SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Sec.240.14a-11(c) or Sec.240.14a-12
THE NEW YORK TIMES COMPANY
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each Class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
________________________________________________________________________
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
LOGO Notice of 1994
Annual Meeting
and Proxy Statement
The New York Times Company
229 West 43rd Street, New York, NY 10036
212-556-1234
<PAGE>
The New York Times Company
229 West 43d Street, New York, N. Y. 10036 (212) 556-1234
March 21, 1994
To Our Stockholders:
Our 1994 Annual Meeting of Stockholders will be held on Tuesday, April 19,
at 8:30 A.M., local time, at the Boston Park Plaza Hotel, 64 Arlington Street,
Boston, Massachusetts 02116.
The accompanying Notice of Annual Meeting and Proxy Statement set forth the
business intended to be transacted. Time will be made available for a discussion
of these items as well as for other questions about the business affairs of the
Company. As usual, all stockholders will be sent a report of the meeting.
This year our meeting will be held in Boston, Massachusetts, home of The
Boston Globe. The Globe joined The Times Company group last October. We are
proud to include this unique property, with its powerful franchise and its
reputation for quality and integrity, in our family. A map showing you how to
reach the meeting site appears on the outside back cover of this Proxy
Statement.
It is important that your shares be represented at the meeting, whether or
not you are personally able to attend. Accordingly, please sign, date and mail
the enclosed proxy card in the return envelope as promptly as possible. Your
cooperation in this regard will be very much appreciated.
Sincerely yours,
ARTHUR OCHS SULZBERGER
Chairman
<PAGE>
The New York Times Company
229 West 43d Street, New York, N. Y. 10036 (212) 556-1234
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held April 19, 1994
TO THE HOLDERS OF CLASS A AND CLASS B COMMON STOCK OF
THE NEW YORK TIMES COMPANY:
The Annual Meeting of the holders of the Class A and Class B Common Stock
of The New York Times Company (the "Company") will be held at the Boston Park
Plaza Hotel, 64 Arlington Street, Boston, Massachusetts 02116, on Tuesday, April
19, 1994, at 8:30 A.M., local time, for the following purposes:
1. To elect a Board of 16 members;
2. To consider and act upon a proposal to amend the Company's Employee
Stock Purchase Plan to reserve an additional 6,000,000 shares of
Class A Common Stock for sale under the Plan;
3. To ratify the selection of Deloitte & Touche, independent certified
public accountants, as auditors for the year ending December 31,
1994; and
4. To transact such other business as may properly come before the
meeting.
Holders of the Class A and Class B Common Stock of record at the close of
business on February 28, 1994, are entitled to notice of and to vote at this
meeting as set forth in the Proxy Statement. Class A stockholders are entitled
to vote for the election of five of the 16 directors. Class A and Class B
stockholders, voting together as a single class, are entitled to vote for the
amendment to the Company's Employee Stock Purchase Plan and the ratification of
the selection of Deloitte & Touche as auditors for 1994. Class B stockholders
are entitled to vote for the election of 11 of the 16 directors and on all other
matters presented to the meeting.
New York, N.Y.
March 21, 1994
By Order of the Board of Directors
LAURA J. CORWIN
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. THIS IS IMPORTANT FOR
THE PURPOSE OF INSURING A QUORUM AT THE MEETING.
<PAGE>
THE NEW YORK TIMES COMPANY
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE> <CAPTION>
Page
<S> <C>
Solicitation of Proxies................................................................................. 1
Voting Securities of the Company................................................................... 1
Principal Holders of Common Stock.................................................................. 1
Security Ownership of Management................................................................... 4
The 1986 Trusts.................................................................................... 6
Globe Voting Trust and Jordan Voting Trust......................................................... 7
Proposal Number 1: Election of Directors................................................................ 9
Class A Directors.................................................................................. 9
Class B Directors.................................................................................. 11
Interest of Directors in Certain Transactions of the Company....................................... 14
Certain Information about the Board of Directors................................................... 15
Compensation of Directors; Liability and Reimbursement Insurance................................... 16
Compensation of Executive Officers...................................................................... 17
Summary Compensation Table......................................................................... 17
Option Grants in Last Fiscal Year.................................................................. 18
Aggregated Option Exercises in Last Fiscal Year, and FY-End
Option Values................................................................................... 19
Pension Plan Table................................................................................. 19
Performance Presentation........................................................................... 20
Compensation Committee Report...................................................................... 20
Compensation Committee Interlocks and Insider Participation........................................ 23
Proposal Number 2: Amendment of Employee Stock Purchase Plan............................................ 23
Description of the Stock Purchase Plan............................................................. 23
Federal Income Tax Consequences of Participation in the Stock
Purchase Plan................................................................................... 24
Current Offering................................................................................... 25
Proposal Number 3: Selection of Auditors................................................................ 25
Other Matters........................................................................................... 26
Discretionary Authority to Vote Proxy.............................................................. 26
Annual Report; Annual Report on Form 10-K.......................................................... 26
Submission of Stockholder Proposals................................................................ 26
Appendix: 1993 Financial Report......................................................................... App
</TABLE>
<PAGE>
THE NEW YORK TIMES COMPANY
PROXY STATEMENT
1994 ANNUAL MEETING OF STOCKHOLDERS
- - --------------------------------------------------------------------------------
SOLICITATION OF
PROXIES
- - --------------------------------------------------------------------------------
The enclosed proxy is solicited by the Board of Directors of the Company
for use at the Annual Meeting of Stockholders to be held April 19, 1994, and at
any adjournment or adjournments thereof. A proxy may be revoked by notice in
writing to the Secretary at any time prior to the exercise thereof or by
execution of a proxy bearing a later date. Each valid proxy received in time
will be voted at the meeting, and, if a choice is specified, it will be voted in
accordance with such specification. This Proxy Statement and the proxies
solicited hereby are being first sent or delivered to stockholders of the
Company on or about March 21, 1994. The cost of solicitation of proxies,
including the reimbursement to banks and brokers for reasonable expenses of
sending proxy material to their principals, will be borne by the Company. The
Company has engaged Georgeson & Co., Inc. to assist in the solicitation of
proxies from brokers, banks, institutions and other fiduciaries by mail,
telephone, telegraph and facsimile for a fee of $6,000 plus out-of-pocket
expenses. In addition, proxies may be solicited by officers of the Company in
person or by mail, telephone, telegraph or facsimile.
VOTING SECURITIES OF THE COMPANY
The Company has two classes of outstanding voting securities, the Class A
Common Stock, 10 cents par value, and the Class B Common Stock, 10 cents par
value. As of February 28, 1994, there were outstanding 106,461,863 shares of
Class A Common Stock and 431,681 shares of Class B Common Stock. Only holders of
record of the Class A or Class B Common Stock at the close of business on
February 28, 1994, are entitled to vote at the meeting.
Each share of stock is entitled to one vote. The Class A stockholders have
limited voting rights and are entitled to vote for the election of five of the
16 directors. Class A and Class B stockholders, voting together as a single
class, are entitled to vote on the amendment to the Company's Employee Stock
Purchase Plan and for the ratification of the selection of Deloitte & Touche as
auditors for the year ending December 31, 1994. The Class B stockholders are
entitled to vote for the election of 11 of the 16 directors and on all other
matters presented to the meeting.
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth the only persons who, to the knowledge of
management, owned beneficially on February 28, 1994, more than 5% of the
outstanding shares of either Class A or Class B Common Stock:
<TABLE> <CAPTION>
NAME AND ADDRESS SHARES (%)
- - -------------------------------------------------------------------- ----------------------------------
CLASS A CLASS B
------------- ---------
<S> <C> <C>
1986 Trusts 1,2..................................................... 3,694,050(3.5%) 369,405(85.6%)
229 West 43d Street
New York, NY
Marian S. Heiskell 1,2,3,4.......................................... 6,571,417(6.2%) 370,890(85.9%)
229 West 43d Street
New York, NY
Ruth S. Holmberg 1,2,3,5............................................ 7,217,088(6.8%) 370,590(85.8%)
117 Tenth Street
Chattanooga, TN
</TABLE>
1
<PAGE>
<TABLE> <CAPTION>
NAME AND ADDRESS SHARES (%)
- - -------------------------------------------------------------------- -----------------------------------
CLASS A CLASS B
------------- -------------
<S> <C> <C>
Judith P. Sulzberger 1,2,3.......................................... 7,152,795(6.7%) 370,590(85.8%)
229 West 43d Street
New York, NY
Arthur Ochs Sulzberger 1,2,3,6...................................... 7,945,379(7.4%) 371,190(86%)
229 West 43d Street
New York, NY
Jordan Voting Trust 7............................................... 6,608,787(6.2%) 0
William O. Taylor, Robert A. Lawrence
and Roland D. Grimm, Trustees
c/o Boston Safe Deposit & Trust Co.
One Boston Place
Boston, MA 02108
William O. Taylor 7,8............................................... 11,789,426(11.1%) 0
135 Morrissey Boulevard
Boston, MA 02107
Robert A. Lawrence 7................................................ 6,626,787(6.2%) 0
Saltonstall & Co.
50 Congress Street
Boston, MA 02109
Roland D. Grimm 7................................................... 6,614,508(6.2%) 0
P.O. Box 8680
St. Thomas, V.I. 00801
INVESCO PLC 9....................................................... 6,065,322(5.7%) 0
11 Devonshire Square
London EC2M 4YR
England
</TABLE>
- - ---------------
1. Each of Mrs. Heiskell, Mrs. Holmberg, Dr. Sulzberger and Mr. Sulzberger, as
trustees of the 1986 Trusts (as defined below in "The 1986 Trusts"), share
voting and investment power with respect to the shares owned by the 1986
Trusts, and thus under current Securities and Exchange Commission ("SEC")
regulations, each may be deemed a beneficial owner of the shares held by
such 1986 Trusts. The shares held by the 1986 Trusts are included in the
amounts listed in this table opposite the names of all four of the foregoing
persons. As a result of this presentation, there are substantial
duplications in the number of shares and percentages shown in the table.
2. Class B Common Stock is convertible into Class A Common Stock on a
share-for-share basis. Ownership of Class B Common Stock is therefore deemed
to be beneficial ownership of Class A Common Stock under current SEC
regulations. For purposes of the table of Class A ownership, it has been
assumed that each person listed therein as holding Class B Common Stock has
converted into Class A Common Stock all shares of Class B Common Stock of
which that person is deemed the beneficial owner. Thus all shares of Class B
Common Stock held by the 1986 Trusts and by Mrs. Heiskell, Mrs. Holmberg,
Dr. Sulzberger and Mr. Sulzberger have been included in the calculation of
the total amount of Class A Common Stock owned by each such person as well
as in the calculation of the total amount of Class B Common Stock owned by
each such person. As a result of this presentation, there are substantial
duplications in the number of shares and percentages shown in the table.
3. The holdings of Class A Common Stock recorded for Mrs. Heiskell, Mrs.
Holmberg, Mr. Sulzberger and Dr. Sulzberger include 54,600 shares of Class A
Common Stock held by The Sulzberger Foundation, Inc., a private foundation
of which they are officers and directors. The holdings of Class A Common
Stock recorded for each of Mrs. Heiskell, Mrs. Holmberg and Dr. Sulzberger
include 3,000 shares which could be acquired within 60 days under the
Company's Non-Employee Directors' Stock Option Plan.
4. The holdings of Class A Common Stock recorded for Mrs. Heiskell include
28,806 shares of Class A Common Stock held by a trust of which Mrs. Heiskell
is a trustee, which was created by Mrs. Heiskell's mother for one of her
grandchildren.
5. The holdings of Class A Common Stock recorded for Mrs. Holmberg include
5,040 shares of Class A Common Stock held by three trusts of which Mrs.
Holmberg is a trustee, which were created by Mr. Holmberg for his children.
(Footnotes continued on following page)
2
<PAGE>
(Footnotes continued from preceding page)
6. The holdings of Class A Common Stock recorded for Mr. Sulzberger include
28,806 shares of Class A Common Stock held by a trust of which Mr.
Sulzberger is a trustee, which was created by his mother for one of her
grandchildren (who is a child of Mr. Sulzberger), 750,000 shares of Class A
Common Stock held by a trust created by Mrs. Heiskell of which Mr.
Sulzberger is the trustee, and 126,410 shares of Class A Common Stock which
could be acquired pursuant to options granted under the Company's Executive
Incentive Compensation Plan and the Company's 1991 Executive Stock Incentive
Plan (the "Plans"). The holdings of Class A Common Stock recorded for Mr.
Sulzberger exclude 200,180 shares of Class A Common Stock owned by his wife
as her separate property. Mr. Sulzberger disclaims beneficial ownership of
such shares. Mr. Sulzberger also holds 40,821 retirement units (right under
the Plans to receive shares of Class A Common Stock in ten annual
installments upon retirement).
7. Each of Mr. Taylor, Mr. Lawrence and Mr. Grimm, as trustees of the Jordan
Voting Trust (as described in "Globe Voting Trust and Jordan Voting Trust"),
share voting and investment power with respect to the 6,608,787 shares of
Class A Common Stock held by the Jordan Trust (as defined in "Globe Voting
Trust and Jordan Voting Trust"). Messrs. Taylor, Lawrence and Grimm have no
economic interest in these shares and have no beneficial interest in the
Jordan Trust. Because Messrs. Taylor, Lawrence and Grimm have the power to
vote these shares, SEC rules also require inclusion of such shares in the
Company's listing of each such person's beneficial ownership of Company
stock. As a result of this presentation, there are substantial duplications
in the number of shares and percentages shown in the table. The shares in
the Jordan Voting Trust are subject to the Globe Stockholders Agreement (as
defined in "Globe Voting Trust and Jordan Voting Trust"). See "Globe Voting
Trust and Jordan Voting Trust." The shares reported for Mr. Lawrence include
18,000 shares held directly. The shares reported for Mr. Grimm include 1,636
shares held directly and 4,085 shares which could be acquired pursuant to
options granted under a stock option plan of Affiliated Publications, Inc.,
former parent company of The Boston Globe ("API"). These options were
converted into options to purchase Class A Common Stock upon the acquisition
of API by the Company.
8. The holdings recorded for Mr. Taylor include the following shares of Class A
Common Stock in which Mr. Taylor has an economic interest: (a) 218,376
shares held directly, (b) 8,437 shares held by a trust of which Mr. Taylor
is a co-trustee and sole beneficiary, (c) 63,419 shares held through
ownership of units in the Globe Voting Trust (as defined in "Globe Voting
Trust and Jordan Voting Trust") by a trust of which Mr. Taylor is a
co-trustee and sole beneficiary, (d) 426 shares held through ownership of
units in the Globe Voting Trust by Mr. Taylor, (e) 630 shares held by Mr.
Taylor's wife, and (f) 35,176 shares which could be acquired pursuant to
options granted under stock option plans of API. These options were
converted into options to purchase Class A Common Stock upon the acquisition
of API by the Company. In addition, the holdings recorded for Mr. Taylor
include the 6,608,787 shares held by the Jordan Voting Trust as described in
note 7. Finally, the holdings recorded for Mr. Taylor also include 4,854,175
shares of Class A Common Stock held through various trusts, other than the
Jordan Voting Trust, of which Mr. Taylor is co-trustee. Of these shares,
4,757,275 have been deposited with the Globe Voting Trust. Mr. Taylor has no
economic interest in these shares and is not a beneficiary of any such trust
with respect to such shares. Because Mr. Taylor shares the power to vote,
and in some cases, to dispose of or direct the disposition of, these shares,
SEC rules require inclusion of such shares in the Company's listing of his
beneficial ownership of Company stock. Of the shares of Class A Common Stock
recorded as beneficially owned by Mr. Taylor, 9,020,109 shares, including
2,208,718 shares held through the Globe Voting Trust, are subject to the
Globe Stockholders Agreement. See "Globe Voting Trust and Jordan Voting
Trust."
9. According to information contained in its filing with the SEC pursuant to
Section 13(g) of the Securities Exchange Act of 1934, as of December 31,
1993, INVESCO PLC shared voting and investment power over 6,065,322 shares
of Class A Common Stock with its subsidiaries, INVESCO North American Group,
Ltd., INVESCO, Inc., INVESCO North American Holdings, Inc., INVESCO Capital
Management, Inc., and INVESCO Management & Research, Inc. According to such
filing, such shares were acquired for other persons in the ordinary course
of business, none of whose interests exceed 5% of the outstanding Class A
Common Stock, and were not acquired for the purpose of and do not have the
effect of changing or influencing the control of the Company.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership, reported to the Company
as of February 28, 1994, of Class A Common Stock, Class B Common Stock and 5
1/2% Cumulative Prior Preference Stock, including shares as to which a right to
acquire ownership exists (for example, by the exercise of stock options, or the
conversion of Class B Common Stock into Class A Common Stock) within the meaning
of Rule 13d-3(d)(1) under the Securities Exchange Act, of each director and
nominee, the chief executive officer and the four other most highly compensated
executive officers of the Company and all directors, nominees and executive
officers of the Company, as a group. A portion of the shares reported below are
held by the 1986 Trusts, the Globe Voting Trust and the Jordan Voting Trust,
whose trustees share voting and, in some cases, investment power with respect
thereto. See "1986 Trusts" and "Globe Voting Trust and Jordan Voting Trust."
<TABLE> <CAPTION>
5 1/2%
CUMULATIVE PRIOR
COMMON STOCK PREFERENCE STOCK
------------------------ -----------------
CLASS A CLASS B
------------- ---------
<S> <C> <C> <C>
John F. Akers1............................... 7,000(*) 0 0
Director
Richard L. Gelb1............................. 12,000(*) 0 0
Director
Louis V. Gerstner, Jr.2...................... 4,500(*) 0 0
Director
David L. Gorham3............................. 71,023(*) 0 0
Senior Vice President and Chief Financial
Officer
Marian S. Heiskell........................... (**) (**) 0
Director
A. Leon Higginbotham, Jr.4................... 1,200(*) 0 0
Director
Ruth S. Holmberg............................. (**) (**) 698 (3.9%)
Director
Robert A. Lawrence........................... (***) 0 0
Director
Walter E. Mattson5........................... 121,189(*) 0 0
Director
George B. Munroe2............................ 4,000(*) 0 0
Director
Charles H. Price II1......................... 4,000(*) 0 0
Director
Lance R. Primis6............................. 116,039(*) 0 0
President
Michael E. Ryan7............................. 132,671(*) 0 0
Senior Vice President
George L. Shinn1............................. 5,000(*) 0 0
Director
Donald M. Stewart1........................... 3,201(*) 0 0
Director
Arthur Ochs Sulzberger....................... (**) (**) 185 (1%)
Chairman of the Board and Chief Executive
Officer
Arthur Ochs Sulzberger, Jr.8................. 89,490(*) 480(*) 180 (1%)
Publisher of The New York Times
Judith P. Sulzberger......................... (**) (**) 185 (1%)
Director
William O. Taylor............................ (***) 0 0
Director, Publisher of The Boston Globe and
Chief Executive Officer of Globe Newspaper
Company
</TABLE>
4
<PAGE>
<TABLE> <CAPTION>
5 1/2%
CUMULATIVE PRIOR
COMMON STOCK PREFERENCE STOCK
------------------------ -----------------
CLASS A CLASS B
------------- ---------
<S> <C> <C> <C>
Cyrus R. Vance1.............................. 9,200(*) 0 0
Director
All Directors, Nominees and Executive
Officers9 (34 individuals)................... 30,453,812 8%) 376,084 7%) 1,248(7%)
</TABLE>
- - ---------------
* Less than 1%.
** See "Principal Holders of Common Stock" and "1986 Trusts."
*** See "Principal Holders of Common Stock" and "Globe Voting Trust and Jordan
Voting Trust."
1. The amount reported for this director includes 3,000 shares of Class A Common
Stock which could be acquired within 60 days pursuant to options under the
Company's Non-Employee Directors' Stock Option Plan.
2. The amount reported for this director includes 2,000 shares of Class A Common
Stock which could be acquired within 60 days pursuant to options under the
Company's Non-Employee Directors' Stock Option Plan.
3. The amount reported for Mr. Gorham includes 12,688 shares of Class A Common
Stock owned, including 400 shares held by Mr. Gorham's children, the
beneficial ownership of which Mr. Gorham disclaims, and 58,335 shares which
could be acquired within 60 days pursuant to options under the Company's 1991
Executive Stock Incentive Plan and Executive Incentive Compensation Plan (the
"Plans") (see "Compensation of Executive Officers," table of "Aggregated
Option Exercises in Last Fiscal Year, and FY-End Option Values"). Mr. Gorham
also holds 2,615 retirement units (right under the Plans to receive shares of
Class A Common Stock in ten annual installments upon retirement).
4. The amount reported for this director includes 1,000 shares of Class A Common
Stock which could be acquired within 60 days pursuant to options under the
Company's Non-Employee Directors' Stock Option Plan.
5. The amount reported for Mr. Mattson includes 20,457 shares of Class A Common
Stock owned, and 100,732 shares which could be acquired within 60 days
pursuant to options under the Company's Plans. Mr. Mattson also holds 15,703
retirement units (right under the Plans to receive shares of Class A Common
Stock in ten annual installments upon retirement).
6. The amount reported for Mr. Primis includes 37,399 shares of Class A Common
Stock owned, including 1,600 shares held as custodian for Mr. Primis's minor
children, the beneficial ownership of which Mr. Primis disclaims, and 78,640
shares which could be acquired within 60 days pursuant to options under the
Company's Plans (see "Compensation of Executive Officers," table of
"Aggregated Option Exercises in Last Fiscal Year, and FY-End Option Values").
7. The amount reported for Mr. Ryan includes 71,106 shares of Class A Common
Stock owned, and 61,565 shares which could be acquired within 60 days
pursuant to options under the Company's Plans (see "Compensation of Executive
Officers," table of "Aggregated Option Exercises in Last Fiscal Year, and
FY-End Option Values"). Mr. Ryan also holds 8,258 retirement units (right
under the Plans to receive shares of Class A Common Stock in ten annual
installments upon retirement).
8. The amount reported for Mr. Sulzberger, Jr. includes 12,218 shares of Class A
Common Stock owned, 6,650 shares held in trust for his children, and 3,105
shares held by trusts of which Mr. Sulzberger, Jr. is a trustee, which were
created by Mr. Sulzberger, Jr.'s cousin for the benefit of the latter's
children. Mr. Sulzberger, Jr. disclaims beneficial ownership of all of these
shares of Class A Common Stock except the 12,218 shares owned by him
directly. The amount reported also includes 67,037 shares which could be
acquired within 60 days pursuant to options under the Company's Plans (see
"Compensation of Executive Officers," table of "Aggregated Option Exercises
in Last Fiscal Year, and FY-End Option Values") and 480 shares which could be
acquired upon conversion of Mr. Sulzberger, Jr.'s 480 shares of Class B
Common Stock. The holdings of Class A Common Stock recorded for Mr.
Sulzberger, Jr. exclude 660 shares held by Mr. Sulzberger's wife as custodian
for their minor children. Mr. Suzberger, Jr. disclaims beneficial ownership
of these shares.
9. Class B Common Stock is convertible into Class A Common Stock on a
share-for-share basis. Ownership of Class B Common Stock is therefore deemed
to be beneficial ownership of Class A Common Stock under SEC regulations. For
purposes of the presentation of ownership of Class A Common Stock in this
table, it
(Footnotes continued on following page)
5
<PAGE>
(Footnotes continued from preceding page)
has been assumed that each director, nominee and executive officer has
converted into Class A Common Stock all shares of Class B Common Stock of
which that person is deemed the beneficial owner. Thus all shares of Class B
Common Stock held by the directors, nominees and executive officers,
including shares held by the 1986 Trusts, have been included in the
calculation of the total amount of Class A Common Stock owned by such group
as well as in the calculation of the total amount of Class B Common Stock
owned by such group.
The Company's directors and executive officers are required to file reports
with the SEC of changes in their ownership of Company stock. Based on its review
of such reports, the Company believes that all filing requirements were met by
its directors and executive officers during 1993 except for the following: Mr.
