Edgar Filing: NEW YORK TIMES CO

2011 Form 10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



For the fiscal year ended	December 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, N.Y.		10018
(Address of principal executive offices)		(Zip code)

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

Securities registered pursuant to Section 12(b) of the Act:



Title of each class		Name of each exchange on which registered
Class A Common Stock of $.10 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: Not Applicable

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No þ

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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



Large accelerated filer þ	Accelerated filer	¨
Non-accelerated filer ¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate worldwide market value of Class A Common Stock held by non-affiliates, based on the closing price on June 24, 2011, the last business day of the registrant’s most recently completed second quarter, as reported on the New York Stock Exchange, was approximately $1.1 billion. As of such date, non-affiliates held 71,859 shares of Class B Common Stock. There is no active market for such stock.

The number of outstanding shares of each class of the registrant’s common stock as of February 17, 2012 (exclusive of treasury shares), was as follows: 147,047,756 shares of Class A Common Stock and 818,885 shares of Class B Common Stock.

Documents incorporated by reference

Portions of the Proxy Statement relating to the registrant’s 2012 Annual Meeting of Stockholders, to be held on April 25, 2012, are incorporated by reference into Part III of this report.

INDEX TO THE NEW YORK TIMES COMPANY 2011 ANNUAL REPORT ON FORM 10-K



	ITEM NO.
PART I		Forward-Looking Statements	1
	1	Business	1
		Introduction	1
		News Media Group	2
		The New York Times Media Group	2
		New England Media Group	4
		Regional Media Group	5
		About Group	5
		Forest Products Investments and Other Joint Ventures	5
		Raw Materials	6
		Competition	7
		Employees	7
		Labor Relations	8
	1A	Risk Factors	9
	1B	Unresolved Staff Comments	15
	2	Properties	15
	3	Legal Proceedings	15
	4	Mine Safety Disclosures	15
	Executive Officers of the Registrant		16

PART II	5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
	6	Selected Financial Data	20
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	7A	Quantitative and Qualitative Disclosures About Market Risk	54
	8	Financial Statements and Supplementary Data	55
	9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	115
	9A	Controls and Procedures	115
	9B	Other Information	115

PART III	10	Directors, Executive Officers and Corporate Governance	116
	11	Executive Compensation	116
	12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	116
	13	Certain Relationships and Related Transactions, and Director Independence	116
	14	Principal Accountant Fees and Services	116

PART IV	15	Exhibits and Financial Statement Schedules	117

PART I

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including the sections titled “Item 1A — Risk Factors” and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that relate to future events or our future financial performance. We may also make written and oral forward-looking statements in our Securities and Exchange Commission (“SEC”) filings and otherwise. We have tried, where possible, to identify such statements by using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “project,” “plan” and similar expressions in connection with any discussion of future operating or financial performance. Any forward-looking statements are and will be based upon our then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in any such statements. You should bear this in mind as you consider forward-looking statements. Factors that we think could, individually or in the aggregate, cause our actual results to differ materially from expected and historical results include those described in “Item 1A — Risk Factors” below as well as other risks and factors identified from time to time in our SEC filings.

ITEM 1. BUSINESS

INTRODUCTION

The New York Times Company (the “Company”) was incorporated on August 26, 1896, under the laws of the State of New York. The Company is a leading global, multimedia news and information company that currently includes newspapers, digital businesses, investments in paper mills and other investments. The Company and its consolidated subsidiaries are referred to collectively in this Annual Report on Form 10-K as “we,” “our” and “us.”

We classify our businesses based on our operating strategies into two reportable segments, the News Media Group and the About Group. Financial information about our segments can be found in “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 19 of the Notes to the Consolidated Financial Statements.

The News Media Group consists of the following:


•	The New York Times Media Group, which includes The New York Times (“The Times”), the International Herald Tribune (the “IHT”), 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 (the “T&G”), Telegram.com and related businesses; and


•	the Regional Media Group, which included 16 regional newspapers, other print publications and related businesses in Alabama, California, Florida, Louisiana, North Carolina and South Carolina. On January 6, 2012, we completed the sale of the Regional Media Group to Halifax Media Holdings LLC for $143.0 million in cash, subject to certain adjustments.

The About Group consists of the Web sites of About.com, ConsumerSearch.com, CalorieCount.com and related businesses.

Additionally, we own equity interests in a Canadian newsprint company; a supercalendered paper manufacturing partnership in Maine; Metro Boston LLC (“Metro Boston”), which publishes a free daily newspaper in the greater Boston area; and quadrantONE LLC (“quadrantONE”), which is an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Web sites.

We also own a 4.97% 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). We sold 390 units in Fenway Sports Group in July 2011 and 100 units in February 2012. We continue to explore the sale of our remaining 210 units in Fenway Sports Group, in whole or in parts.

THE NEW YORK TIMES COMPANY – P. 1

Revenues, operating profit and identifiable assets of foreign operations are not significant.

Our businesses are affected in part by seasonal patterns in advertising, with generally higher advertising volume in the fourth quarter due to holiday advertising.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are made available, free of charge, on our Web site http://www.nytco.com, as soon as reasonably practicable after such reports have been filed with or furnished to the SEC.

NEWS MEDIA GROUP

The News Media Group reportable segment consists of The New York Times Media Group, the New England Media Group and, through January 6, 2012, the Regional Media Group. The News Media Group generates revenues principally from advertising and circulation.

Advertising is sold in our newspapers and other publications, on our Web sites and across other digital platforms. We divide advertising into three main categories: national, retail and classified. Advertising revenue also includes preprints, which are advertising supplements. Our digital advertising offerings include mainly display advertising (such as banners, large-format units, half-page units and interactive multimedia), classified advertising and contextual advertising (links supplied by Google).

Circulation revenue is from amounts charged to readers or distributors for products in print, online or through other digital platforms. Charges vary by property and by city and depend on the type of sale (i.e., subscription or single copy) and distribution arrangements.

Advertising and circulation revenue information for the News Media Group appears under “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The New York Times Media Group

The New York Times Media Group comprises The Times, the IHT, NYTimes.com and related businesses. The Times, a daily (Monday through Saturday) and Sunday newspaper, commenced publication in 1851. The IHT, a daily newspaper, commenced publishing in Paris in 1887 and serves as the global edition of The Times. NYTimes.com was launched in 1996.

In March 2011, The Times began charging consumers for content provided on NYTimes.com and other digital platforms, in addition to its other paid subscription offerings on several e-reader devices. The Times implemented a metered model that offers users free access to a set number of articles per month and then charges users who are not print home-delivery subscribers once they exceed that number. All print home-delivery subscribers receive free digital access.

In October 2011, the IHT launched digital subscription packages for full access to its news apps on the iPhone and iPad and on NYTimes.com. These digital packages are free to IHT home-delivery subscribers who subscribe for a minimum of five days per week.

Audience

The Times and the IHT reach a broad audience in print, online at NYTimes.com and global.nytimes.com (formerly iht.com) and on other digital platforms. The Times and the IHT have also expanded their reach and deepened engagement with readers and users by delivering content online and across other digital platforms, including mobile and e-reader applications and social networking sites.

According to reports filed with the Audit Bureau of Circulations (“ABC”), an independent agency that audits the circulation of most U.S. newspapers and magazines, for the six-month period ended September 30, 2011, The Times had the largest daily and Sunday circulation of all seven-day newspapers in the United States. For the year ended December 25, 2011, The Times’s average circulation, which includes paid and verified circulation of the newspaper in print, online and on other digital platforms, was 1,317,100 for weekday (Mon. - Fri.) and 1,781,100 for Sunday. Under ABC’s reporting guidance, verified circulation represents copies available for individual consumers that are either non-paid or paid by someone other than the individual, such as copies served to schools and colleges and copies purchased by businesses for free distribution. The Times’s average circulation for 2011 captures for the first time paid subscribers to its digital subscription packages since The Times began offering them in March 2011. In 2011,

P. 2 – THE NEW YORK TIMES COMPANY

approximately 75% of the weekday and 81% of the Sunday circulation was sold through print or digital subscriptions; the remainder was sold primarily on newsstands. Approximately 40% of the weekday and Sunday average circulation, in print and on digital platforms, is in the 31 counties that make up the greater New York City area, which includes New York City, Westchester, Long Island, and parts of upstate New York, Connecticut, New Jersey and Pennsylvania; approximately 60% is elsewhere.

The IHT’s average circulation, which includes newspapers sold in print and electronic replica editions, for the years ended December 25, 2011, and December 26, 2010, was 226,207 (estimated) and 217,700, respectively. These figures follow the guidance of Office de Justification de la Diffusion, an agency based in Paris and a member of the International Federation of Audit Bureaux of Circulations that audits the circulation of most of France’s newspapers and magazines. The final 2011 figure will not be available until April 2012.

According to comScore Media Metrix, an online audience measurement service, in 2011 NYTimes.com had a monthly average of approximately 33 million unique visitors in the United States and approximately 48 million unique visitors worldwide. Paid subscribers to digital subscription packages, e-readers and replica editions of The Times and the IHT totaled approximately 390,000 as of our fiscal year ended December 25, 2011.

Advertising

According to data compiled by Kantar Media, an independent agency that measures advertising sales volume and estimates advertising revenue, The Times had the largest market share in 2011 in print advertising revenues among a national newspaper set that consists of USA Today, The Wall Street Journal and The Times. Approximately three-quarters of The New York Times Media Group’s total advertising revenues in 2011 came from national advertisers. Based on recent data provided by Kantar Media, we believe The Times ranks first by a substantial margin in print advertising revenues in the general weekday and Sunday newspaper field in the New York metropolitan area.

Production and Distribution

The Times is currently printed at our production and distribution facility in College Point, N.Y., as well as under contract at 26 remote print sites across the United States. The Times is delivered to newsstands and retail outlets in the New York metropolitan area through a combination of third-party wholesalers and our own drivers. In other markets in the United States and Canada, The Times is delivered through agreements with other newspapers and third-party delivery agents.

The IHT is printed under contract at 40 sites throughout the world and is sold in more than 160 countries and territories.

Other Businesses

The New York Times Media Group’s other businesses include:


•	The New York Times Index, which produces and licenses The New York Times Index, a print publication;


•	Digital Archive Distribution, which licenses electronic archive databases to resellers of that information in the business, professional and library markets; and

•

The New York Times News Services Division, which is made up of Syndication Sales and Business Development. Syndication Sales transmits articles, graphics and photographs from The Times, the Globe and other publications to over 1,400 newspapers, magazines and Web sites in nearly 100 countries and territories worldwide. Business Development principally comprises photo archives, The New York Times store, book development and rights and permissions.

We also have a 57% ownership interest in Epsilen, LLC, an online education business, and its operating results are consolidated in the results of The New York Times Media Group.

In October 2011, we sold Baseline, a leading online subscription database and research service for information on the film and television industries and a provider of premium film and television data to Web sites.

THE NEW YORK TIMES COMPANY – P. 3

New England Media Group

The New England Media Group comprises the Globe, BostonGlobe.com, Boston.com, the T&G, Telegram.com and related businesses. The Globe is a daily and Sunday newspaper that commenced publication in 1872. The T&G is a daily and Sunday newspaper that began publishing in 1866.

In 2011, the Globe developed two distinct online brands to better serve a wide array of consumers and advertisers. In September 2011, the Globe launched a new paid subscription Web site, BostonGlobe.com, which offers exclusive access to the full range and depth of content produced by the newspaper’s journalists, in a format optimized for reading on a tablet, smartphone, laptop and desktop. The Globe began charging for content provided on BostonGlobe.com in October 2011 and all print home-delivery subscribers receive free digital access.

This new site complements Boston.com, a Web site that previously included all Globe content and has now been refocused and enhanced as a community portal for the greater Boston area. Boston.com remains free to consumers and continues to offer, among other things, breaking news and sports coverage, community conversations, blogs, daily deals, entertainment listings and classifieds, along with a wide array of new content and select offerings from the Globe.

Audience

The Globe reaches a broad audience in print, online and other digital platforms. The Globe is distributed in print throughout New England, although its circulation is concentrated in the Boston metropolitan area. The Globe has expanded its reach and deepened engagement with readers and users by delivering content online and across other digital platforms, including mobile and e-reader applications and social networking sites.

According to reports filed with ABC, for the six-month period ended September 30, 2011, the Globe ranked first in New England for both daily and Sunday circulation. For the year ended December 25, 2011, the Globe’s average circulation, which includes paid and verified circulation of the newspaper in print, online and other digital platforms, was 206,900 for weekday (Mon. - Fri.) and 354,800 for Sunday. The Globe’s average circulation for 2011 captures for the first time paid subscribers to the BostonGlobe.com pay site since its launch in the fall of 2011. Approximately 74% of the Globe’s weekday and 72% of its Sunday circulation was sold through print and digital subscriptions in 2011; the remainder was sold primarily on newsstands.

Boston.com, New England’s largest regional news and information Web site, in 2011 had a monthly average of approximately 6 million unique visitors in the United States, according to comScore Media Metrix. In December 2011, the new paid subscription Web site BostonGlobe.com had over 1 million unique visitors in the United States, according to comScore Media Metrix. Paid digital subscribers to BostonGlobe.com, e-readers and replica editions totaled approximately 16,000 as of our fiscal year end December 25, 2011.

