The New York Times Company (NYSE:NYT) announced today fourth-quarter
2014 diluted earnings per share from continuing operations of $.22
compared with $.24 in the same period of 2013. Adjusted diluted earnings
per share from continuing operations (defined below) were $.26 in the
fourth quarter of 2014 compared with $.29 in the fourth quarter of 2013.
Operating profit was $62.4 million in the fourth quarter of 2014
compared with $68.9 million in the same period of 2013, as severance
expense associated with workforce reductions as well as retirement costs
combined to offset slight growth in overall revenues. Adjusted operating
profit (defined below) was $103.9 million in the fourth quarter of 2014
compared with $104.3 million in the fourth quarter of 2013.
For full-year 2014, the Company had an operating profit of $91.9 million
compared with $156.1 million in 2013, with the decline mainly resulting
from investment spending related to the Company’s strategic initiatives
and severance expense. Adjusted operating profit in 2014 was $256.3
million compared with $277.1 million in 2013.
“2014 was an encouraging year with sufficient progress in digital
advertising and subscription revenues to deliver modest overall revenue
growth for the Company,” said Mark Thompson, president and chief
executive officer. “We were particularly pleased with the strong growth
in digital advertising, boosted by the introduction of Paid Posts, our
native advertising solution, as well as rapid growth in ad sales
associated with video and mobile. We delivered digital ad growth for all
four quarters, highlighted by double-digit strength in the second half
of the year, including a 19 percent gain in the fourth quarter. As a
result, despite continued secular headwinds on the print advertising
side, total advertising revenue was within a percentage point of flat
compared to 2013, the most encouraging year-over-year trend since 2005.
“We continued to build our digital subscriber total in 2014 and finished
the year with 910,000 paid digital subscribers, an increase of 150,000
from the previous year, beating our tally of net new additions in 2013
by 25 percent and putting us on track to exceed the one million digital
subscriber milestone in 2015.
“The reduction in operating profit for the year was due to our strategic
investments in digital and severance costs associated with our long-term
focus on cost reduction. We intend to continue to invest in digital
growth but will also bear down on costs to defend our profitability.
“In 2015, we will remain focused on using our unique journalism and
brand to broaden and deepen our audience and to monetize that audience
more effectively through innovation in both digital and print.
Initiatives in the coming weeks include the relaunch of The New York
Times Magazine and our new relationship with Tina Brown’s Women in the
World. We will also soon be appointing new leaders in marketing and
digital product/technology.”
Comparisons
Unless otherwise noted, all comparisons are for
the fourth quarter of 2014 to the fourth quarter of 2013. The results of
New England Media Group (NEMG), which was sold at the beginning of the
fourth quarter of 2013, are reported within discontinued operations in
2013 and 2014.
This release presents certain non-GAAP financial measures, including
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); 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 exhibits include a
discussion of management’s reasons for the presentation of these
non-GAAP financial measures and reconciliations to the most comparable
GAAP financial measures, as well as an explanation of non-operating
retirement costs.
Fourth-quarter 2014 results included the following special items:
-
A $9.2 million ($5.9 million after tax or $.04 per share) impairment
charge related to the Company’s investment in a joint venture.
-
An $11.5 million ($.07 per share) income tax benefit primarily due to
a reduction in the Company’s reserve for uncertain tax positions.
Fourth-quarter 2013 results included the following special item:
-
A $3.2 million ($1.9 million after tax or $.01 per share) settlement
charge in connection with the Company’s immediate pension benefit
offer to certain former employees.
The Company had severance costs of $9.4 million ($5.6 million after tax
or $.03 per share) and $4.0 million ($2.4 million after tax or $.01 per
share) in the fourth quarters of 2014 and 2013, respectively.
Results from Continuing Operations
Revenues
Total revenues for the fourth quarter of 2014
increased 0.2 percent to $444.7 million from $443.9 million. Circulation
and other revenues increased 1.4 percent and 10.0 percent, respectively,
while advertising revenues declined 2.1 percent.
Circulation revenues rose as revenues from the Company’s digital
subscription initiatives and the 2014 increase in home-delivery prices
at The New York Times more than offset a decline in print copies sold.
