Edgar Filing: NEW YORK TIMES CO

2013 Form 10-K

UNITED STATES 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 29, 2013				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 incorporation or organization)		(I.R.S. Employer Identification No.)
620 Eighth Avenue, New York, N.Y.		10018
(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:



Title of each class		Name of each exchange on 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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No þ

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ 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. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

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

The aggregate worldwide market value of Class A Common Stock held by non-affiliates, based on the closing price on June 28, 2013, the last business day of the registrant’s most recently completed second quarter, as reported on the New York Stock Exchange, was approximately $1.5 billion. As of such date, non-affiliates held 67,398 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 21, 2014 (exclusive of treasury shares), was as follows: 149,344,059 shares of Class A Common Stock and 816,841 shares of Class B Common Stock.

Documents incorporated by reference

Portions of the Proxy Statement relating to the registrant’s 2014 Annual Meeting of Stockholders, to be held on April 30, 2014, are incorporated by reference into Part III of this report.

Table of Contents

INDEX TO THE NEW YORK TIMES COMPANY 2013 ANNUAL REPORT ON FORM 10-K



	ITEM NO.
PART I		Forward-Looking Statements	1
	1	Business	1
		Overview	1
		Circulation and Audience	2
		Advertising	3
		Print Production and Distribution	3
		Other Businesses	3
		Forest Products Investments	4
		Raw Materials	4
		Competition	4
		Employees and Labor Relations	5
	1A	Risk Factors	6
	1B	Unresolved Staff Comments	12
	2	Properties	12
	3	Legal Proceedings	13
	4	Mine Safety Disclosures	13
	Executive Officers of the Registrant		14

PART II	5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
	6	Selected Financial Data	17
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	7A	Quantitative and Qualitative Disclosures About Market Risk	46
	8	Financial Statements and Supplementary Data	47
	9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	110
	9A	Controls and Procedures	110
	9B	Other Information	110

PART III	10	Directors, Executive Officers and Corporate Governance	111
	11	Executive Compensation	111
	12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	111
	13	Certain Relationships and Related Transactions, and Director Independence	111
	14	Principal Accountant Fees and Services	111

PART IV	15	Exhibits and Financial Statement Schedules	112

PART I

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including the sections titled “Item 1A — Risk Factors” and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that relate to future events or our future financial performance. We may also make written and oral forward-looking statements in our Securities and Exchange Commission (“SEC”) filings and otherwise. We have tried, where possible, to identify such statements by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “could,” “project,” “plan” and similar expressions in connection with any discussion of future operating or financial performance. Any forward-looking statements are and will be based upon our then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in any such statements. You should bear this in mind as you consider forward-looking statements. Factors that we think could, individually or in the aggregate, cause our actual results to differ materially from expected and historical results include those described in “Item 1A — Risk Factors” below, as well as other risks and factors identified from time to time in our SEC filings.

ITEM 1. BUSINESS

OVERVIEW

The New York Times Company (the “Company”) was incorporated on August 26, 1896, under the laws of the State of New York. The Company and its consolidated subsidiaries are referred to collectively in this Annual Report on Form 10-K as “we,” “our” and “us.”

We are a global media organization focused on creating, collecting and distributing high-quality news and information. Our continued commitment to premium content and journalistic excellence makes The New York Times brand a trusted source of news and information for readers across various media. Recognized widely for the quality of our reporting and content, our properties have been awarded many industry and peer accolades, including over 110 Pulitzer Prizes.

Our company includes newspapers, digital businesses and investments in paper mills. We currently have one reportable segment with businesses that include:


•	The New York Times (“The Times”);


•	the International New York Times;


•	our websites, NYTimes.com and international.nytimes.com; and


•	related businesses, such as The Times news services division, digital archive distribution, our conference business and other products and services under The Times brand.

We generate revenues principally from circulation and advertising. Circulation and advertising revenue information for our Company appears under “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Revenues, operating profit and identifiable assets of our foreign operations are not significant.

The Times’s award-winning content is available in print, online and through other digital platforms. The Times’s print edition, a daily (Mon. – Sat.) and Sunday newspaper in the United States, commenced publication in 1851. The NYTimes.com website was launched in 1996.

The International New York Times is the international edition of The Times, tailored and edited for global audiences. The International New York Times succeeds the International Herald Tribune, a leading daily newspaper that commenced publishing in Paris in 1887, and that we rebranded as the International New York Times in the fourth

THE NEW YORK TIMES COMPANY – P. 1

quarter of 2013 to create a single global media brand. Its content is also available at the international.nytimes.com website.

On October 24, 2013, we completed the sale of substantially all of the assets and operating liabilities of the New England Media Group, consisting of The Boston Globe (the “Globe”), BostonGlobe.com, Boston.com, the Worcester Telegram & Gazette (the “T&G”), Telegram.com and related properties, for approximately $70 million in cash, subject to customary adjustments. As part of that transaction, we also sold our 49% equity interest in Metro Boston, which publishes a free daily newspaper in the greater Boston area. Results of operations for the New England Media Group have been treated as discontinued operations for all periods presented in this Annual Report on Form 10-K. For information regarding discontinued operations, see Note 15 of the Notes to the Consolidated Financial Statements.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are made available, free of charge, on our website at http://www.nytco.com, as soon as reasonably practicable after such reports have been filed with or furnished to the SEC.

CIRCULATION AND AUDIENCE

Our products reach a broad audience in print, online and through other digital media. In addition to reaching consumers through print products, we deliver content across a variety of digital platforms, including mobile, tablet and e-reader applications.

Circulation revenues are based on the number of copies of the printed newspaper (through home-delivery subscriptions and single-copy and bulk sales) and digital subscriptions sold and the rates charged to the respective customers. In 2011, we began charging consumers for content provided on NYTimes.com and other digital platforms. NYTimes.com’s metered model offers users free access to a set number of articles per month and then charges users who are not print home-delivery subscribers, once they exceed that number. All print home-delivery subscribers receive free digital access.

According to reports filed with the Alliance for Audited Media (“AAM”), formerly known as the Audit Bureau of Circulations, an independent agency that audits the circulation of most U.S. newspapers and magazines, for the six-month period ended September 30, 2013, The Times had the largest daily and Sunday circulation of all seven-day newspapers in the United States. For the fiscal year ended December 29, 2013, The Times’s average circulation, which includes paid and verified circulation of the newspaper in print, online and through other digital platforms, was 1,926,800 for weekday (Mon. - Fri.) and 2,409,000 for Sunday. Under AAM’s reporting guidance, verified circulation represents copies available for individual consumers that are either non-paid or paid by someone other than the individual, such as copies delivered to schools and colleges and copies purchased by businesses for free distribution. In 2013, approximately 90% of the weekday and 91% of the Sunday circulation was through print or digital subscriptions; the remainder was primarily single-copy print newsstand sales.

Approximately 43% of the weekday average print circulation for The Times for the fiscal year ended December 29, 2013, was sold in the 31 counties that make up the greater New York City area, which includes New York City, Westchester County, Long Island, and parts of upstate New York, Connecticut, New Jersey and Pennsylvania; and approximately 57% was sold elsewhere. On Sundays, approximately 37% of the average print circulation was sold in the greater New York City area and 63% was sold elsewhere.

Average circulation for the International New York Times, which includes paid circulation of the newspaper in print and electronic replica editions, for our fiscal years ended December 29, 2013, and December 30, 2012, was 220,440 (estimated) and 224,616, respectively. These figures follow the guidance of Office de Justification de la Diffusion, an agency based in Paris and a member of the International Federation of Audit Bureaux of Circulations that audits the circulation of most newspapers and magazines in France. The final 2013 figure will not be available until April 2014.

According to comScore Media Metrix, an online audience measurement service, in 2013, NYTimes.com had a monthly average of approximately 30 million unique visitors in the United States and approximately 45 million unique visitors worldwide. In addition, according to comScore Mobile Metrix, for the 11 months ended December 31, 2013, we had a monthly average of approximately 20 million unique visitors to NYTimes.com on mobile devices and our other mobile applications coming through smartphone and tablet platforms.

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Paid subscribers to digital-only subscription packages, e-readers and replica editions totaled approximately 760,000 as of our fiscal year ended December 29, 2013, an increase of approximately 19% compared with our fiscal year ended December 30, 2012.

ADVERTISING

We sell advertising across multiple platforms, including print in our newspapers, online on our websites, and across other digital platforms, including mobile, tablet and e-reader applications. We also generate advertising revenues from preprints, which are stand-alone advertising supplements inserted into another print product. Competition for advertising is generally based upon audience levels and demographics, advertising rates, service, targeting capabilities and advertising results.

We divide advertising into three main categories: national, retail and classified.

•

National advertising is principally from advertisers promoting national products or brands, such as financial institutions, movie studios, American and international fashion designers and major corporations. According to data compiled by MediaRadar, an independent agency that measures advertising sales volume and estimates advertising revenue, The Times had the largest market share in 2013 in print advertising revenues among a national newspaper set that consists of USA Today, The Wall Street Journal and The Times. Approximately three-quarters of our print and digital advertising revenues in 2013 came from national advertisers.


•	Retail advertising is generally associated with regional and national chains that sell in the local market.


•	Classified advertising includes the major categories of real estate, help wanted, automotive and other.

Our digital advertising offerings include mainly display advertising, video spots and classified advertising. Display advertising comprises the text, images and other interactive ads that run across the web on computers and mobile devices, including content specially formatted to be displayed on smartphones, tablets and other mobile personal digital devices.

Based on recent data provided by MediaRadar, we believe The Times ranks first in print advertising revenues in the general weekday and Sunday newspaper field in the New York metropolitan area.

Our businesses are affected in part by seasonal patterns in advertising, with generally higher advertising volume in the fourth quarter due to holiday advertising.

PRINT PRODUCTION AND DISTRIBUTION

The Times is currently printed at our production and distribution facility in College Point, N.Y., as well as under contract at 27 remote print sites across the United States. The Times is delivered to newsstands and retail outlets in the New York metropolitan area through a combination of third-party wholesalers and our own drivers. In other markets in the United States and Canada, The Times is delivered through agreements with other newspapers and third-party delivery agents.

The International New York Times is printed under contract at 36 sites throughout the world and is sold in more than 130 countries and territories. The International New York Times is distributed through agreements with other newspapers and third-party delivery agents.

OTHER BUSINESSES

Our other businesses primarily include:

•

Our ventures division, which includes The Times news services division, our conference unit and other products and services under The Times brand. The Times news services division transmits articles, graphics and photographs from The Times and other publications to over 1,300 newspapers, magazines and websites in over 90 countries and territories worldwide. It also comprises a number of other businesses, including commerce, photo archives, book development and rights and permissions. Our expanding conference business, which is a platform for our live journalism, convenes thought leaders from business, academia and government to discuss topics ranging from education to sustainability to the luxury business.


•	Digital archive distribution, which licenses electronic archive databases to resellers of that information in the business, professional and library markets.

THE NEW YORK TIMES COMPANY – P. 3

FOREST PRODUCTS INVESTMENTS

We have non-controlling ownership interests primarily in one newsprint company and one mill producing supercalendered paper, a polished paper used in some magazines, catalogs and preprinted inserts, which is a higher-value grade than newsprint (the “Forest Products Investments”). These investments are accounted for under the equity method and reported in “Investments in joint ventures” in our Consolidated Balance Sheets as of December 29, 2013. For additional information on our investments, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 7 of the Notes to the Consolidated Financial Statements.

We have a 49% equity interest in a Canadian newsprint company, Donohue Malbaie Inc. (“Malbaie”). The other 51% is owned by Resolute FP Canada Inc., a subsidiary of Resolute Forest Products Inc. (“Resolute”), a Delaware corporation. Resolute is a large global manufacturer of paper, market pulp and wood products. Malbaie manufactures newsprint on the paper machine it owns within Resolute’s paper mill in Clermont, Quebec. Malbaie is wholly dependent upon Resolute for its pulp, which is purchased by Malbaie from Resolute’s Clermont paper mill. In 2013, Malbaie produced approximately 212,000 metric tons of newsprint, of which approximately 10% was sold to us, with the balance sold to Resolute for resale.

We have a 40% equity interest in Madison Paper Industries (“Madison”), a partnership operating a supercalendered paper mill in Madison, Maine. Madison purchases the majority of its wood from local suppliers, mostly under long-term contracts. In 2013, Madison produced approximately 190,000 metric tons, of which approximately 5% was sold to us.

Malbaie and Madison are subject to comprehensive environmental protection laws, regulations and orders of provincial, federal, state and local authorities of Canada and 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 designed 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, we believe that Malbaie and Madison are in substantial compliance with such Environmental Laws and Governmental Authorizations.

RAW MATERIALS

The primary raw materials we use are newsprint and supercalendered and coated paper. We purchase newsprint from a number of North American producers. In 2013, the paper we used for our print products was purchased from unrelated suppliers and related suppliers in which we hold equity interests (see “— Forest Products Investments”). A significant portion of newsprint is purchased from Resolute.

In 2013 and 2012, we used the following types and quantities of paper:



(In metric tons)	2013	2012
Newsprint	119,000	133,000
Supercalendered and Coated Paper⁽¹⁾	17,200	16,200


(1)	The Times uses supercalendered and coated paper for The New York Times Magazine and T: The New York Times Style Magazine.

COMPETITION

Our print and digital products compete for advertising and consumers with other media in their respective markets, including paid and free newspapers, digital media, broadcast, satellite and cable television, broadcast and satellite radio, magazines, other forms of media and direct marketing. Competition for advertising is generally based upon audience levels and demographics, advertising rates, service, targeting capabilities and advertising results, while competition for consumer revenue and readership is generally based upon platform, format, content, quality, service, timeliness and price.