The T&G and several Company-owned non-daily newspapers – some published under the name of Coulter Press – circulate throughout Worcester County and northeastern Connecticut. According to reports filed with ABC, for the six-month period ended September 30, 2011, the T&G ranked seventh in New England in daily and Sunday circulation volume. Telegram.com began offering paid digital subscriptions in August 2010, implementing a metered model that offers users free access to a set number of local news articles per month and then charges users who are not print home-delivery subscribers once they exceed that number for full access to articles produced by its staff on Telegram.com. All print home-delivery subscribers receive free digital access. For the year ended December 25, 2011, the T&G’s average circulation, which includes paid and verified circulation of the newspaper in print and online, was 74,100 for weekday (Mon. - Fri.) and 83,000 for Sunday.

Advertising

The sales forces of the New England Media Group sell retail, national and classified advertising across multiple channels, including print, digital, direct marketing, niche magazines and events, capitalizing on opportunities to deliver to national and local advertisers a broad audience in the New England region. Nearly one-third of the New England Media Group’s advertising revenues in 2011 came from national advertisers.

Production and Distribution

The Globe is currently printed at its facility in Boston, Mass. The T&G is currently printed at its facility in Millbury, Mass., and, beginning in the second quarter of 2012, will be printed at the Globe’s facility in Boston, Mass. All of the Globe’s and T&G’s print subscription circulation was delivered by a third-party service in 2011.

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Regional Media Group

On January 6, 2012, we completed the sale of the Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses, to Halifax Media Holdings LLC for $143.0 million in cash, subject to certain adjustments. The Regional Media Group comprised the following publications:


•	Sarasota Herald-Tribune in Sarasota, Fla.;


•	The Press Democrat in Santa Rosa, Calif.;


•	The Ledger in Lakeland, Fla.;


•	Star-News in Wilmington, N.C.;


•	Herald-Journal in Spartanburg, S.C.;


•	Star-Banner in Ocala, Fla.;


•	The Gainesville Sun in Gainesville, Fla.;


•	The Tuscaloosa News in Tuscaloosa, Ala.;


•	The Gadsden Times in Gadsden, Ala.;


•	The Courier in Houma, La.;


•	Times-News in Hendersonville, N.C.;


•	Daily Comet in Thibodaux, La.;


•	The Dispatch in Lexington, N.C.;


•	Petaluma Argus-Courier in Petaluma, Calif.;


•	News Chief in Winter Haven, Fla.; and


•	North Bay Business Journal in Santa Rosa, Calif.

ABOUT GROUP

The About Group includes the Web sites of About.com, ConsumerSearch.com, CalorieCount.com and related businesses.

About.com focuses on delivering at scale high-quality, expert content on everyday topics that is personally relevant to its users. The topic sites on the About.com platform are supported by independent, freelance subject-matter experts, or Guides, who create and publish original content across a variety of subject matters. At the end of 2011, About.com had more than 900 topic sites supported by independent Guides across more than 115,000 topics, in over 3 million articles. The About.com platform has expanded its reach and deepened engagement with users by delivering content across other digital platforms, including mobile applications and social networking sites, launching a Spanish-language channel in 2011 and increasing the number of how-to and do-it-yourself videos across its 24 channels with more than 10,000 videos at the end of 2011. According to comScore Media Metrix, in December 2011 About.com had approximately 60 million unique visitors in the United States and 108 million unique visitors worldwide.

ConsumerSearch.com analyzes expert and user-generated consumer product reviews and recommends the best products to purchase based on the findings. CalorieCount.com is an online resource that offers weight management tools, nutritional information and social support that is personally relevant to its users. In February 2011, we sold UCompareHealthCare.com, which provides dynamic Web-based interactive tools that enable users to measure the quality of certain healthcare services.

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 2011) are derived from the sale of cost-per-click advertising and display advertising. Cost-per-click advertising, which in 2011 represented 56% of the About Group’s total advertising revenues, is principally derived from an arrangement with Google under which third-party advertising is placed on the About Group’s Web sites.

FOREST PRODUCTS INVESTMENTS AND OTHER JOINT VENTURES

We have ownership interests in one newsprint mill and one mill producing supercalendered paper, a polished paper used in some magazines, catalogs and preprinted inserts, which is a higher-value grade than newsprint (the “Forest Products Investments”), as well as in Fenway Sports Group, Metro Boston and quadrantONE. These investments were accounted for under the equity method and reported in “Investments in joint ventures” in our Consolidated Balance Sheets as of December 25, 2011. For additional information on our investments, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 7 of the Notes to

THE NEW YORK TIMES COMPANY – P. 5

the Consolidated Financial Statements.

Forest Products Investments

We have a 49% equity interest in a Canadian newsprint company, Donohue Malbaie Inc. (“Malbaie”). The other 51% is owned by AbiBow Canada Inc., a subsidiary of AbitibiBowater Inc., currently doing business as Resolute Forest Products (“Resolute”), a large global manufacturer of paper, market pulp and wood products. Malbaie manufactures newsprint on the paper machine it owns within Resolute’s paper mill in Clermont, Quebec. Malbaie is wholly dependent upon Resolute for its pulp, which is purchased by Malbaie from Resolute’s paper mill in Clermont, Quebec. In 2011, Malbaie produced approximately 205,000 metric tons of newsprint, of which approximately 17% was sold to us, with the balance sold to Resolute for resale.

We have a 40% equity interest in Madison Paper Industries (“Madison”), a partnership operating a supercalendered paper mill in Madison, Maine. Madison purchases the majority of its wood from local suppliers, mostly under long-term contracts. In 2011, Madison produced approximately 195,000 metric tons, of which approximately 6% was sold to us.

Malbaie and Madison are subject to comprehensive environmental protection laws, regulations and orders of provincial, federal, state and local authorities of Canada or the United States (the “Environmental Laws”). The Environmental Laws impose effluent and emission limitations and require Malbaie and Madison to obtain, and operate in compliance with the conditions of, permits and other governmental authorizations (“Governmental Authorizations”). Malbaie and Madison follow policies and operate monitoring programs designed to ensure compliance with applicable Environmental Laws and Governmental Authorizations and to minimize exposure to environmental liabilities. Various regulatory authorities periodically review the status of the operations of Malbaie and Madison. Based on the foregoing, we believe that Malbaie and Madison are in substantial compliance with such Environmental Laws and Governmental Authorizations.

Other Joint Ventures

We own a 4.97% 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); and 50% of Roush Fenway Racing (a leading NASCAR team). We sold 390 of our units in Fenway Sports Group in July 2011 and 100 units in February 2012. We continue to explore the sale of our remaining 210 units in Fenway Sports Group, in whole or in parts.

We own a 49% interest in Metro Boston, which publishes a free daily newspaper in the greater Boston area.

We also own a 25% interest in quadrantONE, which is an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Web sites. The Web sites of the New England Media Group currently participate in this network.

RAW MATERIALS

The primary raw materials we use are newsprint and supercalendered paper. We purchase newsprint from a number of North American producers. In 2011, the paper used by The New York Times, New England and Regional Media Groups was purchased from unrelated suppliers and related suppliers in which we hold equity interests (see “— Forest Products Investments”). A significant portion of newsprint is purchased from Resolute.

In 2011 and 2010, we used the following types and quantities of paper:



	Newsprint		Coated, Supercalendered and Other Paper
(In metric tons)	2011	2010	2011	2010
The New York Times Media Group⁽¹⁾	138,000	145,000	15,300	14,900
New England Media Group⁽¹⁾	41,000	45,000	1,600	1,800
Regional Media Group	36,000	38,000	—	—
Total	215,000	228,000	16,900	16,700


(1)	The Times and the Globe use coated, supercalendered or other paper for The New York Times Magazine, T: The New York Times Style Magazine and the Globe’s Sunday Magazine.

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COMPETITION

Our media properties and investments compete for advertising and consumers with other media in their respective markets, including paid and free newspapers, Web sites, digital platforms and applications, social media, broadcast, satellite and cable television, broadcast and satellite radio, magazines, other forms of media and direct marketing. Competition for advertising is generally based upon audience levels and demographics, price, service, targeting capabilities and advertising results, while competition for circulation and readership is generally based upon platform, format, content, quality, service, timeliness and price.

The Times competes for advertising and circulation primarily with national newspapers such as The Wall Street Journal and USA Today; newspapers of general circulation in New York City and its suburbs; other daily and weekly newspapers and television stations and networks in markets in which The Times circulates; and some national news and lifestyle magazines.

The IHT’s key competitors include all international sources of English-language news, including The Wall Street Journal’s European and Asian Editions, the Financial Times, Time, Newsweek International and The Economist; and news channels CNN, CNNi, Sky News International, CNBC and BBC.

The Globe competes primarily for advertising and circulation with other newspapers and television stations in Boston, its neighboring suburbs and the greater New England region, including, among others, The Boston Herald (daily and Sunday).

In addition, as a result of the secular shift from print to digital media, all of our newspapers increasingly face competition for audience and advertising from a wide variety of digital alternatives, including news and other Web sites, news aggregation sites, social media sites, online advertising networks and exchanges, online classified services and other new media formats.

NYTimes.com, Boston.com and BostonGlobe.com primarily compete for advertising and traffic with other advertising-supported news and information Web sites, such as Google News, Yahoo! News, MSNBC and CNN.com, online advertising networks and exchanges and classified advertising portals. Internationally, global.nytimes.com competes against international online sources of English language news, such as bbc.co.uk, guardian.co.uk and reuters.com.

About.com competes for advertising and traffic with large-scale portals, such as AOL, MSN and Yahoo!, and across a broad array of digital advertising media, including advertising networks and exchanges. About.com also competes with other content providers, such as Demand Media and Associated Content, as well as targeted Web sites, such as WebMD, CNET and iVillage, whose content overlaps with that of About.com’s individual topics.

EMPLOYEES

We had approximately 7,273 full-time equivalent employees as of December 25, 2011.



	Employees
The New York Times Media Group	3,056
New England Media Group	1,909
Regional Media Group⁽¹⁾	1,689
About Group	214
Corporate	405
Total Company	7,273


(1)	On January 6, 2012, we sold the Regional Media Group.

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Labor Relations

As of December 25, 2011, more than half of the full-time equivalent employees of The Times and NYTimes.com were represented by nine unions with 10 labor agreements. As indicated below, certain collective bargaining agreements have expired and negotiations for new contracts are ongoing. We cannot predict the timing or the outcome of these negotiations.



	Employee Category	Expiration Date
The Times and	Mailers	March 30, 2011 (expired)
NYTimes.com	New York Newspaper Guild	March 30, 2011 (expired)
	Electricians	March 30, 2012
	Machinists	March 30, 2012
	Paperhandlers	March 30, 2014
	Typographers	March 30, 2016
	Pressmen	March 30, 2017
	Stereotypers	March 30, 2017
	Drivers	March 30, 2020

More than half of the full-time equivalent employees of the IHT are located in France, whose terms and conditions of employment are established by a combination of French national labor law, industry-wide collective agreements and Company-specific agreements.

More than half of the full-time equivalent employees of the Globe and Boston.com were represented by 10 unions with 12 labor agreements. As indicated below, certain collective bargaining agreements have expired and negotiations for new contracts are ongoing. We cannot predict the timing or the outcome of these negotiations.



	Employee Category	Expiration Date
The Globe and	Drivers	December 31, 2010 (expired)
Boston.com	Paperhandlers	December 31, 2010 (expired)
	Boston Newspaper Guild	December 31, 2012
	Engravers	December 31, 2012
	Boston Mailers Union	December 31, 2012
	Pressmen	December 31, 2012
	Technical services group	December 31, 2012
	Electricians	December 31, 2012
	Typographers	December 31, 2013
	Garage mechanics	December 31, 2013
	Machinists	December 31, 2013
	Warehouse employees	December 31, 2015

As part of various cost-cutting measures in 2009 that resulted in amendments to certain collective bargaining agreements, the Globe agreed to a profit-sharing plan based on the performance of the Globe and Boston.com in 2011 and 2012. Pursuant to these collective bargaining agreements, the Globe expects to make profit-sharing payments in 2012 to eligible full-time union employees based on a formula tied to the 2011 operating profit of the Globe and Boston.com, calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such payments will reflect the lowest threshold at which payments are required to be made.

Approximately one-third of the full-time equivalent employees of the T&G are represented by four unions. Labor agreements with production unions expired or will expire on August 31, 2011, October 8, 2011 and November 30, 2016. The labor agreements with the Providence Newspaper Guild, representing newsroom and circulation employees, expire on June 14, 2012.

P. 8 – THE NEW YORK TIMES COMPANY

ITEM 1A. RISK FACTORS

You should carefully consider the risk factors described below, as well as the other information included in this Annual Report on Form 10-K. Our business, financial condition or results of operations could be materially adversely affected by any or all of these risks, or by other risks or uncertainties not presently known or currently deemed immaterial, that may adversely affect us in the future.

Economic weakness and uncertainty in the United States, in the regions in which we operate and in key advertising categories have adversely affected and may continue to adversely affect our advertising revenues.

Advertising spending, which drives a significant portion of our revenues, is sensitive to economic conditions. National and local economic conditions, particularly in the New York City and Boston metropolitan regions, affect the levels of our national, retail and classified advertising revenues. Economic factors that have adversely affected advertising revenues include lower consumer and business spending, high unemployment, depressed home sales and other challenges affecting the economy. Our advertising revenues are particularly adversely affected if advertisers respond to weak and uneven economic conditions by reducing their budgets or shifting spending patterns or priorities, or if they are forced to consolidate or cease operations. Continuing weak and uncertain economic conditions and outlook would adversely affect our level of advertising revenues and our business, financial condition and results of operations.

