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<SEC-DOCUMENT>0001005477-01-001357.txt : 20010224
<SEC-HEADER>0001005477-01-001357.hdr.sgml : 20010224
ACCESSION NUMBER: 0001005477-01-001357
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010221
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-K405
SEC ACT:
SEC FILE NUMBER: 001-05837
FILM NUMBER: 1551039
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
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10-K405
<TEXT>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 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, N.Y. 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area
code (212) 556-1234 Securities registered
pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Class A Common Stock of $.10 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Not Applicable
(Title of class)
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 |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
The aggregate market value of Class A Common Stock held by non-affiliates as of
February 16, 2001, was approximately $5.80 billion. As of such date,
non-affiliates held 93,270 shares of Class B Common Stock. There is no active
market for such stock.
The number of outstanding shares of each class of the registrant's common stock
as of February 16, 2001, was as follows: 161,310,881 shares of Class A Common
Stock and 847,158 shares of Class B Common Stock.
Document incorporated by reference Part
---------------------------------- ----
Proxy Statement for the 2001 Annual Meeting of Stockholders.............. III
================================================================================
<PAGE>
INDEX TO THE NEW YORK TIMES COMPANY
2000 FORM 10-K
-----------------
<TABLE>
<CAPTION>
PART I
Item No. Page
- -------- -----
<S> <C>
1. Business .................................................................................... 1
Introduction............................................................................... 1
Newspapers................................................................................. 1
The New York Times...................................................................... 1
Circulation.......................................................................... 1
Advertising.......................................................................... 2
Production and Distribution.......................................................... 2
Related Businesses................................................................... 3
New England Newspaper Group............................................................. 3
Circulation: The Globe............................................................... 4
Circulation: Worcester............................................................... 4
Advertising.......................................................................... 5
Production and Distribution.......................................................... 5
Regional Newspapers..................................................................... 5
Broadcasting............................................................................... 6
Magazines.................................................................................. 7
New York Times Digital..................................................................... 7
Forest Products Investments and Other Joint Venture........................................ 8
Forest Product Investments.............................................................. 8
Other Joint Venture..................................................................... 8
Raw Materials.............................................................................. 8
Competition .............................................................................. 9
Employees.................................................................................. 10
Labor Relations......................................................................... 10
2. Properties.................................................................................... 11
3. Legal Proceedings............................................................................. 12
4. Submission of Matters to a Vote of Security Holders........................................... 12
Executive Officers of the Registrant....................................................... 12
PART II
5. Market for the Registrant's Common Equity and Related Stockholder Matters..................... 13
6. Selected Financial Data....................................................................... 13
7. Management's Discussion and Analysis of Financial Condition and Results of Operations......... 13
8. Financial Statements and Supplementary Data................................................... 13
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......... 13
PART III
10. Directors and Executive Officers of the Registrant............................................ 13
11. Executive Compensation........................................................................ 14
12. Security Ownership of Certain Beneficial Owners and Management................................ 14
13. Certain Relationships and Related Transactions................................................ 14
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............................... 14
</TABLE>
<PAGE>
1
PART I
ITEM 1. Business.
INTRODUCTION
The New York Times Company (the "Company") was incorporated on August 26, 1896,
under the laws of the State of New York. The Company is a diversified media
company including newspapers, television and radio stations, magazines,
electronic information and publishing, Internet businesses, and forest products
investments. Financial information about industry segments is incorporated by
reference to Note 16 to the Consolidated Financial Statements on page F-31 of
this report.
The Company currently classifies its businesses into the following segments:
o Newspapers: The New York Times ("The Times"); the New England Newspaper
Group, consisting of The Boston Globe, a daily newspaper, the Boston
Sunday Globe (both editions, "The Globe") and the Worcester Telegram &
Gazette, in Worcester, Mass. (acquired January 7, 2000); 14 other daily
newspapers in Alabama, California, Florida, Louisiana, North Carolina and
South Carolina ("Regional Newspapers"); newspaper distributors in the New
York City and Boston metropolitan areas; news, photo and graphics services
and news and features syndication; TimesDigest; The New York Times Index;
and licensing of the trademarks and copyrights of The Times and The Globe.
o Broadcasting: television stations WREG-TV in Memphis, Tenn.; WTKR-TV in
Norfolk, Va.; KFOR-TV in Oklahoma City, Okla.; WNEP-TV in Scranton, Pa.;
WHO-TV in Des Moines, Iowa; WHNT-TV in Huntsville, Ala.; WQAD-TV in
Moline, Ill.; and KFSM-TV in Fort Smith, Ark.; and radio stations WQXR(FM)
and WQEW(AM) in New York City.
o Magazines: Golf Digest, Golf Digest Woman, Golf World and Golf World
Business (the "Magazine Group"). On January 31, 2001, the Company
announced an agreement with Advance Publications, Inc. to purchase the
Company's golf properties, which include substantially all of the assets
of the Magazine Group and GolfDigest.com.
o New York Times Digital: the Company's major Internet businesses, including
NYTimes.com (www.nytimes.com), Boston.com (www.boston.com),
newyorktoday.com (www.newyorktoday.com), WineToday.com
(www.winetoday.com), GolfDigest.com (www.golfdigest.com), Abuzz, an online
knowledge-sharing network; and licensing of electronic databases and
CD-ROM products.
Additionally, the Company owns minority equity interests in a Canadian
newsprint company and a supercalendered paper manufacturing partnership in
Maine, and a one-half interest in the International Herald Tribune.
NEWSPAPERS
The Newspaper Group segment consists of The Times, the New England Newspaper
Group, 14 Regional Newspapers, newspaper distributors, and certain related
businesses.
The New York Times
Circulation
The Times is a standard-size daily (Monday through Saturday) and Sunday
newspaper, which commenced publication in 1851. The Times is circulated in each
of the 50 states, the District of Columbia and worldwide. Approximately 59% of
the weekday (Monday through Friday) circulation is sold in the 31 counties that
make up the greater New York City area, which includes New York City,
Westchester and parts of upstate New York, Connecticut, New Jersey and
Pennsylvania; 41% is sold elsewhere. On Sundays, approximately 55% of the
circulation is sold in the greater New York City area and 45% elsewhere.
According to reports filed with the Audit Bureau of Circulations ("ABC"), an
independent agency that audits the
<PAGE>
2
circulation of most U.S. newspapers and magazines, for the six-month period
ended September 30, 2000, The Times has the largest daily and Sunday circulation
of all seven-day newspapers in the United States.
The Times's average weekday and Sunday circulations for the two 12-month periods
ended September 30, 1999, and September 30, 2000, as audited by ABC (except as
indicated), are shown in the table below:
<TABLE>
<CAPTION>
Weekday (Mon. - Fri.) Sunday
--------------------- ------
(Thousands of copies)
<S> <C> <C>
2000 (unaudited)................................... 1,122.4 1,686.7
1999............................................... 1,109.7 1,671.2
</TABLE>
Approximately 62% of the weekday circulation and 58% of the larger Sunday
circulation were sold through home and office delivery in 2000. During the year
ended December 31, 2000, the average weekday circulation of The Times increased
approximately 22,200 copies above 1999 to approximately 1,132,400 copies and the
average Sunday circulation increased by approximately 29,200 copies above 1999
to approximately 1,697,300 copies. An increase in home delivery rates was
effective February 5, 2001.
Advertising
Total advertising volume in The Times for the two years ended December 26, 1999,
and December 31, 2000, as measured by The Times, is shown in the table below.
The "National" heading in the table below includes such categories as
entertainment, financial, magazine and general advertising.
<TABLE>
<CAPTION>
Full Run
------------------------------------ Preprint
Retail National Classified Zoned Total(1) Copies
Inches Inches Inches Inches Inches Distributed
------- ------- -------- ------- ------- -----------
(Inches and Preprints in Thousands)
<S> <C> <C> <C> <C> <C> <C>
2000....................... 574.0 1,691.6 964.6 1,033.4 4,263.6 459,311
1999....................... 567.3 1,582.1 984.2 1,015.7 4,149.3 427,857
</TABLE>
The table includes volume for The New York Times Magazine, which published 3,760
pages of advertising in 2000, compared with 3,651 pages in 1999.
Advertising rates for The Times increased an average of 7% in January 2000, and
7% in January 2001.
Based on recent data provided by Competitive Media Reporting, Inc., an
independent agency that measures advertising sales volume and estimates
advertising revenue, and The Times's internal analysis, The Times believes that
it ranks first by a substantial margin in advertising revenue in the general
weekday and Sunday newspaper field in the New York City metropolitan area.
Production and Distribution
Generally, The Times is printed at its production and distribution facilities in
Edison, N.J., and Flushing, N.Y., as well as the regional print sites described
below.
The Edison and Flushing facilities print all sections of the weekday and Sunday
newspapers (except The New York Times Magazine and the Sunday Television
section) for distribution in the New York metropolitan area. Both facilities
have the capacity to print in color and have modern, automated presses,
packaging and distribution equipment.
The Times has agreements with two commercial printing companies to print its
Sunday Television section and The New York Times Magazine.
- ----------
(1) All totals exclude preprint inches.
<PAGE>
3
The editions of The Times distributed outside of the New York City area are
printed under contract at the following sites:
Region(1) Print Sites
- --------------------------------------------------------------------------------
Midwest Chicago, Ill.; Canton, Ohio; Ann Arbor, Mich.(2);
Columbia, Mo.(2); Dayton, Ohio(2); Minneapolis, Minn.(2)
- --------------------------------------------------------------------------------
Northeast Billerica, Mass.(3); Springfield, Va.
- --------------------------------------------------------------------------------
Southeast Atlanta, Ga.; Ft. Lauderdale, Fla.; Lakeland, Fla.(4);
Gastonia, N.C.(2)
- --------------------------------------------------------------------------------
Southwest Austin, Tex.; Phoenix, Ariz.
- --------------------------------------------------------------------------------
West Torrance and Concord, Calif.; Tacoma, Wash.; Denver, Colo.
- --------------------------------------------------------------------------------
The Times currently has agreements with various newspapers and other delivery
agents located in the United States and Canada to deliver The Times in their
respective markets and, in some cases, to expand current markets. The agreements
include various arrangements for delivery on Sundays and daily to homes and
newsstands.
A subsidiary of the Company, City & Suburban Delivery Systems, Inc. ("City &
Suburban"), operates a wholesale newspaper distribution business that
distributes The Times and other newspapers and periodicals in New York City,
Long Island (N.Y.), the counties of Westchester (N.Y.) and Fairfield (Conn.) and
New Jersey. Approximately 94% of The Times's single-copy daily circulation and
93% of its single-copy Sunday circulation in the New York City metropolitan area
are delivered by City & Suburban or The Times. Approximately 94% of The Times's
daily home-delivered circulation and 95% of its Sunday home-delivered
circulation in the New York City metropolitan area are delivered to depots by
City & Suburban or The Times.
Related Businesses
Name Description of Business
- --------------------------------------------------------------------------------
New York Times Index Produces The New York Times Index, a
print publication; also licenses
Bell & Howell Information and
Learning to sell The New York Times
Index and to produce and sell The
Times on microfilm
- --------------------------------------------------------------------------------
The New York Times News Services Division:
- --------------------------------------------------------------------------------
The New York Times News Service Transmits articles, graphics and
photographs from The Times, The
Globe and other publications to
approximately 650 newspapers and
magazines in the United States and
in more than 50 countries worldwide
- --------------------------------------------------------------------------------
The New York Times Syndicate Markets other supplemental news
services and feature material,
graphics and photographs from The
Times and other leading news sources
to newspapers and magazines around
the world
- --------------------------------------------------------------------------------
NYT Television Using New York Times branded and
other content, creates television
programming for a variety of cable
channels and other outlets,
including PBS
- --------------------------------------------------------------------------------
New England Newspaper Group
The Boston Globe is owned and published by the Company's subsidiary, Globe
Newspaper Company, Inc. ("The Globe" may also be used to refer to Globe
Newspaper Company, Inc.)
On January 7, 2000, the Telegram & Gazette was acquired by the Company's
subsidiary, Worcester Telegram & Gazette Corporation ("Worcester"), which owns
and publishes the newspaper in Worcester, Mass.
The Globe and Worcester are divisions of the Company's New England Newspaper
Group.
- ----------
(1) Most advance sections of the Sunday newspaper distributed in these areas
are printed at Edison, N.J., Flushing, N.Y., and Concord, Calif.
(2) Commencing in 2001.
(3) At The Globe.
(4) At the Company's regional newspaper, The Ledger.
<PAGE>
4
Circulation: The Globe
The Globe is a daily (Monday through Saturday) and Sunday newspaper, which
commenced publication in 1872, and was acquired by the Company in 1993. The
Globe is distributed throughout New England, although its circulation is
concentrated in the Boston metropolitan area. According to ABC reports, as of
September 24, 2000, the weekday (Monday through Friday) circulation of The Globe
was the 15th largest of any weekday newspaper; circulation of the Sunday edition
was the 10th largest of any Sunday newspaper published in the United States; and
its daily and Sunday circulation was the largest of all newspapers published in
either Boston or New England.
The Globe's average weekday and Sunday paid circulation for the two 12-month
periods ended March 26, 2000, and March 28, 1999, as audited by ABC, are shown
below:
Weekday (Mon-Fri) Sunday
---------------- ------
(Thousands of copies)
2000.............................................. 469.9 726.8
1999.............................................. 470.0 741.2
During the year ended December 31, 2000, the average weekday circulation of The
Globe decreased approximately 1,181 copies below 1999 to approximately 467,900
copies and the average Sunday circulation decreased by approximately 8,939
copies below 1999 to approximately 719,500 copies.
Approximately 75.3% of The Globe's weekday circulation and 65.4% of its larger
Sunday circulation are sold through home or office delivery; the remainder are
sold primarily on newsstands.
Circulation: Worcester
The Telegram & Gazette is a daily (Monday through Saturday) newspaper, which
began publishing in 1866. Its Sunday companion, the Sunday Telegram, began in
1884. These newspapers and several non-daily newspapers, some published under
the name of Coulter Press, circulate throughout Worcester County and
northeastern Connecticut. The daily Telegram & Gazette is the 97th largest
newspaper in the U.S.
The Telegram & Gazette's average weekday and Sunday paid circulations, for the
two six-month periods ended September 30, 2000 and September 30, 1999, as
reported to ABC in the Newspaper Publisher's Statement, are shown below:
Daily (Mon-Sat) Sunday
------------- ------
(Thousands of copies)
2000............................................... 103.6 127.5
1999............................................... 106.7 133.2
From December 31, 1999 to December 31, 2000, the average daily circulation of
the Telegram & Gazette decreased approximately 3,600 copies, and the average
Sunday circulation decreased approximately 5,800 copies. Approximately 80% of
its daily and Sunday circulation is distributed by home or office delivery; the
remainder are sold in stores or newsstands.
<PAGE>
5
Advertising
The Globe's and Worcester's advertising volumes by category of advertising for
the two years ended December 31, 2000, for all editions, as measured by The
Globe and Worcester, respectively, are set forth below:
<TABLE>
<CAPTION>
Full Run
------------------------------------ Preprint
Retail National Classified Zoned Total(1) Copies
Inches Inches Inches Inches Inches Distributed
------- ------- -------- ------- ------- -----------
(Inches and Preprints in Thousands)
<S> <C> <C> <C> <C> <C> <C>
2000
Globe...................... 646.6 797.6 1,371.8 301.6 3,117.6 831,303
Worcester(2)............... 320.1 82.2 536.7 493.9 1,432.9 201,135
1999
Globe...................... 667.5 753.1 1,354.4 256.2 3,031.2 801,842
Worcester.................. 345.8 51.6 521.7 567.3 1,486.4 200,931
</TABLE>
Both The Globe and Worcester adjusted advertising rates in each category of
advertising in 2000. Worcester adjusted all of its rates effective as of January
1, 2001. Additionally, The Globe's latest increase in certain retail, preprint
and help-wanted advertising rates occurred on January 1, 2001. These rate
increases ranged from 2% to 6%.
Based on information supplied by major daily newspapers published in New England
and assembled by the New England Newspaper Association, Inc. for the 12-month
period ending December 31, 2000, the Globe ranked first and Worcester ranked
sixth in advertising inches among all newspapers published in Boston and New
England.
Production and Distribution
All editions of The Globe are printed and prepared for delivery at its main
Boston plant or its Billerica, Mass. satellite plant. All editions of the
Telegram & Gazette are printed and prepared for delivery at Worcester's plant in
Millbury, Mass.
Virtually all of The Globe's home-delivered circulation is delivered through The
Globe's distribution subsidiary, Community Newsdealers Inc., although Worcester
is now delivering 7,500 daily and 10,000 Sunday Globes in its home delivery
area. Direct single-copy distribution by The Globe and its subsidiary Retail
Sales, Inc. accounted for 61% and 56% of the average weekday and Sunday
single-copy distribution of The Globe in 2000.
Regional Newspapers
The Company currently owns 14 daily newspapers, of which 12 publish on Sunday.
<TABLE>
<CAPTION>
Daily Sunday Daily Sunday
Daily Newspapers Circulation Circulation Daily Newspapers Circulation Circulation
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Gadsden Times (Ala.) 25,500 27,300 The Ledger (Lakeland, Fla.) 73,600 89,100
The Tuscaloosa News (Ala.) 38,000 39,700 The Courier (Houma, La.) 19,000 21,000
TimesDaily (Florence, Ala.) 31,900 34,600 Daily Comet (Thibodaux, La.) 11,700 NA
The Press Democrat (Santa Rosa, Calif.) 92,000 101,300 The Dispatch (Lexington, N.C.) 13,000 NA
Sarasota Herald-Tribune (Fla.) 105,900 131,900 Times-News (Hendersonville, N.C.) 20,100 20,300
Star-Banner (Ocala, Fla.) 49,400 53,400 Wilmington Morning Star (N.C.) 55,900 64,400
The Gainesville Sun (Fla.) 51,300 58,500 Herald-Journal (Spartanburg, S.C.) 54,200 62,700
</TABLE>
In September and October 2000, the Company sold the Santa Barbara News-Press
(Calif.), the Daily World (Opelousas, La.), the Daily News (Palatka, Fla.), the
Lake City Reporter (Fla.), The News-Sun (Sebring/Avon Park, Fla.), The
News-Leader (Fernandina Beach, Fla.) and the Marco Island Eagle (Fla.). The
News-Leader, The News-Sun and the Marco Island Eagle were all non-daily
newspapers. The advertising and circulation information presented below does not
include amounts relating to the newspapers sold in 2000.
- ----------
(1) All totals exclude preprint inches.
(2) For the period January 7 through December 31, 2000.
<PAGE>
6
The Regional Newspapers' circulation for the years ended December 31, 2000, and
December 26, 1999, is shown in the table below:
Daily Sunday(1)
----- -------
(Thousands of Copies)
2000........................................ 641.5 704.2
1999........................................ 653.8 716.8
Advertising volume, stated on the basis of six columns per page, was 13,790,400
inches in 2000, compared with 13,590,600 inches in 1999. Preprints distributed
in 2000 were 1,081,986,000, compared with 1,021,144,000 in 1999.
BROADCASTING
The Company's television and radio stations are operated under licenses from the
Federal Communications Commission ("FCC") and are subject to FCC regulations.
Radio and television license renewals are now normally granted for terms of
eight years.
Station License Expiration Date
- --------------------------------------------------------------------------------
WTKR-TV (Norfolk, Va.) October 1, 2004
- --------------------------------------------------------------------------------
WHNT-TV (Huntsville, Ala.) April 1, 2005
KFSM-TV (Ft. Smith, Ark.) June 1, 2005
WREG-TV (Memphis, Tenn.) August 1, 2005
WQAD-TV (Moline, Ill.) December 1, 2005
- --------------------------------------------------------------------------------
WHO-TV (Des Moines, Iowa) February 1, 2006
KFOR-TV (Oklahoma City, Okla.) June 1, 2006
- --------------------------------------------------------------------------------
WNEP-TV (Scranton, Penn.) August 1, 2007
- --------------------------------------------------------------------------------
WQXR(FM) (New York, N.Y.) June 1, 2006
WQEW(AM) (New York, N.Y.) June 1, 2006
- --------------------------------------------------------------------------------
The Company anticipates that its future applications for renewal of its station
licenses will result in the licenses being renewed for eight-year periods.
All of the television stations have three principal sources of revenue: local
advertising sold to advertisers in the immediate geographic areas of the
stations, national spot advertising (sold to national clients by individual
stations rather than networks), and compensation paid by the networks for
carrying commercial network programs.
Market's Network
Station Nielsen Ranking(2) Affiliation Band
- --------------------------------------------------------------------------------
WREG-TV 40 CBS VHF
- --------------------------------------------------------------------------------
WTKR-TV 41 CBS VHF
- --------------------------------------------------------------------------------
KFOR-TV 45 NBC VHF
- --------------------------------------------------------------------------------
WNEP-TV 51 ABC UHF(3)
- --------------------------------------------------------------------------------
WHO-TV 70 NBC VHF
- --------------------------------------------------------------------------------
WHNT-TV 82 CBS UHF(3)
- --------------------------------------------------------------------------------
WQAD-TV 88 ABC VHF
- --------------------------------------------------------------------------------
KFSM-TV 118 CBS VHF
- --------------------------------------------------------------------------------
- ----------
(1) Includes twelve daily newspapers.
(2) According to Nielsen Media Research, a research company that measures
audiences for television stations.
(3) All other stations in this market are also in the UHF band.
<PAGE>
7
The Company's two radio stations serve the New York City metropolitan area.
WQXR(FM) is currently the only commercial classical music station serving this
market, which is the nation's largest radio audience. In December 1998, the
Company entered into a Time Brokerage Agreement with ABC, Inc., under which ABC,
Inc. is providing substantially all of the programming for WQEW(AM) for an
eight-year period. Under a separate option agreement, ABC, Inc. has acquired the
right to purchase WQEW(AM) at the end of the eight-year period.
MAGAZINES
The Magazine Group segment includes: Magazines (including those publications set
forth in the table below) and related activities in the golf field.
As of December 31, 2000, the Company published the magazines listed in the chart
below:
<TABLE>
<CAPTION>
Percentage Percentage
Increase Increase
(Decrease) in (Decrease) in
Average Advertising
Subject/ Average Circulation Advertising Pages
Magazine Frequency Audience Rate Base Circulation(1) Over 1999 Pages(2) Over 1999
- -------------------- ---------------- -------- --------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Golf Digest Monthly Golf 1,550,000 1,567,600 0.9 1,488 (2.9)
Golf Digest Woman 4 issues per year Golf 250,000 250,000 -- 159 205.8
Golf World 46 issues per year Golf 155,000 157,700 (0.2) 1,434 10.4
Golf World Business 10 issues per year Golf trade 17,500 18,600 (5.1) 621(3) (27.6)(3)
</TABLE>
On January 31, 2001, the Company announced an agreement with Advance
Publications, Inc. to purchase the Company's golf properties, which include
substantially all of the assets of the Magazine Group and GolfDigest.com.
NEW YORK TIMES DIGITAL
New York Times Digital operates the Company's major Internet businesses, which
include the following:
- --------------------------------------------------------------------------------
NYTimes.com Exclusive Internet access to the
complete contents of The Times, plus
enhanced features and regularly
updated breaking news.
- --------------------------------------------------------------------------------
newyorktoday.com Information concerning life in New
York City, including neighborhood
news, classifieds and entertainment
and restaurant reviews and listings.
- --------------------------------------------------------------------------------
Boston.com Information concerning Boston and
New England and featuring exclusive
Internet access to the complete
contents of The Globe.
- --------------------------------------------------------------------------------
WineToday.com News and information about wine,
including a searchable database
containing expert tastings of over
5,000 wines from around the world.
- --------------------------------------------------------------------------------
GolfDigest.com(4) Custom news, features and
instructional information for
golfers featuring exclusive Internet
access to the complete contents of
Golf Digest, Golf World and Golf
Digest Woman.
- --------------------------------------------------------------------------------
Abuzz Online knowledge-sharing network.
- --------------------------------------------------------------------------------
New York Times Digital also licenses LEXIS/NEXIS, Factiva, Bell & Howell
Information and Learning, The Dialog Corp., and the Gale Group to store, market
and distribute its online computer databases. New York Times Digital also
distributes some of these databases itself.
- ----------
(1) As reported by the publisher to ABC or the Business Publications
Association.
(2) As reported by the publisher to Publisher's Information Bureau ("PIB");
or, in the case of Golf World Business and Golf Digest Woman, as
calculated by the publisher using the same methodology as for PIB. The
advertising pages for Golf Digest exclude Golf Digest Woman.
(3) Golf World Business has been redesigned resulting in a 37% page size
reduction from 10 3/4 x 14 1/2 to 9 x 10 7/8.
(4) GolfDigest.com is included in the sale of the Company's golf properties to
Advance Publications, Inc.
<PAGE>
8
FOREST PRODUCTS INVESTMENTS AND OTHER JOINT VENTURE
The Company has ownership interests in one newsprint mill and one
supercalendered (glossy paper used in magazines) paper mill (the "Forest
Products Investments") and the International Herald Tribune.
Forest Products Investments
The Company has a 49% equity interest in a Canadian newsprint company, Donohue
Malbaie Inc. ("Malbaie"). The other 51% is owned by Abitibi-Consolidated
("Abitibi"), a global manufacturer of paper. Malbaie purchases pulp from Abitibi
and manufactures newsprint from this raw material on the paper machine it owns
within the Abitibi paper mill at Clermont, Quebec. Malbaie is wholly dependent
upon Abitibi for its pulp. In 2000 Malbaie produced 225,000 metric tons of
newsprint, 97,000 tons of which were sold to the Company, with the balance sold
to Abitibi for resale.
The Company has an equity interest in a partnership operating a supercalendered
paper mill in Maine, Madison Paper Industries ("Madison"). The Company's
interest in Madison is 40%. Madison produces supercalendered paper at its
facility in Madison, Me. Madison purchases all of its wood from local suppliers,
mostly under long-term contracts. In 2000 Madison produced 185,000 metric tons,
14,000 tons of which were sold to the Company.
The debt of Malbaie and Madison is not guaranteed by the Company.
Malbaie and Madison are subject to comprehensive environmental protection laws,
regulations and orders of provincial, federal, state and local authorities of
Canada or the United States (the "Environmental Laws"). The Environmental Laws
impose effluent and emission limitations and require Malbaie and Madison to
obtain, and operate in compliance with the conditions of, permits and other
governmental authorizations ("Governmental Authorizations"). Malbaie and Madison
follow policies and operate monitoring programs to ensure compliance with
applicable Environmental Laws and Governmental Authorizations and to minimize
exposure to environmental liabilities. Various regulatory authorities
periodically review the status of the operations of Malbaie and Madison. Based
on the foregoing, the Company believes that Malbaie and Madison are in
substantial compliance with such Environmental Laws and Governmental
Authorizations.
Other Joint Venture
The Company and The Washington Post Company each own a one-half interest in the
International Herald Tribune S.A.S., which publishes the International Herald
Tribune. The newspaper is edited in Paris and printed in Athens, Bangkok,
Bologna, Frankfurt, Hong Kong, Jakarta, Kuala Lumpur, London, Madrid, Manila,
Marseille, New York, Paris, Seoul, Singapore, Tel Aviv, The Hague, Tokyo,
Toulouse and Zurich.
RAW MATERIALS
The primary raw materials used by the Company are newsprint and supercalendered
and coated paper. Neither the Company nor any of its businesses is dependent on
any one supplier of paper.
<PAGE>
9
In 2000 and 1999, the Company used the following types and quantities of paper
(all amounts in metric tons):
Coated,
Supercalendered
Publication Newsprint and Other Paper
- --------------------------------------------------------------------------------
2000 1999 2000 1999
- --------------------------------------------------------------------------------
The Times1(1) 347,000 322,000 27,000 26,000
- --------------------------------------------------------------------------------
The Globe(1) 137,000 141,000 4,300 4,000
Worcester(2) 13,000 -- -- --
- --------------------------------------------------------------------------------
Total New England
Newspaper Group 150,000 141,000 4,300 4,000
- --------------------------------------------------------------------------------
Regional Newspapers 102,000 100,500 -- --
- --------------------------------------------------------------------------------
Magazine Group -- -- 10,400 10,200
- --------------------------------------------------------------------------------
Total 599,000 563,500 41,700 40,200
- --------------------------------------------------------------------------------
The paper used by The Times, The New York Times Magazine, the New England
Newspaper Group, the Regional Newspapers and the magazines published by the
Magazine Group was purchased under long-term contracts with unrelated suppliers
and related suppliers in which the Company holds equity interests (see "Forest
Products Investments"). During 2000, The Globe and Worcester decreased the size
of their printed sheets from 54 inches to 50 inches. Web width reductions are
planned at eight of the fourteen Regional Newspapers in 2001.
COMPETITION
The Times competes with newspapers of general circulation in New York City and
its suburbs, as well as with national publications such as The Wall Street
Journal and USA Today. The Times also competes with magazines, television,
radio, direct mail, the Internet and other media.
The Globe competes with other daily, weekly and national newspapers distributed
in Boston, its neighboring suburbs and the greater New England region,
including, among others, The Boston Herald (daily and Sunday). The Globe also
competes with other communications media, such as direct mail, magazines, radio,
the Internet and television. Worcester competes with other daily and weekly
newspapers distributed in Worcester and adjacent counties, including in
northeastern Connecticut, and competes with radio, cable television and direct
mail.
The Regional Newspapers and the International Herald Tribune compete with a
variety of other advertising media in their respective markets.
The magazines published by the Company compete directly with other golfing
publications as well as with general interest magazines and other media,
primarily broadcast and cable television.
All of the Company's television stations compete directly with other television
stations in their respective markets and with other video services, such as
cable network programming carried on local cable systems and satellite-to-home
systems and, to a lesser extent, with the Internet. WQXR(FM) competes for
listeners with WNYC(FM) (a non-commercial station) for the classical music
audience and for listeners and revenues with many adult-audience commercial
radio stations and other media in New York City and surrounding suburbs.
The New York Times News Service and Syndicate operations compete with several
other syndicated features and supplemental news services.
- ----------
(1) The Times and The Globe use coated, supercalendered or other paper for The
New York Times Magazine and The Globe's Sunday Magazine.
(2) Worcester was acquired by the Company on January 7, 2000.
<PAGE>
10
New York Times Digital competes with other news and information Websites, such
as MSNBC.com and CNN.com, Internet content aggregators, such as Yahoo and AOL,
and other Internet businesses.
EMPLOYEES
As of December 31, 2000, the Company had approximately 14,000 full-time
equivalent employees.
The Times 4,950
New England Newspaper Group 3,950
Regional Newspapers 3,100
Broadcast Group 900
Magazine Group 250
New York Times Digital 450
Corporate/Shared Service Center 400
-------
Total Company 14,000
=======
Labor Relations
Approximately 3,582 full-time equivalent employees of The Times and City &
Suburban are represented by 15 unions for collective bargaining purposes.
Approximately 30 employees of New York Times Digital are represented by the
Newspaper Guild of New York.
The Times has collective bargaining agreements in effect through at least March
30, 2003, with all of its unions except the International Brotherhood of
Electricians, which has a contract expiring March 30, 2002, that covers
approximately five full-time maintenance employees.
City & Suburban's collective bargaining agreement with its drivers' union,
representing approximately 510 full-time equivalent employees, expires in 2008;
its four agreements with its truck maintenance unions, representing
approximately 23 full-time equivalent employees, expire in 2003; its agreement
with its support staff union, representing approximately 17 full-time equivalent
employees, expires in April, 2001; and its agreements with its two building
maintenance unions, representing approximately nine full-time equivalent
employees, expired in 2000. City & Suburban is in the process of negotiating
successor agreements.
The Times's agreement with its printing pressmens' union (which covers
approximately 450 production employees) provides that wages for the 2000-2005
period are to be negotiated by the parties. If the negotiations do not result in
an agreement, the issue of wages for this period is to be submitted to binding
arbitration for resolution.
Approximately 2,100 full-time equivalent employees of The Globe are represented
by 12 unions. Effective December 31, 2000, the contract with the Boston Globe
Employees Association, an affiliate of The Newspaper Guild representing
non-production employees, expired and negotiations for a new contract have
begun.
In 2000, The Globe concluded negotiations with one production union for a
four-year contract, effective January 1, 1999 through December 31, 2002 and also
concluded negotiations for a wage re-opener with a second production union,
which has a nine-year contract that expires December 31, 2001. Two other
production unions have contracts that will expire December 31, 2001. In
addition, one other production union has a four-year contract, which extends
through December 31, 2002, two unions have six-year contracts, which extend
through December 31, 2004, and one has a ten-year contract, which extends
through December 31, 2006. Three production unions have contracts which expired
December 31, 1998. Negotiations with those unions are ongoing. The Globe expects
to conclude those negotiations in 2001.
Approximately one-third of the 661 full-time equivalent employees of Worcester
are represented by four unions. Contracts with three production unions expire
August 31, 2002, November 30, 2002 and October 8, 2003, respectively. The
Providence
<PAGE>
11
Newspaper Guild was certified as the bargaining agent for Worcester newsroom
employees in 1993 and for Worcester circulation employees in 2000. Negotiations
are ongoing.
The Company cannot predict the timing or the outcome of the various negotiations
described above.
Two other entities owned by the Company (The Press Democrat and WQXR(FM)) also
have collective bargaining agreements covering certain of their employees.
ITEM 2. Properties.
The general character, location, terms of occupancy and approximate size of the
Company's principal plants and other materially important properties at December
31, 2000, are listed below.
General Character Approximate Area in Approximate Area in
of Property Square Feet (Owned) Square Feet (Leased)
- --------------------------------------------------------------------------------
Newspaper Publishing
- --------------------------------------------------------------------------------
Printing plants, business
and editorial offices,
garages and warehouse
space located in:
- --------------------------------------------------------------------------------
New York, N.Y. 714,000 70,000
- --------------------------------------------------------------------------------
Flushing, N.Y. -- 515,000(1)
- --------------------------------------------------------------------------------
Edison, N.J. -- 1,300,000(2)
- --------------------------------------------------------------------------------
Boston, Mass. 652,000 --
- --------------------------------------------------------------------------------
Billerica, Mass. 290,000 --
- --------------------------------------------------------------------------------
Westwood, Mass. 115,000 --
- --------------------------------------------------------------------------------
Worcester, Mass. 137,000 --
- --------------------------------------------------------------------------------
Millbury, Mass. 120,000 --
- --------------------------------------------------------------------------------
Other locations 1,324,600 548,000
- --------------------------------------------------------------------------------
Online publishing -- 83,000
- --------------------------------------------------------------------------------
Broadcasting
- --------------------------------------------------------------------------------
Business offices, studios
and transmitters at
various locations 324,820 26,725
- --------------------------------------------------------------------------------
Magazine Publishing 87,000 34,300
- --------------------------------------------------------------------------------
Total 3,764,420 2,577,025
- --------------------------------------------------------------------------------
On October 13, 2000, the Company announced that the Renzo Piano Building
Workshop (in association with Fox & Fowle Architects), has been selected to
design the proposed new headquarters of the Company, to be located in midtown
Manhattan, N.Y. Contingent upon approval by the Company's Board of Directors and
the successful completion of negotiations with the State of New York, the
Company and Forest City Ratner Companies Inc. (its development partner) are
preliminarily targeting occupancy for 2005.
- ----------
(1) The Company is leasing a 31-acre site in Flushing, N.Y., where its
printing and distribution plant is located, and has the option to purchase
the property at any time prior to the end of the lease in 2019.
(2) The Edison production and distribution facility is occupied pursuant to a
long-term lease with renewal and purchase options.
<PAGE>
12
ITEM 3. Legal Proceedings.
There are various legal actions that have arisen in the ordinary course of
business and are now pending against the Company. Such actions are usually for
amounts greatly in excess of the payments, if any, that may be required to be
made. It is the opinion of management after reviewing such actions with legal
counsel to the Company that the ultimate liability which might result from such
actions will not have a material adverse effect on the consolidated financial
statements.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant
<TABLE>
<CAPTION>
Employed By Position(s) As Of
Name Age Registrant Since February 21, 2001
- --------------------------- ---- ---------------- ---------------------------------------------------------------------
Corporate Officers
<S> <C> <C> <C>
Arthur Sulzberger, Jr. 49 1978 Chairman (since 1997) and Publisher of The Times
(since 1992)
Russell T. Lewis 53 1966(1) President (since 1996) and Chief Executive Officer (since 1997);
Chief Operating Officer (1996 to 1997); President and General
Manager of The Times (1993 to 1996)
Michael Golden 51 1984 Vice Chairman and Senior Vice President (since 1997); Vice
President, Operations Development (1996 to 1997)
Cynthia H. Augustine 43 1986(2) Senior Vice President, Human Resources (since 1998) and
Broadcasting (since 2000); President, The New York Times Company
Broadcast Group (since 2000); Partner in Sabin, Bermant and
Gould LLP (1994 to 1998)
John M. O'Brien 58 1960 Senior Vice President and Chief Financial Officer (since 1998);
Senior Vice President (1996 to 1998), Operations; Executive Vice
President (1992 to 1996) and Deputy General Manager (1991 to
1996) of The Times
Solomon B. Watson IV 56 1974 Senior Vice President (since 1996); Vice President (1990 to 1996);
General Counsel (since 1989); and Secretary (since 2000)
James C. Lessersohn 45 1987 Vice President and Treasurer (since 1999); Vice President,
Corporate Planning (1997 to 1999); Managing Director, Corporate
Planning (1994 to 1997)
Stuart Stoller 45 1996 Vice President and Corporate Controller (since 1996)
Michael G. Williams 44 1998 Vice President, Chief Information Officer (since 2000); Vice
President, Chief Information Officer, The Times (1998 to 2000);
Vice President, Information Technology and Chief Technology
Officer, The Seagram Spirits and Wine Group (1992 to 1998)
</TABLE>
- ----------
(1) Mr. Lewis left the Company in 1973 and returned in 1977.
