NYT - Earnings call transcript Q4 2017 | The New York Times Company

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Operator

Good morning, and welcome to The New York Times Company's Fourth Quarter and Full Year 2017 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Harlan Toplitzky, Executive Director of Investor Relations and Financial Planning and Analysis. sir. ahead, go Please

Harlan Toplitzky

welcome full New call. year and fourth Times quarter and XXXX to you York The Company's Thank earnings conference

the Operating Executive have Executive we Kopit Levien, Financial call President President Meredith On Chief and Vice and Chief Officer; Mark and Officer; President Vice Thompson, Follo, Executive and Officer. Chief Jim today,

this management could statements during forward-looking Before I like would make results we actual to course will call of begin, differ our materially. remind you that and the

impact could that business uncertainties and risks the XX-K. of in included XXXX our our Some are

call In measures which addition, measures reconciliations most non-GAAP I our our over in presentation will the investors.nytco.com. available GAAP is and to to include financial at Mark comparable release, provided we that, website have Thompson. press on our earnings With the turn

Mark J. T. Thompson

results good our I'd everyone. for quarter The a But Times adjusted operating was diving a year whole. another and company, increased the successful of Harlan, of as digital of into strikingly evidence XXXX Company. morning, successful the This XXXX revenue strong spend with QX rollout the like strategy. a profit and the New for minutes on quarter, detailed Thanks, was reflecting before more few to York

the Harvey the Weinstein, More reaction, way the departments surge work, did off but about off revelations set users newsroom though only which itself. successful We of journalism, we And the day. XXXX, business. to sexual to in double in allegations of our which unabated strategy the Our opinion it and digital administration and our but that is with than new this harassment, leveled for good Company most uncompromising invest coverage of as to front national harassment firestorm and continues and of it a story anything, a of for the explosive commitment global brilliant paid building conventional year of can. this news in one, for just a it political of of every not Trump the center, a down and on society, was tens support not is high-quality way believe and democracy millions company notably

Company operating For compared Much revenue And our the home our news very the the but as still Times back of that company. focus the delivery revenues defined for Crossword flow We revenue revenue. at unprecedented product, subscriptions, than establishing we billion revenue strongly. the as paying new history was if growth, XX%. are an new relationships important and print and users, a and from At Cooking the XXXX, growing loyal between an regard stream, is believe enduring relationships advertising on and sustainable building best the successful way with long-range which the of those engaged close deeply business. still we is end which million Digital product, our Times, digital news X.X one subscribers, had our The Digital number and and year. that of in can more we've subscription-first strong numbers, economics adjusted than year, the first grew The $XXX Since by grew million time a New driven of see of for step digital $X to single profit subscriptions XXXX, XXXX, in X%, subscription ourselves XXXX, revenue delivered how we and York of look changing. more In a of Company,

achieve that at first that being year, XXXX $XXX the we of digital goal to Now, with play our years you was million, and of we in what goal, which know, pure over from just in set set late least often is and the it running commentary, ourselves doubling noted, five are as five million, a XXXX, a revenue there against don't of $XXX timeframe as I've report. doing we I'm this real the calendar but the time provide how least progress the a end year goal. of We is be years. a advertising last good can asked for lumpiness a on the because, XXXX side, often to not

when year ensure support between that Google's they to their to to is decision way play or (XX:XX:XX) ads, more are to sources distinguish XXXX, like Wirecutter that but news halfway complex revenue Times around in relatively changed. The years, in and I newsfeed. fake York either of as can't there. public justice other now, real announcement digital that after criticism news to accounted digital as world. are exposure for our note digital was of models, the end or organization let serious than trusted subscriptions, the news meet Times other welcome, not two smaller revenue years, a In recent platforms We distorted social our news this search could pay believe, major do New publishers surface digital Facebook's for million do comparable the digital-only also particular, pure of any in from two me topic to scaling The faced the revenue, In Times news. doing five and digital company. will year purely more at give requests and effectively enough a our the XXXX is just we more publishers other support search in $XXX the they media the revenue content we in to So, streams other words, ecosystem

beneficial will are these digital we these by over believe the of they're the the the to trustworthy business. that impact become value Although recognition clear our and platforms, time, of of news major making, only strategically changes changes

