Exhibit 99.1
The New York Times Company Reports
2006 Fourth-Quarter and Full-Year Results
Non-Cash Charge Reduces GAAP Earnings
NEW YORK--(BUSINESS WIRE)--Jan. 31, 2007--The New York Times
Company announced today a 2006 fourth-quarter diluted loss per share
of $4.50, compared with diluted earnings per share (EPS) of $.43 in
the fourth quarter of 2005. This loss resulted from a non-cash charge
of $5.11 per share for the write-down of intangible assets at the New
England Media Group. Excluding this charge, fourth-quarter EPS would
have increased 41.9 percent to $.61 from $.43 in the fourth quarter of
2005.
Fourth-quarter net loss was $648.0 million compared with net
income of $63.2 million in the same period of 2005. Excluding the
non-cash charge, fourth-quarter net income would have increased 39.0
percent to $87.9 million from $63.2 million in the same period of
2005.
Details of the non-cash charge for assets at the New England Media
Group (NEMG), which includes The Boston Globe, the Worcester Telegram
& Gazette and their related properties, are provided below.
The 2006 fourth quarter and year included an additional week (14
weeks and 53 weeks) compared with the 2005 fourth quarter and year (13
weeks and 52 weeks) because of our fiscal calendar. The additional
week reduced the 2006 fourth-quarter and full-year 2006 diluted loss
per share by an estimated $.06. Reconciliations of revenues and
expenses, excluding the additional week, to the comparable item
including the additional week are included in the exhibits to this
release. Results before the 2006 fourth quarter also reflect the
effects of a restatement, details of which are provided below.
"While the overall print advertising market remains challenging,
our fourth-quarter results reflect better than anticipated revenue
growth in December," said Janet L. Robinson, president and CEO. "Once
again our digital businesses showed excellent revenue growth - up
approximately 35 percent excluding the additional week - and made up 9
percent of our revenues in the quarter. In its first full year under
our ownership, About.com turned in an outstanding performance with
revenue growth up an estimated 50 percent excluding the additional
week.
"Costs remain under tight control. Excluding the additional week
in 2006, expenses decreased 2.2 percent in the fourth quarter. With
the initiatives we have taken, we expect that expense growth will
continue to be constrained this year. The non-cash charge taken in the
quarter related to the New England Media Group in no way diminishes
our belief in this important asset and our commitment to improving its
performance and value in the future.
"In 2007 we plan to continue to enhance the positions of our
strong brands through the introduction of innovative new products and
services across all of our media platforms, aggressively pursue
leadership positions in key content verticals, expand our research and
development capabilities, rebalance our portfolio of properties and
maintain our focus on reducing costs. These steps will strengthen our
Company for the benefit of our customers and shareholders."
Included in the fourth-quarter 2006 results are:
-- A non-cash charge of $814.4 million ($735.9 million after tax,
or $5.11 per share) related to the write-down of intangible
assets at the NEMG,
-- Staff reduction costs of $8.5 million ($4.9 million after tax,
or $.03 per share) and
-- Accelerated depreciation expense of $20.8 million ($11.5
million after tax, or $.08 per share) for certain assets at
our Edison, N.J., printing plant, which we are in the process
of closing.
Included in the fourth-quarter 2005 results are:
-- Staff reduction costs of $35.4 million ($21.7 million after
tax, or $.15 per share) and
-- A charge of $9.9 million ($5.5 million after tax, or $.04 per
share) for the cumulative effect of a change in accounting
principle for the adoption of FASB Interpretation No. 47,
which relates primarily to our lease agreements that require
restoration of land or facilities to their original condition
at the end of the leases. A portion of the 2005 charge has
been reclassified to conform to the 2006 presentation of the
Broadcast Media Group as a discontinued operation.
In 2006, we announced plans to sell our Broadcast Media Group, and
on January 3, 2007, we entered into an agreement to do so for $575
million. The results of operations of the Broadcast Media Group are
classified under discontinued operations for all periods presented.
Restatement
We are restating our previously issued financial statements as a
result of reporting errors primarily relating to pension and benefits
plans established pursuant to collective bargaining agreements between
the Company and its subsidiaries and The New York Times Newspaper
Guild. These errors arose from our treatment of the plans since they
began in 1965 and 1981, respectively, as multi-employer plans. We have
now concluded that the plans, which include employees of The New York
Times and a Company subsidiary, as well as employees of the plans'
administrator, should have been accounted for as single-employer
plans.
The main effect of the change is that we must account for the
present value of projected future benefits to be provided under the
plans. Previously, we had recorded the expense of our annual
contributions to the plans. While the calculations will increase our
reported expense, the accounting changes will not materially increase
our funding obligations. We will also include in our restated
financial statements other unrecorded adjustments that were previously
determined to be immaterial, but are now considered material when
combined with the errors related to the pension and benefit plans.
The impact of the restatement was not material from an income and
cash flows statement perspective but was material from a balance sheet
perspective. In connection with the restatement, we currently estimate
that, as of December 25, 2005, assets will increase approximately $30
million, liabilities will increase approximately $100 million (net of
deferred taxes) and stockholders' equity will decrease by
approximately $70 million.
