FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For Quarter Ended September 27, 1998
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Commission file number 1-5837
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THE NEW YORK TIMES COMPANY
---------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1102020
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
229 WEST 43RD STREET, NEW YORK, NEW YORK
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(Address of principal executive offices)
10036
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(Zip Code)
Registrant's telephone number, including area code 212-556-1234
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No .
Number of shares of each class of the registrant's common stock outstanding as
of November 1, 1998 (exclusive of treasury shares):
Class A Common Stock 181,516,261 shares
Class B Common Stock 849,602 shares
Exhibit Index is located on page 24 of this document
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars and shares in thousands, except per share data)
Three Months Ended Nine Months Ended
------------------------------------- ------------------------------------
September 27, September 28, September 27, September 28,
1998 1997 1998 1997
------------------------------------- ------------------------------------
(13 Weeks) (39 Weeks)
Revenues
Advertising ........................ $ 471,166 $ 466,766 $ 1,510,621 $ 1,449,082
Circulation ........................ 167,180 165,819 507,205 503,505
Other .............................. 44,382 50,996 136,654 145,402
----------- ----------- ----------- -----------
Total ........................... 682,728 683,581 2,154,480 2,097,989
----------- ----------- ----------- -----------
Production costs
Raw materials ...................... 83,492 78,266 260,015 228,026
Wages and benefits ................. 139,522 145,633 440,760 453,275
Other .............................. 134,686 126,104 378,408 360,454
----------- ----------- ----------- -----------
Total ........................... 357,700 350,003 1,079,183 1,041,755
Selling, general and administrative
expenses ............................. 223,607 242,243 712,392 736,295
----------- ----------- ----------- -----------
Total ........................... 581,307 592,246 1,791,575 1,778,050
----------- ----------- ----------- -----------
Operating profit ....................... 101,421 91,335 362,905 319,939
Income from joint ventures ............. 5,336 3,359 13,614 7,726
Interest expense - net ................. 10,337 11,699 30,964 31,406
Gains on dispositions of assets ........ -- -- 12,619 --
----------- ----------- ----------- -----------
Income before income taxes and
extraordinary charge ............... 96,420 82,995 358,174 296,259
Income taxes ........................... 41,445 36,767 155,831 113,243
----------- ----------- ----------- -----------
Income before extraordinary charge ..... 54,975 46,228 202,343 183,016
Extraordinary charge, net of tax ....... -- -- 7,716 --
----------- ----------- ----------- -----------
Net income ............................. $ 54,975 $ 46,228 $ 194,627 $ 183,016
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Average number of common shares
outstanding:
Basic ................................ 188,546 191,786 190,889 193,262
Diluted .............................. 192,284 195,622 195,082 197,128
Per share of common stock:
Basic earnings before extraordinary
charge ............................. $ 0.29 $ 0.24 $ 1.06 $ 0.95
Extraordinary charge, net of tax ..... -- -- (0.04) --
----------- ----------- ----------- -----------
Basic earnings after extraordinary
charge ............................. $ 0.29 $ 0.24 $ 1.02 $ 0.95
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted earnings before extraordinary
charge ............................. $ 0.29 $ 0.24 $ 1.04 $ 0.93
Extraordinary charge, net of tax ..... -- -- (0.04) --
----------- ----------- ----------- -----------
Diluted earnings after extraordinary
charge ............................. $ 0.29 $ 0.24 $ 1.00 $ 0.93
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Dividends ............................ $ 0.095 $ 0.080 $ 0.275 $ 0.235
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
See notes to condensed consolidated financial statements.
2
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 27, December 28,
1998 1997
------------- ------------
(Unaudited)
ASSETS
Current Assets
Cash and short-term investments .......................... $ 31,825 $ 106,820
Accounts receivable - net ................................ 310,271 331,287
Inventories
Newsprint and magazine paper .......................... 30,021 27,694
Work-in-process, etc .................................. 4,591 4,440
---------- ----------
Total inventories ................................. 34,612 32,134
Deferred income taxes .................................... 44,204 44,204
Other current assets ..................................... 70,802 85,556
---------- ----------
Total current assets .............................. 491,714 600,001
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Other Assets
Investment in joint ventures ............................. 128,301 133,054
Property, plant and equipment (less accumulated
depreciation of $913,490 in 1998 and $868,274
in 1997) .............................................. 1,340,608 1,366,931
Intangible assets acquired
Cost in excess of net assets acquired (less accumulated
amortization of $233,715 in 1998 and $210,815
in 1997) .............................................. 970,419 993,206
Other intangible assets acquired (less accumulated
amortization of $59,142 in 1998 and $43,975 in 1997) .. 369,718 384,499
Miscellaneous assets ..................................... 153,508 145,492
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TOTAL ASSETS ...................................... $3,454,268 $3,623,183
---------- ----------
---------- ----------
See notes to condensed consolidated financial statements.
3
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
September 27, December 28,
1998 1997
--------------- -------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Commercial paper outstanding ................ $ 67,750 $ --
Accounts payable ............................ 174,690 189,580
Accrued payroll and other related liabilities 83,211 103,511
Accrued expenses ............................ 152,873 175,500
Unexpired subscriptions ..................... 82,359 82,621
Current portion of long-term debt and
Capital lease obligations .................. 104,152 104,033
----------- -----------
Total current liabilities ................ 665,035 655,245
----------- -----------
Other Liabilities
Long-term debt .............................. 415,039 490,237
Capital lease obligations ................... 84,007 45,191
Deferred income taxes ....................... 189,383 170,870
Other ....................................... 549,025 533,578
----------- -----------
Total other liabilities .................. 1,237,454 1,239,876
----------- -----------
Total liabilities ........................ 1,902,489 1,895,121
----------- -----------
Stockholders' Equity
Capital stock ............................... 21,358 11,385
Additional paid-in capital .................. 261,753 773,367
Earnings reinvested in the business ......... 1,629,970 1,488,910
Common stock held in treasury, at cost ...... (361,302) (545,600)
----------- -----------
Total stockholders' equity ............... 1,551,779 1,728,062
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...... $ 3,454,268 $ 3,623,183
----------- -----------
----------- -----------
See notes to condensed consolidated financial statements.
