NEW YORK | 13-1102020 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Class A Common Stock | 160,203,257 | shares | |||
Class B Common Stock | 816,632 | shares |
ITEM NO. | ||||||
PART I | Financial Information | |||||
Item | 1 | Financial Statements | ||||
Condensed Consolidated Balance Sheets as of June 26, 2016 (unaudited) and December 27, 2015 | ||||||
Condensed Consolidated Statements of Operations (unaudited) for the quarter and six months ended June 26, 2016 and June 28, 2015 | ||||||
Condensed Consolidated Statements of Comprehensive Income (unaudited) for the quarter and six months ended June 26, 2016 and June 28, 2015 | ||||||
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 26, 2016 and June 28, 2015 | ||||||
Notes to the Condensed Consolidated Financial Statements | ||||||
Item | 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
Item | 3 | Quantitative and Qualitative Disclosures about Market Risk | ||||
Item | 4 | Controls and Procedures | ||||
PART II | Other Information | |||||
Item | 1 | Legal Proceedings | ||||
Item | 1A | Risk Factors | ||||
Item | 2 | Unregistered Sales of Equity Securities and Use of Proceeds | ||||
Item | 6 | Exhibits |
June 26, 2016 | December 27, 2015 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 400,062 | $ | 105,776 | |||
Short-term marketable securities | 327,641 | 507,639 | |||||
Accounts receivable (net of allowances of $13,783 in 2016 and $13,485 in 2015) | 149,957 | 207,180 | |||||
Prepaid expenses | 15,173 | 19,430 | |||||
Other current assets | 46,309 | 22,507 | |||||
Total current assets | 939,142 | 862,532 | |||||
Other assets | |||||||
Long-term marketable securities | 187,679 | 291,136 | |||||
Investments in joint ventures | 12,998 | 22,815 | |||||
Property, plant and equipment (less accumulated depreciation and amortization of $886,010 in 2016 and $856,974 in 2015) | 611,135 | 632,439 | |||||
Goodwill | 119,765 | 109,085 | |||||
Deferred income taxes | 303,441 | 309,142 | |||||
Miscellaneous assets | 155,081 | 190,541 | |||||
Total assets | $ | 2,329,241 | $ | 2,417,690 |
June 26, 2016 | December 27, 2015 | |||||||
(Unaudited) | ||||||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 75,251 | $ | 96,082 | ||||
Accrued payroll and other related liabilities | 69,076 | 98,256 | ||||||
Unexpired subscriptions | 62,812 | 60,184 | ||||||
Current portion of long-term debt and capital lease obligations | 188,784 | 188,377 | ||||||
Accrued expenses and other | 130,294 | 120,686 | ||||||
Total current liabilities | 526,217 | 563,585 | ||||||
Other liabilities | ||||||||
Long-term debt and capital lease obligations | 244,898 | 242,851 | ||||||
Pension benefits obligation | 613,445 | 627,697 | ||||||
Postretirement benefits obligation | 60,068 | 62,879 | ||||||
Other | 85,462 | 92,223 | ||||||
Total other liabilities | 1,003,873 | 1,025,650 | ||||||
Stockholders’ equity | ||||||||
Common stock of $.10 par value: | ||||||||
Class A – authorized: 300,000,000 shares; issued: 2016 – 169,069,650; 2015 – 168,263,533 (including treasury shares: 2016 – 8,870,801; 2015 – 7,691,129) | 16,907 | 16,826 | ||||||
Class B – convertible – authorized and issued shares: 2016 – 816,632; 2015 – 816,635 (including treasury shares: 2016 – none; 2015 – none) | 82 | 82 | ||||||
Additional paid-in capital | 143,513 | 146,348 | ||||||
Retained earnings | 1,313,817 | 1,328,744 | ||||||
Common stock held in treasury, at cost | (171,211 | ) | (156,155 | ) | ||||
Accumulated other comprehensive loss, net of income taxes: | ||||||||
Foreign currency translation adjustments | 1,157 | 17 | ||||||
Funded status of benefit plans | (501,222 | ) | (509,111 | ) | ||||
Total accumulated other comprehensive loss, net of income taxes | (500,065 | ) | (509,094 | ) | ||||
Total New York Times Company stockholders’ equity | 803,043 | 826,751 | ||||||
Noncontrolling interest | (3,892 | ) | 1,704 | |||||
Total stockholders’ equity | 799,151 | 828,455 | ||||||
Total liabilities and stockholders’ equity | $ | 2,329,241 | $ | 2,417,690 |
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
June 26, 2016 | June 28, 2015 | June 26, 2016 | June 28, 2015 | |||||||||||||
(13 weeks) | (26 weeks) | |||||||||||||||
Revenues | ||||||||||||||||
Circulation | $ | 219,480 | $ | 213,128 | $ | 437,474 | $ | 425,921 | ||||||||
Advertising | 131,155 | 148,599 | 270,835 | 298,507 | ||||||||||||
Other | 21,995 | 21,159 | 43,836 | 42,697 | ||||||||||||
Total revenues | 372,630 | 382,886 | 752,145 | 767,125 | ||||||||||||
Operating costs | ||||||||||||||||
Production costs: | ||||||||||||||||
Wages and benefits | 90,630 | 89,030 | 183,101 | 179,668 | ||||||||||||
Raw materials | 17,012 | 18,348 | 34,887 | 38,625 | ||||||||||||
Other | 45,075 | 45,395 | 92,591 | 91,116 | ||||||||||||
Total production costs | 152,717 | 152,773 | 310,579 | 309,409 | ||||||||||||
Selling, general and administrative costs | 172,069 | 176,252 | 350,315 | 355,049 | ||||||||||||
Depreciation and amortization | 15,147 | 15,810 | 30,619 | 30,654 | ||||||||||||
Total operating costs | 339,933 | 344,835 | 691,513 | 695,112 | ||||||||||||
Restructuring charge | 11,855 | — | 11,855 | — | ||||||||||||
Multiemployer pension plan withdrawal expense | 11,701 | — | 11,701 | 4,697 | ||||||||||||
Pension settlement charges | — | — | — | 40,329 | ||||||||||||
Operating profit | 9,141 | 38,051 | 37,076 | 26,987 | ||||||||||||
Loss from joint ventures | (412 | ) | (356 | ) | (42,308 | ) | (928 | ) | ||||||||
Interest expense, net | 9,097 | 9,776 | 17,923 | 21,968 | ||||||||||||
(Loss)/ income from continuing operations before income taxes | (368 | ) | 27,919 | (23,155 | ) | 4,091 | ||||||||||
Income tax expense/(benefit) | 124 | 11,700 | (9,077 | ) | 2,293 | |||||||||||
Net (loss)/ income | (492 | ) | 16,219 | (14,078 | ) | 1,798 | ||||||||||
Net loss attributable to the noncontrolling interest | 281 | 181 | 5,596 | 340 | ||||||||||||
Net (loss)/ income attributable to The New York Times Company common stockholders | $ | (211 | ) | $ | 16,400 | $ | (8,482 | ) | $ | 2,138 | ||||||
Average number of common shares outstanding: | ||||||||||||||||
Basic | 161,128 | 166,355 | 161,052 | 165,173 | ||||||||||||
Diluted | 161,128 | 168,316 | 161,052 | 167,491 | ||||||||||||
Basic (loss)/earnings per share attributable to The New York Times Company common stockholders | $ | (0.00 | ) | $ | 0.10 | $ | (0.05 | ) | $ | 0.01 | ||||||
Diluted (loss)/earnings per share attributable to The New York Times Company common stockholders | $ | (0.00 | ) | $ | 0.10 | $ | (0.05 | ) | $ | 0.01 | ||||||
Dividends declared per share | $ | 0.00 | $ | 0.04 | $ | 0.04 | $ | 0.08 |
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
June 26, 2016 | June 28, 2015 | June 26, 2016 | June 28, 2015 | |||||||||||||
(13 weeks) | (26 weeks) | |||||||||||||||
Net (loss)/income | $ | (492 | ) | $ | 16,219 | $ | (14,078 | ) | $ | 1,798 | ||||||
Other comprehensive income, before tax: | ||||||||||||||||
(Loss)/income on foreign currency translation adjustments | (136 | ) | 1,907 | 1,506 | (6,620 | ) | ||||||||||
Pension and postretirement benefits obligation | 6,551 | 9,142 | 13,103 | 58,480 | ||||||||||||
Other comprehensive income, before tax | 6,415 | 11,049 | 14,609 | 51,860 | ||||||||||||
Income tax expense | 2,477 | 4,256 | 5,580 | 20,576 | ||||||||||||
Other comprehensive income, net of tax | 3,938 | 6,793 | 9,029 | 31,284 | ||||||||||||
Comprehensive income/(loss) | 3,446 | 23,012 | (5,049 | ) | 33,082 | |||||||||||
Comprehensive loss attributable to the noncontrolling interest | 281 | 130 | 5,596 | 289 | ||||||||||||
Comprehensive income attributable to The New York Times Company common stockholders | $ | 3,727 | $ | 23,142 | $ | 547 | $ | 33,371 |
For the Six Months Ended | |||||||
June 26, 2016 | June 28, 2015 | ||||||
(26 weeks) | |||||||
Cash flows from operating activities | |||||||
Net (loss)/income | $ | (14,078 | ) | $ | 1,798 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Restructuring charge | 11,855 | — | |||||
Pension settlement charges | — | 40,329 | |||||
Multiemployer pension plan withdrawal expense | 11,701 | 4,697 | |||||
Depreciation and amortization | 30,619 | 30,654 | |||||
Stock-based compensation expense | 5,872 | 4,670 | |||||
Undistributed loss of joint ventures | 42,308 | 928 | |||||
Long-term retirement benefit obligations | (14,738 | ) | (4,581 | ) | |||
Uncertain tax positions | 121 | 152 | |||||
Other-net | (3,478 | ) | 7,642 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable-net | 57,223 | 58,081 | |||||
Other current assets | (19,934 | ) | 7,579 | ||||
Accounts payable, accrued payroll and other liabilities | (78,595 | ) | (87,644 | ) | |||
Unexpired subscriptions | 2,628 | 1,375 | |||||
Net cash provided by operating activities | 31,504 | 65,680 | |||||
Cash flows from investing activities | |||||||
Purchases of marketable securities | (34,912 | ) | (393,839 | ) | |||
Maturities of marketable securities | 316,515 | 470,457 | |||||
Cash distribution from corporate-owned life insurance | 38,000 | — | |||||
Acquisition of digital marketing agency | (12,250 | ) | — | ||||
Purchase of investments – net of proceeds | (1,350 | ) | (3,242 | ) | |||
Capital expenditures | (14,592 | ) | (14,446 | ) | |||
Change in restricted cash | 521 | (1,230 | ) | ||||
Other-net | (380 | ) | (270 | ) | |||
Net cash provided by investing activities | 291,552 | 57,430 | |||||
Cash flows from financing activities | |||||||
Long-term obligations: | |||||||
Repayment of debt and capital lease obligations | (322 | ) | (223,659 | ) | |||
Dividends paid | (12,937 | ) | (13,365 | ) | |||
Capital shares: | |||||||
Stock issuances | 93 | 102,640 | |||||
Repurchases | (15,684 | ) | (9,342 | ) | |||
Net cash used in financing activities | (28,850 | ) | (143,726 | ) | |||
