-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QO2CFJ7pIgXRNgTSL5eWw5zaFNGQJrHOzo39Of48feGmXuHV2AhrJmisy49aK961 h5KPlTXSjOUk+RoXTk0s1w== 0000912057-97-026991.txt : 19970812 0000912057-97-026991.hdr.sgml : 19970812 ACCESSION NUMBER: 0000912057-97-026991 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970629 FILED AS OF DATE: 19970811 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW YORK TIMES CO CENTRAL INDEX KEY: 0000071691 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 131102020 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05837 FILM NUMBER: 97655714 BUSINESS ADDRESS: STREET 1: 229 W 43RD ST CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125561234 MAIL ADDRESS: STREET 1: 229 W 43RD STREET CITY: NEW YORK STATE: NY ZIP: 10036 10-Q 1 FORM 10/Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For Quarter Ended June 29, 1997 ----------------------- Commission file number 1-5837 ----------------------- THE NEW YORK TIMES COMPANY -------------------------- (Exact name of registrant as specified in its charter) NEW YORK 13-1102020 - ------------------------ ------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 229 WEST 43RD STREET, NEW YORK, NEW YORK ---------------------------------------- (Address of principal executive offices) 10036 ----- (Zip Code) Registrant's telephone number, including area code 212-556-1234 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ---- ----- Number of shares of each class of the registrant's common stock outstanding as of August 3, 1997 (exclusive of treasury shares): Class A Common Stock 95,465,416 shares Class B Common Stock 425,001 shares PART I. FINANCIAL INFORMATION Item 1. Financial Statements THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------- (Unaudited) (Dollars and shares in thousands, except per share data)
Three Months Ended Six Months Ended ---------------------------- ----------------------------- June 29, June 30, June 29, June 30, 1997 1996 1997 1996 ---------------------------- ----------------------------- (13 Weeks) (26 Weeks) Revenues Advertising..................................... $ 504,996 $ 449,685 $ 981,544 $ 881,302 Circulation..................................... 169,132 163,363 337,686 325,919 Other........................................... 47,819 36,458 95,178 69,860 ------------ ------------ -------------- ------------ Total.......................................... 721,947 649,506 1,414,408 1,277,081 ------------ ------------ -------------- ------------ Production Costs Raw Materials................................... 76,280 96,382 149,757 201,949 Wages and Benefits.............................. 139,898 135,546 293,070 272,380 Other........................................... 119,708 106,132 234,353 211,248 ------------ ------------ -------------- ------------ Total.......................................... 335,886 338,060 677,180 685,577 Selling, General and Administrative Expenses..... 258,712 228,926 508,624 448,361 ------------ ------------ -------------- ------------ Total.......................................... 594,598 566,986 1,185,804 1,133,938 ------------ ------------ -------------- ------------ Operating Profit................................. 127,349 82,520 228,604 143,143 Income from Joint Ventures....................... 3,052 2,210 4,367 6,892 Interest Expense, Net of Interest Income......... 11,389 5,962 19,707 12,400 Net Gain on Disposition.......................... - 7,751 - 7,751 ------------ ------------ -------------- ------------ Income Before Income Taxes....................... 119,012 86,519 213,264 145,386 Income Taxes..................................... 34,063 39,707 76,476 65,860 ------------ ------------ -------------- ------------ Net Income....................................... $ 84,949 $ 46,812 $ 136,788 $ 79,526 ------------ ------------ -------------- ------------ ------------ ------------ -------------- ------------ Weighted Average Number of Common and Common Equivalent Shares....................... 99,835 97,755 100,450 97,703 Earnings Per Common and Common Equivalent Share........................ $.85 $.48 $1.36 $.81 Cash Dividends Per Common Share.................. $.16 $.14 $ .31 $.28
See notes to condensed consolidated financial statements. 2 THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Dollars in thousands)
June 29, December 29, 1997 1996 ------------ ------------ ASSETS (Unaudited) - ------ Current Assets - -------------- Cash and short-term investments............................................... $ 38,525 $ 39,103 Accounts receivable - net..................................................... 302,278 309,164 Inventories Newsprint and magazine paper................................................. 26,568 28,778 Work-in-process, etc......................................................... 5,175 5,030 ------------ ------------ Total inventories........................................................... 31,743 33,808 Other current assets.......................................................... 89,756 96,697 ------------ ------------ Total current assets........................................................ 462,302 478,772 ------------ ------------ Other Assets - ------------ Investment in joint ventures.................................................. 137,079 137,255 Property, plant and equipment (less accumulated depreciation of $864,305 in 1997 and $807,120 in 1996).................................... 1,397,270 1,358,029 Intangible assets acquired Cost in excess of net assets acquired (less accumulated amortization of $198,576 in 1997 and $184,196 in 1996).................................... 1,013,607 1,041,672 Other intangible assets acquired (less accumulated amortization of $31,789 in 1997 and $23,384 in 1996)................................................. 392,086 396,042 Miscellaneous assets.......................................................... 133,361 128,101 ------------ ------------ TOTAL ASSETS ............................................................... $ 3,535,705 $ 3,539,871 ------------ ------------ ------------ ------------
See notes to condensed consolidated financial statements. 3 THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Dollars in thousands)
June 29, December 29, 1997 1996 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) - ------------------------------------ Current Liabilities - ------------------- Commercial paper........................................................... $ 74,200 $ 45,500 Accounts payable........................................................... 175,289 171,853 Accrued payroll and other related liabilities.............................. 82,668 84,458 Accrued expenses........................................................... 236,253 258,468 Unexpired subscriptions.................................................... 83,221 90,059 Current portion of capital lease obligations............................... 3,606 3,359 ------------ ------------ Total current liabilities................................................. 655,237 653,697 ------------ ------------ Other Liabilities - ----------------- Long-term debt............................................................. 589,958 589,693 Capital lease obligations.................................................. 46,181 46,939 Deferred income taxes...................................................... 155,109 188,560 Other...................................................................... 466,125 435,850 ------------ ------------ Total other liabilities................................................... 1,257,373 1,261,042 ------------ ------------ Total Liabilities........................................................... 1,912,610 1,914,739 - ----------------- ------------ ------------ Stockholders' Equity Capital stock.............................................................. 13,020 12,872 Additional paid in capital................................................. 694,068 663,007 Earnings reinvested in the business........................................ 1,397,387 1,290,899 Common stock held in treasury, at cost..................................... (481,380) (341,646) ------------ ------------ Total stockholders' equity................................................ 1,623,095 1,625,132 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................................. $ 3,535,705 $ 3,539,871 ------------ ------------ ------------ ------------