Circulation revenue from the Company’s digital-only subscription
products increased 13.6 percent to $44.5 million in the fourth quarter
and 13.5 percent to $169.3 million for the full year of 2014 compared
with the fourth quarter and full year of 2013.
Paid subscribers to the Company’s digital-only subscription products
totaled approximately 910,000 as of the end of the fourth quarter of
2014, an increase of 35,000 subscribers compared to the end of the third
quarter and an increase of nearly 20 percent compared to the end of the
fourth quarter of 2013.
Fourth-quarter print advertising revenue decreased 9.2 percent while
digital advertising revenue increased 19.3 percent. Digital advertising
revenue was $63.2 million, or 30.5 percent of total Company advertising
revenues, compared with $53.0 million, or 25.0 percent, in the 2013
fourth quarter.
For the full year of 2014, print advertising revenue decreased 4.7
percent while digital advertising revenue rose 11.9 percent. Digital
advertising revenue was $182.2 million in 2014 compared with $162.9
million in 2013.
Other revenues rose 10.0 percent in the fourth quarter due to an
increase in revenues from the Company’s e-commerce business and content
licensing.
Operating Costs
Operating costs increased 2.8 percent to
$382.3 million from $371.8 million in the fourth quarter. Costs rose
mainly as a result of severance expense associated with workforce
reductions as well as retirement costs, partially offset by efficiencies
in print distribution and customer care. Adjusted operating costs
increased 0.4 percent to $340.8 million.
Non-operating retirement costs increased to $11.2 million from $7.7
million in the fourth quarter, driven by lower expected returns on
pension assets, higher retiree medical costs and higher pension interest
cost. The exhibits in this release include the detail of those expenses.
Raw materials costs decreased to $24.4 million from $26.0 million in the
fourth quarter due to newsprint volume declines.
Other Data
Joint Ventures
During the fourth quarter of 2014, the
Company recognized an impairment charge of $9.2 million ($5.9 million
after tax) for one of its forest products investments, Madison Paper
Industries. The Company’s proportionate share of the loss was $4.7
million after tax and adjusted for the allocation of the loss to the
non-controlling interest.
Interest Expense, net
Interest expense, net decreased to
$12.0 million from $13.9 million due to a lower level of debt
outstanding as a result of repurchases made in 2014 and higher interest
income.
Income Taxes
The Company had income tax expense of $8.7
million in the fourth quarter of 2014 and $16.4 million in the fourth
quarter of 2013. The decrease is primarily due to a reduction in the
Company’s reserve for uncertain tax positions.
The Company had an income tax benefit of $3.5 million for the full year
of 2014 and income tax expense of $37.9 million for the full year of
2013. The decrease is primarily due to a reduction in the Company’s
reserve for uncertain tax positions and a decrease in income from
continuing operations.
Liquidity
As of December 28, 2014, the Company had cash and
marketable securities of approximately $981.2 million (excluding
restricted cash of approximately $30.2 million primarily to
collateralize certain workers’ compensation obligations). Total debt and
capital lease obligations were approximately $650.1 million. During the
fourth quarter of 2014, the Company repurchased approximately $20.4
million principal amount of its 5.0 percent senior unsecured notes due
March 2015.
At the beginning of the first quarter of 2015, entities affiliated with
Carlos Slim Helú exercised warrants to acquire 15.9 million shares of
the Company’s Class A common stock, and as a result the Company received
cash proceeds of approximately $101.1 million. To help offset the
associated share dilution, the Company currently intends to use the
proceeds to repurchase Class A shares from time to time in open market
transactions as conditions permit.
Capital Expenditures
Capital expenditures totaled
approximately $12.4 million in the fourth quarter of 2014 and
approximately $33.3 million for the full year of 2014.
Pension Obligations
For accounting purposes on a GAAP
basis, based on preliminary results, the underfunded status of the
Company’s qualified pension plans as of December 28, 2014, was
approximately $264.0 million compared with approximately $80.0 million
as of December 29, 2013. The funded status of the Company’s qualified
pension plans was negatively impacted by interest rates and the adoption
of new mortality tables issued by the Society of Actuaries, partially
offset by strong asset performance.