The Times newspaper competes for print advertising and circulation primarily with national newspapers such as The Wall Street Journal and USA Today; newspapers of general circulation in New York City and its suburbs; other daily and weekly newspapers and television stations and networks in markets in which The Times circulates; and some national news and lifestyle magazines. The International New York Times newspaper’s key competitors include

P. 4 – THE NEW YORK TIMES COMPANY

all international sources of English-language news, including The Wall Street Journal’s European and Asian Editions, the Financial Times, Time, Bloomberg Business Week and The Economist.

As our industry continues to experience a secular shift from print to digital media, our print and digital products face increasing competition for audience and advertising from a wide variety of digital alternatives, such as news and other information websites and digital applications, news aggregation sites, sites that cover niche content, social media platforms, digital advertising networks and exchanges, real-time bidding and other programmatic buying channels and other new forms of media. Developments in methods of distribution, such as applications for mobile phones, tablets and other devices, also increase competition for users and digital advertising revenues.

Our websites most directly compete for traffic and readership with other news and information websites and mobile applications. NYTimes.com faces competition from sources such as WSJ.com, Google News, Yahoo! News, MSNBC and CNN.com. Internationally, international.nytimes.com competes against international online sources of English-language news, including bbc.co.uk, guardian.co.uk, ft.com and reuters.com. For digital advertising revenues, we face competition from a wide range of companies offering competing products, such as other advertising-supported websites and mobile applications, including websites that provide platforms for classified advertisements, as well as search engines, social media sites and other Internet companies.

EMPLOYEES AND LABOR RELATIONS

We had 3,529 full-time equivalent employees as of December 29, 2013.

As of December 29, 2013, approximately half of our full-time equivalent employees were represented by nine unions. The following is a list of collective bargaining agreements covering various categories of Times employees and their corresponding expiration dates.



Employee Category	Expiration Date
Paperhandlers	March 30, 2014
Electricians	March 30, 2015
Machinists	March 30, 2015
Mailers	March 30, 2016
New York Newspaper Guild	March 30, 2016
Typographers	March 30, 2016
Pressmen	March 30, 2017
Stereotypers	March 30, 2017
Drivers	March 30, 2020

Approximately 140 of our full-time equivalent employees are located in France, and the terms and conditions of employment of those employees are established by a combination of French national labor law, industry-wide collective agreements and Company-specific agreements.

THE NEW YORK TIMES COMPANY – P. 5

ITEM 1A. RISK FACTORS

You should carefully consider the risk factors described below, as well as the other information included in this Annual Report on Form 10-K. Our business, financial condition or results of operations could be materially adversely affected by any or all of these risks, or by other risks or uncertainties not presently known or currently deemed immaterial, that may adversely affect us in the future.

If our efforts to retain and grow our digital subscriber base and build consumer revenues are not successful, and if we are unable to maintain and grow our digital audience for advertising sales, our business, financial condition and prospects may be adversely affected.

A significant portion of our revenues is from digital subscriptions for content provided on NYTimes.com and other digital platforms. Our future growth depends upon the development and management of our digital businesses, including successfully adding, retaining and engaging digital subscribers. Our ability to retain and grow our digital subscription base and audience for our digital products depends on many factors, including continued market acceptance of our evolving digital pay model, consumer habits, pricing, available alternatives from current and new competitors, delivery of high-quality journalism and content that is interesting and relevant to users, development and improvement of digital products across platforms, an adequate and adaptable digital infrastructure, access to delivery platforms on acceptable terms and other factors. Our digital user or traffic levels may also flatten or decline as a result of, among other factors, the failure to successfully manage changes in search engine optimization and social media traffic. If we are not able to continue to attract, convert and retain digital subscribers in numbers sufficient to grow our business, our revenues may be reduced. Even if we successfully maintain or increase our digital audience, the market position of our brands may not be enough to counteract a significant downward pressure on advertising rates as digital advertising inventory increases across multiple platforms. We may also incur additional expenses for increased marketing and other digital acquisition and retention efforts.

We have significant competition for advertising, which may adversely affect our advertising revenues and advertising rates.

Our print and digital products face substantial competition for advertising revenues from a variety of sources, such as newspapers and magazines; television, radio and other forms of media; direct marketing; and, increasingly, advertising-supported digital products that provide news and information, including websites and digital applications, news aggregators and social media sites. This competition has intensified as a result of continued developments of new digital media technologies. While distribution of news and other content over the Internet, including through mobile phones, tablets and other devices, continues to gain popularity, the digital advertising model is still evolving to address these rapid technological changes. In recent years, the advertising industry has experienced a secular shift toward digital advertising, which is significantly less expensive and can offer more directly measurable returns than traditional print media. As media audiences fragment, we expect advertisers to continue to allocate larger portions of their advertising budgets to digital media. Digital advertising networks and exchanges, real-time bidding and other programmatic buying channels that allow advertisers to buy audiences at scale are also playing a more significant role in the advertising marketplace and causing downward pricing pressure. Competition from these media and services, many of which charge lower rates than the Company’s properties, as well as increased inventory in the digital marketplace, could adversely affect advertising revenues by impacting our ability to attract and retain advertisers and to maintain or increase our advertising rates.

Economic weakness and uncertainty globally, in the United States and in key advertising categories have adversely affected and may continue to adversely affect our advertising revenues.

Advertising spending, which drives a significant portion of our revenues, is sensitive to economic conditions. Global, national and local economic conditions, particularly in the New York City metropolitan region, affect the levels of our advertising revenues. Our advertising revenues are particularly adversely affected if advertisers respond to weak and uneven economic conditions by reducing their budgets or shifting spending patterns or priorities, or if they are forced to consolidate or cease operations. Continuing soft economic conditions and an uneven recovery would adversely affect our level of advertising revenues and our business, financial condition and results of operations.

P. 6 – THE NEW YORK TIMES COMPANY

Decreases in print circulation volume adversely affect our circulation and advertising revenues.

Print advertising and circulation revenues are affected by circulation and readership levels. Competition for circulation and readership is generally based upon format, content, quality, service, timeliness and price. In recent years, we, and the newspaper industry as a whole, have experienced declining print circulation volume. This is primarily due to increased competition from digital media formats and sources other than traditional newspapers (often free to users), changes in discretionary spending by consumers affected by economic conditions, higher subscription and single-copy rates and a growing preference among certain consumers to receive all or a portion of their news from sources other than a newspaper. If these or other factors result in a continued decline in circulation volume, circulation revenues may be adversely affected as we may be unable to institute circulation price increases at a rate sufficient to offset circulation volume declines. In addition, the rate and volume of print advertising revenues may be adversely affected (as rates reflect circulation and readership, among other factors).

To remain competitive, we must be able to respond to and exploit changes in technology and consumer behavior, and significant investments may be required.

Technology in the media industry continues to evolve rapidly. Advances in technology have led to an increasing number of methods for the delivery and consumption of news and other content and have driven consumer demand and expectations in unanticipated directions. If we are unable to exploit new and existing technologies to distinguish our products and services from those of our competitors or adapt to new distribution methods that provide optimal user experiences, including introducing in a timely manner compelling new products and services that engage users across platforms, our business, financial condition and prospects may be adversely affected.

Technological developments also pose other challenges that could adversely affect our revenues and competitive position. New delivery platforms may lead to pricing restrictions, the loss of distribution control and the loss of a direct relationship with consumers. New delivery devices, such as smartphones, tablets and other mobile devices, which present challenges for traditional display advertising, may also reduce our advertising inventory or otherwise limit our ability to sell advertising. We may also be adversely affected if the use of technology developed to block the display of advertising on websites proliferates.

Technological developments and changes we may make to our business may require significant investments. We may be limited in our ability to invest funds and resources in digital products, services or opportunities, and we may incur research and development costs in building, maintaining and evolving our technology infrastructure. Some of our existing competitors and new entrants may have greater operational, financial and other resources or may otherwise be better positioned to compete for opportunities and, as a result, our digital businesses may be less successful. The success of our digital businesses also depends on our ability to attract and retain qualified talent for critical positions in those businesses.

Our international operations expose us to risks inherent in foreign operations.

An important element of our strategic initiatives is the expansion of the international scope of our operations, and we face the inherent risks associated with doing business abroad, including:


•	effectively managing and staffing foreign operations, including complying with diverse local labor laws and regulations;


•	navigating local customs and practices;


•	responding to government policies that restrict the digital flow of information;


•	protecting and enforcing our intellectual property rights under varying legal regimes;


•	complying with international laws and regulations, including those governing the collection, use, retention, sharing and security of consumer data;


•	addressing political or social instability;


•	adapting to currency exchange rate fluctuations; and


•	complying with restrictions on repatriation of funds.

Adverse developments in any of these areas could have an adverse impact on our business, financial condition and results of operations.

In addition, we have limited experience in operating and marketing our products in new international regions and could be at a disadvantage compared to competitors with more experience.

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If we are unable to successfully develop and execute our strategic growth initiatives, or if they do not adequately address the challenges or opportunities we face, our business, financial condition and prospects may be adversely affected.

Our success is dependent on our ability to identify, develop and execute appropriate strategic growth initiatives that will enable the Company to achieve sustainable growth in the long term. The implementation of our strategic initiatives is subject to both the risks affecting our business generally and the inherent risks associated with implementing new strategies. These strategic initiatives may not be successful in generating revenues or improving operating profit and, if they are, it may take longer than anticipated. As a result and depending on evolving conditions and opportunities, we may need to adjust our strategic initiatives and such changes could be substantial, including modifying or terminating one or more of the initiatives. Transition and changes in our strategic initiatives may also create uncertainty by our employees, customers and partners that could adversely affect our business and revenues. In addition, we may incur higher than expected or unanticipated costs in implementing our strategic initiatives, attempting to attract revenue opportunities or changing our strategies. There is no assurance that the implementation of any strategic growth initiative will be successful, and we may not realize anticipated benefits at levels we project or at all, which would adversely affect our business, financial condition and prospects.

If we are unable to execute cost-control measures successfully, our total operating costs may be greater than expected, which would adversely affect our profitability.

Over the last several years, we have significantly reduced operating costs by reducing staff and employee benefits and implementing general cost-control measures across the Company, and we plan to continue these cost management efforts. If we do not achieve expected savings or our operating costs increase as a result of investments in our strategic initiatives, our total operating costs would be greater than anticipated. In addition, if we do not manage our costs properly, such efforts may affect the quality of our products and our ability to generate future revenues. Reductions in staff and employee compensation and benefits could also adversely affect our ability to attract and retain key employees.

Significant portions of our expenses are fixed costs that neither increase nor decrease proportionately with revenues. In addition, our ability to make short-term adjustments to manage our costs or to make changes to our business strategy may be limited by certain of our collective bargaining agreements. If we are not able to implement further cost-control efforts or reduce our fixed costs sufficiently in response to a decline in our revenues, net income from continuing operations may decline.

The underfunded status of our pension plans may adversely affect our operations, financial condition and liquidity.

We maintain qualified defined benefit pension plans. In addition, although we sold the New England Media Group in October 2013 and the Regional Media Group in January 2012, we retained pension assets and liabilities and postretirement obligations related to employees of those businesses. As a result, and although we have frozen participation and benefits under all but two of the qualified pension plans we maintain, our results of operations will be affected by the amount of income or expense we record for, and the contributions we are required to make to, these plans. Pension income and expense is calculated using a number of actuarial valuations. These valuations reflect assumptions about financial markets and other economic conditions, which may change based on changes in key economic indicators. The most significant year-end assumptions we use to estimate pension expense are the discount rate and the expected long-term rate of return on the plan assets. Our qualified defined benefit pension plans were underfunded as of December 29, 2013. We are required to make contributions to our qualified defined benefit pension plans to comply with minimum funding requirements imposed by laws governing those plans. A decrease in the discount rate used to determine the liabilities for pension obligations may result in increased contributions. Failure to achieve expected returns on plan assets driven by various factors, which could include a continued environment of low interest rates or sustained volatility and disruption in the stock and bond markets, could also result in an increase in the amount of cash we would be required to contribute to these pension plans. In addition, unfavorable changes in applicable laws or regulations could materially change the timing and amount of required plan funding. As a result, we may have less cash available for working capital and other corporate uses, which may have an adverse impact on our operations, financial condition and liquidity.

P. 8 – THE NEW YORK TIMES COMPANY

Our participation in multiemployer pension plans may subject us to liabilities that could materially adversely affect our financial condition, cash flows and results of operations.

We participate in, and make periodic contributions to, various multiemployer pension plans that cover many of our current and former union employees. Our required contributions to these plans could increase because of a shrinking contribution base as a result of the insolvency or withdrawal of other companies that currently contribute to these plans, the inability or failure of withdrawing companies to pay their withdrawal liability, low interest rates, lower than expected returns on pension fund assets or other funding deficiencies. Our withdrawal liability for any multiemployer pension plan will depend on the nature and timing of any triggering event and the extent of that plan’s funding of vested benefits. If a multiemployer pension plan in which we participate has significant underfunded liabilities, such underfunding will increase the size of our potential withdrawal liability. In addition, under the Pension Protection Act of 2006, special funding rules apply to multiemployer pension plans that are classified as “endangered,” “seriously endangered,” or “critical” status. If plans in which we participate are in critical status, benefit reductions may apply and/or we could be required to make additional contributions. If, in the future, we elect to withdraw from these plans or if we trigger a partial withdrawal due to declines in contribution base units, additional liabilities would need to be recorded that could have an adverse effect on our business, results of operations, financial condition or cash flows.

