into forward interest rate swaps which hedged an
additional $130.0 million of anticipated first-quarter borrowings. In total,
these swaps fix the 10-year treasury rate used to determine the Company's
interest rate at 7.8 percent on $150.0 million of anticipated borrowings.
Short-term debt is comprised of current maturities of long-term debt and
capital lease obligations. Outstanding notes payable at December 31, 1993
consistsconsist of $62,340,000 of short-term bank borrowings at an average interest rate
of 3.71 percent. There were no outstanding notes payable at December 31, 1992.1994.
Interest expense, net of interest income, as shown in the accompanying
Consolidated Statements of Operations consisted of the following:
- ---------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
- --------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1992
1991
- ---------------------------------------------------------------------------------------------------------------------------------------
Interest expense $34,880 $29,549 $30,075
$32,401
Interest income (6,718) (4,174) (3,960)
(1,815)
- ---------------------------------------------------------------------------------------------------------------------------------------
Net $28,162 $25,375 $26,115
$30,586
- ---------------------------------------------------------------------------------------------------------------------------------------
In connection with various construction projects, interest of approximately
$4,943,000, $1,351,000 and $705,000 was capitalized as property, plant and
equipment for 1994, 1993 and 1992, respectively.
There was no interest capitalized in 1991.
- --------------------------------------------------------------------------------
9. LEASE COMMITMENTS8. CAPITAL INVESTMENT PROJECTS
In December 1993, the Company and Thethe City of New York executed a long-term lease
agreement and related agreements, under which the Company will leaseis leasing 31 acres of
City-owned land to buildin College Point, Queens, New York, on which The Times is
building a state-of-the-art printingproduction and distribution facility. Conditions
stipulated under the lease were met in June 1994 and, accordingly, a capital
lease of $5,000,000 was recorded at such time. The lease will continue for 25
years after the start of construction with an option to ultimately purchase the
property. Under the terms of the agreement, The Times would receive various tax
and energy cost reductions.
In July 1994, the Company's Board of Directors approved the construction of
the new facility which will allow for later news deadlines and provide color and
inserting capability for the daily newspaper. The cost of the new facility,
excluding capitalized interest currently projected to be $45,000,000, is
estimated to be $315,000,000.
Construction of the facility began in August 1994 with completion
anticipated in the second half of 1997. While the new facility will replace
The Times's Manhattan production and distribution facility, business and news
operations will remain at the Manhattan building. No write-down is anticipated
as a result of the discontinuance of production at the Manhattan facility.
The Company's Edison facility commenced production in late 1992. Depreciation
of the equipment began during the fourth quarter of 1992 and was phased in as
each element was placed in service. Full operation of the facility began in the
first quarter of 1993. Depreciation of the building and equipment totaled
$33,000,000 in 1993 and increased to $35,000,000 in 1994 when the facility was
operational for a full year.
In 1993, the Company announced that The Times (see Note 3).
Operating Leases:
Such lease commitments are primarilyclosed its printing plant in
Carlstadt, New Jersey, and transferred production and distribution to the Edison
facility. The Company completed removal of equipment from the facility in
September 1994 and has commenced marketing of the Carlstadt facility for office space and equipment. Certain
office space leases provide for adjustments relating to changeslease.
The carrying value of the facility, which reflects management's estimate of its
net realizable value (approximately $16,400,000), has been included in
real estate
taxes and other operating expenses.
Rental expense amounted to $24,744,000 in 1993, $23,689,000 in 1992 and
$24,159,000 in 1991. The approximate minimum rental commitments under
noncancelable leases (exclusive of minimum sublease rentals of $301,000)miscellaneous assets at December 31, 1993 were as follows: 1994, $16,917,000; 1995, $11,977,000; 1996,
$9,647,000; 1997, $8,566,000; 1998, $7,416,000 and $36,427,000 thereafter.
Capital Leases:
In connection with its Capital Investment Projects (see Note 3), the Company
entered into a long-term lease for a building and site in Edison, New Jersey.
The lease provides the Company with certain early cancellation rights, as well
as renewal and purchase options. For financial reporting purposes, the lease
has been classified as a capital lease; accordingly, an asset of approximately
$57,000,000 (included in buildings, building equipment and improvements at
December 31, 1993 and 1992) has been recorded.
The following is a schedule of future minimum lease payments under all
capitalized leases together with the present value of the net minimum lease
payments as of December 31, 1993:
Dollars in thousands
- --------------------------------------
Year Ended December 31 Amount
- --------------------------------------
1994 $ 7,221
1995 6,871
1996 6,623
1997 6,411
1998 6,400
Later years 52,800
- --------------------------------------
Total minimum lease
payments 86,326
Less: amount representing
interest 37,254
- --------------------------------------
Present value of net
minimum lease payments
including current
maturities of $2,590 $49,072
- --------------------------------------1994.
F - 2021
- --------------------------------------------------------------------------------
10.9. PENSION PLANS
The Company sponsors several pension plans and makes contributions to several
others in connection with collective bargaining agreements, including a joint
Company-union plan and a number of joint industry-union plans. These plans cover
substantially all employees.
The Company-sponsored pension plans provide participating employees with
retirement benefits in accordance with benefit provision formulas which are
based on years of service and final average or career pay and, where applicable,
employee contributions. Funding is based on an evaluation and review of the
assets, liabilities and requirements of each plan. Retirement benefits are also
provided under supplemental unfunded pension plans.
Amounts for 1993 have
increased due to the October 1, 1993 acquisition of The Globe.
Net periodic pension cost was $32,730,000 in 1994, $16,461,000 in 1993,
and $15,082,000 in 1992, and
$14,467,000 in 1991.1992. The components
of net periodic pension cost are:
- ------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
- --------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1992
1991
- ------------------------------------------------------------------------------------------------------------------------------------------------
Service cost $19,194 $14,075 $11,879
$11,210
Interest cost 38,933 26,675 24,167
22,451
Actual returnloss (return) on plan assets 2,942 (38,907) (25,365)
(37,430)
Curtailment gain -loss (gain)
(See Note 2) 1,887 -- (885) -
Net amortization and
deferral (30,226) 14,618 5,286
18,236
- ------------------------------------------------------------------------------------------------------------------------------------------------
Net periodic pension cost $32,730 $16,461 $15,082
$14,467
- ------------------------------------------------------------------------------------------------------------------------------------------------
Due to the sale of the Women's Magazines Division, the Company recognized a
curtailment loss in 1994. Accordingly, net periodic pension cost relating to
certain plans was remeasured at July 1994, using an increased discount rate of
8.0 percent.
Assumptions used in the actuarial computations were:
- ------------------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1992
1991
- ------------------------------------------------------------------------------------------------------------------------------------------------
Discount rate 7.0% 8.0% 8.25% 7.00% 8.00%
Rate of increase in
compensation levels 5.5% 5.5% 5.5%5.50% 5.50% 5.50%
Expected long-term rate of
return on assets 8.75% 8.75% 8.75%
- ------------------------------------------------------------------------------------------------------------------------------------------------
In connection with collective bargaining agreements, the Company contributes to
several other pension plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Pension cost for these plans was $19,535,000 in 1994,
$17,970,000 in 1993, and $15,700,000 in 1992, and $15,052,000 in 1991.1992.