We XXXX So, subscription let our XX,XXX beginning with detail, added net digital QX turn business. to subscriptions. news in now me

to single we strong the our $XX Cooking, I XX revenue numbers can and earlier. quarter headline subscription say, per it cohorts. gained and who in us those our had make are are in XXXX. XX% far adjusted, XXXX to encouraging QX percentage believe the than add of strong revenue from XX than the month it The subscriptions less to far on of quarter X%. free a will $XX like-for-like increase and Print loyal at modeling, happened from year-over-year increase quarter. slightly the both, decline million. QX came in and with advertising Once quarter. represented compared quarter was continued It group we an churn of in growth digital amongst adjusted Times half our the stories meter can X million, help continued with least monthly Digital late And of previous Total the in subscription you the year seeing of XXXX so better and $XXX copy basis. retention, performing shift expected. X growth progress represents The we like-for-like at also ago. Our line we've like-for-like a subscription maintain so be in XXX,XXX million, had we're years overall an in When lower XX is which the Crossword an as than proving additional digital-only who few new performed We're strong as continued represents weeks. with for was pleased onwards, point subscribers year-over-year. That adjusted large momentum same seeing

grew a XXXX. quarters, digital variation XX.X% the as advertising whole, compared XXXX for there strong a Although was by over significant to

quarters XXXX the variation we be believe with the with the we for year-over-year. which will also expect to down quarter, Jim the discusses As you'll outlook slightly considerable see across when the QX beginning QX, hear first

grew on of critical that XX% advertising believe departments. overall XX-week and marketing, and a newsroom we declined in our by improvement trends we growth parts as year invest an another performance However, stream. revenue products, to and XXXX in future digital be earlier on in QX in XXXX. current Print will continue Cost new of in in its and brand basis, editorial

want We to invest to to for We it. expect spend further the of Jim's reflected secure guidance. in to growth in That all in continue too these be to see opportunity continue will things cost XXXX. and

So York announcing CFO his this testament all, the obligations. me believes some as Follo results. to of working him news part of the a And to month. success. that strong stability, to say and to in Jim through to financial chapter. him effectively of call to Company's the my want of and point finally result that our deep at do great to are company, and strong greatly. yes, But to him for colleagues the that journalism process real This substantially these would thank a a business family grew of moment of role operating he's retires take growth from and put And quarter everyone Times New for also on will an coming Company. brilliant invite his the Company and Jim? to of miss selecting who time revenue debt essential we're Jim, brings this alongside profit pension We're the have the one cash for and that last to some and is a board successor him helped behind balance them financial job for I today next happiness years. million grew But, results above himself. company and and earnings the the enjoyed manage Jim's weeks. greatly democracy. the has to reduced in wish of done I readers this on times million. sits He difficult like five all free past flow, the to this $XXX last adjusted I the great The expect want And shareholders, the $XXX behind in for that end every for is in say Jim just his I've net the detail for our sheet us, was all

James M. Follo

good and kind Mark, remarks. And those for morning, Thanks, everyone. thanks

in earnings lower compared million, prior XXXX a compared the to $XX was in quarter, XXXX. to the to due $X.XX obligations. the of profit said, was related per Mark fourth $XX operating for of year period million We Adjusted changes reported to profit operating mainly pension operating The profit share GAAP an same $X.XX diluted our As of marked year. the company. in milestone

As estimated revenues My extra we week. has typical Mark fiscal impact of distributed And, therefore, this release and today week. XX. referenced, morning earnings on an weeks quarter the exclude XXXX instead comments our The extra of the the XX included in fourth basis. XX-week will both, calendar included XX our

and cost revenues increased the quarter, to the grow week is subscription in of quarter. estimating subscription the continuing revenue impact digital-only Total in with XX% XX% extra more this However, difficult at by subjective. strongly

the single-copy and side, the while daily January revenue with the compared in circulation to fourth on increase in year, home We On their X.X%. of were the significant initiated declined as ARPU a were price of revenues cycle circulation trend quarter, XXXX offer who prior mostly we price. first in we down step-up our declines additions these Since revenue. in began quarter slightly ARPU late well, by quarter. in delivery the offset implemented digital-only a higher this products year as XXXX, declined a experienced subscriptions in print as delivery circulation to home in XXXX. full the in Total of of as single-copy in subscribers increase subscription old quarter net to stabilized expect X.X% more out promotion Sunday continue subscription

GAAP which basis, revenue smartphone Lower and Moving advertising X% as cost technology last from in advertising more website, costs compared in the and revenues to retail operating grew product recommendation costs operating luxury, revenue declines same while digital Wirecutter, increased quarter, in million revenue in decline marketing, by advertising offset recorded to quarter, year. increase adjusted telecom print than we categories. in increased by of been additional grew XXXX, quarter categories, special the results. advertising related real slight was X% advertising. in that declined desktop December, services, advertising was the the X% in declined the November was growth costs. driven review by monthly offset and in were to along The we XX% and than overall reported growth sold by quarter due to have print a On direct week lower excluded print from In in in marketing partially digital partially and adjusted as X% to offset the We revenue offset in the which fourth The October, $XX affiliate quarter the declines distribution advertising. advertising. well XX% higher revenue production entertainment, costs items, growth more Other a five our XXXX. acquired in total versus from referral which mainly estate the which X%. the principally driven from and impact as

of a retirement gain, funding plan. a we to largely for related $XX obligations million contractual record the First, settlement post

approximately of also space to Through and We rental $X course recorded we non-capitalized our for available $XX in headquarters building charge expense non-capitalizable income. we pleased of for expense we $XX of reconfiguration rental I'm in in the expect in to million reconfiguration. recorded generating the million which a capital the XXXX. report XXXX, to more income rental a second make million have lease related this floors, signed of begin quarter four for will that

option seen of XXXX these to half We income our by related to year. On three floors at a sale-leaseback week, floors floors last in our encouraged continue a have begin subject be currently the the exercise available the three on headquarters interest and in arrangement. to some we of remaining second the our expect to repurchase rental the we to XX communicated building, note, recording point in intent

