-----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, JPYO/vgCjb9S4KG5NWS8t+ofHfcP/2HEIxZb/Mu1TULJ+xAFUGiVCF0LWfWUIAqo xKKF5pH9J5CZpBgm/fuzfg== 0001047469-97-003663.txt : 19971114 0001047469-97-003663.hdr.sgml : 19971114 ACCESSION NUMBER: 0001047469-97-003663 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970928 FILED AS OF DATE: 19971112 SROS: NYSE 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: SEC FILE NUMBER: 001-05837 FILM NUMBER: 97712540 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 10Q 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 September 28, 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 November 2, 1997 (exclusive of treasury shares): Class A Common Stock 95,552,198 shares Class B Common Stock 424,801 shares Exhibit Index is located on page 20 of this document 1 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 Nine Months Ended ---------------------- ---------------------- Sept. 28, Sept. 29, Sept. 28, Sept. 29, 1997 1996 1997 1996 ---------------------- ---------------------- (13 Weeks) (39 Weeks) Revenues Advertising ............................ $ 466,435 $ 424,488 $1,447,979 $1,305,790 Circulation ............................ 165,819 165,578 503,505 491,497 Other .................................. 51,327 41,337 146,505 111,197 ---------- ---------- ---------- ---------- Total ............................... 683,581 631,403 2,097,989 1,908,484 ---------- ---------- ---------- ---------- Production Costs Raw Materials .......................... 78,269 85,825 228,026 287,774 Wages and Benefits ..................... 145,633 140,682 453,275 413,062 Other .................................. 126,101 109,880 360,454 321,128 ---------- ---------- ---------- ---------- Total ............................... 350,003 336,387 1,041,755 1,021,964 Selling, General and Administrative Expenses 242,243 232,149 736,295 680,510 Impairment Loss ............................ -- 126,763 -- 126,763 ---------- ---------- ---------- ---------- Total ............................... 592,246 695,299 1,778,050 1,829,237 ---------- ---------- ---------- ---------- Operating Profit (Loss) .................... 91,335 (63,896) 319,939 79,247 Income from Joint Ventures ................. 3,359 6,395 7,726 13,287 Interest Expense, Net ...................... 11,699 7,975 31,406 20,375 Net Gain on Dispositions ................... -- 25,085 -- 32,836 ---------- ---------- ---------- ---------- Income (Loss) Before Income Taxes .......... 82,995 (40,391) 296,259 104,995 Income Taxes ............................... 36,767 7,293 113,243 73,153 ---------- ---------- ---------- ---------- Net Income (Loss) .......................... $ 46,228 $ (47,684) $ 183,016 $ 31,842 ========== ========== ========== ========== Weighted Average Number of Common and Common Equivalent Shares ................. 99,646 97,008 100,106 97,472 Earnings Per Common and Common Equivalent Share .................. $ 0.46 $ (0.49) $ 1.83 $ 0.33 Cash Dividends Per Common Share ............ $ 0.16 $ 0.14 $ 0.47 $ 0.42
See notes to condensed consolidated financial statements. 2 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
September 28, December 29, 1997 1996 ------------- ------------ ASSETS (Unaudited) Current Assets Cash and short-term investments ................................. $ 37,843 $ 39,103 Accounts receivable - net ....................................... 312,578 309,164 Inventories Newsprint and magazine paper .................................. 25,570 28,778 Work-in-process, etc .......................................... 4,628 5,030 ---------- ---------- Total inventories ........................................... 30,198 33,808 Other current assets ............................................ 93,752 96,697 ---------- ---------- Total current assets ........................................ 474,371 478,772 ---------- ---------- Other Assets Investment in joint ventures .................................... 137,317 137,255 Property, plant and equipment (less accumulated depreciation of $888,007 in 1997 and $807,120 in 1996) ........ 1,383,940 1,358,029 Intangible assets acquired Cost in excess of net assets acquired (less accumulated amortization of $204,391 in 1997 and $184,196 in 1996) ........ 1,006,844 1,041,672 Other intangible assets acquired (less accumulated amortization of $38,654 in 1997 and $23,384 in 1996) .......... 389,705 396,042 Miscellaneous assets ............................................ 138,870 128,101 ---------- ---------- TOTAL ASSETS ................................................ $3,531,047 $3,539,871 ========== ==========
See notes to condensed consolidated financial statements. 3 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 28, December 29, 1997 1996 ------------ ----------- LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) Current Liabilities Commercial paper ................................. $ 19,000 $ 45,500 Accounts payable ................................. 186,054 171,853 Accrued payroll and other related liabilities .... 96,125 84,458 Accrued expenses ................................. 232,997 258,468 Unexpired subscriptions .......................... 85,853 90,059 Current portion of capital lease obligations ..... 3,868 3,359 ----------- ----------- Total current liabilities ...................... 623,897 653,697 ----------- ----------- Other Liabilities Long-term debt ................................... 590,097 589,693 Capital lease obligations ........................ 46,149 46,939 Deferred income taxes ............................ 154,864 188,560 Other liabilities ................................ 472,358 435,850 ----------- ----------- Total noncurrent liabilities ................... 1,263,468 1,261,042 ----------- ----------- Total Liabilities .............................. 1,887,365 1,914,739 ----------- ----------- Stockholders' Equity Capital stock .................................... 13,049 12,872 Additional paid in capital ....................... 706,823 663,007 Earnings reinvested in the business .............. 1,428,245 1,290,899 Common stock held in treasury, at cost ........... (504,435) (341,646) ----------- ----------- Total stockholders' equity ..................... 1,643,682 1,625,132 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... $ 3,531,047 $ 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 Nine Months Ended --------------------------- September 28, September 29, 1997 1996 --------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: (39 Weeks) Net cash provided by operating activities .................. $ 309,027 $ 264,868 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired ......................... -- (246,805) Additions to property, plant and equipment ................. (126,578) (157,048) Net proceeds from dispositions ............................. 11,872 16,878 Other - net ................................................ (198) (1,675) --------- --------- Net cash used in investing activities ...................... (114,904) (388,650) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Commercial paper - net ..................................... (26,500) 153,900 Long-term debt reduction ................................... (2,827) (2,558) Capital Shares Issuance ................................................. 6,317 2,534 Repurchase ............................................... (127,283) (36,829) Dividends paid to stockholders ............................. (45,434) (40,989) Other - net ................................................ 344 51 --------- --------- Net cash (used in) provided by financing activities ........ (195,383) 76,109 --------- --------- Decrease in cash and short-term investments ................ (1,260) (47,673) 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 .. $ 37,843 $ 43,769 ========= =========
NONCASH INVESTING AND FINANCING TRANSACTIONS Repurchases of common stock in connection with certain exercises under the Company's stock option plans increased treasury stock by $36,067 and $12,109 in 1997 and 1996, respectively. Additional paid in capital increased by a corresponding amount. Asset and liability changes related to acquisitions in 1996 were as follows: Fair value of assets acquired $268,319 Assets forgiven (9,833) Liabilities assumed and accrued (11,681) -------- Net cash paid $246,805 ======== 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. 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 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 September 28, 1997. 2. Impairment Loss In September 1996, the Company recorded a noncash accounting charge related to an impairment of certain long-lived assets as required by Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121 charge"). As a result of the Company's strategic review process, analyses were prepared to determine if there was impairment of any long-lived asset and certain assets, primarily in the Newspaper Group, met the test for impairment in 1996. These assets were associated with three small regional newspapers, certain wholesale distribution operations and a printing facility. The revised carrying values of these assets were generally calculated on the basis of discounted estimated future cash flow and resulted in the pre-tax noncash charge of $126,763,000 ($94,500,000 after-tax or $.97 per share). The SFAS 121 charge had no impact on the Company's 1996 cash flow or its ability to generate cash flow in the future. As a result of the SFAS 121 charge, depreciation and amortization expense related to these assets will decrease in future periods. However, in conjunction with the review for impairment, the estimated lives of certain of the Company's long-lived assets were reviewed, which resulted in the acceleration of amortization expense for certain intangible assets. In the aggregate, the net effect of the change on depreciation and amortization expense is not anticipated to have a material effect on earnings per share in the future. 3. Acquisitions/Dispositions In the first nine months of 1997, the Company sold its NYT Custom Publishing division and a closed printing facility located in Carlstadt, New Jersey. These sales did not have a material effect on the Company's consolidated financial statements. In October 1997, the Company announced that it had entered into an agreement to sell the assets of its tennis, sailing and ski magazine businesses. This transaction is expected to be completed in the fourth quarter of 1997. The operating profit (loss) of these properties was not material to the results of the Company for the third quarter and the first nine months of 1997. In July 1996, the Company acquired KFOR-TV in Oklahoma City, Okla., and WHO-TV in Des Moines, Iowa. The aggregate cost of the acquisition was approximately $234,075,000, of which approximately $232,925,000 was paid in cash and the balance represented accrued liabilities. The purchases resulted in increases in intangible assets of approximately $197,118,000 (consisting primarily of network affiliation agreements, Federal Communications Commission licenses and other intangible assets), property plant and equipment of $29,058,000, other assets of $9,687,000 and other assumed liabilities of $1,788,000. 6 In June 1996, the Company acquired a newspaper distribution business that distributes The New York Times and other newspapers and periodicals throughout the New York City metropolitan area. The aggregate cost of the acquisition was $32,456,000 of which approximately $13,880,000 was paid in cash, $9,833,000 in notes and accounts receivable which were forgiven, and the balance represented assumed and accrued liabilities. The purchase resulted in increases in intangible assets of approximately $30,438,000 (consisting primarily of a customer list), and accounts receivable and equipment of $2,018,000. 4. 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 the SFAS 121 charge and gains on dispositions in 1996, are as follows:
- ------------------------------------------------------------------------------------------------------------------------ Three Months Ended Nine Months Ended ---------------------------------------------------------------------------------------- September 28, September 29, September 28, September 29, 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 $ 29,048 35.0% $ 21,451 35.0% $103,691 35.0% $ 69,623 35.0% State and local taxes, net of federal benefits .... 6,554 7.9% 4,266 7.0% 20,279 6.8% 12,551 6.3% Amortization of nondeductible intangible assets acquired . 2,143 2.6% 1,807 2.9% 7,297 2.5% 7,140 3.6% Other - net ................. (978) (1.2%) 240 0.4% (24) -- 799 0.4% ----------------------------------------------------------------------------------------- Subtotal .................... 36,767 44.3% 27,764 45.3% 131,243 44.3% 90,113 45.3% Favorable Tax Adjustment .... -- -- 18,000 -- Impairment Loss ............. -- (32,264) -- (32,264) Dispositions ................ -- 11,793 -- 15,304 ----------------------------------------------------------------------------------------- Income taxes ................ $ 36,767 $ 7,293 $113,243 $ 73,153 =========================================================================================
5. 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 third-quarter and nine-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 third quarter and the first nine 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 ending after December 15, 1997, at which time previously reported earnings per share for periods prior to the effective date will be restated, as required by the pronouncement. SFAS 128 simplifies the computation of earnings per share by replacing the 7 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 a 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 third quarter and nine months ended September 28, 1997, assuming the adoption of SFAS 128 in the first quarter of 1997, is as follows: Three Months Ended Nine Months Ended September 28, 1997 September 28, 1997 ------------------ ------------------ Basic Earnings Per Share $0.48 $1.89 Diluted Earnings Per Share $0.46 $1.82 6. 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 September 28, 1997, approximately $917,000,000 of stockholders' equity was unrestricted under these agreements. At September 28, 1997, and December 29, 1996, the Company had commercial paper outstanding of $19,000,000 and $45,500,000, respectively, which is supported by the revolving credit agreements. 7. Stock Repurchase Program During the first nine months of 1997, the Company repurchased approximately 2,500,000 shares of Class A Common Stock at a cost of approximately $114,900,000. The average price of these repurchases was approximately $47 per share. To date, approximately $41,300,000 remain from the February 1997 authorization of $150,000,000. Stock repurchases under this program exclude shares reacquired in connection with certain exercises under the Company's stock option plans at a cost of approximately $11,800,000. 8. Voluntary Staff Reductions During the first nine 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 September 28, 1997, and December 29, 1996, approximately $20,304,000 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 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Advertising and circulation revenues accounted for approximately 69% and 24%, respectively, of the Company's revenues in the first nine 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 three quarters of 1997. A subsequent price increase may occur in the last quarter of the year which could further increase the Company's cost of newsprint by the end of 1997 or the beginning of 1998. Although the Company expects its cost of newsprint to be higher in the fourth quarter of 1997 than in the comparable 1996 quarter, the annual 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 o $18.0 million favorable tax adjustment ($.18 per share for the nine months) resulting from the completion of the Company's federal tax audits for periods through 1992 ("favorable tax adjustment"). o $2.5 million pre-tax charge ($.01 per share for the nine months) for severance and related costs resulting from work force reductions ("buyouts"). 1996 o $126.8 million pre-tax noncash accounting charge ($.97 per share for the quarter and nine months) related to the measurement for impairment of long-lived assets as required by Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed Of" ("SFAS 121 charge"). o $25.1 million pre-tax gain ($.14 per share for the quarter and nine months) resulting from the realization of a gain contingency from the disposition of a paper mill in a prior year. o $7.8 million pre-tax gain ($.04 per share for the nine months) from the sale of the 110 Fifth Avenue building. o $7.0 million pre-tax charge for the quarter ($.04 per share) and $12.6 million pre-tax charge for the nine months ($.07 per share) for buyouts. Results of Operations The 1997 third-quarter net income was $46.2 million, or $.46 earnings per share, compared with a net loss of $47.7 million, or $.49 loss per share, in the third quarter of 1996. For the first nine months of 1997, net income rose to $183.0 million, or $1.83 per share, from $31.8 million, or $.33 per share, in 1996. In the 1996 third-quarter and nine-month period, the Company recorded, among other special factors described above, a noncash accounting charge of $94.5 million or $.97 per share. Exclusive of the special factors described above, 1997 third-quarter net income increased 23.8% to $46.2 million, or $.46 per share, from $37.4 million, or $.38 per share in 1996, and 1997 net income for the nine months increased 43.8% to $166.4 million, or $1.66 per share, from $115.7 million, or $1.19 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 and continuing strong performance of KFOR-TV, Oklahoma City, Okla., and WHO-TV, Des Moines, Iowa, two NBC affiliates which were acquired in July 1996 ("New Television Stations"). 9 The earnings per share amounts in the third-quarter and nine-month periods of 1997 reflect a $.02 and $.06 per share decrease, respectively, resulting from the inclusion of outstanding stock options in the earnings per share calculation as required by Accounting Principles Board Opinion No. 15 ("APB 15"). This provision of APB 15 was triggered primarily as a result of the Company's higher stock price. Included in the $.06 per share decrease in the nine-month period is $.01 per share related to the favorable tax adjustment, which is a special factor. The 1996 reported results did not require the inclusion of outstanding stock options. Certain provisions of APB 15 will be superseded by Statement of Financial Accounting Standards No. 128, "Earnings Per Share", which will be adopted in the fourth quarter of 1997, at which time previously reported earnings per share amounts will be restated, as required by the pronouncement. Revenues for the third quarter of 1997 were $683.6 million, an 8.3% increase over the 1996 third-quarter revenues of $631.4 million. Revenues for the first nine months of 1997 were $2.1 billion, a 9.9% increase from $1.9 billion in 1996. On a comparable basis, adjusted for the acquisitions of certain properties, third-quarter and nine-month revenues increased by approximately 8% and 7%, respectively, over 1996. Production costs in the third quarter of 1997 were $350.0 million, a 4% increase over the 1996 third-quarter production costs of $336.4 million. Production costs for the first nine months of 1997 were $1.04 billion, a 2% increase from $1.02 billion in 1996. The increase was primarily due to higher salary and payroll-related costs and depreciation expenses associated with new production facilities, partially offset by lower raw material costs resulting from lower paper prices. Selling, general and administrative expenses ("SGA expenses") in the third quarter of 1997 were $242.2 million, a 4% increase over the 1996 third quarter of $232.1 million. SGA expenses, exclusive of buyouts of $7.0 million in the 1996 quarter, increased 8% in the third quarter of 1997. SGA expenses for the first nine months of 1997 were $736.3 million, an 8% increase from $680.5 million in 1996. SGA expenses, exclusive of buyouts of $2.5 million and $12.6 million in 1997 and 1996, respectively, increased 10% in the first nine months of 1997. The increases were primarily due to higher salary and payroll-related costs and promotional expenses. The Impairment Loss in 1996 is related to the SFAS 121 charge of $126.8 million (See Note 2 of Notes to Condensed Consolidated Financial Statements). Operating profit in the third quarter of 1997 was $91.3 million compared with an operating loss of $63.9 million in 1996. Operating profit, exclusive of buyouts of $7.0 million and the SFAS 121 charge of $126.8 million in the 1996 quarter, increased to $91.3 million in the third quarter of 1997 from $69.9 million in 1996. Operating profit for the first nine months of 1997 was $319.9 million compared with $79.2 million in 1996. Operating profit, exclusive of buyouts of $2.5 million in the first nine months of 1997 and the SFAS 121 charge of $126.8 million and buyouts of $12.6 million in 1996, rose to $322.4 10 million in 1997 from $218.6 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 and continuing strong performance of the New Television Stations. The 1997 third-quarter earnings before interest, income taxes, depreciation and amortization ("EBITDA") rose to $139.4 million from $5.6 million in 1996. EBITDA for the first nine months of 1997 rose to $456.4 million from $233.8 million in 1996. EBITDA for the 1996 third quarter and the first nine months was $107.2 million and $327.7 million, respectively, exclusive of the SFAS 121 charge of $126.8 and gains on dispositions of $32.8 million. EBITDA is presented because it is a widely accepted indicator of funds available to service debt, although it is not a measure of liquidity or of financial performance under generally accepted accounting principles ("GAAP"). The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Income from Joint Ventures decreased to $3.4 million in the third quarter of 1997 from $6.4 million in 1996. For the first nine months of 1997, such income decreased to $7.7 million from $13.3 million in 1996. The decrease in the third quarter and nine months of 1997 was primarily attributable to lower selling prices for paper from the mills in which the Company has investments. The decrease in the nine months was partially offset by the absence of a loss from a new venture which ceased operations in December 1996. Interest Expense, Net increased to $11.7 million in the third quarter of 1997 from $8.0 million in 1996. For the nine months of 1997, Interest Expense, Net increased to $31.4 million from $20.4 million in 1996. Interest income and capitalized interest included in the amounts presented was $0.8 million and $6.7 million in the quarter and nine months of 1997, respectively, compared with $5.6 million and $17.3 million in the comparable quarter and nine months of 1996, respectively. The 1997 increases in Interest Expense, Net were primarily attributable to lower capitalization of interest associated with construction. The Company's effective tax rate was 44.3% in the 1997 third quarter and first nine months of 1997, excluding the favorable tax adjustment, compared to 45.3% in the 1996 quarter and nine months. The 1996 third-quarter and nine-month rates exclude the tax effect of the SFAS 121 charge and gains on dispositions. The variation in the projected annual effective tax rate was principally attributable to a lower percentage of nondeductible amortization. 11 Segment Information