4
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended
------------------------------
September 27, September 28,
1998 1997
------------------------------
(39 Weeks)
OPERATING ACTIVITIES:
Net cash provided by operating activities .................................. $ 348,105 $ 309,027
--------- ---------
INVESTING ACTIVITIES:
Additions to property, plant and equipment ................................. (60,458) (126,578)
Net proceeds from dispositions ............................................. 9,934 11,872
Other - net ................................................................ 2,822 (198)
--------- ---------
Net cash used in investing activities ...................................... (47,702) (114,904)
--------- ---------
FINANCING ACTIVITIES:
Net commercial paper borrowings ............................................ 67,750 (26,500)
Long-term debt reduction ................................................... (78,820) (2,827)
Capital shares
Issuance .............................................................. 6,365 6,317
Repurchase ............................................................ (318,336) (127,283)
Dividends paid to stockholders ............................................. (52,357) (45,434)
Other - net ................................................................ -- 344
--------- ---------
Net cash used in financing activities ...................................... (375,398) (195,383)
--------- ---------
Decrease in cash and short-term investments ................................ (74,995) (1,260)
Cash and short-term investments at the beginning of the year ............... 106,820 39,103
--------- ---------
Cash and short-term investments at the end of the quarter .................. $ 31,825 $ 37,843
--------- ---------
--------- ---------
Amounts in these Statements of Cash Flows are presented on a cash basis and may
differ from those shown in other sections of the financial statements.
See notes to condensed consolidated financial statements.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
1. General
The accompanying Notes to Condensed Consolidated Financial
Statements should be read in conjunction with the Consolidated Financial
Statements included in the annual report on Form 10-K for the year ended
December 28, 1997, for The New York Times Company (the "Company") filed with
the Securities and Exchange Commission. In the opinion of management, all
adjustments necessary for a fair presentation of the financial position and
results of operations, as of and for the interim periods ended, have been
included. Due to the seasonal nature of the Company's business, results for
interim periods are not necessarily indicative of a full year's operations.
Certain reclassifications have been made to the 1997 Condensed
Consolidated Financial Statements to conform with classifications used at
September 27, 1998.
2. Dispositions of Assets
During the second quarter of 1998, the Company recorded an $8,000,000
pre-tax gain from the satisfaction of a post-closing requirement related to the
1997 sale of the Company's non-golf magazines. This gain increased basic and
diluted earnings per share by $.02. For further details, see the "Magazine
Group" section in "Management's Discussion and Analysis".
During the first quarter of 1998, the Company recorded a $4,600,000
pre-tax gain resulting from the sale of equipment. The gain increased basic and
diluted earnings per share by $.01.
3. Common Stock Split, Retirement and Dividend Increase
On June 17, 1998, a 2-for-1 split of the Company's Class A and B Common
Stock was effective. Additionally, the Company increased the number of
authorized Class A shares to 300,000,000 and Class B shares to 849,602. The
number of shares of Class A Common Stock outstanding on June 17, 1998, after
giving effect to the split, was 190,193,392; the number of Class B shares was
849,602. All references in the Consolidated Financial Statements referring to
per share, share price and share amounts have been adjusted retroactively for
the 2-for-1 stock split. As a result of the issuance of additional shares,
approximately $9,600,000 was transferred from additional paid-in capital to
capital stock to record the distribution.
On June 17, 1998, the Company retired 16,911,881 shares of Class A
Common Stock and 139,943 shares of Class B Common Stock. The Company accounts
for treasury stock retirements on a first-in-first-out basis. As a result of
this retirement, treasury stock and additional paid-in capital were reduced by
approximately $539,200,000.
On May 21, 1998, the Board of Directors authorized a $.01 increase, on
a post-split basis, in the quarterly dividend payments on both classes of common
stock.
6
4. Income Taxes
The variances between the effective tax rate on income before income
taxes and the federal statutory rate, exclusive of an extraordinary charge and
gains on dispositions of assets in 1998 and a favorable adjustment resulting
from the completion of the Company's federal tax audits for periods through 1992
("favorable tax adjustment") in 1997, are as follows:
Three Months Ended Nine Months Ended
---------------------------------------------------------------------------------
September 27, September 28, September 27, September 28,
1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
% of % of % of % of
(Dollars in thousands) Amount Pre-tax Amount Pre-tax Amount Pre-tax Amount Pre-tax
- -----------------------------------------------------------------------------------------------------------------------------------
Tax at federal statutory rate................ $33,747 35.0% $29,048 35.0% $120,944 35.0% $103,691 35.0%
State and local taxes,
net of federal benefits ................... 6,197 6.4 6,554 7.9 23,014 6.7 22,812 7.7
Amortization of nondeductible
intangible assets acquired................. 1,852 1.9 2,143 2.6 6,704 1.9 7,297 2.5
Other - net ................................. (351) (0.4) (978) (1.2) (344) 0.1 (2,557) (0.9)
-------- -------- -------- -------- -------- -------- -------- ------
Subtotal..................................... $41,445 43.0% $36,767 44.3% $150,318 43.5% $131,243 44.3%
Favorable tax adjustment .................... -- -- -- (18,000)
Gains on dispositions of assets.............. -- -- 5,513 --
-------- -------- -------- -------- -------- -------- -------- ------
Income taxes................................. $41,445 $36,767 $155,831 $113,243
-------- -------- -------- -------- -------- -------- -------- ------
-------- -------- -------- -------- -------- -------- -------- ------
5. Debt Obligations and Extraordinary Charge
On April 2, 1998, the Company's tender offer for any and all of its
$150,000,000 of outstanding publicly-held 8.25% debentures due March 15, 2025,
expired. The debenture holders tendered approximately $78,100,000 of the
outstanding debentures. As a result, the Company recorded a pre-tax
extraordinary charge of approximately $13,700,000 in the second quarter of 1998
in connection with this early extinguishment of debt. This charge reduced basic
and diluted earnings per share by $.04.