The funded status of the Company's plans which were valued at September 30, 19931994
and 19921993 is as follows:
Plans- --------------------------------------------------------------------------------
Plans Whose Plans Whose
Assets Exceed Accumulated
December 31, 1994 Accumulated Benefits
Dollars in thousands Benefits Exceed BenefitsAssets
- --------------------------------------------------------------------------------
Actuarial present value of benefit obligation:
Vested benefit obligation $187,656 $207,104
- --------------------------------------------------------------------------------
Accumulated benefit obligation $193,129 $212,519
- --------------------------------------------------------------------------------
Projected benefit obligation $238,574 $263,044
Plan assets at fair value 231,236 144,200
- --------------------------------------------------------------------------------
Projected benefit obligation
in excess of plan assets 7,338 118,844
Unrecognized net (losses) gains (12,337) 11,269
Unrecognized prior service cost 6,567 (10,814)
Unrecognized transition obligation (2,038) (1,517)
Fourth-quarter contribution, net (2,483) (7,891)
- --------------------------------------------------------------------------------
Recorded pension (asset) liability $(2,953) $109,891
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Plans Whose Plans Whose
Assets Exceed Accumulated
December 31, 1993 Accumulated ExceedBenefits
Dollars in thousands Benefits Exceed Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Actuarial present value of benefit obligation:
Vested benefit obligation $187,972 $219,554
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation $193,951 $227,102
- ----------------------------------------------------------------------------------------------------------------------------------
Projected benefit obligation $251,679 $282,179
Plan assets at fair value 234,366 142,015
- ----------------------------------------------------------------------------------------------------------------------------------
Projected benefit obligation
in excess of plan assets 17,313 140,164
Unrecognized net losses(losses) (24,972) (20,043)
Unrecognized prior service cost 7,746 (9,633)
Unrecognized transition obligation (2,690) (2,724)
Fourth-quarter contribution, net (2,675) (3,220)
Adjustment required to
recognize additional minimum liability - 10,087
- ------------------------------------------------------------------------------------------------------------------------------------
Recorded pension (asset) liability $ (5,278)$(5,278) $114,631
- ----------------------------------------------------
Plans Plans
Whose Whose
Assets Accumulated
Exceed Benefits
December 31, 1992 Accumulated Exceed
Dollars in thousands Benefits Assets
- ----------------------------------------------------
Actuarial present
value of
benefit obligation:
Vested benefit
obligation $230,705 $21,039
- ----------------------------------------------------
Accumulated benefit
obligation $235,994 $21,153
- ----------------------------------------------------
Projected benefit
obligation $296,312 $30,722
Plan assets at fair
value 284,469 -
- ----------------------------------------------------
Projected benefit
obligation
in excess of plan
assets 11,843 30,722
Unrecognized net
gains (losses) 6,181 (6,393)
Unrecognized prior
service cost (1,202) (1,005)
Unrecognized net
asset (transition
obligation) 1,873 (6,339)
Fourth-quarter
contribution, net (3,172) (265)
Adjustment required
to recognize
additional minimum
liability - 4,167
- ----------------------------------------------------
Recorded pension
liability $ 15,523 $20,887
- ------------------------------------------------------------------------------------------------------------------------------------
Plan assets, which were valued as of September 30, 19931994 and 1992,1993, consist of
money market investments, investments in marketable fixed income and equity
securities, an investment in a diversified real estate equity fund and
investments in group annuity insurance contracts.
The additional minimum liability relating to the unfunded status of these
plans is included in other liabilities on the Consolidated Balance Sheets as of
December 31, 1993 and 1992 and miscellaneous assets includes a related intangible asset
of an equal amount. No such liability was required as of December 31, 1994.
F - 2122
- --------------------------------------------------------------------------------
11.10. POSTRETIREMENT BENEFITS OTHER THAN
PENSIONS AND POSTEMPLOYMENT BENEFITS
The Company provides health and life insurance benefits to retired employees
(and their eligible dependents) who are not covered by any collective bargaining
agreements if the employee meets specified age and service requirements.
The Company adopted the provisions of SFAS No. 106 - Employers' Accounting
for Postretirement Benefits Other Than Pensions ("SFAS 106"), changing to the
accrual method of accounting for these benefits effective January 1, 1992. Prior
to 1992, postretirement benefit expenses were recognized on a pay-as-you-
gopay-as-you-go
basis and were not material.
As permitted by SFAS 106, the Company elected to recognize in 1992 the
accumulated postretirement benefit obligation related to prior service costs.
The Company recorded this obligation of $64,856,000 ($37,411,000 after taxes or
$.48 per share) as the cumulative effect of an accounting change at January 1,
1992.
Net periodic postretirement cost was $12,419,000 and $10,809,000 in 1994 and
$7,776,000 in 1993, and
1992 respectively. The components of this cost are as follows:
- ----------------------------------------------------------------------------------------------------------------------------
Dollars in thousands 1994 1993
1992
- ----------------------------------------------------------------------------------------------------------------------------
Service cost for benefits
earned during the period $4,629 $3,955 $3,299
Interest cost on accumulated
postretirement benefit obligation 9,376 6,854
5,239Net amortization and deferral (102) -
Curtailment gain (See Note 2) (1,484) -
(762)
- ----------------------------------------------------------------------------------------------------------------------------
Net periodic postretirement
benefit cost $12,419 $10,809
$7,776
- ---------------------------------------------------------------------------------------------------------------------------
The Company's policy is to fund the above-mentioned payments as claims and
premiums are paid.
The following table sets forth the amounts included in "Accrued
Expenses"Accrued Expenses and
"Other Liabilities" inOther Liabilities on the Consolidated Balance Sheets at December 31, 19931994 and
19921993, based on valuation dates of September 30 in each year.
The 1993 amounts have
increased principally due to the
October 1, 1993 acquisition of The
Globe.
- ----------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
- ----------------------------------------------------------------------------------------------------------------------------
December 31 1994 1993
1992
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated postretirement benefit
obligation
Retirees $49,595 $53,677 $28,054
Fully eligible active 28,450 18,943
plan participants 26,894 28,450
Other active plan participants 45,017 51,522
25,645
- ----------------------------------------------------------------------------------------------------------------------------
Total 121,506 133,649 72,642
Unrecognized net gains (losses) 3,093 (2,198)26,287 4,535
Fourth-quarter expense
net of benefit
payment 621payments (1,035) (821)
- - ----------------------------------------------------------------------------------------------------------------------------
Total accrued postretirement
benefit liability 146,758 137,363 70,444
Current portion included in
accrued expenses 4,400 4,040
2,591
- ----------------------------------------------------------------------------------------------------------------------------
Long-term accrued postretirement
benefit liability $142,358 $133,323
$67,853
- ----------------------------------------------------------------------------------------------------------------------------
Subsequent to the measurement date, a plan amendment was adopted to reduce
benefits for participants retiring after January 1, 1995. The effect on the
accumulated postretirement benefit obligation is a reduction of $16,736,000.
This amount will be amortized over a period of approximately nine years.
For 19931994, the accumulated postretirement benefit obligation was determined
using a discount rate of 7.08.25 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of between 1312.0 percent
and 1110.0 percent in the first year grading down to 55.0 percent in the year 2008.
Increasing the assumed health care cost trend rates by one percentage point
in each year and holding all other assumptions constant would increase the
accumulated postretirement benefit obligation as of December 31, 19931994 by
$18,857,000$16,833,000 and increase the net periodic postretirement benefit cost for 19931994
by $2,300,000.$2,297,000.
For 19921993, the accumulated postretirement benefit obligation was determined
using a discount rate of 8.07.0 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of approximately 15.0between 13.0 percent
for pre-age-65 benefits, decreasingand 11.0 percent in the first year, grading down to 6.255.0 percent in the year
2014 and
thereafter and a rate of 14.75 percent for post-age-65 benefits decreasing to
6.0 percent in the year 2014 and thereafter.2008.
In connection with collective bargaining agreements, the Company contributes
to several welfare plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Portions of these contributions, which cannot be
disaggregated, related to postretirement benefits for plan participants. Total
contributions to these welfare funds were approximately $25,460,000 and
$18,000,000 in 1994 and $16,800,000 in 1993, and 1992 respectively.
The Company also adopted SFAS No. 112 - Employers' Accounting for
Postemployment Benefits ("SFAS 112") as of the beginning of 1992. SFAS 112
requires that certain benefits provided to former or inactive employees, after
employment but before retirement, such as workers' compensation, disability
benefits and health care continuation coverage, be accrued if attributable to
employees' service already rendered. The cumulative effect on net income of this
change in accounting method resulted in a one-time charge of $16,365,000
($9,440,000 after taxes or $.12 per share) and has been reflected as of January
1, 1992.
F - 2223
- --------------------------------------------------------------------------------
12.11. EXECUTIVE AND NON-EMPLOYEE DIRECTORS'
INCENTIVE PLAN
Under the Company's 1991 Executive Stock Incentive Plan and 1991 Executive Cash
Bonus Plan (together the "1991 Executive Plans"), the Board of Directors may
authorize incentive compensation awards and grant stock options to key employees
of the Company. Awards may be granted in cash, restricted and unrestricted
shares of the Company's Class A Common Stock, Retirement Units or such other
forms as the Board of Directors deems appropriate. Under the 1991 Executive
Plans, stock options of up to 10,000,000 shares of Class A Common Stock may be
granted and stock awards of up to 1,000,000 shares of Class A Common Stock may
be made. In adopting the 1991 Executive Plans, shares previously available for
issuance of retirement units and stock options under prior plans are no longer
available for future awards.
Retirement Units are payable in Class A Common Stock over a period of 10
years following retirement.