- ---------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended --------------------------------------------------------- September 28, September 29, September 28, September 29, (Dollars in thousands) 1997 1996 1997 1996 - ---------------------------------------------------------------------------------------- (13 Weeks) (39 Weeks) Revenues Newspapers $ 605,271 $ 559,562 $ 1,863,330 $ 1,706,440 Magazines 43,377 40,219 129,571 122,628 Broadcasting 34,933 31,622 105,088 79,416 - ---------------------------------------------------------------------------------------- Total $ 683,581 $ 631,403 $ 2,097,989 $ 1,908,484 ======================================================================================== Operating Profit (Loss) Newspapers $ 84,830 $ (61,281) $ 302,716 $ 82,237 Magazines 6,603 6,287 21,561 19,821 Broadcasting 9,656 7,331 27,245 18,703 Unallocated Corporate Expenses (9,754) (16,233) (31,583) (41,514) - ---------------------------------------------------------------------------------------- Total $ 91,335 $ (63,896) $ 319,939 $ 79,247 ======================================================================================== Depreciation and Amortization Newspapers $ 41,773 $ 34,780 $ 118,787 $ 102,901 Magazines (2,019) (1,929) (5,492) (5,518) Broadcasting 3,913 4,374 13,334 9,489 Corporate 977 651 1,831 1,252 Joint Ventures 89 96 266 288 - ---------------------------------------------------------------------------------------- Total $ 44,733 $ 37,972 $ 128,726 $ 108,412 ========================================================================================
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 Nine Months Ended ---------------------------------------------------------- September 28, September 29, September 28, September 29, (Dollars in thousands) 1997 1996 1997 1996 - ----------------------------------------------------------------------------------- (13 Weeks) (39 Weeks) Revenues Newspapers $ 601,011 $ 557,824 $ 1,854,152 $ 1,700,903 New Ventures 4,260 1,738 9,178 5,537 - ----------------------------------------------------------------------------------- Total Revenues $ 605,271 $ 559,562 $ 1,863,330 $ 1,706,440 - ----------------------------------------------------------------------------------- EBITDA Newspapers $ 128,206 $ 102,191 $ 425,513 $ 317,654 New Ventures (1,603) (3,000) (4,010) (6,824) - ----------------------------------------------------------------------------------- Total EBITDA $ 126,603 $ 99,191 $ 421,503 $ 310,830 - ----------------------------------------------------------------------------------- Operating Profit (Loss) Newspapers $ 86,704 $ (54,895) $ 307,475 $ 93,026 New Ventures (1,874) (6,386) (4,759) (10,789) - ----------------------------------------------------------------------------------- Total Operating Profit $ 84,830 $ (61,281) $ 302,716 $ 82,237 - -----------------------------------------------------------------------------------
12 The Newspaper Group's operating profit was $84.8 million in the third quarter of 1997 compared with $65.4 million, in 1996, excluding buyouts and the SFAS 121 charge. Revenues were $605.3 million in the third quarter of 1997, compared with $559.6 million in 1996. Operating profit for the first nine months of 1997, excluding buyouts, rose to $304.2 million in 1997 from $214.3 million in 1996, excluding buyouts and the SFAS 121 charge, on revenues of $1.9 billion and $1.7 billion, respectively. The increase in the Group's revenues for both the quarter and nine months was primarily due to higher advertising revenues as a result of higher rates and volume. The improvement in operating profit in 1997 included the favorable effect of a 14% and 26% decrease for the third-quarter and nine-month periods, respectively, in the Company's average cost of newsprint compared to 1996. Average circulation of daily newspapers for the third quarter and nine months ended September 28, 1997, on a comparable basis, was as follows: -------------------------------------------------------------------- Three Months Ended September 28, 1997 ------------------------------------------ (Copies in thousands) Weekday % Change Sunday % Change -------------------------------------------------------------------- Average Circulation The New York Times 1,060.5 1.0% 1,642.4 0.4% The Boston Globe 480.6 1.8% 764.9 -0.3% Regional Newspapers 702.4 0.8% 758.0 0.2% -------------------------------------------------------------------- -------------------------------------------------------------------- Nine Months Ended September 28, 1997 ------------------------------------------ (Copies in thousands) Weekday % Change Sunday % Change -------------------------------------------------------------------- Average Circulation The New York Times 1,079.9 -1.5% 1,653.5 -2.2% The Boston Globe 472.3 -0.1% 756.3 -1.3% Regional Newspapers 731.4 0.2% 786.9 -0.2% The average circulation decline for the nine 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 third quarter and nine months was as follows:
- ---------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended September 28, 1997 September 28, 1997 --------------------------------------------------- (Inches in thousands) Volume % Change Volume % Change - ---------------------------------------------------------------------------------------------- Advertising Volume (excluding preprints) The New York Times 888.1 4.8% 2,827.8 4.5% The Boston Globe 697.0 0.9% 2,175.8 3.2% Regional Newspapers 3,777.7 1.4% 11,510.8 0.8% - ----------------------------------------------------------------------------------------------
Advertising volume at The Times for the third quarter of 1997 increased approximately 4.8% from the 1996 third quarter. The national, classified and zoned categories showed increases of 10.0%, 4.3% and 3.0%, respectively, while the retail category was down 1.7%. For the first nine months of 1997, advertising volume increased 4.5% from the comparable 1996 period. The national, classified and zoned categories showed increases of 7.6%, 5.3% and 3.3%, respectively, while the retail category was down 1.1%. Preprint distribution was up 26.7% for the quarter and 4.2% for the nine months over 1996. 13 At The Globe, advertising volume for the 1997 third quarter increased 0.9% from the 1996 third quarter. Advertising volume was higher in the national, classified and zoned categories by 2.6%, 3.9% and 7.1%, respectively, while the retail category was down 8.7%. For the first nine months of 1997, advertising volume increased 3.2% primarily as a result of increases in the national and classified categories of 4.1% and 6.7%, respectively, offset by a decrease of 3.1% in the retail category. Preprint distribution was up 3.5% for the quarter and 6.1% for the nine months over 1996. For the regional newspaper group, advertising volume for the third quarter increased 1.4% from the 1996 third quarter. For the first nine months of 1997, advertising volume increased 0.8%. The increases were a result of higher volume in all advertising categories except legal. Preprint distribution increased 10.8% and 10.5% for the third-quarter and nine-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 Nine Months Ended ----------------------------------------------------------- September 28, September 29, September 28, September 29, (Dollars in thousands) 1997 1996 1997 1996 - --------------------------------------------------------------------------------------- (13 Weeks) (39 Weeks) Revenues Sports/Leisure Magazines $40,062 $37,414 $120,400 $114,394 Non-Compete 2,500 2,500 7,500 7,500 New Ventures 815 305 1,671 734 - --------------------------------------------------------------------------------------- Total Revenues $43,377 $40,219 $129,571 $122,628 - --------------------------------------------------------------------------------------- EBITDA Sports/Leisure Magazines $ 6,465 $ 6,982 $ 21,869 $ 19,438 New Ventures (1,881) (1,553) (5,800) (4,064) - --------------------------------------------------------------------------------------- Total EBITDA $ 4,584 $ 5,429 $ 16,069 $ 15,374 - --------------------------------------------------------------------------------------- Operating Profit (Loss) Sports/Leisure Magazines $ 6,210 $ 5,525 $ 20,504 $ 16,921 Non-Compete 2,500 2,500 7,500 7,500 New Ventures (2,107) (1,738) (6,443) (4,600) - --------------------------------------------------------------------------------------- Total Operating Profit $ 6,603 $ 6,287 $ 21,561 $ 19,821 - ---------------------------------------------------------------------------------------
The Magazine Group's operating profit was $6.6 million in the third quarter of 1997 compared with $7.4 million in 1996, excluding the SFAS 121 charge, on revenues of $43.4 million and $40.2 million, respectively. The decrease in operating profit in the third quarter of 1997 was primarily related to increased costs associated with increased promotion expenses and higher new venture losses. Operating profit for the first nine months was $21.6 million in 1997 compared with $20.9 million in 1996, excluding the SFAS 121 charge, on revenues of $129.6 million and $122.6 million, respectively. The improvement in nine-month operating profit was primarily related to higher advertising revenues as a result of higher ad volume at the golf-related publications, partially offset by increased losses associated with new ventures. In October 1997, the Company announced it had entered into an agreement to sell the assets of its tennis, sailing and ski magazine businesses. The transaction is expected to be completed in the fourth quarter of 1997. 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 third quarter or the first nine months of 1997 and their sale will not have a material impact on the future results or financial position of the Company. 14 Broadcasting Group: The Broadcasting Group consists of eight network-affiliated television stations and two radio stations. - -------------------------------------------------------------------------------- Three Months Ended Nine Months Ended ---------------------------------------------------------- September 28, September 29, September 28, September 29, (Dollars in thousands) 1997 1996 1997 1996 - -------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) Revenues $34,933 $31,622 $105,088 $79,416 - -------------------------------------------------------------------------------- EBITDA $13,569 $11,705 $ 40,579 $28,192 - -------------------------------------------------------------------------------- Operating Profit $ 9,656 $ 7,331 $ 27,245 $18,703 - -------------------------------------------------------------------------------- The Broadcasting Group's operating profit rose to $9.7 million in the third quarter of 1997 from $7.3 million in 1996, on revenues of $34.9 million and $31.6 million, respectively. Operating profit was $27.2 million for the first nine months of 1997 compared with $18.9 million in 1996, excluding buyouts, on revenues of $105.1 million and $79.4 million, respectively. The revenue and operating profit increases were principally attributable to the acquisition of the New Television Stations, as well as stronger advertising revenues at most of the Broadcast properties. The New Television Stations contributed $3.9 million and $9.1 million of operating profit in the third quarter and first nine months of 1997, respectively. Liquidity and Capital Resources Net cash provided by operating activities was $309.0 million in the first nine months of 1997 compared with $264.9 million in 1996. The increase of $44.2 million, or 17%, in 1997 was attributable to higher earnings and other changes in working capital. 