Our businesses face substantial competition for advertisers.

We face substantial competition for advertising revenues in our various markets from free and paid newspapers, magazines, Web sites, digital platforms and applications, television, radio, other forms of media, direct marketing and digital advertising networks and exchanges. Competition for advertising is generally based on audience levels and demographics, price, service and advertising results. It has intensified as a result of both the continued development and fragmentation of digital media and adverse economic conditions. Competition from all of these media and services affects our ability to attract and retain advertisers and consumers and to maintain or increase our advertising rates.

The increasing popularity of digital media and the shift in consumer habits and advertising expenditures from traditional to digital media has adversely affected and may continue to adversely affect our print advertising revenues.

Web sites, applications for mobile devices, social networking tools and other digital platforms distributing news and other content continue to gain popularity. This migration to digital technologies among both providers and consumers of content is likely to continue with companies seeking greater efficiencies and consumers seeking more value, convenience and timeliness of digital technologies. As a result, print subscriptions may decline and advertising spending may continue to shift from traditional media forms to digital media. We expect that advertisers will continue to allocate increasing portions of their budgets to digital media, which through pay-for-performance and keyword-targeted advertising can offer more measurable returns than traditional print media. This secular shift has intensified competition for advertising in traditional media and has contributed to and is likely to continue to contribute to a decline in print advertising revenue.

We may not achieve sufficient subscribers or audience levels to make our digital pay models financially attractive.

During 2011, we launched digital subscriptions at The Times, the IHT and the Globe, with the intention of developing a new consumer revenue stream while preserving our digital advertising business. Our ability to build a subscriber base on our digital platforms depends on market acceptance, consumer habits, pricing, an adequate online infrastructure, terms of delivery platforms and other factors. Traffic levels may stagnate or decline as a result of the implementation of a pay model, which may adversely affect our advertiser base and advertising rates and result in a decline in digital revenues. If we are unable to convert and retain a sufficient number of digital users to a paid status or maintain our digital audience for advertising sales, our business, financial condition and prospects may be adversely affected.

If we are unable to retain and grow our digital audience, our digital businesses will be adversely affected.

The increasing number of digital media options available on the Internet, through social networking tools and through mobile and other devices distributing news and other content, is expanding consumer choice significantly. Faced with a multitude of media choices and a dramatic increase in accessible information, consumers may place greater value on when, where, how and at what price they consume digital content than they do on the source or

THE NEW YORK TIMES COMPANY – P. 9

reliability of such content. News aggregation Web sites and customized news feeds (often free to users) may reduce our traffic levels by creating a disincentive for the audience to visit our Web sites or use our digital applications. In addition, the undifferentiated presentation of some of our content in aggregation with other content may lead audiences to fail to distinguish our content from the content of other providers. Our reputation for quality journalism and content is important in competing for revenues in this environment and is based on consumer and advertiser perceptions. If consumers fail to differentiate our content from other content providers in digital media, or if the quality of our journalism or content is perceived as less reliable, we may not be able to increase our online traffic sufficiently or retain a base of frequent visitors to our digital platforms.

Online traffic is also driven by Internet search results, including search results provided by Google, the primary search engine directing traffic to the Web sites of the About Group and many of our other sites. Search engines frequently update and change the methods for directing search queries to Web pages or change methodologies and metrics for valuing the quality and performance of Internet traffic on delivering cost-per-click advertisements. Any such changes could decrease the amount of revenue that we generate from online advertisements. The failure to successfully manage search engine optimization efforts across our businesses could result in a significant decrease in traffic to our various Web sites, which could result in substantial decreases in conversion rates and repeat business, as well as increased costs if we were to replace free traffic with paid traffic, any or all of which would adversely affect our business, financial condition and results of operations.

If traffic levels stagnate or decline, we may not be able to create sufficient advertiser interest in our digital businesses or to maintain or increase the advertising rates of the inventory on our digital platforms. Even if we maintain traffic levels, the market position of our brands may not be enough to counteract a significant downward pressure on advertising rates as a result of a significant increase in inventory.

The About Group depends upon arrangements with Google, and any changes in this relationship or Google’s practices could adversely affect its business, financial condition and results of operations.

Cost-per-click revenue of the About Group is principally derived from an arrangement with Google. If the About Group is unable to continue the existing agreement with Google on favorable terms and conditions or if Google’s position in the marketplace wanes, the About Group’s business, financial condition and results of operations would be adversely affected. In addition, the amount of revenue we receive from Google depends upon a number of factors outside of our control, including the efficiency of Google’s system in attracting advertisers and serving up paid listings on our content pages and judgments made by Google about the relative attractiveness (to the advertiser) of clicks on paid listings on our Web pages. Changes to Google’s paid listings network efficiency or its judgment about the relative attractiveness of clicks on paid listings on our Web pages has had and may continue to have an adverse effect on the About Group’s business, financial condition and results of operations.

To remain competitive, we must be able to respond to and capitalize on changes in technology, services and standards and changes in consumer behavior, and significant capital investments may be required.

Technological developments in the media industry continue to evolve rapidly. Advances in technology have led to an increasing number of methods for the delivery of news and other content and have driven consumer demand and expectations in unanticipated directions. If we are unable to exploit new and existing technologies to distinguish our products and services from those of our competitors or adapt to new distribution methods that provide optimal user experiences, our business, financial condition and prospects may be adversely affected.

Technological developments also pose other challenges that could adversely affect our revenues and competitive position. New delivery platforms may lead to pricing restrictions, the loss of distribution control and the loss of a direct relationship with consumers. We may also be adversely affected if the use of technology developed to block the display of advertising on Web sites proliferates.

Technological developments and any changes we make to our business model may require significant capital investments. We may be limited in our ability to invest funds and resources in digital products, services or opportunities and we may incur costs of research and development in building and maintaining the necessary and continually evolving technology infrastructure. It may also be difficult to attract and retain talent for critical positions. Some of our existing competitors and new entrants may have greater operational, financial and other resources or may otherwise be better positioned to compete for opportunities and as a result, our digital businesses may be less successful.

P. 10 – THE NEW YORK TIMES COMPANY

Decreases in print circulation volume adversely affect our circulation and advertising revenues.

Advertising and circulation revenues are affected by circulation and readership levels of our newspaper properties. Competition for circulation and readership is generally based upon format, content, quality, service, timeliness and price. In recent years, our newspaper properties, and the newspaper industry as a whole, have experienced declining print circulation volume. This is due to, among other factors, increased competition from digital media formats and sources other than traditional newspapers (often free to users), declining discretionary spending by consumers affected by weak economic conditions, high subscription and single-copy rates, and a growing preference among some consumers to receive all or a portion of their news other than from a newspaper. We have also experienced volume declines as a result of our strategy to implement circulation price increases at many of our newspaper properties and to focus on individually paid circulation that is preferred by advertisers. If these or other factors result in a continued decline in circulation volume, the rate and volume of advertising revenues may be adversely affected (as rates reflect circulation and readership, among other factors). These factors could also affect our ability to institute circulation price increases for our products at a rate sufficient to offset circulation volume declines. We may also incur increased spending on marketing designed to attract and retain subscribers or drive traffic to our digital products, and we may not be able to recover these costs through circulation and advertising revenues.

If we are unable to execute cost-control measures successfully, our total operating costs may be greater than expected, which may adversely affect our profitability.

We have significantly reduced operating costs by reducing staff and employee benefits and implementing general cost-control measures across the Company, and expect to continue these cost management efforts. If we do not achieve expected savings or our operating costs increase as a result of our strategic initiatives, our total operating costs may be greater than anticipated. In addition, if our cost-control strategy is not managed properly, such efforts may affect the quality of our products and our ability to generate future revenue. Reductions in staff and employee compensation and benefits could also adversely affect our ability to attract and retain key employees.

Significant portions of our expenses are fixed costs that neither increase nor decrease proportionately with revenues. If we are not able to implement further cost control efforts or reduce our fixed costs sufficiently in response to a decline in our revenues, we may experience a higher percentage decline in our income from continuing operations.

A significant increase in the price of newsprint, or limited availability of newsprint supply, would have an adverse effect on our operating results.

The cost of raw materials, of which newsprint is the major component, represented approximately 8% of our total operating costs in 2011. The price of newsprint has historically been volatile and may increase as a result of various factors, including:


•	a reduction in the number of suppliers as a result of restructurings and consolidations in the North American newsprint industry;


•	declining newsprint supply as a result of paper mill closures and conversions to other grades of paper; and


•	other factors that adversely impact supplier profitability, including increases in operating expenses caused by raw material and energy costs, and a rise in the value of the Canadian dollar, which adversely affects Canadian suppliers whose costs are incurred in Canadian dollars but whose newsprint sales are priced in U.S. dollars.

In addition, we rely on our suppliers for deliveries of newsprint. The availability of our newsprint supply may be affected by various factors, including strikes and other disruptions that may affect deliveries of newsprint.

If newsprint prices increase significantly or we experience significant disruptions in the availability of our newsprint supply in the future, our operating results will be adversely affected.

The underfunded status of our pension plans may adversely affect our operations, financial condition and liquidity.

We sponsor several qualified defined benefit pension plans. We are required to make contributions to our qualified defined benefit pension plans to comply with minimum funding requirements imposed by laws governing these employee benefit plans. The difference between the obligations and assets of the qualified defined benefit plans, or the funded status of the qualified defined benefit plans, is a significant factor in determining pension expense and the ongoing funding requirements to those plans. Our qualified defined benefit pension plans were underfunded as

THE NEW YORK TIMES COMPANY – P. 11

of the January 1, 2012, valuation date and we expect to make substantial contributions in the future to fund this deficiency. In addition, while we sold the Regional Media Group in January 2012, we retained pension assets and liabilities and postretirement obligations related to employees of that business. Future volatility and disruption in the stock and bond markets could cause declines in the asset values of our qualified defined benefit pension plans. In addition, a decrease in the discount rate used to determine the liabilities for pension obligations will result in increased liabilities. If investment returns on plan assets are below expectations or interest rates decrease or remain very low, our contributions may be higher than currently anticipated. As a result, we may have less cash available for working capital and other corporate uses, which may have an adverse impact on our operations, financial condition and liquidity.

Due to our participation in multiemployer pension plans, we have exposures under those plans that may extend beyond what our obligations would be with respect to our employees.

We participate in, and make periodic contributions to, various multiemployer pension plans that cover many of our union employees. Our required contributions to these plans could increase because of a shrinking contribution base as a result of the insolvency or withdrawal of other companies that currently contribute to these plans, inability or failure of withdrawing companies to pay their withdrawal liability, low interest rates, lower than expected returns on pension fund assets or other funding deficiencies.

We have incurred significant withdrawal liabilities to the multiemployer pension plans in which we participate, such as the liability assessed against us in 2009 in connection with amendments to various collective bargaining agreements affecting certain multiemployer pension plans. We may be required to make additional contributions under applicable law with respect to those plans or other multiemployer pension plans from which we may withdraw or partially withdraw. Our withdrawal liability for any multiemployer pension plan will depend on the extent of that plan’s funding of vested benefits. If a multiemployer pension plan in which we participate has significant underfunded liabilities, such underfunding will increase the size of our potential withdrawal liability.

A significant number of our employees are unionized, and our business and results of operations could be adversely affected if labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations.

Approximately half of our full-time equivalent work force are unionized. As a result, we are required to negotiate the wages, salaries, benefits, staffing levels and other terms with many of our employees collectively. Our results could be adversely affected if future labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations. If we were to experience labor unrest, strikes or other business interruptions in connection with labor negotiations or otherwise, or if we are unable to negotiate labor contracts on reasonable terms, our ability to produce and deliver our most significant products could be impaired. In addition, our ability to make short-term adjustments to control compensation and benefits costs, rebalance our portfolio of businesses or otherwise adapt to changing business needs may be limited by the terms and duration of our collective bargaining agreements.

We may buy or sell different properties as a result of our evaluation of our portfolio of businesses. Such acquisitions or divestitures would affect our costs, revenues, profitability and financial position.

From time to time, we evaluate the various components of our portfolio of businesses and may, as a result, buy or sell different properties. These acquisitions or divestitures affect our costs, revenues, profitability and financial position. We may also consider the acquisition of specific properties or businesses that fall outside our traditional lines of business if we deem such properties sufficiently attractive.

Divestitures have inherent risks, including possible delays in closing transactions (including potential difficulties in obtaining regulatory approvals), the risk of lower-than-expected sales proceeds for the divested businesses, unexpected costs associated with the separation of the business to be sold from our integrated information technology systems and other operating systems, and potential post-closing claims for indemnification. In addition, adverse economic or market conditions may result in fewer potential bidders and unsuccessful sales efforts. Expected cost savings, which are offset by revenue losses from divested businesses, may also be difficult to achieve or maximize due to our fixed cost structure, and we may experience varying success in reducing fixed costs or transferring liabilities previously associated with the divested businesses.

Acquisitions also involve risks, including difficulties in integrating acquired operations, diversions of management resources, debt incurred in financing these acquisitions (including the related possible reduction in our credit ratings and increase in our cost of borrowing), differing levels of management and internal control effectiveness

P. 12 – THE NEW YORK TIMES COMPANY

at the acquired entities and other unanticipated problems and liabilities. Competition for certain types of acquisitions, particularly digital properties, is significant. Even if successfully negotiated, closed and integrated, certain acquisitions or investments may prove not to advance our business strategy and may fall short of expected return on investment targets.