Mattson inadvertently filed late reports on (a) an option exercise in September
1993 and (b) the crediting and reinvestment by the Company of dividend
equivalents payable on retirement units held in his account. Retirement units
are rights under the Company's Plans to receive Class A Common Stock in ten
annual installments upon retirement.
THE 1986 TRUSTS
Mrs. Heiskell, Mrs. Holmberg, Dr. Sulzberger, and Mr. Sulzberger (the
"grantors") (see "Principal Holders of Common Stock") have executed indentures
creating four separate trusts (the "1986 Trusts"), one for the benefit of each
of the grantors and his or her family. Each grantor transferred to the 1986
Trust for his or her family the shares of Class B Common Stock and a portion of
the Class A Common Stock that he or she inherited from Adolph S. Ochs.
The grantors are the initial trustees of the 1986 Trusts. Each of the 1986
Trusts will continue in existence until the expiration of 21 years after the
death of the survivor of all descendants of the mother of the grantors, Mrs.
Iphigene Ochs Sulzberger ("Mrs. Sulzberger") living on August 5, 1986. Each
Indenture of Trust is subject to the terms and provisions of a shareholders
agreement (the "Shareholders Agreement") among the grantors, their children and
the Company, which restricts the transfer of Class B Common Stock transferred to
the 1986 Trusts by requiring, prior to any sale or transfer, the offering of
those shares among the other family shareholders (including the 1986 Trusts) and
then to the Company at the Class A Common Stock market price then prevailing (or
if the Company is the purchaser, at the option of the selling shareholder, in
exchange for Class A Common Stock on a share-for-share basis), and the
conversion of such shares into Class A Common Stock if such purchase rights are
not exercised and the shares are to be transferred to a person or persons other
than family shareholders or the Company. There are certain exceptions for gifts
and other transfers within the family of Adolph S. Ochs provided that the
recipients become parties to the Shareholders Agreement.
In addition, the Shareholders Agreement provides that if the Company is a
party to a merger (other than a merger solely to change the Company's
jurisdiction of incorporation), consolidation or plan of liquidation in which
the Class B Common Stock is exchanged for cash, stock, securities or any other
property of the Company or of any other corporation or entity, each signing
shareholder will convert his or her shares of Class B Common Stock into Class A
Common Stock prior to the effective date of such transaction so that a holder of
such shares will receive the same cash, stock or other consideration that a
holder of Class A Common Stock would receive in such a transaction. Except for
the foregoing, each signing shareholder has agreed not to convert any shares of
Class B Common Stock received from a trust created under the will of Adolph S.
Ochs into Class A Common Stock. The Shareholders Agreement will terminate upon
the expiration of 21 years after the death of the survivor of all descendants of
Mrs. Sulzberger living on August 5, 1986. The trustees of the 1986 Trusts have
also signed the Shareholders Agreement and become parties thereto.
6
<PAGE>
The trustees of each 1986 Trust, subject to the limited exceptions
described below, are directed to retain the Class B Common Stock held in each
1986 Trust and not to sell, distribute or convert such shares into Class A
Common Stock and to vote such Class B Common Stock against any merger, sale of
assets or other transaction pursuant to which control of The New York Times
passes from the trustees unless they unanimously determine that the primary
objective of the 1986 Trusts, which is to maintain the editorial independence
and integrity of The New York Times and to continue it as an independent
newspaper, entirely fearless, free of ulterior influence and unselfishly devoted
to the public welfare, can be achieved better by the sale, distribution or
conversion of such stock or by the implementation of such transaction. If upon
such determination any Class B Common Stock is distributed to the beneficiaries
of the 1986 Trusts, it must be distributed only to descendants of Mrs.
Sulzberger, subject to the provisions of the Shareholders Agreement. Similarly,
any sale by the 1986 Trusts of Class B Common Stock upon such determination can
be made only in compliance with the Shareholders Agreement.
The trustees of each 1986 Trust are granted various powers and rights,
including among others: (i) to vote all the shares of Class A and Class B Common
Stock held by such 1986 Trusts; (ii) to fill any vacancy in the office of
trustee; (iii) to remove any successor trustee; and (iv) to amend certain
provisions of the Trust Indenture, but not the provisions relating to retaining
the Class B Common Stock or the manner in which such shares may be distributed,
sold or converted. The trustees act by the affirmative vote of three trustees,
except that prior to any sale or distribution of Class B Common Stock outside of
the 1986 Trusts or conversion of Class B Common Stock or a vote to approve a
merger, sale of assets or other transaction pursuant to which control of The New
York Times passes from the trustees, the trustees must unanimously determine
that the primary purpose of the 1986 Trusts as described above is best achieved
by such distribution, sale, conversion or other transaction. Unanimity is also
required for the amendment of those provisions of the Trust Indenture which may
be amended. An original trustee may not be removed unless physically or mentally
incapable of discharging the duties of trustee.
Upon the termination of the 1986 Trusts at the end of the stated term
thereof, the shares of Class A and Class B Common Stock held by such trusts will
be distributed to the descendants then living of Mrs. Sulzberger.
GLOBE VOTING TRUST AND JORDAN VOTING TRUST
The Globe Voting Trust was established on October 1, 1954, and amended on
October 1, 1993, the effective date of the Company's acquisition of API, the
parent company of The Boston Globe (the "API Acquisition"). Units in the Globe
Voting Trust represent 4,821,120 shares of Class A Common Stock received
pursuant to the API Acquisition principally by descendants of one of the
founders of The Boston Globe or by trusts for their benefit. Subject to the
terms of the Globe Stockholders Agreement (as defined below), the trustees of
the Globe Voting Trust have the sole power to exercise all voting rights of
stockholders with respect to shares of the Company's Class A Common Stock
deposited therein. Holders of Globe Voting Trust units, subject to certain
disposition restrictions contained in the Globe Voting Trust, have the power to
dispose, or to direct the disposition, of Globe Voting Trust Units or the
underlying shares of the Company's Class A Common Stock. The Globe Voting Trust
restricts the number of shares of Class A Common Stock subject thereto that can
be sold by any one person in a year, restricts sales to broker's transactions
and sales to the Company, and requires that prior to the sale of more than 1,000
shares in the aggregate in any calendar year, such shares in excess of 1,000
must be offered to the Company at the prevailing market price. Such restrictions
and requirements do not apply to the sale or gift to another beneficiary of such
trust or a descendant of one of the founders of The Boston Globe; however, in
such case the transferee shall be subject to the terms of the Globe Voting
Trust. To the extent any such units are subject to the Globe Stockholders
Agreement, their disposition is further restricted as described below. The Globe
Voting Trust terminates on September 30, 2003. William O. Taylor is one of the
five trustees of the Globe Voting Trust.
7
<PAGE>
The Jordan Voting Trust was established on January 29, 1987. Units in the
Jordan Voting Trust represent the 6,608,787 shares of Class A Common Stock
received pursuant to the API Acquisition by a trust created by one of the
founders of The Boston Globe for the benefit of his descendants (the "Jordan
Trust"). The trustees of the Jordan Voting Trust share all voting rights and
investment power with respect to the shares in this trust. However, all the
shares of Class A Common Stock in the Jordan Voting Trust are subject to the
terms of the Globe Stockholders Agreement. The Jordan Voting Trust and its
underlying trust, the Jordan Trust, terminate on January 16, 1996. The
beneficiaries of the Jordan Trust who receive shares of Class A Common Stock on
liquidation of the trust will be offered the opportunity to deposit such shares
with the Globe Voting Trust. William O. Taylor and Robert A. Lawrence are two of
the three trustees of the Jordan Voting Trust and the Jordan Trust.
Neither the Globe Voting Trust nor the Jordan Voting Trust is the
beneficial owner of any of the shares of Class B Common Stock of the Company.
Pursuant to a Stockholders Agreement entered into in connection with the
API Acquisition (the "Globe Stockholders Agreement"), holders of Globe Voting
Trust Units representing 2,208,718 shares of Class A Common Stock (out of
4,821,120 shares held by the Globe Voting Trust) and the trustees of the Jordan
Voting Trust have agreed (a) to vote (or cause to be voted) all their shares of
Class A Common Stock (8,817,505 shares in the aggregate) as recommended by the
Board of Directors of the Company, with certain exceptions for certain
dispositions of assets and charter and by-law amendments and (b) generally not
to sell, transfer or offer to sell any such shares received pursuant to the API
Acquisition. These provisions of the Globe Stockholders Agreement terminate on
January 16, 1996. Management expects the trustees of the Globe Voting Trust and
the Jordan Voting Trust to vote the shares in these trusts which are subject to
the Globe Stockholders Agreement for the nominees for directors of the Company
listed below and for the two other proposals described in this proxy statement.
8
<PAGE>
- - --------------------------------------------------------------------------------
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
- - --------------------------------------------------------------------------------
The persons named as proxies intend (unless authority is withheld) to vote
for the election as directors of the persons hereinafter named (the "Nominees"),
upon their nomination for such office at the Annual Meeting. Directors so
elected will hold office until the next Annual Meeting and until their
successors are elected and qualified.
The Certificate of Incorporation of the Company provides that Class A
stockholders have the right to vote for the election of 30% of the Board of
Directors, or the nearest larger whole number, if such percentage is not a whole
number. Accordingly, the Class A stockholders will elect five of the 16
directors, and Class B stockholders will elect 11 directors. Directors are
elected by a plurality of the votes cast.
The five Nominees for election as directors by the Class A stockholders are
Louis V. Gerstner, Jr., A. Leon Higginbotham, Jr., Robert A. Lawrence, Charles
H. Price II and Donald M. Stewart. The 11 Nominees for election as directors by
the Class B stockholders are John F. Akers, Richard L. Gelb, Marian S. Heiskell,
Ruth S. Holmberg, Walter E. Mattson, George B. Munroe, George L. Shinn, Arthur
Ochs Sulzberger, Judith P. Sulzberger, William O. Taylor and Cyrus R. Vance.
Except as described above in "Principal Holders of Common Stock" and "The 1986
Trusts," there are no marriage, blood or adoption relationships among the
Nominees. All of the Nominees are currently directors of the Company. All except
Messrs. Taylor and Lawrence were elected at the Annual Meeting of Stockholders
held on April 13, 1993, for which proxies were solicited. Messrs. Taylor and
Lawrence were elected directors by the Board in October 1993, immediately
following the consummation of the API Acquisition. Mr. Taylor was formerly
Chairman of the Board of API, and Mr. Lawrence was a director of API. Their
election to the Company's board was required by the Agreement and Plan of
Merger, dated as of June 11, 1993, among the Company, its subsidiary, Sphere,
Inc., and API (the "API Merger Agreement"). The API Merger Agreement also
requires the Company to cause Messrs. Taylor and Lawrence to be nominees for
director at least through the Company's 1998 annual meeting. See "Interest of
Directors in Certain Transactions of the Company."
If any of the Nominees should become unavailable for election, all
uninstructed proxies will be voted for the election of such other person or
persons as may be designated by the Board, but the Board has no reason to
anticipate that this will occur. The following information is furnished with
respect to each of the Nominees and is based on information submitted by the
person named:
- - --------------------------------------------------------------------------------
Name, Principal Occupation, and Other Information
- - --------------------------------------------------------------------------------
CLASS A DIRECTORS
LOUIS V. GERSTNER, JR.
[PHOTO] Chairman, Director and Chief Executive Officer, International
Business Machines Corporation ("IBM") (information-handling
systems, equipment and services) from 1993
Chairman, Director and Chief Executive Officer, RJR Nabisco
Holdings Corp. from 1989 to 1993 (consumer products)
President (from 1985 to 1989), Director (from 1979 to 1989),
American Express Company (diversified financial and travel
services); Chairman and Chief Executive Officer (from 1982 to
1989), American Express Travel Related Services Company, Inc.;
Director and officer of various subsidiaries of American
Express Company from 1982 to 1989
Director of Bristol-Myers Squibb Company and RJR Nabisco
Holdings Corp.
Director Since: 1986
Committee Memberships: Finance (Chairman) and Compensation
Age: 52
9
<PAGE>
- - --------------------------------------------------------------------------------
Name, Principal Occupation, and Other Information
- - --------------------------------------------------------------------------------
[PHOTO] THE HONORABLE A. LEON HIGGINBOTHAM, JR.
Of counsel, Paul, Weiss, Rifkind, Wharton & Garrison (law
firm) from 1993
Senior Circuit Judge for the United States Court of Appeals,
Third Circuit (from 1991 to 1993); Chief Judge for the United
States Court of Appeals, Third Circuit (from 1990 to 1991);
Circuit Judge for the United States Court of Appeals, Third
Circuit (from 1977 to 1991)
Director Since: 1993
Committee Memberships: Audit and Employee Retirement Income
Security Act ("ERISA")
Age: 66
[PHOTO] ROBERT A. LAWRENCE
Partner, Saltonstall & Co. from 1984 (family trust and
investment office)
Director and Trustee of various funds managed by Metropolitan
Life Insurance Co., State Street Research and Management Co.
and affiliates
Director Since: 1993
Committee Membership: Compensation
Age: 67
[PHOTO] THE HONORABLE CHARLES H. PRICE II
Chairman, Mercantile Bank of Kansas City from 1992, and
Director, Mercantile Bancorp (bank holding company) from 1992
Chairman (from 1989 to 1992), President and Chief Executive
Officer (from 1990 to 1992), Ameribanc, Inc. (bank holding
company)
Director of Hanson PLC, Texaco Inc., Sprint Corporation and
British Airways PLC
United States Ambassador to the United Kingdom of Great
Britain and Northern Ireland from 1983 to 1989
Director Since: 1989
Committee Memberships: Compensation and Employee Stock
Purchase Plan ("ESPP")
Age: 62
10
<PAGE>
- - --------------------------------------------------------------------------------
Name, Principal Occupation, and Other Information
- - --------------------------------------------------------------------------------
[PHOTO] DONALD M. STEWART
President of The College Board from 1987 (association of high
schools and colleges, sponsor of Scholastic Assessment Tests
and other academic activities)
Director of Principal Financial Group (Bankers Life of Iowa
Insurance Company) and Campbell Soup Company, Trustee,
Educational Broadcasting Corporation (Thirteen/WNET-TV)
Director Since: 1986
Committee Memberships: ERISA (Chairman) and Audit
Age: 55
CLASS B DIRECTORS
[PHOTO] JOHN F. AKERS
Consultant and Director of various corporations
Chairman (from 1986 to 1993), Director (from 1983 to 1993),
Chief Executive Officer (from 1985 to 1993), and President
(from 1983 to 1989), IBM
Director of PepsiCo, Inc., Springs Industries, Inc. and Zurich
Insurance Company-U.S.
Director Since: 1985
Committee Memberships: Compensation and Finance
Age: 59
[PHOTO] RICHARD L. GELB
Chairman (from 1976), President (from 1972 to 1976), Chief
Executive Officer (from 1972 to 1993) and Director (from
1960), Bristol-Myers Squibb Company (a diversified healthcare
company)
Director of New York Life Insurance Company and Bessemer
Securities Corporation
Director Since: 1974
Committee Memberships: Compensation (Chairman) and Finance
Age: 69
[PHOTO] MARIAN S. HEISKELL
Director of various charitable organizations
Former Special Activities Director of the Company, Director of
various corporations from 1971 to 1991
Director Since: 1963
Committee Memberships: ESPP (Chairman) and Compensation
Age: 75
11
<PAGE>
- - --------------------------------------------------------------------------------
Name, Principal Occupation, and Other Information
- - --------------------------------------------------------------------------------
[PHOTO] RUTH S. HOLMBERG
Chairman, Times Printing Company (The Chattanooga Times
newspaper), from 1992
Publisher, The Chattanooga Times, from 1964 to 1992
Director Since: 1961
Committee Memberships: Finance and ERISA
Age: 73
[PHOTO] WALTER E. MATTSON
Director of various corporations and not-for-profit entities
Vice Chairman of the Company from 1992 to 1993
President of the Company from 1979 to 1992
Director Since: 1979
Committee Memberships: Finance and ESPP
Age: 61
[PHOTO] GEORGE B. MUNROE
Director of various corporations and not-for-profit entities
Consultant (from 1987 to 1990), Chairman (from 1975 to 1987)
and Chief Executive Officer (from 1969 to 1987), Phelps Dodge
Corporation (copper mining, manufacturing and specialty
chemicals)
Director of New York Life Insurance Company, Phelps Dodge
Corporation and Santa Fe Pacific Corporation
Director Since: 1988
Committee Membership: Audit (Chairman) and Finance
Age: 72
[PHOTO] GEORGE L. SHINN
Consultant and Director of various corporations
Chairman of the Board and Chief Executive Officer (from 1976
to 1983) and Director (from 1976 to 1988), First Boston, Inc.
(international investment bank)
Director of New York Life Insurance Company and Phelps Dodge
Corporation; Director and Trustee of various funds of the
Colonial Group of Mutual Funds
Director Since: 1978
Committee Memberships: Audit, ERISA and ESPP
Age: 71
12
<PAGE>
- - --------------------------------------------------------------------------------
Name, Principal Occupation, and Other Information
- - --------------------------------------------------------------------------------
[PHOTO] ARTHUR OCHS SULZBERGER
Chairman and Chief Executive Officer of the Company from 1973
Publisher, The New York Times, from 1963 to 1992
Director Since: 1959
Age: 68
[PHOTO] JUDITH P. SULZBERGER
Physician, Columbia College of Physicians & Surgeons, from
1992
Attending Physician, St. Luke's-Roosevelt Hospital Center,
Division of Allergy, Clinical Immunology and Infectious
Diseases, from 1986 to 1991
Director Since: 1974
Committee Memberships: ESPP and ERISA
Age: 70
[PHOTO] WILLIAM O. TAYLOR
Publisher, The Boston Globe from 1978, Chairman and Chief
Executive Officer, Globe Newspaper Company, from 1988
Chairman (from 1988 to 1993), President (from 1988 to 1993)
and Director (from 1972 to 1993), Affiliated Publications,
Inc.
Director Since: 1993
Committee Membership: Finance
Age: 61
[PHOTO] CYRUS R. VANCE
Partner, Simpson Thacher & Bartlett (law firm)
Director Since: 1975 (resigned January 1977 to become
Secretary of State; rejoined Board June 1980)
Committee Memberships: Audit
Age: 76
13
<PAGE>
INTEREST OF DIRECTORS IN CERTAIN TRANSACTIONS OF THE COMPANY
1. In the ordinary course of business, the Company and its subsidiaries
from time to time engage in transactions with other corporations or financial
institutions whose officers or directors are also directors of the Company. Such
transactions are conducted on an arm's length basis and may not come to the
attention of the directors or officers of the Company or of the other
corporations or financial institutions involved. During 1993, the Company
retained Simpson Thacher & Bartlett, the law firm in which Mr. Vance is a
partner, in connection with the acquisition of API.
2. During 1993, Arthur Ochs Sulzberger, Jr., Mr. Sulzberger's son, was
employed as Publisher of The New York Times; Stephen Golden, Mrs. Holmberg's
son, was employed as Vice President, Forest Products, Health, Safety and
Environmental Affairs, of the Company; Michael Golden, Mrs. Holmberg's son, was
employed as Executive Vice President & General Manager and as Senior Vice
President and General Manager, NYT Women's Magazines, a division of the
Company's Magazine Group; Daniel Cohen, Dr. Sulzberger's son, was employed as
Managing Director, Sales Development, and Group Director, Promotion, in the
Advertising Department of The New York Times; and Susan W. Dryfoos, Mrs.
Heiskell's daughter, was employed as Director, Times History Project. With
respect to services performed for the Company in 1993, Mr. Stephen Golden earned
$171,000 and a bonus of $48,400; Mr. Michael Golden earned $200,000 and a bonus
of $47,936; Mr. Cohen earned $125,416 and a bonus of $32,000; and Ms. Dryfoos
earned $83,200 and a bonus of $13,750. See "Compensation of Executive Officers"
for a description of Mr. Sulzberger, Jr.'s compensation.
3. On October 1, 1993, the Company completed the acquisition of API, the
parent company of The Boston Globe. William O. Taylor was Chairman of the Board,
Chief Executive Officer, and a shareholder of API and Robert A. Lawrence was a
director and shareholder. Pursuant to the API Merger Agreement, Messrs. Taylor
and Lawrence (as well as members of Mr. Taylor's family) received the same
consideration as all API stockholders. Mr. Taylor received 202,604 shares of
Class A Common Stock for shares of API in which he held an economic interest,
including 8,437 shares held by a trust of which he is a co-trustee and sole
beneficiary. The Jordan Voting Trust and the Globe Voting Trust, received in the
aggregate 11,431,907 shares of Class A Common Stock (including 63,845 of the
shares in which Mr. Taylor has an economic interest). Mr. Taylor is a trustee of
the Jordan Voting Trust and the Globe Voting Trust, and Mr. Lawrence is a
trustee of the Jordan Voting Trust. See "Globe Voting Trust and Jordan Voting
Trust." Pursuant to the API Merger Agreement, Messrs. Taylor and Lawrence were
elected directors of the Company and named to the Finance and Compensation
Committees respectively. They will be included as nominees for director at least
through the 1998 annual meeting, provided they are willing and able to serve.
The API Merger Agreement also provides Mr. Taylor (and his successors as
publisher of The Boston Globe) certain management and other rights (including
agreements relating to the composition of the board of directors, the management
and the continued separate existence of Globe Newspaper Company ("GNC"), the
Company's subsidiary that owns The Boston Globe). Mr. Taylor has an employment
agreement with GNC that provides that he will remain employed until December 31,
1998, at the salary (as adjusted in the ordinary course) and with the benefits
that he received prior to the merger. In addition, it provides that if his
employment ends as a result of a termination without cause, or as a result of
certain reasons specified therein, Mr. Taylor will become immediately vested in
all outstanding stock options, will become eligible for continued health
insurance coverage and outplacement services and will be entitled to receive the
larger of two salary settlement arrangements, one of which is the present value
of the sum of 125% of base salary and the target bonus for the remaining term of
the agreement, and the other of which is one dollar less than three times Mr.
Taylor's "base amount" as defined in Section 280G of the Internal Revenue Code
of 1986. As was the case with all executive officers and employees of API
holding options in that company's stock, Mr. Taylor's options were converted (at
the merger conversion rate) to options to acquire Class A Common Stock of the
Company. Finally, Mr. Taylor is a party to the Globe Stockholders Agreement with
respect to 266,448 shares of Class A Common Stock in which he holds a economic
interest, and 6,608,787 shares
14
<PAGE>
as to which he shares voting control and investment power as a trustee of the
Jordan Voting Trust. See "Globe Voting Trust and Jordan Voting Trust." Pursuant
to the API Merger Agreement, the Company has also purchased, effective October
1, 1993, directors' and officers' liability and reimbursement insurance from
Federal Insurance Company that applies to claims made after October 1, 1993, and
before September 30, 1996, relating to occurrences prior to October 1, 1993,
against individuals, including Messrs. Taylor and Lawrence, who were directors
and officers of API prior to October 1, 1993. The combined limit of liability
for the insurance is $10,000,000 for the policy; the cost of the policy was
$175,000 for the three-year period of coverage.
4. Pursuant to the API Merger Agreement, the Company assumed the
obligations of a consulting agreement dated March 31, 1992, between API and John
Giuggio (the "Consulting Agreement"). Mr. Giuggio retired as Vice Chairman,
President and Chief Operating Officer of API in 1992. He was elected a director
of the Company in October 1993 pursuant to the terms of the API Merger
Agreement, but died in late 1993. The Consulting Agreement provides that he or
his estate be paid $100,000 a year through September 30, 1995, and such payments
are being made to his estate as a result of his death.
CERTAIN INFORMATION ABOUT THE BOARD OF DIRECTORS
The Company has standing Audit, Compensation, Employee Retirement Income
Security Act ("ERISA"), Employee Stock Purchase Plan ("ESPP") and Finance
Committees. The Company does not have a standing nominating committee.
