Segment Information

6 Months Ended

Jun. 26, 2022

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company identifies a business as an operating segment if: (i) it engages in business activities from which it may earn revenues and incur expenses; (ii) its operating results are regularly reviewed by the Company’s President and Chief Executive Officer (who is the Company’s Chief Operating Decision Maker) to make decisions about resources to be allocated to the segment and assess its performance; and (iii) it has available discrete financial information.

On February 1, 2022, the Company acquired The Athletic (see Note 5). Beginning with the first quarter of 2022, the results of The Athletic have been included in the Company's Condensed Consolidated Financial Statements beginning February 1, 2022. The Athletic is a separate reportable segment of the Company. As a result, beginning in the first quarter of 2022, the

Company has two reportable segments: The New York Times Group and The Athletic. These segments are evaluated regularly by the Company’s Chief Operating Decision Maker in assessing performance and allocating resources. Management uses adjusted operating profit by segment in assessing performance and allocating resources. The Company includes in its presentation revenues and adjusted operating costs to arrive at adjusted operating profit by segment. Adjusted operating costs are defined as operating costs before depreciation and amortization, severance and multiemployer pension plan withdrawal costs. Adjusted operating profit is defined as operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items.

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.

The following tables present segment information:

	For the Quarters Ended						For the Six Months Ended
(In thousands)	June 26, 2022		June 27, 2021		% Change		June 26, 2022		June 27, 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
	For the Quarters Ended						For the Six Months Ended
(In thousands)	June 26, 2022		June 27, 2021		% Change		June 26, 2022		June 27, 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.

Adjusted operating costs (operating costs before depreciation and amortization, severance and multiemployer pension plan withdrawal costs) detail by segment
	For the Quarters Ended						For the Six Months Ended
(In thousands)	June 26, 2022		June 27, 2021		% Change		June 26, 2022		June 27, 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 quarter and six months ended June 26, 2022, and multiemployer pension withdrawal costs of $1.2 million and $2.4 million for the quarter and six months ended June 26, 2022, respectively. Excludes multiemployer pension withdrawal costs of $1.3 million and $2.6 million for the quarter and six months ended June 27, 2021, respectively, and severance of $0.4 million for the six months ended June 27, 2021.
(2) Excludes $0.2 million of severance for the quarter and six months ended June, 26, 2022.
* Represents a change equal to or in excess of 100% or not meaningful.

Reconciliation of operating costs before depreciation and amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs)
	For the Quarters Ended						For the Six Months Ended
(In thousands)	June 26, 2022		June 27, 2021		% Change		June 26, 2022		June 27, 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.

Reconciliation of operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit)
	For the Quarters Ended						For the Six Months Ended
(In thousands)	June 26, 2022		June 27, 2021		% Change		June 26, 2022		June 27, 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)	%
* Represents a change equal to or in excess of 100% or not meaningful.