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UNITED STATES
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDERPURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.


For Quarter Ended March 28, 2004

For quarterly period ended June 27, 2004

Commission file number 1-5837


THE NEW YORK TIMES COMPANY
(Exact name of registrant as specified in its charter)


NEW YORK

(State or other jurisdiction of
incorporation or organization)

 

13-1102020
(I.R.S. Employer
Identification No.)

229 WEST 43RD STREET, NEW YORK, NEW YORK
(Address of principal executive offices)

10036

(Zip Code)

212-556-1234
Registrant's telephone number, including area code

        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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o.

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý    No o.

        Number of shares of each class of the registrant's common stock outstanding as of AprilJuly 30, 2004 (exclusive of treasury shares):



Class A Common Stock
 
147,852,503
145,985,280 shares

Class B Common Stock

 

840,316 shares





PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)(Unaudited)
(Dollars and shares in thousands, except per share data)



 For the Quarters Ended

 Three Months Ended
 Six Months Ended
 


 March 28,
2004

 March 30,
2003


 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 


 (13 Weeks)


 (13 Weeks)

 (26 Weeks)

 
RevenuesRevenues    Revenues         
Advertising $529,027 $513,154Advertising $551,511 $530,564 $1,080,538 $1,043,718 
Circulation 220,243 221,001Circulation 220,156 221,304 440,399 442,305 
Other 52,674 49,585Other 52,264 50,023 104,938 99,608 
 
 
 
 
 
 
 
 Total 801,944 783,740 Total 823,931 801,891 1,625,875 1,585,631 

Production costs

Production costs

 

 

 

 
Production costs         
Raw materials 70,513 66,221Raw materials 71,594 67,534 142,107 133,755 
Wages and benefits 174,650 167,847Wages and benefits 170,972 167,672 345,622 335,519 
Other 122,316 117,390Other 122,893 115,840 245,209 233,230 
 
 
 
 
 
 
 
 Total 367,479 351,458 Total 365,459 351,046 732,938 702,504 

Selling, general and administrative expenses

Selling, general and administrative expenses

 

325,303

 

309,987

Selling, general and administrative expenses

 

326,715

 

320,788

 

652,018

 

630,775

 
 
 
 
 
 
 
 
 Total 692,782 661,445 Total 692,174 671,834 1,384,956 1,333,279 
 
 
 
 
 
 
 
Operating profitOperating profit 109,162 122,295Operating profit 131,757 130,057 240,919 252,352 

Net loss from joint ventures

 

3,293

 

6,212
Net income/(loss) from joint venturesNet income/(loss) from joint ventures 2,734 694 (559) (5,518)

Interest expense, net

Interest expense, net

 

10,320

 

11,802
Interest expense, net 10,353 11,484 20,673 23,286 

Other income

Other income

 

1,250

 

9,527
Other income 1,250 1,250 2,500 10,777 
 
 
 
 
 
 
 

Income before income taxes and minority interest

Income before income taxes and minority interest

 

96,799

 

113,808
Income before income taxes and minority interest 125,388 120,517 222,187 234,325 

Income taxes

Income taxes

 

38,239

 

44,946
Income taxes 49,538 47,606 87,777 92,552 

Minority interest in net income of subsidiaries

Minority interest in net income of subsidiaries

 

125

 

16
Minority interest in net income of subsidiaries 173 82 298 98 
 
 
 
 
 
 
 
Net IncomeNet Income $58,435 $68,846Net Income $75,677 $72,829 $134,112 $141,675 
 
 
 
 
 
 
 
Average Number of Common Shares OutstandingAverage Number of Common Shares Outstanding    Average Number of Common Shares Outstanding         
Basic 149,925 151,845Basic 148,626 150,730 149,275 151,287 
Diluted 152,460 154,598Diluted 150,902 153,403 151,673 154,001 

Basic Earnings Per Share

Basic Earnings Per Share

 

$

..39

 

$

..45
Basic Earnings Per Share $.51 $.48 $.90 $.94 
 
 
 
 
 
 
 
Diluted Earnings Per ShareDiluted Earnings Per Share $.38 $.45Diluted Earnings Per Share $.50 $.47 $.88 $.92 
 
 
 
 
 
 
 
Dividends Per ShareDividends Per Share $.145 $.135Dividends Per Share $.155 $.145 $.300 $.280 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.



THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)



 March 28,
2004

 December 28,
2003


 June 27,
2004

 December 28,
2003



 (Unaudited)

  

 (Unaudited)

  
ASSETSASSETS    ASSETS    

Current Assets

Current Assets

 

 

 

 
Current Assets    

Cash and cash equivalents

 

$

32,323

 

$

39,447
Cash and cash equivalents $45,185 $39,447

Accounts receivable-net

 

347,078

 

387,720
Accounts receivable—net 356,434 387,720

Inventories

 

 

 

 
Inventories    
 Newsprint and magazine paper 35,030 26,067 Newsprint and magazine paper 37,153 26,067
 Work-in-process and other 3,251 2,885 Work-in-process and other 2,796 2,885
 
 
 
 
 Total inventories 38,281 28,952 Total inventories 39,949 28,952

Deferred income taxes

 

66,178

 

66,178
Deferred income taxes 66,178 66,178

Other current assets

 

55,942

 

81,014
Other current assets 54,989 81,014
 
 
 
 
 
Total current assets

 

539,802

 

603,311
 Total current assets 562,735 603,311

Other Assets

Other Assets

 

 

 

 

Other Assets

 

 

 

 

Investments in joint ventures

 

223,330

 

227,470
Investments in joint ventures 222,009 227,470

Property, plant and equipment (less accumulated depreciation and amortization of $1,315,691 in 2004 and $1,288,696 in 2003)

 

1,181,058

 

1,187,313
Property, plant and equipment (less accumulated depreciation and amortization of $1,340,684 in 2004 and $1,288,696 in 2003) 1,185,231 1,187,313

Intangible assets acquired

 

 

 

 
Intangible assets acquired    
 Goodwill 1,095,823 1,097,682 Goodwill 1,096,026 1,097,682
 
Other intangible assets acquired (less accumulated amortization of $130,557 in 2004 and $126,238 in 2003)

 

371,900

 

376,688
 Other intangible assets acquired (less accumulated amortization of $134,901 in 2004 and $126,238 in 2003) 367,611 376,688

Miscellaneous assets

 

323,819

 

312,275
Miscellaneous assets 350,992 312,275
 
 
 
 

TOTAL ASSETS

TOTAL ASSETS

 

$

3,735,732

 

$

3,804,739
TOTAL ASSETS $3,784,604 $3,804,739
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.



THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)



 March 28,
2004

 December 28,
2003

 
 June 27,
2004

 December 28,
2003

 


 (Unaudited)

  
 
 (Unaudited)

  
 
LIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITY     LIABILITIES AND STOCKHOLDERS' EQUITY     

Current Liabilities

Current Liabilities

 

 

 

 

 
Current Liabilities     
Commercial paper outstanding $141,300 $227,980 Commercial paper outstanding $144,000 $227,980 
Accounts payable 172,394 176,570 Accounts payable 186,302 176,570 
Accrued payroll and other related liabilities 105,455 119,490 Accrued payroll and other related liabilities 117,553 119,490 
Accrued expenses 181,767 158,446 Accrued expenses 189,769 158,446 
Unexpired subscriptions 80,273 76,281 Unexpired subscriptions 77,975 76,281 
Current portion of long-term debt and capital lease obligations 254,749 1,597 Current portion of long-term debt and capital lease obligations 253,384 1,597 
 
 
   
 
 
 Total current liabilities 935,938 760,364  Total current liabilities 968,983 760,364 
 
 
   
 
 
Other LiabilitiesOther Liabilities     Other Liabilities     
Long-term debt 393,334 646,909 Long-term debt 393,422 646,909 
Capital lease obligations 78,932 78,816 Capital lease obligations 78,656 78,816 
Deferred income taxes 140,371 140,336 Deferred income taxes 140,317 140,336 
Other 707,270 694,661 Other 713,821 694,661 
 
 
   
 
 
 Total other liabilities 1,319,907 1,560,722  Total other liabilities 1,326,216 1,560,722 
 
 
   
 
 
Minority InterestMinority Interest 95,086 91,411 Minority Interest 113,013 91,411 
 
 
   
 
 
Stockholders' EquityStockholders' Equity     Stockholders' Equity     
Common stock of $.10 par value:     Common stock of $.10 par value:     
 Class A—authorized 300,000,000 shares; issued: 2004—158,211,303; 2003—157,716,009 (including treasury shares: 2004—10,031,982; 2003—8,677,435) 15,821 15,772  Class A—authorized 300,000,000 shares; issued: 2004—158,634,186; 2003—157,716,099 (including treasury shares: 2004—11,235,989; 2003—8,677,435) 15,863 15,772 
 Class B—convertible—authorized and issued shares; 2004—840,316; and 2003—840,316 84 84  Class B—convertible—authorized and issued shares; 2004—840,316; 2003—840,316 84 84 
Additional paid-in capital 73,100 53,645 Additional paid-in capital 88,477 53,645 
Retained earnings 1,827,463 1,790,801 Retained earnings 1,857,104 1,790,801 
Common stock held in treasury, at cost (442,644) (381,004)Common stock held in treasury, at cost (497,148) (381,004)
Deferred compensation (8,181) (8,037)Deferred compensation (7,208) (8,037)
Accumulated other comprehensive loss, net of income taxes (80,842) (79,019)Accumulated other comprehensive loss, net of income taxes (80,780) (79,019)
 
 
   
 
 
 Total stockholders' equity 1,384,801 1,392,242  Total stockholders' equity 1,376,392 1,392,242 
 
 
   
 
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITYTOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,735,732 $3,804,739 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,784,604 $3,804,739 
 
 
   
 
 

See Notes to Condensed Consolidated Financial Statements.



THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)



 For the Quarters Ended
 
 Six Months Ended
 


 March 28,
2004

 March 30,
2003

 
 June 27,
2004

 June 29,
2003

 


 (13 Weeks)

 
 (26 Weeks)

 
OPERATING ACTIVITIESOPERATING ACTIVITIES     OPERATING ACTIVITIES     
Net cash provided by operating activitiesNet cash provided by operating activities $160,387 $148,123 Net cash provided by operating activities $292,226 $266,205 
 
 
   
 
 

INVESTING ACTIVITIES

INVESTING ACTIVITIES

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 
Capital expenditures—netCapital expenditures—net (24,428) (41,646)Capital expenditures—net (56,895) (71,727)
AcquisitionAcquisition  (65,059)Acquisition  (65,059)
Other investing paymentsOther investing payments (3,928) (47,134)Other investing payments (19,058) (49,089)
 
 
   
 
 
Net cash used in investing activitiesNet cash used in investing activities (28,356) (153,839)Net cash used in investing activities (75,953) (185,875)
 
 
   
 
 

FINANCING ACTIVITIES

FINANCING ACTIVITIES

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 
Commercial paper (repayments)/borrowings—netCommercial paper (repayments)/borrowings—net (86,680) 46,099 Commercial paper (repayments)/borrowings—net (83,980) 11,220 
Long-term obligations:Long-term obligations:     Long-term obligations:     
Increase   Reduction (974) (1,388)
Reduction (484) (462)
Capital shares:Capital shares:     Capital shares:     
Issuance 17,813 8,830 Issuance 30,220 17,677 
Repurchase (53,180) (60,951)Repurchase (106,455) (108,606)
Dividends paid to stockholdersDividends paid to stockholders (21,773) (20,526)Dividends paid to stockholders (44,791) (42,162)
Other financing proceeds 5,217 35,033 
Other financing (payments)/proceeds—netOther financing (payments)/proceeds—net (4,461) 38,932 
 
 
   
 
 
Net cash (used in)/provided by financing activities (139,087) 8,023 

Net cash used in financing activities

Net cash used in financing activities

 

(210,441

)

 

(84,327

)
 
 
   
 
 
(Decrease)/Increase in cash and cash equivalents (7,056) 2,307 

Increase/(Decrease) in cash and cash equivalents

Increase/(Decrease) in cash and cash equivalents

 

5,832

 

(3,997

)

Effect of exchange rate changes on cash and cash equivalents

Effect of exchange rate changes on cash and cash equivalents

 

(68

)

 

179

 

Effect of exchange rate changes on cash and cash equivalents

 

(94

)

 

450

 

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the beginning of the year

 

39,447

 

36,962

 

Cash and cash equivalents at the beginning of the year

 

39,447

 

36,962

 
 
 
   
 
 
Cash and cash equivalents at the end of the quarterCash and cash equivalents at the end of the quarter $32,323 $39,448 Cash and cash equivalents at the end of the quarter $45,185 $33,415 
 
 
   
 
 

SUPPLEMENTAL DATA

Acquisition

        On January 1, 2003, the Company purchased the remaining 50% interest in the International Herald Tribune that it did not previously own for approximately $65 million.

