The New York Times Company Reports 2016 Second-Quarter Results
The New York Times Company (NYSE: NYT) announced today a second-quarter 2016 diluted loss per share from continuing operations
of $.00 compared with diluted earnings per share of $.10 in the same period of 2015. Adjusted diluted earnings per share from
continuing operations (defined below) were $.11 in the second quarter of 2016 compared with $.13 in the second quarter of 2015.
Operating profit decreased to $9.1 million in the second quarter of 2016 from $38.1 million in the same period of 2015. The
decline was driven by costs incurred in connection with the streamlining of the Company’s international print operations, a charge
for a partial withdrawal obligation under a multiemployer pension plan and lower advertising revenues. Adjusted operating profit
(defined below) was $54.5 million in the second quarter of 2016 compared with $64.4 million in the second quarter of 2015. The
decline was driven by lower advertising revenues, which were partially offset by higher circulation revenues.
“We once again saw a robust quarter in terms of digital subscriber growth, with 51,000 net paid digital-only subscriptions to
our news products added in Q2 and growth of 22 percent year-over-year. Much of our success in building our digital pay model is the
result of a renewed effort to clearly communicate the value of Times journalism and our products through mission-related, native
messaging to an expanding number of highly engaged readers,” said Mark Thompson, president and chief executive officer, The New
York Times Company.
“Advertising was tougher in the quarter, particularly on the print side. In digital, we saw very strong growth in mobile, video
and virtual reality, branded content and programmatic advertising. These were not enough to offset declines in traditional web
display in Q2, which led to an overall decline in digital advertising. However, we expect that situation to improve in the second
half of the year; in fact, we are already seeing a marked turnaround in July. We expect to deliver strong revenue growth from both
digital advertising and our digital consumer business in Q3.
“And finally, in the quarter, we have undertaken a variety of steps to keep our cost base in line and will continue to maintain
a mindful eye in this respect.”
Comparisons
Unless otherwise noted, all comparisons are for the second quarter of 2016 to the second quarter of 2015.
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.
Second-quarter 2016 results included the following special items:
- An $11.9 million ($7.1 million after tax or $.04 per share) charge in connection with the
streamlining of the Company’s international print operations (primarily consisting of severance costs).
- An $11.7 million ($7.0 million after tax or $.04 per share) charge for a partial withdrawal
obligation under a multiemployer pension plan following an unfavorable arbitration decision.
There were no special items in the second quarter of 2015.
The Company had severance costs (in addition to those associated with the streamlining of the Company’s international print
operations) of $1.7 million ($1.0 million after tax or $.01 per share) and $1.9 million ($1.1 million after tax or $.01 per share)
in the second quarters of 2016 and 2015, respectively.
Results from Continuing Operations
Revenues
Total revenues for the second quarter of 2016 decreased 2.7 percent to $372.6 million from $382.9 million in the second quarter of
2015. Circulation revenues increased 3.0 percent, while advertising revenues declined 11.7 percent and other revenues increased 4.0
percent.
Circulation revenues rose as revenues from the Company’s digital subscription initiatives and the 2016 increase in home-delivery
prices at The New York Times newspaper more than offset a decline in print copies sold. Circulation revenue from the Company’s
digital-only subscriptions (which includes news product and Crossword product subscriptions) increased 15.3 percent compared with
the second quarter of 2015, to $56.4 million. Circulation revenue from digital-only subscriptions to our news products increased
14.0 percent to $54.1 million.
Paid digital-only subscriptions totaled approximately 1,424,000 as of the end of the second quarter of 2016, a net increase of
67,000 subscriptions compared to the end of the first quarter of 2016 and a 25 percent increase compared to the end of the second
quarter of 2015. Of the 67,000 net additions, 51,000 net additions came from the Company’s digital news products, while the
remainder came from the Company’s Crossword product.
