<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For Quarter Ended September 28, 1997
Commission file number 1-5837
THE NEW YORK TIMES COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1102020
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
229 WEST 43RD STREET, NEW YORK, NEW YORK
----------------------------------------
(Address of principal executive offices)
10036
----------
(Zip Code)
Registrant's telephone number, including area code 212-556-1234
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No .
--- ---
Number of shares of each class of the registrant's common stock outstanding as
of November 2, 1997 (exclusive of treasury shares):
Class A Common Stock 95,552,198 shares
Class B Common Stock 424,801 shares
Exhibit Index is located on page 20 of this document
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars and shares in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- ----------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
1997 1996 1997 1996
---------------------- ----------------------
(13 Weeks) (39 Weeks)
<S> <C> <C> <C> <C>
Revenues
Advertising ............................ $ 466,435 $ 424,488 $1,447,979 $1,305,790
Circulation ............................ 165,819 165,578 503,505 491,497
Other .................................. 51,327 41,337 146,505 111,197
---------- ---------- ---------- ----------
Total ............................... 683,581 631,403 2,097,989 1,908,484
---------- ---------- ---------- ----------
Production Costs
Raw Materials .......................... 78,269 85,825 228,026 287,774
Wages and Benefits ..................... 145,633 140,682 453,275 413,062
Other .................................. 126,101 109,880 360,454 321,128
---------- ---------- ---------- ----------
Total ............................... 350,003 336,387 1,041,755 1,021,964
Selling, General and Administrative Expenses 242,243 232,149 736,295 680,510
Impairment Loss ............................ -- 126,763 -- 126,763
---------- ---------- ---------- ----------
Total ............................... 592,246 695,299 1,778,050 1,829,237
---------- ---------- ---------- ----------
Operating Profit (Loss) .................... 91,335 (63,896) 319,939 79,247
Income from Joint Ventures ................. 3,359 6,395 7,726 13,287
Interest Expense, Net ...................... 11,699 7,975 31,406 20,375
Net Gain on Dispositions ................... -- 25,085 -- 32,836
---------- ---------- ---------- ----------
Income (Loss) Before Income Taxes .......... 82,995 (40,391) 296,259 104,995
Income Taxes ............................... 36,767 7,293 113,243 73,153
---------- ---------- ---------- ----------
Net Income (Loss) .......................... $ 46,228 $ (47,684) $ 183,016 $ 31,842
========== ========== ========== ==========
Weighted Average Number of Common and
Common Equivalent Shares ................. 99,646 97,008 100,106 97,472
Earnings Per Common and
Common Equivalent Share .................. $ 0.46 $ (0.49) $ 1.83 $ 0.33
Cash Dividends Per Common Share ............ $ 0.16 $ 0.14 $ 0.47 $ 0.42
</TABLE>
See notes to condensed consolidated financial statements.
2
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THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
September 28, December 29,
1997 1996
------------- ------------
ASSETS (Unaudited)
<S> <C> <C>
Current Assets
Cash and short-term investments ................................. $ 37,843 $ 39,103
Accounts receivable - net ....................................... 312,578 309,164
Inventories
Newsprint and magazine paper .................................. 25,570 28,778
Work-in-process, etc .......................................... 4,628 5,030
---------- ----------
Total inventories ........................................... 30,198 33,808
Other current assets ............................................ 93,752 96,697
---------- ----------
Total current assets ........................................ 474,371 478,772
---------- ----------
Other Assets
Investment in joint ventures .................................... 137,317 137,255
Property, plant and equipment (less accumulated
depreciation of $888,007 in 1997 and $807,120 in 1996) ........ 1,383,940 1,358,029
Intangible assets acquired
Cost in excess of net assets acquired (less accumulated
amortization of $204,391 in 1997 and $184,196 in 1996) ........ 1,006,844 1,041,672
Other intangible assets acquired (less accumulated
amortization of $38,654 in 1997 and $23,384 in 1996) .......... 389,705 396,042
Miscellaneous assets ............................................ 138,870 128,101
---------- ----------
TOTAL ASSETS ................................................ $3,531,047 $3,539,871
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
3
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THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 28, December 29,
1997 1996
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
Current Liabilities
Commercial paper ................................. $ 19,000 $ 45,500
Accounts payable ................................. 186,054 171,853
Accrued payroll and other related liabilities .... 96,125 84,458
Accrued expenses ................................. 232,997 258,468
Unexpired subscriptions .......................... 85,853 90,059
Current portion of capital lease obligations ..... 3,868 3,359
----------- -----------
Total current liabilities ...................... 623,897 653,697
----------- -----------
Other Liabilities
Long-term debt ................................... 590,097 589,693
Capital lease obligations ........................ 46,149 46,939
Deferred income taxes ............................ 154,864 188,560
Other liabilities ................................ 472,358 435,850
----------- -----------
Total noncurrent liabilities ................... 1,263,468 1,261,042
----------- -----------
Total Liabilities .............................. 1,887,365 1,914,739
----------- -----------
Stockholders' Equity
Capital stock .................................... 13,049 12,872
Additional paid in capital ....................... 706,823 663,007
Earnings reinvested in the business .............. 1,428,245 1,290,899
Common stock held in treasury, at cost ........... (504,435) (341,646)
----------- -----------
Total stockholders' equity ..................... 1,643,682 1,625,132
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... $ 3,531,047 $ 3,539,871
=========== ===========
See notes to condensed consolidated financial statements.
4
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THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine Months Ended
---------------------------
September 28, September 29,
1997 1996
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: (39 Weeks)
<S> <C> <C>
Net cash provided by operating activities .................. $ 309,027 $ 264,868
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired ......................... -- (246,805)
Additions to property, plant and equipment ................. (126,578) (157,048)
Net proceeds from dispositions ............................. 11,872 16,878
Other - net ................................................ (198) (1,675)
--------- ---------
Net cash used in investing activities ...................... (114,904) (388,650)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper - net ..................................... (26,500) 153,900
Long-term debt reduction ................................... (2,827) (2,558)
Capital Shares
Issuance ................................................. 6,317 2,534
Repurchase ............................................... (127,283) (36,829)
Dividends paid to stockholders ............................. (45,434) (40,989)
Other - net ................................................ 344 51
--------- ---------
Net cash (used in) provided by financing activities ........ (195,383) 76,109
--------- ---------
Decrease in cash and short-term investments ................ (1,260) (47,673)
Cash and short-term investments at the beginning of the year 39,103 91,442
--------- ---------
Cash and short-term investments at the end of the quarter .. $ 37,843 $ 43,769
========= =========
</TABLE>
NONCASH INVESTING AND FINANCING TRANSACTIONS
Repurchases of common stock in connection with certain exercises under the
Company's stock option plans increased treasury stock by $36,067 and $12,109 in
1997 and 1996, respectively. Additional paid in capital increased by a
corresponding amount.
Asset and liability changes related to acquisitions in 1996 were as follows:
Fair value of assets acquired $268,319
Assets forgiven (9,833)
Liabilities assumed and accrued (11,681)
--------
Net cash paid $246,805
========
SUPPLEMENTAL INFORMATION
Amounts in these statements of cash flows are presented on a cash basis and may
differ from those shown in other sections of the financial statements.
See notes to condensed consolidated financial statements.
5
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THE NEW YORK TIMES COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
The accompanying Notes to Condensed Consolidated Financial Statements
should be read in conjunction with the Consolidated Financial Statements
included in the annual report on Form 10-K for the year ended December 29, 1996,
for The New York Times Company (the "Company") filed with the Securities and
Exchange Commission. In the opinion of management, all adjustments necessary for
a fair presentation of the financial position and results of operations, as of
and for the interim period ended, have been included. Due to the seasonal nature
of the Company's business, results for the interim periods are not necessarily
indicative of a full year's operations.
Certain reclassifications have been made to the 1996 Condensed
Consolidated Financial Statements to conform with classifications used at
September 28, 1997.
2. Impairment Loss
In September 1996, the Company recorded a noncash accounting charge
related to an impairment of certain long-lived assets as required by
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121 charge"). As a result of the Company's strategic review process,
analyses were prepared to determine if there was impairment of any long-lived
asset and certain assets, primarily in the Newspaper Group, met the test for
impairment in 1996. These assets were associated with three small regional
newspapers, certain wholesale distribution operations and a printing
facility. The revised carrying values of these assets were generally
calculated on the basis of discounted estimated future cash flow and resulted
in the pre-tax noncash charge of $126,763,000 ($94,500,000 after-tax or $.97
per share).
The SFAS 121 charge had no impact on the Company's 1996 cash flow or its
ability to generate cash flow in the future. As a result of the SFAS 121 charge,
depreciation and amortization expense related to these assets will decrease in
future periods. However, in conjunction with the review for impairment, the
estimated lives of certain of the Company's long-lived assets were reviewed,
which resulted in the acceleration of amortization expense for certain
intangible assets. In the aggregate, the net effect of the change on
depreciation and amortization expense is not anticipated to have a material
effect on earnings per share in the future.
3. Acquisitions/Dispositions
In the first nine months of 1997, the Company sold its NYT Custom
Publishing division and a closed printing facility located in Carlstadt, New
Jersey. These sales did not have a material effect on the Company's consolidated
financial statements. In October 1997, the Company announced that it had entered
into an agreement to sell the assets of its tennis, sailing and ski magazine
businesses. This transaction is expected to be completed in the fourth quarter
of 1997. The operating profit (loss) of these properties was not material to the
results of the Company for the third quarter and the first nine months of 1997.
In July 1996, the Company acquired KFOR-TV in Oklahoma City, Okla., and
WHO-TV in Des Moines, Iowa. The aggregate cost of the acquisition was
approximately $234,075,000, of which approximately $232,925,000 was paid in
cash and the balance represented accrued liabilities. The purchases resulted
in increases in intangible assets of approximately $197,118,000 (consisting
primarily of network affiliation agreements, Federal Communications
Commission licenses and other intangible assets), property plant and
equipment of $29,058,000, other assets of $9,687,000 and other assumed
liabilities of $1,788,000.
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In June 1996, the Company acquired a newspaper distribution business
that distributes The New York Times and other newspapers and periodicals
throughout the New York City metropolitan area. The aggregate cost of the
acquisition was $32,456,000 of which approximately $13,880,000 was paid in
cash, $9,833,000 in notes and accounts receivable which were forgiven, and
the balance represented assumed and accrued liabilities. The purchase
resulted in increases in intangible assets of approximately $30,438,000
(consisting primarily of a customer list), and accounts receivable and
equipment of $2,018,000.