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. Net cash used in investing activities was $114.9 million in the first nine months of 1997 compared with $388.7 million in 1996. The decrease of $273.7 million was primarily attributable to the acquisition of certain properties in 1996 (See Note 3 of Notes to Condensed Consolidated Financial Statements). Net cash used in financing activities was $195.4 million in the first nine months of 1997 compared with cash provided by financing activities of $76.1 million in 1996. The increase of $271.5 million was primarily related to an increase in share repurchases in 1997 and the financing of the New Television Stations, partially through the commercial paper program, in 1996 (see Financing section below). 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 .76 and .77 at September 28, 1997 and September 29, 1996, respectively. The ratio of long-term debt and capital lease obligations as a percentage of total capitalization was 28% at September 28, 1997 compared to 34% at September 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 included provisions which require, among other matters, specified levels of stockholders' equity. Approximately $917.0 million and $863.0 million of stockholders' equity was unrestricted under these agreements at September 28, 1997, and September 29, 1996, respectively. Approximately $19.0 million and $153.9 million of commercial paper, supported by the revolving credit agreements, was outstanding at September 28, 1997 and September 29, 1996, respectively. The higher level of outstanding commercial paper at September 29, 1996 was primarily related to the acquisition of the New Television Stations. The Company's long-term debt, including capital leases, was $636.2 million at September 28, 1997, of which $100.0 million is due in October 1998. At September 29, 1996, the Company's long-term debt, including capital leases, was $791.1 million. 15 Capital Expenditures: The Company currently estimates that, inclusive of the new facilities in College Point, New York City and Lakeland, Florida, capital expenditures for 1997 will range from $160.0 million to $180.0 million. The Company currently anticipates that depreciation and amortization expense will approximate $170.0 million to $180.0 million for 1997 compared with $147.8 million in 1996. Stock Repurchase Program: During the first nine months of 1997, the Company repurchased approximately 2.5 million shares of Class A Common Stock at a cost of approximately $114.9 million compared to approximately 1.2 million shares at cost of approximately $34.9 million in 1996. To date, approximately $41.3 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 at a cost of approximately $11.8 million. Acquisitions/Dispositions: In the first nine months of 1997, the Company sold its NYT Custom Publishing division and a closed printing facility located in Carlstadt, New Jersey. These sales did not have a material effect on the Company's consolidated financial statements. In October 1997, the Company announced that it had entered into an agreement to sell the assets of its tennis, sailing and ski magazine businesses. This transaction is expected to be completed in the fourth quarter of 1997. In July 1996, the Company acquired the New Television Stations. The aggregate cost of the acquisition was approximately $234.1 million, of which approximately $232.9 million was paid in cash ($143.0 million was financed using the Company's commercial paper facility) and the balance represented accrued liabilities. In June 1996, the Company acquired a newspaper distribution business that distributes The Times, other newspapers and periodicals throughout the New York City metropolitan area. The aggregate cost of the acquisition was $32.5 million of which approximately $13.9 million was paid in cash, $9.8 million in notes and accounts receivable which were forgiven, and the balance represented assumed and accrued liabilities. Other: At September 28, 1997, approximately $20.3 million of payments remain from charges associated with staff reductions. This 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 solutions will involve a mix of purchasing new systems and modifying existing systems and confirming vendor compliance. The Company currently anticipates that incremental capital expenditures associated with the Year 2000 problem will be modest. Additional expenses to remediate existing systems are currently expected to range between $10.0 million and $15.0 million. These expenses are expected to be incurred through 1999. 16 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. 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. 17 PART II. OTHER INFORMATION Item 5. Other Information On October 16, 1997, the Company announced the following executive changes: Arthur Ochs Sulzberger resigned as Chairman and Chief Executive Officer of the Company and was elected Chairman Emeritus; he remains on the Board of Directors. Arthur O. Sulzberger, Jr. was appointed Chairman of the Board and continues as Publisher of The New York Times. Russell T. Lewis, President of the Company, was appointed to the additional position of Chief Executive Officer, and Michael Golden was elected to the Board and appointed Vice Chairman and Senior Vice President. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.2 By-laws as amended through October 16, 1997 10.20 The Company's Non-Employee Directors Deferral Plan 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: November 12, 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 September 28, 1997 Exhibit No. Exhibit - ----------- ------- 3.2 By-laws as amended through October 16, 1997 10.20 The Company's Non-Employee Directors Deferral Plan. 11 Statements of Computation of Primary and Fully Diluted Net Income Per Share 27 Financial Data Schedule 20 EX-3.2 2 BY-LAWS EXHIBIT 3.2 THE NEW YORK TIMES COMPANY BY-LAWS As Amended by the Board of Directors October 21, 1968, February 26, 1969, March 24, 1971, March 29, 1972, March 28, 1973, May 30, 1973, November 28, 1973, March 27, 1974, March 31, 1976, April 26, 1977, January 30, 1978, October 25, 1978, April 3, 1979, July 23, 1979, March 20, 1980, May 15, 1980, March 19, 1981, March 18, 1982, February 17, 1983, April 28, 1983, February 16, 1984, July 18, 1985, February 20, 1986, April 30, 1986, October 16, 1986, February 19, 1987, February 18, 1988, March 16, 1989, February 15, 1990, February 21, 1991, February 20, 1992, February 18, 1993, October 21, 1993, December 16, 1993, February 17, 1994, February 16, 1995, March 20, 1997 and October 16, 1997. As Ratified by the Class B Stockholders April 22, 1969 and the Class A and Class B Stockholders (Article XI only) April 19, 1988 BY-LAWS OF THE NEW YORK TIMES COMPANY
As Amended by the Board of Directors October 21, 1968 As Ratified by the February 26, 1969 Class B Stockholders March 24, 1971 April 22, 1969 March 29, 1972 and the Class A and March 28, 1973 Class B Stockholders May 30, 1973 (Article XI only) November 28, 1973 April 19, 1988 March 27, 1974 March 31, 1976 April 26, 1977 January 30, 1978 October 25, 1978 April 3, 1979 July 23, 1979 March 20, 1980 May 15, 1980 March 19, 1981 March 18, 1982 February 17, 1983 April 28, 1983 February 16, 1984 July 18, 1985 February 20, 1986 April 30, 1986 October 16, 1986 February 19, 1987 February 18, 1988 March 16, 1989 February 15, 1990 February 21, 1991 February 20, 1992 February 18, 1993 October 21, 1993 December 16, 1993 February 17, 1994 February 16, 1995 March 20, 1997 October 16, 1997
INDEX
PAGE ----- ARTICLE I. STOCKHOLDERS.......................................................................... 1 1. Annual Meeting..................................................................... 1 2. Special Meetings................................................................... 1 3. Notice of Meetings................................................................. 1 4. Quorum............................................................................. 1 5. Voting............................................................................. 1 ARTICLE II. CLOSING TRANSFER BOOKS; SETTING RECORD DATE........................................... 2 1. Qualification of Voters............................................................ 2 2. Determination of Stockholders of Record for Other Purposes......................... 2 ARTICLE III. BOARD OF DIRECTORS.................................................................... 2 1. Number, Classification, Election and Qualifications................................ 2 2. Vacancies.......................................................................... 2 3. Regular Meetings................................................................... 2 4. Special Meetings................................................................... 3 5. Quorum............................................................................. 3 6. Committees......................................................................... 3 7. Salaries........................................................................... 3 8. Resignation........................................................................ 4 9. Telephonic Meetings................................................................ 4 ARTICLE IV. OFFICERS.............................................................................. 4 1. Appointment........................................................................ 4 2. Term of Office..................................................................... 4 3. The Chairman of the Board.......................................................... 4 4. The Vice Chairman of the Board..................................................... 4 5. The President...................................................................... 4 6. Vice Presidents.................................................................... 5 7. The Secretary...................................................................... 5 8. The Treasurer...................................................................... 5 9. Duties of Officers may be Delegated................................................ 5 ARTICLE V. STOCK CERTIFICATES.................................................................... 5 1. Issuance of Stock Certificates..................................................... 5 2. Lost Stock Certificates............................................................ 5 3. Transfers of Stock................................................................. 5 4. Regulations........................................................................ 6 ARTICLE VI. SEAL.................................................................................. 6 ARTICLE VII. CHECKS................................................................................ 6 ARTICLE VIII. BOOKS OF ACCOUNT AND STOCK BOOK....................................................... 6 ARTICLE IX. FISCAL YEAR........................................................................... 6 ARTICLE X. VOTING SECURITIES..................................................................... 6 ARTICLE XI. INDEMNIFICATION....................................................................... 7 1. Directors and Officers............................................................. 7 2. Non-Exclusivity.................................................................... 7