Other

        InFor the first quartersix months of 2003, capital expenditures are net of a reimbursement of remediation costs at one of the Company's major printing facilities, a portion of which costs had been previously capitalized.

        The Company's and its development partner's interests in the Company's new headquarters are approximately 58% and 42% (see Note 11)12). Due to the Company's majority interest, 100% of the financial position and results of operations of the building partnership are consolidated with those of the Company. Capital expenditures attributable to the Company's development partner's interest in the Company's new headquarters are included in Investing Activities—Other investing payments and were approximately $4$19 million for the first quartersix months of 2004 and approximately $42$46 million for the first quartersix months of 2003. Cash received from the development partner for capital expenditures is included in Financing Activities—Other financing proceeds(payments)/proceeds—net and werewas approximately $5$18 million for the first quartersix months of 2004 and approximately $35$36 million for the first quartersix months of 2003.

See Notes to Condensed Consolidated Financial Statements.



THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.     General

        In the opinion of The New York Times Company's (the "Company") management, the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of March 28,June 27, 2004, and December 28, 2003, and the results of operations and cash flows of the Company for the periods ended March 28,June 27, 2004, and March 30,June 29, 2003. All adjustments necessary for a fair presentation have been included and are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company's Condensed Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company's Annual Report on Form 10-K for the year ended December 28, 2003. Due to the seasonal nature of the Company's business, operating results for the interim periods are not necessarily indicative of a full year's operations. Certain reclassifications have been made to the 2003 Condensed Consolidated Financial Statements to conform with classifications used as of and for the period ended March 28,June 27, 2004. The fiscal periods included herein comprise 13 weeks.weeks for the three-month periods and 26 weeks for the six-month periods.

        As of March 28,June 27, 2004, the Company's significant accounting policies and estimates, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 28, 2003, have not changed from December 28, 2003.

2.     Recent Accounting Pronouncements

        In January 2004 the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. 106-1 ("FSP 106-1"), Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which permitted a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act"). In May 2004 the FASB issued FSP No.106-2 ("FSP 106-2"), which superseded FSP 106-1. FSP 106-2 provides authoritative guidance on the accounting for the Act and specifies the disclosure requirements for employers who have adopted FSP 106-2. FSP 106-2 is effective for the interim or annual period beginning after June 15, 2004. See Note 7 for the effect of the adoption of FSP 106-2 on the Company's Condensed Consolidated Financial Statements.

3.     Stock Option and Employee Stock Purchase Plans

        The Company applies the intrinsic value method under Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and related interpretations to account for its stock option plans and employee stock purchase plan ("ESPP") (together, "Stock-Based Plans"). Accordingly, the Company would only recordsrecord compensation expense for anyif it granted stock options granted with an exercise price that is less than the fair market value of the underlying stock at the date of grant. The Company does not record compensation expense for rights to purchase shares under its ESPP because it satisfies certain conditions under APB 25.


        The following table details the effect on net income and earnings per share had compensation expense for awards issued and vested under the Stock-Based Plans been recorded based on the fair



value method under Statement of Financial Accounting Standards ("FAS") No. 123, as amended, Accounting for Stock-Based Compensation.


 For the Quarters Ended
  Three Months Ended
 Six Months Ended
 
(Dollars in thousands, except per share data)

 March 28,
2004

 March 30,
2003

  June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
Reported net income $58,435 $68,846  $75,677 $72,829 $134,112 $141,675 
Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of related tax effects (10,557) (13,005) (42,634) (13,005) (53,191) (26,010)
 
 
  
 
 
 
 
Pro forma net income $47,878 $55,841  $33,043 $59,824 $80,921 $115,665 
 
 
  
 
 
 
 
Earnings per share:              
Basic—as reported $.39 $.45  $.51 $.48 $.90 $.94 
Basic—pro forma $.32 $.37  $.22 $.40 $.54 $.76 
 
 
  
 
 
 
 
Diluted—as reported $.38 $.45  $.50 $.47 $.88 $.92 
Diluted—pro forma $.32 $.37  $.22 $.40 $.53 $.76 
 
 
  
 
 
 
 

        In June 2004 the Company accelerated the vesting of certain employee stock options where the exercise price of the stock options was above the Company's stock price. Due to the acceleration of the vesting of these stock options, additional compensation expense of approximately $32 million (net of income taxes) was included in stock-based compensation expense in the table above for the second quarter and first six months of 2004.

3.4.     Goodwill and Other Intangible Assets

        Goodwill is the excess of cost over the fair market value of tangible net assets acquired. Goodwill is not amortized but tested for impairment annually or if certain circumstances indicate a possible impairment may exist in accordance with FAS No. 142, Goodwill and Other Intangible Assets.

        Other intangible assets acquired consist primarily of mastheads and licenses on various acquired properties, customer lists, as well as other assets. Other intangible assets acquired (mastheads and licenses), which that have indefinite lives are not amortized but tested for impairment annually or if certain circumstances indicate a possible impairment may exist. Certain other intangible assets acquired (customer lists and other assets) are amortized over their estimated useful lives.

        The changes in the carrying amount of Goodwill for the quarter ended March 28,in 2004 are as follows:

(Dollars in thousands)

 Newspaper
Group

 Broadcast
Group

 Total
  Newspaper
Group

 Broadcast
Group

 Total
 
Balance as of December 29, 2003 $1,056,773 $40,909 $1,097,682  $1,056,773 $40,909 $1,097,682 

Foreign currency translation

 

(1,859

)

 


 

(1,859

)
 (1,656)  (1,656)
 
 
 
  
 
 
 
Balance as of March 28, 2004 $1,054,914 $40,909 $1,095,823 
Balance as of June 27, 2004 $1,055,117 $40,909 $1,096,026 
 
 
 
  
 
 
 

        The foreign currency translation line item above reflects changes in Goodwill resulting from fluctuating exchange rates related to the consolidation of the International Herald Tribune.



        Other intangible assets acquired as of March 28,June 27, 2004, and December 28, 2003, were as follows:

 
 March 28, 2004
 December 28, 2003
(Dollars in thousands)

 Gross Carrying
Amount

 Accumulated
Amortization

 Gross Carrying
Amount

 Accumulated
Amortization

Amortized other intangible
  assets acquired:
            
 Customer lists $203,238 $124,797 $203,252 $120,608
 Other  7,104  5,760  7,158  5,630
  
 
 
 
  Total  210,342  130,557  210,410  126,238
  
 
 
 

Unamortized other intangible
  assets acquired:

 

 

 

 

 

 

 

 

 

 

 

 
 Broadcast licenses  220,194    220,194  
 Newspaper mastheads  71,921    72,322  
  
 
 
 
  Total  292,115    292,516  
  
 
 
 
Total other intangible assets
  acquired
 $502,457 $130,557 $502,926 $126,238
  
 
 
 
 
 June 27, 2004
 December 28, 2003
(Dollars in thousands)

 Gross Carrying
Amount

 Accumulated
Amortization

 Gross Carrying
Amount

 Accumulated
Amortization

Amortized other intangible assets acquired:            
 Customer lists $203,240 $128,987 $203,252 $120,608
 Other  7,111  5,914  7,158  5,630
  
 
 
 
  Total  210,351  134,901  210,410  126,238
  
 
 
 
Unamortized other intangible assets acquired:            
 Broadcast licenses  220,194    220,194  
 Newspaper mastheads  71,967    72,322  
  
 
 
 
  Total  292,161    292,516  
  
 
 
 
Total other intangible assets acquired $502,512 $134,901 $502,926 $126,238
  
 
 
 

        As of March 28,June 27, 2004, the remaining weighted-average amortization period is 8eight years for customer lists and 5five years for other intangible assets acquired included in the table above.

        Amortization expense related to other intangible assets acquired, which is subject to amortization, was $4.3$8.7 million for the first quartersix months of 2004 and is expected to be $17.3 million for the full-yearfull year 2004. Estimated annual amortization expense for the next five years related to these intangible assets is expected to be as follows:

(Dollars in thousands)

(Dollars in thousands)

(Dollars in thousands)

Year

  
 Amount
 Amount
2005   17,022 $17,022
2006   13,801 13,801
2007   4,651 4,651
2008   4,651 4,651
2009   4,552 4,552

4.5.     Debt Obligations

        The Company's total debt, consisting ofincluding commercial paper medium-term notes and capital lease obligations, was $868.3$869.5 million as of March 28,June 27, 2004.

        The Company's $600.0 million commercial paper program is supported by the revolving credit agreements described below and, therefore, issuances can be made up to a maximum of $600.0 million.below. Commercial paper issued by the Company is unsecured and can have maturities of up to 270 days.

The Company had $141.3$144.0 million in commercial paper outstanding as of March 28,June 27, 2004, with an annual weighted average interest rate of 1.0%1.1% and an average of 93 days to maturity from original issuance.

        The primary purpose of the Company's revolving credit agreements is to support the Company's commercial paper program. The Company has a total of $600.0$670.0 million available to borrow under its revolving credit agreements. In May 2004 the Company terminated its one-year $330.0 million revolving credit agreement and entered into a $400.0 million five-year revolving credit agreement that extends to May 2009. The Company's multi-year $270.0 million credit agreement remains unchanged, maturing in June 2006. There were no amounts outstanding under the revolving credit agreements as of March 28,June 27, 2004. The Company intends to extend the revolving credit agreements beyond their current expiration dates.


        The revolving credit agreements permit borrowings that bear interest at specified margins based on the Company's credit rating, over various floating rates selected by the Company.



        The revolving credit agreements contain a covenant that requires specified levels of stockholders' equity. The amount of stockholders' equity in excess of the required levels was $434.2$425.8 million as of March 28,June 27, 2004.

        The Company's 10-year notes, aggregating $250.0 million and bearing interest at an annual rate of 7.625%, mature on March 15, 2005. As a result, the Company reclassified these notes from "Long-term debt" to "Current portion of long-term debt and capital lease obligations" in the Company's Condensed Consolidated Balance Sheets asin the first quarter of March 28, 2004.

        "Interest expense, net" in the Company's Condensed Consolidated Statements of Income was as follows:

 
 Three Months Ended
 Six Months Ended
 
(In thousands)

 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
Interest expense $12,281 $13,236 $24,438 $26,135 
Interest income  (253) (466) (597) (932)
Capitalized interest  (1,675) (1,286) (3,168) (1,917)
  
 
 
 
 
Interest expense, net $10,353 $11,484 $20,673 $23,286 
  
 
 
 
 

5.6.     Common Stock

        During the first quarterhalf of 2004, the Company repurchased 1.42.6 million shares of its Class A Common Stock at a cost of $62.7$117.3 million. The average price of these repurchases was $45.47$45.38 per share. From March 29,June 28, 2004, through AprilJuly 30, 2004, the Company repurchased 0.41.5 million shares at a cost of $18.6$62.5 million. See Note 12 for additional information about the Company's stock repurchase program.