This release contains 2006 fourth-quarter and full-year financial
information presented on the restated basis. Financial information for
the fourth quarter and full year 2005 and first three quarters of 2006
has been restated to reflect the effect of the change in accounting
and the other adjustments mentioned above. The quarterly EPS impact of
the restatement is below:
First Second Third Fourth
Quarter Quarter Quarter Quarter Year-to-Date
- ----------------------------------------------------------------------
2006 Diluted EPS
As Reported $0.24 $0.42 $0.10 N/A N/A
2006 Diluted EPS
As Restated $0.22 $0.41 $0.09 N/A N/A
2005 Diluted EPS
As Reported $0.76 $0.42 $0.16 $0.45 $1.78
2005 Diluted EPS
As Restated $0.75 $0.41 $0.15 $0.43 $1.74
Full-Year EPS and Net Income
For 2006, we reported a diluted loss per share of $3.76 compared
with diluted EPS of $1.74 in 2005, and a net loss of $543.4 million
compared with net income of $253.5 million in 2005. Excluding the
non-cash charge, 2006 EPS would have been $1.33, and 2006 net income
would have been $192.5 million.
2006
Included in the full-year 2006 results are:
-- A non-cash charge of $814.4 million ($735.9 million after tax,
or $5.09 per share) related to the write-down of intangible
assets at the NEMG,
-- Staff reduction costs of $34.3 million ($19.6 million after
tax, or $.14 per share),
-- Accelerated depreciation expense of $20.8 million ($11.5
million after tax, or $.08 per share) for certain assets at
the Edison, N.J., printing plant, which we are in the process
of closing, and
-- A loss of $7.8 million ($4.3 million after tax, or $.03 per
share) from the sale of our 50 percent investment in the
Discovery Times Channel (DTC), a digital cable channel.
2005
Included in full-year 2005 results are:
-- A gain of $122.9 million from the sale of our current
headquarters ($63.3 million after tax, or $.43 per share) as
well as property in Florida ($5.0 million after tax, or $.03
per share),
-- Staff reduction costs of $57.8 million ($35.3 million after
tax, or $.23 per share) and
-- A charge of $9.9 million ($5.5 million after tax, or $.04 per
share) for the cumulative effect of a change in accounting
principle for the adoption of FASB Interpretation No. 47. A
portion of the 2005 charge has been reclassified to
discontinued operations as noted above.
Fourth-Quarter Results from Continuing Operations
All comparisons are for the fourth quarter of 2006 to the fourth
quarter of 2005. The results exclude the Broadcast Media Group and
include the effect of the additional week. The fourth quarter 2005
results reflect the effect of a restatement, details of which are
provided above. Reconciliations of non-GAAP financial measures to GAAP
measures are included in the exhibits to this release.
Revenues
Total revenues increased 4.3 percent to $931.5 million from $893.1
million. Advertising revenues increased 1.6 percent; circulation
revenues were up 7.7 percent; and other revenues rose 20.4 percent.
Excluding the additional week, total revenues decreased 1.4 percent;
advertising revenues decreased 3.7 percent; circulation revenues were
up 0.7 percent; and other revenues rose 15.6 percent.
Costs and Expenses
Total costs and expenses increased 2.5 percent to $802.3 million
from $782.8 million. Excluding the additional week, total costs and
expenses decreased 2.2 percent. The decline was a result of lower
staff reduction expenses and decreased newsprint expenses, which were
partially offset by higher depreciation expense from the accelerated
depreciation of certain assets at our Edison, N.J., printing plant and
increased compensation costs.
Newsprint expense decreased 1.6 percent in the fourth quarter.
Excluding the additional week, newsprint expense decreased 7.5 percent
in the fourth quarter, with 13.1 percent of the decrease resulting
from lower consumption partially offset by a 5.6 percent increase from
higher prices.
Non-cash Charge
In late 2006, we indicated that we would be conducting our annual
impairment test of intangible assets, under Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets,
and that a write-down of intangible assets of the NEMG could be
required. The completion of this test has resulted in a non-cash
charge of $814.4 million ($735.9 million after tax, or $5.11 per
share). The write-down mainly resulted from declines in current and
projected operating results and cash flows of the NEMG due to, among
other factors, advertiser consolidations in the New England area and
increased competition with online media.
Operating Loss/Profit
We had an operating loss of $685.2 million in the fourth quarter,
due to the NEMG charge described above, compared to an operating
profit of $110.3 million in the same period of last year. Excluding
the charge, operating profit increased as a result of the factors
discussed above.
Fourth-Quarter Business Segment Results
News Media Group
Total News Media Group revenues increased 3.5 percent mainly due
to the effect of the additional week in our fiscal quarter. Excluding
the additional week, total revenues decreased 2.1 percent.
Advertising revenues in the quarter increased 0.4 percent due to
the additional week. Excluding the additional week, advertising
revenues decreased 4.8 percent, mainly due to lower print advertising
revenues at The Times and New England Media Groups.
Circulation revenues for the quarter rose 7.7 percent and 0.7
percent, excluding the additional week, mainly due to higher prices at
The New York Times Media Group partially offset by fewer copies sold.
On October 1, The New York Times raised the newsstand price of the
Northeast edition of the Sunday Times from $4.50 to $5.00, and on
November 6, home-delivery prices of The Times increased 4 percent.