During 1993 the Board of Directors had 12 meetings. In addition, its
standing committees, Audit, Compensation, ERISA, ESPP and Finance, held a total
of 18 meetings. All directors of the Company except Mr. Vance attended 75% or
more of the total meetings of the Board and committees of the Board of which
they are members. Mr. Vance was unable to attend several meetings because his
role as special United Nations envoy to the former Yugoslavia required his
presence out of the United States on several occasions that coincided with Board
and/or committee meetings.
In summary, the functions performed by these committees, their number of
meetings and memberships are as follows:
The Audit Committee selects the independent auditors for the Company
(subject to ratification by the stockholders), reviews the scope and results of
the annual audit, approves the services to be performed by the independent
auditors, reviews the independence of the auditors, reviews the performance and
fees of the independent auditors, reviews the adequacy of the system of internal
accounting controls and reviews the scope and results of internal auditing
procedures. The current members of the Audit Committee are George B. Munroe,
Chairman, A. Leon Higginbotham, Jr., George L. Shinn, Donald M. Stewart and
Cyrus R. Vance. The Committee held three meetings during 1993.
The Compensation Committee adopts and oversees the administration of
compensation plans for executive officers and senior management of the Company,
determines awards granted senior management under such plans, approves
remuneration arrangements for senior management, including all executive
officers of the Company, and reviews the reasonableness of all such
compensation. The current members of the Compensation Committee are Richard L.
Gelb, Chairman, John F. Akers, Louis V. Gerstner, Jr., Marian S. Heiskell,
Robert A. Lawrence and Charles H. Price II. The Committee held three meetings
during 1993. As required by the API Merger Agreement, Mr. Lawrence was made a
member of the Compensation Committee in October 1993 upon his election to the
Board of Directors.
The ERISA Committee appoints the members of the employee benefits committee
of the Company, appoints and reviews the performance of the trustees and
investment managers of the Company's pension plans and establishes and amends
the Company's employee welfare and pension benefit plans and related trusts. The
current members of the ERISA Committee are Donald M. Stewart, Chairman,
15
<PAGE>
A. Leon Higginbotham, Jr., Ruth S. Holmberg, George L. Shinn and Judith P.
Sulzberger. The Committee held two meetings in 1993.
The ESPP Committee oversees the administration of the Employee Stock
Purchase Plan for eligible employees of the Company and its subsidiaries. In
that connection, the Committee has authority to adopt, administer and interpret
such rules and regulations concerning the ESPP and offerings thereunder as it
may deem advisable. The current members of the ESPP Committee are Marian S.
Heiskell, Chairman, Walter E. Mattson, Charles H. Price II, George L. Shinn and
Judith P. Sulzberger. The Committee held one meeting in 1993.
The Finance Committee reviews the financial policies of the Company
including, without limitation, dividend policy, repurchase of the Company's
stock, short-and long-term financing, material acquisitions and dispositions and
capital expenditures. The current members of the Finance Committee are Louis V.
Gerstner, Jr., Chairman, John F. Akers, Richard L. Gelb, Ruth S. Holmberg,
Walter E. Mattson, George B. Munroe and William O. Taylor. The Committee held
nine meetings in 1993. As required by the API Merger Agreement, Mr. Taylor was
made a member of the Finance Committee in October 1993 upon his election to the
Board of Directors.
COMPENSATION OF DIRECTORS; LIABILITY AND REIMBURSEMENT INSURANCE
Under the By-Laws, the directors do not receive a salary for their
services, but may receive an annual retainer and a fixed sum for attendance at
Board and committee meetings. Pursuant to resolutions of the Board, non-employee
directors receive an annual retainer of $25,000, payable in quarterly
installments of $6,250 and a fee of $1,000 for attendance at each Board and
Committee meeting. In addition, they are paid their expenses of attendance. For
1993 the Company paid $560,113 in the form of retainers, meeting fees and
expenses of attendance. In addition, in 1991 each non-employee director began
receiving annually an option to purchase 1,000 shares of the Company's Class A
Common Stock pursuant to the Company's Non-Employee Directors' Stock Option
Plan. Such options, which are granted each year on the date of the Company's
annual stockholders meeting with an exercise price equal to the market value of
the Class A Common Stock on such date, become exercisable on the date of the
next succeeding annual meeting and remain exercisable for nine years thereafter.
The Company maintains life insurance on the life of each director who is
not also an employee of the Company in the amount of $100,000. The income
required by the Internal Revenue Service to be imputed in 1993 to non-employee
directors because of the life insurance coverage was $6,007 in the aggregate.
The Company also maintains life insurance on the life of each non-employee
director who retired after 1991 in the amount of $25,000.
The Company has purchased directors' and officers' liability and
reimbursement insurance from the American Casualty Company of Reading,
Pennsylvania, and the CIGNA Insurance Company. Both policies were purchased
effective January 1, 1994, for a period of one year. The combined limit of
liability for the insurance is $25,000,000 for the policy year and the annual
cost to the Company is $269,063.
16
<PAGE>
- - --------------------------------------------------------------------------------
COMPENSATION OF EXECUTIVE OFFICERS
- - --------------------------------------------------------------------------------
The following tables and discussion summarize the compensation of the chief
executive officer of the Company and each of the four other most highly
compensated executive officers of the Company for the fiscal year ended December
31, 1993.
SUMMARY COMPENSATION TABLE
<TABLE> <CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h)
Securities
Other Underlying
Annual Restricted Stock
Name and Principal Salary Compensation Stock Options LTIP
Position Year ($) Bonus ($) ($) Awards ($) (#)1 Payouts ($)
- - --------------------------------- --------- --------- --------- ------------- ----------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Arthur Ochs Sulzberger........... 1993 515,000 384,560 0 0 92,571 0
Chairman and Chief 1992 497,500 588,350 0 0 47,187 0
Executive Officer 1991 482,500 461,440 -- 0 58,842 0
Lance R. Primis.................. 1993 415,000 265,760 0 0 48,840 0
President3 1992 373,000 305,725 0 0 34,289 0
Arthur Ochs Sulzberger, Jr....... 1993 390,000 194,089 0 0 40,094 0
Publisher of The New York 1992 373,140 361,200 0 0 29,344 0
Times3
Michael E. Ryan.................. 1993 319,000 159,390 0 0 27,811 0
Senior Vice President 1992 309,000 243,775 0 0 22,345 0
1991 297,000 191,240 -- 0 27,864 0
David L. Gorham.................. 1993 310,000 259,390 0 0 27,811 0
Senior Vice President and 1992 297,000 243,775 0 0 22,345 0
Chief Financial Officer 1991 285,000 191,240 -- 0 27,864 0
<CAPTION>
(a) (i)
All Other
Name and Principal Compensation
Position ($)2
- - --------------------------------- ---------------
Arthur Ochs Sulzberger........... 7,075
Chairman and Chief 6,866
Executive Officer --
Lance R. Primis.................. 7,075
President3 4,820
Arthur Ochs Sulzberger, Jr....... 2,500
Publisher of The New York 2,500
Times3
Michael E. Ryan.................. 7,075
Senior Vice President 6,866
--
David L. Gorham.................. 7,075
Senior Vice President and 6,866
Chief Financial Officer --
</TABLE>
- - ---------------
1. The provisions of the stock options, among other things, allow an optionee
exercising an option to satisfy the exercise price and withholding tax
obligations by electing to have the Company withhold shares of stock
otherwise issuable under the option with a market value equal to such
obligations.
2. All amounts shown in column (i) represent amounts contributed by the Company
as 50% matching contributions for the first 6% of earnings contributed by or
on behalf of the named executive officers to the Company's Supplemental
Retirement and Investment Plan.
3. Mr. Primis and Mr. Sulzberger, Jr. became executive officers of the Company
in 1992.
17
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE> <CAPTION>
Grant Date
Individual Grants1(#) Value2
- - ------------------------------------------------------------------------------------------------------------- ----------------
(a) (b) (c) (d) (e) (f)
% of Total
Options
Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present Value
Name Granted (#) Fiscal Year ($/SH) Date ($)
- - --------------------------------------------------- ----------- --------------- ----------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Arthur Ochs Sulzberger............................. 92,571 4.89 26.50 12/15/2003 818,328
Lance R. Primis.................................... 48,840 2.58 26.50 12/15/2003 431,746
Arthur Ochs Sulzberger, Jr. ....................... 40,094 2.12 26.50 12/15/2003 354,431
Michael E. Ryan.................................... 27,811 1.47 26.50 12/15/2003 245,849
David L. Gorham.................................... 27,811 1.47 26.50 12/15/2003 245,849
</TABLE>
- - ---------------
1. The options granted to the named individuals in 1993 become exercisable in
installments of 25% of the original grant on each of the first through fourth
anniversaries of the grant date. All options are for Class A Common Stock and
have an exercise price equal to the market value of the stock on the grant
date. All options were granted under the Company's 1991 Executive Stock
Incentive Plan, the provisions of which, among other things, allow an
optionee exercising an option to satisfy the exercise price and withholding
tax obligations by electing to have the Company withhold shares of stock
otherwise issuable under the option with a market value equal to such
obligations.
2. In accordance with the rules of the SEC, "Grant Date Value" has been
calculated using the Black-Scholes model of option valuation, adjusted to
reflect an option term of 7.3 years, which represents the weighted average
(by number of options) over the past ten years of the length of time between
the grant date of options under the Company's plans and their exercise date
for all option exercises of the named executive officers and five others who
were named executive officers during that period. The model also assumes: (a)
an interest rate that represents the interest rate on a U.S. Treasury Bond
with a maturity date corresponding to that of the adjusted option term of 7.3
years; (b) volatility calculated using weekly stock prices for the five years
(260 weeks) prior to the grant date; and (c) dividends for 1993 at the rate
of $.56 per share, which was the total amount of dividends paid with respect
to a share of Class A Common Stock in 1993. Based on this model, the
calculated value of the options on the December 16, 1993, grant date, was
determined to be $8.84 per option.
18
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUES1
<TABLE> <CAPTION>
(a) (b) (c-1) (c-2) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Aggregate Annualized FY-End (#) FY-End ($)
Acquired Value Value Exercisable/ Exercisable/
Name On Exercise (#) Realized ($)2 Realized ($)3 Unexercisable4 Unexercisable5
- - ---------------------------------- --------------- ------------- ------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Arthur Ochs Sulzberger............ 32,448 325,015 33,671 126,410/157,383 400,314/194,941
Lance R. Primis................... 4,622 50,987 5,099 78,640/91,405 268,844/113,337
Arthur Ochs Sulzberger, Jr. ...... 0 -- -- 67,037/80,398 236,469/121,228
Michael E. Ryan................... 0 -- -- 66,711/58,502 235,238/ 92,312
David L. Gorham................... 5,146 40,043 4,449 58,335/58,502 194,874/ 92,312
</TABLE>
- - ---------------
1. All options are for Class A Common Stock. All options were granted either
under the Company's 1991 Executive Stock Incentive Plan or the Company's
Executive Incentive Compensation Plan, the provisions of which, among other
things, allow an optionee exercising an option to satisfy the exercise price
and withholding tax obligations by electing to have the Company withhold
shares of stock otherwise issuable under the option with a market value equal
to such obligations.
2. Market value of underlying securities at exercise minus the exercise price.
3. Aggregate Value Realized upon exercise (column c-1) divided by the number of
years executive held option before exercise (8-10 years in all cases).
4. Options granted to these executives under the Company's 1991 Executive Stock
Incentive Plan become exercisable in four equal installments over a period of
four years from the date of grant.
5. Market value of underlying securities at December 31, 1993 ($26.25), minus
the option exercise price.
PENSION PLAN TABLE
The following table shows the annual estimated benefits payable under the
Company's defined benefit retirement plans upon retirement to employees in
specified covered compensation and years of credited service classifications.
The maximum annual benefit payable under the plans is 50% of average annual
covered compensation for the five highest paid consecutive years out of the most
recent 10 years. The maximum annual benefit is payable with 20 years of credited
service and is prorated for less than 20 years. The highest amount of
compensation shown in the following table is approximately equal to 120% of the
highest amount of covered compensation of the most highly compensated person
named in the Summary Compensation Table above. The amount of estimated annual
benefit is based upon the assumptions that the individual will remain in the
employ of the Company until age 60 and that the Company's nonqualified
supplemental executive retirement plan will continue in force in its present
form.
<TABLE> <CAPTION>
Highest Estimated Annual Pension for
Consecutive Representative Years of
Five-Year Credited Service
Average -------------------------------------
Compensation 10 15 20
- - --------------------- ----------- ----------- -----------
<S> <C> <C> <C>
$ 200,000 $ 50,000 $ 75,000 $ 100,000
400,000 100,000 150,000 200,000
700,000 175,000 262,500 350,000
1,000,000 250,000 375,000 500,000
</TABLE>
Benefits are calculated on a straight-life annuity basis and are not
subject to any reduction for Social Security or other offset amounts.
For executive officers, annual covered compensation for 1993 is the sum of
(i) the amounts shown for 1993 in column (c) of the Summary Compensation Table
above, (ii) the portion of the bonus earned
19
<PAGE>
for 1993 which was paid in 1993 and (iii) the portion of the annual bonus earned
for 1992 which was paid in 1993. The Company generally pays more than 50% of the
annual bonus earned for a particular year in that year and pays the remainder
early in the following year. The covered compensation under the plans as of
December 31, 1993, for each of the executive officers named in this section of
the Proxy Statement is: Arthur Ochs Sulzberger: $811,542; Lance R. Primis:
$594,715; Arthur Ochs Sulzberger, Jr.: $601,069; Michael E. Ryan: $451,235; and
David L. Gorham: $542,234. These executive officers had the following full years
of credited service as of December 31, 1993: Arthur Ochs Sulzberger, 40; Lance
R. Primis, 24; Arthur Ochs Sulzberger, Jr., 15; Michael E. Ryan, 34; and David
L. Gorham, 19.
PERFORMANCE PRESENTATION
The following graph shows the annual cumulative total shareholder return
for the five years ending December 31, 1993, on an assumed investment of $100 on
December 31, 1988 (as measured by dividing (a) the sum of (i) the cumulative
amount of dividends declared for the measurement period, assuming monthly
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), of the Company, Standard &
Poor's S&P 500 Stock Index and an average weighted by market capitalization at
the beginning of each annual measurement period for the Company and the
following other communications companies: Dow Jones & Company, Inc., Gannett
Co., Inc., Knight-Ridder, Inc., Meredith Corporation, Media General, Inc., The
Times Mirror Company, Tribune Company and The Washington Post Company.
[Performance chart to be filed by paper format on Form SE]
COMPENSATION COMMITTEE REPORT
The Compensation Committee has furnished the following report on executive
compensation for inclusion in this proxy statement:
To the Stockholders of The New York Times Company:
Compensation for the Company's executive officers, including the Chief
Executive Officer, is designed to reward and create incentives for high
levels of individual and Company performance and to serve effectively the
interests of the Company and its stockholders. Direct links between the
20
<PAGE>
performance of the Company and executive compensation are created by
conditioning the payment of annual and long-term bonuses on the achievement
of financial targets. These targets are reviewed and approved by the
Committee in conjunction with its review of the Company's strategic and
operating plans. The interests of executives are directly tied to those of
stockholders by granting stock options as part of executive compensation.
Stock options produce value for executives only if the Company's stock
price increases over the option grant price, which is set at the market
price on the date of grant.
For 1993, the Committee, which consisted solely of non-employee
directors of the Company, structured compensation for executive officers to
consist of four elements: base salary, an annual bonus potential, a
long-term bonus potential and stock options. Bonus amounts actually paid
were based on Company performance. Since a large share of total potential
cash compensation for executive officers depended on incentive bonus
potentials, a large portion of potential cash compensation was tied to
Company performance. The more responsible the executive officer's position,
the greater the portion of potential total cash compensation that depended
on incentive bonus potentials.
Prior to the Committee's determination of base salaries, bonus
potentials and option grants for the Company's Chief Executive Officer and
its executive officers, management reported to the Committee on its review
of data prepared by outside consultants that focused on current base
salaries, annual bonus potentials and long-term compensation, including
option grants, for comparable executive positions at other companies, and
on data informally gathered by management with respect to wage trends in
the communications industry.
The Compensation Committee believes that the Company's competition for
executive talent is not necessarily limited to the peer group established
to compare shareholder returns. For this reason, the Committee, while it
reviews compensation information for that group of companies, also reviews
and considers compensation at other companies, including several other
communications companies. The Committee also believes it is important to,
and does, consider other factors such as individual performance,
performance of the executive's operating unit where applicable and the
performance of the Company as a whole.
Base salaries for 1993 were set for executive officers in late 1992.
Increases in base salaries over 1992, including increases for the named
executive officers, were based on a review of the competitive data and
other factors described above. Base salaries are generally reviewed
annually (when they are set), but in certain cases, such as when an
executive officer assumes increased responsibilities during the year,
interim increases to base salaries may be reviewed by the Committee and
increases granted. This was the case in several instances in 1993. No
interim increases were made for any of the named executive officers. The
Committee believes that base salaries are appropriate in light of salaries
paid for competitive positions at other companies, the individual
performance of the executives, and the performance of the Company and,
where appropriate, the applicable operating unit.
Annual bonus potentials for 1993 were set for executive officers in
late 1992 as a specified portion of each such person's base salary. Payment
of a percentage of the potential amounts depended on the level of
achievement of financial performance targets which were also set in late
1992. These financial targets were generally based on operating earnings of
the Company or of the person's unit and excluded the effect of unusual
events. For 1993, targets for annual bonuses were generally met at lower
levels than for 1992. The Committee also approved a few special bonus
payments to executive officers, including one to the Chief Financial
Officer in recognition of his role in connection with the negotiation and
completion of the acquisition of The Boston Globe.
Long-term bonus potentials for the three-year cycle that ended in 1993
were set in late 1990 at a specified percentage of an executive officer's
base salary. Payment depended solely on the achievement of cumulative
earnings per share growth targets for the Company. The targets for the
three-year cycle that ended in 1993 were not met, and therefore, consistent
with the Company's
21
<PAGE>
philosophy of relating compensation to performance, no long-term bonus was
paid to any executive officer for that cycle.
The number of stock options granted to each executive officer in 1993
was determined by dividing a specified dollar amount for the grant by the
market price of stock on the grant date. The more responsible the executive
officer's position, the greater the dollar amount of the grant. The dollar
amounts of the 1993 grants increased significantly over the amounts used to
determine grants in past years because the Committee has suspended the
long-term incentive plan for periods beginning in or after 1994. (Existing
three-year cycles under the plan remain in effect.) The Committee believes
that these additional option grants will strengthen the ties between the
interests of executives and those of stockholders and thus more effectively
serve the interests of the stockholders as well as create additional
incentives for high levels of Company performance.
The size of the dollar amount of the grant is based in part on a
review of stock option grants and other long-term compensation made to
executives in comparable positions at other companies. These data were
supplied by an outside consultant. All stock options granted in 1993 had an
exercise price equal to the market price of the Class A Common Stock at the
time of grant. In order to assure the retention of high level executives
and to tie the compensation of those executives to the creation of
long-term value for stockholders, the Committee provided that these stock
options generally become exercisable in equal portions over a four-year
period. The Committee views options as a means of motivating performance
and as part of an executive's total compensation. The number of options
previously granted that remain outstanding was not considered in making
option grants in 1993.
The Internal Revenue Code has set limitations on the deductibility of
compensation paid to executive officers effective in 1994. Depending on the
final form of applicable Treasury regulations and the Company's future
compensation structure, the Committee will consider recommending
appropriate steps that may be necessary to preserve all available tax
deductions for the Company.
For 1993, the base salary for the Company's Chief Executive Officer,
Arthur Ochs Sulzberger, increased 3.5% over 1992. The annual bonus paid to
Mr. Sulzberger for 1993 decreased by approximately 35% over the amount paid
for 1992. The decrease resulted from the fact that the earnings per share
target set for the annual bonus was met at a higher level in 1992 than in
1993. No long-term bonus was paid to any executive officer, including Mr.
Sulzberger, for the three-year plan cycle ended in 1993 because the
financial targets set by the Committee in December 1990 for that cycle were
not met. Mr. Sulzberger's maximum potential long-term and annual bonuses
payable for 1993 represented approximately 65% of his total potential cash
compensation for 1993; his actual bonus for 1993 represented approximately
43% of his total cash compensation for 1993.
The Committee believes that Mr. Sulzberger's 1993 salary increase and
his annual bonus are appropriate in light of his role in the Company's
performance in a difficult economic climate for communications companies,
the negotiation and completion of the acquisition of The Boston Globe and
the integration of that business into the Company's structure.
Richard L. Gelb, Chairman
John F. Akers
Louis V. Gerstner, Jr.
Marian S. Heiskell
Robert A. Lawrence
Charles H. Price II
22
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Richard L. Gelb,
Chairman, John F. Akers, Louis V. Gerstner, Jr., Marian S. Heiskell, Robert A.
Lawrence and Charles H. Price II. Mrs. Heiskell is a sister of Arthur Ochs
Sulzberger, Chairman and Chief Executive Officer of the Company. For a
description of the employment by the Company of a child and other family members
of Mrs. Heiskell, see "Interest of Directors in Certain Transactions of the
Company." Mrs. Heiskell does not participate in any vote respecting the
compensation of any family members.
- - --------------------------------------------------------------------------------
PROPOSAL NUMBER 2
AMENDMENT OF EMPLOYEE STOCK PURCHASE PLAN
- - --------------------------------------------------------------------------------
A proposal to amend the Employee Stock Purchase Plan (the "Stock Purchase
Plan") will be submitted to stockholders to authorize the reservation of an
additional 6,000,000 shares of Class A Common Stock that may be sold under the
Stock Purchase Plan. As a result of this amendment, an aggregate of 6,991,882
shares may be sold pursuant to the Stock Purchase Plan (in addition to the
20,808,118 shares that have been sold since the Plan's adoption in 1969).
DESCRIPTION OF THE STOCK PURCHASE PLAN
The Stock Purchase Plan was adopted by stockholders at their Annual Meeting
in April 1969. It authorizes the Board from time to time to make offerings of
Class A Common Stock for sale to eligible employees of the Company and
designated affiliated companies at not less than 85% of the market price of such
stock on the date of the offering or 85% of the market price of such stock on
the last day of the purchase period, whichever is lower. All individuals with a
regularly scheduled work week of 20 hours or more who are employees of the
Company or its wholly-owned affiliated companies on a specified date prior to
the year payroll deductions begin for the offering in question, including
officers and employee directors (except for any employee owning more than 5% of
the combined voting power or value of all classes of the stock of the Company),
are eligible to participate in the Stock Purchase Plan. Certain other employees
may participate in the Stock Purchase Plan if they work an average of at least
20 hours a week during specified periods.
The purpose of the Stock Purchase Plan is to provide an opportunity by
which all eligible employees may purchase shares of Class A Common Stock through
voluntary, systematic payroll deductions. By this means such employees are
provided with an opportunity to acquire an interest in the economic progress of
the Company and a further incentive to promote its best interests.
Payment for shares is made through payroll deductions in a uniform
relationship to the eligible compensation received by each employee over the
period of time in which such compensation is paid, which cannot exceed 27 months
(the "Purchase Period"). For the current offering the Purchase Period is the
calendar year 1994. Interest on amounts so deducted is credited toward the
purchase price of the shares. An employee may withdraw from the Stock Purchase
Plan at any time prior to the second to last day of the Purchase Period and
receive a full refund of accumulated contributions, with interest. If no such
withdrawal is made, an employee is deemed to have exercised an option to
purchase shares on the last day of the Purchase Period. The Stock Purchase Plan
contemplates that all moneys withheld from employees will be under the control
of the Company and can be used for general corporate purposes. In the event of
termination of a participant's employment by retirement, death, or disposition
by the Company of its affiliate employing such participant, such person or his
estate will be offered an opportunity to purchase as many full shares as may be
equal to the amounts deducted from his compensation (plus interest) divided by
the initial offering price. The maximum number of shares that may be purchased
under the Stock Purchase Plan is a number equal to $25,000 divided by the fair
market value of the Class A Common Stock on the date of the offering.