Outlook
Total circulation revenues in the first quarter of
2015 are expected to increase at a rate similar to that of the fourth
quarter of 2014.
Total advertising revenues in the first quarter of 2015 are expected to
decrease in the mid-single digits compared with the first quarter of
2014.
Operating costs and adjusted operating costs are each expected to be
roughly flat in the first quarter of 2015 compared with the first
quarter of 2014.
The Company expects the following on a pre-tax basis in 2015:
-
Results from joint ventures: breakeven to $5 million,
-
Depreciation and amortization: $60 million to $65 million,
-
Interest expense, net: $40 million to $45 million, and
-
Capital expenditures: $35 million to $45 million.
Conference Call Information
The Company’s fourth-quarter
and full-year 2014 earnings conference call will be held on Tuesday,
February 3 at 11:00 a.m. E.T. To access the call, dial 877-201-0168 (in
the U.S.) or 647-788-4901 (international callers). The passcode is
61546091. Online listeners can link to the live webcast at investors.nytco.com.
An archive of the webcast will be available beginning about two hours
after the call at investors.nytco.com.
The archive will be available for approximately three months. An audio
replay will be available at 855-859-2056 (in the U.S.) and 404-537-3406
(international callers) beginning approximately two hours after the call
until 11:59 p.m. E.T. on Tuesday, February 10. The passcode is 61546091.
Except for the historical information contained herein, the matters
discussed in this press release are forward-looking statements that
involve risks and uncertainties, and actual results could differ
materially from those predicted by such forward-looking statements.
These risks and uncertainties include national and local conditions, as
well as competition, that could influence the levels (rate and volume)
of circulation and advertising generated by the Company’s various
markets and the development of the Company’s digital businesses. They
also include other risks detailed from time to time in the Company’s
publicly filed documents, including the Company’s Annual Report on Form
10-K for the year ended December 29, 2013. The Company undertakes no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
The New York Times Company is a global media organization dedicated to
enhancing society by creating, collecting and distributing high-quality
news and information. The Company includes The New York Times,
International New York Times, NYTimes.com,
international.nytimes.com and
related properties. It is known globally for excellence in its
journalism, and innovation in its print and digital storytelling and its
business model. Follow news about the company at @NYTimesComm or
investor news at @NYT_IR.
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Exhibits:
|
|
|
|
Condensed Consolidated Statements of Operations
|
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|
|
|
|
Footnotes
|
|
|
|
|
|
Reconciliation of Non-GAAP Information
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This press release can be downloaded from www.nytco.com.
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THE NEW YORK TIMES COMPANY
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Dollars and shares in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
% Change
|
|
|
2014
|
|
|
2013
|
|
|
% Change
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Circulation
|
|
|
|
$
|
|
210,555
|
|
|
$
|
|
207,674
|
|
|
1.4
|
%
|
|
$
|
836,822
|
|
|
$
|
824,277
|
|
|
1.5
|
%
|
|
Advertising(a)