Second-quarter print advertising revenue decreased 14.1 percent while digital advertising revenue decreased 6.8 percent. Digital
advertising revenue was $45.0 million, or 34.3 percent of total Company advertising revenues, compared with $48.3 million, or 32.5
percent, in the second quarter of 2015. The decrease in print advertising revenues resulted primarily from a decline in display
advertising. The decrease in digital advertising revenues primarily reflected a decrease in traditional website display
advertising, partially offset by increases in revenue from our mobile platform, our programmatic buying channels and branded
content.
Operating Costs
Operating costs decreased in the second quarter of 2016 to $339.9 million compared with $344.8 million in the second quarter of
2015, largely due to lower non-operating retirement costs. Adjusted operating costs were relatively flat at $318.2 million as
savings in print production and distribution were offset by higher costs in advertising and technology.
Non-operating retirement costs, which exclude special items, decreased to $5.0 million from $8.7 million in the second quarter,
driven by a change in the methodology of calculating the discount rate applied to retirement costs. The exhibits in this release
include the detail of non-operating retirement costs.
Raw materials costs decreased to $17.0 million from $18.3 million in the second quarter largely due to volume declines.
Other Data
Interest Expense, net
Interest expense, net decreased to $9.1 million in the second quarter of 2016 from $9.8 million in the second quarter of 2015 due
to higher yielding investment income in the second quarter.
Income Taxes
The Company had income tax expense of $0.1 million in the second quarter of 2016 and $11.7 million in the second quarter of 2015.
The decrease in income tax expense is due to lower income from continuing operations in the second quarter of 2016.
Liquidity
As of June 26, 2016, the Company had cash and marketable securities of approximately $915.4 million (excluding restricted cash
of approximately $28.2 million, the majority of which is set aside to collateralize certain workers’ compensation obligations).
Total debt and capital lease obligations were approximately $433.7 million.
Capital Expenditures
Capital expenditures totaled approximately $5 million in the second quarter of 2016.
Outlook
Total circulation revenues in the third quarter of 2016 are expected to increase at a rate similar to that of the second quarter of
2016.
Total advertising revenues in the third quarter of 2016 are expected to decrease in the mid-single digits compared with the
third quarter of 2015.
Operating costs are expected to increase in the mid-single digits in the third quarter of 2016 compared with the third
quarter of 2015, while adjusted operating costs are expected to increase in the low to mid-single digits. Our outlook on
adjusted operating costs excludes severance and non-operating retirement costs, and in the third quarter of 2016, we
expect severance costs to increase compared to the third quarter of 2015, partially offset by a decrease in non-operating
retirement costs.
The Company expects the following on a pre-tax basis in 2016:
- Depreciation and amortization: $60 million to $65 million,
- Interest expense, net: $35 million to $40 million, and
- Capital expenditures: $35 million to $40 million.
Conference Call Information
The Company’s second-quarter 2016 earnings conference call will be held on Thursday, July 28 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 26465463. 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 Thursday, August 4. The passcode is 26465463.
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 changes in the business and competitive environment in which the
Company operates, the impact of national and local conditions and developments in technology, each of which could influence the
levels (rate and volume) of the Company’s circulation and advertising, the growth of its businesses and the implementation of its
strategic initiatives. 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 27, 2015. 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.