(2) Ms. Augustine left the Company in 1993 and returned in 1998.
<PAGE>
13
<TABLE>
<CAPTION>
Employed By Position(s) As Of
Name Age Registrant Since February 21, 2001
- --------------------------- ---- ---------------- ---------------------------------------------------------------------
Operating Unit Executives
<S> <C> <C> <C>
Leonard P. Forman 55 1974(1) President and Chief Executive Officer, The New York Times Company
Magazine Group, Inc. (since 1998); Senior Vice President,
Corporate Development, New Ventures and Electronic Businesses
(1996-1998)
Richard H. Gilman 50 1983 Publisher of The Globe (since 1999); Senior Vice President,
Operations (1993 to 1998) and Circulation (1998 to 1999) of The
Times
Lynn O. Matthews 56 1973 President and Chief Operating Officer, The New York Times Company
Regional Newspaper Group (since 2000); Publisher, Sarasota
Herald-Tribune (1991 to 2000)
Martin A. Nisenholtz 45 1995 Chief Executive Officer, New York Times Digital (since 1999);
President, The New York Times Electronic Media Company (1995 to
1999)
Janet L. Robinson 50 1983 Senior Vice President, Newspaper Operations (since 2001), and
President and General Manager of The Times (since 1996); Senior
Vice President, Advertising of The Times (1995-1996)
</TABLE>
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
The information required by this item appears at page F-40 of this Form 10-K.
ITEM 6. Selected Financial Data.
The information required by this item appears at page F-1 of this Form 10-K.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The information required by this item appears at pages F-3 to F-12 of this Form
10-K.
ITEM 8. Financial Statements and Supplementary Data.
The information required by this item appears at pages F-13 to F-37 and page
F-39 to F-40 of this Form 10-K.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
In addition to the information set forth under the caption "Executive Officers
of the Registrant" in Part I of this Form 10-K, the information required by this
item is incorporated by reference to the sections entitled "Section 16(a)
Beneficial Ownership
- ----------
(1) Mr. Forman left the Company in 1986 and returned in 1996.
<PAGE>
14
Reporting Compliance," "Proposal Number 1 - Election of Directors," and
"Interest of Directors in Certain Transactions of the Company," but only up to
and not including the section entitled "Board of Directors," of the Company's
Proxy Statement for the 2001 Annual Meeting of Stockholders.
ITEM 11. Executive Compensation.
The information required by this item is incorporated by reference to the
sections entitled "Directors' Compensation," "Directors' and Officers' Liability
Insurance" and "Compensation of Executive Officers," but only up to and not
including the section entitled "Performance Presentation," of the Company's
Proxy Statement for the 2001 Annual Meeting of Stockholders.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference to the
sections entitled "Voting On Matters Before The Annual Meeting," "Principal
Holders of Common Stock," "Security Ownership of Management and Directors,"
"Section 16(a) Beneficial Ownership Reporting Compliance," and "The 1997 Trust,"
of the Company's Proxy Statement for the 2001 Annual Meeting of Stockholders.
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item is incorporated by reference to the
sections entitled "Interest of Directors in Certain Transactions of the
Company," "Compensation of Executive Officers," but only up to and not including
the section entitled "Performance Presentation," of the Company's Proxy
Statement for the 2001 Annual Meeting of Stockholders.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(A) DOCUMENTS FILED AS PART OF THIS REPORT
(1) Financial Statements and Supplemental Schedules
(a) The Consolidated Financial Statements of the Company are filed as part of
this Form 10-K and are set forth on pages F-13 to F-37. The report of
Deloitte & Touche LLP, Independent Auditors, dated January 24, 2001
(January 31, 2001 as to Note 17), is set forth on page F-38 of this Form
10-K.
(b) The following additional consolidated financial information is filed as
part of this Form 10-K and should be read in conjunction with the
Consolidated Financial Statements set forth on pages F-13 to F-37.
Schedules not included with this additional consolidated financial
information have been omitted either because they are not applicable or
because the required information is shown in the Consolidated Financial
Statements at the aforementioned pages.
Page
----
Ratio of Earnings to Fixed Charges................................... Exhibit 12
Independent Auditors' Consent........................................ Exhibit 23
Consolidated Schedules for the Three Years Ended December 31, 2000:
II--Valuation and Qualifying Accounts.......................... S-1
Separate financial statements and supplemental schedules of associated companies
accounted for by the equity method are omitted in accordance with the provisions
of Rule 3-09 of Regulation S-X.
<PAGE>
15
(2) Exhibits
(3.1) Certificate of Incorporation as amended and restated to reflect
amendments effective June 19, 1998 (filed as an Exhibit to the
Company's Form 10-Q dated August 11, 1998, and incorporated by
reference herein).
(3.2) By-laws as amended through May 21, 1998 (filed as an Exhibit to the
Company's Form 10-Q dated August 11, 1998, and incorporated by
reference herein).
(4) The Company agrees to furnish to the Commission upon request a copy
of any instrument with respect to long-term debt of the Company and
any subsidiary for which consolidated or unconsolidated financial
statements are required to be filed, and for which the amount of
securities authorized thereunder does not exceed 10% of the total
assets of the Company and its subsidiaries on a consolidated basis.
(9.1) Globe Voting Trust Agreement, dated as of October 1, 1993, as
amended effective October 1, 1995 (filed as an Exhibit to the
Company's Form 10-K dated March 11, 1996, and incorporated by
reference herein).
(10.1) The Company's 1991 Executive Stock Incentive Plan, as amended
through February 15, 2001.
(10.2) The Company's 1991 Executive Cash Bonus Plan, as amended through May
23, 2000 (filed as an Exhibit to the Company's Form 10-Q dated
November 8, 2000, and incorporated by reference herein).
(10.3) The Company's Non-Employee Directors' Stock Option Plan, as amended
through September 21, 2000 (filed as an Exhibit to the Company's
Form 10-Q dated November 8, 2000 and incorporated by reference
herein).
(10.4) The Company's Supplemental Executive Retirement Plan, as amended and
restated through January 1, 1993 (filed as an Exhibit to the
Company's Form 10-K dated March 11, 1996, and incorporated by
reference herein).
(10.5) Amendment No. 1, dated May 1, 1997, to the Company's Supplemental
Executive Retirement Plan (filed as an Exhibit to the Company's Form
10-Q dated March 30, 1997, and incorporated by reference herein).
(10.6) Lease (short form) between the Company and Z Edison Limited
Partnership, dated April 8, 1987 (filed as an Exhibit to the
Company's Form 10-K dated March 27, 1988, and incorporated by
reference herein).
(10.6.1) Amendment to Lease between the Company and Z Edison Limited
Partnership, dated May 14, 1997 (filed as an Exhibit to the
Company's Form 10-Q dated November 10, 1998, and incorporated by
reference herein).
(10.6.2) Second Amendment to Lease between the Company and Z Edison Limited
Partnership, dated June 30, 1998 (filed as an Exhibit to the
Company's Form 10-Q dated November 10, 1998, and incorporated by
reference herein).
(10.7) Agreement of Lease, dated as of December 15, 1993, between The City
of New York, Landlord, and the Company, Tenant (as successor to New
York City Economic Development Corporation (the "EDC"), pursuant to
an Assignment and Assumption of Lease With Consent, made as of
December 15, 1993, between the EDC, as Assignor, to the Company, as
Assignee) (filed as an Exhibit to the Company's Form 10-K dated
March 21, 1994, and incorporated by reference herein).
(10.8) Funding Agreement #1, dated as of December 15, 1993, between the EDC
and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.9) Funding Agreement #2, dated as of December 15, 1993, between the EDC
and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.10) Funding Agreement #3, dated as of December 15, 1993, between the EDC
and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.11) Funding Agreement #4, dated as of December 15, 1993, between the EDC
and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
<PAGE>
16
(10.12) New York City Public Utility Service Power Service Agreement, made
as of May 3, 1993, between The City of New York, acting by and
through its Public Utility Service, and The New York Times Newspaper
Division of the Company (filed as an Exhibit to the Company's Form
10-K dated March 21, 1994, and incorporated by reference herein).
(10.13) Employment Agreement, dated May 19, 1993, between API, Globe
Newspaper Company and William O. Taylor (filed as an Exhibit to the
Company's Form 10-K dated March 21, 1994, and incorporated by
reference herein).
(10.14) Globe Newspaper Company, Inc. Supplemental Executive Retirement
Plan, as amended effective December 16, 1998 (filed as an Exhibit to
the Company's Form 10-K dated February 26, 1999, and incorporated by
reference herein).
(10.15) API's 1990 Stock Option Plan (Restated 1991) (filed as Exhibit 1 to
API's Quarterly Report on Form 10-Q for the Quarter ended June 30,
1991 (Commission File No. 1-10251), and incorporated by reference
herein).
(10.16) The Company's Deferred Executive Compensation Plan, as amended
effective January 1, 2001.
(10.17) The Company's Non-Employee Directors Deferral Plan (filed as an
Exhibit to the Company's Form 10-Q dated November 12, 1997, and
incorporated by reference herein).
(10.18) Distribution Agreement, dated as of September 24, 1998, by and among
the Company, Morgan Stanley & Co., Incorporated, Chase Securities
Inc. and Salomon Smith Barney Inc. (filed as an Exhibit to the
Company's Form 8-K dated September 24, 1998, and incorporated by
reference herein).
(10.19) Exchange Rate Agency Agreement, dated as of September 24, 1998, by
and between the Company and Morgan Stanley Dean Witter (filed as an
Exhibit to the Company's Form 8-K dated September 24, 1998, and
incorporated by reference herein).
(10.20) Calculation Agent Agreement, dated as of September 24, 1998, by and
between the Company and The Chase Manhattan Bank (filed as an
Exhibit to the Company's Form 8-K dated September 24, 1998, and
incorporated by reference herein).
(10.21) Employment Agreement, dated as of September 1, 1999, between the
Company and Martin Nisenholtz (filed as an Exhibit to the Company's
Form 10-K dated March 14, 2000, and incorporated by reference
herein).
(12) Ratio of Earnings to Fixed Charges.
(21) Subsidiaries of the Company.
(23) Consent of Deloitte & Touche LLP.
(B) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the fiscal year
ended December 31, 2000.
<PAGE>
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: February 21, 2001
(Registrant)
THE NEW YORK TIMES COMPANY
By: /S/ SOLOMON B. WATSON IV
---------------------------------------------------------
Solomon B. Watson IV, Senior Vice President,
General Counsel and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
ARTHUR OCHS SULZBERGER Chairman Emeritus, Director February 21, 2001
ARTHUR SULZBERGER, JR. Chairman, Director (Principal February 21, 2001
Executive Officer)
RUSSELL T. LEWIS Chief Executive Officer, February 21, 2001
President and Director
MICHAEL GOLDEN Vice Chairman, Senior Vice February 21, 2001
President and Director
JOHN F. AKERS Director February 21, 2001
BRENDA C. BARNES Director February 21, 2001
RAUL E. CESAN Director February 21, 2001
JACQUELINE H. DRYFOOS Director February 21, 2001
RICHARD L. GELB Director February 21, 2001
ROBERT A. LAWRENCE Director February 21, 2001
DAVID E. LIDDLE Director February 21, 2001
ELLEN R. MARRAM Director February 21, 2001
JOHN M. O'BRIEN Senior Vice President and February 21, 2001
Chief Financial Officer
(Principal Financial Officer)
CHARLES H. PRICE II Director February 21, 2001
HENRY B. SCHACHT Director February 21, 2001
DONALD M. STEWART Director February 21, 2001
STUART STOLLER Vice President, Corporate February 21, 2001
Controller (Principal Accounting
Officer)
<PAGE>
THE NEW YORK TIMES COMPANY
2000 FINANCIAL REPORT
- --------------------------------------------------------------------------------
Contents Page
- --------------------------------------------------------------------------------
Selected Financial Data.................................................... F-1
Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................... F-3
Consolidated Statements of Income.......................................... F-13
Consolidated Balance Sheets................................................ F-14
Consolidated Statements of Cash Flows...................................... F-16
Consolidated Statements of Stockholders' Equity............................ F-18
Notes to the Consolidated Financial Statements............................. F-19
Independent Auditors' Report............................................... F-38
Management's Responsibilities Report....................................... F-38
Quarterly Information (unaudited).......................................... F-39
Market Information......................................................... F-40
Ten-Year Supplemental Financial Data....................................... F-41
<PAGE>
F-1
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Years Ended
-------------------------------------------------------------------------
December 31, December 26, December 27, December 28, December 29,
(In thousands, except per share and employee data) 2000 1999 1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES AND INCOME
Revenues $3,489,455 $3,156,756 $2,956,555 $2,881,841 $2,643,143
Operating profit 635,921 571,282 509,387 445,102 163,280
Income before income taxes and extraordinary item 673,086 538,464 505,520 437,365 197,909
Extraordinary item, net of tax - debt extinguishment -- -- (7,716) -- --
Net income 397,536 310,177 278,914 262,301 84,534
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and equipment - net $1,207,160 $1,218,396 $1,326,196 $1,366,931 $1,358,029
Total assets 3,606,679 3,495,802 3,465,109 3,623,183 3,539,871
Long-term debt and capital lease obligations 636,866 598,327 597,818 535,428 636,632
Common stockholders' equity 1,281,163 1,448,658 1,531,470 1,729,297 1,623,523
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Basic earnings per share
Earnings before extraordinary item $ 2.37 $ 1.77 $ 1.52 $ 1.36 $ .43
Extraordinary item, net of tax - debt extinguishment -- -- (.04) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net income $ 2.37 $ 1.77 $ 1.48 $ 1.36 $ .43
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share
Earnings before extraordinary item $ 2.32 $ 1.73 $ 1.49 $ 1.33 $ .43
Extraordinary item, net of tax - debt extinguishment -- -- (.04) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net income $ 2.32 $ 1.73 $ 1.45 $ 1.33 $ .43
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends $ .45 $ .41 $ .37 $ .32 $ .29
Common stockholders' equity $ 7.47 $ 8.08 $ 7.94 $ 8.77 $ 8.25
- -----------------------------------------------------------------------------------------------------------------------------------
KEY RATIOS
Operating profit to revenues 18% 18% 17% 15% 6%
Return on average common stockholders' equity 29% 21% 17% 16% 5%
Return on average total assets 11% 9% 8% 7% 2%
Long-term debt and capital lease obligations
to total capitalization 33% 29% 28% 24% 28%
Current assets to current liabilities .70 .91 .82 .92 .74
- -----------------------------------------------------------------------------------------------------------------------------------
FULL-TIME EQUIVALENT EMPLOYEES 14,000 13,400 13,200 13,100 12,800
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
o See page F-2 for special items included in Selected Financial Data. All
earnings per share amounts for special items on page F-2 are on a diluted
basis.
o For comparability, certain prior year amounts have been reclassified to
conform with the 2000 presentation.
o Fiscal year 2000 comprises 53 weeks and fiscal years 1999, 1998, 1997 and
1996 each comprise 52 weeks.
<PAGE>
F-2
Income used in computing the key operating ratios on page F-1 include the
following special items:
2000
These items increased earnings per share by $.22.
o The Company recorded an $85.3 million pre-tax net gain ($.36 per share)
principally resulting from the sale of seven newspapers: the Santa Barbara
News-Press in Santa Barbara, Calif., the Daily World in Opelousas, La.,
the Daily News in Palatka, Fla., the Lake City Reporter in Lake City,
Fla., The News-Sun in Sebring/Avon Park, Fla., The News-Leader in
Fernandina Beach, Fla., and the Marco Island Eagle in Marco Island, Fla.
and nine telephone directory operations ("divested Regionals") amounting
to $132.1 million. This net gain includes a disposition loss as well as
write-downs for certain of the Company's equity interests in online
ventures in the aggregate amount of $46.8 million. Additionally, in
connection with the sale of the Santa Barbara News-Press in October 2000,
the Company entered into a five-year $25.0 million non-compete agreement.
This amount will be recognized as income on a straight-line basis over the
life of the agreement. See Note 2 of the Notes to the Consolidated
Financial Statements.
o The Company recorded a $22.7 million pre-tax noncash charge ($.12 per
share) for a write-down of intangible assets related to an acquisition at
New York Times Digital, the Company's Internet business division (see Note
2 of the Notes to the Consolidated Financial Statements).
o The Company recorded a $5.3 million pre-tax charge ($.02 per share) for
work force reduction charges ("Buyouts") across the Company (see Notes 8
and 16 of the Notes to the Consolidated Financial Statements).
1999
This item reduced earnings per share by $.05.
o The Company recorded a $15.5 million pre-tax charge principally for
Buyouts at The Boston Globe (see Notes 8 and 16 of the Notes to the
Consolidated Financial Statements).
1998
These items reduced earnings per share by $.01.
o The Company recorded a $4.6 million pre-tax gain ($.01 per share) from the
sale of equipment (see Note 2 of the Notes to the Consolidated Financial
Statements).
o The Company recorded a $7.7 million after-tax ($.04 per share)
extraordinary item in connection with its repurchase of $78.1 million of
its $150.0 million, 8.25% notes due in 2025 (see Note 6 of the Notes to
the Consolidated Financial Statements).
o The Company recorded an $8.0 million pre-tax gain ($.02 per share) from
the satisfaction of a post-closing requirement related to the sale of
assets of its tennis, sailing and ski magazines in 1997 (see Note 2 of the
Notes to the Consolidated Financial Statements).
o The Company recorded $5.8 million in pre-tax income ($.02 per share)
related to a non-compete agreement entered into as part of the divestiture
of the Company's Women's Magazine Division in 1994.
o The Company recorded a $5.4 million pre-tax charge ($.02 per share) for
Buyouts (see Notes 8 and 16 of the Notes to the Consolidated Financial
Statements).
1997
These items increased earnings per share by $.10.
o The Company recorded an $18.0 million benefit from a tax settlement ($.09
per share) resulting from the completion of its federal income tax audits
for periods through 1992.
o The Company recorded aggregate pre-tax gains totaling $10.4 million ($.03
per share) from the sale of assets of its tennis, sailing and ski
magazines and certain small properties, net of costs associated with the
exit of a golf tee-time reservation operation.
o The Company recorded a $10.1 million pre-tax noncash charge ($.03 per
share) relating to the adoption of Emerging Issues Task Force Issue No.
97-13, Accounting for Costs Incurred in Connection with a Consulting
Contract or an Internal Project That Combines Business Process
Reengineering and Information Technology Transformation ("EITF 97-13").
o The Company recorded $10.0 million in pre-tax income ($.03 per share)
related to a non-compete agreement entered into as part of the divestiture
of the Company's Women's Magazine Division in 1994.
o The Company recorded an $8.5 million pre-tax charge ($.02 per share) for
Buyouts.
1996
These items reduced earnings per share by $.48.
o The Company recorded a $126.8 million pre-tax noncash charge ($.48 per
share) relating to Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets To Be Disposed Of.
o The Company recorded pre-tax gains totaling $32.9 million ($.09 per share)
from the sale of a building and the realization of a gain contingency from
the disposition of a paper mill in a prior year.
o The Company recorded $10.0 million in pre-tax income ($.03 per share)
related to a non-compete agreement entered into as part of the divestiture
of the Company's Women's Magazine Division in 1994.
o The Company recorded a $44.1 million pre-tax charge ($.12 per share) for
Buyouts.
<PAGE>
F-3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
In 2000 newspapers contributed 91% of the Company's $3.5 billion in revenues,
while broadcasting accounted for 5%, magazines accounted for 3% and the
Company's Internet business division accounted for the remainder.
Advertising revenues were 72% and circulation revenues were 22% of the Company's
total revenues in 2000, and newspaper distribution operations and database
royalties principally made up the balance.
Newsprint is the major component of the Company's cost of raw materials.
Newsprint market prices in 2000 increased from 1999 and are expected to rise in
2001 over 2000 levels.
Below is a chart of the Company's consolidated costs and expenses for the three
years ended December 31, 2000.
Components of Consolidated Costs and Expenses
[The following table was depicted as a bar chart in the printed material.]
2000 1999 1998
---- ---- ----
Wages and Benefits 41% 42% 41%
Raw Materials 13% 12% 14%
Other Operating Costs 38% 38% 37%
Depreciation & Amortization 8% 8% 8%
----------------------------
100% 100% 100%
Consolidated Costs and Expenses as a Percentage of Revenues
[The following table was depicted as a bar chart in the printed material.]
2000 1999 1998
---- ---- ----
Wages and Benefits 34% 34% 34%
Raw Materials 10% 10% 12%
Other Operating Costs 31% 32% 30%
Depreciation & Amortization 7% 6% 7%
----------------------------
82% 82% 83%
RESULTS OF OPERATIONS
CONSOLIDATED RESULTS
The Company's consolidated financial results for 2000, 1999 and 1998 were as
follows:
- --------------------------------------------------------------------------------
% Change
(In millions, except per ------------
share data) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Revenues $3,489.5 $3,156.8 $2,956.6 10.5 6.8
- --------------------------------------------------------------------------------
Operating profit $ 635.9 $ 571.3 $ 509.4 11.3 12.2
- --------------------------------------------------------------------------------
Income before special
items $ 359.9 $ 319.1 $ 279.3 12.8 14.2
Special items 37.6 (8.9) (0.4) * *
- --------------------------------------------------------------------------------
Net income $ 397.5 $ 310.2 $ 278.9 28.2 11.2
- --------------------------------------------------------------------------------
Diluted earnings per
share before
special items $ 2.10 $ 1.78 $ 1.46 18.0 21.9
Special items .22 (.05) (.01) * *
- --------------------------------------------------------------------------------
Diluted earnings per
share $ 2.32 $ 1.73 $ 1.45 34.1 19.3
- --------------------------------------------------------------------------------
For an explanation of special items, see "Special Items" on page F-5.
All references to earnings per share in this Management's Discussion and
Analysis of Financial Condition and Results of Operations are to diluted
earnings per share.
Fiscal year 2000 comprises 53 weeks and fiscal years 1999 and 1998 each comprise
52 weeks. The impact of the 53rd week (the "additional week") in the Company's
2000 fiscal year was revenues of $40.2 million, operating profit of $6.7
million, net income of $3.3 million and earnings per share of $.02.
*Represents percentages greater than or equal to 100%.
Revenues were $3.5 billion in 2000, up 10.5% from $3.2 billion in 1999.
Excluding revenues from disposed properties including seven newspapers and nine
telephone directory operations ("divested Regionals"), the Worcester Telegram &
Gazette ("T&G"), which was acquired on January 7, 2000, and the additional week
total revenues for the Company grew 7.3% in 2000 and advertising revenues grew
8.4% over 1999. On a comparable basis, total revenues in 2000 improved mostly as
a result of higher advertising rates and increased advertising volume.
In 1999 revenues were up 6.8% from $3.0 billion in 1998. Revenues in 1999
improved mostly as a result of higher advertising rates, increased advertising
volume and an improved advertising mix.
Operating profit for 2000 increased 11.3% to $635.9 million from $571.3 million
in 1999. Operating profit for 2000, exclusive of special items, rose 13.2% to
$664.0 million from $586.7 million in 1999. Net income for 2000 increased 28.2%
to $397.5 million from $310.2 million in 1999. Net income for 2000, exclusive of
special items, rose 12.8% to $359.9 million from $319.1 million in 1999. The
increases were mainly due to strong advertising revenue growth, partially offset
by higher newsprint costs.
<PAGE>
F-4
In 1999 operating profit rose 12.2% to $571.3 million from $509.4 million in
1998. Operating profit for 1999, exclusive of special items, rose 14.0% to
$586.7 million from $514.8 million in 1998. Net income in 1999 increased 11.2%
to $310.2 million from $278.9 million in 1998. Net income for 1999, exclusive of
special items, rose 14.2% to $319.1 million from $279.3 million in 1998. The
increases were mainly due to higher advertising revenues and lower newsprint
expense at the Company's newspapers.
EBITDA
The Company's consolidated EBITDA (earnings before interest, taxes, depreciation
and amortization) for 2000, 1999 and 1998 was as follows:
- --------------------------------------------------------------------------------
% Change
--------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
EBITDA $965.1 $786.6 $723.4 22.7 8.8
Special items (80.0) 15.5 0.6 * *
- --------------------------------------------------------------------------------
EBITDA excluding
special items $885.1 $802.1 $724.0 10.3 10.8
- --------------------------------------------------------------------------------
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 accounting principles generally accepted in the United States
of America ("GAAP"). The EBITDA presented may not be comparable to similarly
titled measures reported by other companies. 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.
OPERATING EXPENSES
Consolidated operating expenses were as follows:
- --------------------------------------------------------------------------------
% Change
-------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Production costs
Raw materials $ 363.3 $ 321.4 $ 354.9 13.0 (9.4)
Wages and benefits 614.6 591.2 578.1 4.0 2.3
Other 480.1 450.4 433.7 6.6 3.8
- --------------------------------------------------------------------------------
Total production
costs 1,458.0 1,363.0 1,366.7 7.0 (0.3)
- --------------------------------------------------------------------------------
Selling, general and
administrative
expenses 1,395.5 1,222.5 1,080.5 14.1 13.1
- --------------------------------------------------------------------------------
Total $2,853.5 $2,585.5 $2,447.2 10.4 5.7
- --------------------------------------------------------------------------------
Production costs for 2000 increased 7.0% to $1.5 billion from $1.4 billion in
1999. The increase was in part related to higher newsprint expense associated
with increases in price and consumption, and the addition of the T&G.
Excluding the divested Regionals, the T&G and New York Times Digital ("NYTD"),
the Company's Internet business division, production costs for 2000 increased
4.2% principally due to higher newsprint expense.
Production costs for 1999 were flat compared with 1998 at $1.4 billion. Lower
newsprint expense was primarily offset by higher compensation and contracted
printing costs associated with The New York Times newspaper's national
expansion.
Selling, general and administrative ("SGA") expenses for 2000, exclusive of
special items, increased 13.3% to $1.4 billion from $1.2 billion in 1999.
Excluding the divested Regionals, the T&G and NYTD, SGA expenses increased 6.7%
in 2000. The higher level of SGA expenses is partly attributable to the national
expansion of The New York Times newspaper.
SGA expenses for 1999, exclusive of special items, increased 12.3% to $1.2
billion from $1.1 billion in 1998, principally as a result of higher incentive
compensation tied to improved earnings, increased costs associated with The New
York Times newspaper's national expansion and higher promotional spending.
OTHER ITEMS
Joint Ventures
Income from joint ventures (see Note 3 of the Notes to the Consolidated
Financial Statements) decreased to $15.9 million in 2000 from $17.9 million in
1999. In 1999 income from joint ventures decreased to $17.9 million from $21.0
million in 1998.
The reduction in joint venture income in 2000 from 1998 was in part due to
unfavorable operating results at Madison Paper Industries ("Madison") in which
the Company holds an equity interest. Despite higher paper selling prices in
2000, Madison had higher raw material costs as well as higher other operating
costs, principally related to accelerated depreciation associated with equipment
modernization. The modernization project is expected to continue through early
2001. Joint venture income decreased in 1999 from 1998 mostly due to lower paper
selling prices at the mills in which the Company holds equity interests.
Interest Expense
Interest expense, net increased to $64.1 million in 2000 from $50.7 million in
1999. The increase was principally due to increased borrowing levels to fund the
purchase of the T&G and the Company's share repurchase program. In 1999 interest
expense, net increased to $50.7 million from $43.3 million in 1998. The increase
was principally due to increased borrowing levels to fund the Company's share
repurchase program.
Total interest income was $4.5 million in 2000, $1.8 million in 1999 and $3.6
million in 1998.
Taxes
The Company's annual effective income tax rates were 41.6% in 2000, 42.4% in
1999 and 43.3% in 1998, exclusive of special items. The decline in the effective
income tax rates was primarily attributable to lower state and local income
taxes.
EARNINGS PER SHARE
Diluted earnings per share in 2000 was $2.10, up 18.0% from $1.78 in 1999, and
up 21.9% from $1.46 in 1998, excluding special items. The increases were mostly
due to stronger advertising revenues in the Newspaper Group.
<PAGE>
F-5
Diluted earnings per share as reported in the Company's Consolidated Statements
of Income were $2.32 in 2000, $1.73 in 1999 and $1.45 in 1998. The effect of
repurchases on diluted earnings per share was an increase to earnings per share
of $.09 in 2000 and $.07 in 1999 (see Note 12 of the Notes to the Consolidated
Financial Statements).
The average basic Class A and Class B common shares outstanding were 168.0
million in 2000, 175.6 million in 1999 and 188.8 million in 1998. The average
diluted Class A and Class B common shares outstanding were 171.6 million in
2000, 179.2 million in 1999 and 192.8 million in 1998.
For 2001 the Company expects to achieve 10 to 15% earnings per share growth,
excluding special items.
SPECIAL ITEMS
Over the past three years, the Company's results have been affected by the
following special items:
2000
These items increased net income by $37.6 million and earnings per share by
$.22.
o An $85.3 million pre-tax net gain ($.36 per share) principally resulting
from the sale of the divested Regionals amounting to $132.1 million,
partially offset by a disposition loss as well as write-downs for certain
of the Company's equity interests in online ventures in the aggregate
amount of $46.8 million. Additionally, in connection with the sale of the
Santa Barbara News-Press in October 2000, the Company entered into a
five-year $25.0 million non-compete agreement. This amount will be
recognized as income on a straight-line basis over the life of the
agreement. See Note 2 of the Notes to the Consolidated Financial
Statements.
o A $22.7 million pre-tax noncash charge ($.12 per share) for a write-down
of intangible assets related to an acquisition at New York Times Digital,
the Company's Internet division. This charge is included in amortization
expense (see Note 2 of the Notes to the Consolidated Financial
Statements).
o A $5.3 million pre-tax charge ($.02 per share) for work force reduction
expenses ("Buyouts") across the Company (see Notes 8 and 16 of the Notes
to the Consolidated Financial Statements).
1999
This item reduced net income by $8.9 million and earnings per share by $.05.
o A $15.5 million pre-tax charge principally for Buyouts at The Boston Globe
(see Notes 8 and 16 of the Notes to the Consolidated Financial
Statements).
1998
These items reduced net income by $0.4 million and earnings per share by $.01.
o A $4.6 million pre-tax ($.01 per share) gain from the sale of equipment
(see Note 2 of the Notes to the Consolidated Financial Statements).
o A $7.7 million after-tax ($.04 per share) extraordinary item in connection
with the Company's repurchase of $78.1 million of its $150.0 million,
8.25% notes due in 2025 (see Note 6 of the Notes to the Consolidated
Financial Statements).
o An $8.0 million pre-tax gain ($.02 per share) from the satisfaction of a
post-closing requirement related to the 1997 sale of the Company's assets
of its tennis, sailing and ski magazines (see Note 2 of the Notes to the
Consolidated Financial Statements).
o A $5.8 million addition to pre-tax income ($.02 per share) related to a
non-compete agreement entered into as part of the divestiture of the
Company's Women's Magazine Division in 1994 (see Note 2 of the Notes to
the Consolidated Financial Statements).
o A $5.4 million pre-tax charge ($.02 per share) for Buyouts: $2.5 million
(The Boston Globe), $3.0 million (Magazine Group), $1.9 million (Broadcast
Group) offset by a reversal of $2.0 million (Corporate) (see Notes 8 and
16 of the Notes to the Consolidated Financial Statements).
<PAGE>
F-6
OPERATING SEGMENT INFORMATION
REVENUES, EBITDA AND OPERATING PROFIT
Consolidated revenues, EBITDA and operating profit by business segment were as
follows:
- --------------------------------------------------------------------------------
% Change
-------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Revenues
Newspapers $3,160.2 $2,857.4 $2,674.9 10.6 6.8
Broadcast 160.3 150.1 151.2 6.8 (0.7)
Magazines 115.4 110.6 115.1 4.4 (3.9)
New York Times
Digital 66.6 43.7 20.4 52.4 *
Intersegment
Eliminations(A) (13.0) (5.0) (5.0) * --
- --------------------------------------------------------------------------------
Total revenues $3,489.5 $3,156.8 $2,956.6 10.5 6.8
- --------------------------------------------------------------------------------
EBITDA
Newspapers $ 842.6 $ 732.8 $ 656.8 15.0 11.6
Broadcast 65.6 63.2 62.8 3.7 0.7
Magazines 20.6 20.0 11.9 2.9 68.4
New York Times
Digital (36.7) (9.5) (12.5) * 24.0
Unallocated corporate
expenses (28.2) (37.8) (21.4) 25.4 (77.0)
Income from joint
ventures 15.9 17.9 21.0 (11.1) (14.8)
Gain on dispositions
of assets and other
- net 85.3 -- 18.5 * *
Extraordinary item -
debt extinguishment -- -- (13.7) -- *
- --------------------------------------------------------------------------------
Total EBITDA $ 965.1 $ 786.6 $ 723.4 22.7 8.8
- --------------------------------------------------------------------------------
Operating Profit (Loss)
Newspapers $ 677.6 $ 568.6 $ 491.4 19.2 15.7
Broadcast 48.8 45.8 45.1 6.5 1.6
Magazines 19.3 18.7 16.3 3.7 14.8
New York Times
Digital (70.0) (14.1) (13.6) * (3.1)
Unallocated corporate
expenses (39.8) (47.7) (29.8) 16.5 (60.2)
- --------------------------------------------------------------------------------
Total operating profit $ 635.9 $ 571.3 $ 509.4 11.3 12.2
- --------------------------------------------------------------------------------
(A) Intersegment eliminations primarily include revenues between New York
Times Digital and other segments.
The Company began presenting NYTD as a separate segment in 2000. At the end of
2000, the business of selling information to online database providers ("Digital
Archive Distribution"), which was previously part of The New York Times
newspaper, became part of NYTD. NYTD now includes NYTimes.com, Boston.com,
newyorktoday.com, WineToday.com, GolfDigest.com, Digital Archive Distribution
and Abuzz. The Company has restated all prior periods presented to reflect these
changes.
Newspaper Group
The Newspaper Group includes The New York Times ("The Times"), The Boston Globe
("The Globe"), other newspapers, newspaper distributors, a news service, a
features syndicate, TimesDigest, licensing operations of The New York Times
databases and microfilm.
The Company acquired certain assets and liabilities of the T&G on January 7,
2000, and the related results of operations are included as of such date.
Beginning in 2001 The Globe and the T&G will be combined and presented as the
New England Newspaper Group.
- --------------------------------------------------------------------------------
% Change
----------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Revenues $3,160.2 $2,857.4 $2,674.9 10.6 6.8
- --------------------------------------------------------------------------------
EBITDA $ 842.6 $ 732.8 $ 656.8 15.0 11.6
- --------------------------------------------------------------------------------
Operating Profit $ 677.6 $ 568.6 $ 491.4 19.2 15.7
- --------------------------------------------------------------------------------
Revenues grew to $3.2 billion in 2000, up 10.6% from $2.9 billion in 1999.
Excluding revenues from the divested Regionals, the T&G and the additional week,
total Newspaper Group revenues grew 7.0% over 1999. Performance was strongest at
The Times and The Globe, where advertising revenues climbed 11.2% and 6.8%. The
Times benefited from higher advertising rates, while both newspapers benefited
from increased volume.
The Newspaper Group's operating profit for 2000 rose 19.2% to $677.6 million,
compared with $568.6 million in 1999. Excluding special items, 2000 operating
profit rose 16.4% to $679.7 million, compared with $584.0 million in 1999. The
improvement primarily resulted from strong revenue growth despite higher
newsprint costs. Excluding the T&G and divested Regionals operating profit
increased 17.1% in 2000.
In 2000 the Company's newsprint expense increased 12.2%, 5.7% which resulted
from an increase in the average cost of newsprint and 6.5% resulted from an
increase in consumption due to increased advertising compared with 1999.
Revenues grew to $2.9 billion in 1999, up 6.8% from $2.7 billion in 1998. The
increase in revenue was primarily due to higher advertising rates and volume and
an improved advertising mix. Performance was strongest at The Times and The
Globe, where advertising revenues climbed 11.8% and 5.5%. Both newspapers
benefited from strong national advertising including increased business from
technology companies and telecommunications businesses. At the Regionals,
advertising revenues were also strong, due in part to the success of Celebrate
2000, a comprehensive program of millennium-related advertising, circulation and
promotion initiatives. Across the Newspaper Group there was also a slight
increase in circulation revenue.
The Newspaper Group's operating profit for 1999 rose 15.7% to $568.6 million,
compared with $491.4 million in 1998. In 1999 operating profit rose 18.2% to
$584.0 million, compared with $494.0 million in 1998, excluding special items.
The improvement primarily resulted from higher advertising revenues and lower
<PAGE>
F-7
newsprint expense. In 1999 the Company's newsprint expense fell 10.9%, which
resulted from a decrease in the average cost of newsprint of 12.9% and an
increase in consumption of 2.0% due to strong advertising compared with 1998.
For 2001 the Company currently expects advertising revenue growth in the
Newspaper Group to be in the range of 5 to 7%, and expense growth to be in the 3
to 5% range, excluding newsprint and buyouts.
