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TheStreet Open House

The New York Times Company Reports 2012 Fourth-Quarter And Full-Year Results

The New York Times Company, a leading global, multimedia news and information company with 2012 revenues of $2.0 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, NYTimes.com, BostonGlobe.com, Boston.com and related properties. The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news and information.

This press release can be downloaded from www.nytco.com

   
Exhibits: Condensed Consolidated Statements of Operations
Revenues by Operating Segment
Advertising Revenues by Category
Footnotes
Reconciliation of Non-GAAP Information
 

 

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share data)
       
  Fourth Quarter   Full Year
2012   2011   % Change 2012   2011   % Change
(14 weeks) (13 weeks) (53 weeks) (52 weeks)

Revenues

Advertising $ 279,975 $ 289,039 -3.1% $ 898,078 $ 954,531 -5.9%
Circulation 257,816 222,065 16.1% 952,968 862,982 10.4%
Other (a) 38,027   36,291   4.8% 139,034   135,117   2.9%
Total revenues 575,818 547,395 5.2% 1,990,080 1,952,630 1.9%
Operating costs
Production costs 224,110 206,920 8.3% 832,228 810,569 2.7%
Selling, general and administrative costs 235,114 221,501 6.1% 901,405 886,232 1.7%
Depreciation and amortization (b) 21,237   23,660   -10.2% 96,758   94,224   2.7%
Total operating costs 480,461 452,081 6.3% 1,830,391 1,791,025 2.2%
Pension settlement expense (c) 48,729 N/A 48,729 N/A
Other expense (d) 2,620 4,500 -41.8% 2,620 4,500 -41.8%
Write-down of assets (e) N/A 9,225 N/A
Pension withdrawal expense (f)     N/A   4,228   N/A
Operating profit 44,008 90,814 -51.5% 108,340 143,652 -24.6%
Gain on sale of investments (g) 164,630 N/A 220,275 71,171 *
Write-down of investments (h) N/A 5,500 N/A
Income from joint ventures 927 4,054 -77.1% 3,004 28 *
Premium on debt redemption (i) N/A 46,381 N/A
Interest expense, net 16,402   15,461   6.1% 62,815   85,243   -26.3%
Income from continuing operations before income taxes 193,163 79,407 * 263,304 83,227 *
Income tax expense 75,775   28,423   * 103,482   31,932   *
Income from continuing operations 117,388 50,984 * 159,822 51,295 *

Income/(loss) from discontinued operations, net

of income taxes (j)

59,789   7,921   * (26,483 ) (91,519 ) -71.1%
Net income/(loss) 177,177 58,905 * 133,339 (40,224 ) *

Net (income)/loss attributable to the noncontrolling interest

(267 ) 40   * (166 ) 555   *

Net income/(loss) attributable to The New York

Times Company common stockholders

$ 176,910   $ 58,945   * $ 133,173   $ (39,669 ) *
 

Amounts attributable to The New York Times

Company common stockholders:

Income from continuing operations $ 117,121 $ 51,024 * $ 159,656 $ 51,850 *

Income/(loss) from discontinued operations, net of

income taxes

59,789   7,921   * (26,483 ) (91,519 ) -71.1%
Net income/(loss) $ 176,910   $ 58,945   * $ 133,173   $ (39,669 ) *
 
Average number of common shares outstanding:
Basic 148,461 147,451 0.7% 148,147 147,190 0.7%
Diluted 154,685 149,887 3.2% 152,693 152,007 0.5%
 

Basic earnings/(loss) per share attributable to

The New York Times Company common stockholders:

Income from continuing operations $ 0.79 $ 0.35 * $ 1.08 $ 0.35 *

Income/(loss) from discontinued operations, net of

income taxes

0.40   0.05   * (0.18 ) (0.62 ) -71.0%
Net income/(loss) $ 1.19   $ 0.40   * $ 0.90   $ (0.27 ) *
 

Diluted earnings/(loss) per share attributable to

The New York Times Company common stockholders:

Income from continuing operations $ 0.76 $ 0.34 * $ 1.04 $ 0.34 *

Income/(loss) from discontinued operations, net of

income taxes

0.38   0.05   * (0.17 ) (0.60 ) -71.7%
Net income/(loss) $ 1.14   $ 0.39   * $ 0.87   $ (0.26 ) *
 
* Represents an increase or decrease in excess of 100%.  
See footnotes page for additional information.