From time to time, we make noncontrolling minority investments in private entities and these investments may be subject to capital calls. We may have limited voting rights or an inability to influence the direction of such entities, although income from such investments may represent a significant portion of our income. Therefore, the success of these ventures may be dependent upon the efforts of our partners, fellow investors and licensees. These investments are generally illiquid, and the absence of a market inhibits our ability to dispose of them. This inhibition as well as an inability to control the timing or process relating to a disposition could adversely affect our liquidity and the value we may ultimately attain on a disposition. If the value of the companies in which we invest declines, we may be required to record a charge to earnings.

Our debt agreements contain restrictions that limit our flexibility in operating our business.

Our debt agreements contain various covenants that limit our ability to engage in specified types of transactions. For example, these covenants, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to:


•	incur or guarantee additional debt or issue certain preferred equity;


•	pay dividends on or make distributions to holders of our common stock or make other restricted payments;


•	create or incur liens on certain assets to secure debt;


•	make certain investments, acquisitions or dispositions;


•	consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;


•	prepay debt; or


•	enter into certain transactions with affiliates.

In addition, our credit facility has a springing financial covenant that requires us to satisfy a minimum fixed charge coverage ratio when availability under the credit facility falls below the greater of $16.7 million or 15% of the commitment for three consecutive business days. These restrictions limit our flexibility in operating our business and responding to opportunities.

Changes in our credit ratings or macroeconomic conditions may affect our liquidity, increasing borrowing costs and limiting our financing options.

Our long-term debt is currently rated below investment grade by Standard & Poor’s and Moody’s Investors Service. If our credit ratings remain below investment grade or are lowered further, borrowing costs for future long-term debt or short-term borrowing facilities may increase and our financing options, including our access to the unsecured borrowing market, would be more limited. We may also be subject to additional restrictive covenants that would reduce our flexibility. In addition, macroeconomic conditions, such as continued or increased volatility or disruption in the credit markets, would adversely affect our ability to refinance existing debt or obtain additional financing to support operations or to fund new acquisitions or capital-intensive internal initiatives.

We may be required to record non-cash impairment charges with respect to certain of our assets.

Each year, we evaluate the various components of our portfolio in connection with annual impairment testing. We also continually evaluate whether current factors or indicators require the performance of an interim impairment assessment of those assets, as well as other investments and other long-lived assets. We may be required to record a non-cash charge if the financial statement carrying value of an asset is in excess of its estimated fair value. Fair value could be adversely affected by weak economic or market conditions within our industry that may have an adverse impact on our projected future cash flows or our stock price. An impairment charge would adversely affect our reported earnings.

We may not be able to protect intellectual property rights upon which our business relies, and if we lose intellectual property protection, our assets may lose value.

Our business depends on our intellectual property, including our valuable brands, content, services and

THE NEW YORK TIMES COMPANY – P. 13

internally developed technology. We believe our proprietary trademarks and other intellectual property rights are important to our continued success and our competitive position.

Unauthorized parties may attempt to copy or otherwise obtain and use our content, services, technology and other intellectual property, and we cannot be certain that the steps we have taken to protect our proprietary rights will prevent any misappropriation or confusion among consumers and merchants, or unauthorized use of these rights.

Advancements in technology have exacerbated the risk by making it easier to duplicate and disseminate content. In addition, as our business and the risk of misappropriation of our intellectual property rights have become more global in scope, we may not be able to protect our proprietary rights in a cost effective manner in a multitude of jurisdictions with varying laws.

If we are unable to procure, protect and enforce our intellectual property rights, we may not realize the full value of these assets, and our business may suffer. If we must litigate in the United States or elsewhere to enforce our intellectual property rights or determine the validity and scope of the proprietary rights of others, such litigation may be costly and divert the attention of our management.

Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, through a family trust, and this control could create conflicts of interest or inhibit potential changes of control.

We have two classes of stock: Class A Common Stock and Class B Common Stock. Holders of Class A Common Stock are entitled to elect 30% of the Board of Directors and to vote, with holders of Class B Common Stock, on the reservation of shares for equity grants, certain material acquisitions and the ratification of the selection of our auditors. Holders of Class B Common Stock are entitled to elect the remainder of the Board and to vote on all other matters. Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, who purchased The Times in 1896. A family trust holds approximately 90% of the Class B Common Stock. As a result, the trust has the ability to elect 70% of the Board of Directors and to direct the outcome of any matter that does not require a vote of the Class A Common Stock. Under the terms of the trust agreement, the trustees are directed to retain the Class B Common Stock held in trust and to vote such stock against any merger, sale of assets or other transaction pursuant to which control of The Times passes from the trustees, unless they determine that the primary objective of the trust can be achieved better by the implementation of such transaction. Because this concentrated control could discourage others from initiating any potential merger, takeover or other change of control transaction that may otherwise be beneficial to our businesses, the market price of our Class A Common Stock could be adversely affected.

Legislative and regulatory developments may result in increased costs and lower advertising revenues from our digital businesses.

All of our operations are subject to government regulation in the jurisdictions in which they operate. Due to the wide geographic scope of its operations, the IHT is subject to regulation by political entities throughout the world. In addition, our Web sites are available worldwide and are subject to laws regulating the Internet both within and outside the United States. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Advertising revenues from our digital businesses could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to the use of consumer data in digital media.

P. 14 – THE NEW YORK TIMES COMPANY

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive offices are located in our New York headquarters building in the Times Square area. The building was completed in 2007 and consists of approximately 1.54 million gross square feet, of which approximately 828,000 gross square feet of space have been allocated to us. We owned a leasehold condominium interest representing approximately 58% of the New York headquarters building until March 6, 2009, when one of our affiliates entered into an agreement to sell and simultaneously lease back a portion of our leasehold condominium interest (the “Condo Interest”). The sale-leaseback transaction encompassed 21 floors, or approximately 750,000 rentable square feet, currently occupied by us. The sale price for the Condo Interest was $225 million. We have an option exercisable in 2019 to repurchase the Condo Interest for $250 million. The lease term is 15 years, and we have three renewal options that could extend the term for an additional 20 years. We continue to own a leasehold condominium interest in seven floors in our New York headquarters building, totaling approximately 216,000 rentable square feet, that were not included in the sale-leaseback transaction, of which six floors are leased to a third party.

In addition, we built a printing and distribution facility with 570,000 gross square feet located in College Point, N.Y., on a 31-acre site for which we have a ground lease. We have an option to purchase the property at any time before the lease ends in 2019. We own a facility in Boston, Mass., of 703,000 gross square feet that includes printing operations and offices. We also currently own properties with an aggregate of approximately 192,000 gross square feet and lease properties with an aggregate of approximately 398,000 rentable square feet in various locations, which does not include properties formerly used by the Regional Media Group, which was sold on January 6, 2012. These properties, our New York headquarters and the College Point and Boston properties are used by our News Media Group. Properties leased by the About Group total approximately 52,000 rentable square feet.

ITEM 3. LEGAL PROCEEDINGS

There are various legal actions that have arisen in the ordinary course of business and are now pending against us. Such actions are usually 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 such actions with our legal counsel that the ultimate liability that might result from such actions will not have a material adverse effect on our consolidated financial statements.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

THE NEW YORK TIMES COMPANY – P. 15

EXECUTIVE OFFICERS OF THE REGISTRANT



Name	Age	Employed By Registrant Since	Recent Position(s) Held as of February 23, 2012 (except as noted)
Corporate Officers
Arthur Sulzberger, Jr.	60	1978	Chairman (since 1997); Chief Executive Officer (since December 2011); Publisher of The Times (since 1992)
Michael Golden	62	1984	Vice Chairman (since 1997); President and Chief Operating Officer, Regional Media Group (2009 to January 2012); Publisher of the IHT (2003 to 2008); Senior Vice President (1997 to 2004)
James M. Follo	52	2007	Senior Vice President and Chief Financial Officer (since 2007); Chief Financial and Administrative Officer, Martha Stewart Living Omnimedia, Inc. (2001 to 2006)
R. Anthony Benten	48	1989	Senior Vice President, Finance (since 2008); Corporate Controller (since 2007); Vice President (2003 to 2008); Treasurer (2001 to 2007)
Todd C. McCarty	46	2009	Senior Vice President, Human Resources (since 2009); Senior Vice President, Global Human Resources, The Reader’s Digest Association (2008 to 2009); Senior Vice President, Human Resources, Rite Aid Corporation (2005 to 2008); Senior Vice President, North American Human Resources, Starwood Hotels & Resorts Worldwide, Inc. (2000 to 2005)
Kenneth A. Richieri	60	1983	Senior Vice President (since 2007), General Counsel (since 2006) and Secretary (from 2008 to February 2011); Vice President (2002 to 2007); Deputy General Counsel (2001 to 2005); Vice President and General Counsel, New York Times Digital (1999 to 2003)
Operating Unit Executives
Scott H. Heekin-Canedy	60	1987⁽¹⁾	President and General Manager of The Times (since 2004); Senior Vice President, Circulation of The Times (1999 to 2004)
Darline Jean	44	2005	President and Chief Executive Officer (since September 2011), Senior Vice President (2010 to September 2011), Chief Financial Officer (2006 to September 2011) and Vice President, Finance (2004 to 2006) of the About Group; Chief Operating Officer of About.com (2010 to September 2011)
Christopher M. Mayer	50	1984	Publisher of the Globe and President of the New England Media Group (since 2010); Senior Vice President, Circulation and Operations, of the Globe (2008 to 2009); Chief Information Officer and Senior Vice President of the Globe (2005 to 2008); Vice President, Circulation Sales, of the Globe (2002 to 2005)


(1)	Mr. Heekin-Canedy left the Company in 1989 and returned in 1992.

P. 16 – THE NEW YORK TIMES COMPANY

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

The Class A Common Stock is listed on the New York Stock Exchange. The Class B Common Stock is unlisted and is not actively traded.

The number of security holders of record as of February 17, 2012, was as follows: Class A Common Stock: 6,738; Class B Common Stock: 28.

No dividends have been declared or paid on our Class A or Class B Common Stock since the fourth quarter of 2008. The decision to pay a dividend in future periods and the appropriate level of dividends will be considered by our Board of Directors on an ongoing basis in light of our earnings, capital requirements, financial condition and other factors considered relevant. In addition, our Board of Directors will consider restrictions in any existing indebtedness, such as the terms of our 6.625% senior unsecured notes due 2016, which restrict our ability to pay dividends. See “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Third-Party Financing.”

The following table sets forth, for the periods indicated, the high and low closing sales prices for the Class A Common Stock as reported on the New York Stock Exchange.



	2011				2010
Quarters	High		Low		High		Low
First Quarter	$	10.90	$	8.86	$	14.67	$	10.62
Second Quarter	9.67		7.19		12.80		8.35
Third Quarter	9.21		5.76		9.76		7.18
Fourth Quarter	7.97		5.65		10.00		7.60

ISSUER PURCHASES OF EQUITY SECURITIES⁽¹⁾



Period	Total Number of Shares of Class A Common Stock Purchased (a)	Average Price Paid Per Share of Class A Common Stock (b)		Total Number of Shares of Class A Common Stock Purchased as Part of Publicly Announced Plans or Programs (c)	Maximum Number (or Approximate Dollar Value) of Shares of Class A Common Stock that May Yet Be Purchased Under the Plans or Programs (d)
September 26, 2011 - October 30, 2011	—	$	—	—	$	91,386,000
October 31, 2011 - November 27, 2011	—	—		—	$	91,386,000
November 28, 2011 - December 25, 2011	—	—		—	$	91,386,000
Total for the fourth quarter of 2011	—	$	—	—	$	91,386,000

(1)

On April 13, 2004, our Board of Directors authorized repurchases in an amount up to $400 million. During the fourth quarter of 2011, we did not purchase any shares of Class A Common Stock pursuant to our publicly announced share repurchase program. As of February 17, 2012, we had authorization from our Board of Directors to repurchase an amount of up to approximately $91 million of our Class A Common Stock. Our Board of Directors has authorized us to purchase shares from time to time as market conditions permit. There is no expiration date with respect to this authorization.

THE NEW YORK TIMES COMPANY – P. 17

EQUITY COMPENSATION PLAN INFORMATION

The following table presents information regarding our existing equity compensation plans as of December 25, 2011.



Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders
Stock options and stock-based awards	18,166,000	⁽¹⁾	$30	6,771,000	⁽²⁾
Employee Stock Purchase Plan	—		—	6,410,000	⁽³⁾
Total	18,166,000		—	13,181,000
Equity compensation plans not approved by security holders	None		None	None

(1)

Includes shares of Class A Common Stock to be issued upon exercise of outstanding stock options granted under the Company’s 1991 Executive Stock Incentive Plan (the “1991 Incentive Plan”) and the Company's 2010 Incentive Compensation Plan (the “2010 Incentive Plan”), as well as its Non-Employee Directors’ Stock Option Plan or Non-Employee Directors’ Stock Incentive Plan (together, the “Directors’ Plans”). Includes shares of Class A Common Stock to be issued upon conversion of stock-settled restricted stock units under the 1991 Incentive Plan and 2010 Incentive Plan.