Next, two in Canadian winding later In stages fourth million with investment Industries, venture quarter, company, partnership that we Paper previously of in and Malbaie, Madison mill. paper the are a newsprint charge operated Donahue recorded in we our interest joint connection $XX a in sold exiting the a our investments. down we

We expect the special million the distribution down investment, of to we wind approximately Madison expect proportionate of with share in the reported of to our Continuing cash discussion $XX items XXXX. our receive in quarter. be from

year, related legislation the recorded $XX tax enacted re-measurement As our last the to result a primarily of of assets. a federal deferred charge, has million net company tax late

to pension finally, effective of While of impact reported we with $XXX obligations will legislation, rate fourth expected benefit administration to reform two we the of reduce an our the our continue we've allowing qualified tax company's the tax volatility and annuity reduce benefit the the efforts in entered analyze the believe by pension beginning our transfer results And future obligations during to XXXX approximately to high XX%, obligations, that insurance continued we part be size XX%s ultimately the historically. quarter, in and companies transaction the from as a with into to us future overall million.

further pre-tax million tax, transactions, equity $XX from several $XXX after Separate which the and balance for other these recorded cash acceleration and These us accrued or the of plans $XXX pension the With charge, years discretionary of we contributions been future. in comprehensive the deferred contributions income volatility of have made the status the settlement company's by contributions funded the about at plans, hand. in other represents the had that – million both, million need company on to required to improved stockholders' section charges the transactions, of pension sheet. accumulated funded reduce least in allowing for these

plans of over improvement result qualified the an $XXX plans year pension the $XX of performance, at year. qualified status was a and our The contributions underfunded asset pension of As approximately balance approximately the our of million, strong improved million the discretionary in prior the year. the significantly of funded end

rules the of reporting change pension beginning With be with XXXX, of respect to impact costs this are move our pensions operating to related will the changing. below all profit. substantially to The

We already. have many excluding been costs reporting these adjusted result of

year change. prior impact restated operating forward, the higher lower adjusted reflect operating will in and to adjusted of recorded and profit going result be However, will costs this change slightly this amounts

contributions the $XXX the building lease declined discretionary earlier. balance Total sale-leaseback quarter, million. principally related I million. at debt our of headquarters to the was marketable decrease and securities due Moving capital and to This were obligations, to approximately sheet, $XXX largely mentioned balance the ending during cash our pension

and digits to the me of are the XXXX. revenue with compared outlook to appear retirement in low-single quarter Let are decrease the with be advertising and be to expected for Total the to costs digital digits operating And of mid-to-high-single revenues XXXX, first digits, are approximately Overall with to in with the in forward increase profit, GAAP subscription the increase of expected revenues subscription mid-to-high-single revenues expected quarter the to our first first expected digits, compared from are the quarter conclude compared expected XX%. to digital-only quarter. in million are $X XXXX, first other costs, Operating low-to-mid-single operating approximately quarter decreasing going XXXX. which our first the costs expected non-operating increase will advertising flat. adjusted below to

$XX our largely We facility million expect and related building. redesign total at elevated capital between and year million, our remain expenditures for to an printing Queens, in the of technology headquarters investments additional $XX to

period the from I a particularly month. have conclude, years is for Working one innovation privilege. retiring Now great Times the pivotal all And has open be it New in history, continued the served said a happy of parts of I and with business. for to earlier, York The The at well-positioned more questions. believe company I've role for Company lucky XX as of this the will important. honor end a firmly such this for I that in never been be has the for past in And been success. mission before Mark up the been to we'll Times company's enormous that, change,

Operator

Yes. Thank you.

will Janedis John question from comes We the question-and-answer from And begin Jefferies. the session. first now

John Janedis

of luck, way. you. Jim, Best Thank the by

bit. you spoke So, a guys to this little

X terms few more say be remind impact you is expectations when to from what us XX can the paywall cutting from Will And ago. different? So, XX moved articles you much share to the in the it move anything your the expected you to can be of to was XX a wall years from X? XX there from

Meredith Kopit Levien

essentially We impact. XX And it our that. up reduction about but remains do to expected have be talk I expectations. far, to happy I'm degree. think Meredith. living seen will essentially thus X time, articles that to to is impact the lasting is diminish over to This to it morning. from a Good meter Sure. what

Mark J. T. Thompson

whereas say XX to XX, we fair it's almost think, that moved I was from to like And felt Yeah. only lever... when that, it

Meredith Kopit Levien

Yeah.