We have recorded significant withdrawal liabilities with respect to multiemployer pension plans in which we formerly participated, primarily in connection with the sales of the New England and the Regional Media Groups. Until demand letters from some of the multiemployer plans’ trustees are received, the exact amount of the withdrawal liability will not be fully known and, as such, a difference from the recorded estimate could have an adverse effect on our results of operations, financial condition and cash flows. In addition, in the event a mass withdrawal is deemed to have occurred at any of these plans, we may be required to make additional contributions under applicable law.

A significant number of our employees are unionized, and our business and results of operations could be adversely affected if labor agreements were to further restrict our ability to maximize the efficiency of our operations.

Approximately half of our full-time equivalent work force is unionized. As a result, we are required to negotiate the wages, salaries, benefits, staffing levels and other terms with many of our employees collectively. Our results could be adversely affected if future labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. If we were to experience labor unrest or other business interruptions in connection with labor negotiations or otherwise, or if we are unable to negotiate labor contracts on reasonable terms, our ability to produce and deliver our products could be impaired. In addition, our ability to make short-term adjustments to control compensation and benefits costs, change our strategy or otherwise adapt to changing business needs may be limited by the terms and duration of our collective bargaining agreements.

A significant increase in the price of newsprint, or significant disruptions in our newsprint supply chain, would have an adverse effect on our operating results.

The cost of raw materials, of which newsprint is the major component, represented approximately 7% of our total operating costs in 2013. The price of newsprint has historically been volatile and may increase as a result of various factors, including a reduction in the number of suppliers due to restructurings, bankruptcies and consolidations; declining newsprint supply as a result of paper mill closures and conversions to other grades of paper; and other factors that adversely impact supplier profitability, including increases in operating expenses caused by raw material and energy costs, and a rise in the value of the Canadian dollar, which adversely affects Canadian suppliers whose costs are incurred in Canadian dollars but whose newsprint sales are priced in U.S. dollars.

In addition, we rely on our suppliers for deliveries of newsprint. The availability of our newsprint supply may be affected by various factors, including labor unrest, transportation issues and other disruptions that may affect deliveries of newsprint.

If newsprint prices increase significantly or we experience significant disruptions in the availability of our newsprint supply in the future, our operating results will be adversely affected.

THE NEW YORK TIMES COMPANY – P. 9

Our debt agreements contain restrictions that limit our flexibility in operating our business.

Our debt agreements contain various covenants that limit our ability to engage in specified types of transactions. For example, these covenants, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to:


•	incur or guarantee additional debt or issue certain preferred equity;


•	pay dividends on or make distributions to holders of our common stock or make other restricted payments;


•	create or incur liens on certain assets to secure debt;


•	make certain investments, acquisitions or dispositions;


•	consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and


•	enter into certain transactions with affiliates.

These restrictions limit our flexibility in operating our business and responding to opportunities.

Changes in our credit ratings or macroeconomic conditions may affect our liquidity by increasing borrowing costs and limiting our financing options.

Our long-term debt is currently rated below investment grade by Standard & Poor’s and Moody’s Investors Service. If our credit ratings remain below investment grade or are lowered further, borrowing costs for future long-term debt or short-term borrowing facilities may increase and our financing options, including our access to the unsecured borrowing market, would be limited. We may also be subject to additional restrictive covenants that would reduce our flexibility. In addition, macroeconomic conditions, such as continued or increased volatility or disruption in the credit markets, could adversely affect our ability to refinance existing debt or obtain additional financing to support operations or to fund new acquisitions or other capital-intensive initiatives.

Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, through a family trust, and this control could create conflicts of interest or inhibit potential changes of control.

We have two classes of stock: Class A Common Stock and Class B Common Stock. Holders of Class A Common Stock are entitled to elect 30% of the Board of Directors and to vote, with holders of Class B Common Stock, on the reservation of shares for equity grants, certain material acquisitions and the ratification of the selection of our auditors. Holders of Class B Common Stock are entitled to elect the remainder of the Board and to vote on all other matters. Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, who purchased The Times in 1896. A family trust holds approximately 90% of the Class B Common Stock. As a result, the trust has the ability to elect 70% of the Board of Directors and to direct the outcome of any matter that does not require a vote of the Class A Common Stock. Under the terms of the trust agreement, the trustees are directed to retain the Class B Common Stock held in trust and to vote such stock against any merger, sale of assets or other transaction pursuant to which control of The Times passes from the trustees, unless they determine that the primary objective of the trust can be achieved better by the implementation of such transaction. Because this concentrated control could discourage others from initiating any potential merger, takeover or other change of control transaction that may otherwise be beneficial to our businesses, the market price of our Class A Common Stock could be adversely affected.

We may not be able to protect intellectual property rights upon which our business relies, and if we lose intellectual property protection, our assets may lose value and our advertising revenues may be adversely affected.

Our business depends on our intellectual property, including our valuable brands, content, services and internally developed technology. We believe our proprietary trademarks and other intellectual property rights are important to our continued success and our competitive position. Unauthorized parties may attempt to copy or otherwise unlawfully obtain and use our content, services, technology and other intellectual property, and we cannot be certain that the steps we have taken to protect our proprietary rights will prevent any misappropriation or confusion among consumers and merchants, or unauthorized use of these rights.

Advancements in technology have made the unauthorized duplication and wide dissemination of content easier, making the enforcement of intellectual property rights more challenging. In addition, as our business and the risk of misappropriation of our intellectual property rights have become more global in scope, we may not be able to protect our proprietary rights in a cost-effective manner in a multitude of jurisdictions with varying laws.

If we are unable to procure, protect and enforce our intellectual property rights, including maintaining and monetizing our intellectual property rights to our content, we may not realize the full value of these assets, and our business and profitability may suffer. For example, the development of new mobile applications that republish our

P. 10 – THE NEW YORK TIMES COMPANY

copyrighted content for the users of those applications, while avoiding the advertising displayed when such content is accessed through our digital platforms, could adversely affect our advertising revenues. In addition, if we must litigate in the United States or elsewhere to enforce our intellectual property rights or determine the validity and scope of the proprietary rights of others, such litigation may be costly and divert the attention of our management.

Our brand and reputation are key assets of the Company, and negative perceptions or publicity could adversely affect our business, financial condition and results of operations.

The New York Times brand is a key asset of the Company, and our continued success depends on our ability to preserve, grow and leverage the value of our brand. We believe that we have a very powerful and trusted brand with an excellent reputation for high-quality journalism and content. This reputation could be damaged by incidents that erode consumer trust. As we focus on developing brand extensions, we may work with third-party vendors, and shortcomings of such third parties could also negatively impact our reputation and brand value. To the extent consumers perceive the quality of our products to be less reliable or our reputation is damaged, our revenues and profitability could be adversely affected.

We have been, and may be in the future, subject to claims of intellectual property infringement that could adversely affect our business.

We periodically receive claims from third parties alleging infringement, misappropriation or other violations of their intellectual property rights. These third parties often include patent holding companies seeking to monetize patents they have purchased or otherwise obtained through asserting claims of infringement or misuse. Even if we believe that these claims of intellectual property infringement are without merit, defending against the claims can be time-consuming, be expensive to litigate or settle, and cause diversion of management attention.

These intellectual property infringement claims may require us to enter into royalty or licensing agreements on unfavorable terms, use more costly alternative technology or otherwise incur substantial monetary liability. Additionally, these claims may require us to significantly alter certain of our operations. The occurrence of any of these events as a result of these claims could result in substantially increased costs or otherwise adversely affect our business.

Security breaches and other network and information systems disruptions could affect our ability to conduct our business effectively.

Network and information systems and other technologies, including those related to our network management, are important to our business activities. We use third-party technology and systems for a variety of operations, including encryption and authentication technology, employee email, domain name registration, content delivery to customers, back-office support and other functions. Our systems and those of third parties upon which our business relies may be vulnerable to interruption or damage that can result from natural disasters, fires, power outages, acts of terrorism or other similar events, or from deliberate attacks such as computer hackings, computer viruses, worms or other destructive or disruptive software, process breakdowns, denial of service attacks, malicious social engineering or other malicious activities, or any combination of the foregoing. Despite the security measures we and our third-party service providers have taken, our computer systems, and those of our vendors, have been, and will likely continue to be, subject to attack. For example, during 2012 and 2013, The Times was the target of cyber-attacks allegedly sponsored by foreign sources, designed to interfere with our journalism and undermine our reporting. Although we believe no internal systems, including the systems housing confidential customer and employee data, were breached in these attacks, there can be no assurance that will be the case in the future.

We have implemented additional controls and taken other preventative measures designed to further strengthen our systems against future attacks, including controls and preventative measures designed to reduce the impact of a security breach at our third-party vendors. The costs of the controls and other measures we have taken to date have not had a material effect on our financial condition, results of operations or liquidity. However, there can be no assurance as to the cost of additional controls and measures that we may conclude are necessary in the future.

There can be no assurance that the actions, measures and controls we have implemented will be effective against future attacks or be sufficient to prevent a future security breach or other disruption to our network or information systems, or those of our third-party providers. Such an event could result in a disruption of our services or improper disclosure of personal data or confidential information, which could harm our reputation, require us to expend resources to remedy such a security breach or defend against further attacks, divert managements’ attention

THE NEW YORK TIMES COMPANY – P. 11

and resources or subject us to liability under laws that protect personal data, resulting in increased operating costs or loss of revenue.

Acquisitions, divestitures and other transactions could adversely affect our costs, revenues, profitability and financial position.

In order to position our business to take advantage of growth opportunities, we conduct discussions, evaluate opportunities and enter into agreements for possible acquisitions, divestitures, investments and other transactions. We routinely evaluate our portfolio of businesses and may, as a result, buy or sell different properties. In that regard, in 2013, we completed the sale of the New England Media Group and our 49% equity interest in Metro Boston. We may also consider the acquisition of specific properties, businesses or technologies that fall outside our traditional lines of business and diversify our portfolio, including those that may operate in new and developing industries, if we deem such properties sufficiently attractive.

Acquisitions or divestitures affect our costs, revenues, profitability and financial position. Acquisitions involve significant risks, including difficulties in integrating acquired operations, diversion of management resources, debt incurred in financing these acquisitions (including the related possible reduction in our credit ratings and increase in our cost of borrowing), differing levels of management and internal control effectiveness at the acquired entities and other unanticipated problems and liabilities. Competition for certain types of acquisitions, particularly digital properties, is significant. Even if successfully negotiated, closed and integrated, certain acquisitions or investments may prove not to advance our business strategy and may fall short of expected return on investment targets, which would adversely affect our business, results of operations and financial condition.

Legislative and regulatory developments may result in increased costs and lower revenues from our digital businesses.

Our digital businesses are subject to government regulation in the jurisdictions in which we operate, and our websites, which are available worldwide, may be subject to laws regulating the Internet even in jurisdictions where we do not do business. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Revenues from our digital businesses could be adversely affected, directly or indirectly, in particular by existing or future laws and regulations relating to online privacy and the collection and use of consumer data in digital media.

Adverse results from litigation or governmental investigations can impact our business practices and operating results.

From time to time, we and our subsidiaries are parties to litigation and regulatory, environmental and other proceedings with governmental authorities and administrative agencies. Adverse outcomes in lawsuits or investigations could result in significant monetary damages or injunctive relief that could adversely affect our operating results or financial condition as well as our ability to conduct our business as it is presently being conducted.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive offices are located in our New York headquarters building in the Times Square area. The building was completed in 2007 and consists of approximately 1.54 million gross square feet, of which approximately 828,000 gross square feet of space have been allocated to us. We owned a leasehold condominium interest representing approximately 58% of the New York headquarters building until March 2009, when we entered into an agreement to sell and simultaneously lease back 21 floors, or approximately 750,000 rentable square feet, currently occupied by us (the “Condo Interest”). The sale price for the Condo Interest was $225.0 million. We have an option exercisable in 2019 to repurchase the Condo Interest for $250.0 million. The lease term is 15 years, and we have three renewal options that could extend the term for an additional 20 years. We continue to own a leasehold condominium interest in seven floors in our New York headquarters building, totaling approximately 216,000 rentable square feet that were not included in the sale-leaseback transaction, of which six floors are currently leased to a third party.

P. 12 – THE NEW YORK TIMES COMPANY

In addition, we built a printing and distribution facility with 570,000 gross square feet located in College Point, N.Y., on a 31-acre site owned by the City of New York for which we have a ground lease. We have an option to purchase the property at any time before the lease ends in 2019 for $6.9 million. We also currently own other properties with an aggregate of approximately 2,200 gross square feet and lease other properties with an aggregate of approximately 250,400 rentable square feet in various locations.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various legal actions incidental to our business that are now pending against us. 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 our legal counsel that the ultimate liability that might result from these actions would not have a material adverse effect on our Consolidated Financial Statements.

Newspaper and Mail Deliverers – Publishers’ Pension Fund

In September 2013, we received a notice and demand for payment in the amount of approximately $26 million from the Newspaper and Mail Deliverers – Publishers’ Pension Fund. We participate in the fund, which covers drivers employed by The New York Times. City & Suburban, a retail and newsstand distribution subsidiary and the largest contributor to the fund, ceased operations in 2009. The fund claims that The New York Times Company partially withdrew from the fund in the plan years ending May 31, 2013 and 2012, as a result of a more than 70% decline in contribution base units. We disagree with the plan determination and are disputing the claim vigorously. We do not believe that a loss is probable on this matter and have not recorded a loss contingency for the period ended December 29, 2013.

Pension Benefit Guaranty Corporation

In February 2014, the Pension Benefit Guaranty Corporation (“PBGC”) notified us that it believes that the Company has had a triggering event under Section 4062(e) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), with respect to The Boston Globe Retirement Plan for Employees Represented by the Boston Newspaper Guild and The New York Times Companies Pension Plan on account of the Company’s sale of the New England Media Group. Under Section 4062(e), the PBGC may be entitled to protection if, as a result of a cessation of operations at a facility, more than 20% of the active participants in a plan are separated from employment. The Company, which retained all pension assets and liabilities related to New England Media Group employees, maintains that an asset sale is not a triggering event for purposes of Section 4062(e). Additionally, with respect to The New York Times Companies Pension Plan, we believe that the 20% threshold was not met.