Net increase in cash and cash equivalents | 294,206 | (20,616 | ) | ||||
Effect of exchange rate changes on cash | 80 | (990 | ) | ||||
Cash and cash equivalents at the beginning of the period | 105,776 | 176,607 | |||||
Cash and cash equivalents at the end of the period | $ | 400,062 | $ | 155,001 |
(In thousands) | June 26, 2016 | December 27, 2015 | ||||||
Short-term marketable securities | ||||||||
U.S Treasury securities | $ | 85,451 | $ | 184,278 | ||||
Corporate debt securities | 141,425 | 185,561 | ||||||
U.S. agency securities | 53,649 | 65,222 | ||||||
Municipal securities | — | 1,363 | ||||||
Certificates of deposit | 28,246 | 60,244 | ||||||
Commercial paper | 18,870 | 10,971 | ||||||
Total short-term marketable securities | $ | 327,641 | $ | 507,639 | ||||
Long-term marketable securities | ||||||||
Corporate debt securities | $ | 81,358 | $ | 119,784 | ||||
U.S. agency securities | 88,538 | 150,583 | ||||||
U.S Treasury securities | 17,783 | 20,769 | ||||||
Total long-term marketable securities | $ | 187,679 | $ | 291,136 |
(In thousands) | Total Company | |||
Balance as of December 27, 2015 | $ | 109,085 | ||
HelloSociety acquisition | 9,860 | |||
Foreign currency translation | 820 | |||
Balance as of June 26, 2016 | $ | 119,765 |
Company | Approximate % Ownership | ||||
Donohue Malbaie Inc. | 49 | % | |||
Madison Paper Industries | 40 | % | |||
Women in the World Media, LLC | 30 | % |
(In thousands, except percentages) | June 26, 2016 | December 27, 2015 | ||||||
Senior notes due in December 2016: | ||||||||
Principal amount | $ | 189,170 | $ | 189,170 | ||||
Less unamortized discount based on imputed interest rate of 6.625% | 386 | 793 | ||||||
Total senior notes due in 2016 | 188,784 | 188,377 | ||||||
Option to repurchase ownership interest in headquarters building in 2019: | ||||||||
Principal amount | 250,000 | 250,000 | ||||||
Less unamortized discount based on imputed interest rate of 13.0% | 11,869 | 13,905 | ||||||
Total option to repurchase ownership interest in headquarters building in 2019 | 238,131 | 236,095 | ||||||
Capital lease obligations | 6,767 | 6,756 | ||||||
Total debt and capital lease obligations | 433,682 | 431,228 | ||||||
Less current portion | 188,784 | 188,377 | ||||||
Total long-term debt and capital lease obligations | $ | 244,898 | $ | 242,851 |
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | June 26, 2016 | June 28, 2015 | ||||||||||||
Interest expense | $ | 10,020 | $ | 9,920 | $ | 19,942 | $ | 22,089 | ||||||||
Amortization of debt costs and discount on debt | 1,191 | 1,145 | 2,444 | 2,360 | ||||||||||||
Capitalized interest | (165 | ) | (106 | ) | (281 | ) | (157 | ) | ||||||||
Interest income | (1,949 | ) | (1,183 | ) | (4,182 | ) | (2,324 | ) | ||||||||
Total interest expense, net | $ | 9,097 | $ | 9,776 | $ | 17,923 | $ | 21,968 |
(In thousands) | June 26, 2016 | December 27, 2015 | ||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Deferred compensation | $ | 29,569 | $ | 29,569 | $ | — | $ | — | $ | 35,578 | $ | 35,578 | $ | — | $ | — |
For the Quarters Ended | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | |||||||||||||||||||||||
(In thousands) | Qualified Plans | Non- Qualified Plans | All Plans | Qualified Plans | Non- Qualified Plans | All Plans | ||||||||||||||||||
Service cost | $ | 2,248 | $ | — | $ | 2,248 | $ | 2,987 | $ | — | $ | 2,987 | ||||||||||||
Interest cost | 16,573 | 2,034 | 18,607 | 18,514 | 2,502 | 21,016 | ||||||||||||||||||
Expected return on plan assets | (27,789 | ) | — | (27,789 | ) | (28,832 | ) | — | (28,832 | ) | ||||||||||||||
Amortization of actuarial loss | 7,068 | 1,053 | 8,121 | 9,479 | 1,270 | 10,749 | ||||||||||||||||||
Amortization of prior service credit | (486 | ) | — | (486 | ) | (486 | ) | — | (486 | ) | ||||||||||||||
Net periodic pension (income)/cost | $ | (2,386 | ) | $ | 3,087 | $ | 701 | $ | 1,662 | $ | 3,772 | $ | 5,434 |
For the Six Months Ended | ||||||||||||||||||||||||
June 26, 2016 | June 28, 2015 | |||||||||||||||||||||||
(In thousands) | Qualified Plans | Non- Qualified Plans | All Plans | Qualified Plans | Non- Qualified Plans | All Plans | ||||||||||||||||||
Service cost | $ | 4,495 | $ | — | $ | 4,495 | $ | 5,975 | $ | — | $ | 5,975 | ||||||||||||
Interest cost | 33,147 | 4,068 | 37,215 | 37,452 | 5,004 | 42,456 | ||||||||||||||||||
Expected return on plan assets | (55,579 | ) | — | (55,579 | ) | (57,607 | ) | — | (57,607 | ) | ||||||||||||||
Amortization of actuarial loss | 14,137 | 2,106 | 16,243 | 18,876 | 2,540 | 21,416 | ||||||||||||||||||
Amortization of prior service credit | (972 | ) | — | (972 | ) | (972 | ) | — | (972 | ) | ||||||||||||||
Effect of settlement | — | — | — | 40,329 | — | 40,329 | ||||||||||||||||||
Net periodic pension (income)/cost | $ | (4,772 | ) | $ | 6,174 | $ | 1,402 | $ | 44,053 | $ | 7,544 | $ | 51,597 |
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | June 26, 2016 | June 28, 2015 | ||||||||||||
Service cost | $ | 104 | $ | 147 | $ | 208 | $ | 294 | ||||||||
Interest cost | 495 | 689 | 990 | 1,377 | ||||||||||||
Amortization of actuarial loss | 1,026 | 1,303 | 2,052 | 2,606 | ||||||||||||
Amortization of prior service credit | (2,110 | ) | (2,475 | ) | (4,220 | ) | (4,950 | ) | ||||||||
Net periodic postretirement benefit income | $ | (485 | ) | $ | (336 | ) | $ | (970 | ) | $ | (673 | ) |
(In thousands) | Total New York Times Company Stockholders’ Equity | Noncontrolling Interest | Total Stockholders’ Equity | |||||||||
Balance as of December 27, 2015 | $ | 826,751 | $ | 1,704 | $ | 828,455 | ||||||
Net loss | (8,482 | ) | (5,596 | ) | (14,078 | ) | ||||||
Other comprehensive income, net of tax | 9,029 | — | 9,029 | |||||||||
Effect of issuance of shares | (9,194 | ) | — | (9,194 | ) | |||||||
Share repurchases | (15,056 | ) | — | (15,056 | ) | |||||||
Dividends declared | (6,445 | ) | — | (6,445 | ) | |||||||
Stock-based compensation | 6,440 | — | 6,440 | |||||||||
Balance as of June 26, 2016 | $ | 803,043 | $ | (3,892 | ) | $ | 799,151 |
(In thousands) | Total New York Times Company Stockholders’ Equity | Noncontrolling Interest | Total Stockholders’ Equity | |||||||||
Balance as of December 28, 2014 | $ | 726,328 | $ | 2,021 | $ | 728,349 | ||||||
Net income/(loss) | 2,138 | (340 | ) | 1,798 | ||||||||
Other comprehensive income, net of tax | 31,233 | 51 | 31,284 | |||||||||
Effect of issuance of shares | 100,589 | — | 100,589 | |||||||||
Share repurchases | (9,342 | ) | — | (9,342 | ) | |||||||
Dividends declared | (13,375 | ) | — | (13,375 | ) | |||||||
Stock-based compensation | 4,567 | — | 4,567 | |||||||||
Balance as of June 28, 2015 | $ | 842,138 | $ | 1,732 | $ | 843,870 |
(In thousands) | Foreign Currency Translation Adjustments | Funded Status of Benefit Plans | Total Accumulated Other Comprehensive Loss | |||||||||
Balance as of December 27, 2015 | $ | 17 | $ | (509,111 | ) | $ | (509,094 | ) | ||||
Other comprehensive income before reclassifications, before tax(1) | 1,506 | — | 1,506 | |||||||||
Amounts reclassified from accumulated other comprehensive loss, before tax(1) | — | 13,103 | 13,103 | |||||||||
Income tax expense(1) | 366 | 5,214 | 5,580 | |||||||||
Net current-period other comprehensive income, net of tax | 1,140 | 7,889 | 9,029 | |||||||||
Balance as of June 26, 2016 | $ | 1,157 | $ | (501,222 | ) | $ | (500,065 | ) |
(1) | All amounts are shown net of noncontrolling interest. |
(In thousands) | ||||||
Detail about accumulated other comprehensive loss components | Amounts reclassified from accumulated other comprehensive loss | Affect line item in the statement where net income is presented | ||||
Funded status of benefit plans: | ||||||
Amortization of prior service credit(1) | $ | (5,192 | ) | Selling, general & administrative costs | ||
Amortization of actuarial loss(1) | 18,295 | Selling, general & administrative costs | ||||
Total reclassification, before tax(2) | 13,103 | |||||
Income tax expense | 5,214 | Income tax (benefit)/expense | ||||
Total reclassification, net of tax | $ | 7,889 |
(1) | These accumulated other comprehensive income components are included in the computation of net periodic benefit cost for pension and other retirement benefits. See Note 9 for additional information. |
(2) | There were no reclassifications relating to noncontrolling interest for the quarter ended June 26, 2016. |
For the Quarters Ended | For the Six Months Ended | |||||||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | June 26, 2016 | June 28, 2015 | % Change | ||||||||||||||
Revenues | ||||||||||||||||||||
Circulation | $ | 219,480 | $ | 213,128 | 3.0 | % | 437,474 | 425,921 | 2.7 | % | ||||||||||
Advertising | 131,155 | 148,599 | (11.7 | )% | 270,835 | 298,507 | (9.3 | )% | ||||||||||||
Other | 21,995 | 21,159 | 4.0 | % | 43,836 | 42,697 | 2.7 | % | ||||||||||||
Total revenues | 372,630 | 382,886 | (2.7 | )% | 752,145 | 767,125 | (2.0 | )% | ||||||||||||
Operating costs | ||||||||||||||||||||
Production costs: | ||||||||||||||||||||
Wages and benefits | 90,630 | 89,030 | 1.8 | % | 183,101 | 179,668 | 1.9 | % | ||||||||||||
Raw materials | 17,012 | 18,348 | (7.3 | )% | 34,887 | 38,625 | (9.7 | )% | ||||||||||||
Other | 45,075 | 45,395 | (0.7 | )% | 92,591 | 91,116 | 1.6 | % | ||||||||||||
Total production costs | 152,717 | 152,773 | — | % | 310,579 | 309,409 | 0.4 | % | ||||||||||||
Selling, general and administrative costs | 172,069 | 176,252 | (2.4 | )% | 350,315 | 355,049 | (1.3 | )% | ||||||||||||
Depreciation and amortization | 15,147 | 15,810 | (4.2 | )% | 30,619 | 30,654 | (0.1 | )% | ||||||||||||
Total operating costs | 339,933 | 344,835 | (1.4 | )% | 691,513 | 695,112 | (0.5 | )% | ||||||||||||
Restructuring charge | 11,855 | — | * | 11,855 | — | * | ||||||||||||||
Multiemployer pension plan withdrawal expense | 11,701 | — | * | 11,701 | 4,697 | * | ||||||||||||||