|
|
|
|
207,632
|
|
|
212,092
|
|
|
-2.1
|
%
|
|
662,315
|
|
|
666,687
|
|
|
-0.7
|
%
|
|
Other(b)
|
|
|
|
26,496
|
|
|
24,094
|
|
|
10.0
|
%
|
|
89,391
|
|
|
86,266
|
|
|
3.6
|
%
|
|
Total revenues
|
|
|
|
444,683
|
|
|
443,860
|
|
|
0.2
|
%
|
|
1,588,528
|
|
|
1,577,230
|
|
|
0.7
|
%
|
|
Operating costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs
|
|
|
|
165,891
|
|
|
164,515
|
|
|
0.8
|
%
|
|
643,995
|
|
|
626,913
|
|
|
2.7
|
%
|
|
Selling, general and administrative costs
|
|
|
|
195,549
|
|
|
186,744
|
|
|
4.7
|
%
|
|
761,055
|
|
|
706,354
|
|
|
7.7
|
%
|
|
Depreciation and amortization(c)
|
|
|
|
20,819
|
|
|
20,496
|
|
|
1.6
|
%
|
|
79,455
|
|
|
78,477
|
|
|
1.2
|
%
|
|
Total operating costs
|
|
|
|
382,259
|
|
|
371,755
|
|
|
2.8
|
%
|
|
1,484,505
|
|
|
1,411,744
|
|
|
5.2
|
%
|
|
Early termination charge (d)
|
|
|
|
—
|
|
|
—
|
|
|
0.0
|
%
|
|
2,550
|
|
|
—
|
|
|
100.0
|
%
|
|
Pension settlement charge(e)
|
|
|
|
—
|
|
|
3,228
|
|
|
-100.0
|
%
|
|
9,525
|
|
|
3,228
|
|
|
*
|
|
Multiemployer pension withdrawal expense(f)
|
|
|
|
—
|
|
|
—
|
|
|
0.0
|
%
|
|
—
|
|
|
6,171
|
|
|
-100.0
|
%
|
|
Operating profit
|
|
|
|
62,424
|
|
|
68,877
|
|
|
-9.4
|
%
|
|
91,948
|
|
|
156,087
|
|
|
-41.1
|
%
|
|
(Loss)/income from joint ventures(g)
|
|
|
|
(7,845
|
)
|
|
183
|
|
|
*
|
|
(8,368
|
)
|
|
(3,215
|
)
|
|
*
|
|
Interest expense, net
|
|
|
|
11,970
|
|
|
13,904
|
|
|
-13.9
|
%
|
|
53,730
|
|
|
58,073
|
|
|
-7.5
|
%
|
|
Income from continuing operations before income taxes
|
|
|
|
42,609
|
|
|
55,156
|
|
|
-22.7
|
%
|
|
29,850
|
|
|
94,799
|
|
|
-68.5
|
%
|
|
Income tax expense/(benefit)
|
|
|
|
8,685
|
|
|
16,419
|
|
|
-47.1
|
%
|
|
(3,541
|
)
|
|
37,892
|
|
|
*
|
|
Income from continuing operations
|
|
|
|
33,924
|
|
|
38,737
|
|
|
-12.4
|
%
|
|
33,391
|
|
|
56,907
|
|
|
-41.3
|
%
|
|
(Loss)/income from discontinued operations, net of income taxes(h)
|
|
|
|
(92
|
)
|
|
26,944
|
|
|
*
|
|
(1,086
|
)
|
|
7,949
|
|
|
*
|
|
Net income
|
|
|
|
33,832
|
|
|
65,681
|
|
|
-48.5
|
%
|
|
32,305
|
|
|
64,856
|
|
|
-50.2
|
%
|
|
Net loss/(income) attributable to the noncontrolling interest
|
|
|
|
1,043
|
|
|
(55
|
)
|
|
*
|
|
1,002
|
|
|
249
|
|
|
*
|
|
Net income attributable to The New York Times Company common
stockholders
|
|
|
|
$
|
|
34,875
|
|
|
$
|
|
65,626
|
|
|
-46.9
|
%
|
|
$
|
33,307
|
|
|
$
|
65,105
|
|
|
-48.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to The New York Times Company common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
|
34,967
|
|
|
$
|
|
38,682
|
|
|
-9.6
|
%
|
|
$
|
34,393
|
|
|
$
|
57,156
|
|
|
-39.8
|
%
|
|
(Loss)/income from discontinued operations, net of income taxes
|
|
|
|
(92
|
)
|
|
26,944
|
|
|
*
|
|
(1,086
|
)
|
|
7,949
|
|
|
*
|
|
Net income
|
|
|
|
$
|
|
34,875
|
|
|
$
|
|
65,626
|
|
|
-46.9
|
%
|
|
$
|
33,307
|
|
|
$
|
65,105
|
|
|
-48.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
150,779
|
|
|
150,162
|
|
|
0.4
|
%
|
|
150,673
|
|
|
149,755
|
|
|
0.6
|
%
|
|
Diluted
|
|
|
|
160,455
|
|
|
160,013
|
|
|
0.3
|
%
|
|
161,323
|
|
|
157,774
|
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to The New York Times
Company common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
|
0.23
|
|
|
$
|
|
0.26
|
|
|
-11.5
|
%
|
|
$
|
0.23
|
|
|
$
|
0.38
|
|
|
-39.5
|
%
|
|
Income/(loss) from discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
0.18
|
|
|
-100.0
|
%
|
|
(0.01
|
)
|
|
0.05
|
|
|
*
|
|
Net income
|
|
|
|
$
|
|
0.23
|
|
|
$
|
|
0.44
|
|
|
-47.7
|
%
|
|
$
|
0.22
|
|
|
$
|
0.43
|
|
|
-48.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to The New York Times
