NEW YORK--(BUSINESS WIRE)--October 23, 2008
The New York Times Company announced today a preliminary
third-quarter loss per share from continuing operations of $.01,
including $.07 per share for severance costs, compared with $.10
earnings per share (EPS) in the third quarter last year, which
included $.02 per share for severance costs.
Preliminary third-quarter operating profit decreased to $10.0
million from $28.1 million in the third quarter of 2007, while
preliminary operating profit excluding depreciation and amortization
decreased to $43.9 million from $79.9 million in the third quarter
last year.
Preliminary results do not include an anticipated non-cash charge
for impairment of goodwill and long-lived assets. Due to the continued
softening of business conditions driven by the secular forces
affecting the newspaper industry, the Company is testing the assets of
its New England Media Group for impairment in the 2008 third quarter.
While the results have not yet been finalized, the Company currently
estimates a non-cash impairment charge of $100 to $150 million. The
Company will record the charge in its financial statements when it
files its third-quarter Form 10-Q with the Securities and Exchange
Commission. The charge will affect EPS for the third quarter but will
not affect the Company's operating cash flow.
"The impairment charge reflects the decrease in print advertising
revenues stemming from the secular changes in the media industry,"
said Janet L. Robinson, president and CEO. "It does not, however,
affect our cash flow or our long-term strategy of becoming an
increasingly digital organization.
"The decline in print advertising revenues this quarter
accelerated as the economy slowed. The U.S. presidential election and
the turmoil in the world's financial markets have again demonstrated
the need for the high-quality journalism we provide in print and
online. The continued strength of our brands is evident in our ability
to raise home-delivery and newsstand prices, which resulted in an
increase in our circulation revenues. It is also reflected in the
strong growth in traffic to our Web sites, which increased 15 percent
in September. Online advertising grew 10.2 percent in the quarter, in
part due to the introduction of new ad formats. In total, our online
revenues now account for 12.4 percent of the Company's revenues.
"As we continued our drive to reduce expenses, operating costs
decreased 6.8 percent compared with the same quarter last year,
despite a more than 20 percent increase in the price of newsprint.
Given the adverse economic conditions, we will continue our strict
cost discipline.
"In this difficult environment, we are reviewing our uses of cash.
We have reduced our estimate for capital expenditures in 2008. Next
year we expect they will decline from their 2008 level and be
approximately $80 million. In addition, our Board of Directors plans
to review our dividend policy before the end of this year to determine
what is most prudent in light of the overall market conditions.
"As part of our analysis of our uses of cash, we are evaluating
future financing arrangements. Based on the conversations we have had
with lenders, we expect that we will be able to manage our debt and
credit obligations as they mature. Going forward, we plan to continue
to explore opportunities to reduce our debt levels.
"As we move into the fourth quarter, our visibility on advertising
revenues is limited. To date in October, print advertising revenue
declines are similar to those in September but we are seeing slowing
in digital advertising revenues, mainly because of less display
advertising. We remain committed to executing our strategy of
developing new revenue streams for both our print and online products,
reducing costs, making full use of our R & D capability and
rebalancing our portfolio of businesses."
Third-Quarter Results
Comparisons
All comparisons are for the third quarter of 2008 to the third
quarter of 2007. The results of the Broadcast Media Group, which was
sold in the second quarter of 2007, are reported within discontinued
operations. Net income from discontinued operations of $8.6 million
($.06 per share) in the third quarter of 2008 was due to a reduction
in income taxes on the gain on the sale, and the net loss from
discontinued operations of $0.7 million ($.01 per share) in the third
quarter of 2007 was due to post-closing adjustments to the gain.
This release includes non-GAAP financial measures, and the
exhibits include a discussion of management's use of these non-GAAP
financial measures and reconciliations to the most comparable GAAP
financial measures.
Revenues
Total revenues decreased 8.9 percent to $687.0 million from $754.4
million. Advertising revenues decreased 14.4 percent; circulation
revenues increased 1.0 percent; and other revenues declined 4.2
percent. Revenues decreased mainly due to lower print advertising.
Operating Costs
Operating costs decreased 6.8 percent to $677.1 million from
$726.3 million. Depreciation and amortization decreased 34.6 percent
to $33.9 million from $51.8 million last year, when accelerated
depreciation totaled $11.7 million ($6.7 million after tax, or $.05
per share) for assets at the Edison, N.J., printing plant, which the
Company closed earlier this year. There was no accelerated
depreciation in the third quarter of 2008.