ii
PAGE ----- 3. Continuity of Rights............................................................... 7 ARTICLE XII. INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS WITH THE COMPANY...................... 7 ARTICLE XIII. NOTICES............................................................................... 8 ARTICLE XIV. AMENDMENT............................................................................. 8
iii THE NEW YORK TIMES COMPANY BY-LAWS ARTICLE I STOCKHOLDERS 1. ANNUAL MEETING. The Annual Meeting of Stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the third Friday in May, at such time and place either within or without the State of New York as may be specified by the Board of Directors. 2. SPECIAL MEETINGS. Special meetings of the stockholders, to be held at such place either within or without the State of New York and for the purpose or purposes as may be specified in the notices of such meetings, may be called by the Chairman of the Board or the President and shall be called by the President or the Secretary at the request of a majority of the Board of Directors or of stockholders owning 25 per cent or more of the shares or stock of the Company issued and outstanding and entitled to vote on any action proposed by such stockholders for such meetings. Such request shall be in writing and shall state the purpose or purposes of the proposed meeting. 3. NOTICE OF MEETINGS. Notice of the time, place and purpose or purposes of every meeting of stockholders shall be in writing, signed by the President or the Secretary, and shall be mailed by the Secretary, or the person designated by him to perform this duty, at least ten, and not more than fifty, days before the meeting, to each stockholder of record entitled to vote at such meeting and to each stockholder of record who would be entitled to have his stock appraised if the action proposed at such meeting were taken. Such notice shall be directed to a stockholder at his address as it appears on the stock book, unless he shall have filed with the Secretary a written request that notices intended for him be mailed to some other address, in which case it will be mailed to the address designated in such request. 4. QUORUM. The holders of record of a majority of the shares of stock issued and outstanding and entitled to vote thereat, present in person or by proxy, shall be requisite and shall constitute a quorum at each meeting of stockholders for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation or by these By-laws; provided that, when any specified action is required to be voted upon by a class of stock voting as a class, the holders of a majority of the shares of such class shall be requisite and shall constitute a quorum for the transaction of such specified action. If, however, there shall be no quorum, the officer of the Company presiding as chairman of the meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. 5. VOTING. Each stockholder entitled to vote on any action proposed at a meeting of stockholders shall be entitled to one vote in person or by proxy for each share of voting stock held of record by him. Every proxy must be executed in writing by the stockholder or by his duly authorized attorney. No proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it shall have specified therein its duration. The vote for directors shall be by ballot, and the election of each director shall be decided by a plurality vote. Except as otherwise provided by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, votes on any other matters coming before any meeting of stockholders shall be decided by the vote of the holders of a majority of the shares represented at such meeting, in person or by proxy, and entitled to vote on the specific matter. Except as required by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by 1 these By-laws, the chairman presiding at any meeting of stockholders may rule on questions of order or procedure coming before the meeting or submit such questions to the vote of the meeting, which vote may at his direction be by ballot. The chairman shall submit any such questions to the vote of the meeting at the request of any stockholder entitled to vote present in person or by proxy at the meeting, which vote shall be by ballot. ARTICLE II CLOSING TRANSFER BOOKS; SETTING RECORD DATE 1. QUALIFICATION OF VOTERS. The Board of Directors may prescribe a period, not exceeding fifty days prior to the date of any meeting of the stockholders or prior to the last day on which the consent or dissent of stockholders may be effectively expressed for any purpose without a meeting, as the time as of which stockholders entitled to notice of and to vote at such a meeting or whose consent or dissent is required or may be expressed for any purpose, as the case may be, shall be determined, and all persons who were holders of record of voting stock at such time and no others shall be entitled to notice of and to vote at such meeting or to express their consent or dissent, as the case may be. 2. DETERMINATION OF STOCKHOLDERS OF RECORD FOR OTHER PURPOSES.The Board of Directors may fix a time, not exceeding forty days preceding the date fixed for the payment of any dividend or for the making of any distribution or for the delivery of evidences of rights or evidences of interests arising out of any change, conversion or exchange of capital stock, as a record time for the determination of the stockholders entitled to receive any such dividend, distribution, rights or interests, and in such case only stockholders of record at the time so fixed shall be entitled to receive such dividend, distribution, rights or interests. ARTICLE III BOARD OF DIRECTORS 1. NUMBER, CLASSIFICATION, ELECTION AND QUALIFICATIONS.The affairs of the Company shall be managed by a Board of Directors consisting of fifteen members. For the purpose of election of directors only, and not for any other purpose, the fifteen directors shall be divided into two classes, the five directors whom the holders of Class A Common Stock are entitled to elect, to be designated the Class A directors, and the ten directors whom the Class B Common Stock are entitled to elect, to be designated the Class B directors. The directors shall, except as provided in Section 2 of this Article III, be elected by the classes of shares entitled to elect them, by ballot at each annual meeting of stockholders, and shall hold office until the next annual meeting of stockholders and until their successors shall be elected and qualified. All directors must be of full age and at least one shall be a citizen of the United States and a resident of New York State. 2. VACANCIES. Any vacancy in the Board of Directors, whether caused by resignation, death, increase in the number of directors, disqualification or otherwise, may be filled by a majority of the directors in office after the vacancy has occurred, although less than a quorum. A director so elected shall hold office for the unexpired term in respect of which such vacancy occurred. 3. REGULAR MEETINGS. A regular meeting of the Board shall be held in each year immediately following the Annual Meeting of Stockholders or if such meeting be adjourned, the final adjournment thereof at the same place as such meeting of stockholders. No notice of such meeting shall be necessary to the newly elected directors in order to legally constitute the meeting. Other regular meetings of the Board may be held at such time and place, either within or without the State of New York, as shall from time to time be determined by a resolution of the Board. Any business may be transacted at any regular meeting at which a quorum is present. The time and place of any such 2 regular meeting may be changed (i) at the preceding regular meeting; or (ii) subsequent to the adjournment of the preceding regular meeting by consent in writing signed by a majority of the whole Board; provided, however, that in either case notice of such change be served on each director personally or by telegram two days or by mail five days prior to the date originally designated for such regular meeting. 4. SPECIAL MEETINGS. A special meeting of the Board of Directors may be held at the time fixed by resolution of the Board or upon call of the Chairman of the Board, the President or any two directors and may be held at any place within or without the State of New York. Except as otherwise provided by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, notice of the time and place of any special meeting of the Board shall be given by the Secretary or other person designated by him to perform this duty by serving the same personally or by telegram on each director at his post office address as the same shall appear on the books of the Company at least two days previous to such meeting or by mailing a copy of such notice, postage prepaid, to each director at such address at least five days previous to such meeting; provided, however, that no notice need be given to any director if waived by him either before or after the meeting or if he shall be present at such meeting, and any meeting of the Board may be held at any time without notice if all the directors then in office shall be present thereat. Any such notice shall also state the items of business which are expected to come before the meeting, and the items of business transacted at any special meeting of the Board shall be limited to those stated in such notice, unless all the directors are present at the meeting, or all those absent consent in writing either before or after the meeting, to the transaction of an item or items of business not stated in such notice. 5. QUORUM. At all meetings of the Board, the presence of any five of the directors in office shall be necessary and sufficient to constitute a quorum for the transaction of business, and, except as otherwise required by law, by the Certificate of Incorporation, by other certificate filed pursuant to law or by these By-laws, the affirmative vote of a majority of the directors present at any meeting at which a quorum is present shall be necessary for the adoption of any business or resolution which may come before the meeting; provided, however, that in the absence of a quorum a majority of the directors present or any director solely present may adjourn any meeting from time to time until a quorum is present. No notice of any adjournment to a later hour on the date originally designated for the holding of a meeting need be given, but immediate telegraphic notice shall be given by the Secretary or other person designated by him to perform this duty to all directors of any adjournment to any subsequent date, and such notice shall be deemed sufficient, though less than the notice required by Section 3 if such meeting be an adjourned regular meeting of the Board, or by Section 4 if such meeting be an adjourned special meeting of the Board. 