        On April 13, 2004, the Company's Board of Directors (the "Board") declared a $.01 per share increase in the quarterly dividend on the Company's Class A and Class B Common Stock from $.145 per share to $.155 per share effective with the June 2004 dividend.

        On June 17, 2004, the Board declared a dividend of $.155 per share. This represents a $.01 per share increase fromon the most recent quarterly dividend.Company's Class A and B Common Stock. The dividend is payable on June 18,September 17, 2004, to shareholders of record on JuneSeptember 1, 2004. The estimated dividend payable of approximately $23 million is included in "Accounts payable" in the Company's Condensed Consolidated Balance Sheet as of June 27, 2004.


6.7.     Pension and Postretirement Benefits

Pension

        The components of net periodic pension benefits cost of all Company-sponsored pension plans were as follows:

 
 For the Quarters Ended
 
 
 March 28, 2004
 March 30, 2003
 
(Dollars in thousands)

 Qualified
Plans

 Non-
Qualified
Plans

 All Plans
 Qualified
Plans

 Non-
Qualified
Plans

 All Plans
 
Service cost $8,320 $502 $8,822 $6,886 $485 $7,371 
Interest cost  16,051  2,760  18,811  15,113  2,738  17,851 
Expected return on plan assets  (19,073)   (19,073) (16,964)   (16,964)
Amortization of prior service cost  101  64  165  100  78  178 
Recognized actuarial loss  4,144  1,033  5,177  2,060  879  2,939 
  
 
 
 
 
 
 
Net periodic pension cost $9,543 $4,359 $13,902 $7,195 $4,180 $11,375 
  
 
 
 
 
 
 
 
 Three Months Ended
 
 
 June 27, 2004
 June 29, 2003
 
(Dollars in thousands)

 Qualified
Plans

 Non-
Qualified
Plans

 All Plans
 Qualified
Plans

 Non-
Qualified
Plans

 All Plans
 
Service cost $8,320 $502 $8,822 $6,886 $485 $7,371 
Interest cost  16,051  2,760  18,811  15,113  2,738  17,851 
Expected return on plan assets  (19,073)   (19,073) (16,964)   (16,964)
Amortization of prior service cost  101  64  165  100  78  178 
Recognized actuarial loss  4,882  1,033  5,915  2,060  879  2,939 
  
 
 
 
 
 
 
Net periodic pension cost $10,281 $4,359 $14,640 $7,195 $4,180 $11,375 
  
 
 
 
 
 
 
 
 Six Months Ended
 
 
 June 27, 2004
 June 29, 2003
 
(Dollars in thousands)

 Qualified
Plans

 Non-
Qualified
Plans

 All Plans
 Qualified
Plans

 Non-
Qualified
Plans

 All Plans
 
Service cost $16,640 $1,004 $17,644 $13,772 $970 $14,742 
Interest cost  32,102  5,520  37,622  30,226  5,476  35,702 
Expected return on plan assets  (38,146)   (38,146) (33,928)   (33,928)
Amortization of prior service cost  202  128  330  200  156  356 
Recognized actuarial loss  9,026  2,066  11,092  4,120  1,758  5,878 
  
 
 
 
 
 
 
Net periodic pension cost $19,824 $8,718 $28,542 $14,390 $8,360 $22,750 
  
 
 
 
 
 
 

        The Company did not make any contributions to its pension plans in the first quarterhalf of 2004 and it will determine the level of contributions to be made if any,this year during the thirdfourth quarter of 2004. The Company does not pre-fund its non-qualified pension plans, but rather pays for benefits as required.required from ongoing cash flows.

Postretirement Benefits

        The components of net periodic postretirement benefits cost were as follows:


 For the Quarters Ended
  Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

  June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
Service cost $1,540 $2,508  $1,540 $2,508 $3,080 $5,016 
Interest cost 2,885 3,987  2,885 3,987 5,770 7,974 
Amortization of prior service cost (1,351) (745) (1,351) (745) (2,702) (1,490)
Recognized actuarial loss 395 1,029  395 1,029 790 2,058 
 
 
  
 
 
 
 
Net periodic postretirement cost $3,469 $6,779  $3,469 $6,779 $6,938 $13,558 
 
 
  
 
 
 
 

        Postretirement costs decreased in the second quarter and first half of 2004 compared to the second quarter and first half of 2003 primarily due to the plan amendments and the Medicare reform discussed in Note 2 and below.



        On January 1, 2004, amendments to the Company's postretirement plan became effective. These amendments included changes to the age and service eligibility requirements and an increase in deductibles, co-payments, and out-of-pocket maximum payments related to the medical and prescription drug plans. The amendments resulted in a reduction of the Company's Accumulated Postretirement Benefit Obligation ("APBO") of $44.2 million that was treated as a negative prior service cost, which is being amortized starting in 2004. Additionally, the Company began recognizing the effects of Financial Accounting Standards Board Staff Position 106-1, Accounting and Disclosure Requirements Related toFSP 106-2 (see Note 2).

        The estimated effect of the Medicare Prescription Drug, Improvement and Modernization Act resulted in a decrease in the Company's APBO of 2003 (the "Act")$32.7 million. The decrease in December 2003. The Act introduced a prescription drug benefit under Medicare Part D as wellthe APBO was treated as a federal subsidy to sponsors of retiree health benefit plans that provide a benefit thatgain, which is at least actuarially equivalent to Medicare Part D. Postretirement benefitsbeing amortized starting in 2004. The table below details the reduction in net periodic postretirement cost decreasedby component in the second quarter and first quarterhalf of 2004 compared withas a result of the first quarter of 2003 primarily due to the plan amendments and the Medicare reform discussed above.Act.

 
 Three Months Ended
 Six Months Ended
(Dollars in thousands)

 June 27,
2004

 June 27,
2004

Service cost $323 $646
Interest cost  504  1,008
Amortization of prior service cost    
Recognized actuarial gain  490  980
  
 
Net periodic postretirement cost $1,317 $2,634
  
 

7.8.     Other Income

        "Other income" in the Company's Condensed Consolidated Statements of Income includes the following items:


 For the Quarters Ended
 Three Months Ended
 Six Months Ended
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

Non-compete agreement $1,250 $1,250 $1,250 $1,250 $2,500 $2,500

Advertising credit(a)

 


 

8,277
Advertising credit(a)    8,277
 
 
 
 
 
 
Other income $1,250 $9,527 $1,250 $1,250 $2,500 $10,777
 
 
 
 
 
 


8.9.     Earnings Per Share

        Basic and diluted earnings per share have been computed as follows:



 For the Quarters Ended

 Three Months Ended
 Six Months Ended
(Dollars in thousands, except per share data)

(Dollars in thousands, except per share data)

 March 28,
2004

 March 30,
2003

(Dollars in thousands, except per share data)

 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

Basic earnings per share computation:Basic earnings per share computation:    Basic earnings per share computation:        
NumeratorNumerator    Numerator        
Net income $58,435 $68,846Net income $75,677 $72,829 $134,112 $141,675
 
 
 
 
 
 
DenominatorDenominator    Denominator        
Average number of common shares outstanding 149,925 151,845Average number of common shares outstanding 148,626 150,730 149,275 151,287
 
 
 
 
 
 
Basic earnings per shareBasic earnings per share $.39 $.45Basic earnings per share $.51 $.48 $.90 $.94
 
 
 
 
 
 
Diluted earnings per share computation:Diluted earnings per share computation:    Diluted earnings per share computation:        
NumeratorNumerator    Numerator        
Net income $58,435 $68,846Net income $75,677 $72,829 $134,112 $141,675
 
 
 
 
 
 
DenominatorDenominator    Denominator        
Average number of common shares outstanding 149,925 151,845Average number of common shares outstanding 148,626 150,730 149,275 151,287
Incremental shares for assumed exercise of securities 2,535 2,753Incremental shares for assumed exercise of securities 2,276 2,673 2,398 2,714
 
 
 
 
 
 
Total sharesTotal shares 152,460 154,598Total shares 150,902 153,403 151,673 154,001
 
 
 
 
 
 
Diluted earnings per shareDiluted earnings per share $.38 $.45Diluted earnings per share $.50 $.47 $.88 $.92
 
 
 
 
 
 

        The difference between basic and diluted shares is primarily due to the assumed exercise of stock options included in the diluted earnings per share computation.

        Stock options with exercise prices that exceeded the fair market value of the Company's common stock had an antidilutive effect and, therefore, were excluded from the computation of diluted earnings per share. Approximately 8 million stock options with exercise prices ranging from $46.34 to $48.54 were excluded from the computation in the second quarter of 2004 and approximately 5 million stock options with exercise prices ranging from $46.40 to $48.54 were excluded from the computation in the first quartersix months of 2004 and 2003. These2004. Approximately 5 million stock options hadwith exercise prices ranging from $47.28$46.40 to $48.54$47.25 were excluded from the computation in the second quarter and first quarter of 2004 and $46.68 to $47.28 in the first quartersix months of 2003.


9.10.   Comprehensive Income

        Comprehensive income for the Company includes foreign currency translation adjustments, unrealized gains/(losses) on cash-flow hedges as well asand net income reported in the Company's Condensed Consolidated Statements of Income.

        Comprehensive income was as follows:

 
 Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
Net income $75,677 $72,829 $134,112 $141,675 
Foreign currency translation adjustments  (162) 6,095  (2,429) 9,146 
Change in unrealized derivative losses on cash-flow hedges  137  469  776  934 
Income tax benefit/(charge)  87  (2,330) (108) (3,592)
  
 
 
 
 
Comprehensive income $75,739 $77,063 $132,351 $148,163 
  
 
 
 
 
 
 For the Quarters Ended
 
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 
Net income $58,435 $68,846 
Foreign currency translation adjustments  (2,267) 3,051 
Change in unrealized derivative losses on cash-flow hedges  639  465 
Income tax charge  (195) (1,262)
  
 
 
Comprehensive income $56,612 $71,100 
  
 
 

        The "Accumulated other comprehensive loss, net of income taxes" in the Company's Condensed Consolidated Balance Sheets was net of a deferred income tax assetbenefit of $68.4$68.5 million as of March 28,June 27, 2004, and $68.6 million as of December 28, 2003.

10.11.   Segment Statements of Income

        The Company's reportable segments consist of its Newspaper Group, Broadcast Group and New York Times Digital ("NYTD"), its digital and business information group. These segments are evaluated regularly by key management in assessing performance and allocating resources.



 For the Quarters Ended
 
 Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 (Dollars in thousands)

 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
REVENUESREVENUES     REVENUES         
Newspapers $744,812 $735,051 Newspapers $758,468 $745,915 $1,503,280 $1,480,966 
Broadcast 35,055 32,205 Broadcast 41,971 37,926 77,026 70,131 
NYTD 25,737 19,625 NYTD 27,396 21,626 53,133 41,251 
Intersegment eliminations(a) (3,660) (3,141)Intersegment eliminations(a) (3,904) (3,576) (7,564) (6,717)
 
 
   
 
 
 
 
 Total $801,944 $783,740  Total $823,931 $801,891 $1,625,875 $1,585,631 
 
 
   
 
 
 
 
OPERATING PROFIT (LOSS)OPERATING PROFIT (LOSS)     OPERATING PROFIT (LOSS)         
Newspapers(b) $104,946 $125,600 Newspapers(b) $123,431 $126,575 $228,377 $252,175 
Broadcast 6,445 4,962 Broadcast 12,939 10,289 19,384 15,251 
NYTD 8,391 3,196 NYTD 8,934 4,285 17,325 7,481 
Corporate (10,620) (11,463)Corporate (13,547) (11,092) (24,167) (22,555)
 
 
   
 
 
 
 
 Total 109,162 122,295  Total 131,757 130,057 240,919 252,352 

Net loss from joint ventures

 

3,293

 

6,212

 
Interest expense—net 10,320 11,802 

Net income/(loss) from joint ventures

Net income/(loss) from joint ventures

 

2,734

 

694

 

(559

)

 

(5,518

)
Interest expense, netInterest expense, net 10,353 11,484 20,673 23,286 
Other incomeOther income 1,250 9,527 Other income 1,250 1,250 2,500 10,777 
 
 
   
 
 
 
 
Income before income taxes and minority interestIncome before income taxes and minority interest 96,799 113,808 Income before income taxes and minority interest 125,388 120,517 222,187 234,325 
Income taxesIncome taxes 38,239 44,946 Income taxes 49,538 47,606 87,777 92,552 
Minority interest in income of subsidiariesMinority interest in income of subsidiaries 125 16 Minority interest in income of subsidiaries 173 82 298 98 
 
 
   
 
 
 
 
Net IncomeNet Income $58,435 $68,846 Net Income $75,677 $72,829 $134,112 $141,675 
 
 
   
 
 
 
 

        See Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q for more information on the Company's reportable segments.