(2)

Includes shares of Class A Common Stock available for future stock options to be granted under the 2010 Incentive Plan and the Directors’ Plans. As of December 25, 2011, the 2010 Incentive Plan had 6,539,000 shares remaining for issuance upon the grant, exercise or other settlement of share-based awards. The Directors’ Plans provide for the issuance of up to 496,000 shares of Class A Common Stock in the form of stock options or restricted stock units. The amount reported for stock options includes the aggregate number of securities remaining (approximately 232,000 as of December 25, 2011) for future issuances under those plans. Stock options granted under the 1991 Incentive Plan, 2010 Incentive Plan and the Directors’ Plans must provide for an exercise price of 100% of the fair market value on the date of grant and, except in the case of the 2010 Incentive Plan (which does not specify a maximum term), a maximum term of 10 years.


(3)	Includes shares of Class A Common Stock available for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). We have not had an offering under the ESPP since 2010.

P. 18 – THE NEW YORK TIMES COMPANY

PERFORMANCE PRESENTATION

The following graph shows the annual cumulative total stockholder return for the five years ending December 30, 2011, on an assumed investment of $100 on December 29, 2006, in the Company, the Standard & Poor’s S&P 500 Stock Index and S&P MidCap 400 Stock Index and an index of peer group media companies. In December 2010, the Company was moved from the S&P 500 Stock Index to the S&P MidCap 400 Stock Index, and we believe the latter index now provides a more meaningful comparison. The peer group returns are weighted by market capitalization at the beginning of each year. The peer group is comprised of the Company and the following media companies: Gannett Co., Inc., Media General, Inc., The McClatchy Company and The Washington Post Company. Stockholder return is measured by dividing (a) the sum of (i) the cumulative amount of dividends declared for the measurement period, assuming monthly reinvestment of dividends, and (ii) the difference between the issuer’s share price at the end and the beginning of the measurement period by (b) the share price at the beginning of the measurement period. As a result, stockholder return includes both dividends and stock appreciation.

THE NEW YORK TIMES COMPANY – P. 19



	ITEM 6. SELECTED FINANCIAL DATA

The Selected Financial Data should be read in conjunction with “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and the related Notes in Item 8. The results of operations for WQXR-FM and WQEW-AM, previously included in The New York Times Media Group, which is part of the News Media Group, have been presented as discontinued operations for all periods presented before the sale of WQXR-FM in 2009. The Broadcast Media Group’s results of operations have been presented as discontinued operations in 2007. The pages following the table show certain items included in Selected Financial Data. All per share amounts on those pages are on a diluted basis. All fiscal years presented in the table below comprise 52 weeks.



	As of and for the Years Ended
(In thousands)	December 25, 2011			December 26, 2010		December 27, 2009		December 28, 2008			December 30, 2007
Statement of Operations Data
Revenues	$	2,323,401		$	2,393,463	$	2,440,439	$	2,939,764		$	3,184,757
Operating costs	2,093,532			2,136,927		2,307,800		2,783,076			2,919,031
Impairment of assets	164,434			16,148		4,179		197,879			11,000
Pension withdrawal expense	4,228			6,268		78,931		—			—
Loss on leases and other expenses	4,500			—		34,633		—			—
Net pension curtailment gain	—			—		53,965		—			—
Gain/(loss) on sale of assets	—			—		5,198		—			(68,156		)
Operating profit/(loss)	56,707			234,120		74,059		(41,191		)	186,570
Income/(loss) from joint ventures	28			19,035		20,667		17,062			(2,618		)
Gain on sale of investments	71,171			9,128		—		—			—
Interest expense, net	85,243			85,062		81,701		47,790			39,842
Premium on debt redemptions	46,381			—		9,250		—			—
(Loss)/income from continuing operations before income taxes	(3,718		)	177,221		3,775		(71,919		)	144,110
(Loss)/income from continuing operations	(40,224		)	108,705		1,569		(65,940		)	86,960
Discontinued operations, net of income taxes	—			13		18,332		8,602			121,637
Net (loss)/income attributable to The New York Times Company common stockholders	$	(39,669	)	$	107,704	$	19,891	$	(57,839	)	$	208,704
Balance Sheet Data
Property, plant and equipment, net	$	1,085,190		$	1,156,786	$	1,250,021	$	1,353,619		$	1,468,013
Cash and cash equivalents and short-term investments	279,997			399,642		36,520		56,784			51,532
Total assets	2,883,450			3,285,741		3,088,557		3,401,680			3,473,092
Total debt and capital lease obligations	773,140			996,443		769,217		1,059,375			1,034,979
Total New York Times Company stockholders’ equity	506,360			659,927		604,042		503,963			978,200

P. 20 – THE NEW YORK TIMES COMPANY



	As of and for the Years Ended
(In thousands, except ratios, per share and employee data)	December 25, 2011			December 26, 2010			December 27, 2009			December 28, 2008			December 30, 2007
Per Share of Common Stock
Basic (loss)/earnings per share attributable to The New York Times Company common stockholders:
(Loss)/income from continuing operations	$	(0.27	)	$	0.74		$	0.01		$	(0.46	)	$	0.61
Discontinued operations, net of income taxes	0.00			0.00			0.13			0.06			0.84
Net (loss)/income	$	(0.27	)	$	0.74		$	0.14		$	(0.40	)	$	1.45
Diluted (loss)/earnings per share attributable to The New York Times Company common stockholders:
(Loss)/income from continuing operations	$	(0.27	)	$	0.71		$	0.01		$	(0.46	)	$	0.61
Discontinued operations, net of income taxes	0.00			0.00			0.13			0.06			0.84
Net (loss)/income	$	(0.27	)	$	0.71		$	0.14		$	(0.40	)	$	1.45
Dividends per share	$	—		$	—		$	—		$	0.750		$	0.865
Stockholders’ equity per share	$	3.44		$	4.32		$	4.13		$	3.51		$	6.79
Average basic shares outstanding	147,190			145,636			144,188			143,777			143,889
Average diluted shares outstanding	147,190			152,600			146,367			143,777			144,158
Key Ratios
Operating profit/(loss) to revenues	2		%	10		%	3		%	(1		)%	6		%
Return on average common stockholders’ equity	(7		)%	17		%	4		%	(8		)%	23		%
Return on average total assets	(1		)%	3		%	1		%	(2		)%	6		%
Total debt and capital lease obligations to total capitalization	60		%	60		%	56		%	68		%	51		%
Current assets to current liabilities	1.46			1.70			1.00			0.60			0.68
Ratio of earnings to fixed charges⁽¹⁾	—			2.78			—			—			3.14
Full-Time Equivalent Employees	7,273			7,414			7,665			9,346			10,231


(1)	In 2011, 2009 and 2008, earnings were inadequate to cover fixed charges by approximately $1 million, $16 million and $56 million, respectively, due to certain charges in each year.

THE NEW YORK TIMES COMPANY – P. 21

The items below are included in the Selected Financial Data.

2011

The items below had an unfavorable effect on our results of $161.9 million, or $.94 per share:


•	a $164.4 million pre-tax charge ($139.1 million after tax, or $.94 per share) for the impairment of assets, consisting of $152.1 million related to goodwill at the Regional Media Group, $9.2 million related to certain assets held for sale, primarily of Baseline, and $3.1 million related to an intangible asset at ConsumerSearch, Inc., which is part of the About Group.


•	a $71.2 million pre-tax gain ($41.4 million after tax, or $.28 per share) from the sales of 390 of our units in Fenway Sports Group and a portion of our interest in Indeed.com, a job listing aggregator.


•	a $46.4 million pre-tax charge ($27.6 million after tax, or $.19 per share) in connection with the prepayment of our $250.0 million 14.053% Notes.


•	a $13.6 million pre-tax charge ($8.0 million after tax, or $.05 per share) for severance costs.


•	a $4.5 million pre-tax charge ($2.6 million after tax, or $.02 per share) for a retirement and consulting agreement in connection with the retirement of our chief executive officer.


•	a $4.2 million estimated pre-tax charge ($2.7 million after tax, or $.02 per share) for a pension withdrawal obligation under a multiemployer pension plan at the Globe, whose results are included in the New England Media Group.

2010

The items below had an unfavorable effect on our results of $17.8 million, or $.13 per share:


•	a $16.1 million pre-tax charge ($10.1 million after tax, or $.07 per share) for the impairment of assets at the Globe’s printing facility in Billerica, Mass.


•	a $12.7 million pre-tax gain from the sale of an asset at one of the paper mills in which we have an investment. Our share of the pre-tax gain, after eliminating the noncontrolling interest portion, is $10.2 million ($6.4 million after tax, or $.04 per share).


•	an $11.4 million tax charge ($.07 per share) for the reduction in future tax benefits for retiree health benefits resulting from the federal health-care legislation enacted in 2010.


•	a $9.1 million pre-tax gain ($5.3 million after tax, or $.03 per share) from the sale of 50 of our units in Fenway Sports Group.


•	a $6.8 million pre-tax charge ($4.1 million after tax, or $.03 per share) for severance costs.


•	a $6.3 million pre-tax charge ($3.9 million after tax, or $.03 per share) for an adjustment to estimated pension withdrawal obligations under several multiemployer pension plans at the Globe.

2009

The items below had an unfavorable effect on our results of $56.3 million, or $.38 per share:


•	a $78.9 million pre-tax charge ($49.5 million after tax, or $.34 per share) for a pension withdrawal obligation under certain multiemployer pension plans primarily at the Globe.


•	a $54.0 million pre-tax net pension curtailment gain ($30.7 million after tax, or $.21 per share) resulting from freezing of benefits under various Company-sponsored qualified and non-qualified pension plans.


•	a $53.9 million pre-tax charge ($32.3 million after tax, or $.22 per share) for severance costs.


•	a $34.9 million pre-tax gain ($19.5 million after tax, or $.13 per share) from the sale of WQXR-FM.

•

a $34.6 million pre-tax charge ($20.0 million after tax, or $.13 per share) for a loss on leases ($31.1 million) and a fee ($3.5 million) for the early termination of a third-party printing contract. The lease charge included a $22.8 million charge for a loss on leases associated with the closure of City & Suburban, our retail and newsstand distribution subsidiary, and $8.3 million for office space at The New York Times Media Group.

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•	a $9.3 million pre-tax charge ($5.3 million after tax, or $.04 per share) for a premium on the redemption of $250.0 million principal amount of our 4.5% notes, which was completed in April 2009.


•	a $5.2 million pre-tax gain ($3.2 million after tax, or $.02 per share) on the sale of surplus real estate assets at the Regional Media Group.


•	a $4.2 million pre-tax charge ($2.6 million after tax, or $.01 per share) for the impairment of assets due to the reduced scope of a systems project.

2008

The items below had an unfavorable effect on our results of $180.1 million, or $1.24 per share:


•	a $160.4 million pre-tax, non-cash charge ($109.3 million after tax, or $.76 per share) for the impairment of property, plant and equipment, intangible assets and goodwill at the New England Media Group.


•	an $81.0 million pre-tax charge ($46.2 million after tax, or $.32 per share) for severance costs.


•	a $19.2 million pre-tax, non-cash charge ($10.7 million after tax, or $.07 per share) for the impairment of an intangible asset at the IHT, whose results are included in The New York Times Media Group.


•	an $18.3 million pre-tax, non-cash charge ($10.4 million after tax, or $.07 per share) for the impairment of assets for a systems project.


•	a $5.6 million pre-tax, non-cash charge ($3.5 million after tax, or $.02 per share) for the impairment of our 49% ownership interest in Metro Boston.

2007

The items below increased net income by $18.8 million, or $.13 per share:


•	a $190.0 million pre-tax gain ($94.0 million after tax, or $.65 per share) from the sale of the Broadcast Media Group.


•	a $68.2 million net pre-tax loss ($41.3 million after tax, or $.29 per share) from the sale of assets, mainly our Edison, N.J., facility, which we closed in March 2008.


•	a $42.6 million pre-tax charge ($24.4 million after tax, or $.17 per share) for accelerated depreciation of certain assets at the Edison, N.J., facility.


•	a $39.6 million pre-tax gain ($21.2 million after tax, or $.15 per share) from the sale of WQEW-AM.


•	a $35.4 million pre-tax charge ($20.2 million after tax, or $.14 per share) for severance costs.


•	an $11.0 million pre-tax, non-cash charge ($6.4 million after tax, or $.04 per share) for the impairment of an intangible asset at the T&G, whose results are included in the New England Media Group.


•	a $7.1 million pre-tax, non-cash charge ($4.1 million after tax, or $.03 per share) for the impairment of our 49% ownership interest in Metro Boston.

THE NEW YORK TIMES COMPANY – P. 23

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated financial condition as of December 25, 2011, and results of operations for the three years ended December 25, 2011. This item should be read in conjunction with our Consolidated Financial Statements and the related Notes included in this Annual Report.

EXECUTIVE OVERVIEW

We are a leading global, multimedia news and information 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.

The News Media Group consists of the following divisions:


•	The New York Times Media Group, which includes The Times, the IHT, NYTimes.com and related businesses;


•	the New England Media Group, which includes the Globe, BostonGlobe.com, Boston.com, the T&G, Telegram.com and related businesses; and


•	the Regional Media Group, which included 16 regional newspapers, other print publications and related businesses in Alabama, California, Florida, Louisiana, North Carolina and South Carolina. On January 6, 2012, we completed the sale of the Regional Media Group to Halifax Media Holdings LLC for $143.0 million in cash, subject to certain adjustments.

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

Our revenues were $2.3 billion in 2011. The percentage of revenues contributed by division is below.

News Media Group

The News Media Group generates revenues principally from advertising and 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.