Excluding depreciation and amortization and severance costs,
operating costs decreased 6.6 percent to $625.1 million from $669.6
million, mainly due to lower compensation costs and benefits expense.
Compensation costs declined primarily as a result of lower incentive
compensation and a reduced workforce in the third quarter of 2008
compared with the same period last year. Benefits expense decreased
due in part to lower workers' compensation expense and lower pension
and other postretirement expense.
Newsprint expense increased 2.1 percent, stemming from a 22.1
percent increase in prices, offset in part by a 20.0 percent decrease
in consumption.
Severance costs were $18.1 million ($10.3 million after tax, or
$.07 per share), about half of which was for the shutdown of City &
Suburban (C & S), the Company's retail and newsstand distribution
subsidiary, which operates in the New York metropolitan area. The
closure of C & S is expected to be completed in January 2009, and
additional severance costs may be recorded before it is closed. In the
third quarter of last year, the Company had $4.9 million ($2.8 million
after tax, or $.02 per share) in severance costs.
Third-Quarter Business Segment Results
News Media Group
Total News Media Group revenues decreased 9.8 percent to $658.3
million from $729.6 million.
Advertising revenues decreased 15.9 percent due to weakness in
print advertising at all of the Company's major properties. In
particular, classified advertising revenues decreased across the News
Media Group.
Circulation revenues increased 1.0 percent, mainly because of
higher prices for The New York Times, partially offset by volume
declines. In July and August, The New York Times announced newsstand
and home-delivery price increases.
Other revenues decreased 5.4 percent to $61.0 million from $64.5
million primarily because of the elimination of subscription revenues
for TimesSelect, an online product offering that was discontinued in
September 2007.
Total News Media Group operating costs decreased 6.5 percent to
$651.2 million from $696.5 million. Excluding depreciation and
amortization and severance costs, operating costs decreased 6.5
percent to $604.1 million from $646.0 million, mainly as a result of
the items noted in the operating costs section above.
Operating profit for the News Media Group decreased 78.6 percent
to $7.1 million from $33.1 million. Excluding depreciation and
amortization, operating profit for the News Media Group decreased 53.9
percent to $36.5 million from $79.2 million.
About Group
Total About Group revenues increased 16.1 percent to $28.7 million
from $24.7 million due to increased cost-per-click and display
advertising.
Total About Group operating costs decreased 2.8 percent to $17.9
million from $18.4 million. Excluding depreciation and amortization,
operating costs increased 5.6 percent to $15.3 million from $14.5
million, mainly because of investments in new revenue initiatives that
resulted in higher professional fees. Depreciation and amortization
was lower, primarily because an asset reached the end of its
amortization period in the second quarter of 2008.
Operating profit grew 71.4 percent to $10.8 million from $6.3
million. The operating profit margin improved significantly because of
increased advertising as noted above and lower depreciation and
amortization. Operating profit before depreciation and amortization
rose 31.0 percent to $13.4 million from $10.2 million, mainly due to
higher revenues.
Corporate
Corporate costs decreased 30.3 percent to $7.9 million compared
with $11.3 million in the prior-year third quarter mainly due to lower
professional fees and compensation costs.
Other Financial Data
Internet Revenues
In the third quarter, the Company's Internet revenues increased
6.7 percent to $85.1 million from $79.7 million in the third quarter
of 2007, and Internet advertising revenues grew 10.2 percent to $74.4
million from $67.5 million. Internet businesses include NYTimes.com,
About.com, Boston.com and other company Web sites. In total, Internet
businesses accounted for 12.4 percent of the Company's revenues in the
third quarter versus 10.6 percent in the 2007 third quarter.
Joint Ventures
Net income from joint ventures was $12.5 million compared with
$5.4 million. Higher earnings resulted from stronger performance at
most of the properties in which the Company has equity interests.
Interest Expense-net
Interest expense-net increased to $11.7 million from $10.5
million, as a result of less capitalized interest.
Income Taxes
The Company's income tax expense of $12.8 million was larger than
pre-tax income of $10.8 million in the third quarter. Income taxes
were unfavorably affected by non-deductible losses on investments in
corporate-owned life insurance policies and a change in Massachusetts
state tax law. The effective income tax rate in the third quarter of
last year was 39.0 percent.