Stock options currently outstanding were granted under the Company's 1974 and
1984
Stock Option PlansPlan and the 1991 Executive Plans. The Plans provide for granting
of both incentive and non-qualified stock options principally at an option
price per share of 100 percent of the fair market value of the Class A Common
Stock on the date of grant. These options have terms of five or ten years, and
become exercisable in annual periods ranging from one year to four years from
the date of grant. Payment upon exercise of an option may be made in cash,
with previously-acquired shares, with shares (valued at fair market value)
which would be otherwise issued on the exercise of the option or any combination
thereof.
Under the Company's Non-Employee Directors' Stock Option Plan (the
"Directors' Plan"), non-qualified options with ten-year terms are granted
annually to each non-employee director of the Company. Each annual grant allows
the director to purchase from the Company up to 1,000 shares of Class A Common
Stock at the fair market value of such shares at the date of grant. Options for
an aggregate of 250,000 shares of Class A Common Stock may be granted under the
Directors' Plan.
Outstanding stocksstock options granted to key employees of The Globe to purchase
its Series A and/or Series B Common Stock prior to the merger have been
converted to stock options to purchase the Company's Class A Common Stock. The
former Globe stock options were converted at a ratio of 0.6 shares of Class A
Common for each share of Globe stock as determined by the merger agreement.
All of these stock options became exercisable effective withas of the merger on October
1, 1993.acquisition date.
Changes in stock options for each of the three years in the period ended
December 31, 19931994 were as follows:
- --------------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands Option Price
except per share data Shares Per Share($Share ($) Total
- --------------------------------------------------------------------------------------------------------------------------------------
Options outstandingoustanding
January 1, 1991 3,296,385 4.77 to 38.87 76,344
Granted 1,269,064 20.00 to 20.81 25,391
Exercised (134,984) 4.77 to 18.40 (1,121)
Terminations (94,957) 20.56 to 38.87 (2,515)
- --------------------------------------------------------------
Options outstanding
December 31, 19911992 4,335,508 5.76 to 38.87 98,099$98,099
Granted 1,103,410 25.93 to 28.88 28,473
Exercised (466,320) 5.76 to 26.75 (7,900)
Terminations (91,982) 20.56 to 36.43 (2,737)
- --------------------------------------------------------------------------------------------------------------------------------------
Options outstanding
December 31, 1992 4,880,616 13.96 to 38.87 115,935
Granted 1,909,080 26.50 to 30.68 50,641
Globe stock option
conversion 958,654 6.89 to 22.50 14,381
Exercised (346,334) 6.89 to 26.75 (6,333)
Terminations (41,175) 20.00 to 36.43 (1,116)
- --------------------------------------------------------------------------------------------------------------------------------------
Options outstanding
December 31, 1993 7,360,841 6.89 to 38.87 $173,508173,508
Granted 2,426,376 22.56 to 26.18 54,807
Exercised (378,392) 6.89 to 26.75 (6,634)
Terminations (127,037) 11.45 to 36.43 (3,174)
- --------------------------------------------------------------------------------------------------------------------------------------
Options outstanding
outstanding
December 31, 1994 9,281,788 6.89 to 38.87 $218,507
- ------------------------------------------------------------------------
Options which became
exercisable during
1991 1,086,077 20.56 $22,332
1992 728,859 20.00 to 20.81 14,588$14,588
1993 1,803,174 6.89 to 28.88 35,098
1994 761,221 20.00 to 30.68 19,021
- --------------------------------------------------------------------------------------------------------------------------------------
Options exercisable
at December 31,
1991 3,066,444 5.76 to 38.87 $72,708
1992 3,237,964 13.96 to 38.87 76,678$76,678
1993 4,673,663 6.89 to 38.87 104,789
1994 4,953,313 6.89 to 38.87 114,260
- --------------------------------------------------------------
F-23------------------------------------------------------------------------
F - 24
- --------------------------------------------------------------------------------
13.12. CAPITAL STOCK
The 5 1/2 percent cumulative prior preference stock, which is redeemable at the
option of the Company on 30-day's notice at par plus accrued dividends, is
entitled to an annual dividend of $5.50 payable quarterly.
The serial preferred stock is subordinate to the 5 1/2 percent cumulative
prior preference stock. The Board of Directors is authorized to set the
distinguishing characteristics of each series prior to issuance, including the
granting of limited or full voting rights; however, the consideration received
must be at least $100 per share. No shares of serial preferred stock have been
issued.
The Class A and Class B Common Stock are entitled to equal participation in
the event of liquidation and in dividend declarations. The Class B Common Stock
is convertible at the holders' option on a share-for-share basis into Class A
shares. As provided for in the certificateCertificate of incorporation,Incorporation, the Class A Common
Stock has limited voting rights, including the right to elect 30 percent of the
Board of Directors, and the Class A and Class B Common Stock have the right to
vote together on reservations of Company stock for stock options, on the
ratification of the selection of independent certified public accountants and,
in certain circumstances, on acquisitions of the stock or assets of other
companies. Otherwise, except as provided by the laws of the State of New York,
all voting power is vested solely and exclusively in the holders of the Class B
Common Stock.
At the April 1994 annual meeting of the Company's Class A and B Common
Stockholders, an amendment to the Employee Stock Purchase Plan was approved to
reserve an additional 6,000,000 shares of Class A Common Stock for sale under
the Plan.
At a special meeting of shareholders in September 1993, an amendment of the
Company's Restated Certificate of Incorporation was approved to increase the
total number of authorized shares of Class A Common Stock to 200,000,000 shares,
thereby increasing the Company's overall total number of authorized shares of
capital stock of The New York Times Company to 200,910,000 shares.
Under a stock repurchase program which commenced in June 1993 and expired at
the close of The Globe transaction on October 1, 1993, the Company repurchased
approximately 10,231,000 shares of its Class A Common Stock at an average price
of $24.87 per share.
In a newThe Company expended all of the $150,000,000 authorized under its previous
stock repurchase program announced in October 1993,1993. In October 1994, the Company's Board of DirectorsCompany
announced authorized additional expenditures of up to $150,000,000$100,000,000 for repurchases of its
Class A Common Stock. Under the new Board authorization,program, purchases may be made from time to
time either in the open market or through private transactions. The number of
shares that may be purchased in market transactions may be limited as a result
of The Globe transaction. Purchases may be suspended from time to time or
discontinued. Under this program, to date,the two programs, the Company has repurchased approximately
30,00010,074,000 shares of its Class A Common Stock at an average effective price of
$24.78$23.42 per share. Had the stock repurchases, under both programs, occurred as
of January 1, 1993,1994, earnings per share for the year 19931994 would have been $.08.$2.12.
In January 1995, the Company repurchased approximately 397,000 shares of its
Class A Common Stock at an average effective price of $22.32 per share under the
$100.0 million authorization. The Company has expended substantially all of this
authorization. In February 1995, the Company's Board of Directors authorized
additional expenditures of up to $50.0 million for repurchases of its Class A
Common Stock.
In addition to the Company's stock repurchase program, in 1994 the Company
sold equity put options in a series of private placements that entitle the
holder, upon exercise, to sell shares of Class A Common Stock to the Company at
a specified price. In 1994, put options for 1,210,000 shares were issued for
$1,189,000 in premiums which have been accounted for as additional capital. As
of December 31, 1994, put options of $2,660,000 included in other liabilities
for 120,000 shares remain outstanding at strike prices ranging from $21.88 to
$22.50 per share with exercise dates in March 1995. Premiums received on these
options reduced the average price of repurchased shares to $23.42 per share from
$23.53 per share.
Under the 19941995 Offering of the Employee Stock Purchase Plan, eligible
employees may purchase Class A Common Stock through payroll deductions during
19941995 at the lower of $20.03$19.23 per share (85 percent of the average market price on
November 1, 1993)1994) or 85 percent of the average market price on December 29,
1994.28,
1995. Shares of Class A Common Stock reserved for issuance at December 31, 19931994
and 19921993 were as follows:
- ----------------------------------------------------------------------------------------------------------------------------------
December 31 1994 1993
1992
- ----------------------------------------------------------------------------------------------------------------------------------
Retirement Units
Outstanding 221,021 216,806 229,574
Stock Awards
Available 973,844 993,359 -
Stock Options
Outstanding 9,281,788 7,360,841
4,880,616
Available 3,646,047 5,988,480 7,651,526
Employee Stock
Purchase Plan
Available 5,802,596 993,919 1,813,085
Voluntary Conversion of
Class B Common Stock
Available 570,121 571,624
571,804
- ----------------------------------------------------------------------------------------------------------------------------------
Total 20,495,417 16,125,029
15,146,605
- ----------------------------------------------------------------------------------------------------------------------------------
F - 2425
- --------------------------------------------------------------------------------
13. LEASE COMMITMENTS
OPERATING LEASES:
Such lease commitments are primarily for office space and equipment. Certain
office space leases provide for adjustments relating to changes in real estate
taxes and other operating expenses.