News Media Group revenues in 2011 by category and percentage share are below.

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About Group

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 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 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, which publishes a free daily newspaper in the greater Boston area;


•	a 49% interest in a Canadian newsprint company, Malbaie;


•	a 40% interest in a partnership, Madison, operating a supercalendered paper mill in Maine;


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

•

a 4.97% 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); and 50% of Roush Fenway Racing (a leading NASCAR team). We sold 390 of our units in Fenway Sports Group in July 2011 and 100 units in February 2012. We continue to explore the sale of our remaining 210 units in Fenway Sports Group, in whole or in parts.

Business Environment

We believe that a number of factors and industry trends have had, and will continue to have, an adverse effect on our business and prospects. These include the following:

Economic conditions

The business environment in 2011 remained challenging due in large part to the slow economic recovery in the United States and uncertain global conditions. Advertising spending, which drives a significant portion of our revenues, is susceptible to economic conditions. The level of advertising sales in any period may be affected by advertisers’ decisions to increase or decrease their advertising expenditures in response to anticipated consumer demand and general economic conditions. In 2011, advertisers continued to exercise caution in response to uneven economic conditions and lingering uncertainty about the economic outlook. The challenging advertising marketplace contributed to declines in print advertising revenues and moderating growth trends in digital advertising revenues at the News Media Group in 2011 compared with 2010. Weak national and local economic conditions, particularly in the New York City and Boston metropolitan regions, affect the levels of our national, classified and retail advertising revenues. Changes in spending patterns and priorities, including shifts in marketing strategies and budget cuts of key advertisers, in response to weak and uneven economic conditions, have depressed and may continue to depress our advertising revenues.

Secular shift to digital media choices

The competition for advertising revenues in various markets has intensified as a result of the continued development of digital media technologies. We expect that technological developments will continue to favor digital media choices, adding to the challenges posed by audience fragmentation.

We have expanded and will continue to expand our digital offerings; however, a significant portion of our revenues are currently from traditional print products where advertising revenues are declining. We believe that the shift from traditional media forms to a growing number of digital media choices and changing consumer behavior have contributed to, and is likely to continue to contribute to, a decline in print advertising. The digital advertising marketplace has experienced significant downward pressure on advertising rates as a result of significant increases in inventory. In addition, search technology has continued to improve the organization of and access to a broad range of Web sites and online information, reshaping consumer behavior and expectations for consuming news and information. As economic conditions and the advertising environment remain challenged, media companies have been re-evaluating their business models, with some moving toward various forms of digital pay models that will depend on greater market acceptance and a shift in consumer attitudes.

THE NEW YORK TIMES COMPANY – P. 25

Circulation

Circulation is another significant source of revenue for us and an increasingly important driver as the overall composition of our revenues is shifting in response to the transformations in our industry. Circulation revenues are affected by circulation and readership levels. In recent years, our newspaper properties, and the newspaper industry as a whole, have experienced declining print circulation volume. This is due to, among other factors, increased competition from digital platforms and sources other than traditional newspapers (often free to users), declining discretionary spending by consumers, higher subscription and single-copy rates and a growing preference among some consumers for receiving their news from a variety of sources.

Costs

A significant portion of our costs are fixed, and therefore we are limited in our ability to reduce them in the short term. Our most significant costs are employee-related costs and raw materials, which together accounted for approximately 50% of our total operating costs in 2011. Changes in employee-related costs and the price and availability of newsprint can materially affect our operating results.

For a discussion of these and other factors that could affect our results of operations and financial condition, see “Forward-Looking Statements” and “Item 1A — Risk Factors.”

Our Strategy

Our results in 2011 reflect our ability to manage the business during a period of transformation for our industry and amidst weak and uneven economic conditions. We anticipate that the challenges we currently face will continue, and we believe that the following elements are key to our efforts to address them.

Diversifying our revenue streams and strengthening our digital businesses

As the advertising marketplace has changed, we have focused on diversifying our revenue streams and strengthening our digital businesses to make us less susceptible to the inevitable economic cycles and to respond to the secular changes in our industry.

Our digital businesses provide meaningful diversification during our transition to becoming an increasingly multiplatform company. Our goal is to grow our digital businesses by broadening our audiences, deepening engagement and further monetizing the usage of our Web sites and across other digital platforms. We are pursuing a multiplatform strategy across our Company with new digital products and platforms, such as mobile, social media networks and reader application products.

During 2011, we launched digital subscriptions at The Times, the IHT and the Globe, with the intention of developing a new consumer revenue stream, while preserving our robust digital advertising business. Overall circulation revenues increased in 2011 compared with 2010 as the addition of digital subscription offerings at The Times offset a decline in print copies sold across the News Media Group. In addition, the rate of home-delivery circulation volume declines moderated at The Times due to an increase in new orders and improved retention rates following the launch of digital subscriptions at The Times, as print subscribers receive all-digital access for free. As our news and content are being featured in an increasingly broad range of platforms and devices, we will continue to examine our circulation pricing and pay models in coordination with our overall multiplatform strategy, and to focus on building on our digital subscriber base and strengthening our digital businesses.

Building on the strength of our brands

Because of our high-quality journalism and content, we believe we have very powerful and trusted brands that attract educated, affluent and influential audiences. As we continued to face weak and uneven economic conditions in 2011 and an increasingly fragmented media landscape, we focused on building on the strength of our brands, particularly The Times. We have significantly expanded our presence on new digital platforms, broadened our journalism and content and added new tools and multimedia features across our properties to increase the engagement of our users. We are also focused on continuing to offer a premier environment for integrated brand advertising across platforms through advertising product innovation and our integrated print and digital sales structure.

In 2011, the Globe’s digital strategy focused on the development of two distinct online brands to better serve the distinct audiences of the Globe and Boston.com and a wide array of advertisers. In September 2011, the Globe launched a new paid subscription site, BostonGlobe.com, which offers exclusive access to the full range and depth of

P. 26 – THE NEW YORK TIMES COMPANY

content produced by the newspaper’s journalists, in a format optimized for reading on a tablet, smartphone, laptop and desktop. This new site complements Boston.com, a Web site that previously offered all Globe content and has now been enhanced as a community portal for the greater Boston area.

The initial digital subscription numbers and the growth in digital advertising revenues at the News Media Group in 2011 reaffirm that advertisers and readers are embracing our high-quality content across multiple platforms and underscore the value users place on our brands. Regardless of the distribution model of news and information, we remain committed to creating quality content and a quality user experience.

Managing our expenses

Over the past few years as we transform and rebalance our business for the evolving media landscape, we have focused on realigning our cost base to ensure that we are operating our businesses as efficiently as possible, while maintaining our commitment to investing in high-quality content and achieving our long-term strategy. In 2011, we remained disciplined in our approach toward costs and focused on realigning our work force, even as we invested in new business models and other digital initiatives. We reduced our operating costs by approximately $43 million in 2011 and more than $890 million since 2006. In 2012, we expect costs to increase modestly for the first time in several years. We plan to prudently increase spending in 2012 as we continue to invest in our digital capabilities and subscription acquisition efforts, invest in the About Group’s sales and marketing efforts and reset our variable compensation targets, even as we expect expense savings in our production and distribution operations and from further leveraging our centralized processes and resources. Managing expenses will remain a priority and we will continue to identify operational efficiencies across our organization, such as in our production and distribution operations and from further leveraging centralized processes and resources, and to respond to the ongoing secular changes in our industry.

Rebalancing our portfolio of businesses

Over the past several years, we have been rebalancing our portfolio of businesses, focusing more on growth areas, such as digital. We have focused on investing in our expanding digital operations, including our new business models and other digital initiatives.

We also continuously evaluate our businesses to determine whether they are meeting our targets for financial performance, growth and return on investment and whether they remain relevant to our strategy and align with our core purpose to enhance society by creating, collecting and distributing high-quality news, information and entertainment. During 2011, we sold Baseline and UCompareHealthCare.com. Over the past two years, we have sold almost three-quarters of our initial investment in Fenway Sports Group and we continue to market our remaining 210 units.

On January 6, 2012, we sold the Regional Media Group for $143.0 million in cash, subject to certain adjustments. The sale of our Regional Media Group will enable us to continue our transformation to a digitally focused multimedia news and information company.

Improving our liquidity

We have continued to manage our liquidity position by improving our financial flexibility and our debt profile.

Over the past two years, we have taken decisive steps to strengthen our liquidity position. With our strong cash flows from operations, along with proceeds from the sale of a portion of our interest in Fenway Sports Group and a $225.0 million private debt offering in November 2010, we prepaid all $250.0 million aggregate principal amount of our 14.053% senior unsecured notes due January 15, 2015 (“14.053% Notes”) on August 15, 2011. Eliminating this high-interest debt from our balance sheet more than three years ahead of maturity has increased our financial flexibility, and we expect interest expense savings of more than $39 million annually over the next three years.

At the end of 2011, we had cash, cash equivalents and short-term investments of approximately $280 million, even after prepaying the 14.053% Notes and making pension contributions totaling approximately $151 million during the year. Our cash position further improved after the end of 2011 with the proceeds from the sale of the Regional Media Group in January 2012 and the sale of 100 of our units in Fenway Sports Group in February 2012. Our main priorities for cash in 2012 will be managing the underfunded levels of our pension plans and paying off our $75.0 million aggregate principal amount of 4.610% senior notes due in September 2012.

As of December 25, 2011, we had total debt and capital lease obligations of approximately $773 million and total

THE NEW YORK TIMES COMPANY – P. 27

debt and capital lease obligations, net of cash, cash equivalents and short-term investments, or “net debt,” of approximately $493 million. We believe “net debt” provides a useful measure of our liquidity and overall debt position. We have reduced our net debt by approximately $104 million as of the end of 2011 from $597 million at the end of 2010. As of December 26, 2010, we had total debt and capital lease obligations of approximately $996 million and cash, cash equivalents and short-term investments of approximately $399 million.

By prepaying the 14.053% Notes more than three years ahead of maturity, we have improved our debt profile and the majority of our debt matures in 2015 or later. 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 December 25, 2011, we had no outstanding borrowings under the new credit facility. We believe our cash balance and cash provided by operations, in combination with other financing sources, will be sufficient to meet our financing needs over the next 12 months.

Managing our pension-related obligations

The funded status of our qualified defined benefit pension plans has been adversely affected by the current interest rate environment, and required contributions for our qualified pension plans can have a significant effect on future cash flows.

For purposes of GAAP, our qualified pension plans were underfunded (meaning the present value of future obligations exceeded the fair value of plan assets) as of December 25, 2011, by approximately $522 million, compared with approximately $442 million as of December 26, 2010. The funded status of these pension plans was negatively affected primarily by the decline in interest rates in 2011. We expect to fund the majority of the shortfall over the next four to five years, although the balance could fluctuate significantly depending on interest rate movements and asset performance.

We made contributions totaling approximately $151 million in 2011 to certain qualified pension plans, including $31 million in contractual obligations 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. In connection with the sale of the Regional Media Group, we will continue to retain pension assets and liabilities and postretirement obligations related to the Regional Media Group’s employees. We expect to make mandatory contributions, primarily contractual contributions in connection with The New York Times Newspaper Guild pension plan, of approximately $45 million in 2012 and we may make discretionary contributions in 2012 to our Company-sponsored qualified pension plans depending on cash flows, pension asset performance, interest rates and other factors.

We have taken a number of other steps to manage our pension-related obligations. In the last two years, we have frozen accruals under certain qualified defined benefit pension plans that cover the majority of our employees, including our non-union pension plan and certain qualified pension plans in connection with collective bargaining agreements. For such frozen pension plans, any actuarial gains and losses from interest rate changes and asset performance are amortized over a longer period of time. As a result, we do not expect that such changes will have a significant impact on pension expense in 2012 relative to 2011.

We also remain focused on managing our multiemployer pension plans. Certain of our cost management efforts have created significant withdrawal obligations under the multiemployer pension plans in which we participate, such as the liability assessed against us in 2009 in connection with amendments to various collective bargaining agreements affecting certain multiemployer pension plans. However, we believe these withdrawals are an important step to address pension obligations that we projected could otherwise have continued to grow over time.

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Outlook

We remain in a challenging business environment, reflecting continuing uncertainty in economic conditions, and an increasingly competitive landscape. Advertising revenues continue to be affected by the slow economic recovery and visibility remains limited.

To date in the first quarter of 2012, digital advertising at the News Media Group is trending below the level of the fourth quarter of 2011. Thus, for the overall Company we expect total advertising revenue trends for the first quarter of 2012 to be slightly below the level of the fourth quarter of 2011.

Total circulation revenues are projected to increase in the high-single digits in the first quarter of 2012 as we expect to benefit from our digital subscription initiatives, as well as from the print circulation price increase at The Times implemented in the first quarter of 2012.

We expect operating costs to increase in the low-single digits in the first quarter of 2012.

In addition, we expect the following on a pre-tax basis in 2012:


•	Depreciation and amortization: $105 to $110 million, which includes approximately $7 million of accelerated depreciation, primarily in the first quarter, associated with the consolidation of most of the T&G’s printing into the Globe’s facility in Boston, Mass., beginning in the second quarter of 2012,


•	Interest expense, net: $60 to $65 million,


•	Capital expenditures: $50 to $60 million, and

•

Results from joint ventures: $8 to $10 million. Effective with the sale of 100 of our units in Fenway Sports Group in February 2012, given our reduced ownership level and lack of influence on the operations of Fenway Sports Group, we will change the accounting for our investment from the equity method to the cost method. Therefore, we will no longer recognize our proportionate share of the operating results of Fenway Sports Group in “Income from joint ventures” in our Consolidated Statements of Operations.