If a triggering event under Section 4062(e) with respect to either or both of these plans is determined to have occurred, the Company would be required to place funds into an escrow account or to post a surety bond, with the escrowed funds or the bond proceeds available to the applicable plan if it were to terminate in a distress or involuntary termination within five years of the date of the New England Media Group sale. We do not expect such a termination for either of these plans. If the applicable plan did not so terminate within the five-year period, any escrowed funds for that plan would be returned to the Company or the bond for that plan would be cancelled. The amount of any required escrow or bond would be based on a percentage of the applicable plan’s unfunded benefit liabilities, computed under Section 4062(e) on a “termination basis,” which would be higher than that computed under GAAP. In lieu of establishing an escrow account with the PBGC or posting a bond, the Company and the PBGC can negotiate an alternate resolution of the liability, which could include making cash contributions to these plans in excess of minimum requirements.

At this time, we cannot predict the ultimate outcome of this matter, but we do not expect that the resolution of this matter will have a material adverse effect on our earnings or financial condition.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

THE NEW YORK TIMES COMPANY – P. 13

EXECUTIVE OFFICERS OF THE REGISTRANT



Name	Age	Employed By Registrant Since	Recent Position(s) Held as of February 26, 2014
Arthur Sulzberger, Jr.	62	1978	Chairman (since 1997) and Publisher of The Times (since 1992); Chief Executive Officer (2011 to 2012)
Mark Thompson	56	2012	President and Chief Executive Officer (since 2012); Director-General, British Broadcasting Corporation (“BBC”) (2004 to 2012); Chief Executive, Channel 4 Television Corporation (2002 to 2004); and various positions of increasing responsibility at the BBC (1979 to 2001)
Michael Golden	64	1984	Vice Chairman (since 1997); President and Chief Operating Officer, Regional Media Group (2009 to 2012); Publisher of the International Herald Tribune (2003 to 2008); Senior Vice President (1997 to 2004)
James M. Follo	54	2007	Executive Vice President (since March 2013) and Chief Financial Officer (since 2007); Senior Vice President (2007 to March 2013); Chief Financial and Administrative Officer, Martha Stewart Living Omnimedia, Inc. (2001 to 2006)
R. Anthony Benten	50	1989	Senior Vice President, Finance (since 2008) and Corporate Controller (since 2007); Vice President (2003 to 2008); Treasurer (2001 to 2007)
Kenneth A. Richieri	62	1983	Executive Vice President (since March 2013) and General Counsel (since 2006); Senior Vice President (2007 to March 2013); Secretary (2008 to 2011); Vice President (2002 to 2007); Deputy General Counsel (2001 to 2005); Vice President and General Counsel, New York Times Digital (1999 to 2003)

P. 14 – THE NEW YORK TIMES COMPANY

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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 February 21, 2014, was as follows: Class A Common Stock: 6,969; Class B Common Stock: 27.

In September 2013, we announced the initiation of a quarterly dividend in which both classes of our common stock participate equally. A dividend of $.04 per share was paid on the Class A and Class B Common Stock in October 2013, and an additional dividend of $.04 per share of Class A and Class B Common Stock was declared in December 2013 and paid in January 2014. No dividends were declared or paid in 2012. We currently expect to continue to pay comparable cash dividends in the future, although changes in our dividend program will be considered by our Board of Directors in light of our earnings, capital requirements, financial condition and other factors considered relevant. In addition, our Board of Directors will consider restrictions in any existing indebtedness, such as the terms of our 6.625% senior unsecured notes due 2016, which restrict our ability to pay dividends. See also “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Our Strategy” and “— Liquidity and Capital Resources — Third-Party Financing.”

The following table sets forth, for the periods indicated, the high and low closing sales prices for the Class A Common Stock as reported on the New York Stock Exchange.



	2013				2012
Quarters	High		Low		High		Low
First Quarter	$	10.13	$	8.18	$	8.08	$	6.50
Second Quarter	11.06		8.73		7.04		5.98
Third Quarter	12.66		11.06		9.80		6.66
Fourth Quarter	15.47		11.94		10.88		7.86

ISSUER PURCHASES OF EQUITY SECURITIES⁽¹⁾



Period	Total number of shares of Class A Common Stock purchased (a)	Average price paid per share of Class A Common Stock (b)	Total number of shares of Class A Common Stock purchased as part of publicly announced plans or programs (c)	Maximum number (or approximate dollar value) of shares of Class A Common Stock that may yet be purchased under the plans or programs (d)
September 30, 2013 - November 3, 2013	—	—	—	$	91,386,000
November 4, 2013 - December 1, 2013	—	—	—	$	91,386,000
December 2, 2013 - December 29, 2013	—	—	—	$	91,386,000
Total for the fourth quarter of 2013	—	—	—	$	91,386,000

(1)

On April 13, 2004, our Board of Directors authorized repurchases in an amount up to $400 million. During the fourth quarter of 2013, we did not purchase any shares of Class A Common Stock pursuant to our publicly announced share repurchase program. As of February 21, 2014, we had authorization from our Board of Directors to repurchase an amount of up to approximately $91 million of our Class A Common Stock. Our Board of Directors has authorized us to purchase shares from time to time as market conditions permit. There is no expiration date with respect to this authorization.

THE NEW YORK TIMES COMPANY – P. 15

Table of Contents

PERFORMANCE PRESENTATION

The following graph shows the annual cumulative total stockholder return for the five fiscal years ending December 29, 2013, on an assumed investment of $100 on December 28, 2008, in the Company, the Standard & Poor’s S&P 400 MidCap Stock Index, the Standard & Poor’s S&P 1500 Publishing and Printing Index and an index of peer group media companies. The peer group returns are weighted by market capitalization at the beginning of each year. Stockholder return is measured by dividing (a) the sum of (i) the cumulative amount of dividends declared for the measurement period, assuming reinvestment of dividends, and (ii) the difference between the issuer’s share price at the end and the beginning of the measurement period, by (b) the share price at the beginning of the measurement period. As a result, stockholder return includes both dividends and stock appreciation.

For the fiscal year ended December 30, 2012, the Company used a peer group (the “Peer Group”), comprising the Company, Gannett Co., Inc., Media General, Inc., The McClatchy Company and Graham Holdings Company (formerly The Washington Post Company), that includes certain companies that no longer publish newspapers. Accordingly, the Company has selected for the comparison herein the S&P 1500 Publishing and Printing Index, which includes newspaper companies, as well as publishing and general media companies, and which we believe provides a more meaningful comparison. The S&P 1500 Publishing and Printing Index, also weighted by market capitalization, comprises the Company and the following companies: E.W. Scripps Company, Gannett Co., John Wiley & Sons, Inc., Meredith Corporation, News Corporation, Scholastic Corporation and Valassis Communications, Inc. In future filings, the Company will no longer compare its stock performance against the Peer Group.

Stock Performance Comparison Between the S&P 400 Midcap Index, S&P 1500 Publishing & Printing Index,

The New York Times Company’s Class A Common Stock and Peer Group Common Stock

P. 16 – THE NEW YORK TIMES COMPANY



	ITEM 6. SELECTED FINANCIAL DATA

The Selected Financial Data should be read in conjunction with “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and the related Notes in Item 8. The results of operations for the New England Media Group, as well as for the Regional Media Group and the About Group that we sold in 2012, have been presented as discontinued operations and certain assets and liabilities are classified as held for sale for all periods presented (see Note 15 of the Notes to the Consolidated Financial Statements). The results of operations for WQXR-FM, a New York City classical radio station that we sold in 2009, have also been presented as discontinued operations. The pages following the table show certain items included in Selected Financial Data. All per share amounts on those pages are on a diluted basis. Fiscal year 2012 comprises 53 weeks and all other fiscal years presented in the table below comprise 52 weeks.



	As of and for the Years Ended
(In thousands)	December 29, 2013			December 30, 2012			December 25, 2011			December 26, 2010		December 27, 2009
	(52 Weeks)			(53 Weeks)			(52 Weeks)			(52 Weeks)		(52 Weeks)
Statement of Operations Data
Revenues	$	1,577,230		$	1,595,341		$	1,554,574		$	1,556,839	$	1,581,860
Operating costs	1,411,744			1,441,410			1,411,652			1,422,173		1,521,190
Pension settlement expense	3,228			47,657			—			—		—
Multiemployer pension plan withdrawal expense	6,171			—			4,228			6,268		78,931
Net pension curtailment gain	—			—			—			—		56,671
Other expenses	—			2,620			4,500			—		34,633
Impairment of assets	—			—			7,458			—		1,216
Operating profit	156,087			103,654			126,736			128,398		2,561
Gain on sale of investments	—			220,275			71,171			9,128		—
Impairment of investments	—			5,500			—			—		—
(Loss)/income from joint ventures	(3,215		)	2,936			(270		)	18,652		20,796
Premium on debt redemption	—			—			46,381			—		9,250
Interest expense, net	58,073			62,808			85,243			85,052		81,702
Income/(loss) from continuing operations before income taxes	94,799			258,557			66,013			71,126		(67,595		)
Income/(loss) from continuing operations, net of income taxes	56,907			163,940			44,596			51,745		(30,499		)
Income/(loss) from discontinued operations, net of income taxes	7,949			(27,927		)	(82,799		)	58,909		53,515
Net income/(loss) attributable to The New York Times Company common stockholders	$	65,105		$	135,847		$	(37,648	)	$	109,640	$	23,006
Balance Sheet Data
Cash, cash equivalents and marketable securities	$	1,023,780		$	959,754		$	279,997		$	399,642	$	36,520
Property, plant and equipment, net	713,356			773,469			837,595			891,470		970,357
Total assets	2,572,552			2,807,470			2,887,367			3,297,401		3,109,789
Total debt and capital lease obligations	684,163			696,875			773,120			996,384		769,117
Total New York Times Company stockholders’ equity	842,910			662,325			533,678			680,360		622,527

THE NEW YORK TIMES COMPANY – P. 17



	As of and for the Years Ended
(In thousands, except ratios, per share and employee data)	December 29, 2013			December 30, 2012			December 25, 2011			December 26, 2010			December 27, 2009
	(52 Weeks)			(53 Weeks)			(52 Weeks)			(52 Weeks)			(52 Weeks)
Per Share of Common Stock
Basic earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	0.38		$	1.11		$	0.31		$	0.35		$	(0.21	)
Income/(loss) from discontinued operations, net of income taxes	0.05			(0.19		)	(0.57		)	0.40			0.37
Net income/(loss)	$	0.43		$	0.92		$	(0.26	)	$	0.75		$	0.16
Diluted earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	0.36		$	1.07		$	0.30		$	0.33		$	(0.21	)
Income/(loss) from discontinued operations, net of income taxes	0.05			(0.18		)	(0.55		)	0.39			0.37
Net income/(loss)	$	0.41		$	0.89		$	(0.25	)	$	0.72		$	0.16
Dividends declared per share	$	0.08		$	—		$	—		$	—		$	—
Stockholders’ equity per share	$	5.34		$	4.34		$	3.51		$	4.46		$	4.25
Average basic shares outstanding	149,755			148,147			147,190			145,636			144,188
Average diluted shares outstanding	157,774			152,693			152,007			152,600			146,367
Key Ratios
Operating profit/(loss) to revenues	10		%	6		%	8		%	8		%	—		%
Return on average common stockholders’ equity	9		%	23		%	(6		)%	17		%	4		%
Return on average total assets	2		%	5		%	(1		)%	3		%	1		%
Total debt and capital lease obligations to total capitalization	45		%	51		%	59		%	59		%	55		%
Current assets to current liabilities	3.36			3.30			2.67			3.35			2.70
Ratio of earnings to fixed charges	2.58			4.94			1.76			1.65			0.02
Full-Time Equivalent Employees	3,529			5,363			7,273			7,414			7,665

The items below are included in the Selected Financial Data.

2013

The items below had a net unfavorable effect on our results from continuing operations of $12.9 million, or $.08 per share:


•	a $12.4 million pre-tax charge ($7.3 million after tax, or $.05 per share) for severance costs.


•	a $6.2 million pre-tax charge ($3.7 million after tax, or $.02 per share) for a partial withdrawal obligation under a multiemployer pension plan.


•	a $3.2 million pre-tax charge ($1.9 million after tax, or $.01 per share) for the settlement of pension obligations under an immediate pension benefit offer to certain former employees.

2012 (53-week fiscal year)

The items below had a net favorable effect on our results from continuing operations of $95.1 million, or $.62 per share:


•	a $220.3 million pre-tax gain ($134.7 million after tax, or $.87 per share) on the sales of our ownership interest in Indeed.com and our remaining units in Fenway Sports Group.


•	a $47.7 million pre-tax charge ($27.7 million after tax, or $.18 per share) for the settlement of pension obligations in connection with lump-sum payments made under an immediate pension benefit offer to certain former employees.

P. 18 – THE NEW YORK TIMES COMPANY


•	a $12.3 million pre-tax charge ($7.2 million after tax, or $.04 per share) for severance costs.


•	a $5.5 million pre-tax, non-cash charge ($3.2 million after tax, or $.02 per share) for the impairment of certain investments, primarily related to our investment in Ongo Inc., a consumer service for reading and sharing digital news and information from multiple publishers.


•	a $2.6 million pre-tax charge ($1.5 million after tax, or $.01 per share) in connection with a legal settlement.