6. COMMITTEES. The Board of Directors may by resolution or resolutions passed by a majority of the whole Board designate one or more committees, each committee to consist of three or more of the directors, which, to the extent provided in said resolution or resolutions, shall have and may exercise powers of the Board of Directors in the management of the business and affairs of the Company and may have power to authorize the seal of the Company to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. All committees so appointed shall keep regular minutes of the business transacted at their meetings. 7. SALARIES. Directors, as such, shall not receive any stated salary for their services, but by resolution of the Board may receive an annual retainer and, in addition, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting, or adjourned session thereof, of the Board; provided that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. 3 Members of committees may be allowed such compensation as may be fixed from time to time by the Board for attending committee meetings. 8. RESIGNATION. Any director may, at any time, resign, such resignation to take effect upon receipt of written notice thereof by the President or the Secretary, unless otherwise stated in the resignation. 9. TELEPHONIC MEETINGS. One or more directors may participate in a meeting of the Board of Directors, or a committee designated pursuant to Section 6 of this Article III, by a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear and speak to each other. Participation in a meeting pursuant to this provision shall constitute actual attendance at such meeting. ARTICLE IV OFFICERS 1. APPOINTMENT. The Board of Directors may appoint from their number a Chairman of the Board and a Vice Chairman of the Board. The Board of Directors shall appoint a President, a Secretary and a Treasurer and may also appoint one or more Vice Presidents, none of whom need be members of the Board, and may from time to time appoint such other officers as they may deem proper. Any two of the aforesaid offices, except those of President and Vice President, or President and Secretary, may be filled by the same person. The compensation of all officers of the Company shall be fixed by the Board. 2. TERM OF OFFICE. The officers of the Company shall hold office at the pleasure of the Board of Directors. Any officer elected or appointed by the Board may be removed from office at any time for or without cause by the affirmative vote of a majority of the whole Board of Directors. Any officer may resign his office at any time, such resignation to take effect upon receipt of written notice thereof by the Company, unless otherwise stated in the resignation. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board. 3. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of the Board of Directors and all meetings of the stockholders. He shall have final authority, subject to the control of the Board of Directors, over the general policy and business of the Company, and shall have such other powers and duties as may from time to time be prescribed by the Board of Directors. 4. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board shall have such powers and duties as may from time to time be prescribed by the Board of Directors or by the Chairman of the Board. In the absence or inability to act of the Chairman of the Board, the Vice Chairman of the Board shall preside at all meetings of the Board of Directors and all meetings of the stockholders. 5. THE PRESIDENT. The President shall be the chief executive officer of the Company and as such shall have the general control and management of the business and affairs of the Company subject, however, to the control of the Chairman of the Board. The President shall have the power, subject to the control of the Chairman of the Board, to appoint or discharge and to prescribe the duties and to fix the compensation of such agents and employees of the Company as he may deem necessary. He shall have, as does the Chairman of the Board, the authority to make and sign bonds, mortgages and other contracts and agreements in the name and on behalf of the Company, except when the Board of Directors by resolution instructs the same to be done by some other officer or agent. He shall see that all orders and resolutions of the Board of Directors are carried into effect and shall perform all other duties necessary to his office or properly required of him by the Board of Directors subject, however, to the right of the directors to delegate any specific powers, except such as may by statute be exclusively conferred upon the President, to any other officer or officers of the Company. In the 4 absence or inability to act of the Chairman of the Board, the President shall have the duties prescribed for the Chairman of the Board subject, however, to Section 4 of this Article IV. 6. VICE PRESIDENTS. Each Vice President shall have such powers and perform such duties as may be assigned to him from time to time by the Chairman of the Board or the President. 7. THE SECRETARY. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President. He shall keep in safe custody the seal of the Company and shall see that it is affixed to all documents, the execution of which, on behalf of the Company, under its seal, is necessary or proper, and when so affixed may attest the same. 8. THE TREASURER. The Treasurer shall, if required by the Board of Directors, give a bond for the faithful discharge of his duties in such amount and with such surety or sureties as the Board of Directors may determine; the cost of any such bond, and any expenses incurred in connection therewith, shall be borne by the Company. He shall have the custody of the corporate funds and securities, except as otherwise provided by the Board, and shall cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and the directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Company. 9. DUTIES OF OFFICERS MAY BE DELEGATED. In the case of the absence of any officer, or for any other reason that the Board may deem sufficient, the President or the Board may delegate for the time being the powers or duties of such officer to any other officer or to any director. ARTICLE V STOCK CERTIFICATES 1. ISSUANCE OF STOCK CERTIFICATES. The Capital Stock of the Company shall be represented by certificates signed by the Chairman or the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and sealed with the seal of the Company. Such seal may be a facsimile, engraved or printed and where any such certificate is signed by a transfer agent or transfer clerk and by a registrar the signatures of any officers appearing thereon may be facsimiles, engraved or printed. 2. LOST STOCK CERTIFICATES. The Board of Directors may by resolution adopt, from time to time, such regulations concerning the issue of any new or duplicate certificates for lost, stolen or destroyed stock certificates of the Company as shall not be inconsistent with the provisions of the laws of the State of New York as presently in effect or as they may hereafter be amended. 3. TRANSFERS OF STOCK. Transfers of stock shall be made only on the stock transfer books of the Company, and, except in the case of any such certificate which has been lost, stolen or destroyed, in which case the resolutions of the Board then in effect respecting lost, stolen or destroyed stock certificates shall be complied with, such transfer shall only be made upon surrender to the Company of a certificate for shares for cancellation duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer. Upon the issue of a new certificate to the person 5 entitled thereto, the Company shall cancel the old certificate and record the transaction upon its books. 4. REGULATIONS. Except to the extent that the exercise of such power shall be prohibited or circumscribed by these By-laws, by the Certificate of Incorporation, or other certificate filed pursuant to law, or by statute, the Board of Directors shall have power to make such rules and regulations concerning the issuance, registration, transfer and cancellation of stock certificates as it shall deem appropriate. ARTICLE VI SEAL The seal of the Company shall be circular in form, shall bear the legend: "The New York Times Company--1851 Inc. 1896" and shall contain in the center the letters NYT. ARTICLE VII CHECKS All checks or demands for money and notes of the Company shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. ARTICLE VIII BOOKS OF ACCOUNT AND STOCK BOOK The Company shall keep at its principal office correct books of account of all its business and transactions. A book to be known as the stock book, containing the names alphabetically arranged, of all persons who are stockholders of the Company, showing their places of residence, the number of shares of stock held by them respectively, the times when they respectively became the owners thereof, and the amount paid thereon, shall be kept at the principal office of the Company or its transfer agent. ARTICLE IX FISCAL YEAR The fiscal year of the Company shall be the calendar year unless otherwise provided by the Board of Directors. ARTICLE X VOTING SECURITIES Unless otherwise ordered by the Board of Directors, the President, or, in the event of his absence or inability to act, the Vice Presidents, in order of seniority or priority established by the Board or by the President, unless and until the Board shall otherwise direct, shall have full power and authority on behalf of the Company to attend and to act and to vote, or to execute in the name and on behalf of the Company a proxy authorizing an agent or attorney-in-fact for the Company to attend and to act and to vote at any meetings of security holders of corporations in which the Company may hold securities, and at such meetings he or his duly authorized agent or attorney-in-fact shall possess and may exercise any and all rights and powers incident to the ownership of such securities, and which as the owner 6 thereof the Company might have possessed and exercised, if present. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. ARTICLE XI INDEMNIFICATION 1. DIRECTORS AND OFFICERS. The Company shall, to the fullest extent permitted by applicable law as the same exists or may hereafter be in effect, indemnify any person who is or was made or threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or any other entity, which any director or officer of the Company is serving, has served or has agreed to serve in any capacity at the request of the Company, by reason of the fact that such person or such person's testator or intestate is or was or has agreed to become a director or officer of the Company, or is or was serving or has agreed to serve such other corporation, partnership, joint venture, trust, employee benefit plan or other entity in any capacity, against judgments, fines, amounts paid or to be paid in settlement, taxes or penalties, and costs, charges and expenses, including attorneys' fees, incurred in connection with such action or proceeding or any appeal therein; provided, however, that no indemnification shall be provided to any such person if a judgment or other final adjudication adverse to the director or officer establishes that (i) his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated or (ii) he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled. 2. NON-EXCLUSIVITY. Nothing contained in this Article XI shall limit the right to indemnification and advancement of expenses to which any person would be entitled by law in the absence of this Article, or shall be deemed exclusive of any other rights to which such person seeking indemnification or advancement of expenses may have or hereafter may be entitled under law, any provision of the Certificate of Incorporation, or By-laws, any agreement approved by the Board of Directors, or a resolution of stockholders or directors; and the adoption of any such resolution or entering into of any such agreement approved by the Board of Directors is hereby authorized. 