4. Income Taxes
The reasons for the variances between the effective tax rate on income
before income taxes and the federal statutory rate, exclusive of a favorable
adjustment resulting from the completion of the Company's federal tax audits for
periods through 1992 ("Favorable Tax Adjustment") in 1997, and the SFAS 121
charge and gains on dispositions in 1996, are as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------------------------------------------------------------------------
September 28, September 29, September 28, September 29,
1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------
% of % of % of % of
(Dollars in thousands) Amount Pre-tax Amount Pre-tax Amount Pre-tax Amount Pre-tax
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tax at federal statutory rate $ 29,048 35.0% $ 21,451 35.0% $103,691 35.0% $ 69,623 35.0%
State and local taxes,
net of federal benefits .... 6,554 7.9% 4,266 7.0% 20,279 6.8% 12,551 6.3%
Amortization of nondeductible
intangible assets acquired . 2,143 2.6% 1,807 2.9% 7,297 2.5% 7,140 3.6%
Other - net ................. (978) (1.2%) 240 0.4% (24) -- 799 0.4%
-----------------------------------------------------------------------------------------
Subtotal .................... 36,767 44.3% 27,764 45.3% 131,243 44.3% 90,113 45.3%
Favorable Tax Adjustment .... -- -- 18,000 --
Impairment Loss ............. -- (32,264) -- (32,264)
Dispositions ................ -- 11,793 -- 15,304
-----------------------------------------------------------------------------------------
Income taxes ................ $ 36,767 $ 7,293 $113,243 $ 73,153
=========================================================================================
</TABLE>
5. Earnings Per Share
Earnings per share is computed after preference dividends and is based on
the weighted average number of Class A and Class B common shares outstanding
during the period. The 1997 third-quarter and nine-month calculations reflect
primary earnings per share including incremental shares associated with stock
options in accordance with Accounting Principles Board Opinion No.15, "Earnings
Per Share" ("APB 15"). Fully diluted earnings per share for the third quarter
and the first nine months of 1997 is not presented since dilution is not
material. The potential dilutive effect of stock options on 1996 earnings per
share was not material.
In March 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"),
which supersedes APB 15. SFAS 128 is effective for periods ending after December
15, 1997, at which time previously reported earnings per share for periods prior
to the effective date will be restated, as required by the pronouncement. SFAS
128 simplifies the computation of earnings per share by replacing the
7
<PAGE>
presentation of primary earnings per share with a presentation of basic earnings
per share which excludes the dilutive effect of common stock equivalents such as
stock options, warrants and other convertible securities. SFAS 128 requires a
dual presentation of basic and diluted earnings per share by entities with
complex capital structures. Diluted earnings per share under SFAS 128 is
computed similarly to fully diluted earnings per share under APB 15.
Pro forma dual presentation of basic and diluted earnings per share for
the third quarter and nine months ended September 28, 1997, assuming the
adoption of SFAS 128 in the first quarter of 1997, is as follows:
Three Months Ended Nine Months Ended
September 28, 1997 September 28, 1997
------------------ ------------------
Basic Earnings Per Share $0.48 $1.89
Diluted Earnings Per Share $0.46 $1.82
6. Debt Obligations
The Company currently maintains $300,000,000 in revolving credit
agreements, $100,000,000 of which was renewed in July 1997 and has been extended
through July 1998, and $200,000,000 of which had an original maturity of July
2001 and has been extended through July 2002. The extended 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
LIBOR rate, plus various margins based on the Company's credit rating. In
addition, these agreements include provisions which require, among other
matters, specified levels of stockholders' equity. At September 28, 1997,
approximately $917,000,000 of stockholders' equity was unrestricted under these
agreements. At September 28, 1997, and December 29, 1996, the Company had
commercial paper outstanding of $19,000,000 and $45,500,000, respectively, which
is supported by the revolving credit agreements.
7. Stock Repurchase Program
During the first nine months of 1997, the Company repurchased
approximately 2,500,000 shares of Class A Common Stock at a cost of
approximately $114,900,000. The average price of these repurchases was
approximately $47 per share. To date, approximately $41,300,000 remain from the
February 1997 authorization of $150,000,000. Stock repurchases under this
program exclude shares reacquired in connection with certain exercises under the
Company's stock option plans at a cost of approximately $11,800,000.
8. Voluntary Staff Reductions
During the first nine months of 1997, the Company recorded approximately
$2,500,000, or $.01 per share, for pre-tax charges relating to staff reductions
at corporate headquarters and The New York Times. At September 28, 1997, and
December 29, 1996, approximately $20,304,000 and $49,052,000, respectively, were
included in liabilities in the accompanying Condensed Consolidated Balance
Sheets, which represent the unpaid balance of total pre-tax charges relating to
staff reductions. This balance will be principally paid within one year.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Advertising and circulation revenues accounted for approximately 69% and
24%, respectively, of the Company's revenues in the first nine months of 1997.
Advertising revenues influence the pattern of the Company's consolidated
revenues because they are seasonal in nature. Traditionally, second-quarter and
fourth-quarter advertising volume is higher than that which occurs in the first
and third quarters since economic activity tends to be lower in the post-holiday
season and the summer period. Quarterly trends are also affected by the overall
economy and economic conditions that may exist in specific markets served by
each of the Company's business segments.
Newsprint is the major component of the Company's cost of raw materials.
Newsprint prices, which were at historic highs in the first quarter of 1996,
began to decline during the second quarter of 1996, and fell dramatically by
year end. Newsprint prices increased in the first three quarters of 1997. A
subsequent price increase may occur in the last quarter of the year which could
further increase the Company's cost of newsprint by the end of 1997 or the
beginning of 1998. Although the Company expects its cost of newsprint to be
higher in the fourth quarter of 1997 than in the comparable 1996 quarter, the
annual cost of newsprint for 1997 will remain significantly lower than 1996.
The special factors that affected the 1997 and 1996 reported results were
as follows:
1997
o $18.0 million favorable tax adjustment ($.18 per share for the
nine months) resulting from the completion of the Company's
federal tax audits for periods through 1992 ("favorable tax
adjustment").
o $2.5 million pre-tax charge ($.01 per share for the nine
months) for severance and related costs resulting from
work force reductions ("buyouts").
1996
o $126.8 million pre-tax noncash accounting charge ($.97 per
share for the quarter and nine months) related to the
measurement for impairment of long-lived assets as required by
Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of" ("SFAS 121 charge").
o $25.1 million pre-tax gain ($.14 per share for the quarter and
nine months) resulting from the realization of a gain
contingency from the disposition of a paper mill in a prior
year.
o $7.8 million pre-tax gain ($.04 per share for the nine months)
from the sale of the 110 Fifth Avenue building.
o $7.0 million pre-tax charge for the quarter ($.04 per share)
and $12.6 million pre-tax charge for the nine months ($.07 per
share) for buyouts.
Results of Operations
The 1997 third-quarter net income was $46.2 million, or $.46 earnings
per share, compared with a net loss of $47.7 million, or $.49 loss per share,
in the third quarter of 1996. For the first nine months of 1997, net income
rose to $183.0 million, or $1.83 per share, from $31.8 million, or $.33 per
share, in 1996. In the 1996 third-quarter and nine-month period, the Company
recorded, among other special factors described above, a noncash accounting
charge of $94.5 million or $.97 per share. Exclusive of the special factors
described above, 1997 third-quarter net income increased 23.8% to $46.2
million, or $.46 per share, from $37.4 million, or $.38 per share in 1996,
and 1997 net income for the nine months increased 43.8% to $166.4 million, or
$1.66 per share, from $115.7 million, or $1.19 per share, in 1996. The higher
1997 net income was principally due to higher advertising revenues and lower
newsprint prices in the Newspaper Group, and to the acquisition and
continuing strong performance of KFOR-TV, Oklahoma City, Okla., and
WHO-TV, Des Moines, Iowa, two NBC affiliates which were acquired in July 1996
("New Television Stations").
9
<PAGE>
The earnings per share amounts in the third-quarter and nine-month
periods of 1997 reflect a $.02 and $.06 per share decrease, respectively,
resulting from the inclusion of outstanding stock options in the earnings per
share calculation as required by Accounting Principles Board Opinion No. 15
("APB 15"). This provision of APB 15 was triggered primarily as a result of
the Company's higher stock price. Included in the $.06 per share decrease in
the nine-month period is $.01 per share related to the favorable tax
adjustment, which is a special factor. The 1996 reported results did not
require the inclusion of outstanding stock options. Certain provisions of APB
15 will be superseded by Statement of Financial Accounting Standards No. 128,
"Earnings Per Share", which will be adopted in the fourth quarter of 1997, at
which time previously reported earnings per share amounts will be restated,
as required by the pronouncement.
Revenues for the third quarter of 1997 were $683.6 million, an 8.3%
increase over the 1996 third-quarter revenues of $631.4 million. Revenues for
the first nine months of 1997 were $2.1 billion, a 9.9% increase from $1.9
billion in 1996. On a comparable basis, adjusted for the acquisitions of certain
properties, third-quarter and nine-month revenues increased by approximately 8%
and 7%, respectively, over 1996.
Production costs in the third quarter of 1997 were $350.0 million, a 4%
increase over the 1996 third-quarter production costs of $336.4 million.
Production costs for the first nine months of 1997 were $1.04 billion, a 2%
increase from $1.02 billion in 1996. The increase was primarily due to higher
salary and payroll-related costs and depreciation expenses associated with new
production facilities, partially offset by lower raw material costs resulting
from lower paper prices.
Selling, general and administrative expenses ("SGA expenses") in the third
quarter of 1997 were $242.2 million, a 4% increase over the 1996 third quarter
of $232.1 million. SGA expenses, exclusive of buyouts of $7.0 million in the
1996 quarter, increased 8% in the third quarter of 1997. SGA expenses for the
first nine months of 1997 were $736.3 million, an 8% increase from $680.5
million in 1996. SGA expenses, exclusive of buyouts of $2.5 million and $12.6
million in 1997 and 1996, respectively, increased 10% in the first nine months
of 1997. The increases were primarily due to higher salary and payroll-related
costs and promotional expenses.
The Impairment Loss in 1996 is related to the SFAS 121 charge of $126.8
million (See Note 2 of Notes to Condensed Consolidated Financial Statements).
Operating profit in the third quarter of 1997 was $91.3 million compared
with an operating loss of $63.9 million in 1996. Operating profit, exclusive of
buyouts of $7.0 million and the SFAS 121 charge of $126.8 million in the 1996
quarter, increased to $91.3 million in the third quarter of 1997 from $69.9
million in 1996. Operating profit for the first nine months of 1997 was $319.9
million compared with $79.2 million in 1996. Operating profit, exclusive of
buyouts of $2.5 million in the first nine months of 1997 and the SFAS 121 charge
of $126.8 million and buyouts of $12.6 million in 1996, rose to $322.4
10
<PAGE>
million in 1997 from $218.6 million in 1996. The improvement in operating profit
was principally due to higher advertising revenues and lower newsprint prices in
the Newspaper Group, and to the acquisition and continuing strong performance of
the New Television Stations.
