The New York Times Company
2017 Annual Report
The truth is hard.
The truth is hidden.
The truth must be pursued.
The truth is hard to hear.
The truth is rarely simple.
The truth isn’t so obvious.
The truth is necessary.
The truth can’t be glossed over.
The truth has no agenda.
The truth can’t be manufactured.
The truth doesn’t take sides.
The truth isn’t red or blue.
The truth is hard to accept.
The truth pulls no punches.
The truth is powerful.
The truth is under attack.
The truth is worth defending.
The truth requires taking a stand.
The truth is more important now than ever.
TO OUR
SHAREHOLDERS,
Two thousand and seventeen was another successful year for The New York Times Company, with every
part of the organization contributing to that success.
Our newsroom and Opinion departments in particular had brilliant years with serious and probing coverage
of the first year of the Trump administration. And, true to our mission to cover the world with breadth
and depth, our biggest story this year wasn’t even a conventional political one. Instead, it was about the
explosive surge of revelations about sexual harassment that set off a national and global firestorm of reaction
in every corner of the globe that continues to this day.
The Times remains unrivaled in our commitment to boots-on-the-ground, deeply reported and expert
journalism. We’ve doubled down on our investment in that journalism. To that end, in 2017, The Times had
1,450 journalists, speaking 57 different languages, reporting from 160 countries.
We’re very pleased that our mission to help people understand the world through the journalism we produce
has propelled us toward our business goal of making The New York Times the most successful digital news
subscription business in the world.
Our focus on growing deeply engaged audiences and converting those readers to subscribers has never
been sharper. Today, we are clearly a subscription-first business and ended 2017 with more than $1 billion of
subscription revenue.
As part of an effort to continue to iterate and improve our execution and coordination, we reorganized our
digital operations and promoted Meredith Kopit Levien to the role of chief operating officer.
We also saw transition at the top of the company. At the year’s end, Arthur O. Sulzberger Jr. retired as
publisher, a position he held since 1992. He remains chairman of the company’s board of directors.
In his 25 years as publisher, Mr. Sulzberger transformed The Times into an international, digital-first news
organization with a global audience of more than 135 million people and 3.6 million paid subscriptions, by
far the most in Times history. During his tenure, The Times won an astonishing 60 Pulitzer Prizes, nearly
doubling the paper’s Pulitzer count.
A. G. Sulzberger became publisher on Jan. 1, 2018. A proven leader and force for change in the organization,
A. G. now serves as the principal steward of the editorial independence, excellence and long-term prosperity
of The New York Times.
Last year The Times won three Pulitzer Prizes:
feature writing for a New York Times Magazine story about Sam Siatta, a Marine struggling to adjust to
life after war;
international reporting for an investigative series on Russia’s covert projection of power;
and breaking news photography of President Rodrigo Duterte’s brutal campaign in the Philippines. (This
is The Times’s fifth photography Pulitzer Prize in four years.)
2017 AnnuAl RepoRt
One of the reasons millions of subscribers pay for Times journalism is its breadth. The New York Times has
always offered comprehensive coverage of U.S. national and political news but The Times now offers
much more.
In February of last year, we introduced “The Daily,” an audio news report that became the most downloaded
new podcast on Apple for the year. New York magazine’s Vulture called “The Daily” “a triumph, plain and
simple.” It reinvented the podcast news format and showcases the deep bench of New York Times talent.
The Times also led the news industry in virtual reality and 360 video. Since November 2016, The Times
produced a 360-degree video each day with more than 200 Times journalists filing these videos from 57
countries.
Beyond our outstanding investigative coverage of the sexual harassment issue, this year our newsroom also
mobilized to cover a number of large-scale global news stories, providing unrivaled coverage of the Las
Vegas mass shooting, earthquakes in Mexico, and back-to-back hurricanes, while covering the rest of the
world — from the economy, to Washington, to the arts and more.
We continue to follow the strategy we outlined in “Our Path Forward” and believe we are well on track to
meet our goal of $800 million of annual digital revenue by 2020.
We thank you for your continued support.
Mark Thompson
President and C.E.O.
February 27, 2018
2017 AnnuAl RepoRt
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2017
Commission file number 1-5837
THE NEW YORK TIMES COMPANY
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of
incorporation or organization)
620 Eighth Avenue, New York, N.Y.
(Address of principal executive offices)
13-1102020
(I.R.S. Employer
Identification No.)
10018
(Zip code)
Registrant’s telephone number, including area code: (212) 556-1234
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Class A Common Stock of $.10 par value
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: Not Applicable
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Exchange Act. Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Non-accelerated filer
Accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to section
13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes
No
The aggregate worldwide market value of Class A Common Stock held by non-affiliates, based on the closing price
on June 25, 2017, the last business day of the registrant’s most recently completed second quarter, as reported on the New
York Stock Exchange, was approximately $2.7 billion. As of such date, non-affiliates held 66,205 shares of Class B
Common Stock. There is no active market for such stock.
The number of outstanding shares of each class of the registrant’s common stock as of February 23, 2018 (exclusive
of treasury shares), was as follows: 164,017,902 shares of Class A Common Stock and 803,763 shares of Class B Common
Stock.
Documents incorporated by reference
Portions of the Proxy Statement relating to the registrant’s 2018 Annual Meeting of Stockholders, to be held on
April 19, 2018, are incorporated by reference into Part III of this report.
INDEX TO THE NEW YORK TIMES COMPANY 2017 ANNUAL REPORT ON FORM 10-K
ITEM NO.
PART I
Forward-Looking Statements
Business
1
Overview
Products
Subscriptions and Audience
Advertising
Competition
Other Businesses
Print Production and Distribution
Raw Materials
Employees and Labor Relations
Available Information
1A Risk Factors
1B Unresolved Staff Comments
2
3
Properties
Legal Proceedings
4 Mine Safety Disclosures
Executive Officers of the Registrant
PART II
5 Market for the Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
6
Selected Financial Data
7 Management’s Discussion and Analysis of
Financial Condition and Results of Operations
7A Quantitative and Qualitative Disclosures About Market Risk
8
9
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
9A Controls and Procedures
9B Other Information
PART III
10 Directors, Executive Officers and Corporate Governance
11
12
Executive Compensation
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
13 Certain Relationships and Related Transactions, and Director Independence
14
Principal Accountant Fees and Services
PART IV
15
16
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signatures
1
1
1
2
2
3
4
4
4
5
5
5
6
14
15
15
15
16
17
19
23
47
48
106
106
106
107
107
107
108
108
109
111
112
PART I
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including the sections titled “Item 1A — Risk Factors” and “Item 7 —
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking
statements that relate to future events or our future financial performance. We may also make written and oral
forward-looking statements in our Securities and Exchange Commission (“SEC”) filings and otherwise. We have
tried, where possible, to identify such statements by using words such as “believe,” “expect,” “intend,” “estimate,”
“anticipate,” “will,” “could,” “project,” “plan” and similar expressions in connection with any discussion of future
operating or financial performance. Any forward-looking statements are and will be based upon our then-current
expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such
statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results
to differ materially from those anticipated in any such statements. You should bear this in mind as you consider
forward-looking statements. Factors that we think could, individually or in the aggregate, cause our actual results to
differ materially from expected and historical results include those described in “Item 1A — Risk Factors” below, as
well as other risks and factors identified from time to time in our SEC filings.
ITEM 1. BUSINESS
OVERVIEW
The New York Times Company (the “Company”) was incorporated on August 26, 1896, under the laws of the
State of New York. The Company and its consolidated subsidiaries are referred to collectively in this Annual Report
on Form 10-K as “we,” “our” and “us.”
We are a global media organization focused on creating, collecting and distributing high-quality news and
information. Our continued commitment to premium content and journalistic excellence makes The New York Times
brand a trusted source of news and information for readers and viewers across various platforms. Recognized widely
for the quality of our reporting and content, our publications have been awarded many industry and peer accolades,
including 122 Pulitzer Prizes and citations, more than any other news organization.
The Company includes newspapers, print and digital products and investments. We have one reportable
segment with businesses that include:
• our newspaper, The New York Times (“The Times”);
• our websites, including NYTimes.com;
• our mobile applications, including The Times’s core news applications, as well as interest-specific
applications, including our Crossword and Cooking products; and
•
related businesses, such as The Times news services division; our product review and recommendation
website, Wirecutter; our digital archive distribution; NYT Live (our live events business); our digital
marketing agencies and other products and services under The Times brand.
We generate revenues principally from subscriptions and advertising. Subscription revenues consist of revenues
from subscriptions to our print and digital products (which include our news products, as well as our Crossword and
Cooking products) and single-copy sales of our print newspaper. Advertising revenue is derived from the sale of our
advertising products and services on our print and digital platforms. Revenue information for the Company appears
under “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Revenues, operating profit and identifiable assets of our foreign operations are not significant.
During 2017, we continued to make significant investments in our journalism, while taking further steps to
position our organization to operate more efficiently in a digital environment. During the year, The Times continued
to break stories and produce investigative reports that sparked global conversations on wide-ranging topics. We also
launched groundbreaking digital journalism projects and a popular daily news podcast, The Daily, and created
THE NEW YORK TIMES COMPANY – P. 1
special inserts in our print newspaper, including a monthly section dedicated to children. In addition, we continued to
create innovative digital advertising solutions across our platforms and expand our creative services offerings.
We believe that the significant growth over the last year in subscriptions to our products demonstrates the
success of our “subscription-first” strategy and the willingness of our readers to pay for high-quality journalism. We
had approximately 3.6 million subscriptions to our products as of December 31, 2017, more than at any point in our
history.
During the year, we exited our joint venture investments in Women in the World, LLC, a live-event conference
business, and Donahue Malbaie Inc. (“Malbaie”), a Canadian newsprint company, and we are in the process of exiting
our joint venture investment in Madison Paper Industries (“Madison”), a partnership that previously operated a
paper mill. These investments were accounted for under the equity method. For additional information on these
investments, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and Note 5 of the Notes to the Consolidated Financial Statements.
The Company sold the New England Media Group in 2013 and the results of operations for this business have
been presented as discontinued operations for all periods presented. See Note 13 of the Notes to the Consolidated
Financial Statements for additional information regarding our discontinued operations.
PRODUCTS
The Company’s principal business consists of distributing content generated by our newsroom through our
digital and print platforms. In addition, we distribute selected content on third-party platforms.
Our core news website, NYTimes.com, was launched in 1996. Since 2011, we have charged consumers for
content provided on this website and our core news mobile application. Digital subscriptions can be purchased
individually or through group corporate or group education subscriptions. Our metered model offers users free
access to a set number of articles per month and then charges users for access to content beyond that limit. In addition
to subscriptions to our news product, we offer standalone subscriptions to other digital products, namely our
Crossword and Cooking products. Certain digital news product subscription packages include complimentary access
to our Crossword and Cooking products.
The Times’s print edition, a daily (Mon. - Sat.) and Sunday newspaper in the United States, commenced
publication in 1851. The Times also has an international edition that is tailored and edited for global audiences. First
published in 2013 and previously called the International New York Times, the international edition succeeded the
International Herald Tribune, a leading daily newspaper that commenced publishing in Paris in 1887. Our print
newspapers are sold in the United States and around the world through individual home-delivery subscriptions, bulk
subscriptions (primarily by schools and hotels) and single-copy sales. All print home-delivery subscribers are entitled
to receive unlimited digital access.
SUBSCRIPTIONS AND AUDIENCE
Our content reaches a broad audience through our print, web and mobile platforms. As of December 31, 2017,
we had approximately 3.6 million paid subscriptions across 208 countries and territories to our print and digital
products.
Paid digital-only subscriptions totaled approximately 2,644,000 as of December 31, 2017, an increase of
approximately 42% compared with December 25, 2016. This amount includes standalone paid subscriptions to our
Crossword and Cooking products, which totaled approximately 413,000 as of December 31, 2017.
The number of paid digital-only subscriptions also includes estimated group corporate and group education
subscriptions (which collectively represent approximately 7% of total paid digital subscriptions to our news
products). The number of paid group subscriptions is derived using the value of the relevant contract and a
discounted basic subscription rate. The actual number of users who have access to our products through group
subscriptions is substantially higher.
In the United States, The Times had the largest daily and Sunday print circulation of all seven-day newspapers
for the three-month period ended September 30, 2017, according to data collected by the Alliance for Audited Media
(“AAM”), an independent agency that audits circulation of most U.S. newspapers and magazines.
For the fiscal year ended December 31, 2017, The Times’s average print circulation (which includes paid and
qualified circulation of the newspaper in print) was approximately 540,000 for weekday (Monday to Friday) and
P. 2 – THE NEW YORK TIMES COMPANY
1,066,000 for Sunday. (Under AAM’s reporting guidance, qualified circulation represents copies available for
individual consumers that are either non-paid or paid by someone other than the individual, such as copies delivered
to schools and colleges and copies purchased by businesses for free distribution.)
Internationally, average circulation for the international edition of our newspaper (which includes paid
circulation of the newspaper in print and electronic replica editions) for the fiscal years ended December 31, 2017, and
December 25, 2016, was approximately 173,000 (estimated) and 197,000, respectively. These figures follow the
guidance of Office de Justification de la Diffusion, an agency based in Paris and a member of the International
Federation of Audit Bureaux of Circulations that audits the circulation of most newspapers and magazines in France.
The final 2017 figure will not be available until April 2018.
According to comScore Media Metrix, an online audience measurement service, in 2017, NYTimes.com had a
monthly average of approximately 97 million unique visitors in the United States on either desktop/laptop computers
or mobile devices. Globally, including the United States, NYTimes.com had a 2017 monthly average of approximately
136 million unique visitors on either desktop/laptop computers or mobile devices, according to internal data
estimates.
ADVERTISING
We have a comprehensive portfolio of advertising products and services that we provide across print, web and
mobile platforms. Our advertising revenue is divided into three main categories:
Display Advertising
Display advertising is principally from advertisers promoting products, services or brands, such as financial
institutions, movie studios, department stores, American and international fashion and technology. In print, column-
inch ads are priced according to established rates, with premiums for color and positioning. The Times had the largest
market share in 2017 in print advertising revenue among a national newspaper set that consists of USA Today, The
Wall Street Journal and The Times, according to MediaRadar, an independent agency that measures advertising sales
volume and estimates advertising revenue.
On our web and mobile platforms, display advertising comprises banners, video, rich media and other
interactive ads. Display advertising also includes branded content on The Times’s platforms. Branded content is
longer form marketing content that is distinct from The Times’s editorial content. In 2017, digital and print display
advertising represented approximately 87% of our advertising revenues.
Classified and Other Advertising
Classified advertising includes line ads sold in the major categories of real estate, help wanted, automotive and
other. In print, classified advertisers pay on a per-line basis. On our web and mobile platforms, classified advertisers
pay on either a per-listing basis for bundled listing packages, or as an add-on to their print ad.
Other advertising primarily includes creative services fees associated with our branded content studio and our
digital marketing agencies, including HelloSociety and Fake Love, each of which the Company acquired in 2016;
advertising revenue generated by our product review and recommendation website, Wirecutter, which the Company
also acquired in 2016; revenues from preprinted advertising, also known as free-standing inserts; revenues generated
from branded bags in which our newspapers are delivered; and advertising revenues from our news services
business. In 2017, digital and print classified and other advertising represented approximately 13% of our advertising
revenues.
Our business is affected in part by seasonal patterns in advertising, with generally higher advertising volume in
the fourth quarter due to holiday advertising.
THE NEW YORK TIMES COMPANY – P. 3
COMPETITION
Our print, web and mobile products compete for subscriptions and advertising with other media in their
respective markets. Competition for subscription revenue and readership is generally based upon platform, format,
content, quality, service, timeliness and price, while competition for advertising is generally based upon audience
levels and demographics, advertising rates, service, targeting capabilities and advertising results.
Our print newspaper competes for subscriptions and advertising primarily with national newspapers such as
The Wall Street Journal and The Washington Post; newspapers of general circulation in New York City and its
suburbs; other daily and weekly newspapers and television stations and networks in markets in which The Times is
circulated; and some national news and lifestyle magazines. The international edition of our newspaper competes
with international sources of English-language news, including the Financial Times, Time, Bloomberg Business Week
and The Economist.
As our industry continues to experience a shift from print to digital media, our products face competition for
audience, subscriptions and advertising from a wide variety of digital media, including news and other information
websites and mobile applications, news aggregation sites, sites that cover niche content, social media platforms, and
other forms of media. In addition, we compete for advertising on digital advertising networks and exchanges and
real-time bidding and other programmatic buying channels.
Our websites and mobile applications most directly compete for audience, subscriptions and advertising with
other U.S. news and information websites and mobile applications, including The Washington Post, The Wall Street
Journal, CNN, Yahoo! News, Buzzfeed, HuffPost, Vox and Vice. We also compete for audience and advertising against
customized news feeds and news aggregation websites such as Facebook Newsfeed, Apple News and Google News.
Internationally, our websites and mobile applications compete against international online sources of English-
language news, including BBC News, CNN, The Guardian, the Financial Times, The Wall Street Journal, The
Economist, HuffPost and Reuters.
OTHER BUSINESSES
We derive revenue from other businesses, which primarily include:
• The Times news services division, which transmits articles, graphics and photographs from The Times and
other publications to approximately 1,800 newspapers, magazines and websites in over 100 countries and
territories worldwide. It also comprises a number of other businesses that primarily include digital archive
distribution, which licenses electronic databases to resellers in the business, professional and library markets;
magazine licensing; news digests; book development and rights and permissions;
• The Company’s NYT Live business, a platform for our live journalism that convenes thought leaders from
business, academia and government at conferences and events to discuss topics ranging from education to
sustainability to the luxury business; and
• Wirecutter, a product review and recommendation website acquired in October 2016 that serves as a guide to
technology gear, home products and other consumer goods. This website generates affiliate referral revenue
(revenue generated by offering direct links to merchants in exchange for a portion of the sale price), which we
record as other revenues.
PRINT PRODUCTION AND DISTRIBUTION
The Times is currently printed at our production and distribution facility in College Point, N.Y., as well as under
contract at 26 remote print sites across the United States. We also utilize excess printing capacity at our College Point
facility for commercial printing. The Times is delivered to newsstands and retail outlets in the New York metropolitan
area through a combination of third-party wholesalers and our own drivers. In other markets in the United States and
Canada, The Times is delivered through agreements with other newspapers and third-party delivery agents.
The international edition of The Times is printed under contract at 39 sites throughout the world and is sold in
over 130 countries and territories. It is distributed through agreements with other newspapers and third-party delivery
agents.
P. 4 – THE NEW YORK TIMES COMPANY
RAW MATERIALS
The primary raw materials we use are newsprint and coated paper, which we purchase from a number of North
American and European producers. A significant portion of our newsprint is purchased from Resolute Forest
Products Inc., a large global manufacturer of paper, market pulp and wood products with which we shared
ownership in Malbaie before we sold our interest in the fourth quarter of 2017.
In 2017 and 2016, we used the following types and quantities of paper:
(In metric tons)
Newsprint
Coated and Supercalendared Paper(1)
2017
90,500
16,500
2016
97,800
19,500
(1) The Times uses a mix of coated and supercalendered paper for The New York Times Magazine, and coated paper for T: The New York
Times Style Magazine.
EMPLOYEES AND LABOR RELATIONS
We had approximately 3,790 full-time equivalent employees as of December 31, 2017.
As of December 31, 2017, nearly half of our full-time equivalent employees were represented by unions. The
following is a list of collective bargaining agreements covering various categories of the Company’s employees and
their corresponding expiration dates. As indicated below, one collective bargaining agreement, under which less than
1% of our full-time equivalent employees are covered, will expire within one year and negotiations for a new contract
are ongoing. We cannot predict the timing or the outcome of these negotiations.
Employee Category
Machinists
Mailers
Typographers
Drivers
NewsGuild of New York
Paperhandlers
Pressmen
Stereotypers
Expiration Date
March 30, 2018
March 30, 2019
March 30, 2020
March 30, 2020
March 30, 2021
March 30, 2021
March 30, 2021
March 30, 2021
AVAILABLE INFORMATION
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all
amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are made available,
free of charge, on our website at http://www.nytco.com, as soon as reasonably practicable after such reports have
been filed with or furnished to the SEC.
THE NEW YORK TIMES COMPANY – P. 5
ITEM 1A. RISK FACTORS
You should carefully consider the risk factors described below, as well as the other information included in this
Annual Report on Form 10-K. Our business, financial condition or results of operations could be materially adversely
affected by any or all of these risks, or by other risks or uncertainties not presently known or currently deemed
immaterial, that may adversely affect us in the future.
We face significant competition in all aspects of our business.
We operate in a highly competitive environment. We compete for subscription and advertising revenue with
both traditional publishers and other content providers. Competition among companies offering online content is
intense, and new competitors can quickly emerge. Some of our current and potential competitors may have greater
resources than we do, which may allow them to compete more effectively than us.
Our ability to compete effectively depends on many factors both within and beyond our control, including
among others:
• our ability to continue delivering high-quality journalism and content that is interesting and relevant to our
audience;
•
the popularity, usefulness, ease of use, performance and reliability of our digital products compared with
those of our competitors;
•
the engagement of our current users with our print and digital products, and our ability to reach new users;
• our ability to develop, maintain and monetize our products;
•
the pricing of our products;
• our marketing and selling efforts, including our ability to differentiate our products from those of our
competitors;
• our ability to provide marketers with a compelling return on their investments;
• our ability to attract, retain, and motivate talented employees, including journalists and product and
technology specialists;
• our ability to manage and grow our operations in a cost-effective manner; and
• our reputation and brand strength relative to those of our competitors.
Our success depends on our ability to respond and adapt to changes in technology and consumer behavior.
Technology in the media industry continues to evolve rapidly. Advances in technology have led to an increased
number of methods for the delivery and consumption of news and other content. These developments are also
driving changes in the preferences and expectations of consumers as they seek more control over how they consume
content.
Changes in technology and consumer behavior pose a number of challenges that could adversely affect our
revenues and competitive position. For example, among others:
• we may be unable to develop products for mobile devices or other digital platforms that consumers find
engaging, that work with a variety of operating systems and networks and that achieve a high level of market
acceptance;
• we may introduce new products or services, or make changes to existing products and services, that are not
favorably received by consumers;
•
there may be changes in user sentiment about the quality or usefulness of our existing products or concerns
related to privacy, security or other factors;
• news aggregation websites and customized news feeds may reduce our traffic levels by creating a
disincentive for users to visit our websites or use our digital products;
•
consumers’ increased reliance on mobile devices for the consumption of news and other content may
contribute to a decline in engagement with our products;
P. 6 – THE NEW YORK TIMES COMPANY
•
•
changes implemented by social media platforms and search engines, including those affecting how content is
displayed and/or prioritized, could affect our business;
failure to successfully manage changes in search engine optimization and social media traffic to increase our
digital presence and visibility may reduce our traffic levels;
• we may be unable to maintain or update our technology infrastructure in a way that meets market and
consumer demands; and
•
the distribution of our content on delivery platforms of third parties may lead to limitations on monetization
of our products, the loss of control over distribution of our content and loss of a direct relationship with our
audience.
Responding to these changes may require significant investment. We may be limited in our ability to invest
funds and resources in digital products, services or opportunities, and we may incur expense in building, maintaining
and evolving our technology infrastructure.
Unless we are able to use new and existing technologies to distinguish our products and services from those of
our competitors and develop in a timely manner compelling new products and services that engage users across
platforms, our business, financial condition and prospects may be adversely affected.
Our advertising revenues are affected by numerous factors, including economic conditions, market dynamics,
audience fragmentation and evolving digital advertising trends.
We derive substantial revenues from the sale of advertising in our products. Advertising spending is sensitive
to overall economic conditions, and our advertising revenues could be adversely affected if advertisers respond to
weak and uneven economic conditions by reducing their budgets or shifting spending patterns or priorities, or if they
are forced to consolidate or cease operations.
In determining whether to buy advertising, our advertisers consider the demand for our products,
demographics of our reader base, advertising rates, results observed by advertisers, and alternative advertising
options.
Although print advertising revenue continues to represent a majority of our total advertising revenue (57% of
our total advertising revenues in 2017), the overall proportion continues to decline. The increased popularity of digital
media among consumers, particularly as a source for news and other content, has driven a corresponding shift in
demand from print advertising to digital advertising. However, our digital advertising revenue has not replaced, and
may not replace in full, print advertising revenue lost as a result of the shift.
The increasing number of digital media options available, including through social networking platforms and
news aggregation websites, has expanded consumer choice significantly, resulting in audience fragmentation.
Competition from new content providers and platforms, some of which charge lower rates than we do or have greater
audience reach and targeting capabilities, and the significant increase in inventory of digital advertising space, have
affected and will likely continue to affect our ability to attract and retain advertisers and to maintain or increase our
advertising rates. In recent years, large digital platforms, such as Facebook, Google and Amazon, which have greater
audience reach and targeting capabilities than we do, have commanded an increased share of the digital display
advertising market, and we anticipate that this trend will continue.
The digital advertising market itself continues to undergo significant change. Digital advertising networks and
exchanges, real-time bidding and other programmatic buying channels that allow advertisers to buy audiences at
scale are playing a more significant role in the advertising marketplace and may cause further downward pricing
pressure. New delivery platforms may also lead to a loss of distribution and pricing control and loss of a direct
relationship with consumers. In addition, changes in the standards for the delivery of digital advertising could also
negatively affect our digital advertising revenues.
Technologies have been developed, and will likely continue to be developed, that enable consumers to
circumvent digital advertising on websites and mobile devices. Advertisements blocked by these technologies are
treated as not delivered and any revenue we would otherwise receive from the advertiser for that advertisement is
lost. Increased adoption of these technologies could adversely affect our advertising revenues, particularly if we are
unable to develop effective solutions to mitigate their impact.
THE NEW YORK TIMES COMPANY – P. 7
As the digital advertising market continues to evolve, our ability to compete successfully for advertising
budgets will depend on, among other things, our ability to engage and grow digital audiences and prove the value of
our advertising and the effectiveness of our platforms to advertisers.
We may experience further downward pressure on our advertising revenue margins.
The character of our digital advertising business continues to change, as demand for newer forms of
advertising, such as branded content and other customized advertising, and video advertising, increases. The margin
on revenues from some of these newer advertising forms is generally lower than the margin on revenues we generate
from our print advertising and traditional digital display advertising. Consequently, we may experience further
downward pressure on our advertising revenue margins as a greater percentage of advertising revenues comes from
these newer forms.
The inability of the Company to retain and grow our subscriber base could adversely affect our results of operations
and business.
Revenue from subscriptions to our print and digital products makes up a majority of our total revenue.
Subscription revenue is sensitive to discretionary spending available to subscribers in the markets we serve, as well as
economic conditions. To the extent poor economic conditions lead consumers to reduce spending on discretionary
activities, our ability to retain current and obtain new subscribers could be hindered, thereby reducing our
subscription revenue. In addition, the growth rate of new subscriptions to our news products that are driven by
significant news events, such as an election, may not be sustainable.
Print subscriptions have declined over the last several years, primarily due to increased competition from
digital media formats (which are often free to users), higher subscription rates and a growing preference among many
consumers to receive all or a portion of their news from sources other than a print newspaper. If we are unable to
offset continued revenue declines resulting from falling print subscriptions with revenue from home-delivery price
increases, our print subscription revenue will be adversely affected.
Subscriptions to content provided on our digital platforms generate substantial revenue for us, and our future
growth depends upon our ability to retain and grow our digital subscription base and audience. To do so will require
us to evolve our subscription model, address changing consumer demands and developments in technology and
improve our digital product offering while continuing to deliver high-quality journalism and content that is
interesting and relevant to readers. There is no assurance that we will be able to successfully maintain and increase
our digital subscriber base or that we will be able to do so without taking steps such as reducing pricing or incurring
subscription acquisition costs that would affect our margin or profitability.
Failure to execute cost-control measures successfully could adversely affect our profitability.
Over the last several years, we have taken steps to reduce operating costs across the Company, and we plan to
continue our cost-management efforts. Some of these cost management efforts require significant up-front investment.
If we do not achieve expected savings from these efforts, our total operating costs will be greater than anticipated. In
addition, if we do not manage cost-management efforts properly, such efforts may affect the quality of our products
and therefore our ability to generate future revenues. And to the extent our cost-management efforts result in
reductions in staff and employee compensation and benefits, our ability to attract and retain key employees could be
adversely affected.
Significant portions of our expenses are fixed costs that neither increase nor decrease proportionately with
revenues. In addition, our ability to make short-term adjustments to manage our costs or to make changes to our
business strategy may be limited by certain of our collective bargaining agreements. If we are not able to implement
further cost-control efforts or reduce our fixed costs sufficiently in response to a decline in our revenues, our results of
operations will be adversely affected.
P. 8 – THE NEW YORK TIMES COMPANY
The size and volatility of our pension plan obligations may adversely affect our operations, financial condition and
liquidity.
We sponsor several single-employer defined benefit pension plans. Although we have frozen participation and
benefits under all but two of these qualified pension plans, and have taken other steps to reduce the size and volatility
of our pension plan obligations, our results of operations will be affected by the amount of income or expense we
record for, and the contributions we are required to make to, these plans.
We are required to make contributions to our plans to comply with minimum funding requirements imposed
by laws governing those plans. As of December 31, 2017, our qualified defined benefit pension plans were
underfunded by approximately $69 million. Our obligation to make additional contributions to our plans, and the
timing of any such contributions, depends on a number of factors, many of which are beyond our control. These
include: legislative changes; assumptions about mortality; and economic conditions, including a low interest rate
environment or sustained volatility and disruption in the stock and bond markets, which impact discount rates and
returns on plan assets.
As a result of required contributions to our qualified pension plans, we may have less cash available for
working capital and other corporate uses, which may have an adverse impact on our results of operations, financial
condition and liquidity.
In addition, the Company sponsors several non-qualified pension plans, with unfunded obligations totaling
$245 million. Although we have frozen participation and benefits under these plans, and have taken other steps to
reduce the size and volatility of our obligations under these plans, a number of factors, including changes in discount
rates or mortality tables, may have an adverse impact on our results of operations and financial condition.
Our participation in multiemployer pension plans may subject us to liabilities that could materially adversely affect
our results of operations, financial condition and cash flows.
We participate in, and make periodic contributions to, various multiemployer pension plans that cover many of
our current and former production and delivery union employees. Our required contributions to these plans could
increase because of a shrinking contribution base as a result of the insolvency or withdrawal of other companies that
currently contribute to these plans, the inability or failure of withdrawing companies to pay their withdrawal liability,
low interest rates, lower than expected returns on pension fund assets or other funding deficiencies. Our withdrawal
liability for any multiemployer pension plan will depend on the nature and timing of any triggering event and the
extent of that plan’s funding of vested benefits.
If a multiemployer pension plan in which we participate has significant underfunded liabilities, such
underfunding will increase the size of our potential withdrawal liability. In addition, under federal pension law,
special funding rules apply to multiemployer pension plans that are classified as “endangered,” “critical” or “critical
and declining.” If plans in which we participate are in critical status, benefit reductions may apply and/or we could
be required to make additional contributions.
We have recorded significant withdrawal liabilities with respect to multiemployer pension plans in which we
formerly participated (primarily in connection with the sales of the New England Media Group in 2013 and the
Regional Media Group in 2012) and may record additional liabilities in the future. In addition, we have recorded
withdrawal liabilities for actual and estimated partial withdrawals from several plans in which we continue to
participate. Until demand letters from some of the multiemployer plans’ trustees are received, the exact amount of the
withdrawal liability will not be fully known and, as such, a difference from the recorded estimate could have an
adverse effect on our results of operations, financial condition and cash flows. Several of the multiemployer plans in
which we participate are specific to the newspaper industry, which continues to undergo significant pressure. A
withdrawal by a significant percentage of participating employers may result in a mass withdrawal declaration by the
trustees of one or more of these plans, which would require us to record additional withdrawal liabilities.
If, in the future, we elect to withdraw from these plans or if we trigger a partial withdrawal due to declines in
contribution base units or a partial cessation of our obligation to contribute, additional liabilities would need to be
recorded that could have an adverse effect on our business, results of operations, financial condition or cash flows.
THE NEW YORK TIMES COMPANY – P. 9
Security breaches and other network and information systems disruptions could affect our ability to conduct our
business effectively and damage our reputation.
Our systems store and process confidential subscriber, employee and other sensitive personal and Company
data, and therefore maintaining our network security is of critical importance. In addition, we rely on the technology
and systems provided by third-party vendors (including cloud-based service providers) for a variety of operations,
including encryption and authentication technology, employee email, domain name registration, content delivery to
customers, administrative functions (including payroll processing and certain finance and accounting functions) and
other operations.
We regularly face attempts by third parties to breach our security and compromise our information technology
systems, and we believe these attempts are increasing in number and in technical sophistication. These attackers may
use a blend of technology and social engineering techniques (including denial of service attacks, phishing attempts
intended to induce our employees and users to disclose information or unwittingly provide access to systems or data
and other techniques), with the goal of service disruption or data exfiltration. Information security threats are
constantly evolving, increasing the difficulty of detecting and successfully defending against them. To date, no
incidents have had, either individually or in the aggregate, a material adverse effect on our business, financial
condition or results of operations.
In addition, our systems, and those of third parties upon which our business relies, may be vulnerable to
interruption or damage that can result from natural disasters, fires, power outages, acts of terrorism or other similar
events.
We have implemented controls and taken other preventative measures designed to strengthen our systems
against attacks, including measures designed to reduce the impact of a security breach at our third-party vendors.
Although the costs of the controls and other measures we have taken to date have not had a material effect on our
financial condition, results of operations or liquidity, there can be no assurance as to the costs of additional controls
and measures that we may conclude are necessary in the future.
There can also be no assurance that the actions, measures and controls we have implemented will be effective
against future attacks or be sufficient to prevent a future security breach or other disruption to our network or
information systems, or those of our third-party providers. Such an event could result in a disruption of our services,
improper disclosure of personal data or confidential information, or theft or misuse of our intellectual property, all of
which could harm our reputation, require us to expend resources to remedy such a security breach or defend against
further attacks, divert management’s attention and resources or subject us to liability under laws that protect personal
data, or otherwise adversely affect our business.
Our brand and reputation are key assets of the Company, and negative perceptions or publicity could adversely affect
our business, financial condition and results of operations.
The New York Times brand is a key asset of the Company, and we believe that it contributes significantly to the
success of our business. We also believe that our continued success depends on our ability to preserve, grow and
leverage the value of our brand. We believe that we have a powerful and trusted brand with an excellent reputation
for high-quality journalism and content, but our brand could be damaged by incidents that erode consumer trust. For
example, to the extent consumers perceive our journalism to be less reliable, whether as a result of negative publicity
or otherwise, our ability to attract readers and advertisers may be hindered. In addition, we may introduce new
products or services that users do not like and which may negatively affect our brand. We also may fail to provide
adequate customer service, which could erode confidence in our brand. Our reputation could also be damaged by
failures of third-party vendors we rely on in many contexts. Maintaining and enhancing our brand may require us to
make significant investments, which may not be successful. To the extent our brand and reputation are damaged by
these or other incidents, our revenues and profitability could be adversely affected.
Our international operations expose us to economic and other risks inherent in foreign operations.
We have news bureaus and other offices around the world, and our print, web and mobile products are
generally available globally. We are focused on further expanding the international scope of our business, and face the
inherent risks associated with doing business abroad, including:
• effectively managing and staffing foreign operations, including complying with local laws and regulations in
each different jurisdiction;
P. 10 – THE NEW YORK TIMES COMPANY
• ensuring the safety and security of our journalists and other employees working in foreign locations;
• navigating local customs and practices;
• government policies and regulations that restrict the digital flow of information, which could block access to,
or the functionality of, our products;
• protecting and enforcing our intellectual property and other rights under varying legal regimes;
•
complying with international laws and regulations, including those governing consumer privacy and the
collection, use, retention, sharing and security of consumer and staff data;
• economic uncertainty, volatility in local markets and political or social instability;
•
restrictions on foreign ownership, foreign investment or repatriation of funds;
• higher-than-anticipated costs of entry; and
•
currency exchange rate fluctuations.
