The New York Times Group | The Athletic (contribution to consolidated results) | The New York Times Company | |||||||||
Digital-only subscription revenues | increase 10% - 14% | 10 - 12 percentage points (pp) | increase 21% - 25% | ||||||||
Total subscription revenues | increase 5% - 7% | 5 - 7 pp | increase 11% - 13% | ||||||||
Digital advertising revenues | decrease 4% - 8% | 5 - 7 pp | flat to decrease low-single digits | ||||||||
Total advertising revenues | decrease low- to mid-single digits | 2 - 5 pp | flat to decrease low-single digits | ||||||||
Other revenue | decrease approximately 5% | n/a | decrease approximately 5% | ||||||||
Operating costs | n/a | n/a | increase 10% - 15% | ||||||||
Adjusted operating costs | increase mid-single digits | approximately 7 - 9 pp | increase 9% - 13% |
THE NEW YORK TIMES COMPANY | |||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||||||
(Dollars and shares in thousands, except per share data) | |||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | ||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
Subscription(a) | $ | 383,619 | $ | 339,217 | 13.1 | % | $ | 755,598 | $ | 668,301 | 13.1 | % | |||||||||||||||||||||||
Advertising(b) | 117,379 | 112,774 | 4.1 | % | 233,649 | 209,890 | 11.3 | % | |||||||||||||||||||||||||||
Other(c) | 54,682 | 46,506 | 17.6 | % | 103,858 | 93,351 | 11.3 | % | |||||||||||||||||||||||||||
Total revenues | 555,680 | 498,497 | 11.5 | % | 1,093,105 | 971,542 | 12.5 | % | |||||||||||||||||||||||||||
Operating costs | |||||||||||||||||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | 300,583 | 251,358 | 19.6 | % | 581,948 | 502,355 | 15.8 | % | |||||||||||||||||||||||||||
Sales and marketing | 62,769 | 53,555 | 17.2 | % | 140,357 | 113,708 | 23.4 | % | |||||||||||||||||||||||||||
Product development | 50,822 | 39,699 | 28.0 | % | 98,255 | 78,642 | 24.9 | % | |||||||||||||||||||||||||||
General and administrative | 69,141 | 62,283 | 11.0 | % | 140,498 | 118,860 | 18.2 | % | |||||||||||||||||||||||||||
Depreciation and amortization (d) | 20,704 | 14,486 | 42.9 | % | 39,390 | 29,203 | 34.9 | % | |||||||||||||||||||||||||||
Total operating costs | 504,019 | 421,381 | 19.6 | % | 1,000,448 | 842,768 | 18.7 | % | |||||||||||||||||||||||||||
Acquisition-related costs (e) | — | — | — | 34,712 | — | * | |||||||||||||||||||||||||||||
Lease termination charge (f) | — | 3,831 | * | — | 3,831 | * | |||||||||||||||||||||||||||||
Operating profit | 51,661 | 73,285 | (29.5) | % | 57,945 | 124,943 | (53.6) | % | |||||||||||||||||||||||||||
Other components of net periodic benefit costs | 1,624 | 2,598 | (37.5) | % | 3,146 | 5,197 | (39.5) | % | |||||||||||||||||||||||||||
Interest income and other, net (g) | 35,604 | 1,873 | * | 36,679 | 3,384 | * | |||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 85,641 | 72,560 | 18.0 | % | 91,478 | 123,130 | (25.7) | % | |||||||||||||||||||||||||||
Income tax expense | 23,864 | 18,243 | 30.8 | % | 24,976 | 27,704 | (9.8) | % | |||||||||||||||||||||||||||
Net income attributable to The New York Times Company common stockholders | $ | 61,777 | $ | 54,317 | 13.7 | % | $ | 66,502 | $ | 95,426 | (30.3) | % | |||||||||||||||||||||||
Average number of common shares outstanding: | |||||||||||||||||||||||||||||||||||
Basic | 167,636 | 168,012 | (0.2) | % | 167,816 | 167,828 | 0.0 | % | |||||||||||||||||||||||||||
Diluted | 167,636 | 168,346 | (0.4) | % | 167,816 | 168,312 | (0.3) | % | |||||||||||||||||||||||||||
Basic earnings per share attributable to The New York Times Company common stockholders | $ | 0.37 | $ | 0.32 | 15.6 | % | $ | 0.40 | $ | 0.57 | (29.8) | % | |||||||||||||||||||||||
Diluted earnings per share attributable to The New York Times Company common stockholders | $ | 0.37 | $ | 0.32 | 15.6 | % | $ | 0.40 | $ | 0.57 | (29.8) | % | |||||||||||||||||||||||
Dividends declared per share | $ | — | $ | — | * | $ | 0.09 | $ | 0.07 | 28.6 | % | ||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. | |||||||||||||||||||||||||||||||||||
See footnotes pages for additional information. |
(a) The following table summarizes digital and print subscription revenues for the second quarters and first six months of 2022 and 2021: | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Digital-only subscription revenues (1) | $ | 238,727 | $ | 190,145 | 25.5 | % | 465,489 | 369,745 | 25.9 | % | ||||||||||||||||||||||||||||