The 1997 third-quarter earnings before interest, income taxes,
depreciation and amortization ("EBITDA") rose to $139.4 million from $5.6
million in 1996. EBITDA for the first nine months of 1997 rose to $456.4 million
from $233.8 million in 1996. EBITDA for the 1996 third quarter and the first
nine months was $107.2 million and $327.7 million, respectively, exclusive of
the SFAS 121 charge of $126.8 and gains on dispositions of $32.8 million. EBITDA
is presented because it is a widely accepted indicator of funds available to
service debt, although it is not a measure of liquidity or of financial
performance under generally accepted accounting principles ("GAAP"). The Company
believes that EBITDA, while providing useful information, should not be
considered in isolation or as an alternative to net income or cash flows as
determined under GAAP.
Income from Joint Ventures decreased to $3.4 million in the third quarter
of 1997 from $6.4 million in 1996. For the first nine months of 1997, such
income decreased to $7.7 million from $13.3 million in 1996. The decrease in the
third quarter and nine months of 1997 was primarily attributable to lower
selling prices for paper from the mills in which the Company has investments.
The decrease in the nine months was partially offset by the absence of a loss
from a new venture which ceased operations in December 1996.
Interest Expense, Net increased to $11.7 million in the third quarter of
1997 from $8.0 million in 1996. For the nine months of 1997, Interest Expense,
Net increased to $31.4 million from $20.4 million in 1996. Interest income and
capitalized interest included in the amounts presented was $0.8 million and
$6.7 million in the quarter and nine months of 1997, respectively, compared with
$5.6 million and $17.3 million in the comparable quarter and nine months of
1996, respectively. The 1997 increases in Interest Expense, Net were primarily
attributable to lower capitalization of interest associated with construction.
The Company's effective tax rate was 44.3% in the 1997 third quarter
and first nine months of 1997, excluding the favorable tax adjustment,
compared to 45.3% in the 1996 quarter and nine months. The 1996 third-quarter
and nine-month rates exclude the tax effect of the SFAS 121 charge and gains
on dispositions. The variation in the projected annual effective tax rate
was principally attributable to a lower percentage of nondeductible
amortization.
11
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Segment Information
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
---------------------------------------------------------
September 28, September 29, September 28, September 29,
(Dollars in thousands) 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
<S> <C> <C> <C> <C>
Revenues
Newspapers $ 605,271 $ 559,562 $ 1,863,330 $ 1,706,440
Magazines 43,377 40,219 129,571 122,628
Broadcasting 34,933 31,622 105,088 79,416
- ----------------------------------------------------------------------------------------
Total $ 683,581 $ 631,403 $ 2,097,989 $ 1,908,484
========================================================================================
Operating Profit (Loss)
Newspapers $ 84,830 $ (61,281) $ 302,716 $ 82,237
Magazines 6,603 6,287 21,561 19,821
Broadcasting 9,656 7,331 27,245 18,703
Unallocated Corporate Expenses (9,754) (16,233) (31,583) (41,514)
- ----------------------------------------------------------------------------------------
Total $ 91,335 $ (63,896) $ 319,939 $ 79,247
========================================================================================
Depreciation and Amortization
Newspapers $ 41,773 $ 34,780 $ 118,787 $ 102,901
Magazines (2,019) (1,929) (5,492) (5,518)
Broadcasting 3,913 4,374 13,334 9,489
Corporate 977 651 1,831 1,252
Joint Ventures 89 96 266 288
- ----------------------------------------------------------------------------------------
Total $ 44,733 $ 37,972 $ 128,726 $ 108,412
========================================================================================
</TABLE>
A discussion of the operating results of the Company's segments follows:
Newspaper Group: The New York Times ("The Times"), The Boston Globe ("The
Globe"), 21 Regional Newspapers, newspaper distributors, a news service, a
features syndicate, TimesFax, licensing operations of The New York Times
databases and microfilm and New Ventures. New Ventures include projects
developed in electronic media.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------------------------------------------
September 28, September 29, September 28, September 29,
(Dollars in thousands) 1997 1996 1997 1996
- -----------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
<S> <C> <C> <C> <C>
Revenues
Newspapers $ 601,011 $ 557,824 $ 1,854,152 $ 1,700,903
New Ventures 4,260 1,738 9,178 5,537
- -----------------------------------------------------------------------------------
Total Revenues $ 605,271 $ 559,562 $ 1,863,330 $ 1,706,440
- -----------------------------------------------------------------------------------
EBITDA
Newspapers $ 128,206 $ 102,191 $ 425,513 $ 317,654
New Ventures (1,603) (3,000) (4,010) (6,824)
- -----------------------------------------------------------------------------------
Total EBITDA $ 126,603 $ 99,191 $ 421,503 $ 310,830
- -----------------------------------------------------------------------------------
Operating Profit (Loss)
Newspapers $ 86,704 $ (54,895) $ 307,475 $ 93,026
New Ventures (1,874) (6,386) (4,759) (10,789)
- -----------------------------------------------------------------------------------
Total Operating Profit $ 84,830 $ (61,281) $ 302,716 $ 82,237
- -----------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
The Newspaper Group's operating profit was $84.8 million in the third
quarter of 1997 compared with $65.4 million, in 1996, excluding buyouts and the
SFAS 121 charge. Revenues were $605.3 million in the third quarter of 1997,
compared with $559.6 million in 1996. Operating profit for the first nine months
of 1997, excluding buyouts, rose to $304.2 million in 1997 from $214.3 million
in 1996, excluding buyouts and the SFAS 121 charge, on revenues of $1.9 billion
and $1.7 billion, respectively. The increase in the Group's revenues for both
the quarter and nine months was primarily due to higher advertising revenues as
a result of higher rates and volume. The improvement in operating profit in 1997
included the favorable effect of a 14% and 26% decrease for the third-quarter
and nine-month periods, respectively, in the Company's average cost of newsprint
compared to 1996.
Average circulation of daily newspapers for the third quarter and nine
months ended September 28, 1997, on a comparable basis, was as follows:
--------------------------------------------------------------------
Three Months Ended September 28, 1997
------------------------------------------
(Copies in thousands) Weekday % Change Sunday % Change
--------------------------------------------------------------------
Average Circulation
The New York Times 1,060.5 1.0% 1,642.4 0.4%
The Boston Globe 480.6 1.8% 764.9 -0.3%
Regional Newspapers 702.4 0.8% 758.0 0.2%
--------------------------------------------------------------------
--------------------------------------------------------------------
Nine Months Ended September 28, 1997
------------------------------------------
(Copies in thousands) Weekday % Change Sunday % Change
--------------------------------------------------------------------
Average Circulation
The New York Times 1,079.9 -1.5% 1,653.5 -2.2%
The Boston Globe 472.3 -0.1% 756.3 -1.3%
Regional Newspapers 731.4 0.2% 786.9 -0.2%
The average circulation decline for the nine months is partly attributable
to the increase in newsstand and home delivery prices and a decrease in
distribution to selected outlying areas. To increase circulation, the Company is
investing in a national image campaign at The Times, as well as other product
enhancements and improvements in delivery service.
Advertising volume on a comparable basis for the third quarter and nine
months was as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 28, 1997 September 28, 1997
---------------------------------------------------
(Inches in thousands) Volume % Change Volume % Change
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Advertising Volume (excluding preprints)
The New York Times 888.1 4.8% 2,827.8 4.5%
The Boston Globe 697.0 0.9% 2,175.8 3.2%
Regional Newspapers 3,777.7 1.4% 11,510.8 0.8%
- ----------------------------------------------------------------------------------------------
</TABLE>
Advertising volume at The Times for the third quarter of 1997 increased
approximately 4.8% from the 1996 third quarter. The national, classified and
zoned categories showed increases of 10.0%, 4.3% and 3.0%, respectively, while
the retail category was down 1.7%. For the first nine months of 1997,
advertising volume increased 4.5% from the comparable 1996 period. The national,
classified and zoned categories showed increases of 7.6%, 5.3% and 3.3%,
respectively, while the retail category was down 1.1%. Preprint distribution was
up 26.7% for the quarter and 4.2% for the nine months over 1996.
13
<PAGE>
At The Globe, advertising volume for the 1997 third quarter increased 0.9%
from the 1996 third quarter. Advertising volume was higher in the national,
classified and zoned categories by 2.6%, 3.9% and 7.1%, respectively, while the
retail category was down 8.7%. For the first nine months of 1997, advertising
volume increased 3.2% primarily as a result of increases in the national and
classified categories of 4.1% and 6.7%, respectively, offset by a decrease of
3.1% in the retail category. Preprint distribution was up 3.5% for the quarter
and 6.1% for the nine months over 1996.
For the regional newspaper group, advertising volume for the third quarter
increased 1.4% from the 1996 third quarter. For the first nine months of 1997,
advertising volume increased 0.8%. The increases were a result of higher volume
in all advertising categories except legal. Preprint distribution increased
10.8% and 10.5% for the third-quarter and nine-month periods, respectively, over
1996.
Magazine Group: The Magazine Group is comprised of a number of sports-related
publications, related activities in the sports/leisure fields, and New Ventures
such as computerized systems for golf tee time reservations and on-line magazine
services. The revenues for the Group include the amortization of a $40.0 million
non-compete agreement ("Non-Compete"), associated with the divestiture of the
Women's Magazine Division, which is being recognized on a straight-line basis
over four years ending in July 1998.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
-----------------------------------------------------------
September 28, September 29, September 28, September 29,
(Dollars in thousands) 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------
(13 Weeks) (39 Weeks)
<S> <C> <C> <C> <C>
Revenues
Sports/Leisure Magazines $40,062 $37,414 $120,400 $114,394
Non-Compete 2,500 2,500 7,500 7,500
New Ventures 815 305 1,671 734
- ---------------------------------------------------------------------------------------
Total Revenues $43,377 $40,219 $129,571 $122,628
- ---------------------------------------------------------------------------------------
EBITDA
Sports/Leisure Magazines $ 6,465 $ 6,982 $ 21,869 $ 19,438
New Ventures (1,881) (1,553) (5,800) (4,064)
- ---------------------------------------------------------------------------------------
Total EBITDA $ 4,584 $ 5,429 $ 16,069 $ 15,374
- ---------------------------------------------------------------------------------------
Operating Profit (Loss)
Sports/Leisure Magazines $ 6,210 $ 5,525 $ 20,504 $ 16,921
Non-Compete 2,500 2,500 7,500 7,500
New Ventures (2,107) (1,738) (6,443) (4,600)
- ---------------------------------------------------------------------------------------
Total Operating Profit $ 6,603 $ 6,287 $ 21,561 $ 19,821
- ---------------------------------------------------------------------------------------
</TABLE>
The Magazine Group's operating profit was $6.6 million in the third
quarter of 1997 compared with $7.4 million in 1996, excluding the SFAS 121
charge, on revenues of $43.4 million and $40.2 million, respectively. The
decrease in operating profit in the third quarter of 1997 was primarily
related to increased costs associated with increased promotion expenses and
higher new venture losses. Operating profit for the first nine months was
$21.6 million in 1997 compared with $20.9 million in 1996, excluding the SFAS
121 charge, on revenues of $129.6 million and $122.6 million, respectively.