The Company currently maintains $300,000,000 in revolving credit
agreements which require, among other matters, specified levels of
stockholders' equity. The amount of stockholders' equity in excess of the
required levels was approximately $760.0 million at September 27, 1998,
compared with $917.0 million at September 28, 1997. In July 1998, the Company
renewed its $100,000,000 revolving credit agreement, which had a maturity of
July 1998, through July 1999. The remaining $200,000,000 revolving credit
agreement expires in July 2002.
7
On August 21, 1998, the Company filed a $300,000,000 Shelf Registration
Statement on Form S-3 with the Securities and Exchange Commission for unsecured
debt securities that may be issued by the Company from time to time. This
registration statement became effective August 28, 1998. On September 24, 1998,
the Company filed a prospectus supplement to allow the issuance of up to
$300,000,000 in medium-term notes. On October 8, 1998, the Company borrowed
$49,500,000 under the medium-term note program. These notes mature on October 8,
2003, and pay interest semi-annually at a rate of 5%. The proceeds were utilized
to pay down borrowings under the Company's commercial paper program.
In October of 1993, the Company issued $200,000,000 of senior notes.
Five-year notes totaling $100,000,000 were due in October of 1998 while the
remaining six and one-half year $100,000,000 notes are due in April 2000. On
October 28, 1998, the Company repaid $100,000,000 due on its five-year senior
notes.
6. Supplemental Cash Flow Information; Noncash Financing Activities
Repurchases of common stock in connection with certain exercises under the
Company's stock option plans increased treasury stock by $30,155,000 in 1998 and
$36,067,000 in 1997. Additional paid-in capital increased by corresponding
amounts.
In May 1998, the Company amended a lease agreement for its Edison printing
facility. The amendment modifies certain provisions of the lease agreement
including extending its term by an additional 10 years through May 2018 and
reducing rental obligations. As a result, capitalized lease costs and the
related liability were increased by approximately $42,000,000.
7. Common Stock Repurchases
During the first nine months of 1998, the Company repurchased
approximately 9,455,000 shares of its Class A Common Stock at a cost of
approximately $303,000,000. The average price of these repurchases was
approximately $32 per share. To date, approximately $419,000,000 remains from an
August 1998 Board of Directors repurchase authorization of $575,000,000. Stock
repurchases under this program exclude shares reacquired in connection with
certain exercises under the Company's stock option plans at a cost of
approximately $21,700,000 in the first nine months of 1998 and $11,800,000 in
the first nine months of 1997.
8. Voluntary Staff Reductions
At September 27, 1998, and December 28, 1997, approximately $18,000,000
and $25,000,000 of the total amount of prior charges related to voluntary staff
reductions remain unpaid. The $18,000,000 balance is expected to be paid within
two years. No such charges were recorded in the second or third quarters of 1997
or in the first nine months of 1998. In the first quarter of 1997, the Company
recorded approximately $2,500,000 in pre-tax charges, relating to staff
reductions at corporate headquarters and The New York Times. These charges
reduced basic and diluted earnings per share by $.01.
8
9. Comprehensive Income
In the first quarter of 1998, the Company adopted the provisions of
the Financial Accounting Standards Board's Statement of Accounting Standards
No. 130 ("FAS 130"), Reporting Comprehensive Income. Comprehensive Income for
the Company includes foreign currency translation adjustments in addition to
net income as reported in the Company's Condensed Consolidated Financial
Statements. FAS 130 requires the disclosure of Comprehensive Income, which
was $54,400,000 for the third quarter of 1998 and $193,400,000 for the first
nine months of 1998 and was the same as net income for the third quarter and
first nine months of 1997.
9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Advertising revenues accounted for approximately 70% of the Company's revenues
in the first nine months of 1998 and circulation revenues accounted for
approximately 24% of its revenues in the same period. Advertising revenues cause
the Company's consolidated revenues to vary by season. Second-quarter and
fourth-quarter advertising volume are usually higher than first and
third-quarter volume since economic activity tends to be lower after the
holidays and in the summer. Quarterly trends are also affected by the overall
economy and by economic conditions in the Company's various markets.
In the first nine months of 1998, raw materials represented
approximately 15% of the Company's total costs. The major component of raw
materials is newsprint. The Company's cost of newsprint has been higher during
all of 1998 than in 1997. A price increase has been announced that could further
increase the Company's cost of newsprint in 1998; however even if it becomes
effective, this increase is not expected to have a material effect on the
Company's operations for the fourth quarter of 1998. The Company expects that
any percentage increase in newsprint costs comparing the fourth quarter of 1998
to the 1997 comparable period will be less than the percentage increase already
experienced in the first nine months of 1998 over the 1997 comparable period.
Results of Operations
Third-quarter net income increased 18.9% to $55.0 million, or $.29
basic and diluted earnings per share, from 1997 third-quarter net income of
$46.2 million, or $.24 basic and diluted earnings per share.* Net income,
excluding special items and an extraordinary charge, for the first nine
months, increased 17.3% to $195.2 million, or $1.03 basic ($1.01 diluted)
earnings per share, from $166.4 million, or $.87 basic ($.85 diluted)
earnings per share, in the first nine months of 1997. For the first nine
months of 1998, the increase in net income was primarily due to higher
advertising revenues and greater cost containment; higher newsprint costs and
depreciation expense reduced somewhat that increase in net income. Including
special items and an extraordinary charge, net income for the first nine months
of 1998 rose 6.3% to $194.6 million from $183.0 million in the comparable
1997 period.
Special Items and Extraordinary Charge
The special items and extraordinary charge that affected the 1998 and 1997
first nine months results were:
1998 - The overall effect of these items reduced both basic and diluted
earnings per share by $.01 for the nine months.
- $7.7 million after-tax extraordinary charge for the first
nine months in connection with the Company's repurchase of
$78.1 million of its $150.0 million, 8.25% notes due in
2025. This charge reduced basic and diluted earnings per
share by $.04.