Company common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
|
0.22
|
|
|
$
|
|
0.24
|
|
|
-8.3
|
%
|
|
$
|
0.21
|
|
|
$
|
0.36
|
|
|
-41.7
|
%
|
|
Income/(loss) from discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
0.17
|
|
|
-100.0
|
%
|
|
(0.01
|
)
|
|
0.05
|
|
|
*
|
|
Net income
|
|
|
|
$
|
|
0.22
|
|
|
$
|
|
0.41
|
|
|
-46.3
|
%
|
|
$
|
0.20
|
|
|
$
|
0.41
|
|
|
-51.2
|
%
|
|
Dividends declared per share
|
|
|
|
$
|
|
0.04
|
|
|
$
|
|
0.04
|
|
|
0.0
|
%
|
|
$
|
0.16
|
|
|
$
|
0.08
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents an increase or decrease in excess of 100%.
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes pages for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE NEW YORK TIMES COMPANY
|
|
FOOTNOTES
|
|
(Dollars in thousands)
|
(a) The following table summarizes the fourth quarter of 2014
advertising revenues by category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
|
|
|
Change
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
vs. 2013
|
|
|
Full Year
|
|
|
vs. 2013
|
|
|
|
|
Display
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
192,135
|
|
|
-2.2
|
%
|
|
|
$
|
606,838
|
|
|
-0.5
|
%
|
|
|
|
|
Classified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,512
|
|
|
-3.8
|
%
|
|
|
36,689
|
|
|
-2.0
|
%
|
|
|
|
|
Other advertising
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,985
|
|
|
3.9
|
%
|
|
|
18,788
|
|
|
-2.7
|
%
|
|
|
|
|
Total advertising(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
207,632
|
|
|
-2.1
|
%
|
|
|
$
|
662,315
|
|
|
-0.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Beginning in the fourth quarter of 2014, the Company has
reclassified advertising revenues by category, including prior period
information. “Display” combines the prior “Retail” and “National”
categories and includes advertising in our newspapers, online on our
websites and across our digital products principally by advertisers
promoting products or brands. “Classified” includes line ads sold in the
Classified section of our newspapers and websites. “Other advertising”
includes among others creative services fees associated with our branded
content studio and revenue from pre-printed advertising, also known as
free-standing inserts.
|
(b)
|
|
Other revenues consist primarily of revenues from news
services/syndication, digital archives, office rental income,
conferences/events and e-commerce.
|
|
|
|
|
|
(c)
|
|
Includes $1.0 million of accelerated depreciation expense in the
fourth quarter of 2013 for software and certain assets related to
the Company’s building.
|
|
|
|
|
|
(d)
|
|
In the first quarter of 2014, the Company recorded a $2.6 million
charge for the early termination of a distribution agreement.
|
|
|
|
|
|
(e)
|
|
In the second quarter of 2014 and the fourth quarter of 2013, the
Company recorded pension settlement charges of $9.5 million and $3.2
million, respectively, in connection with lump sum payment offers to
certain former employees.
|
|
|
|
|
|
(f)
|
|
In the third quarter of 2013, the Company recorded a $6.2 million
charge for a partial withdrawal obligation under a multiemployer
pension plan.
|
|
|
|
|
|
(g)
|
|
Includes an impairment charge related to an investment in a joint
venture that was recorded in the fourth quarter of 2014.
|
|
|
|
|
|
(h)
|
|
The results of operations for the New England Media Group, which was
sold in 2013, as well as for the Regional Media Group and the About
Group, which were sold in 2012, have been presented as discontinued
operations for all periods presented.