The improvement in nine-month operating profit was primarily related to
higher advertising revenues as a result of higher ad volume at the
golf-related publications, partially offset by increased losses associated
with new ventures. In October 1997, the Company announced it had entered into
an agreement to sell the assets of its tennis, sailing and ski magazine
businesses. The transaction is expected to be completed in the fourth quarter
of 1997. The results of these magazines will be included in the Group's
results until the divestitures are completed. The operating profit (loss) of
these magazines was not material to the Group in the third quarter or the
first nine months of 1997 and their sale will not have a material impact on
the future results or financial position of the Company.
14
<PAGE>
Broadcasting Group: The Broadcasting Group consists of eight network-affiliated
television stations and two radio stations.
- --------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------------------------------------------
September 28, September 29, September 28, September 29,
(Dollars in thousands) 1997 1996 1997 1996
- --------------------------------------------------------------------------------
(13 Weeks) (26 Weeks)
Revenues $34,933 $31,622 $105,088 $79,416
- --------------------------------------------------------------------------------
EBITDA $13,569 $11,705 $ 40,579 $28,192
- --------------------------------------------------------------------------------
Operating Profit $ 9,656 $ 7,331 $ 27,245 $18,703
- --------------------------------------------------------------------------------
The Broadcasting Group's operating profit rose to $9.7 million in the
third quarter of 1997 from $7.3 million in 1996, on revenues of $34.9 million
and $31.6 million, respectively. Operating profit was $27.2 million for the
first nine months of 1997 compared with $18.9 million in 1996, excluding
buyouts, on revenues of $105.1 million and $79.4 million, respectively. The
revenue and operating profit increases were principally attributable to the
acquisition of the New Television Stations, as well as stronger advertising
revenues at most of the Broadcast properties. The New Television Stations
contributed $3.9 million and $9.1 million of operating profit in the third
quarter and first nine months of 1997, respectively.
Liquidity and Capital Resources
Net cash provided by operating activities was $309.0 million in the
first nine months of 1997 compared with $264.9 million in 1996. The increase
of $44.2 million, or 17%, in 1997 was attributable to higher earnings and
other changes in working capital. The increase in operating cash flows was
primarily used for the construction of production and distribution
facilities, stock repurchases and the payment of dividends to stockholders.
Net cash used in investing activities was $114.9 million in the first nine
months of 1997 compared with $388.7 million in 1996. The decrease of $273.7
million was primarily attributable to the acquisition of certain properties
in 1996 (See Note 3 of Notes to Condensed Consolidated Financial Statements).
Net cash used in financing activities was $195.4 million in the first nine
months of 1997 compared with cash provided by financing activities of $76.1
million in 1996. The increase of $271.5 million was primarily related to an
increase in share repurchases in 1997 and the financing of the New Television
Stations, partially through the commercial paper program, in 1996 (see
Financing section below).
The Company believes that cash generated from its operations and the
availability of funds from external sources should be adequate to cover
working capital needs, planned capital expenditures, dividend payments to
stockholders, stock repurchases and other cash requirements. The ratio of
current assets to current liabilities was .76 and .77 at September 28, 1997
and September 29, 1996, respectively. The ratio of long-term debt and capital
lease obligations as a percentage of total capitalization was 28% at
September 28, 1997 compared to 34% at September 29, 1996.
Financing: The Company currently maintains $300.0 million in revolving credit
agreements, $100.0 million of which was renewed in July 1997 and has been
extended through July 1998, and $200.0 million of which had an original
maturity of July 2001 and has been extended through July 2002. The extended
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 LIBOR rate, plus various margins based on the
Company's credit rating. In addition, these agreements included provisions
which require, among other matters, specified levels of stockholders' equity.
Approximately $917.0 million and $863.0 million of stockholders' equity was
unrestricted under these agreements at September 28, 1997, and September 29,
1996, respectively. Approximately $19.0 million and $153.9 million of
commercial paper, supported by the revolving credit agreements, was
outstanding at September 28, 1997 and September 29, 1996, respectively. The
higher level of outstanding commercial paper at September 29, 1996 was
primarily related to the acquisition of the New Television Stations. The
Company's long-term debt, including capital leases, was $636.2 million at
September 28, 1997, of which $100.0 million is due in October 1998. At
September 29, 1996, the Company's long-term debt, including capital leases,
was $791.1 million.
15
<PAGE>
Capital Expenditures: The Company currently estimates that, inclusive of the
new facilities in College Point, New York City and Lakeland, Florida, capital
expenditures for 1997 will range from $160.0 million to $180.0 million. The
Company currently anticipates that depreciation and amortization expense will
approximate $170.0 million to $180.0 million for 1997 compared with $147.8
million in 1996.
Stock Repurchase Program: During the first nine months of 1997, the Company
repurchased approximately 2.5 million shares of Class A Common Stock at a
cost of approximately $114.9 million compared to approximately 1.2 million
shares at cost of approximately $34.9 million in 1996. To date, approximately
$41.3 million remain from the February 1997 authorization. Stock repurchases
under this program exclude shares reacquired in connection with certain
exercises under the Company's stock option plans at a cost of approximately
$11.8 million.
Acquisitions/Dispositions: In the first nine months of 1997, the Company sold
its NYT Custom Publishing division and a closed printing facility located in
Carlstadt, New Jersey. These sales did not have a material effect on the
Company's consolidated financial statements. In October 1997, the Company
announced that it had entered into an agreement to sell the assets of its
tennis, sailing and ski magazine businesses. This transaction is expected to
be completed in the fourth quarter of 1997.
In July 1996, the Company acquired the New Television Stations. The
aggregate cost of the acquisition was approximately $234.1 million, of which
approximately $232.9 million was paid in cash ($143.0 million was financed
using the Company's commercial paper facility) and the balance represented
accrued liabilities.
In June 1996, the Company acquired a newspaper distribution business
that distributes The Times, other newspapers and periodicals throughout the
New York City metropolitan area. The aggregate cost of the acquisition was
$32.5 million of which approximately $13.9 million was paid in cash, $9.8
million in notes and accounts receivable which were forgiven, and the balance
represented assumed and accrued liabilities.
Other: At September 28, 1997, approximately $20.3 million of payments remain
from charges associated with staff reductions. This balance will be principally
paid within one year.
The Company is evaluating the potential impact of the situation
commonly referred to as the "Year 2000 problem". The Year 2000 problem, which
is common to most corporations, concerns the inability of information
systems, primarily computer software programs, to properly recognize and
process date sensitive information related to the year 2000. Preliminary
assessment indicates that solutions will involve a mix of purchasing new
systems and modifying existing systems and confirming vendor compliance. The
Company currently anticipates that incremental capital expenditures
associated with the Year 2000 problem will be modest. Additional expenses to
remediate existing systems are currently expected to range between $10.0
million and $15.0 million. These expenses are expected to be incurred through
1999.
16
<PAGE>
New Accounting Pronouncements: In June 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS") No.
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"), and SFAS No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 131 establishes standards for reporting financial and descriptive
information for reportable segments on the same basis that is used internally
for evaluating segment performance and the allocation of resources to segments.
The Company is evaluating the effect, if any, of SFAS 131, on its operating
segment reporting disclosure. SFAS 130 establishes standards for presenting
nonshareholder related items that are excluded from net income and reported as
components of stockholders' equity, such as foreign currency translation. These
statements are effective for fiscal years beginning after December 15, 1997. The
adoption of these statements will not have a material effect on the Company's
results of operations or financial position.
Factors That Could Affect Operating Results
Except for the historical information contained herein, the matters
discussed in this quarterly report are forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those predicted by such forward-looking statements. Such risks and
uncertainties include national and local conditions that could influence the
level of retail, national and classified advertising revenues as well as
circulation revenue, the impact of competition that could affect levels (rate
and volume) of advertising and circulation generated by the markets served by
the Company's business segments, material increases in newsprint and magazine
paper prices, and other risks detailed from time to time in the Company's
publicly-filed documents, including its Annual Report on Form 10-K for the
period ended December 29, 1996.
17
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
On October 16, 1997, the Company announced the following executive
changes: Arthur Ochs Sulzberger resigned as Chairman and Chief Executive
Officer of the Company and was elected Chairman Emeritus; he remains on
the Board of Directors. Arthur O. Sulzberger, Jr. was appointed Chairman
of the Board and continues as Publisher of The New York Times. Russell T.
Lewis, President of the Company, was appointed to the additional position
of Chief Executive Officer, and Michael Golden was elected to the Board
and appointed Vice Chairman and Senior Vice President.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.2 By-laws as amended through October 16, 1997
10.20 The Company's Non-Employee Directors Deferral Plan
11 Statements re: Computation of earnings per share
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the period for which
this report is filed.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE NEW YORK TIMES COMPANY
(Registrant)
Date: November 12, 1997 /s/ Diane P. Baker
-----------------------------
Diane P. Baker
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
19
<PAGE>
Exhibit Index to Quarterly Report Form 10-Q
Quarter Ended September 28, 1997
Exhibit No. Exhibit
- ----------- -------
3.2 By-laws as amended through October 16, 1997
10.20 The Company's Non-Employee Directors Deferral Plan.
11 Statements of Computation of Primary and Fully Diluted
Net Income Per Share
27 Financial Data Schedule
20
<PAGE>
EXHIBIT 3.2
THE NEW YORK TIMES COMPANY
BY-LAWS
As Amended by the
Board of Directors
October 21, 1968, February 26, 1969, March 24, 1971, March
29, 1972, March 28, 1973, May 30, 1973, November 28, 1973,
March 27, 1974, March 31, 1976, April 26, 1977, January 30,
1978, October 25, 1978, April 3, 1979, July 23, 1979, March
20, 1980, May 15, 1980, March 19, 1981, March 18, 1982,
February 17, 1983, April 28, 1983, February 16, 1984, July
18, 1985, February 20, 1986, April 30, 1986, October 16,
1986, February 19, 1987, February 18, 1988, March 16, 1989,
February 15, 1990, February 21, 1991, February 20, 1992,
February 18, 1993, October 21, 1993, December 16, 1993,
February 17, 1994, February 16, 1995, March 20, 1997 and
October 16, 1997.
