-----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, Hi094/F2aDwF3Vsoa7qecXkQQtklN2Uf69sKjrgVIKFFFETdKWv8NUKet5SuQYwD ranyHZGBzS+y42vd5Z1dGw== 0001047469-98-030403.txt : 19980812 0001047469-98-030403.hdr.sgml : 19980812 ACCESSION NUMBER: 0001047469-98-030403 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980628 FILED AS OF DATE: 19980811 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: 98682396 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 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For Quarter Ended JUNE 28, 1998 ----------------------- Commission file number 1-5837 ----------------------- THE NEW YORK TIMES COMPANY -------------------------- (Exact name of registrant as specified in its charter) NEW YORK 13-1102020 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 229 WEST 43RD STREET, NEW YORK, NEW YORK ---------------------------------------- (Address of principal executive offices) 10036 ---------- (Zip Code) Registrant's telephone number, including area code 212-556-1234 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No . Number of shares of each class of the registrant's common stock outstanding as of August 2, 1998 (exclusive of treasury shares): Class A Common Stock 188,666,392 shares ----------- Class B Common Stock 849,602 shares ----------- Exhibit Index is located on page 20 of this document PART I. FINANCIAL INFORMATION Item 1. Financial Statements THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars and shares in thousands, except per share data)
Three Months Ended Six Months Ended ---------------------------- ------------------------------ June 28, June 29, June 28, June 29, 1998 1997 1998 1997 ---------------------------- ------------------------------ (13 Weeks) (26 Weeks) Revenues Advertising........................................... $ 531,977 $ 504,938 $1,039,455 $ 982,316 Circulation........................................... 170,503 169,132 340,025 337,686 Other................................................. 46,710 47,877 92,273 94,406 ---------- ---------- ---------- ---------- Total.............................................. 749,190 721,947 1,471,753 1,414,408 ---------- ---------- ---------- ---------- Production costs Raw materials......................................... 88,746 77,797 176,524 152,772 Wages and benefits.................................... 147,516 149,278 301,238 307,642 Other................................................. 121,918 118,191 243,722 231,338 ---------- ---------- ---------- ---------- Total.............................................. 358,180 345,266 721,484 691,752 Selling, general and administrative expenses.............. 245,896 249,332 488,785 494,052 ---------- ---------- ---------- ---------- Total.............................................. 604,076 594,598 1,210,269 1,185,804 ---------- ---------- ---------- ---------- Operating profit.......................................... 145,114 127,349 261,484 228,604 Income from joint ventures................................ 3,907 3,052 8,278 4,367 Interest expense - net.................................... 10,484 11,389 20,627 19,707 Gains on dispositions of assets........................... 8,000 - 12,619 - ---------- ---------- ---------- ---------- Income before income taxes and extraordinary charge....... 146,537 119,012 261,754 213,264 Income taxes.............................................. 63,806 34,063 114,386 76,476 ---------- ---------- ---------- ---------- Income before extraordinary charge........................ 82,731 84,949 147,368 136,788 Extraordinary charge, net of tax.......................... 7,716 - 7,716 - ---------- ---------- ---------- ---------- Net income $ 75,015 $ 84,949 $ 139,652 $ 136,788 ========== ========== ========== ========== Average number of common shares outstanding:* Basic................................................... 191,530 192,356 192,060 194,000 Diluted................................................. 196,138 196,119 196,474 197,879 Per share of common stock:* Basic earnings before extraordinary charge.............. $ 0.43 $ 0.44 $ 0.77 $ 0.70 Extraordinary charge, net of tax........................ (0.04) - (0.04) - ---------- ---------- ---------- ---------- Basic earnings after extraordinary charge............... $ 0.39 $ 0.44 $ 0.73 $ 0.70 ========== ========== ========== ========== Diluted earnings before extraordinary charge............ $ 0.42 $ 0.43 $ 0.75 $ 0.69 Extraordinary charge, net of tax........................ (0.04) - (0.04) - ---------- ---------- ---------- ---------- Diluted earnings after extraordinary charge............. $ 0.38 $ 0.43 $ 0.71 $ 0.69 ========== ========== ========== ========== Dividends............................................... $ 0.095 $ 0.080 $ 0.180 $ 0.155 ========== ========== ========== ==========
* All share and per share information is presented on a post-2-for-1 split basis. See notes to condensed consolidated financial statements. 2 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
June 28, December 28, 1998 1997 --------------- --------------- ASSETS (Unaudited) CURRENT ASSETS Cash and short-term investments.......................................... $ 42,237 $ 106,820 Accounts receivable - net................................................ 325,198 331,287 Inventories Newsprint and magazine paper.......................................... 32,899 27,694 Work-in-process, etc.................................................. 4,003 4,440 --------------- --------------- Total inventories................................................. 36,902 32,134 Deferred income taxes.................................................... 44,204 44,204 Other current assets..................................................... 70,811 85,556 --------------- --------------- Total current assets.............................................. 519,352 600,001 --------------- --------------- OTHER ASSETS Investment in joint ventures............................................. 130,835 133,054 Property, plant and equipment (less accumulated Depreciation of $917,935 in 1998 and $868,274 in 1997)................ 1,325,603 1,366,931 Intangible assets acquired Cost in excess of net assets acquired (less accumulated Amortization of $225,661 in 1998 and $210,815 in 1997)................ 978,359 993,206 Other intangible assets acquired (less accumulated Amortization of $54,229 in 1998 and $43,975 in 1997) ................. 374,245 384,499 Miscellaneous assets..................................................... 152,438 145,492 --------------- --------------- TOTAL ASSETS...................................................... $ 3,480,832 $ 3,623,183 =============== ===============
See notes to condensed consolidated financial statements. 3 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
June 28, December 28, 1998 1997 --------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) CURRENT LIABILITIES Accounts payable...................................................... $ 172,923 $ 189,580 Accrued payroll and other related liabilities......................... 75,777 103,511 Accrued expenses...................................................... 165,971 175,500 Unexpired subscriptions............................................... 80,440 82,621 Current portion of long-term debt and Capital lease obligations........................................... 104,122 104,033 --------------- --------------- Total current liabilities.......................................... 599,233 655,245 --------------- --------------- OTHER LIABILITIES Long-term debt........................................................ 414,898 490,237 Capital lease obligations............................................. 43,019 45,191 Deferred income taxes................................................. 184,739 170,870 Other................................................................. 548,152 533,578 --------------- --------------- Total other liabilities............................................ 1,190,808 1,239,876 --------------- --------------- Total liabilities.................................................. 1,790,041 1,895,121 --------------- --------------- STOCKHOLDERS' EQUITY Capital stock......................................................... 21,061 11,385 Additional paid-in capital............................................ 255,684 773,367 Earnings reinvested in the business................................... 1,594,699 1,488,910 Common stock held in treasury, at cost................................ (180,653) (545,600) --------------- --------------- Total stockholders' equity......................................... 1,690,791 1,728,062 --------------- --------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................ $ 3,480,832 $ 3,623,183 =============== ===============