These two price increases are expected to add approximately $12
million to circulation revenues in 2007.
Other revenues rose 20.3 percent. Excluding the additional week,
other revenues increased 15.4 percent largely because of higher
commercial printing revenues, growth in subscriptions to TimesSelect
and revenues from Baseline StudioSystems, which was acquired on August
28, 2006. Baseline is a leading online database and research service
for information on the film and television industries.
Total News Media Group costs and expenses increased 2.5 percent.
Excluding the additional week, total costs and expenses declined 2.3
percent due to lower staff reduction expenses and decreased newsprint
expenses, which were partially offset by higher depreciation expense
from the accelerated depreciation of certain assets at our Edison,
N.J., printing plant and increased compensation costs.
Operating profit for the News Media Group increased to $138.8
million from $126.6 million due to the additional week.
About.com
About.com's fourth-quarter revenues increased 44.8 percent to
$24.2 million from $16.7 million. Excluding the additional week,
revenues increased 36.4 percent due to higher display and
cost-per-click advertising and e-commerce revenue. Operating profit
nearly doubled to $10.2 million from $5.2 million as a result of
higher incremental revenues and the additional week in fiscal 2006.
For the year, About.com's revenues rose an estimated 50 percent,
excluding the extra week and based on the previous owner's accounting
records before the acquisition date in March 2005 and our records
after the acquisition date.
Other Financial Data
Internet Revenues
In the fourth quarter, our Internet revenues grew 42 percent to
$84.8 million from $59.7 million in the fourth quarter of 2005. For
the full-year 2006, Internet revenues rose 41.2 percent to $273.9
million from $193.9 million in 2005. Excluding the additional week,
Internet revenues grew 35.3 percent in the fourth quarter and 39.2
percent for the full year. Internet businesses include our digital
archives, NYTimes.com, Boston.com, About.com and Web sites of our
other newspaper properties. In total, Internet businesses accounted
for 9.1 percent of our revenues in the fourth quarter versus 6.7
percent in the 2005 fourth quarter. For the year, Internet revenues
accounted for 8.3 percent of total revenues compared with 6.0 percent
in 2005.
Joint Ventures
Net income from joint ventures decreased in the fourth quarter to
$1.3 million from $2.2 million due to the loss of earnings from the
DTC as a result of the sale of our 50% ownership interest in it during
the third quarter of 2006. This decline was partially offset by
favorable results at other properties in which we have equity
interests.
Interest Expense-net
Interest expense-net increased slightly in the quarter to $11.6
million from $11.4 million due to higher levels of debt outstanding
and higher short-term interest rates, partially offset by the effect
of capitalized interest associated with the new building.
Income Taxes
The effective income tax rate was 5.0 percent in the fourth
quarter and 3.0 percent for the full year of 2006 because the majority
of the non-cash charge of $814.4 million at the NEMG is not deductible
for tax purposes. Excluding the non-cash charge, the effective income
tax rate would have been 36.6 percent in the fourth quarter and 36.2
percent for the full year of 2006 compared with 36.5 percent in the
fourth quarter and 40.2 percent for the full year of 2005.
Shares
In the fourth quarter, we repurchased 0.6 million Class A shares
at a cost of $14.5 million. Approximately $93.7 million remained at
the end of the fourth quarter from our share repurchase authorization.
Class A and Class B common shares outstanding at the end of the
quarter totaled 143.9 million shares.
Cash and Total Debt
At the end of the quarter, our cash and cash equivalents were
approximately $72 million and total debt was approximately $1.4
billion, which includes our development partner's $125 million
construction loan.
Capital Expenditures
In the fourth quarter, total capital expenditures were
approximately $119 million, which included approximately $69 million
for our new headquarters.
For the year, total capital expenditures were approximately $358
million, including approximately $192 million for our portion of the
cost of our new headquarters. Our development partner's portion of
total capital expenditures was $55 million.
2007 Expectations
Below are our expectations for 2007. With the exception of
newsprint and capital expenditures for our new building, our
expectations have remained substantially unchanged since they were
first provided in December 2006.
-- Advertising rates for The New York Times and the regional
newspapers will increase in the low-single digits, and will be
flat to slightly up at The Boston Globe.
-- We expect our revenues from Internet-related businesses,
including About.com, NYTimes.com, Boston.com, iht.com and the
sites associated with our regional newspapers, to grow
approximately 30 percent to approximately $350 million mainly
from organic growth.
-- In the fourth quarter of 2006, The New York Times raised the
newsstand price of the Northeast edition of the Sunday Times
to the same price as the national edition, and increased
home-delivery prices by 4 percent. These two price increases
are expected to add approximately $12 million to circulation
revenues in 2007.
-- We anticipate wages will increase 2 to 3 percent.
-- Newsprint cost per ton is expected to decline in the
low-single digits. Previously we had expected newsprint cost
per ton in 2007 to be flat with 2006.
-- Cost savings and productivity gains - estimated $65 to $75
million, excluding certain one-time expenses, mainly buyout
costs.
-- Depreciation and amortization - $195 to $205 million, which
includes $45 to $48 million of accelerated depreciation
expense associated with our plant consolidation project. Total
depreciation and amortization includes approximately $16 to
$19 million for the new building in the second half of 2007.