As Ratified by the
Class B Stockholders
April 22, 1969
and the Class A and Class B Stockholders
(Article XI only)
April 19, 1988
<PAGE>
BY-LAWS
OF
THE NEW YORK TIMES COMPANY
<TABLE>
<CAPTION>
As Amended by the
Board of Directors
<S> <C>
October 21, 1968 As Ratified by the
February 26, 1969 Class B Stockholders
March 24, 1971 April 22, 1969
March 29, 1972 and the Class A and
March 28, 1973 Class B Stockholders
May 30, 1973 (Article XI only)
November 28, 1973 April 19, 1988
March 27, 1974
March 31, 1976
April 26, 1977
January 30, 1978
October 25, 1978
April 3, 1979
July 23, 1979
March 20, 1980
May 15, 1980
March 19, 1981
March 18, 1982
February 17, 1983
April 28, 1983
February 16, 1984
July 18, 1985
February 20, 1986
April 30, 1986
October 16, 1986
February 19, 1987
February 18, 1988
March 16, 1989
February 15, 1990
February 21, 1991
February 20, 1992
February 18, 1993
October 21, 1993
December 16, 1993
February 17, 1994
February 16, 1995
March 20, 1997
October 16, 1997
</TABLE>
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
ARTICLE I. STOCKHOLDERS.......................................................................... 1
1. Annual Meeting..................................................................... 1
2. Special Meetings................................................................... 1
3. Notice of Meetings................................................................. 1
4. Quorum............................................................................. 1
5. Voting............................................................................. 1
ARTICLE II. CLOSING TRANSFER BOOKS; SETTING RECORD DATE........................................... 2
1. Qualification of Voters............................................................ 2
2. Determination of Stockholders of Record for Other Purposes......................... 2
ARTICLE III. BOARD OF DIRECTORS.................................................................... 2
1. Number, Classification, Election and Qualifications................................ 2
2. Vacancies.......................................................................... 2
3. Regular Meetings................................................................... 2
4. Special Meetings................................................................... 3
5. Quorum............................................................................. 3
6. Committees......................................................................... 3
7. Salaries........................................................................... 3
8. Resignation........................................................................ 4
9. Telephonic Meetings................................................................ 4
ARTICLE IV. OFFICERS.............................................................................. 4
1. Appointment........................................................................ 4
2. Term of Office..................................................................... 4
3. The Chairman of the Board.......................................................... 4
4. The Vice Chairman of the Board..................................................... 4
5. The President...................................................................... 4
6. Vice Presidents.................................................................... 5
7. The Secretary...................................................................... 5
8. The Treasurer...................................................................... 5
9. Duties of Officers may be Delegated................................................ 5
ARTICLE V. STOCK CERTIFICATES.................................................................... 5
1. Issuance of Stock Certificates..................................................... 5
2. Lost Stock Certificates............................................................ 5
3. Transfers of Stock................................................................. 5
4. Regulations........................................................................ 6
ARTICLE VI. SEAL.................................................................................. 6
ARTICLE VII. CHECKS................................................................................ 6
ARTICLE VIII. BOOKS OF ACCOUNT AND STOCK BOOK....................................................... 6
ARTICLE IX. FISCAL YEAR........................................................................... 6
ARTICLE X. VOTING SECURITIES..................................................................... 6
ARTICLE XI. INDEMNIFICATION....................................................................... 7
1. Directors and Officers............................................................. 7
2. Non-Exclusivity.................................................................... 7
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
3. Continuity of Rights............................................................... 7
ARTICLE XII. INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS WITH THE COMPANY...................... 7
ARTICLE XIII. NOTICES............................................................................... 8
ARTICLE XIV. AMENDMENT............................................................................. 8
</TABLE>
iii
<PAGE>
THE NEW YORK TIMES COMPANY
BY-LAWS
ARTICLE I
STOCKHOLDERS
1. ANNUAL MEETING. The Annual Meeting of Stockholders for the election
of directors and for the transaction of such other business as may properly
come before the meeting shall be held on the third Friday in May, at such
time and place either within or without the State of New York as may be
specified by the Board of Directors.
2. SPECIAL MEETINGS. Special meetings of the stockholders, to be held
at such place either within or without the State of New York and for the
purpose or purposes as may be specified in the notices of such meetings, may
be called by the Chairman of the Board or the President and shall be called
by the President or the Secretary at the request of a majority of the Board
of Directors or of stockholders owning 25 per cent or more of the shares or
stock of the Company issued and outstanding and entitled to vote on any
action proposed by such stockholders for such meetings. Such request shall
be in writing and shall state the purpose or purposes of the proposed
meeting.
3. NOTICE OF MEETINGS. Notice of the time, place and purpose or
purposes of every meeting of stockholders shall be in writing, signed by the
President or the Secretary, and shall be mailed by the Secretary, or the
person designated by him to perform this duty, at least ten, and not more
than fifty, days before the meeting, to each stockholder of record entitled
to vote at such meeting and to each stockholder of record who would be
entitled to have his stock appraised if the action proposed at such meeting
were taken. Such notice shall be directed to a stockholder at his address as
it appears on the stock book, unless he shall have filed with the Secretary
a written request that notices intended for him be mailed to some other
address, in which case it will be mailed to the address designated in such
request.
4. QUORUM. The holders of record of a majority of the shares of stock
issued and outstanding and entitled to vote thereat, present in person or by
proxy, shall be requisite and shall constitute a quorum at each meeting of
stockholders for the transaction of business, except as otherwise provided
by law, by the Certificate of Incorporation or by these By-laws; provided
that, when any specified action is required to be voted upon by a class of
stock voting as a class, the holders of a majority of the shares of such
class shall be requisite and shall constitute a quorum for the transaction
of such specified action. If, however, there shall be no quorum, the officer
of the Company presiding as chairman of the meeting shall have the power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present, when any
business may be transacted which might have been transacted at the meeting
as first convened had there been a quorum.
5. VOTING. Each stockholder entitled to vote on any action proposed at
a meeting of stockholders shall be entitled to one vote in person or by
proxy for each share of voting stock held of record by him. Every proxy must
be executed in writing by the stockholder or by his duly authorized
attorney. No proxy shall be valid after the expiration of eleven months from
the date of its execution, unless the person executing it shall have
specified therein its duration.
The vote for directors shall be by ballot, and the election of each director
shall be decided by a plurality vote. Except as otherwise provided by law,
by the Certificate of Incorporation, by other certificate filed pursuant to
law or by these By-laws, votes on any other matters coming before any
meeting of stockholders shall be decided by the vote of the holders of a
majority of the shares represented at such meeting, in person or by proxy,
and entitled to vote on the specific matter. Except as required by law, by
the Certificate of Incorporation, by other certificate filed pursuant to law
or by
1
<PAGE>
these By-laws, the chairman presiding at any meeting of stockholders may
rule on questions of order or procedure coming before the meeting or submit
such questions to the vote of the meeting, which vote may at his direction
be by ballot. The chairman shall submit any such questions to the vote of
the meeting at the request of any stockholder entitled to vote present in
person or by proxy at the meeting, which vote shall be by ballot.
ARTICLE II
CLOSING TRANSFER BOOKS; SETTING RECORD DATE
1. QUALIFICATION OF VOTERS. The Board of Directors may prescribe a
period, not exceeding fifty days prior to the date of any meeting of the
stockholders or prior to the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose without a meeting,
as the time as of which stockholders entitled to notice of and to vote at
such a meeting or whose consent or dissent is required or may be expressed
for any purpose, as the case may be, shall be determined, and all persons
who were holders of record of voting stock at such time and no others shall
be entitled to notice of and to vote at such meeting or to express their
consent or dissent, as the case may be.
2. DETERMINATION OF STOCKHOLDERS OF RECORD FOR OTHER PURPOSES.The Board
of Directors may fix a time, not exceeding forty days preceding the date
fixed for the payment of any dividend or for the making of any distribution
or for the delivery of evidences of rights or evidences of interests arising
out of any change, conversion or exchange of capital stock, as a record time
for the determination of the stockholders entitled to receive any such
dividend, distribution, rights or interests, and in such case only
stockholders of record at the time so fixed shall be entitled to receive
such dividend, distribution, rights or interests.
ARTICLE III
BOARD OF DIRECTORS
1. NUMBER, CLASSIFICATION, ELECTION AND QUALIFICATIONS.The affairs of
the Company shall be managed by a Board of Directors consisting of fifteen
members. For the purpose of election of directors only, and not for any
other purpose, the fifteen directors shall be divided into two classes, the
five directors whom the holders of Class A Common Stock are entitled to
elect, to be designated the Class A directors, and the ten directors whom
the Class B Common Stock are entitled to elect, to be designated the Class B
directors. The directors shall, except as provided in Section 2 of this
Article III, be elected by the classes of shares entitled to elect them, by
ballot at each annual meeting of stockholders, and shall hold office until
the next annual meeting of stockholders and until their successors shall be
elected and qualified. All directors must be of full age and at least one
shall be a citizen of the United States and a resident of New York State.
2. VACANCIES. Any vacancy in the Board of Directors, whether caused by
resignation, death, increase in the number of directors, disqualification or
otherwise, may be filled by a majority of the directors in office after the
vacancy has occurred, although less than a quorum. A director so elected
shall hold office for the unexpired term in respect of which such vacancy
occurred.
3. REGULAR MEETINGS. A regular meeting of the Board shall be held in
each year immediately following the Annual Meeting of Stockholders or if
such meeting be adjourned, the final adjournment thereof at the same place
as such meeting of stockholders. No notice of such meeting shall be
necessary to the newly elected directors in order to legally constitute the
meeting. Other regular meetings of the Board may be held at such time and
place, either within or without the State of New York, as shall from time to
time be determined by a resolution of the Board. Any business may be
transacted at any regular meeting at which a quorum is present. The time and
place of any such
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regular meeting may be changed (i) at the preceding regular meeting; or (ii)
subsequent to the adjournment of the preceding regular meeting by consent in
writing signed by a majority of the whole Board; provided, however, that in
either case notice of such change be served on each director personally or
by telegram two days or by mail five days prior to the date originally
designated for such regular meeting.