Cash and Total Debt
At the end of the quarter, cash and cash equivalents were
approximately $46 million and total debt was approximately $1.1
billion. The Company's current source of short-term funding is its
revolving credit agreements under which it had approximately $398
million in borrowings outstanding at the end of the quarter.
Capital Expenditures
In the third quarter, total capital expenditures were
approximately $27 million. Year to date, capital expenditures totaled
approximately $95 million.
Expectations
Below are updated expectations on key items for 2008 unless
otherwise noted.
-- Cost savings and productivity gains - Previously the Company
said it believed that it would achieve a reduction in costs
from its year-end 2007 cash cost base of a total of more than
$230 million in 2008 and 2009, excluding the effects of
inflation, severance costs and one-time costs. More than $130
million of these savings were expected in 2008. As a result of
the Company's continuous cost reduction efforts, it now
expects to exceed the $130 million and $230 million targets by
even larger amounts. Therefore, the Company will stop
measuring its cost savings against these targets. The Company
continues to explore a wide range of additional cost reduction
initiatives, and as they develop, details will be provided.
-- Depreciation and amortization - $145 to $155 million, which
includes approximately $5 million of accelerated depreciation
expense in the first quarter of 2008 associated with the New
York area plant consolidation project. Depreciation for the
new headquarters building is expected to be $7 million per
quarter.
-- Income from joint ventures - $20 to $25 million.
-- Interest expense - $49 to $53 million.
-- Income tax rate - Previous guidance was 40% to 43%. Due to the
significant volatility in the quarter to quarter tax rate, the
Company no longer plans to give tax rate guidance.
-- Capital expenditures - $140 to $145 million. Previous guidance
was $150 to $165 million, including approximately $35 million
for the consolidation of the Company's New York area plants
and about $22 million for its new headquarters. For 2009, the
Company expects capital expenditures to be approximately $80
million.
-- Severance - Previous guidance was $40 to $50 million.
Year-to-date severance costs are approximately $57 million,
which is higher than previous guidance because of the
severance costs associated with the closure of C & S.
Additional amounts may be recorded for C & S before it is
closed. Due to the uncertainty of the amount of possible
severance costs, the Company is not providing updated guidance
at this time.
Conference Call Information
The Company's third-quarter earnings conference call will be held
on Thursday, October 23, at 11:00 a.m. E.T. To access the call, dial
877-741-4245 (in the U.S.) and 719-325-4830 (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.
An archive of the webcast will be available beginning two hours
after the call at www.nytco.com/investors, and a transcript of the
call will also be posted. The archive and transcript will be available
for one quarter.
An audio 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 Friday, October 24. The
access code is 4044846.
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 30,
2007. 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 2007 revenues of $3.2 billion, includes The New York Times, the
International Herald Tribune, The Boston Globe, 16 other daily
newspapers, WQXR-FM and more than 50 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.
Exhibits: Preliminary Condensed Consolidated Statements of Income
Preliminary Segment Information
News Media Group Revenues by Operating Segment
Footnotes
Preliminary Reconciliation of Non-GAAP Information
This press release can be downloaded from www.nytco.com
THE NEW YORK TIMES COMPANY
(a) PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except per share data)
----------------------------------------------------------------------
Third Quarter