23
<PAGE>
The following table shows the shares purchased for 1993 under the Stock
Purchase Plan for the executive officers named in the Summary Compensation
Table, all executive officers as a group and all employees as a group:
<TABLE> <CAPTION>
DOLLAR VALUE
NAME AND POSITION ($)1 NUMBER OF SHARES
- - ---------------------------------------------------------------------------- ---------------- -----------------
<S> <C> <C>
Arthur Ochs Sulzberger...................................................... N/A 0
Chairman and Chief Executive Officer
Lance R. Primis............................................................. 4,043 938
President
Arthur Ochs Sulzberger, Jr.................................................. 754 175
Publisher of The New York Times
Michael E. Ryan............................................................. N/A 0
Senior Vice President
David L. Gorham............................................................. 4,043 938
Senior Vice President and Chief Financial Officer
Executive officers as a group (13 persons).................................. 36,782 8,534
Non-executive officer directors as a group.................................. N/A 0
Non-executive officer employee group (4,062 persons)........................ 3,497,406 811,463
</TABLE>
- - ---------------
1. The dollar value is computed by multiplying the aggregate number of shares
purchased by the difference between the purchase price and the average market
price of the Class A Common Stock on the date the option to purchase was
deemed exercised. This computation does not necessarily mean that the shares
so acquired have actually been sold or that, if they are sold in the future,
these amounts will be the actual amounts realized on such sales.
FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE STOCK PURCHASE PLAN
Counsel has provided the Company with the following brief summary of the
federal income tax consequences under the Code of participation in the Stock
Purchase Plan.
An employee will not realize taxable income upon the grant of a right to
purchase shares or upon the purchase of shares pursuant to the terms of the
Stock Purchase Plan even though the price paid for the shares is less than their
fair market value. If an employee disposes of shares acquired under the Stock
Purchase Plan, the amount of ordinary income, capital gain or capital loss
realized will depend on the holding period of the shares. Under current federal
law, net capital gain is taxed at the same rate as ordinary income up to a
maximum rate of 28%.
If the employee disposes of shares more than one year after the shares have
been transferred and more than two years after the date of grant, the employee
will realize ordinary income in the year of disposition equal to the lesser of
(i) 15% of the fair market value of the shares on the date of grant or (ii) the
amount by which the fair market value of the shares on the date of disposition
exceeds the purchase price. Any additional gain from the sale will be long-term
capital gain.
If the shares are disposed of within either of the holding periods
described above (a disqualifying disposition), the employee will realize
ordinary income equal to the excess of the fair market value of the shares on
the date of purchase pursuant to the Plan over the purchase price. This excess
is taxed as ordinary income even if the shares are sold at a loss. In addition,
the employee will have capital gain or loss measured by the difference between
(i) the sale price and (ii) the purchase price plus the amount of ordinary
income recognized.
The Company generally is not entitled to an income tax deduction when an
employee exercises an option to purchase a share under the Stock Purchase Plan
or upon the subsequent disposition of any such share. If the disposition is a
disqualifying disposition, the Company will be entitled to an income tax
deduction in the year of such disposition in an amount equal to the amount of
ordinary income recognized by the employee as a result of such disposition.
24
<PAGE>
CURRENT OFFERING
In September 1993 the Board authorized a 1994 Offering under the Stock
Purchase Plan at 85% of the average market price on November 1, 1993 ($20.03 per
share, 85% of $23.5625), or 85% of the market price on December 29, 1994,
whichever is lower. On February 28, 1994, the last reported sale price of the
stock on the American Stock Exchange was $28. Payroll deductions for the 1994
Offering are being made at a rate of 1% to 10% of the eligible compensation
received by an employee during the period from January 1, 1994, to December 31,
1994.
About 44% of the approximately 14,000 eligible full-time and part-time
employees subscribed to the 1994 Offering. There are currently 991,882 shares of
Class A Common Stock reserved for issuance under the Stock Purchase Plan. Based
on current participation and the initial offering price, it is estimated that
1,100,000 shares will be issuable in December 1994. It is therefore necessary to
reserve additional shares for such 1994 Offering. The Board believes it is
appropriate at this time to have sufficient shares available for several
offerings. Accordingly, the Board is recommending that the stockholders
authorize an amendment to the Stock Purchase Plan so that an additional
6,000,000 shares of Class A Common Stock may be offered under it.
If the stockholders approve this amendment to the Stock Purchase Plan,
6,000,000 additional shares of Class A Common Stock of the Company will be
reserved for future offerings under the Stock Purchase Plan.
The Board of Directors recommends a vote FOR the following resolution which
will be presented to the meeting:
RESOLVED, that Section 4 of the Employee Stock
Purchase Plan, approved by the stockholders of this
Company on April 22, 1969, and amended on April 20,
1971, April 26, 1977, April 21, 1981, April 24,
1984, and April 18, 1989, be, and it hereby is,
amended to increase the number of shares of Class A
Common Stock to be sold under the Employee Stock
Purchase Plan by an additional 6,000,000.
The affirmative vote of the holders of a majority of the outstanding shares
of Class A and Class B Common Stock, voting together as one class, is required
for approval of this resolution. As a result, an abstention or broker non-vote
will have the same effect as a vote against the foregoing resolution.
- - --------------------------------------------------------------------------------
PROPOSAL NUMBER 3
SELECTION OF AUDITORS
- - --------------------------------------------------------------------------------
The Company has an Audit Committee of the Board of Directors, whose members
are appointed annually by the Board. The Audit Committee currently consists of
George B. Munroe, Chairman, A. Leon Higginbotham, Jr., George L. Shinn, Donald
M. Stewart and Cyrus R. Vance, none of whom is an employee of the Company.
The Audit Committee has selected the firm of Deloitte & Touche, independent
certified public accountants, as auditors of the Company for the year ending
December 31, 1994, subject to ratification of such selection by the Class A and
Class B stockholders of the Company voting together as one class. Deloitte &
Touche and its predecessor firm, Deloitte Haskins & Sells, have audited the
financial statements of the Company for many years.
The Company has been informed by Deloitte & Touche that such firm has no
direct financial interest nor any material indirect financial interest in the
Company or any of its affiliated companies. Neither Deloitte & Touche nor its
predecessor has had any connection during the past five years with the Company
or any of its affiliated companies in the capacity of promoter, underwriter,
voting trustee, director, officer or employee.
25
<PAGE>
A representative of Deloitte & Touche will be present at the Annual Meeting
and will be afforded the opportunity to make a statement if he decides to do so.
Such representative will also be available to respond to appropriate questions
from stockholders at the Annual Meeting.
The Board of Directors recommends a vote FOR the following resolution which
will be presented to the meeting:
RESOLVED, that the selection, by the Audit
Committee of the Board of Directors, of Deloitte &
Touche, independent certified public accountants,
as auditors of the Company for the year ending
December 31, 1994, is hereby ratified, confirmed
and approved.
The affirmative vote of the holders of a majority of the shares of Class A
and Class B Common Stock represented at the Annual Meeting, in person or by
proxy, voting together as one class, is required for approval of this
resolution. As a result, an abstention or a broker non-vote will have the same
effect as a vote against the foregoing resolution.
- - --------------------------------------------------------------------------------
OTHER MATTERS
- - --------------------------------------------------------------------------------
DISCRETIONARY AUTHORITY TO VOTE PROXY
Management does not know of any other matters to be considered at the
Annual Meeting. If any other matters do properly come before the meeting, the
Proxy will be voted in respect thereof in accordance with the best judgment of
the persons authorized therein, and the discretionary authority to do so is
included in the Proxy.
ANNUAL REPORT; ANNUAL REPORT ON FORM 10-K
The Annual Report of the Company for the year 1993 accompanies this Proxy
Statement. Audited financial statements for 1993 are included in the Appendix to
this Proxy Statement.
Stockholders who would like a copy of the Company's 1993 Annual Report on
Form 10-K as filed with the SEC may obtain it, free of charge, upon request to
the Secretary of the Company.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders who intend to present proposals at the 1995 Annual Meeting
must insure that such proposals are received by the Secretary of the Company not
later than November 21, 1994. Such proposals must meet the requirements of the
SEC to be eligible for inclusion in the Company's 1995 proxy materials.
By Order of the Board of Directors.
LAURA J. CORWIN
Secretary
New York, N. Y.
March 21, 1994
26
<PAGE>
Appendix
1993 Financial Report
<PAGE>
THE NEW YORK TIMES COMPANY
1993 Consolidated Financial Statements
- - ----------------------------------------------------------------------
Contents Page
- - ----------------------------------------------------------------------
Financial Highlights F-1
Segment Information F-2
Management's Discussion and Analysis F-4
Consolidated Statements of Operations F-8
Consolidated Balance Sheets F-9
Consolidated Statements of Cash Flows F-11
Consolidated Statements of Stockholders' Equity F-13
Notes to Consolidated Financial Statements F-14
Independent Auditors' Report F-26
Management's Responsibilities Report F-26
Market Information F-26
Quarterly Information F-27
Ten-Year Supplemental Financial Data F-28
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE><CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
Dollars in thousands except per share data Year Ended December 31
1993 1992 1991 1990 1989
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES AND INCOME
Revenues $2,019,654 $1,773,535 $1,703,101 $1,776,761 $1,768,893
Operating profit 126,581 88,408 93,639 129,779 169,044
Income from continuing operations before income
taxes and equity in operations of forest
products group 101,206 8,525 63,053 110,190 148,364
Income (Loss) from continuing operations before
equity in operations of forest products group 57,975 (2,554) 41,293 60,871 84,097
Equity in operations of forest products group (51,852) (8,718) 5,700 3,965 (15,922)
Income (Loss) from continuing operations before
net cumulative effect of accounting changes 6,123 (11,272) 46,993 64,836 68,175
Income from discontinued operations, net of taxes - - - - 198,448
Net cumulative effect of accounting changes - (33,437) - - -
Net income (loss) 6,123 (44,709) 46,993 64,836 266,623
- - --------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and equipment - net 1,112,024 902,755 966,593 1,013,430 972,474
Total assets 3,215,204 1,994,974 2,127,981 2,149,623 2,187,520
Long-term debt and capital lease obligations 460,063 206,911 213,487 319,449 337,417
Common stockholders' equity 1,598,883 999,630 1,073,442 1,055,785 1,064,446
- - --------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Continuing operations before net cumulative
effect of accounting changes .07 (.14) .61 .85 .87
Discontinued operations - - - - 2.52
Net cumulative effect of accounting changes - (.43) - - -
Net income (loss) .07 (.57) .61 .85 3.39
Dividends .56 .56 .56 .54 .50
Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63
- - --------------------------------------------------------------------------------------------------------------------
KEY RATIOS (See notes below)
Operating profit to revenues 6% 5% 5% 7% 10%
Income from continuing operations before equity in
operations of forest products group to revenues 3% 2% 2% 3% 5%
Return on average stockholders' equity - 2% 4% 6% 27%
Return on average total assets - 1% 2% 3% 13%
Long-term debt and capital lease obligations to
total capitalization 22% 17% 17% 23% 24%
Current assets to current liabilities .89 1.08 .89 .81 .86
- - --------------------------------------------------------------------------------------------------------------------
EMPLOYEES 13,000 10,100 10,100 10,400 10,600
- - --------------------------------------------------------------------------------------------------------------------
Amounts for 1993 have been affected by the October 1, 1993 acquisition of The Boston Globe (see Note 2).
</TABLE>
In September 1992 the Company closed The Gwinnett (Ga.) Daily News and sold the
residual assets. The closing and related sale resulted in a pre-tax loss of
$53.8 million ($37.1 million after taxes or $.47 per share). This transaction
is not reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
Net cumulative effect of accounting changes reflects the 1992 adoption of the
change in methods of accounting for income taxes, postretirement benefits other
than pensions and postemployment benefits. The net cumulative effect is not
reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
For 1993, return on average stockholders' equity and return on average total
assets are less than 1 percent due to several factors which lowered net income
for the year. See Management's Discussion and Analysis on page F-4.
F-1
<PAGE>
SEGMENT INFORMATION
- - ------------------------------------------------------------------------------
The Company has classified its business into the following segments and equity
interests:
NEWSPAPERS: The New York Times, The Boston Globe, 28 regional newspapers, a
wholesale newspaper distribution business in the New York City metropolitan
area and a one-half interest in the International Herald Tribune S.A.
MAGAZINES: Numerous publications and related activities in the women's
publishing and sports/leisure fields.
BROADCASTING/INFORMATION SERVICES: Five network-affiliated television stations,
two radio stations, a news service, a features syndicate, TimesFax and licensing
operations of The New York Times databases and microfilm.
FOREST PRODUCTS: Equity interests in two newsprint companies and a partnership
in a supercalendered paper mill that together supply the major portion of the
Newspaper Group's annual paper requirements.
- - -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- - -------------------------------------------------------------------------------
REVENUES
Newspapers $1,537,934 $1,306,952 $1,274,435
Magazines 394,463 386,120 352,686
Broadcasting/Information services 87,257 80,463 75,980
- - -------------------------------------------------------------------------------
Total $2,019,654 $1,773,535 $1,703,101
- - -------------------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Newspapers $ 114,332 $ 81,173 $ 93,578
Magazines 12,330 9,929 (492)
Broadcasting/Information services 19,403 14,766 13,957
Unallocated corporate expenses (19,484) (17,460) (13,404)
- - -------------------------------------------------------------------------------
Total 126,581 88,408 93,639
Interest expense, net of interest income 25,375 26,115 30,586
Loss on disposition of Gwinnett Daily News - 53,768 -
- - -------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products group 101,206 8,525 63,053
Income taxes 43,231 11,079 21,760
- - -------------------------------------------------------------------------------
Income (Loss) before equity in
operations of forest products group 57,975 (2,554) 41,293
Equity in operations of forest products
group (51,852) (8,718) 5,700
- - -------------------------------------------------------------------------------
INCOME (LOSS) BEFORE NET CUMULATIVE
EFFECT OF ACCOUNTING CHANGES $ 6,123 $ (11,272) $ 46,993
- - -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-2
<PAGE>
SEGMENT INFORMATION
- - -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- - -------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspapers $ 98,957 $ 74,495 $ 77,090
Magazines 18,616 20,628 26,683
Broadcasting/Information services 10,731 12,424 12,621
Corporate 528 385 446
- - -------------------------------------------------------------------------------
Total $ 128,832 $ 107,932 $ 116,840
- - -------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Newspapers $ 71,746 $ 42,675 $ 21,867
Magazines 3,059 1,888 1,467
Broadcasting/Information services 3,323 1,863 2,697
Corporate 1,491 903 169
- - -------------------------------------------------------------------------------
Total $ 79,619 $ 47,329 $ 26,200
- - -------------------------------------------------------------------------------
IDENTIFIABLE ASSETS AT DECEMBER 31
Newspapers $2,676,779 $1,321,667 $1,444,462
Magazines 247,723 255,777 272,323
Broadcasting/Information services 113,675 117,679 122,436
Corporate 101,007 160,459 125,760
Investment in forest products group 76,020 139,392 163,000
- - -------------------------------------------------------------------------------
Total $3,215,204 $1,994,974 $2,127,981
- - -------------------------------------------------------------------------------
See notes to consolidated financial statements.
Newspaper Group amounts for 1993 have been affected by the October 1, 1993
acquisition of The Boston Globe (see Note 2).
Newspaper Group operating profit for 1993, 1992 and 1991 includes charges of
$35.4 million, $28.0 million and $20.0 million, respectively, for costs related
to staff reductions at The New York Times newspaper.
Equity in operations of Forest Products Group and investment in Forest Products
Group for 1993 reflect an after-tax noncash charge of $47.0 million to write
down the Company's investment in this Group to reflect current operating
conditions and economic factors in the industry.
Newspaper Group operating results for 1992 were negatively affected by $21.4
million for labor disruptions and training and start-up costs related to the new
production and distribution facility located in Edison, New Jersey ("Edison")
for The New York Times newspaper.
F-3
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
- - -------------------------------------------------------------------------------
Per share amounts in the following Management's Discussion and Analysis are
computed on an after-tax basis.
Results of Operations: 1993 Compared with 1992
In 1993, the Company reported net income of $6.1 million, or $.07 per share
compared with a net loss of $44.7 million, or $.57 per share, in 1992.
Earnings for 1993 were affected by the following factors:
- $47.0 million after-tax charge ($.56 per share) against equity in
operations of the Forest Products Group to write down the
Company's investment in the Group to reflect current operating
conditions and economic factors in the industry.
- $30.0 million pre-tax charge ($.20 per share) to cover severance
and related costs resulting from anticipated white-collar staff
reductions at The New York Times newspaper ("The Times").
- $5.4 million pre-tax charge ($.03 per share) to cover severance
and related costs resulting from voluntary early retirements from
the composing room of The Times.
- $2.6 million pre-tax gain ($.02 per share) on the sale of assets.
- $5.6 million tax expense ($.07 per share) due to the enactment of
the Omnibus Budget Reconciliation Act of 1993 ("Tax Act") which
increased the Federal corporate income tax rate from 34 percent
to 35 percent retroactively to January 1, 1993, affected the
deductibility of certain costs and caused the Company to
remeasure its year-end 1992 deferred tax balances to reflect the
higher tax rate.
- $3.7 million pre-tax ($.02 per share) in unfavorable advertising
and circulation rate adjustments due to a snowstorm in March that
disrupted delivery of The Times.
Earnings for 1992 were affected by the following factors:
- $33.4 million after-tax charge ($.43 per share) for the adoption
as of January 1, 1992, of three mandated non-cash accounting
changes related to income taxes, postretirement benefits and
postemployment benefits.
- $3.1 million pre-tax gain ($.02 per share) on the sales of
assets.
- $28.0 million pre-tax charge ($.20 per share) to cover severance
and related costs for production unions at The Times.
- $53.8 million pre-tax loss ($.47 per share) due to the closing of
The Gwinnett (Ga.) Daily News, the sale of its residual assets
and its 1992 operations.
- $10.4 million pre-tax ($.07 per share) for training and start-up
costs related to The Times's new production and distribution
facility located in Edison, N.J. ("Edison").
- $11.0 million pre-tax ($.08 per share) due to labor disruptions
arising from a dispute between independent distributors of The
Times and its Drivers' Union.
Exclusive of the factors described above for the 1993 and 1992 periods,
earnings would have been $.93 per share in 1993 compared with $.66 per share in
1992.
Consolidated revenues for 1993 increased to $2.02 billion from $1.77 billion
in 1992, due principally to the October 1, 1993 acquisition of The Boston Globe
("The Globe"), the June 1992 acquisition of two wholesale newspaper distribution
businesses and higher advertising and circulation revenues. Costs and expenses
after excluding special items increased to $1.86 billion from $1.64 billion in
1992. The increase was due principally to the October 1993 Globe acquisition,
the June 1992 wholesale distribution business acquisition and higher newsprint,
depreciation, and payroll and benefit costs.
Operating profit after excluding the special factors rose to $163.1 million
from $134.7 million in 1992 due principally to higher advertising and
circulation revenues in the Newspaper Group, which included the operations of
The Globe subsequent to October 1, 1993 and a strong performance by the
Company's television stations which was partially offset by higher newsprint
prices and increased depreciation.
Interest expense, net of interest income, declined to $25.4 million in 1993
from $26.1 million in 1992. Lower levels of borrowings through the first half
of 1993 were partially offset by increased borrowings in connection with the
Company's stock repurchase program (see Note 13) and the utilization of cash
balances in connection with the October 1, 1993 acquisition of The Globe.
The Company's effective income tax rate for 1993 was 42.7 percent compared
with 44.5 percent in 1992, exclusive of the effect of the Gwinnett transaction.
The lower rate is due principally to the recognition of capital loss
carryforwards and state operating loss carryforwards, which were partially
offset by the negative impact of the Tax Act.
A discussion of the operating results of the Company's segments and equity
interests follows:
Exclusive of the special pre-tax items ($36.5 million in 1993 and $47.9
million in 1992), operating profit of the Newspaper Group was $150.8 million
compared with $129.1 million in 1992 on revenues of $1.54 billion and $1.31
billion respectively. Improvements in revenues were due to higher advertising
and circulation rates, principally at The Times, the June 1992 acquisition of
two wholesale newspaper distribution businesses and the October 1, 1993
acquisition of The Globe. The higher operating profit results principally
from the inclusion of the results of The Globe since the October 1, 1993
acquisition date, higher advertising and circulation revenues, cost controls
throughout the Group and cost savings related to Edison, which were partially
offset by advertising weakness at the Company's two California regional
newspapers, increased depreciation and start-up and redesign costs related to
certain sections of The Times.
F-4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- - -------------------------------------------------------------------------------
Advertising linage at The Times increased 1.0 percent over 1992 to 77.8
million lines. Retail advertising rose 4.9 percent over 1992 while national and
classified advertising declined 2.4 percent and 4.1 percent respectively.
Circulation of The Times for the year ended December 31, 1993 was 1,179,000
copies weekdays, approximately equal to the 1992 period. Sunday circulation of
1,781,200 copies reached a record high, up 17,100 copies over the prior year.
At The Globe, full-run advertising volume for the year 1993 increased 4.0
percent over 1992 to 2.5 million inches. Retail and classified advertising
increased 9.9 percent and 2.6 percent, respectively, over 1992, but national
advertising declined 1.6 percent. Circulation of The Globe for the year ended
December 31, 1993 was 504,600 copies weekdays, down 3,300 copies, and 814,500
copies Sundays, up 2,700 copies.
At the 30 regional newspapers that were in the Group for the entire 1993 and
1992 periods (two weekly newspapers were sold at the end of 1993), advertising
volume increased 3.9 percent to 35.2 million inches. The 1993 amount includes a
significantly higher volume of advertising inserts. Circulation for the daily
regional newspapers for the year ended December 31, 1993 was 851,000 copies
weekdays, up 4,500 copies, and 853,700 copies Sundays, up 9,200 copies.
Circulation for the non-dailies was 72,700 copies, down 500 copies.
The Magazine Group's operating profit was $12.3 million in 1993 compared with
$9.9 million in 1992 on revenues of $394.5 million and $386.1 million
respectively. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), the Group's operating profit was
$25.4 million in both years. Results for 1993 were adversely affected by an
August 1993 lawsuit settlement of $1.5 million. In addition, continuing
softness in the consumer packaged goods category in the women's magazines field
continues to affect the Group adversely.
Advertising pages as reported to Publications Information Bureau ("PIB") for
Golf Digest increased 1 percent from 1992 to 1,344 pages; for Tennis increased 4
percent from 1992 to 795 pages; for Family Circle decreased 9 percent from 1992
to 1,570 pages, and for McCall's decreased 5 percent from 1992 to 1,138 pages.
The Broadcasting/Information Services Group operating profit was $19.4 million
compared with $14.8 million in 1992 on revenues of $87.3 million and $80.5
million respectively. Higher local advertising revenues at the Company's
television stations accounted for the improved results.
Exclusive of the $47.0 million noncash charge to write down the Company's
investment in its Forest Products Group, equity in operations (an after-tax
amount) of the Group was a loss of $4.9 million compared with a loss of $8.7
million in 1992. The 1993 results have been adversely affected by $0.6 million
resulting from the impact of the Tax Act. Lower newsprint discounts and a
favorable Canadian exchange rate accounted for the improved results. Higher
newsprint discounts which were effective October 1, 1993 negatively affected the
Group during the fourth quarter and into 1994.
The Forest Products Group write-down resulted principally from the softening
of paper prices due to continuing oversupply, as well as high costs and
projected environmental expenditures at one mill.
All of the Company's paper mills were affected by pricing difficulties in
1993. Newsprint prices showed some strengthening during the second and third
quarters but they resumed their decline in October and were at their lowest
point at year-end. This trend continued into the first quarter of 1994 as
prices fell further in January. A modest March 1, 1994, newsprint price
increase has been announced throughout the industry. However, other recently
announced increases have not become effective because of oversupply, and it is
uncertain whether this increase will be realized. In addition to pricing
difficulties, one of the Company's two newsprint mills has been unable to fully
overcome high cost disadvantages. This mill also requires a capital expenditure
(estimated to be $25.0 million) to comply with environmental regulations which
become effective in 1995. This expenditure, if it is made, will not lower the
mill's costs.