Advertising, circulation and other revenue, by major product of the Newspaper
Group, were as follows:
- --------------------------------------------------------------------------------
% Change
-------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
The New York Times
Advertising $1,306.2 $1,175.2 $1,051.6 11.2 11.8
Circulation 476.6 452.6 439.9 5.3 2.9
Other 144.6 129.3 140.4 11.8 (7.9)
- --------------------------------------------------------------------------------
Total $1,927.4 $1,757.1 $1,631.9 9.7 7.7
- --------------------------------------------------------------------------------
New England Newspaper Group
The Boston Globe
Advertising $ 493.9 $ 462.4 $ 438.4 6.8 5.5
Circulation 135.9 133.7 133.4 1.7 0.2
Other 34.5 22.5 12.6 53.1 79.1
- --------------------------------------------------------------------------------
Subtotal $ 664.3 $ 618.6 $ 584.4 7.4 5.9
- --------------------------------------------------------------------------------
Worcester Telegram & Gazette
Advertising $ 58.4 N/A N/A N/A N/A
Circulation 23.5 N/A N/A N/A N/A
Other 0.7 N/A N/A N/A N/A
- --------------------------------------------------------------------------------
Subtotal $ 82.6 N/A N/A N/A N/A
- --------------------------------------------------------------------------------
Total New England Newspaper Group
Advertising $ 552.3 $ 462.4 $ 438.4 19.4 5.5
Circulation 159.4 133.7 133.4 19.2 0.2
Other 35.2 22.5 12.6 56.2 79.1
- --------------------------------------------------------------------------------
Total $ 746.9 $ 618.6 $ 584.4 20.7 5.9
- --------------------------------------------------------------------------------
Regional Newspapers(A)
Advertising $ 368.6 $ 363.4 $ 342.7 1.4 6.0
Circulation 101.2 103.0 103.0 (1.8) --
Other 16.1 15.3 12.9 5.6 18.0
- --------------------------------------------------------------------------------
Total $ 485.9 $ 481.7 $ 458.6 0.9 5.0
- --------------------------------------------------------------------------------
Total Newspaper Group
Advertising $2,227.1 $2,001.0 $1,832.7 11.3 9.2
Circulation 737.2 689.3 676.3 6.9 1.9
Other 195.9 167.1 165.9 17.2 0.7
- --------------------------------------------------------------------------------
Total $3,160.2 $2,857.4 $2,674.9 10.6 6.8
- --------------------------------------------------------------------------------
(A) Excluding divested Regionals, 2000 advertising revenue for the Regional
Newspaper Group increased 4.9% compared with 1999 and 5.9% compared with
1998.
Advertising volume for The Times, The Globe, the T&G and the Regionals was as
follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
(Inches in thousands, % Change
preprints in --------------
thousands of copies) 2000 1999 1998 00-99 99-98
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The New York Times
Retail 574.0 567.3 587.2 1.2 (3.4)
National 1,691.6 1,582.1 1,392.7 6.9 13.6
Classified 964.6 984.2 996.9 (2.0) (1.3)
Zoned 1,033.4 1,015.7 1,019.6 1.8 (0.4)
- -----------------------------------------------------------------------------------
Total 4,263.6 4,149.3 3,996.4 2.8 3.8
- -----------------------------------------------------------------------------------
Preprints 459,311 427,857 343,070 7.4 24.7
- -----------------------------------------------------------------------------------
New England Newspaper Group
The Boston Globe
Retail 646.6 667.5 701.9 (3.1) (4.9)
National 797.6 753.1 697.4 5.9 8.0
Classified 1,371.8 1,354.4 1,350.5 1.3 0.3
Zoned 301.6 256.2 278.9 17.7 (8.2)
- -----------------------------------------------------------------------------------
Total 3,117.6 3,031.2 3,028.7 2.9 0.1
- -----------------------------------------------------------------------------------
Preprints 831,303 801,842 787,016 3.7 1.9
- -----------------------------------------------------------------------------------
Worcester Telegram & Gazette
Retail 320.1 N/A N/A N/A N/A
National 82.2 N/A N/A N/A N/A
Classified 536.7 N/A N/A N/A N/A
Zoned 493.9 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------
Total 1,432.9 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------
Preprints 201,135 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------
Regional Newspapers(A)
Retail 7,099.8 7,575.4 7,884.4 (6.3) (3.9)
National 290.8 285.0 252.7 2.0 12.8
Classified 8,046.7 8,068.4 7,671.4 (0.3) 5.2
Zoned 511.4 456.4 476.4 12.1 (4.2)
- -----------------------------------------------------------------------------------
Total 15,948.7 16,385.2 16,284.9 (2.7) 0.6
- -----------------------------------------------------------------------------------
Preprints 1,149,955 1,115,303 1,082,712 3.1 3.0
- -----------------------------------------------------------------------------------
</TABLE>
(A) Excluding divested Regionals, 2000 advertising volume for the Regional
Newspaper Group increased 1.5% compared with 1999 and was flat compared
with 1998.
<PAGE>
F-8
Circulation for The Times, The Globe, the T&G and the Regionals was as follows:
- --------------------------------------------------------------------------------
Weekday/Daily Sunday
----------------- ------------------
(Copies in thousands) 2000 % Change 2000 % Change
- --------------------------------------------------------------------------------
Average Circulation
The New York Times 1,132.4 2.0 1,697.3 1.8
New England Newspaper Group
The Boston Globe 467.9 (0.3) 719.5 (1.2)
Worcester Telegram & Gazette 104.1 N/A 127.7 N/A
Regional Newspapers(A) 696.9 (4.9) 749.0 (3.9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Weekday/Daily Sunday
----------------- ------------------
(Copies in thousands) 1999 % Change 1999 % Change
- --------------------------------------------------------------------------------
Average Circulation
The New York Times 1,110.2 1.5 1,668.1 1.4
New England Newspaper Group
The Boston Globe 469.1 (0.2) 728.5 (2.2)
Worcester Telegram & Gazette N/A N/A N/A N/A
Regional Newspapers 732.7 (0.6) 779.5 (1.0)
- --------------------------------------------------------------------------------
(A) Excluding divested Regionals, average net paid circulation for the
Regionals decreased 1.9% for weekday/daily copies and 1.8% for Sunday
copies in 2000 compared with 1999.
Circulation growth for The Times was primarily due to additional availability
and promotion in major markets across the nation combined with programs to
improve the quality and levels of its home delivery circulation base.
Additionally, The Times, The Globe, and the Regionals are continuing to make
improvements in product delivery and customer service to attract new readers and
retain existing ones.
Broadcast Group
The Broadcast Group is comprised of eight network-affiliated television stations
and two radio stations.
- --------------------------------------------------------------------------------
% Change
---------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Revenues $160.3 $150.1 $151.2 6.8 (0.7)
- --------------------------------------------------------------------------------
EBITDA $ 65.6 $ 63.2 $ 62.8 3.7 0.7
- --------------------------------------------------------------------------------
Operating Profit $ 48.8 $ 45.8 $ 45.1 6.5 1.6
- --------------------------------------------------------------------------------
Revenues and operating profit increased in 2000 as a result of higher
advertising revenue associated with the election and the Olympics. In 1999
revenues and operating profit remained flat. Additionally, the Broadcast Group
has employed tight cost controls to aid profitability.
The Broadcast Group's operating profit was $49.8 million in 2000, $45.9 million
in 1999 and $47.0 million in 1998, excluding Buyouts.
Magazine Group
This group consists of four golf publications and related activities in the golf
field.
- --------------------------------------------------------------------------------
% Change
---------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Revenues $115.4 $110.6 $115.1 4.4 (3.9)
- --------------------------------------------------------------------------------
EBITDA $ 20.6 $ 20.0 $ 11.9 2.9 68.4
- --------------------------------------------------------------------------------
Operating Profit $ 19.3 $ 18.7 $ 16.3 3.7 14.8
- --------------------------------------------------------------------------------
The Magazine Group's operating profit increased in 2000 to $19.3 million from
$18.7 million in 1999 and $16.3 million in 1998. Revenue and operating profit
for 2000 rose primarily due to advertising and special events related to the
50th anniversary of Golf Digest magazine as well as increased advertising
revenues from Golf World and Golf Woman, which debuted in the beginning of 2000.
Consolidation in the golf equipment industry and a competitive rate environment
adversely affected the Group's performance in all periods.
On January 31, 2001, the Company entered into an agreement to sell the assets of
the Magazine Group and GolfDigest.com. The sale is expected to be completed,
subject to regulatory approval, in the second quarter of 2001 (see Note 17 of
the Notes to the Consolidated Financial Statements).
New York Times Digital
NYTD is the Company's Internet business division, which consists of NYTimes.com,
Boston.com, newyorktoday.com, WineToday.com, GolfDigest.com, Digital Archive
Distribution and Abuzz. Abuzz develops and deploys technology to enable online
communities to share knowledge, interests and experience. GolfDigest.com is
included in the sale of the Magazine Group as noted above.
- --------------------------------------------------------------------------------
% Change
-------------
(In millions) 2000 1999 1998 00-99 99-98
- --------------------------------------------------------------------------------
Revenues $ 66.6 $ 43.7 $ 20.4 52.4 *
- --------------------------------------------------------------------------------
EBITDA $(36.7) $ (9.5) $(12.5) * 24.0
- --------------------------------------------------------------------------------
Operating Profit $(70.0) $(14.1) $(13.6) * (3.1)
- --------------------------------------------------------------------------------
NYTD revenues for 2000 were $66.6 million, up from $43.7 million in 1999 and
$20.4 million in 1998. The 2000 increase was primarily from new revenue streams
and the 1999 increase was primarily due to increased growth in advertising
volume. Advertising revenue accounted for approximately 66% of NYTD total
revenues for 2000 and approximately 57% for 1999.
Operating losses in 2000 increased to $70.0 million from $14.1 million in 1999.
Operating losses in 2000 included a $22.7 million write-down of intangible
assets. Operating losses in 1999 increased to $14.1 million from $13.6 million
in 1998. Higher operating losses were mainly due to increased staffing,
promotion and advertising.
Digital Archive Distribution accounted for 25.3%, 38.7% and 21.0% of revenues
and had operating profit of $15.9 million, $16.0 million and $4.1 million in
2000, 1999 and 1998.
<PAGE>
F-9
In January 2001 the Company announced staff reductions that reduced the total
work force at NYTD by 17%.
NYTD has experienced significant revenue growth, and its goal is to achieve
positive EBITDA for the year in 2002.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $589.9 million in 2000 compared
with $601.1 million in 1999 and $496.9 million in 1998. The 2000 results
compared to 1999 were primarily due to higher earnings offset by changes in
working capital. The 1999 increase over 1998 was principally due to improved
earnings. Operating cash flow in all periods was primarily used for share
repurchases, capital expenditures and dividend payments to stockholders.
Net cash used in investing activities was $195.0 million in 2000 compared with
$82.9 million in 1999 and $56.2 million in 1998. The increase of $112.1 million
in 2000 was primarily due to the acquisition of the T&G for $296.3 million in
cash and the Company's minority interest investments in online ventures,
partially offset by the proceeds of the sales of the divested Regionals. The
increase in 1999 from 1998 was primarily due to additional minority interest
investments in Internet-related companies partially offset by reduced levels of
capital expenditures.
Net cash used in financing activities was $389.7 million in 2000 compared with
$490.4 million in 1999 and $511.6 million in 1998. Although the Company spent
$156.9 million more in share repurchases in 2000 compared to 1999, the increase
in commercial paper borrowings in 2000 caused a decrease in cash used by $100.7
million. The decrease of $21.2 million in 1999 compared with 1998 was
principally related to the debt extinguishment in 1998.
Cash generated from the Company's operations and the funds available from
external sources are expected to be adequate to cover all cash requirements,
including working capital needs, stock repurchases, planned capital expenditures
and acquisitions, and dividend payments to stockholders.
The ratio of current assets to current liabilities decreased to 69.6% at
December 31, 2000, from 91.3% at December 26, 1999. This decrease was
principally due to an increase in commercial paper outstanding mostly resulting
from the funding of the T&G acquisition. Long-term debt and capital lease
obligations, as a percentage of total capitalization, were 33.2% at December 31,
2000, and 29.2% at December 26, 1999. This increase was principally from
reductions in stockholders' equity related to stock repurchases.
FINANCING
In June 2000 total available funds under the Company's revolving credit
agreements were increased to $600.0 million from $400.0 million. The Company's
one-year revolving credit agreement was renewed and increased to $300.0 million
from $200.0 million and will now mature in June 2001. The Company's multi-year
revolving credit agreement was renewed and increased to $300.0 million from
$200.0 million and will now mature in June 2005. The Company's revolving credit
agreements require, among other provisions, specified levels of stockholders'
equity. The amount of stockholders' equity over required levels was $262.7
million at December 31, 2000, compared with $509.2 million at December 26, 1999.
The decline in the level of unrestricted stockholders' equity was primarily due
to stock repurchases.
The revolving credit agreements permit borrowings, which bear interest at the
Company's option (i) for domestic borrowings: based on a certificates of deposit
rate, a Federal Funds rate, a base rate or a quoted rate; or (ii) for Eurodollar
borrowings: based on the LIBOR rate, plus various margins based on the Company's
credit rating.
In June 2000 the Company increased its ability to issue commercial paper from
$400.0 million to $600.0 million, which is supported by the Company's revolving
credit agreements. Borrowings are in the form of unsecured notes sold at a
discount with maturities ranging up to 270 days.
The Company had $291.3 million in commercial paper outstanding at December 31,
2000 with an annual weighted average interest rate of 6.6% and an average of 52
days to maturity from original issuance. At December 26, 1999, the Company had
no commercial paper outstanding.
In March 2000 the Company issued $40.0 million of 7% subordinated convertible
notes due March 21, 2003, to three venture capital firms. Upon an initial public
offering of Class C Stock (see Tracking Stock on page F-10), this debt is
convertible, at the election of the venture capital firms, into shares of Class
C Stock intended to represent approximately 6.7% of the pre-offering equity of
NYTD. This debt is not currently convertible (the Company withdrew its
registration statement on Form S-3 for an initial public offering of Class C
Stock, see Tracking Stock on page F-10). Beginning January 1, 2002, if no
initial public offering of the Class C Stock has occurred, the venture capital
firms have the right to require the Company to repurchase the notes at their
$40.0 million face value.
On August 21, 1998, the Company filed a $300.0 million shelf registration
statement on Form S-3 with the Securities and Exchange Commission for unsecured
debt securities that may be issued by the Company from time to time. The
registration statement became effective August 28, 1998. On September 24, 1998,
the Company filed a prospectus supplement to allow the issuance of up to $300.0
million in medium-term notes. As of December 31, 2000, the Company had issued a
total of $198.0 million, excluding unamortized debt costs, under the medium-term
note program. The notes have maturity dates ranging from October 8, 2003,
through November 15, 2009, and pay interest semi-annually with rates ranging
from 5.0% to 7.125%.
In October 1993 the Company issued $200.0 million of senior notes. The Company
repaid the remaining $100.0 million of these senior notes in April 2000.
<PAGE>
F-10
The Company's total debt, including commercial paper and capital lease
obligations, was $930.7 million at December 31, 2000, and $701.2 million at
December 26, 1999. The increase is primarily attributable to the higher levels
of commercial paper outstanding resulting from the acquisition of the T&G and
the Company's share repurchases program, partially offset by the payment of
$100.0 million due on its six and one-half year notes.
Total additional borrowings available under all financing arrangements amounted
to $410.7 million as of December 31, 2000, and $503.4 million as of January 24,
2001. Total debt, including current portion and capital lease obligations, as of
January 24, 2001, amounted to $838.0 million. The decrease of $92.7 million in
total debt from December 31, 2000, is primarily from a reduction in commercial
paper outstanding.
TRACKING STOCK
On January 20, 2000, the Board of Directors of the Company authorized, subject
to shareholder approval, the issuance of a new class of stock ("Class C Stock")
and on January 28, 2000, the Company filed a registration statement on Form S-3
("the Form S-3") related to the initial public offering of Class C Stock. This
tracking stock was intended to track the performance of NYTD. At the Annual
Meeting of Stockholders held on May 23, 2000, stockholders authorized the filing
of an amendment to the Company's certificate of incorporation to create this new
class of stock, which the Company has yet to do.
On October 12, 2000, the Company withdrew the Form S-3 due to unfavorable
conditions in the public equities markets. This decision to withdraw the Form
S-3 does not have a material effect on the operations of NYTD or to the
Company's Consolidated Financial Statements.
CAPITAL EXPENDITURES
The Company estimates that capital expenditures for 2001 will be in a range from
$130.0 million to $150.0 million, compared with $85.3 million in 2000, $73.4
million in 1999 and $81.6 million in 1998. The 2001 expenditures will include
costs related to improving customer service and increasing efficiency in support
of the Company's national expansion efforts, as well as adding capability to
transmit digital high definition broadcast signals and constructing a new
printing facility in Tuscaloosa, Ala. The 1998 capital expenditures exclude
$78.0 million related to the Company's Edison facility lease renegotiations (see
Note 13 of the Notes to the Consolidated Financial Statements).
DEPRECIATION AND AMORTIZATION
The Company expects that depreciation and amortization expense will be between
$210.0 million to $220.0 million for 2001, compared with $228.0 million in 2000,
$197.5 million in 1999 and $188.2 million in 1998. In 2000 amortization expense
included the $22.7 million write-down of intangible assets.
RECENT ACCOUNTING PRONOUNCEMENT
In June 1998 the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities ("SFAS No.
133"), which is effective for all quarters of fiscal years beginning after June
15, 1999. SFAS No. 133 requires that an entity recognize all derivatives as
either assets or liabilities and measure those instruments at fair value. Unless
the entity can treat the derivative as a hedge according to certain criteria,
the entity will be required to reflect any changes in the derivative's fair
value in income from continuing operations. In June 1999 the FASB issued SFAS
No. 137, Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of Statement of Financial Accounting Standard
Statement No. 133 ("SFAS No. 137"). SFAS No. 137 amended the effective date for
SFAS No. 133 from June 15, 1999 to June 15, 2000. In June 2000 the FASB issued
SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities -- an Amendment of FASB Statement No. 133 ("SFAS No. 138"), which is
effective for all quarters of fiscal years beginning after June 15, 2000. SFAS
No. 138 expands the scope of derivatives in order for an instrument to qualify
as a SFAS No. 133 hedge. These statements will be adopted as required by the
Company in the first quarter of 2001, and will not have a material effect on the
Company's Consolidated Financial Statements.
In December 1999 the Securities and Exchange Commission ("the SEC") released
Staff Accounting Bulletin No. 101 -- Revenue Recognition ("SAB No. 101"). SAB
No. 101 provides SEC views in applying generally accepted accounting principles
in the United States of America to selected revenue recognition issues. In March
2000 the SEC released Staff Accounting Bulletin No. 101A -- Amendment ("SAB No.
101A"). SAB No. 101A amended the implementation date of SAB No. 101 for
registrants with fiscal years that begin between December 16, 1999 and March 15,
2000. In June 2000 the SEC released Staff Accounting Bulletin No. 101B -- Second
Amendment ("SAB No. 101B") further delaying the implementation date of SAB No.
101 to no later than the fourth fiscal quarter of registrants with fiscal years
beginning after December 15, 1999. The adoption of this pronouncement did not
have a material effect on the Company's Consolidated Financial Statements.
FACTORS THAT COULD AFFECT OPERATING RESULTS
This Form 10-K contains forward-looking statements. Additional written and oral
forward-looking statements may be made by the Company from time to time in SEC
filings and otherwise. The Company cautions readers that results predicted by
forward-looking statements, including, without limitation, those relating to the
Company's:
o future business prospects
o revenues
o operating expenses
o working capital
o liquidity
o capital needs
o interest costs and
o income
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those indicated in the
<PAGE>
F-11
forward-looking statements. The risks and uncertainties include those listed
below as well as other risks and factors identified from time to time in the
Company's filings with the SEC.
ADVERTISING REVENUES
Advertising is the Company's most significant source of revenue. Competition
from other forms of media available in the Company's various markets, including
but not limited to other newspapers, broadcast, magazines, direct marketing and
the Internet, affects the Company's ability to attract and retain advertisers
and to increase advertising rates. Advertising could be negatively affected by
an economic downturn in any of the Company's markets.
Advertising revenues cause the Company's quarterly consolidated results to vary
by season. Second-quarter and fourth-quarter advertising volume is higher than
first- and third-quarter volume since economic activity tends to be lower after
the holidays and in the summer. National and local economic conditions,
particularly in the New York City and Boston metropolitan regions, affect the
levels of the Company's retail, national and most particularly, classified
advertising revenue. Structural changes in the retail environment may also
depress the level of advertising revenue.
CIRCULATION REVENUES
Circulation is a significant source of revenue for the Company. Circulation
revenue and the Company's ability to achieve price increases for its print
products are affected by competition from other publications and other forms of
media available in the Company's various markets. Declining consumer spending on
discretionary items like newspapers and magazines, decreasing amounts of free
time and the declining number of regular newspaper buyers among young people
could also negatively affect circulation.
PAPER PRICES
Newsprint and magazine paper are the Company's most important raw material and
represent a significant portion of the Company's operating costs. The Company's
operating results could be adversely affected to the extent that such
historically volatile raw material prices increase materially.
LABOR RELATIONS
Advances in technology and other factors have allowed the Company to lower costs
by reducing the size of its work force. There is no assurance that the Company
will continue to be able to reduce costs in this way. A significant portion of
the Company's employees are unionized and the Company's results could be
adversely affected if labor negotiations were to restrict its ability to
maximize the efficiency of its operations. In addition, if the Company
experienced labor unrest, its ability to produce and deliver its largest
products could be impaired.
NEW PRODUCTS IN NEW MARKETS
There are substantial uncertainties associated with the Company's efforts to
develop new products and services for evolving markets. The success of these
ventures will be determined by the Company's efforts, and in some cases by those
of its partners, fellow investors and licensees. Initial timetables for the
introduction and development of new products or services may not be achieved and
price/profitability targets may not prove feasible. External factors, such as
the development of competitive alternatives and market response, may cause new
markets to move in unanticipated directions.
The Company may also consider the acquisition of specific properties or
businesses that fall outside its traditional lines of business if it deems such
properties sufficiently attractive.
The Company expects to make substantial investments in its Internet businesses
for the foreseeable future. These are highly risky businesses which are likely
to incur losses. The Company's Internet businesses have a limited operating
history, are dependent on advertising revenue and the continued growth and
acceptance of the Internet and subject to all risks of Internet businesses, such
as evolving regulation and technology, changes in consumer preferences and
intense competition.
PRODUCT PORTFOLIO; ACQUISITIONS
From time to time, the Company evaluates the various components of its portfolio
of products and may, as a result, buy or sell different properties. Such
acquisitions or divestitures may affect the Company's costs, revenues,
profitability and financial position.
Acquisitions involve risks, including difficulties in integrating acquired
operations, diversions of management resources, debt incurred in financing such
acquisitions and unanticipated problems and liabilities.
GOVERNMENT REGULATIONS
The Company's broadcast stations are subject to continuing technological and
regulatory developments that may affect their future profitability. The advent
of digital television broadcasting is one such development. The Federal
Communications Commission ("FCC") adopted rules in 1997 under which all
television stations are required to change to a new system of digital
broadcasting. The direct hardware cost of this change will be substantial and
the new digital stations are unlikely to produce significant additional revenue
until consumers have purchased a substantial number of digital television
receivers or until other sources of revenue to be derived from the digital
spectrum have been developed. Additionally, the new digital transmission systems
to be used by television stations, cable systems and direct broadcast satellites
could greatly increase the number of electronic video services with which the
Company's stations compete.
<PAGE>
F-12
MEDIA CONSOLIDATION AND CONVERGENCE
Changes in the regulatory and technological environment may encourage
consolidation of media companies and convergence among various forms of media.
The Company might then face competition with larger and more diversified
entities for circulation and advertising revenues. Such consolidation could also
affect the Company's opportunities to make acquisitions.
----------------------------
The foregoing list of factors should not be construed as exhaustive or as any
admission regarding the adequacy of disclosure made by the Company.
The Company disclaims any intention or obligation to update or revise
forward-looking statements, whether as a result of new information, future
events or otherwise.
MARKET RISK
The Company's qualitative and quantitative market risk is principally associated
with market interest rate fluctuations related to its debt obligations and stock
market price fluctuations with respect to marketable securities (see Notes 6 and
14 of the Notes to the Consolidated Financial Statements). Any such market risks
are not considered significant by the Company.
<PAGE>
F-13
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years Ended
-------------------------------------------
December 31, December 26, December 27,
(In thousands, except per share data) 2000 1999 1998
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Advertising $2,505,315 $2,248,613 $2,070,133
Circulation 761,475 712,604 703,386
Other 222,665 195,539 183,036
- -----------------------------------------------------------------------------------------------
Total 3,489,455 3,156,756 2,956,555
- -----------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs
Raw materials 363,334 321,397 354,872
Wages and benefits 614,582 591,200 578,109
Other 480,134 450,340 433,667
- -----------------------------------------------------------------------------------------------
Total 1,458,050 1,362,937 1,366,648
Selling, general and administrative expenses 1,395,484 1,222,537 1,080,520
- -----------------------------------------------------------------------------------------------
Total 2,853,534 2,585,474 2,447,168
- -----------------------------------------------------------------------------------------------
OPERATING PROFIT 635,921 571,282 509,387
Income from joint ventures 15,914 17,900 21,014
Interest expense, net 64,098 50,718 43,333
Gain on dispositions of assets and other - net 85,349 -- 18,452
- -----------------------------------------------------------------------------------------------
Income before income taxes and extraordinary item 673,086 538,464 505,520
Income taxes 275,550 228,287 218,890
- -----------------------------------------------------------------------------------------------
Income before extraordinary item 397,536 310,177 286,630
Extraordinary item, net of tax -- -- (7,716)
- -----------------------------------------------------------------------------------------------
NET INCOME $ 397,536 $ 310,177 $ 278,914
- -----------------------------------------------------------------------------------------------
Average number of common shares outstanding
Basic 167,987 175,587 188,762
Diluted 171,597 179,244 192,846
- -----------------------------------------------------------------------------------------------
Basic earnings per share
Earnings before extraordinary item $ 2.37 $ 1.77 $ 1.52
Extraordinary item, net of tax -- -- (.04)
- -----------------------------------------------------------------------------------------------
Net income $ 2.37 $ 1.77 $ 1.48
- -----------------------------------------------------------------------------------------------
Diluted earnings per share
Earnings before extraordinary item $ 2.32 $ 1.73 $ 1.49
Extraordinary item, net of tax -- -- (.04)
- -----------------------------------------------------------------------------------------------
Net income $ 2.32 $ 1.73 $ 1.45
- -----------------------------------------------------------------------------------------------
Dividends per share $ .45 $ .41 $ .37
- -----------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
F-14
CONSOLIDATED BALANCE SHEETS
December 31, December 26,
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents $ 69,043 $ 63,861
Accounts receivable (net of allowances: 2000 -
$44,169; 1999 - $39,749) 341,863 366,754
Inventories 35,064 28,650
Deferred income taxes 62,939 53,611
Assets held for sale -- 37,796
Other current assets 101,857 64,236
- --------------------------------------------------------------------------------
Total current assets 610,766 614,908
- --------------------------------------------------------------------------------
INVESTMENT IN JOINT VENTURES 107,320 121,940
- --------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land 72,228 67,149
Buildings, building equipment and improvements 814,658 789,504
Equipment 1,364,256 1,307,365
Construction and equipment installations
in progress 37,132 31,145
- --------------------------------------------------------------------------------
Total - at cost 2,288,274 2,195,163
Less accumulated depreciation 1,081,114 976,767
- --------------------------------------------------------------------------------
Property, plant and equipment - net 1,207,160 1,218,396
- --------------------------------------------------------------------------------
INTANGIBLE ASSETS ACQUIRED
Costs in excess of net assets acquired
(less accumulated amortization
of $302,571 in 2000 and $270,235 in 1999) 1,060,796 953,709
Other intangible assets acquired
(less accumulated amortization
of $110,172 in 2000 and $85,365 in 1999) 419,302 351,309
- --------------------------------------------------------------------------------
Total 1,480,098 1,305,018
- --------------------------------------------------------------------------------
MISCELLANEOUS ASSETS 201,335 235,540
- --------------------------------------------------------------------------------
Total $3,606,679 $3,495,802
- --------------------------------------------------------------------------------
See Notes to the Consolidated Financial Statements.
<PAGE>
F-15
<TABLE>
<CAPTION>
December 31, December 26,
(In thousands, except share data) 2000 1999
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Commercial paper outstanding $ 291,251 $ --
Accounts payable 178,302 191,706
Accrued payroll and other related liabilities 114,233 105,257
Accrued expenses 203,855 193,553
Unexpired subscriptions 87,130 80,161
Current portion of long-term debt and capital lease obligations 2,599 102,837
- ------------------------------------------------------------------------------------------------------------------
Total current liabilities 877,370 673,514
- ------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES
Long-term debt 553,415 512,627
Capital lease obligations 83,451 85,700
Deferred income taxes 106,247 141,033
Other 705,033 634,270
- ------------------------------------------------------------------------------------------------------------------
Total other liabilities 1,448,146 1,373,630
- ------------------------------------------------------------------------------------------------------------------
Total liabilities 2,325,516 2,047,144
- ------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Serial preferred stock of $1 par value - authorized 200,000 shares - none issued -- --
Common stock of $.10 par value
Class A - authorized 300,000,000 shares; issued: 2000 - 166,526,108;
1999 - 177,971,194 (including treasury shares: 2000 - 5,000,000;
1999 - 5,000,000) 16,653 17,797
Class B - convertible - authorized 847,158 shares; issued: 2000 - 847,158;
1999 - 847,240 (including treasury shares: 2000 - none and 1999 - none) 85 85
Retained earnings 1,467,103 1,600,743
Common stock held in treasury, at cost (198,858) (173,137)
Deferred compensation on issuance of restricted Class A common stock (1,127) --
- ------------------------------------------------------------------------------------------------------------------
1,283,856 1,445,488
Accumulated other comprehensive income (loss), net of income tax:
Unrealized gain on marketable securities -- 5,753
Foreign currency translation adjustments (2,693) (2,583)
- ------------------------------------------------------------------------------------------------------------------
Total accumulated other comprehensive income (loss) (2,693) 3,170
- ------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,281,163 1,448,658
- ------------------------------------------------------------------------------------------------------------------
Total $ 3,606,679 $ 3,495,802
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
F-16
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended
-------------------------------------------
December 31, December 26, December 27,
(In thousands) 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 397,536 $ 310,177 $ 278,914
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 227,973 197,493 188,237
Excess distributed earnings (undistributed earnings) of affiliates 3,461 (4,839) (2,822)
Net gain on dispositions (85,349) -- (18,452)
Deferred income taxes (28,166) (44,632) (2,010)
Long-term retirement benefit obligations 39,950 38,452 33,643
Other - net 1,628 13,108 (4,446)
Changes in operating assets and liabilities, net of acquisitions/dispositions
Accounts receivable - net 28,330 (38,743) (646)
Inventories (4,576) 3,122 (153)
Other current assets (42,104) 43,121 36,449
Accounts payable (14,967) 29,263 (25,797)
Accrued payroll and accrued expenses 62,469 53,583 15,524
Unexpired subscriptions 3,672 990 (1,541)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 589,857 601,095 496,900
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Businesses acquired (296,278) (5,100) --
Net proceeds from dispositions 191,171 11,434 23,661
Additions to property, plant and equipment (85,300) (73,407) (81,578)
Other investing proceeds 13,865 8,704 14,725
Other investing payments (18,418) (24,489) (12,974)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (194,960) (82,858) (56,166)
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Commercial paper (repayments) borrowings - net 291,251 (124,100) 124,100
Long-term obligations
Increase 40,000 103,861 98,433
Reduction (102,487) (2,358) (190,847)
Capital shares
Issuance 37,503 27,961 7,208
Repurchase (580,584) (423,715) (480,857)
Dividends paid to stockholders (75,398) (72,016) (69,600)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (389,715) (490,367) (511,563)
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 5,182 27,870 (70,829)
Cash and cash equivalents at the beginning of the year 63,861 35,991 106,820
- -----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year $ 69,043 $ 63,861 $ 35,991
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Consolidated Financial Statements and Supplemental Disclosures
to Consolidated Statements of Cash Flows.
<PAGE>
F-17
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOW INFORMATION Years Ended
----------------------------------------
December 31, December 26, December 27,
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Cash payments during the year for
- --------------------------------------------------------------------------------
Interest $ 61,575 $ 50,050 $ 49,025
- --------------------------------------------------------------------------------
Income taxes, net of refunds $253,989 $210,951 $177,261
- --------------------------------------------------------------------------------
NONCASH INVESTING AND FINANCING TRANSACTIONS
1. In February 1999 the Company purchased a minority interest in
TheStreet.com for $15.6 million, of which $3.6 million was in cash and
$12.0 million represents an irrevocable credit for future advertising to
be used by TheStreet.com through February 2003. Investment and deferred
revenue accounts were increased by $12.0 million accordingly. A total of
$3.6 million of advertising credits was utilized as of December 31, 2000.
2. The Company renegotiated its lease agreement in 1998 for its Edison
newspaper printing facility, extending the capitalized lease commitment
for an additional 10 years. Accordingly, the capitalized lease value was
increased to $78.0 million, with a corresponding increase to $78.0 million
of the capital lease obligation (see Note 13 of the Notes to Consolidated
Financial Statements).
BUSINESSES ACQUIRED
1. In January 2000 the Company acquired certain assets ($313.8 million) and
assumed certain liabilities ($17.5 million) of a newspaper, the Worcester
Telegram & Gazette, for $296.3 million in cash (see Note 2 of the Notes to
Consolidated Financial Statements).
2. The Company acquired Abuzz Technologies, Inc. on July 22, 1999, for $5.1
million in cash and $25.0 million in the stock of a subsidiary of the
Company (see Note 2 of the Notes to Consolidated Financial Statements).
OTHER
Amounts in these Consolidated Statements of Cash Flows are presented on a
cash basis and may differ from those shown in other sections of the
financial statements.
<PAGE>
F-18
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common
Capital Stock Stock
--------------------- Additional Held in
Class A Class B Paid-in Retained Treasury,
(In thousands, except share and per share data) Common Common Capital Earnings at cost
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 29, 1997 $22,656 $ 113 $ 761,982 $1,491,655 $(545,599)
- ----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 278,914
Foreign currency translation adjustments (net
of tax of $926)
- ----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Dividends, common - $.37 per share (69,600)
Issuance of shares
Retirement units - 152,866 Class A shares (1,088) 1,897
Employee stock purchase plan -
1,427,273 Class A shares 1 (3,764) 35,802
Stock options - 1,559,185 Class A shares 339 76,295 (61,433)
Repurchase of stock - 14,784,000 Class A shares (454,091)
Treasury stock retirement - 44,477,000 shares (4,420) (28) (833,425) (23,500) 861,373
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 27, 1998 18,576 85 -- 1,677,469 (162,051)
- ----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 310,177
Foreign currency translation adjustments (net
of tax of $55)
Change in unrealized gains on marketable
securities (net of tax of $4,708)
- ----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Dividends, common - $.41 per share (72,016)
Issuance of shares
Retirement units - 16,407 Class A shares (615) 532
Employee stock purchase plan -
1,523,292 Class A shares 1 (15,261) 49,101
Stock options - 2,529,597 Class A shares 361 87,134 (37,152)
Stock conversions - 2,362 shares
Repurchase of stock - 11,864,000 Class A shares (410,853)
Treasury stock retirement - 11,407,000 shares (1,141) (71,258) (314,887) 387,286
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 26, 1999 17,797 85 -- 1,600,743 (173,137)
- ----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 397,536
Foreign currency translation adjustments (net
of tax of $92)
Change in unrealized loss on marketable
securities (net of tax benefit of $9,858)
Reclassification adjustment for loss included in
net income (net of tax benefit of $5,150)
- ----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Dividends, common - $.45 per share (75,398)
Issuance of shares
Retirement units - 34,468 Class A shares (1,193) 1,191
Employee stock purchase plan -
1,137,820 Class A shares 1 (3,977) 39,090
Restricted shares - 28,000 Class A shares 157 970
Stock options - 1,952,544 Class A shares 195 61,370 137
Stock conversions - 82 shares
Repurchase of stock - 14,598,000 Class A shares (580,584)
Treasury stock retirement - 13,402,791 shares (1,340) (56,357) (455,778) 513,475
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2000 $16,653 $ 85 $ -- $1,467,103 $(198,858)
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Deferred Accumulated
Compensation on Other
Issuance of Comprehensive
Restricted Income (Loss),
Class A Net of
(In thousands, except share and per share data) Common Stock Income Tax Total
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCE, DECEMBER 29, 1997 $ -- $ (1,510) $1,729,297
- ------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 278,914
Foreign currency translation adjustments (net
of tax of $926) (1,099) (1,099)
- ------------------------------------------------------------------------------------------------------
Comprehensive income 277,815
Dividends, common - $.37 per share (69,600)
Issuance of shares
Retirement units - 152,866 Class A shares 809
Employee stock purchase plan -
1,427,273 Class A shares 32,039
Stock options - 1,559,185 Class A shares 15,201
Repurchase of stock - 14,784,000 Class A shares (454,091)
Treasury stock retirement - 44,477,000 shares --
- ------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 27, 1998 -- (2,609) 1,531,470
- ------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 310,177
Foreign currency translation adjustments (net
of tax of $55) 26 26
Change in unrealized gains on marketable
securities (net of tax of $4,708) 5,753 5,753
- ------------------------------------------------------------------------------------------------------
Comprehensive income 315,956
Dividends, common - $.41 per share (72,016)
Issuance of shares
Retirement units - 16,407 Class A shares (83)
Employee stock purchase plan -
1,523,292 Class A shares 33,841
Stock options - 2,529,597 Class A shares 50,343
Stock conversions - 2,362 shares
Repurchase of stock - 11,864,000 Class A shares (410,853)
Treasury stock retirement - 11,407,000 shares --
- ------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 26, 1999 -- 3,170 1,448,658
- ------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 397,536
Foreign currency translation adjustments (net
of tax of $92) (110) (110)
Change in unrealized loss on marketable
securities (net of tax benefit of $9,858) (11,732) (11,732)
Reclassification adjustment for loss included in
net income (net of tax benefit of $5,150) 5,979 5,979
- ------------------------------------------------------------------------------------------------------
Comprehensive income 391,673
Dividends, common - $.45 per share (75,398)
Issuance of shares
Retirement units - 34,468 Class A shares (2)
Employee stock purchase plan -
1,137,820 Class A shares 35,114
Restricted shares - 28,000 Class A shares (1,127) --
Stock options - 1,952,544 Class A shares 61,702
Stock conversions - 82 shares
Repurchase of stock - 14,598,000 Class A shares (580,584)
Treasury stock retirement - 13,402,791 shares --
- ------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2000 $ (1,127) $ (2,693) $1,281,163
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
F-19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
The New York Times Company (the "Company") is engaged in diversified activities
in media. The Company's principal businesses are newspapers, magazines,
television and radio stations, and Internet properties. The Company also has
equity interests in a Canadian newsprint mill and a "supercalendered" (glossy
paper used in magazines) paper mill. The Company's major source of revenue is
advertising from its newspaper business. The newspapers generally operate in the
Northeast, Southeast and California markets.