-- Income from joint ventures - $10 to $15 million.
-- Interest expense - $48 to $52 million. It will be lower in the
first half of 2007 and then increase in the second half of the
year when interest capitalization on the new building ends.
-- Capital expenditures - $340 to $370 million, including $170 to
$190 million for our new headquarters and $75 million for the
plant consolidation. Previously, we had expected spending on
our new headquarters to be $155 to $170 million. The change is
due to lower spending on our new building in 2006. The total
amount of capital expenditures is unchanged at $340 to $370
million.
-- We expect our tax rate will be higher in 2007 primarily due to
a new accounting rule related to income taxes, and will
provide an estimated effective tax rate when our analysis of
this rule is complete.
-- We expect to complete the sale of our Broadcast Media Group
for $575 million in the first half of the year. At this time,
we plan to use the proceeds to reduce debt and have reflected
this in our interest expense guidance. This could change if
other opportunities with better-projected returns are
available.
-- We expect to complete the sale of one of our radio stations,
WQEW, for $40 million in the first quarter.
Conference Call Information
The Company's fourth-quarter earnings conference call will be held
on Wednesday, January 31, at 11 a.m. E.T. To access the call, dial
866-316-1367 (in the U.S.) and 913-312-6677 (international callers).
Participants should dial into the conference approximately 10 minutes
before the start time. Online listeners can link to the live webcast
at www.nytco.com/investors.html.
A digital replay will be available at 888-203-1112 (in the U.S.)
and 719-457-0820 (international callers) beginning approximately two
hours after the call until 5 p.m. E.T. on Thursday, February 1. The
access code is 3794791. An archive of the webcast will be available
beginning two hours after the call for 30 days at
www.nytco.com/investors.html. In addition, an MP3 file of the call can
be downloaded from the Company's site.
Except for the historical information contained herein, the
matters discussed in this press release 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 our 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 year ended December 25,
2005. The Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
The New York Times Company (NYSE: NYT), a leading media company
with 2006 revenues of $3.3 billion, includes The New York Times, the
International Herald Tribune, The Boston Globe, 15 other daily
newspapers, nine network-affiliated television stations, two New York
City radio stations and 35 Web sites, including NYTimes.com,
Boston.com and About.com. The Company's core purpose is to enhance
society by creating, collecting and distributing high-quality news,
information and entertainment.
This press release can be downloaded from www.nytco.com
Exhibits: Condensed Consolidated Statements of Income
Segment Information
News Media Group Revenues by Operating Segment
Footnotes - Reconciliation of Non-GAAP Information
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
Fourth Quarter
-----------------------------------
2006 2005 % Change
----------- ----------- ---------
(Restated)
(14 weeks) (13 weeks)
Revenues
Advertising $ 626,332 $ 616,601 1.6%
Circulation 234,729 218,004 7.7%
Other (a) 70,423 58,513 20.4%
----------- -----------
Total 931,484 893,118 4.3%
Costs and expenses (b) 802,255 782,844 2.5%
Write-down of intangible assets
(c) 814,433 - N/A
Operating (loss)/profit (685,204) 110,274 *
Net income from joint ventures 1,255 2,161 -41.9%
Interest expense - net 11,626 11,399 2.0%
Other income - 417 N/A
----------- -----------
(Loss)/Income from continuing
operations before income taxes
and minority interest (695,575) 101,453 *
Income tax (benefit)/expense (34,949) 37,076 *
Minority interest in net (income)
of subsidiaries (245) (144) 70.1%
----------- -----------
(Loss)/Income from continuing
operations (660,871) 64,233 *
Income from discontinued
operations, net of income taxes-
Broadcast Media Group (e) 12,838 4,532 *
Cumulative effect of a change in
accounting principle, net of
income taxes (f) - (5,527) N/A
----------- -----------
Net (Loss)/Income $ (648,033) $ 63,238 *
=========== ===========
Average Number of Common Shares:
Basic 143,906 145,153 -0.9%
Diluted 143,906 145,407 -1.0%
Basic (Loss)/Earnings Per Share:
(Loss)/Income from continuing
operations $ (4.59) $ 0.44 *
Discontinued operations, net of
income taxes 0.09 0.04 *
Cumulative effect of a change
in accounting principle, net
of income taxes - (0.04) N/A
----------- -----------
Net (Loss)/Income $ (4.50) $ 0.44 *
=========== ===========
Diluted (Loss)/Earnings Per Share:
(Loss)/Income from continuing
operations $ (4.59) $ 0.44 *
Discontinued operations, net of