See notes to condensed consolidated financial statements. 4 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
For the Six Months Ended -------------------------------------- June 28, June 29, 1998 1997 -------------------------------------- (26 Weeks) OPERATING ACTIVITIES: Net cash provided by operating activities.......................................... $ 228,398 $ 190,982 ---------- ---------- INVESTING ACTIVITIES: Additions to property, plant and equipment......................................... (44,175) (94,777) Net proceeds from dispositions..................................................... 9,934 11,522 Other - net........................................................................ (991) (300) ---------- ---------- Net cash used in investing activities.............................................. (35,232) (83,555) ---------- ---------- FINANCING ACTIVITIES: Commercial paper borrowings........................................................ 494 28,700 Long-term debt reduction........................................................... (2,184) (1,884) Early extinguishment of debt....................................................... (75,616) - Capital shares Issuance .................................................................... 4,653 5,053 Repurchase.................................................................... (150,579) (110,154) Dividends paid to stockholders..................................................... (34,517) (30,064) Other - net........................................................................ - 344 ---------- ---------- Net cash used in financing activities.............................................. (257,749) (108,005) ---------- ---------- Decrease in cash and short-term investments........................................ (64,583) (578) Cash and short-term investments at the beginning of the year....................... 106,820 39,103 ---------- ---------- Cash and short-term investments at the end of the quarter.......................... $ 42,237 $ 38,525 ========== ==========
SUPPLEMENTAL INFORMATION: Noncash Financing Activities: Repurchases of common stock in connection with certain exercises under the Company's stock option plans increased treasury stock by $25,550 and $30,146 in 1998 and 1997, respectively. Additional paid-in capital increased by a corresponding amount. On June 17, 1998, a 2-for-1 split of the Company's Class A and B Common Stock was effective. On this same date, the Company retired certain Class A and B treasury shares. See Note 2 to the Condensed Consolidated Financial Statements. Other: 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 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 28, 1997, 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 1997 Condensed Consolidated Financial Statements to conform with classifications used at June 28, 1998. 2. COMMON STOCK SPLIT, RETIREMENT AND DIVIDEND INCREASE On June 17, 1998, a 2-for-1 split of the Company's Class A and B Common Stock was effective. As a result of the stock split, the number of authorized Class A and B shares increased to 300,000,000 and 849,602, respectively. The number of shares of Class A and B Common Stock outstanding on June 17, 1998, after giving effect to the split, was 190,193,392 and 849,602, respectively. All references in the Consolidated Financial Statements referring to per share, share price and share amounts have been adjusted retroactively for the 2-for-1 stock split. As a result of the issuance of additional shares, approximately $9,552,000 was transferred from additional paid-in capital to capital stock to record the distribution. On June 17, 1998, the Company retired 16,911,881 shares of Class A Common Stock and 139,943 shares of Class B Common Stock. The Company accounts for treasury stock retirements on a first-in-first-out basis. As a result of this retirement, treasury stock and additional paid-in capital were reduced by approximately $539,211,000. On May 21, 1998, the Board of Directors authorized a $.01 increase, on a post-split basis, in the quarterly dividend payments on both classes of common stock. 6 3. INCOME TAXES The reasons for the variances between the effective tax rate on income before income taxes and the federal statutory rate, exclusive of an extraordinary charge and gains on dispositions of assets in 1998 and a favorable adjustment resulting from the completion of the Company's federal tax audits for periods through 1992 ("favorable tax adjustment") in 1997, are as follows:
Three Months Ended Six Months Ended --------------------------------------------------------------------------------- June 28, June 29, June 28, June 29, 1998 1997 1998 1997 - ----------------------------------------------------------------------------------------------------------------------------------- % of % of % of % of (Dollars in thousands) Amount Pre-tax Amount Pre-tax Amount Pre-tax Amount Pre-tax - ----------------------------------------------------------------------------------------------------------------------------------- Tax at federal statutory rate................ $48,488 35.0% $41,654 35.0% $87,197 35.0% $74,642 35.0% State and local taxes, net of federal benefits 9,296 6.7 9,346 7.9 16,817 6.8 16,401 7.7 Amortization of nondeductible intangible assets acquired............................ 2,632 1.9 2,952 2.5 4,852 1.9 5,154 2.4 Other - net ................................. (96) (0.1) (1,889) (1.5) 7 0.0 (1,721) (0.8) --------------------------------------------------------------------------------- Subtotal..................................... $60,320 43.5% $52,063 43.8% $108,873 43.7% $94,476 44.3% Favorable tax adjustment .................... - (18,000) - (18,000) Gains on dispositions of assets.............. 3,486 - 5,513 - --------------------------------------------------------------------------------- Income taxes................................. $63,806 $34,063 $114,386 $76,476 =================================================================================
4. DEBT OBLIGATIONS AND EXTRAORDINARY CHARGE On April 2, 1998, the Company's tender offer for any and all of its $150,000,000 of outstanding publicly-held 8.25% debentures due March 15, 2025, expired. The debenture holders tendered approximately $78,100,000 of the outstanding debentures. As a result, the Company recorded a pre-tax extraordinary charge of approximately $13,700,000, or $.04 basic and diluted earnings per share in the second quarter of 1998 in connection with this early extinguishment of debt. The Company currently maintains $300,000,000 in revolving credit agreements which require, among other matters, specified levels of stockholders' equity. At June 28, 1998, approximately $900,000,000 of stockholders' equity was unrestricted under these agreements. In July 1998, the Company renewed its $100.0 million revolving credit agreement, which had a maturity of July 1998, through July 1999. The remaining $200.0 million revolving credit agreement expires in July 2002. 7 5. DISPOSITIONS OF ASSETS During the second quarter of 1998, the Company recorded an $8,000,000 pre-tax gain, or $.02 basic and diluted earnings per share, from the satisfaction of a post-closing requirement related to the 1997 sale of the Company's non-golf related publications. During the first quarter of 1998, the Company recorded a $4,600,000 pre-tax gain, or $.01 basic and diluted earnings per share, resulting from the sale of equipment. 6. COMMON STOCK REPURCHASES During the first six months of 1998, the Company repurchased approximately 3,900,000 shares of Class A Common Stock at a cost of approximately $131,000,000. The average price of these repurchases was approximately $34 per share. To date, approximately $48,500,000 remains from a December 1997 Board of Directors authorization of $215,000,000. 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 $17,700,000 and $9,400,000 in the first six months of 1998 and 1997, respectively. 7. VOLUNTARY STAFF REDUCTIONS At June 28, 1998, and December 28, 1997, approximately $18,000,000 and $25,000,000, respectively, of the total amount of prior charges related to voluntary staff reductions remain unpaid. The $18,000,000 balance is expected to be paid within two years. No such charges were recorded in the second quarter of 1997 or in the second quarter and first six months of 1998. In the first quarter of 1997, the Company recorded approximately $2,500,000 in pre-tax charges, or $.01 basic and diluted earnings per share, relating to staff reductions at corporate headquarters and The New York Times. 8. COMPREHENSIVE INCOME In the first quarter of 1998, the Company adopted the provisions of the Financial Accounting Standards Board's Statement of Accounting Standards No. 130, Reporting Comprehensive Income. Comprehensive Income for the Company includes foreign currency translation adjustments in addition to net income as reported in the Company's Condensed Consolidated Financial Statements. Comprehensive income was $75,515,000 and $140,152,000 for the second quarter and first six months of 1998, respectively, and was the same as net income for the second quarter and first six months of 1997. 