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements include the accounts of the Company after
elimination of intercompany items.
FISCAL YEAR
The Company's fiscal year-end is the last Sunday in December. Fiscal year 2000
comprises 53 weeks and fiscal years 1999 and 1998 each comprise 52 weeks.
INVENTORIES
Inventories are stated at the lower of cost or current market value. Inventory
cost is generally based on the last-in, first-out ("LIFO") method for newsprint
and magazine paper and the first-in, first-out ("FIFO") method for other
inventories.
INVESTMENTS
Investments in which the Company has at least 20%, but not more than 50%,
interest are accounted for under the equity method. Investment interests below
20% are accounted for under the cost method.
MARKETABLE SECURITIES
The Company determines the appropriate classification of marketable securities
at the time of purchase and re-evaluates such designation at each balance sheet
date. Marketable securities have been classified as available-for-sale and are
carried at fair value, with unrealized holding gains and losses reported as a
separate component of the Consolidated Statements of Stockholders' Equity and in
the Consolidated Balance Sheets, in the caption "Accumulated other comprehensive
income (loss), net of income tax."
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost; and depreciation is computed
by the straight-line method over the shorter of estimated asset service lives or
lease terms. The Company capitalizes interest costs as part of the cost of
constructing major facilities and equipment.
INTANGIBLE ASSETS ACQUIRED
Cost in excess of net assets acquired is primarily the excess of cost over the
fair market value of tangible net assets acquired. Each quarter the Company
evaluates whether there has been an impairment that is other than temporary in
any of its intangible assets, including goodwill. An impairment in value is
considered to have occurred when the undiscounted future operating cash flows
generated by the acquired businesses are not sufficient to recover the carrying
values of the intangible assets. If it is determined that an impairment in value
has occurred, the excess of the purchase price over the net assets acquired and
intangible assets will be written down to the present value of the future
operating cash flows to be generated by the acquired businesses in accordance
with the Statement of Financial Accounting Standards ("SFAS") No. 121 Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed
Of ("SFAS No. 121"). See Note 2 for intangible asset write-down in 2000.
The excess costs that arose from acquisitions after October 31, 1970, are being
amortized by the straight-line method mainly over 40 years. The remaining
portion ($13.0 million), which arose from acquisitions before November 1, 1970,
is not being amortized since management believes there has been no decrease in
value. Other intangible assets acquired consist primarily of advertiser and
subscriber relationships, mastheads and licenses on various acquired properties,
as well as software. These intangible assets are being amortized over their
estimated useful lives, ranging from 10 to 40 years for customer relationships,
mastheads and licenses, and three to 10 years for software.
SUBSCRIPTION REVENUES AND COSTS
Proceeds from subscriptions and related costs, principally agency commissions,
are deferred at the time of sale and are included in the Consolidated Statements
of Income on a pro rata basis over the terms of the subscriptions.
FOREIGN CURRENCY TRANSLATION
The assets and liabilities of foreign companies are translated at year-end
exchange rates. Results of operations are translated at average rates of
exchange in effect during the year. The resulting translation adjustment is
included as a separate component of the Consolidated Statements of Stockholders'
Equity and in the Stockholders' Equity section of the Consolidated Balance
Sheets, in the caption "Accumulated other comprehensive income (loss), net of
income tax."
EARNINGS PER SHARE
The Company calculates earnings per share in accordance with Statement of
Financial Accounting Standards SFAS No. 128, Earnings Per Share (see Note 4).
Basic earnings per share is calculated by dividing net earnings available to
common shares by average common shares outstanding. Diluted earnings per share
is calculated similarly, except that it includes the dilutive effect of the
assumed exercise of securities, including the effect of shares issuable under
the Company's incentive plans (see Note 11). All references to earnings per
share are on a diluted basis.
CASH AND CASH EQUIVALENTS
The Company considers all highly-liquid debt instruments with original
maturities of three months or less to be cash equivalents.
INVESTMENT TAX CREDITS
The Company uses the deferral method of accounting for investment tax credits.
<PAGE>
F-20
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements. Actual results could differ from these estimates.
RECLASSIFICATIONS
For comparability, certain 1999 and 1998 amounts have been reclassified to
conform with the 2000 presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998 the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities ("SFAS No.
133"), which is effective for all quarters of fiscal years beginning after June
15, 1999. SFAS No. 133 requires that an entity recognize all derivatives as
either assets or liabilities and measure those instruments at fair value. Unless
the entity can treat the derivative as a hedge according to certain criteria,
the entity will be required to reflect any changes in the derivative's fair
value in income from continuing operations. In June 1999 the FASB issued SFAS
No. 137, Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of Statement of Financial Accounting Standards
Statement No. 133 ("SFAS No. 137"). SFAS No. 137 amended the effective date for
SFAS No. 133 from June 15, 1999 to June 15, 2000. In June 2000 the FASB issued
SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities -- an Amendment of FASB Statement No. 133 ("SFAS No. 138"), which is
effective for all quarters of fiscal years beginning after June 15, 2000. SFAS
No. 138 expands the scope of derivatives in order for an instrument to qualify
as a SFAS No. 133 hedge. These statements will be adopted as required by the
Company in the first quarter of 2001, and will not have a material effect on the
Company's Consolidated Financial Statements.
In December 1999 the Securities and Exchange Commission (the "SEC") released
Staff Accounting Bulletin No. 101 -- Revenue Recognition ("SAB No. 101"). SAB
No. 101 provides SEC views in applying generally accepted accounting principles
to selected revenue recognition issues. In March 2000 the SEC released Staff
Accounting Bulletin No. 101A -- Amendment ("SAB No. 101A"). SAB No. 101A amended
the implementation date of SAB No. 101 for registrants with fiscal years that
begin between December 16, 1999 and March 15, 2000. In June 2000 the SEC
released Staff Accounting Bulletin No. 101B -- Second Amendment ("SAB No. 101B")
further delaying the implementation date of SAB No. 101 to no later than the
fourth fiscal quarter of registrants with fiscal years beginning after December
15, 1999. The adoption of this pronouncement did not have a material effect on
the Company's Consolidated Financial Statements.
- --------------------------------------------------------------------------------
2. ACQUISITIONS/DISPOSITIONS
ACQUISITIONS
On January 7, 2000, the Company acquired certain assets and assumed certain
liabilities of a newspaper, the Worcester Telegram & Gazette ("T&G"), in
Worcester, Mass., for $296.3 million in cash. The cost of this acquisition was
principally funded through the Company's commercial paper program. This
transaction was accounted for as a purchase and, accordingly, the T&G has been
included in the Company's Consolidated Financial Statements, (as of January 7,
2000). Based on a final valuation, the purchase price was allocated to the fair
values of goodwill ($161.3 million), other intangibles ($100.5 million
principally advertising and subscriber relationships) and to other assets
acquired net of liabilities assumed. The amount allocated to goodwill is
amortized over a 40-year period and the amount allocated to other intangibles is
amortized over an average of 19 years. If this acquisition had occurred in the
beginning of 2000 and 1999, it would not have had a material impact on the
results of operations for periods presented herein.
On July 22, 1999, a subsidiary of the Company ("Acquisition Subsidiary")
acquired Abuzz Technologies, Inc. ("Abuzz"). Abuzz develops and deploys
technology to enable online communities to share knowledge, interests and
experience. The purchase price of Abuzz amounted to $30.1 million and resulted
in an increase to goodwill of $23.8 million and other intangible assets of $7.7
million, all of which is amortized over five years. The purchase price included
$5.1 million in cash and $25.0 million in the stock of Acquisition Subsidiary.
After the acquisition, the Company owned 95.8% and the former stockholders of
Abuzz owned 4.2% of Acquisition Subsidiary. The operating results of Abuzz are
not material to the Company's Consolidated Financial Statements. Since the
Company did not issue a certain new class of stock ("Class C Stock") to the
public by December 31, 2000, (see Note 12 under Tracking Stock), the former
stockholders of Abuzz and certain optionees of Acquisition Subsidiary have since
required Acquisition Subsidiary to redeem their shares for cash in the amount of
$25.0 million, most of which is expected to be paid in the first quarter of
2001. The Company has reflected this $25.0 million in "Accrued expenses" on the
Company's Consolidated Balance Sheets as of December 31, 2000.
In 2000, the Company recorded a write-down of intangible assets related to Abuzz
amounting to $22.7 million (see Notes 1 and 16). This write-down was related to
an impairment determined in accordance with SFAS No. 121 due to the uncertainty
of expected cash flows.
DISPOSITIONS
In 2000 the Company recorded a pre-tax net gain of $85.3 million from the sale
of seven newspapers: the Santa Barbara News-Press in Santa Barbara, Calif., the
Daily World in Opelousas, La., the Daily News in Palatka, Fla., the Lake City
Reporter in Lake City, Fla., The News-Sun in Sebring/Avon Park, Fla., The
News-Leader in Fernandina Beach, Fla., and the
<PAGE>
F-21
Marco Island Eagle in Marco Island, Fla. and nine telephone directory operations
("divested Regionals") amounting to $132.1 million. This net gain includes a
disposition loss as well as write-downs for certain of the Company's equity
interests in online ventures in the aggregate amount of $46.8 million.
Additionally, in connection with the sale in October 2000 of the Santa Barbara
News-Press, the Company entered into a five-year $25.0 million non-compete
agreement. This amount will be recognized as income on a straight-line basis
over the life of the agreement. This net gain increased earnings per share by
$.36.
The operations of all of these newspapers and telephone directories as well as
the interests in online ventures were not material to the Company's Consolidated
Financial Statements.
During the second quarter of 1998 the Company recorded an $8.0 million pre-tax
gain from the satisfaction of a post-closing requirement related to the 1997
sale of assets of the Company's tennis, sailing and ski magazines. This net gain
increased earnings per share by $.02.
During the first quarter of 1998, the Company recorded a $4.6 million pre-tax
gain resulting from the sale of equipment. This gain increased earnings per
share by $.01.
In 1998 the Company recorded $5.8 million of income related to a non-compete
agreement entered into as part of the divestiture of the Company's Women's
Magazine Division in 1994. This income increased earnings per share by $.02.
See Note 17 on Subsequent Events relating to the Company's agreement to sell the
Magazine Group in 2001.
- --------------------------------------------------------------------------------
3. INVESTMENT IN JOINT VENTURES
Investment in Joint Ventures consists of equity ownership interests in two paper
mills ("Forest Products Investments") and the International Herald Tribune
S.A.S. ("IHT"). The results of the IHT are not material to the Company's
Consolidated Financial Statements.
The Forest Products Investments consist of a Canadian newsprint company, Donohue
Malbaie Inc. ("Malbaie"), and a partnership operating a supercalendered paper
mill in Maine, Madison Paper Industries ("Madison") (with Malbaie, the "Paper
Mills"). The equity interest in Malbaie represents a 49% ownership interest.
The Company and Myllykoski Oy, a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison. The partners' interests in the
net assets of Madison at any time will depend on their capital accounts, as
defined, at such time. Through an 80%-owned subsidiary, the Company's share of
Madison's profits and losses is 40%.
The Company received distributions from Madison of $6.2 million in 2000, $7.2
million in 1999 and $8.3 million in 1998. Loan repayments were $12.1 million in
2000, $7.0 million in 1999 and $14.7 million in 1998. No loans or contributions
were made to Madison in 2000, 1999 or 1998.
The Company received distributions from Malbaie of $13.2 million in 2000, $5.9
million in 1999 and $9.9 million in 1998. No loans or contributions were made to
Malbaie in 2000, 1999 or 1998.
There was no current portion of debt of the Paper Mills included in current
liabilities in the table below at December 31, 2000, and at December 26, 1999.
The debt of the Paper Mills is not guaranteed by the Company.
Condensed combined balance sheets of the Paper Mills were as follows:
- --------------------------------------------------------------------------------
Condensed Combined Balance Sheets
Of Paper Mills
- --------------------------------------------------------------------------------
December 31, December 26,
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Current assets $ 55,520 $ 66,606
Less current liabilities 45,422 32,912
- --------------------------------------------------------------------------------
Working capital 10,098 33,694
Fixed assets, net 208,336 200,307
Long-term debt (26,000) --
Deferred income taxes and other (14,685) (53,637)
- --------------------------------------------------------------------------------
Net assets $ 177,749 $ 180,364
- --------------------------------------------------------------------------------
During 2000, 1999 and 1998, the Company's Newspaper Group purchased newsprint
and supercalendered paper from the Paper Mills at competitive prices. Such
purchases aggregated approximately $113.6 million for 2000, $67.6 million for
1999 and $79.1 million for 1998.
Condensed combined income statements of the Paper Mills were as follows:
- --------------------------------------------------------------------------------
Condensed Combined Income Statements
of Paper Mills
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Net sales and other income $258,308 $237,519 $248,611
Costs and expenses 212,369 192,941 188,665
- --------------------------------------------------------------------------------
Income before taxes 45,939 44,578 59,946
Income tax expense 8,395 5,525 8,826
- --------------------------------------------------------------------------------
Net income $ 37,544 $ 39,053 $ 51,120
- --------------------------------------------------------------------------------
The condensed combined financial information of the Paper Mills excludes the
income tax effects attributable to Madison, since it is a partnership. Such tax
effects have been included in the Company's Consolidated Financial Statements.
<PAGE>
F-22
- --------------------------------------------------------------------------------
4. EARNINGS PER SHARE
Basic and diluted earnings per share for the years ended December 31, 2000,
December 26, 1999, and December 27, 1998, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
(In thousands, except per share data) 2000 1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Basic earnings per share computation
Numerator
Net income $397,536 $310,177 $278,914
Denominator
Average number of common shares outstanding 167,987 175,587 188,762
- -------------------------------------------------------------------------------------------------
Basic earnings per share $ 2.37 $ 1.77 $ 1.48
- -------------------------------------------------------------------------------------------------
Diluted earnings per share computation
Numerator
Net income $397,536 $310,177 $278,914
Denominator
Average number of common shares outstanding 167,987 175,587 188,762
Incremental shares for assumed exercise of securities 3,610 3,657 4,084
- -------------------------------------------------------------------------------------------------
Total shares 171,597 179,244 192,846
- -------------------------------------------------------------------------------------------------
Diluted earnings per share $ 2.32 $ 1.73 $ 1.45
- -------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
5. INVENTORIES
Inventories as shown in the accompanying Consolidated Balance Sheets were as
follows:
- --------------------------------------------------------------------------------
December 31, December 26,
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Newsprint and magazine paper $30,639 $23,666
Work-in-process and other inventory 4,425 4,984
- --------------------------------------------------------------------------------
Total $35,064 $28,650
- --------------------------------------------------------------------------------
Inventories are stated at the lower of cost or current market value. Cost was
determined utilizing the LIFO method for 89% of inventory in 2000 and 84% of
inventory in 1999. The replacement cost of inventory was approximately $41.3
million at December 31, 2000, and $32.1 million at December 26, 1999.
- --------------------------------------------------------------------------------
6. DEBT
Long-term debt consists of the following:
- --------------------------------------------------------------------------------
December 31, December 26,
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
5.77% Senior Notes due 2000(A) $ -- $100,000
7.625% Notes due 2005, net of unamortized debt
costs of $3,254 in 2000, and $3,884 in 1999,
effective interest rate 7.996%(B) 246,746 246,116
8.25% Debentures due 2025 (due 2005 at option of
Company), net of unamortized debt costs of
$2,198 in 2000 and $2,225 in 1999, effective
interest rate 8.553%(B) 69,702 69,675
5.0%-7.125% Medium-Term Notes due 2003 and 2008,
net of unamortized debt costs of $1,033 in
2000 and $1,164 in 1999(C) 196,967 196,836
7.0% Subordinated Convertible Notes due March
21, 2003(D) 40,000 --
- --------------------------------------------------------------------------------
Total notes and debentures 553,415 612,627
- --------------------------------------------------------------------------------
Less current portion -- 100,000
- --------------------------------------------------------------------------------
Total long-term debt $553,415 $512,627
- --------------------------------------------------------------------------------
(A) In October 1993 the Company issued senior notes totaling $200.0 million
with interest payable semi-annually. Five-year notes totaling $100.0
million were issued at an annual rate of 5.50%, and the remaining $100.0
million were issued as six and one-half year notes at an annual rate of
5.77%. In October 1998 $100.0 million due on the five-year notes was paid.
In April 2000 the remaining $100.0 million of the six and one-half year
notes was paid.
(B) In March 1995 the Company completed a public offering of $400.0 million of
unsecured notes and debentures. The offering consisted of 10-year notes
aggregating $250.0 million maturing March 15, 2005, at an annual rate of
7.625% and 30-year debentures aggregating $150.0 million maturing March
15, 2025, at an annual rate of 8.25%. The debentures are callable after
ten years. Interest is payable semi-annually on March 15 and September 15
on both the notes and the debentures.
In 1998 the Company made a tender offer for any and all of its $150.0
million of outstanding publicly-held 8.25% debentures due March 15, 2025.
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 reduced interest expense and generated a
positive return on a net present value basis. Total cash paid in
connection with the tender offer was $89.3 million. The Company recorded
an extraordinary charge in 1998 of $13.7 million ($7.7 million net of tax
or $.04 per share) in connection with this debt extinguishment.
<PAGE>
F-23
(C) On August 21, 1998, the Company filed a $300.0 million shelf registration
on Form S-3 with the SEC for unsecured debt securities that may be issued
by the Company from time to time. The registration statement became
effective August 28, 1998. On September 24, 1998, the Company filed a
prospectus supplement to allow the issuance of up to $300.0 million in
medium-term notes. As of December 31, 2000, the Company had issued a total
of $198.0 million, excluding unamortized debt costs under the medium-term
note program. The notes have maturity dates ranging from October 8, 2003,
through November 15, 2009, and pay interest semi-annually with rates
ranging from 5.0% to 7.125%.
(D) In March 2000 the Company issued $40.0 million of 7% subordinated
convertible notes due March 21, 2003, to three venture capital firms. Upon
an initial public offering of Class C Stock, this debt is convertible, at
the election of the venture capital firms, into shares of Class C Stock
intended to represent approximately 6.7% of the pre-offering equity of the
Company's Internet business division ("NYTD"). This debt is not currently
convertible (the Company withdrew its registration statement on Form S-3
for an initial public offering of Class C Stock, see Note 12 under
Tracking Stock). Beginning January 1, 2002, if no initial public offering
of the Class C Stock has occurred, the venture capital firms have the
right to require the Company to repurchase the notes at their $40.0
million face value.
----------------------------
Based on borrowing rates currently available for debt with similar terms and
average maturities, the fair value of long-term debt, excluding the current
portion, was $582.8 million at December 31, 2000, and $552.6 million at December
26, 1999.
In June 2000 total available funds under revolving credit agreements were
increased to $600.0 million from $400.0 million. The Company's one-year
agreement was renewed and increased to $300.0 million from $200.0 million and
will now mature in June 2001. The Company's multi-year agreement was renewed and
increased to $300.0 million from $200.0 million and will now mature in June
2005.
The revolving credit agreements permit borrowings, which bear interest at the
Company's option (i) for domestic borrowings: based on a certificates of deposit
rate, a Federal Funds rate, a base rate or a quoted rate; or (ii) for Eurodollar
borrowings: based on the LIBOR rate, plus various margins based on the Company's
credit rating. The revolving credit agreements include provisions that require,
among other matters, specified levels of stockholders' equity. The amount of
stockholders' equity in excess of the required levels was $262.7 million at
December 31, 2000.
In June 2000 the Company increased its ability to issue commercial paper from
$400.0 million to $600.0 million, which is supported by the Company's revolving
credit agreements. Borrowings are in the form of unsecured notes sold at a
discount with maturities ranging up to 270 days.
At December 31, 2000, the Company had $291.3 million in commercial paper
outstanding with an annual weighted average interest rate of 6.6% and an average
of 52 days to maturity from original issuance. At December 26, 1999, the Company
had no commercial paper outstanding.
Total debt as of December 31, 2000, including commercial paper and capital lease
obligations (see Note 13), amounted to $930.7 million. Total additional
borrowings available under all financing arrangements amounted to $410.7 million
as of December 31, 2000.
The aggregate face amount of maturities of long-term debt over the next five
years are as follows: 2001, none; 2002, $40.0 million; 2003, $49.5 million;
2004, none; 2005, $250.0 million and $220.4 million, thereafter.
Interest expense, net as shown in the accompanying Statements of Income were as
follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Interest expense $ 68,567 $ 52,503 $ 47,100
Capitalized interest -- -- (173)
Interest income (4,469) (1,785) (3,594)
- --------------------------------------------------------------------------------
Interest expense, net $ 64,098 $ 50,718 $ 43,333
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. INCOME TAXES
Income tax expense for each of the years presented is determined in accordance
with SFAS No. 109, Accounting for Income Taxes.
Reconciliations between the effective tax rate on income before income taxes and
the federal statutory rate are presented below.
The components of income tax expense as shown in the Consolidated Statements of
Income were as follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Current tax expense
Federal $ 253,682 $ 194,984 $ 173,516
State, local, foreign 50,034 77,935 47,384
- --------------------------------------------------------------------------------
Total current expense 303,716 272,919 220,900
- --------------------------------------------------------------------------------
Deferred tax (benefit) expense
Federal (26,509) (16,157) (10,529)
State, local, foreign (1,657) (28,475) 8,519
- --------------------------------------------------------------------------------
Total deferred benefit (28,166) (44,632) (2,010)
- --------------------------------------------------------------------------------
Income tax expense $ 275,550 $ 228,287 $ 218,890
- --------------------------------------------------------------------------------
<PAGE>
F-24
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
% of % of % of
Amount Pretax Amount Pretax Amount Pretax
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax at federal statutory rate $ 213,655 35.0% $ 188,463 35.0% $ 172,515 35.0%
Increase (decrease)
State and local taxes - net 30,897 5.1 32,149 6.0 35,289 7.2
Amortization of nondeductible intangible
assets acquired 11,059 1.8 10,090 1.9 9,510 1.9
Other - net (1,972) (0.3) (2,415) (0.5) (3,889) (0.8)
- -------------------------------------------------------------------------------------------------------------------------
Subtotal 253,639 41.6% 228,287 42.4% 213,425 43.3%
- -------------------------------------------------------------------------------------------------------------------------
Tax effect of net gain on dispositions,
write-downs and other 21,911 -- 5,465
- -------------------------------------------------------------------------------------------------------------------------
Income tax expense $ 275,550 $ 228,287 $ 218,890
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Income tax benefits, which related to the exercise of options reduced current
taxes payable and increased additional paid-in capital by $22.9 million in 2000,
$35.5 million in 1999 and $32.0 million in 1998.
Federal and state tax operating loss carryforwards totaled $8.6 million at
December 31, 2000. Such loss carryforwards expire in accordance with provisions
of applicable tax laws and have remaining lives ranging from one to 20 years.
Certain loss carryforwards are likely to expire unused. Accordingly, the Company
has valuation allowances amounting to $1.9 million as of December 31, 2000.
Tax expense in 2000, 1999 and 1998 was reduced by $1.4 million, $0.4 million and
$1.5 million ($2.1 million, $0.7 million and $2.3 million before Federal income
tax effect) due to a reduction in the valuation allowance attributable to state
net operating loss tax benefits.
The Company generated $16.0 million in investment tax credits in the state of
New York in connection with the construction of its College Point facility in
1997. The Company has fully utilized the investment tax credit for state income
tax purposes through December 26, 1999. For financial statement purposes, the
Company has selected the deferral method of accounting for investment tax
credits, and therefore will amortize the $16.0 million tax benefit over the
average useful life of the assets which ranges from 10 to 20 years.
The Company reduced goodwill by $3.1 million in 2000 and $7.7 million in 1999
related to pre-acquisition tax related settlements.
In 1999 the Internal Revenue Service completed its examination of federal income
tax returns for 1993 through 1995. The examination resulted in a benefit from a
tax settlement which did not have a material effect on the Company's
Consolidated Financial Statements. The audits for the years 1996 and 1997 are
currently in process and are not expected to have a material effect on the
Company's Consolidated Financial Statements.
The components of the net deferred tax liabilities recognized on the respective
Consolidated Balance Sheets were as follows:
- --------------------------------------------------------------------------------
December 31, December 26,
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Deferred Tax Assets
Retirement, postemployment and
deferred compensation plans $ 226,544 $ 211,131
Accruals for other employee
benefits, compensation,
insurance and other 74,713 62,587
Accounts receivable allowances 13,493 11,803
Other 43,699 45,530
- --------------------------------------------------------------------------------
Total deferred tax assets 358,449 331,051
Valuation allowance (1,922) (3,303)
- --------------------------------------------------------------------------------
Net deferred tax assets 356,527 327,748
- --------------------------------------------------------------------------------
Deferred Tax Liabilities
Property, plant and equipment 253,881 257,502
Intangible assets 106,598 102,315
Investments in joint ventures 15,616 39,592
Other 23,740 15,761
- --------------------------------------------------------------------------------
Total deferred tax liabilities 399,835 415,170
- --------------------------------------------------------------------------------
Net deferred tax liability 43,308 87,422
- --------------------------------------------------------------------------------
Amounts included in
Other current assets 62,939 53,611
- --------------------------------------------------------------------------------
Deferred income tax liability $ 106,247 $ 141,033
- --------------------------------------------------------------------------------
As of December 31, 2000, "Accumulated other comprehensive income (loss), net of
income tax" in the Company's Consolidated Balance Sheets and Consolidated
Statements of Stockholders' Equity was net of a deferred income tax asset of
$2.3 million, and net of a deferred income tax liability of $2.6 million as of
December 26, 1999.
<PAGE>
F-25
- --------------------------------------------------------------------------------
8. WORK FORCE REDUCTION CHARGES
In 2000 the Company recorded pre-tax charges of $5.3 million related to work
force reduction charges ("Buyouts"). This charge reduced earnings per share by
$.02 in 2000. In 1999 and 1998, the Company recorded pre-tax charges of $15.5
million and $5.4 million. These charges reduced earnings per share by $.05 in
1999 and $.02 in 1998. At December 31, 2000, $13.6 million and at December 26,
1999, $20.0 million of these charges were unpaid. This balance will be
principally paid within one year.
- --------------------------------------------------------------------------------
9. PENSION PLANS
The Company sponsors several pension plans and makes contributions to several
others in connection with collective bargaining agreements, including a joint
Company-union plan and a number of joint industry-union plans. These plans cover
substantially all employees.
The Company-sponsored pension plans provide participating employees with
retirement benefits in accordance with benefit provision formulas, which are
based on years of service and final average or career pay and, where applicable,
employee contributions. Retirement benefits are also provided under supplemental
unfunded pension plans.
In accordance with SFAS No. 132, Employer's Disclosures about Pensions and Other
Postretirement Benefits, the components of net periodic pension cost for all
Company-sponsored pension plans were as follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Service cost $ 24,058 $ 25,248 $ 22,093
Interest cost 61,609 54,781 51,367
Expected return on plan assets (62,153) (48,190) (44,521)
Recognized actuarial (gain) loss (4,053) 1,655 958
Amortization of prior service cost 873 576 433
Amortization of transition obligation 243 609 637
- --------------------------------------------------------------------------------
Net periodic pension cost $ 20,577 $ 34,679 $ 30,967
- --------------------------------------------------------------------------------
Assumptions used in the actuarial computations were as follows:
- --------------------------------------------------------------------------------
2000 1999 1998
- --------------------------------------------------------------------------------
Discount rate 7.75% 7.75% 6.75%
Rate of increase in compensation levels 5.00% 5.00% 5.00%
Expected long-term rate of return
on assets 9.00% 9.00% 8.75%
- --------------------------------------------------------------------------------
In connection with collective bargaining agreements, the Company contributes to
several other pension plans, including a joint Company-union plan and a number
of joint industry-union plans. Contributions are determined as a function of
hours worked or period earnings. Pension cost for these plans was $28.7 million
in 2000, $29.6 million in 1999, and $23.2 million in 1998.
The changes in benefit obligation and plan assets at September 30, 2000, and
1999 were as follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Change in benefit obligation
Benefit obligation at prior measurement
date $ 755,385 $ 813,224
Service cost 24,058 25,248
Interest cost 61,609 54,781
Plan participants' contributions 145 86
Amendments 311 8,077
Actuarial (gain)/loss 15,038 (114,015)
Acquisitions 34,179 --
Benefits paid (38,891) (32,016)
- --------------------------------------------------------------------------------
Benefit obligation at current
measurement date 851,834 755,385
- --------------------------------------------------------------------------------
Change in plan assets
Fair value of plan assets at prior
measurement date 647,144 578,155
Actual return on plan assets 95,950 94,793
Employer contribution 7,125 6,126
Plan participants' contributions 145 86
Acquisitions 37,160 --
Benefits paid (38,891) (32,016)
- --------------------------------------------------------------------------------
Fair value of plan assets at current
measurement date 748,633 647,144
- --------------------------------------------------------------------------------
Funded status (103,201) (108,241)
Unrecognized actuarial gain (130,136) (110,971)
Unrecognized transition obligation 59 393
Unrecognized prior service cost 9,431 10,008
Contribution paid after measurement date 1,834 1,618
- --------------------------------------------------------------------------------
Net amount recognized $(222,013) $(207,193)
- --------------------------------------------------------------------------------
The fair value of plan assets for all funded plans was in excess of the
accumulated benefit obligation as of December 31, 2000, and December 26, 1999.
The financial statement effects of the Company's Supplemental Employee
Retirement Plans were included in the tables above. The primary portion of the
Company's net obligation under these plans is included in "Other Liabilities --
Other" on the Company's Consolidated Balance Sheets (see Note 15).
The amount of cost recognized for employer sponsored defined contribution
benefit plans for the year ended December 31, 2000, was $13.2 million, $11.9
million for the year ended December 26, 1999, and $12.0 million for the year
ended December 27, 1998.
<PAGE>
F-26
- --------------------------------------------------------------------------------
10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS AND POSTEMPLOYMENT BENEFITS
The Company provides health and life insurance benefits to retired employees
(and their eligible dependents) who are not covered by any collective bargaining
agreements if the employee meets specified age and service requirements.
In accordance with SFAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions, the Company accrues the costs of such benefits
during the employee's active years of service.
Net periodic postretirement cost was as follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Components of net periodic benefit cost
Service cost $ 4,790 $ 4,363 $ 4,129
Interest cost 10,578 8,499 8,822
Recognized actuarial gain (1,292) (1,167) (852)
Amortization of prior service cost (3,182) (2,231) (2,132)
- --------------------------------------------------------------------------------
Net periodic postretirement benefit cost $ 10,894 $ 9,464 $ 9,967
- --------------------------------------------------------------------------------
The Company's policy is to pay claims and premiums under the above-mentioned
plans from Company assets.
The accumulated postretirement benefit obligation assumptions were as follows:
- --------------------------------------------------------------------------------
2000 1999 1998
- --------------------------------------------------------------------------------
Discount rate 7.75% 7.75% 6.75%
Estimated increase in
compensation level 5.00% 5.00% 5.00%
Health care cost trend
rate range 7.25%-5.00% 7.75%-5.00% 8.50%-5.00%
- --------------------------------------------------------------------------------
A one-percentage point change in assumed health care cost trend rates would have
the following effects in 2000:
- --------------------------------------------------------------------------------
(In thousands) One-Percentage Point One-Percentage Point
Increase Decrease
- --------------------------------------------------------------------------------
Effect on total service and
interest cost for 2000 $ 1,962 $ (1,641)
Effect on accumulated
postretirement benefit
obligation as of
December 31, 2000 $ 18,862 $(15,520)
- --------------------------------------------------------------------------------
The accrued postretirement benefit liability and the change in benefit
obligation at September 30 in each year were as follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Change in benefit obligation
Benefit obligation at prior measurement date $ 115,627 $ 140,149
Service cost 4,790 4,363
Interest cost 10,578 8,499
Plan participants' contributions 1,848 --
Actuarial (gain)/loss 22,235 (29,598)
Amendments (14,001) (3,189)
Acquisitions 7,007 --
Benefits paid (7,597) (4,597)
- --------------------------------------------------------------------------------
Benefit obligation at current
measurement date 140,487 115,627
- --------------------------------------------------------------------------------
Change in plan assets
Fair value of plan assets at prior
measurement date -- --
Employer contribution 7,597 4,597
Benefits paid (7,597) (4,597)
- --------------------------------------------------------------------------------
Fair value of plan assets at current
measurement date -- --
- --------------------------------------------------------------------------------
Funded status (140,487) (115,627)
Unrecognized actuarial gain (21,156) (44,965)
Unrecognized prior service cost (26,778) (15,674)
Contribution paid after
measurement date 2,044 1,303
- --------------------------------------------------------------------------------
Net amount recognized $(186,377) $(174,963)
- --------------------------------------------------------------------------------
In connection with collective bargaining agreements, the Company contributes to
several welfare plans, including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Portions of these contributions, which cannot be
disaggregated, related to postretirement benefits for plan participants. Total
contributions to these welfare funds were $25.7 million in 2000, $25.5 million
in 1999, and $27.0 million in 1998. The primary portion of the Company's net
obligation under these plans is included in "Other Liabilities -- Other" on the
Company's Consolidated Balance Sheets (see Note 15).
In accordance with SFAS No. 112, Employers' Accounting for Postemployment
Benefits, the Company accrues the cost of certain benefits provided to former or
inactive employees after employment but before retirement (such as workers'
compensation, disability benefits and health care continuation coverage) during
the employee's active years of service.
- --------------------------------------------------------------------------------
11. EXECUTIVE AND NON-EMPLOYEE DIRECTORS' INCENTIVE PLANS
Under the Company's 1991 Executive Stock Incentive Plan and the 1991 Executive
Cash Bonus Plan (together, the "1991 Executive Plans"), the Board of Directors
may authorize incentive compensation awards and grant stock options to key
employees of the Company. Awards may be granted in cash, restricted and
unrestricted shares of the Company's Class A Common Stock, retirement units
(stock equivalents) or such other forms as the Board of Directors deems
appropriate. Under the 1991 Executive Plans, stock options of up to 60 million
shares of Class A Common Stock may be granted and stock awards of up to two
million shares of Class A Common Stock may be made. In adopting the 1991
Executive Plans, shares previously available for issuance of
<PAGE>
F-27
retirement units and stock options under prior plans are no longer available for
future awards.
Retirement units are payable in Class A Common Stock generally over a period of
10 years following retirement.
The Plans provide for granting of both incentive and non-qualified stock options
principally at an option price per share of 100% of the fair market value of the
Class A Common Stock on the date of grant. These options have a term of 10
years, and become exercisable in annual periods ranging from one year to four
years from the date of grant. Payment upon exercise of an option may be made in
cash, or with previously-acquired shares.
Under the Company's Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"), non-qualified options with 10-year terms are granted annually to each
non-employee director of the Company. The 1997 annual grant increased the number
of shares of Class A Common Stock a director may purchase from the Company from
2,000 to 4,000 shares at the fair market value of such shares at the date of
grant. Options for an aggregate of 0.5 million shares of Class A Common Stock
may be granted under the Directors' Plan.