income taxes 0.09 0.03 *
Cumulative effect of a change
in accounting principle, net
of income taxes - (0.04) N/A
----------- -----------
Net (Loss)/Income $ (4.50) $ 0.43 *
=========== ===========
Dividends Per Share $ 0.175 $ 0.165 6.1%
=========== ===========
------------------------------------
Full Year
------------------------------------
2006 2005 % Change
----------- ----------- ---------
(53 weeks) (Restated)
(52 weeks)
Revenues
Advertising $2,153,936 $2,139,486 0.7%
Circulation 889,722 873,975 1.8%
Other (a) 246,245 217,667 13.1%
----------- -----------
Total 3,289,903 3,231,128 1.8%
Costs and expenses (b) 2,996,081 2,911,578 2.9%
Write-down of intangible assets
(c) 814,433 - N/A
Gain on sale of assets (d) - 122,946 N/A
----------- -----------
Operating (loss)/profit (520,611) 442,496 *
Net income from joint ventures 19,340 10,051 92.4%
Interest expense - net 50,651 49,168 3.0%
Other income - 4,167 N/A
----------- -----------
(Loss)/Income from continuing
operations before income taxes
and minority interest (551,922) 407,546 *
Income tax expense 16,608 163,976 -89.9%
Minority interest in net
loss/(income) of subsidiaries 359 (257) *
----------- -----------
(Loss)/Income from continuing
operations (568,171) 243,313 *
Income from discontinued
operations, net of income taxes-
Broadcast Media Group (e) 24,728 15,687 57.6%
Cumulative effect of a change in
accounting principle, net of
income taxes (f) - (5,527) N/A
----------- -----------
Net (Loss)/Income $ (543,443) $ 253,473 *
=========== ===========
Average Number of Common Shares:
Basic 144,579 145,440 -0.6%
Diluted 144,579 145,877 -0.9%
Basic (Loss)/Earnings Per Share:
(Loss)/Income from continuing
operations $ (3.93) $ 1.67 *
Discontinued operations, net of
income taxes 0.17 0.11 54.5%
Cumulative effect of a change
in accounting principle, net
of income taxes - (0.04) N/A
----------- -----------
Net (Loss)/Income $ (3.76) $ 1.74 *
=========== ===========
Diluted (Loss)/Earnings Per Share:
(Loss)/Income from continuing
operations $ (3.93) $ 1.67 *
Discontinued operations, net of
income taxes 0.17 0.11 54.5%
Cumulative effect of a change
in accounting principle, net
of income taxes - (0.04) N/A
----------- -----------
Net (Loss)/Income $ (3.76) $ 1.74 *
=========== ===========
Dividends Per Share $ 0.690 $ 0.650 6.2%
=========== ===========
* Represents an increase or decrease in excess of 100%.
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
SEGMENT INFORMATION
(Dollars in thousands)
- ----------------------------------------------------------------------
--------------------------------
Fourth Quarter
-------------------------------
2006 2005 % Change
---------- ---------- ---------
(Restated)
(14 weeks) (13 weeks)
Revenues (e)
- -------------------------------------
News Media Group $ 907,263 $876,393 3.5%
About.com (g) 24,221 16,725 44.8%
---------- ----------
Total $ 931,484 $893,118 4.3%
========== ==========
Operating Profit (Loss) (e)
- -------------------------------------
News Media Group $ 138,784 $126,574 9.6%
About.com (g) 10,150 5,182 95.9%
Corporate (19,705) (21,482) -8.3%
Write-down of assets (c) (814,433) - N/A
Gain on sale of assets (d) - - N/A
---------- ----------
Total $(685,204) $110,274 *
========== ==========
Depreciation & Amortization (e)
- -------------------------------------
News Media Group $ 49,410 $ 30,611 61.4%
About.com (g) 3,056 2,998 1.9%
Corporate 2,152 1,743 23.5%
---------- ----------
Total $ 54,618 $ 35,352 54.5%
========== ==========
---------------------------------
Full Year
---------------------------------
2006 2005 % Change
---------- ---------- ---------
(Restated)
(53 weeks) (52 weeks)
Revenues (e)
- ----------------------------------
News Media Group $3,209,704 $3,187,180 0.7%
About.com (g) 80,199 43,948 82.5%
----------- -----------
Total $3,289,903 $3,231,128 1.8%
=========== ===========
Operating Profit (Loss) (e)
- ----------------------------------
News Media Group $ 317,157 $ 360,633 -12.1%
About.com (g) 30,819 11,685 *
Corporate (54,154) (52,768) 2.6%
Write-down of assets (c) (814,433) - N/A
Gain on sale of assets (d) - 122,946 N/A
----------- -----------
Total $ (520,611) $ 442,496 *
=========== ===========
Depreciation & Amortization (e)
- ----------------------------------
News Media Group $ 143,671 $ 119,293 20.4%
About.com (g) 11,920 9,165 30.1%
Corporate 6,740 7,022 -4.0%
----------- -----------
Total $ 162,331 $ 135,480 19.8%
=========== ===========
* Represents an increase or decrease in excess of 100%.
- ----------------------------------------------------------------------
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
NEWS MEDIA GROUP REVENUES BY OPERATING SEGMENT
(Dollars in thousands)
- ----------------------------------------------------------------------
2006
------------------------------------
% %
Change Change
Fourth vs. vs.