Print subscription revenues: | ||||||||||||||||||||||||||||||||||||||
Domestic home delivery subscription revenues (2) | 131,080 | 134,755 | (2.7) | % | 262,472 | 269,150 | (2.5) | |||||||||||||||||||||||||||||||
Single-copy, NYT International and Other subscription revenues (3) | 13,812 | 14,317 | (3.5) | % | 27,637 | 29,406 | (6.0) | % | ||||||||||||||||||||||||||||||
Subtotal print subscription revenues | 144,892 | 149,072 | (2.8) | % | 290,109 | 298,556 | (2.8) | % | ||||||||||||||||||||||||||||||
Total subscription revenues | $ | 383,619 | $ | 339,217 | 13.1 | % | $ | 755,598 | $ | 668,301 | 13.1 | % | ||||||||||||||||||||||||||
(1) Includes revenue from digital-only bundled and standalone subscriptions to our news product, as well as The Athletic and our Games, Cooking, Audm and Wirecutter products. | ||||||||||||||||||||||||||||||||||||||
(2) Domestic home delivery subscriptions include access to our digital news product, as well as our Games, Cooking and Wirecutter products. | ||||||||||||||||||||||||||||||||||||||
(3) NYT International is the international edition of our print newspaper. |
The following table summarizes digital and print subscribers as of the end of the second quarters of 2022 and 2021, and first quarter of 2022: | ||||||||||||||||||||||||||||||||
Second Quarter | First Quarter | |||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 (1) | % Change | ||||||||||||||||||||||||||||
Digital-only subscribers (2) | 8,410 | 6,190 | 35.9 | % | 8,230 | 2.2 | % | |||||||||||||||||||||||||
Print subscribers(3) | 760 | 815 | (6.7) | % | 780 | (2.6) | % | |||||||||||||||||||||||||
Total subscribers | 9,170 | 7,005 | 30.9 | % | 9,010 | 1.8 | % | |||||||||||||||||||||||||
(1) Corrected from previously released information. Refer to Supplementary Information section. | ||||||||||||||||||||||||||||||||
(2) Subscribers with paid digital-only subscriptions to one or more of our news product, The Athletic, or our Games, Cooking and Wirecutter products. Subscribers with a paid domestic home-delivery print subscription to The New York Times are excluded. The number of paid digital-only subscribers from group education and group corporate subscriptions (which collectively represented approximately 4% of paid digital-only subscribers as of the second quarter of 2022) is derived using the value of the relevant contract and a discounted subscription rate. | ||||||||||||||||||||||||||||||||
(3) Subscribers with a paid domestic home delivery or mail print subscription to The New York Times, which also includes access to our digital news product, as well as our Games, Cooking and Wirecutter products, or a paid print subscription to our Book Review or Large Type Weekly products. Book Review, Mail and Large Type Weekly subscribers are included in the count of subscribers but not subscriptions. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||
FOOTNOTES | ||||||||||||||||||||||||||||||||
(Amounts in thousands, except for ARPU) | ||||||||||||||||||||||||||||||||
The following table summarizes digital and print subscriptions (1) as of the end of the second quarters of 2022 and 2021, and first quarter of 2022: | ||||||||||||||||||||||||||||||||
Second Quarter | First Quarter | |||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 (2) | % Change | ||||||||||||||||||||||||||||
Digital-only subscriptions(3)(4) | 9,810 | 7,175 | 36.7 | % | 9,579 | 2.4 | % | |||||||||||||||||||||||||
Print subscriptions(5) | 750 | 803 | (6.6) | % | 770 | (2.6) | % | |||||||||||||||||||||||||
Total subscriptions | 10,560 | 7,978 | 32.4 | % | 10,349 | 2.0 | % | |||||||||||||||||||||||||
(1) While the Company is moving toward an emphasis on individual subscriber growth rather than growth of total subscriptions, we expect to continue to report on the number of subscriptions at least through the fourth quarter of 2022. | ||||||||||||||||||||||||||||||||
(2) Corrected from previously released information. Refer to Supplementary Information section. | ||||||||||||||||||||||||||||||||
(3) Paid digital-only subscriptions to our news product, as well as The Athletic and our Games, Cooking, Audm and Wirecutter products. Standalone subscriptions to these products are counted separately and bundle subscriptions are counted as one subscription. | ||||||||||||||||||||||||||||||||