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Advertising and circulation revenues accounted for approximately 71% and 23%, respectively, of the Company's revenues in the second quarter and first six months of 1998. 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 and represented approximately 14% of the Company's total costs in the first six months of 1998. The Company's cost of newsprint was higher in the second quarter and the first six months of 1998 than in the comparable 1997 periods. A price increase may occur later in the year which could further increase the Company's cost of newsprint in 1998. The Company expects that any percentage increase in its cost of newsprint in the second half of 1998 (over the second half of 1997) will be lower than the percentage increase experienced in the first half of 1998 (over the first half of 1997). RESULTS OF OPERATIONS The 1998 second-quarter net income increased 16.8% to $78.2 million, or $.41 basic ($.40 diluted) earnings per share, from net income of $66.9 million, or $.35 basic ($.34 diluted) earnings per share in the second quarter of 1997, exclusive of special items and an extraordinary charge noted below. For the first six months of 1998, net income increased 16.7% to $140.3 million, or $.74 basic ($.72 diluted) earnings per share, from $120.2 million or $.62 basic ($.61 diluted) earnings per share in the first six months of 1997, exclusive of special items and an extraordinary charge described below. For the first six months of 1998, the increase in net income was primarily due to higher advertising revenues and cost containment, partially offset by higher newsprint costs and depreciation expense. Including special items and an extraordinary charge, the Company's 1998 second-quarter net income decreased to $75.0 million, or $.39 basic ($.38 diluted) earnings per share, from its 1997 second-quarter net income of $84.9 million, or $.44 basic ($.43 diluted) earnings per share. For the first six months of 1998, net income, including special items and an extraordinary charge, rose to $139.7 million, or $.73 basic ($.71 diluted) earnings per share from $136.8 million, or $.70 basic ($.69 diluted) earnings per share in the first six months of 1997. The 1997 second-quarter and first six-month figures include a favorable tax adjustment of $18.0 million, or $.09 basic and diluted earnings per share. (Note: All share and per share amounts are presented on a post-2-for-1 split basis.) 9 The special items and extraordinary charge that affected the 1998 and 1997 second-quarter and first six-month results were as follows: 1998 o $7.7 million after-tax extraordinary charge for the second quarter and first six months ($.04 basic and diluted earnings per share) in connection with the Company's repurchase of $78.1 million of its $150.0 million, 8.25% notes due in 2025 ("debt extinguishment"). o $8.0 million pre-tax gain for the second quarter and first six months ($.02 basic and diluted earnings per share) from the satisfaction of a post-closing requirement related to the 1997 sale of the non-golf related publications ("magazine gain"). o $4.6 million pre-tax gain for the first six months ($.01 basic and diluted earnings per share) from the sale of equipment ("gain on sale of equipment"). 1997 o $18.0 million after-tax gain for the second quarter and first six months ($.09 basic and diluted earnings per share) resulting from the completion of the Company's federal income tax audits for the periods through 1992 ("favorable tax adjustment"). o $2.5 million pre-tax charge for the first six months ($.01 basic and diluted earnings per share) for severance and related costs resulting from work force reductions ("buyouts"). Revenues for the second quarter of 1998 increased 3.8% to $749.2 million led by the Newspaper Group's 7.1% gain in advertising revenues. For the first six months of 1998, revenues grew 4.1% to $1.5 billion. On a comparable basis, adjusted for the 1997 disposition of certain properties (primarily the non-golf related publications), 1998 second-quarter and first six-month revenues increased by approximately 5.3% and 6.0% over 1997, respectively. Production costs for the second quarter of 1998 were $358.2 million, an approximately 3.7% increase over the 1997 second-quarter production costs of $345.3 million. For the first six months of 1998, production costs increased 4.3% to $721.5 million from $691.8 million in the first six months of 1997. The increase was primarily due to higher newsprint costs and depreciation expense associated with the new production facilities. Selling, general and administrative expenses ("SGA expenses") in the second quarter of 1998 decreased 1.4% to $245.9 million from $249.3 million in the second quarter of 1997. For the first six months of 1998, SGA expenses decreased 0.6% to $488.8 million from $491.6 million in the first six months of 1997, exclusive of buyouts. The decrease was primarily due to lower compensation expenses and reduced expenses as a result of the disposition of certain properties in 1997. Operating profit in the second quarter of 1998 increased 13.9% to $145.1 million compared with $127.3 million in the second quarter of 1997. For the first six months of 1998, operating profit rose 13.1% to $261.5 million from $231.1 million in the first six months of 1997, excluding buyouts. The improvement in operating profit was principally due to higher advertising revenues at the Newspaper Group partially offset by higher newsprint costs. 10 The 1998 second-quarter earnings, before interest, income taxes, depreciation and amortization ("EBITDA"), excluding the magazine gain and the extraordinary charge, rose 12.7% to $196.0 million from $174.0 million in 1997. Including the magazine gain and the extraordinary charge, EBITDA decreased 0.9% to $190.3 million from $192.0 million in the second quarter of 1997. For the first six months of 1998, EBITDA, excluding gains on dispositions of assets and the extraordinary charge, rose 14.4% to $362.6 million from $317.0 million in the first six months of 1997. Including the special items and the extraordinary charge, EBITDA for the first six months of 1998 rose 7.9% to $361.5 million from $335.0 million in the first six months of 1997. 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 increased to $3.9 million and $8.3 million in the second quarter and first six months of 1998, respectively, from $3.1 million and $4.4 million in the comparable periods of 1997. The increase was primarily due to higher income from equity investments in paper mills. Interest expense - net decreased to $10.5 million in the second quarter of 1998 from $11.4 million in the second quarter of 1997. The decrease for the 1998 second quarter is primarily the result of a reduction in total indebtedness, partially offset by lower capitalized interest expense associated with construction. Total interest income and capitalized interest included in the second quarter amounts were $0.9 million in 1998 and $1.7 million in 1997. For the first six months of 1998, Interest expense - net increased to $20.6 million from $19.7 million in 1997. The increase for the first six months of 1998 is primarily attributable to a reduction in the amount of capitalized interest expense associated with construction, partially offset by a decrease in interest expense related to total indebtedness and an increase in investment income. Total interest income and capitalized interest included in the first six-month periods were $2.5 million in 1998 and $5.8 million in 1997. The Company's effective tax rate was 43.5% in the second quarter of 1998, compared with 43.8% in the second quarter of 1997, exclusive of a special item and an extraordinary charge. For the first six months of 1998, the effective tax rate was 43.7% compared with 44.3% in the first six months of 1997, exclusive of special items and an extraordinary charge. The decreases in the effective tax rates were primarily related to lower state and local income taxes. 11 SEGMENT INFORMATION