Changes in the Company's stock options for the three-year period ended December
31, 2000, were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
2000 1999 1998
-------------------------- -------------------------- -------------------------
Weighted Weighted Weighted
Number of Average Number of Average Number of Average
(Shares in thousands) Options Exercise Price Options Exercise Price Options Exercise Price
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding, 21,703 $30 20,317 $23 19,585 $18
beginning of year
Granted 5,897 40 5,271 47 4,505 34
Exercised (1,966) 18 (3,574) 15 (3,513) 13
Forfeited (632) 35 (311) 26 (260) 18
- ---------------------------------------------------------------------------------------------------------
Options outstanding,
end of year 25,002 $33 21,703 $30 20,317 $23
- ---------------------------------------------------------------------------------------------------------
Options exercisable,
end of year 12,857 $26 10,343 $22 10,045 $16
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The Company's stock options outstanding at December 31, 2000, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
(In thousands) Options Outstanding Options Exercisable
-------------------------------------------------- -----------------------------
Weighted Average
Number Remaining Weighted Remaining Number Weighted Average
Exercise Price Ranges of Options Contractual Life Exercise Price of Options Exercise Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 5-10 71 2 years $9 69 $ 9
$10-15 3,871 4 years 13 3,871 13
$15-20 2,428 6 years 19 2,428 19
$20-35 7,653 8 years 33 4,966 33
$35-50 10,979 10 years 43 1,523 47
- -------------------------------------------------------------------------------------------------------------------------
25,002 $33 12,857 $26
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
In 1999 Acquisition Subsidiary (see Note 2) adopted a stock option plan (the
"Subsidiary Plan") that provides for the grant of options in Acquisition
Subsidiary's common stock to employees of and service providers to Acquisition
Subsidiary and its affiliates. Acquisition Subsidiary has reserved 15.0 million
shares of its common stock for issuance under the Subsidiary Plan. With certain
exceptions, such options generally vest over four years as follows: 25% on the
first anniversary of the grant date and 12.5% every six months thereafter.
During 2000 Acquisition Subsidiary granted options for 3.4 million shares at an
exercise price of $7.03 per share. Outstanding options under the Subsidiary Plan
as of December 31, 2000, were for 10.8 million shares at a weighted average
exercise price of $5.71 per share of which 3.3 million options were exercisable
at a weighted average exercise price of $4.36 per share.
During 1999 Acquisition Subsidiary granted options for 8.2 million shares at an
exercise price range of $5.86 to $7.03 per share. Outstanding options under the
Subsidiary Plan as of December 26, 1999, were for 8.8 million shares at a
weighted average exercise price of $5.17 per share of which 0.7 million options
were exercisable at a weighted average exercise price of $0.17 per share.
In connection with the acquisition of Abuzz in July 1999, unvested options to
acquire 0.4 million shares of Abuzz were exchanged into unvested options of
Acquisition Subsidiary's common stock with similar terms and conditions ("Abuzz
<PAGE>
F-28
Rollover Options"). The average exercise price of these options is $0.19. These
options vest ratably over a two-year period.
In addition, also in connection with the acquisition of Abuzz, Acquisition
Subsidiary exchanged vested options in Abuzz for vested options of 0.7 million
common shares in Acquisition Subsidiary ("Special Options"). The average
exercise price of these options is $0.17 per share.
Since the Company did not issue Class C Stock to the public by December 31,
2000, (see Note 12 under Tracking Stock), substantially all of the holders of
Special Options have required Acquisition Subsidiary to redeem their shares
(acquired upon exercise of Special Options) for cash (see Note 2).
In 2000 the Company recorded compensation expense of $1.9 million for 3.4
million Acquisition Subsidiary options granted and in 1999 the Company recorded
compensation expense of $2.0 million for 3.0 million Acquisition Subsidiary
options granted for the difference between the exercise price and the fair
market value at the date of grant. Except for options under the Subsidiary Plan
noted above, no compensation expense has been recorded by the Company. The
Company expects to recognize future noncash compensation for accounting purposes
as follows: 2001 - $0.5 million and 2002 - $0.1 million, as the options vest
over their respective vesting periods.
The Company applies Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations to accounting for its
stock option and employee stock purchase plans (see Note 12) ("Employee
Stock-Based Plans").
The weighted average fair values for stock option grants were $13.94 in 2000,
$15.84 in 1999 and $9.35 in 1998. The weighted average values for the Company's
Employee Stock Purchase Plan ("ESPP") rights were $9.46 in 2000, $8.62 in 1999
and $6.67 in 1998. The weighted average value for stock options under the
Subsidiary Plan was $1.27 in 2000 and $2.16 in 1999. The weighted average values
were estimated at the date of grant using the Black Scholes Option Valuation
model and the assumptions presented in the table below. There was no expected
volatility assumed for the Subsidiary Plan as such assumption is not required
for non-public companies.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
The
Subsidiary
Plan Stock Options ESPP Rights
----------------- ----------------------------- -------------------------------
2000 1999 2000 1999 1998 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Risk-free interest rate 5.06% 6.19% 5.00% 6.20% 4.34% 5.16% 4.15% 5.15%
Expected life 4 years 4 years 5 years 5 years 5 years 1.1 years 1.1 years 1.1 years
Expected volatility -- -- 34.09% 28.08% 24.90% 34.09% 28.08% 24.90%
Expected dividend yield -- -- 1.12% 0.87% 1.08% 1.33% 1.89% 1.39%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Had compensation cost for the Employee Stock-Based Plans and the Subsidiary Plan
been determined over the vesting period based on the fair value at the grant
date for awards under those plans, the Company's net income and earnings per
share would have been reduced to the pro forma amounts indicated below. The pro
forma effect for 2000, 1999 and 1998 on the amounts presented below is not
representative of the pro forma effect in future years because it does not take
into account pro forma compensation expense related to grants made prior to
1995.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998
-------------------------- -------------------------- --------------------------
(In thousands, except per share data) As reported Pro forma As reported Pro forma As reported Pro forma
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Income $ 397,536 $ 353,323 $ 310,177 $ 279,807 $ 278,914 $ 256,837
Basic earnings per share $ 2.37 $ 2.10 $ 1.77 $ 1.59 $ 1.48 $ 1.36
Diluted earnings per share $ 2.32 $ 2.06 $ 1.73 $ 1.56 $ 1.45 $ 1.33
</TABLE>
- --------------------------------------------------------------------------------
12. CAPITAL STOCK
The Board of Directors is authorized to set the distinguishing characteristics
of each series of preferred stock prior to issuance, including the granting of
limited or full voting rights; however, the consideration received must be at
least $100 per share. No shares of serial preferred stock have been issued.
The Company's Class A and Class B Common Stock are entitled to equal
participation in the event of liquidation and in dividend declarations. The
Class B Common Stock is convertible at the holders' option on a share-for-share
basis into Class A shares. As provided for in the Company's Certificate of
Incorporation, the Class A Common Stock has limited voting rights, including the
right to elect 30% of the directors of the Board, and the Class A and Class B
Common Stock have the right to vote together on reservation of Company stock for
stock options and other stock-related plans, on the ratification of the
selection of independent certified public accountants and, in certain
circumstances, on acquisitions of the stock or assets of
<PAGE>
F-29
other companies. Otherwise, except as provided by the laws of the State of New
York, all voting power is vested solely and exclusively in the holders of the
Class B Common Stock.
The Company paid $580.6 million in 2000 and $410.9 million in 1999 to repurchase
shares of Class A Common Stock. The Company repurchased 14.6 million shares in
2000 at an average cost of $39.77 per share and 11.9 million shares in 1999 at
an average cost of $34.63 per share.
On September 21, 2000, the Board of Directors authorized additional repurchase
expenditures under the Company's stock repurchase program for up to $600.0
million. During the period from January 1, 2001, through January 24, 2001, the
Company paid $29.6 million to repurchase 0.7 million shares of Class A Common
Stock at an average price of $40.85 per share. As of January 24, 2001, the
remaining amount of repurchase authorizations from the Company's Board of
Directors is $425.8 million. Under the authorizations, purchases may be made
from time to time either in the open market or through private transactions.
Purchases may be suspended from time to time or discontinued. The effect of
repurchases on diluted earnings per share was an increase to earnings per share
of $.09 in 2000 and $.07 in 1999.
Stock repurchases under the repurchase program exclude shares reacquired in
connection with taxes due from optionees on certain exercises under the
Company's stock option plans at a cost of $12.8 million in 1999. Also excluded
from the repurchase program were repurchases of common stock in connection with
noncash exercises under the Company's stock option plans at a cost of $24.3
million in 1999. Effective in 2000, the Company no longer reacquires shares in
connection with taxes or noncash exercises.
In 2000 the Company retired from treasury 13.4 million Class A shares. This
retirement resulted in a reduction of $513.5 million in treasury stock, $56.4
million in Additional Paid-In Capital and $455.8 million in Retained Earnings.
In 1999 the Company retired from treasury 11.4 million Class A shares. This
retirement resulted in a reduction of $387.3 million in treasury stock, $71.3
million in Additional Paid-In Capital and $314.9 million in Retained Earnings.
Under the 2001 Offering of the ESPP, eligible employees may purchase Class A
Common Stock through payroll deductions during the 2001 plan year at the lower
of $33.87 per share (85% of the average market price on September 29, 2000) or
85% of the average market price on November 30, 2001. Between 43% to 51% of
eligible employees have participated in the ESPP in the last three years. Under
the ESPP, the Company issued 1.1 million shares in 2000, 1.5 million shares in
1999, and 1.4 million shares in 1998.
In December 2000 the Company awarded 28,000 shares of restricted common stock to
certain executives. These shares vest 50% in December 2003 and 50% in December
2004. The Company will expense the value of the shares awarded over the vesting
period.
Shares of Class A Common Stock reserved for issuance were as follows:
- --------------------------------------------------------------------------------
December 31, December 26,
(Shares in thousands) 2000 1999
- --------------------------------------------------------------------------------
Stock Options
Outstanding 25,002 21,703
Available 6,928 6,296
- --------------------------------------------------------------------------------
Employee Stock Purchase Plan
Available 1,785 2,921
- --------------------------------------------------------------------------------
Voluntary Conversion of
Class B Common Stock
Available 847 847
- --------------------------------------------------------------------------------
Retirement Units and Other Awards
Outstanding 135 198
Available 1,933 1,933
- --------------------------------------------------------------------------------
Total
Outstanding 25,137 21,901
Available 11,493 11,997
- --------------------------------------------------------------------------------
TRACKING STOCK
On January 20, 2000, the Board of Directors of the Company authorized, subject
to shareholder approval, the issuance of Class C Stock and on January 28, 2000,
the Company filed a registration statement on Form S-3 ("the Form S-3") related
to an initial public offering of Class C Stock. This tracking stock was intended
to track the performance of NYTD. At the Annual Meeting of Stockholders held on
May 23, 2000, stockholders authorized the filing of an amendment to the
Company's Certificate of Incorporation to create this new class of stock, which
the Company has yet to do.
On October 12, 2000, the Company withdrew the Form S-3 due to unfavorable
conditions in the public equities markets. This decision to withdraw the Form
S-3 does not have a material impact on operations of NYTD or to the Company's
Consolidated Financial Statements.
<PAGE>
F-30
- --------------------------------------------------------------------------------
13. COMMITMENTS AND CONTINGENT LIABILITIES
OPERATING LEASES
Such lease commitments are primarily for office space and equipment. Certain
office space leases provide for rent adjustments relating to changes in real
estate taxes and other operating expenses.
Rental expense amounted to $37.4 million in 2000, $32.8 million in 1999, and
$29.0 million in 1998. The approximate minimum rental commitments under
noncancelable leases at December 31, 2000, were as follows: 2001, $168.6
million; 2002, $160.7 million; 2003, $128.0 million; 2004, $121.0 million; 2005,
$107.7 million and $125.1 million thereafter.
CAPITAL LEASES
In 1994 the Company recorded $5.0 million in a capital lease for 31 acres of
city-owned land in College Point, New York, on which the Company has completed
building a printing and distribution facility. The Company has the option to
purchase the property at any time prior to the end of the lease in 2019. Under
the terms of the lease agreement with the City of New York, the Company receives
various tax and energy cost reductions.
The Company also has a long-term lease for a building and site in Edison, N.J.
The lease provides the Company with certain early cancellation rights, as well
as renewal and purchase options. For financial reporting purposes, the Edison
lease has been classified as a capital lease; accordingly, an asset of $57.0
million (included in buildings, building equipment and improvements) was
recorded at December 28, 1997. In May 1998 the Company renegotiated its lease
for this property to extend its commitment for an additional 10 years through
2018. Accordingly, the Company increased its capitalized asset and corresponding
liability to $78.0 million.
Future minimum lease payments for all capital leases, and the present value of
the minimum lease payments at December 31, 2000, are as follows:
- --------------------------------------------------------------------------------
(In thousands) Amount
- --------------------------------------------------------------------------------
2001 $ 8,935
2002 8,328
2003 7,402
2004 7,275
2005 6,952
Later years 126,189
- --------------------------------------------------------------------------------
Total minimum lease payments $ 165,081
Less imputed interest (79,031)
- --------------------------------------------------------------------------------
Present value of net minimum lease
payments including current maturities $ 86,050
- --------------------------------------------------------------------------------
OTHER
There are various legal actions that have arisen in the ordinary course of
business and are now pending against the Company. These actions are generally
for amounts greatly in excess of the payments, if any, that may be required to
be made. It is the opinion of management after reviewing these actions with
legal counsel to the Company that the ultimate liability that might result from
these actions would not have a material adverse effect on the Consolidated
Financial Statements.
- --------------------------------------------------------------------------------
14. Marketable Securities
In 1999 the Company acquired a total of 1.6 million shares or approximately 6%
in TheStreet.com for $15.6 million, of which $3.6 million was in cash and $12.0
million represents an irrevocable credit for future advertising to be used by
TheStreet.com through February 2003. These marketable securities are classified
as available-for-sale as defined under Statement of Financial Accounting
Standards ("SFAS") No. 115, Accounting for Certain Investments in Debt and
Equity Securities. These securities are reported at fair market value, and are
included in the caption "Miscellaneous Assets" in the Company's Consolidated
Balance Sheets. The fair value was $4.5 million at December 31, 2000, and $26.1
million at December 26, 1999. In 2000, the Company recorded a $6.0 million loss
(net of income tax) on its original $15.6 million investment in TheStreet.com
due to an impairment in value that is other than temporary. There was an
unrealized gain of $5.8 million (net of income tax) in 1999 recorded in
comprehensive income. There were no realized gains or losses on
available-for-sale securities in 1999.
<PAGE>
F-31
- --------------------------------------------------------------------------------
15. OTHER LIABILITIES
The components of the "Other Liabilities -- Other" balance on the Company's
Consolidated Balance Sheets were as follows:
- --------------------------------------------------------------------------------
(In thousands) December 31, December 26,
2000 1999
- --------------------------------------------------------------------------------
Pension plan obligation
(see Note 9) $222,013 $207,193
Obligation for postretirement benefits
other than pensions and postemployment
benefits
(see Note 10) 186,377 174,963
Deferred compensation obligation 95,783 84,497
Other 200,860 167,617
- --------------------------------------------------------------------------------
Total $705,033 $634,270
- --------------------------------------------------------------------------------
Certain eligible executives of the Company have elected to defer a portion of
their compensation on a pre-tax basis under a deferred executive compensation
plan sponsored by the Company. The deferrals are for a period of up to four
years that may be extended by participants, or taxable distributions must begin.
Employees' contributions earn income based on the performance of available
investment funds among which they may elect.
The deferred compensation obligation is recorded at fair market value in "Other
Liabilities -- Other" in the Company's Consolidated Balance Sheets, and amounted
to $95.8 million at December 31, 2000, and $84.5 million at December 26, 1999.
This obligation is principally funded with instruments expected to have market
performance similar to those available to employees in this plan. The Company's
corresponding investments are recorded at fair market value and are included in
"Miscellaneous Assets" in the Company's Consolidated Balance Sheets.
- --------------------------------------------------------------------------------
16. SEGMENT INFORMATION
Operating segments represent components of the Company's business that are
evaluated regularly by key management in assessing performance and resource
allocation. The Company has determined that its reportable segments consist of
its Newspaper, Broadcast, Magazine and its Internet business division, NYTD. For
the years presented herein, the Newspaper Group is comprised of the following
operating segments, each of which has its own management: The New York Times,
The Boston Globe, and 15 other newspapers. The economic characteristics,
products, services, production process, customer type and distribution methods
for the operating segments of the Newspaper Group are substantially similar and
have therefore been aggregated as a reportable segment.
The Broadcast, Magazine and NYTD are managed separately and have different
economic characteristics from those of the Newspaper Group, and are therefore
shown as separate reportable segments.
The Company began presenting NYTD as a separate segment in 2000. At the end of
2000, the business of selling information to online database providers ("Digital
Archive Distribution"), which was previously part of The New York Times
newspaper, became part of NYTD. The Company has restated all prior periods to
reflect these changes.
Revenues from individual customers, and revenues, operating profit and
identifiable assets of foreign operations are not significant. For the years
presented herein, the following are the Company's reportable operating segments:
NEWSPAPER GROUP
The New York Times, The Boston Globe, the Company's 15 other newspapers,
newspaper distributors, a news service, a features syndicate, TimesDigest,
licensing operations of The New York Times databases and microfilm.
Beginning in 2001 The Boston Globe and the T&G will be combined and presented as
the New England Newspaper Group.
BROADCAST GROUP
Eight network-affiliated television stations and two radio stations.
MAGAZINE GROUP
Four golf publications and related activities in the golf field. See Note 17 on
subsequent events relating to the Company's agreement to sell the Magazine Group
in 2001.
NEW YORK TIMES DIGITAL
NYTD now consists of NYTimes.com, Boston.com, newyorktoday.com, WineToday.com,
GolfDigest.com, Digital Archive Distribution and Abuzz.
<PAGE>
F-32
The Company's Statements of Income on a segment basis were as follows:
<TABLE>
<CAPTION>
Years Ended
-------------------------------------------------
December 31, December 26, December 27,
(In thousands) 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Newspapers $ 3,160,247 $ 2,857,380 $ 2,674,872
Broadcast 160,297 150,130 151,175
Magazines 115,438 110,566 115,065
New York Times Digital 66,590 43,680 20,443
Intersegment eliminations(A) (13,117) (5,000) (5,000)
- ----------------------------------------------------------------------------------------------------------
Total $ 3,489,455 $ 3,156,756 $ 2,956,555
- ----------------------------------------------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Newspapers $ 677,643 $ 568,600 $ 491,446
Broadcast 48,818 45,833 45,120
Magazines 19,342 18,652 16,250
New York Times Digital (70,007) (14,063) (13,637)
Unallocated corporate expenses (39,875) (47,740) (29,792)
- ----------------------------------------------------------------------------------------------------------
Total 635,921 571,282 509,387
- ----------------------------------------------------------------------------------------------------------
Income from joint ventures 15,914 17,900 21,014
Interest expense, net 64,098 50,718 43,333
Gain on dispositions of assets and other - net 85,349 -- 18,452
- ----------------------------------------------------------------------------------------------------------
Income before income taxes and extraordinary item 673,086 538,464 505,520
Income taxes 275,550 228,287 218,890
- ----------------------------------------------------------------------------------------------------------
Income before extraordinary item 397,536 310,177 286,630
Extraordinary item, net of tax - debt extinguishment -- -- (7,716)
- ----------------------------------------------------------------------------------------------------------
NET INCOME $ 397,536 $ 310,177 $ 278,914
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(A) Intersegment eliminations primarily include revenues between New York
Times Digital and other segments.
<PAGE>
F-33
Newspaper Group operating profit includes Buyouts of $2.1 million for 2000,
$15.4 million for 1999 and $2.5 million for 1998. In 2000 the Company sold
certain regional properties, (see Note 2).
The Broadcast Group operating profit includes Buyouts of $0.9 million for 2000,
$0.1 million for 1999 and $1.9 million in 1998.
The Magazine Group operating profit includes Buyouts of $0.9 million for 2000
and $3.0 million for Buyouts in 1998. See Note 17 on subsequent events relating
to the Company's agreement to sell the Magazine Group.
NYTD operating loss includes Buyouts of $0.4 million in 2000. Additionally, the
2000 operating loss includes a $22.7 million pre-tax noncash charge for a
write-down of intangible assets (see Note 2). See Note 17 on subsequent events
relating to the Company's agreement to sell GolfDigest.com in 2001.
In 2000 unallocated corporate expenses included Buyouts of $1.0 million. In 1998
unallocated corporate expenses included a benefit of $2.0 million from the
reversal of a Buyout accrual.
Advertising, circulation and other revenue, by major product of the Newspaper
Group, were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
% Change
----------------------
(In millions) 2000 1999 1998 00-99 99-98
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The New York Times
Advertising $1,306.2 $1,175.2 $1,051.6 11.2 11.8
Circulation 476.6 452.6 439.9 5.3 2.9
Other 144.6 129.3 140.4 11.8 (7.9)
- ----------------------------------------------------------------------------------------
Total $1,927.4 $1,757.1 $1,631.9 9.7 7.7
- ----------------------------------------------------------------------------------------
New England
Newspaper Group
The Boston Globe
Advertising $ 493.9 $ 462.4 $ 438.4 6.8 5.5
Circulation 135.9 133.7 133.4 1.7 0.2
Other 34.5 22.5 12.6 53.1 79.1
- ----------------------------------------------------------------------------------------
Total $ 664.3 $ 618.6 $ 584.4 7.4 5.9
- ----------------------------------------------------------------------------------------
Worcester Telegram
& Gazette
Advertising $ 58.4 N/A N/A N/A N/A
Circulation 23.5 N/A N/A N/A N/A
Other 0.7 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------
Total $ 82.6 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------
Total New England
Newspaper Group
Advertising $ 552.3 $ 462.4 $ 438.4 19.4 5.5
Circulation 159.4 133.7 133.4 19.2 0.2
Other 35.2 22.5 12.6 56.2 79.1
- ----------------------------------------------------------------------------------------
Total $ 746.9 $ 618.6 $ 584.4 20.7 5.9
- ----------------------------------------------------------------------------------------
Regional Newspapers(A)
Advertising $ 368.6 $ 363.4 $ 342.7 1.4 6.0
Circulation 101.2 103.0 103.0 (1.8) --
Other 16.1 15.3 12.9 5.6 18.0
- ----------------------------------------------------------------------------------------
Total $ 485.9 $ 481.7 $ 458.6 0.9 5.0
- ----------------------------------------------------------------------------------------
Total Newspaper Group
Advertising $2,227.1 $2,001.0 $1,832.7 11.3 9.2
Circulation 737.2 689.3 676.3 6.9 1.9
Other 195.9 167.1 165.9 17.2 0.7
- ----------------------------------------------------------------------------------------
Total $3,160.2 $2,857.4 $2,674.9 10.6 6.8
- ----------------------------------------------------------------------------------------
</TABLE>
(A) Excluding divested Regionals, 2000 advertising revenue for the Regional
Newspaper Group increased 4.9% compared with 1999 and 5.9% compared with
1998.
<PAGE>
F-34
The Company's segment depreciation and amortization, capital expenditures and
identifiable assets reconciled to consolidated amounts were as follows:
- --------------------------------------------------------------------------------
Years Ended
---------------------------------------------
December 31, December 26, December 27,
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspapers $ 164,977 $ 164,195 $ 165,326
Broadcast 16,732 17,368 17,662
Magazines 1,265 1,372 (4,361)
New York Times Digital(A) 33,314 4,586 1,159
Corporate 11,333 9,620 8,099
Investment in joint ventures 352 352 352
- --------------------------------------------------------------------------------
Total $ 227,973 $ 197,493 $ 188,237
- --------------------------------------------------------------------------------
CAPITAL EXPENDITURES(B)
Newspapers $ 50,882 $ 40,160 $ 52,213
Broadcast 9,001 10,475 4,331
Magazines 129 465 631
New York Times Digital 20,136 9,726 1,965
Corporate 5,152 12,581 22,438
- --------------------------------------------------------------------------------
Total $ 85,300 $ 73,407 $ 81,578
- --------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
Newspapers $2,754,716 $2,564,674 $2,673,197
Broadcast 368,112 377,221 387,680
Magazines 55,964 60,362 62,148
New York Times Digital 38,378 50,538 6,769
Corporate 282,189 321,067 213,042
Investment in joint ventures 107,320 121,940 122,273
- --------------------------------------------------------------------------------
Total $3,606,679 $3,495,802 $3,465,109
- --------------------------------------------------------------------------------
(A) The Company recorded a write-down of intangible assets related to Abuzz
amounting to $22.7 million, which was included in amortization expense.
(B) Capital expenditures exclude additions to capitalized leases for the
Edison Facility in 1998 (see Note 13).
- --------------------------------------------------------------------------------
17. Subsequent Events
On January 4, 2001, the Company sold substantially all of its investment in
TheStreet.com. The proceeds of the sale approximated carrying value.
On January 31, 2001, the Company entered into an agreement to sell the assets of
Golf Digest, Golf Digest Woman, Golf World, Golf World Business and
GolfDigest.com. The sale is expected to be completed, subject to regulatory
approval, in the second quarter of 2001. The results of operations for the
Magazine Group are not material to the Company's Consolidated Financial
Statements.
<PAGE>
F-35
- --------------------------------------------------------------------------------
18. CONSOLIDATING FINANCIAL INFORMATION
Below is the consolidating financial information of the Company excluding NYTD
("NYT") as well as NYTD. The financial information reflects the businesses of
NYT and NYTD including the allocation of revenues and expenses between NYT and
NYTD in accordance with the Company's allocation policies.
The allocations are as follows: a) Inter-group advertising revenues between NYT
and NYTD, b) a portion of classified advertising revenues from NYT to NYTD, c)
license fees charged by NYT to NYTD for the electronic use of the trademarks and
copyrights owned by NYT, d) a portion of NYT expenses for general and
administrative services and shared processing services from NYT to NYTD.
Additionally, the income tax benefit relating to the operations of NYTD, which
could be utilized on a consolidated basis, were allocated to NYTD. The Company
believes that the aforementioned allocations were made on a reasonable basis.
CONSOLIDATING STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31, 2000
-------------------------------------------------
The New
Elimina- York Times
(In thousands) NYT NYTD tions Company
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
External non-internet
revenues $3,422,280 $ -- $ -- $3,422,280
External internet
revenues 3,158 64,017 -- 67,175
Inter-group license
fee revenue 10,544 2,573 (13,117) --
- --------------------------------------------------------------------------------
Total 3,435,982 66,590 (13,117) 3,489,455
- --------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs:
External expenses 1,426,562 31,488 -- 1,458,050
Inter-group license
fee expense 61 5,000 (5,061) --
Selling, general and
administrative
expenses:
External expenses 1,302,585 92,899 -- 1,395,484
Inter-group allocated
expenses 846 7,210 (8,056) --
- --------------------------------------------------------------------------------
Total 2,730,054 136,597 (13,117) 2,853,534
- --------------------------------------------------------------------------------
OPERATING PROFIT 705,928 (70,007) -- 635,921
(LOSS)
Income from joint
ventures 15,914 -- -- 15,914
Interest expense, net 64,098 -- -- 64,098
Gain on dispositions
of assets and other-net 85,349 -- -- 85,349
- --------------------------------------------------------------------------------
Income (loss) before
income taxes and
extraordinary item 743,093 (70,007) -- 673,086
Income taxes (benefit) 296,310 (20,760) -- 275,550
- --------------------------------------------------------------------------------
Income (loss) before
extraordinary item 446,783 (49,247) -- 397,536
Extraordinary item,
net of tax -- -- -- --
- --------------------------------------------------------------------------------
NET INCOME/(LOSS) $ 446,783 $(49,247) $ -- $ 397,536
- --------------------------------------------------------------------------------
<CAPTION>
Year Ended December 26, 1999
-------------------------------------------------
The New
Elimina- York Times
(In thousands) NYT NYTD tions Company
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
External non-internet
revenues $3,110,834 $ -- $ -- $3,110,834
External internet
revenues 2,242 43,680 -- 45,922
Inter-group license
fee revenue 5,000 -- (5,000) --
- --------------------------------------------------------------------------------
Total 3,118,076 43,680 (5,000) 3,156,756
- --------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs:
External expenses 1,343,922 19,015 -- 1,362,937
Inter-group license
fee expense -- 5,000 (5,000) --
Selling, general and
administrative
expenses:
External expenses 1,191,122 31,415 -- 1,222,537
Inter-group allocated
expenses (2,313) 2,313 -- --
- --------------------------------------------------------------------------------
Total 2,532,731 57,743 (5,000) 2,585,474
- --------------------------------------------------------------------------------
OPERATING PROFIT (LOSS) 585,345 (14,063) -- 571,282
Income from joint
ventures 17,900 -- -- 17,900
Interest expense, net 50,704 14 -- 50,718
Gain on dispositions
of assets and other-net -- -- -- --
- --------------------------------------------------------------------------------
Income (loss) before
income taxes and
extraordinary item 552,541 (14,077) -- 538,464
Income taxes (benefit) 234,228 (5,941) -- 228,287
- --------------------------------------------------------------------------------
Income (loss) before
extraordinary item 318,313 (8,136) -- 310,177
Extraordinary item,
net of tax -- -- -- --
- --------------------------------------------------------------------------------
NET INCOME/(LOSS) $ 318,313 $ (8,136) $ -- $ 310,177
- --------------------------------------------------------------------------------
<CAPTION>
Year Ended December 27, 1998
-------------------------------------------------
The New
Elimina- York Times
(In thousands) NYT NYTD tions Company
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
External non-internet
revenues $2,934,543 $ -- $ -- $2,934,543
External internet
revenues 1,569 20,443 -- 22,012
Inter-group license
fee revenue 5,000 -- (5,000) --
- --------------------------------------------------------------------------------
Total 2,941,112 20,443 (5,000) 2,956,555
- --------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs:
External expenses 1,353,533 13,115 -- 1,366,648
Inter-group license
fee expense -- 5,000 (5,000) --
Selling, general and
administrative
expenses:
External expenses 1,064,555 15,965 -- 1,080,520
Inter-group allocated
expenses -- -- -- --
- --------------------------------------------------------------------------------
Total 2,418,088 34,080 (5,000) 2,447,168
- --------------------------------------------------------------------------------
OPERATING PROFIT 523,024 (13,637) -- 509,387
(LOSS)
Income from joint
ventures 21,014 -- -- 21,014
Interest expense, net 43,333 -- -- 43,333
Gain on dispositions
of assets and other-net 18,452 -- -- 18,452
- --------------------------------------------------------------------------------
Income (loss) before
income taxes and
extraordinary item 519,157 (13,637) -- 505,520
- --------------------------------------------------------------------------------
Income taxes (benefit) 225,231 (6,341) -- 218,890
- --------------------------------------------------------------------------------
Income (loss) before
extraordinary item 293,926 (7,296) -- 286,630
Extraordinary item,
net of tax (7,716) -- -- (7,716)
- --------------------------------------------------------------------------------
NET INCOME/(LOSS) $ 286,210 $ (7,296) $ -- $ 278,914
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-36
CONSOLIDATING BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 2000
----------------------------------------------------
Reclassifi- The New
cations/ York Times
(In thousands) NYT NYTD Eliminations Company
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets $ 600,455 $ 10,311 $ -- $ 610,766
Investment in joint ventures 107,320 -- -- 107,320
Funds allocated to NYTD 51,910 -- (51,910) --
Property plant
& equipment, net 1,181,242 25,918 -- 1,207,160
Intangible assets
acquired, net 1,479,972 126 -- 1,480,098
Miscellaneous assets 198,683 2,652 -- 201,335
- -----------------------------------------------------------------------------------------------
Total $3,619,582 $ 39,007 $(51,910) $3,606,679
- -----------------------------------------------------------------------------------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $ 854,450 $ 22,920 $ -- $ 877,370
Other liabilities 1,402,315 45,831 -- 1,448,146
Funds allocated from NYTD -- 51,910 (51,910) --
Common stock 16,738 -- -- 16,738
Retained earnings
(accumulated losses) 1,548,757 (81,654) -- 1,467,103
Common stock held in treasury, at cost,
and other (201,551) -- -- (201,551)
Deferred compensation on issuance
of restricted Class A common stock (1,127) -- -- (1,127)
- -----------------------------------------------------------------------------------------------
Total $3,619,582 $ 39,007 $(51,910) $3,606,679
- -----------------------------------------------------------------------------------------------
<CAPTION>
December 26, 1999
----------------------------------------------------
Reclassifi- The New
cations/ York Times
(In thousands) NYT NYTD Eliminations Company
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets $ 603,537 $ 11,371 $ -- $ 614,908
Investment in joint ventures 121,940 -- -- 121,940
Funds allocated to NYTD 68,634 -- (68,634) --
Property plant
& equipment, net 1,208,601 9,795 -- 1,218,396
Intangible assets
acquired, net 1,276,134 28,884 -- 1,305,018
Miscellaneous assets 235,052 488 -- 235,540
- -----------------------------------------------------------------------------------------------
Total $3,513,898 $ 50,538 $(68,634) $3,495,802
- -----------------------------------------------------------------------------------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $ 660,960 $ 12,554 $ -- $ 673,514
Other liabilities 1,371,873 1,757 -- 1,373,630
Funds allocated from NYTD -- 68,634 (68,634) --
Common stock 17,882 -- -- 17,882
Retained earnings
(accumulated losses) 1,633,150 (32,407) -- 1,600,743
Common stock held in treasury, at cost,
and other (169,967) -- -- (169,967)
Deferred compensation on issuance
of restricted Class A common stock -- -- -- --
- -----------------------------------------------------------------------------------------------
Total $3,513,898 $ 50,538 $(68,634) $3,495,802
- -----------------------------------------------------------------------------------------------
</TABLE>
SUPPLEMENTAL INFORMATION TO THE CONDENSED CONSOLIDATING BALANCE SHEETS
- --------------------------------------------------------------------------------
FUNDS ALLOCATED TO/FROM NYTD
(In thousands) Debt Funds
Funds proceeds allocated
allocated advanced to to/from
from NYT NYT NYT, net
-----------------------------------
Balance at December 28, 1998 ............. $ 27,639 $ -- $ 27,639
Funds allocated from NYT .............. 40,995 -- 40,995
-----------------------------------
Balance at December 26, 1999 ............. 68,634 -- 68,634
-----------------------------------
Funds allocated from NYT .............. 3,237 20,039 23,276
Debt proceeds advanced to NYT (A) ..... -- (40,000) (40,000)
-----------------------------------
Balance at December 31, 2000 ............. $ 71,871 $(19,961) $ 51,910
-----------------------------------
(A) The Company makes available the proceeds of this debt (see Note 6) to NYTD
as they are needed and as such NYTD accrues interest income on the amount of
proceeds still available to NYTD at the Company's short-term interest rate.
ADVERTISING CREDITS
On March 3, 2000, NYT committed to provide $30.0 million in advertising credits
to NYTD to be utilized in any of the NYT's print publications. It is NYTD's
current intention to use these credits as consideration to effect strategic
alliances, investments and acquisitions.
The advertising credits will be recorded on NYTD's financial statements as they
are committed to independent third parties. The fair market value of what is
received or the value of the advertising given up, whichever is more readily
determinable, will be recorded as an asset with a corresponding amount recorded
as funds allocated from NYT to NYTD, in NYTD's financial statements. As of
December 31, 2000, none of the advertising credits have been utilized.