Rental expense amounted to $26,559,000 in 1994, $24,744,000 in 1993 and
$23,689,000 in 1992. The approximate minimum rental commitments under
noncancelable leases (exclusive of minimum sublease rentals of $878,000) at
December 31, 1994 were as follows: 1995, $15,711,000; 1996, $13,252,000; 1997,
$10,758,000; 1998, $9,066,000; 1999, $7,995,000 and $28,275,000 thereafter.
CAPITAL LEASES:
In 1993, the Company and The City of New York executed a long-term lease
agreement and related agreements, under which the Company is leasing City-owned
land to build a state-of-the-art printing and distribution facility for The
Times. Conditions stipulated under the lease were met in 1994 and, accordingly,
a capital lease of $5,000,000 was recorded at such time (see Note 8).
The Company also has a long-term lease for a building and site in Edison, New
Jersey. The lease provides the Company with certain early cancellation rights,
as well as renewal and purchase options. For financial reporting purposes, the
lease has been classified as a capital lease; accordingly, an asset of
approximately $57,000,000 (included in buildings, building equipment and
improvements at December 31, 1994 and 1993) has been recorded.
The following is a schedule of future minimum lease payments under all
capitalized leases together with the present value of the net minimum lease
payments as of December 31, 1994:
- --------------------------------------------------------------------------------
Dollars in thousands
- --------------------------------------------------------------------------------
Year Ended December 31 Amount
- --------------------------------------------------------------------------------
1995 $7,089
1996 6,838
1997 6,734
1998 7,018
1999 6,971
Later years 64,110
- --------------------------------------------------------------------------------
Total minimum lease payments 98,760
Less: amount representing interest 46,413
- --------------------------------------------------------------------------------
Present value of net minimum
lease payments including current
maturities of $2,681 $52,347
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
14. ACCOUNTING CHANGES
During 1992, the Company adopted three noncash accounting changes mandated by
the Financial Accounting Standards Board: SFAS No. 106-Employers' Accounting for
Postretirement Benefits Other Than Pensions (see Note 11)10), SFAS 109-
Accounting109-Accounting
for Income Taxes (see Note 7)6) and SFAS 112-Employers' Accounting for
Postemployment Benefits (see Note 11)10). All accounting changes have been adopted
prospectively and, accordingly, earnings for 1991 have not been restated.
The cumulative effect of adopting these accounting changes is as follows:
- ------------------------------------------------------------------------------------------------------------------------------
After-tax effects Earnings
(Dollars in thousands) per share
- ------------------------------------------------------------------------------------------------------------------------------
Postretirement Benefits $(37,411) $(.48)
Income Taxes 13,414 .1717
Postemployment Benefits (9,440) (.12)
-------- -----------
Net charge $(33,437) $(.43)
======== ============== ======
- ------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
15. SEGMENTS
The Company's segment and related information is included on pages 2 and 3 of
this Appendix. The information for the years 1994, 1993 1992 and 19911992 appearing
therein is presented on a basis consistent with, and is an integral part of,
the consolidated financial statements. Revenues from individual customers,
revenues between business segments and revenues, operating profit and
identifiable assets of foreign operations are not significant.
- --------------------------------------------------------------------------------
16. CONTINGENT LIABILITIES
There are various libel and other legal actions that have arisen in the ordinary course of
business and are now pending against the Company. Such actions are usually for
amounts greatly in excess of the payments, if any, that may be required to be
made. It is the opinion of management after reviewing such actions with legal
counsel to the Company that the ultimate liability which might result from
such actions would not have a material adverse effect on the consolidated
financial statements.
- --------------------------------------------------------------------------------
17. RECLASSIFICATIONS
For comparability, certain 19911992 and 19921993 amounts have been reclassified to
conform with the 19931994 presentation.
F - 2526
INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS AND STOCKHOLDERS OF
THE NEW YORK TIMES COMPANY:
We have audited the accompanying consolidated balance sheets of The New York
Times Company as of December 31, 19931994 and 19921993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1993.1994. Our audits also include
the financial schedulesschedule listed in the Index at Item 14(a). These consolidated
financial statements and financial statement schedulesschedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedulesschedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, thesuch consolidated financial statements present fairly, in
all material respects, the financial position of The New York Times Company as
of December 31, 19931994 and 19921993, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 19931994
in conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules,schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presentpresents fairly in all
material respects the information set forth therein.
As discussed in notes 7, 116, 10 and 14, the Company changed its methods of
accounting for income taxes, postretirement benefits other than pensions and
postemployment benefits effective January 1, 1992 to conform with Statements
of Financial Accounting Standards 109, 106 and 112.
-DeloitteDeloitte & Touche-Touche LLP
New York, New York
February 10, 19949, 1995
MANAGEMENT'S RESPONSIBILITIES REPORT
The Company's consolidated financial statements were prepared by management who
is responsible for their integrity and objectivity. The consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and, as such, include amounts based on management's best estimates
and judgments.
Management is further responsible for maintaining a system of internal
accounting control, designed to provide reasonable assurance that the Company's
assets are adequately safeguarded and that the accounting records reflect
transactions executed in accordance with management's authorization. The
system of internal control is continually reviewed for its effectiveness and
is augmented by written policies and procedures, the careful selection and
training of qualified personnel and a program of internal audit.
The consolidated financial statements were audited by Deloitte & Touche
LLP, independent auditors. Their audit was conducted in accordance with
generally accepted auditing standards and their report is shown on this page.
The Audit Committee of the Board of Directors, which is composed solely
of independent directors, meets regularly with the independent auditors,
internal auditors and management to discuss specific accounting, financial
reporting and internal control matters. Both the independent auditors and the
internal auditors have full and free access to the Audit Committee. Each year
the Audit Committee selects, subject to ratification by stockholders, the firm
which is to perform audit and other related work for the Company.
- --------------------------------------------------------------------------------
MARKET INFORMATION
- --------------------------------------------------------------------------------
The Class A Common Stock is listed on the American Stock Exchange. The Class B
convertible Common Stock and the 5 1/2 percent cumulative prior preference
stock are unlisted and are not actively traded. Dividends on the preference
stock were paid at the quarterly rate of $1.375 per share during each of the
two years.
The approximate number of security holders of record as of January 31,
19941995 was as follows: Class A Common Stock: 17,245;17,678; Class B Common Stock: 43;44;
5 1/2 percent cumulative prior preference stock: 65.66.
