Sale of About Group – Discontinued Operations
On September 24, 2012, the first day of the fiscal fourth quarter, the Company completed the sale of the About Group for $300 million in cash, plus a net working capital adjustment of approximately $17 million. As a result of the sale, the Company recorded a gain of $96.7 million ($61.9 million after tax) in the fourth quarter of 2012. The net after-tax proceeds from the sale were approximately $291 million.
Fourth-Quarter Results from Continuing Operations
Total revenues increased 5.2 percent to $575.8 million from $547.4 million. Advertising revenues decreased 3.1 percent, while circulation and other revenues increased 16.1 percent and 4.8 percent, respectively. Excluding the additional week, estimated total revenues decreased 0.7 percent, with advertising revenues down 8.3 percent and circulation and other revenues up 8.6 percent and 2.1 percent, respectively.
Print advertising revenues decreased 5.6 percent and digital advertising revenues rose 5.1 percent. Excluding the additional week, estimated print and digital advertising revenues decreased 10.2 percent and 1.7 percent, respectively, largely due to the uneven economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace. Circulation revenues rose mainly as growth in digital subscriptions and the increase in print circulation prices in the first half of 2012 at The New York Times and The Boston Globe offset a decline in print copies sold.
Operating costs increased 6.3 percent to $480.5 million from $452.1 million. Excluding depreciation, amortization and severance, operating costs increased 7.3 percent to $451.3 million from $420.6 million. In addition to the effect of the additional week, costs rose mainly due to higher promotion costs, benefits expense and various other costs, offset in part by lower compensation costs, including stock-based compensation, and raw materials expense.
Digital businesses principally include NYTimes.com, BostonGlobe.com and Boston.com. In the fourth quarter of 2012, digital advertising revenues increased 5.1 percent to $69.0 million from $65.7 million. For the full year of 2012, digital advertising revenues increased 0.2 percent to $214.8 million from $214.5 million in 2011. Excluding the additional week, estimated digital advertising revenues decreased 1.7 percent in the fourth quarter and 1.9 percent for the full year of 2012.