Edgar Filing: NEW YORK TIMES CO

NYT 10-Q 9.25.2011

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 25, 2011

Commission file number 1-5837

THE NEW YORK TIMES COMPANY

(Exact name of registrant as specified in its charter)



NEW YORK		13-1102020
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

620 EIGHTH AVENUE, NEW YORK, NEW YORK

(Address of principal executive offices)

10018

(Zip Code)

Registrant’s telephone number, including area code 212-556-1234

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 x No o

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares of each class of the registrant’s common stock outstanding as of October 28, 2011 (exclusive of treasury shares):



Class A Common Stock	146,626,388	shares
Class B Common Stock	818,885	shares

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)



	For the Quarters Ended						For the Nine Months Ended
	September 25, 2011			September 26, 2010			September 25, 2011			September 26, 2010
	(13 weeks)						(39 weeks)
Revenues
Advertising	$	261,779		$	286,980		$	862,954		$	914,518
Circulation	236,964			229,148			699,898			700,819
Other	38,492			38,205			117,589			116,450
Total revenues	537,235			554,333			1,680,441			1,731,787
Operating costs
Production costs:
Raw materials	37,890			39,571			118,040			114,962
Wages and benefits	121,109			123,766			373,127			376,204
Other	73,904			74,047			222,211			223,869
Total production costs	232,903			237,384			713,378			715,035
Selling, general and administrative costs	241,885			255,440			763,878			781,044
Depreciation and amortization	29,402			30,100			87,597			90,816
Total operating costs	504,190			522,924			1,564,853			1,586,895
Impairment of assets	—			16,148			161,318			16,148
Pension withdrawal expense	—			6,268			4,228			6,268
Operating profit/(loss)	33,045			8,993			(49,958		)	122,476
Gain on sale of investments	65,273			—			71,171			9,128
(Loss)/income from joint ventures	(1,068		)	5,482			(4,026		)	22,271
Premium on debt redemption	46,381			—			46,381			—
Interest expense, net	20,039			20,627			69,782			61,825
Income/(loss) from continuing operations before income taxes	30,830			(6,152		)	(98,976		)	92,050
Income tax expense/(benefit)	15,362			(2,018		)	153			50,444
Income/(loss) from continuing operations	15,468			(4,134		)	(99,129		)	41,606
(Loss)/income from discontinued operations, net of income taxes	—			(224		)	—			13
Net income/(loss)	15,468			(4,358		)	(99,129		)	41,619
Net loss/(income) attributable to the noncontrolling interest	217			97			515			(1,054		)
Net income/(loss) attributable to The New York Times Company common stockholders	$	15,685		$	(4,261	)	$	(98,614	)	$	40,565
Amounts attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	15,685		$	(4,037	)	$	(98,614	)	$	40,552
(Loss)/income from discontinued operations, net of income taxes	—			(224		)	—			13
Net income/(loss)	$	15,685		$	(4,261	)	$	(98,614	)	$	40,565
Average number of common shares outstanding:
Basic	147,355			145,803			147,103			145,533
Diluted	151,293			145,803			147,103			153,092
Basic earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	0.11		$	(0.03	)	$	(0.67	)	$	0.28
(Loss)/income from discontinued operations, net of income taxes	—			—			—			—
Net income/(loss)	$	0.11		$	(0.03	)	$	(0.67	)	$	0.28
Diluted earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	0.10		$	(0.03	)	$	(0.67	)	$	0.26
Loss/(income) from discontinued operations, net of income taxes	—			—			—			—
Net income/(loss)	$	0.10		$	(0.03	)	$	(0.67	)	$	0.26

See Notes to Condensed Consolidated Financial Statements.



THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
	September 25, 2011		December 26, 2010
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	93,685	$	369,668
Short-term investments	169,764		29,974
Restricted cash	28,628		—
Accounts receivable (net of allowances of $23,800 in 2011 and $30,209 in 2010)	250,921		302,245
Inventories:
Newsprint and magazine paper	14,956		12,596
Other inventory	4,060		3,536
Total inventories	19,016		16,132
Deferred income taxes	68,875		68,875
Other current assets	49,186		70,338
Total current assets	680,075		857,232
Other assets
Investments in joint ventures	85,206		134,641
Property, plant and equipment (less accumulated depreciation and amortization of $1,117,481 in 2011 and $1,048,956 in 2010)	1,099,734		1,156,786
Intangible assets acquired:
Goodwill (less accumulated impairment losses of $957,311 in 2011 and $805,218 in 2010)	491,944		644,464
Other intangible assets acquired (less accumulated amortization of $69,755 in 2011 and $69,383 in 2010)	22,239		35,415
Total intangible assets acquired	514,183		679,879
Deferred income taxes	273,946		255,701
Miscellaneous assets	181,817		201,502
Total assets	$	2,834,961	$	3,285,741

See Notes to Condensed Consolidated Financial Statements.



THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
	September 25, 2011			December 26, 2010
	(Unaudited)
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	102,298		$	113,968
Accrued payroll and other related liabilities	104,494			143,850
Unexpired subscriptions	75,046			72,896
Accrued expenses and other	158,484			173,663
Total current liabilities	440,322			504,377
Other liabilities
Long-term debt and capital lease obligations	771,991			996,405
Pension benefits obligation	707,710			772,785
Postretirement benefits obligation	127,812			130,623
Other	194,444			217,475
Total other liabilities	1,801,957			2,117,288
Stockholders’ equity
Common stock of $.10 par value:
Class A – authorized 300,000,000 shares; issued: 2011 – 149,967,099; 2010 – 149,302,487 (including treasury shares: 2011 – 3,340,711; 2010 – 3,970,238)	14,997			14,930
Class B – convertible – authorized and issued shares: 2011 – 818,885; 2010 – 819,125 (including treasury shares: 2011 – 0; 2010 – 0)	82			82
Additional paid-in capital	42,029			40,155
Retained earnings	1,027,680			1,126,294
Common stock held in treasury, at cost	(119,534		)	(134,463		)
Accumulated other comprehensive loss, net of income taxes:
Foreign currency translation adjustments	13,118			11,298
Unrealized derivative loss on cash-flow hedge of equity method investment	(680		)	(1,143		)
Funded status of benefit plans	(388,644		)	(397,226		)
Total accumulated other comprehensive loss, net of income taxes	(376,206		)	(387,071		)
Total New York Times Company stockholders’ equity	589,048			659,927
Noncontrolling interest	3,634			4,149
Total stockholders’ equity	592,682			664,076
Total liabilities and stockholders’ equity	$	2,834,961		$	3,285,741