4. SPECIAL MEETINGS. A special meeting of the Board of Directors may be
held at the time fixed by resolution of the Board or upon call of the
Chairman of the Board, the President or any two directors and may be held at
any place within or without the State of New York. Except as otherwise
provided by law, by the Certificate of Incorporation, by other certificate
filed pursuant to law or by these By-laws, notice of the time and place of
any special meeting of the Board shall be given by the Secretary or other
person designated by him to perform this duty by serving the same personally
or by telegram on each director at his post office address as the same shall
appear on the books of the Company at least two days previous to such
meeting or by mailing a copy of such notice, postage prepaid, to each
director at such address at least five days previous to such meeting;
provided, however, that no notice need be given to any director if waived by
him either before or after the meeting or if he shall be present at such
meeting, and any meeting of the Board may be held at any time without notice
if all the directors then in office shall be present thereat.
Any such notice shall also state the items of business which are expected to
come before the meeting, and the items of business transacted at any special
meeting of the Board shall be limited to those stated in such notice, unless
all the directors are present at the meeting, or all those absent consent in
writing either before or after the meeting, to the transaction of an item or
items of business not stated in such notice.
5. QUORUM. At all meetings of the Board, the presence of any five of
the directors in office shall be necessary and sufficient to constitute a
quorum for the transaction of business, and, except as otherwise required by
law, by the Certificate of Incorporation, by other certificate filed
pursuant to law or by these By-laws, the affirmative vote of a majority of
the directors present at any meeting at which a quorum is present shall be
necessary for the adoption of any business or resolution which may come
before the meeting; provided, however, that in the absence of a quorum a
majority of the directors present or any director solely present may adjourn
any meeting from time to time until a quorum is present. No notice of any
adjournment to a later hour on the date originally designated for the
holding of a meeting need be given, but immediate telegraphic notice shall
be given by the Secretary or other person designated by him to perform this
duty to all directors of any adjournment to any subsequent date, and such
notice shall be deemed sufficient, though less than the notice required by
Section 3 if such meeting be an adjourned regular meeting of the Board, or
by Section 4 if such meeting be an adjourned special meeting of the Board.
6. COMMITTEES. The Board of Directors may by resolution or resolutions
passed by a majority of the whole Board designate one or more committees,
each committee to consist of three or more of the directors, which, to the
extent provided in said resolution or resolutions, shall have and may
exercise powers of the Board of Directors in the management of the business
and affairs of the Company and may have power to authorize the seal of the
Company to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. All committees so
appointed shall keep regular minutes of the business transacted at their
meetings.
7. SALARIES. Directors, as such, shall not receive any stated salary
for their services, but by resolution of the Board may receive an annual
retainer and, in addition, a fixed sum and expenses of attendance, if any,
may be allowed for attendance at each regular or special meeting, or
adjourned session thereof, of the Board; provided that nothing herein
contained shall be construed to preclude any director from serving the
Company in any other capacity and receiving compensation therefor.
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Members of committees may be allowed such compensation as may be fixed from
time to time by the Board for attending committee meetings.
8. RESIGNATION. Any director may, at any time, resign, such resignation
to take effect upon receipt of written notice thereof by the President or
the Secretary, unless otherwise stated in the resignation.
9. TELEPHONIC MEETINGS. One or more directors may participate in a
meeting of the Board of Directors, or a committee designated pursuant to
Section 6 of this Article III, by a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear and speak to each other. Participation in a meeting
pursuant to this provision shall constitute actual attendance at such
meeting.
ARTICLE IV
OFFICERS
1. APPOINTMENT. The Board of Directors may appoint from their number a
Chairman of the Board and a Vice Chairman of the Board. The Board of
Directors shall appoint a President, a Secretary and a Treasurer and may
also appoint one or more Vice Presidents, none of whom need be members of
the Board, and may from time to time appoint such other officers as they may
deem proper. Any two of the aforesaid offices, except those of President and
Vice President, or President and Secretary, may be filled by the same
person. The compensation of all officers of the Company shall be fixed by
the Board.
2. TERM OF OFFICE. The officers of the Company shall hold office at the
pleasure of the Board of Directors. Any officer elected or appointed by the
Board may be removed from office at any time for or without cause by the
affirmative vote of a majority of the whole Board of Directors. Any officer
may resign his office at any time, such resignation to take effect upon
receipt of written notice thereof by the Company, unless otherwise stated in
the resignation. If the office of any officer becomes vacant for any reason,
the vacancy may be filled by the Board.
3. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
at all meetings of the Board of Directors and all meetings of the
stockholders. He shall have final authority, subject to the control of the
Board of Directors, over the general policy and business of the Company, and
shall have such other powers and duties as may from time to time be
prescribed by the Board of Directors.
4. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board shall
have such powers and duties as may from time to time be prescribed by the
Board of Directors or by the Chairman of the Board. In the absence or
inability to act of the Chairman of the Board, the Vice Chairman of the
Board shall preside at all meetings of the Board of Directors and all
meetings of the stockholders.
5. THE PRESIDENT. The President shall be the chief executive officer of
the Company and as such shall have the general control and management of the
business and affairs of the Company subject, however, to the control of the
Chairman of the Board. The President shall have the power, subject to the
control of the Chairman of the Board, to appoint or discharge and to
prescribe the duties and to fix the compensation of such agents and
employees of the Company as he may deem necessary. He shall have, as does
the Chairman of the Board, the authority to make and sign bonds, mortgages
and other contracts and agreements in the name and on behalf of the Company,
except when the Board of Directors by resolution instructs the same to be
done by some other officer or agent. He shall see that all orders and
resolutions of the Board of Directors are carried into effect and shall
perform all other duties necessary to his office or properly required of him
by the Board of Directors subject, however, to the right of the directors to
delegate any specific powers, except such as may by statute be exclusively
conferred upon the President, to any other officer or officers of the
Company. In the
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absence or inability to act of the Chairman of the Board, the President
shall have the duties prescribed for the Chairman of the Board subject,
however, to Section 4 of this Article IV.
6. VICE PRESIDENTS. Each Vice President shall have such powers and
perform such duties as may be assigned to him from time to time by the
Chairman of the Board or the President.
7. THE SECRETARY. The Secretary shall attend all sessions of the Board
and all meetings of the stockholders and record all votes and the minutes of
all proceedings in a book to be kept for that purpose, and shall perform
like duties for committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and meetings of the Board
of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or the President. He shall keep in safe custody the
seal of the Company and shall see that it is affixed to all documents, the
execution of which, on behalf of the Company, under its seal, is necessary
or proper, and when so affixed may attest the same.
8. THE TREASURER. The Treasurer shall, if required by the Board of
Directors, give a bond for the faithful discharge of his duties in such
amount and with such surety or sureties as the Board of Directors may
determine; the cost of any such bond, and any expenses incurred in
connection therewith, shall be borne by the Company. He shall have the
custody of the corporate funds and securities, except as otherwise provided
by the Board, and shall cause to be kept full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall
deposit all moneys and other valuable effects in the name and to the credit
of the Company in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Company as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render
to the President and the directors, at the regular meetings of the Board, or
whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Company.
9. DUTIES OF OFFICERS MAY BE DELEGATED. In the case of the absence of
any officer, or for any other reason that the Board may deem sufficient, the
President or the Board may delegate for the time being the powers or duties
of such officer to any other officer or to any director.
ARTICLE V
STOCK CERTIFICATES
1. ISSUANCE OF STOCK CERTIFICATES. The Capital Stock of the Company
shall be represented by certificates signed by the Chairman or the President
or a Vice President and by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer and sealed with the seal of the Company.
Such seal may be a facsimile, engraved or printed and where any such
certificate is signed by a transfer agent or transfer clerk and by a
registrar the signatures of any officers appearing thereon may be
facsimiles, engraved or printed.
2. LOST STOCK CERTIFICATES. The Board of Directors may by resolution
adopt, from time to time, such regulations concerning the issue of any new
or duplicate certificates for lost, stolen or destroyed stock certificates
of the Company as shall not be inconsistent with the provisions of the laws
of the State of New York as presently in effect or as they may hereafter be
amended.
3. TRANSFERS OF STOCK. Transfers of stock shall be made only on the
stock transfer books of the Company, and, except in the case of any such
certificate which has been lost, stolen or destroyed, in which case the
resolutions of the Board then in effect respecting lost, stolen or destroyed
stock certificates shall be complied with, such transfer shall only be made
upon surrender to the Company of a certificate for shares for cancellation
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer. Upon the issue of a new certificate to the person
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entitled thereto, the Company shall cancel the old certificate and record
the transaction upon its books.
4. REGULATIONS. Except to the extent that the exercise of such power
shall be prohibited or circumscribed by these By-laws, by the Certificate of
Incorporation, or other certificate filed pursuant to law, or by statute,
the Board of Directors shall have power to make such rules and regulations
concerning the issuance, registration, transfer and cancellation of stock
certificates as it shall deem appropriate.
ARTICLE VI
SEAL
The seal of the Company shall be circular in form, shall bear the legend:
"The New York Times Company--1851 Inc. 1896" and shall contain in the center
the letters NYT.
ARTICLE VII
CHECKS
All checks or demands for money and notes of the Company shall be signed by
such officer or officers or such other person or persons as the Board of
Directors may from time to time designate.
ARTICLE VIII
BOOKS OF ACCOUNT AND STOCK BOOK
The Company shall keep at its principal office correct books of account of
all its business and transactions. A book to be known as the stock book,
containing the names alphabetically arranged, of all persons who are
stockholders of the Company, showing their places of residence, the number
of shares of stock held by them respectively, the times when they
respectively became the owners thereof, and the amount paid thereon, shall
be kept at the principal office of the Company or its transfer agent.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Company shall be the calendar year unless otherwise
provided by the Board of Directors.
ARTICLE X
VOTING SECURITIES
Unless otherwise ordered by the Board of Directors, the President, or, in
the event of his absence or inability to act, the Vice Presidents, in order
of seniority or priority established by the Board or by the President,
unless and until the Board shall otherwise direct, shall have full power and
authority on behalf of the Company to attend and to act and to vote, or to
execute in the name and on behalf of the Company a proxy authorizing an
agent or attorney-in-fact for the Company to attend and to act and to vote
at any meetings of security holders of corporations in which the Company may
hold securities, and at such meetings he or his duly authorized agent or
attorney-in-fact shall possess and may exercise any and all rights and
powers incident to the ownership of such securities, and which as the owner
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thereof the Company might have possessed and exercised, if present. The
Board of Directors by resolution from time to time may confer like powers
upon any other person or persons.