Adverse developments in any of these areas could have an adverse impact on our business, financial condition
and results of operations. We may, for example, incur increased costs necessary to comply with existing and newly
adopted laws and regulations or penalties for any failure to comply. In addition, we have limited experience in
developing and marketing our digital products in international regions and could be at a disadvantage compared
with local and multinational competitors.
A significant increase in the price of newsprint, or significant disruptions in our newsprint supply chain or
newspaper printing and distribution channels, would have an adverse effect on our operating results.
The cost of raw materials, of which newsprint is the major component, represented approximately 4% of our
total operating costs in 2017. The price of newsprint has historically been volatile and could increase as a result of
various factors, including:
•
•
•
•
•
a reduction in the number of newsprint suppliers due to restructurings, bankruptcies and consolidations;
increases in supplier operating expenses due to rising raw material or energy costs or other factors;
currency volatility;
duties on certain paper imports from Canada into United States; and
inability to maintain existing relationships with our newsprint suppliers.
We also rely on suppliers for deliveries of newsprint, and the availability of our newsprint supply may be
affected by various factors, including labor unrest, transportation issues and other disruptions that may affect
deliveries of newsprint.
Outside the New York area, The Times is printed and distributed under contracts with print and distribution
partners across the United States and internationally. Financial pressures, newspaper industry economics or other
circumstances affecting these print and distribution partners could lead to reduced operations or consolidations of
print sites and/or distribution routes, which could increase the cost of printing and distributing our newspapers.
If newsprint prices increase significantly or we experience significant disruptions in our newsprint supply chain
or newspaper printing and distribution channels, our operating results may be adversely affected.
Acquisitions, divestitures, investments and other transactions could adversely affect our costs, revenues,
profitability and financial position.
In order to position our business to take advantage of growth opportunities, we engage in discussions, evaluate
opportunities and enter into agreements for possible acquisitions, divestitures, investments and other transactions.
We may also consider the acquisition of, or investment in, specific properties, businesses or technologies that fall
outside our traditional lines of business and diversify our portfolio, including those that may operate in new and
developing industries, if we deem such properties sufficiently attractive.
THE NEW YORK TIMES COMPANY – P. 11
Acquisitions involve significant risks and uncertainties, including:
• difficulties in integrating acquired operations (including cultural challenges associated with integrating
employees from the acquired company into our organization);
• diversion of management attention from other business concerns or resources;
• use of resources that are needed in other parts of our business;
• possible dilution of our brand or harm to our reputation;
•
•
the potential loss of key employees;
risks associated with integrating financial reporting and internal control systems; and
• other unanticipated problems and liabilities.
Competition for certain types of acquisitions, particularly digital properties, is significant. Even if successfully
negotiated, closed and integrated, certain acquisitions or investments may prove not to advance our business strategy
and may fall short of expected return on investment targets, which could adversely affect our business, results of
operations and financial condition.
In addition, we have divested and may in the future divest certain assets or businesses that no longer fit with
our strategic direction or growth targets. Divestitures involve significant risks and uncertainties that could adversely
affect our business, results of operations and financial condition. These include, among others, the inability to find
potential buyers on favorable terms, disruption to our business and/or diversion of management attention from other
business concerns, loss of key employees and possible retention of certain liabilities related to the divested business.
Finally, we have made investments in companies, and we may make similar investments in the future.
Investments in these businesses subject us to the operating and financial risks of these businesses and to the risk that
we do not have sole control over the operations of these businesses. Our investments are generally illiquid and the
absence of a market may inhibit our ability to dispose of them. In addition, if the book value of an investment were to
exceed its fair value, we would be required to recognize an impairment charge related to the investment.
A significant number of our employees are unionized, and our business and results of operations could be adversely
affected if labor agreements were to further restrict our ability to maximize the efficiency of our operations.
Nearly half of our full-time equivalent work force is unionized. As a result, we are required to negotiate the
wage, benefits and other terms and conditions of employment with many of our employees collectively. Our results
could be adversely affected if future labor negotiations or contracts were to further restrict our ability to maximize the
efficiency of our operations. If we are unable to negotiate labor contracts on reasonable terms, or if we were to
experience labor unrest or other business interruptions in connection with labor negotiations or otherwise, our ability
to produce and deliver our products could be impaired. In addition, our ability to make adjustments to control
compensation and benefits costs, change our strategy or otherwise adapt to changing business needs may be limited
by the terms and duration of our collective bargaining agreements.
Failure to comply with laws and regulations, including with respect to privacy, data protection and consumer
marketing practices, could adversely affect our business.
Our business is subject to government regulation in the jurisdictions in which we operate, and our websites,
which are available worldwide, may be subject to laws regulating the Internet even in jurisdictions where we do not
do business. Among others, we are subject to laws and regulations with respect to online privacy and the collection
and use of consumer data, as well as laws and regulations with respect to consumer marketing practices.
Various federal and state laws and regulations, as well as the laws of foreign jurisdictions, govern the collection,
use, retention, processing, sharing and security of the data we receive from and about our users. Failure to protect
confidential user data, provide users with adequate notice of our privacy policies or obtain valid consent could
subject us to liabilities imposed by these jurisdictions. Existing privacy-related laws and regulations are evolving and
subject to potentially differing interpretations, and various federal and state legislative and regulatory bodies, as well
as foreign legislative and regulatory bodies, may expand current or enact new laws regarding privacy and data
protection. For example, the General Data Protection Regulation recently adopted by the European Union will impose
more stringent data protection requirements, and significant penalties for noncompliance, beginning on May 25, 2018.
In addition, the European Union’s forthcoming ePrivacy Regulation is expected to impose stricter data protection and
P. 12 – THE NEW YORK TIMES COMPANY
data collection requirements, which we expect will require certain changes in our marketing and advertising
practices. The actions needed to comply with existing and newly adopted laws and regulations, or penalties for any
failure to comply, could adversely affect our results of operations.
In addition, various federal and state laws and regulations, as well as the laws of foreign jurisdictions, govern
the manner in which we market our subscription products, including with respect to pricing and subscription
renewals. These laws and regulations often differ across jurisdictions. Failure to comply with these laws and
regulations could result in claims against us by governmental entities or others, damage to our reputation and/or
increased costs to change our practices.
Any failure, or perceived failure, by us to comply with laws and regulations that govern our business
operations, as well as any failure, or perceived failure, by us to comply with our own posted policies, could result in
claims against us by governmental entities or others and/or increased costs to change our practices. They could also
result in negative publicity and a loss of confidence in us by our users and advertisers. All of these potential
consequences could adversely affect our business and results of operations.
Our business may suffer if we cannot protect our intellectual property.
Our business depends on our intellectual property, including our valuable brands, content, services and
internally developed technology. We believe our proprietary trademarks and other intellectual property rights are
important to our continued success and our competitive position. Unauthorized parties may attempt to copy or
otherwise unlawfully obtain and use our content, services, technology and other intellectual property, and we cannot
be certain that the steps we have taken to protect our proprietary rights will prevent any misappropriation or
confusion among consumers and merchants, or unauthorized use of these rights.
Advancements in technology have made the unauthorized duplication and wide dissemination of content
easier, making the enforcement of intellectual property rights more challenging. In addition, as our business and the
risk of misappropriation of our intellectual property rights have become more global in scope, we may not be able to
protect our proprietary rights in a cost-effective manner in a multitude of jurisdictions with varying laws.
If we are unable to procure, protect and enforce our intellectual property rights, including maintaining and
monetizing our intellectual property rights to our content, we may not realize the full value of these assets, and our
business and profitability may suffer. In addition, if we must litigate in the United States or elsewhere to enforce our
intellectual property rights or determine the validity and scope of the proprietary rights of others, such litigation may
be costly and divert the attention of our management.
We have been, and may be in the future, subject to claims of intellectual property infringement that could adversely
affect our business.
We periodically receive claims from third parties alleging infringement, misappropriation or other violations of
their intellectual property rights. These third parties often include patent holding companies seeking to monetize
patents they have purchased or otherwise obtained through asserting claims of infringement or misuse. Even if we
believe that these claims of intellectual property infringement are without merit, defending against the claims can be
time-consuming, be expensive to litigate or settle, and cause diversion of management attention.
These intellectual property infringement claims, if successful, may require us to enter into royalty or licensing
agreements on unfavorable terms, use more costly alternative technology or otherwise incur substantial monetary
liability. Additionally, these claims may require us to significantly alter certain of our operations. The occurrence of
any of these events as a result of these claims could result in substantially increased costs or otherwise adversely
affect our business.
We may not have access to the capital markets on terms that are acceptable to us or may otherwise be limited in our
financing options.
From time to time the Company may need or desire to access the long-term and short-term capital markets to
obtain financing. The Company’s access to, and the availability of, financing on acceptable terms and conditions in
the future will be impacted by many factors, including, but not limited to: (1) the Company’s financial performance;
(2) the Company’s credit ratings or absence of a credit rating; (3) liquidity of the overall capital markets and (4) the
state of the economy. There can be no assurance that the Company will continue to have access to the capital markets
on terms acceptable to it.
THE NEW YORK TIMES COMPANY – P. 13
In addition, macroeconomic conditions, such as continued or increased volatility or disruption in the credit
markets, could adversely affect our ability to obtain financing to support operations or to fund acquisitions or other
capital-intensive initiatives.
Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, through a family trust, and this
control could create conflicts of interest or inhibit potential changes of control.
We have two classes of stock: Class A Common Stock and Class B Common Stock. Holders of Class A Common
Stock are entitled to elect 30% of the Board of Directors and to vote, with holders of Class B Common Stock, on the
reservation of shares for equity grants, certain material acquisitions and the ratification of the selection of our
auditors. Holders of Class B Common Stock are entitled to elect the remainder of the Board of Directors and to vote
on all other matters. Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, who
purchased The Times in 1896. A family trust holds approximately 90% of the Class B Common Stock. As a result, the
trust has the ability to elect 70% of the Board of Directors and to direct the outcome of any matter that does not
require a vote of the Class A Common Stock. Under the terms of the trust agreement, the trustees are directed to retain
the Class B Common Stock held in trust and to vote such stock against any merger, sale of assets or other transaction
pursuant to which control of The Times passes from the trustees, unless they determine that the primary objective of
the trust can be achieved better by the implementation of such transaction. Because this concentrated control could
discourage others from initiating any potential merger, takeover or other change of control transaction that may
otherwise be beneficial to our businesses, the market price of our Class A Common Stock could be adversely affected.
Adverse results from litigation or governmental investigations can impact our business practices and operating
results.
From time to time, we are party to litigation and regulatory, environmental and other proceedings with
governmental authorities and administrative agencies. See Note 18 of the Notes to the Consolidated Financial
Statements regarding certain matters. Adverse outcomes in lawsuits or investigations could result in significant
monetary damages or injunctive relief that could adversely affect our results of operations or financial condition as
well as our ability to conduct our business as it is presently being conducted. In addition, regardless of merit or
outcome, such proceedings can have an adverse impact on the Company as a result of legal costs, diversion of
management and other personnel, and other factors.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
P. 14 – THE NEW YORK TIMES COMPANY
ITEM 2. PROPERTIES
Our principal executive offices are located in our New York headquarters building in the Times Square area.
The building was completed in 2007 and consists of approximately 1.54 million gross square feet, of which
approximately 828,000 gross square feet of space have been allocated to us. We owned a leasehold condominium
interest representing approximately 58% of the New York headquarters building until March 2009, when we entered
into an agreement to sell and simultaneously lease back 21 floors, or approximately 750,000 rentable square feet,
currently occupied by us (the “Condo Interest”). The sale price for the Condo Interest was $225.0 million. The lease
term is 15 years, and we have three renewal options that could extend the term for an additional 20 years. We have an
option to repurchase the Condo Interest for $250.0 million in 2019, and we have provided notice of our intent to
exercise this option. We continue to own a leasehold condominium interest in seven floors in our New York
headquarters building, totaling approximately 216,000 rentable square feet that were not included in the sale-
leaseback transaction, all of which are currently leased to third parties.
We are engaged in a plan to consolidate the Company’s operations in our headquarters building from the 17
floors we previously occupied to 10, and to lease the remaining seven floors to third parties. We believe this plan will
generate meaningful rental income to the Company and result in a more collaborative workspace.
In addition, we have a printing and distribution facility with 570,000 gross square feet located in College Point,
N.Y., on a 31-acre site owned by the City of New York for which we have a ground lease. We have an option to
purchase the property before the lease ends in 2019 for $6.9 million. As of December 31, 2017, we also owned other
properties with an aggregate of approximately 3,000 gross square feet and leased other properties with an aggregate
of approximately 205,000 rentable square feet in various locations.
ITEM 3. LEGAL PROCEEDINGS
We are involved in various legal actions incidental to our business that are now pending against us. These
actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. See Note
18 of the Notes to the Consolidated Financial Statements for a description of certain matters, which is incorporated
herein by reference. Although the Company cannot predict the outcome of these matters, it is possible that an
unfavorable outcome in one or more matters could be material to the Company’s consolidated results of operations or
cash flows for an individual reporting period. However, based on currently available information, management does
not believe that the ultimate resolution of these matters, individually or in the aggregate, is likely to have a material
effect on the Company’s financial position.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
THE NEW YORK TIMES COMPANY – P. 15
EXECUTIVE OFFICERS OF THE REGISTRANT
Age
60
Employed By
Registrant Since
2012
Name
Mark Thompson
A.G. Sulzberger
R. Anthony Benten
Diane Brayton
James M. Follo(1)
37
54
49
58
Meredith Kopit Levien
46
2009
1989
2004
2007
2013
Recent Position(s) Held as of February 27, 2018
President and Chief Executive Officer (since 2012); Director-
General, British Broadcasting Corporation (2004 to 2012)
Publisher of The Times (since 2018); Deputy Publisher (2016 to
2017); Associate Editor (2015-2016); Assistant Editor
(2012-2015)
Senior Vice President, Treasurer (since December 2016) and
Corporate Controller (since 2007); Senior Vice President,
Finance (2008 to 2016)
Executive Vice President, General Counsel (since January 2017)
and Secretary (since 2011); Deputy General Counsel (2016);
Assistant Secretary (2009 to 2011) and Assistant General
Counsel (2009 to 2016)
Executive Vice President (since 2013) and Chief Financial
Officer (since 2007); Senior Vice President (2007 to 2013)
Executive Vice President (since 2013) and Chief Operating
Officer (since 2017); Chief Revenue Officer (2015 to 2017);
Executive Vice President, Advertising (2013 to 2015); Chief
Revenue Officer, Forbes Media LLC (2011 to 2013)
(1) Mr. Follo will retire from the Company effective February 28, 2018. As previously disclosed, Roland Caputo, currently Executive Vice President,
Print Products and Services Group, will serve as Interim Chief Financial Officer following Mr. Follo’s retirement and until the Company appoints a
permanent Chief Financial Officer.
P. 16 – THE NEW YORK TIMES COMPANY
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION
The Class A Common Stock is listed on the New York Stock Exchange. The Class B Common Stock is unlisted
and is not actively traded.
The number of security holders of record as of February 23, 2018, was as follows: Class A Common Stock: 5,662;
Class B Common Stock: 21.
We have paid quarterly dividends of $0.04 per share on the Class A and Class B Common Stock since late 2013.
We currently expect to continue to pay comparable cash dividends in the future, although changes in our dividend
program may be considered by our Board of Directors in light of our earnings, capital requirements, financial
condition and other factors considered relevant. In addition, our Board of Directors will consider restrictions in any
future indebtedness. See also “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources — Third-Party Financing.”
The following table sets forth, for the periods indicated, the high and low closing sales prices for the Class A
Common Stock as reported on the New York Stock Exchange.
Quarters
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2017
2016
High
Low
High
$
16.25
$
13.05
$
13.74
$
17.90
19.95
20.00
14.20
17.35
17.10
13.12
13.17
14.10
Low
12.25
11.80
11.54
10.80
ISSUER PURCHASES OF EQUITY SECURITIES(1)
Total number of
shares of Class A
Common Stock
purchased
(a)
Average
price paid
per share of
Class A
Common Stock
(b)
Total number of
shares of Class A
Common Stock
purchased
as part of
publicly
announced plans
or programs
(c)
Maximum
number (or
approximate
dollar value)
of shares of
Class A
Common
Stock that may
yet be
purchased
under the plans
or programs
(d)
— $
— $
— $
— $
—
—
—
—
— $
— $
— $
— $
16,236,612
16,236,612
16,236,612
16,236,612
Period
September 25, 2017 - October 29, 2017
October 30, 2017 - November 26, 2017
November 27, 2017 - December 31, 2017
Total for the fourth quarter of 2017
(1) On January 13, 2015, the Board of Directors approved an authorization of $101.1 million to repurchase shares of the Company’s Class A
Common Stock. As of December 31, 2017, repurchases under this authorization totaled $84.9 million (excluding commissions), and $16.2 million
remained under this authorization. All purchases were made pursuant to our publicly announced share repurchase program. Our Board of
Directors has authorized us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date with
respect to this authorization.
THE NEW YORK TIMES COMPANY – P. 17
UNREGISTERED SALES OF EQUITY SECURITIES
On September 26, 2017, and December 28, 2017, we issued 2,170 and 5,000 shares, respectively, of Class A
Common Stock to holders of Class B Common Stock upon the conversion of such Class B Common Stock into Class A
Common Stock. The conversions, which were in accordance with our Certificate of Incorporation, did not involve a
public offering and were exempt from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as
amended.
PERFORMANCE PRESENTATION
The following graph shows the annual cumulative total stockholder return for the five fiscal years ended
December 31, 2017, on an assumed investment of $100 on December 30, 2012, in the Company, the Standard & Poor’s
S&P 400 MidCap Stock Index and the Standard & Poor’s S&P 1500 Publishing and Printing Index. Stockholder return
is measured by dividing (a) the sum of (i) the cumulative amount of dividends declared for the measurement period,
assuming reinvestment of dividends, and (ii) the difference between the issuer’s share price at the end and the
beginning of the measurement period, by (b) the share price at the beginning of the measurement period. As a result,
stockholder return includes both dividends and stock appreciation.
Stock Performance Comparison Between the S&P 400 Midcap Index, S&P 1500 Publishing & Printing Index
and The New York Times Company’s Class A Common Stock
P. 18 – THE NEW YORK TIMES COMPANY
ITEM 6. SELECTED FINANCIAL DATA
The Selected Financial Data should be read in conjunction with “Item 7 — Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and the
related Notes in Item 8. The results of operations for the New England Media Group, which was sold in 2013, have
been presented as discontinued operations for all periods presented (see Note 13 of the Notes to the Consolidated
Financial Statements). The pages following the table show certain items included in Selected Financial Data. All per
share amounts on those pages are on a diluted basis. Fiscal year 2017 comprised 53 weeks and all other fiscal years
presented in the table below comprised 52 weeks.
(In thousands)
Statement of Operations Data
Revenues
Operating costs
As of and for the Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
December 28,
2014
December 29,
2013
(53 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
$
1,675,639
$
1,555,342
$
1,579,215
$
1,588,528
$
1,577,230
1,488,131
1,410,910
1,393,246
1,484,505
1,411,744
Headquarters redesign and consolidation
10,090
Restructuring charge
Multiemployer pension plan withdrawal expense
—
—
Postretirement benefit plan settlement gain
(37,057)
—
14,804
6,730
—
—
—
9,055
—
Pension settlement expense
102,109
21,294
40,329
Early termination charge and other expenses
—
—
—
—
—
—
—
9,525
2,550
—
—
6,171
—
3,228
—
Operating profit
112,366
101,604
136,585
91,948
156,087
Gain/(loss) from joint ventures
Interest expense and other, net
18,641
19,783
(36,273)
(783)
34,805
36,050
(8,368)
53,730
(3,215)
58,073
Income from continuing operations before income
taxes
111,224
30,526
96,752
29,850
94,799
Income from continuing operations
7,268
26,105
62,842
33,391
56,907
(Loss)/income from discontinued operations, net of
income taxes
Net income attributable to The New York Times
Company common stockholders
Balance Sheet Data
(431)
(2,273)
—
(1,086)
7,949
4,296
29,068
63,246
33,307
65,105
Cash, cash equivalents and marketable securities
$
732,911
$
737,526
$
904,551
$
981,170
$
1,023,780
Property, plant and equipment, net
640,939
596,743
632,439
665,758
713,356
Total assets
2,099,780
2,185,395
2,417,690
2,566,474
2,572,552
Total debt and capital lease obligations
Total New York Times Company stockholders’ equity
250,209
897,279
246,978
847,815
431,228
826,751
650,120
726,328
684,163
842,910
THE NEW YORK TIMES COMPANY – P. 19
(In thousands, except ratios, per share
and employee data)
December 31,
2017
December 25,
2016
December 27,
2015
December 28,
2014
December 29,
2013
(53 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
As of and for the Years Ended
Per Share of Common Stock
Basic earnings/(loss) per share attributable to The New York Times Company common stockholders:
0.03
$
0.19
$
0.38
$
0.23
$
0.38
Income from continuing operations
(Loss)/income from discontinued operations, net
of income taxes
Net income
$
$
—
(0.01)
0.03
$
0.18
$
—
0.38
Diluted earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income from continuing operations
(Loss)/income from discontinued operations, net
of income taxes
Net income
Dividends declared per share
New York Times Company stockholders’ equity per
share
$
$
$
$
0.03
$
0.19
$
0.38
—
0.03
0.16
5.46
$
$
$
(0.01)
0.18
0.16
5.21
$
$
$
—
0.38
0.16
4.97
(0.01)
0.22
0.21
(0.01)
0.20
0.16
4.50
$
$
$
$
$
$
$
$
$
$
0.05
0.43
0.36
0.05
0.41
0.08
5.34
Average basic shares outstanding
Average diluted shares outstanding
Key Ratios
Operating profit to revenues
Return on average common stockholders’ equity
Return on average total assets
Total debt and capital lease obligations to total
capitalization
161,926
164,263
161,128
162,817
164,390
166,423
150,673
161,323
149,755
157,774
6.7%
0.5%
0.2%
6.5%
3.5%
1.3%
8.6%
8.1%
2.5%
5.8%
4.2%
1.3%
9.9%
8.7%
2.4%
21.8%
22.6%
34.3%
47.2%
44.8%
Current assets to current liabilities
Full-Time Equivalent Employees
1.80
3,789
2.00
3,710
1.53
3,560
1.91
3,588
3.36
3,529
The items below are included in the Selected Financial Data.
2017 (53-week fiscal year)
The items below had a net unfavorable effect on our Income from continuing operations of $127.3 million, or $.77 per
share:
• $102.1 million pre-tax pension settlement charges ($61.5 million after tax, or $.37 per share) in connection with
the transfer of certain pension benefit obligations to insurers. See Note 9 of the Notes to the Consolidated
Financial Statements for more information on this item.
• a $68.7 million charge ($.42 per share) primarily attributable to the remeasurement of our net deferred tax
assets required as a result of recent tax legislation. See Note 12 of the Notes to the Consolidated Financial
Statements for more information on this item.
• a $37.1 million pre-tax gain ($22.3 million after tax, or $.14 per share) primarily in connection with the
settlement of contractual funding obligations for a postretirement plan. See Note 10 of the Notes to the
Consolidated Financial Statements for more information on this item.
• a $23.9 million pre-tax charge ($14.4 million after tax, or $.09 per share) for severance costs.
P. 20 – THE NEW YORK TIMES COMPANY
• a $15.3 million net pre-tax gain ($7.8 million after tax and net of noncontrolling interest, or $.05 per share)
from joint ventures consisting of (i) a $30.1 million gain related to the sale of the remaining assets of Madison
Paper Industries, in which the Company has an investment through a subsidiary, (ii) an $8.4 million loss
reflecting our proportionate share of Madison’s settlement of pension obligations, and (iii) a $6.4 million loss
from the sale of our 49% equity interest in Donahue Malbaie Inc., a Canadian newsprint company. See Note 5
of the Notes to the Consolidated Financial Statements for more information on this item.
• $11.2 million of pre-tax expenses ($6.7 million after tax, or $.04 per share) for non-operating retirement costs.
• a $10.1 million pre-tax charge ($6.1 million after tax, or $.04 per share) in connection with the ongoing
redesign and consolidation of space in our headquarters building. See Note 7 of the Notes to the Consolidated
Financial Statements for more information on this item.
2016
The items below had a net unfavorable effect on our Income from continuing operations of $65.4 million, or $.40
per share:
• a $37.5 million pre-tax loss ($22.8 million after tax and net of noncontrolling interest, or $.14 per share) from
joint ventures related to the announced closure of the paper mill operated by Madison.
• a $21.3 million pre-tax pension settlement charge ($12.8 million after tax, or $.08 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees.
• an $18.8 million pre-tax charge ($11.3 million after tax, or $.07 per share) for severance costs.
• $15.9 million of pre-tax expenses ($9.5 million after tax, or $.06 per share) for non-operating retirement costs.
• a $14.8 million pre-tax charge ($8.8 million after tax, or $.05 per share) in connection with the streamlining of
the Company’s international print operations (primarily consisting of severance costs).
• a $6.7 million pre-tax charge ($4.0 million after tax or $.02 per share) for a partial withdrawal obligation under
a multiemployer pension plan following an unfavorable arbitration decision.
• a $3.8 million income tax benefit ($.02 per share) primarily due to a reduction in the Company’s reserve for
uncertain tax positions.
2015
The items below had a net unfavorable effect on our Income from continuing operations of $54.1 million, or $.32
per share:
• a $40.3 million pre-tax pension settlement charge ($24.0 million after tax, or $.14 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees.
• $34.4 million of pre-tax expenses ($20.5 million after tax, or $.12 per share) for non-operating retirement costs.
• a $9.1 million pre-tax charge ($5.4 million after tax, or $.03 per share) for partial withdrawal obligations under
multiemployer pension plans.
• a $7.0 million pre-tax charge ($4.2 million after tax, or $.03 per share) for severance costs.
2014
The items below had a net unfavorable effect on our Income from continuing operations of $35.1 million, or $.22
per share:
• $36.7 million of pre-tax expenses ($21.7 million after tax, or $.13 per share) for non-operating retirement costs.
• a $36.1 million pre-tax charge ($21.4 million after tax, or $.13 per share) for severance costs.
• a $21.1 million income tax benefit ($.13 per share) primarily due to reductions in the Company’s reserve for
uncertain tax positions.
• a $9.5 million pre-tax pension settlement charge ($5.7 million after tax, or $.04 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees.
THE NEW YORK TIMES COMPANY – P. 21
• a $9.2 million pre-tax charge ($5.9 million after tax or $.04 per share) for an impairment related to the
Company’s investment in a joint venture.
• a $2.6 million pre-tax charge ($1.5 million after tax, or $.01 per share) for the early termination of a
distribution agreement.
2013
The items below had a net unfavorable effect on our Income from continuing operations of $25.2 million, or $.16
per share:
• $20.8 million of pre-tax expenses ($12.3 million after tax, or $.08 per share) for non-operating retirement costs.
• a $12.4 million pre-tax charge ($7.3 million after tax, or $.05 per share) for severance costs.
• a $6.2 million pre-tax charge ($3.7 million after tax, or $.02 per share) for a partial withdrawal obligation
under multiemployer pension plans.
• a $3.2 million pre-tax pension settlement charge ($1.9 million after tax, or $.01 per share) in connection with
lump-sum payments under an immediate pension benefit offer to certain former employees.
P. 22 – THE NEW YORK TIMES COMPANY
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis provides information that management believes is relevant to an
assessment and understanding of our consolidated financial condition as of December 31, 2017, and results of
operations for the three years ended December 31, 2017. This item should be read in conjunction with our
Consolidated Financial Statements and the related Notes included in this Annual Report.
EXECUTIVE OVERVIEW
We are a global media organization that includes newspapers, print and digital products and investments. We
have one reportable segment with businesses that include our newspaper, websites, mobile applications and related
businesses.
We generate revenues principally from subscriptions and advertising. Other revenues primarily consist of
revenues from news services/syndication, digital archive licensing, building rental income, affiliate referrals, NYT
Live (our live events business) and retail commerce. Our main operating costs are employee-related costs.
In the accompanying analysis of financial information, we present certain information derived from
consolidated financial information but not presented in our financial statements prepared in accordance with
generally accepted accounting principles in the United States of America (“GAAP”). We are presenting in this report
supplemental non-GAAP financial performance measures that exclude depreciation, amortization, severance, non-
operating retirement costs and certain identified special items, as applicable. These non-GAAP financial measures
should not be considered in isolation from or as a substitute for the related GAAP measures, and should be read in
conjunction with financial information presented on a GAAP basis. For further information and reconciliations of
these non-GAAP measures to the most directly comparable GAAP measures, see “—Results of Operations—Non-
GAAP Financial Measures.”
Fiscal year 2017 comprised 53 weeks, while all other fiscal years presented in this Item 7 comprised 52 weeks.
2017 Financial Highlights
In 2017, diluted earnings per share from continuing operations were $0.03, compared with $0.19 for 2016.
Diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and
special items discussed below (or “adjusted diluted earnings per share,” a non-GAAP measure) were $0.80 for 2017,
compared with $0.57 for 2016.
Operating profit in 2017 was $112.4 million, compared with $101.6 million for 2016. The increase was mainly
driven by higher subscription revenues, a postretirement benefit settlement gain and higher digital advertising
revenues, partially offset by a pension settlement charge, lower print advertising revenues and higher operating costs.
Operating profit before depreciation, amortization, severance, non-operating retirement costs and special items
discussed below (or “adjusted operating profit,” a non-GAAP measure) was $284.5 million and $240.9 million for
2017 and 2016, respectively.
Total revenues increased 7.7% to $1.68 billion in 2017 from $1.56 billion in 2016 primarily driven by a significant
increase in digital subscription revenue, as well as increased digital advertising revenue, partially offset by a decrease
in print advertising revenue.
Subscription revenues increased 14.5% in 2017 compared with 2016, and surpassed $1 billion for the first time in
our history. This increase was primarily due to significant growth in the number of subscriptions to the Company’s
digital subscription products, as well as the 2017 increase in home-delivery prices for The New York Times
newspaper, which more than offset a decline in print copies sold. Revenue from our digital-only subscription
products, which include our news product, as well as our Crossword product and Cooking product (which first
launched as a paid digital product in the third quarter of 2017), increased 46.2% in 2017 compared with 2016.
Paid digital-only subscriptions totaled approximately 2,644,000 as of December 31, 2017, a 41.8% increase
compared with year-end 2016. News product subscriptions totaled approximately 2,231,000 at the end of 2017, a
37.9% increase compared with 2016. Other product subscriptions, which include subscriptions to our Crossword
product and Cooking product, totaled approximately 413,000 at the end of 2017, a 67.2% increase compared with 2016.
THE NEW YORK TIMES COMPANY – P. 23
Total advertising revenues decreased 3.8% in 2017 compared with 2016, reflecting a 13.9% decrease in print
advertising revenues, offset by an 14.2% increase in digital advertising revenues. The decrease in print advertising
revenues resulted from a continued decline in display advertising, primarily in the luxury, travel and real estate
categories. The increase in digital advertising revenues primarily reflected increases in revenue from smartphone
advertising and branded content, partially offset by a continued decrease in traditional website display advertising.
Other revenues increased 15.6% in 2017 compared with 2016, largely due to affiliate referral revenue associated
with the product review and recommendation website, Wirecutter, which the Company acquired in October 2016.
Operating costs increased in 2017 to $1.49 billion from $1.41 billion in 2016, driven by higher marketing and
compensation costs, partially offset by a decline in outside printing costs and raw materials expense. Operating costs
before depreciation, amortization, severance and non-operating retirement costs (or “adjusted operating costs,” a non-
GAAP measure) increased in 2017 to $1.39 billion from $1.31 billion in 2016.
Non-operating retirement costs, excluding special items, decreased to $11.2 million in 2017 from $15.9 million in
2016, primarily due to lower multiemployer pension plan withdrawal expense.
Business Environment
We believe that a number of factors and industry trends have had, and will continue to have, an adverse effect
on our business and prospects. These include the following:
Competition in our industry
We operate in a highly competitive environment. Our print and digital products compete for subscription and
advertising revenue with both traditional and other content providers. Competition among companies offering online
content is intense, and new competitors can quickly emerge. Some of our current and potential competitors may have
greater resources than we do, which may allow them to compete more effectively than us.
Our ability to compete effectively depends on, among other things, our ability to continue delivering high-
quality journalism and content that is interesting and relevant to our audience; the popularity, ease of use and
performance of our products compared to those of our competitors; the engagement of our current users with our
print and digital products, and our ability to reach new users; our ability to develop, maintain and monetize our
products, and the pricing of our products; our ability to attract, retain and motivate talented employees, including
journalists and product and technology specialists; and our ability to manage and grow our business in a cost-
effective manner.
Evolving subscription model
Subscription revenue is a significant source of revenue for us and an increasingly important driver as the
overall composition of our revenues has shifted in response to our “subscription-first” strategy and transformations
in our industry. The largest portion of our subscription revenue is currently from our print newspaper, where we have
experienced declining print circulation volume in recent years. This is due to, among other factors, increased
competition from digital media formats (which are often free to users), higher print subscription and single-copy
prices and a growing preference among some consumers to receive their news from sources other than a print
newspaper.
Advances in technology have led to an increased number of methods for the delivery and consumption of news
and other content. These developments are also driving changes in the preferences and expectations of consumers as
they seek more control over how they consume content. Our ability to retain and continue to build on our digital
subscription base depends on, among other things, our ability to evolve our subscription model, address changing
consumer demands and developments in technology and improve our digital product offering while continuing to
deliver high-quality journalism and content that is interesting and relevant to readers.
Advertising market dynamics
We derive substantial revenue from the sale of advertising in our print and digital products. In determining
whether to buy advertising, our advertisers consider the demand for our products, demographics of our reader base,
advertising rates, results observed by advertisers, and alternative advertising options.
During 2017, the Company, along with others in the industry, continued to experience significant pressure on
print advertising revenue. Although print advertising revenue represents a majority of our total advertising revenue,
P. 24 – THE NEW YORK TIMES COMPANY
the overall proportion continues to decline. The increased popularity of digital media among consumers, particularly
as a source for news and other content, has driven a corresponding shift in demand from print advertising to digital
advertising. However, our digital advertising revenue has not replaced, and may not replace in full, print advertising
revenue lost as a result of the shift.
The digital advertising market continues to undergo significant changes. The increasing number of digital
media options available, including through social networking platforms and news aggregation websites, has resulted
in audience fragmentation and increased competition for advertising. Competition from new content providers and
platforms, some of which charge lower rates than we do or have greater audience reach and targeting capabilities,
and the significant increase in inventory of digital advertising space, have affected and will likely continue to affect
our ability to attract and retain advertisers and to maintain or increase our advertising rates. In recent years, large
digital platforms, such as Facebook, Google and Amazon, which have greater audience reach and targeting
capabilities than we do, have commanded an increased share of the digital display advertising market, and we
anticipate that this trend will continue.
In addition, digital advertising networks and exchanges, real-time bidding and other programmatic buying
channels that allow advertisers to buy audiences at scale are playing a more significant role in the advertising
marketplace and may cause further downward pricing pressure.
The character of our digital advertising business also continues to change, as demand for newer forms of
advertising, such as branded content and other customized advertising, and video advertising, increases. The margin
on revenues from some of these newer advertising forms is generally lower than the margin on revenues we generate
from our print advertising and traditional digital display advertising. Consequently, we may experience further
downward pressure on our advertising revenue margins as a greater percentage of advertising revenues comes from
these newer forms.
