UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 29, ~~2019~~2020

Commission file number 1-5837

THE NEW YORK TIMES COCOMPANY~~MPANY~~

(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~~Eighth Avenue, ~~NEW YORK~~New York, New York 10018

(Address and zip code of principal executive offices)

~~10018(Zip Code)~~

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

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	NYT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

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



Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

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

Number of shares of each class of the registrant’s common stock outstanding as of ~~November~~May 1, ~~2019~~2020 (exclusive of treasury shares):



Class A Common Stock	~~165,235,217~~165,860,725	shares
Class B Common Stock	803,404	shares

THE NEW YORK TIMES COMPANY

INDEX



PART I		Financial Information	1		Financial Information	1
Item	1	Financial Statements	1	1	Financial Statements	1
		Condensed Consolidated Balance Sheets as of September 29, 2019 (unaudited) and December 30, 2018	1		Condensed Consolidated Balance Sheets as of March 29, 2020 (unaudited) and December 29, 2019	1
		Condensed Consolidated Statements of Operations (unaudited) for the quarters and nine months ended September 29, 2019 and September 30, 2018	3		Condensed Consolidated Statements of Operations (unaudited) for the quarters ended March 29, 2020 and March 31, 2019	3
		Condensed Consolidated Statements of Comprehensive Income (unaudited) for the quarters and nine months ended September 29, 2019 and September 30, 2018	4		Condensed Consolidated Statements of Comprehensive Income (unaudited) for the quarters ended March 29, 2020 and March 31, 2019	4
		Condensed Consolidated Statements of Changes In Stockholder’s Equity (unaudited) for the quarters and nine months ended September 29, 2019 and September 30, 2018	5		Condensed Consolidated Statements of Changes In Stockholders’ Equity (unaudited) for the quarters ended March 29, 2020 and March 31, 2019	5
		Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 29, 2019 and September 30, 2018	7		Condensed Consolidated Statements of Cash Flows (unaudited) for the quarters ended March 29, 2020 and March 31, 2019	6
		Notes to the Condensed Consolidated Financial Statements	8		Notes to the Condensed Consolidated Financial Statements	7
Item	2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23	2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item	3	Quantitative and Qualitative Disclosures about Market Risk	35	3	Quantitative and Qualitative Disclosures about Market Risk	30
Item	4	Controls and Procedures	36	4	Controls and Procedures	31

PART II		Other Information	37		Other Information	32
Item	1	Legal Proceedings	37	1	Legal Proceedings	32
Item	1A	Risk Factors	37	1A	Risk Factors	32
Item	2	Unregistered Sales of Equity Securities and Use of Proceeds	37	2	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item	6	Exhibits	38	6	Exhibits	34

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	September 29, 2019		December 30, 2018		March 29, 2020		December 29, 2019
	(Unaudited)				(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	283,795	$	241,504	$	218,316	$	230,431
Short-term marketable securities	376,863		371,301		216,658		201,785
Accounts receivable (net of allowances of $13,626 in 2019 and $13,249 in 2018)	167,081		222,464
Accounts receivable (net of allowances of $14,617 in 2020 and $14,358 in 2019)					157,680		213,402
Prepaid expenses	31,442		25,349		29,834		29,089
Other current assets	50,108		33,328		31,209		42,124
Total current assets	909,289		893,946		653,697		716,831
Other assets
Long-term marketable securities	217,265		213,558		251,926		251,696
Property, plant and equipment (less accumulated depreciation and amortization of $939,234 in 2019 and $911,845 in 2018)	627,059		638,846
Property, plant and equipment (less accumulated depreciation and amortization of $963,664 in 2020 and $950,881 in 2019)					622,113		627,121
Goodwill	137,256		140,282		138,450		138,674
Deferred income taxes	124,412		128,431		113,480		115,229
Miscellaneous assets	239,680		182,060		243,804		239,587
Total assets	$	2,254,961	$	2,197,123	$	2,023,470	$	2,089,138

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS-(Continued)

(In thousands, except share and per share data)


	September 29, 2019			December 30, 2018			March 29, 2020			December 29, 2019
	(Unaudited)						(Unaudited)
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	106,867		$	111,553		$	99,162		$	116,571
Accrued payroll and other related liabilities	99,055			104,543			60,581			108,865
Unexpired subscriptions revenue	86,748			84,044			99,116			88,419
Short-term debt and finance lease obligations	246,208			253,630
Accrued expenses and other	120,904			119,534			112,185			123,840
Total current liabilities	659,782			673,304			371,044			437,695
Other liabilities
Pension benefits obligation	333,312			362,940			304,251			313,655
Postretirement benefits obligation	37,651			40,391			36,497			37,688
Other	126,450			77,847			118,104			126,237
Total other liabilities	497,413			481,178			458,852			477,580
Stockholders’ equity
Common stock of $.10 par value:
Class A – authorized: 300,000,000 shares; issued: 2019 – 174,106,014; 2018 – 173,158,414 (including treasury shares: 2019 – 8,870,801; 2018 – 8,870,801)	17,411			17,316
Class B – convertible – authorized and issued shares: 2019 – 803,408; 2018 – 803,408	80			80
Class A – authorized: 300,000,000 shares; issued: 2020 – 174,723,526; 2019 – 174,242,668 (including treasury shares: 2020 – 8,870,801; 2019 – 8,870,801)							17,472			17,424
Class B – convertible – authorized and issued shares: 2020 – 803,404; 2019 – 803,404							80			80
Additional paid-in capital	203,293			206,316			199,933			208,028
Retained earnings	1,552,788			1,506,004			1,635,473			1,612,658
Common stock held in treasury, at cost	(171,211		)	(171,211		)	(171,211		)	(171,211		)
Accumulated other comprehensive loss, net of income taxes:
Foreign currency translation adjustments	2,254			4,677			3,252			3,438
Funded status of benefit plans	(509,403		)	(520,308		)	(494,383		)	(498,986		)
Net unrealized gain/(loss) on available-for-sale securities	694			(2,093		)
Net unrealized gain on available-for-sale securities							1,098			572
Total accumulated other comprehensive loss, net of income taxes	(506,455		)	(517,724		)	(490,033		)	(494,976		)
Total New York Times Company stockholders’ equity	1,095,906			1,040,781			1,191,714			1,172,003
Noncontrolling interest	1,860			1,860			1,860			1,860
Total stockholders’ equity	1,097,766			1,042,641			1,193,574			1,173,863
Total liabilities and stockholders’ equity	$	2,254,961		$	2,197,123		$	2,023,470		$	2,089,138

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


	For the Quarters Ended						For the Nine Months Ended						For the Quarters Ended
	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018			March 29, 2020		March 31, 2019
	(13 weeks)						(39 weeks)						(13 weeks)
Revenues
Subscription	$	267,302		$	257,796		$	808,568		$	779,018		$	285,434	$	270,810
Advertising	113,531			121,677			359,380			366,525			106,137		125,088
Other	47,668			37,873			135,873			100,311			52,065		43,164
Total revenues	428,501			417,346			1,303,821			1,245,854			443,636		439,062
Operating costs
Production costs:
Wages and benefits	106,377			95,941			313,244			280,688
Raw materials	18,531			19,972			57,527			54,490
Other production costs	53,868			47,521			149,102			138,454
Total production costs	178,776			163,434			519,873			473,632
Selling, general and administrative costs	207,226			202,473			638,820			614,464
Cost of revenue (excluding depreciation and amortization)													243,672		239,359
Sales and marketing													73,796		74,820
Product development													30,802		23,728
General and administrative													52,861		51,639
Depreciation and amortization	15,450			14,847			45,548			43,969			15,185		14,918
Total operating costs	401,452			380,754			1,204,241			1,132,065			416,316		404,464
Headquarters redesign and consolidation	—			—			—			3,140
Restructuring charge	4,008			—			4,008			—
Gain from pension liability adjustment	(2,045		)	(4,851		)	(2,045		)	(4,851		)
Operating profit	25,086			41,443			97,617			115,500			27,320		34,598
Other components of net periodic benefit costs	1,834			2,335			5,502			6,226			2,314		1,835
Loss from joint ventures	—			(16		)	—			(9		)
Interest expense and other, net	755			4,026			3,572			13,439
Interest income/(expense) and other, net													13,854		(1,303		)
Income from continuing operations before income taxes	22,497			35,066			88,543			95,826			38,860		31,460
Income tax expense	6,070			10,092			16,789			25,342			6,006		1,304
Net income	16,427			24,974			71,754			70,484			32,854		30,156
Net loss attributable to the noncontrolling interest	—			2			—			1
Net income attributable to The New York Times Company common stockholders	$	16,427		$	24,976		$	71,754		$	70,485		$	32,854	$	30,156
Average number of common shares outstanding:
Basic	166,148			165,064			165,976			164,742			166,549		165,674
Diluted	167,555			166,966			167,384			166,671			167,845		167,129
Basic earnings per share attributable to The New York Times Company common stockholders	$	0.10		$	0.15		$	0.43		$	0.43		$	0.20	$	0.18
Diluted earnings per share attributable to The New York Times Company common stockholders	$	0.10		$	0.15		$	0.43		$	0.42		$	0.20	$	0.18
Dividends declared per share	$	0.05		$	0.04		$	0.15		$	0.12		$	0.06	$	0.05

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	For the Quarters Ended						For the Nine Months Ended						For the Quarters Ended
	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018			March 29, 2020			March 31, 2019
	(13 weeks)						(39 weeks)						(13 weeks)
Net income	$	16,427		$	24,974		$	71,754		$	70,484		$	32,854		$	30,156
Other comprehensive income, before tax:
Loss on foreign currency translation adjustments	(3,159		)	(567		)	(3,286		)	(2,923		)	(254		)	(1,649		)
Pension and postretirement benefits obligation	4,893			8,009			14,685			24,850			6,397			4,896
Net unrealized gain/(loss) on available-for-sale securities	284			314			3,773			(784		)
Net unrealized gain on available-for-sale securities													715			2,074
Other comprehensive income, before tax	2,018			7,756			15,172			21,143			6,858			5,321
Income tax expense	489			2,031			3,903			5,535			1,915			1,399
Other comprehensive income, net of tax	1,529			5,725			11,269			15,608			4,943			3,922
Comprehensive income	17,956			30,699			83,023			86,092
Comprehensive loss attributable to the noncontrolling interest	—			2			—			1
Comprehensive income attributable to The New York Times Company common stockholders	$	17,956		$	30,701		$	83,023		$	86,093		$	37,797		$	34,078

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Quarters Ended ~~September~~March 29, ~~2019~~2020 and ~~September 30, 2018~~March 31, 2019

(Unaudited)

(In thousands, except share data)

Capital Stock -
Class A
and
Class B Common
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock
Held in
Treasury,
at Cost
Accumulated
Other
Comprehensive
Loss, Net of
Income
Taxes
Total
New York
Times
Company
Stockholders’
Equity
Non-
controlling
Interest
Total
Stock-
holders’
Equity

Balance, July 1, 2018 $ 17,376
$ 201,601
$ 1,439,121
$ (171,211 ) $ (507,281 ) $ 979,606
$ 85
$ 979,691
Net income —
—
24,976
—
—
24,976
(2 ) 24,974
Dividends —
—
(6,634 ) —
—
(6,634 ) —
(6,634 )
Other comprehensive income —
—
—
—
5,725
5,725
—
5,725
Issuance of shares:
Stock options – 34,000 Class A shares 3
120
—
—
—
123
—
123
Restricted stock units vested – 7,648 Class A shares 1
(92 ) —
—
—
(91 ) —
(91 )
Stock-based compensation —
2,883
—
—
—
2,883
—
2,883
Balance, September 30, 2018 $ 17,380
$ 204,512
$ 1,457,463
$ (171,211 ) $ (501,556 ) $ 1,006,588
$ 83
$ 1,006,671

Balance, June 30, 2019 $ 17,488
$ 200,356
$ 1,544,694
$ (171,211 ) $ (507,984 ) $ 1,083,343
$ 1,860
$ 1,085,203
Net income —
—
16,427
—
—
16,427
—
16,427
Dividends —
—
(8,333 ) —
—
(8,333 ) —
(8,333 )
Other comprehensive income —
—
—
—
1,529
1,529
—
1,529
Issuance of shares:
Stock options – 3,000 Class A shares —
33
—
—
—
33
—
33
Restricted stock units vested – 25,512 Class A shares 3
(3 ) —
—
—
—
—
—
Stock-based compensation —
2,907
—
—
—
2,907
—
2,907
Balance, September 29, 2019 $ 17,491
$ 203,293
$ 1,552,788
$ (171,211 ) $ (506,455 ) $ 1,095,906
$ 1,860
$ 1,097,766



	Capital Stock - Class A and Class B Common		Additional Paid-in Capital			Retained Earnings			Common Stock Held in Treasury, at Cost			Accumulated Other Comprehensive Loss, Net of Income Taxes			Total New York Times Company Stockholders’ Equity			Non- controlling Interest		Total Stock- holders’ Equity

Balance, December 30, 2018	$	17,396	$	206,316		$	1,506,004		$	(171,211	)	$	(517,724	)	$	1,040,781		$	1,860	$	1,042,641
Net income	—		—			30,156			—			—			30,156			—		30,156
Dividends	—		—			(8,301		)	—			—			(8,301		)	—		(8,301		)
Other comprehensive income	—		—			—			—			3,922			3,922			—		3,922
Issuance of shares:
Stock options – 279,510 Class A shares	28		2,937			—			—			—			2,965			—		2,965
Restricted stock units vested – 161,120 Class A shares	16		(3,468		)	—			—			—			(3,452		)	—		(3,452		)
Performance-based awards – 418,491 Class A shares	42		(11,966		)	—			—			—			(11,924		)	—		(11,924		)
Stock-based compensation	—		3,807			—			—			—			3,807			—		3,807
Balance, March 31, 2019	$	17,482	$	197,626		$	1,527,859		$	(171,211	)	$	(513,802	)	$	1,057,954		$	1,860	$	1,059,814

Balance, December 29, 2019	$	17,504	$	208,028		$	1,612,658		$	(171,211	)	$	(494,976	)	$	1,172,003		$	1,860	$	1,173,863
Net income	—		—			32,854			—			—			32,854			—		32,854
Dividends	—		—			(10,039		)	—			—			(10,039		)	—		(10,039		)
Other comprehensive income	—		—			—			—			4,943			4,943			—		4,943
Issuance of shares:
Stock options – 88,775 Class A shares	9		922			—			—			—			931			—		931
Restricted stock units vested – 134,985 Class A shares	13		(3,622		)	—			—			—			(3,609		)	—		(3,609		)
Performance-based awards – 257,098 Class A shares	26		(7,850		)	—			—			—			(7,824		)	—		(7,824		)
Stock-based compensation	—		2,455			—			—			—			2,455			—		2,455
Balance, March 29, 2020	$	17,552	$	199,933		$	1,635,473		$	(171,211	)	$	(490,033	)	$	1,191,714		$	1,860	$	1,193,574