In measuring the write-down, the Company projected the future cash flows of
the mills, including the required capital expenditure, and determined that the
value of those cash flows was less than the carrying value of its investment in
the Forest Products Group. Due in part to this write-down, the Company
currently expects to report an improvement in 1994 equity operations since it
will not be recording operating losses for one of its mills.
- - -------------------------------------------------------------------------------
Results of Operations: 1992 Compared with 1991
In 1992, the Company reported a net loss of $44.7 million, or $.57 per share,
compared with net income of $47.0 million, or $.61 per share, in 1991. The 1992
year was adversely affected by $33.4 million, or $.43 per share, resulting from
the net cumulative effect of adopting three mandated noncash accounting changes
related to postretirement and postemployment benefits (see Note 11) and income
taxes (see Note 7) as of January 1, 1992.
Exclusive of the net cumulative effect of the accounting changes, the net loss
for 1992 was $11.3 million or $.14 per share. Earnings for 1992 and 1991 have
also been affected by the following factors:
- $3.1 million pre-tax gains ($.02 per share) in 1992 on the sale
of assets.
- $28.0 million pre-tax charge ($.20 per share) in 1992 to cover
severance and related costs resulting from labor agreements for
various production unions at The Times.
- $53.8 million pre-tax loss ($.47 per share) in 1992 due to the
closing of The Gwinnett (Ga.) Daily News, the sale of its
residual assets and its 1992 operations.
F-5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- - ------------------------------------------------------------------------------
- $10.4 million pre-tax ($.07 per share) in 1992 for training and
start-up costs related to commencement of operations at Edison.
- $11.0 million pre-tax ($.08 per share) in 1992 due to labor
disruptions arising from a dispute between inde-pendent
distributors of The Times and its Drivers' Union.
- $7.8 million pre-tax ($.05 per share) in 1992 for the annual
charge related to postretirement benefits.
- $20.0 million pre-tax charge ($.15 per share) in 1991 to cover
severance and related costs resulting from a voluntary early
retirement program for 160 employees, mainly Newspaper Guild at
The Times.
- $10.0 million ($.13 per share) in 1991 for the reversal of a
provision for income taxes which related to a settlement with the
Internal Revenue Service for tax years 1980 through 1984.
Exclusive of these factors, 1992 earnings would have been $.71 per share
compared with $.63 per share for 1991.
Excluding the factors mentioned above, the principal reason for the increase
in net income is higher advertising and circulation revenues in the Newspaper
and Magazine Groups and lower newsprint costs due to increased price discounting
offset, in part, by the adverse effect such discounting had on equity in
earnings of the Forest Products Group.
Consolidated revenues increased to $1.77 billion from $1.70 billion in 1991.
The increase was due principally to higher advertising rates, higher
circulation revenues in the Newspaper and Magazine Groups and the June 1992
acquisition of two wholesale newspaper distribution businesses, which distribute
The Times and other publications in New York City and parts of New Jersey.
Excluding the special factors, costs and expenses increased to $1.63 billion
in 1992 from $1.59 billion in 1991 due principally to higher payroll and benefit
costs and operating expenses of two wholesale distribution businesses acquired
in June 1992 offset, in part, by lower newsprint prices.
Interest expense, net of interest income, declined to $26.1 million compared
with $30.6 million in 1991 due to lower levels of borrowings.
The nondeductibility of a portion of the loss on the closedown and sale of The
Gwinnett (Ga.) Daily News significantly increased the Company's tax rate.
Exclusive of the Gwinnett transaction and the 1991 favorable IRS settlement, the
effective income tax rate in 1992 declined to 44.5 percent compared with 50.4
percent in 1991. The lower rate is due principally to a decrease in the
relationship of amortization expense for intangible assets to 1992's pre-tax
income, which was significantly higher than that of 1991.
A discussion of the operating results of the Company's segments and equity
interests follows:
Exclusive of the special pre-tax items ($47.9 million in 1992 and $20.0
million in 1991), operating profit of the Newspaper Group increased to $129.1
million in 1992 from $113.6 million in 1991 on revenues of $1.31 billion and
$1.27 billion respectively.
Improvements in revenues and operating profit were due to higher advertising
and circulation rates and increased circulation. Lower newsprint costs also
favorably affected the Group. The June 1992 acquisition of wholesale newspaper
distribution businesses also increased the Group's revenues.
Advertising linage at The Times declined 2.0 percent to 77.0 million lines
compared with 1991. Retail advertising was flat compared with 1991 and national
advertising rose 0.9 percent. However, classified advertising declined 10.5
percent from last year. Circulation of The Times for the year ended December
31, 1992, reached record highs. Circulation was 1,181,500 copies weekdays and
1,763,800 copies Sundays, up 21,600 copies and 29,800 copies, respectively, over
the prior year.
Depreciation of the building portion of Edison amounted to $14.0 million per
year beginning in 1990. Depreciation of the facility's equipment has begun and
will increase as each element is placed in service. Production commenced in
September 1992 and depreciation of related equipment began in the fourth
quarter.
Full operation of the facility began during the first quarter of 1993. The
Company estimates that depreciation of the building and equipment will total
$33.0 million in 1993 increasing to $35.0 million in 1994 when the facility is
operational for a full year.
At the 30 regional newspapers that were in the Group for the entire 1992 and
1991 periods, advertising volume increased 2.5 percent to 33.8 million inches.
The 1992 amount includes a significantly higher volume of advertising inserts.
Circulation for the daily regional newspapers for the year ended December 31,
1992, was 844,500 copies Sundays, up 13,800 copies, and 846,500 copies weekdays,
up 10,400 copies. Circulation for the non-dailies was 73,200 copies, up 3,100
copies.
The Magazine Group's operating profit was $9.9 million in 1992 compared with a
loss of $0.5 million in 1991 on revenues of $386.1 million and $352.7 million
respectively. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), which were structured to
maximize cash flow, the Group's operating profit was $25.4 million in 1992
compared with $21.2 million in 1991. The better 1992 results were primarily due
to increased advertising pages at most of the Group's magazines and lower
magazine paper prices. Most of the Group's magazines increased their market
share compared with 1991.
Advertising pages as reported to PIB for Golf Digest increased 10 percent from
1991 to 1,332 pages; for Tennis increased 4 percent from 1991 to 768 pages; for
Family Circle increased 12 percent from 1991 to 1,723 pages, and for McCall's
increased 11 percent from 1991 to 1,201 pages.
Broadcasting/Information Services Group operating profit was $14.8 million in
1992 compared with $14.0 million in 1991 on revenues of $80.5 million and $76.0
million respectively. The higher operating profit was due to higher local
advertising revenues at the Company's television stations offset, in part, by
costs related to a format change for the AM radio station WQEW, formerly WQXR-
AM.
Equity in operations of the Forest Products Group (an after-tax amount) was a
loss of $8.7 million compared with income of $5.7 million in 1991. Higher paper
discounts due to oversupply continue to have a negative impact.
F-6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONCLUDED)
- - -------------------------------------------------------------------------------
Liquidity and Capital Resources
Net cash provided by operating activities of $175.3 million was used primarily
to modernize facilities and equipment, to pay dividends to stockholders, to
repurchase shares of the Company's Class A Common Stock and, in part, to
purchase The Globe. The ratio of current assets to current liabilities was 0.89
at December 31, 1993 compared with 1.08 at December 31, 1992, and long-term debt
and capital lease obligations as a percentage of total capitalization was 22
percent at December 31, 1993 compared with 17 percent at December 31,1992. The
increase was due principally to the impact of the Company's stock repurchase
program discussed below, which was partially offset by the acquisition of The
Globe on October 1, 1993.
In October 1993, the Company announced authorized expenditures of up to $150.0
million for repurchases of its Class A Common Stock. Under the program,
purchases may be made from time to time either in the open market or through
private transactions. The number of shares that may be purchased in market
transactions may be limited as a result of The Globe transaction. Purchases may
be suspended from time to time or discontinued. To date the Company has
repurchased approximately 30,000 shares of its Class A Common Stock at an
average price of $24.78 per share under this program.
Under a previously announced program that expired at the close of The Globe
transaction, the Company expended approximately $254.0 million. Under this
program, the Company repurchased approximately 10,231,000 shares of its Class A
Common Stock at an average price of $24.87 per share.
In December 1993 the Company and the City of New York executed a lease
agreement and related agreements, under which the Company will lease 31 acres of
City-owned land in Queens, New York, on which The Times plans to build a state-
of-the-art printing and distribution facility. The Company estimates that the
cost of the new facility will be approximately $280.0 million with construction
to begin in the summer of 1994 and completion expected in 1997. Construction of
the facility is subject to approval of the Company's Board of Directors.
The Company currently estimates that, exclusive of the Queens facility,
capital expenditures for 1994 will range from $90.0 million to $110.0 million.
In connection with the 1991 divestiture of a jointly-owned affiliate, Spruce
Falls Power and Paper Company Limited, the Company committed to lend up to $26.5
million (C$30.0 million) to the new owners of the mill. Such loans will take
place over a five-year period ending December 1996. To date the Company has
loaned approximately U.S. $20.5 million under the commitment.
In October 1993 the Company issued notes totaling $200.0 million to an
insurance company with interest payable semi-annually. $100.0 million of five-
year notes were issued at a rate of 5.50 percent, and the remaining $100.0
million were issued as six and one-half year notes at a rate of 5.77 percent.
In connection with the previously announced charges totaling $35.4 million for
white-collar and production union staff reductions (see Note 4), the Company
currently anticipates that the staff reductions and related expenditures will
occur during 1994 and that the cost of this program will be recovered through
reduced costs over a two-year period. The charges cover approximately 300
employees with an average annual wage and benefit cost of $110,000 per employee.
The Company does not anticipate that its ongoing business operations will be
affected by this reduction of staff and expects to fund this charge through
internally generated funds.
In January 1994 a definitive agreement was reached regarding the sale of a
partnership (BPI Communications, L.P.) in which the Company has a one-third
interest. In February 1994, the Company received approximately $53.0 million,
which will primarily be utilized to repay notes payable, which totaled $62.3
million at December 31, 1993.
In addition to cash provided from operating activities, the Company has
several established sources for future liquidity purposes, including several
revolving credit and term loan agreements. At December 31, 1993, $150.0 million
was available for borrowing by the Company under these agreements. The Company
anticipates that during 1994 cash for operating, investing and financing
activities will continue to come from a combination of internally generated
funds and external financing.
F-7
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
- - -------------------------------------------------------------------------------
Dollars and shares in thousands except Year Ended December 31
per share data 1993 1992 1991
- - -------------------------------------------------------------------------------
REVENUES
Advertising $1,399,042 $1,254,764 $1,254,365
Circulation 473,971 419,454 390,600
Other 146,641 99,317 58,136
- - -------------------------------------------------------------------------------
Total 2,019,654 1,773,535 1,703,101
- - -------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs:
Raw materials 280,531 250,575 288,618
Wages and benefits 437,528 388,403 361,660
Other 418,554 365,651 341,105
- - -------------------------------------------------------------------------------
Total 1,136,613 1,004,629 991,383
Selling, general and administrative
expenses 756,460 680,498 618,079
- - -------------------------------------------------------------------------------
Total 1,893,073 1,685,127 1,609,462
- - -------------------------------------------------------------------------------
OPERATING PROFIT 126,581 88,408 93,639
Interest expense, net of interest income 25,375 26,115 30,586
Loss on disposition of Gwinnett Daily News - 53,768 -
- - -------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products group 101,206 8,525 63,053
Income taxes 43,231 11,079 21,760
- - -------------------------------------------------------------------------------
Income (Loss) before equity in operations
of forest products group 57,975 (2,554) 41,293
Equity in operations of forest products
group (51,852) (8,718) 5,700
- - -------------------------------------------------------------------------------
Income (Loss) before net cumulative
effect of accounting changes 6,123 (11,272) 46,993
Net cumulative effect of accounting
changes - (33,437) -
- - -------------------------------------------------------------------------------
NET INCOME (LOSS) $ 6,123 $ (44,709) $ 46,993
- - -------------------------------------------------------------------------------
Average number of common shares
outstanding 84,459 78,534 77,299
Per share of common stock
Before net cumulative effect of
accounting changes $ .07 $ (.14) $ .61
Net cumulative effect of accounting
changes - (.43) -
Net income (loss) .07 (.57) .61
Dividends .56 .56 .56
- - -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-8
<PAGE>
CONSOLIDATED BALANCE SHEETS
- - -------------------------------------------------------------------------------
December 31
1993 1992
- - -------------------------------------------------------------------------------
ASSETS Dollars in thousands
- - -------------------------------------------------------------------------------
CURRENT ASSETS
Cash and short-term investments (at cost which
approximates market:
1993, $27,744,000; 1992, $91,685,000) $ 42,058 $ 118,503
Accounts receivable (net of allowances: 1993,
$43,507,000; 1992, $33,300,000) 264,218 192,233
Inventories 47,271 51,551
Deferred subscription costs 32,597 32,830
Other current assets 107,009 37,661
- - -------------------------------------------------------------------------------
Total current assets 493,153 432,778
- - -------------------------------------------------------------------------------
INVESTMENT IN FOREST PRODUCTS GROUP 76,020 139,392
- - -------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT (at cost)
Land 65,839 61,961
Buildings, building equipment and improvements 650,186 597,597
Equipment 874,479 751,186
Construction and equipment installations in progress 93,007 47,842
- - -------------------------------------------------------------------------------
Total 1,683,511 1,458,586
Less accumulated depreciation 571,487 555,831
- - -------------------------------------------------------------------------------
Total property, plant and equipment - net 1,112,024 902,755
- - -------------------------------------------------------------------------------
INTANGIBLE ASSETS ACQUIRED
Costs in excess of net assets acquired 1,383,582 554,014
Other intangible assets acquired 227,377 63,200
- - -------------------------------------------------------------------------------
Total 1,610,959 617,214
Less accumulated amortization 190,006 160,991
- - -------------------------------------------------------------------------------
Total intangible assets acquired - net 1,420,953 456,223
- - -------------------------------------------------------------------------------
MISCELLANEOUS ASSETS 113,054 63,826
- - -------------------------------------------------------------------------------
Total $3,215,204 $1,994,974
- - -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-9
<PAGE>
- - -------------------------------------------------------------------------------
December 31
1993 1992
- - -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY Dollars in thousands
- - -------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 115,402 $ 139,115
Notes payable 62,340 -
Payrolls 71,256 47,820
Accrued expenses 171,515 90,063
Unexpired subscriptions 130,627 119,508
Short-term debt 2,590 2,643
- - -------------------------------------------------------------------------------
Total current liabilities 553,730 399,149
- - -------------------------------------------------------------------------------
OTHER LIABILITIES
Long-term debt 413,581 158,131
Capital lease obligations 46,482 48,780
Deferred income taxes 196,875 187,701
Other 403,869 199,799
- - -------------------------------------------------------------------------------
Total other liabilities 1,060,807 594,411
- - -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
5 1/2% Cumulative prior preference stock of $100 par
value - authorized 110,000 shares; outstanding:
1993 and 1992, 17,837 shares 1,784 1,784
Serial preferred stock of $1 par value - authorized
200,000 shares - none issued - -
Common stock of $.10 par value
Class A - authorized 200,000,000 shares; issued:
1993, 107,678,024 shares; 1992, 88,047,623 shares
(including treasury shares: 1993, 1,251,573; 1992,
8,773,419) 10,768 8,805
Class B, convertible - authorized 600,000 shares;
issued: 1993, 571,624 shares; 1992, 571,804
(including treasury shares: 1993 and 1992,
139,943) 57 57
Additional capital 599,758 164,928
Earnings reinvested in the business 1,022,958 1,065,347
Common stock held in treasury, at cost (34,658) (239,507)
- - -------------------------------------------------------------------------------
Total stockholders' equity 1,600,667 1,001,414
- - -------------------------------------------------------------------------------
Total $3,215,204 $1,994,974
- - -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-10
<PAGE>
<TABLE><CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- - --------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH PROVIDED (USED):
OPERATING ACTIVITIES
Income (loss) before net cumulative effect of accounting changes $ 6,123 $ (11,272) $ 46,993
Adjustments to reconcile income (loss) before net cumulative effect of
accounting changes to net cash provided by operating activities
Depreciation 89,274 69,880 72,441
Amortization 39,558 38,052 44,399
Equity in operations of forest products group - net 52,311 943 (6,406)
Cash distributions and dividends from forest products group - 6,775 775
Loss on closing and disposition of Gwinnett Daily News - 53,768 -
Deferred income taxes (37,901) (18,216) 8,729
(Increase) Decrease in receivables - net (21,636) 430 (2,375)
Decrease (Increase) in inventories 10,799 (10,707) 5,471
Decrease (Increase) in deferred subscription costs and other current assets 4,749 1,078 (13,963)
(Decrease) Increase in accounts payable (41,429) 15,216 9,120
Increase (Decrease) in payrolls and accrued expenses 46,758 (12,474) 9,377
Increase in unexpired subscriptions 11,196 4,342 6,666
Other - net 15,491 290 4,944
- - --------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 175,293 138,105 186,171
- - --------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Businesses acquired, net of cash acquired (134,384) (23,091) -
Proceeds on sale of residual assets of Gwinnett Daily News - 68,000 -
Additions to property, plant and equipment (75,738) (47,068) (39,708)
Purchases of marketable securities (65,077) - -
Proceeds from sales of marketable securities 65,077 - -
Decrease in investment in forest products group - - 46,234
Loans to former affiliate (15,000) - (5,000)
Other investing proceeds 944 4,985 1,495
Other investing payments (1,986) (8,629) (16,354)
- - --------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (226,164) (5,803) (13,333)
- - --------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Short-term borrowing - net 62,340 - (11,971)
Long-term obligations and notes payable
Increase 200,000 - 76,963
Reduction (5,510) (63,847) (167,477)
Capital shares
Issuance 19,894 19,785 15,121
Repurchase (255,222) - (9)
Dividends paid to stockholders (47,076) (54,935) (32,580)
- - --------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (25,574) (98,997) (119,953)
- - --------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in Cash and short-term investments (76,445) 33,305 52,885
Cash and short-term investments at the beginning of the year 118,503 85,198 32,313
- - --------------------------------------------------------------------------------------------------------------------
Cash and short-term investments at the end of the year $ 42,058 $ 118,503 $ 85,198
- - --------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements and supplemental disclosures to consolidated statements of cash flows.
</TABLE>
F-11
<PAGE>
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
- - -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- - -------------------------------------------------------------------------------
NONCASH INVESTING AND FINANCING
TRANSACTIONS
Capital lease assets and obligations
incurred $ 338 $ 668 $ 311
========== ========== ==========
Businesses acquired
Fair value of assets acquired $1,237,029 $ 34,462
Liabilities assumed (209,000) (11,371)
Liabilities incurred, net of
payments (18,744) -
Common stock issued (874,901) -
--------- ----------
Net cash paid $ 134,384 $ 23,091
========= ==========
Valuation reserve (investment in
forest products group) $ (26,927)
==========
CASH FLOW INFORMATION
Cash payments during the year for
Interest (net of amount capitalized) $ 26,861 $ 28,486 $ 31,367
========= ======== =========
Income taxes $ 55,327 $ 36,776 $ 25,620
========= ======== =========
- - -------------------------------------------------------------------------------
F-12
<PAGE>
<TABLE><CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- - ------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
except per share data Capital Stock Common
5 1/2% Class A Class B Earnings Stock
Preference Common Common Reinvested Held in
Additional in the Treasury
Capital Business at cost
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1991 $1,798 $ 8,755 $58 $178,826 $1,157,045 $(288,899)
- - ------------------------------------------------------------------------------------------------------------------------
Net income 46,993
- - ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (43,306)
- - ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 26,544 Class A
shares from treasury 348 370
Employee stock purchase plan - 1,041,858
Class A shares 1 (2,062) 16,978
Stock options - 95,125 Class A shares 13 963 (891)
Stock conversions - 8,572 shares 1 (1)
- - ------------------------------------------------------------------------------------------------------------------------
Purchase of company stock -
143 preference shares (14) 5
- - ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,657)
- - ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1991 1,784 8,770 57 178,080 1,158,977 (272,442)
- - ------------------------------------------------------------------------------------------------------------------------
Net loss (44,709)
- - ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (43,987)
- - ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 19,576 Class A
shares from treasury (491) 524
Employee stock purchase plan - 1,069,743
Class A shares 1 (16,432) 34,311
Stock options - 252,435 Class A shares 34 3,771 (1,900)
Stock conversions - 600 shares - -
- - ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (4,836)
- - ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1992 1,784 8,805 57 164,928 1,065,347 (239,507)
- - ------------------------------------------------------------------------------------------------------------------------
Net income 6,123
- - ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (47,003)
- - ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
The Globe acquisition - 36,397,313
Class A shares 1,940 432,624 440,337
Retirement units, etc. 10,877 Class A
shares from treasury 123 339
Employee stock purchase plan - 819,166
Class A shares (2,612) 20,329
Stock options - 185,611 Class A shares 23 4,695 (934)
Stock conversions - 180 shares - -
- - ------------------------------------------------------------------------------------------------------------------------
Purchase of company stock - 10,260,900
Class A shares (255,222)
- - ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,411)
- - ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1993 $1,784 $10,768 $57 $599,758 $1,022,958 $ (34,658)
- - ------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation. The consolidated financial statements include the
accounts of The New York Times Company and all subsidiaries (the "Company")
after elimination of intercompany items.
Inventories. Inventories are stated at the lower of cost or current market
value. Inventory cost generally is based on the last-in, first-out ("LIFO")
method for newsprint and magazine paper and the first-in, first-out ("FIFO")
method for other inventories.
Investments. Investments in which the Company has at least a 20 percent but not
more than 50 percent interest are accounted for under the equity method.
Property, Plant and Equipment. Property, plant and equipment is stated at cost,
and depreciation is computed by the straight-line method over estimated service
lives. The Company capitalizes interest costs as part of the cost of
constructing major facilities and equipment.
Intangible Assets Acquired. Costs in excess of net assets acquired consist of
excess costs of businesses acquired over values assigned to their net tangible
assets and other intangible assets. The excess costs which arose from
acquisitions after October 31, 1970 are being amortized by the straight-line
method principally over 40 years. The remaining portion of such excess, which
arose from acquisitions before November 1, 1970 (approximately $13,000,000), is
not being amortized since in the opinion of management there has been no
diminution in value. Other intangible assets acquired consist principally of
advertiser and subscriber relationships which are being amortized over the
remaining lives, ranging from 5 to 40 years.
Subscription Revenues and Costs. Proceeds from subscriptions and related costs,
principally agency commissions, are deferred at the time of sale and are
included in the Consolidated Statements of Operations on a pro rata basis over
the terms of the subscriptions.
Foreign Currency Translation. The assets and liabilities of foreign companies
are translated at the year-end exchange rates. Results of operations are
translated at the average rates of exchange in effect during the year. The
resultant translation adjustment is included as a component of stockholders'
equity.
Earnings Per Share. Earnings per share is computed after preference dividends
and is based on the weighted average number of shares of Class A and Class B
Common Stock outstanding during each year. The effect of shares issuable under
the Company's Incentive Plans (see Note 12), including stock options, is not
material and therefore excluded from the computation.
Cash and Short-Term Investments. For purposes of the Consolidated Statements of
Cash Flows, the Company considers all highly liquid debt instruments purchased
with maturities of three months or less to be cash equivalents. The Company has
overdraft positions at certain banks caused by outstanding checks. These
overdrafts have been reclassified to accounts payable.
- - -------------------------------------------------------------------------------
2. ACQUISITIONS/DIVESTITURES
On October 1, 1993, pursuant to an Agreement and Plan of Merger dated June 11,
1993, as amended as of August 12, 1993 (the "Merger Agreement"), a wholly-owned
subsidiary of the Company was merged with Affiliated Publications, Inc., the
parent company of The Boston Globe ("The Globe"), which became a wholly-owned
subsidiary of the Company.