11.12.   Contingent Liabilities

New Headquarters Building

        AThe Company is in the process of developing a 1.54 million square foot condominium office building (the "Building") in New York City that will serve as its new headquarters. In December 2001, a wholly-owned subsidiary of the Company ("NYT"), and FC Lion LLC (a partnership between an affiliate of the Forest City Ratner Companies and an affiliate of ING Real Estate, "FC") arebecame the



sole members of The New York Times Building LLC (the "Building Partnership"), a partnership established for the purpose of constructing the Company's new headquarters.Building.

        The Building Partnership is a New York limited liability company and a separate and distinct legal entity from the Company. NYT's and FC's percentage interests in the Building Partnership are approximately 58% and 42%, respectively,. Due to the Company's majority interest, 100% of the financial position and results of operations of the Building Partnership are consolidated with those of the Company, and FC's minority interest in the Building Partnership is included in "Minority Interest" in the Company's Condensed Consolidated Balance Sheets as of MarchJune 27, 2004 and December 28, 2004.2003 and in "Minority interest in net income of subsidiaries" in the Condensed Consolidated Statements of Income for the periods ended June 27, 2004 and June 29, 2003.

        In December 2001, the Building Partnership entered into a land acquisition and development agreement ("LADA") for the Building site with a New York State agency, which subsequently acquired title to the site through a condemnation proceeding. Pursuant to the LADA, the Building Partnership was required to fund all costs of acquiring the Building site, including the purchase price of approximately $86 million, and certain additional amounts ("excess site acquisition costs") to be paid in connection with the condemnation proceeding. NYT and FC were required to post letters of credit for these acquisition costs. As of June 27, 2004, approximately $19 million remained undrawn on a letter of credit posted by the Company on behalf of NYT and approximately $14 million remained undrawn on a letter of credit posted by Forest City Enterprises, Inc. ("FCE") on behalf of FC.

        On September 24, 2003, the Building Partnership obtained vacant possession of the Building site, and the New York State agency leased the site to the Building Partnership under a 99-year lease (the "Ground Lease"). Under the terms of the Ground Lease, no fixed rent is payable, but the Building Partnership is required to make payments in lieu of real estate taxes ("PILOT"), pay percentage (profit) rent with respect to retail portions of the Building, and make certain other payments over the term of the Ground Lease. The Building Partnership which is a consolidated subsidiaryreceives credits for its excess site acquisition costs against 85% of the PILOT payments. The Ground Lease gives the Building Partnership or its designee the option to purchase the Building site after 29 years for nominal consideration.

        The Ground Lease requires the Building Partnership to commence construction of the Building no later than September 24, 2004 and to complete construction within 36 months following construction commencement, subject to certain extensions. The Company and FCE have guaranteed the Building Partnership's obligation to complete construction of the Building in accordance with the Ground Lease.

        Pursuant to the Operating Agreement of the Building Partnership, dated December 12, 2001, and amended June 25, 2004 (the "Operating Agreement"), the funds for construction of the Building are to be provided through a construction loan and capital contributions of NYT and FC. On June 25, 2004, the Building Partnership closed a construction loan with GMAC Commercial Mortgage Corporation (the "construction lender"), which will provide a loan of up to $320 million (the "construction loan"), secured by the Building, for construction of the Building's core and shell as well as other development costs. NYT has elected not to borrow any portion of its share of the total costs of the Building through this construction loan and, instead, has made and will make capital contributions to the Building Partnership for its share of Building costs. The Company will fund such contributions from internally generated cash, including the sale proceeds of its existing headquarters, and external financing sources. FC's share of the total costs of the Building will be funded through capital contributions and the construction loan.

        Under the terms of the Operating Agreement and the construction loan, NYT is required to fund all of its construction equity related to construction of the core and shell as well as other devolopment costs prior to the funding of acquiring the building site.construction loan. As of June 27, 2004, NYT's remaining construction equity requirement related to the construction of the core and shell as well as other development costs was approximately $218 million. This requirement has been guaranteed by the Company and is backed



by a standby letter of credit of $206 million, the amount of which will decline on a monthly basis as capital contributions are made. Because NYT is funding its construction equity first, a portion of those funds will be used to fund FC's share of Building costs (the "FC funded share") prior to commencement of funding of the construction loan. The FC funded share will bear interest at the construction loan rate and will be repaid to NYT out of construction loan draws. FC's interest in the Building Partnership had posted lettershas been pledged to NYT to secure repayment of credit totaling $134.0 millionthe FC funded share.

        The construction loan, made through a building loan agreement and a project loan agreement, bears interest at an initial annual rate of LIBOR plus 265 basis points and will mature on July 1, 2008, subject to the Building Partnership's right to extend the maturity date for two six-month periods upon the satisfaction of certain terms and conditions. FCE has provided the construction lender with a guaranty of completion with respect to the Building conditioned upon the availability of the construction loan and NYT construction capital contributions. In addition, the Company has provided the construction lender with a guaranty of NYT's obligation to complete the interior construction of the NYT portions of the Building.

        Upon substantial completion of the Building's core and shell, the Building will be converted to a leasehold condominium, and the Building Partnership will be dissolved. At such acquisition costs.time, ownership of the leasehold condominium units will transfer from the Building Partnership to NYT postedand FC.

        Under the terms of the Operating Agreement and the construction loan, the lien of the construction loan will be released from the NYT condominium units upon substantial completion of the Building's core and shell but will remain upon the FC condominium units until the construction loan is repaid in full. If FC is unable to obtain other financing to repay the construction loan upon substantial completion of the Building's core and shell, the Company is required to make a letterloan (the "extension loan") to FC of creditapproximately $119.5 million to pay a portion of the construction loan balance. The extension loan will have a maturity date of five years following substantial completion of the core and shell of the Building, bear interest at 1% per annum in excess of the construction loan rate, and be secured by a second mortgage lien on the FC condominium units.

        In January 2004, the Building Partnership entered into a construction management agreement with AMEC Construction Management, Inc., a construction manager, for the construction of the core and shell of the Building at a guaranteed maximum price of approximately $353 million.

        Capital expenditures in connection with the Building, including both core and shell and interior construction costs, are detailed in the amount of $77.2table below.

Capital Expenditures

(Dollars in millions)

 NYT
 FC
 Total
2001–2003 $96 $88 $184
2004 $65–$75 $32–$42 (a)$97–$117
Beyond 2004 (b)$415–$435 $272–$292 $687–$727
  
 
 
Total (c)$576–$606 $392–$422 $968–$1,028
  
 
 


        Capital expenditures attributable to NYT's interest in the Building are included in "Property, plant and equipment" and capital expenditures attributable to FC's interest in the Building are included in "Miscellaneous assets" in the Company's Condensed Consolidated Balance Sheets as of MarchJune 27, 2004 and December 28, 2004, for its share of these costs.2003.

Third-Party Guarantees

        The Company has outstanding guarantees on behalf of a third party that provides circulation customer service, telemarketing and home-delivery services for The New York Times ("The Times") and The Boston Globe (the "circulation servicer"), and on behalf of three third parties that provide printing and distribution services for The Times's National Edition (the "National Edition printers"). In accordance with accounting principles generally accepted in the United States of America, the contingent obligations related to these guarantees are not reflected in the Company's Condensed Consolidated Balance Sheets as of March 28,June 27, 2004, and December 28, 2003.

        The Company has guaranteed the payments under the circulation servicer's credit facility and any miscellaneous costs related to any default thereunder (the "credit facility guarantee"). The total amount of the credit facility guarantee was $20 million as of March 28,June 27, 2004. The amount outstanding under the credit facility, which expires in April 2005 and is renewable, was approximately $18 million as of March 28,June 27, 2004. The credit facility guarantee was made by the Company to allow the circulation servicer to obtain more favorable financing terms. The circulation servicer has agreed to reimburse the Company for any amounts the Company pays under the credit facility guarantee and has granted the Company a security interest in all of its assets to secure repayment of any amounts the Company pays under the credit facility guarantee.

        In addition, the Company has guaranteed the payments of four property leases of the circulation servicer and any miscellaneous costs related to any default thereunder (the "property lease guarantees"). The total amount of the property lease guarantees was approximately $6$5 million as of March 28,June 27, 2004. The property leases expire at various dates through May 2009. The property lease guarantees were made by the Company to allow the circulation servicer to obtain space to conduct business.

        The Company would have to perform the obligations of the circulation servicer under the credit facility and property lease guarantees if the circulation servicer defaulted under the terms of its credit facility or lease agreements.


        The Company has guaranteed a portion of the payments of equipment leases of two of the National Edition printers and any miscellaneous costs related to any default thereunder (the "equipment lease guarantees"). The total amount of the equipment lease guarantees was approximately $9 million as of March 28,June 27, 2004. OneThe Company was released from one equipment lease guarantee ($5 million) subsequent to the second quarter of 2004, because the remaining amount due under the equipment leaseslease was paid. The remaining equipment lease expires in March 2011 but is cancelable in March 2006, and the other equipment lease expires in February 2011 but is cancelable in February 2006. The Company made the equipment lease guarantees to allow the National Edition printers to obtain a lower cost of borrowing.

        The Company has also guaranteed certain debt of one of the three National Edition printers and any miscellaneous costs related to any default thereunder (the "debt guarantee"). The total amount of the debt guarantee was approximately $8$7 million as of March 28,June 27, 2004. The debt guarantee, which expires in May 2012, was made by the Company to allow the National Edition printer to obtain a lower cost of borrowing.

        The Company has obtained a secured guarantee from a related party of the National Edition printer to repay the Company for any amounts that it would pay under the debt guarantee. In addition,



the Company has a security interest in the equipment that was purchased by the National Edition printer with the funds it received from its debt issuance, as well as other equipment and real property.

        The Company would have to perform the obligations of the National Edition printers under the equipment and debt guarantees if the National Edition printers defaulted under the terms of their equipment leases or debt agreements.

Other

        The Company also has letters of credit of approximately $34 million, which are required by insurance companies, to provide support for the Company's workers' compensation liability. The workers' compensation liability is included in the Company's Condensed Consolidated Balance SheetsSheet as of March 28,June 27, 2004.

        There are various legal actions that have arisen in the ordinary course of business and are now pending against the Company. These actions are generally 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 these actions with legal counsel to the Company that the ultimate liability that might result from these actions would not have a material adverse effect on the Company's Condensed Consolidated Financial Statements.

12.   Subsequent Events

        On April 13, 2004, the Company's Board of Directors authorized an additional $400.0 million of repurchase expenditures under the Company's stock repurchase program. As of April 30, 2004, the remaining amount of the aggregate repurchase authorization from the Company's Board of Directors was approximately $414 million.


Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW

Our Business

        The core purpose of The New York Times Company (the "Company") is to enhance society by creating, collecting and distributing high-quality news, information and entertainment. In order to fulfill its mission, the Company must create value for all of the constituents it serves, including its customers, employees and stockholders and the communities in which it operates. The Company creates value by executing its long-term strategy, which is to operate leading news and advertising media in the national/global market and in each of the local markets it serves. In addition, the Company enhances value by controlling costs and implementing process improvement initiatives. The Company continues to execute its strategy to grow geographically and across platforms.

        The Company's long-term strategy is pursued with a portfolio of properties that serves its customers in print, in broadcast and online. InFor the first quartersix months of 2004, the Newspaper Group contributed 93%92% of the Company's total revenues, the Broadcast Group accounted for 4%5% and New York Times Digital ("NYTD"), the Company's digital and business information group, accounted for 3%. Advertising revenues cause the Company's quarterly consolidated results to vary by season. Second-quarter and fourth-quarter advertising volume is traditionally higher than first-quarter and third-quarter volume since economic activity tends to be lower during the winter and summer. The business model of each of the Company's segments is summarized below.

        Newspaper Group (consisting(consisting of The New York Times Newspaper Group, which includes The New York Times ("The Times") and the International Herald Tribune (the "IHT"), the New England Newspaper Group, which includes The Boston Globe (the "Globe") and the Worcester Telegram & Gazette, and the Regional Newspaper Group, consisting of 15 other newspapers). The Newspaper Group derives the majority of its revenues by offering advertisers a means to promote their brands, products and services to the buying public. InFor the first quartersix months of 2004, approximately 64% of the Newspaper Group's revenues was from advertising. The Newspaper Group also derives revenues by offering the public a source of timely news and editorial materials, as well as information on products sold by advertisers. InFor the first quartersix months of 2004, approximately 30%29% of the Newspaper Group's revenues was from circulation. Other revenues, which makes up the remainder of revenues, primarily consists of revenues from wholesale delivery operations, news services and direct marketing. The Newspaper Group's main operating expenses are employee-related costs, which include compensation and benefits, and raw materials, primarily newsprint.

        Broadcast Group (consisting(consisting of eight network-affiliated television stations and two radio stations). The Broadcast Group derives almost all of its revenues (95% infor the first quartersix months of 2004) from the sale of commercial time to advertisers. The Broadcast Group's main operating expenses are employee-related costs and programming costs.


        NYTD (consisting(consisting of NYTimes.com, Boston.com and Digital Archive Distribution ("DAD"), which licenses archive databases of The Times and the Globe to electronic information providers). NYTD derives most of its revenues from the sale of advertisements. InFor the first quartersix months of 2004, advertising revenues accounted for 75%77% of NYTD's total revenues. Display advertisements accounted for approximately 59% of NYTD's advertising revenues and classified ads, such as help-wanted, real estate and automotive listings, accounted for approximately 41%. NYTD benefits from the exclusive online distribution rights for the classified listings of The Times and the Globe. Access to NYTD's Web sites is offered without subscription fees. Non-advertising revenues infor the first quartersix months of 2004, which accounted for 25%23% of revenues, were primarily from DAD. NYTD's main operating expenses are employee-related costs and royalties paid to The Times and the Globe for content.



        The Company's long-term strategy is also pursued through its 50% interest in the Discovery Times Channel, a digital cable television channel, and its interest of approximately 17% in New England Sports Ventures, which owns the Boston Red Sox, Fenway Park and 80% of the New England Sports Network, a regional cable sports network. The Company also has investments in a Canadian newsprint company, Donohue Malbaie Inc., and a partnership, Madison Paper Industries, operating a supercalendared paper mill in Maine.

2004 First-Quarter Highlights



Trends and Uncertainties

        The Company's Annual Report on Form 10-K for the year ended December 28, 2003, details the Company's trends and uncertainties. As of March 28,June 27, 2004, there have been no material changes in the Company's trends and uncertainties from December 28, 2003.

2004 Guidance

        Earnings comparisons are easier for the balance of 2004 than they were in the first quarter and the Company is encouraged by recent improvements in the advertising market. Although the Company is optimistic about the outlook for advertising, at this time the Company is not changing its earnings guidance for 2004, which it originally issued on December 9, 2003. The Company will continue to monitor the advertising market and provide updated guidance in the second quarter of 2004.        The key financial measures discussed in the table below are in accordance with accounting principles generally accepted in the United States of America ("GAAP").

        A summary of guidance on key financial measures for 2004, on a GAAP basis, is shown below.

Item

 2004 Guidance

Total Company Advertising Revenues(a) Growth rate expected to be in the low- to mid-single digits
Newspaper Group Circulation Revenues Growth rate expected to be in the low-single digits
Newsprint Cost Per Ton Growth rate expected to be in the low teens
Total Company Expenses(a) Growth rate expected to be in the low- to mid-single digits
Depreciation & Amortization $145 to $150 million
Capital Expenditures(b)Expenditures(a) $220 to $250 million
Net Loss from Joint Ventures Breakeven to a loss of $5 million
Interest Expense $4742 to $52$46 million
Tax Rate 39.5%
Diluted EarningEarnings Per Share Growth Growth rate expected to be in the low- to mid-single digits over 2003 EPS of $1.98


RESULTS OF OPERATIONS

Overview

        The following table presents the Company's consolidated financial results for the second quarter and first quarterhalf of 2004 and 2003.



 For the Quarters Ended
 
 Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
 (Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
 
REVENUESREVENUES       REVENUES                 
AdvertisingAdvertising $529,027 $513,154 3.1 Advertising $551,511 $530,564 3.9 $1,080,538 $1,043,718 3.5 
CirculationCirculation 220,243 221,001 (0.3)Circulation  220,156  221,304 (0.5) 440,399  442,305 (0.4)
OtherOther 52,674 49,585 6.2 Other  52,264  50,023 4.5  104,938  99,608 5.4 
 
 
 
   
 
 
 
 
 
 
TotalTotal 801,944 783,740 2.3 Total  823,931  801,891 2.7  1,625,875  1,585,631 2.5 
 
 
 
   
 
 
 
 
 
 
COSTS AND EXPENSESCOSTS AND EXPENSES       
COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Production costsProduction costs       Production costs                 
Raw materials 70,513 66,221 6.5 Raw materials  71,594  67,534 6.0  142,107  133,755 6.2 
Wages and benefits 174,650 167,847 4.1 Wages and benefits  170,972  167,672 2.0  345,622  335,519 3.0 
Other 122,316 117,390 4.2 Other  122,893  115,840 6.1  245,209  233,230 5.1 
 
 
 
   
 
 
 
 
 
 
TotalTotal 367,479 351,458 4.6 Total  365,459  351,046 4.1  732,938  702,504 4.3 
Selling, general and administrative expensesSelling, general and administrative expenses 325,303 309,987 4.9 Selling, general and administrative expenses  326,715  320,788 1.8  652,018  630,775 3.4 
 
 
 
   
 
 
 
 
 
 
TotalTotal 692,782 661,445 4.7 Total  692,174  671,834 3.0  1,384,956  1,333,279 3.9 
 
 
 
   
 
 
 
 
 
 
OPERATING PROFITOPERATING PROFIT 109,162 122,295 (10.7)
OPERATING PROFIT

 

 

131,757

 

 

130,057

 

1.3

 

 

240,919

 

 

252,352

 

(4.5

)
Net loss from joint ventures 3,293 6,212 (47.0)
Net income/(loss) from joint venturesNet income/(loss) from joint ventures  2,734  694 *  (559) (5,518)(89.9)
Interest expense, netInterest expense, net 10,320 11,802 (12.6)Interest expense, net  10,353  11,484 (9.8) 20,673  23,286 (11.2)
Other incomeOther income 1,250 9,527 (86.9)Other income  1,250  1,250 0.0  2,500  10,777 (76.8)
 
 
 
   
 
 
 
 
 
 
Income before income taxes and minority interestIncome before income taxes and minority interest 96,799 113,808 (14.9)Income before income taxes and minority interest  125,388  120,517 4.0  222,187  234,325 (5.2)
Income taxesIncome taxes 38,239 44,946 (14.9)Income taxes  49,538  47,606 4.1  87,777  92,552 (5.2)
Minority interest in net income of subsidiariesMinority interest in net income of subsidiaries 125 16 * Minority interest in net income of subsidiaries  173  82 *  298  98 * 
 
 
 
   
 
 
 
 
 
 
NET INCOMENET INCOME $58,435 $68,846 (15.1)NET INCOME $75,677 $72,829 3.9 $134,112 $141,675 (5.3)
 
 
 
   
 
 
 
 
 
 


Revenues

        Revenues, for the second quarter and first quarterhalf of 2004 and 2003, by reportable segment and for the Company as a whole, were as follows:



 For the Quarters Ended

 Three Months Ended
 Six Months Ended
(Dollars in thousands)

(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
(Dollars in thousands)

 June 27,
2004

 June 29,
2003

 %
Change

 June 27,
2004

 June 29,
2003

 %
Change

Revenues:Revenues:      Revenues:                
Newspapers $744,812 $735,051 1.3Newspapers $758,468 $745,915 1.7 $1,503,280 $1,480,966 1.5
Broadcast 35,055 32,205 8.8Broadcast  41,971  37,926 10.7  77,026  70,131 9.8
NYTD 25,737 19,625 31.1NYTD  27,396  21,626 26.7  53,133  41,251 28.8
Intersegment eliminations (a) (3,660) (3,141)16.5Intersegment eliminations(a)  (3,904) (3,576)9.2  (7,564) (6,717)12.6
 
 
 
 
 
 
 
 
 
TotalTotal $801,944 $783,740 2.3Total $823,931 $801,891 2.7 $1,625,875 $1,585,631 2.5
 
 
 
 
 
 
 
 
 

Newspaper Group


Newspaper Group::    Advertising, circulation and other revenues by division of the Newspaper Group and for the Group as a whole were as follows:

 
 Three Months Ended
  
 Six Months Ended
  
 
(Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
 
The New York Times Newspaper Group                 
Advertising $287,690 $281,215 2.3 $570,833 $566,165 0.8 
Circulation  153,158  156,764 (2.3) 305,501  312,242 (2.2)
Other  32,995  32,981 0.0  66,567  64,858 2.6 
  
 
 
 
 
 
 
Total $473,843 $470,960 0.6 $942,901 $943,265 0.0 
  
 
 
 
 
 
 

New England Newspaper Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Advertising $116,234 $116,013 0.2 $225,220 $220,295 2.2 
Circulation  45,646  42,949 6.3  90,382  85,077 6.2 
Other  9,908  8,056 23.0  18,881  16,262 16.1 
  
 
 
 
 
 
 
Total $171,788 $167,018 2.9 $334,483 $321,634 4.0 
  
 
 
 
 
 
 

Regional Newspaper Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Advertising $86,916 $82,656 5.2 $172,041 $163,645 5.1 
Circulation  21,352  21,591 (1.1) 44,516  44,986 (1.0)
Other  4,569  3,690 23.8  9,339  7,436 25.6 
  
 
 
 
 
 
 
Total $112,837 $107,937 4.5 $225,896 $216,067 4.5 
  
 
 
 
 
 
 

Total Newspaper Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Advertising $490,840 $479,884 2.3 $968,094 $950,105 1.9 
Circulation  220,156  221,304 (0.5) 440,399  442,305 (0.4)
Other  47,472  44,727 6.1  94,787  88,556 7.0 
  
 
 
 
 
 
 
Total $758,468 $745,915 1.7 $1,503,280 $1,480,966 1.5 
  
 
 
 
 
 
 
 
 For the Quarters Ended
 
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
 
The New York Times Newspaper Group         
Advertising $283,143 $284,950 (0.6)
Circulation  152,343  155,478 (2.0)
Other  33,572  31,877 5.3 
  
 
 
 
Total $469,058 $472,305 (0.7)
  
 
 
 
New England Newspaper Group         
Advertising $108,986 $104,282 4.5 
Circulation  44,736  42,128 6.2 
Other  8,973  8,206 9.3 
  
 
 
 
Total $162,695 $154,616 5.2 
  
 
 
 
Regional Newspaper Group         
Advertising $85,125 $80,989 5.1 
Circulation  23,164  23,395 (1.0)
Other  4,770  3,746 27.3 
  
 
 
 
Total $113,059 $108,130 4.6 
  
 
 
 
Total Newspaper Group         
Advertising $477,254 $470,221 1.5 
Circulation  220,243  221,001 (0.3)
Other  47,315  43,829 8.0 
  
 
 
 
Total $744,812 $735,051 1.3 
  
 
 
 

Advertising Revenues

        Total Newspaper Group advertisingAdvertising revenues increased 1.5% in the second quarter and first quarterhalf of 2004 compared with the second quarter and first quarterhalf of 2003, primarily due to higher advertising rates. AdvertisingTotal advertising volume for the Newspaper Group in the second quarter and first half of 2004 remained flat.