|
|
|
|
THE NEW YORK TIMES COMPANY
|
|
FOOTNOTES (continued)
|
|
(Dollars in thousands)
|
|
|
|
The following tables summarize the 2014 and 2013 results of
operations presented as discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Fourth Quarter
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
New
England
Media
Group
|
|
About
Group
|
|
Regional
Media
Group
|
|
Total
|
|
New
England
Media
Group
|
|
About
Group
|
|
Regional
Media
Group
|
|
Total
|
|
Revenues
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,940
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,940
|
|
|
Total operating costs
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,337
|
|
|
—
|
|
|
—
|
|
|
19,337
|
|
|
Multiemployer pension plan withdrawal expense(a)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Write-down of assets
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss from joint ventures
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
Interest expense, net
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Pre-tax loss
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(430
|
)
|
|
—
|
|
|
—
|
|
|
(430
|
)
|
|
Income tax expense
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
694
|
|
|
294
|
|
|
—
|
|
|
988
|
|
|
Loss from discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,124
|
)
|
|
(294
|
)
|
|
—
|
|
|
(1,418
|
)
|
|
Gain/(loss) on sale, net of income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain/(loss) on sale
|
|
|
|
1,210
|
|
|
(229
|
)
|
|
(397
|
)
|
|
584
|
|
|
47,561
|
|
|
419
|
|
|
—
|
|
|
47,980
|
|
|
Income tax expense/(benefit)
|
|
|
|
438
|
|
|
(93
|
)
|
|
331
|
|
|
676
|
|
|
19,457
|
|
|
161
|
|
|
—
|
|
|
19,618
|
|
|
Gain/(loss) on sale, net of income taxes
|
|
|
|
772
|
|
|
(136
|
)
|
|
(728
|
)
|
|
(92
|
)
|
|
28,104
|
|
|
258
|
|
|
—
|
|
|
28,362
|
|
|
Income/(loss) from discontinued operations, net of income taxes
|
|
|
|
$
|
772
|
|
|
$
|
(136
|
)
|
|
$
|
(728
|
)
|
|
$
|
(92
|
)
|
|
$
|
26,980
|
|
|
$
|
(36
|
)
|
|
$
|
—
|
|
|
$
|
26,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year
|
|
Full Year
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
New
England
Media
Group
|
|
About
Group
|
|
Regional
Media
Group
|
|
Total
|
|
New
England
Media
Group
|
|
About
Group
|
|
Regional
Media
Group
|
|
Total
|
|
Revenues
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
287,677
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
287,677
|
|
|
Total operating costs
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
281,414
|
|
|
—
|
|
|
—
|
|
|
281,414
|
|
|
Multiemployer pension plan withdrawal expense(a)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,997
|
|
|
—
|
|
|
—
|
|
|
7,997
|
|
|
Write-down of assets(b)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,300
|
|
|
—
|
|
|
—
|
|
|
34,300
|
|
|
Loss from joint ventures
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
Interest expense, net
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
Pre-tax loss
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,283
|
)
|
|
—
|
|
|
—
|
|
|
(36,283
|
)
|
|
Income tax benefit
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,373
|
)
|
|
(2,497
|
)
|
|
—
|
|
|
(15,870
|
)
|
|
(Loss)/income from discontinued operations, net of income taxes
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,910
|
)
|
|
2,497
|
|
|
—
|
|
|
(20,413
|
)
|
|
(Loss)/gain on sale, net of income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/gain on sale
|
|
|
|
(349
|
)
|
|
(229
|
)
|
|
(397
|
)
|
|
(975
|
)
|
|
47,561
|
|
|
419
|
|
|
—
|
|
|
47,980
|
|
|
Income tax (benefit)/expense
|
|
|
|
(127
|
)
|
|
(93
|
)
|
|
331
|
|
|
111
|
|
|
19,457
|
|
|
161
|
|
|
—
|
|
|
19,618
|
|
|
(Loss)/gain on sale, net of income taxes
|
|
|
|
(222
|
)
|
|
(136
|
)
|
|
(728
|
)
|
|
(1,086
|
)
|
|
$
|
28,104
|
|
|
$
|
258
|
|
|
$
|
—
|
|
|
$
|
28,362
|
|
|
(Loss)/income from discontinued operations, net of income taxes
|
|
|
|
$
|
(222
|
)
|
|
$
|
(136
|
)
|
|
$
|
(728
|
)
|
|
$
|
(1,086
|
)
|
|
$
|
5,194
|
|
|
$
|
2,755
|
|
|
$
|
—
|
|
|
$
|
7,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The multiemployer pension plan withdrawal expense related to
estimated charges for complete or partial withdrawal obligations
under multiemployer pension plans triggered by the sale of NEMG.