- $8.0 million pre-tax gain for the first nine months from
the satisfaction of a post-closing requirement related to
the 1997 sale of the Company's non-golf magazines. This
gain increased basic and diluted earnings per share by
$.02.
- $4.6 million pre-tax gain for the first nine months from
the sale of equipment. This gain increased basic and
diluted earnings per share by $.01.
- --------------
* All share and per share amounts are adjusted for the 2-for-1 split that took
effect in June of 1998.
10
1997 - The overall effect of these items increased both basic and
diluted earnings per share by $.08 for the nine months.
- $18.0 million after-tax gain for the first nine months
resulting from a favorable tax adjustment from the
completion of the Company's federal income tax audits for
the periods through 1992. This gain increased basic and
diluted earnings per share by $.09.
- $2.5 million pre-tax charge for the first nine months for
severance and related costs resulting from work force
reductions. This charge reduced basic and diluted earnings
per share by $.01.
Revenues
Revenues for the third quarter of 1998 were $682.7 million,
approximately equal to the comparable 1997 period. For the first nine months
of 1998, revenues grew 2.7% to $2.2 billion. On a comparable basis, adjusted
for the 1997 disposition of certain properties (primarily six magazines),
1998 third-quarter revenues increased by approximately 1.9% and nine month
revenues increased approximately 4.7% over the comparable 1997 periods.
Expenses
Production costs for the third quarter of 1998 increased 2.2% to
$357.7 million from $350.0 million in the comparable 1997 period. For the
first nine months of 1998, production costs increased 3.6% to $1.08 billion
from $1.04 billion in the first nine months of 1997. The increase for the
nine months was primarily due to higher newsprint costs and depreciation
expense associated with new production facilities. On a comparable basis,
adjusted for the 1997 sale of the Company's non-golf magazines, 1998 third
quarter production costs increased 3.7% and nine month production costs
increased 5.0%.
Selling, general and administrative expenses in the third quarter of
1998 decreased 7.7% to $223.6 million from $242.2 million in the third quarter
of 1997. For the first nine months of 1998, these expenses decreased 2.9% to
$712.4 million from $733.8 million in the first nine months of 1997, exclusive
of the workforce reduction costs described above. The decrease for both periods
was primarily due to lower compensation expenses and a reduction in other
expenses as a result of the disposition of certain properties in 1997. On a
comparable basis, adjusted for the 1997 sale of the Company's non-golf
magazines, 1998 third quarter selling, general and administrative expenses
decreased 5.3% and nine month selling, general and administrative expenses
decreased .9%.
Operating Profit
Operating profit in the third quarter of 1998 increased 11.0% to $101.4
million compared with $91.3 million in the third quarter of 1997. For the first
nine months of 1998, operating profit rose 12.6% to $362.9 million from $322.4
million in the first nine months of 1997, excluding workforce reduction costs.
The improvement in operating profit was principally due to higher advertising
revenues at the Newspaper Group and tighter cost controls. Higher newsprint
costs and depreciation and amortization expense, partly offset the improvement.
11
EBITDA
"EBITDA" is earnings before interest, income taxes, depreciation and
amortization. EBITDA is a widely accepted indicator of funds available to
service debt, although it is not a measure of liquidity or of financial
performance under generally accepted accounting principles ("GAAP"). EBITDA,
while providing useful information, should not be considered in isolation or as
an alternative to net income or cash flows as determined under GAAP. EBITDA for
the 1998 third quarter rose 11.6% to $155.6 million from $139.4 million in 1997.
For the first nine months of 1998, excluding gains on dispositions of assets and
the extraordinary charge, EBITDA rose 13.5% to $518.2 million from $456.4
million in the first nine months of 1997. Including the special items and the
extraordinary charge, EBITDA for the first nine months of 1998 rose 9.0% to
$517.1 million from $474.4 million in the first nine months of 1997.
Joint Ventures
Income from Joint Ventures increased to $5.3 million from $3.4 million
in the third quarter of 1998 and to $13.6 million from $7.7 million in the first
nine months of 1998. The increase was primarily due to higher income from equity
investments in paper mills.
Interest
Net interest expense, which appears as the line item "Interest
Expense-net", decreased to $10.3 million in the third quarter of 1998, from
$11.7 million in the third quarter of 1997. The decrease, is primarily the
result of a reduction in total indebtedness. Total interest income and
capitalized interest included in the third-quarter amounts were $1.1 million in
1998 and $.8 million in 1997. For the first nine months of 1998, net interest
expense decreased to $31.0 million from $31.4 million in 1997. The decrease for
the first nine months of 1998 is primarily attributable to a reduction in the
amount of total indebtedness as well as increased investment income. Lower
capitalized interest partially offset this decrease in net interest expense.
Total interest income and capitalized interest included in the first nine-month
amounts were $3.3 million in 1998 and $6.7 million in 1997.
Effective Tax Rate
The Company's effective tax rate was 43.0% in the third quarter of
1998, compared with 44.3% in the third quarter of 1997. For the first nine
months of 1998, the effective tax rate was 43.5% compared with 44.3% in the
first nine months of 1997, exclusive of special items and an extraordinary
charge. The decreases in the effective tax rates were primarily the result of
lower state and local income taxes.