THE NEW YORK TIMES COMPANY – P. 29

RESULTS OF OPERATIONS

Overview

The following table presents our consolidated financial results:



	December 25, 2011			December 26, 2010			December 27, 2009			% Change
(In thousands)	December 25, 2011			December 26, 2010			December 27, 2009			11-10		10-09
Revenues
Advertising	$	1,221,497		$	1,300,361		$	1,336,291		(6.1	)	(2.7	)
Circulation	941,468			931,493			936,486			1.1		(0.5	)
Other	160,436			161,609			167,662			(0.7	)	(3.6	)
Total	2,323,401			2,393,463			2,440,439			(2.9	)	(1.9	)
Operating costs
Production costs:
Raw materials	161,691			160,422			166,387			0.8		(3.6	)
Wages and benefits	495,607			498,270			524,782			(0.5	)	(5.1	)
Other	300,169			303,086			330,061			(1.0	)	(8.2	)
Total production costs	957,467			961,778			1,021,230			(0.4	)	(5.8	)
Selling, general and administrative costs	1,019,611			1,054,199			1,152,874			(3.3	)	(8.6	)
Depreciation and amortization	116,454			120,950			133,696			(3.7	)	(9.5	)
Total operating costs	2,093,532			2,136,927			2,307,800			(2.0	)	(7.4	)
Impairment of assets	164,434			16,148			4,179			*		*
Pension withdrawal expense	4,228			6,268			78,931			(32.5	)	(92.1	)
Loss on leases and other expenses	4,500			—			34,633			N/A		N/A
Net pension curtailment gain	—			—			53,965			N/A		N/A
Gain on sale of assets	—			—			5,198			N/A		N/A
Operating profit	56,707			234,120			74,059			(75.8	)	*
Gain on sale of investments	71,171			9,128			—			*		N/A
Income from joint ventures	28			19,035			20,667			(99.9	)	(7.9	)
Premium on debt redemptions	46,381			—			9,250			N/A		N/A
Interest expense, net	85,243			85,062			81,701			0.2		4.1
(Loss)/income from continuing operations before income taxes	(3,718		)	177,221			3,775			*		*
Income tax expense	36,506			68,516			2,206			(46.7	)	*
(Loss)/income from continuing operations	(40,224		)	108,705			1,569			*		*
Discontinued operations:
Loss from discontinued operations, net of income taxes	—			—			(1,156		)	N/A		N/A
Gain on sale, net of income taxes	—			13			19,488			N/A		(99.9	)
Income from discontinued operations, net of income taxes	—			13			18,332			N/A		(99.9	)
Net (loss)/income	(40,224		)	108,718			19,901			*		*
Net loss/(income) attributable to the noncontrolling interest	555			(1,014		)	(10		)	*		*
Net (loss)/income attributable to The New York Times Company common stockholders	$	(39,669	)	$	107,704		$	19,891		*		*

* Represents an increase or decrease in excess of 100%.

P. 30 – THE NEW YORK TIMES COMPANY

Revenues

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



	December 25, 2011		December 26, 2010		December 27, 2009		% Change
(In thousands)	December 25, 2011		December 26, 2010		December 27, 2009		11-10		10-09
News Media Group	$	2,212,575	$	2,257,386	$	2,319,378	(2.0	)	(2.7	)
About Group	110,826		136,077		121,061		(18.6	)	12.4
Total revenues	$	2,323,401	$	2,393,463	$	2,440,439	(2.9	)	(1.9	)

News Media Group

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



	December 25, 2011		December 26, 2010		December 27, 2009		% Change
(In thousands)	December 25, 2011		December 26, 2010		December 27, 2009		11-10		10-09
The New York Times Media Group
Advertising	$	756,148	$	780,424	$	797,298	(3.1	)	(2.1	)
Circulation	705,163		683,717		683,445		3.1		—
Other	93,263		92,697		101,118		0.6		(8.3	)
Total	$	1,554,574	$	1,556,838	$	1,581,861	(0.1	)	(1.6	)
New England Media Group
Advertising	$	198,383	$	213,720	$	230,886	(7.2	)	(7.4	)
Circulation	157,819		167,360		167,998		(5.7	)	(0.4	)
Other	41,854		42,809		41,710		(2.2	)	2.6
Total	$	398,056	$	423,889	$	440,594	(6.1	)	(3.8	)
Regional Media Group
Advertising	$	161,831	$	177,056	$	192,924	(8.6	)	(8.2	)
Circulation	78,486		80,416		85,043		(2.4	)	(5.4	)
Other	19,628		19,187		18,956		2.3		1.2
Total	$	259,945	$	276,659	$	296,923	(6.0	)	(6.8	)
Total News Media Group
Advertising	$	1,116,362	$	1,171,200	$	1,221,108	(4.7	)	(4.1	)
Circulation	941,468		931,493		936,486		1.1		(0.5	)
Other	154,745		154,693		161,784		0.0		(4.4	)
Total	$	2,212,575	$	2,257,386	$	2,319,378	(2.0	)	(2.7	)

Advertising Revenues

Advertising revenues are primarily determined by the volume, rate and mix of advertisements. Advertising spending, which drives a significant portion of revenues, is susceptible to economic conditions and the ongoing transformation in our industry. During 2011, the advertising marketplace remained challenging as advertisers continued to exercise caution in response to uneven economic conditions and lingering uncertainty about the outlook for the global economy. Changes in spending patterns and priorities, including shifts in marketing strategies and budget cuts of key advertisers in response to uneven economic conditions and alternative digital advertising platforms, contributed to the decline in print advertising revenues and the growth in digital advertising revenues. Total advertising revenue trends were slightly lower in 2011 compared with 2010 as the rate of decline in print advertising revenues was similar to the prior year, while the rate of growth in digital advertising revenues moderated.

THE NEW YORK TIMES COMPANY – P. 31

In 2011, News Media Group advertising revenues decreased primarily due to lower print volume across all advertising categories, offset in part by growth in digital advertising revenues. Print advertising revenues, which represented approximately 79% of total advertising revenues for the News Media Group, declined 7.9% in 2011, led by weakness in national and retail advertising. Digital advertising revenues grew 10.0% in 2011, primarily due to growth in national display advertising.

In 2010, News Media Group advertising revenues decreased primarily due to lower print volume across most advertising categories, offset in part by higher digital advertising revenues. Print advertising revenues, which represented approximately 82% of total advertising revenues for the News Media Group, declined 7.9% in 2010, mainly due to lower national and retail advertising. The rate of decline in print advertising revenues began to moderate in 2010 compared with 2009 as encouraging signs of improvement were seen in the overall economy. Digital advertising revenues grew 18.3% in 2010, mainly driven by growth in national display advertising.

Advertising revenues (print and digital) by category for the News Media Group were as follows:



	December 25, 2011		December 26, 2010		December 27, 2009		% Change
(In thousands)	December 25, 2011		December 26, 2010		December 27, 2009		11-10		10-09
National	$	647,356	$	664,377	$	667,732	(2.6	)	(0.5	)
Retail	257,115		277,196		301,075		(7.2	)	(7.9	)
Classified	173,829		190,911		213,823		(8.9	)	(10.7	)
Other	38,062		38,716		38,478		(1.7	)	0.6
Total	$	1,116,362	$	1,171,200	$	1,221,108	(4.7	)	(4.1	)

Below is a percentage breakdown of 2011 advertising revenues by division:



	National		Retail and Preprint		Classified								Total Classified		Other Advertising Revenues		Total
	National		Retail and Preprint		Help Wanted		Real Estate		Auto		Other		Total Classified		Other Advertising Revenues		Total
The New York Times Media Group	77	%	13	%	2	%	4	%	1	%	2	%	9	%	1	%	100	%
New England Media Group	30		32		5		6		9		8		28		10		100
Regional Media Group	5		60		5		6		8		9		28		7		100
Total News Media Group	58		23		3		5		3		4		15		4		100

The New York Times Media Group

Total advertising revenues declined in 2011 compared with 2010 due to lower print advertising revenues, offset in part by growth in digital advertising revenues. Print advertising revenues were negatively affected by the declines in the volume of spending in all advertising categories reflecting the continued uneven economic environment, global events and secular forces. Growth in digital advertising revenues was driven by increased spending on digital platforms, primarily in the national display category.

While total national, classified and retail advertising revenues declined, total classified advertising revenue trends improved as the rate of decline moderated in 2011 compared with 2010. The continued uneven economic conditions and secular changes in our industry contributed to lower advertising revenues in 2011 compared with 2010. Total national advertising revenues decreased led by declines in the travel, corporate and financial services categories offset in part by gains in the luxury and technology categories. The declines in total classified advertising revenues were primarily in the real estate and automotive categories. Total retail advertising revenues declined as advertisers reduced spending in the face of the uncertain economic climate primarily in the mass market, home furnishings and department stores advertising categories.

Total advertising revenues declined in 2010 compared with 2009 due to lower print advertising revenues, particularly in the national and classified advertising categories, offset in part by strong growth in digital advertising revenues. Print advertising revenues were negatively affected by the declines in the volume of spending in most advertising categories reflecting the uneven economic recovery during 2010. Increased spending on digital platforms, particularly in national display advertising, contributed to the strong growth in digital advertising revenues.

P. 32 – THE NEW YORK TIMES COMPANY

While total classified, retail and national advertising revenues declined, the advertising revenue trends improved in all categories in 2010 as the rates of decline moderated compared with 2009. Total classified advertising revenues declined in 2010 compared with 2009 as the soft economic environment and secular changes in our industry contributed to declines in the real estate, automotive and help-wanted categories. Total retail advertising revenues decreased in 2010 compared with the prior year as soft economic conditions throughout 2010 negatively affected retail advertising. While retail advertising experienced declines in the first three quarters of 2010 compared with the respective periods in 2009, both digital and print retail advertising revenues grew in the fourth quarter of 2010 compared with the fourth quarter of 2009 mainly as advertisers responded to increased consumer spending. Total national advertising revenues decreased in 2010 compared with the prior year, led by declines in the studio entertainment and telecommunications categories, offset in part by gains in the luxury and corporate categories.

New England Media Group

Total advertising revenues declined in 2011 compared with 2010 due to declines in print advertising revenues, partially offset by growth in digital advertising revenues. The decline in print advertising revenues was driven by lower advertising in all categories, reflecting uncertain national and local economic conditions and secular forces in our industry. The increase in digital advertising revenues was due to higher spending in the national and automotive classified categories.

While total retail, national and classified advertising revenues declined, an improvement was seen in the retail advertising revenue trend as the rate of decline moderated in 2011 compared with 2010. The uncertain national and local economic conditions continued to negatively affect total retail advertising revenues, as retailers cut the volume of spending mainly in the department stores and home furnishings categories in 2011 compared with 2010. The uneven economic environment coupled with secular changes in our industry contributed to declines in total national advertising revenues led by lower advertiser spending in the financial services, telecommunications and studio entertainment categories in 2011 compared with 2010. These factors also adversely affected total classified advertising revenues in 2011 compared with 2010, primarily in the real estate category.

Total advertising revenues declined in 2010 compared with 2009 mainly due to declines in print advertising revenues, partially offset by growth in digital advertising revenues. The decline in print advertising revenues was driven by lower advertising in most categories, reflecting challenging market conditions in the national and local economy and exacerbated by the secular shifts to digital advertising. The increase in digital advertising revenues was mainly due to higher national advertising spending.

While total retail, national and classified advertising revenues declined, advertising revenue trends improved in all categories in 2010 as the rates of decline moderated compared with 2009. Advertisers cut the level of total retail advertising spending in response to soft national and local economic conditions during 2010 compared with 2009, mainly in the department stores category. Similar factors contributed to the declines in total national advertising revenues in 2010 compared with 2009 led by reduced spending in the telecommunications and bank advertising categories. These factors also adversely affected total classified advertising revenues in 2010 compared with 2009, primarily in the real estate and automotive categories.

Regional Media Group

Total advertising revenues declined in 2011 compared with 2010 due to declines in print advertising revenues, partially offset by growth in digital advertising revenues. The decline in print advertising revenues was driven by lower advertising in all categories, reflecting uncertain local and national economic conditions, secular forces in our industry and regional events. The increase in digital advertising revenues was led by higher spending in the retail advertising category.

While total retail, classified and national advertising revenues declined, advertising revenue trends improved as the rates of decline in total retail and classified advertising revenues moderated in 2011 compared with 2010. Uneven local and national economic conditions continued to weigh on the retail sector, as advertisers reduced their volume of spending in 2011 compared with 2010. Total classified advertising revenues experienced declines in 2011 compared with 2010, primarily in the real estate and automotive categories, as economic conditions and secular changes occurring in our industry continued to have a negative impact. Total national advertising revenues declined in 2011 compared with 2010 mainly due to challenging comparisons with 2010 when there was higher spending related to the Gulf oil spill.

THE NEW YORK TIMES COMPANY – P. 33

Total advertising revenues declined in 2010 compared with 2009 due to lower print advertising revenues, partially offset by growth in digital advertising revenues. The decline in print advertising revenues was driven by lower advertising in most categories, reflecting soft local and national economic conditions, secular forces in our industry and regional events. The increase in digital advertising revenues was led by higher spending in the national advertising category.