3. CONTINUITY OF RIGHTS. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article XI shall (i) apply with respect to acts or omissions occurring prior to the adoption of this Article XI to the fullest extent permitted by law and (ii) survive the full or partial repeal or restrictive amendment hereof with respect to events occurring prior thereto. ARTICLE XII INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS WITH THE COMPANY A director or officer of the Company shall not be disqualified by his office from dealing or contracting with the Company either as a vendor, purchaser or otherwise, nor shall any transaction or contract of the Company be void or voidable by reason of the fact that any director or officer or any firm of which any director or officer is a member or any corporation of which any director or officer is a shareholder, officer or director, is in any way interested in such transaction or contract, provided that such transaction or contract is or shall be authorized, ratified or approved either (1) by a vote of a majority of a quorum of the Board of Directors, without counting in such majority or quorum any director so interested or member of a firm so interested, or a shareholder, officer or director of a corporation so interested, or (2) by the written consent, or by the vote at any stockholders' meeting of the holders of record of a majority of all the outstanding shares of stock of the Company entitled to 7 vote on such transaction or contract; nor shall any director or officer be liable to account to the Company for any profits realized by or from or through any such transaction or contract of the Company authorized, ratified or approved as aforesaid by reason of the fact that he, or any firm of which he is a member or any corporation of which he is a shareholder, officer or director, was interested in such transaction or contract. Nothing herein contained shall create liability in the events above described or prevent the authorization, ratification or approval of such transactions or contracts in any other manner permitted by law. ARTICLE XIII NOTICES Whenever, under the provisions of these By-laws, notice is required to be given to any director, officer, or stockholder, it shall not be construed to mean personal notice, but unless otherwise expressly stated in these By-laws, such notice may be given in writing by depositing the same in a post office or letter box in a postpaid sealed wrapper, addressed to such stockholder, officer or director, at such address as appears on the books of the Company, and such notice shall be deemed to have been given at the time when the same was thus mailed. ARTICLE XIV AMENDMENT These By-laws may be amended, altered, changed, added to or repealed by a majority vote of all the Class B Common Stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided that such amendments are not inconsistent with any provisions of the Company's Certificate of Incorporation. The Board of Directors, at any regular or at any special meeting, by a majority vote of the whole Board, may amend, alter, change, add to or repeal these By-laws, provided that such amendments are not inconsistent with any provisions of the Company's Certificate of Incorporation, and provided further that if any By-law regulating an impending election of directors is adopted or amended or repealed by the Board, there shall be set forth in the notice of the next stockholders meeting for the election of directors the By-laws so adopted or amended or repealed, together with a concise statement of the changes made. 8 EX-10.20 3 NON-EMPLOYEE DIRECTORS DEFERRAL PLAN EXHIBIT 10.20 THE NEW YORK TIMES COMPANY NON-EMPLOYEE DIRECTORS DEFERRAL PLAN ARTICLE 1 NAME AND PURPOSE The New York Times Company (the "Company") hereby establishes The New York Times Company Non-Employee Directors Deferral Plan (the "Plan"). The purpose of the Plan is to provide a means for the elective deferral of the payment of compensation payable to non-employee directors of the Company. ARTICLE 2 EFFECTIVE DATE The Plan is effective as of September 17, 1997 (the "Effective Date"). ARTICLE 3 PARTICIPATION Each member of the Board of Directors of the Company (the "Board") who is not an employee of the Company or any subsidiary of the Company may participate in the Plan (each a "Non-Employee Director"). ARTICLE 4 DEFERRAL ELECTIONS Pursuant to the terms of the Plan, a Non-Employee Director may make an election to defer a percentage of (i) the annual retainer fee payable in respect of the Non-Employee Director's service on the Board and (ii) the Board meeting fees and committee meeting fees payable in respect of the Non-Employee Director's attendance at such meetings (collectively, "Compensation"). A Non-Employee Director's deferral election may apply to one or both of the foregoing categories of Compensation and may range from 10% to 100% of such Compensation, in 10% gradations, as elected by the Non-Employee Director. Each initial deferral election and each change to an existing deferral election shall be made by the submission of an Election Form as follows: (a) Prior to the Effective Date of the Plan, each Non-Employee Director may submit an Election Form which will be given effect with respect to Compensation payable to the Non-Employee Director after the Effective Date of the Plan. (b) Each Non-Employee Director initially elected or appointed to the Board on or after the Effective Date of the Plan may submit an Election Form prior to the later of thirty (30) calendar days following the Non-Employee Director's election or appointment or the date on which the Non-Employee Director receives his or her first payment of Compensation, which Election Form will be given effect with respect to Compensation payable after the submission of the Election Form. (c) At any time after the election periods described in subparagraphs (a) and (b) above, a Non-Employee Director may submit an initial Election Form or a new Election Form superseding an existing Election Form, in which case such initial or new Election Form will be given effect with respect to Compensation payable after the commencement of the calendar year immediately following the submission of such Election Form. ARTICLE 5 BENEFICIARY DESIGNATION Each Non-Employee Director may, at any time, designate one or more Beneficiaries to receive amounts credited to the Non-Employee Director's deferral account in the event of the Non-Employee Director's death. A Non-Employee Director may make an initial Beneficiary designation, or change an existing Beneficiary designation, by completing and signing a Beneficiary Designation Form and submitting it to the Secretary of the Company. Upon acceptance by the Secretary of the Company of a Non-Employee Director's Beneficiary Designation Form, all Beneficiary designations previously filed shall automatically be canceled. ARTICLE 6 MAINTENANCE OF DEFERRED ACCOUNTS Compensation may be deferred by a Non-Employee Director under the Plan either in the form of cash or units of common stock of the Company ("Stock") (but in no event shall deferrals be made in a combination of cash and Stock). Compensation deferred by a Non-Employee Director under the Plan shall be credited to a record keeping account maintained by the Company in the Non-Employee Director's name as follows: (a) CASH DEFERRALS. Deferrals made in cash shall be credited to an account ("Cash Deferral Account") as of the date on which such Compensation would otherwise have been paid to the Non-Employee Director. All amounts credited to a Non-Employee Director's Cash Deferral Account shall accrue interest from the time such amounts would otherwise have been paid to the Non-Employee Director until the date that such amounts cease accruing interest in connection with a distribution pursuant to Article 7 or Article 12. The interest rate shall be reset annually and shall equal the interest rate payable on one-year U.S. Treasury Bills auctioned in the first auction of the calendar year, compounded as of the last business day of each calendar quarter. (b) STOCK DEFERRALS. Deferrals made in Stock shall be credited to an account ("Stock Deferral Account") as of the last day of the calendar quarter in which such Compensation would otherwise have been paid to the Non-Employee Director. Deferrals made in Stock shall accrue interest from the date such Compensation would otherwise have been paid to the Non-Employee Director to the date such amounts are converted to Stock. All amounts credited to a Non-Employee Director's Stock Deferral Account shall be credited using the Stock price at the close of business on the last business day of the calendar quarter in the period in which such Compensation would otherwise have been paid. Dividends with respect to any such Stock credited to a Non-Employee Director's Stock Deferral Account will be credited as cash on the dividend payment dates and shall accrue interest from such time until such amounts are converted to Stock pursuant to the terms of this paragraph. All such cash shall be converted to Stock at the close of business on the last day of the calendar quarter in which such dividends are credited to the Non-Employee's Stock Deferral Account. The interest rate for purposes of this paragraph (b) shall be the rate set forth in paragraph (a) above. ARTICLE 7 METHOD OF DISTRIBUTION OF DEFERRALS No distribution of deferrals may be made except as provided in this Article 7 and Article 12. All distributions, whether deferrals are made in cash or Stock, shall be made in cash as provided hereunder. (a) CASH DEFERRALS. As described in the following sentence, the full amount credited to a Non-Employee Director's Cash Deferral Account shall be distributed to the Non-Employee Director after the cessation of the Non-Employee Director's service on the Board for any reason other than death. Such distribution shall (i) be made in the form of a lump sum cash payment within thirty (30) days following the end of the month in which the Non-Employee Director ceases service and shall consist of all amounts credited to such Non-Employee Director's Cash Deferral Account plus interest accrued through the end of the month in which the Non-Employee Director ceases service or (ii) be made in the form of substantially equal annual cash installments 2 over a period of up to ten (10) years, payable as of January 30 of each of the selected number of years immediately following the Non-Employee Director's cessation of service, as designated on the Distribution Election Form submitted by the Non-Employee Director. Each such cash