The transaction was accounted for as a purchase and, accordingly, the results
of The Globe's operations have been included in the Company's consolidated
financial statements beginning October 1, 1993, the date the transaction closed.
The acquisition had a net cost of approximately $1,028,000,000. Under the
Merger Agreement the Company exchanged cash of approximately $160,000,000 for 15
percent of The Globe's common stock with the remainder of the consideration paid
by the exchange of approximately 36,400,000 shares of the Company's Class A
Common Stock valued at $24.03 per share. The purchase resulted in increases in
costs in excess of net assets acquired of approximately $830,000,000 (which will
be amortized by the straight-line method over 40 years); other intangible assets
acquired of $161,000,000 (which consist principally of advertiser and subscriber
relationships which are being amortized by the straight-line method over an
average period of 33 years); and property, plant and equipment of $246,000,000.
Net liabilities assumed as a result of the transaction totaled approximately
$209,000,000.
The following pro forma supplemental financial information is presented as if
the enterprises had combined at the beginning of the respective periods. It is
not necessarily indicative of the combined results that would have occurred had
the merger taken place as of the beginning of the periods provided, nor
necessarily indicative of results that may be achieved in the future:
(Dollars in thousands Year Ended December 31,
except per share data) 1993 1992
- - ----------------------------------------------------------------------------
Revenues $ 2,335,985 $2,187,490
Income (loss)
before net cumulative
effect of accounting changes 1,380 (14,237)
Net income (loss) 1,380 (61,783)
Income (loss)
per share before net
cumulative effect of
accounting changes .01 (.13)
Net income (loss) per share .01 (.54)
F-14
<PAGE>
Pro forma depreciation and amortization expense for the year ended December 31,
1993 and 1992 was approximately $166,816,000 and $158,363,000 respectively.
On December 31, 1993 the Company sold two weekly newspapers and recognized a
pre-tax gain of $2,600,000, or $.02 per share, on the transaction.
In January 1994, a definitive agreement was announced regarding the sale of
BPI Communications, L.P. ("BPI"), a partnership in which the Company acquired a
one-third interest through its October 1993 merger with The Globe. The Company
received approximately $53,000,000 when the transaction was completed in
February 1994 with additional payments of approximately $2,000,000 expected
later in the year. For financial reporting purposes, no gain or loss will be
recognized on the transaction. The Company's investment in BPI of $55,000,000
has been included in other current assets on the accompanying Consolidated
Balance Sheet at December 31, 1993.
In September 1992 the Company closed The Gwinnett (Ga.) Daily News and sold
the residual assets. The closing, related sale and its 1992 operations resulted
in a pre-tax loss of approximately $53,768,000 ($37,113,000 after taxes or $.47
per share). The newspaper had not earned a profit since its acquisition in
1987, but its annual operating losses were not material.
In June 1992 the Company acquired two wholesale newspaper distribution
businesses that distribute The Times and other newspapers and periodicals in
New York City and central and northern New Jersey. The acquisition was
accounted for as a purchase; accordingly, the operating results have been
included in the consolidated financial statements from the date of the
acquisition. The cost of the acquisition was approximately $34,500,000, of
which $23,091,000 was paid in cash with the remainder representing net
liabilities assumed. The purchase resulted in an increase in intangible
assets acquired of $34,462,000.
In April 1991 the Company increased its interest in the International Herald
Tribune S.A. to 50 percent.
- - -------------------------------------------------------------------------------
3. CAPITAL INVESTMENT PROJECTS
Depreciation of the building portion of the Company's Edison facility, amounting
to approximately $14,000,000 per year, began in 1990 when the facility was
substantially completed. Due to the resolution of various labor issues,
commencement of production at the facility was delayed until late in 1992.
Depreciation of the equipment began during the fourth quarter and was phased in
as each element was placed in service with full operation of the facility
beginning in the first quarter of 1993. Depreciation of the building and
equipment totaled $33,000,000 in 1993 and will increase to $35,000,000 in 1994
when the facility is operational for a full year.
In February 1993 the Company announced that The Times closed its printing
plant in Carlstadt, New Jersey, and transferred production and distribution to
the new Edison facility. The carrying value of the facility (approximately
$24,000,000) has been included in miscellaneous assets at December 31, 1993
pending the Company's determination of the future of the facility. The closing
of the plant and decision related to its future is not expected to result in a
writedown.
In December 1993 the Company and the City of New York executed a lease
agreement and related agreements, under which the Company will lease 31 acres of
City-owned land in Queens, New York, on which The Times plans to build a state-
of-the-art printing and distribution facility. Such agreement will not commence
until certain provisions relating to site preparation have been met and,
accordingly, the transaction has not yet been recorded on the Company's
financial statements. The Company estimates that the cost of the new facility
will be approximately $280,000,000 with construction to begin in the summer of
1994 and completion expected in 1997. The new facility will replace presses and
distribution facilities now located at The Times's facility in Manhattan. The
lease will continue for 25 years after the start of construction with an option
ultimately to purchase the property. Under the terms of the agreement, The
Times would receive various tax and energy cost reductions. Construction of the
facility is subject to approval of the Company's Board of Directors.
- - -------------------------------------------------------------------------------
4. VOLUNTARY STAFF REDUCTIONS AND PRODUCTION UNION NEGOTIATIONS
The Company announced two fourth quarter 1993 pre-tax charges totaling
$35,400,000 or $.23 per share for severance and related costs resulting from
anticipated white-collar staff reductions (approximately $30,000,000) and
voluntary early retirements from the composing room (approximately $5,400,000)
at The Times.
In 1993 the Company completed the negotiations of long-term labor agreements
with all of its production unions, which extend to the year 2000. These
agreements include wages, payments to the unions' benefit and pension funds, job
security and financial incentives. The agreements extend to all of The Times's
production and distribution facilities and to any new facilities which the
Company might utilize (see Note 3).
In connection with these agreements, the Company recorded two pre-tax charges,
$28,000,000, or $.20 per share, in 1992 and $30,000,000, or $.22 per share, in
1989) for voluntary production union staff reductions at The Times related to
the opening of Edison (see Note 3), the further automation of newspaper
production in the composing room and the announced closing of Carlstadt.
In 1991 the Company recorded a $20,000,000 before-tax charge ($.15 per share)
for severance and related costs resulting from a voluntary termination benefits
program for approximately 160 employees at The Times, most of whom were members
of The Newspaper Guild of New York.
At December 31, 1993 and 1992, approximately $40,000,000 and $29,000,000,
respectively, are included in accrued expenses in the accompanying Consolidated
Balance Sheets, which represents the unpaid balance of the pre-tax charges.
F-15
<PAGE>
- - -------------------------------------------------------------------------------
5. INVESTMENT IN FOREST PRODUCTS GROUP
The Company has equity interests in two Canadian newsprint companies and a paper
manufacturing company operating as a partnership. The equity interests in the
newsprint companies are: Donohue Malbaie Inc. - 49 percent; and Gaspesia Pulp
and Paper Company Ltd. - 49 percent.
In 1993 the Company recorded an after-tax noncash charge of $47.0 million
($.56 per share) against equity in operations to write down the Company's
investment in the Forest Products Group to reflect current operating conditions
and economic factors in the industry.
In December 1991 the Company and Kimberly-Clark Corporation announced the
completion of the divestiture of their jointly-owned affiliate, Spruce Falls
Power and Paper Company, Limited ("Spruce Falls"). Spruce Falls is a producer
of newsprint in which the Company held a 49.5 percent equity interest.
In connection with the divestiture, the Company committed to lend up to
$26,500,000 (C$30,000,000) to the new owners of the mill. Such loans will take
place over a five-year period ending December 1996. At December 31, 1993 and
1992 the Company had loaned Spruce Falls approximately $20,515,000 and
$5,515,000, respectively, under the loan commitment. Interest on the
outstanding balance is payable quarterly at annual rates ranging from 4 to 10
percent. Commencing in December 1997, the borrowings outstanding at the end of
the commitment (December 1996) are payable annually over a 5 year period in 20
percent increments.
The Company and Myllykoski Oy, a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison Paper Industries ("Madison").
Loans and contributions to Madison by an 80 percent-owned subsidiary of the
Company totaled $1,279,000, $1,337,000 and $1,806,000, respectively, in 1993,
1992 and 1991. The partners' interests in the net assets of Madison at any time
will depend on their capital accounts, as defined, at such time. Through the 80
percent-owned subsidiary, the Company's share of Madison's profits and losses is
40 percent.
At December 31, 1993, the Company recorded a distribution receivable from
Donohue Malbaie Inc. of $8,224,000. Such amount is included in other current
assets in the Company's consolidated balance sheet at such date. No other
distributions were received from the Canadian newsprint companies in 1993, 1992
or 1991. The Company's share of undistributed earnings of these companies
aggregated approximately $3,975,000 and $24,551,000 at December 31, 1993 and
1992, respectively.
Loans and contributions to the Canadian newsprint companies by the Company
totaled $171,000 in 1991. No loans and contributions were made in 1993 or 1992.
- - -------------------------------------------------------------------------------
Condensed Combined Balance Sheets
of Forest Products Group
Dollars in thousands
- - -------------------------------------------------------------------------------
December 31 1993 1992
- - -------------------------------------------------------------------------------
Current assets $ 87,984 $ 76,317
Less current liabilities 75,073 65,026
- - -------------------------------------------------------------------------------
Working capital 12,911 11,291
Fixed assets, net, etc. 345,413 372,554
Long-term debt (71,528) (77,025)
Deferred income taxes, etc. (102,752) (86,755)
- - -------------------------------------------------------------------------------
Net assets $184,044 $220,065
- - -------------------------------------------------------------------------------
At December 31, 1993 long-term debt of the Forest Products Group (exclusive of
$10,275,000 due within one year) matures as follows: 1995, $10,335,000; 1996,
$46,085,000; and 1997, $15,108,000. The maturities of a substantial portion of
the debt may be accelerated if cash flow, as defined, exceed certain levels.
None of the Forest Products Group's debt is guaranteed by the Company.
- - -------------------------------------------------------------------------------
Condensed Combined Statements of Operations
of Forest Products Group
Dollars in thousands
- - -------------------------------------------------------------------------------
Year Ended December 31 1993 1992 1991
- - -------------------------------------------------------------------------------
Net sales and other income $254,324 $266,451 $287,924
Costs and expenses 269,845 297,117 276,062
- - -------------------------------------------------------------------------------
Income (Loss) before taxes (15,521) (30,666) 11,862
Income tax benefit (2,700) (11,680) (544)
- - -------------------------------------------------------------------------------
Net income (loss) $(12,821) $(18,986) $ 12,406
- - -------------------------------------------------------------------------------
The condensed combined financial information of the Forest Products Group
excludes the income tax effects related to Madison. Such tax effects (see Note
7) have been included in the Company's consolidated financial statements.
The accumulated translation adjustment (included in earnings reinvested in the
business) decreased stockholders' equity by $2,628,000 and $1,217,000 at
December 31, 1993 and 1992 respectively. Upon the disposition of Spruce Falls
in 1991, stockholders' equity was reduced by $3,506,000 to reflect the
accumulated translation adjustment for such company.
Adjustments from translating certain balance sheet accounts, principally of
the Canadian newsprint companies, for each of the three years in the period
ended December 31, 1993, are set forth in the Consolidated Statements of
Stockholders' Equity.
During 1993, 1992 and 1991, the Company's Newspaper Group purchased newsprint
and supercalendered paper from the Forest Products Group at competitive prices.
Such purchases aggregated approximately $102,000,000, $112,000,000, and
$127,000,000 respectively.
F-16
<PAGE>
- - --------------------------------------------------------------------------------
6. INVENTORIES
Inventories as shown in the accompanying Consolidated Balance Sheets are
composed of the following:
- - ---------------------------------------
Dollars in thousands
- - ---------------------------------------
December 31 1993 1992
- - ---------------------------------------
Newsprint and
magazine paper $38,691 $44,570
Work-in-process, etc. 8,580 6,981
- - ---------------------------------------
Total $47,271 $51,551
- - ---------------------------------------
Utilization of the LIFO method reduced inventories as calculated on the FIFO
method by approximately $2,263,000 and $1,765,000 at December 31, 1993 and 1992
respectively.
- - --------------------------------------------------------------------------------
7. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109 -
Accounting for Income Taxes ("SFAS 109") as of January 1, 1992 which changed its
method of accounting for income taxes from the deferred method (Accounting
Principles Board Opinion No. 11 - "APB 11") to an asset and liability approach.
The cumulative effect of this change in accounting method on net income was a
credit of $13,414,000 ($.17 per share) and was reflected as of January 1, 1992.
Income taxes for 1991 are measured under APB 11.
SFAS 109 requires recognition of deferred tax liabilities and assets for the
estimated future tax consequences attributable to temporary differences. Such
temporary differences exist when the tax basis differs from the financial
reporting amount of assets or liabilities. All tax liabilities and tax assets
are measured using current tax law and applicable rates. A valuation allowance
is recorded to reduce deferred tax assets to amounts which, in management's
judgment, are most likely to be realized.
SFAS 109 further requires adjustment of tax balances to reflect enacted changes
in tax law or rates in the period of enactment. Accordingly, 1993 results
include increased tax expense resulting from the enactment of the Tax Act in
August. The Tax Act increased the statutory corporate income tax rate one
percent (to 35 percent) retroactive to January 1, 1993, and made other changes
concerning the deductibility of certain costs in determining taxable income.
Income tax expense as shown in the Consolidated Statements of Operations is
composed of the following:
- - -----------------------------------------------------
Dollars in thousands 1993 1992 1991
- - -----------------------------------------------------
Current tax expense
Federal $60,178 $8,970 $21,666
State, local,
foreign 17,612 1,413 695
- - -----------------------------------------------------
77,790 10,383 22,361
- - -----------------------------------------------------
Deferred tax expense
Federal (26,982) (1,157) (2,335)
State, local,
foreign (8,919) 1,302 4,941
- - -----------------------------------------------------
(35,901) 145 2,606
- - -----------------------------------------------------
Income tax expense
including the
tax effects of
equity in
operations 41,889 10,528 24,967
Less income tax
(benefit) expense
related to equity
in operations (1,342) (551) 3,207
- - -----------------------------------------------------
Income tax expense $43,231 $11,079 $21,760
- - -----------------------------------------------------
Tax expense in 1993 was reduced by approximately $7,000,000 and $2,485,000,
respectively, relating to a decrease in valuation allowance and recognition of
federal tax benefits of capital loss carryforwards. Of the decrease in
valuation allowance, $4,390,000 was associated with federal tax benefits of
capital loss carryforwards; with the remainder attributable to state and local
tax benefits of net operating loss carryforwards. Adjustment of the Company's
deferred tax balances for the one percent rate increase provided in the Tax Act
added $4,359,000 to deferred tax expense, inclusive of $600,000 of expense
reported in equity in operations of the forest products group. In accordance
with the provisions of SFAS 109, approximately $1,600,000 of additional
reduction in valuation allowance, which was established against acquired
deferred tax assets, was recorded as a reduction of goodwill. No such amounts
affected 1992 tax expense.
In connection with the Gwinnett transaction in 1992 (see Note 2), the Company
had a net tax benefit of $16,655,000 on a pre-tax loss of $53,768,000. The
difference of $1,626,000 between the tax benefit and such benefit calculated at
the federal statutory rate is mainly attributable to an unrecognized capital
loss (which increased tax expense by $3,405,000), net of the impact of
previously amortized intangibles (which decreased tax expense by $1,779,000).
In 1991 the Company reversed a provision for income tax contingencies of
$10,000,000 related to a settlement with the Internal Revenue Service for tax
years 1980 through 1984.
The components of deferred income tax expense for 1991, which totaled
$2,606,000, are as follows: depreciation $13,288,000; tax certificate
$(10,409,000); tax settlement $(10,000,000); subscription expenses $7,969,000;
and other net deferred tax expense of $1,758,000.
Income tax benefits credited directly to stockholders' equity totaled
$3,595,000, $3,735,000 and $707,000 during 1993, 1992 and 1991 respectively.
Foreign taxes included in income tax expense in each of the years presented
were not significant.
F - 17
<PAGE>
The reasons for the variance between the effective tax rate on income before
income taxes and equity in operations of the Forest Products Group and the
federal statutory rate (exclusive in 1992 of the loss on the disposition of
Gwinnett) are as follows:
Year Ended December 31 1993 1992 1991
- - ------------------------------------------------------------------------------
% of % of % of
Dollars in thousands Amount Pretax Amount Pretax Amount Pretax
- - ------------------------------------------------------------------------------
Tax at federal
statutory rate $35,422 35.0% $21,180 34.0% $21,438 34.0%
Increase (decrease)
resulting from
State and local taxes
- - - net 6,883 6.8 2,294 3.7 3,507 5.6
Capital loss
carryforwards (6,875) (6.8) - - - -
Amortization of
intangible
assets acquired 5,602 5.5 4,033 6.5 6,970 11.1
Change in enacted tax
rate 3,759 3.7 - - - -
Tax settlement - - - - (10,000) (15.9)
Other - net (1,560) (1.5) 227 0.3 (155) (0.3)
- - ------------------------------------------------------------------------------
Subtotal 43,231 42.7% 27,734 44.5% 21,760 34.5%
- - ------------------------------------------------------------------------------
Gwinnett disposition - (16,655) -
- - ------------------------------------------------------------------------------
Income tax expense $43,231 $11,079 $21,760
- - ------------------------------------------------------------------------------
Federal income taxes currently refundable totaled $2,992,000 and $4,842,000 at
December 31, 1993 and 1992, respectively, and are included in other current
assets on the Consolidated Balance Sheets. The components of the net deferred
tax liabilities recognized on the respective Consolidated Balance Sheets, are
as follows:
- - -----------------------------------------
Dollars in thousands
December 31 1993 1992
- - -----------------------------------------
Deferred Tax Assets
Intangible assets
acquired $23,568 $ 23,504
Accrued state and
local taxes 19,890 18,522
Postretirement and
postemployment 78,655 40,177
benefits
Other accrued
employee benefits 110,218 25,370
and compensation
Allowance for
doubtful 23,557 24,077
accounts
AMT credit - 4,033
carryforward
Tax loss 23,595 26,741
carryforwards
Other 20,151 6,521
- - -----------------------------------------
Total deferred tax 299,634 168,945
assets
Valuation allowance (25,064) (19,851)
- - -----------------------------------------
Net deferred tax $274,570 $149,094
assets
- - -----------------------------------------
- - -----------------------------------------
Dollars in thousands
December 31 1993 1992
- - -----------------------------------------
Deferred Tax
Liabilities
Property, plant and
equipment $131,189 $ 127,691
Tax certificate 137,343 145,631
Nontaxable 145,298 -
acquisition
Deferred
subscription 21,743 21,361
expenses
Safe harbor tax 20,376 24,433
lease
Other 18,446 20,703
- - -----------------------------------------
Total deferred tax 474,395 339,819
liabilities
- - -----------------------------------------
Net deferred tax (274,570) (149,094)
assets
- - -----------------------------------------
Net deferred tax 199,825 190,725
liability
- - -----------------------------------------
Less amounts
included in:
Other current (4,812) -
assets
Accrued expenses 7,762 3,024
- - -----------------------------------------
Deferred income $196,875 $187,701
taxes
- - -----------------------------------------
At December 31, 1993, there were no federal net operating loss carryforwards.
Benefits from state and local loss carryforwards are attributable mainly to tax
operating losses. Such loss carryforwards expire in accordance with provisions
of applicable tax law and have remaining lives ranging from 1 to 15 years. At
December 31, 1993 the tax benefits relating to these carryforwards expire as
follows: 1996, $4,829,000; 1997, $7,984,000; 1998, $3,017,000; 1999 through
2003, $6,540,000 and 2004 through 2008, $1,225,000.
In connection with the sale in 1989 of its cable television system, the
Federal Communications Commission granted the Company a tax certificate. This
certificate enabled the Company to defer income taxes on the gain on the
transaction and pay such taxes over a number of years. Under the provisions
of the Internal Revenue Code, this is accomplished through a reduction in the
tax bases of various assets. As a result, $10,820,000, $10,388,000 and
$10,409,000 of income taxes that were so deferred became currently payable in
1993, 1992 and 1991 respectively. Additional income taxes that were deferred
will become currently payable over the remaining lives of those assets with
reduced tax bases.
Federal income tax returns for all years through 1989 have been examined by
the Internal Revenue Service. Tentative agreements have been reached for all
years through 1989.
F - 18
<PAGE>
Examinations of the tax returns for the years 1990 through 1992 have not
commenced. Management is of the opinion that any assessments resulting from
these examinations will not have a material effect on the consolidated
financial statements.
Equity in operations of the Forest Products Group (see Note 5) includes the
income tax effects of the Company's interest in Madison and its equity in the
operations of the Canadian newsprint companies. Of such amounts, tax benefits
of $585,000 in 1993, $1,219,000 in 1992 and $120,000 in 1991 are applicable to
the Canadian newsprint companies. Deferred taxes attributable to the Company's
interest in Madison were $1,562,000, $265,000, and $(561,000), respectively,
for 1993, 1992 and 1991. These deferred taxes relate principally to
differences between financial reporting and tax depreciation. The Company's
consolidated federal income tax returns include the income tax effects of its
interest in Madison.
- - --------------------------------------------------------------------------------
8. DEBT
Long-term debt consisted of the following:
- - -----------------------------------------
Dollars in thousands
December 31 1993 1992
- - -----------------------------------------
Notes due 1998-2000
(a) $200,000 $ -
Notes due 1995 net of
unamortized discount:
1993, $2,444; 1992,
$4,169 (b) 159,856 158,131
Notes due 1995 net of
unamortized premium of
$3,725 in 1993(c) 53,725 -
Other notes, due in
1993 at a weighted
average interest
rate of 7.80%
in 1992 - 22
- - -----------------------------------------
Total 413,581 158,153
Less current portion - 22
- - -----------------------------------------
Total long-term
portion $413,581 $158,131
- - -----------------------------------------
(a) In October 1993 the Company issued senior notes totaling $200,000,000 to
an insurance company with interest payable semi-annually. Five-year notes
totaling $100,000,000 were issued at a rate of 5.50 percent, and the remaining
$100,000,000 were issued as six and one-half year notes at a rate of 5.77
percent.
(b) In connection with the 1985 acquisition of certain newspapers, the Company
issued 10-year notes with an aggregate stated value of $162,300,000 which have
been discounted at an interest rate of 11.85 percent for financial reporting
purposes. Interest on certain of the notes is payable semi-annually. The
original difference of $12,600,000 between the stated value of the notes and the
amount that results from discounting the notes at 11.85 percent is being
amortized as interest expense over the term of the notes. Based on the
borrowing rates currently available to the Company for bank loans with similar
terms and average maturities, the fair value of these notes is $179,000,000.
(c) In connection with the 1993 acquisition of The Globe (see Note 2), the
Company assumed $50,000,000 of 9.34 percent fixed-rate notes maturing July 1995
which have been valued for financial reporting purposes using a discount rate of
4.25 percent. Interest on the notes is payable semi-annually. The excess of
the fair value of the notes at the acquisition date over the stated value of
such notes was $4,303,000, which is being amortized as a reduction of interest
expense over the remaining term of the notes.
The Company has an interest rate swap agreement (the "Agreement") with a major
financial institution to manage interest costs. The Agreement matures in 1995
and effectively converts the 9.34 percent interest rate to a variable rate which
is semi-annually indexed to the six-month LIBOR rate. Based on quoted market
prices, the Agreement was valued at $1,800,000 at the acquisition date and is
being amortized as interest expense over its term. Such amount has been
included in miscellaneous assets in the accompanying balance sheet at December
31, 1993. During the 1993 fourth quarter and on December 31, 1993, the
Company's effective interest rate on these unsecured notes was 6.42 percent.
As of December 31, 1993, the recorded amounts for these unsecured notes and
the Agreement approximate fair value.