This press release can be downloaded from www.nytco.com
Exhibits: |
|
Condensed Consolidated Statements of Operations |
|
|
Footnotes |
|
|
Reconciliation of Non-GAAP Information |
|
|
|
|
|
|
|
|
|
|
|
THE NEW YORK TIMES COMPANY |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(Dollars and shares in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
|
Six Months |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Circulation (a) |
|
|
|
|
$ |
|
|
219,480 |
|
|
|
$ |
|
|
213,128 |
|
|
|
3.0 |
% |
|
|
|
$ |
|
|
437,474 |
|
|
|
$ |
|
|
425,921 |
|
|
|
2.7 |
% |
|
|
Advertising(b) |
|
|
|
|
131,155 |
|
|
|
148,599 |
|
|
|
-11.7 |
% |
|
|
|
270,835 |
|
|
|
298,507 |
|
|
|
-9.3 |
% |
|
|
Other(c) |
|
|
|
|
21,995 |
|
|
|
21,159 |
|
|
|
4.0 |
% |
|
|
|
43,836 |
|
|
|
42,697 |
|
|
|
2.7 |
% |
|
|
Total revenues |
|
|
|
|
372,630 |
|
|
|
382,886 |
|
|
|
-2.7 |
% |
|
|
|
752,145 |
|
|
|
767,125 |
|
|
|
-2.0 |
% |
|
|
Operating costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
|
|
152,717 |
|
|
|
152,773 |
|
|
|
0.0 |
% |
|
|
|
310,579 |
|
|
|
309,409 |
|
|
|
0.4 |
% |
|
|
Selling, general and administrative costs |
|
|
|
|
172,069 |
|
|
|
176,252 |
|
|
|
-2.4 |
% |
|
|
|
350,315 |
|
|
|
355,049 |
|
|
|
-1.3 |
% |
|
|
Depreciation and amortization |
|
|
|
|
15,147 |
|
|
|
15,810 |
|
|
|
-4.2 |
% |
|
|
|
30,619 |
|
|
|
30,654 |
|
|
|
-0.1 |
% |
|
|
Total operating costs |
|
|
|
|
339,933 |
|
|
|
344,835 |
|
|
|
-1.4 |
% |
|
|
|
691,513 |
|
|
|
695,112 |
|
|
|
-0.5 |
% |
|
|
Restructuring charge (d) |
|
|
|
|
11,855 |
|
|
|
— |
|
|
|
*
|
|
|
|
|
11,855 |
|
|
|
— |
|
|
|
* |
|
|
|
Multiemployer pension withdrawal expense(e) |
|
|
|
|
11,701 |
|
|
|
— |
|
|
|
* |
|
|
|
|
11,701 |
|
|
|
4,697 |
|
|
|
* |
|
|
|
Pension settlement charges(f) |
|
|
|
|
— |
|
|
|
— |
|
|
|
* |
|
|
|
|
— |
|
|
|
40,329 |
|
|
|
* |
|
|
|
Operating profit |
|
|
|
|
9,141 |
|
|
|
38,051 |
|
|
|
-76.0 |
% |
|
|
|
37,076 |
|
|
|
26,987 |
|
|
|
37.4 |
% |
|
|
Loss from joint ventures (g) |
|
|
|
|
(412 |
) |
|
|
(356 |
) |
|
|
15.7 |
% |
|
|
|
(42,308 |
) |
|
|
(928 |
) |
|
|
* |
|
|
|
Interest expense, net |
|
|
|
|
9,097 |
|
|
|
9,776 |
|
|
|
-6.9 |
% |
|
|
|
17,923 |
|
|
|
21,968 |
|
|
|
-18.4 |
% |
|
|
(Loss)/ income from continuing operations before income taxes |
|
|
|
|
(368 |
) |
|
|
27,919 |
|
|
|
* |
|
|
|
|
(23,155 |
) |
|
|
4,091 |
|
|
|
* |
|
|
|
Income tax expense/(benefit) |
|
|
|
|
124 |
|
|
|
11,700 |
|
|
|
-98.9 |
% |
|
|
|
(9,077 |
) |
|
|
2,293 |
|
|
|
* |
|
|
|
Net (loss)/ income |
|
|
|
|
(492 |
) |
|
|
16,219 |
|
|
|
* |
|
|
|
|
(14,078 |
) |
|
|
1,798 |
|
|
|
* |
|
|
|
Net loss attributable to the noncontrolling interest |
|
|
|
|
281 |
|
|
|
181 |
|
|
|
55.2 |
% |
|
|
|
5,596 |
|
|
|
340 |
|
|
|
* |
|
|
|
Net (loss)/ income attributable to The New York
Times Company common stockholders
|
|
|
|
|
$ |
|
|
(211 |
) |
|
|
$ |
|
|
16,400 |
|
|
|
* |
|
|
|
|
$ |
|
|
(8,482 |
) |
|
|
$ |
|
|
2,138 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
161,128 |
|
|
|
166,355 |
|
|
|
-3.1 |