The market price range of Class A Common Stock in 19931994 and 19921993 is as
follows:
- ------------------------------------------------------------------------------------------------------------------
Quarter Ended 1994 1993
1992
- ------------------------------------------------------------------------------------------------------------------
High Low High Low
March 31 $29.50 $25.75 $31.25 $26.37
$32.12 $22.62
June 30 27.62 23.00 31.25 23.00
32.00 26.00
September 30 25.00 21.62 26.12 22.62
29.75 25.00
December 31 24.62 21.25 28.75 22.37
28.37 23.62
Year 29.50 21.25 31.25 22.37
32.12 22.62
- ------------------------------------------------------------------------------------------------------------------
F - 2627
QUARTERLY INFORMATION (Unaudited)
- ----------------------------------------------------------------------------------------------------------------QUARTERLY INFORMATION
(Unaudited)
- --------------------------------------------------------------------------------
Dollars and shares in
millions First Quarter Second Quarter Third Quarter
except per share data 1994 1993 1994 1993 1994
- --------------------------------------------------------------------------------
Revenues $589.5 $454.5 $635.5 $483.6 $527.2
- --------------------------------------------------------------------------------
Costs and Expenses
Production costs:
Raw materials 78.4 63.7 80.4 67.5 66.0
Wages and benefits 132.1 101.2 133.7 100.1 129.8
Other 112.9 94.5 117.6 98.6 96.2
- --------------------------------------------------------------------------------
Total 323.4 259.4 331.7 266.2 292.0
Selling, general and
administrative
expenses 223.0 164.0 230.4 168.4 201.9
- --------------------------------------------------------------------------------
Total 546.4 423.4 562.1 434.6 493.9
- --------------------------------------------------------------------------------
Operating profit 43.1 31.1 73.4 49.0 33.3
Interest expense, net 8.7 5.2 8.0 5.2 6.2
Net gain (loss) on
dispositions - - - - 204.0
Income taxes 16.7 12.9 31.4 20.9 112.0
- --------------------------------------------------------------------------------
Income (Loss) before
equity in operations of
forest products group 17.7 13.0 34.0 22.9 119.1
Equity in operations of
forest products group - (2.1) 0.3 (0.5) 1.5
- --------------------------------------------------------------------------------
Net income (loss) $17.7 $10.9 $34.3 $22.4 $120.6
- --------------------------------------------------------------------------------
Average number of common
shares outstanding 106.9 79.9 106.3 79.7 104.3
Per share of common
stock
Net income (loss) $.17 $.14 $.32 $.28 $1.16
Dividends .14 .14 .14 .14 .14
- --------------------------------------------------------------------------------
QUARTERLY INFORMATION
(Unaudited)
- --------------------------------------------------------------------------------
Dollars and shares in
millions Third Quarter Fourth Quarter Year
except per share data 1993 1994 1993 1994 1993
- --------------------------------------------------------------------------------
Revenues $ $445.6 $605.4 $636.0 $2,357.6 $2,019.7
- --------------------------------------------------------------------------------
Costs and Expenses
Production costs:
Raw materials 64.2 79.6 85.1 304.4 280.5
Wages and benefits 99.8 134.1 136.4 529.7 437.5
Other 102.9 102.0 122.6 428.7 418.6
- --------------------------------------------------------------------------------
Total 266.9 315.7 344.1 1,262.8 1,136.6
Selling, general and
administrative
expenses 166.5 228.3 257.6 883.6 756.5
- --------------------------------------------------------------------------------
Total 433.4 544.0 601.7 2,146.4 1,893.1
- --------------------------------------------------------------------------------
Operating profit 12.2 61.4 34.3 211.2 126.6
Interest expense, net 6.6 5.3 8.4 28.2 25.4
Net gain (loss) on
dispositions - (3.1) - 200.9 -
Income taxes 6.5 13.8 2.9 173.9 43.2
- --------------------------------------------------------------------------------
Income (Loss) before
equity in operations of
forest products group (0.9) 39.2 23.0 210.0 58.0
Equity in operations of
forest products group (2.1) 1.5 (47.2) 3.3 (51.9)
- --------------------------------------------------------------------------------
Net income (loss) $(3.0) $40.7 $(24.2) $213.3 $6.1
- --------------------------------------------------------------------------------
Average number of common
shares outstanding 72.4 98.8 106.0 104.1 84.5
Per share of common
stock
Net income (loss) $(.04) $.41 $(.23) $2.05 $.07
Dividends .14 .14 .14 .56 .56
- --------------------------------------------------------------------------------
The 1994 and shares in millions First Second Third Fourth
except per share data Quarter Quarter Quarter Quarter Year
1993 1992 1993 1992 1993 1992 1993 1992 1993 1992
- ----------------------------------------------------------------------------------------------------------------
Revenues $ 454.5 $ 435.9 $ 483.6 $443.2 $ 445.6 $ 426.2 $ 636.0 $468.2 $2,019.7 $1,773.5
- ----------------------------------------------------------------------------------------------------------------
Costs and Expenses
Production costs:
Raw materials 63.7 67.6 67.5 62.1 64.2 63.6 85.1 57.3 280.5 250.6
Wages and benefits 101.2 91.4 100.1 92.7 99.8 100.5 136.4 103.8 437.5 388.4
Other 94.5 84.5 98.6 84.5 102.9 88.7 122.6 107.9 418.6 365.6
- ----------------------------------------------------------------------------------------------------------------
Total 259.4 243.5 266.2 239.3 266.9 252.8 344.1 269.0 1,136.6 1,004.6
Selling, general and
administrative
expenses 164.0 157.6 168.4 167.2 166.5 162.0 257.6 193.7 756.5 680.5
- ----------------------------------------------------------------------------------------------------------------
Total 423.4 401.1 434.6 406.5 433.4 414.8 601.7 462.7 1,893.1 1,685.1
- ----------------------------------------------------------------------------------------------------------------
Operating profit 31.1 34.8 49.0 36.7 12.2 11.4 34.3 5.5 126.6 88.4
Interest expense, net 5.2 7.0 5.2 6.7 6.6 6.4 8.4 6.0 25.4 26.1
Loss on disposition
of
Gwinnett Daily News - 1.6 - 1.1 - 51.1 - - - 53.8
Income taxes 12.9 11.2 20.9 12.4 6.5 (13.2) 2.9 0.7 43.2 11.1
- ----------------------------------------------------------------------------------------------------------------
Income (Loss) before
equity in operations of
forest products group 13.0 15.0 22.9 16.5 (0.9) (32.9) 23.0 (1.2) 58.0 (2.6)
Equity in operations of
forest products group (2.1) (1.6) (0.5) (2.5) (2.1) (2.1) (47.2) (2.5) (51.9) (8.7)
- ----------------------------------------------------------------------------------------------------------------
Income (Loss) before
net cumulative effect
of accounting changes 10.9 13.4 22.4 14.0 (3.0) (35.0) (24.2) (3.7) 6.1 (11.3)
Net cumulative effect
of accounting changes - (33.4) - - - - - - - (33.4)
- ----------------------------------------------------------------------------------------------------------------
Net income (loss) $ 10.9 $(20.0) $ 22.4 $14.0 $ (3.0) $(35.0) $(24.2) $(3.7) $ 6.1 $(44.7)
- ----------------------------------------------------------------------------------------------------------------
Average number of
common
shares outstanding 79.9 78.4 79.7 78.5 72.4 78.6 106.0 78.6 84.5 78.5
Per share of common
stock
Before net cumulative
effect of
accounting changes $ .14 $ .17 $ .28 $.18 $ (.04) $(.44) $ (.23) $(.05) $ .07 $ (.14)
Net cumulative effect
of accounting changes - (.43) - - - - - - - (.43)
Net income (loss) .14 (.26) .28 .18 (.04) (.44) (.23) (.05) .07 (.57)
Dividends .14 .14 .14 .14 .14 .14 .14 .14 .56 .56
- ----------------------------------------------------------------------------------------------------------------
The 1993 quarters do not equal the 1993respective year-end amountamounts for
earnings per share due to the weighted average number of shares outstanding used
in the computations for the respective periods. Per share amounts for the
respective quarters and years have been computed using the average number of
common shares outstanding as presented in the table above.
The significant differences inAnnual and quarterly per share amounts are affected by the numbertiming of share
issuances and repurchases. During the second half of 1993, 10.3 million shares
in theof Class A Common Stock were repurchased for approximately $255.2 million. On
October 1, 1993, periods are due principally to the issuance of
approximately 36.4 million shares duewere issued in connection with the
acquisition of The Globe. During 1994, approximately $235.2 million was expended
to the October 1993 Globe acquisition
offset, in part, by stock repurchases of approximately 10.3repurchase 10.0 million shares
during the third and fourth quarter.shares.
The Company's largest source of revenues is advertising, which influences the
pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that in the first quarter. Advertising volume tends to be lower in
the third quarter primarily because of the summer slow-down in many areas of
economic activity. Quarterly trends are also affected by the overall economy and
economic conditions that may exist in specific markets served by each of the
Company's business segments.
Third-quarter 1994 includes a $204.0 million pre-tax gain ($.99 per share)
from the sales of the Women's Magazines Division and U.K. golf publications.
Fourth-quarter 1994 includes a $3.1 million loss ($.02 per share) on the
disposition of Gaspesia.
First-quarter 1993 was negatively affected by $3.7 million pre-tax ($.02 per
share) rate adjustments due to a Marchsevere snowstorm.
Third-quarter 1993 includes $5.6$4.4 million ($.07.05 per share) of additional
income tax expense due to the enactment of the Tax Act.
Fourth-quarter 1993 includes a $2.6 million pre-tax gain ($.02 per share) on
the sale of assets.
Fourth-quarter 1993 includes $35.4 million of pre-tax charges ($.19 per
share) for white-collarseverance and production unionrelated costs for staff reductions at The Times.
Fourth-quarter 1993 includes an after-tax noncash charge to equity in
operations of $47.0 million ($.44 per share) to write-down the Company'swrite down its investment in
Gaspesia to its Forest Products Group to reflect current operating conditionsnet realizable value.
