-1-
EXHIBIT 99.1
99.1 Unaudited pro forma condensed consolidated balance
sheet as of June 30, 1994, and the unaudited pro forma
condensed consolidated statements of income for the year
ended December 31, 1993, and the six-month periods ended
June 30, 1994 and 1993.
On July 26, 1994, pursuant to an Asset Purchase Agreement dated as of June 17,
1994 (the "Agreement"), The New York Times Company ("NYT") and two wholly-owned
subsidiaries (the "Seller") completed the sale (the "Sale") of its Women's
Magazines Division ("WMD") to Gruner + Jahr Printing and Publishing Co. (the
"Buyer"). As provided in the Agreement, the Sale's effective date for
financial reporting purposes was July 1, 1994.
The aggregate consideration due to the Seller of $323,926,000
consists of (i) $10,000,000 paid upon execution of the Agreement on June 17,
1994, (the "Sale Deposit") and (ii) $313,926,000 paid upon completion of the
sale on July 26, 1994, ($27,500,000 of which was paid into escrow and is due to
the Seller December 26, 1994, subject to certain post-closing adjustments
described in Article 10 of the Agreement and $40,000,000 of which is allocated
to a non-competition agreement (the "Non-Compete") pursuant to Section 3.1 of
the Agreement). On July 26, 1994, the Seller paid consideration of $48,926,000
to the Buyer to fulfill currently outstanding subscriptions for the Women's
Magazines, as provided in the Fulfillment Agreement, dated as of July 26, 1994.
NYT plans to use the proceeds for general corporate purposes, including the
repayment of existing debt and the repurchase of NYT's Class A Common Stock.
The consideration was arrived at by arms-length bargaining between the Seller
and the Buyer. As a result of this transaction NYT anticipates a gain in the
range of $.95 to $1.05 per share which will be recorded in the 1994 third
quarter.
On October 1, 1993, pursuant to an Agreement and Plan of Merger dated
June 11, 1993 (as amended August 12, 1993), a wholly-owned subsidiary of NYT was
merged with Affiliated Publications, Inc. ("API"), the parent company of The
Boston Globe, which became a wholly-owned subsidiary of NYT - (the "Merger").
The following pro forma supplemental financial information (see pages
3-5) gives effect to the Sale and the Merger. The pro forma condensed
consolidated balance sheet excludes the historical net assets of the WMD, giving
effect to the Sale as if it had occurred on June 30, 1994. The pro forma
balance sheet gives effect to pro forma adjustments to reflect: $237,500,000
received in cash at the closing; accounts receivable of $27,500,000 representing
the portion of the Sale's proceeds held in escrow until December 26, 1994; a
decrease of $30,174,000 for the net assets subject to disposition in the Sale; a
$112,844,000 aggregate increase in accrued expenses consisting of $108,515,000
of income taxes currently payable, $(9,546,000) of current deferred income
taxes, $(10,000,000) representing the realization of income from the Sale
Deposit, $10,000,000 representing the current portion of unearned income
attributable to the Non-Compete, and $13,875,000 of other accrued expenses and
transaction costs; a decrease of $13,381,000 in deferred income taxes attributed
to the transaction, and an increase of $30,000,000 representing unearned income
in connection with the Non-Compete.
-2-
EXHIBIT 99.1
The pro forma condensed consolidated statements of income for the year
ended December 31, 1993, and the six-month periods ended June 30, 1994 and 1993
exclude the historical results of operations of the WMD, giving effect to the
Sale as if it were consummated on January 1, 1993. These statements give effect
to pro forma adjustments to reflect:
(a) Non-Compete revenues of $10,000,000, $5,000,000 and
$5,000,000 respectively, for the year ended
December 31, 1993 and the six-month periods ended
June 30, 1994 and 1993 (the Non-Compete of $40,000,000
is amortized on a straight-line basis over four years);
(b) Reduced interest expense, net of interest income of
$6,280,000, $4,958,000 and $4,362,000 respectively for
the year ended December 31, 1993 and the six-month periods
ended June 30, 1994 and 1993 resulting from repayment of
certain of NYT's debt and investment of the remaining
proceeds in highly liquid debt instruments; and
(c) Income tax effects (calculated at the relevant statutory
rate in effect during the periods presented) of $7,200,000,
$4,362,000 and $3,308,000 respectively for the year ended
December 31, 1993 and the six-month periods ended
June 30, 1994 and 1993.
The pro forma condensed consolidated statements of income for the year
ended December 31, 1993 and the six months ended June 30, 1993 also give effect
to the Merger as if it were consummated on that same date. The estimated gain
on the Sale is not included in the pro forma condensed consolidated statements
of income.
The pro forma condensed consolidated financial statements are not
necessarily indicative of the results of operations that might have occurred had
the Sale or the Merger actually taken place on January 1, 1993 or the actual
financial position that might have resulted had the Sale been consummated on
June 30, 1994, or of future results of operations or financial position of NYT.
-3-
EXHIBIT 99.1
PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET (UNAUDITED)
JUNE 30, 1994
---------------------------------------------------
WMD and
Historical Pro Forma
NYT Adjustments Pro forma
--- ----------- ---------
(Dollars in thousands)
ASSETS
Current Assets
Cash and short-term investments ........................................... $ 64,887 $237,500 $ 302,387
Accounts receivable-net ................................................... 245,284 27,500 272,784
Inventories ............................................................... 27,018 - 27,018
Other current assets ...................................................... 91,884 (30,174) 61,710
------------ ------------ ------------
Total current assets ...................................................... 429,073 234,826 663,899
Investment in Forest Products Group .......................................... 75,876 - 75,876
Property, plant and equipment-net ............................................ 1,092,376 - 1,092,376
Intangible assets acquired-net ............................................... 1,378,841 - 1,378,841
Miscellaneous assets ......................................................... 110,588 - 110,588
------------ ------------ ------------
TOTAL ASSETS .............................................................. $3,086,754 $234,826 $3,321,580
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities ..........................................................