(4) The number of paid digital-only subscriptions includes estimated group corporate and group education subscriptions (which collectively represented approximately 4% of paid digital-only subscriptions as of June 26, 2022). We calculate this estimate using the value of the relevant contract and a discounted subscription rate. The actual number of users who have access to our products through group subscriptions is substantially higher. In the fourth quarter of 2021, we updated the discounted subscription rate used as part of this calculation in order to bring it in line with our current digital subscription pricing model. For comparison purposes, we recast digital-only subscriptions in prior periods using the updated methodology, and this resulted in approximately 42,000 additional group corporate and group education subscriptions in the second quarter of 2021. There is no impact to subscription revenue as a result of this change. | ||||||||||||||||||||||||||||||||
(5) Paid domestic home-delivery print subscriptions to The New York Times, which also include access to our digital news product, as well as our Games, Cooking and Wirecutter products. Excludes subscriptions to our Book Review or Large Type Weekly products and subscriptions to The New York Times that are delivered by mail. |
The following table summarizes supplementary subscriber metrics as of the end of the second quarters of 2022 and 2021, and first quarter of 2022: | ||||||||||||||||||||||||||||||||
Second Quarter | First Quarter | |||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 (1) | % Change | ||||||||||||||||||||||||||||
Digital-only subscriber ARPU(2) | $ | 8.83 | $ | 9.55 | (7.5) | % | $ | 9.13 | (3.3) | % | ||||||||||||||||||||||
Total multiproduct subscribers(3) | 2,690 | 2,135 | 26.0 | % | 2,566 | 4.8 | % | |||||||||||||||||||||||||
Digital-only subscribers with News(4) | 6,140 | 5,350 | 14.8 | % | 6,101 | 0.6 | % | |||||||||||||||||||||||||
Subscribers with The Athletic(5) | 1,690 | N/A | N/A | 1,216 | 39.0 | % | ||||||||||||||||||||||||||
(1) Corrected from press release previously issued. Refer to Supplementary Information Section. | ||||||||||||||||||||||||||||||||
(2) “Digital-only subscriber Average Revenue per User” or “Digital-only subscriber ARPU” is calculated by dividing the average monthly digital subscription revenue (calculated by dividing digital subscription revenue in the quarter by 3.25 to reflect a 28-day billing cycle) in the measurement period by the average number of digital subscribers during the period. | ||||||||||||||||||||||||||||||||
(3) Subscribers with paid subscriptions that include access to two or more of the Company’s products, including through separate standalone subscriptions; a digital bundle; or a print home-delivery subscription (which includes access to our digital news product, as well as The Athletic and our Games, Cooking and Wirecutter products). | ||||||||||||||||||||||||||||||||
(4) Subscribers with a paid digital-only subscription that includes access to the Company’s digital news product. This reflects the updated methodology referenced in footnote 3 in the table directly above. | ||||||||||||||||||||||||||||||||
(5) Subscribers with a paid subscription that includes access to The Athletic. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
FOOTNOTES | ||||||||||||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||||||||
(b) The following table summarizes digital and print advertising revenues for the second quarters and first six months of 2022 and 2021: | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Advertising revenues: | ||||||||||||||||||||||||||||||||||||||
Digital | $ | 69,292 | $ | 70,995 | (2.4) | % | $ | 136,306 | $ | 130,491 | 4.5 | % | ||||||||||||||||||||||||||
48,087 | 41,779 | 15.1 | % | 97,343 | 79,399 | 22.6 | % | |||||||||||||||||||||||||||||||
Total advertising | $ | 117,379 | $ | 112,774 | 4.1 | % | $ | 233,649 | $ | 209,890 | 11.3 | % | ||||||||||||||||||||||||||
