FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended June 25, 2006

Commission file number 1-5837

THE NEW YORK TIMES COMPANY

(Exact name of registrant as specified in its charter)

229 WEST 43RD STREET, NEW YORK, NEW YORK

(Address of principal executive offices)

10036

(Zip Code)

Registrant’s telephone number, including area code     212-556-1234

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  Large accelerated filer x Accelerated filer o Non-accelerated filer o.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o No x.

Number of shares of each class of the registrant’s common stock outstanding as of July 28, 2006 (exclusive of treasury shares):

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars and shares in thousands, except per share data)

See Notes to Condensed Consolidated Financial Statements.

2

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

See Notes to Condensed Consolidated Financial Statements.

3

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

See Notes to Condensed Consolidated Financial Statements.

4

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

SUPPLEMENTAL DATA

Acquisitions

•                  In March 2005, the Company acquired 100% of the outstanding common stock of About, Inc., a leading online consumer information provider, for approximately $410 million (see Note 2).

•                  In February 2005, the Company acquired the North Bay Business Journal, a weekly publication targeting business leaders in California’s Sonoma, Napa and Marin counties, for approximately $3 million (see Note 2).

Investment

•                  In March 2005, the Company invested $16.5 million to acquire a 49% interest in Metro Boston LLC, which publishes a free daily newspaper catering to young professionals in the Greater Boston area.

Other

•                  The Company’s and its development partner’s interest in the Company’s new headquarters are approximately 58% and 42% (see Note 11).  Due to the Company’s majority interest, 100% of the financial position and results of operations of the building partnership are consolidated with those of the Company.  Cash capital expenditures attributable to the Company’s development partner’s interest in the Company’s new headquarters were approximately $41 million and $22 million in the first six months of 2006 and 2005.

See Notes to Condensed Consolidated Financial Statements.

5

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.              General and Summary of Significant Accounting Policies

In the opinion of The New York Times Company’s (the “Company”) management, the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of June 25, 2006 and December 25, 2005, and the results of operations and cash flows of the Company for the periods ended June 25, 2006 and June 26, 2005.  All adjustments necessary for a fair presentation have been included and are of a normal and recurring nature.  All significant intercompany accounts and transactions have been eliminated in consolidation.  The Company’s Condensed Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 25, 2005.  Due to the seasonal nature of the Company’s business, operating results for the interim periods are not necessarily indicative of a full year’s operations.

As of June 25, 2006, the Company’s significant accounting policies, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 25, 2005, have not changed materially.

Unless specifically stated otherwise, all references to June 2006 and June 2005 refer to the Company’s fiscal periods ended, or the dates as of, June 25, 2006 and June 26, 2005, respectively.  All references to December 2005 refer to the Company’s fiscal year ended, or the date as of, December 25, 2005.  Certain reclassifications have been made to the prior periods to conform to classifications used as of and for the period ended June 2006.  The fiscal periods included herein comprise 13 weeks for the three-month periods and 26 weeks for the six-month periods.

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (“FIN 48”), which clarifies the accounting for uncertainty in income tax positions (“tax positions”).  FIN 48 requires that the Company recognize in its financial statements the impact of a tax position if that tax position is more likely than not of being sustained on audit, based on the technical merits of the tax position. The provisions of FIN 48 are effective as of the beginning of the Company’s 2007 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings.  The Company is currently evaluating the impact of adopting FIN 48 on its financial statements.

2.              Goodwill and Other Intangible Assets

Goodwill is the excess of cost over the fair market value of tangible net assets acquired.  Goodwill is not amortized but tested for impairment annually or if certain circumstances indicate a possible impairment may exist, in accordance with Statement of Financial Accounting Standards (“FAS”) No. 142, Goodwill and Other Intangible Assets.

6

Other intangible assets acquired consist primarily of newspaper mastheads and licenses on various acquired properties, customer lists, as well as other assets.  Other intangible assets acquired that have indefinite lives (mastheads and licenses) are not amortized but tested for impairment annually or if certain circumstances indicate a possible impairment may exist.  Certain other intangible assets acquired (customer lists and other assets) are amortized over their estimated useful lives.