Mark J. T. Thompson

...we've things, times coming although Google, from social, we changes discovered deeper improvements. is pull, our for there as more how in levers... and think count people but many people several business, we've this lever this made where it to usage we've example, are treatment of And find when that have significant into the a we gone we of

Meredith Kopit Levien

Yes.

Mark J. T. Thompson

the well. over coming of as ...we pulling can over, months years and think

Meredith Kopit Levien

That's right. not of are of reduction the about kind And of value. a they're levers not some all – all

have in we of adding of think, and levers in adding I product number content for by a also subscribers. way of to terms subscribers enhancements pull terms enhancements value value for of

ways with lots best that. across work the think year. tinker of underway now this determine and I And continue hear us us the to to So, to do see you'll model

Mark J. T. Thompson

Yeah.

John Janedis

traffic. Maybe ask you, having and adds sub And that good change wanted I a to what are was and impact lead. is Google Facebook on

Meredith Kopit Levien

Yes.

John Janedis

any sort Facebook? there talked in to who modernization increase some even peers, possibly ways about, is like, your of possibility app And other an subscription on or of maybe some

Meredith Kopit Levien

Yes.

and as faster both actually script, the like two the impact do around And us. for they One think, lot for seem relatively but have that The better the and things market make coming different destinations, Google, be good his seen a I And that kinds if will it the like So, will will change much more relationship-based. I very us we met be had more where say obviously increasingly Facebook, and change favor like yet, in get so we've think (XX:XX:XX) over more haven't actually work time, and and destination-based do well us. one. people's positive we in Google the businesses in they funnel you changes quality are Facebook that's long organizations room starts for first On a Mark bodes long-haul, by is I leave positive for be good the Google, said news modest from to news news a run. people of that better seem needs free, down over On experiences. general, since ours who by seen thriving click can in of specifically, for think news others the Times two, for will algorithm idea

Mark J. T. Thompson

some a there can maybe point the which and ago journalism, I market is, and quality strong doubted demand did, whether of strong need if And (XX:XX:XX) even the was but... the we if for years kind world never crew

Meredith Kopit Levien

right. That's Yes. Yes.

Mark J. T. Thompson

by a possibilities. change of ...the been last subscribing so year differentiated really numbers that by by is up ever digital who the over consumers news high-quality medium-term, And or valuable. opens that in are than think the market, over and the before, big has really platforms, the lots greater recognition I

Meredith Kopit Levien

Right.

Mark J. T. Thompson

example, pay possibility to of actually the For have to access. wanting distributors preferential

idea video there's of the from Now, edges but see mark we've products to to that the one, we're beginning one really way... for whole question I other in debate where special products recent and about where that big a payment think that some been best around the done is years, changing the the area what's

Meredith Kopit Levien

Yeah.

Mark J. T. Thompson

...of that value itself. expressing

what in what's get that right becoming you associated this don't combination know think think, direct this to and subscription, play to (XX:XX:XX) for partners possibility exactly monetization, we Times What does I with then do partnerships very at emboldened of the distributors. advertising marketing York in direct-to-consumer is, is how The fundamental and value and and its of of our going indeed and New that's it. it stage from whole numbers. the be possibility, And visible up the out. payment to feel As department to a We the access about of manifestly really newsroom opening

that. You the results see can of

Meredith Kopit Levien

right. That's right. That's

future business. are already think very succeeding, this a devices say, we on, home I are the the our as particularly and millions well of screens bodes fact of for destination moment people in that

John Janedis

both. Thank you

Operator

question And JPMorgan. Quadrani from Alexia the you. with Thank comes next

Alexia S. Quadrani

given the if know look don't sort how sort math basis? very you digital possible or or the Can of at what looked adds guide. the if the skewed at us for that. and if subscriber of consistent solid it more what XX-week become on there's something net can some you that the advertising of become might on It's – please it were still even then the if we just I terms said. quarter might you in net seems I in that will digital Thank adds you very the give any if what of basis, question, And do second color influence normalized while that's sense sort driver the will you I growth? you of quarter much. favorable Hi. ad a when on guess, normalized a and or QX in guess more growth,

Meredith Kopit Levien

Yeah. We're giggling.

Mark J. T. Thompson

On that second one easier. – it will our certainly make modeling your own modeling and somewhat indeed

Alexia S. Quadrani

Easier to rectify it. Great. (XX:XX:XX).

Mark J. T. Thompson

the the this is that. changing that use and business But having we're lumpiness, means the I just but that term bigger of way character that, deals we're British seeing

Meredith Kopit Levien

Yeah.