 

 

THE NEW YORK TIMES COMPANY

REVENUES BY OPERATING SEGMENT AND ADVERTISING REVENUES BY CATEGORY
(Dollars in thousands)
                         
    2012
    % Change         % Change
Fourth Quarter vs. 2011 Full Year vs. 2011
(14 weeks) (53 weeks)

The New York Times Media Group

Advertising $ 226,461 -3.5% $ 711,829 -5.9%
Circulation 216,123 18.1% 795,037 12.7%
Other 25,531   1.1% 88,475   -5.1%
Total $ 468,115   5.7% $ 1,595,341   2.6%
 

New England Media Group

Advertising $ 53,514 -1.6% $ 186,249 -6.1%
Circulation 41,693 6.8% 157,931 0.1%
Other 12,496   13.3% 50,559   20.8%
Total $ 107,703   3.1% $ 394,739   -0.8%
 

Total Company

Advertising $ 279,975 -3.1% $ 898,078 -5.9%
Circulation 257,816 16.1% 952,968 10.4%
Other (a) 38,027   4.8% 139,034   2.9%
Total $ 575,818   5.2% $ 1,990,080   1.9%
                         
See footnotes page for additional information.
 
         
2012
% Change % Change
Fourth Quarter vs. 2011 Full Year vs. 2011
(14 weeks) (53 weeks)
National $ 190,663 -3.4% $ 601,630 -5.9%
Retail 52,602 -2.9% 153,217 -3.8%
Classified:
Help-Wanted 6,343 -4.0% 26,781 -2.5%
Real Estate 9,567 -10.9% 39,057 -16.2%
Automotive 5,958 9.4% 23,057 -2.5%
Other 7,469   -1.3% 28,780   -6.5%
Total Classified 29,337 -3.4% 117,675 -8.4%
Other 7,373   2.0% 25,556   -5.8%
Total Company $ 279,975   -3.1% $ 898,078   -5.9%
 

 
THE NEW YORK TIMES COMPANY
FOOTNOTES
(Dollars in thousands)
 
(a) Other revenues consist primarily of revenues from news services/syndication, commercial printing and distribution, rental income, digital archives and direct mail advertising services.
 
(b) Includes $6.7 million of accelerated depreciation expense in the first quarter of 2012 for certain assets at the Worcester Telegram & Gazette's facility in Millbury, Mass., associated with the consolidation of most of its printing into The Boston Globe's facility in Boston, Mass., in the second quarter of 2012.
 
(c) In the fourth quarter of 2012, the Company recorded a $48.7 million non-cash settlement charge in connection with the Company's immediate pension benefit offer to certain former employees.
 
(d) In the fourth quarter of 2012, the Company recorded a $2.6 million charge in connection with a legal settlement. In the fourth quarter of 2011, the Company recorded a $4.5 million charge for a retirement and consulting agreement in connection with the retirement of the Company's former chief executive officer at the end of 2011.
 
(e) In the second quarter of 2011, the Company recorded a $9.2 million non-cash charge for the write-down of certain assets held for sale.
 
(f) In the second quarter of 2011, the Company recorded a $4.2 million charge for a pension withdrawal obligation under a multiemployer pension plan at The Boston Globe.
 
(g) In the fourth quarter of 2012, the Company recorded a $164.6 million gain on the sale of its ownership interest in Indeed.com, a search engine for jobs. In the second quarter of 2012, the Company recorded a $37.8 million gain on the sale of its remaining 210 units in Fenway Sports Group. In the first quarter of 2012, the Company recorded a $17.8 million gain on the sale of 100 of its units in Fenway Sports Group.
 