- - ------------------------------------------------------------------------------
In May 1992 the Company entered into an $80,000,000 revolving credit and term
loan agreement with a group of banks, which replaced the previous $100,000,000
revolving credit and term loan agreement which would have terminated in July
1992. The new agreement, as amended, terminates in May 1995. At such time,
then outstanding borrowings would be payable semi-annually aggregating 5
percent, 20 percent, 45 percent and 30 percent annually from 1995 to 1998. At
the Company's discretion, this facility may be converted into term loans at any
time. The Company also has a $40,000,000 revolving credit
agreement with the same group of banks that expires May 1994, at which time, any
outstanding borrowings would be payable.
The agreements permit borrowings which bear interest, at the Company's option,
(i) for domestic borrowings: based on the certificates of deposit rate, the
Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar
borrowings: based on the London interbank rate. Borrowings under these
agreements may be prepaid without penalty. In October 1992 the Company entered
into a new $20,000,000 revolving credit and term loan agreement with a bank and
its affiliate, which replaced a previous $30,000,000 revolving credit agreement
with the same bank. The new agreement, as amended, terminates in May 1995. At
such time, then outstanding borrowings would be payable semi-annually
aggregating 5 percent, 20 percent, 45 percent and 30 percent annually from 1995
to 1998. At the Company's discretion, this facility may be converted into term
loans at any time. The Company also has entered into a $10,000,000 revolving
credit agreement with the same bank and its affiliate that expires May 1994, at
which time, any outstanding borrowings would be payable.
The agreements permit borrowings which bear interest, at the Company's option,
(i) for domestic borrowings: based on the certificates of deposit rate, a prime
rate or a quoted rate; or (ii) for
F - 19
<PAGE>
Eurodollar borrowings based on the London interbank rate. Borrowings under
these agreements may be prepaid without penalty.
No borrowings under any of the above agreements were outstanding during 1993.
Both agreements provide for an annual commitment fee of 1/8th of 1 percent on
the unused commitment. Certain of the agreements also include provisions which
require, among other matters, specified levels of stockholders' equity. At
December 31, 1993 approximately $1,148,000,000 of stockholders' equity was
unrestricted.
Short-term debt is comprised of current maturities of long-term debt and
capital lease obligations. Outstanding notes payable at December 31, 1993
consists of $62,340,000 of short-term bank borrowings at an average interest
rate of 3.71 percent. There were no outstanding notes payable at December 31,
1992.
Interest expense, net of interest income, as shown in the accompanying
Consolidated Statements of Operations consisted
of the following:
- - -------------------------------------------------------
Dollars in thousands
Year Ended
December 31 1993 1992 1991
- - -------------------------------------------------------
Interest expense $29,549 $30,075 $32,401
Interest income (4,174) (3,960) (1,815)
- - -------------------------------------------------------
Net $25,375 $26,115 $30,586
- - -------------------------------------------------------
In connection with various construction projects, interest of approximately
$1,351,000 and $705,000 was capitalized as property, plant and equipment for
1993 and 1992 respectively. There was no interest capitalized in 1991.
- - --------------------------------------------------------------------------------
9. LEASE COMMITMENTS
In December 1993, the Company and The City of New York executed a long-term
lease agreement and related agreements, under which the Company will lease land
to build a state-of-the-art printing and distribution facility for The Times
(see Note 3).
Operating Leases:
Such lease commitments are primarily for office space and equipment. Certain
office space leases provide for adjustments relating to changes in real estate
taxes and other operating expenses.
Rental expense amounted to $24,744,000 in 1993, $23,689,000 in 1992 and
$24,159,000 in 1991. The approximate minimum rental commitments under
noncancelable leases (exclusive of minimum sublease rentals of $301,000) at
December 31, 1993 were as follows: 1994, $16,917,000; 1995, $11,977,000; 1996,
$9,647,000; 1997, $8,566,000; 1998, $7,416,000 and $36,427,000 thereafter.
Capital Leases:
In connection with its Capital Investment Projects (see Note 3), the Company
entered into a long-term lease for a building and site in Edison, New Jersey.
The lease provides the Company with certain early cancellation rights, as well
as renewal and purchase options. For financial reporting purposes, the lease
has been classified as a capital lease; accordingly, an asset of approximately
$57,000,000 (included in buildings, building equipment and improvements at
December 31, 1993 and 1992) has been recorded.
The following is a schedule of future minimum lease payments under all
capitalized leases together with the present value of the net minimum lease
payments as of December 31, 1993:
Dollars in thousands
- - --------------------------------------
Year Ended December 31 Amount
- - --------------------------------------
1994 $ 7,221
1995 6,871
1996 6,623
1997 6,411
1998 6,400
Later years 52,800
- - --------------------------------------
Total minimum lease
payments 86,326
Less: amount representing
interest 37,254
- - --------------------------------------
Present value of net
minimum lease payments
including current
maturities of $2,590 $49,072
- - --------------------------------------
F - 20
<PAGE>
- - --------------------------------------------------------------------------------
10. PENSION PLANS
The Company sponsors several pension plans and makes contributions to several
others in connection with collective bargaining agreements, including a joint
Company-union plan and a number of joint industry-union plans. These plans
cover substantially all employees.
The Company-sponsored pension plans provide participating employees with
retirement benefits in accordance with benefit provision formulas which are
based on years of service and final average or career pay, and where applicable,
employee contributions. Funding is based on an evaluation and review of the
assets, liabilities and requirements of each plan. Retirement benefits are also
provided under supplemental unfunded pension plans. Amounts for 1993 have
increased due to the October 1, 1993 acquisition of The Globe.
Net periodic pension cost was $16,461,000 in 1993, $15,082,000 in 1992, and
$14,467,000 in 1991. The components
of net periodic pension cost are:
- - ----------------------------------------------------------------
Dollars in thousands
Year Ended December 31 1993 1992 1991
- - ----------------------------------------------------------------
Service cost $14,075 $11,879 $11,210
Interest cost 26,675 24,167 22,451
Actual return on
plan assets (38,907) (25,365) (37,430)
Curtailment gain - (885) -
Net amortization
and deferral 14,618 5,286 18,236
- - ----------------------------------------------------------------
Net periodic
pension cost $16,461 $15,082 $14,467
- - ----------------------------------------------------------------
Assumptions used in the actuarial computations were:
- - ----------------------------------------------------------------
Year Ended December 31 1993 1992 1991
- - ----------------------------------------------------------------
Discount rate 7.0% 8.0% 8.25%
Rate of increase in
compensation levels 5.5% 5.5% 5.5%
Expected long-term
rate of return
on assets 8.75% 8.75% 8.75%
- - ----------------------------------------------------------------
In connection with collective bargaining agreements, the Company contributes to
several other pension plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Pension cost for these plans was $17,970,000 in
1993, $15,700,000 in 1992, and $15,052,000 in 1991.
The funded status of the Company's plans which were valued at September 30, 1993
and 1992 is as follows:
Plans Plans
Whose Whose
Assets Accumulated
Exceed Benefits
December 31, 1993 Accumulated Exceed
Dollars in thousands Benefits Assets
- - ----------------------------------------------------
Actuarial present
value of
benefit obligation:
Vested benefit
obligation $187,972 $219,554
- - ----------------------------------------------------
Accumulated benefit
obligation $193,951 $227,102
- - ----------------------------------------------------
Projected benefit
obligation $251,679 $282,179
Plan assets at fair
value 234,366 142,015
- - ----------------------------------------------------
Projected benefit
obligation in
excess of plan
assets 17,313 140,164
Unrecognized net
losses (24,972) (20,043)
Unrecognized prior
service cost 7,746 (9,633)
Unrecognized
transition obligation (2,690) (2,724)
Fourth-quarter
contribution, net (2,675) (3,220)
Adjustment required
to recognize
additional minimum
liability - 10,087
- - ----------------------------------------------------
Recorded pension
(asset) liability $ (5,278) $114,631
- - ----------------------------------------------------
Plans Plans
Whose Whose
Assets Accumulated
Exceed Benefits
December 31, 1992 Accumulated Exceed
Dollars in thousands Benefits Assets
- - ----------------------------------------------------
Actuarial present
value of
benefit obligation:
Vested benefit
obligation $230,705 $21,039
- - ----------------------------------------------------
Accumulated benefit
obligation $235,994 $21,153
- - ----------------------------------------------------
Projected benefit
obligation $296,312 $30,722
Plan assets at fair
value 284,469 -
- - ----------------------------------------------------
Projected benefit
obligation
in excess of plan
assets 11,843 30,722
Unrecognized net
gains (losses) 6,181 (6,393)
Unrecognized prior
service cost (1,202) (1,005)
Unrecognized net
asset (transition
obligation) 1,873 (6,339)
Fourth-quarter
contribution, net (3,172) (265)
Adjustment required
to recognize
additional minimum
liability - 4,167
- - ----------------------------------------------------
Recorded pension
liability $ 15,523 $20,887
- - ----------------------------------------------------
Plan assets, which were valued as of September 30, 1993 and 1992, consist of
money market investments, investments in marketable fixed income and equity
securities, an investment in a diversified real estate equity fund and
investments in group annuity insurance contracts.
The additional liability relating to the unfunded status of these plans is
included in other liabilities on the Consolidated Balance Sheets as of December
31, 1993 and 1992 and miscellaneous assets includes a related intangible asset
of equal amount.
F - 21
<PAGE>
- - --------------------------------------------------------------------------------
11. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS AND POSTEMPLOYMENT
BENEFITS
The Company provides health and life insurance benefits to retired employees
(and their eligible dependents) who are not covered by any collective bargaining
agreements if the employee meets specified age and service requirements.
The Company adopted the provisions of SFAS No. 106 - Employers' Accounting for
Postretirement Benefits Other Than Pensions ("SFAS 106"), changing to the
accrual method of accounting for these benefits effective January 1, 1992.
Prior to 1992, postretirement benefit expenses were recognized on a pay-as-you-
go basis and were not material.
As permitted by SFAS 106, the Company elected to recognize in 1992 the
accumulated postretirement benefit obligation related to prior service costs.
The Company recorded this obligation of $64,856,000 ($37,411,000 after taxes or
$.48 per share) as the cumulative effect of an accounting change at January 1,
1992.
Net periodic postretirement cost was $10,809,000 and $7,776,000 in 1993 and
1992 respectively. The components of this cost are as follows:
- - --------------------------------------------
Dollars in thousands 1993 1992
- - --------------------------------------------
Service cost for benefits
earned during the period $3,955 $3,299
Interest cost on
accumulated postretirement
benefit obligation 6,854 5,239
Curtailment gain - (762)
- - --------------------------------------------
Net periodic
postretirement
benefit cost $10,809 $7,776
- - -------------------------------------------
The Company's policy is to fund the
above-mentioned payments as claims
and premiums are paid.
The following table sets forth the
amounts included in "Accrued
Expenses" and "Other Liabilities" in
the Consolidated Balance Sheets at
December 31, 1993 and 1992 based on
valuation dates of September 30 in
each year. The 1993 amounts have
increased principally due to the
October 1, 1993 acquisition of The
Globe.
- - --------------------------------------------
Dollars in thousands
- - --------------------------------------------
December 31 1993 1992
- - --------------------------------------------
Accumulated postretirement
benefit obligation
Retirees $53,677 $28,054
Fully eligible active 28,450 18,943
plan participants
Other active plan
participants 51,522 25,645
- - --------------------------------------------
Total 133,649 72,642
Unrecognized net gains
(losses) 3,093 (2,198)
Fourth-quarter expense
net of benefit
payment 621 -
- - --------------------------------------------
Total accrued
postretirement
benefit liability 137,363 70,444
Current portion included
in accrued expenses 4,040 2,591
- - --------------------------------------------
Long-term accrued
postretirement
benefit liability $133,323 $67,853
- - --------------------------------------------
For 1993 the accumulated postretirement benefit obligation was determined
using a discount rate of 7.0 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of between 13 percent
and 11 percent in the first year grading down to 5 percent in the year 2008.
Increasing the assumed health care cost trend rates by one percentage point in
each year and holding all other assumptions constant would increase the
accumulated postretirement benefit obligation as of December 31, 1993 by
$18,857,000 and increase the net periodic postretirement benefit cost for 1993
by $2,300,000.
For 1992 the accumulated postretirement benefit obligation was determined
using a discount rate of 8.0 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of approximately 15.0
percent for pre-age-65 benefits, decreasing to 6.25 percent in the year 2014 and
thereafter and a rate of 14.75 percent for post-age-65 benefits decreasing to
6.0 percent in the year 2014 and thereafter.
In connection with collective bargaining agreements, the Company contributes
to several welfare plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Portions of these contributions, which cannot be
disaggregated, related to postretirement benefits for plan participants. Total
contributions to these welfare funds were approximately $18,000,000 and
$16,800,000 in 1993 and 1992 respectively.
The Company also adopted SFAS No. 112 - Employers' Accounting for
Postemployment Benefits ("SFAS 112") as of the beginning of 1992. SFAS 112
requires that certain benefits provided to former or inactive employees, after
employment but before retirement, such as workers' compensation, disability
benefits and health care continuation coverage be accrued if attributable to
employees' service already rendered. The cumulative effect on net income of
this change in accounting method resulted in a one-time charge of $16,365,000
($9,440,000 after taxes or $.12 per share) and has been reflected as of
January 1, 1992.
F - 22
<PAGE>
- - --------------------------------------------------------------------------------
12. EXECUTIVE AND NON-EMPLOYEE DIRECTORS' INCENTIVE PLAN
Under the Company's 1991 Executive Stock Incentive Plan and 1991 Executive Cash
Bonus Plan (together the "1991 Executive Plans"), the Board of Directors may
authorize incentive compensation awards and grant stock options to key employees
of the Company. Awards may be granted in cash, restricted and unrestricted
shares of the Company's Class A Common Stock, Retirement Units or such other
forms as the Board of Directors deems appropriate. Under the 1991 Executive
Plans, stock options of up to 10,000,000 shares of Class A Common Stock may be
granted and stock awards of up to 1,000,000 shares of Class A Common Stock may
be made. In adopting the 1991 Executive Plans, shares previously available for
issuance of retirement units and stock options under prior plans are no longer
available for future awards.
Retirement Units are payable in Class A Common Stock over a period of 10 years
following retirement.
Stock options currently outstanding were granted under the Company's 1974 and
1984 Stock Option Plans and the 1991 Executive Plans. The Plans provide for
granting of both incentive and non-qualified stock options principally at an
option price per share of 100 percent of the fair market value of the Class A
Common Stock on the date of grant. These options have terms of five or ten
years, and become exercisable in annual periods ranging from one year to four
years from the date of grant. Payment upon exercise of an option may be made in
cash, with previously-acquired shares, with shares (valued at fair market value)
which would be otherwise issued on the exercise of the option or any combination
thereof.
Under the Company's Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"), non-qualified options with ten-year terms are granted annually to each
non-employee director of the Company. Each annual grant allows the director to
purchase from the Company up to 1,000 shares of Class A Common Stock at the fair
market value of such shares at the date of grant. Options for an aggregate of
250,000 shares of Class A Common Stock may be granted under the Directors' Plan.
Outstanding stocks options granted to key employees of The Globe to purchase
its Series A and/or Series B Common Stock prior to the merger have been
converted to stock options to purchase the Company's Class A Common Stock. The
former Globe stock options were converted at a ratio of 0.6 shares of Class A
Common for each share of Globe stock as determined by the merger agreement. All
of these stock options became exercisable effective with the merger on October
1, 1993.
Changes in stock options for each of the three years in the period ended
December 31, 1993 were as follows:
- - --------------------------------------------------------------
Dollars in thousands Option Price
except per share data Shares Per Share($) Total
- - --------------------------------------------------------------
Options outstanding
January 1, 1991 3,296,385 4.77 to 38.87 76,344
Granted 1,269,064 20.00 to 20.81 25,391
Exercised (134,984) 4.77 to 18.40 (1,121)
Terminations (94,957) 20.56 to 38.87 (2,515)
- - --------------------------------------------------------------
Options outstanding
December 31, 1991 4,335,508 5.76 to 38.87 98,099
Granted 1,103,410 25.93 to 28.88 28,473
Exercised (466,320) 5.76 to 26.75 (7,900)
Terminations (91,982) 20.56 to 36.43 (2,737)
- - --------------------------------------------------------------
Options outstanding
December 31, 1992 4,880,616 13.96 to 38.87 115,935
Granted 1,909,080 26.50 to 30.68 50,641
Globe stock
option conversion 958,654 6.89 to 22.50 14,381
Exercised (346,334) 6.89 to 26.75 (6,333)
Terminations (41,175) 20.00 to 36.43 (1,116)
- - --------------------------------------------------------------
Options outstanding
December 31, 1993 7,360,841 6.89 to 38.87 $173,508
- - --------------------------------------------------------------
Options which became
exercisable during
1991 1,086,077 20.56 $22,332
1992 728,859 20.00 to 20.81 14,588
1993 1,803,174 6.89 to 28.88 35,098
- - --------------------------------------------------------------
Options exercisable
at December 31,
1991 3,066,444 5.76 to 38.87 $72,708
1992 3,237,964 13.96 to 38.87 76,678
1993 4,673,663 6.89 to 38.87 104,789
- - --------------------------------------------------------------
F-23
<PAGE>
- - --------------------------------------------------------------------------------
13. CAPITAL STOCK
The 5 1/2 percent cumulative prior preference stock, which is redeemable at the
option of the Company on 30-day's notice at par plus accrued dividends, is
entitled to an annual dividend of $5.50 payable quarterly.
The serial preferred stock is subordinate to the 5 1/2 percent cumulative
prior preference stock. The Board of Directors is authorized to set the
distinguishing characteristics of each series prior to issuance, including the
granting of limited or full voting rights; however, the consideration received
must be at least $100 per share. No shares of serial preferred stock have been
issued.
The Class A and Class B Common Stock are entitled to equal participation in
the event of liquidation and in dividend declarations. The Class B Common Stock
is convertible at the holders' option on a share-for-share basis into Class A
shares. As provided for in the certificate of incorporation, the Class A Common
Stock has limited voting rights, including the right to elect 30 percent of the
Board of Directors, and the Class A and Class B Common Stock have the right to
vote together on reservations of Company stock for stock options, on the
ratification of the selection of independent certified public accountants and,
in certain circumstances, on acquisitions of the stock or assets of other
companies. Otherwise, except as provided by the laws of the State of New York,
all voting power is vested solely and exclusively in the holders of the Class B
Common Stock.
At a special meeting of shareholders in September 1993, an amendment of the
Company's Restated Certificate of Incorporation was approved to increase the
total number of authorized shares of Class A Common Stock to 200,000,000 shares,
thereby increasing the Company's overall total number of authorized shares of
capital stock of The New York Times Company to 200,910,000 shares.
Under a stock repurchase program which commenced in June 1993 and expired at
the close of The Globe transaction on October 1, 1993, the Company repurchased
approximately 10,231,000 shares of its Class A Common Stock at an average price
of $24.87 per share.
In a new program announced in October 1993, the Company's Board of Directors
authorized additional expenditures of up to $150,000,000 for repurchases of its
Class A Common Stock. Under the new Board authorization, purchases may be made
from time to time either in the open market or through private transactions.
The number of shares that may be purchased in market transactions may be limited
as a result of The Globe transaction. Purchases may be suspended from time to
time or discontinued. Under this program, to date, the Company has repurchased
approximately 30,000 shares of its Class A Common Stock at an average price of
$24.78 per share. Had stock repurchases, under both programs, occurred as of
January 1, 1993, earnings per share for the year 1993 would have been $.08.
Under the 1994 Offering of the Employee Stock Purchase Plan, eligible
employees may purchase Class A Common Stock through payroll deductions during
1994 at the lower of $20.03 per share (85 percent of the average market price on
November 1, 1993) or 85 percent of the average market price on December 29,
1994.
Shares of Class A Common Stock reserved for issuance at December 31, 1993 and
1992 were as follows:
- - --------------------------------------------------
December 31 1993 1992
- - --------------------------------------------------
Retirement Units
Outstanding 216,806 229,574
Stock Awards
Available 993,359 -
Stock Options
Outstanding 7,360,841 4,880,616
Available 5,988,480 7,651,526
Employee Stock
Purchase Plan
Available 993,919 1,813,085
Voluntary Conversion of
Class B Common Stock
Available 571,624 571,804
- - --------------------------------------------------
Total 16,125,029 15,146,605
- - --------------------------------------------------
F - 24
<PAGE>
- - --------------------------------------------------------------------------------
14. ACCOUNTING CHANGES
During 1992, the Company adopted three noncash accounting changes mandated by
the Financial Accounting Standards Board: SFAS No. 106-Employers' Accounting
for Postretirement Benefits Other Than Pensions (see Note 11), SFAS 109-
Accounting for Income Taxes (see Note 7) and SFAS 112-Employers' Accounting for
Postemployment Benefits (see Note 11). All accounting changes have been adopted
prospectively and, accordingly, earnings for 1991 have not been restated.
The cumulative effect of adopting these accounting changes is as follows:
- - ----------------------------------------------
After-tax effects Earnings
(Dollars in thousands) per share
- - ----------------------------------------------
Postretirement Benefits $(37,411) $(.48)
Income Taxes 13,414 .17
Postemployment Benefits (9,440) (.12)
-------- -----
Net charge $(33,437) $(.43)
======== =====
- - ----------------------------------------------
- - --------------------------------------------------------------------------------
15. SEGMENTS
The Company's segment and related information is included on pages 2 and 3 of
this Appendix. The information for the years 1993, 1992 and 1991 appearing
therein is presented on a basis consistent with, and is an integral part of, the
consolidated financial statements. Revenues from individual customers, revenues
between business segments and revenues, operating profit and identifiable assets
of foreign operations are not significant.
- - --------------------------------------------------------------------------------
16. CONTINGENT LIABILITIES
There are various libel and other legal actions that have arisen in the ordinary
course of business and are now pending against the Company. Such actions are
usually for amounts greatly in excess of the payments, if any, that may be
required to be made. It is the opinion of management after reviewing such
actions with legal counsel to the Company that the ultimate liability which
might result from such actions would not have a material adverse effect on the
consolidated financial statements.
- - --------------------------------------------------------------------------------
17. RECLASSIFICATIONS
For comparability, certain 1991 and 1992 amounts have been reclassified to
conform with the 1993 presentation.
F - 25
<PAGE>
INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS
AND STOCKHOLDERS OF
THE NEW YORK TIMES COMPANY:
We have audited the accompanying consolidated balance sheets of The New York
Times Company as of December 31, 1993 and 1992 and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1993. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of The New York Times Company as of
December 31, 1993 and 1992 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles.
As discussed in notes 7, 11 and 14, the Company changed its methods of
accounting for income taxes, postretirement benefits other than pensions and
postemployment benefits effective January 1, 1992 to conform with Statements of
Financial Accounting Standards 109, 106 and 112.
-Deloitte & Touche-
New York, New York
February 10, 1994
MANAGEMENT'S RESPONSIBILITIES
REPORT
The Company's consolidated financial statements were prepared by management who
is responsible for their integrity and objectivity. The consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and, as such, include amounts based on management's best estimates
and judgments.
Management is further responsible for maintaining a system of internal
accounting control, designed to provide reasonable assurance that the Company's
assets are adequately safeguarded and that the accounting records reflect
transactions executed in accordance with management's authorization. The system
of internal control is continually reviewed for its effectiveness and is
augmented by written policies and procedures, the careful selection and training
of qualified personnel and a program of internal audit.
The consolidated financial statements were audited by Deloitte & Touche,
independent auditors. Their audit was conducted in accordance with generally
accepted auditing standards and their report is shown on this page.
The Audit Committee of the Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, internal
auditors and management to discuss specific accounting, financial reporting and
internal control matters. Both the independent auditors and the internal
auditors have full and free access to the Audit Committee. Each year the Audit
Committee selects, subject to ratification by stockholders, the firm which is to
perform audit and other related work for the Company.