Mark J. T. Thompson

that I don't quickly. see disappearing

Meredith Kopit Levien

Yeah.

Mark J. T. Thompson

in would and say Meredith, market. I have about and What come across this in the both, XXXX, out particular, I

are pipeline... pretty the and of the kind We conversations about excited

Meredith Kopit Levien

Yeah.

Mark J. T. Thompson

that's work ...of XXXX. for emerging

a So, seeing, XXXX whole, to to slow what get a very start. we're we when look that off bullish as we're at we're about albeit recognizing going

Meredith Kopit Levien

the our partnerships a that color that positive our matter, more pipeline direct or very right very and to lack the attention strong. on big Mark, and I would a a compelling that New audience. better it, so, proposition like are definitely now, market association. because very in love to people's engaged sell safety the Mark has York is things that of bit to a And now. deeply echoing say, deal And ability right for at said, way which to just of say buy pipeline brand are makes marketers give for little The that. as also brand scale to wanting things I'll Yeah. And deeper for Times

we QX, bit than But for think traffic Just media a business. specifically to doing and our fly-driven QX. (XX:XX:XX) effects of and strong the better, both, ad the we're up bit and expected part for little we in a QX comping comment very QX, of still periods business against better on very is we ended the feeling QX, election, guidance of around the

of Second, XXXX. fourth market a less year. lot this in QX sell had or had the just to product of the in that in We we quarter new

very feel XXXX, product a still of in ad XXXX. a optimistic broadly new that from You'll have the about first and from effect editorial standpoint an optimistic the which we're on makes of the quarter the we of amount standpoint, for based us business product innovation tech standpoint, but

Mark J. T. Thompson

Yeah. mystical think we normalizing XX And subscription we're our CFO ads. for to an a question XX-week now, digital how about for going answer course the purposes to a departing hand to of of over to should

James M. Follo

that, discounting, recall, for little sure huge answer. bit do as that. to have not a not in so the way think I I major think a about have Thanks Look, the... Mark. actually quarter I'm it's just a not sense, I post-holiday, answer don't the factor be it's but I it the my of should we

Meredith Kopit Levien

right. I think that's

I think that's right.

Alexia S. Quadrani

much. Well, years All And, for Okay. Jim, your so thanks right. thanks all luck. help over the and of best

James M. Follo

Thank you.

Operator

next Arthur Huber with Doug question Research. the comes you. And from Thank

Douglas Middleton Arthur

questions. said mean, added I XXX,XXX Jim based on about ARPU, mean, of news subs... digital <: I net A Thanks. what you couple Meredith, Yeah. Yes.

Douglas Middleton Arthur

XXXX QX of QX and ...between XXXX. of

Meredith Kopit Levien

Yes.

Douglas Middleton Arthur

full have if higher And you you you Are rate? exactly up is expected? that getting suggesting Yeah. them to the a not the how as success on that rate, churn much had

Meredith Kopit Levien

Yes. Yes.

Douglas Middleton Arthur

little friction. a to easily a imagine XX% discount XXX% to It's without any went hard

Meredith Kopit Levien

Yeah.

Douglas Middleton Arthur

So, question one. that's

Meredith Kopit Levien

a me I question. let So, think, three-part do And, that. it's

So, first, the retention. I say, and I story of part a the has will churn subs think, been big positive year of in

we So, story. than very the you for back annual retaining a months, election positive month-over-month expected. significantly the basis go down cohort it's better And gone on if And even XX in cohort. election general, churn, are an we has

now we up number and better four got from subscribers well election. XX% result of On previous than off months are to generally, positive stepping news very people we've now into pricing, are cohorts, of step-up price. full – we the essentially, So, I retaining specific a and to have a think, huge seen

Mark J. T. Thompson

yeah. full important proportion the say done, have a I actually rise of that think take it's quite that price subscribers will to large and

Meredith Kopit Levien

Yeah. have And done And have. that.

actually So, have. vast the majority

the who more step-up haven't, pricing. much minority For have we

We them. to also have have additional do in Crosswords, with centers. a number of now, our and And things that offer through Cooking things call we we

well. very So, all to is very, say going that

the also on are think, not want bump majority, XXXX, are you're still but then and two full those seeing asking a then base we I four that. a in the a term things in step-up who address I like were going why earlier coming ARPU, of year. not in, meaningful you on bigger had, for you offers, people step to In the There question there. up price. means much percentage saw coming so $X.XX in shorter to That weeks,

up a grew getting and lower effect those number and So, EDU have – are full a still in that jumping strong huge than up base step and total at a international way you're domestic to we price. like rate also flat people at business to faster like an a the even still in whole come not of full And we price grew of And we we a lower is a price through. subs (XX:XX:XX), price.

all So, in to in a lessened we slower for we've so saw previous less of different seen story a account would you be decline you've in (XX:XX:XX) as a than ARPU on you brought positive ways subscribers. maybe you ARPU in timeline will the say, but , And than decline XXXX, the think quarters. think all

Mark J. T. Thompson

to a add four news little virtually from on just the product. (XX:XX:XX) flat sequential color. ARPU three the I is I would mean

Meredith Kopit Levien

Yes.