~~THE NEW YORK TIMES COMPANY~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY~~

~~For the Nine Months Ended September 29, 2019 and September 30, 2018~~

~~(Unaudited)~~

~~(In thousands, except share data)~~

Capital Stock -
Class A
and
Class B Common
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock
Held in
Treasury,
at Cost
Accumulated
Other
Comprehensive
Loss, Net of
Income
Taxes
Total
New York
Times
Company
Stockholders’
Equity
Non-
controlling
Interest
Total
Stock-
holders’
Equity

Balance, December 31, 2017 $ 17,108
$ 164,275
$ 1,310,136
$ (171,211 ) $ (423,029 ) $ 897,279
$ 84
$ 897,363
Impact of adopting new accounting guidance —
—
96,707
—
(94,135 ) 2,572
—
2,572
Net income —
—
70,485
—
—
70,485
(1 ) 70,484
Dividends —
—
(19,865 ) —
—
(19,865 ) —
(19,865 )
Other comprehensive income —
—
—
—
15,608
15,608
—
15,608
Issuance of shares:
Stock options – 2,219,201 Class A shares 222
40,428
—
—
—
40,650
—
40,650
Restricted stock units vested – 230,822 Class A shares 23
(3,168 ) —
—
—
(3,145 ) —
(3,145 )
Performance-based awards – 271,841 Class A shares 27
(5,930 ) —
—
—
(5,903 ) —
(5,903 )
Stock-based compensation —
8,907
—
—
—
8,907
—
8,907
Balance, September 30, 2018 $ 17,380
$ 204,512
$ 1,457,463
$ (171,211 ) $ (501,556 ) $ 1,006,588
$ 83
$ 1,006,671

Balance, December 30, 2018 $ 17,396
$ 206,316
$ 1,506,004
$ (171,211 ) $ (517,724 ) $ 1,040,781
$ 1,860
$ 1,042,641
Net income —
—
71,754
—
—
71,754
—
71,754
Dividends —
—
(24,970 ) —
—
(24,970 ) —
(24,970 )
Other comprehensive income —
—
—
—
11,269
11,269
—
11,269
Issuance of shares:
Stock options – 282,510 Class A shares 28
2,970
—
—
—
2,998
—
2,998
Restricted stock units vested – 246,599 Class A shares 25
(3,750 ) —
—
—
(3,725 ) —
(3,725 )
Performance-based awards – 418,491 Class A shares 42
(11,966 ) —
—
—
(11,924 ) —
(11,924 )
Stock-based compensation —
9,723
—
—
—
9,723
—
9,723
Balance, September 29, 2019 $ 17,491
$ 203,293
$ 1,552,788
$ (171,211 ) $ (506,455 ) $ 1,095,906
$ 1,860
$ 1,097,766

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	For the Nine Months Ended						For the Quarters Ended
	September 29, 2019			September 30, 2018			March 29, 2020			March 31, 2019
	(39 weeks)						(13 weeks)
Cash flows from operating activities
Net income	$	71,754		$	70,484		$	32,854		$	30,156
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	45,548			43,969			15,185			14,918
Amortization of right of use asset							2,347			1,691
Stock-based compensation expense	9,723			9,969			2,455			3,827
Gain on non-marketable equity investment							(10,074		)	(1,886		)
Long-term retirement benefit obligations	(17,648		)	(19,769		)	(4,469		)	(5,754		)
Fair market value adjustment on life insurance products	(2,215		)	(823		)	3,469			(1,428		)
Other-net	(3,350		)	1,183			3,064			(7,280		)
Changes in operating assets and liabilities:
Accounts receivable-net	55,383			27,024			55,722			42,409
Other assets	(17,401		)	6,226			6,826			(4,329		)
Accounts payable, accrued payroll and other liabilities	(22,898		)	(28,702		)	(79,225		)	(55,835		)
Unexpired subscriptions	2,704			6,815			10,697			8,695
Net cash provided by operating activities	121,600			116,376			38,851			25,184
Cash flows from investing activities
Purchases of marketable securities	(466,108		)	(386,842		)	(142,024		)	(112,029		)
Maturities of marketable securities	458,810			346,601			127,291			108,792
Business acquisitions							(8,055		)	—
Proceeds from sale of investments – net							2,965			41
Capital expenditures	(33,101		)	(61,983		)	(15,217		)	(10,473		)
Other-net	3,141			(1,585		)	1,617			689
Net cash used in investing activities	(37,258		)	(103,809		)	(33,423		)	(12,980		)
Cash flows from financing activities
Long-term obligations:
Repayment of debt and finance lease obligations	(7,220		)	(414		)	—			(138		)
Dividends paid	(23,269		)	(19,761		)	(8,344		)	(6,601		)
Capital shares:
Proceeds from stock option exercises	2,998			40,650			931			2,965
Share-based compensation tax withholding	(15,648		)	(9,048		)	(11,432		)	(15,376		)
Net cash (used in)/provided by financing activities	(43,139		)	11,427
Net increase in cash, cash equivalents and restricted cash	41,203			23,994
Net cash used in financing activities							(18,845		)	(19,150		)
Net decrease in cash, cash equivalents and restricted cash							(13,417		)	(6,946		)
Effect of exchange rate changes on cash	(202		)	(540		)	32			(338		)
Cash, cash equivalents and restricted cash at the beginning of the period	259,799			200,936			247,518			259,799
Cash, cash equivalents and restricted cash at the end of the period	$	300,800		$	224,390		$	234,133		$	252,515

See Notes to Condensed Consolidated Financial Statements.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

In the opinion of management of The New York Times Company (the “Company”), the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of ~~September~~March 29, ~~2019,~~2020, and December ~~30, 2018,~~29, 2019, and the results of operations, changes in ~~stockholder’s~~stockholders’ equity and cash flows of the Company for the periods ended ~~September~~March 29, ~~2019,~~2020, and ~~September 30, 2018.~~March 31, 2019. The Company and its consolidated subsidiaries are referred to collectively as “we,” “us” or “our.” All adjustments necessary for a fair presentation have been included and are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from these interim financial statements. These financial statements, therefore, should be read in conjunction with the Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December ~~30, 2018.~~29, 2019. Due to the seasonal nature of our business, operating results for the interim periods are not necessarily indicative of a full year’s operations. The fiscal periods included herein comprise 13 weeks for the ~~third~~first quarter.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements. Actual results could differ from these estimates.

Reclassification

The Company has changed the expense captions on its Condensed Consolidated Statement of Operations effective for the first quarter ended March 29, 2020. These changes were made in order to reflect how the Company manages its business and to communicate where the Company is investing resources and how this aligns with the Company’s strategy. The Company has reclassified expenses for the prior period in order to present comparable financial results. There is no change to consolidated operating income, operating expense, net income or cash flows as a result of this change in classification. See Note 15 for more detail.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except as described herein, as of ~~September~~March 29, ~~2019,~~2020, our significant accounting policies, which are detailed in our Annual Report on Form 10-K for the year ended December ~~30, 2018,~~29, 2019, have not changed materially.

~~Recently Adopted Accounting Pronouncements~~



~~Accounting Standard Update(s)~~	~~Topic~~	~~Effective Period~~	~~Summary~~
2016-02 2018-10 2018-11 ~~2018-20~~ ~~2019-01~~	~~Leases~~	~~Fiscal years beginning after December 30, 2018. Early adoption is permitted.~~	The Financial Accounting Standards Board (the “FASB”) issued authoritative guidance on accounting for leases and disclosure of key information about leasing arrangements. The guidance requires lessees to recognize the following for all operating and finance leases at such lease’s commencement date: (1) a lease liability, which is the obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset representing the lessee’s right to use, or control the use of, the underlying asset for the lease term. A lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities for short-term leases with a term of 12 months or less. The guidance does not fundamentally change lessor accounting; however, some changes have been made to align that guidance with the lessee guidance and other areas within GAAP. The Company adopted this Accounting Standard Update (“ASU”) on December 31, 2018, utilizing the modified retrospective approach with optional transition relief. Prior periods have not been retrospectively adjusted and we recorded approximately $36 million of right-of-use asset and $42 million of lease liability in our Condensed Consolidated Balance Sheet. The difference between the right-of-use asset and lease liability was due to deferred rent relating to periods prior to December 31, 2018. We have elected the practical expedients under ASU 2016-02 and have not reassessed any of the following: (1) whether any expired or existing contracts are or contain a lease, (2) the classification of any existing leases prior to the adoption of ASU 2016-02 or (3) initial direct costs for any existing leases. The Company has elected not to apply the recognition requirements in ASU 2016-02 to leases with durations of 12 months or less. Lease payments for leases with durations of 12 months or less are recorded in the statement of operations on a straight-line basis over the term of the lease. In addition, we elected the practical expedient not to separate the lease and non-lease components in the contract for our office space and equipment leases and for office space we lease to third parties.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recently ~~Issued and Not Yet~~ Adopted Accounting Pronouncements



Accounting Standard Update(s)	Topic	Effective Period	Summary
2018-15	Intangibles—Goodwill and Other—Internal-Use Software	Fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted.	~~The FASB issued authoritative guidance that clarifies~~ Clarifies the accounting for implementation costs in cloud computing arrangements. The standard provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. ~~We do~~The Company adopted this ASU prospectively on December 30, 2019 and will include capitalized implementation costs in Miscellaneous assets in the Company’s Condensed Consolidated Balance Sheet and within Total operating costs in the Condensed Consolidated Statement of Operations. The adoption did not ~~believe the adoption of this guidance will~~ have a material impact on ~~our condensed~~the Company’s consolidated financial statements.
~~2018-14~~	~~Compensation—Retirement Benefits—Defined Benefit Plans—General~~	~~Fiscal years ending after December 15, 2020. Early adoption is permitted.~~	The FASB issued authoritative guidance that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance removes disclosures, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. We are currently in the process of evaluating the impact of this guidance on our disclosures.
2018-13	Fair Value Measurement (Topic 820) Disclosure Framework	Fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted.	~~The FASB issued authoritative guidance that modifies~~Modifies the disclosure requirements on fair value measurements. The amendments of disclosures related to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ~~We are currently in~~The Company adopted this ASU on December 30, 2019. The adoption did not have a material impact on the ~~process of evaluating the impact of this guidance on our~~Company’s disclosures.
2016-13 2018-19 2019-04	Financial Instruments—Credit Losses	Fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.	~~The FASB issued authoritative guidance that amends~~Amends guidance on reporting credit losses for assets, including trade receivables, available-for-sale marketable securities and any other financial assets not excluded from the scope that have the contractual right to receive cash. For trade receivables, ASU 2016-13 eliminates the probable initial recognition threshold in current generally accepted accounting standards, and, instead, requires an entity to reflect its current estimate of all expected credit losses. ~~The allowance for credit losses is a valuation account that is deducted from the gross trade receivables balance to present the net amount expected to be collected.~~ For available-for-sale marketable securities, credit losses should be measured in a manner similar to current generally accepted accounting standards; however, ASU 2016-13 will require that credit losses be presented as an allowance rather than as a write-down. The Company adopted this ASU on December 30, 2019 using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued authoritative guidance on the following topics:



Accounting Standard Update(s)	Topic	Effective Period	Summary
2019-12	Simplifying the Accounting for Income Taxes (Topic 740)	Fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted.	Simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. We are currently in the process of evaluating the impact of this guidance on our ~~condensed~~consolidated financial statements.
2018-14	Compensation—Retirement Benefits—Defined Benefit Plans—General	Fiscal years ending after December 15, 2020. Early adoption is permitted.	Modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance removes disclosures, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. We are currently in the process of evaluating the impact on our consolidated financial statements.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations.

NOTE 3. REVENUE

We generate revenues principally from subscriptions and advertising. Subscription revenues consist of revenues from subscriptions to our print and digital products (which include our news product, as well as our Crossword, Cooking and ~~Cooking~~audio products) and single-copy and bulk sales of our print products. Subscription revenues are based on both the number of copies of the printed newspaper sold and digital-only subscriptions, and the rates charged to the respective customers.

Advertising revenues are primarily derived from ~~the sale~~offerings sold directly to marketers by our advertising sales team. A significantly smaller and diminishing proportion of our total advertising ~~products and services on our print and digital platforms. These~~revenues is generated through programmatic auctions run by third-party ad exchanges. Advertising revenues are primarily determined by the volume, rate and mix of advertisements. Display advertising revenue is principally from advertisers promoting products, services or brands. Display advertising also includes advertisements that direct viewers to branded content on ~~The Times’s~~our platforms. Other print advertising revenue primarily ~~represents, for our print products,~~includes classified advertising revenue. ~~Digital other~~Other digital advertising revenue primarily includes creative services ~~fees;~~fees, including those associated with our branded content studio; advertising revenue from our podcasts; and advertising revenue generated by Wirecutter, our product review and recommendation website.

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Other revenues primarily consist of revenues from licensing, ~~commercial printing,~~ the leasing of floors in the ~~Company Headquarters,~~New York headquarters building located at 620 Eighth Avenue, New York, New York (the “Company Headquarters”), affiliate referrals, ~~(revenue generated by offering direct links to merchants in exchange for a portion of the sale price),~~commercial printing, television and film (primarily from our television series, “The Weekly”), NYT Live (our live events business) and retail commerce.

Subscription, advertising and other revenues were as follows:


	For the Quarters Ended				For the Nine Months Ended				For the Quarters Ended
(In thousands)	September 29, 2019		September 30, 2018		September 29, 2019		September 30, 2018		March 29, 2020		March 31, 2019
Subscription	$	267,302	$	257,796	$	808,568	$	779,018	$	285,434	$	270,810
Advertising	113,531		121,677		359,380		366,525		106,137		125,088
Other ⁽¹⁾	47,668		37,873		135,873		100,311		52,065		43,164
Total	$	428,501	$	417,346	$	1,303,821	$	1,245,854	$	443,636	$	439,062

⁽¹⁾ Other revenue includes building rental revenue, which is not under the scope of Revenue from Contracts with Customers (Topic 606). Building rental revenue was approximately $8 million ~~and $7 million~~ for the ~~third~~ quarters ofended March 29, 2020 and March 31, 2019, ~~and 2018, respectively, and approximately $23 million and $17 million for the first nine months of 2019 and 2018,~~ respectively.