See notes to condensed consolidated financial statements. 4 THE NEW YORK TIMES COMPANY -------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Unaudited) (Dollars in thousands)
For the Six Months Ended --------------------------------- June 29, June 30, 1997 1996 --------------------------------- (26 Weeks) CASH FLOWS FROM OPERATING ACTIVITIES: - ------------------------------------ Net cash provided by operating activities............................................. $ 190,982 $ 154,325 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: - ------------------------------------ Acquisitions, net of cash acquired..................................................... - (16,695) Additions to property, plant and equipment............................................. (94,777) (98,113) Net proceeds from disposition.......................................................... 11,522 16,878 Other - net............................................................................ (300) (1,724) --------- ---------- Net cash used in investing activities.................................................. (83,555) (99,654) --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: - ------------------------------------ Commercial paper increase - net......................................................... 28,700 - Long-term debt reduction................................................................ (1,884) (1,665) Capital Shares Issuance.............................................................................. 5,053 1,931 Repurchase............................................................................ (110,154) (5,331) Dividends paid to stockholders.......................................................... (30,064) (27,410) Other - net............................................................................. 344 - --------- ---------- Net cash used in financing activities................................................... (108,005) (32,475) --------- ---------- Decrease (increase) in cash and short-term investments.................................. (578) 22,196 Cash and short-term investments at the beginning of the year............................ 39,103 91,442 ---------- ---------- Cash and short-term investments at the end of the quarter............................... $ 38,525 $ 113,638 ---------- ---------- ---------- ----------
SUPPLEMENTAL INFORMATION - ------------------------ Amounts in these statements of cash flows are presented on a cash basis and may differ from those shown in other sections of the financial statements. NONCASH ACTIVITY - ---------------- Repurchases of common stock in connection with certain exercises under the Company's stock option plans increased treasury stock by $30,146 and $10,094 in 1997 and 1996, respectively. Additional paid in capital increased by a corresponding amount. See notes to condensed consolidated financial statements. 5 THE NEW YORK TIMES COMPANY -------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (Unaudited) 1. General The accompanying Notes to Condensed Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the annual report on Form 10-K for the year ended December 29, 1996, for The New York Times Company (the "Company") filed with the Securities and Exchange Commission. In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations, as of and for the interim period ended, have been included. Due to the seasonal nature of the Company's business, results for the interim periods are not necessarily indicative of a full year's operations. Certain reclassifications have been made to the 1996 Condensed Consolidated Financial Statements to conform with classifications used at June 29, 1997. 2. Income Taxes The reasons for the variances between the effective tax rate on income before income taxes and the federal statutory rate, exclusive of a favorable adjustment resulting from the completion of the Company's federal tax audits for periods through 1992 ("Favorable Tax Adjustment") in 1997 and a disposition in 1996, are as follows:
- -------------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------------------------------------------------------- June 29, June 30, June 29, June 30, 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------------------- % of % of % of % of (Dollars in thousands) Amount Pre-tax Amount Pre-tax Amount Pre-tax Amount Pre-tax - --------------------------------------------------------------------------------------------------------------------------- Tax at federal statutory rate........... $41,654 35.0% $27,569 35.0% $74,642 35.0% $48,172 35.0% State and local taxes, net of federal benefits................ 7,434 6.3% 4,851 6.2% 13,725 6.4% 8,533 6.2% Amortization of nondeductible intangible assets acquired............. 2,974 2.5% 3,060 3.8% 5,154 2.4% 5,170 3.8% Other - net............................. 1 - 716 0.9% 955 0.5% 474 0.3% ---------------------------------------------------------------------------------- Subtotal................................ 52,063 43.8% 36,196 45.9% 94,476 44.3% 62,349 45.3% Favorable Tax Adjustment................ (18,000) - (18,000) - Disposition............................. - 3,511 3,511 ---------------------------------------------------------------------------------- Income taxes............................ $34,063 $39,707 $76,476 $65,860 ---------------------------------------------------------------------------------- ----------------------------------------------------------------------------------