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



	For the Nine Months Ended
	September 25, 2011			September 26, 2010
	(39 weeks)
Cash flows from operating activities
Net (loss)/income	$	(99,129	)	$	41,619
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Impairment of assets	161,318			16,148
Pension withdrawal expense	4,228			6,268
Gain on sale of investments	(71,171		)	(9,128		)
Premium on debt redemption	46,381			—
Depreciation and amortization	87,597			90,816
Stock-based compensation expense	5,790			5,835
Undistributed loss/(income) of equity method investments–net of dividends	4,026			(15,946		)
Long-term retirement benefit obligations	(59,430		)	(97,854		)
Other–net	10,341			7,244
Changes in operating assets and liabilities–net of dispositions:
Account receivables–net	51,324			71,388
Inventories	(2,884		)	(5,487		)
Other current assets	1,754			776
Accounts payable and other liabilities	(86,421		)	(16,196		)
Unexpired subscriptions	2,150			(2,854		)
Net cash provided by operating activities	55,874			92,629
Cash flows from investing activities
Purchases of short-term investments	(259,724		)	—
Maturities of short-term investments	119,934			—
Proceeds from sale of investments	115,258			13,605
Capital expenditures	(35,457		)	(20,305		)
Change in restricted cash	(28,628		)	—
Proceeds from the sale of assets	6,667			2,265
Proceeds from loan repayments	—			4,500
Net cash (used in)/provided by investing activities	(81,950		)	65
Cash flows from financing activities
Long-term obligations:
Repayments	(250,442		)	(446		)
Capital shares:
Issuances	218			721
Net cash (used in)/provided by financing activities	(250,224		)	275
(Decrease)/increase in cash and cash equivalents	(276,300		)	92,969
Effect of exchange rate changes on cash and cash equivalents	317			(848		)
Cash and cash equivalents at the beginning of the year	369,668			36,520
Cash and cash equivalents at the end of the quarter	$	93,685		$	128,641

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

In the opinion of The New York Times Company's (the “Company”) management, the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of September 25, 2011, and December 26, 2010, and the results of operations and cash flows of the Company for the periods ended September 25, 2011, and September 26, 2010. The Company and its consolidated subsidiaries are referred to collectively as “we,” “us” or “our.” All adjustments necessary for a fair presentation have been included and are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from these interim financial statements. These financial statements, therefore, should be read in conjunction with the Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December 26, 2010. Due to the seasonal nature of our business, operating results for the interim periods are not necessarily indicative of a full year’s operations. The fiscal periods included herein comprise 13 weeks for the third-quarter periods and 39 weeks for the nine-month periods.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As of September 25, 2011, our significant accounting policies, which are detailed in our Annual Report on Form 10-K for the year ended December 26, 2010, have not changed materially.

New Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (“FASB”) amended its guidance on the disclosure of information in financial statements for multiemployer pension plans to enhance the disclosures by providing more information about the plans in which an employer participates, its level of participation in those plans and the financial health of those plans. The provisions of this new guidance are effective for fiscal years ending after December 15, 2011, with the disclosures being required for all years presented in the initial year of adoption. The adoption of this guidance will expand our disclosures for significant multiemployer pension plans in which we are participants.

In September 2011, the FASB amended its guidance on goodwill impairment testing to reduce the cost and complexity of testing goodwill for impairment by providing the option to 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 result of this assessment will determine whether it is necessary to perform the two-step test. The provisions of this new guidance are effective for fiscal years beginning after December 15, 2011, with early adoption permitted. We anticipate adopting the new guidance early when we conduct our annual goodwill impairment test in the fourth quarter of 2011. We do not anticipate the adoption of this guidance will have a material impact on our financial statements.

In June 2011, the FASB amended its guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of this guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We do not anticipate the adoption of this guidance will have a material impact on our financial statements.

In May 2011, the FASB amended its guidance related to fair value measurements in order to align the definition of fair value measurements and the related disclosure requirements between GAAP and International Financial Reporting Standards. These amendments, which are effective for interim and annual periods beginning after December 15, 2011, also change certain existing fair value measurement principles and disclosure requirements. We do not anticipate the adoption of this guidance will have a material impact on our financial statements.

At the beginning of our 2011 fiscal year, we adopted new guidance that amended previous guidance for the accounting of revenue arrangements with multiple deliverables. The adoption of this guidance, which specifically addressed how consideration should be allocated to the separate units of account included in revenue arrangements, did not have a material impact on our financial statements.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 3. SHORT-TERM INVESTMENTS

We have short-term investments, with original maturities of longer than 3 months, in U.S. Treasury securities and commercial paper as of September 25, 2011, and in U.S. Treasury securities as of December 26, 2010. Since we have the intention and ability to hold these investments to maturity, they are classified as held-to-maturity and are reported at amortized cost. The changes in the value of these securities are not reported in our Condensed Consolidated Financial Statements.

The carrying value of the short-term investments (which approximated the fair value) was approximately $165 million in U.S. Treasury securities and approximately $5 million in commercial paper as of September 25, 2011 and approximately $30 million in U.S. Treasury securities as of December 26, 2010. The short-term investments have remaining maturities of about 1 month to 4 months as of September 25, 2011.

NOTE 4. IMPAIRMENT OF ASSETS

In the second quarter of 2011, we recorded a $161.3 million charge for the impairment of assets at the News Media Group. The impairment consisted of the write-down of goodwill at the Regional Media Group of $152.1 million and the write-down of certain assets held for sale of $9.2 million.

Regional Media Group

Goodwill is not amortized but tested for impairment annually or in an interim period if certain circumstances indicate a possible impairment may exist. Our policy is to perform our annual goodwill impairment test in the fourth quarter of our fiscal year. However, due to certain impairment indicators at the Regional Media Group, including lower-than-expected operating results, we performed an interim impairment test of goodwill as of June 26, 2011. The Regional Media Group is part of the News Media Group reportable segment.