----------------------------
2008 2007 % Change
-------- -------- --------
Revenues
Advertising $398,196 $465,043 -14.4%
Circulation 225,689 223,420 1.0%
Other (b) 63,157 65,896 -4.2%
--------- ---------
Total 687,042 754,359 -8.9%
Operating costs
Production costs 331,447 331,962 -0.2%
Selling, general and administrative
costs 311,728 342,503 -9.0%
Depreciation and amortization 33,881 51,789 -34.6%
--------- ---------
Total 677,056 726,254 -6.8%
Write-down of assets (c) - - N/A
Net loss on sale of assets (d) - - N/A
Gain on sale of WQEW-AM - - N/A
--------- ---------
Operating profit 9,986 28,105 -64.5%
Net income from joint ventures 12,492 5,412 *
Interest expense - net 11,658 10,470 11.3%
--------- ---------
Income from continuing operations before
income taxes and minority interest 10,820 23,047 -53.1%
Income tax expense 12,848 8,991 42.9%
Minority interest in net (income)/loss *
of subsidiaries (54) 54
--------- ---------
(Loss)/income from continuing operations (2,082) 14,110 *
Discontinued operations, Broadcast Media
Group: (e)
Income from discontinued operations,
net of income taxes - - N/A
Gain/(loss) on sale,
net of income taxes 8,611 (671) *
--------- ---------
Discontinued operations,
net of income taxes 8,611 (671) *
--------- ---------
Net income $ 6,529 $ 13,439 -51.4%
========= =========
Average Number of Common Shares
Outstanding:
Basic 143,782 143,902 -0.1%
Diluted 143,782 144,112 -0.2%
Basic Earnings Per Share:
(Loss)/income from continuing *
operations $ (0.01) $ 0.10
Discontinued operations, net of *
income taxes 0.06 (0.01)
--------- ---------
Net income $ 0.05 $ 0.09 -44.4%
========= =========
Diluted Earnings Per Share:
(Loss)/income from continuing *
operations $ (0.01) $ 0.10
Discontinued operations, net of *
income taxes 0.06 (0.01)
--------- ---------
Net income $ 0.05 $ 0.09 -44.4%
========= =========
Dividends Per Share $ 0.230 $ 0.230 0.0%
----------------------------------------------------------------------
Nine Months
-------------------------------
2008 2007 % Change
---------- --------- --------
Revenues
Advertising $1,310,912 $1,478,425 -11.3%
Circulation 676,486 664,538 1.8%
Other (b) 189,404 186,359 1.6%
----------- ----------
Total 2,176,802 2,329,322 -6.5%
Operating costs
Production costs 996,410 1,002,909 -0.6%
Selling, general and administrative
costs 997,191 1,029,045 -3.1%
Depreciation and amortization 108,454 142,871 -24.1%
----------- ----------
Total 2,102,055 2,174,825 -3.3%
Write-down of assets (c) 18,291 - N/A
Net loss on sale of assets (d) - 68,156 N/A
Gain on sale of WQEW-AM - 39,578 N/A
----------- ----------
Operating profit 56,456 125,919 -55.2%
Net income from joint ventures 20,864 8,004 *
Interest expense - net 35,507 28,924 22.8%
----------- ----------
Income from continuing operations
before income taxes and minority
interest 41,813 104,999 -60.2%
Income tax expense 22,407 48,741 -54.0%
Minority interest in net (income)/loss *
of subsidiaries (371) 39
----------- ----------
(Loss)/income from continuing
operations 19,035 56,297 -66.2%
Discontinued operations, Broadcast
Media Group: (e)
Income from discontinued operations,
net of income taxes - 5,753 N/A
Gain/(loss) on sale,
net of income taxes 8,300 93,659 -91.1%
----------- ----------
Discontinued operations,
net of income taxes 8,300 99,412 -91.7%
----------- ----------
Net income $ 27,335 $ 155,709 -82.4%
=========== ==========
Average Number of Common Shares
Outstanding:
Basic 143,773 143,901 -0.1%
Diluted 144,146 144,057 0.1%
Basic Earnings Per Share:
(Loss)/income from continuing
operations $ 0.13 $ 0.39 -66.7%
Discontinued operations, net of
income taxes 0.06 0.69 -91.3%
----------- ----------
Net income $ 0.19 $ 1.08 -82.4%
=========== ==========
Diluted Earnings Per Share:
(Loss)/income from continuing
operations $ 0.13 $ 0.39 -66.7%
Discontinued operations, net of
income taxes 0.06 0.69 -91.3%
----------- ----------
Net income $ 0.19 $ 1.08 -82.4%
=========== ==========
Dividends Per Share $ 0.690 $ 0.635 8.7%
* Represents an increase or decrease in excess of 100%.