2011

The items below had a net unfavorable effect on our results from continuing operations of $2.1 million, or $.02 per share:


•	a $71.2 million pre-tax gain ($41.4 million after tax, or $.27 per share) from the sales of 390 of our units in Fenway Sports Group and a portion of our interest in Indeed.com.


•	a $46.4 million pre-tax charge ($27.6 million after tax, or $.18 per share) in connection with the prepayment of all $250.0 million aggregate principal amount of our 14.053% senior unsecured notes.


•	a $10.0 million pre-tax charge ($5.9 million after tax, or $.04 per share) for severance costs.


•	a $7.5 million pre-tax charge ($4.7 million after tax, or $.03 per share) for the impairment of assets related to certain assets held for sale, primarily of Baseline, Inc. (“Baseline”), an online subscription database and research service for information on the film and television industries and a provider of premium film and television data to websites.


•	a $4.5 million pre-tax charge ($2.6 million after tax, or $.02 per share) for a retirement and consulting agreement in connection with the retirement of our former chief executive officer.


•	a $4.2 million estimated pre-tax charge ($2.7 million after tax, or $.02 per share) for a pension withdrawal obligation under a multiemployer pension plan at the Globe.

2010

The items below had a net unfavorable effect on our results from continuing operations of $4.8 million, or $.02 per share:


•	a $12.7 million pre-tax gain from the sale of an asset at one of the paper mills in which we have an investment. Our share of the pre-tax gain, after eliminating the noncontrolling interest portion, was $10.2 million ($6.5 million after tax, or $.04 per share).


•	an $11.4 million charge ($.07 per share) for the reduction in future tax benefits for retiree health benefits resulting from the federal health-care legislation enacted in 2010.


•	a $9.1 million pre-tax gain ($5.4 million after tax, or $.04 per share) from the sale of 50 of our units in Fenway Sports Group.


•	a $6.3 million pre-tax charge ($3.7 million after tax, or $.02 per share) for an adjustment to estimated pension withdrawal obligations under several multiemployer pension plans at the Globe.


•	a $2.7 million pre-tax charge ($1.6 million after tax, or $.01 per share) for severance costs.

2009

The items below had a net unfavorable effect on our results from continuing operations of $55.6 million, or $.38 per share:


•	a $78.9 million pre-tax charge ($45.8 million after tax, or $.31 per share) for a pension withdrawal obligation under certain multiemployer pension plans primarily at the Globe.


•	a $56.7 million pre-tax net pension curtailment gain ($32.9 million after tax, or $.22 per share) resulting from freezing of benefits under various Company-sponsored qualified and non-qualified pension plans.


•	a $34.6 million pre-tax charge ($20.1 million after tax, or $.14 per share) for a loss on leases ($31.1 million) and a fee ($3.5 million) for the early termination of a third-party printing contract. The lease charge included a

THE NEW YORK TIMES COMPANY – P. 19

$22.8 million charge for a loss on leases associated with the closure of City & Suburban, our retail and newsstand distribution subsidiary, and $8.3 million for office space in New York.


•	a $28.5 million pre-tax charge ($16.5 million after tax, or $.11 per share) for severance costs.


•	a $9.3 million pre-tax charge ($5.4 million after tax, or $.04 per share) for a premium on the redemption of $250.0 million principal amount of our 4.5% notes, which was completed in April 2009.


•	a $1.2 million pre-tax charge ($0.7 million after tax, or $.00 per share) for the impairment of assets due to the reduced scope of a systems project.

P. 20 – THE NEW YORK TIMES COMPANY

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated financial condition as of December 29, 2013, and results of operations for the three years ended December 29, 2013. This item should be read in conjunction with our Consolidated Financial Statements and the related Notes included in this Annual Report.

EXECUTIVE OVERVIEW

We are a global media organization that includes newspapers, digital businesses and investments in paper mills. We currently have one reportable segment comprising businesses that include The Times, the International New York Times, NYTimes.com, international.nytimes.com and related businesses.

Our revenues were $1.6 billion in 2013. We generate revenues principally from circulation and advertising. Other revenues primarily consist of revenues from news services/syndication, digital archives, rental income and conferences/events. Our main operating costs are employee-related costs and raw materials, primarily newsprint.

Joint Ventures

Our investments accounted for under the equity method are primarily as follows:


•	a 49% interest in a Canadian newsprint company, Malbaie; and


•	a 40% interest in a partnership, Madison, operating a supercalendered paper mill in Maine.

Discontinued Operations

On October 24, 2013, we completed the sale of substantially all of the assets and operating liabilities of the New England Media Group, consisting of the Globe, BostonGlobe.com, Boston.com, the T&G, Telegram.com and related properties, for approximately $70 million in cash, subject to customary adjustments. As part of the transaction, we also sold our 49% equity interest in Metro Boston. The net after-tax proceeds from the sale, including a tax benefit, were approximately $74 million.

As a result of the New England Media Group meeting the criteria of being held for sale in the third quarter of 2013, we recorded an impairment charge of $34.3 million reflecting the difference between the expected sales price and the New England Media Group’s net assets at such time. In the fourth quarter of 2013, when the sale was completed, we recognized a pre-tax gain of $47.6 million ($28.1 million after-tax), which was almost entirely comprised of a curtailment gain. This curtailment gain is primarily related to an acceleration of prior service credits from plan amendments announced in prior years, and is due to a reduction in the expected years of future Company service for employees at the New England Media Group.

Results of operations for the New England Media Group, as well as for the About Group and the Regional Media Group that were sold in 2012, have been treated as discontinued operations for all periods presented in this report. For further information regarding our discontinued operations, see “— Discontinued Operations” and Note 15 of the Notes to the Consolidated Financial Statements.

Business Environment

We believe that a number of factors and industry trends have had, and will continue to have, an adverse effect on our business and prospects. These include the following:

Secular shift to digital media choices

The competition for advertising revenues in various markets has intensified as a result of the continued development of digital media technologies and platforms.

We have expanded and will continue to expand our digital offerings; however, the largest portion of our revenues are currently from traditional print products where advertising revenues have been declining. We believe that the shift from traditional media formats to a growing number of digital media choices and changing consumer behavior have contributed to, and are likely to continue to contribute to, a decline in print advertising.

The digital advertising marketplace has become increasingly complex and fragmented, particularly as digital advertising networks and exchanges, real-time bidding and other programmatic-buying channels that allow

THE NEW YORK TIMES COMPANY – P. 21

advertisers to buy audience at scale play a more significant role. Competition from a wide variety of digital media and services and a significant increase in inventory in the digital marketplace have affected, and we expect will continue to affect, our ability to attract and retain advertisers and to maintain or increase our advertising rates. In addition, advances in technology have led to an increasing popularity in the distribution of news and other content through mobile phones, tablets and other mobile devices, reshaping consumer behavior and expectations for consuming news and information. The digital advertising model is still evolving to address these rapid technological changes. Furthermore, as the advertising environment remains challenged, media companies have increasingly re-evaluated business models that have been largely dependent on advertising, with increasing numbers shifting their focus toward various forms of digital subscription models.

Circulation

Circulation is a significant source of revenue for us and an increasingly important driver as the overall composition of our revenues has shifted, and we expect will continue to shift, in response to the transformations in our industry. In recent years, our newspaper properties, and the newspaper industry as a whole, have experienced declining print circulation volume. This is due to, among other factors, increased competition from digital platforms and sources other than traditional newspapers (often free to users), changes in discretionary spending by consumers affected by economic conditions, higher subscription and single-copy rates and a growing preference among some consumers for receiving their news from a variety of sources.

Our paid digital subscription model has created a meaningful revenue stream. Our ability to retain and continue to build on our digital subscription base and audience for our digital products depends on continued market acceptance of our evolving digital subscription model, consumer habits, pricing, available alternatives from current and new competitors, delivery of high-quality journalism and content that is interesting and relevant to users, an adequate and adaptable digital infrastructure, access to delivery platforms on acceptable terms and other factors.

Economic conditions

Advertising spending, which drives a significant portion of our revenues, is sensitive to economic conditions. Global, national and local economic conditions affect the levels of our advertising revenues. The level of advertising sales in any period may be affected by advertisers’ decisions to increase or decrease their advertising expenditures in response to anticipated consumer demand and general economic conditions. Changes in spending patterns and priorities, including shifts in marketing strategies and budget cuts of key advertisers, in response to economic conditions, have depressed and may continue to depress our advertising revenues.

Costs

A significant portion of our costs are fixed, and therefore we are limited in our ability to reduce these costs in the short term. Our most significant costs are employee-related costs and raw materials, which together accounted for approximately 50% of our total operating costs in 2013. Changes in employee-related costs and the price and availability of newsprint can materially affect our operating results.

For a discussion of these and other factors that could affect our business, results of operations and financial condition, see “Forward-Looking Statements” and “Item 1A — Risk Factors.”

Our Strategy

Our business is operating during a period of transformation for our industry and amidst uneven economic conditions. We anticipate that the challenges we currently face will continue, and we believe that the following elements are key to our efforts to address them.

Focusing on our core business by strengthening and extending The New York Times brand and our digital offerings

The sale of the New England Media Group in the fourth quarter of 2013 allows us to focus on The Times brand and on further developing and growing our core business, as well as investing in our transformation to a more digitally-focused multimedia news and information company. Our priority is to better position our streamlined organization for innovation and growth, while maintaining a robust news-gathering operation capable of continuing to provide the high-quality news and information that sets our Company apart.

As we continue to face a challenging advertising environment, we are focused on building consumer revenues. The growth in our digital subscriber base in 2013, more than two years into the implementation of our paid digital

P. 22 – THE NEW YORK TIMES COMPANY

subscription model, underscores the willingness of our readers and users to pay for the high-quality journalism we provide across multiple platforms. The Times’s paid digital subscription model has created a meaningful revenue stream that has partially offset the softness in our advertising and print circulation businesses.

We aim to continue to build our digital subscriber base by increasing engagement and subscription opportunities. As part of our efforts to expand digital subscription sales outside the United States, in the fourth quarter of 2013, we rebranded the International Herald Tribune as the International New York Times to create a single global media brand, and we are focused on further scaling this international opportunity in 2014. In addition, we believe there are consumers who are interested in both lower-priced and premium versions of The Times’s current digital products, and we plan to begin to introduce new options to the market in the first half of 2014.

We believe we have a very powerful and trusted brand that, because of the quality of our journalism, attracts educated, affluent and influential audiences. We are continuing to focus on leveraging our brand and developing and innovating our digital advertising offerings to restore digital advertising revenues to growth. We will also continue to build on the strength of The New York Times brand to expand our presence into new products, markets and endeavors, such as expanding our conference and events business and developing our e-commerce business and games.

As we continue to look for ways to optimize and monetize our products and services, we remain committed to creating quality content and a quality user experience, regardless of the distribution model of news and information.

Managing our expenses

Over the past few years, we have focused on realigning our cost base to ensure that we are operating our businesses efficiently, while maintaining our commitment to investing in high-quality content and achieving our long-term strategy. Our operating costs decreased in 2013, mainly due to lower pension expense, raw materials expense, and salaries and wage expense. We remained disciplined in our approach toward costs in 2013 and focused on realigning our work force, finding efficiencies in our production and distribution operations and further leveraging our centralized processes and resources.

We will endeavor to be diligent in reducing expenses and managing legacy costs going forward, but will also remain prepared to invest where appropriate. We expect to continue to invest in growing our business digitally and globally. Managing expenses will remain a priority and our focus will be on identifying operational efficiencies across our organization.

Strengthening our liquidity

We have continued to strengthen our liquidity position and we remain focused on further de-leveraging and de-risking our balance sheet.

As of December 29, 2013, we had cash, cash equivalents and marketable securities of approximately $1 billion and total debt and capital lease obligations of approximately $684 million. Accordingly, our cash, cash equivalents and marketable securities exceeded total debt and capital lease obligations by over $300 million. Our cash position improved in 2013, primarily due to cash flows from operations and the proceeds from the sale of the New England Media Group and our ownership interest in Metro Boston, offset by contributions totaling approximately $74 million during 2013 to certain qualified pension plans. We believe our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to meet our financing needs over the next 12 months.

In September 2013, we announced the initiation of a quarterly dividend. A dividend of $0.04 per share was paid on our Class A and Class B Common Stock in October 2013, and an additional dividend of $0.04 per share of Class A and Class B Common Stock was declared in December 2013 and paid in January 2014. We believe this quarterly dividend allows us to return capital to our stockholders while also maintaining the financial flexibility necessary to continue to invest in our transformation and growth initiatives. Given current conditions and continued volatility in advertising revenues, as well as the early stage of our growth strategy, we believe it is in the best interests of the Company to maintain a conservative balance sheet and a prudent view of our cash flow going forward.

Managing our retirement-related costs

THE NEW YORK TIMES COMPANY – P. 23

$80 million, compared with approximately $350 million as of December 30, 2012. The improvement in the funded status of these pension plans reflects the increase in interest rates in 2013, solid returns on pension assets, contributions we made in early 2013 and the elimination of obligations resulting from the acceptance by certain former employees of a one-time lump-sum payment offer in 2012. We made contributions of approximately $74 million to certain qualified pension plans in 2013 compared with approximately $144 million in 2012. We expect contributions to total approximately $16 million to satisfy minimum funding requirements in 2014.

We have taken other steps over the last few years as part of our ongoing strategy to address our pension obligations, including freezing accruals under the qualified defined benefit pension plans that cover both our non-union employees and those covered by collective bargaining agreements. In November 2012, in connection with ratified amendments to a collective bargaining agreement covering employees in The New York Times Newspaper Guild, we froze benefit accruals under the existing defined benefit pension plan, a step that will significantly limit future funding volatility for that plan and, accordingly, volatility of the Company’s overall financial condition. As part of such amendments, we adopted a new, low volatility, defined benefit pension plan, subject to the approval of the Internal Revenue Service. We have also offered one-time lump-sum payments to certain former employees and we will continue to look for ways to reduce the size of our pension obligations.