The interim test resulted in an impairment of goodwill of $152.1 million mainly from lower projected long-term operating results and cash flows of the Regional Media Group primarily due to the continued decline in print advertising revenues. These factors resulted in the carrying value of the net assets being greater than their fair value, and therefore a write-down to fair value was required. The impairment charge reduced the carrying value of goodwill at the Regional Media Group to $0.

In determining the fair value of the Regional Media Group, we made significant judgments and estimates regarding the expected severity and duration of the uneven economic environment and the secular changes affecting the newspaper industry in the Regional Media Group markets. The effect of these assumptions on projected long-term revenues, along with the continued benefits from reductions to the group’s cost structure, played a significant role in calculating the fair value of the Regional Media Group.

The fair value of the Regional Media Group’s goodwill was the residual fair value after allocating the total fair value of the Regional Media Group to its other assets, net of liabilities. The total fair value of the Regional Media Group was determined using a combination of a discounted cash flow model (present value of future cash flows) and a market approach model based on comparable businesses. The resulting fair value is considered a Level 3 fair value measurement (significant unobservable inputs for the asset or liabilities). We estimated a flat annual growth rate to arrive at a residual year representing the perpetual cash flows of the Regional Media Group. The residual year cash flow was capitalized to arrive at the terminal value of the Regional Media Group. Utilizing a discount rate of 10.7%, the present value of the cash flows during the projection period and terminal value were aggregated to estimate the fair value of the Regional Media Group. We assumed a flat annual growth rate and a discount rate of 10.7% in the discounted cash flow analysis for the interim impairment test compared with a 2.0% annual growth rate and a 10.5% discount rate used in the 2010 annual impairment test. In determining the appropriate discount rate, we considered the weighted average cost of capital for comparable companies.

Property, plant and equipment is tested for impairment if certain circumstances indicate a possible impairment may exist. Due to the factors discussed above, we completed an interim impairment test of property, plant and equipment as of June 26, 2011. The impairment test was completed at each newspaper (asset group level with the lowest level of cash flows) in the Regional Media Group. Our test did not result in an impairment because the sum of the future undiscounted cash flows at each newspaper was greater than the carrying value of property, plant and equipment.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

Assets Held for Sale

In the second quarter of 2011, we classified certain assets as held for sale. The carrying value of these assets was greater than their fair value, less cost to sell, resulting in an impairment of certain intangible assets and property totaling $9.2 million. The impairment charge reduced the carrying value of intangible assets to $0 and the property to a nominal value. The fair value for these assets was determined by estimating the most likely sale price with a third-party buyer based on market data. The resulting fair value is considered a Level 3 fair value measurement.

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS ACQUIRED

Goodwill is the excess of cost over the fair value of tangible and other 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.

Other intangible assets acquired consist primarily of trade names on various acquired properties, content, customer lists and other assets. Other intangible assets acquired that have indefinite lives (trade names) are not amortized but tested for impairment annually or in an interim period if certain circumstances indicate a possible impairment may exist. Certain other intangible assets acquired (content, customer lists and other assets) are amortized over their estimated useful lives and tested for impairment if certain circumstances indicate a possible impairment may exist.

The tables below include goodwill and other intangible assets impaired during the second quarter of 2011 (see Note 4). In addition, the tables below include goodwill and other intangible assets disposed of during the first quarter of 2011 related to the sale of UCompareHealthCare.com, which was part of the About Group.

The changes in the carrying amount of goodwill were as follows:



(In thousands)	News Media Group			About Group			Total
Balance as of December 26, 2010:
Goodwill	$	1,079,704		$	369,978		$	1,449,682
Accumulated impairment losses	(805,218		)	—			(805,218		)
Balance as of December 26, 2010	274,486			369,978			644,464
Goodwill disposed during year	—			(2,702		)	(2,702		)
Goodwill impaired during year	(152,093		)	—			(152,093		)
Foreign currency translation	2,275			—			2,275
Balance as of September 25, 2011:
Goodwill	1,081,979			367,276			1,449,255
Accumulated impairment losses	(957,311		)	—			(957,311		)
Balance as of September 25, 2011	$	124,668		$	367,276		$	491,944

Other intangible assets acquired were as follows:



	September 25, 2011								December 26, 2010
(In thousands, except years)	Gross Carrying Amount		Accumulated Amortization			Net		Weighted Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net		Weighted Average Useful Life (Years)
Amortized other intangible assets:
Content	$	21,384	$	(17,483	)	$	3,901	2	$	25,712	$	(16,510	)	$	9,202	7
Customer lists	24,508		(21,448		)	3,060		2	28,316		(21,281		)	7,035		6
Other	33,123		(30,824		)	2,299		4	36,390		(31,592		)	4,798		3
Total	$	79,015	$	(69,755	)	9,260			$	90,418	$	(69,383	)	21,035
Unamortized other intangible assets:
Trade names						12,979								14,380
Total other intangible assets acquired						$	22,239							$	35,415

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

Amortization expense related to other intangible assets acquired that are subject to amortization was $5.6 million in the first nine months of 2011 and is expected to be $1.5 million for the remainder of fiscal year 2011.

Amortization expense for the next five years related to these intangible assets is expected to be as follows:



(In thousands)	Amount
2012	$	4,800
2013	1,600
2014	600
2015	350
2016	270

NOTE 6. INVESTMENTS IN JOINT VENTURES

As of September 25, 2011, our investments in joint ventures consisted of equity ownership interests in the following entities:



Company	Approximate % Ownership
Metro Boston LLC	49	%
Donohue Malbaie Inc.	49	%
Madison Paper Industries	40	%
quadrantONE LLC	25	%
Fenway Sports Group	7.3	%

See Note 8 for information regarding the sale of a portion of our ownership interest in Fenway Sports Group.

The following table presents summarized unaudited condensed combined income statements for our unconsolidated joint ventures.