----------------------------------------------------------------------
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
(a) PRELIMINARY SEGMENT INFORMATION
(Dollars in thousands)
---------------------------------------------------------------------
Third Quarter
---------------------------
2008 2007 % Change
-------- -------- --------
Revenues
----------------------------------------
News Media Group $658,336 $729,635 -9.8%
About Group 28,706 24,724 16.1%
--------- ---------
Total $687,042 $754,359 -8.9%
========= =========
Operating Profit(Loss)
----------------------------------------
News Media Group $ 7,090 $ 33,136 -78.6%
About Group 10,784 6,291 71.4%
Corporate (7,888) (11,322) -30.3%
--------- ---------
Total $ 9,986 $ 28,105 -64.5%
========= =========
Operating Profit(Loss) Before
Depreciation & Amortization and Special
Items(f)
----------------------------------------
News Media Group $ 36,549 $ 79,223 -53.9%
About Group 13,420 10,247 31.0%
Corporate (6,102) (9,576) -36.3%
--------- ---------
Total $ 43,867 $ 79,894 -45.1%
========= =========
------------------------------------------------- ----------- --------
Nine Months
-------------------------------
2008 2007 % Change
---------- ---------- --------
Revenues
--------------------------------------
News Media Group $2,091,314 $2,257,350 -7.4%
About Group 85,488 71,972 18.8%
----------- -----------
Total $2,176,802 $2,329,322 -6.5%
=========== ===========
Operating Profit(Loss)
--------------------------------------
News Media Group $ 64,847 $ 139,418 -53.5%
About Group 29,421 23,132 27.2%
Corporate (37,812) (36,631) 3.2%
----------- -----------
Total $ 56,456 $ 125,919 -55.2%
=========== ===========
Operating Profit(Loss) Before
Depreciation & Amortization and
Special Items(f)
--------------------------------------
News Media Group $ 177,020 $ 295,245 -40.0%
About Group 38,459 33,639 14.3%
Corporate (32,278) (31,516) 2.4%
----------- -----------
Total $ 183,201 $ 297,368 -38.4%
=========== ===========
----------------------------------------------------------------------
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
NEWS MEDIA GROUP REVENUES BY OPERATING SEGMENT
(Dollars in thousands)
----------------------------------------------------------------------
2008
-----------------------------------
% %
Change Change
Third vs. Nine vs.
Quarter 2007 Months 2007
-------- ------- ---------- -------
The New York Times Media Group
Advertising $ 234,001 -13.7% $ 781,607 -9.9%
Circulation 165,993 1.9% 496,866 3.2%
Other 43,800 -7.6% 130,587 -2.3%
--------- ----------
Total $ 443,794 -7.8% $1,409,060 -5.0%
--------- ----------
New England Media Group
Advertising $ 74,060 -19.4% $ 240,591 -16.9%
Circulation 38,797 -2.4% 114,060 -3.0%
Other 12,683 10.3% 38,029 20.5%
--------- ----------
Total $ 125,540 -12.3% $ 392,680 -10.4%
--------- ----------
Regional Media Group
Advertising $ 63,547 -19.2% $ 209,212 -17.3%
Circulation 20,899 0.6% 65,560 0.0%
Other 4,556 -19.3% 14,802 -15.2%
--------- ----------
Total $ 89,002 -15.3% $ 289,574 -13.8%
--------- ----------
Total News Media Group
Advertising $ 371,608 -15.9% $1,231,410 -12.7%
Circulation 225,689 1.0% 676,486 1.8%
Other (b) 61,039 -5.4% 183,418 0.4%
--------- ----------
Total $ 658,336 -9.8% $2,091,314 -7.4%
========= ==========
----------------------------------------------------------------------
See footnotes page for additional information.
THE NEW YORK TIMES COMPANY
FOOTNOTES
(Dollars in thousands)
(a) Preliminary results do not include an anticipated non-cash charge
for impairment of goodwill and long-lived assets. Due to the
continued softening of business conditions driven by the secular
forces affecting the newspaper industry, the Company is testing
the assets of its New England Media Group for impairment in the
2008 third quarter. While the results have not yet been
finalized, the Company currently estimates a non-cash impairment
charge of $100 to $150 million. The Company will record the
charge in its financial statements when it files its third-
quarter Form 10-Q with the Securities and Exchange Commission.
The charge will affect EPS for the third quarter but will not
affect the Company's operating cash flow.
(b) Other revenues consist primarily of revenues from wholesale
delivery operations, news services/syndication, commercial
printing, digital archives, direct mail advertising services and
rental income.
(c) Represents a non-cash charge for the write-down of assets for a
systems project. To decrease capital spending, the Company
reduced the scope of a major advertising and circulation project,
which resulted in the write-down of previously capitalized costs
in the first quarter of 2008.
(d) In 2006 the Company announced plans to consolidate the printing
operations of a facility it leased in Edison, N.J., into its
newest facility in College Point, Queens. As part of the
consolidation, the Company originally planned to sublease the
Edison facility through 2018, the end of the then-existing lease
term. After evaluating the options with respect to the lease, the
Company decided it was financially prudent to purchase the Edison
facility and sell it, with two adjacent properties it already
owned, to a third party. The purchase and sale of the Edison
facility closed in the second quarter of 2007, relieving the
Company of rental terms that were above market as well as
restoration obligations under the original lease. As a result of
the sale, the Company recognized a pre-tax loss of $68.2 million
in the second quarter of 2007.