The following table summarizes ~~digital-only~~print and digital subscription revenues, which are ~~a component~~components of subscription revenues above, for the ~~third~~ quarters ended March 29, 2020, and ~~first nine months of 2019 and 2018:~~March 31, 2019:


		For the Quarters Ended				For the Nine Months Ended					For the Quarters Ended
(In thousands)		September 29, 2019		September 30, 2018		September 29, 2019		September 30, 2018			March 29, 2020		March 31, 2019
Print subscription revenues											$	155,424	$	160,951
Digital-only subscription revenues:
News product subscription revenues⁽¹⁾		$	107,009	$	95,568	$	313,785	$	279,693		118,958		102,346
Other product subscription revenues⁽²⁾		8,855		5,639		24,573		15,669			11,052		7,513
Total digital-only subscription revenues		$	115,864	$	101,207	$	338,358	$	295,362
Subtotal digital-only subscriptions											130,010		109,859
Total subscription revenues											$	285,434	$	270,810
⁽¹⁾Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.	⁽¹⁾Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.									⁽¹⁾Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.
⁽²⁾Includes revenues from standalone subscriptions to the Company’s Crossword and Cooking products.
⁽²⁾Includes revenues from standalone subscriptions to the Company’s Crossword, Cooking and audio products.										⁽²⁾Includes revenues from standalone subscriptions to the Company’s Crossword, Cooking and audio products.

~~Advertising revenues (print and digital) by category were as follows:~~

For the Quarters Ended
September 29, 2019 September 30, 2018
(In thousands) Print Digital Total Print Digital Total
Advertising revenues:
Display $ 51,702
$ 36,202
$ 87,904
$ 57,245
$ 43,730
$ 100,975
Other 7,176
18,451
25,627
6,676
14,026
20,702
Total advertising $ 58,878
$ 54,653
$ 113,531
$ 63,921
$ 57,756
$ 121,677

For the Nine Months Ended
September 29, 2019 September 30, 2018
(In thousands) Print Digital Total Print Digital Total
Advertising revenues:
Display $ 169,903
$ 121,147
$ 291,050
$ 188,853
$ 123,870
$ 312,723
Other 21,255
47,075
68,330
22,182
31,620
53,802
Total advertising $ 191,158
$ 168,222
$ 359,380
$ 211,035
$ 155,490
$ 366,525

109

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Advertising revenues (print and digital) by category were as follows:



	For the Quarters Ended
	March 29, 2020						March 31, 2019
(In thousands)	Print		Digital		Total		Print		Digital		Total
Advertising revenues:
Display	$	48,159	$	39,894	$	88,053	$	62,342	$	42,112	$	104,454
Other	6,820		11,264		18,084		7,203		13,431		20,634
Total advertising	$	54,979	$	51,158	$	106,137	$	69,545	$	55,543	$	125,088

Performance Obligations

We have remaining performance obligations related to digital archive and other licensing and certain advertising contracts. As of ~~September~~March 29, ~~2019,~~2020, the aggregate amount of transaction price allocated to the remaining performance obligations for contracts with a duration greater than one year was approximately ~~$95~~$131 million. The Company will recognize this revenue as ~~control of the~~ performance ~~obligation is transferred to the customer.~~obligations are satisfied. We expect that approximately $7$33 million, ~~$25~~$32 million and ~~$63~~$66 million will be recognized in the remainder of ~~2019,~~ 2020, 2021 and thereafter, respectively.

~~These remaining performance obligations exclude contracts that have an original expected duration of one year or less.~~

Contract Assets

As of ~~September~~March 29, ~~2019,~~2020, and December ~~30, 2018,~~29, 2019, the Company had ~~$3.7~~$3.0 million and ~~$2.5~~$3.4 million, respectively, in contract assets recorded in ~~Other current assets~~ in the Condensed Consolidated Balance ~~Sheets.~~Sheets related to digital archiving licensing revenue. The contract asset is reclassified to Accounts receivable when the customer is invoiced based on the contractual billing schedule. The ~~increase~~decrease in the contract assets balance of ~~$1.2~~$0.4 million for the ~~nine months~~quarter ended ~~September~~March 29, ~~2019,~~2020, is ~~primarily driven by new contract assets of $1.9 million offset by $0.7 million of~~due to consideration that was reclassified to Accounts receivable when invoiced based on the contractual billing schedules for the ~~nine months~~period ended ~~September~~March 29, ~~2019.~~2020.

NOTE 4. MARKETABLE SECURITIES

The Company accounts for its marketable securities as available for sale (“AFS”). The Company recorded ~~$0.9~~$1.5 million and ~~$2.8~~$0.8 million of net unrealized gains ~~and net unrealized losses, respectively,~~ in Accumulated other comprehensive income (“AOCI”) as of ~~September~~March 29, ~~2019,~~2020, and December ~~30, 2018,~~29, 2019, respectively.

The following tables present the amortized cost, gross unrealized gains and losses, and fair market value of our AFS debt securities as of ~~September~~March 29, 2020, and December 29, 2019:



	March 29, 2020
(In thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair Value
Short-term AFS securities
Corporate debt securities	$	90,893	$	23	$	(570	)	$	90,346
U.S. Treasury securities	66,792		393		(2		)	67,183
U.S. governmental agency securities	29,613		137		(1		)	29,749
Commercial paper	18,779		—		—			18,779
Certificates of deposit	10,601		—		—			10,601
Total short-term AFS securities	$	216,678	$	553	$	(573	)	$	216,658
Long-term AFS securities
Corporate debt securities	$	99,044	$	141	$	(1,740	)	$	97,445
U.S. Treasury securities	92,720		2,857		—			95,577
U.S. governmental agency securities	58,646		261		(3		)	58,904
Total long-term AFS securities	$	250,410	$	3,259	$	(1,743	)	$	251,926

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	December 29, 2019
(In thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Fair Value
Short-term AFS securities
Corporate debt securities	$	98,864	$	271	$	(9	)	$	99,126
U.S. Treasury securities	43,098		8		(11		)	43,095
U.S. governmental agency securities	37,471		35		(4		)	37,502
Commercial paper	12,561		—		—			12,561
Certificates of deposit	9,501		—		—			9,501
Total short-term AFS securities	$	201,495	$	314	$	(24	)	$	201,785
Long-term AFS securities
Corporate debt securities	$	103,149	$	617	$	(29	)	$	103,737
U.S. Treasury securities	101,457		84		(103		)	101,438
U.S. governmental agency securities	46,600		5		(84		)	46,521
Total long-term AFS securities	$	251,206	$	706	$	(216	)	$	251,696

The following tables represent the AFS securities as of March 29, 2020, and December 29, 2019, that were in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and ~~December 30, 2018:~~the length of time that individual securities have been in a continuous unrealized loss position:

September 29, 2019
(In thousands) Amortized Cost Gross unrealized gains Gross unrealized losses Fair Value
Short-term AFS securities
U.S. Treasury securities $ 123,224
$ 46
$ (47 ) $ 123,223
Corporate debt securities 109,792
263
(36 ) 110,019
Commercial paper 69,298
—
—
69,298
U.S. governmental agency securities 60,515
15
(17 ) 60,513
Certificates of deposit 13,810
—
—
13,810
Total short-term AFS securities $ 376,639
$ 324
$ (100 ) $ 376,863
Long-term AFS securities
Corporate debt securities $ 93,989
$ 696
$ (22 ) $ 94,663
U.S. Treasury securities 71,313
121
(67 ) 71,367
U.S. governmental agency securities 51,258
27
(50 ) 51,235
Total long-term AFS securities $ 216,560
$ 844
$ (139 ) $ 217,265



	March 29, 2020
	Less than 12 Months					12 Months or Greater					Total
(In thousands)	Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses
Short-term AFS securities
Corporate debt securities	$	76,998	$	(570	)	$	—	$	—		$	76,998	$	(570	)
U.S. Treasury securities	—		—			9,501		(2		)	9,501		(2		)
U.S. governmental agency securities	4,999		(1		)	—		—			4,999		(1		)
Total short-term AFS securities	$	81,997	$	(571	)	$	9,501	$	(2	)	$	91,498	$	(573	)
Long-term AFS securities
Corporate debt securities	$	76,311	$	(1,740	)	$	—	$	—		$	76,311	$	(1,740	)
U.S. governmental agency securities	8,747		(3		)	—		—			8,747		(3		)
Total long-term AFS securities	$	85,058	$	(1,743	)	$	—	$	—		$	85,058	$	(1,743	)

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

December 30, 2018
(In thousands) Amortized Cost Gross unrealized gains Gross unrealized losses Fair Value
Short-term AFS securities
U.S. Treasury securities $ 107,717
$ —
$ (232 ) $ 107,485
Corporate debt securities 140,631
1
(464 ) 140,168
Commercial paper 8,177
—
—
8,177
U.S. governmental agency securities 92,628
—
(654 ) 91,974
Certificates of deposit 23,497
—
—
23,497
Total short-term AFS securities $ 372,650
$ 1
$ (1,350 ) $ 371,301
Long-term AFS securities
Corporate debt securities $ 130,612
$ 44
$ (1,032 ) $ 129,624
U.S. Treasury securities 47,079
5
(347 ) 46,737
U.S. governmental agency securities 37,362
3
(168 ) 37,197
Total long-term AFS securities $ 215,053
$ 52
$ (1,547 ) $ 213,558

The following tables represent the AFS securities as of September 29, 2019, and December 30, 2018, that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:

September 29, 2019
Less than 12 Months 12 Months or Greater Total
(In thousands) Fair Value Gross unrealized losses Fair Value Gross unrealized losses Fair Value Gross unrealized losses
Short-term AFS securities
U.S. Treasury securities $ 14,863
$ (7 ) $ 23,113
$ (40 ) $ 37,976
$ (47 )
Corporate debt securities 12,678
(3 ) 36,975
(33 ) 49,653
(36 )
U.S. governmental agency securities 4,998
—
23,188
(17 ) 28,186
(17 )
Total short-term AFS securities $ 32,539
$ (10 ) $ 83,276
$ (90 ) $ 115,815
$ (100 )
Long-term AFS securities
Corporate debt securities $ 11,008
$ (15 ) $ 8,004
$ (7 ) $ 19,012
$ (22 )
U.S. Treasury securities 35,727
(67 ) —
—
35,727
(67 )
U.S. governmental agency securities 41,958
(50 ) —
—
41,958
(50 )
Total long-term AFS securities $ 88,693
$ (132 ) $ 8,004
$ (7 ) $ 96,697
$ (139 )

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~


	December 30, 2018															December 29, 2019
	Less than 12 Months					12 Months or Greater					Total					Less than 12 Months					12 Months or Greater					Total
(In thousands)	Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses			Fair Value		Gross unrealized losses
Short-term AFS securities
Corporate debt securities																$	20,975	$	(6	)	$	8,251	$	(3	)	$	29,226	$	(9	)
U.S. Treasury securities	$	70,830	$	(31	)	$	28,207	$	(201	)	$	99,037	$	(232	)	13,296		(3		)	11,147		(8		)	24,443		(11		)
Corporate debt securities	76,886		(115		)	61,459		(349		)	138,345		(464		)
U.S. governmental agency securities	11,664		(4		)	80,311		(650		)	91,975		(654		)	—		—			15,000		(4		)	15,000		(4		)
Total short-term AFS securities	$	159,380	$	(150	)	$	169,977	$	(1,200	)	$	329,357	$	(1,350	)	$	34,271	$	(9	)	$	34,398	$	(15	)	$	68,669	$	(24	)
Long-term AFS securities
Corporate debt securities	$	81,655	$	(570	)	$	27,265	$	(462	)	$	108,920	$	(1,032	)	$	35,891	$	(25	)	$	4,502	$	(4	)	$	40,393	$	(29	)
U.S. Treasury securities																60,935		(103		)	—		—			60,935		(103		)
U.S. governmental agency securities	21,579		(36		)	11,868		(132		)	33,447		(168		)	34,167		(84		)	—		—			34,167		(84		)
U.S. Treasury securities	20,479		(29		)	23,762		(318		)	44,241		(347		)
Total long-term AFS securities	$	123,713	$	(635	)	$	62,895	$	(912	)	$	186,608	$	(1,547	)	$	130,993	$	(212	)	$	4,502	$	(4	)	$	135,495	$	(216	)

We ~~conduct an other-than-temporary impairment (“OTTI”) analysis~~assess AFS securities on a quarterly basis or more often if a potential loss-triggering event occurs. ~~We consider factors such as the duration, severity and the reason for the decline~~For AFS securities in ~~value, the potential recovery period and~~an unrealized loss position, we first assess whether we intend to ~~sell. We also consider whether (i)~~sell, or if it is more likely than not that we will be required to sell the ~~debt securities~~security before recovery of ~~their~~its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For AFS securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, creditworthiness of the security, and ~~(ii)~~adverse conditions specifically related to the security. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis ~~cannot~~of the security. If the present value of cash flows expected to be ~~recovered as~~collected is less than the amortized cost basis, a ~~result of~~ credit ~~losses.~~loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

As of ~~September~~March 29, ~~2019,~~2020, we did not intend to sell and it was not likely that we would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. Unrealized losses related to these investments are primarily due to perceived credit quality resulting from temporary liquidity issues and interest rate fluctuations as opposed to changes in credit quality. Therefore, as of ~~September~~March 29, ~~2019,~~2020, we have recognized 0 ~~OTTI loss.~~losses or allowance for credit losses related to AFS securities.

As of ~~September~~March 29, ~~2019,~~2020, our short-term and long-term marketable securities had remaining maturities of less than 1 month to 12 months and 13 months to 3435 months, respectively. See Note 98 for more information regarding the fair value of our marketable securities.

NOTE 5. GOODWILL AND INTANGIBLES

During the first quarter of 2020, the Company acquired Listen In Audio, Inc., a company that transforms journalism articles into audio that is made available in a subscription-based product named “Audm,” in an all-cash transaction. We paid $8.6 million (comprised of $8.0 million cash payment and $0.6 million note receivable previously issued by the Company, which was canceled at the close of the transaction) and entered into agreements that will likely require retention payments over the three years following the acquisition. The Company included the purchase price in Miscellaneous assets in the Company’s Condensed Consolidated Balance Sheet as of March 29, 2020, pending the completion of the valuation of assets acquired and liabilities assumed.

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The changes in the carrying amount of goodwill as of ~~September~~March 29, ~~2019,~~2020, and since December ~~30, 2018,~~29, 2019, were as follows:


(In thousands)	Total Company			Total Company
Balance as of December 30, 2018	$	140,282
Balance as of December 29, 2019				$	138,674
Foreign currency translation	(3,026		)	(224		)
Balance as of September 29, 2019	$	137,256
Balance as of March 29, 2020				$	138,450

The foreign currency translation line item reflects changes in goodwill resulting from fluctuating exchange rates related to the consolidation of certain international subsidiaries.

The aggregate carrying amount of intangible assets of ~~$3.3~~$2.2 million is included in Miscellaneous assets in our Condensed Consolidated Balance Sheets as of ~~September~~March 29, ~~2019.~~2020.