	For the Quarters Ended					For the Nine Months Ended
(In thousands)	September 30, 2011			September 30, 2010		September 30, 2011			September 30, 2010
Revenues	$	389,814		$	294,152	$	963,626		$	724,475
Costs and expenses	399,531			245,393		963,167			622,957
Operating (loss)/profit	(9,717		)	48,759		459			101,518
Other income/(loss)	1,227			2,938		(8,094		)	28,969
Pre-tax (loss)/income	(8,490		)	51,697		(7,635		)	130,487
Income tax expense/(benefit)	1,028			366		154			(642		)
Net (loss)/income	(9,518		)	51,331		(7,789		)	131,129
Net income attributable to noncontrolling interest	6,279			6,973		16,974			18,512
Net (loss)/income less noncontrolling interest	$	(15,797	)	$	44,358	$	(24,763	)	$	112,617

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 7. DEBT OBLIGATIONS

As of September 25, 2011, our current indebtedness included senior notes and a sale-leaseback of a portion of our New York headquarters. Our total debt and capital lease obligations consisted of the following:



(In thousands)	Coupon Rate		September 25, 2011		December 26, 2010
Senior notes due 2015, called in 2011	14.053	%	$	—	$	227,680
Senior notes due 2012	4.610	%	74,867		74,771
Senior notes due 2015	5.0	%	249,883		249,860
Senior notes due 2016	6.625	%	220,612		220,102
Option to repurchase ownership interest in headquarters building in 2019			219,952		217,306
Total debt			765,314		989,719
Capital lease obligations			6,707		6,724
Total debt and capital lease obligations			$	772,021	$	996,443

Prepayment of 14.053% Notes

On August 15, 2011, we prepaid in full all $250.0 million outstanding aggregate principal amount of the 14.053% senior unsecured notes due January 15, 2015 (the “14.053% Notes”). The prepayment totaled approximately $280 million, comprising (1) the $250.0 million aggregate principal amount of the 14.053% Notes, (2) approximately $3 million representing all interest that was accrued and unpaid on the 14.053% Notes to August 15, 2011, and (3) a make-whole premium amount of approximately $27 million due in connection with the prepayment. We funded the prepayment from available cash. As a result of this prepayment, we recorded a $46.4 million pre-tax charge in the third quarter of 2011.

Long-Term Debt

Based on borrowing rates currently available for debt with similar terms and average maturities, the fair value of our long-term debt was approximately $863 million as of September 25, 2011 and $1.1 billion as of December 26, 2010.

New Revolving Credit Facility

In June 2011, we entered into a new $125.0 million asset-backed 5-year revolving credit facility. This new credit facility replaced our $400.0 million revolving credit facility, which was to expire on June 21, 2011. As of September 25, 2011, there were $0 outstanding borrowings under the new credit facility.

Borrowings under the new credit facility will be secured by a lien on certain advertising receivables. In addition, borrowings bear interest at specified margins based on our utilization and at rates that vary between the LIBOR and prime rates (as defined by the credit agreement) depending on the term to maturities we specify. The new credit facility contains various customary affirmative and negative covenants.

Interest Expense, Net

“Interest expense, net” in our Condensed Consolidated Statements of Operations was as follows:



	For the Quarters Ended						For the Nine Months Ended
(In thousands)	September 25, 2011			September 26, 2010			September 25, 2011			September 26, 2010
Cash interest expense	$	18,712		$	18,910		$	64,880		$	56,922
Non-cash amortization of discount on debt	1,445			2,113			5,632			6,054
Capitalized interest	(11		)	(80		)	(343		)	(100		)
Interest income	(107		)	(316		)	(387		)	(1,051		)
Total interest expense, net	$	20,039		$	20,627		$	69,782		$	61,825

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 8. OTHER

Gain on Sale of Investments

On July 1, 2011, we sold 390 of our remaining 700 units in Fenway Sports Group for $117.0 million. In the third quarter of 2011, we recorded a pre-tax gain of $65.3 million from the sale. Following the sale, we own 310 units, or 7.3% of Fenway Sports Group. We continue to market our remaining interest in Fenway Sports Group, in whole or in parts.

In the first quarter of 2011, we sold a minor portion of our interest in Indeed.com, a job listing aggregator, resulting in a gain of $5.9 million. We still retain a substantial portion of our initial interest in Indeed.com.

Severance Costs

We recognized severance costs of $3.0 million in the third quarter of 2011 and $5.7 million in the first nine months of 2011. These costs were primarily recognized at the News Media Group related to various initiatives and are primarily recorded in “Selling, general and administrative costs” in our Condensed Consolidated Statements of Operations. As of September 25, 2011, we had a severance liability of approximately $8 million included in “Accrued expenses and other” in our Condensed Consolidated Balance Sheet.

NOTE 9. PENSION AND OTHER POSTRETIREMENT BENEFITS

Pension

We sponsor several pension plans, the majority of which have been frozen; participate in The New York Times Newspaper Guild pension plan, a joint Company and Guild-sponsored plan; and make contributions to several multiemployer plans in connection with collective bargaining agreements. These plans cover the majority of our employees.

In the second quarter of 2011, certain employees of The Boston Globe (the “Globe”) represented by a union ratified amendments to their collective bargaining agreement resulting in a partial withdrawal from a multiemployer pension plan. We recorded an estimated $4.2 million charge for our withdrawal obligation under this multiemployer pension plan.

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. Our non-qualified plans provide enhanced retirement benefits to select members of management.

The components of net periodic pension cost of all Company-sponsored plans and The New York Times Newspaper Guild pension plan were as follows:



	For the Quarters Ended
	September 25, 2011								September 26, 2010
(In thousands)	Qualified Plans			Non- Qualified Plans		All Plans			Qualified Plans			Non- Qualified Plans		All Plans
Service cost	$	3,019		$	377	$	3,396		$	2,937		$	15	$	2,952
Interest cost	24,998			3,286		28,284			24,996			3,362		28,358
Expected return on plan assets	(27,953		)	—		(27,953		)	(28,420		)	—		(28,420		)
Amortization of prior service cost	201			—		201			201			—		201
Recognized actuarial loss	6,445			804		7,249			4,084			565		4,649
Net periodic pension cost	$	6,710		$	4,467	$	11,177		$	3,798		$	3,942	$	7,740

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)



	For the Nine Months Ended
	September 25, 2011								September 26, 2010
(In thousands)	Qualified Plans			Non- Qualified Plans		All Plans			Qualified Plans			Non- Qualified Plans		All Plans
Service cost	$	9,057		$	1,131	$	10,188		$	9,106		$	45	$	9,151
Interest cost	74,994			9,858		84,852			76,895			10,087		86,982
Expected return on plan assets	(83,859		)	—		(83,859		)	(85,205		)	—		(85,205		)
Amortization of prior service cost	603			—		603			603			—		603
Recognized actuarial loss	19,335			2,412		21,747			12,412			3,537		15,949
Net periodic pension cost	$	20,130		$	13,401	$	33,531		$	13,811		$	13,669	$	27,480

In the first nine months of 2011, we made contributions totaling approximately $70 million to certain qualified pension plans. The majority of these contributions were discretionary. Based on our contractual obligations, we expect to make 2011 contributions of approximately $32 million (of which approximately $26 million was made in the first nine months of 2011) to The New York Times Newspaper Guild pension plan. Except for contractual contributions to The New York Times Newspaper Guild pension plan, we have addressed our minimum funding requirements for 2011 and a significant portion for 2012 through discretionary contributions. However, we may make additional discretionary contributions in 2011 to our Company-sponsored qualified pension plans based on cash flows, pension asset performance, interest rates and other factors.