% |
|
|
|
161,052 |
|
|
|
165,173 |
|
|
|
-2.5 |
% |
|
|
Diluted |
|
|
|
|
161,128 |
|
|
|
168,316 |
|
|
|
-4.3 |
% |
|
|
|
161,052 |
|
|
|
167,491 |
|
|
|
-3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share attributable to The
New York Times Company common stockholders
|
|
|
|
|
$ |
|
|
(0.00 |
) |
|
|
$ |
|
|
0.10 |
|
|
|
* |
|
|
|
|
$ |
|
|
(0.05 |
) |
|
|
$ |
|
|
0.01 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)/earnings per share attributable to The
New York Times Company common stockholders
|
|
|
|
|
$ |
|
|
(0.00 |
) |
|
|
$ |
|
|
0.10 |
|
|
|
* |
|
|
|
|
$ |
|
|
(0.05 |
) |
|
|
$ |
|
|
0.01 |
|
|
|
* |
|
|
|
Dividends declared per share (h) |
|
|
|
|
$ |
|
|
— |
|
|
|
$
|
|
|
0.04 |
|
|
|
* |
|
|
|
|
$ |
|
|
0.04 |
|
|
|
$ |
|
|
0.08 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents a change equal to or in excess of 100% or
not meaningful. |
|
|
|
|
See footnotes pages for additional information. |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE NEW YORK TIMES COMPANY |
FOOTNOTES |
(Amounts in thousands) |
(a) |
|
In the first quarter of 2016, the Company reclassified the subscription revenue from its Crossword
product, including prior
period information, into circulation revenues from other revenues. The following tables summarize
2016 and 2015
digital-only subscription revenues reflecting this reclassification:
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
|
|
% Change
vs. 2015
|
|
|
|
Six
Months
|
|
|
|
% Change
vs. 2015
|
|
|
Digital-only subscription revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital-only news product subscription revenues |
|
|
|
|
|
|
|
|
|
$ |
|
|
|
54,126 |
|
|
|
14.0% |
|
|
|
$ |
|
|
|
106,201 |
|
|
|
13.5% |
|
|
Digital Crossword product subscription revenues |
|
|
|
|
|
|
|
|
|
2,272 |
|
|
|
54.6% |
|
|
|
4,370 |
|
|
|
56.5% |
|
|
Total digital-only subscription revenues |
|
|
|
|
|
|
|
|
|
$ |
|
|
|
56,398 |
|
|
|
15.3% |
|
|
|
$ |
|
|
|
110,571 |
|
|
|
14.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
|
First
Quarter
|
|
|
|
Second
Quarter
|
|
|
|
Third
Quarter
|
|
|
|
Fourth
Quarter
|
|
|
|
Full Year |
|
|
Digital-only subscription revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital-only news product subscription revenues |
|
|
|
|
|
$ |
|
|
|
46,127 |
|
|
|
$ |
|
|
|
47,465 |
|
|
|
$ |
|
48,656 |
|
|
|
$ |
|
|
|
50,409 |
|
|
|
$ |
|
192,657 |
|
|
Digital Crossword product subscription revenues |
|
|
|
|
|
1,323 |
|
|
|
1,470 |
|
|
|
1,630 |
|
|
|
1,863 |
|
|
|
6,286 |
|
|
Total digital-only subscription revenues |
|
|
|
|
|
$ |
|
|
|
47,450 |
|
|
|
$ |
|
|
|
48,935 |
|
|
|
$ |
|
50,286 |
|
|
|
$ |
|
|
|
52,272 |
|
|
|
$ |
|
198,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consistent with this reclassification, the Company also adjusted the number of digital-only
subscriptions to include
Crossword product subscriptions. The following tables summarize 2016 and 2015 digital-only
subscriptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 26,
2016
|
|
|
|
% Change vs.