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

NOTE 6. INVESTMENTS

~~Equity Method Investments~~

Our investments in joint ventures consists of a 40% equity ownership interest in Madison Paper Industries (“Madison”), a partnership that previously operated a supercalendered paper mill in Maine. The Company and UPM-Kymmene Corporation (“UPM”), a Finnish paper manufacturing company, are partners through subsidiary companies in Madison. The Company’s 40% ownership of Madison is through an 80%-owned consolidated subsidiary that owns 50% of Madison. UPM owns 60% of Madison, including a 10% interest through a 20% noncontrolling interest in the consolidated subsidiary of the Company.

In 2016, the paper mill closed. During the fourth quarter of 2018, we received a $12.5 million cash distribution in connection with the pending liquidation of Madison. We received no distributions from Madison during the first nine months of 2019 and 2018, respectively. We expect to receive a final cash distribution in the range of $5 million to $8 million.

As of September 29, 2019, and December 30, 2018, the value of our investments in joint ventures was zero. Our proportionate share of the operating results of our investment for the quarters ended September 29, 2019, and September 30, 2018, was de minimis and was recorded in ~~Loss from joint ventures~~ ~~in our Condensed Consolidated Statements of Operations.~~

Non-Marketable Equity Securities

Our non-marketable equity securities are investments in privately held companies/funds without readily determinable market values. ~~Realized gains~~Gains and losses on non-marketable securities sold or impaired are recognized in Interest ~~expense~~income/(expense) and other, net.

As of ~~September~~March 29, ~~2019,~~2020, and December ~~30, 2018,~~29, 2019, non-marketable equity securities included in Miscellaneous assets in our Condensed Consolidated Balance Sheets had a carrying value of ~~$13.3~~$20.5 million and ~~$13.7~~$13.4 million, respectively. During the first quarter of ~~2019,~~2020, we recorded a ~~gain of $1.9~~$10.1 million ~~from fair value adjustment~~gain related to a non-marketable equity investment transaction. The gain is comprised of $2.5 million realized gain due to the partial sale of ~~one~~the investment and an $7.6 million unrealized gain due to the mark to market of ~~our investments~~the remaining investment, and is included in Interest ~~expense~~income/(expense) and other, net in our Condensed Consolidated Statements of Operations.

NOTE 7. ~~DEBT OBLIGATIONS~~OTHER

~~Our indebtedness consisted~~Capitalized Computer Software Costs

Amortization of capitalized computer software costs included in Depreciation and amortization in our Condensed Consolidated Statements of Operations were $3.8 million and $4.3 million in the ~~repurchase option~~first quarters of 2020 and 2019, respectively.

Interest income/(expense) and other, net

Interest income/(expense) and other, net, as shown in the accompanying Condensed Consolidated Statements of Operations was as follows:



	For the Quarters Ended
(In thousands)	March 29, 2020			March 31, 2019
Interest expense	$	(185	)	$	(7,059	)
Amortization of debt costs and discount on debt	—			(893		)
Capitalized interest	—			44
Interest income and other expense, net ⁽¹⁾	14,039			6,605
Total interest income/(expense) and other, net	$	13,854		$	(1,303	)

⁽¹⁾The three months ended March 29, 2020, include a $10.1 million gain related to a non-marketable equity investment transaction. The three months ended March 31, 2019, include a fair value adjustment of $1.9 million related to the ~~sale-leaseback~~sale of a portion of our New York headquarters building located at 620 Eighth Avenue, New York, New York (the “Company Headquarters”). Our total debt and finance lease obligations consisted of the following:

(In thousands) September 29, 2019
December 30, 2018
Option to repurchase ownership interest in headquarters building in 2019:
Principal amount ⁽¹⁾
$ 245,339
$ 250,000
Less unamortized (premium)/discount based on imputed interest rate of 12.0% in 2019 and 13.0% in 2018 (869 ) 3,202
Net option to repurchase ownership interest in headquarters building in 2019 246,208
246,798
Finance lease obligation ⁽²⁾
—
6,832
Total short-term debt and finance lease obligations $ 246,208
$ 253,630

non-marketable equity security.

⁽¹⁾ The reduction in principal amount reflects a $4.7 million credit to the repurchase price as the result of a change in the closing date to December 2019. This credit is accounted for as a reduction in interest expense.

⁽²⁾ ~~On August 1, 2019, we purchased the previously leased land at our College Point, N.Y., printing and distribution facility, which resulted in the settlement of our finance lease obligation.~~

~~See Note 9 for more information regarding the fair value of our debt and Note 15 for more information regarding finance lease obligation.~~

1413

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Interest expense~~Restricted Cash

A reconciliation of cash, cash equivalents and ~~other, net~~,restricted cash as ~~shown in~~of March 29, 2020, and December 29, 2019, from the ~~accompanying~~Condensed Consolidated Balance Sheets to the Condensed Consolidated Statements of ~~Operations was~~Cash Flows is as follows:

For the Quarters Ended For the Nine Months Ended
(In thousands) September 29, 2019
September 30, 2018
September 29, 2019
September 30, 2018
Interest expense $ 7,118
$ 7,061
$ 21,314
$ 21,078
Amortization of debt costs and (premium)/discount on debt (1,278 ) 839
(590 ) 2,528
Capitalized interest (7 ) (38 ) (59 ) (412 )
Interest income and other expense, net ⁽¹⁾
(5,078 ) (3,836 ) (17,093 ) (9,755 )
Total interest expense and other, net $ 755
$ 4,026
$ 3,572
$ 13,439



(In thousands)	March 29, 2020		December 29, 2019
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	218,316	$	230,431
Restricted cash included within other current assets	527		528
Restricted cash included within miscellaneous assets	15,290		16,559
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$	234,133	$	247,518

⁽¹⁾~~The nine months ended September 29, 2019, include a fair value adjustment of $1.9 million related to the sale of a non-marketable equity security.~~

~~Notice of Intent to Exercise Repurchase Option Under Lease Agreement~~

~~On January 30, 2018, the Company provided notice to an affiliate of W.P. Carey & Co. LLC~~Substantially all of the ~~Company’s intention~~amount included in restricted cash is set aside to exercise in the fourth quarter of 2019 its option under the Lease Agreement, dated March 6, 2009, by and between the parties (the “Lease”) to repurchase a portion of the Company’s leasehold condominium interest in the Company Headquarters.

The Company has accounted for the transaction as a financing transaction and accounted for the rental payments as interest expense. The difference between the purchase option price and the net sale proceeds from the transaction is being amortized over the 10-year period of 2009-2019 through interest expense.

The Lease was part of a transaction in 2009 under which the Company sold and simultaneously leased back approximately 750,000 rentable square feet, in the Company Headquarters (the “Condo Interest”). The sale price for the Condo Interest was approximately $225 million. In December 2019, we expect to repurchase the Condo Interest for $245.3 million.collateralize workers’ compensation obligations.

Revolving Credit Facility

In September 2019, the Company entered into a $250.0 million five-year unsecured revolving credit facility (the “Credit Facility”). Certain of the Company’s domestic subsidiaries have guaranteed the Company’s obligations under the Credit Facility. Borrowings under the Credit Facility bear interest at specified rates based on our utilization and consolidated leverage ratio. The Credit Facility contains various customary affirmative and negative covenants. In addition, the Company is obligated to pay a quarterly unused commitment fee of 0.20%.

As of ~~September~~March 29, ~~2019,~~2020, there were no outstanding borrowings under the Credit Facility and the Company was ~~not aware of any instances of non-compliance~~in compliance with the financial covenants contained in the documents governing the Credit Facility.

~~NOTE 8. OTHER~~

~~Capitalized Computer Software Costs~~

~~Amortization of capitalized computer software costs included in~~ ~~Depreciation and amortization~~ in our Condensed Consolidated Statements of Operations were $4.4 million and $4.1 million in the third quarters of 2019 and 2018, respectively, and $13.1 million and $11.4 million in the first nine months of 2019 and 2018, respectively.

~~Headquarters Redesign and Consolidation~~

In 2017 and 2018, we redesigned our Company Headquarters, consolidated our space within a smaller number of floors and leased the additional floors to third parties. As the project was substantially completed as of December 30, 2018, we did not incur significant expenses related to these measures in the third quarter and in the first nine months of 2019. We did not incur significant expenses in the third quarter of 2018 and incurred $3.1 million of total expenses in the first nine months of 2018 related to these measures. We capitalized a de minimis amount and approximately $3 million in the third quarters of 2019 and 2018, respectively, and less than $1 million and $14 million in the first nine months of 2019 and 2018, related to these measures.

~~Marketing Expenses~~

Marketing expense to promote our brand and products and grow our subscriber base was $38.4 million and $40.4 million in the third quarters of 2019 and 2018, respectively, and $122.5 million and $107.6 million in the first nine months of 2019 and 2018, respectively.

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Restricted Cash~~

A reconciliation of cash, cash equivalents and restricted cash as of September 29, 2019, and December 30, 2018, from the Condensed Consolidated Balance Sheets to the Condensed Consolidated Statements of Cash Flows is as follows:

(In thousands) September 29, 2019
December 30, 2018
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents $ 283,795
$ 241,504
Restricted cash included within other current assets 613
642
Restricted cash included within miscellaneous assets 16,392
17,653
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows $ 300,800
$ 259,799

~~Substantially all of the amount included in restricted cash is set aside to collateralize workers’ compensation obligations.~~

~~Restructuring Charge~~

We recognized a restructuring charge of $4.0 million in the third quarter of 2019, which included impairment and severance charges related to the closure of our digital marketing agency, HelloSociety, LLC. These costs are recorded in ~~Restructuring charge~~ ~~in our Condensed Consolidated Statements of Operations.~~

Severance Costs

We recognized severance costs of ~~$0.3 million in each of the third quarters of 2019 and 2018, and $2.4~~$0.4 million and ~~$4.9~~$1.4 million in the first ~~nine months~~quarters of ~~2019~~2020 and ~~2018,~~2019, respectively, related to workforce reductions. These costs are recorded in ~~Selling, general~~General and administrative costs in our Condensed Consolidated Statements of Operations.

We had a severance liability of ~~$8.1~~$7.1 million and ~~$8.3~~$8.4 million included in Accrued expenses and other in our Condensed Consolidated Balance Sheets as of ~~September~~March 29, 2020, and December 29, 2019, respectively. The March 29, 2020, and December ~~30, 2018, respectively. The September~~ 29, 2019, ~~balance includes~~balances include severance liabilities related to the restructuring charge recorded in our Condensed Consolidated Statements of ~~Operations.~~Operations in the third quarter of 2019. We anticipate most of the payments will be made within the next twelve months.

NOTE 9.8. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received upon the sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The transaction would be in the principal or most advantageous market for the asset or liability, based on assumptions that a market participant would use in pricing the asset or liability. The fair value hierarchy consists of three levels:

Level 1–quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;

Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3–unobservable inputs for the asset or liability.

1614

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of ~~September~~March 29, ~~2019,~~2020, and December ~~30, 2018:~~29, 2019:


(In thousands)	September 29, 2019								December 30, 2018								March 29, 2020								December 29, 2019
(In thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Short-term AFS securities ⁽¹⁾
Corporate debt securities																	$	90,346	$	—	$	90,346	$	—	$	99,126	$	—	$	99,126	$	—
U.S. Treasury securities	$	123,223	$	—	$	123,223	$	—	$	107,485	$	—	$	107,485	$	—	67,183		—		67,183		—		43,095		—		43,095		—
Corporate debt securities	110,019		—		110,019		—		140,168		—		140,168		—
U.S. governmental agency securities																	29,749		—		29,749		—		37,502		—		37,502		—
Commercial paper	69,298		—		69,298		—		8,177		—		8,177		—		18,779		—		18,779		—		12,561		—		12,561		—
U.S. governmental agency securities	60,513		—		60,513		—		91,974		—		91,974		—
Certificates of deposit	13,810		—		13,810		—		23,497		—		23,497		—		10,601		—		10,601		—		9,501		—		9,501		—
Total short-term AFS securities	$	376,863	$	—	$	376,863	$	—	$	371,301	$	—	$	371,301	$	—	$	216,658	$	—	$	216,658	$	—	$	201,785	$	—	$	201,785	$	—
Long-term AFS securities ⁽¹⁾
Corporate debt securities	$	94,663	$	—	$	94,663	$	—	$	129,624	$	—	$	129,624	$	—	$	97,445	$	—	$	97,445	$	—	$	103,737	$	—	$	103,737	$	—
U.S. Treasury securities	71,367		—		71,367		—		46,737		—		46,737		—		95,577		—		95,577		—		101,438		—		101,438		—
U.S. governmental agency securities	51,235		—		51,235		—		37,197		—		37,197		—		58,904		—		58,904		—		46,521		—		46,521		—
Total long-term AFS securities	$	217,265	$	—	$	217,265	$	—	$	213,558	$	—	$	213,558	$	—	$	251,926	$	—	$	251,926	$	—	$	251,696	$	—	$	251,696	$	—
Liabilities:
Deferred compensation ⁽²⁾⁽³⁾	$	22,326	$	22,326	$	—	$	—	$	23,211	$	23,211	$	—	$	—	$	16,291	$	16,291	$	—	$	—	$	23,702	$	23,702	$	—	$	—

⁽¹⁾ We classified these investments as Level 2 since the fair value is based on market observable inputs for investments with similar terms and maturities.

⁽²⁾ The deferred compensation liability, included in Other liabilities—other in our Condensed Consolidated Balance Sheets, consists of deferrals under The New York Times Company Deferred Executive Compensation Plan (the “DEC”), which previously enabled certain eligible executives to elect to defer a portion of their compensation on a pre-tax basis. The deferred amounts are invested at the executives’ option in various mutual funds. The fair value of deferred compensation is based on the mutual fund investments elected by the executives and on quoted prices in active markets for identical assets. Participation in the DEC was frozen effective December 31, 2015.

⁽³⁾The Company invests deferred compensation ~~assets~~balance in life insurance products. Our investments in life insurance products are included in Miscellaneous assets in our Condensed Consolidated Balance Sheets, and were ~~$43.4~~$39.2 million as of ~~September~~March 29, ~~2019,~~2020, and ~~$38.1~~$46.0 million as of December ~~30, 2018.~~29, 2019. The fair value of these assets is measured using the net asset value per share (or its equivalent) and has not been classified in the fair value hierarchy.

~~Financial Instruments Disclosed, But Not Reported, at Fair Value~~

The carrying value of our debt was approximately $246 million as of September 29, 2019, and approximately $247 million as of December 30, 2018. The fair value of our debt was approximately $246 million and $260 million as of September 29, 2019, and December 30, 2018, respectively. We estimate the fair value of our debt utilizing market quotations for debt that have quoted prices in active markets. Since our debt does not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities (Level 2).