Pension settlement charges | — | — | — | % | — | 40,329 | * | |||||||||||||
Operating profit | 9,141 | 38,051 | (76.0 | )% | 37,076 | 26,987 | 37.4 | % | ||||||||||||
Loss from joint ventures | (412 | ) | (356 | ) | 15.7 | % | (42,308 | ) | (928 | ) | * | |||||||||
Interest expense, net | 9,097 | 9,776 | (6.9 | )% | 17,923 | 21,968 | (18.4 | )% | ||||||||||||
(Loss)/ income from continuing operations before income taxes | (368 | ) | 27,919 | * | (23,155 | ) | 4,091 | * | ||||||||||||
Income tax expense/(benefit) | 124 | 11,700 | (98.9 | )% | (9,077 | ) | 2,293 | * | ||||||||||||
Net (loss)/ income | (492 | ) | 16,219 | * | (14,078 | ) | 1,798 | * | ||||||||||||
Net loss attributable to the noncontrolling interest | 281 | 181 | 55.2 | % | 5,596 | 340 | * | |||||||||||||
Net (loss)/ income attributable to The New York Times Company common stockholders | $ | (211 | ) | $ | 16,400 | * | (8,482 | ) | 2,138 | * |
For the Quarter Ended | For the Six Months Ended | |||||||||||||
(In thousands) | June 26, 2016 | % Change vs. 2015 | June 26, 2016 | % Change vs. 2015 | ||||||||||
Digital-only subscription revenues: | ||||||||||||||
Digital-only news product subscription revenues | $ | 54,126 | 14.0 | % | $ | 106,201 | 13.5 | % | ||||||
Digital Crossword product subscription revenues | 2,272 | 54.6 | % | 4,370 | 56.5 | % | ||||||||
Total digital-only subscription revenues | $ | 56,398 | 15.3 | % | $ | 110,571 | 14.7 | % |
For the Quarters Ended | For the Year Ended | |||||||||||||||||||
(In thousands) | March 29, 2015 | June 28, 2015 | September 27, 2015 | December 27, 2015 | December 27, 2015 | |||||||||||||||
Digital-only subscription revenues: | ||||||||||||||||||||
Digital-only news product subscription revenues | $ | 46,127 | $ | 47,465 | $ | 48,656 | $ | 50,409 | $ | 192,657 | ||||||||||
Digital Crossword product subscription revenues | 1,323 | 1,470 | 1,630 | 1,863 | 6,286 | |||||||||||||||
Total digital-only subscription revenues | $ | 47,450 | $ | 48,935 | $ | 50,286 | $ | 52,272 | $ | 198,943 |
2016 | ||||||
(In thousands) | June 26, 2016 | % Change vs. 2015 | ||||
Digital-only subscriptions: | ||||||
Digital-only news product subscriptions | 1,212 | 22.4 | % | |||
Digital Crossword product subscriptions | 212 | 46.2 | % | |||
Total digital-only subscriptions | 1,424 | 25.5 | % |
2015 | ||||||||||||
(In thousands) | March 29, 2015 | June 28, 2015 | September 27, 2015 | December 27, 2015 | ||||||||
Digital-only subscriptions: | ||||||||||||
Digital-only news product subscriptions | 957 | 990 | 1,041 | 1,094 | ||||||||
Digital Crossword product subscriptions | 142 | 145 | 159 | 176 | ||||||||
Total digital-only subscriptions | 1,099 | 1,135 | 1,200 | 1,270 |
For the Quarters Ended | |||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | ||||||||||||
Display | $ | 116,446 | $ | 135,505 | (14.1 | )% | |||||||||
Classified | 7,788 | 8,296 | (6.1 | )% | |||||||||||
Other | 6,921 | 4,798 | 44.2 | % | |||||||||||
Total | $ | 131,155 | $ | 148,599 | (11.7 | )% |
For the Six Months Ended | |||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | ||||||||||||
Display | $ | 242,467 | $ | 271,938 | (10.8 | )% | |||||||||
Classified | 15,952 | 17,620 | (9.5 | )% | |||||||||||
Other | 12,416 | 8,949 | 38.7 | % | |||||||||||
Total | $ | 270,835 | $ | 298,507 | (9.3 | )% |
Display | Classified | Other | Total | |||||||||
2016 | 89 | % | 6 | % | 5 | % | 100 | % | ||||
2015 | 91 | % | 6 | % | 3 | % | 100 | % |
For the Quarters Ended | For the Six Months Ended | |||||||||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | June 26, 2016 | June 28, 2015 | % Change | ||||||||||||||||
Production costs: | ||||||||||||||||||||||
Wages and benefits | 90,630 | 89,030 | 1.8 | % | 183,101 | 179,668 | 1.9 | % | ||||||||||||||
Raw materials | 17,012 | 18,348 | (7.3 | )% | 34,887 | 38,625 | (9.7 | )% | ||||||||||||||
Other | 45,075 | 45,395 | (0.7 | )% | 92,591 | 91,116 | 1.6 | % | ||||||||||||||
Total production costs | 152,717 | 152,773 | — | % | 310,579 | 309,409 | 0.4 | % | ||||||||||||||
Selling, general and administrative costs | 172,069 | 176,252 | (2.4 | )% | 350,315 | 355,049 | (1.3 | )% | ||||||||||||||
Depreciation and amortization | 15,147 | 15,810 | (4.2 | )% | 30,619 | 30,654 | (0.1 | )% | ||||||||||||||
Total operating costs | $ | 339,933 | $ | 344,835 | (1.4 | )% | $ | 691,513 | $ | 695,112 | (0.5 | )% |
• | diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and the impact of special items (or adjusted diluted earnings per share from continuing operations); |
• | operating profit before depreciation, amortization, severance, non-operating retirement costs and special items (or adjusted operating profit); and |
• | operating costs before depreciation, amortization, severance and non-operating retirement costs (or adjusted operating costs). |
• | interest cost, expected return on plan assets and amortization of actuarial gain and loss components of pension expense; |
• | interest cost and amortization of actuarial gain and loss components of retiree medical expense; and |
• | all expenses associated with multiemployer pension plan withdrawal obligations, not otherwise included as special items. |
Reconciliation of diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special items (or adjusted diluted earnings per share from continuing operations) | ||||||||||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||||||||
June 26, 2016 | June 28, 2015 | % Change | June 26, 2016 | June 28, 2015 | % Change | |||||||||||||||||
Diluted loss per share from continuing operations | $ | (0.00 | ) | $ | 0.10 | * | $ | (0.05 | ) | $ | 0.01 | * | ||||||||||
Add: | ||||||||||||||||||||||
Severance | 0.01 | 0.01 | * | 0.03 | 0.02 | * | ||||||||||||||||
Non-operating retirement costs | 0.03 | 0.05 | (40.0 | )% | 0.06 | 0.10 | (40.0 | )% | ||||||||||||||
Special items: | ||||||||||||||||||||||
Restructuring charge | 0.07 | — | * | 0.07 | — | * | ||||||||||||||||
Multiemployer pension plan withdrawal expense | 0.07 | — | * | 0.07 | 0.03 | * | ||||||||||||||||
Loss from joint ventures, net of tax and noncontrolling interest | — | — | * | 0.21 | — | * | ||||||||||||||||
Pension settlement charge | — | — | * | — | 0.24 | * | ||||||||||||||||
Income tax expense of special items | (0.08 | ) | (0.03 | ) | * | (0.18 | ) | (0.16 | ) | 12.5 | % | |||||||||||
Adjusted diluted earnings per share from continuing operations (1) | $ | 0.11 | $ | 0.13 | (15.4 | )% | $ | 0.21 | $ | 0.25 | (16.0 | )% | ||||||||||
(1) Amounts may not add due to rounding. | ||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful |
Reconciliation of operating profit before depreciation & amortization, severance, non-operating retirement costs and special items (or adjusted operating profit) | ||||||||||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | June 26, 2016 | June 28, 2015 | % Change | ||||||||||||||||
Operating profit | $ | 9,141 | $ | 38,051 | (76.0 | )% | $ | 37,076 | $ | 26,987 | 37.4 | % | ||||||||||
Add: | ||||||||||||||||||||||
Depreciation & amortization | 15,147 | 15,810 | (4.2 | )% | 30,619 | 30,654 | (0.1 | )% | ||||||||||||||
Severance | 1,656 | 1,874 | (11.6 | )% | 5,256 | 3,391 | 55.0 | % | ||||||||||||||
Non-operating retirement costs | 4,967 | 8,674 | (42.7 | )% | 9,503 | 17,549 | (45.8 | )% | ||||||||||||||
Special items: | ||||||||||||||||||||||
Restructuring charge | 11,855 | — | * | 11,855 | — | * | ||||||||||||||||
Multiemployer pension plan withdrawal expense | 11,701 | — | * | 11,701 | 4,697 | * | ||||||||||||||||
Pension settlement charges | — | — | * | — | 40,329 | * | ||||||||||||||||
Adjusted operating profit | $ | 54,467 | $ | 64,409 | (15.4 | )% | $ | 106,010 | $ | 123,607 | (14.2 | )% | ||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
Reconciliation of operating costs before depreciation & amortization, severance and non-operating retirement costs (or adjusted operating costs) | |||||||||||||||||||||
For the Quarters Ended | For the Six Months Ended | ||||||||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | June 26, 2016 | June 28, 2015 | % Change | |||||||||||||||
Operating costs | $ | 339,933 | $ | 344,835 | (1.4 | )% | $ | 691,513 | $ | 695,112 | (0.5 | )% | |||||||||
Less: | |||||||||||||||||||||
Depreciation & amortization | 15,147 | 15,810 | (4.2 | )% | 30,619 | 30,654 | (0.1 | )% | |||||||||||||
Severance | 1,656 | 1,874 | (11.6 | )% | 5,256 | 3,391 | 55.0 | % | |||||||||||||
Non-operating retirement costs | 4,967 | 8,674 | (42.7 | )% | 9,503 | 17,549 | (45.8 | )% | |||||||||||||
Adjusted operating costs | $ | 318,163 | $ | 318,477 | (0.1 | )% | $ | 646,135 | $ | 643,518 | 0.4 | % |
Components of non-operating retirement costs(1) | ||||||||||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | June 26, 2016 | June 28, 2015 | % Change | ||||||||||||||||
Pension: | ||||||||||||||||||||||
Interest cost | $ | 18,607 | $ | 21,016 | (11.5 | )% | $ | 37,215 | $ | 42,456 | (12.3 | )% | ||||||||||
Expected return on plan assets | (27,789 | ) | (28,832 | ) | (3.6 | )% | (55,579 | ) | (57,607 | ) | (3.5 | )% | ||||||||||
Amortization and other costs | 8,121 | 10,749 | (24.4 | )% | 16,243 | 21,416 | (24.2 | )% | ||||||||||||||
Non-operating pension costs | (1,061 | ) | 2,933 | * | (2,121 | ) | 6,265 | * | ||||||||||||||
Other postretirement benefits: | ||||||||||||||||||||||
Interest cost | 495 | 689 | (28.2 | )% | 990 | 1,377 | (28.1 | )% | ||||||||||||||
Amortization and other costs | 1,026 | 1,303 | (21.3 | )% | 2,052 | 2,606 | (21.3 | )% | ||||||||||||||
Non-operating other postretirement benefits costs | 1,521 | 1,992 | (23.6 | )% | 3,042 | 3,983 | (23.6 | %) | ||||||||||||||
Expenses associated with multiemployer pension plan withdrawal obligations | 4,507 | 3,749 | 20.2 | % | 8,582 | 7,301 | 17.5 | % | ||||||||||||||