2015
|
|
|
Digital-only subscriptions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital-only news product subscriptions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,212 |
|
|
|
22.4% |
|
|
Digital Crossword product subscriptions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
212 |
|
|
|
46.2% |
|
|
Total digital-only subscriptions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,424 |
|
|
|
25.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
March 29,
2015
|
|
|
|
June 28,
2015
|
|
|
|
September
27, 2015
|
|
|
|
December 27,
2015
|
|
|
Digital-only subscriptions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital-only news product subscriptions |
|
|
|
|
|
|
|
|
|
957 |
|
|
|
990 |
|
|
|
1,041 |
|
|
|
1,094 |
|
|
Digital Crossword product subscriptions |
|
|
|
|
|
|
|
|
|
142 |
|
|
|
145 |
|
|
|
159 |
|
|
|
176 |
|
|
Total digital-only subscriptions |
|
|
|
|
|
|
|
|
|
1,099 |
|
|
|
1,135 |
|
|
|
1,200 |
|
|
|
1,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
|
The following table summarizes advertising revenues by category in the
second quarter and first six months of 2016: |
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
|
|
% Change
vs. 2015
|
|
|
|
Six
Months
|
|
|
|
% Change vs.
2015
|
|
|
Display |
|
|
|
$ |
|
|
|
116,446 |
|
|
|
-14.1% |
|
|
|
$ |
|
|
|
242,467 |
|
|
|
-10.8% |
|
|
Classified |
|
|
|
7,788 |
|
|
|
-6.1% |
|
|
|
15,952 |
|
|
|
-9.5% |
|
|
Other advertising |
|
|
|
6,921 |
|
|
|
44.2% |
|
|
|
12,416 |
|
|
|
38.7% |
|
|
Total advertising |
|
|
|
$ |
|
|
|
131,155 |
|
|
|
-11.7% |
|
|
|
$ |
|
|
|
270,835 |
|
|
|
-9.3% |
|
(c) |
|
Other revenues consist primarily of revenues from news services/syndication, digital archives,
rental income, NYT Live
business and e-commerce.
|
|
(d) |
|
In the second quarter of 2016, the Company recorded an $11.9 million charge in connection with the
streamlining of its
international print operations (primarily consisting of severance costs).
|
|
(e) |
|
In the second quarter of 2016 and first quarter of 2015, the Company recorded charges of $11.7
million and $4.7 million,
respectively, for partial withdrawal obligations under multiemployer pension plans. The $11.7
million charge followed an
unfavorable arbitration decision in the second quarter of 2016.
|
|
(f) |
|
In the first quarter of 2015, the Company recorded pension settlement charges of $40.3 million in
connection with lump
sum payment offers to certain former employees.
|
|
(g) |
|
In the second and first quarters of 2016, the Company recorded a $1.6 million and $41.4 million loss
from joint ventures,
respectively, related to the announced closure of a paper mill operated by Madison Paper Industries,
in which the Company
has an investment through a subsidiary.
|
|
(h) |
|
The Board of Directors declared a quarterly dividend on June 28, 2016, subsequent to the second
quarter.
|
|
|
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.