NOTE ~~10.~~9. PENSION AND OTHER POSTRETIREMENT BENEFITS

Pension

Single-Employer Plans

We ~~historically sponsored several~~maintain The New York Times Companies Pension Plan (the “Pension Plan”), a frozen single-employer defined benefit pension ~~plans. Effective January 1, 2018, the~~plan. The Company ~~became the sole sponsor of the frozen Newspaper Guild of New York -~~also jointly sponsors a defined benefit plan with The ~~New York Times Pension Plan (the “Guild-Times Plan”). Previously, the~~ NewsGuild of New York known as the Guild-Times Adjustable Pension Plan that continues to accrue active benefits.

We also have a foreign-based pension plan for certain employees (the ~~“Guild”~~“foreign plan”) ~~and~~. The information for the ~~Company were joint trustees~~foreign plan is combined with the information for U.S. non-qualified plans. The benefit obligation of ~~The Guild-~~the foreign plan is immaterial to our total benefit obligation.

1715

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Times Plan. Effective December 31, 2018, the Guild-Times Plan and the Retirement Annuity Plan For Craft Employees of The New York Times Companies (the “RAP”) were merged into The New York Times Companies Pension Plan.

~~The Company and the Guild jointly sponsor the Guild-Times Adjustable Pension Plan (the “APP”), which continues to accrue active benefits.~~

The components of net periodic pension cost were as follows:


	For the Quarters Ended																For the Quarters Ended
	September 29, 2019								September 30, 2018								March 29, 2020								March 31, 2019
(In thousands)	Qualified Plans			Non- Qualified Plans		All Plans			Qualified Plans			Non- Qualified Plans		All Plans			Qualified Plans			Non- Qualified Plans		All Plans			Qualified Plans			Non- Qualified Plans		All Plans
Service cost	$	1,278		$	—	$	1,278		$	2,393		$	—	$	2,393		$	2,607		$	—	$	2,607		$	1,278		$	—	$	1,278
Interest cost	14,708			2,089		16,797			13,207			1,848		15,055			11,742			1,648		13,390			14,709			2,088		16,797
Expected return on plan assets	(20,258		)	—		(20,258		)	(20,591		)	—		(20,591		)	(17,736		)	—		(17,736		)	(20,258		)	—		(20,258		)
Amortization of actuarial loss	4,635			1,094		5,729			6,680			1,294		7,974			5,655			1,521		7,176			4,635			1,094		5,729
Amortization of prior service credit	(487		)	—		(487		)	(487		)	—		(487		)	(486		)	—		(486		)	(486		)	—		(486		)
Other	—			—		—			—			421		421
Net periodic pension (income)/cost ⁽¹⁾	$	(124	)	$	3,183	$	3,059		$	1,202		$	3,563	$	4,765		$	1,782		$	3,169	$	4,951		$	(122	)	$	3,182	$	3,060

For the Nine Months Ended
September 29, 2019 September 30, 2018
(In thousands)
Qualified
Plans

Non-
Qualified
Plans

All
Plans

Qualified
Plans

Non-
Qualified
Plans

All
Plans
Service cost $ 3,835
$ —
$ 3,835
$ 7,593
$ —
$ 7,593
Interest cost 44,125
6,265
50,390
39,564
5,543
45,107
Expected return on plan assets (60,775 ) —
(60,775 ) (61,736 ) —
(61,736 )
Amortization of actuarial loss 13,905
3,282
17,187
20,122
3,882
24,004
Amortization of prior service credit (1,459 ) —
(1,459 ) (1,459 ) —
(1,459 )
Other —
—
—
—
421
421
Net periodic pension (income)/cost ⁽¹⁾
$ (369 ) $ 9,547
$ 9,178
$ 4,084
$ 9,846
$ 13,930

⁽¹⁾The service cost component of net periodic pension cost is recognized in Total operating costs, while the other components are included in Other components of net periodic benefit costs in our Condensed Consolidated Statements of Operations, below Operating profit.

During the first ~~nine months~~quarters of ~~2019~~2020 and ~~2018,~~2019, we made pension contributions of ~~$6.3~~$2.1 million and ~~$6.2~~$2.0 million, respectively, to ~~the APP.~~certain qualified pension plans. We expect contributions in ~~2019~~2020 to total approximately $9 million to satisfy funding requirements.

~~Multiemployer Plans~~

~~During the third quarter of 2019 and 2018 we recorded a gain of $2.0 million and $4.9 million, respectively, from multiemployer pension liability adjustments, which were recorded in~~ ~~Gain from pension liability adjustment~~ ~~in our Condensed Consolidated Statements of Operations. See Note 16 for more information.~~

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Other Postretirement Benefits

The components of net periodic postretirement benefit ~~income~~cost/(income) were as follows:


	For the Quarters Ended						For the Nine Months Ended						For the Quarters Ended
(In thousands)	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018			March 29, 2020			March 31, 2019
Service cost	$	6		$	8		$	20		$	18		$	7		$	7
Interest cost	402			370			1,202			1,108			256			400
Amortization of actuarial loss	843			1,183			2,531			3,551			763			844
Amortization of prior service credit	(1,192		)	(1,590		)	(3,574		)	(4,772		)	(1,056		)	(1,191		)
Net periodic postretirement benefit cost/(income) ⁽¹⁾	$	59		$	(29	)	$	179		$	(95	)	$	(30	)	$	60

⁽¹⁾ The service cost component of net periodic postretirement benefit cost is recognized in Total operating costs, while the other components are included in Other components of net periodic benefit costs in our Condensed Consolidated Statements of Operations, below Operating profit.

NOTE ~~11.~~10. INCOME TAXES

The Company had income tax expense of ~~$6.1~~$6.0 million and ~~$16.8~~$1.3 million in the ~~third quarter~~first quarters of 2020 and ~~first nine months of~~ 2019, ~~respectively. The Company had income tax expense of $10.1 million and $25.3 million in the third quarter and first nine months of 2018,~~ respectively. The Company’s effective tax rates from continuing operations were ~~27.0%~~15.5% and ~~19.0%~~4.1% for the ~~third quarter~~first quarters of 2020 and ~~first nine months of~~ 2019, respectively. The Company received a tax benefit in ~~the first quarter of 2019~~both periods from stock price appreciation on stock-based awards that settled in the ~~quarter,~~quarters, resulting in a lower than statutory tax ~~rate for~~rate.

On March 27, 2020, the ~~first nine months of 2019. The~~Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law. We do not expect the tax provisions in the CARES Act to have a material impact on the Company’s ~~effective tax rates from continuing operations were 28.8% and 26.4% for the third quarter and first nine months of 2018, respectively.~~consolidated financial statements.

NOTE ~~12.~~11. EARNINGS PER SHARE

We compute earnings per share using a two-class method, which is an earnings allocation method used when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. This method determines earnings per share based on dividends declared on common stock and participating securities (i.e., distributed earnings), as well as participation rights of participating securities in any undistributed earnings.

Earnings per share is computed using both basic shares and diluted shares. The difference between basic and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities. Our stock options, stock-settled long-term performance awards and restricted stock units could have a significant impact on diluted shares. The difference between basic and diluted shares of approximately ~~1.4~~1.3 million and ~~1.9~~1.5 million as of ~~the third quarters~~March 29, 2020 and ~~first nine months of~~ March 31,

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2019, ~~and 2018,~~ respectively, resulted primarily from the dilutive effect of certain stock options, performance awards and restricted stock ~~units and performance awards.~~units.

Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the market value of our Class A Common Stock, because their inclusion would result in an anti-dilutive effect on per share amounts.

There were ~~no anti-dilutive stock options, stock-settled long-term performance awards or~~approximately 0.2 million restricted stock units excluded from the computation of diluted earnings per share because they were anti-dilutive in the ~~third~~first quarters of 2020 and 2019, respectively. There were 0 anti-dilutive stock options or stock-settled long-term performance awards excluded from the computation of diluted earnings per share in the first ~~nine months~~quarters of ~~2019~~2020 and ~~2018,~~2019, respectively.

NOTE ~~13.~~12. SUPPLEMENTAL STOCKHOLDERS’ EQUITY INFORMATION

In 2015, the Board of Directors authorized up to $101.1 million of repurchases of shares of the Company’s Class A Common Stock. As of ~~September~~March 29, ~~2019,~~2020, repurchases under this authorization totaled $84.9 million (excluding commissions) and $16.2 million remained under this authorization. The Company did not repurchase any shares during the first ~~nine~~three months of ~~2019.~~2020. All purchases were made pursuant to our publicly announced share repurchase program. Our Board of Directors has authorized us to purchase shares under this authorization from time to time, subject to market conditions and other factors. There is no expiration date with respect to this authorization.

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The following table summarizes the changes in AOCI by component as of ~~September~~March 29, ~~2019:~~2020:


(In thousands)	Foreign Currency Translation Adjustments			Funded Status of Benefit Plans			Net Unrealized (Loss)/Gain on Available-For-Sale Securities			Total Accumulated Other Comprehensive Loss			Foreign Currency Translation Adjustments			Funded Status of Benefit Plans			Net Unrealized (Loss)/Gain on Available-For-Sale Securities		Total Accumulated Other Comprehensive Loss
Balance as of December 30, 2018	$	4,677		$	(520,308	)	$	(2,093	)	$	(517,724	)
Balance as of December 29, 2019													$	3,438		$	(498,986	)	$	572	$	(494,976	)
Other comprehensive (loss)/income before reclassifications, before tax	(3,286		)	—			3,773			487			(254		)	—			715		461
Amounts reclassified from accumulated other comprehensive loss, before tax	—			14,685			—			14,685			—			6,397			—		6,397
Income tax (benefit)/expense	(863		)	3,780			986			3,903			(68		)	1,794			189		1,915
Net current-period other comprehensive (loss)/income, net of tax	(2,423		)	10,905			2,787			11,269			(186		)	4,603			526		4,943
Balance as of September 29, 2019	$	2,254		$	(509,403	)	$	694		$	(506,455	)
Balance as of March 29, 2020													$	3,252		$	(494,383	)	$	1,098	$	(490,033	)

The following table summarizes the reclassifications from AOCI for the ~~nine months ended September 29, 2019:~~first quarter of 2020:


(In thousands) Detail about accumulated other comprehensive loss components	Amounts reclassified from accumulated other comprehensive loss			Affects line item in the statement where net income is presented	Amounts reclassified from accumulated other comprehensive loss			Affects line item in the statement where net income is presented
Funded status of benefit plans:
Amortization of prior service credit⁽¹⁾	$	(5,033	)	Other components of net periodic benefit costs	$	(1,542	)	Other components of net periodic benefit costs
Amortization of actuarial loss⁽¹⁾	19,718			Other components of net periodic benefit costs	7,939			Other components of net periodic benefit costs
Total reclassification, before tax⁽²⁾	14,685				6,397
Income tax expense	3,780			Income tax expense	1,794			Income tax expense
Total reclassification, net of tax	$	10,905			$	4,603

⁽¹⁾ These AOCI components are included in the computation of net periodic benefit cost for pension and other postretirement benefits. See Note 109 for more information.

⁽²⁾ There were no reclassifications relating to noncontrolling interest for the ~~nine months~~first quarter ended ~~September~~March 29, ~~2019.~~2020.

NOTE ~~14.~~13. SEGMENT INFORMATION

The Company identifies a business as an operating segment if: (i) it engages in business activities from which it may earn revenues and incur expenses; (ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (who is the Company’s President and Chief Executive Officer) to make decisions about resources to be allocated to the segment and

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

assess its performance; and (iii) it has available discrete financial information. The Company has determined that it has 1 reportable segment. Therefore, all required segment information can be found in the Condensed Consolidated Financial Statements.

~~NOTE 15. LEASES~~

~~Lessee activities~~

~~Operating leases~~

We have operating leases for office space and equipment. We determine if an arrangement is a lease at inception. Certain office space leases provide for rent adjustments relating to changes in real estate taxes and other operating costs. Options to extend the term of operating leases are not recognized as part of the right-of-use asset until we are reasonably certain that the option will be exercised. We may terminate our leases with the notice required under the lease and upon the payment of a termination fee, if required. Our leases do not include substantial variable payments based on index or rate. After the adoption of ASU 2016-02 in 2019, for all leases, a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, are recognized in the Condensed Consolidated Balance Sheet as of September 29, 2019, as described below.

Our leases do not provide a readily determinable implicit discount rate. Therefore, we estimate our incremental borrowing rate to discount the lease payments based on the information available at lease commencement.

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

We recognize a single lease cost on a straight-line basis over the term of the lease and we classify all cash payments within operating activities in the statement of cash flows. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

~~We evaluate right-of-use assets for impairment consistent with our property, plant and equipment policy disclosure included in our Annual Report on Form 10-K for the year ended December 30, 2018.~~

On July 2, 2019, we entered into a lease agreement for office space in Long Island City, N.Y. (the “LIC Lease”), which commenced in July and ends in 2035. The present value of lease liabilities associated with the LIC Lease at the commencement date was $22 million.

~~The table below presents the lease-related assets and liabilities recorded on the balance sheet:~~

(In thousands) Classification in the Condensed Consolidated Balance Sheet September 29, 2019
Operating lease right-of-use assets Miscellaneous assets $ 54,909
Current operating lease liabilities Accrued expenses and other $ 7,733
Noncurrent operating lease liabilities Other 56,156
Total operating lease liabilities $ 63,889

~~The total lease cost for operating leases included in~~ ~~Selling, general and administrative costs~~ ~~in our Condensed Consolidated Statement of Operations was as follows:~~

For the Quarter Ended
For the Nine Months Ended
(In thousands) September 29, 2019
Operating lease cost $ 2,763
$ 7,310
Short term and variable lease cost 442
1,454
Total lease cost $ 3,205
$ 8,764

~~The table below presents additional information regarding operating leases:~~

(In thousands, except lease term and discount rate) September 29, 2019
Cash paid for amounts included in the measurement of operating lease liabilities $ 6,818
Right-of-use assets obtained in exchange for operating lease liabilities⁽¹⁾
$ 60,988
Weighted-average remaining lease term 9.9 years
Weighted-average discount rate 4.65 %

⁽¹⁾ ~~Amounts for the nine months ended September 29, 2019, include the transition adjustment resulting from the adoption of ASU 2016-02 as discussed in Note 2.~~

~~Maturities of lease liabilities on an annual basis for the Company's operating leases as of September 29, 2019, were as follows:~~

(In thousands) Amount
2019 (3 months ending December 29, 2019) $ 2,284
2020 9,808
2021 9,026
2022 8,577
2023 7,970
Later Years 41,899
Total lease payments $ 79,564
Less: Interest (15,675 )
Present value of lease liabilities $ 63,889

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Finance lease~~

~~We had a finance lease in connection with the land at our College Point, N.Y., printing and distribution facility. Interest on the lease liability was recorded in~~ ~~Interest expense and other, net~~ in our Condensed Consolidated Statement of Operations. Repayments of the principal portion of our lease liability are recorded in financing activities and payments of interest on our lease liability are recorded in operating activities in the statement of cash flows for our finance lease. On August 1, 2019, using existing cash, we purchased the assets under the finance lease for $6.9 million, ~~which resulted in the settlement of our finance lease obligation. See Note 7 for more information.~~

~~Lessor activities~~

Our leases to third parties predominantly relate to office space in the Company Headquarters. We determine if an arrangement is a lease at inception. Office space leases are operating leases and generally include options to extend the term of the lease. Our leases do not include variable payments based on index or rate. We do not separate the lease and non-lease components in a contract. The non-lease components predominantly include charges for utilities usage and other operating expenses estimated based on the proportionate share of the rental space of each lease.