- -------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended --------------------------------------------------------------------- June 28, June 29, June 28, June 29, (Dollars in thousands) 1998 1997 1998 1997 - -------------------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) REVENUES Newspapers $671,786 $637,099 $1,329,116 $1,258,059 Magazines 36,355 46,047 68,290 86,194 Broadcast 41,049 38,801 74,347 70,155 - -------------------------------------------------------------------------------------------------------------- Total $749,190 $721,947 $1,471,753 $1,414,408 ============================================================================================================== OPERATING PROFIT (LOSS) Newspapers $129,484 $119,423 $ 237,073 $ 217,886 Magazines 12,003 9,247 20,321 14,958 Broadcast 13,610 11,905 20,894 17,589 Unallocated Corporate Expenses (9,983) (13,226) (16,804) (21,829) - -------------------------------------------------------------------------------------------------------------- Total $145,114 $127,349 $ 261,484 $ 228,604 ============================================================================================================== DEPRECIATION AND AMORTIZATION Newspapers $ 42,629 $ 40,115 $ 84,644 $ 77,014 Magazines (2,126) (1,736) (4,257) (3,473) Broadcast 4,410 4,703 8,866 9,421 Corporate 2,014 431 3,423 854 Joint Ventures 88 88 176 177 - -------------------------------------------------------------------------------------------------------------- Total $ 47,015 $ 43,601 $ 92,852 $ 83,993 ==============================================================================================================
A discussion of the operating results of the Company's segments follows: NEWSPAPER GROUP: The newspaper group consists of 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, among other things, projects developed in electronic media.
- ------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ------------------------------------------------------------------ June 28, June 29, June 28, June 29, (Dollars in thousands) 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) REVENUES Newspapers $666,944 $634,451 $1,318,936 $1,253,141 New Ventures 4,842 2,648 10,180 4,918 - ------------------------------------------------------------------------------------------------------------- Total Revenues $671,786 $637,099 $1,329,116 $1,258,059 - ------------------------------------------------------------------------------------------------------------- EBITDA Newspapers $174,955 $160,650 $ 325,884 $ 297,307 New Ventures (2,842) (1,112) (4,167) (2,407) - ------------------------------------------------------------------------------------------------------------- Total EBITDA $172,113 $159,538 $ 321,717 $ 294,900 - ------------------------------------------------------------------------------------------------------------- OPERATING PROFIT (LOSS) Newspapers $132,803 $120,801 $ 242,055 $ 220,771 New Ventures (3,319) (1,378) (4,982) (2,885) - ------------------------------------------------------------------------------------------------------------- Total Operating Profit $129,484 $119,423 $ 237,073 $ 217,886 - -------------------------------------------------------------------------------------------------------------
12 The Newspaper Group's operating profit was $129.5 million in the second quarter of 1998 compared with $119.4 million in the second quarter of 1997. For the first six months of 1998, operating profit was $237.1 million compared with $219.4 million in the first six months of 1997, excluding buyouts. Revenues were $671.8 million in the second quarter of 1998, compared with $637.1 million in the second quarter of 1997. For the first six months of 1998, revenues were $1.33 billion compared with $1.26 billion in the first six months of 1997. The increase in the Group's revenues for the 1998 second quarter and the first six months was primarily due to higher advertising revenues of 7.1% and 7.7%, respectively, as a result of higher rates and volume. The Company currently anticipates that 1998 advertising revenue at the Newspaper Group will increase in a range between 6.5% and 8.0%. The improvement in operating profit for the second quarter and six months was primarily attributable to increases in advertising revenue, partially offset by higher depreciation expense related to new production facilities and unfavorable increases in the cost of newsprint of 18% and 21% for the quarter and six months, respectively. Increases of 5% and 6% in the respective periods were volume related, principally due to higher advertising and new sections, and the remainder was due to higher prices. Average circulation of daily newspapers for the second quarter and first six months ended June 28, 1998, was as follows:
- --------------------------------------------------------------------------------------------- Three Months Ended June 28, 1998 ---------------------------------------------------------- (Copies in thousands) Weekday % Change Sunday % Change - --------------------------------------------------------------------------------------------- AVERAGE NET PAID CIRCULATION The New York Times 1,072.1 (1.5)% 1,633.7 (2.4)% The Boston Globe 468.8 (0.9)% 753.6 0.1% Regional Newspapers 724.9 0.5% 771.3 0.2% - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- Six Months Ended June 28, 1998 ---------------------------------------------------------- (Copies in thousands) Weekday % Change Sunday % Change - --------------------------------------------------------------------------------------------- AVERAGE NET PAID CIRCULATION The New York Times 1,087.7 (0.4)% 1,645.5 (0.8)% The Boston Globe 465.4 (0.5)% 749.8 (0.4)% Regional Newspapers 751.2 0.7% 802.5 0.2% - ---------------------------------------------------------------------------------------------
The average circulation declines for the second quarter and first six months at The Times primarily reflect The Times' continuing strategy to improve the quality of its home delivered circulation base by reducing the use of promotional discounts for new subscription orders. Though this strategy results in fewer new subscribers in the short term, the remaining subscribers have a longer life as customers, resulting in higher circulation in the long term, and a more valuable audience for advertisers. Complementing this quality strategy are a number of vigorous marketing initiatives to improve single-copy sales and encourage continued circulation growth by expanding availability in major markets across the nation. Additionally, The Times and The Boston Globe have added new sections and made improvements in delivery service. 13 Advertising volume on a comparable basis for the second quarter and first six months was as follows:
- ------------------------------------------------------------------------------------------------ Three Months Ended Six Months Ended June 28, 1998 June 28, 1998 ---------------------------------------------------- (Inches in thousands) Volume % Change Volume % Change - ------------------------------------------------------------------------------------------------ ADVERTISING VOLUME (EXCLUDING PREPRINTS) The New York Times 1,020.3 0.9% 1,961.0 1.1% The Boston Globe 786.4 2.1% 1,498.6 1.3% Regional Newspapers 4,160.4 4.4% 8,007.6 3.6% - ------------------------------------------------------------------------------------------------
Advertising volume at The Times for the second quarter of 1998 increased approximately 0.9% from the 1997 second quarter. The national and classified categories increased 8.4% and 1.9%, respectively, and the retail and zoned categories decreased 9.2% and 3.4%, respectively. For the first six months of 1998, advertising volume increased 1.1% from the comparable 1997 period. The national and classified categories increased 7.3% and 3.7%, respectively, while the retail and zoned categories decreased 7.7% and 4.4%, respectively. Preprint volume was up 3.1% and 9.7% for the second quarter and first six months, respectively, over the comparable 1997 periods. At The Globe, advertising volume for the 1998 second quarter increased 2.1% over the 1997 second quarter. Advertising was higher in the national and classified categories by 14.5% and 0.5%, respectively, while the retail and zoned categories were down 2.8% and 4.2%, respectively. For the first six months of 1998, advertising volume increased 1.3% as a result of improvements in the national and classified categories of 13.9% and 1.0%, respectively, offset by decreased advertising in the retail and zoned categories of 6.3% and 5.3%, respectively. Preprint volume was up 3.7% and 2.4% for the second quarter and first six months, respectively, over the comparable 1997 periods. At the Regional Newspapers, advertising volume for the second quarter increased 4.4% from the 1997 second quarter. The increase was a result of higher volume in the retail, legal and classified categories of 3.5%, 0.4% and 6.3%, respectively, offset by a decrease in the national category of 6.0%. For the first six months of 1998, advertising volume increased 3.6%. Advertising volume was higher in all categories. Preprint volume increased 8.7% and 7.4% for the second quarter and first six month periods, respectively, over the comparable 1997 periods. BROADCAST GROUP: The Broadcast Group consists of eight network-affiliated television stations and two radio stations.