(c) Other revenues primarily consist of revenues from licensing, Wirecutter affiliate referrals, commercial printing, the leasing of floors in the Company headquarters, retail commerce, our live events business, our student subscription sponsorship program, and television and film. Digital other revenues, which consist primarily of Wirecutter affiliate referral revenue, digital licensing revenue, and television and film revenue, totaled $27.2 million and $53.0 million for the second quarter and first six months of 2022, respectively. | ||||||||||||||||||||||||||||||||||||||
(d) Includes amortization of intangible assets related to our acquisitions of approximately $7 million and $12 million for the second quarter and first six months of 2022, respectively. | ||||||||||||||||||||||||||||||||||||||
(e) In the first quarter of 2022, the Company recorded acquisition-related costs which primarily include expenses paid in connection with the acceleration of The Athletic stock options, and legal, accounting, financial advisory and integration planning expenses. | ||||||||||||||||||||||||||||||||||||||
(f) In the second quarter of 2021, the Company recorded a $3.8 million charge resulting from the termination of a tenant’s lease in our headquarters building. | ||||||||||||||||||||||||||||||||||||||
(g) In the second quarter of 2022, the Company recorded a $34.2 million gain ($24.9 million or $0.15 per share after tax) related to an agreement to lease and subsequently sell approximately four acres of land at our printing and distribution facility in College Point, N.Y. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||||||||
The results of The Athletic have been included in our Condensed Consolidated Financial Statements beginning February 1, 2022, the date of the acquisition. The Athletic is a separate reportable segment of the Company. As a result, beginning in the first quarter of 2022, we have two reportable segments: The New York Times Group and The Athletic. Management uses revenues, adjusted operating costs and adjusted operating profit by segment in assessing performance and allocating resources. Subscription revenue from our digital subscription package (or “bundle”) is allocated to The New York Times Group and The Athletic. We allocate revenue first to our digital news product based on its list price and then the remaining bundle revenue is allocated to the other products in the bundle, including The Athletic, based on their relative list price. The direct variable expenses associated with the bundle, which include credit card fees, third party fees and sales taxes, are allocated to The New York Times Group and The Athletic based on a historical actual percentage of these costs to bundle revenue. | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||
The New York Times Group | $ | 536,134 | $ | 498,497 | 7.6 | % | $ | 1,061,402 | $ | 971,542 | 9.2 | % | ||||||||||||||||||||||||||
The Athletic | 19,546 | — | * | 31,703 | — | * | ||||||||||||||||||||||||||||||||
Total revenues | $ | 555,680 | $ | 498,497 | 11.5 | % | $ | 1,093,105 | $ | 971,542 | 12.5 | % | ||||||||||||||||||||||||||
Adjusted operating costs | ||||||||||||||||||||||||||||||||||||||
The New York Times Group | $ | 447,316 | $ | 405,594 | 10.3 | % | $ | 904,860 | $ | 810,532 | 11.6 | % | ||||||||||||||||||||||||||
The Athletic | 32,145 | — | * | 51,123 | — | * | ||||||||||||||||||||||||||||||||
Total adjusted operating costs | $ | 479,461 | $ | 405,594 | 18.2 | % | $ | 955,983 | $ | 810,532 | 17.9 | % | ||||||||||||||||||||||||||
Adjusted operating profit | ||||||||||||||||||||||||||||||||||||||
The New York Times Group | $ | 88,818 | $ | 92,903 | (4.4) | % | $ | 156,542 | $ | 161,010 | (2.8) | % | ||||||||||||||||||||||||||
The Athletic | (12,599) | — | * | (19,420) | — | * | ||||||||||||||||||||||||||||||||
Total adjusted operating profit | $ | 76,219 | $ | 92,903 | (18.0) | % | $ | 137,122 | $ | 161,010 | (14.8) | % | ||||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
Revenues detail by segment | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
The New York Times Group | ||||||||||||||||||||||||||||||||||||||
Subscription | $ | 366,620 | $ | 339,217 | 8.1 | % | $ | 728,222 | $ | 668,301 | 9.0 | % | ||||||||||||||||||||||||||
Advertising | 114,832 | 112,774 | 1.8 | % | 229,322 | 209,890 | 9.3 | % | ||||||||||||||||||||||||||||||
Other | 54,682 | 46,506 | 17.6 | % | 103,858 | 93,351 | 11.3 | % | ||||||||||||||||||||||||||||||
Total | $ | 536,134 | $ | 498,497 | 7.6 | % | $ | 1,061,402 | $ | 971,542 | 9.2 | % | ||||||||||||||||||||||||||