Quarter 2005 Full Year 2005
---------- ------ ----------- ------
(14 weeks) (53 weeks)
The New York Times Media Group
Advertising $383,083 1.3% $1,268,592 0.5%
Circulation 169,236 9.7% 637,094 3.5%
Other 48,234 13.9% 171,571 9.3%
---------- -----------
Total $600,553 4.5% $2,077,257 2.1%
---------- -----------
New England Media Group
Advertising $118,174 -6.1% $ 425,743 -9.0%
Circulation 41,964 0.7% 163,019 -4.5%
Other 14,399 50.8% 46,572 25.9%
---------- -----------
Total $174,537 -1.4% $ 635,334 -5.9%
---------- -----------
Regional Media Group
Advertising $101,877 5.4% $ 383,207 4.3%
Circulation 23,529 6.5% 89,609 2.1%
Other 6,767 16.5% 24,297 11.1%
---------- -----------
Total $132,173 6.1% $ 497,113 4.2%
---------- -----------
Total News Media Group
Advertising $603,134 0.4% $2,077,542 -0.9%
Circulation 234,729 7.7% 889,722 1.8%
Other (a) 69,400 20.3% 242,440 12.3%
---------- -----------
Total $907,263 3.5% $3,209,704 0.7%
========== ===========
- ----------------------------------------------------------------------
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
FOOTNOTES
(a) Other revenue consists primarily of revenue from TimesSelect,
commercial printing, wholesale delivery operations, news
services, direct marketing, digital archives and Baseline
StudioSystems.
(b) The Company recognized charges of $8.5 million for staff reduction
costs in the fourth quarter of 2006 and $34.3 million for the
full year of 2006 compared with charges of $35.4 million for the
fourth quarter and $57.8 million for the full year of 2005.
(c) In late 2006, the Company indicated that it would be conducting
its annual impairment test of intangible assets, under Statement
of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets, and that a write-down of intangible assets of
the NEMG could be required. The completion of this test has
resulted in a non-cash charge of $814.4 million ($735.9 million
after tax, or $5.11 per share). The write-down mainly resulted
from declines in current and projected operating results and cash
flows of the NEMG due to, among other factors, advertiser
consolidations in the New England area and increased competition
with online media.
(d) In the first quarter of 2005, the Company recognized a $122.9
million pre-tax gain from the sale of assets. The Company's sale
of its current headquarters building resulted in a total pre-tax
gain of $143.9 million, of which $114.5 million was recognized in
the first quarter of 2005. The remainder of the gain is being
deferred and amortized under GAAP and is offsetting the leaseback
expense in connection with the sale. Additionally, in the first
quarter of 2005, the Company sold property in Sarasota, Fla.,
which resulted in a pre-tax gain of $8.4 million.
(e) In the third quarter of 2006, the Company announced plans to sell
its Broadcast Media Group, which includes nine network-affiliated
television stations and their related properties. Under Statement
of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, the Broadcast Media
Group is treated as a discontinued operation. The Company has
made reclassifications in all periods presented to reflect this
change. On January 3, 2007, the Company entered into an agreement
to sell the Broadcast Media Group for $575 million, which is
expected to be completed in the first half of 2007. Depreciation
and amortization for the Broadcast Media Group totaled $8 million
in the first nine months of the year when it was a continuing
operation.
Results for the Broadcast Media Group, included within
discontinued operations, for the fourth quarter and full year of
2006 and 2005 are as follows:
----------------- -------------------
(In thousands) Fourth Quarter Full Year
----------------- -------------------
2006 2005 2006 2005
-------- -------- --------- ---------
Revenues $49,249 $37,274 $156,791 $139,055
Pre-tax income $21,268 $ 8,233 $ 41,421 $ 27,141
Income taxes 8,430 3,376 16,693 11,129
-------- -------- --------- ---------
Sub-total $12,838 $ 4,857 $ 24,728 $ 16,012
Cumulative effect of a change
in accounting principle, net
of income taxes - (325) - (325)
-------- -------- --------- ---------
Net income $12,838 $ 4,532 $ 24,728 $ 15,687
======== ======== ========= =========
(f) In 2005, the Company recorded a pre-tax charge of $9.9 million
($5.5 million after tax or $.04 per share) for the cumulative
effect of a change in accounting principle related to the
adoption of FASB Interpretation No. 47. This change in accounting
principle related primarily to the Company's lease agreements
that require restoration of the land or facilities to their
original condition at the end of the leases. The Company now
recognizes the restoration costs over the term of the leases.
Before this accounting change, the Company planned to recognize
the costs at the end of the leases. A portion of the 2005 charge
has been reclassified to conform to the 2006 presentation of the
Broadcast Media Group as a discontinued operation.
(g) On March 18, 2005, the Company purchased About, Inc., a leading
online consumer information provider. Fiscal year 2006 includes
results for About.com for the full year compared to results from
the acquisition date through the fourth quarter in 2005.
Reconciliation of Non-GAAP Information
(Dollars in thousands)
Reconciliation of revenues and expenses excluding the additional week
The Company's 2006 fiscal fourth quarter and year included an
additional week (14 weeks and 53 weeks) compared with the 2005 fiscal
fourth quarter and year (13 weeks and 52 weeks). This release
includes revenues and expenses excluding the effect of the additional
week (in each case, a non-GAAP financial measure). The Company
believes that these measures are more indicative of ongoing
performance. These measures should be considered in addition to
results prepared in accordance with GAAP, but should not be
considered a substitute for or superior to GAAP results.
Reconciliations of these items to the most directly comparable GAAP
item are below.