12
Segment Information
- ----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------------------------------------------------------------
September 27, September 28, September 27, September 28,
(Dollars in thousands) 1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
Revenues
Newspapers....................................... $620,965 $605,271 $1,950,080 $1,863,330
Broadcast........................................ 34,817 34,933 109,164 105,088
Magazines........................................ 26,947 43,377 95,237 129,571
-------- -------- ---------- ----------
Total.......................................... $682,728 $683,581 $2,154,480 $2,097,989
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Operating Profit (Loss)
Newspapers....................................... $ 95,013 $ 84,830 $ 332,085 $ 302,716
Broadcast........................................ 9,679 9,656 30,573 27,245
Magazines........................................ 4,489 6,603 24,810 21,561
Unallocated Corporate Expenses................... (7,759) (9,754) (24,563) (31,583)
-------- -------- ---------- ----------
Total.......................................... $101,421 $ 91,335 $ 362,905 $ 319,939
-------- -------- ---------- ----------
-------- -------- ---------- ----------
Depreciation and Amortization
Newspapers....................................... $ 42,932 $ 41,773 $ 127,576 $ 118,787
Broadcast........................................ 4,392 3,913 13,258 13,334
Magazines........................................ (467) (2,019) (4,724) (5,492)
Corporate........................................ 1,824 977 5,247 1,831
Joint Ventures................................... 88 89 264 266
-------- -------- ---------- ----------
Total......................................... $ 48,770 $ 44,733 $ 141,621 $ 128,726
-------- -------- ---------- ----------
-------- -------- ---------- ----------
A discussion of the operating results of the Company's segments follows:
Newspaper Group: The Newspaper Group consists of The New York Times ("The
Times"), The Boston Globe ("The Globe"), 21 Regional Newspapers, newspaper
distributors, a news service, a features syndicate, TimesFax, licensing
operations of The New York Times databases and microfilm and New Ventures. New
Ventures primarily include projects in electronic media.
---------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
-----------------------------------------------------------------------
September 27, September 28, September 27, September 28,
(Dollars in thousands) 1998 1997 1998 1997
---------------------------------------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
Revenues
Newspapers............................ $615,228 $601,011 $1,934,163 $1,854,152
New Ventures.......................... 5,737 4,260 15,917 9,178
-------- -------- ---------- ----------
Total Revenues........................ $620,965 $605,271 $1,950,080 $1,863,330
-------- -------- ---------- ----------
EBITDA
Newspapers............................ $140,609 $128,206 $ 466,533 $ 425,513
New Ventures.......................... (2,664) (1,603) (6,871) (4,010)
-------- -------- ----------- -----------
Total EBITDA........................... $137,945 $126,603 $ 459,661 $ 421,503
-------- -------- ----------- -----------
Operating Profit (Loss)
Newspapers............................. $ 98,129 $ 86,704 $ 340,184 $ 307,475
New Ventures........................... (3,116) (1,874) (8,099) (4,759)
-------- --------- ----------- -----------
Total Operating Profit................. $ 95,013 $ 84,830 $ 332,085 $ 302,716
-------- --------- ----------- -----------
13
The Newspaper Group's operating profit was $95.0 million in the third quarter
of 1998, compared with $84.8 million in the third quarter of 1997. For the
first nine months of 1998, operating profit was $332.1 million, compared with
$304.2 million in the first nine months of 1997, excluding workforce
reductions. Revenues were $621.0 million in the third quarter of 1998,
compared with $605.3 million in the third quarter of 1997. For the first nine
months of 1998, revenues were $1.95 billion, compared with $1.86 billion in
the first nine months of 1997. The increase in the Group's revenues for the
1998 third quarter and first nine months was primarily due to higher
advertising revenues of 3.5% in the third quarter and 6.3% in the nine
months; both increases resulted from higher rates and volume. The Company
currently anticipates that 1998 advertising revenue at the Newspaper Group
will increase in a range between 5.5% and 6.5%. The improvement in operating
profit for the 1998 third quarter and nine months was primarily attributable
to increases in advertising revenue and improved cost containment. Higher
depreciation expense related to new production facilities and unfavorable
increases in newsprint cost of 7.9% for the quarter and 16.4% for the first
nine months, partially offset the improvements. Increases of 3.4% in the
quarter and 4.8% for the first nine months were volume related, principally
due to higher advertising and new sections, and the remainder of the increase
was due to higher prices.
Average circulation of daily newspapers for the third quarter and first
nine months ended September 27, 1998, was as follows:
---------------------------------------------------------------------------------------------
Three Months Ended September 27, 1998
----------------------------------------------------------
(Copies in thousands) Weekday % Change Sunday % Change
---------------------------------------------------------------------------------------------
Average Net Paid Circulation
The New York Times 1,063.0 0.2% 1,604.5 (2.3%)
The Boston Globe 471.4 (1.9%) 749.3 (2.3%)
Regional Newspapers 704.2 0.3% 755.7 (0.3%)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Nine Months Ended September 27, 1998
----------------------------------------------------------
(Copies in thousands) Weekday % Change Sunday % Change
---------------------------------------------------------------------------------------------
Average Net Paid Circulation
The New York Times 1,081.6 0.2% 1,627.8 (1.6%)
The Boston Globe 467.3 (1.1%) 749.3 (0.9%)
Regional Newspapers 735.6 0.6% 786.9 0.0%
---------------------------------------------------------------------------------------------
The average circulation declines for the third quarter and first nine
months, on Sundays, at The Times primarily reflect The Times's continuing
strategy to improve the quality of its home delivered circulation base by
reducing the use of promotional discounts for new subscription orders. Though
this strategy results in fewer new subscribers in the short term, the remaining
subscribers tend to be long-term customers, resulting in higher circulation in
the long term, and a more valuable audience for advertisers. Complementing this
quality strategy are a number of vigorous marketing initiatives to improve
single-copy sales and encourage continued circulation growth by expanding
availability in major markets across the nation. The Times and The Globe have
also added new sections and made improvements in delivery service to attract new
readers and retain existing ones.