Based on independent valuations of About.com (acquired March 18, 2005) and North Bay Business Journal (“North Bay”) (acquired February 1, 2005) and a preliminary independent valuation of KAUT-TV (acquired November 3, 2005), the Company has allocated the excess of the purchase prices over the carrying value of the net assets acquired as follows: About.com- $343.4 million to goodwill and $62.2 million to other intangible assets (primarily content, customer lists and a contract); North Bay- $2.1 million to goodwill and $0.9 million to other intangible assets (primarily customer lists); KAUT-TV- $1.7 million to goodwill and $14.3 million to other intangible assets (primarily FCC licenses).  The goodwill for the acquisitions described above is tax-deductible.

The preliminary purchase price allocation for the acquisition of KAUT-TV is subject to adjustment when additional information concerning asset and liability valuations is obtained.  The final asset and liability fair values may differ from those included in the Company’s Condensed Consolidated Balance Sheet as of June 2006; however, the changes are not expected to have a material effect on the Company’s Condensed Consolidated Financial Statements.

The changes in the carrying amount of Goodwill were as follows:

Goodwill was adjusted in 2006 for changes to the purchase price allocations.  The foreign currency translation line item above reflects changes in Goodwill resulting from fluctuating exchange rates related to the consolidation of the International Herald Tribune (the “IHT”).

7

Other intangible assets acquired were as follows:

Certain amounts in the table above include the foreign currency translation adjustment related to the consolidation of the IHT.

As of June 2006, the remaining weighted-average amortization period is eight years for customer lists and six years for other intangible assets acquired included in the table above.

Amortization expense related to other intangible assets acquired that are subject to amortization was $14.0 million in the first six months of 2006, and is expected to be approximately $25 million for the fiscal year 2006.  Estimated annual amortization expense for the next five years related to these intangible assets is expected to be as follows:

3.                                      Debt Obligations

The Company’s total debt, including commercial paper, capital lease obligations and the construction loan (see below), was $1.4 billion as of June 2006.

In December 2001, a wholly owned subsidiary of the Company and FC Lion LLC (a partnership between an affiliate of the Forest City Ratner Companies and an affiliate of ING Real Estate) became the sole members of The New York Times Building LLC, a partnership established for the purpose of constructing a 1.54 million square foot condominium office building (the “Building”) in New York City that will serve as the Company’s new headquarters.  In May 2006, The New York Times Building LLC began to borrow funds under its $320 million construction loan in connection with the construction of the Building (see Note 11).  As of June 2006, $24.4 million was outstanding under the construction loan, all attributable to the Company’s development partner.

The Company’s $600 million commercial paper program is supported by the revolving credit agreements described below.  Commercial paper issued by the Company is unsecured and can have maturities of up to 270 days.  The Company had $504.0 million in commercial paper outstanding as of June 2006, with an annual weighted-average interest rate of 5.2% and an average of 64 days to maturity from original issuance.

8

The primary purpose of the Company’s revolving credit agreements is to support the Company’s commercial paper program.  In addition, these revolving credit agreements provide a facility for the issuance of letters of credit.  In June 2006, the Company replaced its $270 million multi-year credit agreement with a $400 million credit agreement maturing in June 2011.  Of the total $800 million available under the two revolving credit agreements ($400 million credit agreement maturing in May 2009 and $400 million credit agreement maturing in June 2011), the Company has issued letters of credit of approximately $32 million.  The remaining balance of approximately $768 million supports the Company’s commercial paper program discussed above.  There were no borrowings outstanding under the revolving credit agreements as of June 2006 or December 2005.

Any borrowings under the revolving credit agreements bear interest at specified margins based on the Company’s credit rating, over various floating rates selected by the Company.

The revolving credit agreements each contain a covenant that requires a specified level of stockholders’ equity.  As of June 2006, the amount of stockholders’ equity in excess of the required levels was approximately $448 million.

The Company’s five-year 5.350% notes aggregating $50 million mature on April 16, 2007 and its five-year 4.625% notes aggregating $52 million mature on June 25, 2007.  As a result, the Company reclassified these notes from “Long-term debt” to “Current portion of long-term debt and capital lease obligations” in the Company’s Condensed Consolidated Balance Sheet as of June 2006.