While we have made significant progress in our liability-driven investment strategy to reduce the funding volatility of our qualified pension plans, the size of our pension plan obligations relative to the size of our current operations will continue to have a significant impact on our reported financial results. We expect to continue to experience significant volatility in 2014 in our retirement-related costs, including pension, multiemployer pension and retiree medical costs. In 2013, our retirement-related costs declined by approximately $27 million to $18 million (excluding a $6.2 million multiemployer pension plan withdrawal expense in 2013), as pension interest costs were significantly lower and expected earnings on plan assets were significantly higher in 2013 than in 2012. In 2014, we expect that retirement-related costs will increase approximately $19 million to $37 million, due principally to a lower expected return on pension plan assets due to a shift in asset mix from equity to bonds, higher interest costs, the impact of the acceleration of prior service costs due to the sale of the New England Media Group on retiree medical costs, and higher expenses associated with our multiemployer pension plan withdrawal obligations.

Our retirement plan obligations have not declined proportionately with the relative size of our business over the years, since we have largely retained all pension liabilities following the sales of the New England and Regional Media Groups. As a result, volatility resulting from changes in what we refer to as our “non-operating retirement costs” may obscure trends in the financial performance of our operating business. Non-operating retirement costs include interest cost, expected return on plan assets and amortization of actuarial gains and loss components of pension expense; interest cost and amortization of actuarial gains and loss components of retiree medical expense; and all expenses associated with multiemployer pension plan withdrawal obligations. These non-operating retirement costs are primarily tied to financial market performance and amortization of changes in market interest rates and investment performance. Non-operating retirement costs do not include service costs and amortization of prior service costs for pension and retiree medical benefits, which we believe reflect the ongoing service-related costs of providing pension benefits to our employees. We consider non-operating retirement costs to be outside the performance of the business and we believe presenting operating results excluding non-operating retirement costs, in addition to our GAAP operating results, will provide increased transparency and a better understanding of the underlying trends in our operating business performance. Beginning in 2014, we will provide supplemental non-GAAP information on adjusted operating costs and adjusted operating profit, in each case adjusted to exclude non-operating retirement costs. We believe that this supplemental information will help clarify how the employee benefit costs of our principal plans affect our financial position and how they may affect future operating performance, allowing for a better long-term view of the business.

Outlook

We remain in a challenging business environment, reflecting an increasingly competitive and fragmented landscape, and visibility remains limited.

Total circulation revenues are projected to increase in the low-single digits in the first quarter of 2014 compared with the first quarter of 2013, as we expect to benefit from our digital subscription initiatives, as well as from the print home-delivery price increase implemented in the first quarter of 2014.

We expect total advertising revenue trends for the first quarter of 2014 to be similar to the trends experienced in the fourth quarter of 2013 based on a 13-week comparison.

P. 24 – THE NEW YORK TIMES COMPANY

We expect operating costs in the first quarter of 2014 to increase in the low- to mid-single digits compared with the first quarter of 2013 as investments around the Company’s strategic growth initiatives accelerate. In addition to higher retirement-related costs described above, we expect that costs related to our growth initiatives will increase by approximately $25 to $30 million in 2014 compared with 2013. We expect that operating profit will be negatively affected by these growth initiatives for the full year 2014, with potential positive contributions to profitability beginning late in 2014.

In addition, we expect the following on a pre-tax basis in 2014:


•	Results from joint ventures: $0 to a loss of $1 million,


•	Depreciation and amortization: $75 to $85 million,


•	Interest expense, net: $55 to $60 million, and


•	Capital expenditures: $35 to $45 million.

THE NEW YORK TIMES COMPANY – P. 25

RESULTS OF OPERATIONS

Overview

Fiscal years 2013 and 2011 each comprise 52 weeks and fiscal year 2012 comprises 53 weeks. The effect of the 53rd week (“additional week”) on revenues and operating costs is discussed below. The following table presents our consolidated financial results:



	Years Ended									% Change
(In thousands)	December 29, 2013			December 30, 2012			December 25, 2011			13-12		12-11
	(52 weeks)			(53 weeks)			(52 weeks)
Revenues
Circulation	$	824,277		$	795,037		$	705,163		3.7		12.7
Advertising	666,687			711,829			756,148			(6.3	)	(5.9	)
Other	86,266			88,475			93,263			(2.5	)	(5.1	)
Total revenues	1,577,230			1,595,341			1,554,574			(1.1	)	2.6
Operating costs
Production costs:
Raw materials	92,886			106,381			108,267			(12.7	)	(1.7	)
Wages and benefits	332,085			331,321			315,900			0.2		4.9
Other	201,942			213,616			216,094			(5.5	)	(1.1	)
Total production costs	626,913			651,318			640,261			(3.7	)	1.7
Selling, general and administrative costs	706,354			711,112			687,558			(0.7	)	3.4
Depreciation and amortization	78,477			78,980			83,833			(0.6	)	(5.8	)
Total operating costs	1,411,744			1,441,410			1,411,652			(2.1	)	2.1
Pension settlement expense	3,228			47,657			—			(93.2	)	N/A
Multiemployer pension plan withdrawal expense	6,171			—			4,228			N/A		*
Other expense	—			2,620			4,500			*		(41.8	)
Impairment of assets	—			—			7,458			N/A		*
Operating profit	156,087			103,654			126,736			50.6		(18.2	)
Gain on sale of investments	—			220,275			71,171			*		*
Impairment of investments	—			5,500			—			*		N/A
(Loss)/income from joint ventures	(3,215		)	2,936			(270		)	*		*
Premium on debt redemption	—			—			46,381			N/A		*
Interest expense, net	58,073			62,808			85,243			(7.5	)	(26.3	)
Income from continuing operations before income taxes	94,799			258,557			66,013			(63.3	)	*
Income tax expense	37,892			94,617			21,417			(60.0	)	*
Income from continuing operations	56,907			163,940			44,596			(65.3	)	*
Discontinued operations:
(Loss) from discontinued operations, net of income taxes	(20,413		)	(113,447		)	(82,799		)	(82.0	)	37.0
Gain on sale, net of income taxes	28,362			85,520			—			(66.8	)	N/A
Income/(loss) from discontinued operations, net of income taxes	7,949			(27,927		)	(82,799		)	*		(66.3	)
Net income/(loss)	64,856			136,013			(38,203		)	(52.3	)	*
Net loss/(income) attributable to the noncontrolling interest	249			(166		)	555			*		*
Net income/(loss) attributable to The New York Times Company common stockholders	$	65,105		$	135,847		$	(37,648	)	(52.1	)	*

* Represents an increase or decrease in excess of 100%.

P. 26 – THE NEW YORK TIMES COMPANY

Revenues

Circulation, advertising and other revenues were as follows:



	Years Ended						% Change
(In thousands)	December 29, 2013		December 30, 2012		December 25, 2011		13-12		12-11
	(52 weeks)		(53 weeks)		(52 weeks)
Circulation	$	824,277	$	795,037	$	705,163	3.7		12.7
Advertising	666,687		711,829		756,148		(6.3	)	(5.9	)
Other	86,266		88,475		93,263		(2.5	)	(5.1	)
Total	$	1,577,230	$	1,595,341	$	1,554,574	(1.1	)	2.6

Circulation Revenues

Circulation revenues are based on the number of copies of the printed newspaper (through home-delivery subscriptions and single-copy and bulk sales) and digital subscriptions sold and the rates charged to the respective customers. Total circulation revenues consist of revenues from our print and digital products, including our digital-only subscription packages, e-readers and replica editions.

Circulation revenues increased in 2013 compared with 2012 primarily due to growth in our digital subscription base and the increase in print home-delivery prices at The Times, offset by a decline resulting from fewer print copies sold and the effect of the additional week in 2012. Revenues from our digital-only subscription packages, e-readers and replica editions were $149.1 million in 2013 compared with $111.7 million in 2012, an increase of 33.5%.

Circulation revenues increased in 2012 compared with 2011 mainly as growth in our digital subscription base, the increase in print home-delivery prices in the first half of 2012 at The Times and the effect of the additional week in 2012 offset a decline resulting from fewer print copies sold. Revenues from our digital-only subscription packages, e-readers and replica editions were $111.7 million in 2012 compared with $44.3 million in 2011. In addition, as home-delivery subscribers receive all digital access for free, we saw benefits to The Times’s home-delivery circulation with slight growth in Sunday home-delivery circulation volume in 2012 compared with 2011.

Advertising Revenues

Advertising revenues (print and digital) by category were as follows:



	Years Ended						% Change
(In thousands)	December 29, 2013		December 30, 2012		December 25, 2011		13-12		12-11
	(52 weeks)		(53 weeks)		(52 weeks)
National	$	522,085	$	545,888	$	579,695	(4.4	)	(5.8	)
Retail	82,614		95,709		95,301		(13.7	)	0.4
Classified	57,069		64,575		74,084		(11.6	)	(12.8	)
Other	4,919		5,657		7,068		(13.0	)	(20.0	)
Total	$	666,687	$	711,829	$	756,148	(6.3	)	(5.9	)

Below is a percentage breakdown of 2013 and 2012 advertising revenues (print and digital):



	National		Retail and Preprint		Classified								Total Classified		Other Advertising Revenues		Total
	National		Retail and Preprint		Help Wanted		Real Estate		Auto		Other		Total Classified		Other Advertising Revenues		Total
2013	78	%	12	%	2	%	4	%	—	%	3	%	9	%	1	%	100	%
2012	77	%	13	%	2	%	4	%	1	%	2	%	9	%	1	%	100	%

Advertising revenues are primarily determined by the volume, rate and mix of advertisements. Advertising spending, which drives a significant portion of revenues, is sensitive to economic conditions and affected by the

THE NEW YORK TIMES COMPANY – P. 27

continuing transformation of our industry. During 2013, advertising revenues remained under pressure due to ongoing secular trends and economic factors. Changes in the spending patterns and marketing strategies of our advertisers in response to such conditions and an increasingly complex and fragmented digital advertising marketplace contributed to declines in advertising revenues during 2013. The market for standard web-based digital display advertising continues to experience challenges, due to an abundance of available advertising inventory and a shift toward automation, including digital advertising networks and exchanges, real-time bidding and other programmatic-buying channels that allow advertisers to buy audience at scale, which has led to downward pricing pressure.

In 2013, total advertising revenues decreased primarily due to lower print advertising revenues across all advertising categories and the effect of the additional week in 2012. Print advertising revenues, which represented approximately 76% of total advertising revenues, declined 7.0% in 2013 compared with 2012, due to weakness in national, retail and classified advertising. Digital advertising revenues declined 4.3% in 2013 compared with 2012 due to declines in national and classified advertising revenues, driven in part by the effect of the additional week in 2012, partially offset by an increase in retail advertising revenues.

By category, total advertising revenues declined in 2013 compared with 2012 mainly due to lower retail and classified advertising revenues, partially driven by the effect of the additional week in 2012. Total retail advertising revenues declined as advertisers reduced spending in the face of uneven economic conditions, primarily in the department stores, fashion jewelry and mass market categories. The uncertain economic environment, coupled with secular changes in our industry, contributed to declines in total classified advertising revenues, primarily in the real estate, automotive and help wanted categories. Total national advertising revenues decreased mainly in the financial services, entertainment, department store and hotel categories, partially offset by growth in the telecommunications and corporate categories.

In 2012, total advertising revenues decreased compared with 2011 due to lower print and digital advertising revenues, partially offset by the effect of the additional week in 2012. Print advertising revenues were affected by declines in advertiser spending in most advertising categories, reflecting the continued uneven U.S. economic environment, uncertain global conditions and the secular transformation of our industry. Print advertising revenues, which represented approximately 76% of total advertising revenues in 2012, declined 7.4% in 2012 compared with 2011, due to weakness in national, retail and classified advertising. Market factors, including an increasingly competitive landscape, also contributed to reduced spending on digital platforms and pricing pressure in digital advertising. Digital advertising revenues in 2012 decreased slightly compared with 2011 primarily due to declines in the real estate classified advertising category, partially offset by improvement in the national and retail display advertising categories, which benefited in part from the additional week in 2012.

By category, total advertising revenues declined in 2012 compared with 2011 mainly due to lower national and classified advertising revenues. Total national advertising revenues decreased reflecting the uncertain economic environment, which led to declines mainly in the financial services, studio entertainment, corporate and technology categories, partially offset by growth in the luxury category. The soft economic environment, coupled with secular changes in our industry, contributed to declines in total classified advertising revenues, primarily in the real estate and automotive categories.

Other Revenues

Other revenues consist primarily of revenues from news services/syndication, digital archives, rental income and conferences/events.

Other revenues decreased in 2013 compared with 2012, mainly due to our exit from the education business at the end of 2012.

Other revenues decreased in 2012 compared with 2011, mainly due to the sale of Baseline and our exit from the education business at the end of 2012.