Total retail and classified advertising revenues declined in 2010 compared with 2009, offset in part by higher total national advertising revenues. Total advertising revenue trends improved in 2010 in all categories as the rates of decline moderated compared with 2009. Soft local and national economic conditions adversely impacted the volume of advertising spending in the retail sector and resulted in declines in total retail advertising revenues in 2010 compared with 2009. Total classified advertising revenues decreased in 2010 compared with 2009, primarily in the real estate category, mainly as a result of the soft economic conditions in the Florida and California housing markets. These declines were offset in part by higher total national advertising revenues in 2010 primarily related to the Gulf oil spill.

Circulation Revenues

Circulation revenues are based on the number of copies of the printed newspaper (through home-delivery subscriptions and single-copy sales) and digital subscriptions sold and the rates charged to the respective customers. Total circulation revenues consist of revenues from our print and digital products, including The Times digital subscription packages on NYTimes.com and across other digital platforms beginning in the second quarter of 2011, as well as our new pay site, BostonGlobe.com, and digital subscription packages at the IHT in the fourth quarter of 2011.

Circulation revenues in 2011 increased compared with 2010 as the addition of digital subscription offerings primarily at The Times offset a decline in print copies sold across the News Media Group. In addition, during 2011, the rate of home-delivery circulation volume declines moderated at The Times, as we observed an increase in new home-delivery orders and improved retention rates following the launch of The Times digital subscriptions as print subscribers receive all-digital access for free.

Circulation revenues in 2010 were flat compared with 2009 primarily as declines in copies sold across the News Media Group offset the subscription and newsstand price increases implemented by both The Times and the Globe in the second quarter of 2009.

Other Revenues

Other revenues consist primarily of revenues from news services/syndication, commercial printing, rental income, digital archives and direct mail advertising services.

Other revenues for the News Media Group were flat in 2011 compared with 2010.

Other revenues for the News Media Group decreased in 2010 compared with 2009 primarily because of lower digital archives and commercial printing revenues.

About Group

About Group revenues decreased in 2011 compared with 2010 primarily due to lower cost-per-click and display advertising. The declines in cost-per-click advertising revenues were primarily due to lower click-through rates and page views. Design changes in cost-per-click advertisements served by Google, which were implemented in July 2010, continued to have a negative impact on click-through rates during the first half of 2011. After cycling through those design changes, click-through rates continued to experience downward pressure through the fourth quarter of 2011 and advertising rates for cost-per-click advertising began to decline in the fourth quarter in line with the marketplace. In addition, the increased competition in the content space and the algorithm changes Google implemented during the first quarter of 2011 contributed to the declines in page views experienced during most of 2011. In the fourth quarter of 2011, monthly page views increased compared with 2010. Lower display advertising revenues mainly resulted from competitive marketplace pressures as well as uneven economic conditions during 2011. In the second half of 2011, the About Group implemented a plan to better leverage the site’s reach and rebuild its sales force in order to revitalize display advertising.

About Group revenues increased in 2010 compared with 2009 primarily due to growth in display and cost-per-click advertising revenues as a result of higher click-through rates and page views. However, uneven economic conditions, as well as competitive pressures in the market, negatively impacted display advertising beginning in the fourth quarter of 2010. In addition, the design changes in cost-per-click advertisements served by Google had a negative impact on click-through rates in the second half of 2010.

P. 34 – THE NEW YORK TIMES COMPANY

Operating Costs

Operating costs were as follows:



	December 25, 2011		December 26, 2010		December 27, 2009		% Change
(In thousands)	December 25, 2011		December 26, 2010		December 27, 2009		11-10		10-09
Production costs:
Raw materials	$	161,691	$	160,422	$	166,387	0.8		(3.6	)
Wages and benefits	495,607		498,270		524,782		(0.5	)	(5.1	)
Other	300,169		303,086		330,061		(1.0	)	(8.2	)
Total production costs	957,467		961,778		1,021,230		(0.4	)	(5.8	)
Selling, general and administrative costs	1,019,611		1,054,199		1,152,874		(3.3	)	(8.6	)
Depreciation and amortization	116,454		120,950		133,696		(3.7	)	(9.5	)
Total operating costs	$	2,093,532	$	2,136,927	$	2,307,800	(2.0	)	(7.4	)

The components of operating costs as a percentage of total operating costs were as follows:



	December 25, 2011		December 26, 2010		December 27, 2009
Components of operating costs as a percentage of total operating costs
Wages and benefits	42	%	42	%	43	%
Raw materials	8	%	8	%	7	%
Other operating costs	45	%	44	%	44	%
Depreciation and amortization	5	%	6	%	6	%
Total	100	%	100	%	100	%

The components of operating costs as a percentage of total revenues were as follows:



	December 25, 2011		December 26, 2010		December 27, 2009
Components of operating costs as a percentage of total revenues
Wages and benefits	37	%	38	%	40	%
Raw materials	7	%	7	%	7	%
Other operating costs	41	%	39	%	42	%
Depreciation and amortization	5	%	5	%	6	%
Total	90	%	89	%	95	%

Production Costs

Total production costs in 2011 decreased compared with 2010 primarily due to lower outside printing costs (approximately $5 million) and various other costs, offset by higher raw materials expense (approximately $1 million), primarily newsprint. Cost-saving initiatives primarily contributed to the declines in outside printing costs. Newsprint expense increased 1.7%, with 7.5% from higher pricing offset in part by 5.8% from lower consumption. While newsprint prices have remained stable since increasing steadily through the first half of 2010, newsprint prices were higher in the first half of 2011 compared with the same period in 2010.

Total production costs in 2010 decreased compared with 2009 primarily due to lower compensation and benefits costs (approximately $27 million) and outside printing costs (approximately $12 million), mainly reflecting the impact of a reduced workforce and cost-saving initiatives, as well as lower raw materials expense (approximately $6 million), primarily newsprint. In 2010, newsprint expense declined 6.7%, with 8.5% from lower consumption offset in part by 1.8% from higher pricing. Newsprint prices hit the bottom of the cycle in the third quarter of 2009, but increased steadily through the first half of 2010. Although we did not experience significant newsprint price increases in the second half of 2010, newsprint prices were higher than the same period in 2009.

THE NEW YORK TIMES COMPANY – P. 35

Selling, General and Administrative Costs

Total selling, general and administrative costs in 2011 decreased compared with 2010 primarily due to lower compensation costs (approximately $41 million) and professional fees (approximately $8 million), partially offset by higher promotion (approximately $12 million) and severance (approximately $7 million) costs. Compensation costs declined mainly as a result of lower variable compensation expense. The decline in professional fees mainly resulted from the costs incurred in the prior year associated with our digital initiatives as well as cost-saving initiatives. Promotion costs were higher mainly because of the launch of digital subscription packages at The Times in 2011. Severance costs were higher due to the level of workforce reduction programs year-over-year.

Total selling, general and administrative costs in 2010 decreased compared with 2009 primarily due to lower severance costs (approximately $48 million) as a result of a larger workforce reduction program in 2009, lower bad debt expense (approximately $16 million) due to improvements in the overall economy and lower benefits expense (approximately $11 million), professional fees (approximately $8 million) and various other costs.

Depreciation and Amortization

Consolidated depreciation and amortization by reportable segment and the Company as a whole, were as follows:



	December 25, 2011		December 26, 2010		December 27, 2009		% Change
(In thousands)	December 25, 2011		December 26, 2010		December 27, 2009		11-10		10-09
News Media Group	$	105,934	$	109,341	$	122,609	(3.1	)	(10.8	)
About Group	10,520		11,609		11,087		(9.4	)	4.7
Total depreciation and amortization	$	116,454	$	120,950	$	133,696	(3.7	)	(9.5	)

Depreciation and amortization decreased at the News Media Group in 2010 compared with 2009 primarily due to the accelerated depreciation expense recognized in 2009 for assets at the Billerica, Mass., printing facility. We completed the consolidation of this printing facility with the Globe’s printing facility in Boston, Mass., in the second quarter of 2009.

Segment Operating Costs

The following table sets forth consolidated costs by reportable segment, Corporate and the Company as a whole:



	December 25, 2011		December 26, 2010		December 27, 2009		% Change
(In thousands)	December 25, 2011		December 26, 2010		December 27, 2009		11-10		10-09
News Media Group	$	1,986,176	$	2,015,728	$	2,182,964	(1.5	)	(7.7	)
About Group	67,036		74,125		70,180		(9.6	)	5.6
Corporate	40,320		47,074		54,656		(14.3	)	(13.9	)
Total operating costs	$	2,093,532	$	2,136,927	$	2,307,800	(2.0	)	(7.4	)

News Media Group

In 2011, operating costs for the News Media Group decreased compared with 2010 primarily due to declines in compensation and benefits costs (approximately $29 million), professional fees (approximately $8 million), outside printing costs (approximately $4 million) and various other costs, partially offset by higher promotion (approximately $12 million) and severance costs (approximately $6 million). Compensation costs declined mainly as a result of lower variable compensation expense. The decline in professional fees mainly resulted from the costs incurred in the prior year associated with our digital initiatives as well as cost-saving initiatives. Cost-saving initiatives primarily contributed to lower outside printing costs. Promotion costs were higher mainly in connection with the launch of digital subscription packages at The Times in 2011. Severance costs were higher due to the level of workforce reduction programs year-over-year.

P. 36 – THE NEW YORK TIMES COMPANY

In 2010, operating costs for the News Media Group decreased compared with 2009 primarily due to declines across most major categories. Lower severance costs (approximately $46 million), compensation and benefits costs (approximately $30 million), bad debt expense (approximately $17 million), outside printing and distribution costs (approximately $16 million), and depreciation and amortization costs (approximately $13 million) were the main drivers. Lower severance costs were due to a larger workforce reduction program in 2009 and lower compensation and benefits costs reflect the impact of our reduced workforce and cost-saving initiatives. Lower bad debt expense was a result of improved economic conditions compared with 2009. Lower outside printing and distribution costs mainly reflect the impact of cost-saving initiatives.

About Group

Operating costs for the About Group decreased in 2011 compared with 2010 primarily due to lower compensation costs ($3.1 million), driven by lower variable compensation expense, and a one-time benefit from the sale of UCompareHealthCare.com in February 2011.

Operating costs for the About Group increased in 2010 compared with 2009 primarily due to higher compensation and benefits costs ($2.2 million) and higher marketing costs ($0.5 million).

Corporate

Operating costs for Corporate decreased in 2011 compared with 2010 primarily due to lower compensation and benefits costs ($9.6 million) mainly driven by lower variable compensation expense, offset by various other costs.

Operating costs for Corporate decreased in 2010 compared with 2009 primarily due to lower professional fees ($6.7 million) and benefits and compensation costs ($3.2 million), offset in part by a one-time benefit from the sale of an asset ($1.8 million) in the second quarter of 2009.

Other Items

Impairment of Assets

2011

In 2011, we recorded a $164.4 million impairment charge. 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, primarily of Baseline, totaling $9.2 million. At the About Group, the impairment consisted of a write-down of an intangible asset at ConsumerSearch, Inc. of $3.1 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. See Note 21 of the Notes to the Consolidated Financial Statements for information regarding the sale of the Regional Media Group on January 6, 2012.

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 zero.

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 NEW YORK TIMES COMPANY – P. 37

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.

About Group

Our 2011 annual impairment test, which was completed in the fourth quarter, resulted in a non-cash impairment charge of $3.1 million relating to the write-down of an intangible asset at ConsumerSearch, Inc. This impairment charge reduced the carrying value of the ConsumerSearch trade name to approximately $3 million. The fair value of the trade name was calculated using a relief-from-royalty method. The asset impairment was driven by lower cost-per-click advertising revenues.

There were no additional impairment charges in connection with our 2011 annual impairment test. However, the About Group's estimated fair value was 18% greater than its carrying value in our 2011 impairment test compared with 60% in our 2010 impairment test, a significant decline during 2011. The About Group had approximately $367 million of goodwill as of December 25, 2011.

In determining the fair value of the About Group, we made significant judgments and estimates regarding the expected recovery of display and cost-per-click advertising. The effect of these assumptions on projected long-term revenues, along with investments to grow content and traffic, play a significant role in calculating the fair value of the About Group. We believe if the long-term projected cash flows of the About Group are not met a goodwill impairment charge could be reasonably likely.

Assets Held for Sale

In the second quarter of 2011, we classified certain assets as held for sale, primarily of Baseline. 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 zero 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. In October 2011, we completed the sale of Baseline, which resulted in a nominal gain.

2010

We consolidated the printing facility of the Globe in Billerica, Mass., into the Boston, Mass., printing facility in the second quarter of 2009. After exploring different opportunities for the assets at Billerica, we entered into an agreement in the third quarter of 2010 to sell the majority of these assets to a third party. Therefore, assets with a carrying value of approximately $20 million were written down to their fair value, resulting in a $16.1 million impairment charge in 2010.

2009

In the fourth quarter of 2009, we recorded a $4.2 million charge for an impairment of assets due to the reduced scope of a systems project at the News Media Group.

Pension Withdrawal Expense

Over the past three years, certain events, such as amendments to various collective bargaining agreements, resulted in withdrawals from multiemployer pension plans. These actions along with a reduction in covered employees have resulted in us estimating withdrawal liabilities to the respective plans for our proportionate share of any unfunded vested benefits. We recorded an estimated charge for pension plan withdrawal obligations of $4.2 milli