ARTICLE XI
INDEMNIFICATION
1. DIRECTORS AND OFFICERS. The Company shall, to the fullest extent
permitted by applicable law as the same exists or may hereafter be in
effect, indemnify any person who is or was made or threatened to be made a
party to or is involved in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Company to procure a judgment
in its favor and an action by or in the right of any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture,
trust, employee benefit plan or any other entity, which any director or
officer of the Company is serving, has served or has agreed to serve in any
capacity at the request of the Company, by reason of the fact that such
person or such person's testator or intestate is or was or has agreed to
become a director or officer of the Company, or is or was serving or has
agreed to serve such other corporation, partnership, joint venture, trust,
employee benefit plan or other entity in any capacity, against judgments,
fines, amounts paid or to be paid in settlement, taxes or penalties, and
costs, charges and expenses, including attorneys' fees, incurred in
connection with such action or proceeding or any appeal therein; provided,
however, that no indemnification shall be provided to any such person if a
judgment or other final adjudication adverse to the director or officer
establishes that (i) his or her acts were committed in bad faith or were the
result of active and deliberate dishonesty and, in either case, were
material to the cause of action so adjudicated or (ii) he or she personally
gained in fact a financial profit or other advantage to which he or she was
not legally entitled.
2. NON-EXCLUSIVITY. Nothing contained in this Article XI shall limit
the right to indemnification and advancement of expenses to which any person
would be entitled by law in the absence of this Article, or shall be deemed
exclusive of any other rights to which such person seeking indemnification
or advancement of expenses may have or hereafter may be entitled under law,
any provision of the Certificate of Incorporation, or By-laws, any agreement
approved by the Board of Directors, or a resolution of stockholders or
directors; and the adoption of any such resolution or entering into of any
such agreement approved by the Board of Directors is hereby authorized.
3. CONTINUITY OF RIGHTS. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article XI shall (i)
apply with respect to acts or omissions occurring prior to the adoption of
this Article XI to the fullest extent permitted by law and (ii) survive the
full or partial repeal or restrictive amendment hereof with respect to
events occurring prior thereto.
ARTICLE XII
INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS WITH THE COMPANY
A director or officer of the Company shall not be disqualified by his office
from dealing or contracting with the Company either as a vendor, purchaser
or otherwise, nor shall any transaction or contract of the Company be void
or voidable by reason of the fact that any director or officer or any firm
of which any director or officer is a member or any corporation of which any
director or officer is a shareholder, officer or director, is in any way
interested in such transaction or contract, provided that such transaction
or contract is or shall be authorized, ratified or approved either (1) by a
vote of a majority of a quorum of the Board of Directors, without counting
in such majority or quorum any director so interested or member of a firm so
interested, or a shareholder, officer or director of a corporation so
interested, or (2) by the written consent, or by the vote at any
stockholders' meeting of the holders of record of a majority of all the
outstanding shares of stock of the Company entitled to
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vote on such transaction or contract; nor shall any director or officer be
liable to account to the Company for any profits realized by or from or
through any such transaction or contract of the Company authorized, ratified
or approved as aforesaid by reason of the fact that he, or any firm of which
he is a member or any corporation of which he is a shareholder, officer or
director, was interested in such transaction or contract. Nothing herein
contained shall create liability in the events above described or prevent
the authorization, ratification or approval of such transactions or
contracts in any other manner permitted by law.
ARTICLE XIII
NOTICES
Whenever, under the provisions of these By-laws, notice is required to be
given to any director, officer, or stockholder, it shall not be construed to
mean personal notice, but unless otherwise expressly stated in these
By-laws, such notice may be given in writing by depositing the same in a
post office or letter box in a postpaid sealed wrapper, addressed to such
stockholder, officer or director, at such address as appears on the books of
the Company, and such notice shall be deemed to have been given at the time
when the same was thus mailed.
ARTICLE XIV
AMENDMENT
These By-laws may be amended, altered, changed, added to or repealed by a
majority vote of all the Class B Common Stock issued and outstanding and
entitled to vote at any annual or special meeting of the stockholders,
provided that such amendments are not inconsistent with any provisions of
the Company's Certificate of Incorporation.
The Board of Directors, at any regular or at any special meeting, by a
majority vote of the whole Board, may amend, alter, change, add to or repeal
these By-laws, provided that such amendments are not inconsistent with any
provisions of the Company's Certificate of Incorporation, and provided
further that if any By-law regulating an impending election of directors is
adopted or amended or repealed by the Board, there shall be set forth in the
notice of the next stockholders meeting for the election of directors the
By-laws so adopted or amended or repealed, together with a concise statement
of the changes made.
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EXHIBIT 10.20
THE NEW YORK TIMES COMPANY
NON-EMPLOYEE DIRECTORS DEFERRAL PLAN
ARTICLE 1
NAME AND PURPOSE
The New York Times Company (the "Company") hereby establishes The New York
Times Company Non-Employee Directors Deferral Plan (the "Plan"). The purpose of
the Plan is to provide a means for the elective deferral of the payment of
compensation payable to non-employee directors of the Company.
ARTICLE 2
EFFECTIVE DATE
The Plan is effective as of September 17, 1997 (the "Effective Date").
ARTICLE 3
PARTICIPATION
Each member of the Board of Directors of the Company (the "Board") who is
not an employee of the Company or any subsidiary of the Company may participate
in the Plan (each a "Non-Employee Director").
ARTICLE 4
DEFERRAL ELECTIONS
Pursuant to the terms of the Plan, a Non-Employee Director may make an
election to defer a percentage of (i) the annual retainer fee payable in respect
of the Non-Employee Director's service on the Board and (ii) the Board meeting
fees and committee meeting fees payable in respect of the Non-Employee
Director's attendance at such meetings (collectively, "Compensation"). A
Non-Employee Director's deferral election may apply to one or both of the
foregoing categories of Compensation and may range from 10% to 100% of such
Compensation, in 10% gradations, as elected by the Non-Employee Director. Each
initial deferral election and each change to an existing deferral election shall
be made by the submission of an Election Form as follows:
(a) Prior to the Effective Date of the Plan, each Non-Employee Director may
submit an Election Form which will be given effect with respect to
Compensation payable to the Non-Employee Director after the Effective
Date of the Plan.
(b) Each Non-Employee Director initially elected or appointed to the Board
on or after the Effective Date of the Plan may submit an Election Form
prior to the later of thirty (30) calendar days following the
Non-Employee Director's election or appointment or the date on which the
Non-Employee Director receives his or her first payment of Compensation,
which Election Form will be given effect with respect to Compensation
payable after the submission of the Election Form.
(c) At any time after the election periods described in subparagraphs (a)
and (b) above, a Non-Employee Director may submit an initial Election
Form or a new Election Form superseding an existing Election Form, in
which case such initial or new Election Form will be given effect with
respect to Compensation payable after the commencement of the calendar
year immediately following the submission of such Election Form.
ARTICLE 5
BENEFICIARY DESIGNATION
Each Non-Employee Director may, at any time, designate one or more
Beneficiaries to receive amounts credited to the Non-Employee Director's
deferral account in the event of the Non-Employee
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Director's death. A Non-Employee Director may make an initial Beneficiary
designation, or change an existing Beneficiary designation, by completing and
signing a Beneficiary Designation Form and submitting it to the Secretary of the
Company. Upon acceptance by the Secretary of the Company of a Non-Employee
Director's Beneficiary Designation Form, all Beneficiary designations previously
filed shall automatically be canceled.
ARTICLE 6
MAINTENANCE OF DEFERRED ACCOUNTS
Compensation may be deferred by a Non-Employee Director under the Plan
either in the form of cash or units of common stock of the Company ("Stock")
(but in no event shall deferrals be made in a combination of cash and Stock).
Compensation deferred by a Non-Employee Director under the Plan shall be
credited to a record keeping account maintained by the Company in the
Non-Employee Director's name as follows:
(a) CASH DEFERRALS. Deferrals made in cash shall be credited to an account
("Cash Deferral Account") as of the date on which such Compensation would
otherwise have been paid to the Non-Employee Director. All amounts
credited to a Non-Employee Director's Cash Deferral Account shall accrue
interest from the time such amounts would otherwise have been paid to the
Non-Employee Director until the date that such amounts cease accruing
interest in connection with a distribution pursuant to Article 7 or
Article 12. The interest rate shall be reset annually and shall equal the
interest rate payable on one-year U.S. Treasury Bills auctioned in the
first auction of the calendar year, compounded as of the last business
day of each calendar quarter.
(b) STOCK DEFERRALS. Deferrals made in Stock shall be credited to an account
("Stock Deferral Account") as of the last day of the calendar quarter in
which such Compensation would otherwise have been paid to the
Non-Employee Director. Deferrals made in Stock shall accrue interest from
the date such Compensation would otherwise have been paid to the
Non-Employee Director to the date such amounts are converted to Stock.
All amounts credited to a Non-Employee Director's Stock Deferral Account
shall be credited using the Stock price at the close of business on the
last business day of the calendar quarter in the period in which such
Compensation would otherwise have been paid. Dividends with respect to
any such Stock credited to a Non-Employee Director's Stock Deferral
Account will be credited as cash on the dividend payment dates and shall
accrue interest from such time until such amounts are converted to Stock
pursuant to the terms of this paragraph. All such cash shall be converted
to Stock at the close of business on the last day of the calendar quarter
in which such dividends are credited to the Non-Employee's Stock Deferral
Account. The interest rate for purposes of this paragraph (b) shall be
the rate set forth in paragraph (a) above.
ARTICLE 7
METHOD OF DISTRIBUTION OF DEFERRALS
No distribution of deferrals may be made except as provided in this Article
7 and Article 12. All distributions, whether deferrals are made in cash or
Stock, shall be made in cash as provided hereunder.
(a) CASH DEFERRALS. As described in the following sentence, the full amount
credited to a Non-Employee Director's Cash Deferral Account shall be
distributed to the Non-Employee Director after the cessation of the
Non-Employee Director's service on the Board for any reason other than
death. Such distribution shall (i) be made in the form of a lump sum cash
payment within thirty (30) days following the end of the month in which
the Non-Employee Director ceases service and shall consist of all amounts
credited to such Non-Employee Director's Cash Deferral Account plus
interest accrued through the end of the month in which the Non-Employee
Director ceases service or (ii) be made in the form of substantially
equal annual cash installments
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over a period of up to ten (10) years, payable as of January 30 of each
of the selected number of years immediately following the Non-Employee
Director's cessation of service, as designated on the Distribution
Election Form submitted by the Non-Employee Director. Each such cash
installment shall consist of all amounts credited to such Non-Employee
Director's Cash Deferral Account, plus interest accrued through the end
of the calendar year prior to the year in which each such cash
installment is paid, divided by the remaining number of years during
which the amounts are to be distributed. For these purposes, a
Non-Employee Director may submit an initial Distribution Election Form,
or a new Distribution Election Form superseding an existing Distribution
Election Form, on any date which is (A) prior to the commencement of the
calendar year in which the Non-Employee Director's service ceases and (B)
at least six (6) months prior to such cessation of service. If a
Non-Employee Director has not properly completed and submitted a
Distribution Election Form, the Non-Employee Director's deferral account
shall be distributed in the form of a lump sum cash payment as described
in (i) above.