The Athletic | ||||||||||||||||||||||||||||||||||||||
Subscription | $ | 16,999 | $ | — | * | $ | 27,376 | $ | — | * | ||||||||||||||||||||||||||||
Advertising | 2,547 | — | * | 4,327 | — | * | ||||||||||||||||||||||||||||||||
Total | $ | 19,546 | $ | — | * | $ | 31,703 | $ | — | * | ||||||||||||||||||||||||||||
The New York Times Company | ||||||||||||||||||||||||||||||||||||||
Subscription | $ | 383,619 | $ | 339,217 | 13.1 | % | $ | 755,598 | $ | 668,301 | 13.1 | % | ||||||||||||||||||||||||||
Advertising | 117,379 | 112,774 | 4.1 | % | 233,649 | 209,890 | 11.3 | % | ||||||||||||||||||||||||||||||
Other | 54,682 | 46,506 | 17.6 | % | 103,858 | 93,351 | 11.3 | % | ||||||||||||||||||||||||||||||
Total | $ | 555,680 | $ | 498,497 | 11.5 | % | $ | 1,093,105 | $ | 971,542 | 12.5 | % | ||||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||||||||
Adjusted operating costs (operating costs before depreciation and amortization, severance and multiemployer pension plan withdrawal costs) detail by segment | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
The New York Times Group | ||||||||||||||||||||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | $ | 279,985 | $ | 251,358 | 11.4 | % | $ | 549,460 | $ | 502,355 | 9.4 | % | ||||||||||||||||||||||||||
Sales and marketing | 58,183 | 53,555 | 8.6 | % | 132,643 | 113,708 | 16.7 | % | ||||||||||||||||||||||||||||||
Product development | 46,773 | 39,699 | 17.8 | % | 91,952 | 78,642 | 16.9 | % | ||||||||||||||||||||||||||||||
Adjusted general and administrative (1) | 62,375 | 60,982 | 2.3 | % | 130,805 | 115,827 | 12.9 | % | ||||||||||||||||||||||||||||||
Total | $ | 447,316 | $ | 405,594 | 10.3 | % | $ | 904,860 | $ | 810,532 | 11.6 | % | ||||||||||||||||||||||||||
The Athletic | ||||||||||||||||||||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | $ | 20,598 | $ | — | * | $ | 32,488 | $ | — | * | ||||||||||||||||||||||||||||
Sales and marketing | 4,586 | — | * | 7,714 | — | * | ||||||||||||||||||||||||||||||||
Product development | 4,049 | — | * | 6,303 | — | * | ||||||||||||||||||||||||||||||||
Adjusted general and administrative (2) | 2,912 | — | * | 4,618 | — | * | ||||||||||||||||||||||||||||||||
Total | $ | 32,145 | $ | — | * | $ | 51,123 | $ | — | * | ||||||||||||||||||||||||||||
The New York Times Company | ||||||||||||||||||||||||||||||||||||||
Cost of revenue (excluding depreciation and amortization) | $ | 300,583 | $ | 251,358 | 19.6 | % | $ | 581,948 | $ | 502,355 | 15.8 | % | ||||||||||||||||||||||||||
Sales and marketing | 62,769 | 53,555 | 17.2 | % | 140,357 | 113,708 | 23.4 | % | ||||||||||||||||||||||||||||||
Product development | 50,822 | 39,699 | 28.0 | % | 98,255 | 78,642 | 24.9 | % | ||||||||||||||||||||||||||||||
Adjusted general and administrative | 65,287 | 60,982 | 7.1 | % | 135,423 | 115,827 | 16.9 | % | ||||||||||||||||||||||||||||||
Total | $ | 479,461 | $ | 405,594 | 18.2 | % | $ | 955,983 | $ | 810,532 | 17.9 | % | ||||||||||||||||||||||||||
(1) Excludes severance of $2.5 million for the second quarter and first six months of 2022, and multiemployer pension withdrawal costs of $1.2 million and $2.4 million for the second quarter and first six months of 2022, respectively. Excludes multiemployer pension withdrawal costs of $1.3 million and $2.6 million for the second quarter and first six months of 2021, respectively, and severance of $0.4 million for the first six months of 2021. | ||||||||||||||||||||||||||||||||||||||
(2) Excludes $0.2 million of severance for the second quarter and first six months of 2022. | ||||||||||||||||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP INFORMATION | ||||||||||||||||||||||||||||||||||||||
In this release, the Company has referred to non-GAAP financial information with respect to 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); operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit, and as divided by revenues, adjusted operating profit margin); and operating costs before depreciation, amortization, severance and multiemployer pension withdrawal costs (or adjusted operating costs). The Company has included these non-GAAP financial measures because management reviews them on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. Management believes that, for the reasons outlined below, these non-GAAP financial measures provide useful information to investors as a supplement to reported diluted earnings/(loss) per share from continuing operations, operating profit/(loss) and operating costs. However, these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not be viewed as alternative or superior measures of GAAP results. | ||||||||||||||||||||||||||||||||||||||