14
Advertising volume on a comparable basis for the third quarter and
first nine months was as follows:
---------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 27, 1998 September 27, 1998
--------------------------- -------------------------
(Inches in thousands) Volume % Change Volume % Change
---------------------------------------------------------------------------------------------------------------
Advertising Volume (excluding preprints)
The New York Times................................. 889.6 0.1% 2,853.5 0.9%
The Boston Globe................................... 707.1 1.4% 2,205.7 1.4%
Regional Newspapers................................ 3,836.1 1.6% 11,843.7 3.0%
---------------------------------------------------------------------------------------------------------------
Advertising volume at The Times increased approximately 0.1% for the quarter and
0.9% for the first nine months. Category results were as follows:
------------------------------ ---------------------------- --------------------------
Three Months Ended Nine Months Ended
---------------------------- --------------------------
September 27, 1998 September 27, 1998
---------------------------- --------------------------
% Change % Change
------------------------------ ---------------------------- --------------------------
Retail......................... (7.4%) (7.5%)
National...................... +4.1% +6.7%
Classified.................... +1.8% +2.8%
Zoned......................... (2.4%) (3.6%)
------------------------------ ---------------------------- --------------------------
Total......................... +0.1% +0.9%
------------------------------ ---------------------------- --------------------------
Preprints..................... (10.0%) +2.3%
------------------------------ ---------------------------- --------------------------
Advertising volume at The Globe increased approximately 1.4% for both the
quarter and first nine months. Category results were as follows:
------------------------------ ---------------------------- --------------------------
Three Months Ended Nine Months Ended
---------------------------- --------------------------
September 27, 1998 September 27, 1998
---------------------------- --------------------------
% Change % Change
------------------------------ ---------------------------- --------------------------
Retail........................ (2.6%) (5.1%)
National...................... +20.3% +15.2%
Classified.................... (0.4%) +0.6%
Zoned......................... (15.6%) (8.6%)
------------------------------ ---------------------------- --------------------------
Total......................... +1.4% +1.4%
------------------------------ ---------------------------- --------------------------
Preprints..................... +11.9% +5.5%
------------------------------ ---------------------------- --------------------------
Advertising volume at the Regionals increased approximately 1.6% for
the quarter and 3.0% for the first nine months. Category results were
as follows:
------------------------------ ---------------------------- --------------------------
Three Months Ended Nine Months Ended
---------------------------- --------------------------
September 27, 1998 September 27, 1998
---------------------------- --------------------------
% Change % Change
------------------------------ ---------------------------- --------------------------
Retail........................ (1.1%) +0.8%
National...................... (19.7%) (6.6%)
Legal......................... +12.5% +3.9%
Classified.................... +4.7% +5.6%
------------------------------ ---------------------------- --------------------------
Total......................... +1.6% +3.0%
------------------------------ ---------------------------- --------------------------
Preprints..................... +7.5% +7.4%
------------------------------ ---------------------------- --------------------------
15
Broadcast Group: The Broadcast Group consists of eight network-affiliated
television stations and two radio stations.
-------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------------------------------------------------------------
September 27, September 28, September 27, September 28,
(Dollars in thousands) 1998 1997 1998 1997
-------------------------------------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
Revenues..................... $34,817 $34,933 $109,164 $105,088
-------------------------------------------------------------------------------------------------------------
EBITDA....................... $14,071 $13,569 $ 43,831 $ 40,579
-------------------------------------------------------------------------------------------------------------
Operating Profit............. $ 9,679 $ 9,656 $ 30,573 $ 27,245
-------------------------------------------------------------------------------------------------------------
The Broadcast Group's operating profit was $9.7 million in the third
quarter of 1998 on revenues of $34.8 million, approximately equal to the 1997
operating profit and revenues for the comparable period. Operating profit was
$30.6 million for the first nine months of 1998 on revenues of $109.2 million,
compared with $27.2 million in the first nine months of 1997 on revenues of
$105.1 million. Stronger advertising revenues were the main reason for the
increase in operating profit. Third quarter advertising revenues were adversely
affected by the General Motors strike, which was recently settled.
Magazine Group: The Magazine Group is comprised of three golf-related
publications and related activities in the golf field, and New Ventures such as
on-line magazine services. The revenues for the Group include the amortization
of a $40.0 million non-compete agreement associated with the divestiture of the
Women's Magazine Division. This amount was recognized on a straight-line basis
over a four-year period ended July 1998.
------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
---------------------------------------------------------------------------------
September 27, September 28, September 27, September 28,
(Dollars in thousands) 1998 1997 1998 1997
------------------------------------------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
Revenues
Magazines..................... $25,804 $40,062 $88,465 $120,400
Non-Compete................... 833 2,500 5,833 7,500
New Ventures.................. 310 815 939 1,671
------------------------------------------------------------------------------------------------------------------
Total Revenues................ $26,947 $43,377 $95,237 $129,571
------------------------------------------------------------------------------------------------------------------
EBITDA
Magazines..................... $ 4,086 $ 6,465 $20,297 $ 21,869
New Ventures.................. (64) (1,881) (211) (5,800)
------------------------------------------------------------------------------------------------------------------
Total EBITDA.................. $ 4,022 $ 4,584 $20,086 $ 16,069
------------------------------------------------------------------------------------------------------------------
Operating Profit (Loss)
Magazines..................... $ 3,720 $ 6,210 $19,188 $ 20,504
Non-Compete................... 833 2,500 5,833 7,500
New Ventures.................. (64) (2,107) (211) (6,443)
------------------------------------------------------------------------------------------------------------------
Total Operating Profit........ $ 4,489 $ 6,603 $24,810 $ 21,561
------------------------------------------------------------------------------------------------------------------
16
The Magazine Group's operating profit was $4.5 million in the third
quarter of 1998 on revenues of $26.9 million, compared with $6.6 million in the
third quarter of 1997, on revenues of $43.4 million. Consolidation in the golf
equipment industry and a very competitive rate environment adversely affected
the group's performance. Operating profit was $24.8 million for the first nine
months of 1998 on revenues of $95.2 million, compared with $21.6 million in the
first nine months of 1997, on revenues of $129.6 million. The improvement in
operating profit for the nine months was principally attributable to the
Company's exit from the tee-time reservation business in the fourth quarter of
1997. The Group's revenue decreased for both periods as a result of the sale of
the Company's non-golf magazines in the fourth quarter of 1997. The results of
the magazines that were sold were included in the Group's results for the first
eleven months of 1997. Excluding the magazines that were sold, operating profit
was $4.5 million in the third quarter of 1998 on revenues of $26.9 million,
compared with $5.2 million in the third quarter of 1997, on revenues of $30.6
million. On a comparable basis, operating profit for the first nine months of
1998 was $24.8 million on revenues of $95.2 million, compared with $26.1 million
in the first nine months of 1997, on revenues of $96.8 million.