F - 28
TEN-YEAR SUPPLEMENTAL
FINANCIAL DATA
- --------------------------------------------------------------------------------
Dollars and economic factorsshares in
the industry.
First-quartermillions Year Ended December 31
except per share data 1994 1993 1992 includes $3.1 million1991 1990
- --------------------------------------------------------------------------------
Revenues and Income
Revenues $2,358 $2,020 $1,774 $1,703 $1,777
- --------------------------------------------------------------------------------
Operating Profit 211 127 88 94 130
- --------------------------------------------------------------------------------
Income (Loss) from
continuing operations
before equity in
forest products group 210 58 (2) 41 61
Equity in operations of
forest products group 3 (52) (9) 6 4
- --------------------------------------------------------------------------------
Income (Loss) from
continuing operations 213 6 (11) 47 65
Discontinued operations - - - - -
Net cumulative effect of
accounting changes - - (34) - -
- --------------------------------------------------------------------------------
Net income (loss) 213 6 (45) 47 65
- --------------------------------------------------------------------------------
Balance Sheet
Total assets 3,138 3,215 1,995 2,128 2,150
Long-term debt
and capital lease
obligations 523 460 207 213 319
Common stockholders'
equity 1,544 1,599 1,000 1,073 1,056
- --------------------------------------------------------------------------------
Per share of Common Stock
Continuing operations 2.05 .07 (.14) .61 .85
Discontinued operations - - - - -
Net cumulative effect of
accounting changes - - (.43) - -
Net income (loss) 2.05 .07 (.57) .61 .85
Dividends .56 .56 .56 .56 .54
Common stockholders'
equity (end of year) 15.71 14.96 12.54 13.70 13.68
- --------------------------------------------------------------------------------
Shares Outstanding
(end of year)
Class A and Class B
Common 98.2 106.9 79.7 78.4 77.2
- --------------------------------------------------------------------------------
Market Price
(end of year) 22.12 26.25 26.37 23.62 20.62
- --------------------------------------------------------------------------------
TEN-YEAR SUPPLEMENTAL
FINANCIAL DATA
- -------------------------------------------------------------------------
Dollars and shares in Year Ended December 31
millions
except per share data 1989 1988 1987 1986 1985
- -------------------------------------------------------------------------
Revenues and Income
Revenues $1,769 $1,700 $1,642 $1,524 $1,358
- -------------------------------------------------------------------------
Operating Profit 169 251 284 266 210
- -------------------------------------------------------------------------
Income (Loss) from
continuing operations
before equity in
forest products group 84 132 138 110 93
Equity in operations of
forest products group (16) 29 18 20 21
- -------------------------------------------------------------------------
Income (Loss) from
continuing operations 68 161 156 130 114
Discontinued operations 199 7 4 2 2
Net cumulative effect of
accounting changes - - - - -
- -------------------------------------------------------------------------
Net income (loss) 267 168 160 132 116
- -------------------------------------------------------------------------
Balance Sheet
Total assets 2,188 1,915 1,712 1,405 1,296
Long-term debt
and capital lease
obligations 337 378 391 217 274
Common stockholders'
equity 1,064 873 823 705 586
- -------------------------------------------------------------------------
Per share of Common Stock
Continuing operations .87 2.00 1.91 1.60 1.43
Discontinued operations 2.52 .08 .05 .03 .02
Net cumulative effect of
accounting changes - - - - -
Net income (loss) 3.39 2.08 1.96 1.63 1.45
Dividends .50 .46 .40 .33 .29
Common stockholders'
equity (end of year) 13.63 11.02 10.04 8.59 7.24
- -------------------------------------------------------------------------
Shares Outstanding
(end of year)
Class A and Class B
Common 78.1 79.2 82.0 82.0 80.9
- -------------------------------------------------------------------------
Market Price
(end of year) 26.37 26.87 31.00 35.50 24.50
- -------------------------------------------------------------------------
1994 - Results include a net pre-tax gain of $200.9 million ($.02.99 per share) on
the salessale of assets.
Second-quarter 1992 was negatively affected by $11.0 million pre-tax ($.08 per
share) due to labor disruptions at The Times.
Thirdthe Women's Magazines Division and fourth-quarter 1992 include pre-tax $2.8 million ($.02 per share)U.K. golf publications and $7.6 million ($.05 per share), respectively, for training and start-up costs
for commencementthe
disposition of operations at Edison.
Fourth-quarter 1992 includes a $28.0 million pre-tax charge ($.20 per share)
for voluntary union staff reductions at The Times.
F - 27
TEN-YEAR SUPPLEMENTAL FINANCIAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in millions Year Ended December 31
except per share data 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
- --------------------------------------------------------------------------------------------------------------------------------
Revenues and Income
Revenues $2,020 $1,774 $1,703 $1,777 $1,769 $1,700 $1,642 $1,524 $1,358 $1,199
- --------------------------------------------------------------------------------------------------------------------------------
Operating Profit 127 88 94 130 169 251 284 266 210 176
- --------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing operations before
equity in forest products group 58 (2) 41 61 84 132 138 110 93 86
Equity in operations of forest products group (52) (9) 6 4 (16) 29 18 20 21 13
- --------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing operations 6 (11) 47 65 68 161 156 130 114 99
Discontinued operations - - - - 199 7 4 2 2 1
Net cumulative effect of accounting changes - (34) - - - - - - - -
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 6 (45) 47 65 267 168 160 132 116 100
- --------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
Total assets 3,215 1,995 2,128 2,150 2,188 1,915 1,712 1,405 1,296 869
Long-term debt and capital lease obligations 460 207 213 319 337 378 391 217 274 75
Common stockholders' equity 1,599 1,000 1,073 1,056 1,064 873 823 705 586 485
- --------------------------------------------------------------------------------------------------------------------------------
Per share of Common Stock
Continuing operations .07 (.14) .61 .85 .87 2.00 1.91 1.60 1.43 1.25
Discontinued operations - - - - 2.52 .08 .05 .03 .02 .01
Net cumulative effect of accounting changes - (.43) - - - - - - - -
Net income (loss) .07 (.57) .61 .85 3.39 2.08 1.96 1.63 1.45 1.26
Dividends .56 .56 .56 .54 .50 .46 .40 .33 .29 .25
Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63 11.02 10.04 8.59 7.24 6.09
- --------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding (end of year)
Class A and Class B Common 106.9 79.7 78.4 77.2 78.1 79.2 82.0 82.0 80.9 79.7
- --------------------------------------------------------------------------------------------------------------------------------
Market Price (end of year) 26.25 26.37 23.62 20.62 26.37 26.87 31.00 35.50 24.50 19.19
- --------------------------------------------------------------------------------------------------------------------------------
Gaspesia.
1993 - Results includeincluded pre-tax $3.7 million ($.02 per
share) rate adjustments due to a Marchsevere snowstorm.
Results include $5.6included $4.4 million ($.07.05 per share) of additional tax expense for
remeasurement of deferred tax balances due to the enactment of the Tax Act.
Results included $1.2 million ($.02 per share) of additional tax expense due
to the enactment ofTax Act which increased the Tax Act.federal corporate income tax rate.
Results includeincluded a $2.6 million pre-tax gain ($.02 per share) on the sale of
assets.
Results includeincluded $35.4 million of pre-tax charges ($.23 per share) for
staff reductions at The Times.
Results includeincluded an after-tax noncash charge of $47.0 million ($.56 per
share) against equity in operations to write down the Company's investment in
Gaspesia to its Forest Products Group to reflect current operating conditions and economic
factors in the industry.net realizable value.
1992 - Results included a $53.8 million pre-tax loss ($.47 per share) on the
closing of The Gwinnett (Ga.) Daily News.
Results included a $3.1 million pre-tax gain ($.02 per share) from the sales
of assets.
Results included a $28.0 million pre-tax charge ($.20 per share) for
voluntary union staff reductions at The Times.
Results included $21.4 million pre-tax ($.15 per share) for labor disruptions
and training and start-up costs at Edison.
1991 - Results included a $20.0 million pre-tax charge ($.15 per share) for
voluntary union staff reductions at The Times.
Results includeincluded the reversal of a provision for income taxes of $10.0
million ($.13 per share) for a favorable tax settlement.
1989 - Results included an after-tax gain of $193.3 million ($2.46 per
share) from the sale of the Company's cable television operations. The gain
and results of operations through the 1989 sale date are included as
discontinued operations.
Results included a $30.0 million pre-tax charge ($.22 per share) for
voluntary union staff reductions at The Times.
Results included an after-tax charge of $27.2 million ($.35 per share) for a
valuation reserve against the Company's investment in the Forest Products Group.