Adjusted diluted earnings per share provides useful information in evaluating the Company’s period-to-period performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing operating activities. Adjusted operating profit (and adjusted operating profit margin) is useful in evaluating the ongoing performance of the Company’s business as it excludes the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance and multiemployer pension plan withdrawal costs. Total operating costs excluding these items provide investors with helpful supplemental information on the Company’s underlying operating costs that is used by management in its financial and operational decision-making. | ||||||||||||||||||||||||||||||||||||||
Management considers special items, which may include impairment charges, pension settlement charges, acquisition-related costs and other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that excluding these items provides a better understanding of the underlying trends in the Company’s operating performance and allows more accurate comparisons of the Company’s operating results to historical performance. In addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful comparison of the Company’s operating results to historical performance. | ||||||||||||||||||||||||||||||||||||||
Non-operating retirement costs include (i) interest cost, expected return on plan assets, amortization of actuarial gains and loss components and amortization of prior service credits of single-employer pension expense, (ii) interest cost, amortization of actuarial gains and loss components and amortization of prior service credits of retirement medical expense and (iii) all multiemployer pension plan withdrawal costs. These non-operating retirement costs are primarily tied to financial market performance including changes in market interest rates and investment performance. Management considers non-operating retirement costs to be outside the performance of the business and believes that presenting adjusted diluted earnings per share from continuing operations excluding non-operating retirement costs and presenting adjusted operating results excluding multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted earnings per share from continuing operations and GAAP operating results, provide increased transparency and a better understanding of the underlying trends in the Company’s operating business performance. | ||||||||||||||||||||||||||||||||||||||
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are set out in the tables below. | ||||||||||||||||||||||||||||||||||||||
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP INFORMATION | ||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.37 | $ | 0.32 | 15.6 | % | $ | 0.40 | $ | 0.57 | (29.8 | %) | ||||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||||||||
Severance | 0.02 | — | * | 0.02 | — | * | ||||||||||||||||||||||||||||||||
Non-operating retirement costs: | ||||||||||||||||||||||||||||||||||||||
Multiemployer pension plan withdrawal costs | 0.01 | 0.01 | — | 0.01 | 0.02 | (50.0) | % | |||||||||||||||||||||||||||||||
Other components of net periodic benefit costs | 0.01 | 0.02 | (50.0) | % | 0.02 | 0.03 | (33.3) | % | ||||||||||||||||||||||||||||||
Special items: | ||||||||||||||||||||||||||||||||||||||
Acquisition-related costs | — | — | — | 0.21 | — | * | ||||||||||||||||||||||||||||||||
Lease termination charge | — | 0.02 | * | — | 0.02 | * | ||||||||||||||||||||||||||||||||
Gain on the sale of land | (0.20) | — | * | (0.20) | — | * | ||||||||||||||||||||||||||||||||
Income tax expense of adjustments | 0.05 | (0.01) | * | (0.01) | (0.02) | * | ||||||||||||||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations(1) | $ | 0.24 | $ | 0.36 | (33.3) | % | $ | 0.44 | $ | 0.62 | (29.0) | % | ||||||||||||||||||||||||||