- ------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ------------------------------------------------------------ June 28, June 29, June 28, June 29, (Dollars in thousands) 1998 1997 1998 1997 - ------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) Revenues $41,049 $38,801 $74,347 $70,155 - ------------------------------------------------------------------------------------- EBITDA $18,020 $16,608 $29,760 $27,010 - ------------------------------------------------------------------------------------- Operating Profit $13,610 $11,905 $20,894 $17,589 - -------------------------------------------------------------------------------------
The Broadcast Group's operating profit rose to $13.6 million in the second quarter of 1998 from $11.9 million in 1997, on revenues of $41.0 million and $38.8 million, respectively. Operating profit was $20.9 million for the first six months of 1998 compared with $17.6 million in the first six months of 1997, on revenues of $74.3 million and $70.2 million, respectively. The increase in operating profit was primarily attributable to stronger advertising revenues. 14 MAGAZINE GROUP: The Magazine Group is comprised of three golf-related publications and related activities in the golf field, and New Ventures such as on-line magazine services. The revenues for the Group include the amortization of a $40.0 million non-compete agreement ("Non-Compete"), associated with the divestiture of the Women's Magazine Division, which is being recognized on a straight-line basis over four years ending in July 1998.
- ---------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------------------------------------------------- June 28, June 29, June 28, June 29, (Dollars in thousands) 1998 1997 1998 1997 - ---------------------------------------------------------------------------------------------------- (13 Weeks) (26 Weeks) REVENUES Magazines $33,475 $ 42,961 $62,661 $80,338 Non-Compete 2,500 2,500 5,000 5,000 New Ventures 380 586 629 856 - ---------------------------------------------------------------------------------------------------- Total Revenues $36,355 $ 46,047 $68,290 $86,194 - ---------------------------------------------------------------------------------------------------- EBITDA Magazines $ 9,905 $ 9,246 $16,211 $15,404 New Ventures (28) (1,735) (147) (3,919) - ---------------------------------------------------------------------------------------------------- Total EBITDA $ 9,877 $ 7,511 $16,064 $11,485 - ---------------------------------------------------------------------------------------------------- OPERATING PROFIT (LOSS) Magazines $ 9,531 $ 8,694 $15,468 $14,294 Non-Compete 2,500 2,500 5,000 5,000 New Ventures (28) (1,947) (147) (4,336) - ---------------------------------------------------------------------------------------------------- Total Operating Profit $12,003 $ 9,247 $20,321 $14,958 - ----------------------------------------------------------------------------------------------------
The Magazine Group's operating profit was $12.0 million in the second quarter of 1998 compared with $9.2 million in the second quarter of 1997, on revenues of $36.4 million and $46.0 million, respectively. Operating profit for the first six months was $20.3 million in 1998 compared with $15.0 million in the first six months of 1997, on revenues of $68.3 million and $86.2 million, respectively. The improvement in operating profit was principally attributable to the Company's exit from the tee-time reservation business in the fourth quarter of 1997. The Group's revenue decreased as a result of the sale of the Company's tennis, sailing and ski magazine businesses in the fourth quarter of 1997. The results of the sold magazines were included in the Group's results for the first eleven months of 1997. Excluding the sold magazines, operating profit was $12.0 million in the second quarter of 1998 compared with $10.9 million in the second quarter of 1997, on revenues of $36.4 million and $36.5 million, respectively. On a comparable basis, operating profit for the first six months was $20.3 million in 1998 compared with $18.4 million in the first six months of 1997, on revenues of $68.3 million and $66.1 million, respectively. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $228.4 million in the first six months of 1998 compared with $191.0 million in the first six months of 1997. The increase of $37.4 million in 1998 was primarily due to an improvement in operating profit. Net cash used in investing activities was $35.2 million in the first six months of 1998 compared with $83.6 million in the first six months of 1997. The decrease of $48.4 million in 1998 was primarily due to lower capital expenditures. Net cash used in financing activities was $257.7 million in the first six months of 1998 compared with $108.0 million in the first six months of 1997. The increase of $149.7 million in 1998 was primarily related to stock repurchases, the debt extinguishment and a reduction in issuances of commercial paper. 15 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, stock repurchases, planned capital expenditures, dividend payments to stockholders and other cash requirements. The ratio of current assets to current liabilities was .87 and .92 at June 28, 1998, and December 28, 1997, respectively. The ratio of long-term debt and capital lease obligations as a percentage of total capitalization was 25% at June 28, 1998 compared with 24% at December 28, 1997. The Company currently estimates that capital expenditures for 1998 will range from $90.0 million to $110.0 million. The Company currently anticipates that depreciation and amortization expense will approximate $190.0 million to $195.0 million for 1998 compared with $173.9 million in 1997. The Company currently maintains $300.0 million in revolving credit agreements, which require, among other matters, specified levels of stockholders' equity. Approximately $900.0 million of stockholders' equity was unrestricted under these agreements at both June 28, 1998, and June 29, 1997. In July 1998, the Company renewed its $100.0 million revolving credit agreement, which had a maturity of July 1998, through July 1999. The remaining $200.0 million revolving credit agreement expires in July 2002. The Company's total long-term debt, including capital leases, was $562.0 million and $639.7 million at June 28, 1998, and June 29, 1997, respectively. The decrease is primarily attributable to the debt extinguishment. The Company's tender offer for any and all of its $150.0 million of outstanding publicly-held 8.25% debentures due March 15, 2025, expired on April 2, 1998. The debenture holders tendered $78.1 million of the outstanding debentures. The Company financed the purchase of the debentures with available cash and through its existing commercial paper facility. By replacing higher rate long-term borrowings with lower-rate short-term alternatives, the Company expects to reduce interest expense and generate a positive return on a net present value basis. Total cash paid in connection with the debt extinguishment was $89.3 million. The Company has evaluated 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, modifying existing systems, retiring obsolete systems and confirming vendor compliance. The Company currently anticipates that incremental capital expenditures associated with the Year 2000 problem will be modest. In addition, incremental expenses expected to be incurred in 1998 and 1999 to remediate existing systems are currently expected to range between $10.0 million and $15.0 million. NEW ACCOUNTING PRONOUNCEMENTS: In February 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 132, Employer's Disclosures about Pensions and Other Postretirement Benefits ("SFAS 132"), which is effective for fiscal years beginning after December 15, 1997. SFAS 132 standardizes the disclosure requirements for pension and other postretirement benefits, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures. SFAS 132 does not change the measurement or recognition of pension or other postretirement benefits. The adoption of SFAS 132 will not have a material effect on the Company's Consolidated Financial Statements. 