6 3. Dispositions In March 1997, the Company announced its plans to sell the NYT Custom Publishing division and the following sports/leisure magazines: Tennis, Tennis Buyer's Guide, Cruising World, Sailing World, Snow Country and Snow Country Business. The operating profit (loss) of these properties was not material to the results of the Company for the second quarter and the first six months of 1997. 4. Earnings Per Share Earnings per share is computed after preference dividends and is based on the weighted average number of Class A and Class B common shares outstanding during the period. The 1997 second-quarter and six-month calculations reflect primary earnings per share including incremental shares associated with stock options in accordance with Accounting Principles Board Opinion No.15, "Earnings Per Share" ("APB 15"). Fully diluted earnings per share for the second quarter and the first six months of 1997 is not presented since dilution is not material. The potential dilutive effect of stock options on 1996 earnings per share was not material. In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"), which supersedes APB 15. SFAS 128 is effective for periods after December 15, 1997, at which time earnings per share for periods prior to the effective date will be restated. SFAS 128 simplifies the computation of earnings per share by replacing the presentation of primary earnings per share with a presentation of basic earnings per share which excludes the dilutive effect of common stock equivalents such as stock options, warrants and other convertible securities. SFAS 128 requires dual presentation of basic and diluted earnings per share by entities with complex capital structures. Diluted earnings per share under SFAS 128 is computed similarly to fully diluted earnings per share under APB 15. Pro forma dual presentation of basic and diluted earnings per share for the second quarter and six months ended June 29,1997, assuming the adoption of SFAS 128 in the first quarter of 1997, is as follows: Three Months Ended Six Months Ended June 29,1997 June 29,1997 ----------------- ------------------ Basic Earnings Per Share $.88 $1.41 Diluted Earnings Per Share $.85 $1.36 5. Debt Obligations The Company currently maintains $300,000,000 in revolving credit agreements, $100,000,000 of which was renewed in July 1997 and has been extended through July 1998, and $200,000,000 of which had an original maturity of July 2001 and has been extended through July 2002. The extended agreements permit borrowings which bear interest, at the Company's option, (i) for domestic borrowings: based on the certificates of deposit rate, the Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar borrowings: based on the LIBOR rate, plus various margins based on the Company's credit rating. In addition, these agreements include provisions which require, among other matters, specified levels of stockholders' equity. At June 29, 1997, approximately $896,500,000 of stockholders' equity was unrestricted under these agreements. At June 29, 1997, and December 29, 1996, the Company had commercial paper outstanding of $74,200,000 and $45,500,000, respectively, which is supported by the revolving credit agreements. 7 6. Stock Repurchase Program During the first six months of 1997, the Company paid approximately $100,200,000 to repurchase approximately 2,500,000 shares of Class A Common Stock. Approximately 1,900,000 of these shares were purchased under an agreement with an investment firm. The agreement provides for a settlement amount ("Settlement Amount") in cash or in shares of Class A Common Stock, at the Company's discretion, based on the Company's weighted average stock price as defined in the agreement. The current estimated Settlement Amount is approximately $15,000,000. At December 29, 1996, approximately $6,200,000 remained under a May 1996 stock repurchase authorization. In February 1997, the Board of Directors authorized additional expenditures of up to $150,000,000. To date, including the estimated Settlement Amount, approximately $41,000,000 remain from the February 1997 authorization. Stock repurchases under this program exclude shares reacquired in connection with certain exercises under the Company's stock option plans. 7. Equity Put Options In the second quarter of 1997, the Company sold 180,000 put options in two private placements. The put options entitle the holder, upon exercise, to sell one share of Class A Common Stock to the Company at a specified price. At June 29, 1997, approximately $5,430,000 was included in other liabilities on the accompanying Condensed Consolidated Balance Sheets, which represents the amount that the Company would be obligated to pay if all the options were exercised. The proceeds from the sale of put options are accounted for as additional paid-in capital. To date, 90,000 put options have expired and the remaining unexercised put options expire on various dates through September 1997. 8. Voluntary Staff Reductions During the first six months of 1997, the Company recorded approximately $2,500,000, or $.01 per share, for pre-tax charges relating to staff reductions at corporate headquarters and The New York Times. At June 29, 1997, and December 29, 1996, approximately $23,044,000 and $49,052,000, respectively, were included in liabilities in the accompanying Condensed Consolidated Balance Sheets, which represent the unpaid balance of total pre-tax charges relating to staff reductions. This balance will be principally paid within one year. 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ Advertising and circulation revenues accounted for approximately 69% and 24%, respectively, of the Company's revenues in the first six months of 1997. Advertising revenues influence the pattern of the Company's consolidated revenues because they are seasonal in nature. Traditionally, second-quarter and fourth-quarter advertising volume is higher than that which occurs in the first and third quarters since economic activity tends to be lower in the post-holiday season and the summer period. Quarterly trends are also affected by the overall economy and economic conditions that may exist in specific markets served by each of the Company's business segments. Newsprint is the major component of the Company's cost of raw materials. Newsprint prices, which were at historic highs in the first quarter of 1996, began to decline during the second quarter of 1996, and fell dramatically by year end. Newsprint prices increased in the first half of 1997. A subsequent price increase may occur in the second half of the year which could further increase the Company's cost of newsprint by the end of 1997 or the beginning of 1998. However, the Company's cost of newsprint for 1997 will remain significantly lower than 1996. The special factors that affected the 1997 and 1996 reported results were as follows: 1997 ---- - $18.0 million Favorable Tax Adjustment ($.18 per share for the second quarter and six months) - $2.5 million pre-tax charge ($.01 per share for the six months) for severance and related costs resulting from workforce reductions ("buyouts"). 1996 ---- - $7.8 million pre-tax gain ($.04 per share for the second quarter and six months) from the sale of the 110 Fifth Avenue building. - $5.5 million pre-tax charge ($.02 per share for the second quarter and $.03 per share for the six months) for buyouts. Results of Operations - --------------------- The 1997 second-quarter net income was $84.9 million, or $.85 per share, compared with net income of $46.8 million, or $.48 per share, in the second quarter of 1996. For the first six months of 1997, net income rose to $136.8 million, or $1.36 per share, from $79.5 million, or $.81 per share, in 1996. Exclusive of the Favorable Tax Adjustment and other special factors described above, 1997 second-quarter net income increased 48.7% to $66.9 million, or $.67 per share, from $45.0 million, or $.46 per share in 1996, and 1997 net income for the six months increased 53.3% to $120.2 million, or $1.19 per share, from $78.4 million, or $.80 per share, in 1996. The higher 1997 net income was principally due to higher advertising revenues and lower newsprint prices in the Newspaper Group, and to the acquisition of two television stations in the Broadcast Group in July 1996. 