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 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)
|
|
|
|
|
|
|
Second Quarter |
|
|
|
Six Months |
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
Diluted (loss)/earnings per share from continuing operations |
|
|
|
|
|
$ |
|
|
|
|
(0.00 |
) |
|
|
|
$ |
|
|
|
|
0.10 |
|
|
|
|
*
|
|
|
|
$ |
|
|
|
|
(0.05 |
) |
|
|
|
$ |
|
|
|
|
0.01 |
|
|
|
|
*
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
|
|
|
0.01 |
|
|
|
|
0.01 |
|
|
|
|
*
|
|
|
|
0.03 |
|
|
|
|
0.02 |
|
|
|
|
*
|
Non-operating retirement costs |
|
|
|
|
|
0.03 |
|
|
|
|
0.05 |
|
|
|
|
-40.0% |
|
|
|
0.06 |
|
|
|
|
0.10 |
|
|
|
|
-40.0% |
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge |
|
|
|
|
|
0.07 |
|
|
|
|
— |
|
|
|
|
*
|
|
|
|
0.07 |
|
|
|
|
— |
|
|
|
|
*
|
Multiemployer pension plan withdrawal expense |
|
|
|
|
|
0.07 |
|
|
|
|
— |
|
|
|
|
*
|
|
|
|
0.07 |
|
|
|
|
0.03 |
|
|
|
|
*
|
Loss in joint ventures, net of tax and noncontrolling interest |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
*
|
|
|
|
0.21 |
|
|
|
|
— |
|
|
|
|
*
|
Pension settlement charges |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
*
|
|
|
|
— |
|
|
|
|
0.24 |
|
|
|
|
*
|
Income tax expense of special items |
|
|
|
|
|
(0.08 |
) |
|
|
|
(0.03 |
) |
|
|
|
*
|
|
|
|
(0.18 |
) |
|
|
|
(0.16 |
) |
|
|
|
12.5% |
Adjusted diluted earnings per share from continuing operations
(1) |
|
|
|
|
|
$ |
|
|
|
|
0.11 |
|
|
|
|
$ |
|
|
|
|
0.13 |
|
|
|
|
-15.4% |
|
|
|
$ |
|
|
|
|
0.21 |
|
|
|
|
$ |
|
|
|
|
0.25 |
|
|
|
|
-16.0% |
(1) Amounts may not add due to
rounding. |
* Represents a change equal to or in excess of 100% or not
meaningful |
|
|
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)
|
|
|
|
|
|
|
Second Quarter |
|
|
|
Six Months |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
Operating profit/(loss) |
|
|
|
|
$ |
|
|
9,141 |
|
|
|
|
$ |
|
|
38,051 |
|
|
|
|
-76.0% |
|
|
|
$ |
|
|
37,076 |
|
|
|
|
$ |
|
|
26,987 |
|
|
|
|
37.4% |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization |
|
|
|
|
15,147 |
|
|
|
|
15,810 |
|
|
|
|
-4.2% |
|
|
|
30,619 |
|
|
|
|
30,654 |
|
|
|
|
-0.1% |
Severance |
|
|
|
|
1,656 |
|
|
|
|
1,874 |
|
|
|
|
-11.6% |
|
|
|
5,256 |
|
|
|
|
3,391 |
|
|
|
|
55.0% |
Non-operating retirement costs |
|
|
|
|
4,967 |
|
|
|
|
8,674 |
|
|
|
|
-42.7% |
|
|
|
9,503 |
|
|
|
|
17,549 |
|
|
|
|
-45.8% |
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charge |
|
|
|
|
11,855 |
|
|
|
|
— |
|
|
|
|
* |
|
|
|
11,855 |
|
|
|
|
— |
|
|
|
|
* |
Multiemployer pension plan withdrawal expense |
|
|
|
|
11,701 |
|
|
|
|
— |
|
|
|
|
* |
|
|
|
11,701 |
|
|
|
|
4,697 |
|
|
|
|
* |
Pension settlement charge |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
* |
|
|
|
— |
|
|
|
|
40,329 |
|
|
|
|
* |
Adjusted operating profit |
|
|
|
|
$ |
|
|
54,467 |
|
|
|
|
$ |
|
|
64,409 |
|
|
|
|
-15.4% |
|
|
|
$ |
|
|
106,010 |
|
|
|
|
$ |
|
|