In addition, technologies have been and will continue to be developed that enable consumers to block digital
advertising on websites and mobile devices. Advertisements blocked by these technologies are treated as not
delivered and any revenue we would otherwise receive from the advertiser for that advertisement is lost.
As the digital advertising market continues to evolve, our ability to compete successfully for advertising
budgets will depend on, among other things, our ability to engage and grow our audience and prove the value of our
advertising and the effectiveness of our platforms to advertisers.
Economic conditions
Global, national and local economic conditions affect various aspects of our business. Our subscription revenue
is sensitive to discretionary spending available to subscribers in the markets we serve, and to the extent poor
economic conditions lead consumers to reduce spending on discretionary activities, our ability to retain current
subscribers and obtain new subscribers could be hindered.
In addition, the level of advertising sales in any period may be affected by advertisers’ decisions to increase or
decrease their advertising expenditures in response to anticipated consumer demand and general economic
conditions. Changes in spending patterns and priorities, including shifts in marketing strategies and/or budget cuts
of key advertisers in response to economic conditions could have an effect on our advertising revenues.
Fixed costs
A significant portion of our costs are fixed, and therefore we are limited in our ability to reduce these costs in
the short term. Employee-related costs and raw materials together accounted for approximately half of our total
operating costs in 2017. Changes in employee-related costs and the price and availability of newsprint can materially
affect our operating results.
For a discussion of these and other factors that could affect our business, results of operations and financial
condition, see “Item 1A — Risk Factors.”
THE NEW YORK TIMES COMPANY – P. 25
Our Strategy
We are operating during a period of transformation for our industry and amidst uncertain economic conditions.
We anticipate that the challenges we currently face will continue, and we believe that the following elements are key
to our efforts to address them.
Providing journalism worth paying for
We believe that The Times’s original and high-quality content and journalistic excellence set us apart from other
news organizations, and that our readers are willing to pay for trustworthy, insightful and differentiated content.
During 2017, The Times again broke stories and produced investigative reports that sparked global
conversations on wide-ranging topics. Our ground-breaking journalism continues to be recognized, most notably in
the number of Pulitzer prizes The Times has received — more than any other news organization. In addition, we have
continued to make significant investments in our newsroom, adding journalistic talent across a wide range of areas —
from our business coverage to our opinion page — and investing in new forms of visual and multimedia journalism.
We believe that the significant growth over the last year in subscriptions to our products demonstrates the
success of our “subscription-first” strategy and the willingness of our readers to pay for high-quality journalism. As of
December 31, 2017, we had approximately 3.6 million total subscriptions to our products, more than at any point in
our history.
As we look ahead to further executing on our strategic priorities, we remain committed to providing high-
quality, trustworthy and differentiated content that we believe sets us apart.
Strengthening engagement by becoming an essential part of readers’ daily lives
We continue to focus on deepening the engagement of readers by making The Times an indispensable part of
their daily lives. And we continue to communicate the value of independent, high-quality journalism and why it
matters.
During 2017, we developed and enhanced products spanning a broad range of topics, interests, formats and
platforms. Among other things, we introduced The Daily podcast in early 2017, which became one of the most
downloaded podcasts of the year, and launched a monthly insert in our print newspaper dedicated to children. And
we continued to make investments in our lifestyle products and services, such as our Crossword and Cooking
products and Wirecutter.
We also continued our efforts to reach and engage readers around the world, investing in, among other things, a
news bureau in Australia, and opportunities to reach more readers in the United Kingdom, Europe and Canada. In
addition, we continued to experiment with reaching new readers on third-party platforms, while remaining focused
on building engagement with readers on our own platforms.
Looking ahead, we will continue to explore opportunities to deeply engage readers and further innovate our
products, while remaining committed to creating quality content and a quality user experience, regardless of the
distribution model or platform.
Creating marketing solutions as compelling as our journalism
We are focused on continuing to grow our digital advertising revenue by developing innovative and
compelling advertising offerings that integrate well with the user experience and provide value to advertisers. We
believe we have a powerful brand that, because of the quality of our journalism, attracts educated, affluent and
influential audiences, and provides a safe and trusted platform for advertisers’ brands.
During 2017, the digital advertising market continued to shift away from traditional desktop display
advertising and towards newer advertising forms, such as branded content and other customized forms of
advertising, as well as programmatic, video and mobile advertising. We adapted to this market shift, introducing
innovative digital advertising solutions for our mobile and other platforms, and providing advertisers new ways of
reaching our audience. Looking ahead, we will continue to focus on leveraging our brand in developing and refining
our advertising offerings.
P. 26 – THE NEW YORK TIMES COMPANY
Transforming our operations to deliver on our goals
We are focused on becoming a more effective and efficient organization and have taken and continue to take a
number of steps to achieve this. Among other things, we realigned our organizational structure to accelerate our
digital transformation, and continue to optimize our product, technology and data systems to improve the speed with
which we are able to develop, enhance and deliver our digital products. In addition, we introduced a new editing
process in our newsroom intended to further streamline this function, and continued to optimize our print operations
and supply chain.
We are also engaged in a plan to redesign our headquarters building and consolidate our operations within a
smaller number of floors, and to lease the remaining floors to third parties. We believe this plan will generate
meaningful rental income for the Company and result in a more collaborative workspace.
Looking ahead, we will continue to focus on optimizing our organizational and cost structure to ensure that we
are operating more efficiently and effectively across functions.
Effectively managing our liquidity and our non-operating costs
We have continued to strengthen our liquidity position and further de-leverage and de-risk our balance sheet.
As of December 31, 2017, the Company had cash and cash equivalents and marketable securities of approximately
$733 million, which exceeded our total debt and capital lease obligations by approximately $483 million. We believe
our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to
meet our financing needs over the next 12 months.
In March 2009, we entered into an agreement to sell and simultaneously lease back the Condo Interest in our
headquarters building. The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds
of approximately $211 million. We have an option, exercisable in 2019, to repurchase the Condo Interest for $250.0
million, and we have provided notice of our intent to exercise this option. We believe exercising this option is in the
best interest of the Company given that the market value of the Condo Interest exceeds the exercise price.
In addition, we remain focused on managing our pension plan obligations. Our qualified pension plans were
underfunded (meaning the present value of future benefits obligations exceeded the fair value of plan assets) as of
December 31, 2017, by approximately $69 million, compared with approximately $222 million as of December 25,
2016. We made contributions of approximately $128 million, including discretionary contributions of $120 million, to
certain qualified pension plans in 2017, compared with approximately $8 million in 2016. We expect contributions
made in 2018 to satisfy minimum funding requirements to total approximately $8 million.
We have taken steps over the last several years to reduce the size and volatility of our pension obligations,
including freezing accruals under most of our qualified defined benefit pension plans, which cover both our non-
union employees and those covered by certain collective bargaining agreements, and making immediate pension
benefits offers in the form of lump-sum payments to certain former employees. During 2017, we entered into
agreements to transfer certain future benefit obligations and administrative costs to insurers, which allowed us to
reduce our overall qualified pension plan obligations by approximately $263 million. See Note 9 of the Notes to the
Consolidated Financial Statements for additional information on these actions. We will continue to look for ways to
reduce the size and volatility of our pension obligations.
While we have made significant progress in our liability-driven investment strategy to reduce the funding
volatility of our qualified pension plans, the size of our pension plan obligations relative to the size of our current
operations will continue to have a significant impact on our reported financial results. We expect to continue to
experience volatility in our retirement-related costs, including pension, multiemployer pension and retiree medical
costs.
THE NEW YORK TIMES COMPANY – P. 27
RESULTS OF OPERATIONS
Overview
Fiscal year 2017 comprised 53 weeks and fiscal years 2016 and 2015 each comprised 52 weeks. The following
table presents our consolidated financial results:
(In thousands)
Revenues
Subscription
Advertising
Other
Total revenues
Operating costs
Production costs:
Wages and benefits
Raw materials
Other production costs
Total production costs
Selling, general and administrative costs
Depreciation and amortization
Total operating costs
Headquarters redesign and consolidation
Restructuring charge
Multiemployer pension plan withdrawal expense
Postretirement benefit plan settlement gain
Pension settlement expense
Operating profit
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income taxes
Income tax expense
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Net (income)/loss attributable to the noncontrolling interest
Net income attributable to The New York Times Company
common stockholders
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
14.5
(3.8)
15.6
7.7
(0.1)
(8.3)
(3.3)
(2.0)
0.2
5.5
*
*
*
*
*
10.6
*
3.4
(9.1)
6.0
(1.5)
2.4
(6.3)
3.6
1.7
1.0
0.2
1.3
*
*
(25.7)
*
(47.2)
(25.6)
*
$
1,008,431
$
880,543
$
851,790
558,513
108,695
580,732
638,709
94,067
88,716
1,675,639
1,555,342
1,579,215
362,750
363,051
354,516
66,304
186,352
615,406
810,854
61,871
72,325
192,728
628,104
721,083
61,723
77,176
186,120
617,812
61,597
1,488,131
1,410,910
1,393,246
713,837
12.4
10,090
—
—
(37,057)
102,109
112,366
18,641
19,783
111,224
103,956
7,268
(431)
6,837
(2,541)
—
14,804
6,730
—
—
—
9,055
—
21,294
40,329
101,604
136,585
(36,273)
(783)
34,805
30,526
4,421
26,105
(2,273)
23,832
5,236
39,050
(43.2)
(10.9)
96,752
33,910
62,842
—
62,842
404
*
*
(72.2)
(81.0)
(71.3)
*
(6.3)
(87.0)
(58.5)
*
(62.1)
*
$
4,296
$
29,068
$
63,246
(85.2)
(54.0)
* Represents a change equal to or in excess of 100% or one that is not meaningful.
P. 28 – THE NEW YORK TIMES COMPANY
Revenues
Subscription, advertising and other revenues were as follows:
(In thousands)
Subscription
Advertising
Other
Total
Subscription Revenues
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
1,008,431
$
880,543
$
851,790
558,513
108,695
580,732
638,709
94,067
88,716
$
1,675,639
$
1,555,342
$
1,579,215
14.5
(3.8)
15.6
7.7
3.4
(9.1)
6.0
(1.5)
In 2017, the Company renamed “circulation revenues” as “subscription revenues.” Subscription revenues
consist of revenues from subscriptions to our print and digital products (which include our news product, as well as
our Crossword and Cooking products), and single-copy and bulk sales of our print products (which represent
approximately 10% of these revenues). Our Cooking product first launched as a paid digital product in the third
quarter of 2017. Subscription revenues are based on both the number of copies of the printed newspaper sold and
digital-only subscriptions, and the rates charged to the respective customers.
The following tables summarize digital-only subscription revenues for the years ended December 31, 2017,
December 25, 2016, and December 27, 2015:
(In thousands)
Digital-only subscription revenues:
News product subscription revenues(1)
Other product subscription revenues(2)
Total digital-only subscription revenues
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
$
325,956
$
223,459
$
192,657
14,387
9,369
6,286
340,343
$
232,828
$
198,943
45.9
53.6
46.2
16.0
49.0
17.0
(1) Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the
Company’s Crossword and Cooking products are also included in this category.
(2) Includes revenues from standalone subscriptions to the Company’s Crossword and Cooking products.
THE NEW YORK TIMES COMPANY – P. 29
The following tables summarize digital-only subscriptions as of December 31, 2017, December 25, 2016, and
December 27, 2015:
(In thousands)
Digital-only subscriptions(1):
News product subscriptions(2)
Other product subscriptions(3)
Total digital-only subscriptions
As of
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
2,231
413
2,644
1,618
247
1,865
1,094
176
1,270
37.9
67.2
41.8
47.9
40.3
46.9
(1) Reflects certain immaterial prior-period corrections.
(2) Includes subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword
and Cooking products are also included in this category.
(3) Includes standalone subscriptions to the Company’s Crossword and Cooking products.
2017 Compared with 2016
Subscription revenues increased 14.5% in 2017 compared with 2016. The increase was primarily driven by
significant growth in the number of digital-only subscription products, which led to digital-only subscription revenue
growth of approximately 46%, as well as an increase of approximately 6% in home-delivery prices for The New York
Times newspaper, which more than offset a decline of approximately 1% in print copies sold.
2016 Compared with 2015
Subscription revenues increased in 2016 compared with 2015 primarily due to growth in the number of
subscriptions to the Company’s digital-only subscription products and the January 2016 print home-delivery price
increase for The Times, partially offset by a reduction in the number of print copies sold. Digital-only subscription
revenues were $232.8 million in 2016 compared with $198.9 million in 2015, an increase of 17.0%.
Advertising Revenues
Advertising revenues are derived from the sale of our advertising products and services on our print, web and
mobile platforms. These revenues are primarily determined by the volume, rate and mix of advertisements. Display
advertising revenue is principally from advertisers promoting products, services or brands in print in the form of
column-inch ads, and on our web and mobile platforms in the form of banners, video, rich media and other
interactive ads. Display advertising also includes branded content on The Times’s platforms. Classified advertising
revenue includes line-ads sold in the major categories of real estate, help wanted, automotive and other. Other
advertising revenue primarily includes creative services fees associated with, among other things, our digital
marketing agencies and our branded content studio; advertising revenue generated by our product review and
recommendation website, Wirecutter; revenue from preprinted advertising, also known as free-standing inserts; and
revenue generated from branded bags in which our newspapers are delivered.
2017 Compared with 2016
Years Ended
December 31, 2017
December 25, 2016
% Change
(53 weeks)
(52 weeks)
(In thousands)
Display
Print
Digital
Total
Print
Digital
Total
Print
Digital
Total
$ 285,679
$ 198,658
$ 484,337
$ 335,652
$ 181,545
$ 517,197
(14.9)%
9.4%
(6.4)%
Classified and Other
34,543
39,633
74,176
$ 36,328
27,207
63,535
(4.9)%
Total advertising
$ 320,222
$ 238,291
$ 558,513
$ 371,980
$ 208,752
$ 580,732
(13.9)%
45.7%
14.2%
16.7 %
(3.8)%
P. 30 – THE NEW YORK TIMES COMPANY
Print advertising revenues, which represented 57% of total advertising revenues in 2017, declined 13.9% to
$320.2 million in 2017 compared with $372.0 million in 2016. The decrease was driven by a continued decline in
display advertising, primarily in the luxury, travel and real estate categories.
Digital advertising revenues, which represented 43% of total advertising revenues in 2017, increased 14.2% to
$238.3 million in 2017 compared with $208.8 million in 2016. The increase in digital advertising revenues primarily
reflected increases in revenue from smartphone advertising and branded content, partially offset by a continued
decline in traditional website display advertising.
Classified and Other advertising revenues increased 16.7% in 2017 compared with 2016 largely due to increased
revenue associated with our digital marketing agencies, HelloSociety and Fake Love, each acquired in 2016, and our
branded content studio.
2016 Compared with 2015
Years Ended
December 25, 2016
December 27, 2015
% Change
(52 weeks)
(52 weeks)
(In thousands)
Display
Print
Digital
Total
Print
Digital
Total
Print
Digital
Total
$ 335,652
$ 181,545
$ 517,197
$ 400,596
$ 178,557
$ 579,153
(16.2)%
1.7%
(10.7)%
Classified and Other
36,328
27,207
63,535
$ 40,972
18,584
59,556
Total advertising
$ 371,980
$ 208,752
$ 580,732
$ 441,568
$ 197,141
$ 638,709
(11.3)%
(15.8)%
46.4%
5.9%
6.7 %
(9.1)%
Print advertising revenues, which represented 64% of total advertising revenues in 2016, declined 15.8% to
$372.0 million in 2016 compared with $441.6 million in 2015. The decrease was driven by a continued decline in
display advertising, primarily in the luxury goods, entertainment, retail and technology categories.
Digital advertising revenues, which represented 36% of total advertising revenues in 2016, increased 5.9% to
$208.8 million in 2016 compared with $197.1 million in 2015 due to an increase in revenue from smartphone
advertising, our programmatic buying channels and branded content distribution. Revenues from our digital
marketing agencies, HelloSociety and Fake Love, each acquired in 2016, also contributed favorably to this increase.
This increase was partially offset by a decline in traditional desktop display advertising.
Classified and Other advertising revenues increased 6.7% in 2016 compared with 2015 due to an increase in
creative services fees related to branded content campaign launches during 2016. This was partially offset by a
decrease in the real estate, help wanted and other categories.
Other Revenues
Other revenues primarily consist of revenues from news services/syndication, digital archive licensing,
building rental income, affiliate referrals, NYT Live (our live events business) and retail commerce. Digital other
revenues consists primarily of digital archive licensing revenue and affiliate referral revenue. Building rental income
consists of revenue from the lease of floors in our New York headquarters building, which totaled $16.7 million, $17.1
million and $16.9 million in 2017, 2016 and 2015, respectively.
2017 Compared with 2016
Other revenues increased 15.6% in 2017 compared with 2016 largely due to affiliate referral revenue associated
with the product review and recommendation website, Wirecutter, which the Company acquired in October 2016.
Digital other revenues totaled $41.7 million in 2017, an 83.7% increase compared with 2016, driven primarily by
affiliate referral revenue associated with Wirecutter.
2016 Compared with 2015
Other revenues increased 6.0% in 2016 compared with 2015 largely due to affiliate referral revenue associated
with our acquisition in October 2016 of Wirecutter, as well as from our NYT Live business. Digital other revenues
totaled $22.7 million in 2016, a 14.1% increase compared with 2015, driven primarily by affiliate referral revenue
associated with Wirecutter.
THE NEW YORK TIMES COMPANY – P. 31
Operating Costs
Operating costs were as follows:
(In thousands)
Production costs:
Wages and benefits
Raw materials
Other production costs
Total production costs
Selling, general and administrative costs
Depreciation and amortization
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
362,750
$
363,051
$
354,516
66,304
186,352
615,406
810,854
61,871
72,325
192,728
628,104
721,083
61,723
77,176
186,120
617,812
61,597
713,837
12.4
(0.1)
(8.3)
(3.3)
(2.0)
0.2
5.5
2.4
(6.3)
3.6
1.7
1.0
0.2
1.3
Total operating costs
$
1,488,131
$
1,410,910
$
1,393,246
The components of operating costs as a percentage of total operating costs were as follows:
Components of operating costs as a percentage of total operating costs
Wages and benefits
Raw materials
Other operating costs
Depreciation and amortization
Total
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
(53 weeks)
(52 weeks)
(52 weeks)
46%
4%
46%
4%
45%
5%
46%
4%
44%
6%
46%
4%
100%
100%
100%
The components of operating costs as a percentage of total revenues were as follows:
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
(53 weeks)
(52 weeks)
(52 weeks)
40%
4%
41%
4%
89%
41%
5%
41%
4%
91%
39%
5%
40%
4%
88%
Components of operating costs as a percentage of total revenues
Wages and benefits
Raw materials
Other operating costs
Depreciation and amortization
Total
P. 32 – THE NEW YORK TIMES COMPANY
Production Costs
Production costs include items such as labor costs, raw materials and machinery and equipment expenses
related to news-gathering and production activity, as well as costs related to producing branded content.
2017 Compared with 2016
Production costs decreased in 2017 compared with 2016, primarily driven by a decrease in other production
costs (approximately $6 million) and raw materials expense (approximately $6 million). Other production costs
decreased primarily as a result of lower outside printing expenses (approximately $5 million). Raw materials expense
decreased primarily due to lower newsprint consumption (approximately $6 million).
2016 Compared with 2015
Production costs increased in 2016 compared with 2015 primarily due to higher wages and benefits
(approximately $9 million) and other production costs (approximately $7 million), which consisted mainly of outside
services (approximately $9 million) and travel and entertainment (approximately $2 million), offset by lower outside
printing expenses (approximately $5 million). Newsprint expense declined 6.6% in 2016 compared with 2015, with
6.1% from lower consumption and 0.5% from lower pricing.
Selling, General and Administrative Costs
Selling, general and administrative costs include costs associated with the selling, marketing and distribution of
products as well as administrative expenses.
2017 Compared with 2016
Selling, general and administrative costs increased in 2017 compared with 2016, primarily due to an increase in
compensation costs (approximately $47 million), promotion and marketing costs (approximately $26 million) and
severance costs (approximately $5 million). Compensation costs increased primarily as a result of higher incentive
compensation, increased hiring to support growth initiatives, and higher benefit costs. Promotion and marketing
costs increased due to increased spending to promote our subscription business and brand. Severance costs increased
due to a workforce reduction announced in the second quarter of 2017 primarily affecting our newsroom.
2016 Compared with 2015
Selling, general and administrative costs increased in 2016 compared with 2015 primarily due to an increase in
severance costs (approximately $12 million), compensation costs (approximately $11 million) and promotion costs
(approximately $8 million), partially offset by a decrease in non-operating retirement costs (approximately $19
million) and distribution costs (approximately $6 million). Compensation costs increased primarily as a result of
increased hiring to support growth initiatives and business acquisitions. Distribution costs decreased primarily as a
result of fewer print copies produced and lower transportation costs.
Depreciation and Amortization
2017 Compared with 2016
Depreciation and amortization costs were flat in 2017 compared with 2016.
2016 Compared with 2015
Depreciation and amortization costs were flat in 2016 compared with 2015.
Other Items
See Note 7 of the Notes to the Consolidated Financial Statements for more information regarding other items.
THE NEW YORK TIMES COMPANY – P. 33
NON-OPERATING ITEMS
Investments in Joint Ventures
See Note 5 of the Notes to the Consolidated Financial Statements for information regarding our joint venture
investments.
Interest Expense and Other, Net
See Note 6 of the Notes to the Consolidated Financial Statements for information regarding interest expense and
other.
Income Taxes
See Note 12 of the Notes to the Consolidated Financial Statements for information regarding income taxes.
Discontinued Operations
See Note 13 of the Notes to the Consolidated Financial Statements for information regarding discontinued
operations.
Non-GAAP Financial Measures
We have included in this report certain supplemental financial information derived from consolidated financial
information but not presented in our financial statements prepared in accordance with GAAP. Specifically, we have
referred to the following non-GAAP financial measures in this report:
• diluted earnings per share from continuing operations excluding severance, non-operating retirement costs
and the impact of special items (or adjusted diluted earnings per share from continuing operations);
• operating profit before depreciation, amortization, severance, non-operating retirement costs and special items
(or adjusted operating profit); and
• operating costs before depreciation, amortization, severance and non-operating retirement costs (or adjusted
operating costs).
The special items in 2017 consisted of:
• $102.1 million pre-tax pension settlement charges ($61.5 million after tax, or $.38 per share) in connection with
the transfer of certain pension benefit obligations to insurers.
• a $68.7 million charge ($.42 per share) primarily attributable to the remeasurement of our net deferred tax
assets required as a result of recent tax legislation.
• a $37.1 million pre-tax gain ($22.3 million after tax, or $.14 per share) primarily in connection with the
settlement of contractual funding obligations for a postretirement plan.
• a $15.3 million pre-tax net gain ($7.8 million after tax and net of noncontrolling interest, or $.05 per share) from
joint ventures consisting of (i) a $30.1 million gain related to the sale of the remaining assets of Madison, (ii) an
$8.4 million loss reflecting our proportionate share of Madison’s settlement of pension obligations, and (iii) a
$6.4 million loss from the sale of our 49% equity interest in Malbaie.
• a $10.1 million pre-tax charge ($6.1 million after tax, or $.04 per share) in connection with the ongoing redesign
and consolidation of space in our headquarters building.
The special items in 2016 consisted of:
•
•
a $37.5 million pre-tax loss ($22.8 million after tax and net of noncontrolling interest, or $.14 per share) from
joint ventures related to the announced closure of the paper mill operated by Madison.
a $21.3 million pre-tax pension settlement charge ($12.8 million after tax, or $.08 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees;
• a $14.8 million pre-tax charge ($8.8 million after tax, or $.05 per share) in connection with the streamlining of
the Company’s international print operations (primarily consisting of severance costs);
P. 34 – THE NEW YORK TIMES COMPANY
• a $6.7 million pre-tax charge ($4.0 million after tax, or $.02 per share) for a partial withdrawal obligation under
a multiemployer pension plan following an unfavorable arbitration decision; and
• a $3.8 million income tax benefit ($.02 per share) primarily due to a reduction in the Company’s reserve for
uncertain tax positions.
The special items in 2015 consisted of:
• a $40.3 million pre-tax pension settlement charge ($24.0 million after tax, or $.14 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees; and
• a $9.1 million pre-tax charge ($5.4 million after tax, or $.03 per share) for partial withdrawal obligations under
multiemployer pension plans.
We have included these non-GAAP financial measures because management reviews them on a regular basis
and uses them to evaluate and manage the performance of our operations. We believe 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) and operating costs. 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.
Adjusted diluted earnings per share provides useful information in evaluating our period-to-period
performance because it eliminates items that we do not consider to be indicative of earnings from ongoing operating
activities. Adjusted operating profit is useful in evaluating the ongoing performance of our 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 non-operating retirement costs.
Adjusted operating costs, which exclude these items, provide investors with helpful supplemental information on our
underlying operating costs that is used by management in its financial and operational decision-making.
Management considers special items, which may include impairment charges, pension settlement charges and
other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that
excluding these items provides a better understanding of the underlying trends in the Company’s operating
performance and allows more accurate comparisons of the Company’s operating results to historical performance. In
addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it
believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful
comparison of the Company’s operating results to historical performance.
Non-operating retirement costs include:
•
interest cost, expected return on plan assets and amortization of actuarial gain and loss components of pension
expense;
•
interest cost and amortization of actuarial gain and loss components of retiree medical expense; and
• all expenses associated with multiemployer pension plan withdrawal obligations not otherwise included as
special items.
These non-operating retirement costs are primarily tied to financial market performance and changes in market
interest rates and investment performance. Non-operating retirement costs do not include service costs and
amortization of prior service costs for pension and retiree medical benefits, which we believe reflect the ongoing
operating costs of providing pension and retiree medical benefits to our employees. We consider non-operating
retirement costs to be outside the performance of our ongoing core business operations and believe that presenting
operating results excluding non-operating retirement costs, in addition to our GAAP operating results, provides
increased transparency and a better understanding of the underlying trends in our operating business performance.
THE NEW YORK TIMES COMPANY – P. 35
Reconciliations of non-GAAP financial measures from, respectively, diluted earnings per share from continuing
operations, operating profit and operating costs, the most directly comparable GAAP items, as well as details on the
components of non-operating retirement costs, are set out in the tables below.
Reconciliation of diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and
special items (or adjusted diluted earnings per share from continuing operations)
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
Diluted earnings per share from continuing operations
$
0.03
$
0.19
$
0.38
(84.2%)
(50.0%)
Add:
Severance
Non-operating retirement costs
Special items:
Headquarters redesign and consolidation
Restructuring charge
Pension settlement expense
Multiemployer pension plan withdrawal expense
Postretirement benefit plan settlement gain
Loss in joint ventures, net of tax and noncontrolling interest
Income tax expense of special items
Reduction in reserve for uncertain tax positions
Deferred tax asset remeasurement adjustment
Adjusted diluted earnings per share from continuing
operations (1)
(1) Amounts may not add due to rounding.
0.15
0.07
0.06
—
0.62
—
(0.23)
(0.08)
(0.24)
—
0.42
0.12
0.10
—
0.09
0.13
0.04
—
0.18
(0.26)
(0.02)
—
0.04
0.21
—
—
0.24
0.05
—
—
25.0%
*
(30.0%)
(52.4%)
*
*
*
*
*
*
*
*
(45.8)%
(20.0)%
*
*
(0.22)
(7.7)%
18.2 %
—
—
*
*
*
*
$
0.80
$
0.57
$
0.71
40.4 %
(19.7)%
* Represents a change equal to or in excess of 100% or one that is not meaningful.
P. 36 – THE NEW YORK TIMES COMPANY
Reconciliation of operating profit before depreciation & amortization, severance, non-operating retirement costs and special items (or
adjusted operating profit)
(In thousands)
Operating profit
Add:
Depreciation & amortization
Severance
Non-operating retirement costs
Special items:
Headquarters redesign and consolidation
Restructuring charge
Multiemployer pension plan withdrawal expense
Postretirement benefit plan settlement gain
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
112,366
$
101,604
$
136,585
10.6 %
(25.6)%
61,871
23,949
11,152
10,090
—
—
(37,057)
61,723
18,829
15,880
—
14,804
6,730
—
61,597
0.2%
0.2%
7,035
27.2%
*
34,383
(29.8)%
(53.8)%
—
—
9,055
—
*
*
*
*
*
*
*
(25.7)%
*
(47.2)%
Pension settlement expense
102,109
21,294
40,329
Adjusted operating profit
$
284,480
$
240,864
$
288,984
18.1 %
(16.7)%
* Represents a change equal to or in excess of 100% or one that is not meaningful.
Reconciliation of operating costs before depreciation & amortization, severance and non-operating retirement costs (or adjusted
operating costs)
(In thousands)
Operating costs
Less:
Depreciation & amortization
Severance
Non-operating retirement costs
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
1,488,131
$
1,410,910
$
1,393,246
5.5 %
1.3 %
61,871
23,949
11,152
61,723
18,829
15,880
61,597
0.2%
0.2%
7,035
27.2%
*
34,383
(29.8)%
(53.8)%
Adjusted operating costs
$
1,391,159
$ 1,314,478
$
1,290,231
5.8 %
1.9 %
* Represents a change equal to or in excess of 100% or one that is not meaningful.
THE NEW YORK TIMES COMPANY – P. 37
LIQUIDITY AND CAPITAL RESOURCES
Overview
The following table presents information about our financial position.
Financial Position Summary
(In thousands, except ratios)
Cash and cash equivalents
Marketable securities
Long-term debt and capital lease obligations
Total New York Times Company stockholders’ equity
Ratios:
December 31,
2017
December 25,
2016
2017 vs. 2016
% Change
$
182,911
$
100,692
550,000
250,209
897,279
636,834
246,978
847,815
81.7
(13.6)
1.3
5.8
Total debt and capital lease obligations to total capitalization
Current assets to current liabilities
21.8%
1.80
22.6%
2.00
Our primary sources of cash inflows from operations were revenues from subscription and advertising sales.
Subscription and advertising revenues provided about 60% and 33%, respectively, of total revenues in 2017. The
remaining cash inflows were primarily from other revenue sources such as news services/syndication, digital archive
licensing, building rental income, affiliate referrals, NYT Live (our live events business) and retail commerce.
Our primary sources of cash outflows were for employee compensation and benefits and other operating
expenses. We believe our cash and cash equivalents, marketable securities balance and cash provided by operations,
in combination with other sources of cash, will be sufficient to meet our financing needs over the next 12 months.
We have continued to strengthen our liquidity position and our debt profile. As of December 31, 2017, we had
cash, cash equivalents and marketable securities of $732.9 million and total debt and capital lease obligations of $250.2
million. Accordingly, our cash, cash equivalents and marketable securities exceeded total debt and capital lease
obligations by $482.7 million. Included within marketable securities is approximately $63 million of securities used as
collateral for letters of credit issued by the Company in connection with the leasing of floors in our headquarters
building. See Note 18 of the Notes to the Consolidated Financial Statements for more information regarding these
letters of credit. Our cash, cash equivalent and marketable securities balances decreased in 2017 primarily due to
contributions of approximately $128 million to certain qualified pension plans, partially offset by higher revenues.
We have paid quarterly dividends of $0.04 per share on the Class A and Class B Common Stock since late 2013.
We currently expect to continue to pay comparable cash dividends in the future, although changes in our dividend
program will be considered by our Board of Directors in light of our earnings, capital requirements, financial
condition and other factors considered relevant.
In March 2009, we entered into an agreement to sell and simultaneously lease back the Condo Interest in our
headquarters building. The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds
of approximately $211 million. We have an option, exercisable in 2019, to repurchase the Condo Interest for $250.0
million, and we have provided notice of our intent to exercise this option. We believe that exercising this option is in
the best interest of the Company given that the market value of the Condo Interest exceeds the exercise price.
During 2017, we made contributions of approximately $128 million to certain qualified pension plans funded by
cash on hand. This included $120 million of discretionary contributions and $8 million of contributions to satisfy
minimum funding requirements. As of December 31, 2017, the underfunded balance of our qualified pension plans
was approximately $69 million, a reduction of approximately $153 million from December 25, 2016. We expect
contributions made to satisfy minimum funding requirements to total approximately $8 million in 2018.
As part of our continued effort to reduce the size and volatility of our pension obligations, in 2017, the
Company entered into arrangements with insurers to transfer certain future benefit obligations and administrative
P. 38 – THE NEW YORK TIMES COMPANY
costs for certain qualified pension plans. These transactions allowed us to reduce our overall qualified pension plan
obligations by approximately $263 million. See Note 9 of the Notes to the Consolidated Financial Statements for more
information.
The Company and UPM-Kymmene Corporation (“UPM”), a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison, which previously operated a supercalendered paper mill in
Maine. The paper mill closed in May 2016 and the Company’s joint venture in Madison is currently being liquidated.
In the fourth quarter of 2016, Madison sold certain assets at the mill site and we recognized a gain of $3.9 million
related to the sale. In 2017 we recognized a net gain of $20.8 million, reflecting our proportionate share of the gain
recognized by Madison related to the sale of the remaining assets of the paper mill, partially offset by a loss related to
our share of Madison’s settlement of pension obligations. The Company’s proportionate share of the gain was $11.6
million after tax and net of noncontrolling interest. In 2018, we expect to receive a cash distribution of approximately
$12 million related to the wind down of our Madison investment. See Note 5 of the Notes to the Consolidated
Financial Statements for more information on the Company’s investment in Madison.
In early 2015, entities controlled by Carlos Slim Helú, a beneficial owner of our Class A Common Stock,
exercised warrants to purchase 15.9 million shares of our Class A Common Stock at a price of $6.3572 per share, and
the Company received cash proceeds of approximately $101.1 million from this exercise. Concurrently, the Board of
Directors terminated an existing authorization to repurchase shares of the Company’s Class A Common Stock and
approved a new repurchase authorization of $101.1 million, equal to the cash proceeds received by the Company from
the warrant exercise. As of December 31, 2017, total repurchases under this authorization totaled $84.9 million
(excluding commissions) and $16.2 million remained under this authorization. Our Board of Directors has authorized
us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date
with respect to this authorization.
Capital Resources
Sources and Uses of Cash
Cash flows provided by/(used in) by category were as follows:
(In thousands)
Operating activities
Investing activities
Financing activities
* Represents an increase or decrease in excess of 100%.
Operating Activities
Years Ended
% Change
December 31,
2017
December 25,
2016
December 27,
2015
2017 vs.
2016
2016 vs.
2015
$
$
$
86,712
21,019
(26,019)
$
$
$
103,876
128,272
(237,024)
$
$
$
179,075
(30,703)
(217,960)
(16.5)
(83.6)
(89.0)
(42.0)
*
8.7
Cash from operating activities is generated by cash receipts from subscriptions, advertising sales and other
revenue. Operating cash outflows include payments for employee compensation, pension and other benefits, raw
materials, interest and income taxes.
Net cash provided by operating activities decreased in 2017 compared with 2016 due to contributions totaling
approximately $128 million to certain qualified pension plans, partially offset by higher revenues and lower tax
payments.
Net cash provided by operating activities decreased in 2016 compared with 2015 due to higher income tax
payments, higher employee compensation payments, higher marketing costs and an overall decline in revenues. We
made income tax payments of approximately $45 million in 2016 compared with approximately $21 million in 2015.
THE NEW YORK TIMES COMPANY – P. 39
Investing Activities
Cash from investing activities generally includes proceeds from marketable securities that have matured and
the sale of assets, investments or a business. Cash used in investing activities generally includes purchases of
marketable securities, payments for capital projects, restricted cash (the majority of which is set aside to collateralize
workers’ compensation obligations), acquisitions of new businesses and investments.