installment shall consist of all amounts credited to such Non-Employee Director's Cash Deferral Account, plus interest accrued through the end of the calendar year prior to the year in which each such cash installment is paid, divided by the remaining number of years during which the amounts are to be distributed. For these purposes, a Non-Employee Director may submit an initial Distribution Election Form, or a new Distribution Election Form superseding an existing Distribution Election Form, on any date which is (A) prior to the commencement of the calendar year in which the Non-Employee Director's service ceases and (B) at least six (6) months prior to such cessation of service. If a Non-Employee Director has not properly completed and submitted a Distribution Election Form, the Non-Employee Director's deferral account shall be distributed in the form of a lump sum cash payment as described in (i) above. (b) STOCK DEFERRALS. As described in the following sentence, the full amount credited to a Non-Employee Director's Stock Deferral Account shall be distributed to the Non-Employee Director after the cessation of the Non-Employee Director's service on the Board for any reason other than death. Such distribution shall (i) be made in the form of a lump sum cash payment within thirty (30) days following the end of the month in which the Non-Employee Director ceases service and shall be calculated by multiplying the number of units of Stock credited to the Non-Employee Director's Stock Deferral Account multiplied by the Stock price of a share of Stock on the last business day of the month in which the Non-Employee Director ceases service and crediting such amount with any dividend equivalent and interest accrued thereon through the end of the month in which the Non-Employee Director ceases service, or (ii) be made in the form of substantially equal annual cash installments over a period of up to ten (10) years, payable as of January 30 of each of the selected number of years immediately following the Non-Employee Director's cessation of service, as designated on the Distribution Election Form submitted by the Non-Employee Director. Each such installment shall be calculated by multiplying the number of units of Stock credited to such Non-Employee Director's Stock Deferral Account by the Stock price of a Share of Stock on the last business day of the calendar year prior to the year in which each such installment is paid, and crediting such amount with any dividend equivalent and interest accrued thereon through the end of the calendar year prior to the year in which each such installment is paid, dividing the total thereof by the remaining number of years during which the amounts are to be distributed. For these purposes, a Non-Employee Director may submit an initial Distribution Election Form, or a new Distribution Election Form superseding an existing Distribution Election Form, on any date which is (A) prior to the commencement of the calendar year in which the Non-Employee Director's service ceases and (B) at least six (6) months prior to such cessation of service. If a Non-Employee Director has not properly completed and submitted a Distribution Election Form, the Non-Employee Director's deferral account shall be distributed in the form of a lump sum cash payment as described in (i) above. Notwithstanding the foregoing, at the written request of a Non-Employee Director, the Nominating Committee of the Board (in its role as Plan administrator), may in its sole discretion, accelerate the payment of amounts credited to the Non-Employee Director's deferral account, upon a showing of unforeseeable emergency by such Non-Employee Director, taking into account the Non-Employee Director's other financial resources. Such distribution shall be made in the form of a lump sum cash payment and shall not exceed the lesser of (x) the amount necessary to meet the financial need created by the unforeseeable emergency or (y) all amounts credited to such Non-Employee Director's deferral account plus interest accrued through the end of the month immediately preceding the month in which such request was made. To the extent the amount necessary to meet the Non-Employee Director's unforeseeable emergency exceeds the amount credited to his Cash Deferral Account, the amount of units of Stock necessary to meet such unforeseeable emergency shall be paid in cash and shall be valued as of the day 3 such request is made. For these purposes, "unforeseeable emergency" is a severe financial hardship resulting from extraordinary and unanticipated circumstances arising as a result of one or more recent events beyond the control of the Non-Employee Director. In any event, payment may not be made to the extent such emergency is or may be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidation of the Non-Employee Director's assets, to the extent the liquidation of such assets would not, itself, cause severe financial hardship; and (3) by cessation of deferrals under the Plan. Examples of what are not considered to be unforeseeable emergencies include the payment of a child's tuition expenses or the desire to purchase a home. In the event of a Non-Employee Director's death either before or after the Non-Employee Director's cessation of service on the Board, all amounts then credited to the Non-Employee Director's Cash Deferral Account and Stock Deferral Account shall be distributed to the Non-Employee Director's designated Beneficiaries in the form of a lump sum cash payment within thirty (30) days after the end of the month in which such death occurred or as soon as practicable thereafter and shall consist of all amounts credited to such Non-Employee Director's deferral accounts plus any dividend equivalents and interest accrued through the end of the month in which such death occurred. Units of Stock in a Non-Employee Director's Stock Deferral Account shall be valued as of the last business day of the month in which such death occurred. If the Non-Employee Director has not designated a Beneficiary or the Non-Employee Director's designated Beneficiary(ies) do not survive the Non-Employee Director, the full amount of the Non-Employee Director's deferral account shall be paid to the Non-Employee Director's spouse, or if there is no spouse, to the Non-Employee Director's estate. ARTICLE 8 UNFUNDED STATUS OF THE PLAN A Non-Employee Director shall not have any interest in any amount credited to his or her deferral account until it is distributed in accordance with the Plan. Distributions under the Plan shall be made only from the general assets of the Company. All amounts deferred under the Plan shall remain the sole property of the Company, subject to the claims of its general creditors and available for its use for whatever purposes are desired. With respect to amounts deferred, a Non-Employee Director is merely a general creditor of the Company; and the obligation of the Company hereunder is purely contractual and shall not be funded or secured in any way. ARTICLE 9 NON-ALIENABILITY AND NON-TRANSFERABILITY The rights of a Non-Employee Director to the payment of amounts credited to his or her deferral account shall not be assigned, transferred, pledged or encumbered or be subject in any manner to alienation or anticipation. A Non-Employee Director may not borrow against amounts credited to the Non-Employee Director's account and such amounts shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, change, garnishment, execution or levy of any kind, whether voluntary or involuntary, prior to distribution. ARTICLE 10 STATEMENT OF ACCOUNT Statements will be sent to each Non-Employee Director within thirty (30) days of the beginning of each calendar year indicating the balance of the Non-Employee Director's account as of the end of the previous calendar year. 4 ARTICLE 11 ADMINISTRATION The Plan is intended to be self-effectuating and does not require the exercise of discretion by the Company. However, to the extent necessary, the Nominating Committee of the Board shall act as the Plan administrator for purposes of resolving any ambiguities, claims or disputes arising with respect to the Plan or any deferrals under the Plan. As such the Nominating Committee is authorized to make any rulings and determinations that it deems to be appropriate and consistent with the terms and intent of the Plan and all such rulings and determinations shall be final and binding upon all parties for all purposes. Any member of the Nominating Committee making a claim or request to the Nominating Committee with respect to his or her rights or interests under the Plan shall recuse himself or herself from the Nominating Committee's determination with respect to such claim or request. ARTICLE 12 AMENDMENT AND TERMINATION The Plan may, at any time, be amended, modified or terminated by the Board. No amendment, modification or termination shall, without the consent of a Non-Employee Director, adversely affect such Non-Employee Director's rights with respect to amounts accrued under his or her deferral account. Notwithstanding the foregoing or anything else to the contrary contained in the Plan, as a consequence of any such amendment, modification or termination, the Board may provide in its sole discretion that the account of any Non-Employee Director may be paid on an accelerated basis without regard to the tax effect that it may have for the Non-Employee Director or his Beneficiary(ies) or estate. ARTICLE 13 NOTICES All notices and forms to be submitted to the Company hereunder shall be delivered to the attention of the Secretary of the Company. 5 EX-11 4 COMPUTATION OF SHARES 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 Nine Months Ended Sept. 28, 1997 Sept. 29, 1996 Sept. 28, 1997 Sept. 29, 1996 ============================== ============================== PRIMARY Average shares outstanding 95,893 97,008 96,631 97,472 ========= ========= ========= ========= Net effect of dilutive stock options and retirement units 3,753 -- 3,475 -- --------- --------- --------- --------- Total primary average shares outstanding 99,646 97,008 100,106 97,472 ========= ========= ========= ========= Net Income $ 46,228 $ (47,684) $ 183,016 $ 31,842 Less cumulative preference stock dividends (24) (24) (72) (72) --------- --------- --------- --------- Total $ 46,204 $ (47,708) $ 182,944 $ 31,770 ========= ========= ========= ========= Primary earnings per share $ 0.46 $ (0.49) $ 1.83 $ 0.33 ========= ========= ========= ========= FULLY DILUTED Average shares outstanding 95,893 97,008 96,631 97,472 Net effect of dilutive stock options and retirement units 4,059 2,305 3,975 2,034 --------- --------- --------- --------- Total fully diluted average shares outstanding 99,952 99,313 100,606 99,506 ========= ========= ========= ========= Net Income $ 46,228 $ (47,684) $ 183,016 $ 31,842 Less cumulative preference stock dividends (24) (24) (72) (72) --------- --------- --------- --------- Total $ 46,204 $ (47,708) $ 182,944 $ 31,770 ========= ========= ========= ========= Fully diluted earnings per share $ 0.46 $ (0.48) $ 1.82 $ 0.32 ========= ========= ========= =========
EX-27 5 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-28-1997 SEP-28-1997 37,843 0 340,118 27,540 30,198 474,371 2,271,947 888,007 3,531,047 636,897 0 0 1,753 11,296 1,630,633 3,531,047 0 2,097,989 0 1,041,755 0 0 31,406 296,259 113,243 183,016 0 0 0 183,016 1.83 1.82
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