Accounts payable .......................................................... $ 127,284 $ - $ 127,284
Payrolls .................................................................. 73,554 - 73,554
Accrued expenses .......................................................... 190,462 112,844 303,306
Unexpired subscriptions ................................................... 71,173 - 71,173
Short-term debt ........................................................... 52,719 - 52,719
------------ ------------ ------------
Total current liabilities ................................................. 515,192 112,844 628,036
------------ ------------ ------------
Other Liabilities
Long-term debt & capital lease obligations ................................ 413,829 - 413,829
Deferred income taxes ..................................................... 191,335 (13,381) 177,954
Other ..................................................................... 382,865 30,000 412,865
------------ ------------ ------------
Total other liabilities ................................................... 988,029 16,619 1,004,648
------------ ------------ ------------
Equity Put Options ........................................................... 20,683 - 20,683
------------ ------------ ------------
Stockholders' Equity
Capital shares ............................................................ 12,630 - 12,630
Additional capital ........................................................ 583,653 - 583,653
Earning reinvested in the business ........................................ 1,044,103 105,363 1,149,466
Common stock held in treasury, at cost .................................... (77,536) - (77,536)
------------ ------------ ------------
Total stockholders' equity ................................................ 1,562,850 105,363 1,668,213
------------ ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................ $3,086,754 $234,826 $3,321,580
============ ============ ============
-4-
EXHIBIT 99.1
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
--------------------------------------------------------
Combined WMD and
Pro forma Pro Forma
NYT & API Adjustments Pro forma
--------- ----------- ---------
(Dollars and shares in thousands except per share data)
Revenues ................................................... $ 2,335,985 $ (229,694) $ 2,106,291
Costs and Expenses
Production Costs ......................................... 1,294,071 (143,296) 1,150,775
Selling, General and Administrative Expenses ............ 903,458 (103,733) 799,725
Total .................................................... 2,197,529 (247,029) 1,950,500
Operating Income............................................. 138,456 17,335 155,791
Interest Expense, Net of Interest Income .................... 28,717 (6,280) 22,437
Income Before Income Taxes .................................. 109,739 23,615 133,354
Income Taxes ................................................ 56,658 10,211 66,869
Income Before Equity in Operations of Forest
Products Group ............................................ 53,081 13,404 66,485
Equity in Operations of Forest Products Group ............... (51,852) - (51,852)
Income from Continuing Operations ........................... $ 1,229 $ 13,404 $ 14,633
============== ============== ==============
Average Shares Outstanding .................................. 111,756 111,756
Earnings Per Share .......................................... $.01 $.13
-5-
EXHIBIT 99.1
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1994
---------------------------------------------------------
WMD and
Historical Pro Forma
NYT Adjustments Pro forma
--- ----------- ---------
(Dollars and shares in thousands except per share data)
Revenues ...................................................... $ 1,225,041 $ (120,354) $1,104,687
------------ ------------ ------------
Costs and Expenses
Production Costs ............................................. 655,079 (76,745) 578,334
Selling, General and Administrative Expenses ................ 453,400 (51,361) 402,039
------------ ------------ ------------
Total ........................................................ 1,108,479 (128,106) 980,373
------------ ------------ ------------
Operating Income ................................................ 116,562 7,752 124,314
Interest Expense, Net of Interest Income ........................ 16,693 (4,958) 11,735
------------ ------------ ------------
Income Before Income Taxes ...................................... 99,869 12,710 112,579
Income Taxes .................................................... 48,137 5,500 53,637
------------ ------------ ------------
Income Before Equity in Operations of Forest
Products Group ................................................ 51,732 7,210 58,942
Equity in Operations of Forest Products Group ................... 300 - 300
------------ ------------ ------------
Income from Continuing Operations ............................... $ 52,032 $ 7,210 $ 59,242
============ ============ ============
Average Shares Outstanding ...................................... 106,600 106,600
Earnings Per Share .............................................. $.49 $.56
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1993
---------------------------------------------------------
Combined WMD and
Pro forma Pro Forma
NYT & API Adjustments Pro forma
--------- ----------- ---------
(Dollars and shares in thousands except per share data)
Revenues ....................................................... $ 1,150,796 $ (112,130) $1,038,666
------------ ------------ ------------
Costs and Expenses
Production Costs ............................................. 630,408 (70,418) 559,990
Selling, General and Administrative Expenses ................ 429,236 (53,315) 375,921
------------ ------------ ------------
Total ........................................................ 1,059,644 (123,733) 935,911
------------ ------------ ------------
Operating Income ................................................ 91,152 11,603 102,755
Interest Expense, Net of Interest Income ........................ 12,183 (2,508) 9,675
------------ ------------ ------------
Income Before Income Taxes ...................................... 78,969 14,111 93,080
Income Taxes .................................................... 42,809 6,067 48,876
------------ ------------ ------------
Income Before Equity in Operations of Forest
Products Group ................................................ 36,160 8,044 44,204
Equity in Operations of Forest Products Group ................... (2,668) - (2,668)
------------ ------------ ------------
Income from Continuing Operations ............................... $ 33,492 $ 8,044 $ 41,536
============ ============ ============
Average Shares Outstanding ...................................... 116,131 116,131
Earnings Per Share .............................................. $.29 $.36