|
|
|
|
(b)
|
|
Included in the write-down of assets in 2013 is the impairment
of fixed assets related to NEMG.
|
|
THE NEW YORK TIMES COMPANY
|
|
RECONCILIATION OF NON-GAAP INFORMATION
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
In this release, the Company has referred to non-GAAP financial
information with respect to 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); 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 Company has included these
non-GAAP financial measures because management reviews them on a
regular basis and uses them to evaluate and manage the performance
of the Company’s operations. Management believes that, for the
reasons outlined below, these non-GAAP financial measures provide
useful information to investors as a supplement to reported diluted
earnings/(loss) per share from continuing operations, operating
profit/(loss) 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 the Company’s period-to-period performance because it
eliminates items that the Company does not consider to be
indicative of earnings from ongoing operating activities. Adjusted
operating profit is useful in evaluating the ongoing performance
of the Company’s business 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. Total operating costs excluding these items
provide investors with helpful supplemental information on the
Company’s underlying operating costs that is used by management in
its financial and operational decision-making.
|
|
|
|
Non-operating retirement costs include interest cost, expected
return on plan assets and amortization of actuarial gains and loss
components of pension expense; interest cost and amortization of
actuarial gains and loss components of retiree medical expense;
and all expenses associated with multiemployer pension plan
withdrawal obligations. 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 management believes reflect the ongoing service-related
costs of providing pension and retiree medical benefits to its
employees. Management considers non-operating retirement costs to
be outside the performance of the business and believes that
presenting operating results excluding non-operating retirement
costs, in addition to the Company’s GAAP operating results,
provides increased transparency and a better understanding of the
underlying trends in the Company’s operating business performance.
|
|
|
|
Reconciliations of these 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
|
Diluted earnings per share from continuing operations
|
|
|
|
$
|
0.22
|
|
|
$
|
0.24
|
|
|
-8.3
|
%
|
|
$
|
0.21
|
|
|
$
|
0.36
|
|
|
-41.7
|
%
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
|
0.03
|
|
|
0.01
|
|
|
|
|
|
0.13
|
|
|
0.05
|
|
|
|
|
|
Non-operating retirement costs
|
|
|
|
0.04
|
|
|
0.03
|
|
|
|
|
|
0.13
|
|
|
0.08
|
|
|
|
|
|
Special items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early termination charge
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
0.01
|
|
|
—
|
|
|
|
|
|
Reduction in uncertain tax positions
|
|
|
|
(0.07
|
)
|
|
—
|
|
|
|
|
|
(0.13
|
)
|
|
—
|
|
|
|
|
|
Pension settlement charge
|
|
|
|
—
|
|
|
0.01
|
|
|
|
|
|
0.04
|
|
|
0.01
|
|
|
|
|
|
Multiemployer pension plan withdrawal expense
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
0.02
|
|
|
|
|
|
Impairment charge
|
|
|
|
0.04
|
|
|
—
|
|
|
|
|
|
0.04
|
|
|
—
|
|
|
|
|
|
Adjusted diluted earnings per share from continuing operations
|
|
|
|
$
|
0.26
|
|
|
$
|
0.29
|
|
|
-10.3
|
%
|
|
$
|
0.43
|
|
|
$
|
0.52
|
|
|
-17.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE NEW YORK TIMES COMPANY