Net cash provided by investing activities in 2017 was primarily related to maturities and disposals of
marketable securities of $548.5 million and proceeds from the sale of our 49% share in Malbaie of $15.6 million, offset
by purchases of marketable securities of $466.5 million and capital expenditures of $84.8 million.
Net cash provided by investing activities in 2016 was primarily due to maturities of marketable securities, offset
by purchases of marketable securities and a cash distribution of $38.0 million from the liquidation of certain
investments related to our corporate-owned life insurance, consideration paid for acquisitions of $40.4 million and
payments for capital expenditures of $30.1 million.
Net cash used in investing activities in 2015 was primarily due to purchases of marketable securities, offset by
maturities of marketable securities and payments for capital expenditures.
Payments for capital expenditures were approximately $85 million, $30 million and $27 million in 2017, 2016
and 2015, respectively.
Financing Activities
Cash from financing activities generally includes borrowings under third-party financing arrangements, the
issuance of long-term debt and funds from stock option exercises. Cash used in financing activities generally includes
the repayment of amounts outstanding under third-party financing arrangements, the payment of dividends and the
payment of long-term debt and capital lease obligations.
Net cash used in financing activities in 2017 was primarily related to dividend payments ($26.0 million).
Net cash used in financing activities in 2016 was primarily related to the repayment, at maturity, of the $189.2
million remaining principal amount under our 6.625% senior notes in December 2016, dividend payments of $25.9
million and share repurchases of $15.7 million.
Net cash used in financing activities in 2015 was primarily related to the repayment, at maturity, of $223.7
million remaining under our 5.0% senior notes, share repurchases of $69.3 million and dividend payments of $26.6
million, partially offset by $101.1 million of proceeds from the exercise of warrants.
See “— Third-Party Financing” below and our Consolidated Statements of Cash Flows for additional
information on our sources and uses of cash.
Restricted Cash
We were required to maintain $18.0 million of restricted cash as of December 31, 2017 and $24.9 million as of
December 25, 2016, the majority of which is set aside to collateralize workers’ compensation obligations.
Capital Expenditures
Capital expenditures totaled approximately $104 million, $26 million and $29 million in 2017, 2016 and 2015,
respectively. The cash payments related to the capital expenditures totaled approximately $85 million, $30 million and
$27 million in 2017, 2016 and 2015, respectively. The increase was primarily driven by the ongoing redesign and
consolidation of space in our headquarters building and certain improvements at our printing and distribution
facility in College Point, New York.
Third-Party Financing
As of December 31, 2017, our current indebtedness consisted of the repurchase option related to a sale-leaseback
of a portion of our New York headquarters. See Note 6 for information regarding our total debt and capital lease
obligations. See Note 8 for information regarding the fair value of our long-term debt.
P. 40 – THE NEW YORK TIMES COMPANY
Contractual Obligations
The information provided is based on management’s best estimate and assumptions of our contractual
obligations as of December 31, 2017. Actual payments in future periods may vary from those reflected in the table.
(In thousands)
Debt(1)
Capital leases(2)
Operating leases(2)
Benefit plans(3)
Total
Payment due in
Total
2018
2019-2020
2021-2022
Later Years
$
303,086
$
27,554
$
275,532
$
— $
7,797
52,681
475,546
552
10,738
52,177
7,245
13,685
98,159
—
9,703
94,201
—
—
18,555
231,009
$
839,110
$
91,021
$
394,621
$
103,904
$
249,564
(1) Includes estimated interest payments on long-term debt. See Note 6 of the Notes to the Consolidated Financial Statements for additional
information related to our debt.
(2) See Note 18 of the Notes to the Consolidated Financial Statements for additional information related to our capital and operating leases.
(3) The Company's general funding policy with respect to qualified pension plans is to contribute amounts at least sufficient to satisfy the minimum
amount required by applicable law and regulations. Contributions for our qualified pension plans and future benefit payments for our unfunded
pension and other postretirement benefit payments have been estimated over a 10-year period; therefore, the amounts included in the “Later
Years” column only include payments for the period of 2023-2027. For our funded qualified pension plans, estimating funding depends on
several variables, including the performance of the plans' investments, assumptions for discount rates, expected long-term rates of return on
assets, rates of compensation increases and other factors. Thus, our actual contributions could vary substantially from these estimates. While
benefit payments under these plans are expected to continue beyond 2027, we have included in this table only those benefit payments
estimated over the next 10 years. Benefit plans in the table above also include estimated payments for multiemployer pension plan withdrawal
liabilities. See Notes 9 and 10 of the Notes to the Consolidated Financial Statements for additional information related to our pension and other
postretirement benefits plans.
“Other Liabilities — Other” in our Consolidated Balance Sheets include liabilities related to (1) deferred
compensation, primarily related to our deferred executive compensation plan (the “DEC”) and (2) various other
liabilities, including our contingent tax liability for uncertain tax positions. These liabilities are not included in the
table above primarily because the future payments are not determinable. See Note 11 of the Notes to the Consolidated
Financial Statements for additional information.
The DEC enables certain eligible executives to elect to defer a portion of their compensation on a pre-tax basis.
The deferred amounts are invested at the executives’ option in various mutual funds. The fair value of deferred
compensation is based on the mutual fund investments elected by the executives and on quoted prices in active
markets for identical assets. The DEC was frozen effective December 31, 2015, and no new contributions may be made
into the plan. See Note 11 of the Notes to the Consolidated Financial Statements for additional information on “Other
Liabilities — Other.”
Our liability for uncertain tax positions was approximately $19.3 million, including approximately $2.2 million
of accrued interest as of December 31, 2017. Until formal resolutions are reached between us and the tax authorities,
the timing and amount of a possible audit settlement for uncertain tax benefits is not practicable. Therefore, we do not
include this obligation in the table of contractual obligations. See Note 12 of the Notes to the Consolidated Financial
Statements for additional information regarding income taxes.
We have a contract through the end of 2022 with Resolute, a major paper supplier, to purchase newsprint. The
contract requires us to purchase annually the lesser of a fixed number of tons or a percentage of our total newsprint
requirement at market rate in an arm’s length transaction. Since the quantities of newsprint purchased annually under
this contract are based on our total newsprint requirement, the amount of the related payments for these purchases is
excluded from the table above.
Off-Balance Sheet Arrangements
We did not have any material off-balance sheet arrangements as of December 31, 2017.
THE NEW YORK TIMES COMPANY – P. 41
CRITICAL ACCOUNTING POLICIES
Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these
financial statements requires management to make estimates and assumptions that affect the amounts reported in the
Consolidated Financial Statements for the periods presented.
We continually evaluate the policies and estimates we use to prepare our Consolidated Financial Statements. In
general, management’s estimates are based on historical experience, information from third-party professionals and
various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results may
differ from those estimates made by management.
Our critical accounting policies include our accounting for goodwill and intangibles, retirement benefits and
income taxes. Specific risks related to our critical accounting policies are discussed below.
Goodwill and Intangibles
We evaluate whether there has been an impairment of goodwill or intangibles assets not amortized on an
annual basis or in an interim period if certain circumstances indicate that a possible impairment may exist.
(In thousands)
Goodwill
Intangibles
Total assets
December 31,
2017
December 25,
2016
$
$
$
143,549
8,161
2,099,780
$
$
$
134,517
10,634
2,185,395
Percentage of goodwill and intangibles to total assets
7%
7%
The impairment analysis is considered critical because of the significance of goodwill and intangibles to our
Consolidated Balance Sheets.
We test for goodwill impairment at the reporting unit level, which is our operating segment. We first perform a
qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less
than its carrying value. The qualitative assessment includes, but is not limited to, the results of our most recent
quantitative impairment test, consideration of industry, market and macroeconomic conditions, cost factors, cash
flows, changes in key management personnel and our share price. The result of this assessment determines whether it
is necessary to perform the goodwill impairment two-step test. For the 2017 annual impairment testing, based on our
qualitative assessment, we concluded that it is more likely than not that goodwill is not impaired.
If we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying
value, in the first step we compare the fair value of the reporting unit with its carrying amount, including goodwill.
Fair value is calculated by a combination of a discounted cash flow model and a market approach model. In
calculating fair value for the reporting unit, we generally weigh the results of the discounted cash flow model more
heavily than the market approach because the discounted cash flow model is specific to our business and long-term
projections. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount
exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. In the
second step, we compare the implied fair value of the reporting unit’s goodwill with the carrying amount of that
goodwill. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the
goodwill over the implied fair value of the goodwill.
Intangible assets that are not amortized (i.e., trade names) are tested for impairment at the asset level by
comparing the fair value of the asset with its carrying amount. If the fair value, which is based on future cash flows,
exceeds the carrying value, the asset is not considered impaired. If the carrying amount exceeds the fair value, an
impairment loss would be recognized in an amount equal to the excess of the carrying amount of the asset over the
fair value of the asset.
Intangible assets that are amortized (i.e., customer lists, non-competes, etc.) are tested for impairment at the
asset level associated with the lowest level of cash flows. An impairment exists if the carrying value of the asset (1) is
not recoverable (the carrying value of the asset is greater than the sum of undiscounted cash flows) and (2) is greater
than its fair value.
P. 42 – THE NEW YORK TIMES COMPANY
The discounted cash flow analysis requires us to make various judgments, estimates and assumptions, many of
which are interdependent, about future revenues, operating margins, growth rates, capital expenditures, working
capital, discount rates and royalty rates. The starting point for the assumptions used in our discounted cash flow
analysis is the annual long-range financial forecast. The annual planning process that we undertake to prepare the
long-range financial forecast takes into consideration a multitude of factors, including historical growth rates and
operating performance, related industry trends, macroeconomic conditions, and marketplace data, among others.
Assumptions are also made for perpetual growth rates for periods beyond the long-range financial forecast period.
Our estimates of fair value are sensitive to changes in all of these variables, certain of which relate to broader
macroeconomic conditions outside our control.
The market approach analysis includes applying a multiple, based on comparable market transactions, to
certain operating metrics of the reporting unit.
The significant estimates and assumptions used by management in assessing the recoverability of goodwill and
intangibles are estimated future cash flows, discount rates, growth rates, as well as other factors. Any changes in these
estimates or assumptions could result in an impairment charge. The estimates, based on reasonable and supportable
assumptions and projections, require management’s subjective judgment. Depending on the assumptions and
estimates used, the estimated results of the impairment tests can vary within a range of outcomes.
In addition to annual testing, management uses certain indicators to evaluate whether the carrying value of our
reporting unit or intangibles may not be recoverable and an interim impairment test may be required. These
indicators include: (1) current-period operating or cash flow declines combined with a history of operating or cash
flow declines or a projection/forecast that demonstrates continuing declines in the cash flow or the inability to
improve our operations to forecasted levels, (2) a significant adverse change in the business climate, whether
structural or technological, (3) significant impairments and (4) a decline in our stock price and market capitalization.
Management has applied what it believes to be the most appropriate valuation methodology for its impairment
testing. Additionally, management believes that the likelihood of an impairment of goodwill is remote due to the
excess market capitalization relative to the Company’s net book value. See Note 4 of the Notes to the Consolidated
Financial Statements.
Retirement Benefits
Our single-employer pension and other postretirement benefit costs and obligations are accounted for using
actuarial valuations. We recognize the funded status of these plans – measured as the difference between plan assets,
if funded, and the benefit obligation – on the balance sheet and recognize changes in the funded status that arise
during the period but are not recognized as components of net periodic pension cost, within other comprehensive
income/(loss), net of tax. The assets related to our funded pension plans are measured at fair value.
We also recognize the present value of liabilities associated with the withdrawal from multiemployer pension
plans.
We consider accounting for retirement plans critical to our operations because management is required to make
significant subjective judgments about a number of actuarial assumptions, which include discount rates, long-term
return on plan assets and mortality rates. These assumptions may have an effect on the amount and timing of future
contributions. Depending on the assumptions and estimates used, the impact from our pension and other
postretirement benefits could vary within a range of outcomes and could have a material effect on our Consolidated
Financial Statements.
See “— Pensions and Other Postretirement Benefits” below for more information on our retirement benefits.
Income Taxes
We consider accounting for income taxes critical to our operating results because management is required to
make significant subjective judgments in developing our provision for income taxes, including the determination of
deferred tax assets and liabilities, and any valuation allowances that may be required against deferred tax assets.
Income taxes are recognized for the following: (1) amount of taxes payable for the current year and (2) deferred
tax assets and liabilities for the future tax consequence of events that have been recognized differently in the financial
statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates and are
adjusted for tax rate changes in the period of enactment.
THE NEW YORK TIMES COMPANY – P. 43
We assess whether our deferred tax assets shall be reduced by a valuation allowance if it is more likely than not
that some portion or all of the deferred tax assets will not be realized. Our process includes collecting positive (i.e.,
sources of taxable income) and negative (i.e., recent historical losses) evidence and assessing, based on the evidence,
whether it is more likely than not that the deferred tax assets will not be realized.
We recognize in our financial statements the impact of a tax position if that tax position is more likely than not
of being sustained on audit, based on the technical merits of the tax position. This involves the identification of
potential uncertain tax positions, the evaluation of tax law and an assessment of whether a liability for uncertain tax
positions is necessary. Different conclusions reached in this assessment can have a material impact on the
Consolidated Financial Statements.
We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can
involve complex issues, which could require an extended period of time to resolve. Until formal resolutions are
reached between us and the tax authorities, the timing and amount of a possible audit settlement for uncertain tax
benefits is difficult to predict.
On December 22, 2017, federal tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Act”)
was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited
to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, a one-time
transition tax on the mandatory deemed repatriation of foreign earnings and numerous domestic and international-
related provisions effective in 2018.
We have estimated our provision for income taxes in accordance with the Act and guidance available as of the
date of this filing and as a result have recorded $68.7 million as additional income tax expense in the fourth quarter of
2017, the period in which the legislation was enacted.
On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of
GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed
(including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In
accordance with SAB 118, we have determined that the $68.7 million of additional income tax expense recorded in
connection with the remeasurement of certain deferred tax assets and liabilities, the one-time transition tax on the
mandatory deemed repatriation of foreign earnings, and deferred tax assets related to executive compensation
deductions was a provisional amount and a reasonable estimate at December 31, 2017. Provisional estimates were also
made with regard to the Company’s deductions under the Act’s new expensing provisions and state and local income
taxes related to foreign earnings subject to the one-time transition tax. The ultimate impact of the Act may differ from
the provisional amount recognized due to, among other things, changes in estimates resulting from the receipt or
calculation of final data, changes in interpretations of the Act, and additional regulatory guidance that may be issued.
The accounting for the impact of the Act is expected to be completed by the fourth quarter of fiscal year 2018.
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
We sponsor several single-employer defined benefit pension plans, the majority of which have been frozen. We
also participated in two joint Company and Guild-sponsored plans covering employees who are members of The
NewsGuild of New York. Effective January 1, 2018, the sponsorship of one of these plans, the Newspaper Guild of
New York - The New York Times Pension Plan, which is frozen, was transferred exclusively to the Company. Our
pension liability also includes our multiemployer pension plan withdrawal obligations. Our liability for
postretirement obligations includes our liability to provide health benefits to eligible retired employees.
The table below includes the liability for all of these plans.
(In thousands)
Pension and other postretirement liabilities (includes current portion)
Total liabilities
December 31,
2017
December 25,
2016
$
$
476,965
1,202,417
$
$
640,650
1,341,151
Percentage of pension and other postretirement liabilities to total liabilities
39.7%
47.8%
P. 44 – THE NEW YORK TIMES COMPANY
Pension Benefits
Our Company-sponsored defined benefit pension plans include qualified plans (funded) as well as non-
qualified plans (unfunded). These plans provide participating employees with retirement benefits in accordance with
benefit formulas detailed in each plan. All of our non-qualified plans, which provide enhanced retirement benefits to
select employees, are currently frozen, except for a foreign-based pension plan discussed below.
Our joint Company and Guild-sponsored plan is a qualified plan and is included in the table below.
We also have a foreign-based pension plan for certain non-U.S. employees (the “foreign plan”). The information
for the foreign plan is combined with the information for U.S. non-qualified plans. The benefit obligation of the
foreign plan is immaterial to our total benefit obligation.
The funded status of our qualified and non-qualified pension plans as of December 31, 2017 is as follows:
(In thousands)
Pension obligation
Fair value of plan assets
December 31, 2017
Qualified
Plans
Non-Qualified
Plans
All Plans
$
1,636,488
$
245,302
$
1,881,790
1,567,411
—
1,567,411
Pension underfunded/unfunded obligation, net
$
(69,077)
$
(245,302)
$
(314,379)
We made contributions of approximately $128 million to certain qualified pension plans in 2017. We expect
contributions made to satisfy minimum funding requirements to total approximately $8 million in 2018.
Pension expense is calculated using a number of actuarial assumptions, including an expected long-term rate of
return on assets (for qualified plans) and a discount rate. Our methodology in selecting these actuarial assumptions is
discussed below.
In determining the expected long-term rate of return on assets, we evaluated input from our investment
consultants, actuaries and investment management firms, including our review of asset class return expectations, as
well as long-term historical asset class returns. Projected returns by such consultants and economists are based on
broad equity and bond indices. Our objective is to select an average rate of earnings expected on existing plan assets
and expected contributions to the plan (less plan expenses to be incurred) during the year. The expected long-term
rate of return determined on this basis was 6.75% at the beginning of 2017. Our plan assets had an average rate of
return of approximately 16.59% in 2017 and an average annual return of approximately 7.57% over the three-year
period 2015-2017. We regularly review our actual asset allocation and periodically rebalance our investments to meet
our investment strategy.
The market-related value of plan assets is multiplied by the expected long-term rate of return on assets to
compute the expected return on plan assets, a component of net periodic pension cost. The market-related value of
plan assets is a calculated value that recognizes changes in fair value over three years.
Based on the composition of our assets at the end of the year, we estimated our 2018 expected long-term rate of
return to be 5.70%. If we had decreased our expected long-term rate of return on our plan assets by 50 basis points to
6.25% in 2017, pension expense would have increased by approximately $8 million in 2017 for our qualified pension
plans. Our funding requirements would not have been materially affected.
We determined our discount rate using a Ryan ALM, Inc. Curve (the “Ryan Curve”). The Ryan Curve provides
the bonds included in the curve and allows adjustments for certain outliers (i.e., bonds on “watch”). We believe the
Ryan Curve allows us to calculate an appropriate discount rate.
To determine our discount rate, we project a cash flow based on annual accrued benefits. For active
participants, the benefits under the respective pension plans are projected to the date of termination. The projected
plan cash flow is discounted to the measurement date, which is the last day of our fiscal year, using the annual spot
rates provided in the Ryan Curve. A single discount rate is then computed so that the present value of the benefit cash
flow equals the present value computed using the Ryan Curve rates.
THE NEW YORK TIMES COMPANY – P. 45
The weighted-average discount rate determined on this basis was 3.75% for our qualified plans and 3.67% for
our non-qualified plans as of December 31, 2017.
If we had decreased the expected discount rate by 50 basis points for our qualified plans and our non-qualified
plans in 2017, pension expense would have increased by approximately $1 million as of December 31, 2017 and our
pension obligation would have increased by approximately $117 million.
We will continue to evaluate all of our actuarial assumptions, generally on an annual basis, and will adjust as
necessary. Actual pension expense will depend on future investment performance, changes in future discount rates,
the level of contributions we make and various other factors.
We also recognize the present value of pension liabilities associated with the withdrawal from multiemployer
pension plans. Our multiemployer pension plan withdrawal liability was approximately $108 million as of
December 31, 2017. This liability represents the present value of the obligations related to complete and partial
withdrawals that have already occurred as well as an estimate of future partial withdrawals that we considered
probable and reasonably estimable. For those plans that have yet to provide us with a demand letter, the actual
liability will not be known until they complete a final assessment of the withdrawal liability and issue a demand to
us. Therefore, the estimate of our multiemployer pension plan liability will be adjusted as more information becomes
available that allows us to refine our estimates.
See Note 9 of the Notes to the Consolidated Financial Statements for additional information regarding our
pension plans.
Other Postretirement Benefits
We provide health benefits to retired employees (and their eligible dependents) who meet the definition of an
eligible participant and certain age and service requirements, as outlined in the plan document. While we offer pre-
age 65 retiree medical coverage to employees who meet certain retiree medical eligibility requirements, we do not
provide post-age 65 retiree medical benefits for employees who retired on or after March 1, 2009. We accrue the costs
of postretirement benefits during the employees’ active years of service and our policy is to pay our portion of
insurance premiums and claims from our assets.
The annual postretirement expense was calculated using a number of actuarial assumptions, including a health-
care cost trend rate and a discount rate. The health-care cost trend rate was 7.60% as of December 31, 2017. A one-
percentage point change in the assumed health-care cost trend rate would result in an increase of $0.1 million or a
decrease of $0.1 million in our 2017 service and interest costs, respectively, two factors included in the calculation of
postretirement expense. A one-percentage point change in the assumed health-care cost trend rate would result in an
increase of approximately $2 million or a decrease of approximately $2 million in our accumulated benefit obligation
as of December 31, 2017.
See Note 10 of the Notes to the Consolidated Financial Statements for additional information regarding our
other postretirement benefits.
Change in Discount Rate Methodology
Beginning in 2016, we changed the approach used to calculate the service and interest components of net
periodic benefit cost for benefit plans to provide a more precise measurement of service and interest costs. Prior to
this change, we calculated these service and interest components utilizing a single weighted-average discount rate
derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to
utilize an approach that discounts the individual expected cash flows using the applicable spot rates derived from the
yield curve over the projected cash flow period. The spot rates used to estimate 2016 service and interest costs ranged
from 1.32% to 4.79%. Service costs and interest costs for our benefit plans were reduced by approximately $19 million
in 2016 due to the change in methodology.
See Notes 9 and 10 of the Notes to the Consolidated Financial Statements for more information regarding our
pension benefits and other postretirement benefits, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 of the Notes to the Consolidated Financial Statements for information regarding recent accounting
pronouncements.
P. 46 – THE NEW YORK TIMES COMPANY
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our market risk is principally associated with the following:
• Our exposure to changes in interest rates relates primarily to interest earned and market value on our cash
and cash equivalents, and marketable securities. Our cash and cash equivalents and marketable securities
consist of cash, money market fund, certificates of deposit, U.S. Treasury securities, U.S. government agency
securities, commercial paper, and corporate debt securities. Our investment policy and strategy are focused
on preservation of capital and supporting our liquidity requirements. Changes in U.S. interest rates affect the
interest earned on our cash and cash equivalents and marketable securities, and the market value of those
securities. A hypothetical 100 basis point increase in interest rates would have resulted in a decrease of
approximately $5 million in the market value of our marketable debt securities as of December 31, 2017 and
December 25, 2016. Any realized gains or losses resulting from such interest rate changes would only occur if
we sold the investments prior to maturity.
• Newsprint is a commodity subject to supply and demand market conditions. The cost of raw materials, of
which newsprint expense is a major component, represented approximately 4% and 5% of our total operating
costs in 2017 and 2016, respectively. Based on the number of newsprint tons consumed in 2017 and 2016, a $10
per ton increase in newsprint prices would have resulted in additional newsprint expense of $0.9 million (pre-
tax) in 2017 and 2016.
• The discount rate used to measure the benefit obligations for our qualified pension plans is determined by
using the Ryan Curve, which provides rates for the bonds included in the curve and allows adjustments for
certain outliers (i.e., bonds on “watch”). Broad equity and bond indices are used in the determination of the
expected long-term rate of return on pension plan assets. Therefore, interest rate fluctuations and volatility of
the debt and equity markets can have a significant impact on asset values, the funded status of our pension
plans and future anticipated contributions. See “Item 7 — Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Pensions and Other Postretirement Benefits.”
• A significant portion of our employees are unionized and our results could be adversely affected if future
labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations.
In addition, if we are unable to negotiate labor contracts on reasonable terms, or if we were to experience
labor unrest or other business interruptions in connection with labor negotiations or otherwise, our ability to
produce and deliver our products could be impaired.
See Notes 6, 9 and 18 of the Notes to the Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY – P. 47
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
THE NEW YORK TIMES COMPANY 2017 FINANCIAL REPORT
INDEX
PAGE
Management’s Responsibility for the Financial Statements
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
Reporting
Consolidated Balance Sheets as of December 31, 2017 and December 25, 2016
Consolidated Statements of Operations for the years ended December 31, 2017, December 25, 2016 and
December 27, 2015
Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2017,
December 25, 2016 and December 27, 2015
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2017,
December 25, 2016 and December 27, 2015
Consolidated Statements of Cash Flows for the years ended December 31, 2017, December 25, 2016
and December 27, 2015
Notes to the Consolidated Financial Statements
1. Basis of Presentation
2. Summary of Significant Accounting Policies
3. Marketable Securities
4. Goodwill and Intangibles
5. Investments
6. Debt Obligations
7. Other
8. Fair Value Measurements
9. Pension Benefits
10. Other Postretirement Benefits
11. Other Liabilities
12. Income Taxes
13. Discontinued Operations
14. Earnings/(Loss) Per Share
15. Stock-Based Awards
16. Stockholders’ Equity
17. Segment Information
18. Commitments and Contingent Liabilities
19. Subsequent Events
Schedule II – Valuation and Qualifying Accounts for the three years ended December 31, 2017
Quarterly Information (Unaudited)
P. 48 – THE NEW YORK TIMES COMPANY
49
49
50
51
53
55
57
58
59
61
61
61
70
72
72
75
76
77
78
88
92
93
95
96
96
99
100
101
103
103
104
REPORT OF MANAGEMENT
Management’s Responsibility for the Financial Statements
The Company’s consolidated financial statements were prepared by management, who is responsible for their
integrity and objectivity. The consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) and, as such, include amounts based on
management’s best estimates and judgments.
Management is further responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s
internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The
Company follows and continuously monitors its policies and procedures for internal control over financial reporting
to ensure that this objective is met (see “Management’s Report on Internal Control Over Financial Reporting” below).
The consolidated financial statements were audited by Ernst & Young LLP, an independent registered public
accounting firm, in 2017, 2016 and 2015. Its audits were conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and its report is shown on Page 50.
The Audit Committee of the Board of Directors, which is composed solely of independent directors, meets
regularly with the independent registered public accounting firm, internal auditors and management to discuss
specific accounting, financial reporting and internal control matters. Both the independent registered public
accounting firm and the internal auditors have full and free access to the Audit Committee. Each year the Audit
Committee selects, subject to ratification by stockholders, the firm which is to perform audit and other related work
for the Company.
Management’s Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The
Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Our management, with the participation of our principal executive officer and principal financial officer,
assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017. In
making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control — Integrated Framework (2013 framework). Based on its assessment,
management concluded that the Company’s internal control over financial reporting was effective as of December 31,
2017.
The Company’s independent registered public accounting firm, Ernst & Young LLP, that audited the
consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an
attestation report on the Company’s internal control over financial reporting as of December 31, 2017, which is
included on Page 51 in this Annual Report on Form 10-K.
THE NEW YORK TIMES COMPANY – P. 49
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
The New York Times Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of The New York Times Company as of
December 31, 2017 and December 25, 2016, and the related consolidated statements of operations, comprehensive
income/ (loss), changes in stockholders’ equity, and cash flows for each of the three fiscal years in the period ended
December 31, 2017, and the related notes and the financial statement schedule listed at Item 15(A)(2) of The New York
Times Company’s 2017 Annual Report on Form 10-K (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the
consolidated financial position of The New York Times Company at December 31, 2017 and December 25, 2016, and
the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended
December 31, 2017, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), The New York Times Company's internal control over financial reporting as of December
31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2018
expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of The New York Times Company's management. Our
responsibility is to express an opinion on The New York Times Company’s financial statements based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to The
New York Times Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as The New York Times Company’s auditor since 2007.
New York, New York
February 27, 2018
P. 50 – THE NEW YORK TIMES COMPANY
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
The New York Times Company
Opinion on Internal Control over Financial Reporting
We have audited The New York Times Company’s internal control over financial reporting as of December 31,
2017, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The New York
Times Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2017, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the accompanying consolidated balance sheets of The New York Times Company as of
December 31, 2017 and December 25, 2016, and the related consolidated statements of operations, comprehensive
income/ (loss), changes in stockholders’ equity, and cash flows for each of the three fiscal years in the period ended
December 31, 2017, and the related notes and the financial statement schedule listed at Item 15(A)(2) and our report
dated February 27, 2018 expressed an unqualified opinion thereon.
Basis for Opinion
The New York Times Company’s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in
the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on The New York Times Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to The
New York Times Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
THE NEW YORK TIMES COMPANY – P. 51
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 27, 2018
P. 52 – THE NEW YORK TIMES COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
Assets
Current assets
Cash and cash equivalents
Short-term marketable securities
Accounts receivable (net of allowances of $14,542 in 2017 and $16,815 in 2016)
Prepaid expenses
Other current assets
Total current assets
Long-term marketable securities
Investments in joint ventures
Property, plant and equipment:
Equipment
Buildings, building equipment and improvements
Software
Land
Assets in progress
Total, at cost
Less: accumulated depreciation and amortization
Property, plant and equipment, net
Goodwill
Deferred income taxes
Miscellaneous assets
Total assets
See Notes to the Consolidated Financial Statements.
December 31,
2017
December 25,
2016
$
182,911
$
100,692
308,589
184,885
22,851
50,463
749,699
241,411
1,736
528,111
674,056
232,791
105,710
45,672
449,535
197,355
15,948
32,648
796,178
187,299
15,614
523,104
641,383
212,118
105,710
18,164
1,586,340
1,500,479
(945,401)
(903,736)
640,939
143,549
153,046
169,400
596,743
134,517
301,342
153,702
$
2,099,780
$
2,185,395
THE NEW YORK TIMES COMPANY – P. 53
CONSOLIDATED BALANCE SHEETS — continued
(In thousands, except share and per share data)
Liabilities and stockholders’ equity
Current liabilities
Accounts payable
Accrued payroll and other related liabilities
Unexpired subscriptions revenue
Accrued expenses and other
Total current liabilities
Other liabilities
Long-term debt and capital lease obligations
Pension benefits obligation
Postretirement benefits obligation
Other
Total other liabilities
Stockholders’ equity
Common stock of $.10 par value:
December 31,
2017
December 25,
2016
$
125,479
$
104,463
104,614
75,054
110,510
415,657
250,209
405,422
48,816
82,313
96,463
66,686
131,125
398,737
246,978
558,790
57,999
78,647
786,760
942,414
Class A – authorized: 300,000,000 shares; issued: 2017 – 170,276,449; 2016 – 169,206,879 (including
treasury shares: 2017 –8,870,801; 2016 – 8,870,801)
17,028
16,921
Class B – convertible – authorized and issued shares: 2017 – 803,763; 2016 – 816,632 (including
treasury shares: 2017 – none; 2016 – none)
Additional paid-in capital
Retained earnings
Common stock held in treasury, at cost
Accumulated other comprehensive loss, net of income taxes:
Foreign currency translation adjustments
Funded status of benefit plans
Unrealized loss on available-for-sale securities
Total accumulated other comprehensive loss, net of income taxes
Total New York Times Company stockholders’ equity
Noncontrolling interest
Total stockholders’ equity
80
82
164,275
149,928
1,310,136
1,331,911
(171,211)
(171,211)
6,328
(1,822)
(427,819)
(477,994)
(1,538)
—
(423,029)
(479,816)
897,279
847,815
84
(3,571)
897,363
844,244
Total liabilities and stockholders’ equity
$
2,099,780
$
2,185,395
See Notes to the Consolidated Financial Statements.
P. 54 – THE NEW YORK TIMES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
Revenues
Subscription
Advertising
Other
Total revenues
Operating costs
Production costs:
Wages and benefits
Raw materials
Other production costs
Total production costs
Selling, general and administrative costs
Depreciation and amortization
Total operating costs
Headquarters redesign and consolidation
Restructuring charge
Multiemployer pension plan withdrawal expense
Postretirement benefit plan settlement gain
Pension settlement expense
Operating profit
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income taxes
Income tax expense
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Net (income)/loss attributable to the noncontrolling interest
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
1,008,431
$
880,543
$
851,790
558,513
108,695
580,732
94,067
638,709
88,716
1,675,639
1,555,342
1,579,215
362,750
66,304
186,352
615,406
810,854
61,871
363,051
72,325
192,728
628,104
721,083
61,723
354,516
77,176
186,120
617,812
713,837
61,597
1,488,131
1,410,910
1,393,246
10,090
—
—
(37,057)
102,109
112,366
18,641
19,783
111,224
103,956
7,268
(431)
6,837
(2,541)
—
14,804
6,730
—
21,294
101,604
(36,273)
34,805
30,526
4,421
26,105
(2,273)
23,832
5,236
—
—
9,055
—
40,329
136,585
(783)
39,050
96,752
33,910
62,842
—
62,842
404
Net income attributable to The New York Times Company common stockholders
Amounts attributable to The New York Times Company common stockholders:
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
See Notes to the Consolidated Financial Statements.
$
$
$
4,296
$
29,068
$
63,246
4,727
$
31,341
$
63,246
(431)
(2,273)
—
4,296
$
29,068
$
63,246
THE NEW YORK TIMES COMPANY – P. 55
CONSOLIDATED STATEMENTS OF OPERATIONS — continued
(In thousands, except per share data)
Average number of common shares outstanding:
Basic
Diluted
Basic earnings per share attributable to The New York Times Company common
stockholders:
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Diluted earnings per share attributable to The New York Times Company common
stockholders:
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Dividends declared per share
See Notes to the Consolidated Financial Statements.