Total non-operating retirement costs | $ | 4,967 | $ | 8,674 | (42.7 | )% | $ | 9,503 | $ | 17,549 | (45.8 | )% | ||||||||||
(1)Components of non-operating retirement costs do not include special items. |
For the Six Months Ended | |||||||||||
(In thousands) | June 26, 2016 | June 28, 2015 | % Change | ||||||||
Operating activities | $ | 31,504 | $ | 65,680 | (52.0 | )% | |||||
Investing activities | $ | 291,552 | $ | 57,430 | * | ||||||
Financing activities | $ | (28,850 | ) | $ | (143,726 | ) | (79.9 | )% |
Period | Total number of shares of Class A Common Stock purchased (a) | Average price paid per share of Class A Common Stock (b) | Total number of shares of Class A Common Stock purchased as part of publicly announced plans or programs (c) | Maximum number (or approximate dollar value) of shares of Class A Common Stock that may yet be purchased under the plans or programs (d) | |||||||
March 28, 2016 - May 1, 2016 | — | — | — | $ | 16,235,000 | ||||||
May 2, 2016 - May 29, 2016 | — | — | — | $ | 16,235,000 | ||||||
May 30, 2016 - June 26, 2016 | — | — | — | $ | 16,235,000 | ||||||
Total for the second quarter of 2016 | — | — | — | $ | 16,235,000 |
(1) | On January 13, 2015, the Board of Directors terminated an existing authorization to repurchase shares of the Company’s Class A Common Stock and approved a new repurchase authorization of $101.1 million, equal to the cash proceeds received by the Company from an exercise of warrants. The Company did not repurchase any additional shares during the second quarter of 2016. Our Board of Directors has authorized us to purchase shares under this authorization from time to time as market conditions permit. There is no expiration date with respect to this authorization. |
THE NEW YORK TIMES COMPANY | ||||
(Registrant) | ||||
Date: | July 29, 2016 | /s/ JAMES M. FOLLO | ||
James M. Follo Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Exhibit No. | ||
12 | Ratio of Earnings to Fixed Charges. | |
31.1 | Rule 13a-14(a)/15d-14(a) Certification. | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification. | |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
For the Six Months Ended | For the Years Ended | |||||||||||||||||||
(In thousands, except ratio) | June 26, 2016 | December 27, 2015 | December 28, 2014 | December 29, 2013 | December 30, 2012 | |||||||||||||||
Earnings from continuing operations before fixed charges: | ||||||||||||||||||||
Earnings from continuing operations before income taxes, noncontrolling interest and income/(loss) from joint ventures | $ | 19,153 | $ | 97,535 | $ | 38,218 | $ | 98,014 | $ | 255,621 | ||||||||||
Distributed earning from less than fifty-percent owned affiliates | — | — | 3,914 | 1,400 | 9,251 | |||||||||||||||
Adjusted pre-tax earnings from continuing operations | 19,153 | 97,535 | 42,132 | 99,414 | 264,872 | |||||||||||||||
Fixed charges less capitalized interest | 24,164 | 50,719 | 62,869 | 63,032 | 67,243 | |||||||||||||||
Earnings from continuing operations before fixed charges | $ | 43,317 | $ | 148,254 | $ | 105,001 | $ | 162,446 | $ | 332,115 | ||||||||||
Fixed charges: | ||||||||||||||||||||
Interest expense, net of capitalized interest(1) | $ | 22,105 | $ | 46,391 | $ | 58,914 | $ | 59,588 | $ | 63,218 | ||||||||||
Capitalized interest | 281 | 338 | 152 | — | 17 | |||||||||||||||
Portion of rentals representative of interest factor | 2,059 | 4,328 | 3,955 | 3,444 | 4,025 | |||||||||||||||
Total fixed charges | $ | 24,445 | $ | 51,057 | $ | 63,021 | $ | 63,032 | $ | 67,260 | ||||||||||
Ratio of earnings to fixed charges | 1.77 | 2.90 | 1.67 | 2.58 | 4.94 |
(1) | The Company’s policy is to classify interest expense recognized on uncertain tax positions as income tax expense. The Company has excluded interest expense recognized on uncertain tax positions from the Ratio of Earnings to Fixed Charges. |
Rule 13a-14(a)/15d-14(a) Certification | ||||
I, Mark Thompson, certify that: | ||||
1. | I have reviewed this Quarterly Report on Form 10-Q of The New York Times Company; | |||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ MARK THOMPSON | |
Mark Thompson | |
Chief Executive Officer |
Rule 13a-14(a)/15d-14(a) Certification | ||||
I, James M. Follo, certify that: | ||||
1. | I have reviewed this Quarterly Report on Form 10-Q of The New York Times Company; | |||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JAMES M. FOLLO | |
James M. Follo | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ MARK THOMPSON | |
Mark Thompson | |
Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ JAMES M. FOLLO | |
James M. Follo | |
Chief Financial Officer |
Document Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 26, 2016 |
Jul. 27, 2016 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | NEW YORK TIMES CO | |
Entity Central Index Key | 0000071691 | |
Current Fiscal Year End Date | --12-25 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 26, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NYT | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 160,203,257 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 816,632 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Dec. 27, 2015 |
---|---|---|
Accounts receivable, allowances | $ 13,783 | $ 13,485 |
Accumulated depreciation and amortization | $ 886,010 | $ 856,974 |
Common stock, par value (USD per share) | $ 0.1 | $ 0.1 |
Class A Common Stock | ||
Authorized shares (in shares) | 300,000,000 | 300,000,000 |
Issued shares (in shares) | 169,069,650 | 168,263,533 |
Treasury shares (in shares) | 8,870,801 | 7,691,129 |
Class B Common Stock | ||
Authorized shares (in shares) | 816,632 | 816,635 |
Issued shares (in shares) | 816,632 | 816,635 |
Treasury shares (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Revenues | ||||
Circulation | $ 219,480 | $ 213,128 | $ 437,474 | $ 425,921 |
Advertising | 131,155 | 148,599 | 270,835 | 298,507 |
Other | 21,995 | 21,159 | 43,836 | 42,697 |
Total revenues | 372,630 | 382,886 | 752,145 | 767,125 |
Production costs: | ||||
Wages and benefits | 90,630 | 89,030 | 183,101 | 179,668 |
Raw materials | 17,012 | 18,348 | 34,887 | 38,625 |
Other | 45,075 | 45,395 | 92,591 | 91,116 |
Total production costs | 152,717 | 152,773 | 310,579 | 309,409 |
Selling, general and administrative costs | 172,069 | 176,252 | 350,315 | 355,049 |
Depreciation and amortization | 15,147 | 15,810 | 30,619 | 30,654 |
Total operating costs | 339,933 | 344,835 | 691,513 | 695,112 |
Restructuring charge | 11,855 | 0 | 11,855 | 0 |
Multiemployer pension plan withdrawal expense | 11,701 | 0 | 11,701 | 4,697 |
Pension settlement charges | 0 | 0 | 0 | 40,329 |
Operating profit | 9,141 | 38,051 | 37,076 | 26,987 |
Loss from joint ventures | (412) | (356) | (42,308) | (928) |
Interest expense, net | 9,097 | 9,776 | 17,923 | 21,968 |
(Loss)/ income from continuing operations before income taxes | (368) | 27,919 | (23,155) | 4,091 |
Income tax expense/(benefit) | 124 | 11,700 | (9,077) | 2,293 |
Net (loss)/ income | (492) | 16,219 | (14,078) | 1,798 |
Net loss attributable to the noncontrolling interest | 281 | 181 | 5,596 | 340 |
Net (loss)/ income attributable to The New York Times Company common stockholders | $ (211) | $ 16,400 | $ (8,482) | $ 2,138 |
Average number of common shares outstanding: | ||||
Basic (in shares) | 161,128 | 166,355 | 161,052 | 165,173 |
Diluted (in shares) | 161,128 | 168,316 | 161,052 | 167,491 |
Basic (loss)/earnings per share attributable to The New York Times Company common stockholders | $ 0.00 | $ 0.10 | $ (0.05) | $ 0.01 |
Diluted (loss)/earnings per share attributable to The New York Times Company common stockholders | 0.00 | 0.10 | (0.05) | 0.01 |
Dividends declared per share (USD per share) | $ 0 | $ 0.04 | $ 0.04 | $ 0.08 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss)/income | $ (492) | $ 16,219 | $ (14,078) | $ 1,798 |
Other comprehensive income, before tax: | ||||
(Loss)/income on foreign currency translation adjustments | (136) | 1,907 | 1,506 | (6,620) |
Pension and postretirement benefits obligation | 6,551 | 9,142 | 13,103 | 58,480 |
Other comprehensive income, before tax | 6,415 | 11,049 | 14,609 | 51,860 |
Income tax expense | 2,477 | 4,256 | 5,580 | 20,576 |
Other comprehensive income, net of tax | 3,938 | 6,793 | 9,029 | 31,284 |
Comprehensive income/(loss) | 3,446 | 23,012 | (5,049) | 33,082 |
Comprehensive loss attributable to the noncontrolling interest | 281 | 130 | 5,596 | 289 |
Comprehensive income attributable to The New York Times Company common stockholders | $ 3,727 | $ 23,142 | $ 547 | $ 33,371 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 26, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION In the opinion of management of The New York Times Company (the “Company”), the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of June 26, 2016 and December 27, 2015, and the results of operations and cash flows of the Company for the periods ended June 26, 2016 and June 28, 2015. The Company and its consolidated subsidiaries are referred to collectively as “we,” “us” or “our.” All adjustments necessary for a fair presentation have been included and are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from these interim financial statements. These financial statements, therefore, should be read in conjunction with the Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December 27, 2015. Due to the seasonal nature of our business, operating results for the interim periods are not necessarily indicative of a full year’s operations. The fiscal periods included herein comprise 13 weeks for the second quarter. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements. Actual results could differ from these estimates. For comparability, certain prior-year amounts have been reclassified to conform with the current period presentation. See Management’s Discussion and Analysis of Results of Operations for additional information regarding reclassified amounts. |