9 The earnings per share amounts in the second quarter and six-month period of 1997 reflect a $.03 and $.05 per share decrease, respectively, resulting from the inclusion of outstanding stock options in the earnings per share calculation as required by APB 15. Included in these amounts for both periods is $.01 per share related to the Favorable Tax Adjustment which is a special factor. This provision of APB 15 was triggered primarily as a result of the Company's higher stock price. The 1996 reported results did not include the effect of outstanding stock options. Certain provisions of APB 15 will be superseded by SFAS 128, which will be adopted in the fourth quarter of 1997, at which time earnings per share amounts will be restated. Revenues for the second quarter of 1997 were $721.9 million, an 11.2% increase over the 1996 second-quarter revenues of $649.5 million. Revenues for the first six months of 1997 were $1.4 billion, an increase of 10.8% over revenues of $1.3 billion in 1996. On a comparable basis, adjusted for the acquisitions of certain properties, second-quarter and six-month revenues increased by approximately 7% over 1996. Costs and expenses increased to $594.6 million for the second quarter of 1997 from $567.0 million in 1996, and increased to $1.19 billion for the first six months of 1997 from $1.13 billion in 1996 primarily due to higher wages and payroll-related costs, and promotional expenses, offset by lower raw material costs resulting from lower paper prices. Operating profit rose to $127.3 million for the second quarter of 1997 from $82.5 million in 1996. Operating profit rose to $228.6 million for the first six months of 1997 from $143.1 million in 1996. The improvement in operating profit was principally due to higher advertising revenues and lower newsprint prices in the Newspaper Group, and to the acquisition of two television stations in the Broadcast Group in July 1996. The 1997 second-quarter earnings before interest, income taxes, depreciation and amortization ("EBITDA") rose to $174.0 million from $120.3 million in the comparable 1996 period. EBITDA for the first six months of 1997 rose to $317.0 million from $220.5 million in 1996. Income from Joint Ventures increased to $3.1 million in the second quarter of 1997 from $2.2 million in 1996. For the first six months of 1997, income decreased to $4.4 million from $6.9 million in 1996. The increase in the second quarter of 1997 was attributable to the absence of a loss from a new venture which occurred in 1996. The decrease for the six months was primarily a result of lower selling prices for paper from the mills in which the Company has investments, partially offset by the absence of the 1996 new venture loss. Interest expense, net of interest income, increased in the second quarter and first six months of 1997. The increase was primarily a result of lower interest income and capitalized interest associated with construction. Excluding the $18.0 million Favorable Tax Adjustment, the Company's effective tax rate was 43.8% for the second quarter of 1997 compared with an effective tax rate of 45.9% in the 1996 quarter. For the first six months of 1997, the effective tax rate was 44.3% compared to 45.3% in 1996. The variations in rates were principally attributed to a lower percentage of non-deductible amortization. 10
Segment Information - ------------------- - --------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------------------------------- June 29, June 30, June 29, June 30, (Dollars in thousands) 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) Revenues Newspapers $637,099 $581,468 $1,258,059 $1,146,878 Magazines 46,047 41,699 86,194 82,409 Broadcasting 38,801 26,339 70,155 47,794 - --------------------------------------------------------------------------------------------------------------------- Total $721,947 $649,506 $1,414,408 $1,277,081 - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Operating Profit (Loss) Newspapers $119,423 $ 82,372 $ 217,886 $ 143,518 Magazines 9,247 6,464 14,958 13,534 Broadcasting 11,905 7,988 17,589 11,372 Unallocated Corporate Expenses (13,226) (14,304) (21,829) (25,281) - --------------------------------------------------------------------------------------------------------------------- Total $127,349 $ 82,520 $ 228,604 $ 143,143 - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Depreciation and Amortization Newspapers $ 40,115 $ 34,397 $ 77,014 $ 68,121 Magazines (1,736) (1,718) (3,473) (3,589) Broadcasting 4,703 2,571 9,421 5,115 Corporate 431 256 854 601 Joint Ventures 88 95 177 192 - --------------------------------------------------------------------------------------------------------------------- Total $ 43,601 $ 35,601 $ 83,993 $ 70,440 - --------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------
A discussion of the operating results of the Company's segments follows: Newspaper Group: The New York Times ("The Times"), The Boston Globe ("The Globe"), 21 Regional Newspapers, newspaper distributors, a news service, a features syndicate, TimesFax, licensing operations of The New York Times databases and microfilm and New Ventures. New Ventures include projects developed in electronic media.
- --------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------------------------------- June 29, June 30, June 29, June 30, (Dollars in thousands) 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) Revenues Newspapers $634,451 $579,556 $1,253,141 $1,143,079 New Ventures 2,648 1,912 4,918 3,799 - --------------------------------------------------------------------------------------------------------------------- Total Revenues $637,099 $581,468 $1,258,059 $1,146,878 - --------------------------------------------------------------------------------------------------------------------- EBITDA Newspapers $160,650 $118,472 $ 297,307 $ 215,463 New Ventures (1,112) (1,703) (2,407) (3,824) - --------------------------------------------------------------------------------------------------------------------- Total EBITDA $159,538 $116,769 $ 294,900 $ 211,639 - --------------------------------------------------------------------------------------------------------------------- Operating Profit (Loss) Newspapers $120,801 $ 84,382 $ 220,771 $ 147,921 New Ventures (1,378) (2,010) (2,885) (4,403) - --------------------------------------------------------------------------------------------------------------------- Total Operating Profit $119,423 $ 82,372 $ 217,886 $ 143,518 - --------------------------------------------------------------------------------------------------------------------- 11
The Newspaper Group's operating profit was $119.4 million in the second quarter of 1997 compared with $86.6 million, excluding buyouts, in the second quarter of 1996. Revenues were $637.1 million in the second quarter of 1997, compared with $581.5 million in 1996. Operating profit, excluding buyouts, for the first six months rose to $219.4 million in 1997 from $148.8 million in 1996, on revenues of $1.3 billion and $1.1 billion, respectively. The 10% increase in the Group's revenues for both the quarter and six months was primarily due to higher advertising rates and volume. The improvement in operating profit in 1997 included the favorable effect of a 29% and 32% decrease for the second-quarter and six-month periods, respectively, in the Company's average cost of newsprint compared to 1996. Average circulation of daily newspapers for the second quarter and six months ended June 29, 1997, on a comparable basis, was as follows:
- ------------------------------------------------------------------------------------------------------------------ Three Months Ended June 29, 1997 ----------------------------------------------------------- (Copies in thousands) Weekday % Change Sunday % Change - --------------------------------------------------------------------------------------------------------------------- Average Circulation The New York Times 1,088.9 (0.2%) 1,673.6 0.2% The Boston Globe 472.9 0.6% 752.7 (0.7%) Regional Newspapers 721.3 0.3% 770.1 (0.2%) - ---------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------ Six Months Ended June 29, 1997 ----------------------------------------------------------- (Copies in thousands) Weekday % Change Sunday % Change - --------------------------------------------------------------------------------------------------------------------- Average Circulation The New York Times 1,092.6 (2.5%) 1,658.8 (3.4%) The Boston Globe 467.6 (1.1%) 752.9 (1.6%) Regional Newspapers 745.9 - 801.3 (0.3%) - ---------------------------------------------------------------------------------------------------------------------
The average circulation decline for the six months is partly attributable to the increase in newsstand and home delivery prices and a decrease in distribution to selected outlying areas. To increase circulation, the Company is investing in a national image campaign at The Times, as well as other product enhancements and improvements in delivery service. Advertising volume on a comparable basis for the second quarter and six months was as follows:
- --------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended June 29, 1997 June 29, 1997 ----------------------------------------------------------- (Inches in thousands) Volume % Change Volume % Change - --------------------------------------------------------------------------------------------------------------------- Advertising Volume (excluding preprints) The New York Times 1,012 5.8% 1,940 4.4% The Boston Globe 771 3.8% 1,479 4.3% Regional Newspapers 3,989 (0.1%) 7,733 0.5% - ---------------------------------------------------------------------------------------------------------------------
Advertising volume at The Times for the second quarter of 1997 increased approximately 5.8% from the 1996 second quarter. The national and zoned categories both showed increases of 7.0%, the classified category showed an increase of 7.3% and the retail category showed a decrease of 1.3%. For the first six months of 1997, advertising volume increased 4.4% from the comparable 1996 period. All categories except retail experienced increases, with national being the most significant with a 6.8% increase from the 1996 six months. Preprint distribution was down 0.3% and 5.9% for the second quarter and first six months, respectively. 12 At the Globe, advertising volume for the 1997 second quarter increased 3.8% over the 1996 second quarter. Advertising was higher in national, classified and zoned categories by 5.6%, 7.8% and 1.7%, respectively, while the retail category was down 3.8%. For the first six months of 1997, advertising volume increased 4.3% as a result of increases in the national and classified categories of 4.7% and 8.1%, respectively, offset by decreased advertising in the retail and zoned categories. Preprint distribution was up 5.6% for the quarter and 7.4% for the six months over 1996. For the regional newspaper group, advertising volume for the second quarter decreased 0.1% from the 1996 second quarter. The decrease was a result of lower volume in the legal category, offset by increases in all other advertising categories. For the first six months of 1997, advertising volume increased 0.5%. Advertising volume was higher in all categories except legal. Preprint distribution increased 8.1% and 10.4% for the second- quarter and six-month periods, respectively, over 1996. Magazine Group: The Magazine Group is comprised of a number of sports-related publications, related activities in the sports/leisure fields, and New Ventures such as computerized systems for golf tee time reservations and on-line magazine services. The revenues for the Group include the amortization of a $40.0 million non-compete agreement ("Non-Compete"), associated with the divestiture of the Women's Magazine Division, which is being recognized on a straight-line basis over four years ending in July 1998.
- --------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------------------------------- June 29, June 30, June 29, June 30, (Dollars in thousands) 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) Revenues Sports/Leisure Magazines $42,961 $38,940 $80,338 $76,980 Non-Compete 2,500 2,500 5,000 5,000 New Ventures 586 259 856 429 - --------------------------------------------------------------------------------------------------------------------- Total Revenues $46,047 $41,699 $86,194 $82,409 - --------------------------------------------------------------------------------------------------------------------- EBITDA Sports/Leisure Magazines $ 9,246 $ 6,088 $15,404 $12,456 New Ventures (1,735) (1,342) (3,919) (2,511) - --------------------------------------------------------------------------------------------------------------------- Total EBITDA $ 7,511 $ 4,746 $11,485 $ 9,945 - --------------------------------------------------------------------------------------------------------------------- Operating Profit (Loss) Sports/Leisure Magazines $ 8,694 $ 5,508 $14,294 $11,396 Non-Compete 2,500 2,500 5,000 5,000 New Ventures (1,947) (1,544) (4,336) (2,862) - --------------------------------------------------------------------------------------------------------------------- Total Operating Profit $ 9,247 $ 6,464 $14,958 $13,534 - ---------------------------------------------------------------------------------------------------------------------
The Magazine Group's operating profit was $9.2 million in the second quarter of 1997 compared with $6.5 million in 1996, on revenues of $46.0 million and $41.7 million, respectively. Operating profit for the first six months was $15.0 million in 1997 compared with $13.5 million in 1996, on revenues of $86.2 million and $82.4 million, respectively. The second-quarter and six-month operating profit increases were primarily related to higher advertising revenues as a result of higher ad volume at the Company's golf-related magazines, partially offset by increased losses associated with New Ventures. In March 1997, the Company announced its plans to sell its tennis, sailing and ski magazines. The results of these magazines will be included in the Group's results until the divestitures are completed. The operating profit (loss) of these magazines was not material to the Group in the second quarter or the first six months of 1997 and their sale will not have a material impact on the future results or financial position of the Company. 13 Broadcasting Group: The Broadcasting Group consists of eight network- affiliated television stations and two radio stations.