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
(53 weeks)
(52 weeks)
(52 weeks)
161,926
164,263
161,128
162,817
164,390
166,423
$
$
$
$
$
0.03
$
0.19
$
—
(0.01)
0.03
$
0.18
$
0.03
$
0.19
$
—
0.03
0.16
$
$
(0.01)
0.18
0.16
$
$
0.38
—
0.38
0.38
—
0.38
0.16
P. 56 – THE NEW YORK TIMES COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(In thousands)
Net income
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments-income/(loss)
Pension and postretirement benefits obligation
Net unrealized loss on available-for-sale securities
Other comprehensive income, before tax
Income tax expense
Other comprehensive income, net of tax
Comprehensive income
Comprehensive (income)/loss attributable to the noncontrolling interest
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
(53 weeks)
(52 weeks)
(52 weeks)
$
6,837
$
23,832
$
62,842
12,110
89,881
(2,545)
99,446
41,545
57,901
64,738
(3,655)
(3,070)
51,405
—
48,335
19,096
29,239
53,071
5,275
(8,803)
50,579
—
41,776
16,988
24,788
87,630
317
Comprehensive income attributable to The New York Times Company common
stockholders
$
61,083
$
58,346
$
87,947
See Notes to the Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY – P. 57
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands,
except share and
per share data)
Capital
Stock
Class A
and
Class B
Common
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock
Held in
Treasury,
at Cost
Accumulated
Other
Comprehensive
Loss, Net of
Income
Taxes
Total
New York
Times
Company
Stockholders’
Equity
Non-
controlling
Interest
Total
Stock-
holders’
Equity
Balance, December 28, 2014
$ 15,252 $
39,217 $ 1,291,907 $ (86,253) $
(533,795) $
726,328 $
2,021 $ 728,349
Net income/(loss)
Dividends
Other comprehensive income
Issuance of shares:
Stock options – 341,362
Class A shares
Restricted stock units vested –
233,901 Class A shares
Performance-based awards –
87,134 Class A shares
Warrants - 15,900,000 Class
A Shares
Share repurchases - 5,511,233
Class A shares
Stock-based compensation
Income tax shortfall related to
share-based payments
—
—
—
34
23
9
—
—
—
1,909
(2,207)
(1,574)
1,590
99,474
—
—
—
—
10,431
(902)
63,246
(26,409)
—
—
—
—
—
—
—
—
—
—
—
19
— (69,921)
—
—
—
—
—
—
24,701
—
—
—
—
—
—
—
63,246
(26,409)
24,701
1,943
(2,184)
(1,565)
(404)
62,842
— (26,409)
87
24,788
—
—
—
1,943
(2,184)
(1,565)
101,083
— 101,083
(69,921)
10,431
(902)
— (69,921)
—
—
10,431
(902)
Balance, December 27, 2015
16,908
146,348
1,328,744
(156,155)
(509,094)
826,751
1,704
828,455
Net income/(loss)
Dividends
Other comprehensive income/
(loss)
Issuance of shares:
Stock options – 114,652
Class A shares
Restricted stock units vested –
304,171 Class A shares
Performance-based awards –
524,520 Class A shares
Share Repurchases – 1,179,672
Class A shares
Stock-based compensation
Income tax shortfall related to
share-based payments
—
—
—
12
30
53
—
—
—
—
—
—
750
(2,769)
(6,941)
—
12,622
(82)
29,068
(25,901)
—
—
—
—
—
—
—
—
—
—
— (15,056)
—
—
—
—
—
—
29,068
(5,236)
23,832
(25,901)
— (25,901)
29,278
29,278
(39)
29,239
—
—
—
—
—
—
762
(2,739)
(6,888)
(15,056)
12,622
(82)
—
—
—
762
(2,739)
(6,888)
— (15,056)
—
—
12,622
(82)
Balance, December 25, 2016
17,003
149,928
1,331,911
(171,211)
(479,816)
847,815
(3,571)
844,244
Net income
Dividends
Other comprehensive income
Issuance of shares:
Stock options – 657,704
Class A shares
Restricted stock units vested –
283,116 Class A shares
Performance-based awards –
115,881 Class A shares
Stock-based compensation
—
—
—
66
28
11
—
—
—
—
4,535
(2,743)
(1,360)
13,915
4,296
(26,071)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
56,787
4,296
2,541
6,837
(26,071)
56,787
— (26,071)
1,114
57,901
—
—
—
—
4,601
(2,715)
(1,349)
13,915
—
—
—
—
4,601
(2,715)
(1,349)
13,915
Balance, December 31, 2017
$ 17,108 $
164,275 $ 1,310,136 $(171,211) $
(423,029) $
897,279 $
84 $ 897,363
See Notes to the Consolidated Financial Statements.
P. 58 – THE NEW YORK TIMES COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
$
6,837
$
23,832
$
62,842
Restructuring charge
Pension settlement expense
Multiemployer pension plan charges
Depreciation and amortization
Stock-based compensation expense
Undistributed (income)/loss of joint ventures
Deferred income taxes
Long-term retirement benefit obligations
Uncertain tax positions
Other – net
Changes in operating assets and liabilities:
Accounts receivable – net
Other current assets
Accounts payable, accrued payroll and other liabilities
Unexpired subscriptions
Net cash provided by operating activities
Cash flows from investing activities
Purchases of marketable securities
Maturities/disposals of marketable securities
Cash distribution from corporate-owned life insurance
Business acquisitions
(Purchases)/proceeds from investments
Capital expenditures
Change in restricted cash
Other - net
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Long-term obligations:
Repayment of debt and capital lease obligations
Dividends paid
Capital shares:
Stock issuances
Repurchases
Windfall tax benefit related to share-based payments
Share-based compensation tax withholding
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
See Notes to the Consolidated Financial Statements.
—
102,109
—
61,871
14,809
(18,641)
105,174
(184,418)
(4,343)
2,991
12,470
(30,527)
10,012
8,368
86,712
(466,522)
548,461
—
—
15,591
(84,753)
6,919
1,323
21,019
(552)
(26,004)
4,601
—
—
(4,064)
(26,019)
81,712
507
100,692
14,804
21,294
11,701
61,723
12,430
36,273
(13,128)
(55,228)
5,089
(564)
9,825
1,599
(32,276)
6,502
103,876
(566,846)
725,365
38,000
(40,410)
(1,955)
(30,095)
3,804
409
—
40,329
9,055
61,597
10,588
783
(10,102)
(15,404)
1,627
11,494
5,510
22,141
(22,833)
1,448
179,075
(818,865)
818,262
—
—
(5,068)
(26,965)
1,521
412
128,272
(30,703)
(189,768)
(25,897)
(223,648)
(26,599)
761
(15,684)
3,193
(9,629)
103,026
(69,293)
2,303
(3,749)
(237,024)
(217,960)
(4,876)
(208)
105,776
(69,588)
(1,243)
176,607
105,776
$
182,911
$
100,692
$
THE NEW YORK TIMES COMPANY – P. 59
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash Flow Information
(In thousands)
Cash payments
Interest, net of capitalized interest
Income tax payments – net
See Notes to the Consolidated Financial Statements.
Years Ended
December 31,
2017
December 25,
2016
December 27,
2015
$
$
27,732
21,552
$
$
39,487
44,896
$
$
41,449
21,078
P. 60 – THE NEW YORK TIMES COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Nature of Operations
The New York Times Company is a global media organization that includes newspapers, print and digital
products and investments (see Note 5). The New York Times Company and its consolidated subsidiaries are referred
to collectively as the “Company,” “we,” “our” and “us.” Our major sources of revenue are subscription and
advertising.
Principles of Consolidation
The accompanying Consolidated Financial Statements have been prepared in accordance with generally
accepted accounting principles in the United States of America (“GAAP”) and include the accounts of our Company
and our wholly and majority-owned subsidiaries after elimination of all significant intercompany transactions.
The portion of the net income or loss and equity of a subsidiary attributable to the owners of a subsidiary other
than the Company (a noncontrolling interest) is included as a component of consolidated stockholders‘ equity in our
Consolidated Balance Sheets, within net income or loss in our Consolidated Statements of Operations, within
comprehensive income or loss in our Consolidated Statements of Comprehensive Income/(Loss) and as a component
of consolidated stockholders’ equity in our Consolidated Statements of Changes in Stockholders’ Equity.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in our Consolidated Financial Statements. Actual results could differ
from these estimates.
Fiscal Year
Our fiscal year end is the last Sunday in December. Fiscal year 2017 comprised 53 weeks and fiscal years 2016
and 2015 each comprised 52 weeks. Our fiscal years ended as of December 31, 2017, December 25, 2016, and
December 27, 2015, respectively.
2. Summary of Significant Accounting Policies
Cash and Cash Equivalents
We consider all highly liquid debt instruments with original maturities of three months or less to be cash
equivalents.
Marketable Securities
We have investments in marketable debt securities. We determine the appropriate classification of our
investments at the date of purchase and reevaluate the classifications at the balance sheet date. Marketable debt
securities with maturities of 12 months or less are classified as short-term. Marketable debt securities with maturities
greater than 12 months are classified as long-term. Historically, we have accounted for all marketable securities as
held-to-maturity (“HTM”) and stated at amortized cost as we had the intent and ability to hold our marketable debt
securities until maturity. However, on June 29, 2017, our Board of Directors approved a change to the Company’s cash
reserve investment policy to allow the Company to sell marketable securities prior to maturity. Beginning in the third
quarter of 2017, the Company reclassified all marketable securities from HTM to available-for-sale (“AFS”).
AFS securities are reported at fair value. Unrealized gains and losses, after applicable income taxes, are reported
in accumulated other comprehensive income/(loss).
We conduct an other-than-temporary impairment (“OTTI”) analysis on a quarterly basis or more often if a
potential loss-triggering event occurs. We consider factors such as the duration, severity and the reason for the decline
in value, the potential recovery period and whether we intend to sell. For AFS securities, we also consider whether (i)
it is more likely than not that we will be required to sell the debt securities before recovery of their amortized cost
basis and (ii) the amortized cost basis cannot be recovered as a result of credit losses.
THE NEW YORK TIMES COMPANY – P. 61
Concentration of Risk
Financial instruments, which potentially subject us to concentration of risk, are cash and cash equivalents and
marketable securities. Cash is placed with major financial institutions. As of December 31, 2017, we had cash balances
at financial institutions in excess of federal insurance limits. We periodically evaluate the credit standing of these
financial institutions as part of our ongoing investment strategy.
Our marketable securities portfolio consists of investment-grade securities diversified among security types,
issuers and industries. Our cash equivalents and marketable securities are primarily managed by third-party
investment managers who are required to adhere to investment policies approved by our Board of Directors designed
to mitigate risk. Included within marketable securities is approximately $63 million of securities used as collateral for
letters of credit issued by the Company in connection with the leasing of floors in our headquarters building.
Accounts Receivable
Credit is extended to our advertisers and our subscribers based upon an evaluation of the customer’s financial
condition, and collateral is not required from such customers. Allowances for estimated credit losses, rebates, returns,
rate adjustments and discounts are generally established based on historical experience.
Inventories
Inventories are included within Other current assets of the Consolidated Balance Sheets. Inventories are stated
at the lower of cost or net realizable value. Inventory cost is generally based on the last-in, first-out (“LIFO”) method
for newsprint and other paper grades and the first-in, first-out (“FIFO”) method for other inventories.
Investments
Investments in which we have at least a 20%, but not more than a 50%, interest are generally accounted for
under the equity method. Investment interests below 20% are generally accounted for under the cost method, except
if we could exercise significant influence, the investment would be accounted for under the equity method.
We evaluate whether there has been an impairment of our cost and equity method investments annually or in
an interim period if circumstances indicate that a possible impairment may exist.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method over the
shorter of estimated asset service lives or lease terms as follows: buildings, building equipment and improvements –
10 to 40 years; equipment – 3 to 30 years; and software – 2 to 5 years. We capitalize interest costs and certain staffing
costs as part of the cost of major projects.
We evaluate whether there has been an impairment of long-lived assets, primarily property, plant and
equipment, if certain circumstances indicate that a possible impairment may exist. These assets are tested for
impairment at the asset group level associated with the lowest level of cash flows. An impairment exists if the
carrying value of the asset (1) is not recoverable (the carrying value of the asset is greater than the sum of
undiscounted cash flows) and (2) is greater than its fair value.
Goodwill and Intangibles
Goodwill is the excess of cost over the fair value of tangible and intangible net assets acquired. Goodwill is not
amortized but tested for impairment annually or in an interim period if certain circumstances indicate a possible
impairment may exist. Our annual impairment testing date is the first day of our fiscal fourth quarter.
We test for goodwill impairment at the reporting unit level, which is our single operating segment. We first
perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit
is less than its carrying value. The qualitative assessment includes, but is not limited to, the results of our most recent
quantitative impairment test, consideration of industry, market and macroeconomic conditions, cost factors, cash
flows, changes in key management personnel and our share price. The result of this assessment determines whether it
is necessary to perform the goodwill impairment two-step test. For the 2017 annual impairment testing, based on our
qualitative assessment, we concluded that it is more likely than not that goodwill is not impaired.
If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying
value, in the first step, we compare the fair value of the reporting unit with its carrying amount, including goodwill.
P. 62 – THE NEW YORK TIMES COMPANY
Fair value is calculated by a combination of a discounted cash flow model and a market approach model. In
calculating fair value for our reporting unit, we generally weigh the results of the discounted cash flow model more
heavily than the market approach because the discounted cash flow model is specific to our business and long-term
projections. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount
exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. In the
second step, we compare the implied fair value of the reporting unit’s goodwill with the carrying amount of that
goodwill. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the
goodwill over the implied fair value of the goodwill.
Intangible assets that are not amortized (i.e., trade names) are tested for impairment at the asset level by
comparing the fair value of the asset with its carrying amount. If the fair value, which is based on future cash flows,
exceeds the carrying value, the asset is not considered impaired. If the carrying amount exceeds the fair value, an
impairment loss would be recognized in an amount equal to the excess of the carrying amount of the asset over the
fair value of the asset.
Intangible assets that are amortized (i.e., customer lists, non-competes, etc.) are tested for impairment at the
asset level associated with the lowest level of cash flows. An impairment exists if the carrying value of the asset (1) is
not recoverable (the carrying value of the asset is greater than the sum of undiscounted cash flows) and (2) is greater
than its fair value.
The discounted cash flow analysis requires us to make various judgments, estimates and assumptions, many of
which are interdependent, about future revenues, operating margins, growth rates, capital expenditures, working
capital, discount rates and royalty rates. The starting point for the assumptions used in our discounted cash flow
analysis is the annual long-range financial forecast. The annual planning process that we undertake to prepare the
long-range financial forecast takes into consideration a multitude of factors, including historical growth rates and
operating performance, related industry trends, macroeconomic conditions, and marketplace data, among others.
Assumptions are also made for perpetual growth rates for periods beyond the long-range financial forecast period.
Our estimates of fair value are sensitive to changes in all of these variables, certain of which relate to broader
macroeconomic conditions outside our control.
The market approach analysis includes applying a multiple, based on comparable market transactions, to
certain operating metrics of the reporting unit.
The significant estimates and assumptions used by management in assessing the recoverability of goodwill
acquired and intangibles are estimated future cash flows, discount rates, growth rates, as well as other factors. Any
changes in these estimates or assumptions could result in an impairment charge. The estimates, based on reasonable
and supportable assumptions and projections, require management’s subjective judgment. Depending on the
assumptions and estimates used, the estimated results of the impairment tests can vary within a range of outcomes.
In addition to annual testing, management uses certain indicators to evaluate whether the carrying value of our
reporting unit or intangibles may not be recoverable and an interim impairment test may be required. These
indicators include: (1) current-period operating or cash flow declines combined with a history of operating or cash
flow declines or a projection/forecast that demonstrates continuing declines in the cash flow or the inability to
improve our operations to forecasted levels, (2) a significant adverse change in the business climate, whether
structural or technological, (3) significant impairments and (4) a decline in our stock price and market capitalization.
Management has applied what it believes to be the most appropriate valuation methodology for its impairment
testing. Additionally, management believes that the likelihood of an impairment of goodwill is remote due to the
excess market capitalization relative to its net book value. See Note 4.
Self-Insurance
We self-insure for workers’ compensation costs, automobile and general liability claims, up to certain
deductible limits, as well as for certain employee medical and disability benefits. Employee medical costs above a
certain threshold are insured by a third party. The recorded liabilities for self-insured risks are primarily calculated
using actuarial methods. The liabilities include amounts for actual claims, claim growth and claims incurred but not
yet reported. The recorded liabilities for self-insured risks were approximately $38 million as of December 31, 2017
and December 25, 2016.
THE NEW YORK TIMES COMPANY – P. 63
Pension and Other Postretirement Benefits
Our single-employer pension and other postretirement benefit costs are accounted for using actuarial
valuations. We recognize the funded status of these plans – measured as the difference between plan assets, if funded,
and the benefit obligation – on the balance sheet and recognize changes in the funded status that arise during the
period but are not recognized as components of net periodic pension cost, within other comprehensive income/(loss),
net of income taxes. The assets related to our funded pension plans are measured at fair value.
We make significant subjective judgments about a number of actuarial assumptions, which include discount
rates, health-care cost trend rates, long-term return on plan assets and mortality rates. Depending on the assumptions
and estimates used, the impact from our pension and other postretirement benefits could vary within a range of
outcomes and could have a material effect on our Consolidated Financial Statements.
We have elected the practical expedient to use the month-end that is closest to our fiscal year-end or interim
period-end for measuring the single-employer pension plan assets and obligations as well as other postretirement
benefit plan assets and obligations.
We also recognize the present value of pension liabilities associated with the withdrawal from multiemployer
pension plans. We record liabilities for obligations related to complete, partial and estimated withdrawals from
multiemployer pension plans. The actual liability for estimated withdrawals is not known until each plan completes a
final assessment of the withdrawal liability and issues a demand to us. Therefore, we adjust the estimate of our
multiemployer pension plan liability as more information becomes available that allows us to refine our estimates.
See Notes 9 and 10 for additional information regarding pension and other postretirement benefits.
Revenue Recognition
In 2017, the Company renamed “circulation revenues” as “subscription revenues.” Subscription revenues
include single-copy and subscription revenues. Subscription revenues are based on the number of copies of the
printed newspaper (through home-delivery subscriptions and single-copy sales) and digital subscriptions sold and
the rates charged to the respective customers. Single-copy revenue is recognized based on date of publication, net of
provisions for related returns. Proceeds from subscription revenues are deferred at the time of sale and are recognized
in earnings on a pro rata basis over the terms of the subscriptions. The deferred proceeds are recorded within
unexpired subscription revenue in the Consolidated Balance Sheets. When our digital subscriptions are sold through
third parties, we are a principal in the transaction and, therefore, revenues and related costs to third parties for these
sales are reported on a gross basis. Several factors are considered to determine whether we are a principal, most
notably whether we are the primary obligor to the customer and have determined the selling price and product
specifications.
Advertising revenues are recognized when advertisements are published in newspapers or placed on digital
platforms or, with respect to certain digital advertising, each time a user clicks on certain advertisements, net of
provisions for estimated rebates and rate adjustments.
We recognize a rebate obligation as a reduction of revenues, based on the amount of estimated rebates that will
be earned and claimed, related to the underlying revenue transactions during the period. Measurement of the rebate
obligation is estimated based on the historical experience of the number of customers that ultimately earn and use the
rebate. We recognize an obligation for rate adjustments as a reduction of revenues, based on the amount of estimated
post-billing adjustments that will be claimed. Measurement of the rate adjustment obligation is estimated based on
historical experience of credits actually issued.
Other revenues are recognized when the delivery occurs, services are rendered or purchases are made.
Income Taxes
Income taxes are recognized for the following: (1) amount of taxes payable for the current year and (2) deferred
tax assets and liabilities for the future tax consequence of events that have been recognized differently in the financial
statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates and are
adjusted for tax rate changes in the period of enactment.
We assess whether our deferred tax assets should be reduced by a valuation allowance if it is more likely than
not that some portion or all of the deferred tax assets will not be realized. Our process includes collecting positive (i.e.,
P. 64 – THE NEW YORK TIMES COMPANY
sources of taxable income) and negative (i.e., recent historical losses) evidence and assessing, based on the evidence,
whether it is more likely than not that the deferred tax assets will not be realized.
We recognize in our financial statements the impact of a tax position if that tax position is more likely than not
of being sustained on audit, based on the technical merits of the tax position. This involves the identification of
potential uncertain tax positions, the evaluation of tax law and an assessment of whether a liability for uncertain tax
positions is necessary. Different conclusions reached in this assessment can have a material impact on our
Consolidated Financial Statements.
We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can
involve complex issues, which could require an extended period of time to resolve. Until formal resolutions are
reached between us and the tax authorities, the timing and amount of a possible audit settlement for uncertain tax
benefits is difficult to predict.
On December 22, 2017, federal tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Act”)
was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited
to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, a one-time
transition tax on the mandatory deemed repatriation of foreign earnings and numerous domestic and international-
related provisions effective in 2018.
We have estimated our provision for income taxes in accordance with the Act and guidance available as of the
date of this filing and as a result have recorded $68.7 million as additional income tax expense in the fourth quarter of
2017, the period in which the legislation was enacted.
On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of
GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed
(including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In
accordance with SAB 118, we have determined that the $68.7 million of additional income tax expense recorded in
connection with the remeasurement of certain deferred tax assets and liabilities, the one-time transition tax on the
mandatory deemed repatriation of foreign earnings, and deferred tax assets related to executive compensation
deductions was a provisional amount and a reasonable estimate at December 31, 2017. Provisional estimates were also
made with regard to the Company’s deductions under the Act’s new expensing provisions and state and local income
taxes related to foreign earnings subject to the one-time transition tax. The ultimate impact of the Act may differ from
the provisional amount recognized due to, among other things, changes in estimates resulting from the receipt or
calculation of final data, changes in interpretations of the Act, and additional regulatory guidance that may be issued.
The accounting for the impact of the Act is expected to be completed by the fourth quarter of fiscal year 2018.
Stock-Based Compensation
We establish fair value based on market data for our stock-based awards to determine our cost and recognize
the related expense over the appropriate vesting period. We recognize stock-based compensation expense for
outstanding stock-settled long-term performance awards, stock-settled and cash-settled restricted stock units, stock
options and stock appreciation rights. See Note 15 for additional information related to stock-based compensation
expense.
Earnings/(Loss) Per Share
Basic earnings/(loss) per share is calculated by dividing net earnings/(loss) available to common stockholders
by the weighted-average common stock outstanding. Diluted earnings/(loss) per share is calculated similarly, except
that it includes the dilutive effect of the assumed exercise of securities, including outstanding warrants and the effect
of shares issuable under our Company’s stock-based incentive plans if such effect is dilutive.
The two-class method is an earnings allocation method for computing earnings/(loss) per share when a
company’s capital structure includes either two or more classes of common stock or common stock and participating
securities. This method determines earnings/(loss) per share based on dividends declared on common stock and
participating securities (i.e., distributed earnings), as well as participation rights of participating securities in any
undistributed earnings.
THE NEW YORK TIMES COMPANY – P. 65
Foreign Currency Translation
The assets and liabilities of foreign companies are translated at period-end exchange rates. Results of operations
are translated at average rates of exchange in effect during the year. The resulting translation adjustment is included
as a separate component in the Stockholders’ Equity section of our Consolidated Balance Sheets, in the caption
“Accumulated other comprehensive loss, net of income taxes.”
Recently Adopted Accounting Pronouncements
In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2016-09, “Compensation-Stock Compensation,” which provides guidance on accounting for share-based
payment transactions, including the income tax consequences, classification of awards as either equity or liabilities,
and classification on the statement of cash flows. This guidance became effective for the Company for fiscal years
beginning after December 25, 2016.
As a result of the adoption of ASU 2016-09 in the first quarter of 2017, we recognized excess tax windfalls in
income tax expense rather than additional paid-in capital of $3.6 million for the year ended December 31, 2017. Excess
tax shortfalls and/or windfalls for share-based payments are now included in net cash from operating activities
rather than net cash from financing activities. The changes have been applied prospectively in accordance with the
ASU and prior periods have not been adjusted. Additionally, the presentation of employee taxes paid to taxing
authorities for share-based transactions are now included in net cash from financing activities rather than net cash
from operating activities. This change was applied retrospectively and as a result, we reclassified $9.6 million and $3.7
million for the years ended December 25, 2016 and December 27, 2015, respectively, in our Statement of Cash Flows
from operating activities to financing activities. No other material changes resulted from the adoption of this
standard.
Recently Issued Accounting Pronouncements
In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic
220): Reclassification of Certain Tax Effect from Accumulated Other Comprehensive Income.” The new guidance
provides financial statement preparers with an option to reclassify stranded tax effects within Accumulated Other
Comprehensive Income to retained earnings in each period in which the effect of the change in the U.S. federal
corporate income tax rate in the Tax Cuts and Jobs Act is recorded. The amendments are effective for all organizations
for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is
permitted. We are currently in the process of evaluating the impact of this guidance on our consolidated financial
statements.
In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires
the service cost component to be presented separately from the other components of net benefit costs related to single-
employer pension plans and other postretirement benefits plans. Service cost will be presented with other employee
compensation cost within operations. The other components of net benefit cost, such as interest cost, amortization of
prior service cost and gains or losses are required to be presented outside of operations. The new guidance is effective
for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is
permitted. The guidance should be applied retrospectively for the presentation of the service cost component in the
income statement and allows a practical expedient for the estimation basis for applying the retrospective presentation
requirements. Since the changes required in ASU 2017-07 only change the Consolidated Statements of Operations
classification of the components of net periodic benefit cost, no changes will be made to net income. Upon adoption of
the ASU during the first quarter of 2018, the Company will separately present the components of net periodic benefit
cost or income related to single-employer pension plans and other postretirement benefits plans, excluding the service
cost component, in non-operating expenses on a retrospective basis. Refer to Note 9 and Note 10 for components of
net periodic benefit cost related to single-employer pension plans and other postretirement benefits, respectively.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the
Test for Goodwill Impairment, which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an
entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit
exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for
us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. The Company is in the process
P. 66 – THE NEW YORK TIMES COMPANY
of evaluating the impact that this guidance will have on its consolidated financial statements. However, we do not
expect the adoption of the standard to have a material effect on our consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) : Clarifying the Definition of
a Business, which provides guidance to assist companies with evaluating whether transactions should be accounted
for as acquisitions (or disposals) of assets or businesses. The guidance is effective for interim and annual periods
beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on
the consolidated financial statements of the Company.
In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flow: Restricted Cash,” which amends
the guidance in Accounting Standards Codification (“ASC”) 230 on the classification and presentation of restricted
cash in the statement of cash flows. The key requirements of the ASU are: (1) all entities should include in their cash
and cash-equivalent balances in the statements of cash flows those amounts that are deemed to be restricted cash and
restricted cash equivalents, (2) a reconciliation between the statement of financial position and the statement of cash
flows must be disclosed when the statement of financial position includes more than one line item for cash, cash
equivalents, restricted cash, and restricted cash equivalents, (3) changes in restricted cash and restricted cash
equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash
equivalents should not be presented as cash flow activities in the statement of cash flows and (4) an entity with a
material balance of amounts generally described as restricted cash and restricted cash equivalents must disclose
information about the nature of the restrictions. This guidance becomes effective for Company for fiscal years
beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Upon
adoption of the standard during the first quarter of 2018, the Company will include the restricted cash balance with
cash and cash equivalents balances in the statements of cash flows on a retrospective basis. Cash flows provided by
investing activities will decrease by $6.9 million and $3.8 million for the fiscal years ended December 31, 2017 and
December 25, 2016, respectively. The Company will add a reconciliation from Condensed Consolidated Balance
Sheets to Condensed Consolidated Statement of Cash Flows in the first quarter of 2018.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash
Receipts and Cash Payments,” which amends the guidance in ASC 230 on the classification of certain cash receipts
and cash payments in the statement of cash flows. The primary purpose of this ASU is to reduce the diversity in
practice that has resulted from the lack of consistent principles on this topic. The ASU’s amendments add or clarify
guidance on eight cash flows issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt
instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective
interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from
the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including
bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in
securitization transactions, and separately identifiable cash flows and application of the predominance principle. This
guidance becomes effective for the Company for fiscal years beginning after December 15, 2017, and interim periods
within those fiscal years. Early adoption is permitted, including adoption in an interim period. All amendments must
be adopted in the same period. Since proceeds and premiums of corporate-owned life insurance policies and the
return on equity investment are currently classified as cash flows from investing activities, we do not expect the
adoption of the standard to have a material effect on our consolidated financial statements.
In June 2016, FASB issued ASU 2016-13, “Financial Instruments - Credit Losses.” The new guidance introduces
an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also
modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting
model for purchased financial assets with credit deterioration since their origination. The new guidance is effective
for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is
permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are
currently in the process of evaluating the impact of this guidance on our consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, “Leases,” which provides guidance on accounting for leases
and disclosure of key information about leasing arrangements. The guidance requires lessees to recognize the
following for all operating and finance leases at the commencement date: (1) a lease liability, which is the obligation to
make lease payments arising from a lease, measured on a discounted basis and (2) a right-of-use asset representing
the lessee’s right to use, or control the use of, the underlying asset for the lease term. A lessee is permitted to make an
accounting policy election not to recognize lease assets and lease liabilities for short-term leases with a term of 12
months or less. The guidance does not fundamentally change lessor accounting; however, some changes have been
THE NEW YORK TIMES COMPANY – P. 67
made to align that guidance with the lessee guidance and other areas within GAAP. This guidance becomes effective
for the Company for fiscal years beginning after December 30, 2018. Early application is permitted. This guidance is
expected to be applied on a modified retrospective basis for leases existing at, or entered into after, the earliest period
presented in the financial statements. We are currently in the process of evaluating the impact of the new leasing
guidance and expect that most of our operating lease commitments will be subject to the new standard. The adoption
of the standard will have the most significant change on our balance sheet as it will require us to record right-of-use
assets and lease liabilities. Based upon our initial evaluation, we do not expect the adoption of the standard to have a
material effect on our results of operations and liquidity.
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement
of Financial Assets and Financial Liabilities” which addresses certain aspects of recognition, measurement,
presentation, and disclosure of financial instruments including requirements to measure most equity investments at
fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity
investments without readily determinable fair values, and to separately present financial assets and liabilities by
measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial
statements. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods
within those fiscal years. Early adoption is permitted. The amendments related to equity securities without readily
determinable fair values for which the measurement alternative is applied should be applied prospectively to equity
investments that exist as of the date of adoption. We expect to elect the measurement alternative, defined as cost, less
impairments, adjusted by observable price changes. Starting the fourth quarter of 2017, we have renamed “Interest
expense, net” as “Interest expense and other, net” to account for non-operational income or expense and any
impairments or remeasurement of our non-equity method investments as a result of adopting this ASU. We
anticipate that the adoption of the standard may increase the volatility of our Interest expense and other, net, as a
result of the remeasurement of our equity investments upon the occurrence of observable price changes and
impairments.
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which prescribes a
single comprehensive model for entities to use in the accounting of revenue arising from contracts with customers.
The new guidance will supersede virtually all existing revenue guidance under GAAP and is effective for fiscal years
beginning after December 31, 2017. There are two transition options available to entities: the full retrospective
approach or the modified retrospective approach. Under the full retrospective approach, the Company would restate
prior periods in compliance with ASC 250, “Accounting Changes and Error Corrections.” Alternatively, the Company
may elect the modified retrospective approach, which allows for the new revenue standard to be applied to existing
contracts as of the effective date with a cumulative catch-up adjustment recorded to retained earnings. We will adopt
the new standard using the modified retrospective method beginning January 1, 2018.
Subsequently, in March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic
606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the
implementation guidance on principal versus agent considerations in ASU 2014-09. In April 2016, the FASB also
issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and
Licensing,” to reduce the cost and complexity of applying the guidance on identifying promised goods or services
when identifying a performance obligation and improve the operability and understandability of the licensing
implementation guidance. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers
(Topic 606): Narrow-Scope Improvements and Practical Expedients,” to reduce the cost and complexity of applying
the guidance to address certain issues on assessing collectability, presentation of sales taxes, noncash consideration,
and completed contracts and contract modifications at transition. The amendments in ASU 2016-08, 2016-10, and
2016-12 do not change the core principle of ASU 2014-09.
Based upon our evaluation, the adoption of the standards will not have a material effect on our financial
condition or results of operations. Our subscription and advertising revenues will not be impacted by the new
guidance. The most significant changes will be primarily related to how we account for certain licensing
arrangements in the other revenue category for which archival and updated content is included. Under the current
revenue guidance, licensing revenue is generally recognized based on the annual minimum guarantee amount
specified in the contractual agreement with the licensee as a single deliverable. Based on the guidance of Topic 606,
the Company has determined that the archival content and updated content included in these licensing arrangements
represent two separate performance obligations. As such, a portion of the total contract consideration related to the
archival content will be recognized at the commencement of the contract when control of the archival content is
P. 68 – THE NEW YORK TIMES COMPANY
transferred. Based on the modified retroactive approach, the remaining contractual consideration will be recognized
proportionately over the term of the contract when updated content is transferred to the licensee, in line with when
the control of the new content is transferred. The net impact of these changes will accelerate the revenue of contracts
not completed as of January 1, 2018 and we expect that the adjustment to opening retained earnings will be an
increase in the range of approximately $3 million to $6 million.
The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent
accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or
are not expected to have a material effect on our financial condition or results of operations.
THE NEW YORK TIMES COMPANY – P. 69
3. Marketable Securities
As noted in Note 2, the Company reclassified all marketable securities from HTM to AFS in the third quarter of
2017, following a change to the Company’s cash reserve investment policy that allows the Company to sell
marketable securities prior to maturity. This change resulted in recording a $2.5 million net unrealized loss in other
comprehensive income. The reclassification of the investment portfolio to AFS was made to provide increased
flexibility in the use of our investments to support current operations.
The following table presents the amortized cost, gross unrealized gains and losses, and fair market value of our
AFS securities as of December 31, 2017:
(In thousands)
Amortized Cost
Short-term AFS securities
December 31, 2017
Gross
unrealized
gains
Gross
unrealized
losses
Fair Value
Corporate debt securities
$
150,334
$
— $
(227) $
150,107
U.S. Treasury securities
U.S. governmental agency securities
Certificates of deposit
Commercial paper
Total short-term AFS securities
Long-term AFS securities
U.S. governmental agency securities
Corporate debt securities
U.S. Treasury securities
Total long-term AFS securities
70,985
45,819
9,300
32,591
—
—
—
—
(34)
(179)
—
—
70,951
45,640
9,300
32,591
309,029
$
— $
(440) $
308,589
97,798
$
— $
(1,019) $
92,687
53,031
—
—
(683)
(403)
96,779
92,004
52,628
243,516
$
— $
(2,105) $
241,411
$
$
$
P. 70 – THE NEW YORK TIMES COMPANY
The following table represents the AFS securities as of December 31, 2017 that were in an unrealized loss
position, aggregated by investment category and the length of time that individual securities have been in a
continuous loss position:
Less than 12 Months
12 Months or Greater
Total
December 31, 2017
(In thousands)
Fair Value
Short-term AFS securities
Gross
unrealized
losses
Fair Value
Gross
unrealized
losses
Fair Value
Gross
unrealized
losses
Corporate debt securities
$
140,111
$
(199) $
9,996
$
(28) $
150,107
$
U.S. Treasury securities
U.S. governmental agency
securities
70,951
19,770
(34)
(50)
—
—
70,951
25,870
(129)
45,640
Total short-term AFS securities
$
230,832
$
(283) $
35,866
$
(157) $
266,698
$
(227)
(34)
(179)
(440)
Long-term AFS securities
U.S. governmental agency
securities
Corporate debt securities
U.S. Treasury securities
$
23,998
$
(125) $
72,781
$
(894) $
96,779
$
(1,019)
81,118
52,628
(579)
(403)
10,886
—
(104)
—
92,004
52,628
(683)
(403)
Total long-term AFS securities
$
157,744
$
(1,107) $
83,667
$
(998) $
241,411
$
(2,105)
We periodically review our AFS securities for OTTI. See Note 2 for factors we consider when assessing AFS
securities for OTTI. As of December 31, 2017, we did not intend to sell and it was not likely that we would be required
to sell these investments before recovery of their amortized cost basis, which may be at maturity. Unrealized losses
related to these investments are primarily due to interest rate fluctuations as opposed to changes in credit quality.
Therefore, as of December 31, 2017, we have recognized no OTTI loss.
The following table presents the amortized cost of our HTM securities as of December 25, 2016:
(In thousands)
Short-term HTM securities (1)
U.S. Treasury securities
Corporate debt securities
U.S. governmental agency securities
Commercial paper
Total short-term HTM securities
Long-term HTM securities (1)
U.S. governmental agency securities
Corporate debt securities
U.S. Treasury securities
Total long-term HTM securities
December 25, 2016
Amortized Cost
150,623
150,599
64,135
84,178
449,535
110,732
61,775
14,792
187,299
$
$
$
$
(1) All HTM securities were recorded at amortized cost and not adjusted to fair value in accordance with the HTM accounting treatment. As
of December 25, 2016, the amortized cost approximated fair value because of the short-term maturity and highly liquid nature of these
investments.
THE NEW YORK TIMES COMPANY – P. 71
Marketable debt securities
As of December 31, 2017, our short-term and long-term marketable securities had remaining maturities of less
than 1 month to 12 months and 13 months to 35 months, respectively. See Note 8 for additional information regarding
the fair value hierarchy of our marketable securities.
Letters of credit
We issued letters of credit totaling $56.0 million as of December 31, 2017, to secure commitments under certain
sub-lease agreements associated with the rental of floors in our headquarters building. The letters of credit will expire
in 2019, and are collateralized by marketable securities, with a fair value of $63.1 million, held in our investment
portfolios. No amounts were outstanding on these letters of credit as of December 31, 2017. See Note 18 for additional
information regarding the securities commitment.