1986 - Results included an interest charge of $8.5 million ($.05 per share)
which relates to a court decision arising from the Company's 1981 acquisition of
two cable television systems.
1985 - Results included a $2.8 million gain ($.03 per share) from the sale
of property. The Company acquired five newspapers and two television stations
for $389.6 million.
F-28F - 29
SCHEDULE V
THE NEW YORK TIMES COMPANY
PROPERTY, PLANT AND EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- --------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- --------------------------------------------------------------------------------------------------------
Balance at Other Balance at
beginning changes-- end
Classification of period Additions Retirements add (deduct) of period
- --------------------------------------------------------------------------------------------------------
Dollars in thousands
YEAR ENDED DECEMBER 31, 1993
Land........................ $ 61,961 $ 275 $ 15 $ 3,618(2,3) $ 65,839
Buildings, building
equipment and
improvements.............. 597,597 9,587 147 43,149(2,3) 650,186(5)
Equipment................... 751,186 28,610 9,497 104,180(2,3) 874,479
Construction and equipment
installations in
progress.................. 47,842 41,147(1) -- 4,018(2) 93,007
------------- ------------ ----------- ------------ -------------
Total............. $ 1,458,586 $ 79,619 $ 9,659 $ 154,965(2,3) $1,683,511
------------- ------------ ----------- ------------ -------------
------------- ------------ ----------- ------------ -------------
YEAR ENDED DECEMBER 31, 1992
Land........................ $ 66,022 $ 551 $ 894 $ (3,718)(4) $ 61,961
Buildings, building
equipment and
improvements.............. 605,416 9,849 856 (16,812)(4) 597,597(5)
Equipment................... 770,651 16,917 14,319 (22,063)(4) 751,186
Construction and equipment
installations in
progress.................. 27,830 20,012(1) -- -- 47,842
------------- ------------ ----------- ------------ -------------
Total............. $ 1,469,919 $ 47,329 $ 16,069 $ (42,593)(4) $ 1,458,586
------------- ------------ ----------- ------------ -------------
------------- ------------ ----------- ------------ -------------
YEAR ENDED DECEMBER 31, 1991
Land........................ $ 60,131 $ 5,908 $ 17 $ -- $ 66,022
Buildings, building
equipment and
improvements.............. 602,402 3,182 168 -- 605,416(5)
Equipment................... 762,250 15,248 6,847 -- 770,651
Construction and equipment
installations in
progress.................. 25,968 1,862(1) -- -- 27,830
------------- ------------ ----------- ------------ -------------
Total............. $ 1,450,751 $ 26,200 $ 7,032 $ -- $ 1,469,919
------------- ------------ ----------- ------------ -------------
------------- ------------ ----------- ------------ -------------
- ---------------
(1) Net change for the period.
(2) Includes property, plant and equipment acquired through the October 1, 1993
acquisition of The Boston Globe.
(3) Includes reclassification of closed production facility (totaling $89
million) to miscellaneous assets pending decision related to future use of
such facility.
(4) Sale of residual assets of The Gwinnett (Ga.) Daily News.
(5) Includes $57 million capitalized lease of building and site for a production
and distribution facility in Edison, New Jersey for The New York Times.
S-1
SCHEDULE VI
THE NEW YORK TIMES COMPANY
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- -----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- -----------------------------------------------------------------------------------------------------------
Balance at Other Balance at
beginning changes-- end
Description of period Additions(1) Retirements add (deduct) of period
- -----------------------------------------------------------------------------------------------------------
Dollars in thousands
YEAR ENDED DECEMBER 31, 1993
Buildings, building equipment and
improvements...................... $ 209,247 $ 31,386 $ 101 $ (21,616)(2) $ 218,916
Equipment........................... 346,584 57,888 8,445 (43,456)(2) 352,571
----------- ----------- ----------- ------------ -----------
Total..................... $ 555,831 $ 89,274 $ 8,546 $ (65,072)(2) $ 571,487
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
YEAR ENDED DECEMBER 31, 1992
Buildings, building equipment and
improvements...................... $ 178,869 $ 31,834 $ 378 $ (1,078)(3) $ 209,247
Equipment........................... 324,457 38,046 10,771 (5,148)(3) 346,584
----------- ----------- ----------- ------------ -----------
Total..................... $ 503,326 $ 69,880 $ 11,149 $ (6,226)(3) $ 555,831
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
YEAR ENDED DECEMBER 31, 1991
Buildings, building equipment and
improvements...................... $ 147,723 $ 31,187 $ 41 $ -- $ 178,869
Equipment........................... 289,598 41,254 6,395 -- 324,457
----------- ----------- ----------- ------------ -----------
Total..................... $ 437,321 $ 72,441 $ 6,436 $ -- $ 503,326
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
- ---------------
(1) Depreciation of property, plant and equipment is provided at annual rates
based on estimated service lives. The rates are applied by the straight-line
method using ranges of estimated service lives as follows: 15 to 50 years
for buildings; 5 to 30 years for building equipment and improvements and 2
to 20 years for equipment.
(2) Reclassification of closed production facility to miscellaneous assets
pending decision related to future use of such facility.
(3) Sale of residual assets of The Gwinnett (Ga.) Daily News.
S-2
SCHEDULE VIIIII
THE NEW YORK TIMES COMPANY
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ----------------------------------------------------------------------------------------------------------
Additions Deductions
charged for
to costs purposes
and for
Balance at expenses which Balance
beginning or accounts at end
Description of period revenues were set up of period
- ----------------------------------------------------------------------------------------------------------
Dollars in thousands
1994
- --------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- --------------------------------------------------------------------------------
Deduc-
tions
Additions for
charged purposes
Balance to costs for
at and which Balance
beginning expenses accounts at end
of or were set of
Description period revenues up period
- --------------------------------------------------------------------------------
Dollars in thousands
YEAR ENDED DECEMBER 31, 1994
Deducted from assets to which they
apply
Uncollectible accounts......... $17,108 $23,134 $17,974 $22,268
Returns and allowances, etc.... 26,399 44,562 65,072 5,889
------- -------- -------- -------
Total...................... $43,507 $67,696 $83,046 $28,157
======= ======== ======== =======
YEAR ENDED DECEMBER 31, 1993
Deducted from assets to which they apply
Uncollectible accounts...................... $ 12,809 $ 18,495 $ 14,196 $ 17,108
Returns and allowances, etc................. 20,491 71,657 65,749 26,399
----------- ----------- ----------- -----------
Total.................................. $ 33,300 $ 90,152 $ 79,945 $ 43,507
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
YEAR ENDED DECEMBER 31, 1992
Deducted from assets to which they apply
Uncollectible accounts...................... $ 13,020 $ 14,848 $ 15,059 $ 12,809
Returns and allowances, etc................. 17,621 61,154 58,284 20,491
----------- ----------- ----------- -----------
Total.................................. $ 30,641 $ 76,002 $ 73,343 $ 33,300
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
YEAR ENDED DECEMBER 31, 1991
Deducted from assets to which they apply
Uncollectible accounts...................... $ 11,837 $ 20,334 $ 19,151 $ 13,020
Returns and allowances, etc................. 17,968 42,957 43,304 17,621
Investment in forest products group
valuation allowance......................... 26,927 -- 26,927 --
----------- ----------- ----------- -----------
Total.................................. $ 56,732 $ 63,291 $ 89,382 $ 30,641
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
S-3
SCHEDULE IX
THE NEW YORK TIMES COMPANY
SHORT-TERM BORROWINGS
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
- -------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- -------------------------------------------------------------------------------------------------------------------
Maximum Average Weighted
amount amount average
Weighted outstanding outstanding interest rate
Category of aggregate Balance at average during the during the during the
short-term borrowings end of period interest rate period period(1) period(2)
- -------------------------------------------------------------------------------------------------------------------
Dollars in thousands
Deducted from assets to which they
apply
Uncollectible accounts......... $12,809 $18,495 $14,196 $17,108
Returns and allowances, etc.... 20,491 71,657 65,749 26,399
------- -------- -------- -------
Total...................... $33,300 $90,152 $79,945 $43,507
======= ======== ======== =======
YEAR ENDED DECEMBER 31, 1993
Borrowings from banks and commercial
paper................................ $ 62,340 3.7% $ 281,050 $ 75,924 3.5%
------------- ------ ----------- ----------- ------
------------- ------ ----------- ----------- ------
YEAR ENDED DECEMBER 31, 1992
Borrowings from banks and commercial
paper................................ $ -- -- % $ 45,000 $ 2,331 4.0%
------------- ------ ----------- ----------- ------
------------- ------ ----------- ----------- ------
YEAR ENDED DECEMBER 31, 1991
Borrowings from banks and commercial
paper................................ $ -- -- % $ 66,000 $ 18,941 6.6%
------------- ------ ----------- ----------- ------
------------- ------ ----------- ----------- ------
- ---------------
(1) Calculated by dividing the aggregate amount borrowed during the year by the
number of days in a year.