P. 28 – THE NEW YORK TIMES COMPANY

Operating Costs

Operating costs were as follows:



	Years Ended						% Change
(In thousands)	December 29, 2013		December 30, 2012		December 25, 2011		13-12		12-11
	(52 weeks)		(53 weeks)		(52 weeks)
Production costs:
Raw materials	$	92,886	$	106,381	$	108,267	(12.7	)	(1.7	)
Wages and benefits	332,085		331,321		315,900		0.2		4.9
Other	201,942		213,616		216,094		(5.5	)	(1.1	)
Total production costs	626,913		651,318		640,261		(3.7	)	1.7
Selling, general and administrative costs	706,354		711,112		687,558		(0.7	)	3.4
Depreciation and amortization	78,477		78,980		83,833		(0.6	)	(5.8	)
Total operating costs	$	1,411,744	$	1,441,410	$	1,411,652	(2.1	)	2.1

The components of operating costs as a percentage of total operating costs were as follows:



	Years Ended
	December 29, 2013		December 30, 2012		December 25, 2011
	(52 weeks)		(53 weeks)		(52 weeks)
Components of operating costs as a percentage of total operating costs
Wages and benefits	40	%	40	%	40	%
Raw materials	7	%	7	%	7	%
Other operating costs	47	%	47	%	47	%
Depreciation and amortization	6	%	6	%	6	%
Total	100	%	100	%	100	%

The components of operating costs as a percentage of total revenues were as follows:



	Years Ended
	December 29, 2013		December 30, 2012		December 25, 2011
	(52 weeks)		(53 weeks)		(52 weeks)
Components of operating costs as a percentage of total revenues
Wages and benefits	36	%	36	%	36	%
Raw materials	6	%	7	%	7	%
Other operating costs	43	%	42	%	43	%
Depreciation and amortization	5	%	5	%	5	%
Total	90	%	90	%	91	%

Production Costs

Production costs decreased in 2013 compared with 2012 primarily due to lower raw materials expense (approximately $13 million), mainly newsprint, outside printing costs (approximately $9 million) and pension expense (approximately $3 million), offset in part by higher compensation costs (approximately $4 million). Newsprint expense declined 16.2% in 2013, with 9.8% from lower consumption and 6.4% from lower pricing. Cost savings from contract negotiations mainly contributed to lower outside printing costs. Compensation costs increased

THE NEW YORK TIMES COMPANY – P. 29

mainly due to new hires related to our digital initiatives and lower capitalized salary costs, offset by the additional week in 2012.

Production costs increased in 2012 compared with 2011 primarily due to higher compensation costs (approximately $16 million) and various other costs, offset in part by lower outside printing costs (approximately $6 million) and raw materials expense (approximately $2 million), mainly newsprint. Compensation costs increased mainly due to new hires for our digital initiatives, the effect of the additional week in 2012 and annual salary increases. Cost savings from the expiration of certain contractual commitments and contract negotiations mainly contributed to lower outside printing costs. Newsprint expense declined 1.2% in 2012, with 3.4% from lower consumption offset in part by 2.2% from higher pricing.

Selling, General and Administrative Costs

Selling, general and administrative costs decreased in 2013 compared with 2012 primarily due to lower pension expense (approximately $18 million) and salaries and wage expenses (approximately $10 million) offset by higher other compensation costs (approximately $13 million). Compensation costs increased primarily due to new hires related to digital initiatives and annual salary merit increases.

Selling, general and administrative costs increased in 2012 compared with 2011 primarily due to higher costs associated with promotion (approximately $4 million), severance (approximately $2 million) and various other costs and the effect of the additional week in 2012, offset in part by lower professional fees (approximately $7 million). Promotion costs were higher mainly due to our digital initiatives and print circulation marketing at The Times. Severance costs were higher due to the level of workforce reduction programs year-over-year. Professional fees were lower due to the level of consulting services.

Other Items

Pension Settlement Expense

As part of our strategy to reduce our pension obligations and the resulting volatility of our overall financial condition, during 2013 and 2012, we offered one-time lump-sum payments to certain former employees. The lump-sum payment offers each resulted in settlement charges due to the acceleration of the recognition of the accumulated unrecognized actuarial loss.

2013

In the fourth quarter of 2013, we recorded a $3.2 million non-cash settlement charge in connection with one-time lump-sum payments made to certain former employees who participated in a non-qualified pension plan. Total lump-sum payments made in the fourth quarter of 2013 were approximately $11 million and were paid out of Company cash.

2012

In 2012, we offered certain former employees who participated in The New York Times Companies Pension Plan the option to receive a one-time lump-sum payment equal to the present value of the participant’s pension benefit (payable in cash or rolled over into a qualified retirement plan or IRA) or to commence an immediate monthly annuity. Approximately 2,600 eligible terminated vested participants in The New York Times Companies Pension Plan accepted the offer. We recorded a non-cash settlement charge of $47.7 million in connection with the lump-sum payments made in the fourth quarter of 2012, which totaled approximately $112 million. These lump-sum payments were made out of existing assets of The New York Times Companies Pension Plan and not with Company cash. The lump-sum payments resulted in an actuarial gain of approximately $30 million as of December 30, 2012, thereby improving the underfunded status of The New York Times Companies Pension Plan. The actuarial gain was due to a higher discount rate used to value the lump-sum payments than was used to value the plan’s liabilities as of December 30, 2012.

Multiemployer Pension Plan Withdrawal Expense

Over the past few years, certain events, such as amendments to various collective bargaining agreements and the sales of the New England Media Group and the Regional Media Group, resulted in withdrawals from multiemployer pension plans. These actions, along with a reduction in covered employees, have resulted in us estimating withdrawal liabilities to the respective plans for our proportionate share of any unfunded vested benefits.

P. 30 – THE NEW YORK TIMES COMPANY

Our multiemployer pension plan withdrawal liability was approximately $119 million as of December 29, 2013 and $109 million as of December 30, 2012. This liability represents the present value of the obligations related to complete and partial withdrawals from certain plans, as well as an estimate of future partial withdrawals that we considered probable and reasonably estimable. For the plans that have yet to provide us with a demand letter, the actual liability will not be fully known until those plans complete a final assessment of the withdrawal liability and issue a demand to us. Therefore, the estimate of our multiemployer pension plan liability will be adjusted as more information becomes available that allows us to refine our estimates.

2013

In the third quarter of 2013, we recorded an estimated charge of $6.2 million related to a partial withdrawal obligation under a multiemployer pension plan.

2012

There were nominal charges in 2012 for withdrawal obligations related to our multiemployer pension plans.

2011

In 2011, we recorded an estimated charge of $4.2 million for multiemployer pension plan withdrawal obligations.

Other Expense

2012

In 2012, we recorded a $2.6 million charge in connection with a legal settlement.

2011

In 2011, we recorded a $4.5 million charge for a retirement and consulting agreement in connection with the retirement of our former chief executive officer at the end of 2011.

Impairment of Assets

2011

In the second quarter of 2011, we classified certain assets as held for sale, primarily of Baseline. The carrying value of these assets was greater than their fair value, less cost to sell, resulting in an impairment of certain intangible assets and property totaling $7.5 million. The impairment charge reduced the carrying value of intangible assets to zero and the property to a nominal value. The fair value for these assets was determined by estimating the most likely sale price with a third-party buyer based on market data. In October 2011, we completed the sale of Baseline, which resulted in a nominal gain.

NON-OPERATING ITEMS

Gain on Sale of Investments

2012

In the fourth quarter of 2012, Indeed.com, a search engine for jobs in which we had an ownership interest, was sold. The proceeds from the sale of our interest were approximately $167 million and we recognized a pre-tax gain of $164.6 million.

In the first quarter of 2012, we sold 100 of our units in Fenway Sports Group for an aggregate price of $30.0 million, resulting in a pre-tax gain of $17.8 million, and in the second quarter of 2012, we sold our remaining 210 units for an aggregate price of $63.0 million, resulting in a pre-tax gain of $37.8 million.

2011

In the third quarter of 2011, we sold 390 of our units in Fenway Sports Group, resulting in a pre-tax gain of $65.3 million.

In the first quarter of 2011, we sold a minor portion of our interest in Indeed.com, resulting in a pre-tax gain of $5.9 million.

THE NEW YORK TIMES COMPANY – P. 31

Impairment of Investments

In 2012, we recorded non-cash impairment charges of $5.5 million to reduce the carrying value of certain investments to fair value. The impairment charges were primarily related to our investment in Ongo Inc., a consumer service for reading and sharing digital news and information from multiple publishers.

(Loss)/Income from Joint Ventures

As of December 29, 2013, we had investments in paper mills that were accounted for under the equity method (Malbaie and Madison). Our proportionate share of the operating results of these investments is recorded in “(Loss)/income from joint ventures” in our Consolidated Statements of Operations. See Note 7 of the Notes to the Consolidated Financial Statements for additional information regarding these investments.

In the fourth quarter of 2013, as part of the sale of the New England Media Group, we sold our 49% equity interest in Metro Boston, and classified the results as discontinued operations for all periods presented. See Note 15 of the Notes to the Consolidated Financial Statements for additional information.

In 2013, we had loss from joint ventures of $3.2 million compared with income of $2.9 million in 2012. Joint venture results in 2013 were primarily due to lower results for the paper mills in which we have an investment.

In 2012, we had income from joint ventures of $2.9 million compared with a loss of $0.3 million in 2011. Joint venture results in 2012 were primarily impacted by improved results from the paper mills and the sale of our ownership interest in Fenway Sports Group. We changed the accounting for our ownership interest in Fenway Sports Group from the equity method to the cost method after the sale of a portion of our ownership interest in February 2012 reduced our influence on the operations of Fenway Sports Group. Therefore, starting in February 2012, we no longer recognized our proportionate share of the operating results of Fenway Sports Group in joint venture results in our Consolidated Statements of Operations.

Premium on Debt Redemption

On August 15, 2011, we prepaid in full all $250.0 million outstanding aggregate principal amount of our 14.053% senior unsecured notes due January 15, 2015 (“14.053% Notes”). The prepayment totaled approximately $280 million, comprising (1) the $250.0 million aggregate principal amount of the 14.053% Notes, (2) approximately $3 million representing all interest that was accrued and unpaid on the 14.053% Notes, and (3) a make-whole premium amount of approximately $27 million due in connection with the prepayment. We funded the prepayment from available cash. As a result of this prepayment, we recorded a $46.4 million pre-tax charge in the third quarter of 2011 and saved, and expect to save, in excess of $39 million annually in interest expense through January 15, 2015, the original maturity date.

Interest Expense, Net

Interest expense, net, was as follows:



	Years Ended
(In thousands)	December 29, 2013			December 30, 2012			December 25, 2011
Cash interest expense	$	54,811		$	58,719		$	79,187
Non-cash amortization of discount on debt	4,777			4,516			6,933
Capitalized interest	—			(17		)	(427		)
Interest income	(1,515		)	(410		)	(450		)
Total interest expense, net	$	58,073		$	62,808		$	85,243

Interest expense, net decreased in 2013 compared with 2012 due to a lower level of debt outstanding as a result of repurchases and, in the fourth quarter of 2012, a charge associated with the termination of our $125.0 million revolving credit facility.

Interest expense, net decreased in 2012 compared with 2011 mainly due to the prepayment in August 2011 of the 14.053% Notes and our payment at maturity in September 2012 of all $75.0 million outstanding aggregate principal amount of our 4.610% senior notes (“4.610% Notes”), offset in part by a charge related to the termination of our revolving credit facility in 2012.

P. 32 – THE NEW YORK TIMES COMPANY

Income Taxes

We had income tax expense of $37.9 million on pre-tax income of $94.8 million in 2013. Our effective tax rate was 40.0% in 2013. The effective tax rate for 2013 was favorably affected by strong returns on corporate-owned life insurance investments and approximately $1.8 million for the reversal of reserves for uncertain tax positions due to the lapse of applicable statutes of limitations.

We had income tax expense of $94.6 million on pre-tax income of $258.6 million in 2012. Our effective tax rate was 36.6% in 2012. The effective tax rate for 2012 was favorably affected by a lower income tax rate on the sale of our ownership interest in Indeed.com.

We had income tax expense of $21.4 million on pre-tax income of $66.0 million in 2011. Our effective tax rate was 32.4% in 2011. The effective tax rate for 2011 was favorably affected by approximately $12 million for the reversal of reserves for uncertain tax positions, primarily due to the lapse of applicable statutes of limitations.

Discontinued Operations

New England Media Group

In the fourth quarter of 2013, we completed the sale of substantially all of the assets and operating liabilities of the New England Media Group, consisting of the Globe, BostonGlobe.com, Boston.com, the T&G, Telegram.com and related properties, and our 49% equity interest in Metro Boston, for approximately $70 million in cash, subject to customary adjustments. The net after-tax proceeds from the sale, including a tax benefit, were approximately $74 million.

As a result of the New England Media Group meeting the criteria of being held for sale in the third quarter of 2013, we recorded an impairment charge of $34.3 million reflecting the difference between the expected sales price and the New England Media Group’s net assets at such time. In the fourth quarter of 2013, when the sale was completed, we recognized a pre-tax gain of $47.6 million on the sale ($28.1 million after tax), which was almost entirely comprised of a curtailment gain. This curtailment gain is primarily related to an acceleration of prior service credits from plan amendments announced in prior years, and is due to a reduction in the expected years of future Company service for employees at the New England Media Group.

The results of operations of the New England Media Group have been classified as discontinued operations for all periods presented and certain assets and liabilities are classified as held for sale for all periods presented.

About Group

In the fourth quarter of 2012, we completed the sale of the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses, to IAC/InterActiveCorp. for $300.0 million in cash, plus a net working capital adjustment of approximately $17 million. In 2012, the sale resulted in a pre-tax gain of $96.7 million ($61.9 million after tax). The net after-tax proceeds from the sale were approximately $291 million. The results of operations of the About Group, which had previously been presented as a reportable segment, have been classified as discontinued operations for all periods presented and certain assets are classified as held for sale as of December 30, 2012 and December 25, 2011.