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 no longer provide post-age 65 retiree medical benefits for employees who retire on or after March 1, 2009. We also contribute to a postretirement plan under the provisions of a collective bargaining agreement. 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 general corporate assets.

In October 2011, we amended our retiree medical plan. See Note 16 for additional information.

The components of net periodic postretirement benefit income were as follows:



	For the Quarters Ended						For the Nine Months Ended
(In thousands)	September 25, 2011			September 26, 2010			September 25, 2011			September 26, 2010
Service cost	$	290		$	269		$	870		$	807
Interest cost	1,825			2,335			5,475			7,005
Amortization of prior service credit	(3,901		)	(3,900		)	(11,703		)	(11,700		)
Recognized actuarial loss	481			782			1,443			2,346
Net periodic postretirement benefit income	$	(1,305	)	$	(514	)	$	(3,915	)	$	(1,542	)

NOTE 10. INCOME TAXES

We had an effective tax rate of 49.8% in the third quarter of 2011. The effective tax rate was impacted by certain non-deductible items resulting in a higher than customary effective tax rate. Our effective tax rate for the first nine months of 2011 is not meaningful because a portion of the non-cash charge in the second quarter of 2011 for the impairment of the Regional Media Group's goodwill was non-deductible.

We had an effective tax rate of 32.8% in the third quarter of 2010. The effective tax rate was impacted by lower state tax rates applied to the impairment charge associated with the Globe's Billerica, Mass., printing facility, and pension withdrawal expense in the third quarter of 2010. The effective tax rate for the first nine months of 2010 was 54.8%, primarily because of a $10.9 million tax charge for the reduction in future tax benefits for certain retiree health benefits resulting from the federal health care reform legislation enacted in March 2010.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 11. DISCONTINUED OPERATIONS

The results of operations for WQXR-FM, a New York City classical radio station, which was sold in October 2009, are presented as discontinued operations. We received proceeds related to the sale of approximately $45 million and recorded a pre-tax gain of approximately $35 million (approximately $19 million after tax) in the fourth quarter of 2009. We had a net loss from discontinued operations of $0.2 million in the third quarter of 2010 and net income from discontinued operations of $13,000 in the first nine months of 2010 as a result of post-closing adjustments to the gain.

NOTE 12. EARNINGS/(LOSS) PER SHARE

Basic and diluted earnings/(loss) per share have been computed as follows:



	For the Quarters Ended					For the Nine Months Ended
(In thousands, except per share data)	September 25, 2011		September 26, 2010			September 25, 2011			September 26, 2010
Amounts attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	15,685	$	(4,037	)	$	(98,614	)	$	40,552
(Loss)/income from discontinued operations, net of income taxes	—		(224		)	—			13
Net income/(loss)	$	15,685	$	(4,261	)	$	(98,614	)	$	40,565
Average number of common shares outstanding–Basic	147,355		145,803			147,103			145,533
Incremental shares for assumed exercise of securities	3,938		—			—			7,559
Average number of common shares outstanding–Diluted	151,293		145,803			147,103			153,092
Basic earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	0.11	$	(0.03	)	$	(0.67	)	$	0.28
(Loss)/income from discontinued operations, net of income taxes	—		—			—			—
Net income/(loss)–Basic	$	0.11	$	(0.03	)	$	(0.67	)	$	0.28
Diluted earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income/(loss) from continuing operations	$	0.10	$	(0.03	)	$	(0.67	)	$	0.26
Loss/(income) from discontinued operations, net of income taxes	—		—			—			—
Net income/(loss)–Diluted	$	0.10	$	(0.03	)	$	(0.67	)	$	0.26

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 and warrants could have the most significant impact on diluted shares.

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 Common Stock, because their inclusion would have an anti-dilutive effect on per share amounts.

The number of stock options that were excluded from the computation of diluted earnings per share because they were anti-dilutive were approximately 20 million and 22 million in the third quarter and for the first nine months of 2011 and approximately 26 million and 25 million in the third quarter and for the first nine months of 2010.

A total of 15.9 million warrants were excluded from the computation of diluted earnings per share for the first nine months of 2011 and third quarter of 2010 because they were anti-dilutive.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 13. SUPPLEMENTAL STOCKHOLDERS' EQUITY INFORMATION

Stockholders' equity is summarized as follows:



(In thousands)	Total New York Times Company Stockholders' Equity			Noncontrolling Interest			Total Stockholders' Equity
Balance as of December 26, 2010	$	659,927		$	4,149		$	664,076
Net loss	(98,614		)	(515		)	(99,129		)
Other comprehensive income	10,865			—			10,865
Issuance of shares	8,055			—			8,055
Stock-based compensation	8,815			—			8,815
Balance as of September 25, 2011	$	589,048		$	3,634		$	592,682



(In thousands)	Total New York Times Company Stockholders' Equity			Noncontrolling Interest		Total Stockholders' Equity
Balance as of December 27, 2009	$	604,042		$	3,201	$	607,243
Net income	40,565			1,054		41,619
Other comprehensive loss	(1,608		)	—		(1,608		)
Issuance of shares	9,106			—		9,106
Stock-based compensation	5,835			—		5,835
Balance as of September 26, 2010	$	657,940		$	4,255	$	662,195

Comprehensive income/(loss) was as follows:



	For the Quarters Ended						For the Nine Months Ended
(In thousands)	September 25, 2011			September 26, 2010			September 25, 2011			September 26, 2010
Net income/(loss)	$	15,468		$	(4,358	)	$	(99,129	)	$	41,619
Other comprehensive income/(loss):
Foreign currency translation adjustments	(5,186		)	8,161			3,258			(5,966		)
Unrealized derivative gain on cash-flow hedge of equity method investment	726			—			803			—
Adjustments to pension benefits obligation	—			—			—			(4,087		)
Amortization of unrecognized amounts included in pension and postretirement benefits obligations	5,999			1,730			14,642			7,198
Income tax (expense)/benefit	(857		)	(3,988		)	(7,838		)	1,247
Total other comprehensive income/(loss)	682			5,903			10,865			(1,608		)
Comprehensive income/(loss)	16,150			1,545			(88,264		)	40,011
Net loss/(income) attributable to the noncontrolling interest	217			97			515			(1,054		)
Comprehensive income/(loss) attributable to The New York Times Company common stockholders	$	16,367		$	1,642		$	(87,749	)	$	38,957

The “Accumulated other comprehensive loss, net of income taxes” in our Condensed Consolidated Balance Sheets was net of a deferred income tax benefit of approximately $275 million as of September 25, 2011 and $280 million as of December 26, 2010.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 14. SEGMENT INFORMATION

Our reportable segments consist of the News Media Group and the About Group. These segments are evaluated regularly by key management in assessing performance and allocating resources.

Below is a description of our reportable segments:

News Media Group

The News Media Group consists of The New York Times Media Group, which includes The New York Times, the International Herald Tribune, NYTimes.com, and related businesses; the New England Media Group, which includes the Globe, BostonGlobe.com, Boston.com, the Worcester Telegram & Gazette, Telegram.com, and related businesses; and the Regional Media Group, which includes 14 daily newspapers in Alabama, California, Florida, Louisiana, North Carolina and South Carolina, their Web sites, other print publications and related businesses.

About Group

The About Group consists of About.com, ConsumerSearch.com, CalorieCount.com and related businesses. In February 2011, we sold UCompareHealthCare.com.

Our Statements of Operations by segment and Corporate were as follows:



	For the Quarters Ended						For the Nine Months Ended
(In thousands)	September 25, 2011			September 26, 2010			September 25, 2011			September 26, 2010
Revenues
News Media Group	$	511,511		$	521,868		$	1,595,731		$	1,630,935
About Group	25,724			32,465			84,710			100,852
Total	$	537,235		$	554,333		$	1,680,441		$	1,731,787
Operating profit/(loss)
News Media Group⁽¹⁾	$	30,020		$	6,046		$	(55,940	)	$	108,914
About Group	9,544			13,876			35,406			45,782
Corporate	(6,519		)	(10,929		)	(29,424		)	(32,220		)
Total	$	33,045		$	8,993		$	(49,958	)	$	122,476
Gain on sale of investments	65,273			—			71,171			9,128
(Loss)/income from joint ventures	(1,068		)	5,482			(4,026		)	22,271
Premium on debt redemption	46,381			—			46,381			—
Interest expense, net	20,039			20,627			69,782			61,825
Income/(loss) from continuing operations before income taxes	30,830			(6,152		)	(98,976		)	92,050
Income tax expense/(benefit)	15,362			(2,018		)	153			50,444
Income/(loss) from continuing operations	15,468			(4,134		)	(99,129		)	41,606
(Loss)/income from discontinued operations, net of income taxes	—			(224		)	—			13
Net income/(loss)	15,468			(4,358		)	(99,129		)	41,619
Net loss/(income) attributable to the noncontrolling interest	217			97			515			(1,054		)
Net income/(loss) attributable to The New York Times Company common stockholders	$	15,685		$	(4,261	)	$	(98,614	)	$	40,565

⁽¹⁾

In the second quarter of 2011, we recorded a $161.3 million impairment charge, primarily related to goodwill at the Regional Media Group, and a $4.2 million charge for a pension withdrawal obligation under a multiemployer pension plan at the Globe. In the third quarter of 2010, we recorded a $16.1 million impairment charge associated with the Globe's Billerica, Mass., printing facility and a $6.3 million charge for a pension withdrawal obligation under a multiemployer pension plan at the Globe. The Regional Media Group and the Globe are a part of the News Media Group reportable segment.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

NOTE 15. CONTINGENT LIABILITIES

Restricted Cash

We were required to maintain $28.6 million of restricted cash as of September 25, 2011 subject to certain collateral requirements primarily for obligations under our workers' compensation programs. These collateral requirements were previously supported by letters of credit under our revolving credit facility that was replaced in June 2011.

Other

There are various legal actions that have arisen in the ordinary course of business and 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. It is the opinion of management after reviewing these actions with our legal counsel that the ultimate liability that might result from these actions would not have a material adverse effect on our Condensed Consolidated Financial Statements.

NOTE 16. SUBSEQUENT EVENTS

Amended Retiree Benefit Plan

In October 2011, we amended our retiree medical plan by, among other things, placing a cap (effective January 1, 2012) on our contributions for certain retiree groups. In connection with this plan amendment, we remeasured our postretirement obligation as of the plan amendment date. The plan amendment and remeasurement resulted in a decrease in the postretirement liability and an increase in other comprehensive income (before taxes) of approximately $20 million in October 2011.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a diversified media company that currently includes newspapers, digital businesses, investments in paper mills and other investments. We classify our businesses based on our operating strategies into two reportable segments, the News Media Group and the About Group. Our segments and divisions are:

News Media Group (consisting of The New York Times Media Group, which includes The New York Times (“The Times”), the International Herald Tribune, NYTimes.com, and related businesses; the New England Media Group, which includes The Boston Globe (the “Globe”), BostonGlobe.com, Boston.com, the Worcester Telegram & Gazette, Telegram.com, and related businesses; and the Regional Media Group, which includes 14 daily newspapers, other print publications and related businesses). The News Media Group generates revenues principally from print and digital advertising and through print and digital circulation. Other revenues primarily consist of revenues from news services/syndication, commercial printing, rental income, digital archives and direct mail advertising services. The News Media Group’s main operating costs are employee-related costs and raw materials, primarily newsprint.

About Group (consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses). The About Group generates revenues through cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad), display advertising and e-commerce (including sales lead generation). Almost all of its revenues (95% in the first nine months of 2011) are derived from the sale of cost-per-click and display advertising. Cost-per-click advertising accounted for 56% of the About Group’s total advertising revenues in the first nine months of 2011. The About Group’s main operating costs are employee-related costs and content and hosting costs.