16 In April 1998, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position No. 98-5, Reporting on the Costs of Start-Up Activities ("SOP 98-5"). SOP 98-5 requires that entities expense start-up costs and organization costs as they are incurred. The Company's accounting practices are currently in compliance with SOP 98-5. In March 1998, the AICPA issued SOP No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides guidance on expensing versus capitalization of software costs incurred for internal use, as well as the amortization of capitalized software costs. SOP 98-1 requires computer software costs that are incurred in the preliminary project stage to be expensed as incurred. The adoption of SOP 98-1 is not expected to have a material effect on the Company's Consolidated Financial Statements. SOP 98-5 and SOP 98-1 are effective for fiscal years beginning after December 15, 1998. In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which is effective for all quarters of fiscal years beginning after June 15, 1999. SFAS 133 requires that an entity recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Depending on the intended use of the derivative, changes in derivative fair values may be charged to operations unless the derivative qualifies as a hedge under certain requirements. The adoption of SFAS 133 is not expected to have a material effect on the Company's Consolidated Financial Statements. 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 levels of retail, national and classified advertising revenue 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 28, 1997. 17 PART II. OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS (a) The Company held a special meeting of Class B stockholders on June 16, 1998. (b) The following matter was voted on at the special meeting: The Class B stockholders approved an amendment to the Company's Certificate of Incorporation to increase the number of shares of Class A and Class B Common Stock that may be issued by the Company and to delete references to 5-1/2% Cumulative Prior Preference Stock. The result of the vote taken was as follows: For: 412,722 Against: 0 Abstain: 0 Broker Non-Vote: 0 Total Against, Abstain and Broker Non-Vote: 0 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS 3.1 Certificate of Incorporation, as amended and restated to reflect amendments effective June 19, 1998. 3.2 By-laws as amended through May 21, 1998. 27 Financial Data Schedule. (b) REPORTS ON FORM 8-K No reports on Form 8-K have been filed during the period for which this report is filed. 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE NEW YORK TIMES COMPANY -------------------------- (Registrant) Date: AUGUST 11, 1998 /s/ JOHN M. O'BRIEN --------------- ----------------------------- John M. O'Brien Senior Vice President and Chief Financial Officer (Principal Financial Officer) 19 EXHIBIT INDEX TO QUARTERLY REPORT FORM 10-Q QUARTER ENDED JUNE 28, 1998 EXHIBIT NO. EXHIBIT - ----------- ------- 3.1 Certificate of Incorporation, as amended and restated to reflect amendments effective June 19, 1998. 3.2 By-laws as amended through May 21, 1998. 27 Financial Data Schedule. 20 EX-3.1 2 CERTIFICATE OF INCORPORATION EXHIBIT 3.1 THE NEW YORK TIMES COMPANY CERTIFICATE OF INCORPORATION As Amended and Restated on September 29, 1993; and As Amended on June 19, 1998 CERTIFICATE OF INCORPORATION OF THE NEW YORK TIMES COMPANY* FIRST The name of the proposed corporation is The New York Times Company. SECOND The objects for which it is to be formed are as follows: 1. The business of printing, publishing and selling newspapers, books, pamphlets and other publications, gathering, transmitting and supplying news reports, general job printing, and any and all other business incidental to the foregoing or any of them or thereunto pertaining or proper in connection therewith. 2. To purchase, take on lease or in exchange, hire or otherwise acquire any real or personal property, rights or privileges suitable or convenient for any purpose of its business, and to erect and construct, make, improve or aid or subscribe towards the construction, erection, making and improvement of any building institution, machinery or other appliance insofar as the same may be appurtenant to or useful for the conduct of the business above specified, but only to the extent to which the Corporation may be authorized under the laws of the State of New York or of the United States. 3. To acquire and carry on all or any part of the business or property of any corporation engaged in a business similar to that authorized to be conducted by this Corporation, and to undertake in conjunction therewith any liabilities of any person, firm, association or corporation possessed of property suitable for any of the purposes of this Corporation, or for carrying on any business which this Corporation is authorized to conduct, and as the consideration for the same to pay cash or to issue shares, stock or obligations of this Corporation. 4. To purchase, subscribe for or otherwise acquire, hold and dispose of the shares, stock or obligations of any corporation organized under the laws of this state or any other state, or of any territory of the United States or of any foreign country, except moneyed corporations, insofar as the same may be useful for the conduct of the business of this Corporation and incidental to or proper in connection therewith, and to issue in exchange therefor its stock, bonds or other obligations. 5. To borrow or raise money for any of the aforementioned purposes of this Corporation, and to secure the same and the interest thereon accruing, or for any purpose, to mortgage or charge the undertaking, or all or any part of the property, present or after acquired, subject to the limitations herein expressed, and to create, issue, make, draw, accept and negotiate debentures or debenture stock, mortgage bonds, promissory notes or other obligations or negotiable instruments. 6. To guarantee the payment of dividends or interest on any shares, stocks or debentures or other securities issued by, or any other contract or obligation of any corporation whenever proper or necessary for the business of this Corporation, provided the required authority be first obtained for that purpose. 7. To do any and all such other things as are incidental or conducive to the attainment of the above-mentioned objects. THIRD The Capital Stock is to consist of 301,049,602 shares, of which 200,000 shares of the par value of One Dollar ($1) each shall be Serial Preferred Stock, 300,000,000 shares of the par value of Ten Cents (10 CENTS) each shall be Class A Common Stock and 849,602 shares of the par value of Ten Cents (10 CENTS) each shall be Class B Common Stock. - ------------------------ * Restated to reflect amendments effective June 19, 1998. FOURTH The designations, preferences, privileges and voting powers of the shares of each class and the restrictions or qualifications thereof are as follows: (I) (a) Subject to applicable provisions of law and to the provisions of this Certificate of Incorporation, authority is hereby expressly granted to and vested in the Board of Directors, to the extent permitted by and upon compliance with the provisions set forth in the law of the State of New York, to issue the Serial Preferred Stock from time to time in one or more series, each series to have such relative rights, preferences, limitations or restrictions, and bear such designations, as shall be determined and stated prior to the issuance of any shares of any such series in and by a resolution or resolutions of the Board of Directors authorizing the issuance of such series, including without limitation: (1) The number of shares to constitute such series and the distinctive designation thereof; (2) The dividend rate or rates to which the shares of such series shall be entitled and whether dividends shall be cumulative and, if so, the date from which dividends shall accumulate, and the quarterly dates on which dividends, if declared, shall be payable; (3) Whether the shares of such series shall be redeemable, the limitations and restrictions in respect of such redemptions, the manner of selecting shares of such series for redemption if less than all shares are to be redeemed, and the amount per share, including the premium, if any, which the holders of shares of such series shall be entitled to receive upon the redemption thereof, which amount may vary at different redemption dates and may be different in respect of shares redeemed through the operation of any retirement or sinking fund and in respect of shares otherwise redeemed; (4) Whether the holders of shares of such series shall be entitled to receive, in the event of the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, an amount equal to the dividends accumulated and unpaid thereon, whether or not earned or declared, but without interest; (5) Whether the shares of such series shall be subject to the operation of a purchase, retirement or sinking fund