123,607 |
|
|
|
|
-14.2% |
|
|
Reconciliation of operating costs before depreciation & amortization,
severance and non-operating retirement costs (or adjusted operating costs)
|
|
|
|
|
|
|
Second Quarter |
|
|
|
Six Months |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
Operating costs |
|
|
|
|
$ |
|
|
339,933 |
|
|
|
|
$ |
|
|
344,835 |
|
|
|
|
-1.4% |
|
|
|
$ |
|
|
691,513 |
|
|
|
|
$ |
|
|
695,112 |
|
|
|
|
-0.5% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization |
|
|
|
|
15,147 |
|
|
|
|
15,810 |
|
|
|
|
-4.2% |
|
|
|
30,619 |
|
|
|
|
30,654 |
|
|
|
|
-0.1% |
Severance |
|
|
|
|
1,656 |
|
|
|
|
1,874 |
|
|
|
|
-11.6% |
|
|
|
5,256 |
|
|
|
|
3,391 |
|
|
|
|
55.0% |
Non-operating retirement costs |
|
|
|
|
4,967 |
|
|
|
|
8,674 |
|
|
|
|
-42.7% |
|
|
|
9,503 |
|
|
|
|
17,549 |
|
|
|
|
-45.8% |
Adjusted operating costs |
|
|
|
|
$ |
|
|
318,163 |
|
|
|
|
$ |
|
|
318,477 |
|
|
|
|
-0.1% |
|
|
|
$ |
|
|
646,135 |
|
|
|
|
$ |
|
|
643,518 |
|
|
|
|
0.4% |
|
Components of non-operating retirement costs (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
Six Months |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
% Change |
Pension: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost |
|
|
|
|
$ |
|
|
18,607 |
|
|
|
|
$ |
|
|
21,016 |
|
|
|
|
-11.5% |
|
|
|
$ |
|
|
37,215 |
|
|
|
|
$ |
|
|
42,456 |
|
|
|
|
-12.3% |
Expected return on plan assets |
|
|
|
|
(27,789 |
) |
|
|
|
(28,832 |
) |
|
|
|
-3.6% |
|
|
|
(55,579 |
) |
|
|
|
(57,607 |
) |
|
|
|
-3.5% |
Amortization and other costs |
|
|
|
|
8,121 |
|
|
|
|
10,749 |
|
|
|
|
-24.4% |
|
|
|
16,243 |
|
|
|
|
21,416 |
|
|
|
|
-24.2% |
Non-operating pension costs |
|
|
|
|
(1,061 |
) |
|
|
|
2,933 |
|
|
|
|
* |
|
|
|
(2,121 |
) |
|
|
|
6,265 |
|
|
|
|
* |
Other postretirement benefits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost |
|
|
|
|
495 |
|
|
|
|
689 |
|
|
|
|
-28.2% |
|
|
|
990 |
|
|
|
|
1,377 |
|
|
|
|
-28.1% |
Amortization and other costs |
|
|
|
|
1,026 |
|
|
|
|
1,303 |
|
|
|
|
-21.3% |
|
|
|
2,052 |
|
|
|
|
2,606 |
|
|
|
|
-21.3% |
Non-operating other postretirement benefits costs |
|
|
|
|
1,521 |
|
|
|
|
1,992 |
|
|
|
|
-23.6% |
|
|
|
3,042 |
|
|
|
|
3,983 |
|
|
|
|
-23.6% |
Expenses associated with multiemployer pension plan withdrawal
obligations |
|
|
|
|
4,507 |
|
|
|
|
3,749 |
|
|
|
|
20.2% |
|
|
|
8,582 |
|
|
|
|
7,301 |
|
|
|
|
17.5% |
Total non-operating retirement costs |
|
|
|
|
$ |
|
|
4,967 |
|
|
|
|
$ |
|
|
8,674 |
|
|
|
|
-42.7% |
|
|
|
$ |
|
|
9,503 |
|
|
|
|
$ |
|
|
17,549 |
|
|
|
|
-45.8% |
(1) Components of non-operating retirement
costs do not include special items |
* Represents a change equal to or in excess of 100% or not
meaningful. |
|
The New York Times Company
Media:
Eileen Murphy, 212-556-1982
eileen.murphy@nytimes.com
or
Investors:
Harlan Toplitzky, 212-556-7775
harlan.toplitzky@nytimes.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20160728005844/en/