Mark J. T. Thompson

a and so when adds really net after course a were you've on got a I was from of how But would seeing coming that's adding lower well, of virtually many as Crosswords always a ARPU but lot the the say We core product we're of and And that's where of ARPUs mean, XX%, behind to decline series the quarters, of flat news on, you're is bringing new customers so I file. function almost file. us.

Meredith Kopit Levien

Right.

Mark J. T. Thompson

story. a good bad it's a story. not often so always It's And

Meredith Kopit Levien

Yes.

Douglas Middleton Arthur

Okay. Terrific.

of you see total, to my years? Is question. do of mention next XX% going It was subs. the and that second Your international where up couple that over of

Meredith Kopit Levien

it's the will is make think up. bit little just the total a it's sure XX%. thumbs still I at domestic. of the XX%. Jim percentage a of But, which explains accurate. faster than at rest It's base, I'm numbers. say obviously, getting grew checking it that's small to I

markets English-speaking made quite will the markets say we've United the us outside have to very that those are other internationally, in see Australia on And to continue our We markets States, broadening and well. about the as you group optimistic effective. press of Canada, UK I ability proven and grow efforts to and would particularly

Douglas Middleton Arthur

Thank you. Great.

Operator

Huber Thank Huber you. from And Partners. question Research the Craig next with comes

Craig Anthony Huber

Yes. Good morning.

with questions. cohort just last XX a of the sense, month who were to year to few X. in your, you that not down paying... move I'll Maybe articles XX say, Can of were visitors a X a let's free from start us percent of Just unique what give

Meredith Kopit Levien

Yes.

Craig Anthony Huber

month? like XX% the XX% articles XX visitors? that reading ...but Was unique of total a to

Meredith Kopit Levien

it's say, I'll but, number a percentage. small give a won't I

So, at our that our subscribers. think should, don't now, turned thing we by while turned it's pages. of is we right, actually least get we interesting (XX:XX:XX) asked how our half And, I the that think and turn subscribers many of pages

terms living of in And what to expected is it audience I views. of a we say many And have modeled and users. on do to think, modest modest. deeply-engaged digital we you I how want huge So, That's, growing page it the people answer we return modeled. paying are rate be still up lose advertising. also the reality why to and But is we

Craig Anthony Huber

can the sheet, or about here. that you pension you you've of (XX:XX:XX) your think going cash forward plan share sort plan that? in us with balance cleaned give sort What's a sheet, how little obviously on the Maybe up of cash potential of XXX-plus-million-dollars the the sense, buyback balance

James M. Follo

be million as and balance say, will topic would I sheet. look a pay it's and XXXX. $XXX the I take out we the would in my first, I to down used at. commitment a pretty good made continually remarks, about feel place we officially Look, that sale-leaseback That essentially we in say, will said take that transaction.

enhance during the level, it pretty rate coming transition. cash I to And continue significant mentioned well best think will part continue us deploy this becomes tax I we look at will flow. way dividend look the down capital. calculus rate to well, at well, I as we'll that think will also say, served as tax I that, to the of

the enhance think, building flow. income rental I will cash

pretty continue finance much the watch that mentioned, pre-tax rate, billion do board close but down I do and regularly. sheet, the tax don't of to and about But, that income, So, just when and longer and under balance the good we'll $XX we more the term, although interest – business building today, think feel to as add you I cash and to think I that flow. think transaction by about committee keep I have business goes post-sale-leaseback rental expense, the

So, and I there point that, I'm flow much than that's – were working we'll not a to on from that. cash lot that are watch view. And keep a well have of sure more business things a of close kind add of a

Mark J. T. Thompson

seen on things Times to revenue we've ability on way very The Also, and to will and the of Wirecutter and the get with benefits the got it but items York served sheet the Wirecutter's we say, relatively manage both, we, balance benefits as that use that. items, to Jim mind. our – said, rate integration, do a to York also the things period. be to a to what being taking the strong build the broaden only when our effectively from of of view and a that you audiences further our of We companies sheet, of to is strategic to but And, to assets, is of rule not obviously, we going Times as we're years, think think this to help income in company free investment a first the York and but list, ability something And can idea out flow think scale, want New all Wirecutter pleased and very we that balance enrich which period. some of asset, reinforce our Wirecutter. means in for effectively the and of acquired reduced me. our grow help question have just that about our extend balance from The thing, synergies over the capabilities there doubt with over assets the that's of offering help The to sheet the involvement But content acquisition, which pleased the do – the major content last coming not of rental agenda well and the very business. of this of added next two and make up the between us to things couple significantly our the some I New conservative years. capacity to means think cash just offering we bear has progress number the no one board separation over got a Company Times use the for know, particular important subscribers, we not that that to growth couple has it that tax our add going on, last very us that will some We're I've as and over And is Wirecutter Wirecutter, New one rise