and, if so, whether such fund shall be cumulative or noncumulative, the extent to and the manner in which such fund shall be applied to the purchase or redemption of the shares of such series for retirement or to other corporate purposes, and the terms and provisions in respect of the operation thereof; (6) Whether the shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or series thereof or of any other series of the same class, and if so convertible or exchangeable, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same; (7) The voting powers, if any, of the shares of such series in addition to the voting powers provided by law; (8) Any other rights, preferences, limitations or restrictions not inconsistent with law or the provisions of this Certificate of Incorporation. (b) All shares of any one series of Serial Preferred Stock shall be identical with each other in all respects, except that in respect of any series entitled to cumulative dividends, shares of such series issued at different times may differ as to the dates from which such dividends shall be cumulative. (c) The shares of Serial Preferred Stock shall be issued for a consideration of at least One Hundred Dollars ($100) per share, and the stated capital allocable to each such issued share shall be at least One Hundred Dollars ($100). 2 (II) The holders of the Class A Common Stock shall be entitled to one vote for each share thereof held by them in the election of 30% of the Board of Directors proposed to be elected at any meeting of stockholders held for that purpose (or the nearest larger whole number if such percentage is not a whole number) voting separately and as a class; and the holders of the Class B Common Stock shall be entitled to one vote for each share held by them in the election of the balance of the Board of Directors proposed to be elected at any such meeting, voting separately and as a class. Nothing herein shall be deemed to limit the authority of the Board of Directors with respect to the voting powers of any series of Serial Preferred Stock which may be issued pursuant to paragraph (I) of this Article FOURTH. (III) The holders of the Class A Common Stock, the holders of the Class B Common Stock, and (to the extent determined by the Board of Directors in determining the rights of any series of Serial Preferred Stock issued pursuant to paragraph I hereof) the holders of shares of any series of Serial Preferred Stock shall be entitled to one vote per share, voting together and not as separate classes, upon: (1) The matters specifically set forth in paragraph V of this Article FOURTH; (2) Any proposal submitted to a vote of shareholders in connection with the ratification of the selection of independent certified public accountants to serve as auditors of the Company. (IV) Except as provided in paragraphs I, II and III of this Article FOURTH and as otherwise required by the laws of the State of New York, the entire voting power shall be vested solely and exclusively in the holders of the shares of Class B Common Stock, the holders of Class B Common Stock to be entitled to 1 vote for each 1 share thereof held upon all matters requiring a vote of stockholders of the Corporation and the holders of the Class A Common Stock shall have no voting power, and shall not have the right to participate in any meeting of stockholders or to have notice thereof. (V) Authorization by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon shall be required for any one or more of the following actions, unless the Corporation shall, prior to any such action, receive in writing the consent of any stock exchange upon which any stock of the Corporation may be listed to such action without authorization of stockholders, or unless at the time of such action no shares of stock of the Corporation are listed upon any stock exchange: (1) Reservation of any shares of capital stock of the Corporation for options granted or to be granted to officers, directors or employees of the Corporation: (2) The acquisition of the stock or assets of any other company in the following circumstances: (a) If any officer, director or holder of 10% or more of any class of shares of voting securities of the Corporation has an interest, directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction; (b) If the transaction involves the issuance of Class A Common Stock or Class B Common Stock or securities convertible into either, or any combination of the three, and if the aggregate number of shares of Common Stock so to be issued together with the Common Stock which could be issued upon conversion of such securities approximates (in the reasonable judgment of the Board of Directors) 20% of the aggregate number of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such transaction; or (c) If the transaction involves issuance of Class A Common Stock or Class B Common Stock and any additional consideration, and if the value of the aggregate consideration so to be issued (including the value of any Common Stock which may be issuable in the future in accordance with the terms of the transaction) has in the reasonable judgment of the Board of Directors a combined fair value of approximately 20% or more of the aggregate market value of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such transaction. 3 (VI) Except for the holders of Class B Common Stock, no holder of any share of any class of stock of the Corporation shall have any preemptive or other rights to subscribe for or purchase any shares of any class or any notes, debentures, bonds or any other securities of the Corporation, whether now or hereafter authorized and whether or not convertible into, or evidencing or carrying options, warrants or rights to purchase shares of any class or any notes, debentures, bonds or any other securities now or hereafter authorized, and whether the same shall be issued for cash, services or property, or by way of dividend or otherwise. (VII) Whenever any shares of Class A Common Stock or Class B Common Stock of the Corporation shall have been redeemed, purchased or otherwise reacquired, the Board of Directors shall be authorized either to eliminate such shares from the authorized number of shares of the Corporation or to restore such shares to the status of authorized but unissued shares. (VIII) (1) Each share of Class B Common Stock may at any time be converted, at the option of the holder thereof, into one fully paid and non-assessable (except to the extent provided in Section 630 of the Business Corporation Law) share of Class A Common Stock. Such right shall be exercised by the surrender of the certificate representing such share of Class B Common Stock to be converted at the office of the transfer agent of the Corporation (the "Transfer Agent") during normal business hours accompanied by a written notice of the election by the holder thereof to convert and (if so required by the Corporation or the Transfer Agent) an instrument of transfer, in form satisfactory to the Corporation and to the Transfer Agent, duly executed by such holder or his duly authorized attorney, and funds in the amount of any applicable transfer tax (unless provision satisfactory to the Corporation is otherwise made therefor), if required pursuant to subparagraph (3) below. (2) As promptly as practicable after the surrender for conversion of a certificate representing shares of Class B Common Stock in the manner provided in subparagraph (1) above and the payment in cash of any amount required by the provisions of subparagraphs (1) and (3), the Corporation will deliver or cause to be delivered at the office of the Transfer Agent to or upon the written order of the holder of such certificate, a certificate or certificates representing the number of fully paid and non-assessable (except to the extent provided in Section 630 of the Business Corporation Law) shares of Class A Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class B Common Stock, and all rights of the holder of such shares of Class B Common Stock as such holder shall cease at such time and the person or persons in whose name or names the certificate or certificates representing the shares of Class A Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders of such shares of Class A Common Stock at such time; provided, however, that any such surrender and payment on any date when the stock transfer books of the Corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates representing shares of Class A Common Stock are to be issued as the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer books are open. (3) The issuance of certificates for shares of Class A Common Stock upon conversion of shares of Class B Common Stock shall be made without charge for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of the share or shares of Class B Common Stock converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance, or shall establish to the satisfaction of the Corporation that such tax has been paid. (4) When shares of Class B Common Stock have been converted, they shall be cancelled and not reissued. 