Liquidity and Capital Resources
Net cash provided by operating activities was $348.1 million in the
first nine months of 1998, compared with $309.0 million in the first nine months
of 1997. The increase of $39.1 million in 1998 was primarily due to an
improvement in operating profit. Net cash used in investing activities was $47.7
million in the first nine months of 1998 compared with $114.9 million in the
first nine months of 1997. The decrease of $67.2 million in 1998 was primarily
due to lower capital expenditures. Net cash used in financing activities was
$375.4 million in the first nine months of 1998 compared with $195.4 million in
the first nine months of 1997. The increase of $180.0 million in 1998 was
primarily related to stock repurchases, and the repurchase of its debentures,
partially offset by an increase in issuances of commercial paper.
Cash generated from the Company's operations and from external sources
should be adequate to cover working capital needs, stock repurchases, planned
capital expenditures, dividend payments to stockholders and other cash
requirements. The ratio of current assets to current liabilities was .74 at
September 27, 1998 and .76 and September 28, 1997. The ratio of long-term debt
and capital lease obligations as a percentage of total capitalization was 28% at
both September 27, 1998 and September 28, 1997.
The Company currently estimates that capital expenditures for 1998 will
range from $90.0 million to $100.0 million. The Company currently anticipates
that depreciation and amortization expense will approximate $190.0 million to
$200.0 million for 1998 compared with $173.9 million in 1997.
17
The Company currently maintains $300.0 million in revolving credit
agreements, which require, among other matters, specified levels of
stockholders' equity. The amount of stockholders' equity in excess of the
required levels was approximately $760.0 million at September 27, 1998, compared
with $917.0 million at September 28, 1997. The decrease in the level of
unrestricted stockholders' equity is mainly due to the repurchase of Class A
Common Stock. In July 1998, the Company renewed its $100.0 million revolving
credit agreement, which had a maturity of July 1998, through July 1999. The
remaining $200.0 million revolving credit agreement expires in July 2002. The
Company's total long-term debt, including capital leases, was $603.2 million at
September 27, 1998 and $640.1 million at September 28, 1997, respectively. The
decrease is primarily attributable to the Company's repurchase of its debentures
as described below. This decrease was offset somewhat by an increase in
capitalized lease obligations as a result of an amendment to the Company's lease
for the Edison facility.
On August 21, 1998, the Company filed a $300.0 million Shelf
Registration on Form S-3 with the Securities and Exchange Commission for
unsecured debt securities that may be issued by the Company from time to time.
The registration statement became effective August 28, 1998. On September 24,
1998, the Company filed a prospectus supplement to allow the issuance of up to
$300.0 million in medium term notes. On October 8, 1998, the Company borrowed
$49.5 million under the medium-term note program. These notes mature on October
8, 2003 and pay interest semi-annually at a rate of 5%. The proceeds were
utilized to pay down borrowings under the Company's commercial paper program.
In October of 1993, the Company issued $200.0 million of senior notes.
Five-year notes totaling $100.0 million were due in October of 1998 while the
remaining six and one-half year $100.0 million notes are due in April 2000. On
October 28, 1998, the Company repaid $100.0 million due on its five-year senior
notes.
The Company's tender offer for any and all of its $150.0 million of
outstanding publicly-held 8.25% debentures due March 15, 2025, expired on April
2, 1998. The debenture holders tendered $78.1 million of the outstanding
debentures. The Company financed the purchase of the debentures with available
cash and through its existing commercial paper facility. By replacing higher
rate long-term borrowings with lower-rate short-term alternatives, the Company
expects to reduce interest expense and generate a positive return on a net
present value basis. Total cash paid in connection with the tender offer was
$89.3 million.
Year 2000 Readiness Disclosure
The Company has evaluated the potential impact of the situation
commonly referred to as the "Year 2000 problem." The Year 2000 problem, which is
common to most corporations, concerns the ability of information systems,
primarily computer software programs, to properly recognize and process date
sensitive information related to the Year 2000.
18
The Company's State of Readiness
In April 1997, the Company began an initiative to identify all of its
Year 2000 concerns for all facets of its operations. A Year 2000 Program Office
was established, and a detailed inventory of all systems issues required to be
addressed in connection with the Year 2000 was created. Information was gathered
for each system including location, type of system, its relative importance,
probable method and cost of remediation, and targeted start and end dates for
addressing the issue. This inventory includes systems in the following areas:
(1) systems used to create the Company's publications;
(2) systems used in the operation of the Company's production and
distribution facilities;
(3) systems used in the operation of the Company's broadcast
operations;
(4) business and financial applications systems; and
(5) facility and infrastructure systems (building systems, utilities,
security systems, etc.).
The systems identified in the inventory were further categorized into five
priority classifications:
Shutdown -- highest priority. If these systems (e.g., editorial
systems, presses, utilities) were to fail, the Company's ability
to continue its operations would be seriously impaired.
Approximately 9% of the identified systems are in this category.
Impractical Workaround -- while alternatives exist, it is too
expensive to implement if these systems were to fail.
Approximately 9%.
Costly Workaround -- if these systems were to fail, a feasible
but costly alternative exists. Approximately 29%.
Additional But Manageable Cost -- If these systems fail, and
alternative solution exists at a moderate cost. Approximately
22%.
No Impact -- little if any consequence to the business if these
systems fail. Approximately 31%.
By October 1997, the Company had completed the inventory phase and turned
its attention to the remediation phase. Target dates for each item in the
inventory were identified and are continually monitored to ensure timely
resolution of the issues. The remediation strategy involves a mix of purchasing
new systems, modifying existing systems, retiring obsolete systems and
confirming vendor compliance. As of October 13, 1998, 64% of all systems had
been remediated and tested. Testing systems for Year 2000 compliance includes
the use of dates which simulate transactions and environments, both prior and
subsequent to the Year 2000, including specific testing for leap year.
The Company has communicated with most of its suppliers and other vendors,
and is contacting its significant advertisers, seeking assurances that they will
be Year 2000 compliant. Although no method exists for achieving certainty that
any significant business partners will function without disruption in the Year
2000, the Company's goal is to obtain as much detailed information as possible
about its advertisers' and suppliers' Year 2000 plans and to identify those
companies which could pose a significant risk of failure. The Company will make
alternate arrangements where necessary.