- --------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------------------------------- June 29, June 30, June 29, June 30, (Dollars in thousands) 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) Revenues $38,801 $26,339 $70,155 $47,794 - --------------------------------------------------------------------------------------------------------------------- EBITDA $16,608 $10,559 $27,010 $16,487 - --------------------------------------------------------------------------------------------------------------------- Operating Profit $11,905 $ 7,988 $17,589 $11,372 - ---------------------------------------------------------------------------------------------------------------------
The Broadcasting Group's operating profit rose to $11.9 million in the second quarter of 1997 from $8.2 million in 1996, excluding buyouts, on revenues of $38.8 million and $26.3 million, respectively. Operating profit was $17.6 million for the first six months of 1997 compared with $11.6 million in 1996, excluding buyouts, on revenues of $70.2 million and $47.8 million, respectively. The revenue and operating profit increases were principally attributable to the acquisition of KFOR-TV, Oklahoma City, Oklahoma, and WHO-TV, Des Moines, Iowa, two NBC affiliates which were acquired in July 1996, as well as stronger advertising revenues at WTKR-TV, Norfolk, Virginia. The two new stations contributed $3.6 million and $5.2 million of operating profit in the second quarter and first six months of 1997, respectively. Liquidity and Capital Resources - ------------------------------- Net cash provided by operating activities was $191.0 million in the first six months of 1997 compared with $154.3 million in 1996. The increase in operating cash flows was primarily used for the construction of production and distribution facilities, stock repurchases and the payment of dividends to stockholders. The Company believes that cash generated from its operations and the availability of funds from external sources should be adequate to cover working capital needs, planned capital expenditures, dividend payments to stockholders, stock repurchases and other cash requirements. The ratio of current assets to current liabilities was .71 and .73 at June 29, 1997, and December 29, 1996, respectively. The ratio of long-term debt and capital lease obligations as a percentage of total capitalization was 28% at June 29, 1997, and December 29, 1996. Financing: The Company currently maintains $300.0 million in revolving credit agreements, $100.0 million of which was renewed in July 1997 and has been extended through July 1998, and $200.0 million of which had an original maturity of July 2001 and has been extended through July 2002. The extended agreements permit borrowings which bear interest, at the Company's option, (i) for domestic borrowings: based on the certificates of deposit rate, the Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar borrowings: based on the LIBOR rate, plus various margins based on the Company's credit rating. In addition, these agreements include provisions which require, among other matters, specified levels of stockholders' equity. At June 29, 1997, approximately $896.5 million of stockholders' equity was unrestricted under these agreements. At June 29, 1997, and December 29, 1996, the Company had commercial paper outstanding of $74.2 million and $45.5 million, respectively, which is supported by the revolving credit agreements. The Company's long-term debt, including capital leases, was $636.1 million at June 29, 1997, of which $100.0 million is due in October 1998. 14 Capital Expenditures: The Company's new production and distribution facilities under construction in College Point, New York City and Lakeland, Florida are substantially complete and estimated to cost approximately $375.1 million, exclusive of capitalized interest currently projected to be $38.8 million. At June 29, 1997, approximately $341.7 million had been incurred exclusive of capitalized interest for these projects. The Company currently estimates that, inclusive of these new facilities, capital expenditures for 1997 will range from $170.0 million to $190.0 million. The Company currently anticipates that depreciation and amortization will approximate $170.0 million to $180.0 million for 1997 compared with $147.8 million in 1996. Stock Repurchase Program: During the first six months of 1997, the Company paid approximately $100.2 million to repurchase approximately 2.5 million shares of Class A Common Stock. Approximately 1.9 million of these shares were purchased under an agreement with an investment firm. The agreement provides for a Settlement Amount in cash or in shares of Class A Common Stock, at the Company's discretion, based on the Company's weighted average stock price as defined in the agreement. The current estimated Settlement Amount is approximately $15.0 million. At December 29, 1996, approximately $6.2 million remained under a May 1996 stock repurchase authorization. In February 1997, the Board of Directors authorized additional expenditures of up to $150.0 million. To date, including the estimated Settlement Amount, approximately $41.0 million remain from the February 1997 authorization. Stock repurchases under this program exclude shares reacquired in connection with certain exercises under the Company's stock option plans. Other: At June 29, 1997, approximately $23.0 million of payments remain from charges associated with staff reductions. This unpaid balance will be principally paid within one year. The Company is evaluating the potential impact of the situation commonly referred to as the "Year 2000 problem". The Year 2000 problem, which is common to most corporations, concerns the inability of information systems, primarily computer software programs, to properly recognize and process date sensitive information related to the Year 2000. Preliminary assessment indicates that resulting solutions will involve a mix of purchasing new systems and modifying existing systems. The Company is currently in the process of determining the costs and expenditures associated with the Year 2000 problem. New Accounting Pronouncements: In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131"), and SFAS No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 131 establishes standards for reporting financial and descriptive information for reportable segments on the same basis that is used internally for evaluating segment performance and the allocation of resources to segments. The Company is evaluating the effect, if any, of SFAS 131, on its operating segment reporting disclosure. SFAS 130 establishes standards for presenting nonshareholder related items that are excluded from net income and reported as components of stockholders' equity, such as foreign currency translation. These statements are effective for fiscal years beginning after December 15, 1997. The adoption of these statements will not have a material effect on the Company's results of operations or financial position. 15 Factors That Could Affect Operating Results - ------------------------------------------- Except for the historical information contained herein, the matters discussed in this quarterly report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. Such risks and uncertainties include national and local conditions that could influence the level of retail, national and classified advertising revenues as well as circulation revenue, the impact of competition that could affect levels (rate and volume) of advertising and circulation generated by the markets served by the Company's business segments, material increases in newsprint and magazine paper prices, and other risks detailed from time to time in the Company's publicly-filed documents, including its Annual Report on Form 10-K for the period ended December 29, 1996. 