(e) On May 7, 2007, the Company sold the Broadcast Media Group,
consisting of nine network-affiliated television stations, their
related Web sites and the digital operating center, for $575
million. 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.
Results for the Broadcast Media Group, included within
discontinued operations, for the third quarter and first nine
months of 2008 and 2007 are below. Net income from discontinued
operations of $8.6 million in the third quarter of 2008 was due
to a reduction in income taxes on the gain on the sale, and the
net loss from discontinued operations of $0.7 million in the
third quarter of 2007 was due to post-closing adjustments to the
gain. The first nine months of 2008 also included post-closing
adjustments to the gain on the sale.
----------------- ----------------
Third Quarter Nine Months
----------------- ----------------
2008 2007 2008 2007
--------- ------- ------- --------
Revenues $ - $ - $ - $46,702
Pre-tax income $ - $ - $ - $ 9,848
Income tax expense - - - (4,095)
--------- ------- ------- --------
Income from discontinued
operations, net of income
taxes - Broadcast Media Group - - - 5,753
Gain/(loss) on sale of
Broadcast Media Group, net of
income taxes 8,611 (671) 8,300 93,659
--------- ------- ------- --------
Net income/(loss) $ 8,611 $ (671) $ 8,300 $99,412
========= ======= ======= ========
(f) See "Preliminary Reconciliation of Non-GAAP Information" for
reconciliations of operating profit(loss) to operating
profit(loss) before depreciation & amortization and excluding
special items. There were no such special items in the third
quarters of 2008 and 2007; there were special items in the first
nine months of 2008 and 2007.
THE NEW YORK TIMES COMPANY
PRELIMINARY RECONCILIATION OF NON-GAAP INFORMATION
(Dollars in thousands, except per share data)
In this release, the Company has included non-GAAP financial
information with respect to preliminary operating profit(loss) before
depreciation and amortization and excluding special items and
operating costs before depreciation and amortization, severance and
raw materials. The Company has included these non-GAAP financial
measures because management reviews them on a regular basis and uses
them to evaluate and manage the performance of the operations.
Management believes that, for the reasons outlined below, these non-
GAAP financial measures provide useful information to investors as a
supplement to reported operating profit(loss) and operating costs.
However, these measures should be evaluated only in conjunction with
the comparable GAAP financial measures and should not be viewed as
alternative or superior measures of GAAP results.
Operating profit(loss) before depreciation and amortization and
excluding special items is useful in evaluating the Company's ongoing
cash-generating ability as it excludes the significant non-cash
impact of depreciation and amortization as well as items, if any, not
indicative of ongoing operating activities. Total operating costs
include depreciation and amortization, severance and raw materials.
Total operating costs excluding depreciation and amortization,
severance and raw materials provide investors with helpful
supplemental information on the Company's underlying operating costs
that is used by management in its financial and operational decision-
making.
Reconciliations of these non-GAAP financial measures from,
respectively, preliminary operating profit(loss) and operating costs,
the most directly comparable GAAP items, are set out in the tables
below.