<PAGE>
F-37
CONSOLIDATING STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31, 2000
---------------------------------------------------
The New
Elimina- York Times
(In thousands) NYT NYTD tions Company
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS
FROM OPERATING
ACTIVITIES
Net income/(loss) $ 446,783 $ (49,247) $ -- $ 397,536
Adjustments to reconcile net
income to net cash provided
by operating activities 145,787 46,534 -- 192,321
- --------------------------------------------------------------------------------------
Net cash provided by operating
activities 592,570 (2,713) -- 589,857
- --------------------------------------------------------------------------------------
CASH FLOWS
FROM INVESTING
ACTIVITIES
Businesses acquired (296,278) -- -- (296,278)
Net proceeds from dispositions 191,171 -- -- 191,171
Additions to property, plant
and equipment (68,006) (17,294) -- (85,300)
Other investing proceeds 13,865 -- -- 13,865
Other investing payments (16,918) (1,500) -- (18,418)
- --------------------------------------------------------------------------------------
Net cash used in investing
activities (176,166) (18,794) -- (194,960)
- --------------------------------------------------------------------------------------
CASH FLOWS
FROM FINANCING
ACTIVITIES
Commercial paper (repayment)
borrowings-net 291,251 -- -- 291,251
Long-term obligations,
net of payments (101,442) 38,955 -- (62,487)
Capital shares repurchases, net
of issuances (543,081) -- -- (543,081)
Dividends paid to stockholders (75,398) -- -- (75,398)
Funds allocated to/from NYT
to NYTD 17,723 (17,723) -- --
- --------------------------------------------------------------------------------------
Net cash (used in) provided by
financing activities (410,947) 21,232 -- (389,715)
- --------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents 5,457 (275) -- 5,182
Cash and cash equivalents
at the beginning of the year 63,677 184 -- 63,861
- --------------------------------------------------------------------------------------
Cash and cash equivalents
at the end of the year $ 69,134 $ (91) $ -- $ 69,043
- --------------------------------------------------------------------------------------
<CAPTION>
Year Ended December 26, 1999
---------------------------------------------------
The New
Elimina- York Times
(In thousands) NYT NYTD tions Company
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS
FROM OPERATING
ACTIVITIES
Net income/(loss) $ 318,314 $ (8,137) $ -- $ 310,177
Adjustments to reconcile net
income to net cash provided
by operating activities 285,152 5,766 -- 290,918
- --------------------------------------------------------------------------------------
Net cash provided by operating
activities 603,466 (2,371) -- 601,095
- --------------------------------------------------------------------------------------
CASH FLOWS
FROM INVESTING
ACTIVITIES
Businesses acquired -- (5,100) -- (5,100)
Net proceeds from dispositions 11,434 -- -- 11,434
Additions to property, plant
and equipment (63,429) (9,978) -- (73,407)
Other investing proceeds 8,704 -- -- 8,704
Other investing payments (24,489) -- -- (24,489)
- --------------------------------------------------------------------------------------
Net cash used in investing
activities (67,780) (15,078) -- (82,858)
- --------------------------------------------------------------------------------------
CASH FLOWS
FROM FINANCING
ACTIVITIES
Commercial paper (repayment)
borrowings-net (124,100) -- -- (124,100)
Long-term obligations,
net of payments 98,764 2,739 -- 101,503
Capital shares repurchases, net
of issuances (395,754) -- -- (395,754)
Dividends paid to stockholders (72,016) -- -- (72,016)
Funds allocated to/from NYT
to NYTD (14,850) 14,850 -- --
- --------------------------------------------------------------------------------------
Net cash (used in) provided by
financing activities (507,956) 17,589 -- (490,367)
- --------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents 27,730 140 -- 27,870
Cash and cash equivalents
at the beginning of the year 35,947 44 -- 35,991
- --------------------------------------------------------------------------------------
Cash and cash equivalents
at the end of the year $ 63,677 $ 184 $ -- $ 63,861
- --------------------------------------------------------------------------------------
<CAPTION>
Year Ended December 27, 1998
---------------------------------------------------
The New
Elimina- York Times
(In thousands) NYT NYTD tions Company
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH FLOWS
FROM OPERATING
ACTIVITIES
Net income/(loss) $ 286,210 $ (7,296) $ -- $ 278,914
Adjustments to reconcile net
income to net cash provided
by operating activities 217,717 269 -- 217,986
- --------------------------------------------------------------------------------------
Net cash provided by operating
activities 503,927 (7,027) -- 496,900
- --------------------------------------------------------------------------------------
CASH FLOWS
FROM INVESTING
ACTIVITIES
Businesses acquired -- -- -- --
Net proceeds from dispositions 23,661 -- -- 23,661
Additions to property, plant
and equipment (79,613) (1,965) -- (81,578)
Other investing proceeds 14,725 -- -- 14,725
Other investing payments (12,974) -- -- (12,974)
- --------------------------------------------------------------------------------------
Net cash used in investing
activities (54,201) (1,965) -- (56,166)
- --------------------------------------------------------------------------------------
CASH FLOWS
FROM FINANCING
ACTIVITIES
Commercial paper (repayment)
borrowings-net 124,100 -- -- 124,100
Long-term obligations,
net of payments (92,412) (2) -- (92,414)
Capital shares repurchases, net
of issuances (473,649) -- -- (473,649)
Dividends paid to stockholders (69,600) -- -- (69,600)
Funds allocated to/from NYT
to NYTD (8,999) 8,999 -- --
- --------------------------------------------------------------------------------------
Net cash (used in) provided by
financing activities (520,560) 8,997 -- (511,563)
- --------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents (70,834) 5 -- (70,829)
Cash and cash equivalents
at the beginning of the year 106,781 39 -- 106,820
- --------------------------------------------------------------------------------------
Cash and cash equivalents
at the end of the year $ 35,947 $ 44 $ -- $ 35,991
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-38
INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS
AND STOCKHOLDERS OF
THE NEW YORK TIMES COMPANY
We have audited the accompanying consolidated balance sheets of The New York
Times Company as of December 31, 2000 and December 26, 1999, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 2000. Our audits also
included the financial statement schedules listed in the Index at Item 14a.
These consolidated financial statements and financial statement schedules are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of The New York Times Company as of
December 31, 2000 and December 26, 1999, and the results of their operations and
their cash flows for each of the three years in the period ended December 31,
2000, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedules,
when considered in relation to the basic consolidated financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.
/s/ Deloitte & Touche LLP
New York, New York
January 24, 2001
(January 31, 2001 as to Note 17)
MANAGEMENT'S RESPONSIBILITIES REPORT
The Company's consolidated financial statements were prepared by management, who
is responsible for their integrity and objectivity. The consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America and, as such, include amounts based on
management's best estimates and judgments.
Management is further responsible for maintaining a system of internal
accounting control, designed to provide reasonable assurance that the Company's
assets are adequately safeguarded and that the accounting records reflect
transactions executed in accordance with management's authorization. The system
of internal control is continually reviewed for its effectiveness and is
augmented by written policies and procedures, the careful selection and training
of qualified personnel and a program of internal audit.
The consolidated financial statements were audited by Deloitte & Touche LLP,
independent auditors. Their audit was conducted in accordance with auditing
standards generally accepted in the United States of America and their report is
shown on this page.
The Audit Committee of the Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, internal
auditors and management to discuss specific accounting, financial reporting and
internal control matters. Both the independent auditors and the internal
auditors have full and free access to the Audit Committee. Each year the Audit
Committee selects, subject to ratification by stockholders, the firm which is to
perform audit and other related work for the Company.
/s/ Russell T. Lewis
Russell T. Lewis
President and Chief Executive Officer
The New York Times Company
/s/ John M. O'Brien
John M. O'Brien
Senior Vice President and Chief Financial Officer
The New York Times Company
<PAGE>
F-39
QUARTERLY INFORMATION (Unaudited)
<TABLE>
<CAPTION>
First Quarter Second Quarter Third Quarter
--------------------------------------------------------
(In millions, except per share data) 2000 1999 2000 1999 2000 1999
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $850.7 $745.9 $893.0 $785.9 $794.3 $735.9
- ----------------------------------------------------------------------------------------------
Costs and expenses
Production costs
Raw materials 85.5 87.3 87.9 82.5 84.1 67.5
Wages and benefits 169.4 149.8 142.5 145.5 147.1 143.6
Other 100.9 107.4 129.3 108.9 117.3 110.5
- ----------------------------------------------------------------------------------------------
Total production costs 355.8 344.5 359.7 336.9 348.5 321.6
Selling, general and
administrative expenses 340.0 286.1 347.3 294.1 329.6 301.6
- ----------------------------------------------------------------------------------------------
Operating profit 154.9 115.3 186.0 154.9 116.2 112.7
Income from joint ventures 3.7 4.2 3.6 3.3 3.9 4.9
Interest expense, net 15.4 12.0 15.2 12.8 17.5 12.9
Gain on dispositions of assets
and other - net -- -- -- -- 22.1 --
- ----------------------------------------------------------------------------------------------
Income before taxes 143.2 107.5 174.4 145.4 124.7 104.7
Income taxes 60.2 46.2 72.6 61.8 49.8 44.7
- ----------------------------------------------------------------------------------------------
Net income $ 83.0 $ 61.3 $101.8 $ 83.6 $ 74.9 $ 60.0
- ----------------------------------------------------------------------------------------------
Average number of common
shares outstanding
Basic 173.0 179.7 169.5 176.1 166.6 173.8
Diluted 177.2 183.1 173.0 179.3 169.9 177.7
- ----------------------------------------------------------------------------------------------
Basic earnings per share $ .48 $ .34 $ .60 $ .47 $ .45 $ .35
- ----------------------------------------------------------------------------------------------
Diluted earnings per share $ .47 $ .34 $ .59 $ .47 $ .44 $ .34
- ----------------------------------------------------------------------------------------------
Dividends per share $ .105 $ .095 $ .115 $ .105 $ .115 $ .105
- ----------------------------------------------------------------------------------------------
<CAPTION>
Fourth Quarter Year
----------------------------------------
(In millions, except per share data) 2000 1999 2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $951.5 $889.1 $3,489.5 $3,156.8
- ------------------------------------------------------------------------------
Costs and expenses
Production costs
Raw materials 105.8 84.1 363.3 321.4
Wages and benefits 155.6 152.3 614.6 591.2
Other 132.6 123.6 480.1 450.4
- ------------------------------------------------------------------------------
Total production costs 394.0 360.0 1,458.0 1,363.0
Selling, general and
administrative expenses 378.6 340.7 1,395.5 1,222.5
- ------------------------------------------------------------------------------
Operating profit 178.9 188.4 636.0 571.3
Income from joint ventures 4.7 5.5 15.9 17.9
Interest expense, net 16.0 13.0 64.1 50.7
Gain on dispositions of assets
and other - net 63.2 -- 85.3 --
- ------------------------------------------------------------------------------
Income before taxes 230.8 180.9 673.1 538.5
Income taxes 93.0 75.6 275.6 228.3
- ------------------------------------------------------------------------------
Net income $137.8 $105.3 $ 397.5 $ 310.2
- ------------------------------------------------------------------------------
Average number of common
shares outstanding
Basic 162.9 172.6 168.0 175.6
Diluted 165.7 177.0 171.6 179.2
- ------------------------------------------------------------------------------
Basic earnings per share $ .85 $ .61 $ 2.37 $ 1.77
- ------------------------------------------------------------------------------
Diluted earnings per share $ .83 $ .59 $ 2.32 $ 1.73
- ------------------------------------------------------------------------------
Dividends per share $ .115 $ .105 $ .45 $ .41
- ------------------------------------------------------------------------------
</TABLE>
o All earnings per share amounts for special items below are on a diluted
basis.
o For comparability, certain prior year amounts have been reclassified to
conform with 2000 presentation.
<PAGE>
F-40
The 2000 and 1999 quarters do not equal the respective year-end amounts for
earnings per share due to the weighted average number of shares outstanding used
in the computations for the respective periods. Per share amounts for the
respective quarters and years have been computed using the average number of
common shares outstanding as presented in the table on the proceeding page.
The Company's largest source of revenue is advertising, which influences the
pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that which occurs in the first- and third-quarters. Advertising
volume tends to be lower in these quarters primarily because economic activity
is lower in the post holiday season and summer periods. 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.
Special items for 2000 and 1999 by quarter were as follows:
o Third-quarter 2000 results included a $22.2 million pre-tax gain ($0.08
per share) principally resulting from the sale of certain Regional
newspapers, partially offset by a disposition loss as well as write-downs
for certain of the Company's interests in online ventures (see Note 2). In
the same period, there was a $3.8 million pre-tax charge ($0.01 per share)
for Buyouts.
o Fourth-quarter 2000 results included a $63.2 million pre-tax gain ($.28
per share) principally resulting from the sale of certain Regional
newspapers, partially offset by a disposition loss as well as write-downs
for certain of the Company's investment interests in online ventures (see
Note 2). In the same period, there was a $22.7 million pre-tax charge
($.12 per share) for a write-down of intangible assets (see Note 2) and
$1.5 million pre-tax charge ($0.01 per share) for Buyouts.
o Second-quarter 1999 results included a $4.0 million pre-tax charge ($.01
per share) for Buyouts.
o Third-quarter 1999 results included a $6.1 million pre-tax charge ($.02
per share) for Buyouts.
o Fourth-quarter 1999 results included a $5.3 million pre-tax charge ($.02
per share) principally for Buyouts.
- --------------------------------------------------------------------------------
MARKET INFORMATION
The Class A Common Stock is listed on the New York Stock Exchange. The Class B
Common Stock is unlisted and is not actively traded.
The number of security holders of record as of January 24, 2001, was as follows:
Class A Common Stock: 10,664; Class B Common Stock: 37.
The market price range of Class A Common Stock was as follows:
- --------------------------------------------------------------------------------
Quarter Ended 2000 1999
- --------------------------------------------------------------------------------
High Low High Low
March $49.94 $38.63 $35.94 $28.94
June 45.19 35.75 38.50 26.94
September 42.75 35.88 40.75 36.56
December 44.63 32.63 48.75 37.50
Year 49.94 32.63 48.75 26.94
- --------------------------------------------------------------------------------
<PAGE>
F-41
TEN-YEAR SUPPLEMENTAL FINANCIAL DATA
<TABLE>
<CAPTION>
Years Ended December
-----------------------------------------------------
(In millions, except per share data) 2000 1999 1998 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues and Income
Revenues $ 3,489 $ 3,157 $ 2,957 $ 2,882 $ 2,643
- ----------------------------------------------------------------------------------------------------
Operating Profit 636 571 509 445 163
- ----------------------------------------------------------------------------------------------------
Income (Loss) from Joint Ventures 16 18 21 14 18
- ----------------------------------------------------------------------------------------------------
Income (Loss) before extraordinary item and 398 310 287 262 85
cumulative effect of accounting change
Extraordinary item(1) -- -- (8) -- --
Net cumulative effect of
accounting change -- -- -- -- --
- ----------------------------------------------------------------------------------------------------
Net income (loss) $ 398 $ 310 $ 279 $ 262 $ 85
- ----------------------------------------------------------------------------------------------------
Financial Position
Total assets $ 3,607 $ 3,496 $ 3,465 $ 3,623 $ 3,540
Long-term debt
and capital lease obligations 637 598 598 535 637
Common stockholders' equity 1,281 1,449 1,531 1,729 1,624
- ----------------------------------------------------------------------------------------------------
Basic earnings per share
Income (Loss) before extraordinary item
and cumulative effect of accounting
change $ 2.37 $ 1.77 $ 1.52 $ 1.36 $ .43
Extraordinary item(1) -- -- (.04) -- --
Net cumulative effect of accounting
change -- -- -- -- --
- ----------------------------------------------------------------------------------------------------
Net income $ 2.37 $ 1.77 $ 1.48 $ 1.36 $ .43
- ----------------------------------------------------------------------------------------------------
Diluted earnings per share
Income (Loss) before extraordinary item
and cumulative effect of accounting
change $ 2.32 $ 1.73 $ 1.49 $ 1.33 $ .43
Extraordinary item(1) -- -- (.04) -- --
Net cumulative effect of accounting
change -- -- -- -- --
- ----------------------------------------------------------------------------------------------------
Net income $ 2.32 $ 1.73 $ 1.45 $ 1.33 $ .43
- ----------------------------------------------------------------------------------------------------
Dividends $ .45 $ .41 $ .37 $ .32 $ .29
Common stockholders' equity $ 7.47 $ 8.08 $ 7.94 $ 8.77 $ 8.25
- ----------------------------------------------------------------------------------------------------
Shares Outstanding
Class A and Class B Common 162 174 182 193 195
- ----------------------------------------------------------------------------------------------------
Market Price (end of year) $ 40.06 $ 46.88 $ 35.31 $ 32.03 $ 19.25
- ----------------------------------------------------------------------------------------------------
<CAPTION>
Years Ended December
-----------------------------------------------------
(In millions, except per share data) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues and Income
Revenues $ 2,442 $ 2,392 $ 2,057 $ 1,810 $ 1,737
- ----------------------------------------------------------------------------------------------------
Operating Profit 223 207 126 88 93
- ----------------------------------------------------------------------------------------------------
Income (Loss) from Joint Ventures 15 5 (53) (9) 9
- ----------------------------------------------------------------------------------------------------
Income (Loss) before extraordinary item and 136 213 6 (11) 47
cumulative effect of accounting change
Extraordinary item(1) -- -- -- -- --
Net cumulative effect of
accounting change -- -- -- (34) --
- ----------------------------------------------------------------------------------------------------
Net income (loss) $ 136 $ 213 $ 6 $ (45) $ 47
- ----------------------------------------------------------------------------------------------------
Financial Position
Total assets $ 3,390 $ 3,138 $ 3,215 $ 1,995 $ 2,128
Long-term debt
and capital lease obligations 638 523 460 207 213
Common stockholders' equity 1,610 1,544 1,599 1,000 1,073
- ----------------------------------------------------------------------------------------------------
Basic earnings per share
Income (Loss) before extraordinary item
and cumulative effect of accounting
change $ .70 $ 1.02 $ .04 $ (.07) $ .30
Extraordinary item(1) -- -- -- -- --
Net cumulative effect of accounting
change -- -- -- (.22) --
- ----------------------------------------------------------------------------------------------------
Net income $ .70 $ 1.02 $ .04 $ (.29) $ .30
- ----------------------------------------------------------------------------------------------------
Diluted earnings per share
Income (Loss) before extraordinary item
and cumulative effect of accounting
change $ .70 $ 1.02 $ .04 $ (.06) $ .30
Extraordinary item(1) -- -- -- -- --
Net cumulative effect of accounting
change -- -- -- (.22) --
- ----------------------------------------------------------------------------------------------------
Net income $ .70 $ 1.02 $ .04 $ (.28) $ .30
- ----------------------------------------------------------------------------------------------------
Dividends $ .28 $ .28 $ .28 $ .28 $ .28
Common stockholders' equity $ 8.27 $ 7.39 $ 9.42 $ 6.33 $ 6.93
- ----------------------------------------------------------------------------------------------------
Shares Outstanding
Class A and Class B Common 195 196 214 159 157
- ----------------------------------------------------------------------------------------------------
Market Price (end of year) $ 14.81 $ 11.06 $ 13.13 $ 13.19 $ 11.81
- ----------------------------------------------------------------------------------------------------
</TABLE>
o All earnings per share amounts for special items below are on a diluted
basis.
o For comparability, certain prior year amounts have been reclassified to
conform with 2000 presentation.
<PAGE>
F-42
Special items by year were as follows:
2000
o $85.3 million pre-tax net gain ($.36 per share) principally resulting from
the sale of the divested Regionals amounting to $132.1 million (This net
gain includes a disposition loss as well as write-downs for certain of the
Company's equity interests in online ventures in the aggregate amount of
$46.8 million (see Note 2 of the Notes to the Consolidated Financial
Statements). Additionally, in connection with the sale of the Santa
Barbara News-Press, in October 2000, the Company entered into a five-year
$25.0 million non-compete agreement. This amount will be recognized as
income on a straight-line basis over the life of the agreement.)
o $22.7 million pre-tax noncash charge ($.12 per share) for a write-down of
intangible assets
o $5.3 million pre-tax charge ($.02 per share) for work force reduction
charges ("Buyouts") across most groups
1999
o $15.5 million pre-tax charge ($.05 per share) principally for Buyouts at
The Boston Globe
1998
o $4.6 million pre-tax gain ($.01 per share) from the sale of equipment
o $7.7 million after-tax extraordinary charge ($.04 per share) in connection
with the Company's repurchase of $78.1 million of its $150.0 million,
8.25% notes due in 2025
o $8.0 million pre-tax gain ($.02 per share) from the satisfaction of a
post-closing requirement related to the 1997 sale of assets of the
Company's tennis, sailing and ski magazines
o $5.8 million in pre-tax income ($.02 per share) related to a non-compete
agreement entered into as part of the divestiture of the Company's Women's
Magazine Division in 1994
o $5.4 million pre-tax charge ($.02 per share) for Buyouts
1997
o $18.0 million ($.09 per share) benefit from a tax settlement
o $10.4 million pre-tax gain ($.03 per share) resulting from the sale of
assets of the Company's tennis, sailing and ski magazines and certain
small properties, net of costs associated with the exit of a golf tee-time
reservation operation
o $10.1 million pre-tax noncash accounting charge ($.03 per share) related
to Emerging Issues Task Force Issue No. 97-13
o $10.0 million in pre-tax income ($.03 per share) related to a non-compete
agreement entered into as part of the divestiture of the Company's Women's
Magazine Division in 1994
o $8.5 million pre-tax charge ($.02 per share) for Buyouts
1996
o $126.8 million pre-tax noncash accounting charge ($.48 per share)
related to Statement of Financial Accounting Standards No. 121
o $32.9 million pre-tax gain ($.09 per share) from the sale of a building
and the realization of a gain contingency from the disposition of a paper
mill in a prior year
o $10.0 million in pre-tax income ($.03 per share) related to a non-compete
agreement entered into as part of the divestiture of the Company's Women's
Magazine Division in 1994
o $44.1 million pre-tax charge ($.12 per share) for Buyouts
1995
o $11.3 million pre-tax gain ($.03 per share) from the sales of several
small newspapers
o $10.0 million in pre-tax income ($.03 per share) related to a non-compete
agreement entered into as part of the divestiture of the Company's Women's
Magazine Division in 1994
o $10.1 million pre-tax charge ($.03 per share) for Buyouts
1994
o $200.9 million pre-tax gain ($.49 per share) from the sales of the Women's
Magazines Division and the U.K. golf publications, and the disposition of
a minority interest in a newsprint mill
o $4.2 million in pre-tax income ($.01 per share) related to a non-compete
agreement entered into as part of the divestiture of the Company's Women's
Magazine Division in 1994
1993
o $3.7 million pre-tax charge ($.01 per share) for rate adjustments due to a
severe snowstorm
o $4.4 million ($.02 per share) of additional tax expense for remeasurement
of deferred tax balances due to the enactment of the Revenue
Reconciliation Act of 1993
o $1.2 million ($.01 per share) of additional tax expense due to the Revenue
Reconciliation Act of 1993 which increased the federal corporate income
tax rate
o $2.6 million pre-tax gain ($.01 per share) from the sale of assets
o $35.4 million of pre-tax charges ($.12 per share) for Buyouts
o $47.0 million pre-tax noncash charge ($.28 per share) to write down a
joint venture investment
1992
o $53.8 million pre-tax loss ($.24 per share) on the closing of The Gwinnett
Daily News (GA)
o $3.1 million pre-tax gain ($.01 per share) from the sale of assets
o $28.0 million pre-tax charge ($.10 per share) for Buyouts
o $21.4 million pre-tax charge ($.08 per share) for labor disruptions,
training and start-up costs at Edison
o $34.0 million after-tax net cumulative effect of accounting changes ($.22
per share) includes the change in methods of accounting for income taxes,
postretirement benefits other than pensions and postemployment benefits
1991
o $20.0 million pre-tax charge ($.08 per share) for Buyouts at The New York
Times Company
o $10.0 million reversal of a provision ($.06 per share) for income taxes
related to a favorable tax settlement
<PAGE>
S-1
THE NEW YORK TIMES COMPANY
VALUATION AND QUALIFYING ACCOUNTS
For the Three Years Ended December 31, 2000
<TABLE>
<CAPTION>
(In thousands)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- -----------------------------------------------------------------------------------------------------
Additions Deductions
charged to for purposes
Balance at costs and for which
beginning of expenses or accounts were Balance at
Description period revenues set up end of period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year Ended December 31, 2000
Deducted from assets to which they apply
Uncollectible accounts $33,596 $68,020 $62,741 $38,875
Returns and allowances, etc 6,153 11,189 12,048 5,294
- -----------------------------------------------------------------------------------------------------
Total $39,749 $79,209 $74,789 $44,169
- -----------------------------------------------------------------------------------------------------
Year Ended December 26, 1999
Deducted from assets to which they apply
Uncollectible accounts $28,146 $64,055 $58,605 $33,596
Returns and allowances, etc 6,218 6,754 6,819 6,153
- -----------------------------------------------------------------------------------------------------
Total $34,364 $70,809 $65,424 $39,749
- -----------------------------------------------------------------------------------------------------
Year Ended December 27, 1998
Deducted from assets to which they apply
Uncollectible accounts $20,889 $57,221 $49,964 $28,146
Returns and allowances, etc 4,998 6,242 5,022 6,218
- -----------------------------------------------------------------------------------------------------
Total $25,887 $63,463 $54,986 $34,364
- -----------------------------------------------------------------------------------------------------
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
Exhibit 10.1
THE NEW YORK TIMES COMPANY
1991 EXECUTIVE STOCK INCENTIVE PLAN
AS AMENDED THROUGH FEBRUARY 15, 2001
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Stock
Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to
enable the Company (as hereinafter defined) to retain and attract executives who
enhance its tradition and contribute to its success by their ability, ingenuity
and industry, and to enable them to participate in the long-term success and
growth of the Company.
2. DEFINITIONS
(a) "Awards" has the meaning specified in Section 12 hereof.
(b) "Board" means the Board of Directors of the Company.
(c) "Cash Plan" means the Company's 1991 Executive Cash Bonus Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Committee referred to in Section 3 of the
Plan. If at any time no Committee shall be in office then the
functions of the Committee specified in the Plan shall be exercised
by those members of the Board who are Non-Employee Directors.
(f) "Common Stock" means shares of the Class A Common Stock of the
Company.
(g) "Company" means The New York Times Company, a corporation organized
under the laws of the State of New York (or any successor
corporation), and, unless the context otherwise requires, its
subsidiaries (as hereinafter defined) and other non-corporate
entities in which it owns directly or indirectly 20% or more of the
equity interests. A "subsidiary" means any corporation in which the
Company possesses directly or indirectly 50% or more of the combined
voting power of all classes of stock.
(h) "Consolidated Statement of Income" means the consolidated statement
of income (or any comparable statement, however designated) of the
Company, audited by the independent certified public accountants of
the Company and contained in the Company's annual report to
stockholders or proxy statement.
(i) "Disability" means total disability as defined under the Company's
long-term disability plan, whether or not the Participant is covered
by such plan, as determined by the Committee.
(j) "Fair Market Value" means the arithmetic mean of the highest and
lowest sales prices of the Common Stock as reported by The New York
Stock Exchange (the "NYSE") (or such other national securities
exchange on which the Common Stock may be listed at the time of
determination, and if the Common Stock is listed on more than one
exchange, then on the one located in New York or if the Common Stock
is listed only on the National
<PAGE>
Association of Securities Dealers Automated Quotations System
("NASDAQ"), then on such system) on the date of the grant or other
date on which the Common Stock is to be valued hereunder. If no sale
shall have been made on the NYSE, such other exchange or the NASDAQ
on such date or if the Common Stock is not then listed on any
exchange or on the NASDAQ, Fair Market Value shall be determined by
the Committee in accordance with Treasury Regulations applicable to
incentive stock options.
(k) "Income Before Income Taxes" means the amount designated as Income
Before Income Taxes for the applicable year and shown separately on
the Consolidated Statement of Income for such year.
(l) "Non-Employee Director" means any Director of the Company who at the
time of acting is a "Non-Employee Director" under Rule 16b-3 or any
successor rule ("Rule 16b-3") under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(m) "Participant" means a key employee of the Company who is selected by
the Committee to participate in any one or more parts of the Plan
from among persons who in the judgment of the Committee are key
employees of the Company. In general, key employees are those
employees who have principal responsibility for, or who contribute
substantially to, the management efficiency, editorial achievement
or financial success of the Company. Only employees of The New York
Times Company, its subsidiaries and other non-corporate entities in
which it owns directly or indirectly 40% or more of the equity
interests are eligible to participate in the Plan.
(n) "Retirement" means retirement as defined by the terms of "The New
York Times Companies Pension Plan" which became effective December
31, 1988, or any successor retirement plan, whether or not the
Participant is a member of such retirement plan, and, in the case of
employees of Affiliated Publications, Inc., or any subsidiary
thereof, who retire under the terms of the Globe Newspaper Company
Retirement Plan, which became effective January 1, 1994 (the "Globe
Pension Plan") or any successor retirement plan, "Retirement" shall
also mean retirement as defined by the terms of the Globe Pension
Plan or any successor plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board or the Committee appointed by
it and composed of two or more directors all of whom shall be Non-Employee
Directors. The membership of the Committee shall be constituted so as to comply
at all times with the applicable requirements of Rule 16b-3, and with the
administration requirements of Section 162(m)(4)(C) of the Code. The Committee
shall serve at the pleasure of the Board and shall have such powers as the Board
may from time to time confer upon it.
4. OPTIONS AND AWARDS UNDER THE PLAN
Options, which include "Non-Qualified Options" and "Incentive Stock
Options" or combinations thereof, are rights to purchase Common Stock.
Non-Qualified Options and Incentive Stock Options are subject to the terms,
conditions and restrictions provided in Part I of the Plan.
Awards under the Plan may include one or more of the following types,
either alone or in any combination thereof: (i) "Stock Awards," (ii) "Restricted
Stock Awards," (iii) "Retirement Unit Awards," (iv) "Annual Performance Awards,"
(v) "Performance Awards" or "Other Awards" and (vi) "Long-Term Performance
Awards."
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Stock Awards are granted under Part IIA of the Plan. Restricted Stock
Awards are granted under Part IIB of the Plan. Retirement Unit Awards are
granted under Part IIC of the Plan. Annual Performance Awards are granted under
Part IID of the Plan. Performance Awards or Other Awards are granted under Part
IIE of the Plan. Awards are subject to the terms, conditions and restrictions
provided in the respective subparts of Part II of the Plan. Annual Performance
Awards will be based exclusively on the criteria set forth in Section 27A.
Long-Term Performance Awards are granted under Part IIF of the Plan. Long-Term
Performance Awards will be based exclusively on the criteria set forth in
Section 28A.
PART I STOCK OPTIONS
5. PURPOSE
The purpose of the Stock Option portion of the Plan is to provide an added
incentive for effective service and high levels of performance to Participants
by affording them an opportunity, under the terms of the Plan, to acquire Common
Stock and thereby to increase their proprietary interest in the continued
progress and success of the Company.
6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS
(a) The Committee may grant options to purchase Common Stock ("Options")
to Participants in such amounts as the Committee may determine,
subject to the conditions and limitations set forth in the Plan.
Options may be granted in combination with Awards made under the
Plan, and Options may be granted to any Participant whether or not
he or she was eligible for, or received, an Award.
(b) The number of shares of Common Stock with respect to which Options
may be granted to any key employee during any calendar year shall
not exceed 400,000 (subject to adjustment as provided in Sections 28
and 29 hereof).
(c) There may be issued under the Plan pursuant to the exercise of
Options, an aggregate of not more than 60,000,000 shares of Common
Stock, subject to adjustment as provided in Sections 28 and 29
hereof. Shares of Common Stock issued pursuant to Options may be
either authorized but unissued shares, treasury shares, reacquired
shares, or any combination thereof. Any shares subject to an Option
which expires without being exercised shall be available for
issuance under new Options.
7. OPTION PRICE
The exercise price of Common Stock subject to Options granted pursuant to
the Plan shall be the Fair Market Value thereof at the time the Option is
granted. If a Participant owns or is deemed to be the owner of, by reason of the
attribution rules under Section 425(d) of the Code, more than 10% of the
combined voting power of all classes of the stock of the Company or any
subsidiary of the Company and an Option granted to such Participant is intended
to qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code, the option price shall be no less than 110% of the Fair Market Value of
the Common Stock on the date the Option is granted.
8. PAYMENT OF OPTION PRICE
The purchase price is to be paid in full when the Option is exercised and
Common Stock will be
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delivered only against such payment. Payment of the option price may be made (i)
in cash, (ii) by delivering a properly executed exercise notice to the Company
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the purchase price (or
by otherwise arranging, in a manner satisfactory to the Company, for a broker to
promptly pay the purchase price to the Company), (iii) by delivering to the
Company shares of Common Stock previously owned, or (iv) any combination of the
foregoing forms, all subject to the approval of the Committee and to such rules
as the Committee may adopt. In determining the number of shares of Common Stock
necessary to be delivered to the Company, such Common Stock shall be valued at
Fair Market Value.
9. TYPES OF STOCK OPTIONS
(a) Options granted under the Plan may be two types, an incentive stock
option ("Incentive Stock Option") and a non-qualified stock option
("Non-Qualified Option"). It is intended that Incentive Stock
Options granted hereunder shall constitute incentive stock options
within the meaning of Section 422 of the Code. Anything in the Plan
to the contrary notwithstanding, (i) no provision of this Plan
relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the
Plan be so exercised, so as to disqualify either the Plan or any
Incentive Stock Option granted under such provisions of the Code,
and (ii) no Option designated by the Committee as a Non-Qualified
Option shall constitute an Incentive Stock Option. In furtherance of
the foregoing and not by way of limitation, no Incentive Stock
Option shall be granted to a Participant who is not an employee of
The New York Times Company or one of its subsidiaries.
(b) If the aggregate Fair Market Value of the Common Stock (determined
as of the date of grant) for which any optionee may for the first
time exercise Incentive Stock Options in any calendar year under the
Plan and any other stock option plan of the Company, considered in
the aggregate, exceeds $100,000, such excess Incentive Stock Options
will be treated as Non-Qualified Options.
10. TERMS OF STOCK OPTIONS
(a) Each Option will be for a term of not more than ten years from the
date of grant, except that if a Participant owns or is deemed to be
the owner of, by reason of the attribution rules of Section 425(d)
of the Code, more than 10% of the combined voting power of all
classes of stock of the Company or any subsidiary of the Company and
an Incentive Stock Option is granted to such Participant, the term
of such Option shall be no more than five years from the date of
grant.
(b) An Option may not be exercised within one year after the date of
grant except in the case of the death of the optionee or upon
termination of active employment with the Company by reason of the
Disability or Retirement of the optionee during such period.
Thereafter, an Option shall be exercisable in such installments, if
any, as the Committee may specify, and shall be exercisable during
the optionee's lifetime only by the optionee (or, if the optionee is
disabled, by any guardian or other legal representative appointed to
represent him or her) and, except as provided in subsections (c) and
(d) below, shall not be exercisable by the optionee unless at the
time of exercise such optionee is an employee of the Company.
(c) Upon termination of active employment with the Company by reason of
Disability or
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Retirement, an optionee (or, if the optionee is disabled, any
guardian or legal representative appointed to represent him or her)
may exercise all Options otherwise exercisable by him or her at the
time of such termination of employment (subject to the provisions of
subsection (e) below) until the expiration thereof. In the event an
optionee dies while employed by the Company or after termination of
employment by reason of Disability or Retirement, the person who
acquired the right to exercise his or her Options by reason of the
death of the optionee, as provided in Section 30 hereof, may
exercise such Options otherwise exercisable at the time of death
(subject to the provisions of subsection (e) below) at any time
until the expiration thereof.
(d) Upon termination of employment with the Company for any reason other
than death, Retirement or Disability, the optionee may exercise all
Options otherwise exercisable by him or her at the time of such
termination of employment for an additional one year after such
termination of employment. Upon termination of employment with the
Company as a result of the sale or other disposition of a subsidiary
or division of the Company, management shall have the discretion to
extend the period the optionee may exercise all Options, otherwise
exercisable by him or her for an additional one year after such
termination of employment as described above, up to an additional
two years (for a maximum period of three-years) after such
termination of employment. In the event of a termination as
described in the preceding sentence, the one-year period referred to
in the following sentences in this Section 10(d) shall be extended
accordingly. In the event such optionee dies within such one-year
period, the person who acquired the right to exercise his or her
Options by reason of the death of the optionee, as provided in
Section 30 hereof, may exercise such Options at any time within the
period of the greater of (i) the remainder of the one-year period
described in the foregoing sentence, or (ii) three months from the
date of the optionee's death. For purposes of this Section 10(d), in
the event that any optionee is rehired by the Company within one
year of such optionee's termination of employment with the Company,
such optionee shall be deemed not to have terminated employment for
purposes of determining the expiration date of all unexpired
non-qualified stock options held by such individual on the date of
rehire, with the effect that such options shall continue to be
exercisable at any time until the expiration thereof (subject to the
terms thereof and the provisions of this Section 10).
(e) Notwithstanding any of the foregoing, no Option shall be exercisable
in whole or in part after the expiration date provided in the
Option. In the event of the death of the optionee while employed by
the Company, or the Disability or Retirement of the optionee, the
Committee shall have the discretion to provide for the acceleration
of the exercisability of Options exercisable over a period of time,
or alternatively, to provide for all or any part of such Options to
continue to become exercisable in such installments as originally
specified by the Committee, or such revised installments as
specified by the Committee at the time of termination of employment
(but in no event beyond the original expiration date), in either
case subject to such conditions as determined by the Committee in
its discretion.
(f) No Option shall be transferable otherwise than by will or by the
laws of descent and distribution. Notwithstanding the foregoing
sentence, the Committee may determine that Options granted to a
Participant or a specified group of Participants may be transferred
by the Participant to one or more members of the Participant's
immediate family, to a partnership or limited liability company
whose only partners or members are members of the Participant's
immediate family, or to a trust established by the Participant for
the benefit of one or more members of the Participant's immediate
family; provided,
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however, that no Incentive Stock Options may become transferable if
inconsistent with Section 422 of the Code, unless the Participant
consents. For this purpose, "immediate family" means the
Participant's spouse, parents, children (including adopted and
step-children), grandchildren and the spouses of such parents,
children (including adopted and step-children) and grandchildren. A
transferee described in this subsection may not further transfer an
Option. An Option transferred pursuant to this subsection shall
remain subject to the provisions of the Plan and shall be subject to
such other rules as the Committee shall determine.
11. OPTION AGREEMENTS
In consideration of any Options granted to a Participant under the Plan,
if requested by the Committee, such Participant shall enter into an Option
Agreement with the Company providing such other terms as the Committee may deem
advisable.
PART II AWARDS
12. FORM OF AWARDS
The Award portion of the Plan is designed to provide incentives for
Participants by the making of awards of supplemental compensation ("Awards").
The Committee, subject to the terms and conditions hereof, may make Awards to a
Participant in any one, or in any combination, of the following forms:
(a) Common Stock as provided in Part IIA of the Plan ("Stock Awards");
(b) Restricted Stock as provided in Part IIB of the Plan ("Restricted
Stock Awards");
(c) Retirement Units as provided in Part IIC of the Plan ("Retirement
Unit Awards");
(d) Annual Performance Awards as provided in Part IID of the Plan
("Annual Performance Awards");
(e) Performance Awards ("Performance Awards") or other forms of Awards
("Other Awards"), as provided in Part IIE of the Plan; and
(f) Long-Term Performance Awards as provided in Part IIF of the Plan
("Long-Term Performance Awards").