“Interest expense, net” in the Company’s Condensed Consolidated Statements of Income was as follows:

(a) The Company redeemed all of its $71.9 million 8.25% debentures in March 2005.

4.                              Derivative Instruments

In the first quarter of 2006, the Company entered into a forward starting interest rate swap agreement (“forward starting swap agreement”) designated as a cash-flow hedge as defined under FAS No. 133, as amended, Accounting for Derivative Instruments and Hedging Activities (“FAS 133”).  The forward starting swap agreement, which has a notional amount totaling $50.0 million, is intended to lock in a fixed interest rate on the issuance of debt expected in December 2006.  As of June 2006, the fair value of the forward starting swap agreement resulted in an unrealized gain of $2.3 million that was recorded in “Other current assets” and “Accumulated other comprehensive loss, net of income taxes” in the Company’s Condensed Consolidated Balance Sheet.  There was no amount recognized in earnings related to the forward starting swap agreement.

In March 2006 and December 2005, the Company terminated forward starting swap agreements designated as cash-flow hedges as defined under FAS 133 because the debt for which these agreements were entered into was not issued.  The termination of these agreements resulted in a gain of $3.4 million, of which $3.0

9

million was unrealized and $0.4 million was recognized in earnings.  The Company expects to amortize the unrealized gain of $3.0 million into earnings over the maturity period of debt that it expects to issue in December 2006 as discussed above.

5.          Common Stock

During the first half of 2006, the Company repurchased 0.8 million shares of its Class A Common Stock under its stock repurchase program at a cost of $20.9 million.  The average price of these repurchases was $25.33 per share.

On April 18, 2006, the Company’s Board of Directors (the “Board”) authorized a $.01 per share increase in the quarterly dividend on the Company’s Class A and Class B Common Stock to $.175 per share from $.165 per share effective with the June 2006 dividend.

On June 15, 2006, the Board declared a dividend of $.175 per share on the Company’s Class A and B Common Stock.  The dividend is payable on September 13, 2006, to shareholders of record on September 1, 2006.  The estimated dividend payable of approximately $25 million is included in “Accounts payable” in the Company’s Condensed Consolidated Balance Sheet as of June 2006.

6.             Pension and Postretirement Benefits

Pension

The components of net periodic pension cost of all Company-sponsored pension plans were as follows:

(a)         The staff reduction programs implemented in 2005 resulted in a curtailment because the future working lifetime of impacted employees was reduced for one of the Company’s plans.

The Company did not make any contributions to its pension plans in the first half of 2006.  Although the Company does not have any minimum funding requirements in 2006 (under the Employee

10

Retirement Income Security Act of 1974, as amended, and Internal Revenue Code requirements), it may elect to make a contribution.  The amount of the contribution, if any, would be based on the results of the January 1, 2006, valuation, market performance and interest rates in 2006 as well as other factors.  Assuming that the Company achieves an 8.75% return on pension assets, that interest rates are stable and that there are no material changes to the Company’s benefits structure in 2006, it expects to make contributions in the fourth quarter of 2006 of approximately the same amount as the contributions made in 2005.  In December 2005, the Company made tax-deductible contributions of $47.3 million to its qualified pension plans.

Postretirement Benefits

The components of net periodic postretirement benefit cost were as follows:

Pursuant to the Medicare Prescription Drug Improvement and Modernization Act of 2003, through December 2005, the Company integrated its postretirement benefit plan with Medicare (the “Integration Method”).  Under this option, benefits paid by the Company are offset by Medicare.  Beginning in 2006, the Company elected to receive the Medicare retiree drug subsidy instead of the benefit under the Integration Method.

In February 2006 the Company announced amendments to its postretirement benefit plan effective January 1, 2007, such as the elimination of retiree-medical benefits to new employees.  The amendments will reduce the future obligations and expense under this plan.

7.                                      Other

Staff Reductions

The Company recognized staff reduction charges of $9.1 million in the second quarter of 2006 and $18.4 million in the first six months of 2006.  In the second quarter and first six months of 2005, the Company recognized a staff reduction charge of $10.0 million.  Most of the charges in 2006 and 2005 were recognized at the News Media Group.  These charges are recorded in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.  As of June 2006, the Company had a staff reduction liability of approximately $15 million included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheet.