Generally, the Company is not dependent on a single source for any products
or services, except for products or services supplied by public utilities. In
the event a significant supplier or other vendor is unable to provide products
or services to the Company due to a Year 2000 failure, the Company believes it
has adequate alternate sources for such products or services. There is no
guarantee, however, that such alternate products or services would be available
at the same terms and conditions or that the Company would not experience some
adverse effects as a result of switching to alternate sources.
19
The Costs to Address the Company's Year 2000 Issues
To date, the Company has identified total estimated costs in connection
with the Year 2000 problem of between $15 million and $20 million. This estimate
does not include systems previously scheduled for replacement without regard to
the Year 2000 issue. Of this amount, approximately $10 million will be for
systems replacements involving capital outlays (which are not deducted as an
expense on the Company's Condensed Consolidated Statements of Income), and the
remaining amount is being deducted as an expense on the Company's Condensed
Consolidated Statements of Income through mid-1999. Approximately 75% of this
expense total is attributable to the use of currently available internal
resources. The cost of the Company's Year 2000 remediation efforts is being
funded with cash flows from operations.
Risks of Year 2000 Issues
With respect to its internal operations, those over which the Company has
direct control, the Company believes that all of its critical systems (i.e.,
those categorized in the shutdown or impractical workaround categories described
above) will be remediated and tested by the end of the second quarter of 1999.
Like most large business enterprises, the Company is reliant upon certain
critical vendors. Certain of these vendors have yet to provide a Year 2000
compliant product, while services that are provided by certain other vendors
cannot be tested (i.e., power and telecommunications). The Company believes the
possibility of critical vendor failures to be remote based on the information
supplied to date by such critical vendors.
Contingency Plans
The Company's Year 2000 strategies include contingency planning,
encompassing business continuity both within the Company and in the external
business environment. The planning effort encompasses all critical Company
areas. The Company's contingency planning for the Year 2000 will address a
variety of scenarios that could occur.
While no assurances can be given, because of the Company's extensive
efforts to formulate and carry out an effective Year 2000 remediation program,
the Company believes that such remediation will be completed on a timely basis
and should effectively minimize any disruption to the Company's operations due
to Year 2000 issues. The Company does not expect Year 2000 issues to have a
material effect on its results of operations, liquidity or financial condition.
New Accounting Pronouncements
In February 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 132, Employer's
Disclosures about Pensions and Other Postretirement Benefits ("SFAS 132"), which
is effective for fiscal years beginning after December 15, 1997. SFAS 132
standardizes the disclosure requirements for pension and other postretirement
benefits, requires additional information on changes in the benefit obligations
and fair values of plan assets that will facilitate financial analysis, and
eliminates certain disclosures. SFAS 132 does not change the measurement or
recognition of pension or other postretirement benefits. The adoption of SFAS
132 will not have a material effect on the Company's Consolidated Financial
Statements.
20
In April 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position No. 98-5, Reporting on the Costs of
Start-Up Activities ("SOP 98-5"). SOP 98-5 requires that entities expense
start-up costs and organization costs as they are incurred. The Company's
accounting practices are currently in compliance with SOP 98-5. In March 1998,
the AICPA issued SOP No. 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides guidance
on expensing versus capitalization of software-related costs incurred for
internal use, as well as the amortization of capitalized software costs. SOP
98-1 requires computer software costs that are incurred in the preliminary
project stage to be expensed as incurred. The adoption of SOP 98-1 is not
expected to have a material effect on the Company's Consolidated Financial
Statements. SOP 98-5 and SOP 98-1 are effective for fiscal years beginning after
December 15, 1998.
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"), which is effective for all
quarters of fiscal years beginning after June 15, 1999. SFAS 133 requires that
an entity recognize all derivatives as either assets or liabilities and measure
those instruments at fair value. Unless the entity can treat the derivative as a
hedge according to certain criteria, the entity may be required to deduct any
changes in the derivative's fair value from its operating income. The adoption
of SFAS 133 is not expected to have a material effect on the Company's
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 and magazine paper prices. They also
include other risks detailed from time to time in the Company's publicly-filed
documents, including this Quarterly Report on Form 10-Q and the Company's Annual
Report on Form 10-K for the period ended December 28, 1997.
21
Item 4. Exhibits and Reports on Form 8-K
(a) Exhibits
10.7.1 Amendment to Lease between the Company and Z Edison
Limited Partnership, dated May 14, 1997.
10.7.2 Second Amendment to Lease between the Company and Z
Edison Limited Partnership, dated June 30, 1998.
12 Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
On September 24, 1998, the Company filed a Report on Form 8-K which is
reported under Item 5 the Company's entry into the following agreements on that
day: (i) a U.S. Distribution Agreement with Morgan Stanley & Co. Incorporated,
Chase Securities Inc. and Salomon Smith Barney Inc., (ii) an Exchange Rate
Agency Agreement with Morgan Stanley Dean Witter, and (iii) a Calculation Agent
Agreement with The Chase Manhattan Bank. These Agreements relate to the
Company's registration of up to $300,000,000 (or the equivalent in other
currencies) of Medium-Term Notes (the "Notes"), pursuant to (1) a Registration
Statement filed with the Securities and Exchange Commission (the "SEC") on Form
S-3 (File No. 333-62023) on August 21, 1998, and declared effective by the SEC
on August 28, 1998, and (2) a Prospectus Supplement, dated and filed with the
SEC on September 24, 1998.
22
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: November 9, 1998 /S/ John M. O'Brien
---------------- -------------------------------
John M. O'Brien
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
23
Exhibit Index to Quarterly Report Form 10-Q
Quarter Ended September 27, 1998
Exhibit No. Exhibit
10.7.1 Amendment to Lease between the Company and Z Edison Limited
Partnership, dated May 14, 1997.
10.7.2 Second Amendment to Lease between the Company and Z Edison Limited
Partnership, dated June 30, 1998.
12 Ratio of Earning to Fixed Charges.
27 Financial Data Schedule.