(b) STOCK DEFERRALS. As described in the following sentence, the full amount
credited to a Non-Employee Director's Stock Deferral Account shall be
distributed to the Non-Employee Director after the cessation of the
Non-Employee Director's service on the Board for any reason other than
death. Such distribution shall (i) be made in the form of a lump sum cash
payment within thirty (30) days following the end of the month in which
the Non-Employee Director ceases service and shall be calculated by
multiplying the number of units of Stock credited to the Non-Employee
Director's Stock Deferral Account multiplied by the Stock price of a
share of Stock on the last business day of the month in which the
Non-Employee Director ceases service and crediting such amount with any
dividend equivalent and interest accrued thereon through the end of the
month in which the Non-Employee Director ceases service, or (ii) be made
in the form of substantially equal annual cash installments over a period
of up to ten (10) years, payable as of January 30 of each of the selected
number of years immediately following the Non-Employee Director's
cessation of service, as designated on the Distribution Election Form
submitted by the Non-Employee Director. Each such installment shall be
calculated by multiplying the number of units of Stock credited to such
Non-Employee Director's Stock Deferral Account by the Stock price of a
Share of Stock on the last business day of the calendar year prior to the
year in which each such installment is paid, and crediting such amount
with any dividend equivalent and interest accrued thereon through the end
of the calendar year prior to the year in which each such installment is
paid, dividing the total thereof by the remaining number of years during
which the amounts are to be distributed. For these purposes, a
Non-Employee Director may submit an initial Distribution Election Form,
or a new Distribution Election Form superseding an existing Distribution
Election Form, on any date which is (A) prior to the commencement of the
calendar year in which the Non-Employee Director's service ceases and (B)
at least six (6) months prior to such cessation of service. If a
Non-Employee Director has not properly completed and submitted a
Distribution Election Form, the Non-Employee Director's deferral account
shall be distributed in the form of a lump sum cash payment as described
in (i) above.
Notwithstanding the foregoing, at the written request of a Non-Employee
Director, the Nominating Committee of the Board (in its role as Plan
administrator), may in its sole discretion, accelerate the payment of amounts
credited to the Non-Employee Director's deferral account, upon a showing of
unforeseeable emergency by such Non-Employee Director, taking into account the
Non-Employee Director's other financial resources. Such distribution shall be
made in the form of a lump sum cash payment and shall not exceed the lesser of
(x) the amount necessary to meet the financial need created by the unforeseeable
emergency or (y) all amounts credited to such Non-Employee Director's deferral
account plus interest accrued through the end of the month immediately preceding
the month in which such request was made. To the extent the amount necessary to
meet the Non-Employee Director's unforeseeable emergency exceeds the amount
credited to his Cash Deferral Account, the amount of units of Stock necessary to
meet such unforeseeable emergency shall be paid in cash and shall be valued as
of the day
3
<PAGE>
such request is made. For these purposes, "unforeseeable emergency" is a severe
financial hardship resulting from extraordinary and unanticipated circumstances
arising as a result of one or more recent events beyond the control of the
Non-Employee Director. In any event, payment may not be made to the extent such
emergency is or may be relieved: (1) through reimbursement or compensation by
insurance or otherwise; (2) by liquidation of the Non-Employee Director's
assets, to the extent the liquidation of such assets would not, itself, cause
severe financial hardship; and (3) by cessation of deferrals under the Plan.
Examples of what are not considered to be unforeseeable emergencies include the
payment of a child's tuition expenses or the desire to purchase a home.
In the event of a Non-Employee Director's death either before or after the
Non-Employee Director's cessation of service on the Board, all amounts then
credited to the Non-Employee Director's Cash Deferral Account and Stock Deferral
Account shall be distributed to the Non-Employee Director's designated
Beneficiaries in the form of a lump sum cash payment within thirty (30) days
after the end of the month in which such death occurred or as soon as
practicable thereafter and shall consist of all amounts credited to such
Non-Employee Director's deferral accounts plus any dividend equivalents and
interest accrued through the end of the month in which such death occurred.
Units of Stock in a Non-Employee Director's Stock Deferral Account shall be
valued as of the last business day of the month in which such death occurred. If
the Non-Employee Director has not designated a Beneficiary or the Non-Employee
Director's designated Beneficiary(ies) do not survive the Non-Employee Director,
the full amount of the Non-Employee Director's deferral account shall be paid to
the Non-Employee Director's spouse, or if there is no spouse, to the
Non-Employee Director's estate.
ARTICLE 8
UNFUNDED STATUS OF THE PLAN
A Non-Employee Director shall not have any interest in any amount credited
to his or her deferral account until it is distributed in accordance with the
Plan. Distributions under the Plan shall be made only from the general assets of
the Company. All amounts deferred under the Plan shall remain the sole property
of the Company, subject to the claims of its general creditors and available for
its use for whatever purposes are desired. With respect to amounts deferred, a
Non-Employee Director is merely a general creditor of the Company; and the
obligation of the Company hereunder is purely contractual and shall not be
funded or secured in any way.
ARTICLE 9
NON-ALIENABILITY AND NON-TRANSFERABILITY
The rights of a Non-Employee Director to the payment of amounts credited to
his or her deferral account shall not be assigned, transferred, pledged or
encumbered or be subject in any manner to alienation or anticipation. A
Non-Employee Director may not borrow against amounts credited to the
Non-Employee Director's account and such amounts shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, change, garnishment, execution or levy of any kind, whether
voluntary or involuntary, prior to distribution.
ARTICLE 10
STATEMENT OF ACCOUNT
Statements will be sent to each Non-Employee Director within thirty (30)
days of the beginning of each calendar year indicating the balance of the
Non-Employee Director's account as of the end of the previous calendar year.
4
<PAGE>
ARTICLE 11
ADMINISTRATION
The Plan is intended to be self-effectuating and does not require the
exercise of discretion by the Company. However, to the extent necessary, the
Nominating Committee of the Board shall act as the Plan administrator for
purposes of resolving any ambiguities, claims or disputes arising with respect
to the Plan or any deferrals under the Plan. As such the Nominating Committee is
authorized to make any rulings and determinations that it deems to be
appropriate and consistent with the terms and intent of the Plan and all such
rulings and determinations shall be final and binding upon all parties for all
purposes. Any member of the Nominating Committee making a claim or request to
the Nominating Committee with respect to his or her rights or interests under
the Plan shall recuse himself or herself from the Nominating Committee's
determination with respect to such claim or request.
ARTICLE 12
AMENDMENT AND TERMINATION
The Plan may, at any time, be amended, modified or terminated by the Board.
No amendment, modification or termination shall, without the consent of a
Non-Employee Director, adversely affect such Non-Employee Director's rights with
respect to amounts accrued under his or her deferral account. Notwithstanding
the foregoing or anything else to the contrary contained in the Plan, as a
consequence of any such amendment, modification or termination, the Board may
provide in its sole discretion that the account of any Non-Employee Director may
be paid on an accelerated basis without regard to the tax effect that it may
have for the Non-Employee Director or his Beneficiary(ies) or estate.
ARTICLE 13
NOTICES
All notices and forms to be submitted to the Company hereunder shall be
delivered to the attention of the Secretary of the Company.
5
<PAGE>
Exhibit 11
THE NEW YORK TIMES COMPANY
STATEMENTS OF COMPUTATION OF PRIMARY
AND FULLY DILUTED NET INCOME PER SHARE
(Dollars and shares in thousands, except per share data)
<TABLE>
<CAPTION>
------------------------------ ------------------------------
Quarter Ended Nine Months Ended
Sept. 28, 1997 Sept. 29, 1996 Sept. 28, 1997 Sept. 29, 1996
============================== ==============================
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding 95,893 97,008 96,631 97,472
========= ========= ========= =========
Net effect of dilutive stock options and
retirement units 3,753 -- 3,475 --
--------- --------- --------- ---------
Total primary average shares outstanding 99,646 97,008 100,106 97,472
========= ========= ========= =========
Net Income $ 46,228 $ (47,684) $ 183,016 $ 31,842
Less cumulative preference stock dividends (24) (24) (72) (72)
--------- --------- --------- ---------
Total $ 46,204 $ (47,708) $ 182,944 $ 31,770
========= ========= ========= =========
Primary earnings per share $ 0.46 $ (0.49) $ 1.83 $ 0.33
========= ========= ========= =========
FULLY DILUTED
Average shares outstanding 95,893 97,008 96,631 97,472
Net effect of dilutive stock options and
retirement units 4,059 2,305 3,975 2,034
--------- --------- --------- ---------
Total fully diluted average shares outstanding 99,952 99,313 100,606 99,506
========= ========= ========= =========
Net Income $ 46,228 $ (47,684) $ 183,016 $ 31,842
Less cumulative preference stock dividends (24) (24) (72) (72)
--------- --------- --------- ---------
Total $ 46,204 $ (47,708) $ 182,944 $ 31,770
========= ========= ========= =========
Fully diluted earnings per share $ 0.46 $ (0.48) $ 1.82 $ 0.32
========= ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> SEP-28-1997
<CASH> 37,843
<SECURITIES> 0
<RECEIVABLES> 340,118
<ALLOWANCES> 27,540
<INVENTORY> 30,198
<CURRENT-ASSETS> 474,371
<PP&E> 2,271,947
<DEPRECIATION> 888,007
<TOTAL-ASSETS> 3,531,047
<CURRENT-LIABILITIES> 636,897
<BONDS> 0
0
1,753
<COMMON> 11,296
<OTHER-SE> 1,630,633
<TOTAL-LIABILITY-AND-EQUITY> 3,531,047
<SALES> 0
<TOTAL-REVENUES> 2,097,989
<CGS> 0
<TOTAL-COSTS> 1,041,755
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,406
<INCOME-PRETAX> 296,259
<INCOME-TAX> 113,243
<INCOME-CONTINUING> 183,016
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 183,016
<EPS-PRIMARY> 1.83
<EPS-DILUTED> 1.82
</TABLE>