|
|
RECONCILIATION OF NON-GAAP INFORMATION (continued)
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of operating profit before
depreciation & amortization, severance, non-operating retirement
costs and special items (or adjusted operating profit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
|
Operating profit
|
|
|
|
$
|
62,424
|
|
|
$
|
68,877
|
|
|
-9.4
|
%
|
|
$
|
91,948
|
|
|
$
|
156,087
|
|
|
-41.1
|
%
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization
|
|
|
|
20,819
|
|
|
20,496
|
|
|
|
|
|
79,455
|
|
|
78,477
|
|
|
|
|
|
Severance
|
|
|
|
9,420
|
|
|
4,036
|
|
|
|
|
|
36,082
|
|
|
12,382
|
|
|
|
|
|
Non-operating retirement costs
|
|
|
|
11,190
|
|
|
7,686
|
|
|
|
|
|
36,697
|
|
|
20,791
|
|
|
|
|
|
Special items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early termination charge
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
2,550
|
|
|
—
|
|
|
|
|
|
Pension settlement charge
|
|
|
|
—
|
|
|
3,228
|
|
|
|
|
|
9,525
|
|
|
3,228
|
|
|
|
|
|
Multiemployer pension plan withdrawal expense
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
6,171
|
|
|
|
|
|
Adjusted operating profit
|
|
|
|
$
|
103,853
|
|
|
$
|
104,323
|
|
|
-0.5
|
%
|
|
$
|
256,257
|
|
|
$
|
277,136
|
|
|
-7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of operating costs before
depreciation & amortization, severance and non-operating
retirement costs (or adjusted operating costs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
|
Operating costs
|
|
|
|
$
|
382,259
|
|
|
$
|
371,755
|
|
|
2.8
|
%
|
|
$
|
1,484,505
|
|
|
$
|
1,411,744
|
|
|
5.2
|
%
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization
|
|
|
|
20,819
|
|
|
20,496
|
|
|
|
|
|
79,455
|
|
|
78,477
|
|
|
|
|
|
Severance
|
|
|
|
9,420
|
|
|
4,036
|
|
|
|
|
|
36,082
|
|
|
12,382
|
|
|
|
|
|
Non-operating retirement costs
|
|
|
|
11,190
|
|
|
7,686
|
|
|
|
|
|
36,697
|
|
|
20,791
|
|
|
|
|
|
Adjusted operating costs
|
|
|
|
$
|
340,830
|
|
|
$
|
339,537
|
|
|
0.4
|
%
|
|
$
|
1,332,271
|
|
|
$
|
1,300,094
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE NEW YORK TIMES COMPANY
|
|
RECONCILIATION OF NON-GAAP INFORMATION (continued)
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of non-operating retirement
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Full Year
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
|
2014
|
|
2013
|
|
% Change
|
|
|
Pension:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost
|
|
|
|
$
|
23,593
|
|
|
$
|
22,030
|
|
|
|
|
$
|
94,897
|
|
|
$
|
87,817
|
|
|
|
|
Expected return on plan assets
|
|
|
|
(28,460
|
)
|
|
(31,062
|
)
|
|
|
|
(113,839
|
)
|
|
(124,250
|
)
|
|
|
|
Amortization and other costs
|
|
|
|
8,297
|
|
|
10,069
|
|
|
|
|
31,338
|
|
|
39,331
|
|
|
|
|
Non-operating pension costs
|
|
|
|
3,430
|
|
|
1,037
|
|
|
*
|
|
12,396
|
|
|
2,898
|
|
|
*
|
|
Other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost
|
|
|
|
772
|
|
|
1,074
|
|
|
|
|
3,722
|
|
|
4,101
|
|
|
|
|
Amortization and other costs
|
|
|
|
3,694
|
|
|
1,374
|
|
|
|
|
7,299
|
|
|
4,440
|
|
|
|
|
Non-operating other postretirement benefits costs
|
|
|
|
4,466
|
|
|
2,448
|
|
|
82.4
|
%
|
|
11,021
|
|
|
8,541
|
|
|
29.0
|
%
|
|
Expenses associated with multiemployer pension plan withdrawal
obligations
|
|
|
|
3,294
|
|
|
4,201
|
|
|
|
|
13,280
|
|
|
9,352
|
|
|
|
|
Total non-operating retirement costs
|
|
|
|
$
|
11,190
|
|
|
$
|
7,686
|
|
|
45.6
|
%
|
|
$
|
36,697
|
|
|
$
|
20,791
|
|
|
76.5
|
%
|
* Represents an increase in excess of 100%.
Copyright Business Wire 2015