For our office space operating leases, we recognize rental revenue on a straight-line basis over the term of the lease and we classify all cash payments within operating activities in the statement of cash flows.

Residual value risk is not a primary risk resulting from our office space operating leases because of the long-lived nature of the underlying real estate assets which generally hold their value or appreciate in the long term.

We evaluate assets leased to third parties for impairment consistent with our property, plant and equipment policy disclosure included in our Annual Report on Form 10-K for the year ended December 30, 2018.

~~As of September 29, 2019, the cost and accumulated depreciation related to the Company Headquarters included in~~ ~~Property, plant and equipment~~ in our Condensed Consolidated Balance Sheet was approximately $508 million and $200 million, respectively. Office space leased to third parties represents approximately 39% of rentable square feet of the Company Headquarters.

~~We generate building rental revenue from the floors in the Company Headquarters that we lease to third parties. The building rental revenue was as follows:~~

For the Quarter Ended
For the Nine Months Ended
(In thousands) September 29, 2019
Building rental revenue ⁽¹⁾
$ 7,887
$ 22,962

⁽¹⁾ ~~Building rental revenue includes approximately $3.0 million and $8.8 million of sublease income for the quarter and nine months ended September 29, 2019, respectively.~~

~~Maturities of lease payments to be received on an annual basis for the Company's office space operating leases as of September 29, 2019, were as follows:~~

(In thousands) Amount
2019 (3 months ending December 29, 2019) $ 7,590
2020 32,242
2021 32,259
2022 32,254
2023 19,329
Later Years 142,162
Total building rental revenue from operating leases $ 265,836

NOTE ~~16.~~14. CONTINGENT LIABILITIES

~~Newspaper and Mail Deliverers–Publishers’ Pension Fund~~

In September 2013, the Newspaper and Mail Deliverers-Publishers’ Pension Fund (the “NMDU Fund”) assessed a partial withdrawal liability against the Company in the gross amount of approximately $26 million for the plan years ending May 31, 2012, and 2013 (the “Initial Assessment”), an amount that was increased to a gross amount of approximately $34 million in December 2014, when the NMDU Fund issued a revised partial withdrawal liability assessment for the plan year ending May

~~THE NEW YORK TIMES COMPANY~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

31, 2013 (the “Revised Assessment”). The NMDU Fund claimed that when City & Suburban Delivery Systems, Inc., a retail and newsstand distribution subsidiary of the Company and the largest contributor to the NMDU Fund, ceased operations in 2009, it triggered a decline of more than 70% in contribution base units in each of these two plan years.

The Company disagreed with both the NMDU Fund’s determination that a partial withdrawal occurred and the methodology by which it calculated the withdrawal liability, and the parties engaged in arbitration proceedings to resolve the matter. In June 2016, the arbitrator issued an interim award and opinion that supported the NMDU Fund’s determination that a partial withdrawal had occurred, and concluded that the methodology used to calculate the Initial Assessment was correct. However, the arbitrator also concluded that the NMDU Fund’s calculation of the Revised Assessment was incorrect. In July 2017, the arbitrator issued a final award and opinion reflecting the same conclusions, which both the Company and NMDU Fund challenged in federal district court. In March 2018, the court determined that a partial withdrawal had occurred, but supported the Company’s position that the NMDU Fund’s calculation of the withdrawal liability was improper. The Company appealed the court’s decision with respect to the determination that a partial withdrawal had occurred, and the NMDU Fund appealed the court’s decision with respect to the calculation of the withdrawal liability. Oral arguments were held in May 2019.

Due to requirements of the Employee Retirement Income Security Act of 1974 that sponsors make payments demanded by plans during arbitration and any resultant appeals, the Company had been making payments to the NMDU fund since September 2013 based on the NMDU Fund’s demand. As a result, through September 29, 2019, we have paid $21.6 million relating to the Initial Assessment since the receipt of the initial demand letter. We also paid $5.0 million related to the Revised Assessment, which was refunded in July 2016 based on the arbitrator’s ruling.

On September 16, 2019, the Company and the NMDU Fund reached an agreement to settle this matter. As a result of the settlement, the Company recognized a gain of approximately $2.0 million, and as of September 29, 2019, the Company had no contingent liability related to this matter. In addition, each party withdrew its appeal of the March 2018 court decision.

~~Other~~Legal Proceedings

We are involved in various legal actions incidental to our business that are now pending against us. These actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. Although the Company cannot predict the outcome of these matters, it is possible that an unfavorable outcome in one or more matters could be material to the Company’s consolidated results of operations or cash flows for an individual reporting period. However, based on currently available information, management does not believe that the ultimate resolution of these matters, individually or in the aggregate, is likely to have a material effect on the Company’s financial position.

~~Letters~~

NOTE 15. RECLASSIFICATION

The Company has changed the expense captions on its Condensed Consolidated Statement of ~~Credit Commitment~~

~~We have issued letters of credit totaling $42.4 million~~Operations effective for the first quarter ended March 29, 2020. These changes were made in order to reflect how the Company manages its business and ~~$48.8 million~~ a~~s of September 29, 2019,~~to communicate where the Company is investing resources and ~~December 30, 2018, respectively, in connection~~how this aligns with the ~~leasing~~Company’s strategy. The Company has reclassified expenses for the prior period in order to present comparable financial results. There is no change to consolidated operating income, operating expense, net income or cash flows as a result of ~~floors~~this change in classification. A summary of changes is as follows:

“Production costs” has become “Cost of revenue”:

◦

Cost of revenue contains all costs related to content creation, subscriber and advertiser servicing, and print production and distribution costs as well as infrastructure costs related to delivering digital content, which include all cloud and cloud related costs as well as compensation for employees that enhance and maintain our platforms. This represents a change from previously disclosed production costs, which did not include distribution or subscriber servicing costs. In addition, certain product development costs previously included in production costs have been reclassified to product development.

“Selling, general and administrative” hasbeen split into three lines:


◦	Sales and marketing represents all costs related to the Company’s marketing efforts as well as advertising sales costs.


◦	Product development represents the Company’s investment into developing and enhancing new and existing product technology including engineering, product development, and data insights.


◦	General and administrative includes general management, corporate enterprise technology, building operations and unallocated overhead costs.

In addition, incentive compensation, which was previously wholly included in selling, general and administrative, was reclassified to align with the ~~Company Headquarters. We expect the letters of credit to expire subsequent to the repurchase~~classification of the ~~Condo Interest in December 2019. Approximately $47 million and $54 million~~related wages across each of ~~marketable securities were designated as collateral for~~ the ~~letters of credit, as of September 29, 2019, and December 30, 2018, respectively.~~expense captions.

2318

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A reconciliation of the expenses as previously disclosed to the recast presentation for the quarter ended March 31, 2019, is as follows:



	As Reported March 31, 2019		Reclassification				Recast March 31, 2019
Operating costs
Production costs:
Wages and benefits	$	102,908	$	(102,908	)	⁽¹⁾⁽²⁾	$	—
Raw materials	19,838		(19,838		)	⁽¹⁾	—
Other production costs	45,337		(45,337		)	⁽¹⁾⁽²⁾	—
Total production costs	168,083		(168,083		)	⁽¹⁾⁽²⁾	—
Cost of revenue (excluding depreciation and amortization)	—		239,359			^(1)(3)(4)	239,359
Selling, general and administrative costs	221,463		(221,463		)	^(3)(4)(5)	—
Sales and marketing	—		74,820			⁽⁴⁾⁽⁵⁾	74,820
Product development	—		23,728			^(2)(4)(5)	23,728
General and administrative	—		51,639			⁽⁴⁾⁽⁵⁾	51,639
Depreciation and amortization	14,918		—				14,918
Total operating costs	$	404,464	$	—			$	404,464

⁽¹⁾ In the first quarter of 2020, the Company discontinued the use of the production cost caption. These costs, with the exception of product engineering and product design costs, were reclassified to cost of revenue.

⁽²⁾Costs related to developing and enhancing new and existing product technology previously included in production costs were reclassified to product development.

⁽³⁾Distribution and fulfillment costs and subscriber and advertising servicing related costs previously included in selling, general and administrative were reclassified to cost of revenue.

⁽⁴⁾Incentive Compensation previously included in selling, general and administrative was reclassified to align with the related salaries in each caption.

⁽⁵⁾In the first quarter of 2020, the Company discontinued the use of the selling, general and administrative cost caption. These costs, with the exception of those related to distribution and fulfillment, subscriber and advertising servicing and incentive compensation related to cost of revenue, were reclassified to the new captions: sales and marketing, product development and general and administrative.

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

EXECUTIVE OVERVIEW

We are a global media organization that includes our newspaper, print and digital products and related businesses. We have one reportable segment.

We generate revenues principally from subscriptions and advertising. Other revenues primarily consist of revenues from licensing, ~~commercial printing,~~ the leasing of floors in ~~the Company Headquarters,~~our New York headquarters building located at 620 Eighth Avenue, New York, New York (the “Company Headquarters”), affiliate referrals, commercial printing, television and film (primarily from our television series, “The Weekly”), NYT Live (our live events business) and retail commerce.

Our main operating costs are employee-related costs.

In the accompanying analysis of financial information, we present certain information derived from consolidated financial information but not presented in our financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). We are presenting in this report supplemental non-GAAP financial performance measures that exclude depreciation, amortization, severance, non-operating retirement costs or multiemployer pension plan withdrawal costs, and certain identified special items, as applicable. These non-GAAP financial measures should not be considered in isolation from or as a substitute for the related GAAP measures, and should be read in conjunction with financial information presented on a GAAP basis. For further information and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures, see “Non-Operating Items—Non-GAAP Financial ~~Measurements”~~Measurements.”

Financial Highlights

For the ~~third~~first quarter of ~~2019,~~2020, diluted earnings per share from continuing operations were ~~$0.10,~~$0.20, compared with ~~$0.15~~$0.18 for the ~~third~~first quarter of ~~2018.~~2019. Diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special items discussed below (or “adjusted diluted earnings per share,” a non-GAAP measure) were ~~$0.12~~$0.17 and ~~$0.15~~$0.20 for the ~~third~~first quarters of ~~2019~~2020 and ~~2018,~~2019, respectively.

The Company had an operating profit of ~~$25.1~~$27.3 million in the ~~third~~first quarter of ~~2019,~~2020, compared with ~~$41.4~~$34.6 million in the ~~third~~first quarter of ~~2018.~~2019. The decrease was principally driven by lower advertising revenues and higher costs, ~~and lower advertising revenue that more than~~partially offset by higher digital-only subscription ~~revenues~~ and other revenues. Operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items discussed below (or “adjusted operating profit,” a non-GAAP measure) ~~was $44.1~~decreased to $44.3 million ~~and $53.7~~in the first quarter of 2020 from $52.4 million ~~for~~in the ~~third quarters~~first quarter of 2019, ~~and 2018, respectively,~~ primarily as a result of the factors identified above.

Total revenues increased ~~2.7%~~1.0% to ~~$428.5~~$443.6 million in the ~~third~~first quarter of ~~2019~~2020 from ~~$417.3~~$439.1 million in the ~~third~~first quarter of ~~2018,~~2019, primarily driven by an increase in other revenue (from our television series, “The Weekly,” and from licensing revenue related to Facebook News), as well as an increase in digital-only subscription ~~revenues and other~~ revenues, partially offset by a decrease in advertising revenue.

Operating costs increased in the ~~third~~first quarter of ~~2019~~2020 to ~~$401.5~~$416.3 million from ~~$380.8~~$404.5 million in the ~~third~~first quarter of ~~2018,~~2019, largely due to higher ~~content~~journalism costs, including growth in the number of newsroom and technology employees and costs related to our television series, “The Weekly,” ~~as well as growth in the number of product development employees,~~which was partially offset by lower print production and distribution costs. Operating costs before depreciation, amortization, severance and multiemployer pension plan withdrawal costs (or “adjusted operating costs,” a non-GAAP measure) increased in the ~~third~~first quarter of ~~2019~~2020 to ~~$384.4~~$399.3 million from ~~$363.7~~$386.7 million in the ~~third~~first quarter of ~~2018,~~2019, primarily as a result of the factors identified above.

Impact of COVID-19 Pandemic

The global coronavirus (COVID-19) pandemic, and attempts to contain it, have created significant economic disruption, market volatility and uncertainty. These conditions have affected our business and could continue to do so for the foreseeable future.

Unlike many media companies, which are primarily dependent on advertising, we derive substantial revenue from subscriptions (approximately 60% of total revenues in 2019 and 64% in the first quarter of 2020). We experienced significant growth in the number of subscriptions to our digital news and other products in the first quarter of 2020, which we attribute in

2420

part to an extraordinary increase in traffic given the current news environment. However, revenues from the single-copy sales of our print newspaper (which represent less than 10% of our total subscription revenues) have been, and we expect will continue to be, adversely affected as a result of widespread business closures, increases in remote working and reductions in travel.

The worldwide economic slowdown caused by the pandemic also led to a decline in our first-quarter 2020 advertising revenues, and to the extent conditions persist, we expect that our advertising revenues will continue to be adversely affected, including in the second quarter of 2020.

However, our strong balance sheet has enabled us to continue to operate without the liquidity issues being experienced by many other companies. As of March 29, 2020, we had cash, cash equivalents and short- and long-term marketable securities of $686.9 million, and we were debt-free. We believe our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to meet our financing needs over the next twelve months, enabling us to continue hiring in our newsroom, and in product and technology and continue investment in important growth areas.

We have incurred and expect to continue to incur some additional costs in response to the virus. These costs have not been significant to date, but as the pandemic develops we may alter our response and incur additional costs as necessary.

At this time, the complete impact that the COVID-19 pandemic, and the associated economic downturn, will have on our business is uncertain. While we remain confident in our prospects over the longer term, the extent to which the pandemic impacts us will depend on numerous evolving factors and future developments, including the severity of the virus; the duration of the outbreak; the impact of the pandemic on economic activity and the companies with which we do business; governmental, business and other actions; travel restrictions and social distancing measures, among many other factors. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are appropriate. Please see “Part II—Item 1A—Risk Factors” for more information.