Summary of Significant Accounting Policies |
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Jun. 26, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As of June 26, 2016, our significant accounting policies, which are detailed in our Annual Report on Form 10-K for the year ended December 27, 2015, have not changed. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation,” which provides guidance on accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance becomes effective for the Company for fiscal years beginning after December 25, 2016. Early application is permitted. Amendments related to the timing of when excess tax benefits are recognized and classified on the statement of cash flows, forfeitures, minimum statutory withholding requirements, and intrinsic value will be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when the Company withholds shares to meet the minimum statutory withholding requirement will be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term will be applied prospectively. The Company may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently in the process of evaluating the impact of the new stock compensation guidance. In February 2016, the FASB issued ASU 2016-02, “Leases,” which provides guidance on accounting for leases and disclosure of key information about leasing arrangements. The guidance requires lessees to recognize the following for all operating and finance leases at the commencement date: (1) a lease liability, which is the obligation to make lease payments arising from a lease, measured on a discounted basis and (2) a right-of-use asset representing the lessee’s right to use, or control the use of, the underlying asset for the lease term. A lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities for short-term leases with a term of 12 months or less. The guidance does not fundamentally change lessor accounting; however, some changes have been made to align that guidance with the lessee guidance and other areas within GAAP. This guidance becomes effective for the Company for fiscal years beginning after December 30, 2018. Early application is permitted. This guidance will be applied on a modified retrospective basis for leases existing at, or entered into after, the earliest period presented in the financial statements. We are currently in the process of evaluating the impact of the new leasing guidance. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which prescribes a single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers. The new guidance will supersede virtually all existing revenue guidance under GAAP and International Financial Reporting Standards. There are two transition options available to entities: the full retrospective approach or the modified retrospective approach. Under the full retrospective approach, the Company would restate prior periods in compliance with Accounting Standards Codification 250, “Accounting Changes and Error Corrections.” Alternatively, the Company may elect the modified retrospective approach, which allows for the new revenue standard to be applied to existing contracts as of the effective date and record a cumulative catch-up adjustment to retained earnings. This guidance is effective for fiscal years beginning after December 31, 2017, subject to finalization. Early application is permitted. Subsequently, in March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the implementation guidance on principal versus agent considerations in ASU 2014-09. The amendments in ASU 2016-08 do not change the core principle of ASU 2014-09. In April 2016, the FASB also issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” to reduce the cost and complexity of applying the guidance on identifying promised goods or services when identifying a performance obligation and improve the operability and understandability of the licensing implementation guidance. The amendments in ASU 2016-10 do not change the core principle of ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” to reduce the cost and complexity of applying the guidance to address certain issues on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition.The amendments in ASU 2016-12 do not change the core principle of ASU 2014-09. We are currently in the process of evaluating the impact of the new revenue guidance. The Company considers the applicability and impact of all ASUs. ASUs not specifically identified in our disclosures are either not applicable to the Company or not expected to have a material effect on our financial condition or results of operations. |
Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | MARKETABLE SECURITIES Our marketable debt securities consisted of the following:
As of June 26, 2016, our short-term and long-term marketable securities had remaining maturities of less than 1 month to 12 months and 13 months to 29 months, respectively. See Note 8 for additional information regarding the fair value of our marketable securities. |
Goodwill |
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Jun. 26, 2016 | ||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Goodwill | GOODWILL The Company acquired HelloSociety, LLC (“HelloSociety”), a digital marketing agency, for $12.3 million in a cash transaction effective February 29, 2016. Upon acquisition, the Company preliminarily allocated the entire purchase price to intangible assets pending the completion of the valuation of assets acquired and liabilities assumed. During the second quarter of 2016, the Company received the final valuation and adjusted the allocation of the purchase price to recognize the goodwill acquired in the purchase. The remaining intangible assets have been included in “Miscellaneous Assets” in our Condensed Consolidated Balance Sheets. The changes in the carrying amount of goodwill, including goodwill purchased as part of the acquisition of HelloSociety, as of June 26, 2016 and December 27, 2015 were as follows:
The foreign currency translation line item reflects changes in goodwill resulting from fluctuating exchange rates related to the consolidation of certain international subsidiaries. |
Investments |
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||
Investments | INVESTMENTS Equity Method Investments As of June 26, 2016, our investments in joint ventures consisted of equity ownership interests in the following entities:
We have investments in Donohue Malbaie Inc. (“Malbaie”), a Canadian newsprint company, Madison Paper Industries (“Madison”), a partnership that operated a supercalendered paper mill in Maine, and Women in the World Media, LLC, a live-event conference business. Our Company and UPM-Kymmene Corporation, a Finnish paper manufacturing company, are partners through subsidiary companies in Madison. The Company’s 40% ownership of Madison is through an 80%-owned consolidated subsidiary. UPM-Kymmene owns 60% of Madison, including a 10% interest through a 20% noncontrolling interest in the consolidated subsidiary of the Company. During the first quarter of 2016, we recognized a $41.4 million loss from joint ventures related to the announced closure of the paper mill operated by Madison. Our proportionate share of the loss was $20.1 million after tax and adjusted for the allocation of the loss to the noncontrolling interest. During the second quarter of 2016, we recognized an additional $2.3 million loss from joint ventures, of which $1.6 million related to certain contract termination costs incurred in connection with the paper mill closure. As a result of these costs, our investment in Madison was decreased to zero and a liability of $31.9 million was recorded in “Accrued expenses and other” in our Condensed Consolidated Balance Sheets. We believe Madison will have sufficient existing assets to sell and recover, including cash, receivables and inventory, and therefore we do not currently expect that we will be required to use significant cash in the wind down of this investment. We received no distributions from our equity method investments during the three- and six-month periods ended June 26, 2016 and June 28, 2015. We purchase newsprint from Malbaie, and previously purchased supercalendered paper from Madison, at competitive prices. Such purchases totaled $6.6 million and $6.1 million for the six-month periods ended June 26, 2016 and June 28, 2015, respectively. Cost Method Investments The aggregate carrying amounts of cost method investments included in “Miscellaneous assets’’ in our Consolidated Balance Sheets were $13.2 million and $11.9 million for June 26, 2016 and December 27, 2015, respectively. |
Debt Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | DEBT OBLIGATIONS Our current indebtedness includes senior notes and the repurchase option related to a sale-leaseback of a portion of our New York headquarters. Our total debt and capital lease obligations consisted of the following:
See Note 8 for additional information regarding the fair value of our long-term debt. “Interest expense, net,” as shown in the accompanying Condensed Consolidated Statements of Operations was as follows:
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Other |
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Jun. 26, 2016 | |
Other Income and Expenses [Abstract] | |