        Advertising revenues at The New York Times Newspaper Group were higher in the second quarter and first six months of 2004 compared with the second quarter and first six months of 2003, mainly due to increases in national and retail advertising revenues partially offset by a decrease in classified advertising revenues.

        The New England Newspaper Group advertising revenues were flat in the second quarter of 2004 remained flat compared with the firstsecond quarter of 2003.2003 primarily due to increased classified advertising revenues offset by lower national and retail advertising revenues. For the first six months of 2004, advertising revenues increased compared with the comparable period last year primarily due to higher classified advertising revenues.

        Advertising revenues at the Regional Newspaper Group were higher in the second quarter and first six months of 2004 compared with the second quarter and first six months of 2003 mainly due to increases in classified advertising revenues and other advertising revenues from its local magazines.

        Advertising volume, for the second quarter and first half of 2004 and 2003, for the Newspaper Group was as follows:


 For the Quarters Ended
  Three Months Ended
 Six Months Ended
 
(Inches in thousands, preprints in thousands of copies)

 March 28, 2004
 March 30, 2003
 % Change
  June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
 
Total Newspaper Group(a)                    
National(a)(b) 618.4 620.2 (0.3) 617.2 633.4 (2.6)1,241.0 1,260.2 (1.5)
Retail 1,542.5 1,584.3 (2.6) 1,596.8 1,625.1 (1.7)3,139.3 3,208.2 (2.1)
Classified 2,388.5 2,404.1 (0.6) 2,586.1 2,571.3 0.6 4,969.3 4,970.8 (0.0)
Part Run/Zoned 523.7 491.8 6.4  590.6 558.0 5.8 1,114.1 1,049.1 6.2 
 
 
 
  
 
 
 
 
 
 
Total 5,073.1 5,100.4 (0.5) 5,390.7 5,387.8 0.1 10,463.7 10,488.3 (0.2)
 
 
 
  
 
 
 
 
 
 
Preprints 654,463 659,819 (0.8) 685,563 678,128 1.1 1,340,025 1,337,947 0.2 
 
 
 
  
 
 
 
 
 
 

Circulation Revenues

        Circulation revenues in the second quarter and first quarterhalf of 2004 were on a par withat approximately the 2003 first quarter. An increasesame levels as they were in the prior-year periods. Higher circulation revenues at the GlobeNew England Newspaper Group, primarily due to price increases, waswere offset by lower circulation revenues at The New York Times dueNewspaper Group. The New York Times Newspaper Group had copy growth in the second quarter of 2004, but circulation revenues decreased approximately 2% as a result of more copies being sold to lower volume compared withschools, universities and hotels, where the 2003 first quarter when the start of the Iraqi war stimulated single-copy growth.rate paid is less than that on newsstands or for home delivery.

        The Times continues to improve retail availability across the nation by increasing the number of markets it serves and by adding to the number of outlets where the paper is sold. This includes



expanding copies being sold to schools and universities, which is part of the Company's strategy to reach the next generation of readers. The Times has also expanded its national


home-delivery availability while improving the quality and levels of its home-delivery circulation base. TheAs of July 30, 2004, the Times is nowwas available for home-deliveryhome delivery in a total of 275289 markets nationwide up from 241 in247 at the firstend of the second quarter of 2003. Additionally, during the firstsecond quarter of 2004, The Times continued to expand the number of ZIP codes in which home-delivery service is available. All of the Company's newspapers continue to make improvements in product delivery and customer service to attract new readers and retain existing ones.

        Broadcast Group:Group:    Broadcast Group revenues rose 8.8%10.7% in the firstsecond quarter of 2004 to $35.1$42.0 million from $32.2$37.9 million in the second quarter of 2003 and increased 9.8% to $77.0 million for the first half of 2004 from $70.1 million in the same period in 2003last year, primarily due to increased political advertising revenues ($2.43.4 million in the firstsecond quarter of 2004 compared with $0.1$1.0 million in the prior year second quarter and $5.7 million for the first quarter)six months of 2004 compared with $1.1 million for the same period last year). Political advertising typically increases each presidential election year.


NYTD: InNYTD:    Revenues for NYTD increased 26.7% to $27.4 million in the firstsecond quarter of 2004 revenues at NYTD increased 31.1% to $25.7 million from $19.6$21.6 million in the 2003 second quarter. For the first half of 2004, revenues for NYTD increased 28.8% to $53.1 million from $41.3 million for the first half of 2003. The increases in revenues for the second quarter and first six months of 2003, as a result of2004 were primarily due to higher advertising revenues resulting from increased volume.

Costs and Expenses

        Costs and expenses for the second quarter and first quarterhalf of 2004 and 2003 were as follows:



 For the Quarters Ended

 Three Months Ended
 Six Months Ended
(Dollars in thousands)

(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
(Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
Production costs:Production costs:      Production costs:                
Raw materials $70,513 $66,221 6.5Raw materials $71,594 $67,534 6.0 $142,107 $133,755 6.2
Wages and benefits 174,650 167,847 4.1Wages and benefits  170,972  167,672 2.0  345,622  335,519 3.0
Other 122,316 117,390 4.2Other  122,893  115,840 6.1  245,209  233,230 5.1
 
 
 
 
 
 
 
 
 
Total production costsTotal production costs 367,479 351,458 4.6Total production costs  365,459  351,046 4.1  732,938  702,504 4.3
Selling, general and administrative expensesSelling, general and administrative expenses 325,303 309,987 4.9Selling, general and administrative expenses  326,715  320,788 1.8  652,018  630,775 3.4
 
 
 
 
 
 
 
 
 
TotalTotal $692,782 $661,445 4.7Total $692,174 $671,834 3.0 $1,384,956 $1,333,279 3.9
 
 
 
 
 
 
 
 
 

        Total production costs increased in the second quarter and first quartersix months of 2004 compared with the first quartercorresponding periods in 2003, mainly because of 2003, primarily due to higher newsprint expense and an increase in compensation and newsprint expense as well as increased costs associated with the Company's investments in The Times's national expansion and the IHT.outside printing costs.

        Newsprint expense rose 6.6%5.9% in the firstsecond quarter of 2004 compared with the 2003 firstsecond quarter, due to an 8.2%a 7.2% increase primarily from higher prices, partially offset by a 1.6%1.3% decrease from lower consumption. For the first six months of 2004, newsprint expense increased 6.3% compared with the first six months of 2003, primarily due to a 7.7% increase from higher prices, partially offset by a 1.4% decrease from lower consumption.

        Selling, general and administrative ("SGA") expenses increased 1.8% in the second quarter and 3.4% for the first six months of 2004 compared with the corresponding periods in 2003. Excluding the reimbursement for printing plant remediation expenses and the charge for the closing of a small job fair business (a net benefit of $9.5 million) in the first quartersix months of 2003, selling, general and administrativeSGA expenses forincreased 1.8% in the first quartersix months of 2004 increased 1.8% compared with the 2003 first quarter. This resulted from increased costs associated with the Company's investments in The Times's national expansionsix months of 2003. These increases were mainly because of higher compensation and the IHT.distribution costs.


        The following table sets forth consolidated costs and expenses infor the second quarter and first quarterhalf of 2004 and 2003, by reportable segment and the Company as a whole. The reasons underlying the quarter-to-quarter



period-to-period changes in each segment's cost and expenses are discussed below under "Operating Profit".



 For the Quarters Ended
 
 Three Months Ended
 Six Months Ended
(Dollars in thousands)

(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
 (Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
Costs and expenses:Costs and expenses:       Costs and expenses:                
Newspapers $639,866 $609,451 5.0 Newspapers $635,037 $619,340 2.5 $1,274,903 $1,228,791 3.8
Broadcast 28,610 27,243 5.0 Broadcast  29,032  27,637 5.0  57,642  54,880 5.0
NYTD 17,346 16,429 5.6 NYTD  18,462  17,341 6.5  35,808  33,770 6.0
Corporate 10,620 11,463 (7.4)Corporate  13,547  11,092 22.1  24,167  22,555 7.1
Intersegment eliminations (a) (3,660) (3,141)16.5 Intersegment eliminations(a)  (3,904) (3,576)9.2  (7,564) (6,717)12.6
 
 
 
   
 
 
 
 
 
TotalTotal $692,782 $661,445 4.7 Total $692,174 $671,834 3.0 $1,384,956 $1,333,279 3.9
 
 
 
   
 
 
 
 
 

Operating Profit

        Consolidated operating profit, in the second quarter and first quarterhalf of 2004 and 2003, by reportable segment and for the Company as a whole, were as follows:



 For the Quarters Ended
 
 Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
 (Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
 
Operating Profit (Loss):Operating Profit (Loss):       Operating Profit (Loss):                 
Newspapers $104,946 $125,600 (16.4)Newspapers $123,431 $126,575 (2.5)$228,377 $252,175 (9.4)
Broadcast 6,445 4,962 29.9 Broadcast  12,939  10,289 25.8  19,384  15,251 27.1 
NYTD 8,391 3,196 162.5 NYTD  8,934  4,285 108.5  17,325  7,481 131.6 
Corporate (10,620) (11,463)(7.4)Corporate  (13,547) (11,092)22.1  (24,167) (22,555)7.1 
 
 
 
   
 
 
 
 
 
 
Operating ProfitOperating Profit $109,162 $122,295 (10.7)Operating Profit $131,757 $130,057 1.3 $240,919 $252,352 (4.5)
 
 
 
   
 
 
 
 
 
 

        Operating profit for the Newspaper Group decreased in the second quarter and first quartersix months of 2004 compared with the 2003 first quarter mainly because of increased costs associated with the Company's investments in The Times's national expansion and the IHT,as higher compensation costsadvertising revenues were more than offset by higher newsprint expense and increased newsprint expense, offset in part by higher revenues.compensation, outside printing and distribution costs. Additionally, the first quartersix months of 2003 includes the $9.5 million net benefit from the items included in the costs and expenses discussed in the "2004 First-Quarter Highlights" section above, which make this quarter'smakes the first half of 2004's comparison less favorable.

        The Broadcast Group's operating profit increased in the second quarter and first quartersix months of 2004 compared with the first quarter of 2003 because of higher political advertising revenues resulting from the election cycle.

        NYTD's operating profit more than doubled to $8.4 million (its highest to date),in the second quarter and first six months of 2004 primarily due to higher advertising revenues resulting from increased volume.

Non-operating Items

Joint Ventures

        The Company recorded lossesincome from joint ventures of $3.3$2.7 million in the firstsecond quarter of 2004 and $6.2a loss of $0.6 million for the first six months of 2004 compared with income from joint ventures of $0.7 million in the first quarter of 2003. This decrease compared with the firstsecond quarter of 2003 and a loss of $5.5 million for the first six months of 2003. The increase in income in the second quarter and decrease in losses for the first six months of 2004 resulted primarily from better performancemore favorable results at most of the properties in which the Company has equity interests.