In the third quarter of 2011, the Company recorded a $65.3 million gain on the sale of 390 of its units in Fenway Sports Group. In the first quarter of 2011, the Company recorded a $5.9 million gain on the sale of a portion of the Company's ownership interest in Indeed.com.
 
(h) In the first and third quarters of 2012, the Company recorded a $4.9 million and $0.6 million non-cash charge, respectively, for the write-down of certain investments.
 
(i) In the third quarter of 2011, the Company recorded a $46.4 million charge in connection with the prepayment of its $250 million 14.053% notes.
 
(j) On September 24, 2012, the Company completed the sale of the About Group, consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses. The results of the About Group have been classified as discontinued operations for all periods presented.
 
On January 6, 2012, the Company completed the sale of its Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses. The results of the Regional Media Group have been classified as discontinued operations for all periods presented.
 
The following tables summarize the results of operations presented as discontinued operations for both the About Group and the Regional Media Group:
      Fourth Quarter
2012       2011
      Regional             Regional      
About Media About Media
Group Group Total Group Group Total
Revenues $ $ $ $ 26,116 $ 69,449 $ 95,565
Total operating costs 17,809 58,789 76,598
Write-down of assets       3,116     3,116
Pre-tax income 5,191 10,660 15,851
Income tax expense       1,994   5,936   7,930

Income from discontinued operations, net of

income taxes

3,197 4,724 7,921
Gain/(loss) on sale, net of income taxes:
Gain/(loss) on sale 96,675 (724 ) 95,951
Income tax expense 34,785   1,377   36,162      
Gain/(loss) on sale, net of income taxes 61,890   (2,101 ) 59,789      

Income/(loss) from discontinued operations,

net of income taxes

$ 61,890   $ (2,101 ) $ 59,789   $ 3,197   $ 4,724   $ 7,921
 

 

THE NEW YORK TIMES COMPANY

FOOTNOTES (continued)

(Dollars in thousands)

                           
      Full Year
2012 2011
Regional Regional
About Media About Media
Group Group Total Group Group Total
Revenues $ 74,970 $ 6,115 $ 81,085 $ 110,826 $ 259,945 $ 370,771
Total operating costs 51,140 8,017 59,157 67,475 235,032 302,507
Write-down of assets 194,732     194,732   3,116   152,093   155,209  
Pre-tax (loss)/income (170,902 ) (1,902 ) (172,804 ) 40,235 (127,180 ) (86,945 )
Income tax (benefit)/expense (60,065 ) (736 ) (60,801 ) 15,453   (10,879 ) 4,574  

(Loss)/income from discontinued operations,

net of income taxes

(110,837 ) (1,166 ) (112,003 ) 24,782 (116,301 ) (91,519 )
Gain/(loss) on sale, net of income taxes:
Gain/(loss) on sale 96,675 (5,441 ) 91,234
Income tax expense/(benefit) 34,785   (29,071 ) * 5,714        
Gain on sale, net of income taxes 61,890   23,630   85,520        

(Loss)/income from discontinued operations,

net of income taxes

$ (48,947 ) $ 22,464   $ (26,483 ) $ 24,782   $ (116,301 ) $ (91,519 )

* Tax benefit is primarily due to a tax deduction for goodwill, which was previously non-deductible, triggered upon the sale of the Regional Media Group.

 

 
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION
 
 
In this release, the Company has included non-GAAP financial information with respect to diluted earnings per share from continuing operations excluding severance and special items; operating profit before depreciation, amortization, severance and special items (if any); operating costs before depreciation, amortization, severance and raw materials; revenues excluding the estimated effect of the additional week in the 2012 fiscal calendar; and the effective tax rate on income from continuing operations excluding severance and special items. The Company has included these non-GAAP financial measures because management reviews them on a regular basis and uses them to evaluate and manage the performance of the Company's operations. In addition, because the Company's 2012 fiscal fourth quarter and year included an additional week (14 weeks and 53 weeks) compared with the 2011 fiscal fourth quarter and year (13 weeks and 52 weeks), the Company has disclosed revenues excluding the estimated effect of the additional week in 2012. Management believes that, for the reasons outlined below, these non-GAAP financial measures provide useful information to investors as a supplement to reported diluted earnings/(loss) per share from continuing operations, operating profit/(loss), operating costs, revenues and the effective tax rate. However, these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not be viewed as alternative or superior measures of GAAP results.
 