Other | OTHER Streamlining of International Print Operations On April 26, 2016, we informed employees of proposed measures intended to streamline our international print operations and support future growth efforts. These measures include a redesign of our international print newspaper and the relocation of certain editing and production operations currently conducted in Paris to our locations in Hong Kong and New York. As of June 26, 2016, we incurred $11.9 million of total costs related to the measures, including $11.8 million of relocation and severance-related charges and approximately $0.1 million of lease impairment and other contract-related charges. We expect to incur approximately $3 million of additional costs in the second half of 2016 in connection with these measures. See Note 15 for additional information. Severance Costs We recognized severance costs, other than those associated with the streamlining of the Company’s international print operations, of $1.7 million and $1.9 million in the second quarter of 2016 and 2015, respectively, and $5.3 million and $3.4 million in the first six months of 2016 and 2015, respectively. These costs are recorded in “Selling, general and administrative costs” in our Condensed Consolidated Statements of Operations. We had a severance liability of $21.7 million (inclusive of severance liabilities in connection with the streamlining of our international print operations) and $14.9 million included in “Accrued expenses and other” in our Condensed Consolidated Balance Sheets as of June 26, 2016 and December 27, 2015, respectively. Advertising Expenses Advertising expenses incurred to promote our consumer and marketing services were $20.1 million and $21.1 million in the second quarter of 2016 and 2015, respectively, and $41.2 million and $42.5 million in the first six months of 2016 and 2015, respectively. Capitalized Computer Software Costs Amortization of capitalized computer software costs included in “Depreciation and amortization” in our Condensed Consolidated Statements of Operations was $2.7 million and $3.1 million in the second quarter of 2016 and 2015, respectively, and $5.7 million and $6.0 million in the first six months of 2016 and 2015, respectively. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is the price that would be received upon the sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The transaction would be in the principal or most advantageous market for the asset or liability, based on assumptions that a market participant would use in pricing the asset or liability. The fair value hierarchy consists of three levels: Level 1–quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date; Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3–unobservable inputs for the asset or liability. Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis The following table summarizes our financial liabilities measured at fair value on a recurring basis as of June 26, 2016 and December 27, 2015:
The deferred compensation liability, included in “Other liabilities—Other” in our Condensed Consolidated Balance Sheets, consists of deferrals under The New York Times Company Deferred Executive Compensation Plan (the “DEC”), which enables certain eligible executives to elect to defer a portion of their compensation on a pre-tax basis. The deferred amounts are invested at the executives’ option in various mutual funds. The fair value of deferred compensation is based on the mutual fund investments elected by the executives and on quoted prices in active markets for identical assets. Participation in the DEC was frozen effective December 31, 2015. Financial Instruments Disclosed, But Not Reported, at Fair Value Our marketable securities, which include U.S. Treasury securities, corporate debt securities, U.S. government agency securities, municipal securities, certificates of deposit and commercial paper, are recorded at amortized cost (see Note 3). As of June 26, 2016 and December 27, 2015, the amortized cost approximated fair value because of the short-term maturity and highly liquid nature of these investments. We classified these investments as Level 2 since the fair value estimates are based on market observable inputs for investments with similar terms and maturities. The carrying value of our long-term debt was $238 million as of June 26, 2016 and $236 million as of December 27, 2015. The fair value of our long-term debt was $312 million and $316 million as of June 26, 2016 and December 27, 2015, respectively. We estimate the fair value of our debt utilizing market quotations for debt that have quoted prices in active markets. Since our debt does not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities (Level 2). |
Pension and Other Postretirement Benefits |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits | PENSION AND OTHER POSTRETIREMENT BENEFITS Pension Single-Employer Plans We sponsor several single-employer defined benefit pension plans, the majority of which have been frozen. We also participate in two joint Company and Guild-sponsored defined benefit pension plans covering employees who are members of The News Guild of New York, including The Newspaper Guild of New York - The New York Times Pension Fund, which was frozen in 2012 and replaced by a successor plan, The Guild-Times Adjustable Pension Plan. The components of net periodic pension cost were as follows:
During the first six months of 2016 and 2015, we made pension contributions of $3.9 million and $3.2 million, respectively, to certain qualified pension plans. We expect to make total contributions of $7.6 million in 2016 to satisfy funding requirements. In the first quarter of 2016, we changed the methodology used to calculate the service and interest components of net periodic benefit cost for retirement plans to provide a more precise measurement of service and interest costs. Historically, we calculated these service and interest components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in the first quarter of 2016, we elected to utilize an approach that discounts the individual expected cash flows using the applicable spot rates derived from the yield curve over the projected cash flow period. We have accounted for this change as a change in accounting estimate that is inseparable from a change in accounting principle and accordingly have accounted for it prospectively. As part of our strategy to reduce the pension obligations and the resulting volatility of our overall financial condition, we have offered lump-sum payments to certain former employees participating in both our qualified and non-qualified pension plans. In the first quarter of 2015, we recorded a pension settlement charge of $40.3 million in connection with a lump-sum payment offer made to certain former employees who participated in certain qualified pension plans. These lump-sum payments totaled $98.3 million and were made with cash from the qualified pension plans, not with Company cash. The effect of this lump-sum payment offer was to reduce our pension obligations by $142.8 million. Multiemployer Plans During the second quarter of 2016 and the first quarter of 2015 we recorded charges of $11.7 million and $4.7 million, respectively, related to partial withdrawal obligations under multiemployer pension plans. The $11.7 million charge followed an unfavorable arbitration decision in the second quarter of 2016. See Note 14 for additional information with respect to the arbitration. Other Postretirement Benefits The components of net periodic postretirement benefit income were as follows:
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Income Taxes |
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Jun. 26, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company had income tax expense of $0.1 million in the second quarter of 2016 and an income tax benefit of $9.1 million in the first six months of 2016. The Company had income tax expense of $11.7 million and $2.3 million in the second quarter and first six months of 2015, respectively. The income tax benefit in the first six months of 2016 was due to the $23.2 million loss from continuing operations before taxes for that period. |
Earnings/(Loss) Per Share |
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Jun. 26, 2016 | |
Earnings Per Share [Abstract] | |
Earnings/(Loss) Per Share | EARNINGS/(LOSS) PER SHARE We compute earnings/(loss) per share using a two-class method, an earnings allocation method used when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. This method determines earnings/(loss) per share based on dividends declared on common stock and participating securities (i.e., distributed earnings), as well as participation rights of participating securities in any undistributed earnings. Earnings/(loss) per share is computed using both basic shares and diluted shares. The difference between basic and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities. Our stock options, stock-settled long-term performance awards and restricted stock units could have the most significant impact on diluted shares. The decrease in our basic shares is primarily due to repurchases of the Company’s Class A Common Stock. Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the market value of our Class A Common Stock, because their inclusion would result in an anti-dilutive effect on per share amounts. The number of stock options excluded from the computation of diluted earnings per share because they were anti-dilutive was approximately 6 million in the second quarter and first six months of 2016 and approximately 5 million in the second quarter and first six months of 2015. |
Supplemental Stockholders' Equity Information |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Stockholders' Equity Information | SUPPLEMENTAL STOCKHOLDERS’ EQUITY INFORMATION Stockholders’ equity is summarized as follows:
In January 2009, pursuant to a securities purchase agreement, we issued warrants to affiliates of Carlos Slim Helú, then the beneficial owner of approximately 8% of our Class A Common Stock (excluding the warrants), to purchase 15.9 million shares of our Class A Common Stock at a price of $6.3572 per share. On January 14, 2015, the warrant holders exercised these warrants in full and the Company received cash proceeds of $101.1 million from this exercise. On January 13, 2015, the Board of Directors terminated an existing authorization to repurchase shares of the Company’s Class A Common Stock and approved a new repurchase authorization of $101.1 million, equal to the cash proceeds received by the Company from the exercise of warrants. As of June 26, 2016, the Company had repurchased 6,690,905 Class A shares under this authorization for a cost of $84.9 million (excluding commissions) and $16.2 million remained. Our Board of Directors has authorized us to purchase shares under this authorization from time to time as market conditions permit. There is no expiration date with respect to this authorization. The following table summarizes the changes in AOCI by component as of June 26, 2016:
The following table summarizes the reclassifications from AOCI for the six months ended June 26, 2016:
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Segment Information |
6 Months Ended |
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Jun. 26, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We have one reportable segment that includes The New York Times, International New York Times, NYTimes.com, international.nytimes.com and related businesses. Therefore, all required segment information can be found in the Condensed Consolidated Financial Statements. Our operating segment generated revenues principally from circulation and advertising. Other revenues consist primarily of revenues from news services/syndication, digital archives, rental income, our NYT Live business and e-commerce. |
Contingent Liabilities |
6 Months Ended |
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Jun. 26, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | CONTINGENT LIABILITIES Restricted Cash We were required to maintain $28.2 million of restricted cash as of June 26, 2016 and $28.7 million as of December 27, 2015, the majority of which is set aside to collateralize workers’ compensation obligations. Newspaper and Mail Deliverers–Publishers’ Pension Fund In September 2013, the Newspaper and Mail Deliverers-Publishers’ Pension Fund (the “NMDU Fund”) assessed a partial withdrawal liability against the Company in the amount of approximately $26 million for the plan years ending May 31, 2012 and 2013 (the “Initial Assessment”), an amount that was increased to approximately $34 million in December 2014, when the NMDU Fund issued a revised partial withdrawal liability assessment for the plan year ending May 31, 2013 (the “Revised Assessment”). The NMDU Fund claimed that when City & Suburban Delivery Systems, Inc., a retail and newsstand distribution subsidiary of the Company and the largest contributor to the NMDU Fund, ceased operations in 2009, it triggered a decline of more than 70% in contribution base units in each of these two plan years. The Company disagreed with both the NMDU Fund’s determination that a partial withdrawal occurred and the methodology by which it calculated the withdrawal liability, and the parties engaged in arbitration proceedings to resolve the matter. On June 14, 2016, the arbitrator issued an interim award and opinion that supported the NMDU Fund’s determination that a partial withdrawal had occurred in each of the two plan years. The arbitrator agreed with the methodology by which the NMDU Fund calculated the Initial Assessment, but concluded that the NMDU Fund’s calculation of the Revised Assessment was overstated by $7.5 million. The Company expects to appeal the arbitrator’s decision following the issuance of the final award and opinion. As a result of the interim decision, the Company established a liability of $11.3 million in the second quarter of 2016. Management believes it is reasonably possible that the total loss in this matter could exceed the liability established by a range of zero to approximately $10 million. As required by the Employee Retirement Income Security Act of 1974, the Company has been making the quarterly payments to the NMDU Fund set forth in the demand letters. As of June 26, 2016, we have paid $15.1 million since the receipt of the initial demand letter (of which $9.9 million related to the Initial Assessment and $5.2 million related to the Revised Assessment), including $3.5 million in 2016. Subsequent to that date, the NMDU Fund returned $5.0 million principal and interest to the Company in recognition of the arbitrator’s finding that the Revised Assessment was overstated. The $5.0 million reimbursement will be recorded in the third quarter of 2016 as that is when the gain associated with the Revised Assessment was realized. The Company will continue to make required payments during the pendency of the appeal. Worcester Telegram & Gazette Corporation The Company is involved in class action litigation brought on behalf of individuals who, from 2006 to 2011, delivered newspapers at the Worcester Telegram & Gazette Corporation (“Worcester”), a subsidiary of the Company. The plaintiffs are asserting several claims against Worcester, including a challenge to their classification as independent contractors, and seek unspecified damages. In April 2016, the parties engaged in an unsuccessful mediation process to resolve the litigation. The Company believes that the claims made by the plaintiffs are without merit and continues to vigorously defend its position. The Company is unable to estimate a loss or range of possible losses at this time. Other We are involved in various legal actions incidental to our business that are now pending against us. These actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. Although the Company cannot predict the outcome of these matters, it is possible that an unfavorable outcome in one or more matters could be material to the Company’s consolidated results of operations or cash flows for an individual reporting period. However, based on currently available information, management does not believe that the ultimate resolution of these matters, individually or in the aggregate, is likely to have a material effect on the Company’s financial position. |
Subsequent Events |
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Jun. 26, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTS On June 28, 2016, our Board of Directors approved a dividend of $0.04 per share on our Class A and Class B common stock that was paid on July 28, 2016, to all stockholders of record as of the close of business on July 13, 2016. Our Board of Directors will continue to evaluate the appropriate dividend level on an ongoing basis in light of our earnings, capital requirements, financial condition, restrictions in any existing indebtedness and other relevant factors. On July 4, 2016, the Company reached an agreement with the employee works council in Paris (which was subsequently approved by the labor department) regarding proposed measures to streamline the Company’s international print operations. As of June 26, 2016, the Company incurred $11.9 million of total costs related to the proposed measures. As a result of this agreement, we expect to incur approximately $3 million of additional costs in the second half of 2016 in connection with these measures. On July 13, 2016, the Company received $5.0 million from the NMDU Fund in connection with an ongoing arbitration matter. See Note 14 for additional information. The Company offered a voluntary buyout program to certain employees, which extended until July 15, 2016. Based on the number of employees who accepted the offer, the Company expects to incur severance costs of approximately $11 million in the third quarter of 2016 in connection with the program. |
Summary of Significant Accounting Policies (Policies) |
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Jun. 26, 2016 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation,” which provides guidance on accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance becomes effective for the Company for fiscal years beginning after December 25, 2016. Early application is permitted. Amendments related to the timing of when excess tax benefits are recognized and classified on the statement of cash flows, forfeitures, minimum statutory withholding requirements, and intrinsic value will be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when the Company withholds shares to meet the minimum statutory withholding requirement will be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term will be applied prospectively. The Company may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently in the process of evaluating the impact of the new stock compensation guidance. In February 2016, the FASB issued ASU 2016-02, “Leases,” which provides guidance on accounting for leases and disclosure of key information about leasing arrangements. The guidance requires lessees to recognize the following for all operating and finance leases at the commencement date: (1) a lease liability, which is the obligation to make lease payments arising from a lease, measured on a discounted basis and (2) a right-of-use asset representing the lessee’s right to use, or control the use of, the underlying asset for the lease term. A lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities for short-term leases with a term of 12 months or less. The guidance does not fundamentally change lessor accounting; however, some changes have been made to align that guidance with the lessee guidance and other areas within GAAP. This guidance becomes effective for the Company for fiscal years beginning after December 30, 2018. Early application is permitted. This guidance will be applied on a modified retrospective basis for leases existing at, or entered into after, the earliest period presented in the financial statements. We are currently in the process of evaluating the impact of the new leasing guidance. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which prescribes a single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers. The new guidance will supersede virtually all existing revenue guidance under GAAP and International Financial Reporting Standards. There are two transition options available to entities: the full retrospective approach or the modified retrospective approach. Under the full retrospective approach, the Company would restate prior periods in compliance with Accounting Standards Codification 250, “Accounting Changes and Error Corrections.” Alternatively, the Company may elect the modified retrospective approach, which allows for the new revenue standard to be applied to existing contracts as of the effective date and record a cumulative catch-up adjustment to retained earnings. This guidance is effective for fiscal years beginning after December 31, 2017, subject to finalization. Early application is permitted. Subsequently, in March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the implementation guidance on principal versus agent considerations in ASU 2014-09. The amendments in ASU 2016-08 do not change the core principle of ASU 2014-09. In April 2016, the FASB also issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” to reduce the cost and complexity of applying the guidance on identifying promised goods or services when identifying a performance obligation and improve the operability and understandability of the licensing implementation guidance. The amendments in ASU 2016-10 do not change the core principle of ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” to reduce the cost and complexity of applying the guidance to address certain issues on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition.The amendments in ASU 2016-12 do not change the core principle of ASU 2014-09. We are currently in the process of evaluating the impact of the new revenue guidance. The Company considers the applicability and impact of all ASUs. ASUs not specifically identified in our disclosures are either not applicable to the Company or not expected to have a material effect on our financial condition or results of operations. |
Marketable Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Debt and Equity Securities | Our marketable debt securities consisted of the following:
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Goodwill (Tables) |
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Schedule of goodwill balances | The changes in the carrying amount of goodwill, including goodwill purchased as part of the acquisition of HelloSociety, as of June 26, 2016 and December 27, 2015 were as follows:
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule and summarized unaudited condensed combined income statements of equity method investments | As of June 26, 2016, our investments in joint ventures consisted of equity ownership interests in the following entities:
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Debt Obligations (Tables) |
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Schedule of carrying value of outstanding debt | Our total debt and capital lease obligations consisted of the following:
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Schedule of components of interest expense, net | “Interest expense, net,” as shown in the accompanying Condensed Consolidated Statements of Operations was as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes our financial liabilities measured at fair value on a recurring basis as of June 26, 2016 and December 27, 2015:
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Pension and Other Postretirement Benefits (Tables) |
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Pension Benefits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Net Periodic Pension Cost and Postretirement Benefit Income | The components of net periodic pension cost were as follows:
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Other Postretirement Benefit Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Net Periodic Pension Cost and Postretirement Benefit Income | The components of net periodic postretirement benefit income were as follows:
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Supplemental Stockholders' Equity Information (Tables) |
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Jun. 26, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in stockholders' equity | Stockholders’ equity is summarized as follows:
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Schedule of Accumulated Other Comprehensive Loss | The following table summarizes the changes in AOCI by component as of June 26, 2016:
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Reclassification out of Accumulated Other Comprehensive Income | The following table summarizes the reclassifications from AOCI for the six months ended June 26, 2016:
|
Basis of Presentation (Details) |
3 Months Ended | |
---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Fiscal Period Duration | 91 days | 91 days |
Goodwill (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Feb. 29, 2016 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Goodwill [Line Items] | |||
HelloSociety acquisition | $ 12,250 | $ 0 | |
Goodwill [Roll Forward] | |||
Balance as of December 27, 2015 | 109,085 | ||
HelloSociety acquisition | 9,860 | ||
Foreign currency translation | 820 | ||
Balance as of June 26, 2016 | $ 119,765 | ||
HelloSociety | |||
Goodwill [Line Items] | |||
HelloSociety acquisition | $ 12,300 |
Investments - Cost Method Investments (Details) - USD ($) $ in Millions |
Jun. 26, 2016 |
Dec. 27, 2015 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Cost method investments | $ 13.2 | $ 11.9 |
Debt Obligations - Debt & Capital Leases (Details) - USD ($) $ in Thousands |
Jun. 26, 2016 |
Dec. 27, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term capital lease obligations | $ 6,767 | $ 6,756 |
Total debt and capital lease obligations | 433,682 | 431,228 |
Current portion of long-term debt and capital lease obligations | 188,784 | 188,377 |
Total long-term debt and capital lease obligations | 244,898 | 242,851 |
Notes Due 2016 | ||
Debt Instrument [Line Items] | ||
Principal amount | 189,170 | 189,170 |
Less unamortized discount based on imputed interest rate | $ 386 | 793 |
Interest rate on debt | 6.625% | |
Long-term debt | $ 188,784 | 188,377 |
Option To Repurchase Headquarters Building 2019 | ||
Debt Instrument [Line Items] | ||
Principal amount | 250,000 | 250,000 |
Less unamortized discount based on imputed interest rate | 11,869 | 13,905 |
Total option to repurchase ownership interest in headquarters building in 2019 | $ 238,131 | $ 236,095 |
Interest rate on debt | 13.00% |
Debt Obligations - Interest Expense, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Debt Disclosure [Abstract] | ||||
Interest expense | $ 10,020 | $ 9,920 | $ 19,942 | $ 22,089 |
Amortization of debt costs and discount on debt | 1,191 | 1,145 | 2,444 | 2,360 |
Capitalized interest | (165) | (106) | (281) | (157) |
Interest income | (1,949) | (1,183) | (4,182) | (2,324) |
Total interest expense, net | $ 9,097 | $ 9,776 | $ 17,923 | $ 21,968 |
Other (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
Dec. 27, 2015 |
|
Other Expense [Line Items] | |||||
Restructuring charge | $ 11,855 | $ 0 | $ 11,855 | $ 0 | |
Severance liability | 21,700 | 21,700 | $ 14,900 | ||
Advertising expense | 20,100 | 21,100 | 41,200 | 42,500 | |
Capitalized Computer Software Costs | |||||
Other Expense [Line Items] | |||||
Capitalized Computer Software, Amortization | 2,700 | 3,100 | 5,700 | 6,000 | |
Selling, General and Administrative Expenses | |||||
Other Expense [Line Items] | |||||
Severance costs | 1,700 | $ 1,900 | 5,300 | $ 3,400 | |
International Operation Streamlining Plan | |||||
Other Expense [Line Items] | |||||
Restructuring charge | 11,900 | ||||
Additional costs expected | $ 3,000 | 3,000 | |||
Employee Relocation and Severance | International Operation Streamlining Plan | |||||
Other Expense [Line Items] | |||||
Restructuring charge | 11,800 | ||||
Lease Impairment and Other Contract-related Charges | International Operation Streamlining Plan | |||||
Other Expense [Line Items] | |||||
Restructuring charge | $ 100 |
Other Postretirement Benefits (Details) - Other Postretirement Benefit Plan - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Pension Benefits | ||||
Service cost | $ 104 | $ 147 | $ 208 | $ 294 |
Interest cost | 495 | 689 | 990 | 1,377 |
Amortization of actuarial loss | 1,026 | 1,303 | 2,052 | 2,606 |
Amortization of prior service credit | (2,110) | (2,475) | (4,220) | (4,950) |
Net periodic postretirement benefit income | $ (485) | $ (336) | $ (970) | $ (673) |
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense/(benefit) | $ 124 | $ 11,700 | $ (9,077) | $ 2,293 |
Loss from continuing operations | $ (368) | $ 27,919 | $ (23,155) | $ 4,091 |
Earnings/(Loss) Per Share (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 6 | 5 | 6 | 5 |
Segment Information (Details) |
6 Months Ended |
---|---|
Jun. 26, 2016
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Contingent Liabilities - Restricted Cash (Details) - USD ($) $ in Millions |
Jun. 26, 2016 |
Dec. 27, 2015 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Restricted cash | $ 28.2 | $ 28.7 |
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