Joint Ventures Our investments accounted for under the equity method are as follows:


▪	a 49% interest in Metro Boston LLC, which publishes a free daily newspaper in the greater Boston area;


▪	a 49% interest in a Canadian newsprint company, Donohue Malbaie Inc.;


▪	a 40% interest in a partnership, Madison Paper Industries, operating a supercalendered paper mill in Maine;


▪	a 25% interest in quadrantONE LLC, an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Web sites; and


▪	a 7.3% interest in Fenway Sports Group, which owns the Boston Red Sox baseball club; Liverpool Football Club (a soccer team in the English Premier League); approximately 80% of New England Sports Network (a regional cable sports network that televises the Red Sox and Boston Bruins hockey games); and 50% of Roush Fenway Racing (a leading NASCAR team).

During the third quarter and first nine months of 2011, we experienced a decline in total revenues of 3.1% and 3.0%, respectively, reflecting the continuing uncertainty in economic conditions and ongoing transformation of our industry, while operating costs decreased 3.6% and 1.4%, respectively, compared with the same prior-year periods.

The advertising marketplace remained challenging in the third quarter as advertisers exercised more caution than in the first half of 2011 in response to uneven economic conditions and lingering uncertainty about the economic outlook. Compared with the prior-year period, total advertising revenues decreased 8.8% in the third quarter of 2011 as print advertising revenues declined 10.4% and digital advertising revenues declined 4.5%. The decline in digital advertising revenues was driven by continued challenges at the About Group, offset in part by an increase in the News Media Group's digital advertising revenues, the growth of which moderated in the third quarter of 2011 compared with recent quarters. For the first nine months of 2011, total advertising revenues decreased 5.6% as an 8.0% decline in print advertising revenues was partially offset by 0.9% growth in digital advertising revenues, compared with the same prior-year period. Visibility remains limited for advertising. In October, we saw total advertising revenue trends improve modestly relative to those of the third quarter of 2011 due to a slight moderation in declines in print advertising revenues. October total digital advertising revenue trends were similar to those of the third quarter of 2011.

About Group advertising revenues decreased in the third quarter and first nine months of 2011 compared with the same prior-year periods mainly as a result of declines in both cost-per-click and display advertising. Cost-per-click advertising revenues decreased primarily due to lower click-through rates and the negative effect on page views mainly due to increased competition in the content space and the algorithm changes Google implemented during the first quarter of 2011. The About Group is implementing a plan to grow content and traffic, improve its advertising effectiveness, and aggressively respond to the increased competition in both the display and search engine advertising markets.

Circulation revenues increased 3.4% in the third quarter and remained flat in the first nine months of 2011 compared with the same prior-year periods. The introduction of The Times digital subscriptions in the second quarter of 2011 helped to offset the decline in print copies sold across the News Media Group in the third quarter of 2011. We expect total circulation revenues to increase in the low- to mid-single digits in the fourth quarter of 2011 primarily due to the positive effect of launching The Times digital subscriptions.

Paid digital subscribers to The Times digital subscription packages, e-readers and replica editions totaled approximately 324,000 as of the end of the third quarter of 2011. In addition to these paid digital subscribers, as of the end of the third quarter of 2011, The Times had more than 100,000 highly engaged users, with free access to NYTimes.com and smartphone apps until the end of 2011, sponsored by a luxury automobile brand, and approximately 800,000 home-delivery subscribers with linked digital accounts, who receive free digital access. In total, The Times had paid and sponsored relationships with over 1.2 million digital users as of the end of the third quarter of 2011.

Operating costs decreased 3.6% in the third quarter and 1.4% in the first nine months of 2011 compared with the same periods in 2010 primarily as lower compensation costs and professional fees were partially offset by higher promotion costs, as well as by newsprint and various other expenses in the first nine months of 2011. We remain focused on identifying further efficiencies across our operations, which through 2012 may include increased manufacturing efficiencies, further leveraging of centralized resources and lower ongoing outside printing expenses, while continuing to invest in our digital businesses. We expect operating costs to decline in the low- to mid-single digits in the fourth quarter of 2011. Newsprint prices have remained stable since July 2010 and in the fourth quarter of 2011, are expected to be relatively flat versus the same period in 2010.

We have continued to manage our liquidity position and finished the quarter with cash, cash equivalents and short-term investments of approximately $263 million, even after the prepayment of our $250.0 million 14.053% senior unsecured notes due January 15, 2015 (“14.053% Notes”) and making pension contributions of about $70 million to certain qualified pension plans in the first nine months of 2011. As of September 25, 2011, our total debt and capital lease obligations were approximately $772 million and our total debt and capital lease obligations, net of cash, cash equivalents and short-term investments, which we believe provides a useful measure of our liquidity and overall debt position, were approximately $509 million. Over the past two years, we have taken decisive steps to strengthen our liquidity position and improve our debt profile. These efforts have allowed us to prepay on August 15, 2011, all of our $250.0 million 14.053% Notes, more than three years before these notes were scheduled to mature. In addition, in June 2011, we entered into a new $125.0 million asset-backed five-year revolving credit facility that replaced our $400.0 million revolving credit facility. As of September 25, 2011, we had no outstanding borrowings under the new credit facility. See the “Recent Developments” section for additional information on the prepayment of our 14.053% Notes and the new revolving credit facility.

We expect the following on a pre-tax basis in 2011:


▪	Depreciation and amortization: $120 million,


▪	Interest expense, net: $85 million, and


▪	Capital expenditures: $50 million, which includes investments in digital systems across our Company.

We expect results from joint ventures to be breakeven in the fourth quarter of 2011. Results for joint ventures in 2011 are negatively impacted by Fenway Sports Group's acquisition of Liverpool Football Club, mainly due to amortization expense associated with the purchase. See also the “Recent Developments” section for additional information on the partial sale of our ownership interest in Fenway Sports Group during the third quarter of 2011.

RECENT DEVELOPMENTS

Amended Retiree Benefit Plan

Prepayment of 14.053% Notes

On August 15, 2011, we prepaid in full all $250.0 million outstanding principal amount of the 14.053% Notes. The prepayment totaled approximately $280 million, which included (1) the $250.0 million aggregate principal amount of the 14.053% Notes, (2) approximately $3 million representing all interest accrued and unpaid on the 14.053% Notes to August 15, 2011, and (3) a make-whole premium amount of approximately $27 million due in connection with the prepayment. We funded the prepayment from available cash. As a result of this prepayment, we recorded a $46.4 million pre-tax charge in the third quarter of 2011 and expect to save in excess of $39 million annually in interest expense through January 15, 2015.