Awards may be made to a Participant whether or not he or she is receiving
an Option grant under Part I of the Plan for the year and whether or not he or
she receives an award under the Cash Plan.
Awards will be based on a Participant's performance in those areas for
which the Participant is directly responsible. Performance for this purpose may
be measured by the achievement of specific management goals such as, but not
limited to, an increase in earnings or the operating cash flow of the Company,
outstanding initiative or achievement in any department of the Company, or any
other standards specified by the Committee. Annual Performance Awards will be
based exclusively on the criteria set forth in Section 27A. Long-Term
Performance Awards will be based exclusively on the criteria set forth in
Section 28A.
13. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS UNDER
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PART II OF THE PLAN FOR ANY YEAR
(a) No accrual for Awards shall be made hereunder (or under the Cash
Plan) for any year unless cash dividends of not less than five cents
($.05) per share (subject to adjustment as provided in Sections 28
and 29 hereof) have been declared on the outstanding Class A and
Class B Common Stock of the Company during such year.
(b) In the event that the above condition is met for any year during the
continuance of this Plan, the maximum aggregate amount that may be
accrued for Awards under the Plan and the Cash Plan for such year
shall be 4% of Income Before Income Taxes. The Committee, in its
sole discretion, may make adjustments in Income Before Income Taxes
to take account of extraordinary, unusual or infrequently occurring
events and transactions, changes in accounting principles that
substantially affect the foregoing, or such other circumstances as
the Committee may determine warrant such adjustment.
(c) As soon as feasible after the close of each year, the independent
certified public accountants of the Company shall report the maximum
amount that may be accrued for Awards for such year under the
formula described in Section 13(b), subject to the second sentence
of such Section.
(d) If amounts are accrued in any year under the formula described in
this Section 13 and are not awarded in full in such year under the
Plan and the Cash Plan, such unawarded amounts may, in the
discretion of the Committee, be carried forward and be available for
Awards under the Plan and under the Cash Plan in any future year
without regard to the provisions of Sections 13(a) or (b) of the
Plan applicable to Awards made in such year.
(e) Awards under the Plan for any year may not exceed the sum of (i) the
amount accrued for such year under Section 13(b) above plus (ii)
unawarded accrued amounts carried forward from previous years under
Section 13(d) above plus (iii) amounts that may become available for
Awards pursuant to the last sentence of Sections 15(c) and 27A
hereof, minus (x) the amount of interest or dividend equivalents set
aside during such year pursuant to Sections 15(c) and 27A hereof and
the amount of dividend equivalents allocated to Retirement Unit
Accounts during such year pursuant to Section 24 hereof, and minus
(y) the amount of awards made for such year under the Cash Plan (and
any interest equivalents allocated during such year pursuant to
Section 10(b), 11(f) and 12(b) thereof). For this purpose, the
amount of Awards of Common Stock under the Plan shall be based on
the Fair Market Value of the Common Stock subject to Awards as of
the date of grant of such Awards.
(f) Subject to Sections 28 and 29 hereof, the aggregate number of shares
of Common Stock for which Stock, Restricted Stock, Retirement Units,
Annual Performance Awards, and Performance and Other Awards may be
made under the Plan shall not exceed 2,000,000 shares, which shall
be treasury shares reserved for issuance of Awards under the Plan.
Shares of Common Stock subject to, but not issued under, any
deferred Award which has been discontinued by the Committee pursuant
to the provisions hereof or any Restricted Stock which is forfeited
by any Participant shall again be available for Awards under the
Plan.
14. DETERMINATION OF AWARDS AND PARTICIPANTS
(a) As promptly as practicable after the end of each year, the Committee
may make Awards
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(other than Annual Performance Awards and Long-Term Performance
Awards, which are to be made exclusively as set forth in Sections
27A and 28A, respectively) for such year and determine the amounts
to be carried forward for Awards in future years. The Committee may
also, in its discretion, make Awards (other than Annual Performance
Awards and Long-Term Performance Awards, which are to be made
exclusively as set forth in Sections 27A and 28A, respectively)
prior to the end of the year based on the amounts available under
clauses (ii) and (iii) of Section 13(e) and reasonable estimates of
the accrual for the year in question.
(b) The Committee shall have absolute discretion to determine the key
employees who are to receive Awards (other than Annual Performance
Awards, which are to be made exclusively as set forth in Sections
27A and 28A, respectively) under the Plan for any year and to
determine the amount of such Awards based on such criteria and
factors as the Committee in its sole discretion may determine, such
as the Company's operating cash flow and overall financial
performance. Recommendations as to the key employees who are to
receive Awards (including Annual Performance Awards and Long-Term
Performance Awards) under the Plan for any year and as to the amount
and form of such Awards shall, however, be made to the Committee by
the chief executive officer of the Company. The fact that an
employee is selected as eligible for an Award shall not mean,
however, that such employee will necessarily receive an Award.
(c) A person whose employment terminates during the year or who is
granted a leave of absence during the year may, in the discretion of
the Committee and under such rules as the Committee may from time to
time prescribe, be given an Award with respect to the period of such
person's service during such year.
15. METHOD AND TIME OF PAYMENT OF AWARDS
(a) Awards shall be paid in full as soon as practicable after the Award
is made; provided, however, that the payment of Annual Performance
Awards and Long-Term Performance Awards shall be subject to the
provisions of Sections 27A and 28A, respectively, and provided
further, that the payment of any or all Awards may be deferred,
divided into annual installments, or made subject to such other
conditions as the Committee in its sole discretion may authorize
under such rules and regulations as may be adopted from time to time
by the Committee.
(b) The Committee's rules and regulations may include procedures by
which a Participant expresses a preference to the Committee as to
the form of Award or method of payment of an Award but the final
determination as to the form and the terms and conditions of any
Award shall rest solely with the Committee.
(c) Awards deferred under the Plan shall become payable to the
Participant or, in the event of the Participant's death, as
specified in Section 30 hereof, in such manner, at such time or
times (which may be either before or after Retirement or other
termination of service), and subject to such conditions as the
Committee in its sole discretion shall determine. In any year the
Committee shall have the discretion to set aside, for payment in
such year or any future year, interest on any deferred Award payable
partly in cash, and amounts equivalent to dividends on any deferred
Award payable wholly or partly in stock; provided, however, that the
total amount of such interest and dividend equivalents shall be
deducted from the maximum amount available for Awards under Section
13(e) of the Plan. Any forfeited deferred Awards (including any
forfeited stock at its Award value)
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shall be carried forward and be available for Awards in any future
year without regard to the provisions of Sections 13(a) or (b) of
the Plan.
16. INDIVIDUAL AGREEMENTS
(a) The Committee may in its discretion require that each Participant
receiving an Award enter into an agreement with the Company which
shall contain such terms and conditions as the Committee in its
discretion may require.
(b) The Committee may cancel any unexpired, unpaid or deferred Award at
any time if the Participant is not in compliance with all applicable
provisions of the agreement referred to above, if any, and the Plan.
17. STATUS OF PARTICIPANTS
No Participant in this Plan shall be deemed to be a stockholder of the
Company, or to have any interest in any stock or any specific assets of the
Company by reason of the fact that deferred Stock Awards, Retirement Unit
Awards, Annual Performance Awards, Long-Term Performance Awards, Performance
Awards, Other Awards or dollar credits are to be recorded as being held for such
Participant's account to be paid in installments in the future. The interest of
all Participants shall derive from and be determined solely by the terms and
provisions of the Plan set forth herein.
18. [Intentionally Left Blank]
PART IIA STOCK AWARDS
19. DETERMINATION OF STOCK AWARDS
(a) Each year the Committee shall designate those Participants who shall
receive Stock Awards under this part of the Plan. Stock Awards may
be granted under this part of the Plan only in lieu of cash salary
or bonuses. Stock Awards are made in the form of grants of Common
Stock, which may be delivered immediately, in installments or on a
deferred date, as the Committee, in its discretion, may provide.
(b) If the Committee determines that some portion of a Stock Award to a
Participant shall be treated as a deferred Stock Award and payable
in annual or other periodic installments, then the Participant will
be notified in writing when such deferred Stock Awards shall be paid
and over what period of time. As soon as feasible after the granting
of such a Stock Award, there shall be reserved out of the treasury
shares of the Company, a number (which may include a fraction) of
shares of Common Stock equal to the number of shares of Common Stock
so awarded. In each year at the discretion of the Committee there
may also be allocated or credited to each Participant a dollar
amount equal to the cash dividends declared and paid by the Company
on its Common Stock which the Participant would have received had
such Participant been the owner of the number of shares of any
Common Stock deferred for future payment. Any amounts provided for
pursuant to the preceding sentence shall become payable in such
manner, at such time or times, and subject to such conditions (which
may include provision for an amount equivalent to interest on such
dividend equivalents at rates fixed by the Committee) as the
Committee in its sole discretion shall determine; provided, however,
that the total value of such dividend equivalents (and any interest
thereon) shall be deducted from the amount
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available for Awards under the provisions of Section 13(e) of the
Plan. The Committee in its discretion may make appropriate equitable
adjustments to such deferred Stock Award to account for any
dividends of property (other than cash) declared and paid by the
Company on its Common Stock, or to account for any other event
described in Sections 28 and 29 hereof.
PART IIB RESTRICTED STOCK AWARDS
20. DETERMINATION OF RESTRICTED STOCK AWARDS
Each year the Committee shall designate the Participants who shall receive
Restricted Stock Awards. Shares awarded under this part of the Plan, while
subject to the restrictions hereinafter set forth, are referred to as
"Restricted Stock."
21. TERMS OF RESTRICTED STOCK AWARDS
Any Award of Restricted Stock shall be subject to the following terms and
conditions and to any other terms and conditions not inconsistent with the Plan
as shall be prescribed by the Committee in its sole discretion and which may be
contained in the agreement, if any, referred to in Section 16 above (or in any
amendment thereto):
(a) DELIVERY OF RESTRICTED STOCK. Unless otherwise determined by the
Committee, the Company shall transfer treasury shares to each
Participant to whom an Award of Restricted Stock has been made equal
to the number of shares of Restricted Stock specified in the Award,
and may either (i) hold the certificates representing such shares of
Restricted Stock for the Participant or (ii) take other steps to
restrict the Participant's ability to transfer such shares, in
either case, for the period of time during which such shares shall
remain subject to the restrictions set forth in the Award (the
"Restricted Period"). Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered
by a Participant during the Restricted Period, except as hereinafter
provided. Except for the restrictions set forth herein and unless
otherwise determined by the Committee, a Participant shall have all
the rights of a stockholder with respect to the shares of Restricted
Stock comprising his or her Award, including, but not limited to,
the right to vote and the right to receive dividends (which if in
shares of Common Stock shall be Restricted Stock under the same
terms and conditions).
(b) RESTRICTED PERIOD. The Restricted Period shall commence upon the
date of the Award (which unless otherwise specified by the Committee
shall be the date the Restricted Stock is transferred to the
Participant) and, unless sooner terminated as otherwise provided
herein, shall continue for such period of time as specified by the
Committee in the Award. The Restricted Period for Restricted Stock
shall be at least (i) one year in the case of Restricted Stock
having restrictions based on performance-based criteria and (ii)
three years in the case of Restricted Stock having restrictions
based solely on the passage of time. The terms of any Award of
Restricted Stock, or the Committee at any time, may provide for the
earlier termination of the Restricted Stock Period in the case of,
and only in the case of, the death, Disability or Retirement of the
Participant.
(c) LEGEND. If certificates are issued in respect of shares of
Restricted Stock transferred or issued to a Participant under an
Award registered in the name of the Participant, such
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certificate shall bear the following (or a similar) legend:
"THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW YORK TIMES
COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN (THE "PLAN") APPLICABLE
TO RESTRICTED STOCK AND TO THE RESTRICTED STOCK AGREEMENT DATED (THE
"AGREEMENT"), AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF OR ENCUMBERED IN ANY MANNER
DURING THE RESTRICTED PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF
SUCH PLAN AND AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE
COMPANY."
(d) DEATH OR DISABILITY. Unless the Committee shall otherwise determine
in the Award, if a Participant ceases to be employed by the Company
by reason of death or Disability, the Restricted Period covering all
shares of Restricted Stock transferred or issued to such Participant
under the Plan shall immediately lapse.
(e) RETIREMENT. Unless the Committee shall otherwise determine in the
Award, the Restricted Period covering all shares of Restricted Stock
transferred to a Participant under the Plan shall immediately lapse
upon such Participant's Retirement, whether early or not.
(f) TERMINATION OF EMPLOYMENT. Unless the Committee shall otherwise
determine in the Award or otherwise determine at or after the date
of grant, if a Participant ceases to be employed by the Company
other than due to a condition described in Sections 21(d) or (e)
above, all shares of Restricted Stock owned by such Participant for
which the Restricted Period has not lapsed shall revert back to the
Company upon such termination. Authorized leave of absence or
absence in military service shall constitute employment for the
purposes of this Section 21(f). Whether absence in government
service may constitute employment for the purposes of the Plan shall
be conclusively determined by the Committee.
(g) WAIVER OF FORFEITURE PROVISIONS. The Committee, in its sole and
absolute discretion, may waive the forfeiture provisions in respect
of all or some of the Restricted Stock awarded to a Participant.
(h) LAPSE OF RESTRICTED PERIOD. Upon the lapse of the Restricted Period
with respect to any shares of Restricted Stock, such shares shall no
longer be subject to the restrictions imposed in the Award and shall
no longer be considered Restricted Stock for the purposes of the
Award and the Plan, and the Company shall take all appropriate steps
to effect the foregoing.
PART IIC RETIREMENT UNIT AWARDS
22. DETERMINATION OF RETIREMENT UNIT AWARDS
Each year the Committee shall designate those Participants who shall
receive Retirement Unit Awards under the Plan. The Company shall create and
maintain appropriate records of account for each Participant which shall be
designated as the Participant's Retirement Unit Account.
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23. CREDITS TO RETIREMENT UNIT ACCOUNTS
The Committee shall allocate to each Participant selected to receive a
Retirement Unit Award for that year such dollar amount as the Committee shall
determine, taking into account the value of the Participant's services to the
Company. Such dollar amount shall thereupon be converted into Retirement Units
or fractions of Units and credited to each such Participant's Retirement Unit
Account in a number equal to the quotient obtained by dividing such allocated
dollar amount by the Fair Market Value of one share of Common Stock as of the
date the allocation is made.
24. DIVIDEND CREDITS
At the discretion of the Committee there may also be allocated in each
year to each Participant a dollar amount equal to the cash dividends declared
and paid by the Company on the Common Stock which the Participant would have
received had such Participant been the owner of the number of shares of Common
Stock equal to the number of the whole Retirement Units (but not fractional
Units) credited to the Participant's Retirement Unit Account; provided, however,
that the total value of such dividend equivalents shall be deducted from the
amount available for Awards under Section 13 of the Plan. The dollar amounts
allocated shall be converted into and credited to the Participant's Retirement
Unit Account as Retirement Units or fractions thereof as set forth in Section 23
above as of the date on which such dividends were paid by the Company. No
interest shall be paid on the dollar amount so allocated to the Retirement Unit
Account of any Participant. The Committee in its discretion may make appropriate
equitable adjustments to such Retirement Unit Accounts to account for any
dividends of property (other than cash) declared and paid by the Company on its
Common Stock, or to account for any other event described in Sections 28 and 29
hereof.
25. RESERVATION OF STOCK AND ACCOUNTING RECORDS
The Company shall keep records of the Participant's Retirement Unit
Account. At the time of any allocation to a Participant's account under Sections
23 or 24 hereof, there shall be reserved out of treasury shares of the Company a
number (which may include a fraction) of shares of Common Stock equal to the
number of Units or fraction thereof so allocated.
26. MATURITY AND PAYMENT AFTER MATURITY
(a) The Retirement Unit Account of each Participant shall mature upon
such Participant's death, Retirement or other termination of
employment.
(b) After maturity, the Company shall deliver to the Participant (or in
the event of the death of the Participant, as specified in Section
30 hereof) in ten approximately equal annual installments, shares of
Common Stock equal in the aggregate to the number of Retirement
Units credited to the Participant's Retirement Unit Account. Any
fraction of a Unit credited to the Participant's account at maturity
shall be paid in cash with the first installment, the fractional
Unit being converted into cash at the Fair Market Value of the
Common Stock on such first payment date. The first such installment
shall be paid within 90 days after maturity. However, the Committee
in its discretion at or any time after maturity may, with the
consent of the Participant (or the beneficiary of a deceased
Participant as specified in Section 30 hereof), (i) defer the
commencement of such distribution or defer any installment, (ii)
deliver full payment of the shares of Common Stock equal to the
aggregate number of Retirement Units credited to the Participant's
Retirement Unit Account and the dollar amount credited thereto, or
(iii) reduce or increase the number of annual installments in which
the payments are to be made.
12
<PAGE>
(c) So long as Retirement Units remain credited to the Retirement Unit
Account of a Participant subsequent to maturity, such account shall
be credited with the dollar amount allocated to the account as
dividends as provided for in Section 24 hereof. Any dollar amount so
credited may be paid in cash with the next succeeding annual
installment made under Section 26(b) above, or in such manner, at
such time or times, and subject to such conditions as the Committee
in its sole discretion shall determine; provided, however, that in
the case of any dollar amount credited to an account after maturity
in respect of a dividend declared prior to maturity, such dollar
amounts shall be converted to Retirement Units as of the date of
payment and the remaining installments of Common Stock shall be
increased accordingly.
PART IID ANNUAL PERFORMANCE AWARDS
27A. DETERMINATION OF ANNUAL PERFORMANCE AWARDS
(a) GENERAL. Each year the Committee may make Annual Performance Awards
under this part of the Plan; provided that no Participant may be
eligible to receive an Annual Performance Award hereunder and under
the Cash Plan in the same year.
(b) CERTAIN DEFINITIONS. For the purposes of this Section 27A, the
following terms shall have the meanings specified:
"Affected Officers" shall mean those executive officers of the Company
whose compensation is required to be disclosed in the Company's annual proxy
statement relating to the election of directors.
"Code Section 162(m)" shall mean Section 162(m) of the Code (or any
successor provision), and "Regulations" shall mean the regulations promulgated
thereunder, as from time to time in effect.
"Eligible Participants" shall have the meaning set forth in subsection (c)
below.
"Performance Adjustment" means, for any year, a factor ranging from 0% to
200%, based upon the achievement of Performance Goal Targets established by the
Committee, that, when multiplied by an Eligible Participant's Target Award,
determines the amount of such Eligible Participant's Annual Performance Award
for such year.
"Performance Goal" means, for any year, the business criteria selected by
the Committee to measure the performance during such year of the Company (or of
a division, subsidiary or group thereof) from one or more of the following:
(i) earnings per share of the Company for the year;
(ii) net income of the Company for the year;
(iii) return on assets of the Company for the year (net income of the
Company for the year divided by average total assets during such
year);
(iv) return on stockholder's equity of the Company for the year (net
income of the Company for the year divided by average stockholder's
equity during such year);
(v) operating profit or operating margins of the Company or of a
division, subsidiary or
13
<PAGE>
group thereof for the year;
(vi) cash flow of the Company or of a division, subsidiary or group
thereof for the year;
(vii) increase in shareholder value as determined at the end of each year;
(viii) revenue growth of the Company or of a division, subsidiary or group
thereof for the year; and
(ix) improved use of capital and/or assets of the Company or of a
division, subsidiary or group thereof for the year.
"Performance Goal Target" means, for any Performance Goal, the levels of
performance during a year under such Performance Goal established by the
Committee to determine the Performance Adjustment to an Eligible Participant's
Target Award for such year.
"Target Award" means, for any year, with respect to an Eligible
Participant, the dollar amount set by the Committee that, when multiplied by the
applicable Performance Adjustment, determines the dollar amount of such Eligible
Participant's Annual Performance Award.
(c) ELIGIBILITY. Annual Performance Awards are available each year only
to Plan Participants who are designated by the Committee, prior to
March 31 of such year (or prior to such later date as permitted by
Code Section 162(m) and the Regulations), as likely to be Affected
Officers for such year, whose annual salary and bonus for such year
are expected to exceed $1,000,000 and who are not designated by the
Committee as eligible for an annual performance award under the Cash
Plan for such year ("Eligible Participants").
(d) DETERMINATION OF ANNUAL PERFORMANCE AWARDS. Prior to March 31 of
each year (or prior to such later date as permitted by Code Section
162(m) and the Regulations), the Committee will determine the
Eligible Participants for such year, will designate those Eligible
Participants who will be entitled to earn an Annual Performance
Award for such year under this Plan, and will establish for each
such Eligible Participant for such year: (i) a Target Award, (ii)
one or more Performance Goals, and (iii) for each such Performance
Goal, a Performance Goal Target, the method by which achievement
thereof will be measured and a schedule of Performance Adjustment
factors corresponding to varying levels of Performance Goal Target
achievement. In the event more than one Performance Goal is
established for any Eligible Participant, the Committee shall at the
same time establish the weighting of each such Performance Goal in
determining such Eligible Participant's Annual Performance Award.
Notwithstanding anything in this Section 27A to the contrary, the
Annual Performance Award payable to any Eligible Participant in any
year may not exceed $3.0 million.
(e) PAYMENT OF ANNUAL PERFORMANCE AWARDS. Subject to subsection (f)
below, Annual Performance Awards will be paid as soon as practicable
after the end of the year to which it relates and after the
Committee certifies the extent to which the Performance Goal Target
or Targets under the Performance Goal or Goals have been met or
exceeded. In the discretion of the Committee, an Annual Performance
Award may be paid in cash, shares of Common Stock, shares of
Restricted Stock (subject to the provisions of Section 21 hereof),
Retirement Units (subject to the provisions of Sections 23-26
hereof) or any combination thereof. For this purpose, shares of
Common Stock
14
<PAGE>
shall be valued at Fair Market Value, and Restricted Stock and
Retirement Units shall be deemed to have a value equal to the Fair
Market Value of the underlying Common Stock, in each case as of the
date of the Committee's determination to pay such Annual Performance
Award in such form or forms. If permitted by the Regulations and
Code Section 162(m), the Committee may determine to pay a portion of
an Annual Performance Award in December of the year to which it
relates. The Committee may not increase the amount of an Annual
Performance Award that would otherwise be payable upon achievement
of the Performance Target or Targets, but it may reduce any Eligible
Participant's Annual Performance Award in its discretion. Subject to
Section 14(c) above, no Annual Performance Award will be payable to
any Eligible Participant who is not an employee of the Company on
the last day of the year to which such Annual Performance Award
relates.
(f) DEFERRAL OF ANNUAL PERFORMANCE AWARDS. If the Committee determines
that some portion of an Annual Performance Award to an Eligible
Participant shall be treated as a deferred Annual Performance Award
and be payable in annual or other periodic installments, the
Eligible Participant will be notified in writing when such deferred
Annual Performance Award shall be paid and over what period of time.
A deferred Award in the form of shares of Common Stock shall be
subject to the provisions of Section 19(b) hereof. In the case of a
deferred Award in the form of cash, in each year the Committee shall
have the discretion to provide for the payment of an amount
equivalent to interest, at such rate or rates fixed by the
Committee, on such deferred cash Annual Performance Award. Any
amounts provided for pursuant to the preceding sentence shall become
payable in such a manner, at such time or times, and subject to such
conditions as the Committee shall in its sole discretion determine;
provided, however, that the total amount of such interest shall be
deducted from the maximum amount available for Awards under the
formula described in Section 13 of the Plan.
(g) CODE SECTION 162(m). It is the intent of the Company that Annual
Performance Awards satisfy, and this Section 27A be interpreted in a
manner that satisfies, the applicable requirements of Code Section
162(m) and the Regulations so that the Company's tax deduction for
Annual Performance Awards to Affected Officers is not disallowed in
whole or in part by operation of Code Section 162(m). If any
provision of this Plan or of any Annual Performance Award would
otherwise frustrate or conflict with such intent, that provision
shall be interpreted and deemed amended so as to avoid such
conflict. To the extent of any irreconcilable conflict with such
intent, such provision shall be deemed void as applicable to
Eligible Participants.
PART IIE PERFORMANCE OR OTHER AWARDS
27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS
(a) Each year the Committee in its sole discretion may authorize other
forms of Awards such as, but not limited to, Performance Awards, if
the Committee deems it appropriate to do so in order to further the
purposes of the Plan.
(b) A "Performance Award" shall mean an Award which entitles the
Participant to receive Common Stock, Restricted Stock, Retirement
Units, Options under Part I of the Plan or other compensation (which
may include cash), or any combination thereof, in an amount which
depends upon the financial performance of the Company during a
stated period of
15
<PAGE>
more than one year. Performance for this purpose may be measured by
the growth in book value of the Common Stock, an increase in per
share earnings of the Company, an increase in operating cash flow,
or any other indicators specified by the Committee. The Committee
shall also fix the period during which such performance is to be
measured, the value of a Performance Award for purposes of providing
for the accrual pursuant to Section 13 of the Plan and the form of
payment to be made in respect of the Performance Award.
PART IIF LONG-TERM PERFORMANCE AWARDS
28A. DETERMINATION OF LONG-TERM PERFORMANCE AWARDS
(a) GENERAL. Each year the Committee shall designate those Participants
who shall be eligible to receive Long-Term Performance Awards under
this part of the Plan.
(b) CERTAIN DEFINITIONS. For purposes of this Section 28A, the following
terms shall have the meanings specified:
"Code Section 162(m)" shall mean Section 162(m) of the Internal Revenue
Code of 1986, as amended (or any successor provision), and "Regulations" shall
mean the regulations promulgated thereunder, as from time to time in effect.
"Eligible Participants" shall mean certain key business leaders and senior
management of the Company as determined in the discretion of the Committee.
"Long-Term Performance Goal" means, for any Performance Period, the
business criteria selected by the Committee to measure the performance during
such Performance Period of the Company (or of a division, subsidiary or group
thereof) from one or more of the following:
(i) earnings per share of the Company for the Performance Period;
(ii) net income of the Company for the Performance Period;
(iii) return on assets of the Company for the Performance Period (net
income of the Company for the Performance Period divided by average
total assets for such Performance Period);
(iv) return on stockholder's equity of the Company for the Performance
Period (net income of the Company for the Performance Period
divided by average stockholder's equity for such Performance
Period);
(v) operating profit or operating margins of the Company or of a
division, subsidiary or group thereof for the Performance Period;
(vi) cash flow of the Company or of a division, subsidiary or group
thereof for the Performance Period;
(vii) increase in shareholder value as determined at the end of the
Performance Period;
(viii) revenue growth of the Company or of a division, subsidiary or group
thereof for the Performance Period; and
16
<PAGE>
(ix) improved use of capital and/or assets of the Company or of a
division, subsidiary or group thereof for the Performance Period.
"Long-Term Performance Goal Target" means, for any Long-Term Performance
Goal, the levels of performance during a Performance Period under such Long-Term
Performance Goal established by the Committee to determine an Eligible
Participant's maximum Long-Term Performance Award.
"Performance Period" means the period in excess of one year commencing on
January 1 of the year in which the Committee makes the Long-Term Performance
Award to an Eligible Participant.
(c) ELIGIBILITY. Long-Term Performance Awards are available each year to
Eligible Participants who are designated by the Committee, prior to
March 31 of such year (or prior to such later date as permitted by
Code Section 162(m) and the Regulations).
(d) DETERMINATION OF LONG-TERM PERFORMANCE AWARDS. Prior to March 31 of
each year (or prior to such later date as permitted by Code Section
162(m) and the Regulations), the Committee will designate the
Eligible Participants who will be entitled to earn a Long-Term
Performance Award for such Performance Period under this Plan, and
will establish for each such Eligible Participant for such
Performance Period (i) one or more Long-Term Performance Goals, and
(ii) for each such Long-Term Performance Goal, a Long-Term
Performance Goal Target and the method by which achievement thereof
will be measured. In the event that more than one Long-Term
Performance Goal is established for any Eligible Participant, the
Committee shall at the same time establish the weighting of each
such Long-Term Performance Goal in determining such Eligible
Participant's Long-Term Performance Award. Notwithstanding anything
in this Section 28A to the contrary, the Long-Term Performance Award
payable to any Eligible Participant in any Performance Period may
not exceed $3.0 million.
(e) PAYMENT OF LONG TERM PERFORMANCE AWARDS. Subject to subsection (g)
below, Long-Term Performance Awards will be paid in cash as soon as
practicable after the end of the Performance Period to which it
relates and after the Committee certifies the extent to which the
Long-Term Performance Goal Target or Targets under the Long-Term
Performance Goal or Goals have been met or exceeded. If permitted by
the Regulations and Code Section 162(m), the Committee may determine
to pay a portion of a Long-Term Performance Award in December of the
last year of the Performance Period to which it relates. The
Committee may not increase the amount of a Long-Term Performance
Award that would otherwise be payable upon the achievement of the
Long-Term Performance Goal Target or Targets, but it may reduce any
Eligible Participant's Long-Term Performance Award in its
discretion. Subject to Sections 14(c) and 28A(g), no Long-Term
Performance Award will be payable to any Eligible Participant who is
not an employee of the Company on the last day of the Performance
Period to which such Long-Term Performance Award relates.
(f) TERMINATION OF EMPLOYMENT BECAUSE OF DEATH, DISABILITY OR
RETIREMENT. In the event that an Eligible Participant terminates
employment because of death, Disability or Retirement, such Eligible
Participant, or in the event of death such person as determined in
accordance with Section 30, shall be paid a pro rata portion of such
Eligible Participant's Long-Term Performance Award that would
otherwise be payable upon the achievement of the Long-Term
Performance Goal Target or Targets had the Participant continued
employment until the end of the Performance
17
<PAGE>
Period. Such pro rata Long-Term Performance Award shall not be paid
until the end of the Performance Period to which such Long-Term
Award relates.
(g) DEFERRAL AND ALTERNATIVE FORM OF PAYMENT OF LONG-TERM PERFORMANCE
AWARDS. If the Committee determines that some portion of a Long-Term
Performance Award to an Eligible Participant shall be treated as a
deferred Long-Term Performance Award and payable in annual or other
periodic installments, the Eligible Participant will be notified in
writing when such deferred Long-Term Performance Award shall be paid
and over what period of time. In each year the Committee shall have
the discretion to provide for the payment of an amount equivalent to
interest, at such rate or rates fixed by the Committee, on any
deferred Long-Term Performance Award. Any amounts provided for
pursuant to the preceding sentence shall become payable in such
manner, at such time or times, and subject to such conditions as the
Committee shall in its sole discretion determine; provided, however,
that the total amount of such interest shall be deducted from the
maximum amount available for Awards under the formula described in
Section 5 of the Plan. Furthermore, the Committee may, in its sole
discretion, determine that such Long-Term Performance Award shall be
paid in shares of Common Stock or in the form of Retirement Units
(subject to the provisions of Sections 23-26 hereof). For this
purpose, shares of Common Stock shall be valued at Fair Market
Value, and Retirement Units shall be deemed to have a value equal to
the Fair Market Value of the underlying Common Stock, in each case
as of the date of the Committee's determination to pay such
Long-Term Performance Award in such form.
(h) CODE SECTION 162(m). It is the intent of the Company that Long-Term
Performance Awards satisfy, and this Section 28A be interpreted in a
manner that satisfies, the applicable requirement of Code Section
162(m) and the Regulations so that the Company's tax deduction for
Long-Term Performance Awards to Eligible Participants is not
disallowed in whole or in part by operation of Code Section 162(m).
If any provision of this Plan or of any Long-Term Performance Award
would otherwise frustrate or conflict with such intent, that
provision shall be interpreted and deemed amended so as to avoid
such conflict. To the extent of any irreconcilable conflict with
such intent, such provision shall be deemed void as applicable to
any Participant whose compensation is subject to Code Section
162(m).
PART III GENERAL PROVISIONS
28. STOCK DIVIDEND OR STOCK SPLIT
If at any time the Company shall take any action whether by stock
dividend, stock split, combination of shares, or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, (i) the number of shares of Common Stock
then subject to deferred Awards, credited to Retirement Unit Accounts (matured
or unmatured) or set aside for Performance or Other Awards, (ii) the number of
outstanding Options, the number of shares of Common Stock for which such Options
are exercisable and the exercise price thereof, (iii) the number of shares of
Common Stock reserved for Awards, (iv) the number of shares of Common Stock
reserved for Options, and (v) the maximum number of shares with respect to which
Options may be granted to any key employee in any calendar year under Section
6(b), shall be increased or decreased in the same proportion. The Committee
shall make an appropriate equitable adjustment to the provisions of Section
13(a) to take account of such increase or decrease in issued and outstanding
shares. The
18
<PAGE>
Committee in its discretion may make appropriate equitable adjustments
respecting deferred Stock Awards, Retirement Units, Annual Performance Awards,
Long-Term Performance Awards, Performance or Other Awards and outstanding
Options to take account of a dividend by the Company of property other than
cash. All such adjustments shall be made by the Committee whose determination
shall be conclusive and binding upon all Participants and any person claiming
under or through any Participant.
29. RECLASSIFICATION OR MERGER
If at any time the Company reclassifies or otherwise changes its issued
and outstanding Common Stock (other than in par value) or the Company and one or
more corporations merge and the Company is the surviving corporation of such
merger, then each Stock Award, Retirement Unit (matured or unmatured), Annual
Performance Award, Performance or Other Award which at the time of such
reclassification or merger is credited as a Stock Award, Retirement Unit, Annual
Performance Award, Long-Term Performance Award, Performance or Other Award shall
thereafter be deemed to be the equivalent of (and all Units thereafter credited
to a Retirement Unit Account shall be computed with reference to), and
outstanding Options shall be exercisable for, the shares of stock or other
securities of the Company which pursuant to the terms of such reclassification
or merger are issued with respect to each share of Common Stock. The Committee
shall also make an appropriate equitable adjustment to the provisions of
Sections 6(b) and 13(a) to take account of such event. All such adjustments
shall be made by the Committee whose determination shall be conclusive and
binding upon all Participants and any person claiming under or through any
Participant.
30. NON-ALIENATION OF BENEFITS
Except as herein specifically provided, no right or unpaid benefit under
this Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or person entitled to the benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease. Notwithstanding the foregoing,
rights and benefits hereunder shall pass by will or the laws of descent and
distribution in the following order: (i) to beneficiaries so designated by the
Participant; if none, then (ii) to a legal representative of the Participant; if
none, then (iii) to the persons entitled thereto as determined by a court of
competent jurisdiction. Awards so passing shall be made at such times and in
such manner as if the Participant were living.
31. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any payment or delivery
of any Common Stock to any Participant or beneficiary, any law or regulation of
any governmental authority having jurisdiction in the premises shall require the
Company to withhold, or to make any deduction for, any taxes or take any other
action in connection with the payment or delivery then to be made, such payment
or delivery shall be deferred until such withholding or deduction shall have
been provided for by the Participant or beneficiary, or other appropriate action
shall have been taken. The amount of any such tax shall be computed by the
Company in a manner consistent with applicable law. The Participant or
beneficiary may satisfy the obligation for such withholding or deduction in
whole or in part by electing to deliver shares of Common Stock already owned and
having a value (as determined by Committee rule consistent with applicable law)
equal to the amount to be withheld or deducted.
32. ADMINISTRATION EXPENSES
The entire expense of administering this Plan shall be borne by the
Company.
19
<PAGE>
33. GENERAL CONDITIONS
(a) The Board in its discretion may from time to time amend, suspend or
terminate any or all of the provisions of this Plan, provided that
no change may be made which would prevent Incentive Stock Options
granted under the Plan from being Incentive Stock Options as
described therein without the consent of the optionees concerned,
and further provided that the Board may not make any amendment which
(1) changes the class of persons eligible for Incentive Stock
Options, or (2) increases the total number of shares for which
Options may be granted under Section 6(c), or (3) materially affects
the provisions of Sections 13(a) or (b) of the Plan, or (4)
materially increases the benefits accruing to Participants under the
Plan (provided that changes in the vesting and exercise periods for
Options for Participants who leave the Company may be effected by
the Board or the Committee without stockholder approval), or (5)
increases the total number of shares authorized under Section 13(f)
for which Awards may be granted, without the consent and approval of
the holders of a majority of the outstanding shares of Class A and
Class B Common Stock of the Company entitled to vote thereon, voting
together as one class. The foregoing provisions shall not be
construed to prevent the Committee from exercising its discretion,
or to limit such discretion, to increase the total number of shares
for which Options may be granted under Section 6(b) or the total
number of shares authorized under Section 13(f) for which Awards may
be granted, as expressly permitted by Sections 28 and 29 hereof, or
to adjust the provisions of Sections 13(a) and (b) hereof as
expressly permitted by Sections 13(b), 28 and 29 hereof, or
otherwise to exercise any discretion to the extent expressly
authorized hereunder.
(b) Nothing contained in the Plan shall prohibit the Company from
establishing incentive compensation arrangements in addition to this
Plan and the Cash Plan. Payments made under any such separate
arrangements shall not be included in or considered a part of the
maximum dollar amount available for Awards under the Plan and Cash
Plan, or number of shares available for Awards or Options under the
Plan, and shall not be charged against the dollar or share amounts
available for Awards under the Plan and Cash Plan or Options under
the Plan. In the discretion of the Committee, employees shall be
eligible to participate in such other arrangements, as well as the
Plan and Cash Plan, in the same year.
(c) Nothing in this Plan shall be deemed to limit in any way the right
of the Company to terminate a Participant's employment with the
Company at any time.