Diluted earnings/(loss) per share from continuing operations excluding severance and special items provide useful information in evaluating the Company's period-to-period performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing operating activities. Operating profit/(loss) before depreciation, amortization, severance and special items (if any) is useful in evaluating the Company's ongoing performance of its businesses as it excludes the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance and raw materials. Total operating costs excluding these items provide investors with helpful supplemental information on the Company's underlying operating costs that is used by management in its financial and operational decision-making. The effective tax rate on income from continuing operations excluding severance and special items provides investors with helpful supplemental information in evaluating the Company's period-to-period diluted earnings per share excluding severance and special items, by highlighting the relative impact of the tax rates on this measure in 2012 and 2011.
 

Reconciliations of these non-GAAP financial measures from, respectively, diluted earnings/(loss) per share from continuing operations, operating profit, operating costs, revenues and the effective tax rate on income from continuing operations, the most directly comparable GAAP items, are set out in the tables below.

Reconciliation of diluted earnings per share from continuing operations excluding severance and special items

                       
Fourth Quarter Full Year
2012       2011       % Change 2012 2011 % Change
Diluted earnings per share from continuing operations $     0.76 $     0.34 * $     1.04 $   0.34 *
Add:
Severance 0.03 0.03 0.07 0.04
Special items:
Accelerated depreciation 0.02
Pension settlement expense 0.18 0.18
Other expense 0.01 0.02 0.01 0.02
Write-down of assets 0.04
Pension withdrawal expense 0.02
Gain on sale of investments (0.66 ) (0.87 ) (0.27 )
Write-down of investments 0.02
Premium on debt redemption         0.18    

Diluted earnings per share from continuing

operations excluding severance and special items

$     0.32   $     0.39   -17.9% $     0.47   $   0.37  

27.0%

 
* Represents an increase in excess of 100%.
 

 
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
                       

Reconciliation of operating profit before depreciation & amortization, severance and special items

 
Fourth Quarter Full Year
2012 2011 % Change 2012 2011 % Change
(14 weeks) (13 weeks) (53 weeks) (52 weeks)
Operating profit $ 44,008 $ 90,814 -51.5% $ 108,340 $ 143,652

-24.6

%

Add:
Depreciation & amortization 21,237 23,660 96,758 94,224
Severance 7,923 7,853 18,051 12,852
Special items:
Pension settlement expense 48,729 48,729
Other expense 2,620 4,500 2,620 4,500
Write-down of assets 9,225
Pension withdrawal expense         4,228      

Operating profit before depreciation & amortization,

severance and special items

$ 124,517   $ 126,827   -1.8% $ 274,498   $ 268,681   2.2 %
 
 

Reconciliation of operating costs before depreciation & amortization, severance and raw materials

 
Fourth Quarter Full Year  
2012 2011 % Change 2012 2011 % Change  
(14 weeks) (13 weeks) (53 weeks) (52 weeks)
Operating costs $ 480,461 $ 452,081 6.3% $ 1,830,391 $ 1,791,025 2.2 %
Less:
Depreciation & amortization 21,237 23,660 96,758 94,224
Severance 7,923   7,853     18,051   12,852      

Operating costs before depreciation & amortization

and severance

451,301 420,568 7.3% 1,715,582 1,683,949 1.9 %
Less:
Raw materials 37,975   37,525     136,526   138,622      