Interest Expense, Net

        In"Interest expense, net" in the Company's Condensed Consolidated Statements of Income was as follows:

 
 Three Months Ended
 Six Months Ended
 
(In thousands)

 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
Interest expense $12,281 $13,236 $24,438 $26,135 
Interest income  (253) (466) (597) (932)
Capitalized interest  (1,675) (1,286) (3,168) (1,917)
  
 
 
 
 
Interest expense, net $10,353 $11,484 $20,673 $23,286 
  
 
 
 
 

        "Interest expense, net" decreased in the second quarter and first quartersix months of 2004 interest expense, net, decreased 12.6% to $10.3 million from $11.8 million incompared with the first quarter ofcomparable 2003 periods mainly due to lower levels of debt outstanding and higher levels of capitalized interest.interest related to the Company's new headquarters (see Note 12 of the Notes to the Condensed Consolidated Financial Statements).


Other Income

        "Other income" in the Company's Condensed Consolidated Statements of Income were as follows:includes the following items:


 For the Quarters Ended
 Three Months Ended
 Six Months Ended
(Dollars in thousands)

 March 28, 2004
 March 30, 2003
 June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

Non-compete agreement $1,250 $1,250 $1,250 $1,250 $2,500 $2,500
Advertising credit(a)  8,277
Advertising credit(a)    8,277
 
 
 
 
 
 
Other income $1,250 $9,527 $1,250 $1,250 $2,500 $10,777
 
 
 
 
 
 

EBITDA

        The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP financial measure, is a useful metric for evaluating its financial performance because of its focus on the Company's results from operations before depreciation and amortization.

        EBITDA is a common alternative measure of performance used by investors, financial analysts and rating agencies. These groups use EBITDA, along with other measures, to estimate the value of a company and evaluate a company's ability to meet its debt service requirements. For comparability, the Company's EBITDA in the first quarter of 2003 has been restated to conform with the 2004 presentation. The EBITDA presented may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to other financial measures determined under GAAP.



        The Company's EBITDA, as well as a reconciliation of EBITDA to net income in the second quarter and first quarterhalf of 2004 and 2003, is provided below.


 For the Quarters Ended
  Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

  June 27,
2004

 June 29,
2003

 June 27,
2004

 June 29,
2003

 
EBITDA $143,768 $163,126  $172,520 $167,640 $316,288 $330,766 
Depreciation and amortization (36,861) (37,529) (37,080) (35,778) (73,941) (73,307)
Interest expense, net (10,320) (11,802) (10,353) (11,484) (20,673) (23,286)
Income taxes(a) (38,152) (44,949)
Income taxes(a) (49,410) (47,549) (87,562) (92,498)
 
 
  
 
 
 
 
Net income $58,435 $68,846  $75,677 $72,829 $134,112 $141,675 
 
 
  
 
 
 
 

        EBITDA decreasedincreased 2.9% in the firstsecond quarter of 2004 compared with the 2003 second quarter mainly because of higher advertising revenues as well as an increase in net income from joint ventures. EBITDA decreased 4.4% in the first quartersix months of 2004 compared with the first six months of 2003 primarily due tobecause of the net benefit in the 2003 first quarterhalf of 2003 of $17.8 million resulting from the items discussed in the "2004 First-Quarter Highlights" section above, which makes this quarter'syear's comparison less favorable.

        Consolidated depreciation and amortization, for the second quarter and first quarterhalf of 2004 and 2003, by reportable segment and for the Company as a whole, were as follows:

 
 For the Quarters Ended
 
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
 
Depreciation and Amortization         
Newspapers $30,414 $30,963 (1.8)
Broadcast  2,397  2,238 7.1 
NYTD  1,031  1,533 (32.7)
Corporate  3,019  2,795 8.0 
  
 
 
 
Depreciation and Amortization $36,861 $37,529 (1.8)
  
 
 
 

 
 Three Months Ended
 Six Months Ended
 
(Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 June 27,
2004

 June 29,
2003

 % Change
 
Depreciation and amortization:                 
Newspapers $30,640 $29,352 4.4 $61,054 $60,315 1.2 
Broadcast  2,395  2,325 3.0  4,792  4,563 5.0 
NYTD  932  1,299 (28.3) 1,963  2,832 (30.7)
Corporate  3,113  2,802 11.1  6,132  5,597 9.6 
  
 
 
 
 
 
 
Depreciation and amortization $37,080 $35,778 3.6 $73,941 $73,307 0.9 
  
 
 
 
 
 
 

LIQUIDITY AND CAPITAL RESOURCES

Overview

        The Company expects its cash balance, cash provided from operations and available third-party financing, described below, to be sufficient to meet its normal operating commitments and debt requirements, to fund planned capital expenditures, to repurchase shares of its Class A Common Stock and to pay dividends to its stockholders.

        The Company expects capital expenditures for 2004 will range from $220 to $250 million. Included in the 2004 range are $110 to $120 million of costs related to the Company's interest in its new headquarters in New York City (the "Building"), which it currently anticipates occupying in 2007 (see Note 11 of the Notes to the Condensed Consolidated Financial Statements). The Company's estimate of capital expenditures related to the Building subsequent to 2004 are detailed in the Company's Annual Report on Form 10-K for the year ended December 28, 2003. As of March 28, 2004, this capital expenditures estimate has not changed. The estimated capital expenditures above related to the Building include those of a wholly-owned subsidiary of the Company ("NYT") and exclude those of the Company's development partner. See the "Sources and Uses of Cash-Investing Activities" section below for additional information regarding the Company's capital expenditures.

        In 2004 the Company expects to spend on repurchases of its Class A Common Stock an amount similarunder its stock repurchase program from time to that spenttime either in the open market or through private transactions. The Company's repurchases may be suspended from time to time or discontinued. During the first half of 2004, the Company repurchased 2.6 million shares of Class A Common Stock at a cost of approximately $117 million. In 2003 which wasthe Company repurchased 4.6 million shares of Class A Common Stock at a cost of approximately $209 million. Payments for dividends are expected to increase to approximately $91 million in 2004 from approximately $86 million in 2003. On April 13, 2004, the Company's Board of Directors declared



a $.01 per share increase in the quarterly dividend on the Company's Class A and Class B Common Stock from $.145 per share to $.155 per share effective with the June 2004 dividend.

New Building

        The Company is in the process of developing its new headquarters building in New York City (the "Building"), which it currently anticipates occupying in 2007. See Note 12 of the Notes to the Condensed Consolidated Financial Statements for additional information regarding the Building and the construction financing described below.

        The funds for construction of the Building are to be provided through a construction loan and capital contributions of a wholly-owned subsidiary of the Company ("NYT") and FC Lion LLC ("FC"), the sole members of The New York Times Building LLC (the "Building Partnership"), a partnership established for the purpose of constructing the Building. On June 25, 2004, the Building Partnership closed a construction loan of up to $320 million (the "construction loan"), secured by the Building, for construction of the Building's core and shell and other development costs. NYT has elected not to borrow any portion of its share of the total costs of the Building through this construction loan and, instead, has made and will make capital contributions to the Building Partnership for its share of Building costs. The Company will fund such contributions from internally generated cash, including the sale proceeds of its existing headquarters, and external financing sources. FC's share of the total costs of the Building will be funded through capital contributions and the construction loan.

        Under the terms of the Building Partnership's operating agreement and the construction loan, NYT is required to fund all of its construction equity related to construction of the core and shell as well as other development costs prior to the funding of the construction loan. As of June 27, 2004, NYT's remaining construction equity requirement related to construction of the core and shell as well as other development costs was approximately $218 million. This requirement has been guaranteed by the Company and is backed by a standby letter of credit of $206 million, the amount of which will decline on a monthly basis as capital contributions are made. Because NYT is funding its construction equity first, a portion of those funds will be used to fund FC's share of Building costs (the "FC funded share") prior to commencement of funding of the construction loan. The FC funded share will bear interest at the construction loan rate and will be repaid to NYT out of construction loan draws. FC's interest in the Building Partnership has been pledged to NYT to secure repayment of the FC funded share.

        Capital expenditures in connection with the Building, including both core and shell and interior construction costs, are detailed in the table below.

Capital Expenditures

(Dollars in millions)

 NYT
 FC
 Total
2001–2003 $96 $88 $184
2004 $65–$75 $32–$42 (a)$97–$117
Beyond 2004 (b)$415–$435 $272–$292 $687–$727
Total (c)$576–$606 $392–$422 $968–$1,028


Capital Resources

Sources and Uses of Cash

        Cash flows for the first quartersix months of 2004 and 2003 were as follows:

 
 For the Quarters Ended
 
(Dollars in thousands)

 March 28,
2004

 March 30,
2003

 % Change
 
Operating Activities $160,387 $148,123 8.3 
Investing Activities $(28,356)$(153,839)(81.6)
Financing Activities $(139,087)$8,023 * 

*
Represents percentages that are not meaningful.
 
 For the Six Months Ended
 
(Dollars in thousands)

 June 27,
2004

 June 29,
2003

 % Change
 
Operating Activities $292.2 $266.2 9.8 
Investing Activities $(76.0)$(185.9)(59.1)
Financing Activities $(210.4)$(84.3)149.6 

Operating Activities

        The primary source of the Company's liquidity is cash flows from operating activities. The key component of operating cash flow is cash receipts from advertising customers. Operating cash inflows also include cash receipts from circulation sales and other revenue transactions such as wholesale delivery operations and direct marketing. Operating cash outflows include payments to vendors for raw materials, services and supplies, payments to employees, and payments of interest and income taxes.

        InThe Company reduced its net working capital in the first quartersix months of 2004 the Company had lower working capital requirements compared with the first quartersix months of 2003. The difference in cash inflows from accounts receivable and cash outflows for accounts payable and accrued expenses primarily2003, which resulted in an increase ofin net cash provided by operating activities in the first quarterhalf of 2004.


Investing Activities

        Investment cash inflows generally include proceeds from the sale of assets or a business. Investment cash outflows generally include payments for the acquisition of new businesses, equity investments and capital expenditures, including property, plant and equipment.

        Net cash used in investing activities in the first quartersix months of 2004 decreased compared with the first quartersix months of 2003 primarily due to higher capital expenditures as well as the acquisition of the IHT in the first quartersix months of 2003.

        Capital expenditures (on an accrual basis) were $24.3 million in the first quarter of 2004, and $38.2 million in the first quarter of 2003. The first quarter of 2004 amount includes $5.6 million and the first quarter of 2003 amount includes $32.1 million of costs related to the Building. These amounts exclude the Company's development partner's capital expenditures, which amounted to $3.3 million in the first quarter of 2004 and $39.9 million in the first quarter of 2003. Capital expenditures attributable to NYT's interest in the Building are included in "Property, plant and equipment", and capital expenditures attributable to the Company's development partner's interest in the Building are included in "Miscellaneous assets" in the Company's Condensed Consolidated Balance Sheets.

Financing Activities

        Financing cash inflows generally include borrowings under the Company's commercial paper program, the issuance of medium-term notes, and funds from stock option exercises and from the sale of stock to employees under the Company's Employee Stock Purchase Plan. Financing cash outflows generally include the repayment of commercial paper and long-term debt, the payment of dividends and the repurchase of the Company's Class A Common Stock.

        NetThe Company repaid approximately $84 million of commercial paper in the first half of 2004 compared to commercial paper borrowings of approximately $11 million in the first half of 2003, resulting in the majority of the 2004 increase in net cash used in financing activities in the first quarter of 2004 was primarily due to the repayment of approximately $87 million of commercial paper and repurchases of approximately $53 million of Class A Common Stock. Net cash provided by financing activities in the first quarter of 2003 was primarily due to repurchases of approximately $61 million of Class A Common Stock, which was more than offset by borrowings of approximately $46 million of commercial paper and other financing proceeds of approximately $35 million.activities.