16 Item 4. Submission of Matters to a Vote of Security-Holders --------------------------------------------------- (a) The Company's annual meeting of stockholders was held on May 16, 1997. (b) The following matters were voted on at the annual meeting: 1. The stockholders (with Class A and Class B stockholders voting separately) elected all of management's nominees for election as Class A Directors and Class B Directors. The results of the vote taken was as follows: For Withheld --- -------- Class A Directors: A. Leon Higginbotham 85,486,005 615,512 Robert A. Lawrence 85,251,980 849,537 Charles H. Price II 85,488,783 612,734 Donald M. Stewart 85,490,787 610,730 William O. Taylor 85,257,835 843,682 Class B Directors: 407,923 0 John F. Akers 407,923 0 Richard L. Gelb 407,923 0 Ruth S. Holmberg 407,923 0 Russell T. Lewis 407,923 0 George B. Munroe 407,923 0 George L. Shinn 407,923 0 Arthur Ochs Sulzberger 407,923 0 Arthur O. Sulzberger, Jr. 407,923 0 Judith P. Sulzberger 407,923 0 2. The stockholders (with Class A and Class B stockholders voting together) ratified the selection, by the Audit Committee of the Board of Directors, of Deloitte & Touche LLP, independent certified public accountants, as auditors of the Company for the year ending December 28, 1997. The result of the vote taken was as follows: For 86,058,601 Against 168,001 Abstain 282,838 Broker Non-Vote 0 Total Against, Abstain and Broker Non-Vote* 450,839 _______________________ * An abstention vote had the same effect as a vote against this matter. 17 Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- 10.4 The Company's Non-Employee Directors' Stock Option Plan, as amended through May 16, 1997. 11. Statements re: Computation of earnings per share 27. Financial Data Schedule (b) Reports on Form 8-K ------------------- No reports on Form 8-K have been filed during the period for which this report is filed. 18 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE NEW YORK TIMES COMPANY ----------------------------- (Registrant) Date August 11, 1997 ------------------ /s/ Diane P. Baker ----------------------------- Diane P. Baker Senior Vice President and Chief Financial Officer (Principal Financial Officer) 19 Exhibit Index to Quarterly Report Form 10-Q ------------------------------------------- Quarter Ended June 29, 1997 --------------------------- Exhibit No. Exhibit - ----------- ------- 10.4 The Company's Non-Employee Directors' Stock Option Plan, as amended through May 16, 1997. 11 Statements of Computation of Primary and Fully- Diluted Net Income Per Share 27 Financial Data Schedule 20 EX-10.4 2 NONEMPLOYEE STOCK OPTION PLAN AGREEMENT THE NEW YORK TIMES COMPANY NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN AS AMENDED 1. PURPOSE The purpose of the The New York Times Company Non-Employee Directors' Stock Option Plan (the "Plan") is to secure for The New York Times Company (the "Company") and its stockholders the benefits of the incentive inherent in increased common stock ownership by the members of the Board of Directors (the "Board") of the Company who are not employees of the Company or any of its subsidiaries. 2. ADMINISTRATION The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe the form of the agreement embodying awards of stock options made under the Plan ("Options"). The Board shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Board may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or the Secretary or any other officer of the Company to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to be done by such member or by any other member of the Board in connection with the Plan, except in circumstances involving actual bad faith. 3. AMOUNT OF STOCK The stock which may be issued and sold under the Plan will be the Class A Common Stock of the Company ("Common Stock"), of a total number not exceeding 250,000 shares, subject to adjustment as provided in Section 6 below. The stock to be issued may be either authorized and unissued shares, treasury shares, issued shares acquired by the Company or its subsidiaries or any combination thereof. In the event that Options granted under the Plan shall terminate or expire without being exercised in whole or in part, new Options may be granted covering the shares not purchased under such lapsed Options. 4. ELIGIBILITY Each member of the Board who is not an employee of the Company or any of its subsidiaries (a "Non-Employee Director") shall be eligible to receive an Option in accordance with the specific provisions of Section 5 below. The adoption of this Plan shall be not deemed to give any director any right to be granted an Option to purchase Common Stock except to the extent and upon such terms and conditions consistent with the Plan as may be determined by the Board. 5. TERMS AND CONDITIONS OF OPTIONS Each Option granted under the Plan shall be evidenced by an agreement in such form as the Board shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions: (a) The Option exercise price shall be the Fair Market Value of the shares of Common Stock (as defined in Section 7(a) hereof) subject to such Option on the date the Option is granted. (b) Each year, as of the date of the Annual Meeting of Stockholders of the Company, each Non-Employee Director who has been elected or re-elected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting shall automatically receive an Option for 2,000 shares of Common Stock. (c) The Option shall not be transferable by the optionee otherwise than by will or the laws of descent and distribution, and shall be exercisable during his lifetime only by him, or if the optionee is disabled and a guardian or other legal representative is appointed, by such guardian or representative. (d) No Option or any part of an Option shall be exercisable: (i) before the Non-Employee Director has served one term-year as a member of the Board since the date the Option was granted (as used herein, the term "term-year" means that period from one Annual Meeting to the subsequent Annual Meeting), except as provided in subsection 5(d)(iv)(B) below; (ii) after the expiration of ten years from the date the Option was granted; (iii) unless written notice of the exercise is delivered to the Company specifying the number of shares to be purchased and payment in full is made for the shares of Common Stock being acquired thereunder at the time of exercise; such payment shall be made (A) in United States dollars by certified check or bank draft, or (B) by tendering to the Company shares of Common Stock owned by the person exercising the Option and having a Fair Market Value on the date of exercise equal to the cash exercise price applicable to such Option, or (C) be electing to have the Company retain shares of Common Stock which would be otherwise issued on exercise of the Option and having a Fair Market Value on the date of exercise equal to the cash applicable to such Option, or (D) any combination of the foregoing forms; and (iv) unless the person exercising the Option has been, at all times during the period beginning with the date of grant of the Option and ending on the date of such exercise, a Non-Employee Director of the Company, except that (A) if such a person shall cease to be such a Non-Employee Director for reasons other than Retirement (as defined in Section 7(a) hereof) or death, while holding an Option then exercisable that has not expired, such person, at any time within one year after the date he ceases to be such a Non-Employee Director (but in no event after the Option has expired under the provisions of subsection 5(d)(ii) above), may exercise the Option with respect to any shares of Common Stock as to which such person could have but has not exercised the Option on the date the person ceased to be such a Non-Employee Director; (B) if such a person shall cease to be such a Non-Employee Director by reason of Retirement or death while holding an Option (whether or not then exercisable) that has not expired, notwithstanding the provisions of subsection 5(d)(i) above, such person, or in the case of death (either while a Non-Employee Director or after Retirement), his executors, administrators, heirs, legatees or distributees, as the case may be, may, at any time until the expiration of such Option as provided in subsection 5(d)(ii) above, exercise the Option with respect to any shares of Common Stock as to which such person has not exercised the Option on the date the person ceased to be such a Non-Employee Director; and (C) if any person who has ceased to be such a Non-Employee Director for reasons other than death or Retirement shall die holding an Option, such person's executors, administrators, heirs, legatees or distributees, as the case may be, may, at any time within one year after the date of death (but in no event after the Option has expired under the provisions of subsection 5(d)(ii) above), exercise the Option with respect to any shares as to which the decedent could have exercised the Option at the time of death. 