(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 and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit) | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Operating profit | $ | 51,661 | $ | 73,285 | (29.5) | % | $ | 57,945 | $ | 124,943 | (53.6) | % | ||||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 20,704 | 14,486 | 42.9 | % | 39,390 | 29,203 | 34.9 | % | ||||||||||||||||||||||||||||||
Severance | 2,660 | — | * | 2,660 | 406 | * | ||||||||||||||||||||||||||||||||
Multiemployer pension plan withdrawal costs | 1,194 | 1,301 | (8.2) | % | 2,415 | 2,627 | (8.1) | % | ||||||||||||||||||||||||||||||
Special items: | ||||||||||||||||||||||||||||||||||||||
Acquisition-related costs | — | — | — | 34,712 | — | * | ||||||||||||||||||||||||||||||||
Lease termination charge | — | 3,831 | * | — | 3,831 | * | ||||||||||||||||||||||||||||||||
Adjusted operating profit | $ | 76,219 | $ | 92,903 | (18.0) | % | $ | 137,122 | $ | 161,010 | (14.8) | % | ||||||||||||||||||||||||||
Divided by: | ||||||||||||||||||||||||||||||||||||||
Revenue | $ | 555,680 | $ | 498,497 | 11.5 | % | $ | 1,093,105 | $ | 971,542 | 12.5 | % | ||||||||||||||||||||||||||
Adjusted operating profit margin | 13.7 | % | 18.6% | (490) bps | 12.5% | 16.6% | (410) bps | |||||||||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP INFORMATION | ||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||
Reconciliation of operating costs before depreciation and amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs) | ||||||||||||||||||||||||||||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Operating costs | $ | 504,019 | $ | 421,381 | 19.6 | % | $ | 1,000,448 | $ | 842,768 | 18.7 | % | ||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 20,704 | 14,486 | 42.9 | % | 39,390 | 29,203 | 34.9 | % | ||||||||||||||||||||||||||||||
Severance | 2,660 | — | * | 2,660 | 406 | * | ||||||||||||||||||||||||||||||||
Multiemployer pension plan withdrawal costs | 1,194 | 1,301 | (8.2) | % | 2,415 | 2,627 | (8.1) | % | ||||||||||||||||||||||||||||||
Adjusted operating costs | $ | 479,461 | $ | 405,594 | 18.2 | % | $ | 955,983 | $ | 810,532 | 17.9 | % | ||||||||||||||||||||||||||
* Represents a change equal to or in excess of 100% or not meaningful. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTARY INFORMATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except for ARPU) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning with the second quarter of 2022, the Company has updated its rounding methodology for subscriptions (including net subscriptions additions), subscribers (including net subscriber additions) and subscriber-related metrics (other than ARPU) and will round to the nearest ten thousand instead of the nearest thousand as it had previously been presenting. The sum of individual metrics may not always equal total amounts indicated due to rounding. In addition, the Company has made a change in its methodology for counting subscribers and subscriptions to The Athletic to exclude free trials (which are primarily long-dated (6-12 months) and given as part of its business development partnerships). In addition, the Company identified certain nonmaterial errors in previously released subscription, subscriber and subscriber-related metrics data for the periods presented below. As a result, our computation of the number of The Athletic subscribers and subscriptions as of the acquisition date both decreased by 72,000. The below supplementary tables update certain historical disclosures for the first quarters of 2021 and 2022 and the fourth quarter of 2021 to reflect the changes in methodology and the error corrections described above. The adjustments had no impact on the Company’s consolidated balance sheets, consolidated statements of comprehensive income (loss) or the consolidated statements of cash flows for any of these periods. The impact of the items noted above on our historical disclosures is as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the adjustments to digital subscribers as of the end of the first quarters of 2022 and 2021, and fourth quarter of 2021: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First Quarter | Fourth Quarter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
As Filed | Adj | Adjusted | As Filed | Adj | Adjusted | As Filed | Adj | Adjusted | ||||||||||||||||||||||||||||||||||||||||||||||||