Regional Media Group

In the first quarter of 2012, we completed the sale of the Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses, to Halifax Media Holdings LLC for approximately $140 million in cash. The net after-tax proceeds from the sale, including a tax benefit, were approximately $150 million. The sale resulted in an after-tax gain of $23.6 million (including post-closing adjustments recorded in the second and fourth quarters of 2012 totaling $6.6 million). The results of operations for the Regional Media Group have been classified as discontinued operations for all periods presented and certain assets and liabilities are classified as held for sale as of December 25, 2011.

THE NEW YORK TIMES COMPANY – P. 33

Discontinued operations are summarized in the following charts:



	Year Ended December 29, 2013
(In thousands)	New England Media Group			About Group			Regional Media Group		Total
Revenues	$	287,677		$	—		$	—	$	287,677
Total operating costs	281,414			—			—		281,414
Multiemployer pension plan withdrawal expense⁽¹⁾	7,997			—			—		7,997
Impairment of assets⁽²⁾	34,300			—			—		34,300
Loss from joint ventures	(240		)	—			—		(240		)
Interest expense, net	9			—			—		9
Pre-tax loss	(36,283		)	—			—		(36,283		)
Income tax benefit⁽³⁾	(13,373		)	(2,497		)	—		(15,870		)
(Loss)/income from discontinued operations, net of income taxes	(22,910		)	2,497			—		(20,413		)
Gain/(loss) on sale, net of income taxes:
Gain on sale⁽⁴⁾	47,561			419			—		47,980
Income tax expense	19,457			161			—		19,618
Gain on sale, net of income taxes	28,104			258			—		28,362
Income from discontinued operations, net of income taxes	$	5,194		$	2,755		$	—	$	7,949



	Year Ended December 30, 2012
(In thousands)	New England Media Group			About Group			Regional Media Group			Total
Revenues	$	394,739		$	74,970		$	6,115		$	475,824
Total operating costs	385,527			51,140			8,017			444,684
Impairment of assets⁽²⁾	—			194,732			—			194,732
Income from joint ventures	68			—			—			68
Interest expense, net	7			—			—			7
Pre-tax income/(loss)	9,273			(170,902		)	(1,902		)	(163,531		)
Income tax expense/(benefit)	10,717			(60,065		)	(736		)	(50,084		)
Loss from discontinued operations, net of income taxes	(1,444		)	(110,837		)	(1,166		)	(113,447		)
Gain/(loss) on sale, net of income taxes:
Gain/(loss) on sale	—			96,675			(5,441		)	91,234
Income tax expense/(benefit)⁽⁵⁾	—			34,785			(29,071		)	5,714
Gain on sale, net of income taxes	—			61,890			23,630			85,520
(Loss)/income from discontinued operations, net of income taxes	$	(1,444	)	$	(48,947	)	$	22,464		$	(27,927	)

P. 34 – THE NEW YORK TIMES COMPANY



	Year Ended December 25, 2011
(In thousands)	New England Media Group		About Group		Regional Media Group			Total
Revenues	$	398,056	$	110,826	$	259,945		$	768,827
Total operating costs	376,474		67,475		235,032			678,981
Impairment of assets⁽²⁾	1,767		3,116		152,093			156,976
Income from joint ventures	298		—		—			298
Pre-tax income/(loss)	20,113		40,235		(127,180		)	(66,832		)
Income tax expense/(benefit)⁽⁶⁾	11,393		15,453		(10,879		)	15,967
Income/(loss) from discontinued operations, net of income taxes	$	8,720	$	24,782	$	(116,301	)	$	(82,799	)


(1)	The multiemployer pension plan withdrawal expense in 2013 is related to estimated charges for complete or partial withdrawal obligations under multiemployer pension plans triggered by the sale of the New England Media Group.


(2)	Included the impairment of fixed assets related to the New England Media Group in 2013; impairment of goodwill related to the About Group in 2012; impairment of intangible assets related to the About Group and impairment of goodwill related to Regional Media Group in 2011.


(3)	The income tax benefit for the About Group in 2013 is related to a change in prior period estimated tax expense.


(4)	Included in the gain on sale in 2013 is a $49.1 million post-retirement curtailment gain related to the New England Media Group.


(5)	The income tax benefit for the Regional Media Group in 2012 included a tax deduction for goodwill, which was previously non-deductible, triggered upon the sale of the Regional Media Group.


(6)	The income tax benefit for the Regional Media Group in 2011 was unfavorably impacted because a portion of the goodwill impairment charge was non-deductible.

Impairment of Assets

2013

New England Media Group

The impairment of assets in 2013 reflects the impairment of fixed assets held for sale that related to the New England Media Group. During the third quarter of 2013, we estimated the fair value less cost to sell of the group held for sale, using unobservable inputs. We recorded a $34.3 million non-cash charge in the third quarter of 2013 for fixed assets at the New England Media Group to reduce the carrying value of fixed assets to their fair value less cost to sell.

2012

About Group

Our policy is to perform our annual goodwill impairment test in the fourth quarter of our fiscal year. However, due to certain impairment indicators at the About Group, we performed an interim impairment test as of June 24, 2012. The interim impairment test resulted in a $194.7 million non-cash charge in the second quarter of 2012 for the impairment of goodwill at the About Group. Our expectations for future operating results and cash flows at the About Group in the long term were lower than our previous estimates, primarily driven by a reassessment of the sustainability of our estimated long-term growth rate for display advertising. The reduction in our estimated long-term growth rate resulted in the carrying value of the net assets being greater than their fair value, and therefore a write-down of goodwill to its fair value was required.

2011

About Group

Our 2011 annual impairment test, which was completed in the fourth quarter, resulted in a non-cash impairment charge of $3.1 million relating to the write-down of an intangible asset at ConsumerSearch, Inc., which was part of the About Group. The impairment was driven by lower cost-per-click advertising revenues. This impairment charge reduced the carrying value of the ConsumerSearch trade name to approximately $3 million. The fair value of the trade name was calculated using a relief-from-royalty method.

THE NEW YORK TIMES COMPANY – P. 35

Regional Media Group

Due to certain impairment indicators at the Regional Media Group, including lower-than-expected operating results, we performed an interim impairment test of goodwill as of June 26, 2011. The interim test resulted in an impairment of goodwill of $152.1 million mainly from lower projected long-term operating results and cash flows of the Regional Media Group, primarily due to the continued decline in print advertising revenues. These factors resulted in the carrying value of the net assets being greater than their fair value, and therefore a write-down to fair value was required. The impairment charge reduced the carrying value of goodwill at the Regional Media Group to zero.

In determining the fair value of the Regional Media Group, we made significant judgments and estimates regarding the expected severity and duration of the uneven economic environment and the secular changes affecting the newspaper industry in the Regional Media Group markets. The effect of these assumptions on projected long-term revenues, along with the continued benefits from reductions to the group’s cost structure, played a significant role in calculating the fair value of the Regional Media Group.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The following table presents information about our financial position.

Financial Position Summary



							% Change
(In thousands, except ratios)	December 29, 2013			December 30, 2012			13-12
Cash and cash equivalents	$	482,745		$	820,490		(41.2	)
Marketable securities	541,035			139,264			*
Current portion of long-term debt and capital lease obligations	21			123			(82.9	)
Long-term debt and capital lease obligations	684,142			696,752			(1.8	)
Total New York Times Company stockholders’ equity	842,910			662,325			27.3
Ratios:
Total debt to total capitalization	45		%	51		%
Current assets to current liabilities	3.36			3.30

* Represents an increase in excess of 100%.

Our primary sources of cash inflows from operations are circulation and advertising sales. Circulation and advertising provided about 52% and 42%, respectively, of total revenues in 2013. The remaining cash inflows from operations are from other revenue sources such as news services/syndication, digital archives, rental income and conferences/events. Our primary source of cash outflows are for employee compensation, pension and other benefits, raw materials, services and supplies, interest and income taxes. Contributions to our qualified pension plans can have a significant impact on cash flows. See “— Pensions and Other Postretirement Benefits” for additional information regarding our pension plans. We believe our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to meet our financing needs over the next 12 months.

We have continued to strengthen our liquidity position and our debt profile. As of December 29, 2013, we had cash, cash equivalents and marketable securities of approximately $1 billion and total debt and capital lease obligations of approximately $684 million. Accordingly, our cash, cash equivalents and marketable securities exceeded total debt and capital lease obligations by over $300 million. Our cash position improved in 2013, primarily due to cash flows from operations and the proceeds from the sale of the New England Media Group and our ownership interest in Metro Boston, offset by contributions totaling approximately $74 million during 2013 to certain qualified pension plans.

P. 36 – THE NEW YORK TIMES COMPANY

We remain focused on managing the underfunded status of our pension plans and adjusting the size of our pension obligations relative to the size of our Company. Our qualified pension plans were underfunded (meaning the present value of future obligations exceeded the fair value of plan assets) as of December 29, 2013, by approximately $80 million, compared with approximately $350 million as of December 30, 2012. The improvement in the funded status of these pension plans reflects the increase in interest rates in 2013, solid returns on pension assets, contributions we made in early 2013 and the elimination of obligations relating to certain former employees who accepted a one-time lump-sum payment offer in 2012. We made contributions of approximately $74 million to certain qualified pension plans in 2013. We expect contributions to total approximately $16 million to satisfy minimum funding requirements in 2014. In addition, see “Legal Proceedings” regarding current matters relating to the Pension Benefit Guaranty Corporation.

Capital Resources

Sources and Uses of Cash

Cash flows provided by/(used in) by category were as follows:



	Years Ended									% Change
(In thousands)	December 29, 2013			December 30, 2012			December 25, 2011			13-12		12-11
Operating activities	$	34,855		$	79,310		$	73,927		(56.1	)	7.3
Investing activities	$	(353,657	)	$	646,813		$	(18,254	)	*		*
Financing activities	$	(19,259	)	$	(80,854	)	$	(250,226	)	(76.2	)	(67.7	)

* Represents an increase or decrease in excess of 100%.

Operating Activities

Operating cash inflows include cash receipts from circulation and advertising sales and other revenue transactions. Operating cash outflows include payments for employee compensation, pension and other benefits, raw materials, services and supplies, interest and income taxes.

Net cash provided by operating activities in 2013 decreased compared with 2012 primarily due to cash flows related to the About Group prior to its disposition in 2012 and higher income tax payments in 2013, offset in part by lower pension contributions in 2013. We made contributions to certain qualified pension plans of approximately $74 million in 2013 compared with approximately $144 million in 2012. We also made income tax payments of approximately $53 million in 2013 compared with approximately $7 million in 2012.

Net cash provided by operating activities in 2012 increased compared with 2011 primarily due to lower interest mainly associated with the prepayment of the 14.053% Notes in August 2011, offset in part by higher income taxes primarily for the sales of our ownership interests in Indeed.com and Fenway Sports Group, as well as lower income tax refunds.

Investing Activities

Cash from investing activities generally includes proceeds from marketable securities that have matured and the sale of assets, investments or a business. Cash used in investing activities generally includes purchases of marketable securities, payments for capital projects, restricted cash primarily subject to collateral requirements for obligations under our workers’ compensation programs, acquisitions of new businesses and investments.

Net cash used in investing activities in 2013 was primarily due to net purchases of marketable securities and payments for capital expenditures, offset by proceeds from the sale of the New England Media Group and our ownership interest in Metro Boston.

Net cash provided by investing activities in 2012 was primarily due to proceeds from the sales of the About and Regional Media Groups and our ownership interests in Indeed.com and Fenway Sports Group, offset in part by net purchases of marketable securities and payments for capital expenditures.

Net cash used in investing activities in 2011 was mainly due to net purchases of marketable securities, capital expenditures and changes in restricted cash, offset in part by proceeds from the sales of a portion of our interests in

THE NEW YORK TIMES COMPANY – P. 37

Fenway Sports Group and Indeed.com, as well as proceeds primarily from the sales of UCompareHealthCare.com and Baseline in 2011.

Capital expenditures were $16.9 million in 2013, $34.9 million in 2012 and $44.9 million in 2011.

Financing Activities

Cash from financing activities generally includes borrowings under third-party financing arrangements, the issuance of long-term debt and funds from stock option exercises. Cash used in financing activities generally includes the repayment of amounts outstanding under third-party financing arrangements, the payment of dividends, long-term debt and capital lease obligations.

Net cash used in financing activities in 2013 was primarily due to the repurchase of $17.4 million principal amount of our 6.625% Notes in addition to dividends paid in the fourth quarter of 2013, offset by funds from stock option exercises.

Net cash used in financing activities in 2012 was primarily for the repayment at maturity in September 2012 of all $75.0 million outstanding aggregate principal amount of the 4.610% Notes and the repurchase of $5.9 million principal amount of the 5.0% senior unsecured notes due March 15, 2015.

Net cash used in financing activities in 2011 was primarily for the prepayment of our 14.053% Notes.

See “— Third-Party Financing” below and our Consolidated Statements of Cash Flows for additional information on our sources and uses of cash.

Restricted Cash

We were required to maintain $28.1 million of restricted cash as of December 29, 2013, primarily related to certain collateral requirements for obligations under our workers’ compensation programs.

Third-Party Financing

Our total debt and capital lease obligations consisted of the following:



(In thousands, except percentages)	Coupon Rate		December 29, 2013	December 30, 2012
Senior notes due in 2015, net of unamortized debt costs of $43 in 2013 and $78 in 2012	5.0	%	244,057	244,022
Senior notes due in 2016, net of unamortized debt costs of $2,484 in 2013 and $3,477 in 2012	6.625	%	205,111	221,523
Option to repurchase ownership interest in headquarters building in 2019, net of unamortized debt costs of $21,741 in 2013 and $25,490 in 2012			228,259	224,510
Total debt			677,427	690,055
Short-term capital lease obligations⁽¹⁾			21	123
Long-term capital lease obligations			6,715	6,697
Total capital lease obligations	</