2 In the event any Option is exercised by the executors, administrators, heirs, legatees or distributees of the estate of a deceased optionee or by the guardian or legal representative of a disabled optionee, the Company shall be under no obligation to issue stock thereunder unless and until the Company is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof or the duly appointed guardian or legal representative of the disabled optionee. 6. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK In the event of changes in the outstanding Common Stock of the Company by reason of dividends (other than cash dividends), recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and class of shares available under the Plan, the number, class and the price of shares of Common Stock subject to outstanding Options and the number of shares constituting an Option grant under Section 5(b) hereof, shall be appropriately adjusted by the Board, whose determination shall be conclusive. 7. MISCELLANEOUS PROVISIONS (a) The following terms shall have the meanings specified below: (i) "Fair Market Value" means the arithmetic mean of the highest and lowest sales prices of the Common Stock as reported in the Consolidated Transactions of the American Stock Exchange ("AMSE") (or such other national securities exchange on which the Common Stock may be listed at the time of determination, and if the Common Stock is listed on more than one exchange, then on the one located in New York or if the Common Stock is listed only on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), then on such system) on the date of the grant or other date on which the Common Stock is to be valued hereunder. If no sale shall have been made on the AMSE, such other exchange or the NASDAQ on such date or if the Common Stock is not then listed on any exchange or on the NASDAQ, Fair Market Value shall be determined by the Board in accordance with Treasury Regulations applicable to incentive stock options. (ii) "Retirement" means retirement from the Board at the age of 65 or thereafter or resignation from the Board by reason of disability. (b) Except as expressly provided for in the Plan, no Non-Employee Director or other person shall have any claim or right to be granted an Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Non-Employee Director any right to be retained in the service of the Company. (c) An optionee's rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of an optionee's death, by will or the laws of descent and distribution), including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or interest of any participant in the Plan shall be subject to any obligation or liability of such participant. (d) No shares of Common Stock shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state and other securities laws and regulations. (e) It shall be a condition to the obligation of the Company to issue shares of Common Stock upon exercise of an Option, that the optionee (or any beneficiary or person entitled to act under subsection 5(d)(iv) above) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, the Company may refuse to issue shares of Common Stock. 3 (f) The expenses of the Plan shall be borne by the Company. (g) The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares upon exercise of any Option under the Plan and issuance of shares upon exercise of Options shall be subordinate to the claims of the Company's general creditors. (h) By accepting any Option or other benefit under the Plan, each optionee and each person claiming under or through such person shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company or the Board. (i) It is the intent of the Company that the transactions involving options under the Plan comply in all respects with Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended, that any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention and that if any provision of the Plan is found not to be in compliance with Rule 16b-3, such provision shall be deemed null and void to the extent required to permit any such transaction to comply with Rule 16b-3. The Board may adopt rules and regulations under, and amend, the Plan in furtherance of the intent of the foregoing. 8. AMENDMENT OF DISCONTINUANCE The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable, including, but not limited to, amendments necessary to qualify for any exemption or to comply with applicable law or regulations; provided, however, that except as provided in Section 6 above, the Board may not, without further approval by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon, voting together as one class, increase the maximum number of shares of Common Stock as to which Options may be granted under the Plan, increase the number of shares subject to an Option, change the Option exercise price described in subsection 5(a) above, extend the period during which Options may be granted or exercised under the Plan or change the class of persons eligible to receive Options under the Plan. Subject to the provision of Section 7(i) hereof relating to Rule 16b-3, no amendment of the Plan shall materially and adversely effect any right of any optionee with respect to any Option theretofore granted without such optionee's written consent. It is intended that the Plan be a "formula plan" under Rule 16b-3 and will comply with all applicable rules, regulations and staff interpretations of the Securities and Exchange Commission. 9. TERMINATION This Plan shall terminate upon the earlier of the following dates or events to occur: (a) upon the adoption of a resolution of the Board terminating the Plan; or (b) ten years from the date the Plan is initially approved and adopted by the stockholders of the Company in accordance with Section 10 below. 10. EFFECTIVE DATE OF PLAN The Plan shall become effective as of April 16, 1991 or such later date as the Board may determine, provided that the adoption of the Plan shall have been approved by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual Meeting of Stockholders, in person or by proxy, voting together as a single class. 4 EX-11 3 COMPUTATION OF NET INCOME PER SHARE
EXHIBIT 11 THE NEW YORK TIMES COMPANY STATEMENTS OF COMPUTATION OF PRIMARY AND FULLY-DILUTED NET INCOME PER SHARE (Dollars and shares in thousands, except per share data) ------------------------------ ----------------------------- QUARTER ENDED SIX MONTHS ENDED JUNE 29, 1997 JUNE 30, 1996 JUNE 29, 1997 JUNE 30, 1996 ------------------------------ ----------------------------- PRIMARY Average shares outstanding 96,407 97,755 97,114 97,703 ========= ========= ========= ========= Net effect of dilutive stock options and retirement units 3,428 - 3,336 - --------- --------- --------- --------- Total primary average shares outstanding 99,835 97,755 100,450 97,703 ========= ========= ========= ========= Net Income $ 84,949 $ 46,812 $136,788 $ 79,562 Less cumulative preference stock dividends (24) (24) (48) (48) --------- --------- --------- --------- Total $ 84,925 $ 46,788 $136,740 $ 79,514 ========= ========= ========= ========= Primary earnings per share $ 0.85 $ 0.48 $ 1.36 $ 0.81 ========= ========= ========= ========= FULLY-DILUTED Average shares outstanding 96,407 97,755 97,114 97,703 Net effect of dilutive stock options and retirement units 4,109 2,270 3,933 1,899 --------- --------- --------- --------- Total fully-diluted average shares outstanding 100,516 100,025 101,047 99,602 ========= ========= ========= ========= Net Income $ 84,949 $ 46,812 $136,788 $ 79,562 Less cumulative preference stock dividends (24) (24) (48) (48) --------- --------- --------- --------- Total $ 84,925 $ 46,788 $136,740 $ 79,514 ========= ========= ========= ========= Fully-diluted earnings per share $ 0.84 $ 0.47 $ 1.35 $ 0.80 ========= ========= ========= =========
EX-27 4 FDS SCHEDULE
5 6-MOS DEC-28-1997 JUN-29-1997 38,525 0 331,713 29,435 31,743 462,302 2,261,575 864,305 3,535,705 655,237 0 0 1,753 11,267 1,610,075 3,535,705 0 1,414,408 0 677,180 0 0 19,707 213,264 76,476 136,788 0 0 0 136,788 1.36 1.35
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