(2) Calculated by dividing the total short-term interest expense by the average
short-term borrowings outstanding during the period.
S-4
SCHEDULE X
THE NEW YORK TIMES COMPANY
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31, 1992
Deducted from assets to which they
apply
Uncollectible accounts......... $13,020 $14,848 $15,059 $12,809
Returns and allowances, etc.... 17,621 61,154 58,284 20,491
------- -------- -------- -------
Total...................... $30,641 $76,002 $73,343 $33,300
======= ======== ======== =======
S-1
Exhibit Index
-------------
(2.1) Agreement and Plan of Merger dated as of June 11, 1993,
- --------------------------------------------------------------------------------------------------------------------------
Column A Column B
- --------------------------------------------------------------------------------------------------------------------------
Charged to costs
Item(1) and expenses
- --------------------------------------------------------------------------------------------------------------------------
Dollars in
thousands
YEAR ENDED DECEMBER 31, 1993
Advertising costs (promotion, media, etc.).............................. $ 112,153
-------------------
-------------------
YEAR ENDED DECEMBER 31, 1992
Advertising costs (promotion, media, etc.).............................. $ 98,144
-------------------
-------------------
YEAR ENDED DECEMBER 31, 1991
Advertising costs (promotion, media, etc.).............................. $ 95,463
-------------------
-------------------
-----------------------
(1) Amounts foras
amended by the First Amendment dated as of August 12, 1993, by and among
the Company, Sphere, Inc. and Affiliated Publications, Inc. (filed as
Exhibit 2 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex I to the Joint Proxy
Statement/Prospectus included in such Registration Statement (schedules
omitted--the Company agrees to furnish a copy of any schedule to the
Commission upon request), and incorporated by reference herein).
(2.2) Stockholders Agreement dated as of June 11, 1993, by and
between the Company and the other items requiredparties signatory thereto (filed as
Exhibit 2.1 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex II to the Joint Proxy
Statement/Prospectus included in such Registration Statement, and
incorporated by this schedule arereference herein).
(2.3) Asset Purchase Agreement between the Company, The Family
Circle, Inc., Retail Magazines Marketing Company, Inc. and Gruner + Jahr
Printing and Publishing Co., dated as of June 17, 1994 (filed as an
Exhibit to the Company's Form 10-Q dated August 10, 1994, (Exhibits
omitted - The Company agrees to furnish a copy of any exhibit to the
Commission upon request), and incorporated by reference herein).
(2.4) Fulfillment Agreement between the Company, The Family Circle,
Inc. and Gruner + Jahr Printing and Publishing Co., dated as they are presented inof July 26,
1994 (filed as an Exhibit to the consolidated financial statements or are
less than 1% of consolidated revenues.
S-5
EXHIBIT INDEX
Exhibit
No. Description
- ------ ---------------------------------------------------------------
3.1 -CertificateCompany's Form 10-Q dated August 10,
1994, and incorporated by reference herein).
(3.1) Certificate of Incorporation as amended by the Class A and
Class B stockholders and as restated on September 29, 1993.
3.2 -By-laws1993 (filed as an
Exhibit to the Company's Form 10-K dated March 21, 1994, and incorporated
by reference herein).
(3.2) By-laws as amended through February 17, 1994.
9.1 -Globe1994 (filed as an
Exhibit to the Company's Form 10-K dated March 21, 1994, and incorporated
by reference herein).
(4) The Company agrees to furnish to the Commission upon request a
copy of any instrument with respect to long-term debt of the Company and
any subsidiary for which consolidated or unconsolidated financial
statements are required to be filed, and for which the amount of
securities authorized thereunder does not exceed 10% of the total assets
of the Company and its subsidiaries on a consolidated basis.
(9.1) Globe Voting Trust Agreement, dated as of October 1, 1993.
10.2 -The1993
(filed as an Exhibit to the Company's Form 10-K dated March 21, 1994, and
incorporated by reference herein).
(9.2) Jordan Voting Trust Agreement, dated as of January 29, 1987, as
amended through May 15, 1987 (filed as Exhibit 9.2 to API's Form 10-K for
fiscal year ended December 31, 1989, and incorporated by reference
herein).
(10.1) The Company's Executive Incentive Compensation Plan as amended
through December 20, 1990 (filed as an Exhibit to the Company's Form 10-K
dated March 1, 1991, and incorporated by reference herein).
(10.2) The Company's 1991 Executive Stock Incentive Plan, as amended
through December 15, 1994.
(10.3) The Company's 1991 Executive Cash Bonus Plan, adopted on April
13, 1993.
10.8 -Agreement16, 1991 (filed as an Exhibit to the Company's Proxy Statement dated
March 1, 1991, and incorporated by reference herein).
(10.4) The Company's Non-Employee Directors' Stock Option Plan,
adopted on April 16, 1991 (filed as an Exhibit to the Company's Proxy
Statement dated March 1, 1991, and incorporated by reference herein).
(10.5) The Company's Supplemental Executive Retirement Plan as
amended through May 5, 1989 (filed as an Exhibit to the Company's Form
10-K dated March 29, 1990, and incorporated by reference herein).
(10.6) Lease (short form) between the Company and Z Edison Limited
Partnership dated April 8, 1987 (filed as an Exhibit to the Company's
Form 10-K dated March 27, 1988, and incorporated by reference herein).
(10.7) Agreement of Lease, dated as of December 15, 1993, between The
City of New York, Landlord, and the Company, Tenant (as successor to New
York City Economic Development Corporation (the "EDC"), pursuant to an
Assignment and Assumption of Lease With Consent, made as of December 15,
1993, between the EDC, as Assignor, to the Company, as Assignee) (filed
as an Exhibit to the Company's Form 10-K dated March 21, 1994, and
incorporated by reference herein).
10.9 -Funding(10.8) Funding Agreement #1, dated as of December 15, 1993, between
the EDC and the Company.
10.10 -FundingCompany (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.9) Funding Agreement #2, dated as of December 15, 1993, between
the EDC and the Company.
10.11 -FundingCompany (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.10) Funding Agreement #3, dated as of December 15, 1993, between
the EDC and the Company.
10.12 -FundingCompany (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.11) Funding Agreement #4, dated as of December 15, 1993, between
the EDC and the Company.
10.13 -NewCompany (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.12) New York City Public Utility Service Power Service Agreement,
made as of May 3, 1993, between The City of New York, acting by and
through its Public Utility Service, and The New York Times Newspaper
Division of the Company.
10.14 -EmploymentCompany (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.13) Employment Agreement, dated May 19, 1993, between API, Globe
Newspaper Company and William O. Taylor.
10.16 -API'sTaylor (filed as an Exhibit to the
Company's Form 10-K dated March 21, 1994, and incorporated by reference
herein).
(10.14) API's 1989 Stock Option Plan (filed as Annex F-1 to API's
Proxy Statement-Joint Prospectus, dated as of April 28, 1989, contained
in API's Registration Statement on Form S-4 (Registration Statement No.
33-28373) declared effective April 28, 1989, and incorporated by
reference herein).
(10.15) API's Supplemental Executive Retirement Plan, as amended
effective September 15, 1993.1993 (filed as an Exhibit to the Company's Form
10-K dated March 21, -Subsidiaries1994, and incorporated by reference herein).
(10.16) API's 1990 Stock Option Plan (Restated 1991) (filed as
Exhibit 1 to API's Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1991 (Commission File No. 1-10251), and incorporated by
reference herein).
(10.17) Form of Substituted Stock Option Agreement/Incentive 86 among
API, its predecessor company and certain employees (filed as Exhibit
10.27 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.18) Form of Substituted Stock Option Agreement/Incentive 87 among
API, its predecessor company and certain employees (filed as Exhibit
10.29 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.19) Form of Substituted Stock Option Agreement/Incentive 88 among
API, its predecessor company and certain employees (filed as Exhibit
10.31 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(21) Subsidiaries of the Company.Company
(23) Consent of Deloitte & Touche LLP
(27) Financial Data Schedule