Digital-only subscribers(1) | 8,328 | (98) | 8,230 | 6,101 | (18) | 6,083 | 6,840 | (57) | 6,783 | |||||||||||||||||||||||||||||||||||||||||||||||
(1) Refer to the corresponding footnotes in the main section of the Press Release. |
The following table summarizes the adjustments to digital subscriptions as of the end of the first quarter of 2022: | ||||||||||||||||||||
First Quarter 2022 | ||||||||||||||||||||
As Filed | Adj | Adjusted | ||||||||||||||||||
Digital-only subscriptions(1) | 9,620 | (41) | 9,579 | |||||||||||||||||
(1) Refer to the corresponding footnotes in the main section of the Press Release. |
The following table summarizes the adjustments to supplementary subscriber metrics as of the end of the first quarters of 2022 and 2021, and fourth quarter of 2021: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First Quarter | Fourth Quarter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
As Filed | Adj | Adjusted | As Filed | Adj | Adjusted | As Filed | Adj | Adjusted | ||||||||||||||||||||||||||||||||||||||||||||||||
Digital-only subscriber ARPU (1) | $ | 9.04 | $ | 0.09 | $ | 9.13 | $ | 9.15 | $ | 0.03 | $ | 9.18 | $ | 9.55 | $ | 0.05 | $ | 9.60 | ||||||||||||||||||||||||||||||||||||||
Total multiproduct subscribers (1) | 2,569 | (3) | 2,566 | 2,100 | 3 | 2,103 | 2,351 | — | 2,351 | |||||||||||||||||||||||||||||||||||||||||||||||
Digital-only subscribers with News (1) | 6,150 | (49) | 6,101 | 5,290 | (20) | 5,270 | 5,880 | (54) | 5,826 | |||||||||||||||||||||||||||||||||||||||||||||||
Subscribers with The Athletic (1) | 1,257 | (41) | 1,216 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
(1) Refer to the corresponding footnotes in the main section of the Press Release. |
THE NEW YORK TIMES COMPANY | ||||||||||||||||||||||||||||||||||||||
SUPPLEMENTARY INFORMATION | ||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except for ARPU) | ||||||||||||||||||||||||||||||||||||||
The following table summarizes the Company’s subscribers, subscriptions related subscriber metrics over the last six quarters. The second quarter reflects the update to the rounding methodology and first quarter of 2022, fourth and first quarter of 2021 reflect the adjustments noted in the previous section. | ||||||||||||||||||||||||||||||||||||||
The following table summarizes digital and print subscribers for the last six quarters: | ||||||||||||||||||||||||||||||||||||||
Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |||||||||||||||||||||||||||||||||
Digital-only subscribers (1) | 8,410 | 8,230 | 6,783 | 6,546 | 6,190 | 6,083 | ||||||||||||||||||||||||||||||||
Print subscribers (1) | 760 | 780 | 795 | 806 | 815 | 837 | ||||||||||||||||||||||||||||||||
Total subscribers (1) | 9,170 | 9,010 | 7,578 | 7,352 | 7,005 | 6,920 | ||||||||||||||||||||||||||||||||
(1) Refer to the corresponding footnotes in the main section of the Press Release. |
The following table summarizes digital and print subscriptions for the last six quarters: | ||||||||||||||||||||||||||||||||||||||
Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |||||||||||||||||||||||||||||||||
Digital-only subscriptions (1) | 9,810 | 9,579 | 8,005 | 7,630 | 7,175 | 7,033 | ||||||||||||||||||||||||||||||||
Print subscriptions (1) | 750 | 770 | 784 | 795 | 803 | 825 | ||||||||||||||||||||||||||||||||
Total subscriptions (1) | 10,560 | 10,349 | 8,789 | 8,425 | 7,978 | 7,858 | ||||||||||||||||||||||||||||||||
(1) Refer to the corresponding footnotes in the main section of the Press Release. |
The following table summarizes supplementary subscriber metrics for the last six quarters: | ||||||||||||||||||||||||||||||||||||||
Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |||||||||||||||||||||||||||||||||
Digital-only subscriber ARPU (1) | $ | 8.83 | $ | 9.13 | $ | 9.60 | $ | 9.64 | $ | 9.55 | $ | 9.18 | ||||||||||||||||||||||||||
Total multiproduct subscribers (1) | 2,690 | 2,566 | 2,351 | 2,245 | 2,135 | 2,103 | ||||||||||||||||||||||||||||||||
Digital-only subscribers with News (1) | 6,140 | 6,101 | 5,826 | 5,665 | 5,350 | 5,270 | ||||||||||||||||||||||||||||||||
Subscribers with The Athletic (1) | 1,690 | 1,216 | — | — | — | — | ||||||||||||||||||||||||||||||||
(1) Refer to the corresponding footnotes in the main section of the Press Release. |