4. Goodwill and Intangibles
In 2016, the Company acquired two digital marketing agencies, HelloSociety, LLC and Fake Love, LLC for an
aggregate of $15.4 million, in separate all-cash transactions. Also in 2016, the Company acquired Submarine Leisure
Club, Inc., which owned the product review and recommendation websites The Wirecutter and The Sweethome, in an
all-cash transaction. We paid $25.0 million, including a payment made for a non-compete agreement, and also entered
into a consulting agreement and retention agreements that will likely require payments over the three years following
the acquisition.
The Company allocated the purchase prices for these acquisitions based on the final valuation of assets
acquired and liabilities assumed, resulting in allocations to goodwill, intangibles, property, plant and equipment and
other miscellaneous assets.
The aggregate carrying amount of intangible assets of $8.2 million related to these acquisitions has been
included in “Miscellaneous Assets” in our Consolidated Balance Sheets. The estimated useful lives for these assets
range from 3 to 7 years and are amortized on a straight-line basis.
The changes in the carrying amount of goodwill as of December 31, 2017, and since December 27, 2015, were as
follows:
(In thousands)
Balance as of December 27, 2015
Business acquisitions
Foreign currency translation
Balance as of December 25, 2016
Measurement Period Adjustment (1)
Foreign currency translation
Balance as of December 31, 2017
Total Company
$
109,085
28,529
(3,097)
134,517
(198)
9,230
$
143,549
(1) Includes measurement period adjustment in connection with the Submarine Leisure Club, Inc. acquisition.
The foreign currency translation line item reflects changes in goodwill resulting from fluctuating exchange rates
related to the consolidation of certain international subsidiaries.
5. Investments
Investments in Joint Ventures
As of December 31, 2017, our investment in joint ventures of $1.7 million consisted of a 40% equity ownership
interest in Madison Paper Industries (“Madison”), a partnership that previously operated a supercalendered paper
mill in Maine. In the fourth quarter of 2017, we sold our 49% equity interest in Donohue Malbaie Inc. (“Malbaie”), a
Canadian newsprint company, for $20 million Canadian dollar ($15.6 million USD). In the third quarter of 2017, we
sold our 30% ownership in Women in the World Media, LLC, a live event conference business, for a nominal amount.
P. 72 – THE NEW YORK TIMES COMPANY
These investments are accounted for under the equity method, and are recorded in “Investments in joint
ventures” in our Consolidated Balance Sheets. Our proportionate shares of the operating results of our investments
are recorded in “Gain/(loss) from joint ventures” in our Consolidated Statements of Operations.
In 2017, we had a gain from joint ventures of $18.6 million compared with a loss of $36.3 million in 2016. The
gain was primarily due to the sale of the remaining assets of the paper mill previously operated by Madison, partially
offset by our proportionate share of the loss recognized by Madison resulting from Madison’s settlement of pension
obligations, as well as the sale of our investment in Malbaie.
In 2016, we had a loss from joint ventures of $36.3 million compared with a loss of $0.8 million in 2015. The
increase was primarily due to losses related to the shutdown of the paper mill previously operated by Madison, as
described below, partially offset by increased income from our investment in Malbaie, which benefited from higher
newsprint prices and the impact of a significantly weakened Canadian dollar.
Madison
The Company and UPM-Kymmene Corporation (“UPM”), a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison. The Company’s 40% ownership of Madison is through an 80%-
owned consolidated subsidiary that owns 50% of Madison. UPM owns 60% of Madison, including a 10% interest
through a 20% noncontrolling interest in the consolidated subsidiary of the Company. In 2016, the paper mill closed
and we recognized $41.4 million in losses from joint ventures related to the closure. The Company’s proportionate
share of the loss was $20.1 million after tax and net of noncontrolling interest. As a result of the mill closure, we wrote
our investment down to zero.
The Company’s joint venture in Madison is currently being liquidated. In the fourth quarter of 2016, Madison
sold certain assets at the mill site and we recognized a gain of $3.9 million related to the sale. In 2017 we recognized a
gain of $20.8 million, primarily related to the sale of the remaining assets, partially offset by the loss related to our
proportionate share of Madison’s settlement of certain pension obligations. The Company’s proportionate share of the
gain was $11.6 million after tax and net of noncontrolling interest. We expect to receive our proportionate share of a
cash distribution from the wind down of our Madison investment in 2018.
The following table presents summarized unaudited balance sheet information for Madison, which follows a
calendar year:
(In thousands)
Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities
Total equity
December 31,
2017
December 31,
2016
$
35,764
$
9,640
45,404
137
4,070
4,207
3,766
8,944
12,710
1,373
29,386
30,759
$
41,197
$
(18,049)
THE NEW YORK TIMES COMPANY – P. 73
The following table presents summarized unaudited income statement information for Madison, which follows
a calendar year:
(In thousands)
Revenues
Income/(Expenses):
Cost of sales (1)
General and administrative income/(expense) and other (2)
Total income/(expense)
Operating income/(loss)
Other income/(expense)
Net income/(loss)
For the Twelve Months Ended
December 31,
2017
December 31,
2016
December 31,
2015
$
— $
40,523
$
133,319
(13,396)
(63,439)
(126,292)
55,058
41,662
41,662
18
(62,759)
(13,550)
(126,198)
(139,842)
(85,675)
(6,523)
2
689
$
41,680
$
(85,673)
$
(5,834)
(1) Primarily represents Madison’s settlement of its pension obligations in 2017.
(2) Primarily represents gains/(losses) from the sale of assets and closure of Madison in 2017 and 2016.
We received no distributions from Madison in 2017, 2016, or 2015.
Malbaie
We had a 49% equity interest in Malbaie, which we sold during the fourth quarter of 2017 for $20 million
Canadian dollars ($15.6 million USD). We recognized a loss of $6.4 million before tax as a result of the sale. The other
51% equity interest was owned by Resolute FP Canada Inc., a subsidiary of Resolute Forest Products Inc. (“Resolute”),
a Delaware corporation. Resolute is a large global manufacturer of paper, market pulp and wood products.
Other than from the sale of our equity interest in 2017, we received no distributions from Malbaie in 2017, 2016
or 2015.
Other
We purchased newsprint from Malbaie, and previously purchased supercalendered paper from Madison, at
competitive prices. These purchases totaled approximately $11 million in 2017, $14 million in 2016 and $12 million in
2015.
Cost Method Investments
The aggregate carrying amount of cost method investments included in “Miscellaneous assets’’ in our
Consolidated Balance Sheets were $13.6 million for December 31, 2017 and December 25, 2016.
P. 74 – THE NEW YORK TIMES COMPANY
6. Debt Obligations
Our indebtedness primarily consisted of the repurchase option related to a sale-leaseback of a portion of our
New York headquarters. Our total debt and capital lease obligations consisted of the following:
(In thousands)
Option to repurchase ownership interest in headquarters building in 2019:
December 31,
2017
December 25,
2016
Principal amount
$
250,000
$
250,000
Less unamortized discount based on imputed interest rate of 13.0%
Total option to repurchase ownership interest in headquarters building in 2019
Capital lease obligations
6,596
9,801
243,404
240,199
6,805
6,779
Total long-term debt and capital lease obligations
$
250,209
$
246,978
See Note 8 for information regarding the fair value of our long-term debt.
The aggregate face amount of maturities of debt over the next five years and thereafter is as follows:
(In thousands)
2018
2019
2020
2021
2022
Thereafter
Total face amount of maturities
Less: Unamortized debt costs and discount
Carrying value of debt (excludes capital leases)
Amount
$
—
250,000
—
—
—
—
250,000
(6,596)
$
243,404
“Interest expense and other, net,” as shown in the accompanying Consolidated Statements of Operations was as
follows:
(In thousands)
Interest expense
Amortization of debt costs and discount on debt
Capitalized interest
Interest income and other expense, net
Total interest expense and other, net
6.625% Notes
December 31,
2017
December 25,
2016
December 27,
2015
$
27,732
$
39,487
$
41,973
3,205
(1,257)
(9,897)
4,897
(559)
(9,020)
4,756
(338)
(7,341)
$
19,783
$
34,805
$
39,050
In November 2010, we issued $225.0 million aggregate principal amount of 6.625% senior unsecured notes due
December 15, 2016 (“6.625% Notes”). During 2014, we repurchased $18.4 million principal amount of the 6.625%
Notes. In December 2016, the Company repaid, at maturity, the remaining principal amount of the 6.625% Notes.
THE NEW YORK TIMES COMPANY – P. 75
Sale-Leaseback Financing
In March 2009, we entered into an agreement to sell and simultaneously lease back a portion of our leasehold
condominium interest in our Company’s headquarters building located at 620 Eighth Avenue in New York City (the
“Condo Interest”). The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds of
approximately $211 million. The lease term is 15 years, and we have three renewal options that could extend the term
for an additional 20 years. We have an option, exercisable in 2019, to repurchase the Condo Interest for $250.0 million.
In January 2018, we delivered notice of our intent to exercise this option. See Note 19 for more detail on this notice.
The transaction is accounted for as a financing transaction. As such, we have continued to depreciate the Condo
Interest and account for the rental payments as interest expense. The difference between the purchase option price of
$250.0 million and the net sale proceeds of approximately $211 million, or approximately $39 million, is being
amortized over a 10-year period through interest expense. The effective interest rate on this transaction was
approximately 13%.
7. Other
Advertising Expenses
Advertising expense to promote our brand, subscription products and marketing services were $118.6 million,
$89.8 million and $83.4 million for the fiscal years ended December 31, 2017, December 25, 2016 and December 27,
2015, respectively. We expense our advertising costs as incurred.
Capitalized Computer Software Costs
Amortization of capitalized computer software costs included in “Depreciation and amortization” in our
Consolidated Statements of Operations was $12.8 million, $11.5 million and $11.9 million for the fiscal years ended
December 31, 2017, December 25, 2016 and December 27, 2015, respectively. The unamortized computer software
costs were $28.1 million and $19.0 million as of December 31, 2017 and December 25, 2016, respectively.
Headquarters Redesign and Consolidation
In December 2016, we announced plans to redesign our headquarters building, consolidate our operations
within a smaller number of floors and lease the additional floors to third parties. These changes are expected to
generate additional rental income and result in a more collaborative workspace. We incurred $10.1 million of total
costs related to these measures for the fiscal year ended December 31, 2017 . The capital expenditures related to these
measures were approximately $62 million for the fiscal year ended December 31, 2017.
Severance Costs
On May 31, 2017, we announced certain measures designed to streamline our editing process and allow us to
make further investments in the newsroom. These measures resulted in a workforce reduction primarily affecting our
newsroom. We recognized severance costs of $23.9 million for the fiscal year ended December 31, 2017, substantially
all of which were related to this workforce reduction. We recognized severance costs of $18.8 million in 2016 and $7.0
million in 2015. These costs are recorded in “Selling, general and administrative costs” in our Consolidated
Statements of Operations.
Additionally, during the second quarter of 2016, we announced certain measures to streamline our international
print operations and support future growth efforts. These measures included a redesign of our international print
newspaper and the relocation of certain editing and production operations conducted in Paris to our locations in
Hong Kong and New York. During the third and second quarters of 2016, we incurred $2.9 million and $11.9 million,
respectively, of total costs related to the measures, primarily related to relocation and severance charges. These costs
were recorded in “Restructuring charge” in our Consolidated Statements of Operations.
We had a severance liability of $18.8 million and $23.2 million included in “Accrued expenses and other” in our
Consolidated Balance Sheets as of December 31, 2017 and December 25, 2016, respectively.
P. 76 – THE NEW YORK TIMES COMPANY
8. Fair Value Measurements
Fair value is the price that would be received upon the sale of an asset or paid upon transfer of a liability in an
orderly transaction between market participants at the measurement date. The transaction would be in the principal
or most advantageous market for the asset or liability, based on assumptions that a market participant would use in
pricing the asset or liability. The fair value hierarchy consists of three levels:
Level 1–quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability
to access at the measurement date;
Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and
Level 3–unobservable inputs for the asset or liability.
Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis
As of December 31, 2017 and December 25, 2016, we had assets related to our qualified pension plans measured
at fair value. The required disclosures regarding such assets are presented in Note 9.
The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as
of December 31, 2017 and December 25, 2016:
December 31, 2017
December 25, 2016 (3)
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
(In thousands)
Assets:
Short-term AFS securities(1)
U.S Treasury securities
$ 70,951
$
— $ 70,951
$
— $
— $
— $
— $
Corporate debt securities
150,107
U.S. governmental agency securities
45,640
Certificates of deposit
Commercial paper
9,300
32,591
—
—
—
—
150,107
45,640
9,300
32,591
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total short-term AFS securities
$ 308,589
$
— $ 308,589
$
— $
— $
— $
— $
Long-term AFS securities(1)
U.S. governmental agency securities
$ 96,779
$
— $ 96,779
$
— $
— $
— $
— $
Corporate debt securities
U.S Treasury securities
92,004
52,628
—
—
92,004
52,628
—
—
—
—
—
—
—
—
Total long-term AFS securities
$ 241,411
$
— $ 241,411
$
— $
— $
— $
— $
—
—
—
—
—
—
—
—
—
—
Liabilities:
Deferred compensation(2)
$ 29,526
$ 29,526
$
— $
— $ 31,006
$ 31,006
$
— $
—
(1) Our marketable securities, which include U.S. Treasury securities, corporate debt securities, U.S. government agency securities, municipal
securities, certificates of deposit and commercial paper, are recorded at fair value (see Note 3). We classified these investments as Level 2 since
the fair value is based on market observable inputs for investments with similar terms and maturities.
(2) The deferred compensation liability, included in “Other liabilities—Other” in our Consolidated Balance Sheets, consists of deferrals under The
New York Times Company Deferred Executive Compensation Plan (the “DEC”), which enables certain eligible executives to elect to defer a
portion of their compensation on a pre-tax basis. The deferred amounts are invested at the executives’ option in various mutual funds. The fair
value of deferred compensation is based on the mutual fund investments elected by the executives and on quoted prices in active markets for
identical assets. Participation in the DEC was frozen effective December 31, 2015. Refer to Note 11 for detail.
(3) As noted in Note 2, in the third quarter of 2017, we reclassified our marketable securities from HTM to AFS. Prior to being classified as AFS, the
securities were recorded at amortized cost and not adjusted to fair value in accordance with the HTM accounting treatment. As
of December 25, 2016, the amortized cost approximated fair value because of the short-term maturity and highly liquid nature of these
THE NEW YORK TIMES COMPANY – P. 77
investments. We classified these investments as Level 2 since the fair value estimates are based on market observable inputs for investments
with similar terms and maturities.
Financial Instruments Disclosed, But Not Reported, at Fair Value
The carrying value of our long-term debt was approximately $243 million as of December 31, 2017 and
approximately $240 million as of December 25, 2016. The fair value of our long-term debt was approximately $279
million and $298 million as of December 31, 2017, and December 25, 2016, respectively. We estimate the fair value of
our debt utilizing market quotations for debt that have quoted prices in active markets. Since our debt does not trade
in an active market, the fair value estimates are based on market observable inputs based on borrowing rates
currently available for debt with similar terms and average maturities (Level 2).
Assets Measured and Recorded at Fair Value on a Non-Recurring Basis
Certain non-financial assets, such as goodwill, intangible assets, property, plant and equipment and certain
investments are only recorded at fair value if an impairment charge is recognized. Goodwill and intangible assets are
initially recorded at fair value in purchase accounting. We classified all of these measurements as Level 3, as we used
unobservable inputs within the valuation methodologies that were significant to the fair value measurements, and the
valuations required management‘s judgment due to the absence of quoted market prices. There was no impairment
recognized in 2017, 2016 and 2015.
9. Pension Benefits
Single-Employer Plans
We sponsor several single-employer defined benefit pension plans, the majority of which have been frozen. We
also participated in two joint Company and Guild-sponsored plans covering employees who are members of The
NewsGuild of New York. Effective January 1, 2018, the sponsorship of one of these plans, the Newspaper Guild of
New York - The New York Times Pension Plan, which is frozen, was transferred exclusively to the Company.
We also have a foreign-based pension plan for certain employees (the “foreign plan”). The information for the
foreign plan is combined with the information for U.S. non-qualified plans. The benefit obligation of the foreign plan
is immaterial to our total benefit obligation.
Net Periodic Pension Cost
The components of net periodic pension cost were as follows:
(In thousands)
Service cost
Interest cost
December 31, 2017
December 25, 2016
December 27, 2015
Qualified
Plans
Non-
Qualified
Plans
All
Plans
Qualified
Plans
Non-
Qualified
Plans
All
Plans
Qualified
Plans
Non-
Qualified
Plans
All
Plans
$
9,720 $
79 $
9,799
$
8,991 $
143 $
9,134
$ 11,932 $
157 $ 12,089
60,742
7,840
68,582
66,293
8,172
74,465
74,536
10,060
84,596
Expected return on plan assets
(102,900)
— (102,900)
(111,159)
— (111,159)
(115,261)
— (115,261)
Amortization and other costs
29,051
4,318
33,369
28,274
4,184
32,458
36,442
5,081
41,523
Amortization of prior service
(credit)/cost
(1,945)
—
(1,945)
(1,945)
—
(1,945)
(1,945)
Effect of settlement/curtailment
102,109
— 102,109
21,294
(1,599)
19,695
40,329
—
—
(1,945)
40,329
Net periodic pension cost
$ 96,777 $ 12,237 $ 109,014
$ 11,748 $ 10,900 $ 22,648
$ 46,033 $ 15,298 $ 61,331
Over the past several years the Company has taken steps to reduce the size and volatility of our pension
obligations. In the fourth quarter of 2017, the Company entered into agreements with two insurance companies to
transfer future benefit obligations and annuity administration for certain retirees (or their beneficiaries) in two of the
Company’s qualified pension plans. This transfer of plan assets and obligations reduced the Company’s qualified
pension plan obligations by $263.3 million. As a result of these agreements, the Company recorded pension
settlement charges of $102.1 million. Additionally, during the fourth quarter of 2017, the Company made
discretionary contributions totaling $120 million to certain qualified pension plans.
P. 78 – THE NEW YORK TIMES COMPANY
In the fourth quarter of 2016, we recorded a pension settlement charge of $21.3 million in connection with a
lump-sum payment offer made to certain former employees who participated in certain qualified pension plans.
These lump-sum payments totaled $49.5 million and were made with cash from the qualified pension plans, not with
Company cash. The effect of this lump-sum payment offer was to reduce our pension obligations by $52.2 million. In
addition, we recorded a $1.6 million curtailment related to the streamlining of the Company’s international print
operations. See Note 7 for more information on the streamlining of the Company’s international print operations.
In the first quarter of 2015, we recorded a pension settlement charge of $40.3 million in connection with a lump-
sum payment offer made to certain former employees who participated in certain qualified pension plans. These
lump-sum payments totaled $98.3 million and were made with cash from the qualified pension plans, not with
Company cash. The effect of this lump-sum payment offer was to reduce our pension obligations by $142.8 million.
Other changes in plan assets and benefit obligations recognized in other comprehensive income/loss were as
follows:
(In thousands)
Net actuarial loss/(gain)
Amortization of loss
Amortization of prior service credit
Effect of curtailment
Effect of settlement
December 31,
2017
December 25,
2016
December 27,
2015
$
22,600
$
(4,289)
$
31,044
(33,369)
(32,458)
(41,523)
1,945
—
1,945
—
1,945
(1,264)
(102,109)
(21,294)
(40,329)
Total recognized in other comprehensive (income)/loss
(110,933)
(56,096)
(50,127)
Net periodic pension cost
109,014
22,648
61,331
Total recognized in net periodic benefit cost and other comprehensive (income)/
loss
$
(1,919)
$
(33,448)
$
11,204
Actuarial gains and losses are amortized using a corridor approach. The gain or loss corridor is equal to 10% of
the greater of the projected benefit obligation and the market-related value of assets. Gains and losses in excess of the
corridor are generally amortized over the future working lifetime for the ongoing plans and average life expectancy
for the frozen plans.
The estimated actuarial loss and prior service credit that will be amortized from accumulated other
comprehensive loss into net periodic pension cost over the next fiscal year is approximately $32 million and $2
million, respectively.
In the fourth quarter of 2015, the Company’s ERISA Management Committee made a decision to freeze the
accrual of benefits under the Retirement Annuity Plan For Craft Employees of The New York Times Companies with
respect to all participants covered by a collective bargaining agreement between the Company and The New York
Newspaper Printing Pressmen’s Union No. 2N/1SE, effective as of the close of business on December 31, 2015. As a
result, we recorded a curtailment of $1.3 million in 2015.
We also contribute to defined contribution benefit plans. The amount of cost recognized for defined
contribution benefit plans was approximately $23 million for 2017, $15 million for 2016 and $16 million for 2015.
THE NEW YORK TIMES COMPANY – P. 79
Benefit Obligation and Plan Assets
The changes in the benefit obligation and plan assets and other amounts recognized in other comprehensive
loss were as follows:
(In thousands)
Change in benefit obligation
December 31, 2017
December 25, 2016
Qualified
Plans
Non-
Qualified
Plans
All Plans
Qualified
Plans
Non-
Qualified
Plans
All Plans
Benefit obligation at beginning of year
$ 1,798,652
$ 240,399
$ 2,039,051
$ 1,851,910
$
247,087
$ 2,098,997
Service cost
Interest cost
9,720
79
9,799
8,991
143
9,134
60,742
7,840
68,582
66,293
8,172
74,465
Plan participants’ contributions
9
—
9
9
—
9
Actuarial loss
Curtailments
Settlements
Benefits paid
142,980
15,342
158,322
23,994
2,695
26,689
—
(269,287)
—
—
—
—
(1,599)
(1,599)
(269,287)
(48,413)
—
(48,413)
(106,328)
(18,510)
(124,838)
(104,132)
(15,992)
(120,124)
Effects of change in currency conversion
—
152
152
—
(107)
(107)
Benefit obligation at end of year
1,636,488
245,302
1,881,790
1,798,652
240,399
2,039,051
Change in plan assets
Fair value of plan assets at beginning of year
1,576,760
Actual return on plan assets
238,622
—
—
1,576,760
1,579,356
238,622
142,137
—
—
1,579,356
142,137
Employer contributions
127,635
18,510
146,145
7,803
15,992
23,795
Plan participants’ contributions
Settlements
Benefits paid
9
(269,287)
—
—
9
9
(269,287)
(48,413)
—
—
9
(48,413)
(106,328)
(18,510)
(124,838)
(104,132)
(15,992)
(120,124)
Fair value of plan assets at end of year
1,567,411
—
1,567,411
1,576,760
—
1,576,760
Net amount recognized
$
(69,077)
$ (245,302)
$ (314,379)
$ (221,892)
$ (240,399)
$ (462,291)
Amount recognized in the Consolidated Balance Sheets
Current liabilities
Noncurrent liabilities
$
— $
(16,901)
$
(16,901)
$
— $
(16,818)
$
(16,818)
(69,077)
(228,401)
(297,478)
(221,892)
(223,581)
(445,473)
Net amount recognized
$
(69,077)
$ (245,302)
$ (314,379)
$ (221,892)
$ (240,399)
$ (462,291)
Amount recognized in accumulated other comprehensive loss
Actuarial loss
Prior service credit
Total
$
641,194
$ 109,880
$ 751,074
$ 765,096
$
98,855
$
863,951
(20,731)
—
(20,731)
(22,676)
—
(22,676)
$
620,463
$ 109,880
$ 730,343
$ 742,420
$
98,855
$
841,275
P. 80 – THE NEW YORK TIMES COMPANY
Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:
(In thousands)
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Assumptions
December 31,
2017
December 25,
2016
$
$
$
1,881,790
1,874,445
1,567,411
$
$
$
2,039,051
2,034,636
1,576,760
Weighted-average assumptions used in the actuarial computations to determine benefit obligations for
qualified pension plans were as follows:
Discount rate
Rate of increase in compensation levels
December 31,
2017
December 25,
2016
3.75%
2.95%
4.31%
2.95%
The rate of increase in compensation levels is applicable only for qualified pension plans that have not been
frozen.
Weighted-average assumptions used in the actuarial computations to determine net periodic pension cost for
qualified plans were as follows:
Discount rate for determining projected benefit obligation
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Rate of increase in compensation levels
Expected long-term rate of return on assets
December 31,
2017
December 25,
2016
December 27,
2015
4.31%
4.74%
3.54%
2.95%
6.73%
4.60%
5.78%
3.68%
2.91%
7.01%
4.05%
4.05%
4.05%
2.89%
7.01%
Weighted-average assumptions used in the actuarial computations to determine benefit obligations for non-
qualified plans were as follows:
Discount rate
Rate of increase in compensation levels
December 31,
2017
December 25,
2016
3.67%
2.50%
4.17%
2.50%
The rate of increase in compensation levels is applicable only for the non-qualified pension plans that have not
been frozen.
THE NEW YORK TIMES COMPANY – P. 81
Weighted-average assumptions used in the actuarial computations to determine net periodic pension cost for
non-qualified plans were as follows:
Discount rate for determining projected benefit obligation
Discount rate in effect for determining interest cost
Rate of increase in compensation levels
December 31,
2017
December 25,
2016
December 27,
2015
4.17%
3.39%
2.50%
4.40%
3.44%
2.50%
3.90%
3.90%
2.50%
We determined our discount rate using a Ryan ALM, Inc. Curve (the “Ryan Curve”). The Ryan Curve provides
the bonds included in the curve and allows adjustments for certain outliers (i.e., bonds on “watch”). We believe the
Ryan Curve allows us to calculate an appropriate discount rate.
To determine our discount rate, we project a cash flow based on annual accrued benefits. The projected plan
cash flow is discounted to the measurement date, which is the last day of our fiscal year, using the annual spot rates
provided in the Ryan Curve.
In determining the expected long-term rate of return on assets, we evaluated input from our investment
consultants, actuaries and investment management firms, including our review of asset class return expectations, as
well as long-term historical asset class returns. Projected returns by such consultants and economists are based on
broad equity and bond indices. Our objective is to select an average rate of earnings expected on existing plan assets
and expected contributions to the plan during the year, less expense expected to be incurred by the plan during the
year.
The market-related value of plan assets is multiplied by the expected long-term rate of return on assets to
compute the expected return on plan assets, a component of net periodic pension cost. The market-related value of
plan assets is a calculated value that recognizes changes in fair value over three years.
During the fourth quarters of 2017 and 2016, we adopted new mortality tables released by the Society of
Actuaries (“SOA”) and revised the mortality assumptions used in determining our pension obligations. The net
impact to our qualified and non-qualified pension obligations resulting from the new mortality assumptions in 2017
and 2016 was a decrease of $15.4 million and $34.7 million, respectively.
Beginning in 2016, we changed the approach used to calculate the service and interest components of net
periodic benefit cost for benefit plans to provide a more precise measurement of service and interest costs. Prior to
this change, we calculated these service and interest components utilizing a single weighted-average discount rate
derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to
utilize an approach that discounts the individual expected cash flows using the applicable spot rates derived from the
yield curve over the projected cash flow period. The spot rates used to estimate 2016 service and interest costs ranged
from 1.32% to 4.79%. Service costs and interest costs for our benefit plans were reduced by approximately $18 million
in 2016 due to the change in methodology.
Plan Assets
Company-Sponsored Pension Plans
The assets underlying the Company-sponsored qualified pension plans are managed by professional
investment managers. These investment managers are selected and monitored by the pension investment committee,
composed of certain senior executives, who are appointed by the Finance Committee of the Board of Directors of the
Company. The Finance Committee is responsible for adopting our investment policy, which includes rules regarding
the selection and retention of qualified advisors and investment managers. The pension investment committee is
responsible for implementing and monitoring compliance with our investment policy, selecting and monitoring
investment managers and communicating the investment guidelines and performance objectives to the investment
managers.
Our contributions are made on a basis determined by the actuaries in accordance with the funding
requirements and limitations of the Employee Retirement Income Security Act (“ERISA”) and the Internal Revenue
Code.
P. 82 – THE NEW YORK TIMES COMPANY
Investment Policy and Strategy
The primary long-term investment objective is to allocate assets in a manner that produces a total rate of return
that meets or exceeds the growth of our pension liabilities. Our investment objective is to transition the asset mix to
hedge liabilities and minimize volatility in the funded status of the plans.
Asset Allocation Guidelines
In accordance with our asset allocation strategy, for substantially all of our Company-sponsored pension plan
assets, investments are categorized into long duration fixed income investments whose value is highly correlated to
that of the pension plan obligations (“Long Duration Assets”) or other investments, such as equities and high-yield
fixed income securities, whose return over time is expected to exceed the rate of growth in our pension plan
obligations (“Return-Seeking Assets”).
The proportional allocation of assets between Long Duration Assets and Return-Seeking Assets is dependent on
the funded status of each pension plan. Under our policy, for example, a funded status between 95% and 97.5%
requires an allocation of total assets of 53% to 63% to Long Duration Assets and 37% to 47% to Return-Seeking Assets.
As a plan's funded status increases, the allocation to Long Duration Assets will increase and the allocation to Return-
Seeking Assets will decrease.
The following asset allocation guidelines apply to the Return-Seeking Assets:
Asset Category
Public Equity
Growth Fixed Income
Alternatives
Cash
Percentage
Range
Actual
70% -
90%
83%
0% -
15%
0% -
15%
0% -
10%
6%
8%
3%
The asset allocations by asset category for both Long Duration and Return-Seeking Assets, as of December 31,
2017, were as follows:
Asset Category
Long Duration
Public Equity
Growth Fixed Income
Alternatives
Cash
Percentage
Range
53% -
63%
26% -
42%
0% -
0% -
0% -
7%
7%
5%
Actual
56%
36%
3%
4%
1%
The specified target allocation of assets and ranges set forth above are maintained and reviewed on a periodic
basis by the pension investment committee. The pension investment committee may direct the transfer of assets
between investment managers in order to rebalance the portfolio in accordance with approved asset allocation ranges
to accomplish the investment objectives for the pension plan assets.
THE NEW YORK TIMES COMPANY – P. 83
Fair Value of Plan Assets
The fair value of the assets underlying our Company-sponsored qualified pension plans and the joint-
sponsored Guild-Times Adjustable Pension Plan by asset category are as follows:
Quoted Prices
Markets for
Identical Assets
Significant
Observable
Inputs
Significant
Unobservable
Inputs
Investment
Measured at Net
Asset Value (3)
December 31, 2017
(Level 1)
(Level 2)
(Level 3)
Total
(In thousands)
Asset Category
Equity Securities:
U.S. Equities
$
65,466
$
— $
— $
— $
International Equities
Mutual Funds
Registered Investment
Companies
Common/Collective Funds(1)
Fixed Income Securities:
Corporate Bonds
U.S. Treasury and Other
Government Securities
Group Annuity Contract
Municipal and Provincial
Bonds
Government Sponsored
Enterprises(2)
Other
Cash and Cash Equivalents
Private Equity
Hedge Fund
62,256
44,173
42,868
—
—
—
—
—
—
—
—
—
—
—
—
—
—
416,201
144,085
—
36,674
11,364
10,883
—
—
—
Assets at Fair Value
214,763
619,207
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
65,466
62,256
44,173
42,868
601,896
601,896
—
—
45,005
—
—
—
32,352
20,289
33,899
416,201
144,085
45,005
36,674
11,364
10,883
32,352
20,289
33,899
733,441
1,567,411
—
Other Assets
Total
$
214,763
$
619,207
$
— $
733,441
$
1,567,411
(1) The underlying assets of the common/collective funds are primarily comprised of equity and fixed income securities. The fair value in the above
table represents our ownership share of the net asset value (“NAV”) of the underlying funds.
(2) Represents investments that are not backed by the full faith and credit of the U.S. government.
(3) Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value
hierarchy.
P. 84 – THE NEW YORK TIMES COMPANY
Fair Value Measurement at December 25, 2016
Quoted Prices
Markets for
Identical Assets
Significant
Observable
Inputs
Significant
Unobservable
Inputs
Investment
Measured at Net
Asset Value (3)
(Level 1)
(Level 2)
(Level 3)
Total
(In thousands)
Asset Category
Equity Securities:
U.S. Equities
$
61,327
$
— $
— $
— $
International Equities
Mutual Funds
Registered Investment Companies
Common/Collective Funds (1)
Fixed Income Securities:
Corporate Bonds
U.S. Treasury and Other
Government Securities
Group Annuity Contract
Municipal and Provincial Bonds
Government Sponsored
Enterprises (2)
Other
Cash and Cash Equivalents
Private Equity
Hedge Fund
48,494
49,869
30,870
—
—
—
—
—
—
—
—
—
—
—
—
—
—
376,289
128,179
—
33,115
7,227
4,486
—
—
—
Assets at Fair Value
190,560
549,296
—
—
Other Assets
Total
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
61,327
48,494
49,869
30,870
701,577
701,577
—
—
54,872
—
—
—
22,829
24,931
31,939
376,289
128,179
54,872
33,115
7,227
4,486
22,829
24,931
31,939
836,148
1,576,004
—
756
$
190,560
$
549,296
$
— $
836,148
$
1,576,760
(1) The underlying assets of the common/collective funds are primarily comprised of equity and fixed income securities. The fair value in the above
table represents our ownership share of the net asset value (“NAV”) of the underlying funds.
(2) Represents investments that are not backed by the full faith and credit of the U.S. government.
(3) Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value
hierarchy.
Level 1 and Level 2 Investments
Where quoted prices are available in an active market for identical assets, such as equity securities traded on an
exchange, transactions for the asset occur with such frequency that the pricing information is available on an
ongoing/daily basis. We classify these types of investments as Level 1 where the fair value represents the closing/last
trade price for these particular securities.
For our investments where pricing data may not be readily available, fair values are estimated by using quoted
prices for similar assets, in both active and not active markets, and observable inputs, other than quoted prices, such
as interest rates and credit risk. We classify these types of investments as Level 2 because we are able to reasonably
estimate the fair value through inputs that are observable, either directly or indirectly. There are no restrictions on our
ability to sell any of our Level 1 and Level 2 investments.
THE NEW YORK TIMES COMPANY – P. 85
Cash Flows
In 2017, we made contributions to qualified pension plans of $127.6 million. We expect contributions made to
satisfy minimum funding requirements to total approximately $8 million in 2018.
The following benefit payments, which reflect future service for plans that have not been frozen, are expected to
be paid:
(In thousands)
2018
2019
2020
2021
2022
2023-2027(1)
Plans
Qualified
Non-
Qualified
Total
$
84,216
$
17,181
$
101,397
85,816
87,162
89,169
91,192
479,738
17,068
16,794
16,583
16,389
78,560
102,884
103,956
105,752
107,581
558,298
(1) While benefit payments under these plans are expected to continue beyond 2027, we have presented in this table only those benefit payments
estimated over the next 10 years.
Multiemployer Plans
We contribute to a number of multiemployer defined benefit pension plans under the terms of various
collective bargaining agreements that cover our union-represented employees. In recent years, certain events, such as
amendments to various collective bargaining agreements and the sale of the New England Media Group, resulted in
withdrawals from multiemployer pension plans. These actions, along with a reduction in covered employees, have
resulted in us estimating withdrawal liabilities to the respective plans for our proportionate share of any unfunded
vested benefits. In 2016 and 2015, we recorded $6.7 million and $9.1 million in charges for partial withdrawal
obligations under multiemployer pension plans, respectively. There was no such charge in 2017.
Our multiemployer pension plan withdrawal liability was approximately $108 million as of December 31, 2017
and approximately $113 million as of December 25, 2016. This liability represents the present value of the obligations
related to complete and partial withdrawals that have already occurred as well as an estimate of future partial
withdrawals that we considered probable and reasonably estimable. For those plans that have yet to provide us with
a demand letter, the actual liability will not be fully known until they complete a final assessment of the withdrawal
liability and issue a demand to us. Therefore, the estimate of our multiemployer pension plan liability will be adjusted
as more information becomes available that allows us to refine our estimates.