4 FIFTH The amount with which said Corporation shall commence business is the sum of Seven Hundred Dollars ($700). SIXTH The Secretary of State is designated as agent for the service of process. The principal office of the Corporation shall be located in the City of New York, County of New York and State of New York, and the address to which the Secretary of State shall mail a copy of process in any action or proceeding against the Corporation which may be served on him is 229 West 43d Street, New York, N.Y. SEVENTH The duration of the Corporation shall be perpetual. EIGHTH The number of directors of the Corporation shall be not less than three nor more than eighteen, each of whom shall hold at least one share of Capital Stock. NINTH No director of the Corporation shall be personally liable to the Corporation or its stockholders for damages for any breach of duty as a director; provided that this Article NINTH shall neither eliminate nor limit liability: (a) if a judgment or other final adjudication adverse to such director establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that his or her acts violated Section 719 of the Business Corporation Law; or (b) for any act or omission prior to the effectiveness of this Article NINTH. Any repeal of or modification to the provisions of this Article NINTH shall not adversely affect any right or protection of a director of the Corporation existing pursuant to this Article NINTH immediately prior to such repeal or modification. 5 EX-3.2 3 BY-LAWS, AS AMENDED 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, October 16, 1997, February 19, 1998 and May 21, 1998. 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 February 19, 1998 May 21, 1998
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
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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 such date, 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 sixty, 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. Execution of a proxy may be accomplished by the stockholder or the stockholder's authorized officer, director, employee or agent. Proxies may be executed by facsimile signature or transmitted by telegram, cablegram or other means of electronic transmission authorized by the stockholder to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be reasonably determined that the telegram, cablegram or other electronic transmission was authorized by the 1 stockholder. 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 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 fix a date, which shall not be more than sixty days, nor fewer than 10 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 record date for the determination of 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 on the date so fixed 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 date, which shall not be more than sixty days, nor fewer than 10 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 the record date for the determination of the stockholders entitled to receive any such dividend, distribution, rights or interests, and in such case only stockholders of record on the date 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 not fewer than three nor more than eighteen members. The number of directors shall be determined from time to time by resolution of a majority of the entire Board of Directors then in office, provided that no decrease in the number of directors shall shorten the term of any incumbent director. For the purpose of election of directors only, and not for any other purpose, the directors shall be divided into two classes, the holders of Class A Common Stock are entitled to elect 30% of the Board of Directors proposed to be elected at any meeting of stockholders held for that purpose (or the nearest larger whole number if such percentage is not a whole number), to be designated the Class A directors, and the holders of Class B Common Stock are entitled to elect the balance of the Board of Directors proposed to be elected at any such meeting, 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 2 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 at least eighteen years of 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 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 given to each director personally or by telegram, facsimile transmission or comparable means 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 giving the same personally or by telegram, facsimile transmission or comparable means to each director at his 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 at least one-third 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 notice by telegram, facsimile transmission or comparable means 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. 3 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, provided that, by resolution of the Board, the Board of Directors shall have authority to fix the compensation of directors and provide for the reimbursement of expenses of attending meetings; provided further that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of committees may be allowed such compensation as may be fixed from time to time by the Board for attending committee meetings and reimbursement of expenses of attendance. 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. The Chairman, President or Vice Chairman may appoint one or more Vice Presidents, the Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer. 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 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 or in the case of any Vice President, the Secretary or the Treasurer, or any Assistant Secretary or Assistant Treasurer, the vacancy may be filled by any two of the Chairman, President or Vice Chairman. 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 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 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 5 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 registered by a registrar other than the Company or an employee of the Company or the shares represented by such certificate are listed on a national security exchange, 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 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 addresses, the number and class of shares of stock held by them respectively and the times when they respectively became the owners thereof shall be kept at the principal office of the Company or its transfer agent. 6 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 Chairman, the President or the Vice Chairman, or, in the event of their 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 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. 7 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 or other entity of which any director or officer is a shareholder, officer or director or has a substantial interest, 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 any director so interested or member of a firm so interested, or a shareholder, officer or director or holder of substantial interest of a corporation so interested, or, if the disinterested directors are less than a majority of the directors present at such meeting, by unanimous vote of the disinterested directors and, in each case, the common or interested directors may be counted in determining the presence of a quorum at such meeting, 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 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, with postage pre-paid, in a post office or official depositary under the exclusive care and custody of the United States Postal Service, 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 8 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. 9 EX-27 4 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-27-1998 JUN-28-1998 42,237 0 351,815 26,617 36,902 519,352 2,243,538 917,935 3,480,832 599,233 0 0 0 21,061 1,669,730 3,480,832 0 1,471,753 0 721,484 0 0 20,627 261,754 114,386 147,368 0 7,716 0 139,652 .73 .71
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