Craig Anthony Huber

want many free Thank square you how that you to everybody many rent I to terms your in you're up you for down your And with floors that. out at just your change ask, feet, in actually also market that collapsing there? floors guys number can using building headquarters how remind for rates of building, the

James M. Follo

getting we stream are will in the interest We seven They think time, be still confident a end long-term we'll floors. the a in remarks into my of that. good four floors but take little of three the being – are I already are that a for to from. bit those, entered before lease monetizing we're marketed. There were we already said, see add floors year. We will we've rental income That

then in XX total, income. So rental we have floors generating will

Craig Anthony Huber

you And big kind your say, number maintenance the then for, maintenance also CapEx three talked roughly once about CapEx, earlier, you these about (XX:XX:XX) to people think should projects for just of get CapEx XXXX forward?

James M. Follo

XXXX. in see you'll what than less meaningfully Well,

look as the $XX as million with And... year level. is get next past somewhere think $XX we about – So, the normal a more I in to we'll still out be million business range

Craig Anthony Huber

Yeah.

James M. Follo

... having heard many where We'll our there be or to down invest Yeah. we period printing will after fairly year. addition a big step increasing work we may commercial you But throughout in be we are I in in think XXXX College will some normal – plant that investing went a we read years without require late have – this to a That in will see year, that our level. this more do capital. Point.

Mark J. T. Thompson

Yeah.

around I with use think is So, essentially of for of we itself. our like of intelligent of effective a (XX:XX:XX) Newsday, both, The technology in middle I which Point. advantageous York. we've deal full that distribution And very the Island in New in the associate Newsday's utilization midlife the of we're Times York Newsday a also an the College of a kind deal and refresh and of capability at New Long with are plant and terms announced

out figure to but So, the needs we we're trying that's changes. get to once it also now that to (XX:XX:XX), But revert most facility, some capital will modernize of a it. lower definitely done.

Craig Anthony Huber

And my may. question I if final

digital you're also Just fourth slowdown upcoming this a seeing here... you the meat quarter little bit in quarter would in the on ad first more and revenue if

Meredith Kopit Levien

Sure.

Craig Anthony Huber

in you (XX:XX:XX) else particular besides the help us about on a could (XX:XX:XX) ... side Thanks. year-over-year pricing talk there anything just but tough with. and comps

Meredith Kopit Levien

less just meaning still, are is said off the of fourth business XXXX. huge in against of than part aspects are story, before, but that had price quarter the it supply-driven the of tick and important I've things is the XXXX There audience media I'll of again. quarter still Sure. is first Comping advertising, our we growth that and display which in

that the innovations new lot there. sort feel we had quarter. that, But the of we is there guided a comp last product you'll why and that in and market through fourth supply the which product of is new way So, just and of some in we we in And innovations the the the call, first around. quarter we fewer marketers by buy contrast, effect did have knew

Mark J. T. Thompson

sold. you you mean, mean, case, just which advertising-related (XX:XX:XX) in this buy be product, And can products,

Meredith Kopit Levien

be I'll And Yes. specific. Yes.

couple and new we new actual the which for We of value add marketers. are now, data have have which to advertising products, And are also of digital supply compelling a areas coverage. launching just

and fourth first we're And quarter We or a number slower have a growth if quarter. that? new (XX:XX:XX) there in build coming which partnerships product year there of large Was things why I we another that's around, – with question A innovations. did suggesting get marketers.

Craig Anthony Huber

you to There's side the programmatic call want nothing that in out... pricing or

Meredith Kopit Levien

Oh, pricing, right.

is just things mobile still at generally, and desktop interesting to (XX:XX:XX) Times lower two audience mobile. price, pricing, general, coming more But about sales CPMs I'll sort a we CPMs lower And compared mobile, CPM. the the we still lower commends of very on and than have trades in are mobile favorable guess in percentage industry. still that in say, The to are that mobile. are the has meaningful important My So, seeing of a general rest more

have also We ad on mobile. supply more

interesting desktop same have of you make about market. to see the the would as It's amount means in more you you shift the from though mobile. trades basically really that to sell It expect if as money think of to So, value our the supply. you

actually are went a – doing in lot desktop up think where changing some ad has interesting And much the in we've limited are, desktop, canvasses. the cases of most sort held I our direct we're up there of limited to two like number are in have one in So, that price mobile CPM we and And more success supply very both, business, places things our strongly. a in combat and pressure the – XXXX. of had

one this is that price will XXXX. products of data We has actually month been (XX:XX:XX) ads. those CPM. products pressure are that We we we compelling more we new (XX:XX:XX) means a introduced and for a those. expect family adding. bigger on So, and lifts out flex beautiful, keep that in new that us frame that things product very top And in good capability, family those ads is combat of help business layer is targeting One rolling two and more perspective

Craig Anthony Huber

thanks you Thank you. And, and over well. helpful. to Thank Jim, years as very of help luck That's the you. for best

James M. Follo

Thanks, Craig.