The risks of participating in multiemployer plans are different from single-employer plans in the following
aspects:
• Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees
of other participating employers.
•
•
•
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne
by the remaining participating employers.
If we elect to withdraw from these plans or if we trigger a partial withdrawal due to declines in contribution
base units or a partial cessation of our obligation to contribute, we may be assessed a withdrawal liability
based on a calculated share of the underfunded status of the plan.
If a multiemployer plan from which we have withdrawn subsequently experiences a mass withdrawal, we
may be required to make additional contributions under applicable law.
Our participation in significant plans for the fiscal period ended December 31, 2017, is outlined in the table
below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the
three-digit plan number. The zone status is based on the latest information that we received from the plan and is
P. 86 – THE NEW YORK TIMES COMPANY
certified by the plan’s actuary. A plan is generally classified in critical status if a funding deficiency is projected within
four years or five years, depending on other criteria. A plan in critical status is classified in critical and declining
status if it is projected to become insolvent in the next 15 or 20 years, depending on other criteria. A plan is classified
in endangered status if its funded percentage is less than 80% or a funding deficiency is projected within seven years.
If the plan satisfies both of these triggers, it is classified in seriously endangered status. A plan not classified in any
other status is classified in the green zone. The “FIP/RP Status Pending/Implemented” column indicates plans for
which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been
implemented. The “Surcharge Imposed” column includes plans in a red zone status that are required to pay a
surcharge in excess of regular contributions. The last column lists the expiration date(s) of the collective bargaining
agreement(s) to which the plans are subject.
Pension Fund
EIN/Pension
Plan Number
2017
2016
FIP/RP Status
Pending/
Implemented
2017
2016
2015
Surcharge
Imposed
Pension Protection Act
Zone Status
(In thousands)
Contributions of the
Company
Collective
Bargaining
Agreement
Expiration
Date
CWA/ITU Negotiated
Pension Plan
Newspaper and Mail
Deliverers’-Publishers’
Pension Fund
Critical and
Declining
as of
1/01/17
Critical and
Declining
as of
1/01/16
13-6212879-001
13-6122251-001
Green as of
6/01/17
Green as of
6/01/16
GCIU-Employer
Retirement Benefit
Plan
91-6024903-001
Critical and
Declining
as of
1/01/17
Critical and
Declining
as of
1/01/16
Pressmen’s Publishers’
Pension Fund
13-6121627-001
Green as of
4/01/17
Green as of
4/01/16
Paper-Handlers’-
Publishers’ Pension
Fund
13-6104795-001
Critical and
Declining
as of
4/01/17
Critical and
Declining
as of
4/01/16
Implemented
$
425 $
486 $
543
No
(1)
N/A
995
1,040
1,038
No
3/30/2020(2)
Implemented
39
43
57
Yes
3/30/2021(3)
N/A
963
1,001
1,033
No
3/30/2021(4)
Implemented
88
100
97
Yes
3/30/2021(5)
Contributions for individually significant plans
Total Contributions
$ 2,510 $ 2,670 $ 2,768
$ 2,510 $ 2,670 $ 2,768
(1) There are two collective bargaining agreements requiring contributions to this plan: Mailers which expires March 30, 2019, and Typographers
which expires March 30, 2020.
(2) Elections under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010: Extended Amortization of Net
Investment Losses (IRS Section 431(b)(8)(A)) and the Expanded Smoothing Period (IRS Section 431(b)(8)(B)).
(3) We previously had two collective bargaining agreements requiring contributions to this plan. With the sale of the New England Media Group
only one collective bargaining agreement remains for the Stereotypers, which expires March 30, 2021. The method for calculating actuarial value
of assets was changed retroactive to January 1, 2009, as elected by the Board of Trustees and as permitted by IRS Notice 2010-83. This election
includes smoothing 2008 investment losses over ten years.
(4) The Plan sponsor elected two provisions of funding relief under the Preservation of Access to Care for Medicare Beneficiaries and Pension
Relief Act of 2010 (PRA 2010) to more slowly absorb the 2008 plan year investment loss, retroactively effective as of April 1, 2009. These
included extended amortization under the prospective method and 10-year smoothing of the asset loss for the plan year beginning April 1, 2008.
(5) Board of Trustees elected funding relief. This election includes smoothing the March 31, 2009 investment losses over 10 years.
The rehabilitation plan for the GCIU-Employer Retirement Benefit Plan includes minimum annual
contributions no less than the total annual contribution made by us from September 1, 2008 through August 31, 2009.
THE NEW YORK TIMES COMPANY – P. 87
The Company was listed in the plans’ respective Forms 5500 as providing more than 5% of the total
contributions for the following plans and plan years:
Pension Fund
CWA/ITU Negotiated Pension Plan
Newspaper and Mail Deliverers’-Publishers’ Pension Fund
Pressmen’s Publisher’s Pension Fund
Paper-Handlers’-Publishers’ Pension Fund
Year Contributions to Plan Exceeded More Than 5 Percent of
Total Contributions (as of Plan’s Year-End)
12/31/2016 & 12/31/2015(1)
5/31/2016 & 5/31/2015(1)
3/31/2017 & 3/31/2016
3/31/2017 & 3/31/2016
(1) Forms 5500 for the plans’ year ended 12/31/17 and 5/31/17 were not available as of the date we filed our financial statements.
The Company received a notice and demand for payment of withdrawal liability from the Newspaper and Mail
Deliverers’-Publishers’ Pension Fund in September 2013 and December 2014 associated with partial withdrawals. See
Note 18 for further information.
10. Other Postretirement Benefits
We provide health benefits to retired employees (and their eligible dependents) who meet the definition of an
eligible participant and certain age and service requirements, as outlined in the plan document. While we offer pre-
age 65 retiree medical coverage to employees who meet certain retiree medical eligibility requirements, we do not
provide post-age 65 retiree medical benefits for employees who retired on or after March 1, 2009. We accrue the costs
of postretirement benefits during the employees’ active years of service and our policy is to pay our portion of
insurance premiums and claims from our assets.
Net Periodic Other Postretirement Benefit Income
The components of net periodic postretirement benefit income were as follows:
(In thousands)
Service cost
Interest cost
Amortization and other costs
Amortization of prior service credit
Effect of settlement/curtailment (1)
December 31,
2017
December 25,
2016
December 27,
2015
$
367
$
417
$
1,881
3,621
(7,755)
(32,737)
1,979
4,105
588
2,794
5,197
(8,440)
(9,495)
—
—
Net periodic postretirement benefit income
$
(34,623)
$
(1,939)
$
(916)
(1) In the fourth quarter of 2017, the Company recorded a gain in connection with the settlement of a funding obligation related to a postretirement
plan.
P. 88 – THE NEW YORK TIMES COMPANY
The changes in the benefit obligations recognized in other comprehensive income/loss were as follows:
(In thousands)
Net actuarial loss/(gain)
Prior service cost
Amortization of loss
Amortization of prior service credit
Effect of curtailment
Effect of settlement
Total recognized in other comprehensive loss/(income)
Net periodic postretirement benefit income
December 31,
2017
December 25,
2016
December 27,
2015
$
(6,625)
$
28
$
(5,543)
—
(3,621)
7,755
6,502
26,235
30,246
(34,623)
—
(4,105)
8,440
—
—
4,363
(1,939)
1,145
(5,197)
9,495
—
—
(100)
(916)
Total recognized in net periodic postretirement benefit income and other
comprehensive (income)/loss
$
(4,377)
$
2,424
$
(1,016)
Actuarial gains and losses are amortized using a corridor approach. The gain or loss corridor is equal to 10% of
the accumulated postretirement benefit obligation. Gains and losses in excess of the corridor are generally amortized
over the average remaining service period to expected retirement of active participants.
The estimated actuarial loss and prior service credit that will be amortized from accumulated other
comprehensive loss into net periodic benefit cost over the next fiscal year is approximately $5 million and $6 million,
respectively.
In connection with collective bargaining agreements, we contribute to several multiemployer welfare plans.
These plans provide medical benefits to active and retired employees covered under the respective collective
bargaining agreement. Contributions are made in accordance with the formula in the relevant agreement.
Postretirement costs related to these plans are not reflected above and were approximately $15 million in 2017, $15
million in 2016 and $16 million in 2015.
THE NEW YORK TIMES COMPANY – P. 89
The changes in the benefit obligation and plan assets and other amounts recognized in other comprehensive
income/loss were as follows:
(In thousands)
Change in benefit obligation
December 31,
2017
December 25,
2016
Benefit obligation at beginning of year
$
65,042
$
71,047
Service cost
Interest cost
Plan participants’ contributions
Actuarial loss
Curtailments/settlements
Benefits paid
Benefit obligation at the end of year
Change in plan assets
Fair value of plan assets at beginning of year
Employer contributions
Plan participants’ contributions
Benefits paid
Fair value of plan assets at end of year
Net amount recognized
Amount recognized in the Consolidated Balance Sheets
Current liabilities
Noncurrent liabilities
Net amount recognized
Amount recognized in accumulated other comprehensive loss
Actuarial loss
Prior service credit
Total
367
1,881
4,007
3,703
(10,328)
417
1,979
4,409
28
—
(10,030)
(12,838)
54,642
65,042
—
6,023
4,007
—
8,429
4,409
(10,030)
(12,838)
—
—
(54,642)
$
(65,042)
(5,826)
$
(7,043)
(48,816)
(57,999)
(54,642)
$
(65,042)
38,512
$
22,522
(18,613)
(32,870)
19,899
$
(10,348)
$
$
$
$
$
Weighted-average assumptions used in the actuarial computations to determine the postretirement benefit
obligations were as follows:
Discount rate
Estimated increase in compensation level
December 31,
2017
December 25,
2016
3.46%
3.50%
3.94%
3.50%
P. 90 – THE NEW YORK TIMES COMPANY
Weighted-average assumptions used in the actuarial computations to determine net periodic postretirement
cost were as follows:
Discount rate for determining projected benefit obligation
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Estimated increase in compensation level
The assumed health-care cost trend rates were as follows:
Health-care cost trend rate
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)
Year that the rate reaches the ultimate trend rate
December 31,
2017
December 25,
2016
December 27,
2015
3.93%
4.08%
3.21%
3.50%
4.05%
4.24%
2.96%
3.50%
3.74%
3.74%
3.74%
3.50%
December 31,
2017
December 25,
2016
7.60%
5.00%
2025
8.00%
5.00%
2025
Because our health-care plans are capped for most participants, the assumed health-care cost trend rates do not
have a significant effect on the amounts reported for the health-care plans. A one-percentage point change in assumed
health-care cost trend rates would have the following effects:
(In thousands)
Effect on total service and interest cost for 2017
Effect on accumulated postretirement benefit obligation as of December 31, 2017
One-Percentage Point
Increase
Decrease
$
$
62
2,200
$
$
(53)
(1,865)
The following benefit payments (net of plan participant contributions) under our Company’s postretirement
plans, which reflect expected future services, are expected to be paid:
(In thousands)
2018
2019
2020
2021
2022
2023-2027 (1)
$
Amount
5,968
5,589
5,286
4,988
4,655
19,045
(1) While benefit payments under these plans are expected to continue beyond 2027, we have presented in this table only those benefit
payments estimated over the next 10 years.
We accrue the cost of certain benefits provided to former or inactive employees after employment, but before
retirement. The cost is recognized only when it is probable and can be estimated. Benefits include life insurance,
disability benefits and health-care continuation coverage. The accrued obligation for these benefits amounted to $11.3
million as of December 31, 2017 and $11.4 million as of December 25, 2016.
During the fourth quarters of 2017 and 2016, we adopted new mortality tables released by the SOA and revised
the mortality assumptions used in determining our postretirement benefit obligations. The net impact to our
postretirement obligations resulting from the new mortality assumptions in 2017 and 2016 was a decrease of $0.6
million and $1.2 million, respectively.
THE NEW YORK TIMES COMPANY – P. 91
Beginning in 2016, we changed the approach used to calculate the service and interest components of net
periodic benefit cost for benefit plans to provide a more precise measurement of service and interest costs. Prior to
this change, we calculated these service and interest components utilizing a single weighted-average discount rate
derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to
utilize an approach that discounts the individual expected cash flows using the applicable spot rates derived from the
yield curve over the projected cash flow period. The spot rates used to estimate 2016 service and interest costs ranged
from 1.32% to 4.79%. Service costs and interest costs for our benefit plans were reduced by approximately $1 million
in 2016 due to the change in methodology.
11. Other Liabilities
The components of the “Other Liabilities — Other” balance in our Consolidated Balance Sheets were as follows:
(In thousands)
Deferred compensation
Other liabilities
Total
December 31,
2017
December 25,
2016
$
$
29,526
$
31,006
52,787
47,641
82,313
$
78,647
Deferred compensation consists primarily of deferrals under our DEC. The DEC enabled certain eligible
executives to elect to defer a portion of their compensation on a pre-tax basis. Participation in the DEC was frozen
effective December 31, 2015, and no new contributions may be made into the plan.
We invest deferred compensation in life insurance products designed to closely mirror the performance of the
investment funds that the participants select. Our investments in life insurance products are included in
“Miscellaneous assets” in our Consolidated Balance Sheets, and were $40.3 million as of December 31, 2017 and $34.8
million as of December 25, 2016.
Other liabilities in the preceding table primarily included our post employment liabilities, our contingent tax
liability for uncertain tax positions and self-insurance liabilities as of December 31, 2017 and December 25, 2016.
P. 92 – THE NEW YORK TIMES COMPANY
12. Income Taxes
Reconciliations between the effective tax rate on income from continuing operations before income taxes and
the federal statutory rate are presented below.
(In thousands)
Tax at federal statutory rate
State and local taxes, net
Effect of enacted changes in tax laws
Reduction in uncertain tax positions
Loss/(gain) on Company-owned life insurance
Nondeductible expense, net
Domestic manufacturing deduction
Foreign Earnings and Dividends
Other, net
Income tax expense
December 31, 2017
December 25, 2016
December 27, 2015
Amount
% of
Pre-tax
Amount
% of
Pre-tax
Amount
% of
Pre-tax
$ 38,928
35.0
$ 10,685
35.0
$ 33,863
35.0
4,800
68,747
(2,277)
(1,916)
1,021
—
458
4.3
61.8
(2.0)
(1.7)
0.9
—
0.4
3,095
—
10.1
—
5,093
1,801
5.2
1.8
(4,534)
(14.9)
(2,545)
(2.6)
(736)
1,115
(1,820)
(2,418)
(2.4)
3.7
(6.0)
(7.9)
(3.2)
75
880
(2,651)
(1,214)
(1,392)
0.1
0.9
(2.7)
(1.3)
(1.4)
(5,805)
(5.2)
(966)
$ 103,956
93.5
$
4,421
14.4
$ 33,910
35.0
The components of income tax expense as shown in our Consolidated Statements of Operations were as
follows:
(In thousands)
Current tax expense/(benefit)
Federal
Foreign
State and local
Total current tax expense
Deferred tax expense
Federal
State and local
Total deferred tax expense/(benefit)
Income tax expense/(benefit)
December 31,
2017
December 25,
2016
December 27,
2015
$
(252)
$
22,864
$
41,199
458
350
556
312
(3,295)
19,881
485
5,919
47,603
105,905
(16,625)
(14,554)
(2,505)
1,165
861
103,400
(15,460)
(13,693)
$
103,956
$
4,421
$
33,910
State tax operating loss carryforwards totaled $4.7 million as of December 31, 2017 and $3.4 million as of
December 25, 2016. Such loss carryforwards expire in accordance with provisions of applicable tax laws and have
remaining lives up to 20 years.
On December 22, 2017, federal tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Act”)
was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited
to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, a one-time
transition tax on the mandatory deemed repatriation of foreign earnings and numerous domestic and international-
related provisions effective in 2018.
THE NEW YORK TIMES COMPANY – P. 93
We have estimated our provision for income taxes in accordance with the Act and guidance available as of the
date of this filing and as a result have recorded $68.7 million as additional income tax expense in the fourth quarter of
2017, the period in which the legislation was enacted.
On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of
GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed
(including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In
accordance with SAB 118, we have determined that the $68.7 million of additional income tax expense recorded in
connection with the remeasurement of certain deferred tax assets and liabilities, the one-time transition tax on the
mandatory deemed repatriation of foreign earnings, and deferred tax assets related to executive compensation
deductions was a provisional amount and a reasonable estimate at December 31, 2017. Provisional estimates were also
made with regard to the Company’s deductions under the Act’s new expensing provisions and state and local income
taxes related to foreign earnings subject to the one-time transition tax. The ultimate impact of the Act may differ from
the provisional amount recognized due to, among other things, changes in estimates resulting from the receipt or
calculation of final data, changes in interpretations of the Act, and additional regulatory guidance that may be issued.
The accounting for the impact of the Act is expected to be completed by the fourth quarter of fiscal year 2018.
The components of the net deferred tax assets and liabilities recognized in our Consolidated Balance Sheets
were as follows:
(In thousands)
Deferred tax assets
December 31,
2017
December 25,
2016
Retirement, postemployment and deferred compensation plans
$
140,657
$
275,611
Accruals for other employee benefits, compensation, insurance and other
16,883
34,466
Accounts receivable allowances
Net operating losses
Investment in joint ventures
Other
Gross deferred tax assets
Deferred tax liabilities
Property, plant and equipment
Intangible assets
Investments in joint ventures
Other
Gross deferred tax liabilities
Net deferred tax asset
1,391
6,228
—
2,450
2,598
5,329
30,295
39,943
195,454
$
360,397
31,043
$
46,284
7,300
615
3,450
11,975
—
796
$
$
42,408
59,055
$
153,046
$
301,342
We assess whether a valuation allowance should be established against deferred tax assets based on the
consideration of both positive and negative evidence using a “more likely than not” standard. In making such
judgments, significant weight is given to evidence that can be objectively verified. We evaluated our deferred tax
assets for recoverability using a consistent approach that considers our three-year historical cumulative income/
(loss), including an assessment of the degree to which any such losses were due to items that are unusual in nature
(i.e., impairments of nondeductible goodwill and intangible assets).
We had an income tax receivable of $25.4 million as of December 31, 2017 versus accrued income taxes payable
of $1.9 million as of December 25, 2016.
Income tax benefits related to the exercise or vesting of equity awards reduced current taxes payable by $13.7
million in 2017, $8.6 million in 2016 and $4.4 million in 2015.
P. 94 – THE NEW YORK TIMES COMPANY
As of December 31, 2017 and December 25, 2016, “Accumulated other comprehensive loss, net of income taxes”
in our Consolidated Balance Sheets and for the years then ended in our Consolidated Statements of Changes in
Stockholders’ Equity was net of deferred tax assets of approximately $196 million and $331 million, respectively.
A reconciliation of unrecognized tax benefits is as follows:
(In thousands)
Balance at beginning of year
Gross additions to tax positions taken during the current year
Gross additions to tax positions taken during the prior year
Gross reductions to tax positions taken during the prior year
Reductions from lapse of applicable statutes of limitations
December 31,
2017
December 25,
2016
December 27,
2015
$
10,028
$
13,941
$
16,324
9,009
103
(372)
(1,682)
997
—
(3,042)
(1,868)
1,151
282
(37)
(3,779)
Balance at end of year
$
17,086
$
10,028
$
13,941
The total amount of unrecognized tax benefits that would, if recognized, affect the effective income tax rate was
approximately $7 million as of December 31, 2017 and December 25, 2016.
In 2017 and 2016, we recorded a $2.3 million and $4.5 million income tax benefit, respectively, primarily due to a
reduction in the Company’s reserve for uncertain tax positions.
We also recognize accrued interest expense and penalties related to the unrecognized tax benefits within income
tax expense or benefit. The total amount of accrued interest and penalties was approximately $2 million and $3 million
as of December 31, 2017 and December 25, 2016, respectively. The total amount of accrued interest and penalties was a
net benefit of $0.1 million in 2017, a net benefit of $0.9 million in 2016 and a net benefit of $0.1 million in 2015.
With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax
examinations by tax authorities for years prior to 2010. Management believes that our accrual for tax liabilities is
adequate for all open audit years. This assessment relies on estimates and assumptions and may involve a series of
complex judgments about future events.
It is reasonably possible that certain income tax examinations may be concluded, or statutes of limitation may
lapse, during the next 12 months, which could result in a decrease in unrecognized tax benefits of $3.3 million that
would, if recognized, impact the effective tax rate.
13. Discontinued Operations
New England Media Group
In the fourth quarter of 2013, we completed the sale of substantially all of the assets and operating liabilities of
the New England Media Group — consisting of The Boston Globe, BostonGlobe.com, Boston.com, the T&G,
Telegram.com and related properties — and our 49% equity interest in Metro Boston, for approximately $70.0 million
in cash, subject to customary adjustments. The net after-tax proceeds from the sale, including a tax benefit, were
approximately $74.0 million. In the forth quarter of 2016, the Company reached a settlement with respect to litigation
involving NEMG T&G, Inc., a subsidiary of the Company that was a part of New England Media Group. As a result
of the settlement, the Company recorded charges of $0.7 million ($0.4 million after tax) and $3.7 million ($2.3 million
after tax) for the fiscal years ended December 31, 2017 and December 25, 2016, respectively. The results of operations
of the New England Media Group have been classified as discontinued operations for all periods presented.
THE NEW YORK TIMES COMPANY – P. 95
14. Earnings/(Loss) Per Share
We compute earnings/(loss) per share using a two-class method, an earnings allocation method used when a
company’s capital structure includes either two or more classes of common stock or common stock and participating
securities. This method determines earnings/(loss) per share based on dividends declared on common stock and
participating securities (i.e., distributed earnings), as well as participation rights of participating securities in any
undistributed earnings.
Earnings/(loss) per share is computed using both basic shares and diluted shares. The difference between basic
and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities.
Our stock options, stock-settled long-term performance awards and restricted stock units could have the most
significant impact on diluted shares. The decrease in our basic shares is primarily due to repurchases of the
Company’s Class A Common Stock.
Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share
when a loss from continuing operations exists or when the exercise price exceeds the market value of our Class A
Common Stock, because their inclusion would result in an anti-dilutive effect on per share amounts.
The number of stock options excluded from the computation of diluted earnings per share because they were
anti-dilutive was approximately 2 million in 2017, 4 million in 2016 and 5 million in 2015.
There were no anti-dilutive stock-settled long-term performance awards and restricted stock units excluded
from the computation of diluted earnings per share for the year ended 2017, 2016 and 2015.
15. Stock-Based Awards
As of December 31, 2017, the Company was authorized to grant stock-based compensation under its 2010
Incentive Compensation Plan (the “2010 Incentive Plan”), which became effective April 27, 2010, and was amended
and restated effective April 30, 2014. The 2010 Incentive Plan replaced the 1991 Executive Stock Incentive Plan (the
“1991 Incentive Plan”). In addition, through April 30, 2014, the Company maintained its 2004 Non-Employee
Directors’ Stock Incentive Plan (the “2004 Directors’ Plan”).
The Company’s long-term incentive compensation program provides executives the opportunity to earn cash
and shares of Class A Common Stock at the end of three-year performance cycles based in part on the achievement of
financial goals tied to a financial metric and in part on stock price performance relative to companies in the Standard
& Poor’s 500 Stock Index, with the majority of the target award to be settled in the Company’s Class A Common
Stock. In addition, the Company grants time-vested restricted stock units annually to a number of employees. These
are settled in shares of Class A Common Stock.
We recognize stock-based compensation expense for these stock-settled long-term performance awards and
restricted stock units, as well as any stock options and stock appreciation rights (together, “Stock-Based Awards”).
Stock-based compensation expense was $14.8 million in 2017, $12.4 million in 2016 and $10.6 million in 2015.
Stock-based compensation expense is recognized over the period from the date of grant to the date when the
award is no longer contingent on the employee providing additional service. Awards under the 1991 Incentive Plan
and 2010 Incentive Plan generally vest over a stated vesting period or, with respect to awards granted prior to
December 28, 2014, upon the retirement of an employee or director, as the case may be.
Prior to 2012, under our 2004 Directors’ Plan, each non-employee director of the Company received annual
grants of non-qualified stock options with 10-year terms to purchase 4,000 shares of Class A Common Stock from the
Company at the average market price of such shares on the date of grants. These grants were replaced with annual
grants of cash-settled phantom stock units in 2012, and, accordingly, no grants of stock options have since been made
under this plan. Under its terms, the 2004 Directors’ Plan terminated as of April 30, 2014.
In 2015, the annual grants of phantom stock units were replaced with annual grants of restricted stock units
under the 2010 Incentive Plan. Restricted stock units are awarded on the date of the annual meeting of stockholders
and vest on the date of the subsequent year’s annual meeting, with the shares to be delivered upon a director’s
cessation of membership on the Board of Directors. Each non-employee director is credited with additional restricted
stock units with a value equal to the amount of all dividends paid on the Company’s Class A Common Stock. The
Company’s directors are considered employees for purposes of stock-based compensation.
P. 96 – THE NEW YORK TIMES COMPANY
Stock Options
The 1991 Incentive Plan provided, and the 2010 Incentive Plan provides, for grants of both incentive and non-
qualified stock options at an exercise price equal to the fair market value (as defined in each plan, respectively) of our
Class A Common Stock on the date of grant. Stock options have generally been granted with a 3-year vesting period
and a 10-year term and vest in equal annual installments. Due to a change in the Company’s long-term incentive
compensation, no grants of stock options were made in 2017, 2016 or 2015.
The 2004 Directors’ Plan provided for grants of stock options to non-employee directors at an exercise price
equal to the fair market value (as defined in the 2004 Directors’ Plan) of our Class A Common Stock on the date of
grant. Prior to 2012, stock options were granted with a 1-year vesting period and a 10-year term. No grants of stock
options were made in 2017, 2016 or 2015. The Company’s directors are considered employees for purposes of stock-
based compensation.
Changes in our Company’s stock options in 2017 were as follows:
(Shares in thousands)
Options
December 31, 2017
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(Years)
Options outstanding at beginning of year
Exercised
Forfeited/Expired
Options outstanding at end of period (1)
Options exercisable at end of period
4,518
$
(658)
(86)
3,774
3,774
$
$
14
7
24
15
15
Aggregate
Intrinsic
Value
$(000s)
3
$
12,797
2
2
$
$
17,597
17,597
(1) All outstanding options are vested as of December 31, 2017.
The total intrinsic value for stock options exercised was $7.0 million in 2017, $0.7 million in 2016 and $2.7
million in 2015.
The fair value of the stock options granted was estimated on the date of grant using a Black-Scholes valuation
model that uses the following assumptions. The risk-free rate is based on the U.S. Treasury yield curve in effect at the
time of grant. The expected life (estimated period of time outstanding) of stock options granted was determined using
the average of the vesting period and term. Expected volatility was based on historical volatility for a period equal to
the stock option’s expected life, ending on the date of grant, and calculated on a monthly basis. Dividend yield was
based on expected Company dividends, if applicable on the date of grant. The fair value for stock options granted
with different vesting periods and on different dates is calculated separately.
Restricted Stock Units
The 2010 Incentive Plan provides for grants of other stock-based awards, including restricted stock units.
Outstanding stock-settled restricted stock units have been granted with a stated vesting period up to 5 years.
Each restricted stock unit represents our obligation to deliver to the holder one share of Class A Common Stock upon
vesting. The fair value of stock-settled restricted stock units is the average market price on the grant date. Changes in
our Company’s stock-settled restricted stock units in 2017 were as follows:
THE NEW YORK TIMES COMPANY – P. 97
(Shares in thousands)
Unvested stock-settled restricted stock units at beginning of period
Granted
Vested
Forfeited
Unvested stock-settled restricted stock units at end of period
Unvested stock-settled restricted stock units expected to vest at end of period
December 31, 2017
Restricted
Stock
Units
Weighted
Average
Grant-Date
Fair Value
1,008
$
466
(505)
(83)
886
840
$
$
14
16
14
14
15
15
The intrinsic value of stock-settled restricted stock units vested was $7.9 million in 2017, $7.3 million in 2016
and $5.5 million in 2015.
Long-Term Incentive Compensation
The 2010 Incentive Plan provides for grants of cash and stock-settled awards to key executives payable at the
end of a multi-year performance period.
Cash-settled awards have been granted with three-year performance periods and are based on the achievement
of specified financial performance measures. Cash-settled awards have been classified as a liability because we
incurred a liability payable in cash. There were payments of approximately $3 million in 2017, $4 million in 2016 and
$3 million in 2015.
Stock-settled awards have been granted with three-year performance periods and are based on relative Total
Shareholder Return (“TSR”), which is calculated at stock appreciation plus deemed reinvested dividends, and another
performance measure. Stock-settled awards are payable in Class A Common Stock and are classified within equity.
The fair value of TSR awards is determined at the date of grant using a Monte Carlo simulation model. The fair value
of awards under the other performance measure is determined by the average market price on the grant date.
Unrecognized Compensation Expense
As of December 31, 2017, unrecognized compensation expense related to the unvested portion of our Stock-
Based Awards was approximately $13 million and is expected to be recognized over a weighted-average period of
1.45 years.
Reserved Shares
We generally issue shares for the exercise of stock options and vesting of stock-settled restricted stock units
from unissued reserved shares.
P. 98 – THE NEW YORK TIMES COMPANY
Shares of Class A Common Stock reserved for issuance were as follows:
(Shares in thousands)
Stock options, stock–settled restricted stock units and stock-settled performance
awards
Stock options and stock-settled restricted stock units
Stock-settled performance awards(1)
Outstanding
Available
Employee Stock Purchase Plan(2)
Available
401(k) Company stock match(3)
Available
Total Outstanding
Total Available
December 31,
2017
December 25,
2016
4,772
2,559
7,331
7,188
5,588
3,159
8,747
6,914
6,410
6,410
3,045
7,331
3,045
8,747
16,643
16,369
(1) The number of shares actually earned at the end of the multi-year performance period will vary, based on actual performance, from 0%
to 200% of the target number of performance awards granted. The maximum number of shares that could be issued is included in the
table above.
(2) We have not had an offering under the Employee Stock Purchase Plan since 2010.
(3) Effective 2014, we no longer offer a Company stock match under the Company’s 401(k) plan.
16. Stockholders’ Equity
Shares of our Company’s Class A and Class B Common Stock are entitled to equal participation in the event of
liquidation and in dividend declarations. The Class B Common Stock is convertible at the holders’ option on a share-
for-share basis into Class A Common Stock. Upon conversion, the previously outstanding shares of Class B Common
Stock that were converted are automatically and immediately retired, resulting in a reduction of authorized Class B
Common Stock. As provided for in our Company’s Certificate of Incorporation, the Class A Common Stock has
limited voting rights, including the right to elect 30% of the Board of Directors, and the Class A and Class B Common
Stock have the right to vote together on the reservation of our Company shares for stock options and other stock-
based plans, on the ratification of the selection of a registered public accounting firm and, in certain circumstances, on
acquisitions of the stock or assets of other companies. Otherwise, except as provided by the laws of the State of New
York, all voting power is vested solely and exclusively in the holders of the Class B Common Stock.
There were 803,763 shares as of December 31, 2017 and 816,632 as of December 25, 2016 of Class B Common
Stock issued and outstanding that may be converted into shares of Class A Common Stock.
The Adolph Ochs family trust holds approximately 90% of the Class B Common Stock and, as a result, has the
ability to elect 70% of the Board of Directors and to direct the outcome of any matter that does not require a vote of
the Class A Common Stock.
On January 14, 2015, entities controlled by Carlos Slim Helú, a beneficial owner of our Class A Common Stock,
exercised warrants to purchase 15.9 million shares of our Class A Common Stock at a price of $6.3572 per share, and
the Company received cash proceeds of approximately $101.1 million from this exercise. Concurrently, the Board of
Directors terminated an existing authorization to repurchase shares of the Company’s Class A Common Stock and
approved a new repurchase authorization of $101.1 million, equal to the cash proceeds received by the Company from
the warrant exercise. As of December 31, 2017, total repurchases under this authorization totaled $84.9 million
(excluding commissions) and $16.2 million remained under this authorization. Our Board of Directors has authorized
us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date
with respect to this authorization.
THE NEW YORK TIMES COMPANY – P. 99
We may issue preferred stock in one or more series. The Board of Directors is authorized to set the
distinguishing characteristics of each series of preferred stock prior to issuance, including the granting of limited or
full voting rights; however, the consideration received must be at least $100 per share. No shares of preferred stock
were issued or outstanding as of December 31, 2017.
The following table summarizes the changes in AOCI by component as of December 31, 2017:
(In thousands)
Foreign Currency
Translation
Adjustments
Funded Status of
Benefit Plans
Net unrealized
loss on available-
for-sale Securities
Total
Accumulated
Other
Comprehensive
Loss
Balance as of December 25, 2016
$
(1,822) $
(477,994) $
— $
(479,816)
Other comprehensive income/(loss) before
reclassifications, before tax(1)
Amounts reclassified from accumulated other
comprehensive loss, before tax(1)
Income tax (benefit)/expense(1)
Net current-period other comprehensive (loss)/income,
net of tax
10,810
1,300
3,960
8,150
(7,895)
96,662
38,592
50,175
(2,545)
—
(1,007)
(1,538)
370
97,962
41,545
56,787
Balance as of December 31, 2017
$
6,328
$
(427,819) $
(1,538) $
(423,029)
(1) All amounts are shown net of noncontrolling interest.
The following table summarizes the reclassifications from AOCI for the period ended December 31, 2017:
(In thousands)
Detail about accumulated other comprehensive loss
components
Funded status of benefit plans:
Amounts reclassified
from accumulated
other comprehensive
loss
Affect line item in the statement
where net income is presented
Amortization of prior service credit(1)
$
(9,700) Selling, general & administrative costs
Amortization of actuarial loss(1)
Postretirement benefit plan settlement gain
Pension settlement charge
Total reclassification, before tax(2)
Income tax expense
36,990
Selling, general & administrative costs
(32,737)
Postretirement benefit plan settlement
gain
102,109
Pension settlement charge
96,662
38,592
Income tax expense
Total reclassification, net of tax
$
58,070
(1) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost for pension
and other retirement benefits. See Notes 9 and 10 for additional information.
(2) There were no reclassifications relating to noncontrolling interest for the year ended December 31, 2017.
17. Segment Information
We have one reportable segment that includes The New York Times, NYTimes.com and related businesses.
Therefore, all required segment information can be found in the Consolidated Financial Statements.
Our operating segment generated revenues principally from subscriptions and advertising. Other revenues
primarily consists of revenues from news services/syndication, digital archive licensing, building rental income,
affiliate referrals, NYT Live (our live events business), and retail commerce.
P. 100 – THE NEW YORK TIMES COMPANY
18. Commitments and Contingent Liabilities
Operating Leases
Operating lease commitments are primarily for office space and equipment. Certain office space leases provide
for rent adjustments relating to changes in real estate taxes and other operating costs.
Rental expense amounted to approximately $19 million in 2017 and $16 million in 2016 and 2015. The increase
in rental expense is related to additional costs incurred due to the headquarter redesign and consolidation. The
approximate minimum rental commitments as of December 31, 2017 were as follows:
(In thousands)
2018
2019
2020
2021
2022
Later years
Total minimum lease payments
Capital Leases
Amount
$
10,738
7,532
6,153
4,972
4,731
18,555
$
52,681
Future minimum lease payments for all capital leases, and the present value of the minimum lease payments as
of December 31, 2017, were as follows:
(In thousands)
2018
2019
2020
2021
2022
Later years
Total minimum lease payments
Less: imputed interest
$
Amount
552
7,245
—
—
—
—
7,797
(992)
Present value of net minimum lease payments including current maturities
$
6,805
Restricted Cash
We were required to maintain $18.0 million of restricted cash as of December 31, 2017 and $24.9 million as of
December 25, 2016, the majority of which is set aside to collateralize workers’ compensation obligations. The decrease
reflects the settlement of certain litigation described below.