Gain on Sale of Investments

On July 1, 2011, we sold 390 of our remaining 700 units in Fenway Sports Group for $117.0 million. We recorded a pre-tax gain of $65.3 million in the third quarter of 2011. This transaction is in addition to the sale of 50 units of our original 750 units in Fenway Sports Group that resulted in a pre-tax gain of $9.1 million in the second quarter of 2010. Following these transactions, we own 310 units, or 7.3% of Fenway Sports Group. We continue to market our remaining interest in Fenway Sports Group, in whole or in parts.

Impairment of Assets

Pension Withdrawal Expense

In the second quarter of 2011, certain employees of the Globe represented by a union, ratified amendments to their collective bargaining agreement resulting in a partial withdrawal from a multiemployer pension plan. We recorded an estimated $4.2 million charge for our withdrawal obligation under this multiemployer pension plan.

New Revolving Credit Facility

In June 2011, we entered into a new $125.0 million asset-backed five-year revolving credit facility. This new credit facility replaced our $400.0 million revolving credit facility, which was to expire on June 21, 2011. Borrowings under the new credit facility will be secured by a lien on certain advertising receivables. In addition, borrowings bear interest at specified margins based on our utilization and at rates that vary between the LIBOR and prime rates (as defined by the credit agreement) depending on the term to maturities we specify. See “Liquidity and Capital Resources – Third-Party Financing” for additional information.

Pension Contributions

In the first nine months of 2011, we made contributions of approximately $70 million to certain qualified pension plans. The majority of these contributions were discretionary. Based on our contractual obligations, we expect to make 2011 contributions of approximately $32 million (of which approximately $26 million was made in the first nine months of 2011) to The New York Times Newspaper Guild pension plan.

The recent declines in interest rates as well as softness in the equity market have had a negative effect on the funded status of many defined benefit pension plans, including our Company-sponsored and joint Company and Guild-sponsored plans. Except for contractual contributions to The New York Times Newspaper Guild pension plan, we have addressed our minimum funding requirements for 2011 and a significant portion for 2012 through discretionary contributions. However, we may make additional discretionary contributions in 2011 to our Company-sponsored qualified pension plans based on cash flows, pension asset performance, interest rates and other factors.

RESULTS OF OPERATIONS

The following table presents our consolidated financial results.



	For the Quarters Ended								For the Nine Months Ended
(In thousands)	September 25, 2011			September 26, 2010			% Change		September 25, 2011			September 26, 2010			% Change
Revenues
Advertising	$	261,779		$	286,980		(8.8	)	$	862,954		$	914,518		(5.6	)
Circulation	236,964			229,148			3.4		699,898			700,819			(0.1	)
Other	38,492			38,205			0.8		117,589			116,450			1.0
Total revenues	537,235			554,333			(3.1	)	1,680,441			1,731,787			(3.0	)
Operating costs
Production costs:
Raw materials	37,890			39,571			(4.2	)	118,040			114,962			2.7
Wages and benefits	121,109			123,766			(2.1	)	373,127			376,204			(0.8	)
Other	73,904			74,047			(0.2	)	222,211			223,869			(0.7	)
Total production costs	232,903			237,384			(1.9	)	713,378			715,035			(0.2	)
Selling, general and administrative costs	241,885			255,440			(5.3	)	763,878			781,044			(2.2	)
Depreciation and amortization	29,402			30,100			(2.3	)	87,597			90,816			(3.5	)
Total operating costs	504,190			522,924			(3.6	)	1,564,853			1,586,895			(1.4	)
Impairment of assets	—			16,148			N/A		161,318			16,148			*
Pension withdrawal expense	—			6,268			N/A		4,228			6,268			(32.5	)
Operating profit/(loss)	33,045			8,993			*		(49,958		)	122,476			*
Gain on sale of investments	65,273			—			N/A		71,171			9,128			*
(Loss)/income from joint ventures	(1,068		)	5,482			*		(4,026		)	22,271			*
Premium on debt redemption	46,381			—			N/A		46,381			—			N/A
Interest expense, net	20,039			20,627			(2.9	)	69,782			61,825			12.9
Income/(loss) from continuing operations before income taxes	30,830			(6,152		)	*		(98,976		)	92,050			*
Income tax expense/(benefit)	15,362			(2,018		)	*		153			50,444			(99.7	)
Income/(loss) from continuing operations	15,468			(4,134		)	*		(99,129		)	41,606			*
(Loss)/income from discontinued operations, net of income taxes	—			(224		)	N/A		—			13			N/A
Net income/(loss)	15,468			(4,358		)	*		(99,129		)	41,619			*
Net loss/(income) attributable to the noncontrolling interest	217			97			*		515			(1,054		)	*
Net income/(loss) attributable to The New York Times Company common stockholders	$	15,685		$	(4,261	)	*		$	(98,614	)	$	40,565		*
* Represents an increase or decrease in excess of 100%.

Revenues

Revenues by reportable segment and for the Company as a whole were as follows:



	For the Quarters Ended						For the Nine Months Ended
(In thousands)	September 25, 2011		September 26, 2010		% Change		September 25, 2011		September 26, 2010		% Change
News Media Group	$	511,511	$	521,868	(2.0	)	$	1,595,731	$	1,630,935	(2.2	)
About Group	25,724		32,465		(20.8	)	84,710		100,852		(16.0	)
Total revenues	$	537,235	$	554,333	(3.1	)	$	1,680,441	$	1,731,787	(3.0	)

News Media Group

Advertising, circulation and other revenues by operating segment of the News Media Group and for the Group as a whole were as follows:



	For the Quarters Ended						For the Nine Months Ended
(In thousands)	September 25, 2011		September 26, 2010		% Change		September 25, 2011		September 26, 2010		% Change
The New York Times Media Group
Advertising	$	156,092	$	166,076	(6.0	)	$	521,488	$	536,423	(2.8	)
Circulation	178,241		167,838		6.2		522,131		514,075		1.6
Other	22,524		21,012		7.2		68,003		65,575		3.7
Total	$	356,857	$	354,926	0.5		$	1,111,622	$	1,116,073	(0.4	)
New England Media Group
Advertising	$	44,416