RESULTS OF OPERATIONS

The following table presents our consolidated financial results:


	For the Quarters Ended								For the Nine Months Ended								For the Quarters Ended
(In thousands)	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change		March 29, 2020		March 31, 2019			% Change
Revenues
Subscription	$	267,302		$	257,796		3.7	%	$	808,568		$	779,018		3.8	%	$	285,434	$	270,810		5.4	%
Advertising	113,531			121,677			(6.7	)%	359,380			366,525			(1.9	)%	106,137		125,088			(15.2	)%
Other	47,668			37,873			25.9	%	135,873			100,311			35.5	%	52,065		43,164			20.6	%
Total revenues	428,501			417,346			2.7	%	1,303,821			1,245,854			4.7	%	443,636		439,062			1.0	%
Operating costs
Production costs:
Wages and benefits	106,377			95,941			10.9	%	313,244			280,688			11.6	%
Raw materials	18,531			19,972			(7.2	)%	57,527			54,490			5.6	%
Other production costs	53,868			47,521			13.4	%	149,102			138,454			7.7	%
Total production costs	178,776			163,434			9.4	%	519,873			473,632			9.8	%
Selling, general and administrative costs	207,226			202,473			2.3	%	638,820			614,464			4.0	%
Cost of revenue (excluding depreciation and amortization)																	243,672		239,359			1.8	%
Sales and marketing																	73,796		74,820			(1.4	)%
Product development																	30,802		23,728			29.8	%
General and administrative																	52,861		51,639			2.4	%
Depreciation and amortization	15,450			14,847			4.1	%	45,548			43,969			3.6	%	15,185		14,918			1.8	%
Total operating costs	401,452			380,754			5.4	%	1,204,241			1,132,065			6.4	%	416,316		404,464			2.9	%
Headquarters redesign and consolidation	—			—			—		—			3,140			*
Restructuring charge	4,008			—			*		4,008			—			*
Gain from pension liability adjustment	(2,045		)	(4,851		)	(57.8	)%	(2,045		)	(4,851		)	(57.8	)%
Operating profit	25,086			41,443			(39.5	)%	97,617			115,500			(15.5	)%	27,320		34,598			(21.0	)%
Other components of net periodic benefit costs	1,834			2,335			(21.5	)%	5,502			6,226			(11.6	)%	2,314		1,835			26.1	%
Loss from joint ventures	—			(16		)	*		—			(9		)	*
Interest expense and other, net	755			4,026			(81.2	)%	3,572			13,439			(73.4	)%
Interest income/(expense) and other, net																	13,854		(1,303		)	*
Income from continuing operations before income taxes	22,497			35,066			(35.8	)%	88,543			95,826			(7.6	)%	38,860		31,460			23.5	%
Income tax expense	6,070			10,092			(39.9	)%	16,789			25,342			(33.8	)%	6,006		1,304			*
Net income	16,427			24,974			(34.2	)%	71,754			70,484			1.8	%	32,854		30,156			8.9	%
Net loss attributable to the noncontrolling interest	—			2			*		—			1			*
Net income attributable to The New York Times Company common stockholders	$	16,427		$	24,976		(34.2	)%	$	71,754		$	70,485		1.8	%	$	32,854	$	30,156		8.9	%

* Represents a change equal to or in excess of 100% or not meaningful

2522

Revenues

Subscription Revenues

Subscription revenues consist of revenues from subscriptions to our print and digital products (which include our news product, as well as our Crossword, Cooking and ~~Cooking~~audio products), and single-copy and bulk sales of our print products (which represent less than 10% of these revenues). ~~Revenues from our digital-only news subscriptions include e-readers and replica editions. Our Cooking product first launched as a paid digital product in the third quarter of 2017.~~ Subscription revenues are based on both the number of copies of the ~~print~~printed newspaper sold and digital-only subscriptions, and the rates charged to the respective customers.

Subscription revenues increased ~~3.7% in the third quarter and 3.8%~~5.4% in the first ~~nine months~~quarter of ~~2019~~2020 compared with the same prior-year ~~periods,~~period, primarily due to year-over-year growth of ~~31.0%~~39.6% in the number of subscriptions to the Company’s digital subscription products.

Paid digital-only subscriptions totaled approximately ~~4,053,000~~5,001,000 at the end of the ~~third~~first quarter of ~~2019,~~2020, a ~~958,000~~1,399,000 net increase compared with the end of the ~~third quarter of 2018. News product subscriptions totaled approximately~~ ~~3,197,000~~ ~~at the end of the third~~first quarter of 2019 and a ~~656,000~~587,000 net increase compared with the end of the ~~third~~fourth quarter of ~~2018. Other~~2019. This significant growth in the first quarter is attributed in part to an extraordinary increase in traffic given the current news environment, as well as the digital access model that we launched last year, which requires users to register and log in to access most of our content.

Digital-only news product subscriptions totaled approximately ~~856,000~~3,897,000 at the end of the ~~third~~first quarter of ~~2019,~~2020, a ~~302,000~~1,040,000 net increase compared with the end of the ~~third~~first quarter of ~~2018.~~2019 and a 468,000 increase compared with the end of the fourth quarter of 2019. Other product subscriptions (which include our Crossword and Cooking products and new audio product described below) totaled approximately 1,104,000 at the end of the first quarter of 2020, a 359,000 increase compared with the end of the first quarter of 2019 and a 119,000 increase compared with the end of the fourth quarter of 2019.

During the first quarter of 2020, we acquired Listen In Audio, Inc., a company that transforms journalism articles into audio that is made available in a subscription-based product named “Audm.” In addition to the 359,000 and 119,000 net additions noted above to the Company’s other digital-only products, as a result of the acquisition, approximately 20,000 of the product’s subscriptions at the time of acquisition were included in the Company’s 5,001,000 paid digital-only subscriptions. A de minimis number of audio net subscription additions, which enrolled in the product subsequent to the Company’s acquisition, were included in 359,000 and 119,000 net additions noted above to the Company’s other digital-only products.

The following table summarizes ~~digital-only subscription revenues, which are a component of~~print and digital subscription revenues for the ~~third~~first quarters of 2020 and ~~first nine months of 2019 and 2018:~~2019:


		For the Quarters Ended						For the Nine Months Ended							For the Quarters Ended
(In thousands)		September 29, 2019		September 30, 2018		% Change		September 29, 2019		September 30, 2018		% Change			March 29, 2020		March 31, 2019		% Change
Print subscription revenues															$	155,424	$	160,951	(3.4	)%
Digital-only subscription revenues:
News product subscription revenues⁽¹⁾		$	107,009	$	95,568	12.0	%	$	313,785	$	279,693	12.2	%		118,958		102,346		16.2	%
Other product subscription revenues⁽²⁾		8,855		5,639		57.0	%	24,573		15,669		56.8	%		11,052		7,513		47.1	%
Total digital-only subscription revenues		$	115,864	$	101,207	14.5	%	$	338,358	$	295,362	14.6	%
Subtotal digital-only subscription revenues															130,010		109,859		18.3	%
Total subscription revenues															$	285,434	$	270,810	5.4	%
⁽¹⁾Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.	⁽¹⁾Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.													⁽¹⁾Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.
⁽²⁾Includes revenues from standalone subscriptions to the Company’s Crossword and Cooking products.
⁽²⁾Includes revenues from standalone subscriptions to the Company’s Crossword, Cooking and audio products.														⁽²⁾Includes revenues from standalone subscriptions to the Company’s Crossword, Cooking and audio products.

The following table summarizes digital-only subscriptions as of the end of the ~~third~~first quarters of ~~2019~~2020 and ~~2018:~~2019:

For the Quarters Ended
(In thousands) September 29, 2019
September 30, 2018
% Change
Digital-only subscriptions:
News product subscriptions⁽¹⁾
3,197
2,541
25.8 %
Other product subscriptions⁽²⁾
856
554
54.5 %
Total digital-only subscriptions 4,053
3,095
31.0 %
⁽¹⁾Includes subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.
⁽²⁾Includes standalone subscriptions to the Company’s Crossword and Cooking products.



		For the Quarters Ended
(In thousands)		March 29, 2020	March 31, 2019	% Change
Print subscriptions		840	904	(7.1	)%
Digital-only subscriptions:
News product subscriptions⁽¹⁾		3,897	2,857	36.4	%
Other product subscriptions⁽²⁾		1,104	726	52.1	%
Subtotal digital-only subscriptions	��	5,001	3,583	39.6	%
Total subscriptions		5,841	4,487	30.2	%
⁽¹⁾Includes subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword and Cooking products are also included in this category.
⁽²⁾Includes standalone subscriptions to the Company’s Crossword, Cooking and audio products. During the quarter, the Company acquired a subscription-based audio product. As a result of the acquisition, approximately 20,000 of the product’s subscriptions at the time of acquisition, and a de minimis amount which enrolled in the product subsequent to the Company’s acquisition were included in the Company’s digital-only other product subscriptions starting in the first quarter of 2020.

Advertising Revenues

Advertising revenues are primarily derived from ~~the sale~~offerings sold directly to marketers by our advertising sales teams. A significantly smaller and diminishing proportion of our total advertising ~~products and services on our print and digital platforms. These~~revenues is generated through programmatic auctions run by third-party ad exchanges. Advertising revenues are primarily determined by the volume, rate and mix of advertisements. Display advertising revenue is principally from advertisers promoting products, services or brands in print in the form of column-inch ads, and on our digital platforms in the form of banners and video ~~rich media~~in websites, mobile applications and ~~other interactive ads.~~emails. Display advertising ~~also~~ includes advertisements that direct viewers to branded content on ~~The Times’s~~our platforms. Other print advertising primarily represents ~~for our print products,~~ classified advertising revenue, including line-ads sold in the major categories of real estate, help wanted, automotive and other as well as revenue from preprinted advertising, also known as free-standing inserts. ~~Digital other~~Other digital advertising revenue primarily includes creative services fees, including those associated with ~~among other things, our digital marketing agencies and~~ our branded content studio; advertising revenue from our podcasts; and advertising revenue generated by Wirecutter, our product review and recommendation website.

Advertising revenues (print and digital) by category were as follows:

For the Quarters Ended
September 29, 2019 September 30, 2018 % Change
(In thousands) Print Digital Total Print Digital Total Print Digital Total
Advertising revenues:
Display $ 51,702
$ 36,202
$ 87,904
$ 57,245
$ 43,730
$ 100,975
(9.7 )% (17.2 )% (12.9 )%
Other 7,176
18,451
25,627
6,676
14,026
20,702
7.5 % 31.5 % 23.8 %
Total advertising $ 58,878
$ 54,653
$ 113,531
$ 63,921
$ 57,756
$ 121,677
(7.9 )% (5.4 )% (6.7 )%


		For the Nine Months Ended																			For the Quarters Ended
		September 29, 2019						September 30, 2018						% Change							March 29, 2020						March 31, 2019						% Change
(In thousands)		Print		Digital		Total		Print		Digital		Total		Print		Digital		Total			Print		Digital		Total		Print		Digital		Total		Print		Digital		Total
Advertising revenues:	Advertising revenues:																			Advertising revenues:
Display		$	169,903	$	121,147	$	291,050	$	188,853	$	123,870	$	312,723	(10.0	)%	(2.2	)%	(6.9	)%		$	48,159	$	39,894	$	88,053	$	62,342	$	42,112	$	104,454	(22.8	)%	(5.3	)%	(15.7	)%
Other		21,255		47,075		68,330		22,182		31,620		53,802		(4.2	)%	48.9	%	27.0	%		6,820		11,264		18,084		7,203		13,431		20,634		(5.3	)%	(16.1	)%	(12.4	)%
Total advertising		$	191,158	$	168,222	$	359,380	$	211,035	$	155,490	$	366,525	(9.4	)%	8.2	%	(1.9	)%		$	54,979	$	51,158	$	106,137	$	69,545	$	55,543	$	125,088	(20.9	)%	(7.9	)%	(15.2	)%

Print advertising revenues, which represented ~~51.9% of total advertising revenues for the third quarter of 2019 and 53.2%~~51.8% of total advertising revenues for the first ~~nine months of 2019, declined 7.9% to $58.9 million in the third~~ quarter of ~~2019 and 9.4%~~2020, declined 20.9% to ~~$191.2~~$55.0 million in the first ~~nine months~~quarter of ~~2019,~~2020 compared with ~~$63.9~~$69.5 million ~~and $211.0 million, respectively,~~ in the same prior-year ~~periods.~~period. The decline in print advertising revenues in the ~~third~~first quarter ~~and in the first nine months~~ of ~~2019~~2020 compared with the same ~~periods~~period in the prior year was driven by a ~~continued decline in display advertising revenue. The decline in display advertising revenue in~~lower demand as the ~~third quarter of 2019 was primarily in the financial services, home furnishings and luxury categories, partially offset by growth in the advocacy category.~~COVID-19 pandemic further accelerated secular trends. The decline in display advertising revenue in the first ~~nine months~~quarter of ~~2019~~2020 was primarily in the luxury, media, entertainment and financial services ~~luxury, media and retail categories, partially offset by growth in the advocacy category.~~categories.

Digital advertising revenues, which represented ~~48.1% of total advertising revenues for the third quarter of 2019 and 46.8%~~48.2% of total advertising revenues for the first ~~nine months of 2019, declined 5.4% to $54.7 million in the third~~ quarter of ~~2019 and increased 8.2%~~2020, declined 7.9% to ~~$168.2~~$51.2 million in the first ~~nine months~~quarter of ~~2019,~~2020 compared with ~~$57.8~~$55.5 million ~~and $155.5 million, respectively,~~ in the same prior-year ~~periods.~~period. The decrease in digital advertising revenue for the ~~third~~first quarter of ~~2019~~2020 compared with the same period in the prior year primarily reflected lower revenue from direct-sold advertising on our core digital platforms, partially offset by growth in revenue from podcasts. The increase in digital advertising revenue for the first nine months of 2019 compared with the same periodreflects strong comparisons in the prior year, ~~primarily reflected growth in revenue from podcasts and creative services, partially offset by~~as well as lower ~~open market programmatic~~demand for direct-sold advertising ~~revenue on our core digital platforms.~~as a result of the COVID-19 pandemic.

Other Revenues

Other revenues primarily consist of revenues from licensing, ~~commercial printing,~~ the leasing of floors in ~~the~~our Company Headquarters, affiliate referrals, commercial printing, television and film (primarily from ~~our television series,~~ “The Weekly”), NYT Live ~~(our live events business)~~ and retail commerce. Building

rental revenue consists of revenue from the lease of floors in our Company Headquarters, which totaled $8.0 million in the first quarters of 2020 and 2019, respectively.

Other revenues increased ~~25.9% in the third quarter of 2019 and 35.5%~~20.6% in the first ~~nine months~~quarter of ~~2019,~~2020, compared with the same prior-year ~~periods. The increase in other revenues for the third quarter of 2019 compared with the same~~ period, ~~in the~~

~~prior year is~~ primarily as a result of revenue earned from our television series, “The Weekly.” The increase in other revenues for the first nine months of 2019 compared with the same period in the prior year is primarily a result of growth in our commercial printing operations, revenue earned from “The Weekly,” ~~and additional floors of rental~~as well as from licensing revenue ~~from~~related to Facebook News.