Discovery Times Channel

In April 2006, the Company exercised its right to require Discovery Communications, Inc. (“DCI”) to purchase its 50% investment in the Discovery Times Channel, a digital cable channel.  As part of the initial investment in the channel, this right was exercisable following the fourth anniversary of the investment.  By contract, the sale price is determined by a formula, with a floor of $80 million and a ceiling of $135 million.  The Company is currently negotiating the price with DCI and expects to complete the transaction before the end of

11

the year.  The Company’s investment in the channel was approximately $105 million as of June 2006.  Based on the sale price, the Company will record a gain or loss, depending on whether the price is higher or lower than the investment balance.

WQEW Sale

One of the Company’s New York City radio stations, WQEW-AM (“WQEW”), receives revenues under a time brokerage agreement with ABC, Inc. (“ABC”), that provides substantially all of WQEW’s programming.  Under a separate option agreement, ABC has the right to acquire WQEW at the end of 2006 and, in the first quarter of 2006, ABC notified the Company of its intention to exercise this right.  The sale is currently scheduled to close in the first quarter of 2007 with a purchase price of $40 million and is subject to Federal Communications Commission approval.  At closing, the Company will recognize a significant portion of the sale price as a gain because the net book value of WQEW’s net assets being sold are nominal.

Sale of Assets

In the first quarter of 2005, the Company recognized a $122.9 million pre-tax gain resulting from the

sale of its current headquarters in New York City ($114.5 million) and the sale of property in Sarasota, Florida ($8.4 million).

Other Current Assets

In the second quarter of 2006, the Company’s development partner began to repay the Company for its share of costs associated with the Building that the Company previously paid on the development partner’s behalf (see Note 11).  The remaining amount due to the Company of approximately $110 million is expected to be fully repaid within one year, and therefore this amount was reclassified from “Miscellaneous assets” to “Other current assets” in the Condensed Consolidated Balance Sheet as of June 2006.

8.                                      Earnings Per Share

Basic and diluted earnings per share have been computed as follows:

The difference between basic and diluted shares is primarily due to the assumed exercise of stock options included in the diluted earnings per share computation.

12

Stock options with exercise prices that exceeded the average fair market value of the Company’s Common Stock had an antidilutive effect and, therefore, were excluded from the computation of diluted earnings per share.  Approximately 30 million stock options with exercise prices ranging from $25.05 to $48.54 were excluded from the computation in the second quarter and first six months of 2006.  Approximately 27 million stock options with exercise prices ranging from $33.75 to $48.54 were excluded from the computation in the second quarter of 2005, and approximately 25 million stock options with exercise prices ranging from $36.31 to $48.54 were excluded from the computation in the first six months of 2005.

9.          Comprehensive Income

Comprehensive income for the Company includes foreign currency translation adjustments, unrealized derivative gains/(losses) on cash-flow hedges, unrealized gains/(losses) on marketable securities and “Net income” reported in the Company’s Condensed Consolidated Statements of Income.

Comprehensive income was as follows:

The “Accumulated other comprehensive loss, net of income taxes” in the Company’s Condensed Consolidated Balance Sheets was net of a deferred income tax benefit of approximately $95 million as of June 2006 and approximately $97 million as of December 2005.

10.                       Segment Statements of Income

The Company’s reportable segments consist of the News Media Group, the Broadcast Media Group and About.com.  These segments are evaluated regularly by key management in assessing performance and allocating resources.

Below is a description of the Company’s reportable segments:

News Media Group (consisting of The New York Times Media Group, which includes The New York Times (“The Times”), NYTimes.com, the IHT and two New York City radio stations; the New England Media Group, which includes The Boston Globe (the “Globe”), Boston.com and the Worcester Telegram & Gazette; and the Regional Media Group, which includes 14 daily newspapers and their related digital operations).

13

Broadcast Media Group (consisting of nine network-affiliated television stations and their related digital operations).

About.com (an online consumer information provider).