(d) The Committee may promulgate rules and regulations relating to the
administration and interpretation of, and procedures under, the
Plan. Any decision or action taken by the Company, the Board or the
Committee arising out of or in connection with the construction,
administration, interpretation and effect of the Plan shall be
conclusive and binding upon all Participants and any person claiming
under or through any Participant.
(e) No member of the Board or of the Committee shall be liable for any
act or action, whether of commission or omission, taken by any other
member or by any officer, agent or employee, nor for anything done
or omitted to be done by such Director except in circumstances
involving actual bad faith.
(f) Notwithstanding any other provision of this Plan, the Company shall
not be obligated to make any Award, issue any shares of Common
Stock, or grant any Option with respect thereto, unless it is
advised by counsel of its selection that it may do so without
violation
20
<PAGE>
of the applicable Federal and State laws pertaining to the issuance
of securities, and may require any stock so issued to bear a legend,
may give its transfer agent instructions, and may take such other
steps, as in its judgment are reasonably required to prevent any
such violation.
(g) It is the intent of the Company that transactions involving Options
or Awards granted under the Plan be entitled to the exemption from
Section 16 of the Exchange Act provided by Rule 16b-3, that any
ambiguities or inconsistencies in construction of the Plan be
interpreted to give effect to such intention and that if any
provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent
required to permit any such transaction to comply with Rule 16b-3.
The Committee may adopt rules and regulations under, and amend, the
Plan in furtherance of the intent of the foregoing.
34. TRANSITION
Upon the effectiveness of this Plan, as provided below, and the Cash Plan,
such plans replaced the Company's Executive Incentive Compensation Plan
("EICP"), except that the EICP shall continue to govern options and awards of
restricted stock outstanding under the EICP. No further awards will be made
under the EICP, and all amounts accrued for awards under the EICP and unawarded
were carried forward and made available for Awards under the Plan and awards
under the Cash Plan. All unmatured and matured but undistributed retirement
units and all performance awards respecting current performance cycles awarded
under the EICP became Retirement Units and Performance Awards hereunder and any
payments or distributions in respect thereof shall be made hereunder; provided,
however, that the number of shares of Common Stock available for Awards pursuant
to Section 13(f) hereof shall not be reduced by the number of such retirement
units previously awarded under the EICP and paid subsequently under the Plan.
35. EFFECTIVE DATE; EXPIRATION
The Plan became effective for periods beginning after January 1, 1991 upon
approval by the holders of a majority of the outstanding shares of Class A and
Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual
Meeting of Stockholders, in person or by proxy, voting together as a single
class. No Options may be granted or Awards made under the Plan after December
31, 2010, or such earlier expiration date as may be designated by resolution of
the Board.
21
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>DEFERRED EXECUTIVE COMPENSATION PLAN
<TEXT>
THE NEW YORK TIMES COMPANY
DEFERRED EXECUTIVE COMPENSATION PLAN
Effective July 1, 1994
Amended January 1, 1999
Amended December 8, 1999
Amended Effective January 1, 2001
<PAGE>
ARTICLE I
Introduction
1.1 Purpose Of Plan
The Employer has adopted the Plan set forth herein to provide a means by
which certain employees may elect to defer receipt of designated
percentages or amounts of their Compensation.
1.2 Status Of Plan
The Plan is intended to be "a plan which is unfunded and is maintained by
an employer primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees" within
the meaning of Sections 201(2) and 301(a)(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), and shall be interpreted and
administered to the extent possible in a manner consistent with that
intent.
1.2 History Of Plan
The Plan was first effective on July 1, 1994.
Thereafter, the Plan was amended effective January 1, 1999, to change the
deferral periods under the Plan and the method of distribution thereunder.
Effective December 8, 1999, the Plan was amended to change the eligibility
for participation in the Plan and the definition of Compensation
thereunder for years following 1999. Effective December 8, 1999, The New
York Times Designated Employees Deferred Earnings Plan was merged into the
Plan, as amended.
Effective January 1, 2001, the Plan was amended to provide that only 85%
of a Participant's bonus may be deferred thereunder.
Effective January 1, 2001, the Plan was amended to further change the
deferral periods and methods of benefit distribution thereunder.
Effective January 1, 2001, the Affiliated Publications, Inc. Deferment
Plan for Key Executives (the "BG Plan") was merged into the Plan and each
participant account in the BG Plan was transferred into this Plan.
-1-
<PAGE>
ARTICLE II
Definitions
Wherever used herein, the following terms have the meanings set forth below,
unless a different meaning is clearly required by the context:
2.1 Account means, for each Participant, the account established for his or
her benefit under Section 5.1. Such Account shall include both salary and
bonus deferrals. Effective January 1, 2001, an Account shall include the
amounts, if any, transferred from the BG Plan to this Plan.
2.2 Change Of Control means:
(a) any individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political
subdivision or agency thereof (a "Person") (or two or more Persons
acting in concert), other than any descendent (or any spouse
thereof) of Iphigene Ochs Sulzberger (a "Family Member") or a
beneficiary or trustee (as the same may change from time to time) of
a trust over 50% of the individual beneficiaries of which are Family
Members, acquiring the power to elect a majority of the directors of
The New York Times Company (the "Company") in a transaction or
series of transactions not approved in advance by a vote of at least
three quarters of the Continuing Directors (as defined below); or
(b) individuals who, as of the date hereof, constitute the Board of
Directors of the Company (as of the date hereof the "Continuing
Directors") ceasing for any reason to constitute at least a majority
of the Board of Directors, provided that any person becoming a
director subsequent to the date hereof whose election, or a
nomination for election by the Company's shareholders, was approved
in advance by a vote of at least three quarters of the Continuing
Directors (other than a nomination of an individual whose initial
assumption of office is in connection with an actual or threatened
solicitation with respect to the election or removal of the
directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended) shall be, for purposes of this Agreement,
considered as though such person were a Continuing Director; or
(c) approval by the stockholders of the Company of a reorganization,
merger, consolidation, liquidation or dissolution of the Company or
of the sale (in one transaction or a series of related transactions)
of all or substantially all of the assets of the Company other than
a reorganization, merger, consolidation, liquidation, dissolution or
sale approved in advance by three quarters of the Continuing
Directors.
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2.3 Code means the Internal Revenue Code of 1986, as amended from time to
time. Reference to any section or subsection of the Code includes
reference to any comparable or succeeding provisions of any legislation
which amends, supplements or replaces such section or subsection.
2.4 Compensation means the annual bonus, amounts paid under The Advertising
and Circulation Sales Incentive Plan, the Long-Term Performance Awards
under The New York Times Company 1991 Executive Cash Bonus Plan, any
Discretionary Bonuses and the base salary (including bonuses in lieu of
salary increases) of a Participant. The ERISA Management Committee, in its
sole discretion, shall designate from time to time the maximum percentage
of each component of Compensation that can be deferred under the Plan.
Such designation shall be listed in Appendix A. For purposes of the Plan,
Compensation shall be determined before giving effect to Elective
Deferrals and other salary reduction amounts which are not included in the
Participant's gross income under Code Sections 125, 401(k), 402(h) or
403(b).
2.5 Discretionary Bonus means a bonus which brings a Participant's
Compensation over the amount stated in Section 162(m) of the Code.
2.6 Effective Date means July 1, 1994.
2.7 Election Form means the participation election form as approved and
prescribed by the Plan Administrator.
2.8 Elective Deferral means the portion of Compensation which is deferred by a
Participant under Article IV.
2.9 Eligible Employee means, for the Plan Year 2000 and Plan Years thereafter,
each employee of the Employer whose annual base salary on October 1 of the
year prior to the year for which such employee defers any Compensation
under the Plan is at least $110,000, who is not covered under a collective
bargaining agreement, who is not eligible to participate in any other
non-qualified deferred compensation plan sponsored by the Employer and/or
its subsidiaries and affiliates while deferring Compensation under this
Plan, and who consents to the purchase of Corporate Owned Life Insurance
by the Employer. The $110,000 minimum annual base salary shall be adjusted
by the ERISA Management Committee from time to time at its sole discretion
and without the need for an amendment to the Plan. An employee who
participated in this Plan or The New York Times Designated Employees
Deferred Earnings Plan prior to 2000, and who no longer meets the
definition of an Eligible Employee, shall continue to be an Eligible
Employee hereunder.
2.10 Employer means The New York Times Company, any successor to all or a major
portion of the Employer's assets or business which assumes the obligations
of the Employer, and each other entity that is affiliated with the
Employer whose employees, with the consent of the Company, are eligible,
as provided under Section 2.8, to participate in the Plan.
2.11 ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to any section or subsection of ERISA
includes reference to any
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comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.
2.12 ERISA Board Committee means a committee of the Board of Directors of The
New York Times Company.
2.13 ERISA Management Committee means a committee appointed by the ERISA Board
Committee.
2.14 Insolvency means either (i) the Company is unable to pay its debts as they
become due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
2.15 Participant means any Eligible Employee who participates in the Plan in
accordance with Article III. Effective January 1, 2001, a Participant also
means a former participant of the Affiliated Publications, Inc. Deferment
Plan for Key Executives whose account under the that plan has been
transferred into this Plan.
2.16 Plan means The New York Times Company Deferred Executive Compensation Plan
and all amendments thereto.
2.17 Plan Administrator means the person, persons or entity designated by the
Employer under Article VIII to oversee the administration of the Plan. If
no such person or entity is so serving at any time, the Employer shall be
the Plan Administrator.
2.18 Plan Year means the 12-month period beginning on January 1 and ending on
December 31 of each year, except for the first plan year which begins on
July 1, 1994, and ends on December 31, 1994.
2.19 Recordkeeper means the person(s) or entity appointed or hired by the ERISA
Management Committee under Section 8.1.
2.20 Total and Permanent Disability means the inability of a Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months, and the permanence and degree of which
shall be supported by medical evidence satisfactory to the Plan
Administrator.
2.21 Trust means the trust established by the Employer that identifies the Plan
as a plan with respect to which assets are to be held by the Trustee. Plan
assets in the trust are subject to
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the general creditors of The New York Times Company in the event of
bankruptcy or Insolvency.
2.22 Trustee means the trustee or trustees under the Trust.
2.23 Valuation Option means the performance of the investment funds listed in
Appendix B of the Plan.
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ARTICLE III
Participation
3.1 Commencement Of Participation
Any Eligible Employee who elects to defer part of his or her Compensation
in accordance with Article IV shall become a Participant in the Plan as of
the date such deferrals commence in accordance with such Article.
3.2 Continued Participation
A Participant in the Plan shall continue to be a Participant so long as
any amount remains credited to his or her Account. However, future
deferrals under the Plan may be made only if such Participant continues to
be an Eligible Employee under the Plan.
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ARTICLE IV
Elective Deferrals
4.1 Elective Deferrals
Except as provided in Appendix A, an individual who is an Eligible
Employee on the Effective Date may, by completing an Election Form and
filing it with the Plan Administrator by the end of the first month
following the Effective Date, elect to defer the receipt of a portion of
one or more payments of Compensation for a period of at least three Plan
Years and on such terms as the ERISA Management Committee may permit.
Thereafter, any Eligible Employee may elect to defer the receipt of a
percentage or dollar amount of one or more payments of Compensation for a
period of a least three Plan Years and on such terms as the ERISA
Management Committee may permit, commencing with Compensation paid in the
next succeeding Plan Year, by completing an Election Form during the
annual enrollment period for the Plan as determined by the Plan
Administrator.
Except as provided in Appendix A, effective January 1, 1999, with respect
to Elective Deferrals made for the Plan Year 1999 and thereafter,
deferrals will mature at the end of a three-year cycle. An individual who
is an Eligible Employee may elect to defer the receipt of a portion of one
or more payments of Compensation during the first year of the deferral
cycle for a period of three Plan Years and on such terms as the ERISA
Management Committee may permit; an individual who is an Eligible Employee
may elect to defer the receipt of a portion of one or more payments of
Compensation during the second year of the deferral cycle for a period of
two Plan Years and on such terms as the ERISA Management Committee may
permit; and an individual who is an Eligible Employee may elect to defer
the receipt of a portion of one or more payments of Compensation during
the last year of a deferral cycle for a period of one Plan Year and on
such terms as the ERISA Management Committee may permit. All deferrals
made during a three-year cycle will mature at the end of the third Plan
Year in that cycle. A new three-year cycle will commence after the
expiration of each three-year cycle.
Except as Provided in Appendix A, effective January 1, 2001, deferrals
will mature in a four-year cycle. An individual who is an Eligible
Employee may elect to defer the receipt of a portion of one or more
payments of Compensation during the first year of the deferral cycle for a
period of four Plan Years and on such terms as the ERISA Management
Committee may permit; an individual who is an Eligible Employee may elect
to defer the receipt of a portion of one or more payments of Compensation
during the second year of the deferral cycle for a period of three Plan
Years and on such terms as the ERISA Management Committee may permit; and
an individual who is an Eligible Employee may elect to defer the receipt
of a portion of one or more payments of Compensation during the third year
of a deferral cycle for a period of two Plan Years and on such terms as
the ERISA Management Committee may permit. All deferrals made
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during a four-year cycle will mature at the end of the second Plan Year
that is after the end of the last deferral in that cycle.
It is expressly understood that accounts transferred from the BG Plan into
this Plan shall be treated as if deferred during 2001 and the deferral
period therefor shall expire at the same time all other deferrals made
during 2001 expire.
No Participant may defer more than the portion of his or her Compensation
designated by the ERISA Management Committee in Appendix A. A
Participant's Compensation shall be reduced in accordance with the
Participant's election hereunder and amounts deferred hereunder shall be
paid by the Employer to the Trust as soon as administratively feasible and
credited to the Participant's Account as of the date the amounts are
received by the Trustee.
4.2 Investment Election
An individual who is an Eligible Employee and elects to defer Compensation
under this Plan shall elect to have his or her Account valued based on the
Valuation Option represented by the performance of one or more of the
investment funds listed in Appendix B of the Plan. Such Appendix B may be
amended at any time by an action of the ERISA Management Committee. If a
Participant does not elect a Valuation Option for his or her Account, the
Account shall be valued based on the Valuation Option represented by the
performance of Fund A. A participant may change his or her selection of
Valuation Options on any date.
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ARTICLE V
Accounts
5.1 Accounts
The Plan Administrator and/or the Recordkeeper shall establish an Account
for each Participant reflecting his or her Elective Deferrals made for the
Participant's benefit together with any adjustments for income, gain or
loss and any payments from the Account. The Plan Administrator and/or the
Recordkeeper shall establish sub-accounts for each Participant that has
more than one election in effect under Section 7.1 and such other
sub-accounts as are necessary for the proper administration of the Plan.
As of the last business day of each calendar quarter, the Plan
Administrator shall provide, or cause to be provided, the Participant with
a statement of his or her Account reflecting the income, gains and losses
(realized and unrealized), amounts of deferrals, fund transfers and
distributions of such Account since the prior statement.
Effective January 1, 2001, a Participant Account shall include the amount
transferred from the BG Plan to this Plan.
5.2 Investments
The assets of the Trust shall be invested in such investments as the
Trustee shall determine. The Trustee may (but is not required to) consider
the Employer's or a Participant's investment preferences when investing
the assets attributable to a Participant's Account.
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ARTICLE VI
Vesting
6.1 Vesting
A Participant shall be immediately vested in, i.e., shall have a
nonforfeitable right to, all Elective Deferrals, and all income and gain
attributable thereto, credited to his or her Account.
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ARTICLE VII
Payments
7.1 Election As To Form Of Payment
Payments to Participants shall be made in annual installments over a
period of 10 years commencing between January 2 and March 15 immediately
following the end of each deferral period. The amount of each installment
payment will equal the balance of a Participant's Account immediately
prior to the installment payment divided by the number of installment
payments remaining to be made.
The above notwithstanding, a Participant may elect in writing to receive
the value of his or her Account in one lump sum, in annual installments
over a period of five years, or in annual installments over a period of
fifteen years, so long as such election is made at least 13 months prior
to the end of the deferral period. Additionally, effective January 1,
1999, a Participant may elect in writing to receive the value of his or
her account in a partial lump sum where the Participant may choose the
percent of an expiring deferral to be paid in a lump sum with the balance
in annual installments over the remainder of the 5, 10 or 15
year-installment period; provided, however, that such election is made at
least 13 months prior to the end of the deferral period.
Effective January 1, 1999, (i) for Elective Deferrals made for Plan Year
1999 and thereafter, and (ii) for Elective Deferrals made prior to January
1, 1999 which are subject to a Participant's election after January 1,
1999 to renew the deferral, a Participant's election as to the form of
payment as set forth in this Section 7.1 shall apply to the Participant's
entire Account. If the Participant begins to receive distributions of his
or her Account pursuant to this Section 7.l, a subsequent election to
defer additional Compensation shall be subject to a new election under
this Section 7.1 and shall not affect the payment stream established by
the prior distribution election.
Effective January 1, 2001, (i) for Elective Deferrals made for Plan Year
2001 and thereafter, and (ii) for Elective Deferrals made prior to January
1, 2001 which are subject to a Participant's election after January 1,
2001 to renew the deferral, a Participant may elect to receive a lump sum
payment of a portion of his/her account and renew the deferral of the of
rest such account. If the Participant begins to receive distributions of
his or her Account pursuant to this Section 7.l, a subsequent election to
defer additional Compensation shall be subject to a new election under
this Section 7.1 and shall not affect the payment stream established by
the prior distribution election.
The above notwithstanding, Participants whose accounts in the BG Plan were
in pay status and were transferred from the BG Plan into this Plan shall
continue to receive the same payments and under the same terms as they had
under the BG Plan.
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7.2 Extension Of Deferral Periods
A Participant may make an election in writing to extend any deferral
period for three to ten additional Plan Years so long as such Participant
makes an election therefor at least 13 months prior to the expiration of
the deferral period.
Effective January 1, 1999, elections to extend a deferral period must be
made for a three-year cycle. A new three-year cycle will commence at the
end of every third Plan Year. An election to extend a deferral period must
be made by the Participant in writing at least 13 months prior to the end
of a deferral period. If a deferral period will expire during the course
of a three-year cycle, the Participant's election is limited to an
election to extend the deferral period until the end of such three-year
cycle. A Participant may elect to renew deferral periods for additional
three-year cycles an unlimited number of times.
Effective January 1, 1999, terminated Participants will not be permitted
to renew their deferral elections. Payments to terminated Participants
will begin at the expiration of their current deferral period in
accordance with the method selected under Section 7.1 (unless the
Participant retired under a Company pension plan, or had attained age 55
and completed at least ten years of service as of his or her date of
termination, or has a Total and Permanent Disability, in which case
additional elections to defer are permitted).
Effective January 1, 2001, elections to extend a deferral period must be
made for a four year-cycle. A new four-year cycle will commence at the end
of every fourth Plan Year. An election to extend a deferral period must be
made by the Participant in writing at least 13 months prior to the end of
a deferral period. If a deferral period will expire during the course of a
four-year cycle, the Participant's election is limited to an election to
extend the deferral period until the end of such four-year cycle. A
Participant may elect to renew deferral periods for additional four-year
cycles an unlimited number of times.
7.3 Change Of Control
As soon as possible following a Change Of Control of the Employer, each
Participant shall be paid his or her entire Account balance in a single
lump sum.
7.4 Termination Of Employment
Upon termination of a Participant's employment for any reason other than
death, the Participant's Account shall be paid to the Participant in the
form of payment in effect at the time the termination of employment occurs
and after the expiration of the deferral period. The above
notwithstanding, the Plan Administrator, in its sole discretion, may: (a)
pay out a Participant's Account balance in one lump sum at any time prior
to the expiration of each deferral period; (b) accelerate the beginning of
payments of deferrals to any time prior to the expiration of a deferral
period; and (c) revoke the deferral elections of a Participant for the
year of the termination of his/her employment.
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7.5 Death
If a Participant dies prior to the complete distribution of his or her
Account, the balance of the Account shall be paid as soon as practicable
to the Participant's designated beneficiary or beneficiaries, in the form
elected by the Participant at the time of his or her death, provided,
however, that the ERISA Management Committee and/or the Plan Administrator
may, in their sole discretion, pay out the balance of such Participant's
Account in one lump sum.
Any designation of beneficiary shall be made by the Participant on a
Beneficiary Designation Form filed with the Plan Administrator and may be
changed by the Participant at any time by filing another Beneficiary
Designation Form containing the revised instructions. If no beneficiary is
designated or no designated beneficiary survives the Participant, payment
shall be made to the Participant's surviving spouse or, if none, to
his/her issue per stirpes, in a single payment. If no spouse or issue
survives the Participant, payment shall be made in a single lump sum to
the Participant's estate. The most recent Beneficiary Designation Form
executed by the Participant prior to his/her death shall apply to all
Election Deferrals credited to the Participant's Account at the date of
his/her death.
7.6 Taxes
All federal, state or local taxes that the Plan Administrator determines
are required to be withheld from any payments made pursuant to this
Article VII shall be withheld.
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ARTICLE VIII
Plan Administration
8.1 Plan Administration And Interpretation.
The ERISA Management Committee (the "Committee") shall oversee the
administration of the Plan, shall serve as the agent of the Company with
respect to the trust, and shall appoint a Plan Administrator and/or
Recordkeeper for the day-to-day operations of the Plan. Such Plan
Administrator and/or Recordkeeper shall be listed in Appendix C to this
Plan. The Committee shall have complete control and authority to determine
the rights and benefits under all claims, demands and actions arising out
of the provisions of the Plan of any Participant, beneficiary, deceased
Participant, or other person having or claiming to have any interest under
the Plan. The Committee shall have complete discretion to interpret the
Plan and to decide all matters under the Plan. Such interpretation and
decision shall be final, conclusive and binding on all Participants and
any person claiming under or through any Participant. Any individual(s)
serving on the Committee who is a Participant will not vote or act on any
matter relating solely to himself or herself.
8.2 Committee Powers, Duties, Procedures, Etc.
The Committee shall have such powers and duties, may adopt such rules and
regulations, may act in accordance with such procedures, may appoint such
agents, may delegate such powers and duties, may receive such
reimbursements and compensation, and shall follow such claims and appeal
procedures with respect to the Plan as it may establish.
8.3 Plan Administrator's Duties
The Plan Administrator shall be responsible for the day-to-day operations
of the Plan. His or her duties shall include, but not be limited to, the
following:
(a) Keeping track of employees eligible to participate in the Plan and
the date each employee becomes eligible to participate.
(b) Maintaining, or causing to be maintained by the Recordkeeper,
Participants' Accounts, including all sub-accounts required for
different contribution types and payment elections made by
Participants under the Plan and any other relevant information.
(c) Transmitting, or causing to be transmitted by the Recordkeeper,
various communications to Participants and obtaining information
from Participants such as changes in investment selections.
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(d) Filing reports required by various governmental agencies. When
making a determination or calculation, the Plan Administrator and
the Recordkeeper shall be entitled to rely on information furnished
by a Participant, a beneficiary, the Employer or the Trustee. The
Plan Administrator shall have the responsibility for complying with
any reporting and disclosure requirements of ERISA.
8.4 Information
To enable the Plan Administrator and/or Recordkeeper to perform their
functions, the Employer shall supply full and timely information to the
Plan Administrator and/or Recordkeeper on all matters relating to the
compensation of Participants, their employment, retirement, death,
termination of employment, and such other pertinent facts as the Plan
Administrator and/or Recordkeeper may require.
8.5 Indemnification Of Committee And Plan Administrator
The Employer agrees to indemnify and to defend to the fullest extent
permitted by law any officer(s) or employee(s) who serve on the Committee
or as Plan Administrator (including any such individual who formerly
served on the Committee or as Plan Administrator) against all liabilities,
damages, costs and expenses (including attorneys' fees and amounts paid in
settlement of any claims approved by the Employer) occasioned by any act
or omission to act in connection with the Plan, if such act or omission is
in good faith.
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ARTICLE IX
Amendment And Termination
9.1 Amendments
The Employer shall have the right to amend the Plan from time to time,
subject to Section 9.3, by an action of the ERISA Management Committee.
9.2 Termination Of Plan
This Plan is strictly a voluntary undertaking on the part of the Employer
and shall not be deemed to constitute a contract between the Employer and
any Eligible Employee (or any other employee) or a consideration for, or
an inducement or condition of employment for, the performance of the
services by any Eligible Employee (or other employee). The Employer
reserves the right to terminate the Plan at any time, subject to Section
9.3, by an action of the ERISA Management Committee. Upon termination, the
Employer may (a) elect to continue to maintain the Trust to pay benefits
hereunder as they become due as if the Plan had not terminated or (b)
direct the Trustee to pay promptly to Participants (or their
beneficiaries) the balance of their Accounts.
9.3 Existing Rights
No amendment or termination of the Plan shall adversely affect the rights
of any Participant with respect to amounts that have been credited to his
or her Account prior to the date of such amendment or termination.
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ARTICLE X
Miscellaneous
10.1 No Funding
The Plan constitutes a mere promise by the Employer to make payments in
accordance with the terms of the Plan and Participants and beneficiaries
shall have the status of general unsecured creditors of the Employer.
Nothing in the Plan will be construed to give any employee or any other
person rights to any specific assets of the Employer or of any other
person. In all events, it is the intent of the Employer that the Plan be
treated as unfunded for tax purposes and for purposes of Title I of ERISA.
10.2 Non-Assignability
None of the benefits, payments, proceeds or claims of any Participant or
beneficiary shall be subject to any claim of any creditor of any
Participant or beneficiary and, in particular, the same shall not be
subject to attachment or garnishment or other legal process by any
creditor of such Participant or beneficiary, nor shall any Participant or
beneficiary have any right to alienate, anticipate, commute, pledge,
encumber or assign any of the benefits or payments or proceeds which he or
she may expect to receive, contingently or otherwise, under the Plan.
10.3 Limitation Of Participants' Rights
Nothing contained in the Plan shall confer upon any person a right to be
employed or to continue in the employ of the Employer, or interfere in any
way with the right of the Employer to terminate the employment of a
Participant in the Plan at any time, with or without cause.
10.4 Participants Bound
Any action with respect to the Plan taken by the Plan Administrator or the
Employer or the Trustee or any action authorized by or taken at the
direction of the Plan Administrator, the Employer or the Trustee shall be
conclusive upon all Participants and beneficiaries entitled to benefits
under the Plan.
10.5 Receipt And Release
Any payment to any Participant or beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Employer, the Plan Administrator
and the Trustee under the Plan, and the Plan Administrator may require
such Participant or beneficiary, as a condition precedent to such payment,
to execute a receipt and release to such effect. If any Participant or
beneficiary is determined by
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the Plan Administrator to be incompetent by reason of physical or mental
disability (including minority) to give a valid receipt and release, the
Plan Administrator may cause the payment or payments becoming due to such
person to be made to another person for his or her benefit without
responsibility on the part of the Plan Administrator, the Employer or the
Trustee to follow the application of such funds.
10.6 Governing Law
The Plan shall be construed, administered, and governed in all respects
under and by the laws of the State of New York. If any provision shall be
held by a court of competent jurisdiction to be invalid or unenforceable,
the remaining provisions hereof shall continue to be fully effective.
10.7 Headings And Subheadings
Heading and subheadings in this Plan are inserted for convenience only and
are not to be considered in the construction of the provisions hereof.
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APPENDIX A
Limit on Elective Deferrals
For the 1994 and 1995 Plan Years, a Participant may defer up to 100% of his/her
annual bonus and no portion of his/her salary.
For the 1996 Plan Year and until changed by the Committee, a Participant may
defer up to 100% of his/her annual bonus and up to 33% of his/her base salary.
For the 2000 Plan Year and until changed by the Committee, a Participant may
defer up to 100% of his/her annual bonus, up to 100% of amounts paid under The
Advertising and Circulation Sales Incentive Plan, up to 100% of his/her
Long-Term Performance Awards under The New York Times Company 1991 Executive
Cash Bonus Plan and up to 33% of his/her base salary. In addition, a Participant
who is a "covered employee" within the meaning of Code Section 162(m) (a
"Covered Employee") may defer his/her entire Discretionary Bonus, if any,
payable in a Plan Year. Deferral of such Discretionary Bonus shall continue
without further action by the Participant until such time as the ERISA
Management Committee determines that the Participant is no longer a Covered
Employee. The Participant shall be permitted to extend the deferral period
beyond the time he/she ceases to be a Covered Employee for a three-year cycle
(and for subsequent three-year cycles) in the manner provided in Section 7.2 of
the Plan.
For the 2001 Plan Year and until changed by the Committee, a Participant may
defer up to 85% of his/her annual bonus, up to 100% of amounts paid under The
Advertising and Circulation Sales Incentive Plan, up to 100% of his/her
Long-Term Performance Awards under The New York Times Company 1991 Executive
Cash Bonus Plan and up to 33% of his/her base salary. In addition, a Participant
who is a "covered employee" within the meaning of Code Section 162(m) (a
"Covered Employee") may defer his/her entire Discretionary Bonus, if any,
payable in a Plan Year. Deferral of such Discretionary Bonus shall continue
without further action by the Participant until such time as the ERISA
Management Committee determines that the Participant is no longer a Covered
Employee. The Participant shall be permitted to extend the deferral period
beyond the time he/she ceases to be a Covered Employee in the manner provided in
Section 7.2 of the Plan.
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APPENDIX B
Valuation Options
For 1994 and until changed by the ERISA Management Committee, each Participant
may elect to value his or her account based on the performance of one or more of
the following funds:
1. Fund A: AIM Limited Maturity Treasury
2. Fund B: AIM Aggressive Growth
3. Fund C: AIM Value
4. Fund D: Merrill Lynch Federal Securities
5. Fund E: Merrill Lynch Capital
6. Fund F: Templeton Foreign
7. Fund G: Merrill Lynch Global Allocation
For 1999 and until changed by the ERISA Management Committee, each Participant
may elect to value his or her account based on the performance of one or more of
the following funds:
1. Fund A: Vanguard Short Term Federal Fund
2. Fund B: Vanguard Total Bond Market Index Fund
3. Fund C: Vanguard Asset Allocation Fund
4. Fund D: Vanguard Growth and Income Fund
5. Fund E: Frank Russell Equity I Fund
6. Fund F: Frank Russell Equity II Fund
7. Fund G: AIM Aggressive Growth Fund
8. Fund H: Putnam International Growth Fund
9. Fund I: Putnam Asset Allocation Fund - Balanced Portfolio
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APPENDIX C
Plan Administrator And Record Keeper
1.1 Plan Administrator
For the Plan Year 1995, and until removed, the Plan Administrator shall be Phil
Ryan. For the Plan Year 1997, and until removed, the Plan Administrator shall be
Diane Zubalsky. For the Plan Year 2000, and until removed, the Plan
Administrator shall be Robert Nusspickel.
1.2 Recordkeeper
For the Plan Year 1994, and until removed, the Recordkeeper shall be Actuarial
Information Management Systems. From June 1, 1996, and thereafter until removed,
the Recordkeeper shall be Merrill Lynch.
Effective December 28, 1998, and until removed by the ERISA Management
Committee, the Recordkeeper shall be The Vanguard Group.
Effective July 17, 1999, and until removed by the ERISA Management Committee, in
addition to The Vanguard Group, TBG Financial shall be a Recordkeeper for the
Plan.
Effective January 1, 2001, The Vanguard Group shall be the only Recordkeeper of
Plan.
-21-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>STATEMENT RE: COMPUTATION OF RATIOS
<TEXT>
Exhibit 12
THE NEW YORK TIMES COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
Years Ended
-----------------------------------------------------------------------
December 31, December 26, December 27, December 28, December 29,
(In thousands, except ratio) 2000 1999 1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Earnings from continuing operations before
fixed charges
Income before income taxes, income from joint ventures and
an extraordinary item(1)(2) $657,172 $520,564 $484,506 $423,375 $179,686
Less gain on dispositions of assets and other - net (85,349) -- (18,452) (20,388) (42,836)
Distributed earnings from less than fifty percent owned
affiliates 19,375 13,061 18,192 14,982 16,957
Less pre-tax preferred stock dividends -- -- -- (129) (174)
- -----------------------------------------------------------------------------------------------------------------------------------
Adjusted pre-tax earnings from continuing operations 591,198 533,625 484,246 417,840 153,633
Fixed charges less capitalized interest 81,016 63,448 56,594 55,304 40,821
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations before fixed charges $672,214 $597,073 $540,840 $473,144 $194,454
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed charges
Interest expense, net of capitalized interest $ 68,566 $ 52,503 $ 46,927 $ 45,039 $ 30,759
Capitalized interest -- -- 173 5,394 19,574
Less pre-tax preferred stock dividends -- -- -- 129 174
Portion of rentals representative of interest factor 12,450 10,945 9,667 10,136 9,888
- -----------------------------------------------------------------------------------------------------------------------------------
Total fixed charges $ 81,016 $ 63,448 $ 56,767 $ 60,698 $ 60,395
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of earnings to fixed charges 8.30 9.41 9.53 7.80 3.22
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 1998 excludes a $13.7 million pre-tax extraordinary item resulting from
the early extinguishment of certain long term debt (see Note 6 of the
Notes to the Consolidated Financial Statements).
(2) 1996 includes a $126.8 million pre-tax noncash accounting charge related
to SFAS No. 121, Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>SUBSIDIARIES OF THE COMPANY
<TEXT>
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY(1,2)
Jurisdiction of
Incorporation or
Name of Subsidiary Organization
- ------------------ ----------------
NYT Capital, Inc. .......................................... Delaware
City & Suburban Delivery Systems, Inc................... Delaware
Comet-Press Newspapers, Inc. ........................... Delaware
Comet-Press Newspapers Holdings, Inc............... Delaware
Donohue Malbaie Inc. (49%) ............................. Canada
Globe Newspaper Company, Inc............................ Massachusetts
Boston Globe Electronic Publishing, Inc............ Massachusetts
Boston Globe Marketing, Inc........................ Massachusetts
Community Newsdealers Inc.......................... Massachusetts
Community Newsdealers Holdings, Inc............ Delaware
Globe Specialty Products, Inc...................... Massachusetts
Retail Sales, Inc.................................. Massachusetts
Hendersonville Newspaper Corporation.................... North Carolina
Hendersonville Newspaper Holdings, Inc. ........... Delaware
Lakeland Ledger Publishing Corporation ................. Florida
Lakeland Ledger Holdings, Inc. .................... Delaware
NYT Holdings, Inc. ..................................... Delaware
NYT Management Services ................................ Massachusetts
NYT Shared Service Center, Inc. ........................ Delaware
International Media Concepts, Inc. ................ Delaware
NYT Professional Exchange, Inc. ................... Delaware
The Dispatch Publishing Company, Inc. .................. North Carolina
The Dispatch Publishing Holdings, Inc. ............ Delaware
The Houma Courier Newspaper Corporation................. Delaware
The Houma Courier Newspaper Holdings, Inc.......... Delaware
The New York Times Company Magazine Group, Inc. ........ Delaware
NYT Special Services, Inc. ........................ Delaware
NYT Magazine Group Holdings, Inc. ................. Delaware
The New York Times Distribution Corporation............. Delaware
The New York Times Electronic Media Company ............ Delaware
The New York Times Sales Company........................ Massachusetts
The New York Times Syndication Sales Corporation........ Delaware
The Spartanburg Herald-Journal, Inc. ................... Delaware
The Times Southwest Broadcasting, Inc. ................. Arkansas
Times Leasing, Inc. .................................... Delaware
Times On-Line Services, Inc. ........................... New Jersey
WNEP-TV, Inc. .......................................... Pennsylvania
WNEP-TV, LP. ...................................... Delaware
Worcester Telegram & Gazette Corporation................ Massachusetts
Worcester Telegram & Gazette Holdings, Inc. ....... Delaware
WREG-TV, Inc. .......................................... Delaware
WTKR-TV, Inc. .......................................... Delaware
The New York Times Company.................................. New York
International Herald Tribune S.A.S. (50%) .............. France
London Bureau Limited .................................. United Kingdom
Madison Paper Industries (partnership) (40%)............ Maine
NYT Administradora de Bens e Servicos Ltda. ............ Brazil
NYT 1896T, Inc. ........................................ Delaware
Rome Bureau S.r.l. ..................................... Italy
Times Company Digital, Inc.............................. Delaware
Abuzz Technologies, Inc. .......................... Delaware
- ----------
(1) 100% owned unless otherwise indicated.
(2) The names of certain subsidiaries have been omitted because, considered in
the aggregate, as a single subsidiary, they would not constitute a
significant subsidiary.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>INDEPENDENT AUDITORS' CONSENT
<TEXT>
Exhibit No. 23
INDEPENDENT AUDITORS' CONSENT
THE NEW YORK TIMES COMPANY
We consent to the incorporation by reference in Registration Statements
No. 333-43369, No. 333-43371, No. 333-37331, No. 333-09447, No. 33-31538, No.
33-43210, No. 33-43211, No. 33-50461, No. 33-50465, No. 33-50467, No. 33-50459,
No. 33-56219 and No. 333-49722 on Form S-8 and in Registration Statement No.
333-62023 on Form S-3 of our report dated January 24, 2001 (January 31, 2001 as
to Note 17), appearing in the Annual Report on Form 10-K of The New York Times
Company for the year ended December 31, 2000.
We also consent to the reference to us under the heading "Experts" in
Registration Statement No. 33-31538 on Form S-8 and No. 333-62023 on Form S-3.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 20, 2001
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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