        See the Company's Condensed Consolidated Statements of CashflowsCash Flows for additional information on the Company's sources and uses of cash.

Third-Party Financing

        The Company's total debt, including commercial paper and capital lease obligations, was $869.5 million as of June 27, 2004 compared with $955.3 million as of December 28, 2003. The decrease in total debt was primarily due to lower levels of commercial paper outstanding.



        The Company's 10-year notes, aggregating $250.0 million and bearing interest at an annual rate of 7.625%, mature on March 15, 2005. As a result, the Company reclassified these notes from "Long-term debt" to "Current portion of long-term debt and capital lease obligations" in the Company's Condensed Consolidated Balance Sheets in the first quarter of 2004. Although the Company has not committed to a plan to pay this amount due, the Company believes that its cash from operations and third-party financing, as described below, will be more than sufficient to meet this commitment.

        The Company has the following financing sources available to supplement cash flows from operations:

Commercial Paper

        The Company's liquidity requirements may be funded through the issuance of commercial paper. The Company's $600.0 million commercial paper program is supported by its revolving credit agreements discussed below and,


therefore, issuances can be made up to a maximum of $600.0 million.below. Commercial paper issued by the Company is unsecured and can have maturities of up to 270 days.

The Company had $141.3$144.0 million in commercial paper outstanding as of March 28,June 27, 2004, with an annual weighted average interest rate of 1.0%1.1% and an average of 93 days to maturity from original issuance.

Revolving credit agreementsCredit Agreements

        The primary purpose of the Company's revolving credit agreements is to support the Company's commercial paper program. The Company has a total of $600.0$670.0 million available to borrow under its revolving credit agreements. In May 2004 the Company terminated its one-year $330.0 million revolving credit agreement and entered into a $400.0 million five-year revolving credit agreement that extends to May 2009. The Company increased the amount available and extended the maturity date under its revolving credit agreements to provide the Company with additional borrowing flexibility. The Company's multi-year $270.0 credit agreement remains unchanged, maturing in June 2006. There were no amounts outstanding under the revolving credit agreements as of March 28,June 27, 2004. The Company intends to extend the revolving credit agreements beyond their current expiration dates.

        The revolving credit agreements permit borrowings that bear interest at specified margins based on the Company's credit rating, over various floating rates selected by the Company.

        The revolving credit agreements contain a covenant that requires specified levels of stockholders' equity. The amount of stockholders' equity in excess of the required levels was $434.2$425.8 million as of March 28,June 27, 2004.

Medium-Term Notes

        The Company's liquidity requirements may also be funded through the public offer and sale of notes under the Company's $300.0 million medium-term note program. An additional $225.0 million of medium-term notes may be issued from time to time pursuant to the Company's current effective shelf registration.

        The Company's total debt, including commercial paper, medium-term notes and capital lease obligations, was $868.3 million as of March 28, 2004.

Contractual ObligationsCONTRACTUAL OBLIGATIONS & Off-Balance Sheet ArrangementsOFF-BALANCE SHEET ARRANGEMENTS

        The Company's contractual obligations and off-balance sheet arrangements are detailed in the Company's Annual Report on Form 10-K for the year-endyear ended December 28, 2003. As of March 28,June 27, 2004, the Company's contractual obligations and off-balance sheet arrangements have not materially changed from December 28, 2003.



Critical Accounting PoliciesCRITICAL ACCOUNTING POLICIES

        The Company's critical accounting policies are detailed in the Company's Annual Report on Form 10-K for the year ended December 28, 2003. As of March 28,June 27, 2004, the Company's critical accounting policies have not changed from December 28, 2003.


RECENT ACCOUNTING PRONOUNCEMENTS

        In January 2004 the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. 106-1 ("FSP 106-1"), Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which permitted a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act"). In May 2004 the FASB issued FSP No.106-2 ("FSP 106-2"), which superseded FSP 106-1. FSP 106-2 provides authoritative guidance on the accounting for the Act and specifies the disclosure requirements for employers who have adopted FSP 106-2. FSP 106-2 is effective for the interim or annual period beginning after June 15, 2004. See Note 7 of the Notes to the Condensed Consolidated Financial Statements for the effect of the adoption of FSP 106-2 on the Company's Condensed Consolidated Financial Statements.

FACTORS THAT COULD AFFECT OPERATING RESULTS

        Except for the historical information contained herein, the matters discussed in this quarterly report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include national and local conditions, as well as competition, that could influence the levels (rate and volume) of retail, national and classified advertising and circulation generated by the Company's various markets and material increases in newsprint prices. They also include other risks detailed from time to time in the Company's publicly-filed documents, including the Company's Annual Report on Form 10-K for the periodyear ended December 28, 2003. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

        The Company's Annual Report on Form 10-K for the year ended December 28, 2003, details the Company's disclosures about market risk. As of March 28,June 27, 2004, there have been no material changes in the Company's market risk from December 28, 2003.

Item 4.    Controls and Procedures

        Russell T. Lewis, the Company's Chief Executive Officer, and Leonard P. Forman, the Company's Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures as of March 28,June 27, 2004. Based on such evaluation, each of Messrs. Lewis and Forman concluded that the Company's disclosure controls and procedures were effective to ensure that the material information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There have been no changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.



Part II.    OTHER INFORMATION

Item 2(e):    Issuer Purchases of Equity Securities1Securities(1)

Period

 (a)
Total Number of
Shares of Class A
Common Stock
Purchased

 (b)
Average Price Paid
Per Share of
Class A Common
Stock

 (c)
Total Number of Shares
of Class A Common Stock
Purchased as Part of
Publicly Announced Plans
or Programs

 (d)
Maximum Number (or
Approximate Dollar
Value) of Shares of
Class A Common Stock
that May Yet Be
Purchased Under the
Plans or Programs

December 29, 2003—February 1, 2004     $94,900,000
February 2, 2004—February 29, 2004 310,500 $46.15 310,500 $80,500,000
March 1, 2004—March 28, 2004 1,068,400 $45.28 1,068,400 $32,200,000
Total for the First Quarter of 2004 1,378,900 $45.47 1,378,900 $32,200,000
Period

 (a)
Total Number
of Shares of
Class A
Common Stock
Purchased

 (b)
Average
Price Paid
Per Share of
Class A
Common
Stock

 (c)
Total Number of Shares
of Class A Common
Stock Purchased as Part
of Publicly Announced
Plans or Programs

 (d)
Maximum Number
(or Approximate
Dollar Value) of
Shares of Class A
Common Stock that
May Yet Be
Purchased Under the
Plans or Programs

March 29, 2004–May 2, 2004 411,800 $45.06 411,800 $413,600,000
May 3, 2004–May 30, 2004 353,200 $45.55 353,200 $397,500,000
May 31, 2004–June 27, 2004 440,900 $45.23 440,900 $377,600,000
Total for the second quarter of 2004 1,205,900 $45.27 1,205,900 $377,600,000

1(1)
All purchases were made pursuant to the Company's publicly announced share repurchase program. On April 13, 2004, the Board of Directors (the "Board") authorized repurchases in an amount up to $400 million. As of AprilJuly 30, 2004, the Company has authorization from its Board of Directors (the "Board") to repurchase an amount of up to $414$315.1 million of its Class A Common Stock. On April 13, 2004, the Board authorized repurchases in an amount up to $400 million. The remaining $14 million of authorization had been announced on February 21, 2002. The Board has authorized the Company to purchase shares from time to time as market conditions permit. There is no expiration date with respect to this authorization.

Item 4. Submission of Matters to a Vote of Security-Holders

        1.     The stockholders (with Class A and Class B stockholders voting separately) elected all of management's nominees for election as Class A Directors and Class B Directors. The results of the vote taken were as follows:

Class A Directors:

 For
 Withheld
Raul E. Cesan 125,488,858 3,608,726
William E. Kennard 124,861,415 4,236,169
Thomas Middelhoff 126,312,484 2,785,100
Henry B. Schacht 125,458,673 3,638,911
Donald M. Stewart 126,138,568 2,959,016

Class B Directors:

 

 

 

 
John F. Akers 792,905 200
Brenda C. Barnes 792,905 200
Jacqueline H. Dryfoos 792,905 200
Michael Golden 792,905 200
Russell T. Lewis 792,905 200
David E. Liddle 792,905 200
Ellen R. Marram 792,905 200
Arthur Sulzberger, Jr. 792,905 200
Cathy J. Sulzberger 792,905 200
Doreen A. Toben 792,905 200

        2.     The stockholders (with Class A and Class B stockholders voting together) adopted a New 2004 Non-Employee Directors' Stock Incentive Plan described in Proposal 2 in the Company's 2004 Proxy Statement. The results of the vote taken were as follows:

For:69,270,897
Against:39,147,251
Abstain:1,009,872*
Broker Non-Votes:20,462,669*

        3.     The stockholders (with Class A and Class B stockholders voting together) ratified the selection, by the Audit Committee of the Board of Directors, of Deloitte & Touche LLP, independent certified public accountants, as auditors of the Company for the year ending December 26, 2004. The results of the vote taken were as follows:

For:127,307,849
Against:1,814,907
Abstain:767,933**

*
An abstention or broker non-vote had no effect on this proposal.

**
An abstention had the same effect as a vote against this proposal.

Item 6.    Exhibits and Reports on Form 8-K




SIGNATURES

        Pursuant to the requirements 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.

  THE NEW YORK TIMES COMPANY
(Registrant)

 

 

 

Date:    MayAugust 5, 2004

 

/s/  
LEONARD P. FORMAN      
Leonard P. Forman
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)



Exhibit Index to Quarterly Report on Form 10-Q
For the Quarter Ended March 28,June 27, 2004

Exhibit No.


10.12004 Non-Employee Directors' Stock Incentive Plan
Exhibit No.




10.1

 

Operating Agreement of The New York Times Building LLC, dated December 12, 2001 (the "Operating Agreement"), between FC Lion LLC and NYT Real Estate Company LLC*

10.2


First Amendment to the Operating Agreement, dated June 25, 2004*

10.3


Building Loan Agreement, dated as of June 25, 2004, among The New York Times Building LLC, New York State Urban Development Corporation (d/b/a Empire State Development Corporation) and GMAC Commercial Mortgage Corporation

10.4


Project Loan Agreement, dated as of June 25, 2004, among The New York Times Building LLC, New York State Urban Development Corporation (d/b/a Empire State Development Corporation) and GMAC Commercial Mortgage Corporation

10.5


Construction Management Agreement, dated January 22, 2004, between The New York Times Building LLC and AMEC Construction Management, Inc.*

10.6


The Company's Supplemental Executive Retirement Plan, as amended and restated through January 1, 2004

12   

 

Ratio of Earnings to Fixed Charges



31.1

 

Form ofRule 13a–14(a)/15d–14(a) Certification Required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934



31.2

 

Form ofRule 13a–14(a)/15d–14(a) Certification Required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934



32.1

 

Certification Pursuant to 18 U.S.C. Section 1350, as Added By Section 906 of the Sarbanes-Oxley Act of 2002



32.2

 

Certification Pursuant to 18 U.S.C. Section 1350, as Added By Section 906 of the Sarbanes-Oxley Act of 2002


*
Confidential treatment has been requested as to certain portions, which portions have been filed separately with the Securities and Exchange Commission. Such portions have been redacted and marked with an asterisk.



QuickLinks

PART I. FINANCIAL INFORMATION Item 1. Financial Statements
THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)(Unaudited) (Dollars and shares in thousands, except per share data)
THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
THE NEW YORK TIMES COMPANY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Part II. OTHER INFORMATION
SIGNATURES
Exhibit Index to Quarterly Report on Form 10-Q For the Quarter Ended March 28,June 27, 2004