MARKET INFORMATION
The Class A Common Stock is listed on the American Stock Exchange. The Class B
convertible Common Stock and the 5 1/2 percent cumulative prior preference stock
are unlisted and are not actively traded. Dividends on the preference stock
were paid at the quarterly rate of $1.375 per share during each of the two
years.
The approximate number of security holders of record as of January 31, 1994
was as follows: Class A Common Stock: 17,245; Class B Common Stock: 43; 5 1/2
percent cumulative prior preference stock: 65.
The market price range of Class A Common Stock in 1993 and 1992 is as follows:
- - ------------------------------------------
Quarter Ended 1993 1992
- - ------------------------------------------
High Low High Low
March 31 $31.25 $26.37 $32.12 $22.62
June 30 31.25 23.00 32.00 26.00
September 30 26.12 22.62 29.75 25.00
December 31 28.75 22.37 28.37 23.62
Year 31.25 22.37 32.12 22.62
- - ------------------------------------------
F - 26
<PAGE>
<TABLE> <CAPTION>
QUARTERLY INFORMATION (Unaudited)
- - ----------------------------------------------------------------------------------------------------------------
Dollars and shares in millions First Second Third Fourth
except per share data Quarter Quarter Quarter Quarter Year
1993 1992 1993 1992 1993 1992 1993 1992 1993 1992
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 454.5 $ 435.9 $ 483.6 $443.2 $ 445.6 $ 426.2 $ 636.0 $468.2 $2,019.7 $1,773.5
- - ----------------------------------------------------------------------------------------------------------------
Costs and Expenses
Production costs:
Raw materials 63.7 67.6 67.5 62.1 64.2 63.6 85.1 57.3 280.5 250.6
Wages and benefits 101.2 91.4 100.1 92.7 99.8 100.5 136.4 103.8 437.5 388.4
Other 94.5 84.5 98.6 84.5 102.9 88.7 122.6 107.9 418.6 365.6
- - ----------------------------------------------------------------------------------------------------------------
Total 259.4 243.5 266.2 239.3 266.9 252.8 344.1 269.0 1,136.6 1,004.6
Selling, general and
administrative
expenses 164.0 157.6 168.4 167.2 166.5 162.0 257.6 193.7 756.5 680.5
- - ----------------------------------------------------------------------------------------------------------------
Total 423.4 401.1 434.6 406.5 433.4 414.8 601.7 462.7 1,893.1 1,685.1
- - ----------------------------------------------------------------------------------------------------------------
Operating profit 31.1 34.8 49.0 36.7 12.2 11.4 34.3 5.5 126.6 88.4
Interest expense, net 5.2 7.0 5.2 6.7 6.6 6.4 8.4 6.0 25.4 26.1
Loss on disposition
of
Gwinnett Daily News - 1.6 - 1.1 - 51.1 - - - 53.8
Income taxes 12.9 11.2 20.9 12.4 6.5 (13.2) 2.9 0.7 43.2 11.1
- - ----------------------------------------------------------------------------------------------------------------
Income (Loss) before
equity in operations of
forest products group 13.0 15.0 22.9 16.5 (0.9) (32.9) 23.0 (1.2) 58.0 (2.6)
Equity in operations of
forest products group (2.1) (1.6) (0.5) (2.5) (2.1) (2.1) (47.2) (2.5) (51.9) (8.7)
- - ----------------------------------------------------------------------------------------------------------------
Income (Loss) before
net cumulative effect
of accounting changes 10.9 13.4 22.4 14.0 (3.0) (35.0) (24.2) (3.7) 6.1 (11.3)
Net cumulative effect
of accounting changes - (33.4) - - - - - - - (33.4)
- - ----------------------------------------------------------------------------------------------------------------
Net income (loss) $ 10.9 $(20.0) $ 22.4 $14.0 $ (3.0) $(35.0) $(24.2) $(3.7) $ 6.1 $(44.7)
- - ----------------------------------------------------------------------------------------------------------------
Average number of
common
shares outstanding 79.9 78.4 79.7 78.5 72.4 78.6 106.0 78.6 84.5 78.5
Per share of common
stock
Before net cumulative
effect of
accounting changes $ .14 $ .17 $ .28 $.18 $ (.04) $(.44) $ (.23) $(.05) $ .07 $ (.14)
Net cumulative effect
of accounting changes - (.43) - - - - - - - (.43)
Net income (loss) .14 (.26) .28 .18 (.04) (.44) (.23) (.05) .07 (.57)
Dividends .14 .14 .14 .14 .14 .14 .14 .14 .56 .56
- - ----------------------------------------------------------------------------------------------------------------
</TABLE>
The 1993 quarters do not equal the 1993 year-end amount for earnings per share
due to the weighted average number of shares outstanding used in the
computations for the respective periods. Per share amounts for the respective
quarters and years have been computed using the average number of common shares
outstanding as presented in the table above. The significant differences in the
number of shares in the 1993 periods are due principally to the issuance of
approximately 36.4 million shares due to the October 1993 Globe acquisition
offset, in part, by stock repurchases of approximately 10.3 million shares
during the third and fourth quarter.
The Company's largest source of revenues is advertising, which influences the
pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that in the first quarter. Advertising volume tends to be lower in
the third quarter primarily because of the summer slow-down in many areas of
economic activity. Quarterly trends are also affected by the overall economy
and economic conditions that may exist in specific markets served by each of the
Company's business segments.
First-quarter 1993 was negatively affected by $3.7 million pre-tax ($.02 per
share) due to a March snowstorm.
Third-quarter 1993 includes $5.6 million ($.07 per share) of additional
income tax expense due to the enactment of the Tax Act.
Fourth-quarter 1993 includes a $2.6 million pre-tax gain ($.02 per share) on
the sale of assets.
Fourth-quarter 1993 includes $35.4 million of pre-tax charges ($.19 per share)
for white-collar and production union staff reductions at The Times.
Fourth-quarter 1993 includes an after-tax noncash charge to equity in
operations of $47.0 million ($.44 per share) to write-down the Company's
investment in its Forest Products Group to reflect current operating conditions
and economic factors in the industry.
First-quarter 1992 includes $3.1 million pre-tax gain ($.02 per share) on the
sales of assets.
Second-quarter 1992 was negatively affected by $11.0 million pre-tax ($.08 per
share) due to labor disruptions at The Times.
Third and fourth-quarter 1992 include pre-tax $2.8 million ($.02 per share)
and $7.6 million ($.05 per share), respectively, for training and start-up costs
for commencement of operations at Edison.
Fourth-quarter 1992 includes a $28.0 million pre-tax charge ($.20 per share)
for voluntary union staff reductions at The Times.
F - 27
<PAGE>
<TABLE><CAPTION>
TEN-YEAR SUPPLEMENTAL FINANCIAL DATA
- - --------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in millions Year Ended December 31
except per share data 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and Income
Revenues $2,020 $1,774 $1,703 $1,777 $1,769 $1,700 $1,642 $1,524 $1,358 $1,199
- - --------------------------------------------------------------------------------------------------------------------------------
Operating Profit 127 88 94 130 169 251 284 266 210 176
- - --------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing operations before
equity in forest products group 58 (2) 41 61 84 132 138 110 93 86
Equity in operations of forest products group (52) (9) 6 4 (16) 29 18 20 21 13
- - --------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing operations 6 (11) 47 65 68 161 156 130 114 99
Discontinued operations - - - - 199 7 4 2 2 1
Net cumulative effect of accounting changes - (34) - - - - - - - -
- - --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 6 (45) 47 65 267 168 160 132 116 100
- - --------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
Total assets 3,215 1,995 2,128 2,150 2,188 1,915 1,712 1,405 1,296 869
Long-term debt and capital lease obligations 460 207 213 319 337 378 391 217 274 75
Common stockholders' equity 1,599 1,000 1,073 1,056 1,064 873 823 705 586 485
- - --------------------------------------------------------------------------------------------------------------------------------
Per share of Common Stock
Continuing operations .07 (.14) .61 .85 .87 2.00 1.91 1.60 1.43 1.25
Discontinued operations - - - - 2.52 .08 .05 .03 .02 .01
Net cumulative effect of accounting changes - (.43) - - - - - - - -
Net income (loss) .07 (.57) .61 .85 3.39 2.08 1.96 1.63 1.45 1.26
Dividends .56 .56 .56 .54 .50 .46 .40 .33 .29 .25
Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63 11.02 10.04 8.59 7.24 6.09
- - --------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding (end of year)
Class A and Class B Common 106.9 79.7 78.4 77.2 78.1 79.2 82.0 82.0 80.9 79.7
- - --------------------------------------------------------------------------------------------------------------------------------
Market Price (end of year) 26.25 26.37 23.62 20.62 26.37 26.87 31.00 35.50 24.50 19.19
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1993 - Results include pre-tax $3.7 million ($.02 per share) due to a March
snowstorm.
Results include $5.6 million ($.07 per share) of additional tax expense due to
the enactment of the Tax Act.
Results include a $2.6 million pre-tax gain ($.02 per share) on the sale of
assets.
Results include $35.4 million of pre-tax charges ($.23 per share) for staff
reductions at The Times.
Results include an after-tax noncash charge of $47.0 million ($.56 per share)
against equity in operations to write down the Company's investment in its
Forest Products Group to reflect current operating conditions and economic
factors in the industry.
1992 - Results included a $53.8 million pre-tax loss ($.47 per share) on the
closing of The Gwinnett (Ga.) Daily News.
Results included a $3.1 million pre-tax gain ($.02 per share) from the sales
of assets.
Results included a $28.0 million pre-tax charge ($.20 per share) for voluntary
union staff reductions at The Times.
Results included $21.4 million pre-tax ($.15 per share) for labor disruptions
and training and start-up costs at Edison.
1991 - Results included a $20.0 million pre-tax charge ($.15 per share) for
voluntary union staff reductions at The Times.
Results include the reversal of a provision for income taxes of $10.0 million
($.13 per share) for a favorable tax settlement.
1989 - Results included an after-tax gain of $193.3 million ($2.46 per share)
from the sale of the Company's cable television operations. The gain and
results of operations through the 1989 sale date are included as discontinued
operations.
Results included a $30.0 million pre-tax charge ($.22 per share) for voluntary
union staff reductions at The Times.
Results included an after-tax charge of $27.2 million ($.35 per share) for a
valuation reserve against the Company's investment in the Forest Products Group.
1986 - Results included an interest charge of $8.5 million ($.05 per share)
which relates to a court decision arising from the Company's 1981 acquisition of
two cable television systems.
1985 - Results included a $2.8 million gain ($.03 per share) from the sale
of property. The Company acquired five newspapers and two television stations
for $389.6 million.
F-28
<PAGE>
(Graphic of Map)
From west
- - ---------------------------------------------------------------
Entering Boston on I-90 (the Massachusetts Turnpike),
take the Copley Square/Prudential Center exit. Remain in
lane marked Copley Square. Turn right on Stuart St., the
first street off the exit. Travel 4 blocks, Park Plaza Hotel is
on the lefthand side at 64 Arlington St.
From north
- - ---------------------------------------------------------------
Entering Boston on I-93, take exit 27 toward torrow
Drive. From Storrow Drive turn left on the Copley Sq. exit.
Take an immediate left on Beacon St. followed by a right
onto Arlington St. Park Plaza Hotel is 6 blocks ahead on
the lefthand side at 64 Arlington St.
From south
- - ---------------------------------------------------------------
Entering Boston on I-93, take exit 26 to Storrow Drive.
From Storrow Drive turn left on the Copley Sq. exit. Take
an immediate left on Beacon St. followed by a right onto
Arlington St. Park Plaza Hotel is 6 blocks ahead on the
lefthand side at 64 Arlington St.
Park Plaza Hotel 617-426-2000
<PAGE>
NYT THE NEW YORK TIMES COMPANY CLASS A
PROXY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING ON APRIL 19, 1994
The undersigned hereby constitutes and appoints Arthur Ochs Sulzberger,
Laura J. Corwin and Solomon B. Watson IV, and each of them, as proxies with
full power of substitution in each, to represent the undersigned at the Annual
Meeting of Stockholders of THE NEW YORK TIMES COMPANY to be held at 8:30 A.M.,
local time, at Boston Park Plaza Hotel, 64 Arlington Street, Boston,
Massachusetts 02116, on Tuesday, April 19, 1994, or at any adjournments thereof,
and to vote on all matters coming before said meeting including the proposals
indicated on the reverse side hereof.
Change of Address
Election of Class A Directors, Nominees:
Louis V. Gerstner, Jr., A Leon Higginbotham, Jr., ___________________________
Robert A. Lawrence, Charles H. Price II,
Donald M. Stewart ___________________________
___________________________
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
- - -SEE REVERSE SIDE- BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. YOUR SHARES CANNOT
BE VOTED UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF CLASS A DIRECTORS AND FOR PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
FOR WITHHELD
1. Election of Class
A Directors [ ] [ ]
(see reverse)
For, except vote withheld from the following
nominee(s)
____________________________________________
FOR AGAINST ABSTAIN
2. Amendment of Employee Stock
Purchase Plan [ ] [ ] [ ]
3. Ratification of selection of Deloitte & Touche [ ] [ ] [ ]
as auditors
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON APRIL 19, 1994.
Your signature on the proxy is your acknowledgment of receipt
of the Notice of Meeting and Proxy Statement, both dated
March 21, 1994.
The signer hereby revokes all proxies heretofore given by the
signer to vote at said meeting or at any adjournments thereof.
Change of
address on
Reverse Side [ ] ______________
SIGNATURE(S)________________________________________ DATE _________________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signing as a corporation, please give
full corporate name by authorized officer.
<PAGE>
NYT THE NEW YORK TIMES COMPANY CLASS B
PROXY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING ON APRIL 19, 1994
The undersigned hereby constitutes and appoints Arthur Ochs Sulzberger,
Laura J. Corwin and Solomon B. Watson IV, and each of them, as proxies with
full power of substitution in each, to represent the undersigned at the Annual
Meeting of Stockholders of THE NEW YORK TIMES COMPANY to be held at 8:30 A.M.,
local time, at Boston Park Plaza Hotel, 64 Arlington Street, Boston,
Massachusetts 02116, on Tuesday, April 19, 1994, or at any adjournments thereof,
and to vote on all matters coming before said meeting including the proposals
indicated on the reverse side hereof.
Change of Address
Election of Class B Directors, Nominees:
John F. Akers, Richard L. Gelb, Marian S Heiskell ___________________________
Ruth S. Holmberg, Walter E. Mattson, George B.
Munroe, George L. Shinn, Arthur Ochs Sulzberger, ___________________________
Judith P. Sulzberger, William O. Taylor,
Cyrus R. Vance ___________________________
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
- - -SEE REVERSE SIDE- BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. YOUR SHARES CANNOT
BE VOTED UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF CLASS B DIRECTORS AND FOR PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
FOR WITHHELD
1. Election of Class
B Directors [ ] [ ]
(see reverse)
For, except vote withheld from the following
nominee(s)
____________________________________________
FOR AGAINST ABSTAIN
2. Amendment of Employee Stock
Purchase Plan [ ] [ ] [ ]
3. Ratification of selection of Deloitte & Touche [ ] [ ] [ ]
as auditors
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON APRIL 19, 1994.
Your signature on the proxy is your acknowledgment of receipt
of the Notice of Meeting and Proxy Statement, both dated
March 21, 1994.
The signer hereby revokes all proxies heretofore given by the
signer to vote at said meeting or at any adjournments thereof.
Change of
address on
Reverse Side [ ] ______________
SIGNATURE(S)________________________________________ DATE _________________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signing as a corporation, please give
full corporate name by authorized officer.
<PAGE>
|| | | ||
|| | | ||
|| | | ||
SECRETARY'S OFFICE || | | ||
|| | | || -----------------
|| | | || | NO POSTAGE |
| NECESSARY |
| IF MAILED |
| IN THE |
| UNITED STATES |
-----------------
- - ------------------------------------------------ =================
B U S I N E S S R E P L Y M A I L =================
FIRST CLASS MAIL PERMIT NO 289 NEW YORK NY =================
- - ------------------------------------------------ =================
POSTAGE WILL BE PAID BY ADDRESSEE =================
=================
=================
=================
THE NEW YORK TIMES COMPANY =================
229 WEST 43RD STREET
NEW YORK NY 10109 - 0225
<PAGE>
Please return this card I plan to attend the Meeting.
only if you plan to attend.
- - --------------------------
Please type or print clearly.
The New York Times Company
Annual Meeting of Stockholders
8:30 A.M., Tuesday, April 19, 1994 -----------------------------
Name of Stockholder
Boston Park Plaza Hotel -----------------------------
64 Arlington Street Street Address
Boston, Massachusetts 02116
-----------------------------
City State Zip
*To facilitate counting, please
forward your proxy to the Transfer
Agent even if you are planning to
attend. You can always revoke it
at the meeting if you wish.
<PAGE>
March 22, 1994
TO: The Schedule 3 Stockholders Under the Stockholders
Agreement, dated as of June 11, 1993, by and between
The New York Times Company and the other parties
signatory thereto
c/o Boston Safe Deposit & Trust Co.
One Boston Place
Boston, MA
Attention: Richard W. Towle
Ladies and Gentlemen:
I am writing to you pursuant to the Stockholders
Agreement, dated as of June 11, 1993 by and between The New
York Times Company ("Parent") and the other parties
signatory thereto (the "Stockholders Agreement"). All terms
used herein are used as defined in the Stockholders
Agreement.
This letter is a reminder to you that, as
contemplated by Section 3.6(a)(i) of the Stockholders
Agreement, each of you has agreed to vote all shares of
Parent Voting Securities Beneficially Owned by you as
recommended by the Board of Directors of Parent on all
matters submitted to a vote of Parent's stockholders. This
agreement is applicable to the matters set forth in the
Proxy Statement, dated March 21, 1994, for stockholder
approval at Parent's 1994 Annual Meeting of Stockholders to
be held on Tuesday, April 19, 1994. If you have not yet
received this Proxy Statement in the mail, it should arrive
soon.
Sincerely,
Laura J. Corwin
/tdc
cc: W. Lincoln Boyden
Rhonda L. Brauer
Solomon B. Watson IV
<PAGE>
THE NEW YORK TIMES COMPANY EMPLOYEE
STOCK PURCHASE PLAN
SECTION 1. Purpose.
The Employee Stock Purchase Plan (the "Plan") of The New
York Times Company ("The Times") is designed to provide an
opportunity for the employees of The Times and its designated
subsidiaries to purchase shares of the Class A Common Stock
(the "Stock") of The Times through voluntary systematic
payroll deductions. It is the purpose and policy of the Plan
to provide employees with an opportunity to acquire an
additional interest in the economic progress of The Times and
a further incentive to promote its best interests.
SECTION 2. Offerings Under the Plan.
From time to time within the limits of the Plan, shares
of the Stock will be made available for purchase only by
employees through offers of the Stock made on behalf of
The Times by its Board of Directors (the "Board"). The Board
shall designate the subsidiaries of The Times whose employees
may participate in an offering under the Plan and shall within
the limits of the Plan fix the terms and conditions of each
offering. Except as provided in Section 3 of the Plan, all
employees participating in an offering shall have thesame
rights and privileges to purchase Stock under the Plan.
SECTION 3. Employees Eligible and Participation by
Such Employees.
All regular, full-time employees of The Times and of such
subsidiaries as may be designated by the Board shall be
eligible to participate in the Plan, except that the Board in
its discretion may exclude, on a uniform basis, from any
offering or offerings: (a) employees who at the time of an
offering have been employed less than two (2) years, (b)
employees whose customary employment is twenty (20) hours or
less per week, (c) employees whose customary employment is for
not more than five (5) months in any calendar year, and (d)
employees who have been granted restricted or qualified stock
options as those terms are used in the Internal Revenue Code
1954, as currently in effect or as it may hereafter be
amended, under The New York Times Company Executive Incentive
Compensation Plan. The number of shares that may be purchased
by an employee under any one offering shall bear a uniform
relationship to the basic compensation of such employee over a
period of time in which such compensation is paid (the
"Purchase Period"). However, an employee owning or who would
own directly or indirectly more than five percent (5%) of the
total combined voting power or value of all classes of stock
of The Times, its parent or any subsidiary corporation
immediately after any offering under the Plan in which the
participates or in which he is otherwise eligible to
participate, will not be eligible to participate in the Plan
or any offering made thereunder. No employee shall
3
<PAGE>
be granted he right to purchase shares of the Stock which
would permit his total rights to purchase Stock, under all
employee stock purchase plans of The Times, to accrue at a
rate which exceeds $25,000 of fair market value of such
Stock,determined at the time such rights are granted, for each
calendar year during which rights to purchase such Stock are
outstanding at any time.
SECTION 4. Shares Subject to the Plan.
The shares which may be offered under the Plan may be
treasury Stock, unissued Stock, or The Times may go into the
market and purchase Stock for sale. The number of shares of
Stock to be sold under the Plan shall not exceed 21,800,000
shares, except as such number may be adjusted pursuant to
Section 9. All shares offered under the Plan and for any
reason not purchased as well as all shares not previously
offered will be available for subsequent offerings.
SECTION 5. Price.
The price at which shares may from time to time be offered
shall be fixed by the Board, but shall not be less than the
lower of (a) 85% of the fair market value of the Stock on the
date of offering (the "Offering Price"), or (b) 85% of the
fair market value of the Stock on the last day of the Purchase
Period, except as provided in Section 6.
SECTION 6. Payroll Deductions, Interest and Right of
Cancellation.
Shares purchased under the Plan will be paid for by
payroll deductions during the Purchase Period, which shall not
exceed 27 months, without the right of prepayment. Interest
will accrue on the amounts deducted at a rate and in a manner
fixed by the Board. Each participant will have the right to
cancel his election to purchase shares under the Plan at any
time prior to the last day of the Purchase Period and in such
case any amount paid by such participant in respect of such
shares will be returned to him with interest. The Board will
also make provision with respect to the rights of
participants in the event of retirement, death, termination
of employment, temporary layoff, or authorized leave of
absence, including without limitation a provision that a
participant whose employment has terminated through death or
retirement or otherwise may purchase Stock within three
(3) months thereafter at the Offering Price or 85% of the
fair market value of the Stock at the date of such purchase,
whichever is lower.
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SECTION 7. Issue of Shares.
No shares purchased under the Plan will be issued except
at the end of the Purchase Period and only upon such issuance
will participants have, with respect to such shares, any of
the rights of a stockholder.
SECTION 8. Assignability.
The rights of a participant will not be transferable by
him other than by will or the laws of descent and
distribution, and will be exercisable during his lifetime only
by him.
SECTION 9. Effects of Changes in Shares.
If at any time The Times shall take any action, whether
by stock dividend, stock split, combination of shares, or
otherwise, which results in a proportionate increase or
decease in the number of shares of Stock theretofore issued
and outstanding, the number of shares covered under the Plan
shall be increased or decreased proportionately, and the price
in Section 5 adjusted proportionately, and such other
adjustment shall be made as may be equitable by the Board or
the Committee.
SECTION 10. Administration of the Plan.
The Plan shall be administered by the Board or a Committee
appointed by the Board of three or more of its members (the
"Committee"). The Committee shall serve at the pleasure of
the Board and shall have such powers as the Board may from time
to time confer upon it. Any decision or action taken by the
Board or the Committee arising out of or in connection with
the construction, administration, interpretation and effect of
the Plan shall be conclusive and binding upon all employees
participating in the Plan and any person claiming or under or
through any such employee.
SECTION 11. Amendment or Discontinuance.
The Board may amend or discontinue the Plan at any time.
No such amendment, however, may increase the maximum number of
shares that may be offered, decrease the minimum price pursuant
to Section 5 or change the class of employees eligible to
participate under the Plan without the approval of a majority
of the shares of The Times then issued and outstanding and
entitled to vote thereon.
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SECTION 12. Approval by Stockholders.
This Plan must be approved by the Class A and Class B
Common stockholders of The Times on or before December
17, 1969. If no such approval is obtained, then all amounts in
the accounts of participating employees shall be promptly
refunded, including any interest credited thereon.