Reconciliation of preliminary operating profit(loss) before
depreciation & amortization
------------------------------------
Third Quarter 2008
------------------------------------
News
Media About Total
Group Group Corporate Company
------- ------- --------- -------
Operating profit(loss) $ 7,090 $10,784 $ (7,888) $ 9,986
Add:
Depreciation & amortization 29,459 2,636 1,786 33,881
-------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization $36,549 $13,420 $ (6,102) $43,867
======== ======== ========== ========
-------------------------------------
Third Quarter 2007
-------------------------------------
News
Media About Total
Group Group Corporate Company
------- ------- --------- -------
Operating profit(loss) $33,136 $ 6,291 $ (11,322) $28,105
Add:
Depreciation & amortization 46,087 3,956 1,746 51,789
-------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization $79,223 $10,247 $ (9,576) $79,894
======== ======== ========== ========
-------------------------------------
% Change
-------------------------------------
News
Media About Total
Group Group Corporate Company
------- ------- --------- -------
Operating profit(loss) -78.6% 71.4% -30.3% -64.5%
Add:
Depreciation & amortization -36.1% -33.4% 2.3% -34.6%
-------- -------- ---------- --------
Operating profit(loss) before
depreciation & amortization -53.9% 31.0% -36.3% -45.1%
======== ======== ========== ========
THE NEW YORK TIMES COMPANY
PRELIMINARY RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
Reconciliation of preliminary operating profit(loss) before
depreciation & amortization and special items
---------------------------------------
Nine Months 2008
---------------------------------------
News
Media About Total
Group Group Corporate Company
-------- ------- --------- --------
Operating profit(loss) $ 64,847 $29,421 $ (37,812) $ 56,456
Add:
Depreciation & amortization 93,882 9,038 5,534 108,454
Write-down of assets 18,291 - - 18,291
--------- -------- ---------- ---------
Operating profit(loss) before
depreciation & amortization
and special items $177,020 $38,459 $ (32,278) $183,201
========= ======== ========== =========
---------------------------------------
Nine Months 2007
---------------------------------------
News
Media About Total
Group Group Corporate Company
-------- ------- --------- --------
Operating profit(loss) $139,418 $23,132 $ (36,631) $125,919
Add:
Depreciation & amortization 127,249 10,507 5,115 142,871
Net loss on sale of assets 68,156 - - 68,156
Gain on sale of WQEW-AM (39,578) - - (39,578)
--------- -------- ---------- ---------
Operating profit(loss) before
depreciation & amortization
and special items $295,245 $33,639 $ (31,516) $297,368
========= ======== ========== =========
---------------------------------------
% Change
---------------------------------------
News
Media About Total
Group Group Corporate Company
-------- ------- --------- --------
Operating profit(loss) -53.5% 27.2% 3.2% -55.2%
Add:
Depreciation & amortization -26.2% -14.0% 8.2% -24.1%
Write-down of assets N/A N/A N/A N/A
Net loss on sale of assets N/A N/A N/A N/A
Gain on sale of WQEW-AM N/A N/A N/A N/A
--------- -------- ---------- ---------
Operating profit(loss) before
depreciation & amortization
and special items -40.0% 14.3% 2.4% -38.4%
========= ======== ========== =========
THE NEW YORK TIMES COMPANY
PRELIMINARY RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
Reconciliation of total Company operating costs before depreciation &
amortization, severance and raw materials
--------------------------
Third Quarter
--------------------------
2008 2007 % Change
-------- -------- --------
Total Company
------------------------------------------
Operating costs $677,056 $726,254 -6.8%
Less:
Depreciation & amortization 33,881 51,789
Severance 18,081 4,869
-------- -------- --------
Operating costs before depreciation &
amortization and severance 625,094 669,596 -6.6%
Less:
Raw materials 62,645 58,643
-------- -------- --------
Operating costs before depreciation &
amortization, severance and raw materials$562,449 $610,953 -7.9%
======== ======== ========
Reconciliation of total Company operating costs before depreciation &
amortization, severance and raw materials
-------------------------------
Nine Months
-------------------------------
2008 2007 % Change
---------- ---------- --------
Total Company
---------------------------------------
Operating costs $2,102,055 $2,174,825 -3.3%
Less:
Depreciation & amortization 108,454 142,871
Severance 56,887 17,630
----------- ---------- --------
Operating costs before depreciation &
amortization and severance 1,936,714 2,014,324 -3.9%
Less:
Raw materials 182,006 196,678
----------- ---------- --------
Operating costs before depreciation &
amortization, severance and raw
materials $1,754,708 $1,817,646 -3.5%
=========== ========== ========
Reconciliation of News Media Group operating costs before depreciation
& amortization and severance
--------------------------
Third Quarter
--------------------------
2008 2007 % Change
-------- -------- --------
News Media Group
-------------------------------------
Operating costs $651,246 $696,499 -6.5%
Less:
Depreciation & amortization 29,459 46,087
Severance 17,732 4,367
-------- -------- --------
Operating costs before depreciation &
amortization and severance $604,055 $646,045 -6.5%
======== ======== ========
Reconciliation of About Group operating costs before depreciation &
amortization
--------------------------
Third Quarter
--------------------------
2008 2007 % Change
-------- -------- --------
About Group
-------------------------------------
Operating costs $ 17,922 $ 18,433 -2.8%
Less:
Depreciation & amortization 2,636 3,956
-------- -------- --------
Operating costs before depreciation &
amortization $ 15,286 $ 14,477 5.6%
======== ======== ========
Source: The New York Times Company