Total Company
--------------------------------------------------------
Fourth Quarter
--------------------------------------------------------
2006 Additional 2006
As Reported Week Adjusted 2005 % Change
----------- ---------- ----------- ---------- ---------
(Restated)
(14 weeks) (13 weeks) (13 weeks)
Revenues
Advertising $ 626,332 $ (32,842) $ 593,490 $ 616,601 -3.7%
Circulation 234,729 (15,193) 219,536 218,004 0.7%
Other 70,423 (2,795) 67,628 58,513 15.6%
----------- ---------- ----------- -----------
Total $ 931,484 $ (50,830) $ 880,654 $ 893,118 -1.4%
=========== ========== =========== ===========
Costs and
expenses $ 802,255 $ (36,779) $ 765,476 $ 782,844 -2.2%
--------------------------------------------------------
Full Year
--------------------------------------------------------
2006 Additional 2006
As Reported Week Adjusted 2005 % Change
----------- ---------- ----------- ---------- ---------
(Restated)
(53 weeks) (52 weeks) (52 weeks)
Revenues
Advertising $2,153,936 $ (32,842) $2,121,094 $2,139,486 -0.9%
Circulation 889,722 (15,193) 874,529 873,975 0.1%
Other 246,245 (2,795) 243,450 217,667 11.8%
----------- ---------- ----------- -----------
Total $3,289,903 $ (50,830) $3,239,073 $3,231,128 0.2%
=========== ========== =========== ===========
Costs and
expenses $2,996,081 $ (36,779) $2,959,302 $2,911,578 1.6%
News Media Group
--------------------------------------------------------
Fourth Quarter
--------------------------------------------------------
2006 Additional 2006
As Reported Week Adjusted 2005 % Change
----------- ---------- ----------- ---------- ---------
(Restated)
(14 weeks) (13 weeks) (13 weeks)
The New York Times Media Group
Advertising $ 383,083 (18,016) $ 365,067 $ 378,175 -3.5%
Circulation 169,236 (10,694) 158,542 154,250 2.8%
Other 48,234 (1,556) 46,678 42,343 10.2%
----------- ---------- ----------- -----------
Total $ 600,553 $ (30,266) $ 570,287 $ 574,768 -0.8%
=========== ========== =========== ===========
New England Media Group
Advertising $ 118,174 $ (6,865) $ 111,309 $ 125,841 -11.5%
Circulation 41,964 (2,825) 39,139 41,656 -6.0%
Other 14,399 (876) 13,523 9,547 41.6%
----------- ---------- ----------- -----------
Total $ 174,537 $ (10,566) $ 163,971 $ 177,044 -7.4%
=========== ========== =========== ===========
Regional Media Group
Advertising $ 101,877 $ (6,551) $ 95,326 $ 96,675 -1.4%
Circulation 23,529 (1,674) 21,855 22,098 -1.1%
Other 6,767 (363) 6,404 5,808 10.3%
----------- ---------- ----------- -----------
Total $ 132,173 $ (8,588) $ 123,585 $ 124,581 -0.8%
=========== ========== =========== ===========
Total News Media Group
Revenues
Advertising $ 603,134 $ (31,432) $ 571,702 $ 600,691 -4.8%
Circulation 234,729 (15,193) 219,536 218,004 0.7%
Other 69,400 (2,795) 66,605 57,698 15.4%
----------- ---------- ----------- -----------
Total $ 907,263 $ (49,420) $ 857,843 $ 876,393 -2.1%
=========== ========== =========== ===========
Costs and
expenses $ 768,479 $ (36,201) $ 732,278 $ 749,819 -2.3%
--------------------------------------------------------
Full Year
--------------------------------------------------------
2006 Additional 2006
As Reported Week Adjusted 2005 % Change
----------- ---------- ----------- ---------- ---------
(Restated)
(53 weeks) (52 weeks) (52 weeks)
The New York Times Media Group
Advertising $1,268,592 (18,016) $1,250,576 $1,262,168 -0.9%
Circulation 637,094 (10,694) 626,400 615,508 1.8%
Other 171,571 (1,556) 170,015 157,037 8.3%
----------- ---------- ----------- -----------
Total $2,077,257 $ (30,266) $2,046,991 $2,034,713 0.6%
=========== ========== =========== ===========
New England Media Group
Advertising $ 425,743 $ (6,865) $ 418,878 $ 467,608 -10.4%
Circulation 163,019 (2,825) 160,194 170,744 -6.2%
Other 46,572 (876) 45,696 36,991 23.5%
----------- ---------- ----------- -----------
Total $ 635,334 $ (10,566) $ 624,768 $ 675,343 -7.5%
=========== ========== =========== ===========
Regional Media Group
Advertising $ 383,207 $ (6,551) $ 376,656 $ 367,522 2.5%
Circulation 89,609 (1,674) 87,935 87,723 0.2%
Other 24,297 (363) 23,934 21,879 9.4%
----------- ---------- ----------- -----------
Total $ 497,113 $ (8,588) $ 488,525 $ 477,124 2.4%
=========== ========== =========== ===========
Total News Media Group
Revenues
Advertising $2,077,542 $ (31,432) $2,046,110 $2,097,298 -2.4%
Circulation 889,722 (15,193) 874,529 873,975 0.1%
Other 242,440 (2,795) 239,645 215,907 11.0%
----------- ---------- ----------- -----------
Total $3,209,704 $ (49,420) $3,160,284 $3,187,180 -0.8%
=========== ========== =========== ===========
Costs and
expenses $2,892,547 $ (36,201) $2,856,346 $2,826,547 1.1%
About.com
--------------------------------------------------------
Fourth Quarter
--------------------------------------------------------
2006 Additional 2006
As Reported Week Adjusted 2005 % Change
----------- ---------- ----------- ---------- ---------
(from
March 18,
(14 weeks) (13 weeks) 2005)
Revenues $ 24,221 $ (1,410) $ 22,811 $ 16,725 36.4%
--------------------------------------------------------
Full Year
--------------------------------------------------------
2006 Additional 2006
As Reported Week Adjusted 2005 % Change
----------- ---------- ----------- ---------- ---------
(from March
(53 weeks) (52 weeks) 18, 2005)
Revenues $ 80,199 $ (1,410) $ 78,789 $ 43,948 79.3%
Reconciliation of Non-GAAP Information (continued)
(Dollars and shares in thousands, except per share data)
Net loss and diluted loss per share for the fourth quarter and full
year 2006 include the write-down of certain NEMG assets. This release
includes net income and diluted EPS excluding this write-down (in
each case, a non-GAAP financial measure). The Company believes that
these measures are more indicative of ongoing performance. These
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for
or superior to GAAP results. Reconciliations of these items to the
most directly comparable GAAP item are below.