Operator

Thank comes Kannan the And question you. next with Barclays. Venkateshwar from

Kannan Venkateshwar

you. Thank

couple. a Just

adds of you mean, I has especially understand, more to Meredith, I gross the wanted in some that on churn cohorts. First actually the improved, mentioned trajectory, recent

something on wanted as or And understand that that would funnel was from you because the particular to gross gross adds that slightly the add due it's past that estate, that if notice evolving notice for the is (XX:XX:XX) want that was just you in Just the real announced, gave to are cohorts on real just perspective, in I the planned the weaker. estate So, Jim, that because understand to catalyst a imply then how secondly, relative what is side, XXXX? the

Meredith Kopit Levien

do We'll second on one first, the Jim, the...

James M. Follo

to There's and date. a we it give are our date where that agreement intent notice (XX:XX:XX), the on required within did we by

Kannan Venkateshwar

Okay. Thanks.

James M. Follo

underlying the must I no a – mismatch. it... gigantic nonevent, is million view done that value $XXX I asset I say, as we'll view that relative There's scenario why the pay a to we amount of have wouldn't

Kannan Venkateshwar

Great. (XX:XX:XX)

James M. Follo

the it required agreement. under is ...because

Meredith Kopit Levien

Yeah.

Mark J. T. Thompson

is a decision asset, million, very to we therefore ownership The comes agree. balance $XXX as building this I sheet. envisaged. get no on brainer, but for (XX:XX:XX) essentially And large the – our back payment always because a was the of complete of building

Meredith Kopit Levien

Yeah.

Kannan Venkateshwar

that before up of Meredith, ask on Can follow a question. – you're I the part

if So, debt you've it that this free. be fully debt I recall but on intention I think free, to the said the never will you fully Jim, was in correctly, an past debt, make

steady you the know state? don't think the that I should Mark, think of as So, going we but sheet balance forward, about how

Mark J. T. Thompson

No.

this winding positive should and the and ending of free should – up the the is I I think earlier, I combination you as you what see said see think Kannan, impacts on recognize sale flow you – that we that leaseback. given – should of cash

going that of is our it's up to So, rise the agenda. over me balance coming the sheet the to months issue certain

sense for got it. that anything has range where think a conservative And strategy the sheet We don't balance for timeframe we I a the want we continue to a announce relatively holding have haven't Company. We long give Company. made to for and today,

to On with company board we (XX:XX:XX) think over sure of have be debt right the about years that never I'm other talking the said the and coming the free months hand, it. necessarily we answer and the be we'll be that is to

that anything issue to don't We have today. an certainly than more it's any So say (XX:XX:XX).

Meredith Kopit Levien

you we of done quarter starts to at in before cycle versus meaningful election, and prior the terms I frenzied if in on (XX:XX:XX) what the we've issue, the period say do period and to starts increase fourth you elections. look and And the just expect in of after news would will a the sort the what the see just around

said we've the about You're when I've also on International. focus – had and before I talked seeing this

push that for us seeing that markets new also us. sort of and You're territory is into more virgin

still some room and versus healthy bit are We more learning I But So I of new you rest have And deploying to be this we'll we this mean effectively target quite audiences. on how across marketing it. tactics I the of think and still different improve how say see will – of a do to we year, the I starts. on execute think that to continue based there. often execute

Kannan Venkateshwar

Thanks.

aligned? Sorry. could is follow-up and the it on the tax I (XX:XX:XX) to Jim, fair assume closely tax booked that rate if cash just the are tax question, rates

James M. Follo

with (XX:XX:XX) time, a But high-XX% I pay for a rate at every $X Yes. profit stuff but a XX%, of earn will XX%. ever I will generally very Yes, that's through case. running historical the will pay, rate the is tax we there I've worth said line. say, say, now or rarely was sort of XX% our however, a and for quarter lumpy we tax not we generally long

Kannan Venkateshwar

best. And, you. all Thank the Okay. Jim,

James M. Follo

you. Thank

Operator

to more to remarks. at there present And closing over the Harlan any questions call time, you. back Toplitzky Thank like I as would the are turn no for

Harlan Toplitzky

quarter. talking joining Thank look this forward morning. you for us to you again We to next

Operator

Thank has concluded. This conference you. for Thank you attending today's presentation. now

now disconnect. may You

The New York Times Company (NYT) 8 Feb 182017 Q4 Earnings call transcript