Operating costs before depreciation & amortization,

severance and raw materials

$ 413,326   $ 383,043   7.9% $ 1,579,056   $ 1,545,327   2.2 %
 

 
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
                 

Reconciliation of revenues excluding the estimated effect of the additional week

     
Fourth Quarter

2012

      Additional

2012

As Reported

Week

Adjusted

2011 % Change

Total Company

(14 weeks) (13 weeks) (13 weeks)
Advertising:
Print $ 210,949 $ (10,422 ) $ 200,527 $ 223,352 -10.2%
Digital 69,026   (4,435 ) 64,591   65,687   -1.7%
Total advertising 279,975 (14,857 ) 265,118 289,039 -8.3%
Circulation 257,816 (16,704 ) 241,112 222,065 8.6%
Other 38,027   (964 ) 37,063   36,291   2.1%
Total revenues $ 575,818   $ (32,525 ) $ 543,293   $ 547,395   -0.7%
 

The New York Times Media Group

Advertising $ 226,461 $ (11,613 ) $ 214,848 $ 234,660 -8.4%
Circulation 216,123 (13,903 ) 202,220 183,032 10.5%
Other 25,531   (326 ) 25,205   25,260   -0.2%
Total revenues $ 468,115   $ (25,842 ) $ 442,273   $ 442,952   -0.2%
 

New England Media Group

Advertising $ 53,514 $ (3,244 ) $ 50,270 $ 54,379 -7.6%
Circulation 41,693 (2,801 ) 38,892 39,033 -0.4%
Other 12,496   (638 ) 11,858   11,031   7.5%
Total revenues $ 107,703   $ (6,683 ) $ 101,020   $ 104,443   -3.3%
 
Full Year

2012

Additional

2012

As Reported

Week

Adjusted

2011 % Change

Total Company

(53 weeks) (52 weeks) (52 weeks)
Advertising:
Print $ 683,306 $ (10,422 ) $ 672,884 $ 740,081 -9.1%
Digital 214,772   (4,435 ) 210,337   214,450   -1.9%
Total advertising 898,078 (14,857 ) 883,221 954,531 -7.5%
Circulation 952,968 (16,704 ) 936,264 862,982 8.5%
Other 139,034   (964 ) 138,070   135,117   2.2%
Total revenues $ 1,990,080   $ (32,525 ) $ 1,957,555   $ 1,952,630   0.3%
 

The New York Times Media Group

Advertising $ 711,829 $ (11,613 ) $ 700,216 $ 756,148 -7.4%
Circulation 795,037 (13,903 ) 781,134 705,163 10.8%
Other 88,475   (326 ) 88,149   93,263   -5.5%
Total revenues $ 1,595,341   $ (25,842 ) $ 1,569,499   $ 1,554,574   1.0%
 

New England Media Group

Advertising $ 186,249 $ (3,244 ) $ 183,005 $ 198,383 -7.8%
Circulation 157,931 (2,801 ) 155,130 157,819 -1.7%
Other 50,559   (638 ) 49,921   41,854   19.3%
Total revenues $ 394,739   $ (6,683 ) $ 388,056   $ 398,056   -2.5%
 

 
THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION (continued)
(Dollars in thousands)
     

Reconciliation of effective tax rate on income from continuing operations excluding severance and special items

 
      2012   2011

Pre-

   

After

 

Effective

Pre-

After

Effective

Tax

Tax

Tax

Tax Rate

Tax

Tax

Tax

Tax Rate

Income from continuing operations $   193,163 $   75,775 $   117,388 39.2 % $   79,407 $   28,423 $   50,984 35.8 %
Add:
Severance 7,923 3,525 4,398 7,853 3,184 4,669
Special items:
Pension settlement expense 48,729 20,413 28,316
Other expense 2,620 1,098 1,522 4,500 1,883 2,617
Gain on sale of investment (164,630 ) (62,230 ) (102,400 )          
 

Income from continuing operations excluding

severance and special items

$   87,805   $   38,581   $   49,224   43.9 % $   91,760   $   33,490   $   58,270   36.5 %
 




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