Reconciliations of Net (loss)/income and diluted loss per share/ EPS
excluding the write-down of NEMG assets
--------------------------------
Fourth Quarter
--------------------------------
2006 2005 % Change
---------- ----------- ---------
(Restated)
Net (loss)/income $(648,033) $ 63,238 *
Less:
Write-down of assets (735,937) -
---------- ----------- ---------
Adjusted Net Income $ 87,904 $ 63,238 39.0%
========== =========== =========
--------------------------------
Fourth Quarter
--------------------------------
2006 2005 % Change
---------- ---------- ---------
(Restated)
Diluted loss per share/EPS $ (4.50) $ 0.43 *
Less:
Write-down of assets (5.11) -
---------- ----------- ---------
Adjusted EPS $ 0.61 $ 0.43 41.9%
========== =========== =========
--------------------------------
Full Year
--------------------------------
2006 2005 % Change
---------- ----------- ---------
(Restated)
Net (loss)/income $(543,443) $ 253,473 *
Less:
Write-down of assets (735,937) -
---------- ----------- ---------
Adjusted Net Income $ 192,494 $ 253,473 -24.1%
========== =========== =========
--------------------------------
Full Year
--------------------------------
2006 2005 % Change
--------- ---------- ---------
(Restated)
Diluted loss per share/EPS $ (3.76) $ 1.74 *
Less:
Write-down of assets (5.09) -
---------- ----------- ---------
Adjusted EPS $ 1.33 $ 1.74 -23.6%
========== =========== =========
In addition to the extra week, total costs and expenses include staff
reduction, depreciation and amortization and raw material costs. The
Company believes that presenting total costs and expenses excluding
staff reduction costs (a non-GAAP financial measure) provides
investors with helpful supplemental information on the Company's
underlying operating expenses that is used by management in its
financial and operational decision-making. The Company believes that
presenting total costs and expenses excluding depreciation and
amortization and raw material costs (a non-GAAP financial measure)
provides a useful measure of manageable costs.
These measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for
or superior to GAAP results. Reconciliations of these items to the
most directly comparable GAAP item are below.
Reconciliation of costs and expenses excluding certain items
------------------------------
Fourth Quarter
------------------------------
2006 2005 % Change
--------- ---------- ---------
(Restated)
Costs and Expenses $802,255 $ 782,844 2.5%
Less:
Additional Week 36,779 -
--------- ---------- ---------
Sub-total 765,476 782,844 -2.2%
Less:
Staff reduction expenses 8,450 35,432
Raw materials(a) 83,779 92,184
Accelerated depreciation 20,777 -
Depreciation & amortization(b) 33,841 35,352
--------- ---------- ---------
Total $618,629 $ 619,876 -0.2%
========= ========== =========
---------------------------------
Full Year
---------------------------------
2006 2005 % Change
----------- ----------- ---------
(Restated)
Costs and Expenses 2,996,081 $2,911,578 2.9%
Less:
Additional Week 36,779 -
----------- ----------- ---------
Sub-total 2,959,302 2,911,578 1.6%
Less:
Staff reduction expenses 34,319 57,755
Raw materials(a) 325,372 321,084
Accelerated depreciation 20,777 -
Depreciation & amortization(b) 141,554 135,480
----------- ----------- ---------
Total $2,437,280 $2,397,259 1.7%
=========== =========== =========
(a) Excludes raw materials for the Additional Week, which is included
in the Additional Week above.
(b) Excludes accelerated depreciation, which is included above.
* Represents a decrease in excess of 100%.
CONTACT: The New York Times Company
Catherine J. Mathis, 212-556-1981
mathis@nytimes.com
or
Paula Schwartz, 212-556-5224
schwap@nytimes.com