Newspaper and Mail Deliverers – Publishers’ Pension Fund
In September 2013, the Newspaper and Mail Deliverers-Publishers’ Pension Fund (the “NMDU Fund”)
assessed a partial withdrawal liability against the Company in the gross amount of approximately $26 million for the
plan years ending May 31, 2012 and 2013 (the “Initial Assessment”), an amount that was increased to a gross amount
of approximately $34 million in December 2014, when the NMDU Fund issued a revised partial withdrawal liability
assessment for the plan year ending May 31, 2013 (the “Revised Assessment”). The NMDU Fund claimed that when
City & Suburban Delivery Systems, Inc., a retail and newsstand distribution subsidiary of the Company and the
THE NEW YORK TIMES COMPANY – P. 101
largest contributor to the NMDU Fund, ceased operations in 2009, it triggered a decline of more than 70% in
contribution base units in each of these two plan years.
The Company disagreed with both the NMDU Fund’s determination that a partial withdrawal occurred and
the methodology by which it calculated the withdrawal liability, and the parties engaged in arbitration proceedings to
resolve the matter. In June 2016, the arbitrator issued an interim award and opinion that supported the NMDU Fund’s
determination that a partial withdrawal had occurred, and concluded that the methodology used to calculate the
Initial Assessment was correct. However, the arbitrator also concluded that the NMDU Fund’s calculation of the
Revised Assessment was incorrect. In July 2017, the arbitrator issued a final award and opinion reflecting the same
conclusions, which the Company has appealed.
Due to requirements of the Employee Retirement Income Security Act of 1974 that sponsors make payments
demanded by plans during arbitration and any resultant appeals, the Company had been making payments to the
NMDU Fund since September 2013 relating to the Initial Assessment and February 2015 relating to the Revised
Assessment based on the NMDU Fund’s demand. As a result, as of December 31, 2017, we have paid $15.3 million
relating to the Initial Assessment since the receipt of the initial demand letter. We also paid $5.0 million related to the
Revised Assessment, which was refunded in July 2016 based on the arbitrator’s ruling. The Company recognized $0.4
million of expense for the fiscal year ended December 31, 2017. The Company recognized $10.7 million of expense
(inclusive of a special item of $6.7 million) and $6.8 million for the fiscal years ended December 25, 2016 and
December 27, 2015, respectively. The Company had a liability of $6.5 million as of December 31, 2017, related to this
matter. Management believes it is reasonably possible that the total loss in this matter could exceed the liability
established by a range of zero to approximately $10 million.
NEMG T&G, Inc.
The Company was involved in class action litigation brought on behalf of individuals who, from 2006 to 2011,
delivered newspapers at NEMG T&G, Inc., a subsidiary of the Company (“T&G”). T&G was a part of the New
England Media Group, which the Company sold in 2013. The plaintiffs asserted several claims against T&G,
including a challenge to their classification as independent contractors, and sought unspecified damages. In
December 2016, the Company reached a settlement with respect to the claims, which was approved by the court in
May 2017. As a result of the settlement, the Company recorded charges of $0.7 million ($0.4 million after tax) and $3.7
million ($2.3 million after tax) for the fiscal years ended December 31, 2017 and December 25, 2016, respectively,
within discontinued operations.
Other
We are involved in various legal actions incidental to our business that are now pending against us. These
actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. Although
the Company cannot predict the outcome of these matters, it is possible that an unfavorable outcome in one or more
matters could be material to the Company’s consolidated results of operations or cash flows for an individual
reporting period. However, based on currently available information, management does not believe that the ultimate
resolution of these matters, individually or in the aggregate, is likely to have a material effect on the Company’s
financial position.
Letter of Credit Commitment
The Company issued $56 million letters of credit in connection with a sub-lease entered into in the fourth
quarter of 2017 for approximately four floors of our headquarters building. A portion of the letters of credit will
expire prorata through the second quarter of 2019, while the remaining portion of letters of credit will expire upon the
Company’s repurchase of the Condo Interest in our headquarters building in 2019. Approximately $63 million of
marketable securities were used as collateral for the letters of credit.
P. 102 – THE NEW YORK TIMES COMPANY
19. Subsequent Events
Notice of Intent to Exercise Repurchase Option Under Lease Agreement
On January 30, 2018, the Company provided notice to an affiliate of W.P. Carey & Co. LLC of the Company’s
intention to exercise its option under the Lease Agreement, dated March 6, 2009, by and between the parties (the
“Lease”) to repurchase a portion of the Company’s leasehold condominium interest in the Company’s headquarters
building located at 620 Eighth Avenue, New York, New York (the “Condo Interest”).
The Lease was part of a transaction in 2009 under which the Company sold and simultaneously leased back
approximately 750,000 rentable square feet, comprising the Condo Interest. The sale price for the Condo Interest was
approximately $225 million. Under the Lease, the Company has an option exercisable in 2019 to repurchase the Condo
Interest for approximately $250 million.
The Company has accounted for the transaction as a financing transaction, and has continued to depreciate the
Condo Interest and account for the rental payments as interest expense. The difference between the purchase option
price and the net sale proceeds from the transaction is being amortized over the 10-year period of 2009-2019 through
interest expense.
Quarterly Dividend
On February 21, 2018, our Board of Directors approved a dividend of $0.04 per share on our Class A and Class B
common stock. The dividend is payable on April 19, 2018, to all stockholders of record as of the close of business on
April 4, 2018. Our Board of Directors will continue to evaluate the appropriate dividend level on an ongoing basis in
light of our earnings, capital requirements, financial condition and other relevant factors.
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2017, December 25, 2016, and December 27, 2015:
(In thousands)
Accounts receivable allowances:
Year ended December 31, 2017
Year ended December 25, 2016
Year ended December 27, 2015
Valuation allowance for deferred tax assets:
Year ended December 31, 2017
Year ended December 25, 2016
Year ended December 27, 2015
(1) Includes write-offs, net of recoveries.
Balance at
beginning
of period
Additions
charged to
operating
costs and
other
Deductions(1)
Balance at
end of period
$
$
$
$
$
$
16,815
13,485
12,860
$
$
$
11,747
17,154
13,999
$
$
$
14,020
13,824
13,374
$
$
$
— $
— $
— $
36,204
41,136
$
$
— $
36,204
— $
4,932
$
$
14,542
16,815
13,485
—
—
36,204
THE NEW YORK TIMES COMPANY – P. 103
QUARTERLY INFORMATION (UNAUDITED)
Quarterly financial information for each quarter in the years ended December 31, 2017 and December 25,
2016 is included in the following tables. See Note 13 of the Notes to the Consolidated Financial Statements for
additional information regarding discontinued operations.
(In thousands, except per share data)
Revenues
Operating costs
Headquarters redesign and consolidation(1)
Postretirement benefit plan settlement gain (2)
Pension settlement expense(3)
Operating profit
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income
taxes
Income tax expense (4)
Income/(loss) from continuing operations
(Loss)/income from discontinued operations, net of
income taxes
Net income/(loss)
Net (income)/loss attributable to the noncontrolling
interest
Net income/(loss) attributable to The New York
Times Company common stockholders
Amounts attributable to The New York Times
Company common stockholders:
Income/(loss) from continuing operations
(Loss)/income from discontinued operations, net
of income taxes
Net income/(loss)
Average number of common shares outstanding:
Basic
Diluted
Basic earnings/(loss) per share attributable to The
New York Times Company common stockholders:
Income/(loss) from continuing operations
(Loss) from discontinued operations, net of
income taxes
Net income/(loss)
Diluted earnings/(loss) per share attributable to The
New York Times Company common stockholders:
Income/(loss) from continuing operations
(Loss) from discontinued operations, net of
income taxes
Net income/(loss)
Dividends declared per share
2017 Quarters
March 26,
2017
(13 weeks)
June 25,
2017
(13 weeks)
September 24,
2017
(13 weeks)
December 31,
2017
(14 weeks)
Full Year
(53 weeks)
$
398,804 $
407,074 $
385,635 $
484,126 $
1,675,639
367,393
2,402
377,420
1,985
350,080
2,542
—
—
29,009
173
5,325
23,857
10,742
13,115
—
13,115
66
—
—
27,669
(266)
5,133
22,270
6,711
15,559
—
15,559
40
—
—
33,013
31,557
4,660
59,910
23,420
36,490
(488)
36,002
(3,673)
393,238
3,161
(37,057)
102,109
22,675
(12,823)
4,665
5,187
63,083
(57,896)
57
(57,839)
1,026
1,488,131
10,090
(37,057)
102,109
112,366
18,641
19,783
111,224
103,956
7,268
(431)
6,837
(2,541)
13,181 $
15,599 $
32,329 $
(56,813) $
4,296
13,181 $
15,599 $
32,817 $
(56,870) $
— $
— $
(488) $
57 $
13,181 $
15,599 $
32,329 $
(56,813) $
4,727
(431)
4,296
161,402
162,592
161,787
163,808
162,173
164,405
162,311
162,311
161,926
164,263
0.08 $
— $
0.08 $
0.08 $
— $
0.08 $
0.04 $
0.10 $
— $
0.10 $
0.09 $
— $
0.09 $
— $
0.20 $
— $
0.20 $
0.20 $
— $
0.20 $
0.08 $
(0.35) $
— $
(0.35) $
(0.35) $
— $
(0.35) $
0.04 $
0.03
—
0.03
0.03
—
0.03
0.16
$
$
$
$
$
$
$
$
$
$
$
(1)
We recognized expenses related to the ongoing redesign and consolidation of space in our headquarters building.
(2) We recorded a gain in the fourth quarter primarily in connection with the settlement of contractual funding obligations from a postretirement
plan.
(3) We recorded a pension settlement charge in the fourth quarter in connection with the purchase of group annuity contracts.
(4) We recorded a $68.7 million charge in the fourth quarter primarily attributable to the remeasurement of our net deferred tax assets required as a
result of recent tax legislation.
P. 104 – THE NEW YORK TIMES COMPANY
(In thousands, except per share data)
Revenues
Operating costs
Restructuring charge(1)
Multiemployer pension plan withdrawal expense(2)
Pension settlement expense(3)
Operating (loss)/profit
(Loss)/income from joint ventures
Interest expense and other, net
(Loss)/income from continuing operations before
income taxes
Income tax (benefit)/expense
Income/(loss) from continuing operations
(Loss) from discontinued operations, net of income
taxes
Net (loss)/income
Net income attributable to the noncontrolling interest
Net (loss)/income attributable to The New York
Times Company common stockholders
Amounts attributable to The New York Times
Company common stockholders:
(Loss)/income from continuing operations
(Loss) from discontinued operations, net of
income taxes
Net (loss)/income
Average number of common shares outstanding:
Basic
Diluted
Basic earnings/(loss) per share attributable to The
New York Times Company common stockholders:
(Loss)/income from continuing operations
(Loss) from discontinued operations, net of
income taxes
Net (loss)/income
Diluted earnings/(loss) per share attributable to The
New York Times Company common stockholders:
Income/(loss) from continuing operations
(Loss) from discontinued operations, net of
income taxes
Net (loss)/income
Dividends declared per share
2016 Quarters
March 26,
2016
June 26,
2016
September 25,
2016
December 25,
2016
Full Year
(13 weeks)
(13 weeks)
(13 weeks)
(13 weeks)
(52 weeks)
$
379,515 $
372,630 $
363,547 $
439,650 $
1,555,342
351,580
—
—
—
27,935
(41,896)
8,826
(22,787)
(9,201)
(13,586)
—
(13,586)
5,315
339,933
11,855
11,701
—
9,141
(412)
9,097
(368)
124
(492)
—
(492)
281
356,596
362,801
1,410,910
2,949
(4,971)
—
8,973
463
9,032
404
121
283
—
283
123
—
—
21,294
55,555
5,572
7,850
53,277
13,377
39,900
(2,273)
37,627
(483)
14,804
6,730
21,294
101,604
(36,273)
34,805
30,526
4,421
26,105
(2,273)
23,832
5,236
(8,271) $
(211) $
406 $
37,144 $
29,068
(8,271) $
(211) $
406 $
39,417 $
31,341
—
(8,271) $
—
(211) $
—
406 $
(2,273)
37,144 $
(2,273)
29,068
161,003
161,003
161,128
161,128
161,185
162,945
161,235
162,862
161,128
162,817
(0.05) $
—
(0.05) $
(0.05) $
—
(0.05) $
0.04 $
— $
—
— $
— $
—
— $
— $
— $
—
— $
— $
—
— $
0.08 $
0.24 $
(0.01)
0.23 $
0.24 $
(0.01)
0.23 $
0.04 $
0.19
(0.01)
0.18
0.19
(0.01)
0.18
0.16
$
$
$
$
$
$
$
$
(1) We recorded restructuring charges in the second and third quarters associated with the streamlining of the Company’s international print
operations.
(2) We recorded a charge in the second quarter related to a partial withdrawal obligation under a multiemployer pension plan following an
unfavorable arbitration decision, of which $5 million was reimbursed to the Company in the third quarter.
(3) We recorded a pension settlement charge in the fourth quarter related to a lump-sum payment offer to certain former employees who
participated in a qualified pension plan.
Earnings/(loss) per share amounts for the quarters do not necessarily equal the respective year-end amounts
for earnings or loss per share due to the weighted-average number of shares outstanding used in the computations for
the respective periods. Earnings/(loss) per share amounts for the respective quarters and years have been computed
using the average number of common shares outstanding.
THE NEW YORK TIMES COMPANY – P. 105
One of our largest sources of revenue is advertising. Our business has historically experienced higher
advertising volume in the fourth quarter than the remaining quarters because of holiday advertising.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of our principal executive officer and our principal financial officer,
evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of
the Securities Exchange Act of 1934) as of December 31, 2017. Based upon such evaluation, our principal executive
officer and principal financial officer concluded that our disclosure controls and procedures were effective to ensure
that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms, and is accumulated and communicated to our management, including our principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management’s report on internal control over financial reporting and the attestation report of our independent
registered public accounting firm on our internal control over financial reporting are set forth in Item 8 of this Annual
Report on Form 10-K and are incorporated by reference herein.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the quarter ended December 31,
2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
Not applicable.
P. 106 – THE NEW YORK TIMES COMPANY
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
In addition to the information set forth under the caption “Executive Officers of the Registrant” in Part I of this
Annual Report on Form 10-K, the information required by this item is incorporated by reference to the sections titled
“Section 16(a) Beneficial Ownership Reporting Compliance,” “Proposal Number 1 — Election of Directors,” “Interests
of Related Persons in Certain Transactions of the Company,” “Board of Directors and Corporate Governance,”
beginning with the section titled “Independent Directors,” but only up to and including the section titled “Audit
Committee Financial Experts,” “Board Committees” and “Nominating & Governance Committee” of our Proxy
Statement for the 2018 Annual Meeting of Stockholders.
The Board of Directors has adopted a code of ethics that applies to the principal executive officer, principal
financial officer and principal accounting officer. The current version of such code of ethics can be found on the
Corporate Governance section of our website at http://investors.nytco.com/investors/corporate-governance. We
intend to post any amendments to or waivers from the code of ethics that apply to our principal executive officer,
principal financial officer or principal accounting officer on our website.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the sections titled “Compensation
Committee,” “Directors’ Compensation,” “Directors’ and Officers’ Liability Insurance” and “Compensation of
Executive Officers” of our Proxy Statement for the 2018 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to the sections titled “Principal Holders of
Common Stock,” “Security Ownership of Management and Directors” and “The 1997 Trust” of our Proxy Statement
for the 2018 Annual Meeting of Stockholders.
THE NEW YORK TIMES COMPANY – P. 107
Equity Compensation Plan Information
The following table presents information regarding our existing equity compensation plans as of December 31,
2017.
Plan category
Equity compensation plans approved by security
holders
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
Weighted average
exercise price of
outstanding options,
warrants and rights
(b)
Stock options and stock-based awards
7,331,057 (1)
$
14.71 (2)
Employee Stock Purchase Plan
Total
Equity compensation plans not approved by security
holders
—
7,331,057
None
Number of securities
remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
7,187,603 (3)
6,409,741 (4)
13,597,344
—
None
None
(1)
(2)
(3)
(4)
Includes (i) 3,773,928 shares of Class A stock to be issued upon the exercise of outstanding stock options granted under the 1991 Incentive
Plan, the 2010 Incentive Plan, and the 2004 Non-Employee Directors’ Stock Incentive Plan, at a weighted-average exercise price of $14.71
per share, and with a weighted-average remaining term of 2 years; (ii) 886,243 shares of Class A stock issuable upon the vesting of
outstanding stock-settled restricted stock units granted under the 2010 Incentive Plan; (iii) 111,480 shares of Class A stock related to vested
stock-settled restricted stock units granted under the 2010 Incentive Plan issuable to non-employee directors upon retirement from the Board;
and (iv) 2,559,406, shares of Class A stock that would be issuable at maximum performance pursuant to outstanding stock-settled
performance awards under the 2010 Incentive Plan. Under the terms of the performance awards, shares of Class A stock are to be issued at
the end of three-year performance cycles based on the Company’s achievement against specified performance targets. The shares included
in the table represent the maximum number of shares that would be issued under the outstanding performance awards; assuming target
performance, the number of shares that would be issued under the outstanding performance awards is 1,279,703.
Excludes shares of Class A stock issuable upon vesting of stock-settled restricted stock units and shares issuable pursuant to stock-settled
performance awards.
Includes shares of Class A stock available for future stock options to be granted under the 2010 Incentive Plan. As of December 31, 2017, the
2010 Incentive Plan had 7,187,603 shares of Class A stock remaining available for issuance upon the grant, exercise or other settlement of
share-based awards. Stock options granted under the 2010 Incentive Plan must provide for an exercise price of 100% of the fair market value
(as defined in the 2010 Incentive Plan) on the date of grant. The 2004 Non-Employee Directors’ Stock Incentive Plan terminated on April 30,
2014.
Includes shares of Class A stock available for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). We have not
had an offering under the ESPP since 2010.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this item is incorporated by reference to the sections titled “Interests of Related
Persons in Certain Transactions of the Company,” “Board of Directors and Corporate Governance — Independent
Directors,” “Board of Directors and Corporate Governance — Board Committees” and “Board of Directors and
Corporate Governance — Policy on Transactions with Related Persons” of our Proxy Statement for the 2018 Annual
Meeting of Stockholders.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to the section titled “Proposal Number 3 —
Selection of Auditors,” beginning with the section titled “Audit Committee’s Pre-Approval Policies and Procedures,”
but only up to and not including the section titled “Recommendation and Vote Required” of our Proxy Statement for
the 2018 Annual Meeting of Stockholders.
P. 108 – THE NEW YORK TIMES COMPANY
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) DOCUMENTS FILED AS PART OF THIS REPORT
(1) Financial Statements
As listed in the index to financial information in “Item 8 — Financial Statements and Supplementary Data.”
(2) Supplemental Schedules
The following additional consolidated financial information is filed as part of this Annual Report on Form 10-K
and should be read in conjunction with the Consolidated Financial Statements set forth in “Item 8 — Financial
Statements and Supplementary Data.” Schedules not included with this additional consolidated financial information
have been omitted either because they are not applicable or because the required information is shown in the
Consolidated Financial Statements.
Consolidated Schedule for the Three Years Ended December 31, 2017
II – Valuation and Qualifying Accounts
Page
103
Separate financial statements of associated companies accounted for by the equity method are omitted in
accordance with permission granted by the Securities and Exchange Commission pursuant to Rule 3-13 of Regulation
S-X.
(3) Exhibits
The exhibits listed in the accompanying index are filed as part of this report.
THE NEW YORK TIMES COMPANY – P. 109
INDEX TO EXHIBITS
Exhibit numbers 10.18 through 10.27 are management contracts or compensatory plans or arrangements.
Exhibit
Number
(3.1)
(3.2)
(4)
(4.1)
(10.1)
(10.2)
(10.3)
(10.4)
(10.5)
(10.6)
(10.7)
(10.8)
(10.9)
(10.10)
(10.11)
(10.12)
(10.13)
(10.14)
Description of Exhibit
Certificate of Incorporation as amended and restated to reflect amendments effective July 1, 2007 (filed as an Exhibit
to the Company’s Form 10-Q dated August 9, 2007, and incorporated by reference herein).
By-laws as amended effective January 1, 2018 (filed as an Exhibit to the Company’s Form 8-K dated December 14,
2017, and incorporated by reference herein).
The Company agrees to furnish to the Commission upon request a copy of any instrument with respect to long-
term debt of the Company and any subsidiary for which consolidated or unconsolidated financial statements are
required to be filed, and for which the amount of securities authorized thereunder does not exceed 10% of the total
assets of the Company and its subsidiaries on a consolidated basis.
Securities Purchase Agreement, dated January 19, 2009, among the Company, Inmobiliaria Carso, S.A. de C.V. and
Banco Inbursa S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa (including forms of notes, warrants
and registration rights agreement) (filed as an Exhibit to the Company’s Form 8-K dated January 21, 2009, and
incorporated by reference herein).
Agreement of Lease, dated as of December 15, 1993, between The City of New York, as landlord, and the Company,
as tenant (as successor to New York City Economic Development Corporation (the “EDC”), pursuant to an
Assignment and Assumption of Lease With Consent, made as of December 15, 1993, between the EDC, as Assignor,
to the Company, as Assignee) (filed as an Exhibit to the Company’s Form 10-K dated March 21, 1994, and
incorporated by reference herein).
Funding Agreement #4, dated as of December 15, 1993, between the EDC and the Company (filed as an Exhibit to
the Company’s Form 10-K dated March 21, 1994, and incorporated by reference herein).
New York City Public Utility Service Power Service Agreement, dated as of May 3, 1993, between The City of New
York, acting by and through its Public Utility Service, and The New York Times Newspaper Division of the Company
(filed as an Exhibit to the Company’s Form 10-K dated March 21, 1994, and incorporated by reference herein).
Letter Agreement, dated as of April 8, 2004, amending Agreement of Lease, between the 42nd St. Development
Project, Inc., as landlord, and The New York Times Building LLC, as tenant (filed as an Exhibit to the Company’s
Form 10-Q dated November 3, 2006, and incorporated by reference herein).
Agreement of Sublease, dated as of December 12, 2001, between The New York Times Building LLC, as landlord,
and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q dated November
3, 2006, and incorporated by reference herein).
First Amendment to Agreement of Sublease, dated as of August 15, 2006, between 42nd St. Development Project,
Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q
dated November 3, 2006, and incorporated by reference herein).
Second Amendment to Agreement of Sublease, dated as of January 29, 2007, between 42nd St. Development Project,
Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 8-K
dated February 1, 2007, and incorporated by reference herein).
Third Amendment to Agreement of Sublease (NYT), dated as of March 6, 2009, between 42nd St. Development
Project, Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form
8-K dated March 9, 2009, and incorporated by reference herein).
Fourth Amendment to Agreement of Sublease (NYT), dated as of March 6, 2009, between 42nd St. Development
Project, Inc., as landlord, and 620 Eighth NYT (NY) Limited Partnership, as tenant (filed as an Exhibit to the
Company’s Form 8-K dated March 9, 2009, and incorporated by reference herein).
Fifth Amendment to Agreement of Sublease (NYT), dated as of August 31, 2009, between 42nd St. Development
Project, Inc., as landlord, and 620 Eighth NYT (NY) Limited Partnership, as tenant (filed as an Exhibit to the
Company’s Form 10-Q dated November 4, 2009, and incorporated by reference herein).
Agreement of Sublease (NYT-2), dated as of March 6, 2009, between 42nd St. Development Project, Inc., as landlord,
and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 8-K dated March 9, 2009,
and incorporated by reference herein).
First Amendment to Agreement of Sublease (NYT-2), dated as of March 6, 2009, between 42nd St. Development
Project, Inc., as landlord, and NYT Building Leasing Company LLC, as tenant (filed as an Exhibit to the Company’s
Form 8-K dated March 9, 2009, and incorporated by reference herein).
Agreement of Purchase and Sale, dated as of March 6, 2009, between NYT Real Estate Company LLC, as seller, and
620 Eighth NYT (NY) Limited Partnership, as buyer (filed as an Exhibit to the Company’s Form 8-K dated March
9, 2009, and incorporated by reference herein).
Lease Agreement, dated as of March 6, 2009, between 620 Eighth NYT (NY) Limited Partnership, as landlord, and
NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 8-K dated March 9, 2009,
and incorporated by reference herein).
P. 110 – THE NEW YORK TIMES COMPANY
Exhibit
Number
(10.15)
(10.16)*
(10.17)*
(10.18)
(10.19)
(10.20)
(10.21)
(10.22)
(10.23)
(10.24)
(10.25)
(10.26)
(10.27)
(21)
(23.1)
(24)
(31.1)
(31.2)
(32.1)
(32.2)
(101.INS)
Description of Exhibit
First Amendment to Lease Agreement, dated as of August 31, 2009, 620 Eighth NYT (NY) Limited Partnership, as
landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q dated
November 4, 2009, and incorporated by reference herein).
Letter Agreement, dated as of October 18, 2017, between the Company and Massachusetts Mutual Life Insurance
Company.
Letter Agreement, dated as of October 18, 2017, between the Company and Massachusetts Mutual Life Insurance
Company.
The Company’s 2010 Incentive Compensation Plan, as amended and restated effective April 30, 2014 (filed as an
exhibit to the Company’s Form 8-K dated April 30, 2014, and incorporated by reference herein).
Form of Restricted Stock Unit Award Agreement under the Company’s 2010 Incentive Compensation Plan (filed
as an Exhibit to the Company’s Form 10-K dated February 22, 2017, and incorporated by reference herein).
The Company’s 1991 Executive Stock Incentive Plan, as amended and restated through October 11, 2007 (filed as
an Exhibit to the Company’s Form 8-K dated October 12, 2007, and incorporated by reference herein).
The Company’s Supplemental Executive Retirement Plan, as amended and restated effective January 1, 2015 (filed
as an Exhibit to the Company’s Form 10-Q dated November 4, 2015, and incorporated by reference herein).
The Company’s Deferred Executive Compensation Plan, as amended and restated effective January 1, 2015 (filed
as an Exhibit to the Company’s Form 10-Q dated November 4, 2015, and incorporated by reference herein).
The Company’s 2004 Non-Employee Directors’ Stock Incentive Plan, effective April 13, 2004 (filed as an Exhibit to
the Company’s Form 10-Q dated May 5, 2004, and incorporated by reference herein).
The Company’s Non-Employee Directors Deferral Plan, as amended through October 11, 2007 (filed as an Exhibit
to the Company’s Form 8-K dated October 12, 2007, and incorporated by reference herein).
The Company’s Savings Restoration Plan, amended and restated effective February 19, 2015 (filed as an Exhibit to
the Company’s Form 10-Q filed November 4, 2015, and incorporated by reference herein).
The Company’s Supplemental Executive Savings Plan, amended and restated effective February 19, 2015 (filed as
an Exhibit to the Company’s Form 10-Q filed November 4, 2015, and incorporated by reference herein).
Stock Appreciation Rights Agreement, dated as of September 17, 2009, between the Company and Arthur
Sulzberger, Jr. (filed as an Exhibit to the Company’s Form 8-K dated September 18, 2009, and incorporated by
reference herein).
Subsidiaries of the Company.
Consent of Ernst & Young LLP.
Power of Attorney (included as part of signature page).
Rule 13a-14(a)/15d-14(a) Certification.
Rule 13a-14(a)/15d-14(a) Certification.
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
XBRL Instance Document.
(101.SCH)
XBRL Taxonomy Extension Schema Document.
(101.CAL)
XBRL Taxonomy Extension Calculation Linkbase Document.
(101.DEF)
XBRL Taxonomy Extension Definition Linkbase Document.
(101.LAB)
XBRL Taxonomy Extension Label Linkbase Document.
(101.PRE)
XBRL Taxonomy Extension Presentation Linkbase Document.
* Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a confidential treatment request submitted separately to the SEC
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
ITEM 16. FORM 10-K SUMMARY
None.
THE NEW YORK TIMES COMPANY – P. 111
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: February 27, 2018
THE NEW YORK TIMES COMPANY
(Registrant)
BY: /s/ James M. Follo
James M. Follo
Executive Vice President and Chief Financial Officer
We, the undersigned directors and officers of The New York Times Company, hereby severally constitute Diane
Brayton and James M. Follo, and each of them singly, our true and lawful attorneys with full power to them and each
of them to sign for us, in our names in the capacities indicated below, any and all amendments to this Annual Report
on Form 10-K filed with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ Mark Thompson
/s/ James M. Follo
/s/ R. Anthony Benten
Chief Executive Officer, President and Director
(principal executive officer)
Executive Vice President and Chief Financial Officer
(principal financial officer)
Senior Vice President, Treasurer and Corporate Controller
(principal accounting officer)
/s/ A.G. Sulzberger
Publisher and Director
/s/ Arthur Sulzberger, Jr.
Chairman of the Board
/s/ Raul E. Cesan
/s/ Robert E. Denham
/s/ Rachel Glaser
/s/ Hays N. Golden
/s/ Steven B. Green
/s/ Joichi Ito
/s/ James A. Kohlberg
Director
Director
Director
Director
Director
Director
Director
/s/ Brian P. McAndrews
Director
/s/ Doreen A. Toben
/s/ Rebecca Van Dyck
Director
Director
Date
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
February 27, 2018
THE NEW YORK TIMES COMPANY – P. 112
EXHIBIT 21
Our Subsidiaries*
Name of Subsidiary
The New York Times Company
Fake Love LLC
Hello Society, LLC
Madison Paper Industries (partnership) (40%)
New York Times Canada Ltd.
New York Times Digital LLC
Northern SC Paper Corporation (80%)
NYT Administradora de Bens e Servicos Ltda.
NYT Building Leasing Company LLC
NYT Capital, LLC
Midtown Insurance Company
NYT Shared Service Center, Inc.
International Media Concepts, Inc.
The New York Times Distribution Corporation
The New York Times Sales Company
The New York Times Syndication Sales Corporation
NYT Group Services, LLC
NYT International LLC
New York Times Limited
New York Times (Zürich) GmbH
NYT B.V.
NYT France S.A.S.
International Herald Tribune U.S. Inc.
New York Times France-Kathimerini Commercial S.A. (50%)
The Herald Tribune - Ha’aretz Partnership (50%)
NYT Germany GmbH
NYT Hong Kong Limited
Beijing Shixun Zhihua Consulting Co. LTD.
NYT Japan GK
NYT Singapore PTE. LTD.
NYT News Bureau (India) Private Limited
NYT Real Estate Company LLC
The New York Times Building LLC (58%)
Rome Bureau S.r.l.
The New York Times Company Pty Limited
Wirecutter, Inc.
* 100% owned unless otherwise indicated.
Jurisdiction of
Incorporation or
Organization
New York
Delaware
Delaware
Maine
Canada
Delaware
Delaware
Brazil
New York
Delaware
New York
Delaware
Delaware
Delaware
Massachusetts
Delaware
Delaware
Delaware
United Kingdom
Switzerland
Netherlands
France
New York
Greece
Israel
Germany
Hong Kong
People’s Republic of
China
Japan
Singapore
India
New York
New York
Italy
Australia
Delaware
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statements No. 333-43369, No. 333-43371, No.
333-37331, No. 333-09447, No. 33-31538, No. 33-43210, No. 33-43211, No. 33-50465, No. 33-50467, No. 33-56219, No.
333-49722, No. 333-70280, No. 333-102041, No. 333-114767, No. 333-166426 and No. 333-195731 on Form S-8, and
Registration Statement No. 333-216182 on Form S-3 of The New York Times Company of our reports dated
February 27, 2018 with respect to the consolidated financial statements and schedule of The New York Times
Company and the effectiveness of internal control over financial reporting of The New York Times Company,
included in this Annual Report (Form 10-K) for the fiscal year ended December 31, 2017.
/s/ Ernst & Young LLP
New York, New York
February 27, 2018
EXHIBIT 31.1
Rule 13a-14(a)/15d-14(a) Certification
I, Mark Thompson, certify that:
1.
I have reviewed this Annual Report on Form 10-K of The New York Times Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: February 27, 2018
/s/ MARK THOMPSON
Mark Thompson
Chief Executive Officer
EXHIBIT 31.2
Rule 13a-14(a)/15d-14(a) Certification
I, James M. Follo, certify that:
1.
I have reviewed this Annual Report on Form 10-K of The New York Times Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: February 27, 2018
/s/ JAMES M. FOLLO
James M. Follo
Chief Financial Officer
EXHIBIT 32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
In connection with the Annual Report on Form 10-K of The New York Times Company (the “Company”) for the
year ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Mark Thompson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
February 27, 2018
/s/ MARK THOMPSON
Mark Thompson
Chief Executive Officer
EXHIBIT 32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
In connection with the Annual Report on Form 10-K of The New York Times Company (the “Company”) for the
year ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, James M. Follo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
February 27, 2018
/s/ JAMES M. FOLLO
James M. Follo
Chief Financial Officer
Board of Directors
Raul E. Cesan
Founder and Managing
Partner
Commercial Worldwide LLC
Robert E. Denham
Partner
Munger, Tolles & Olson LLP
Rachel Glaser
Chief Financial Officer
Etsy, Inc.
Hays N. Golden
Vice President, Commercial
Underwriting
American International
Group, Inc.
Steven B. Green
General Partner
Ordinance Capital L.P.
Joichi Ito
Director, Media Lab
Massachusetts Institute
of Technology
James A. Kohlberg
Co-Founder and Chairman
Kohlberg & Company
Brian P. McAndrews
Former President, C.E.O.
and Chairman
Pandora Media, Inc.
A.G. Sulzberger
Publisher
The New York Times
Arthur O. Sulzberger Jr.
Chairman of the Board
The New York Times
Company
Mark Thompson
President and C.E.O.
The New York Times
Company
Doreen A. Toben
Director of various
public corporations
Rebecca Van Dyck
Chief Marketing Officer,
Oculus VR, LLC
Shareholder Information Online
investors.nytco.com
Visit our website for corporate governance information about the
Company, including the Code of Ethics for our C.E.O. and senior financial
officers and our Business Ethics Policy.
Career Opportunities
Employment applicants should apply online at www.nytco.com/careers.
The Company is committed to a policy of providing equal employment
opportunities without regard to race, color, religion, national origin,
ancestry, gender, age, marital status, sexual orientation, disability, military
or veteran status or any other characteristic covered by law.
Office of the Secretary
(212) 556-5995
Corporate Communications and Investor Relations
(212) 556-4317
Stock Listing
The Company’s Class A Common Stock is listed on the New York
Stock Exchange. Ticker symbol: NYT
Registrar and Transfer Agent
If you are a registered shareholder and have a question about your
account, or would like to report a change in your name or address,
please contact:
Computershare
P.O. Box 505000
Louisville, KY 40233
Overnight correspondence should be mailed to:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Shareholder Website
www.computershare.com/investor
Shareholder online inquiries
https://www-us.computershare.com/investor/contact
Domestic: (800) 240-0345; TDD Line: (800) 231-5469
Foreign: (201) 680-6578; TDD Line: (201) 680-6610
Annual Meeting
Thursday, April 19, 2018 at 9 a.m.
The New York Times Building
620 Eighth Ave., 15th Floor
New York, NY 10018
Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
Forward-Looking Statements
This Annual Report contains forward-looking statements that relate
to future events or our future financial performance. By their nature,
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those anticipated in any
such statements. You should bear this in mind as you consider forward-
looking statements. Factors that we think could, individually or in the
aggregate, cause our actual results to differ materially from expected and
historical results include those described in the “Risk Factors” section of
this Annual Report, as well as other risks detailed from time to time in
the Company’s publicly filed documents. The Company undertakes no
obligation to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.
Copyright 2018
The New York Times Company
All rights reserved.
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