Operating Costs

As noted above, the Company ~~Headquarters.~~

has changed the Operating ~~Costs~~costs captions on its Condensed Consolidated Statement of Operations. See Note 15 of the Notes to the Condensed Consolidated Financial Statements for more detail.

Operating costs were as follows:

For the Quarters Ended For the Nine Months Ended
(In thousands) September 29, 2019
September 30, 2018
% Change
September 29, 2019
September 30, 2018
% Change
Production costs:
Wages and benefits $ 106,377
$ 95,941
10.9 % $ 313,244
$ 280,688
11.6 %
Raw materials 18,531
19,972
(7.2 )% 57,527
54,490
5.6 %
Other production costs 53,868
47,521
13.4 % 149,102
138,454
7.7 %
Total production costs 178,776
163,434
9.4 % 519,873
473,632
9.8 %
Selling, general and administrative costs 207,226
202,473
2.3 % 638,820
614,464
4.0 %
Depreciation and amortization 15,450
14,847
4.1 % 45,548
43,969
3.6 %
Total operating costs $ 401,452
$ 380,754
5.4 % $ 1,204,241
$ 1,132,065
6.4 %



	For the Quarters Ended
(In thousands)	March 29, 2020		March 31, 2019		% Change
Operating costs:
Cost of revenue (excluding depreciation and amortization)	$	243,672	$	239,359	1.8	%
Sales and marketing	73,796		74,820		(1.4	)%
Product development	30,802		23,728		29.8	%
General and administrative	52,861		51,639		2.4	%
Depreciation and amortization	15,185		14,918		1.8	%
Total operating costs	$	416,316	$	404,464	2.9	%

~~Production Costs~~Cost of Revenue (excluding depreciation and amortization)

~~Production~~Cost of revenue includes all costs ~~include items such as labor costs, raw materials and machinery and equipment expenses~~ related to ~~news gathering~~content creation, subscriber and advertiser servicing, and print production ~~activity,~~and distribution costs as well as infrastructure costs related to ~~producing branded content.~~delivering digital content, which include all cloud and cloud related costs as well as compensation for employees that enhance and maintain our platforms.

~~Production costs~~Cost of revenue increased in the ~~third~~first quarter of ~~2019~~2020 by ~~$15.3~~$4.3 million compared with the ~~third~~first quarter of ~~2018,~~2019, primarily driven by a ~~$10.4~~$13.8 million increase in ~~wage~~journalism costs and ~~benefits and a $6.3~~$1.3 million increase in ~~other production~~subscription and advertiser servicing costs, partially offset by a ~~$1.4~~$10.8 million decrease in ~~raw materials.~~print production and distribution costs. The increase in ~~wages and benefits~~journalism costs was largely due to growth in the number of newsroom and ~~product development employees.~~technology employees, as well as costs related to “The Weekly.” The increase in ~~other~~subscription and advertising servicing costs was due to higher costs related to distributing digital content, partially offset by lower live events business costs. The decrease in print production and distribution costs was primarily due to ~~expenses incurred in connection with our television series,“The Weekly.” The decrease in raw materials was largely due to~~ lower ~~commercial printing~~distribution costs and newsprint ~~copies.~~pricing, as well as copy declines.

~~Production~~Sales and Marketing

Sales and marketing includes costs ~~increased~~related to the Company’s marketing efforts as well as advertising sales costs.

Sales and marketing costs in the first ~~nine months~~quarter of ~~2019~~2020 decreased by ~~$46.2~~$1.0 million compared with the first ~~nine months~~quarter of ~~2018,~~2019, primarily driven by a ~~$32.6~~decrease in variable compensation related to advertising.

Media expenses, a component of sales and marketing costs, which represents the cost to promote our subscription business, increased to $45.4 million ~~increase~~ in ~~wages~~the first quarter of 2020 from $44.8 million in the first quarter of 2019.

Product Development

Product development includes costs associated with the Company’s investment into developing and ~~benefits, a $10.6~~enhancing new and existing product technology including engineering, product development, and data insights.

Product development costs in the first quarter of 2020 increased by $7.1 million ~~increase in other production costs and a $3.0 million increase in raw materials. The increase in wages and benefits was~~compared with the first quarter of 2019, largely due to growth in the number of ~~our newsroom,~~digital product development ~~and commercial printing operations employees. The increase in other production costs was primarily due to expenses incurred~~employees in connection with our television series, “The Weekly.” The increase in raw materials was largely due to higher volume as a result of commercial printing operations and higher newsprint prices, partially offset by lower newsprint copies.digital subscription strategic initiatives.

~~Selling,~~ General and Administrative Costs

~~Selling, general~~General and administrative costs ~~include costs associated with the selling, marketing~~includes general management, corporate enterprise technology, building operations and ~~distribution of products as well as administrative expenses.~~

Selling, general and administrative costs in the third quarter of 2019 increased by $4.8 million compared with the third quarter of 2018 driven primarily by a $7.3 million increase in wages and benefits to support growth initiatives, partially offset by $3.2 million in lower distributionunallocated overhead costs.

~~Selling, general~~

General and administrative costs in the first ~~nine months~~quarter of ~~2019~~2020 increased by ~~$24.4~~$1.2 million compared with the first ~~nine months~~quarter of ~~2018~~2019, primarily driven ~~primarily~~ by ~~a $16.8 million increase in wages and benefits to support growth initiatives, a $14.9 million increase in marketing expenses largely due to~~ an increase in ~~subscription acquisition and brand marketing costs, partially offset by a $4.8 million decrease in~~ outside services, as well as costs ~~and a $2.5 million decrease~~incurred in ~~severance.~~

connection with expansion of our office space.

Depreciation and Amortization

Depreciation and amortization costs in the ~~third~~first quarter ~~and first nine months~~ of ~~2019 increased $0.6 million and $1.6 million, respectively,~~2020 remained relatively flat compared with the same prior-year ~~periods primarily due to building and software projects that were placed in service and started depreciating in the second half of 2018.~~period.

Other Items

See Note 87 of the Notes to the Condensed Consolidated Financial Statements for additional information regarding other items.

NON-OPERATING ITEMS

Other Components of Net Periodic Benefit ~~Costs/(Income)~~Costs

See Note 109 of the Notes to the Condensed Consolidated Financial Statements for information regarding other components of net periodic benefit ~~costs/(income).~~

~~Joint Ventures~~

~~See Note 6 of the Notes to the Condensed Consolidated Financial Statements for information regarding our joint venture investments.~~costs.

Interest ~~Expense~~Income/(expense) and other, ~~Net~~net

See Note 7 of the Notes to the Condensed Consolidated Financial Statements for information regarding interest ~~expense~~income/(expense) and other, net.

Income Taxes

See Note 1110 of the Notes to the Condensed Consolidated Financial Statements for information regarding income taxes.

Non-GAAP Financial Measures

We have included in this report certain supplemental financial information derived from consolidated financial information but not presented in our financial statements prepared in accordance with GAAP. Specifically, we have referred to the following non-GAAP financial measures in this report:

diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and the impact of special items (or adjusted diluted earnings per share from continuing operations);

operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit); and

operating costs before depreciation, amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs).

The special ~~items~~item in ~~2019~~2020 consisted of:

a ~~$4.0~~$10.1 million ~~charge~~gain ($~~3.0~~7.4 million after tax or ~~$.02~~$.06 per share) related to ~~restructuring charges, including impairment and severance charges related~~a non-marketable equity investment transaction. The gain is comprised of $2.5 million realized gain due to the ~~closure~~partial sale of the investment and an $7.6 million unrealized gain due to the mark to market of the remaining investment, and is included in Interest income/(expense) and other, net in our ~~digital marketing agency, HelloSociety, LLC; and~~Condensed Consolidated Statements of Operations.

~~a $2.0 million gain ($1.5 million after tax or $.01 per share) from a multiemployer pension plan liability adjustment.~~

~~The~~There were no special items in ~~2018 consisted of:~~


•	a ~~$4.9 million~~ ~~gain ($3.6 million after tax or $.02 per share) from a multiemployer pension plan liability adjustment; and~~

a $1.3 million charge ($0.9 million after tax or $.01 per share) in the second quarter and a $1.9 million charge ($1.4 million after tax or $.01 per share) in the first quarter in connection with the redesign and consolidation of space in the Company Headquarters.2019.

We have included these non-GAAP financial measures because management reviews them on a regular basis and uses them to evaluate and manage the performance of our operations. We believe that, for the reasons outlined below, these non-GAAP financial measures provide useful information to investors as a supplement to reported diluted earnings/(loss) per share from continuing operations, operating profit/(loss) and operating costs. However, these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not be viewed as alternative or superior measures of GAAP results.

~~Non-operating retirement costs include:~~

~~interest cost, expected return on plan assets, amortization of actuarial gain and loss components and amortization of prior service credits of single-employer pension expense;~~

~~interest cost and amortization of actuarial gains and loss components and amortization of prior service credits of retirement medical expense; and~~

~~all multiemployer pension plan withdrawal costs.~~

These non-operating retirement costs are primarily tied to financial market performance including changes in market interest rates and investment performance. Management considers non-operating retirement costs to be outside the performance of the business and believes that presenting adjusted diluted earnings per share from continuing operations excluding non-operating retirement costs and presenting adjusted operating results excluding multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted earnings per share from continuing operations and GAAP operating results, provide increased transparency and a better understanding of the underlying trends in the Company’s operating business performance.

Adjusted diluted earnings per share provides useful information in evaluating the Company’s period-to-period performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing operating activities. Adjusted operating profit is useful in evaluating the ongoing performance of the Company’s businesses as it excludes the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance and multiemployer pension plan withdrawal costs. Total operating costs, excluding these items, provide investors with helpful supplemental information on the Company’s underlying operating costs that is used by management in its financial and operational decision-making.

Management considers special items, which may include impairment charges, pension settlement charges and other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that excluding these items provides a better understanding of the underlying trends in the Company’s operating performance and allows more accurate comparisons of the Company’s operating results to historical performance. In addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful comparison of the Company’s operating results to historical performance.

Included in our non-GAAP financial measures are non-operating retirement costs which are primarily tied to financial market performance and changes in market interest rates and investment performance. Management considers non-operating retirement costs to be outside the performance of the business and believes that presenting adjusted diluted earnings per share from continuing operations excluding non-operating retirement costs and presenting adjusted operating results excluding multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted earnings per share from continuing operations and GAAP operating results, provide increased transparency and a better understanding of the underlying trends in the Company’s operating business performance.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are set out in the tables below.

																									Reconciliation of diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special items (or adjusted diluted earnings per share from continuing operations)
	For the Quarters Ended								For the Nine Months Ended								For the Quarters Ended
	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change		March 29, 2020			March 31, 2019			% Change
Diluted earnings per share from continuing operations	$	0.10		$	0.15		(33.3	)%	$	0.43		$	0.42		2.4	%	$	0.20		$	0.18		11.1	%
Add:
Severance	—			—			—		0.01			0.03			(66.7	)%	—			0.01			*
Non-operating retirement costs:
Multiemployer pension plan withdrawal costs	0.01			0.01			—		0.03			0.03			—		0.01			0.01			—
Other components of net periodic benefit costs	0.01			0.02			(50.0	)%	0.03			0.04			(25.0	)%	0.01			0.01			—
Special item:
Headquarters redesign and consolidation	—			—			—		—			0.02			*
Restructuring charge	0.02			—			*		0.02			—			*
Gain from pension liability adjustment	(0.01		)	(0.03		)	(66.7	)%	(0.01		)	(0.03		)	(66.7	)%
Gain from non-marketable equity security																	(0.06		)	—			*
Income tax expense of adjustments	(0.01		)	—			*		(0.02		)	(0.02		)	*		0.01			(0.01		)	*
Adjusted diluted earnings per share from continuing operations⁽¹⁾	$	0.12		$	0.15		(20.0	)%	$	0.49		$	0.49		—		$	0.17		$	0.20		(15.0	)%

⁽¹⁾Amounts may not add due to rounding.

* Represents a change equal to or in excess of 100% or not meaningful

																							Reconciliation of operating profit before depreciation & amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit)
	For the Quarters Ended								For the Nine Months Ended								For the Quarters Ended
(In thousands)	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change		March 29, 2020		March 31, 2019		% Change
Operating profit	$	25,086		$	41,443		(39.5	)%	$	97,617		$	115,500		(15.5	)%	$	27,320	$	34,598	(21.0	)%
Add:
Depreciation & amortization	15,450			14,847			4.1	%	45,548			43,969			3.6	%	15,185		14,918		1.8	%
Severance	367			293			25.3	%	2,441			4,926			(50.4	)%	370		1,403		(73.6	)%
Multiemployer pension plan withdrawal costs	1,204			1,943			(38.0	)%	4,454			5,838			(23.7	)%	1,423		1,450		(1.9	)%
Special items:
Headquarters redesign and consolidation	—			—			—		—			3,140			*
Restructuring charge	4,008			—			*		4,008			—			*
Gain from pension liability adjustment	(2,045		)	(4,851		)	(57.8	)%	(2,045		)	(4,851		)	(57.8	)%
Adjusted operating profit	$	44,070		$	53,675		(17.9	)%	$	152,023		$	168,522		(9.8	)%	$	44,298	$	52,369	(15.4	)%

* Represents a change equal to or in excess of 100% or not meaningful

Reconciliation of operating costs before depreciation & amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs)
For the Quarters Ended For the Nine Months Ended
(In thousands) September 29, 2019
September 30, 2018
% Change
September 29, 2019
September 30, 2018
% Change
Operating costs $ 401,452
$ 380,754
5.4 % $ 1,204,241
$ 1,132,065
6.4 %
Less:
Depreciation & amortization 15,450
14,847
4.1 % 45,548
43,969
3.6 %
Severance 367
293
25.3 % 2,441
4,926
(50.4 )%
Multiemployer pension plan withdrawal costs 1,204
1,943
(38.0 )% 4,454
5,838
(23.7 )%
Adjusted operating costs $ 384,431
$ 363,671
5.7 % $ 1,151,798
$ 1,077,332
6.9 %



Reconciliation of operating costs before depreciation & amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs)
	For the Quarters Ended
(In thousands)	March 29, 2020		March 31, 2019		% Change
Operating costs	$	416,316	$	404,464	2.9	%
Less:
Depreciation & amortization	15,185		14,918		1.8	%
Severance	370		1,403		(73.6	)%
Multiemployer pension plan withdrawal costs	1,423		1,450		(1.9	)%
Adjusted operating costs	$	399,338	$	386,693	3.3	%

3228

LIQUIDITY AND CAPITAL RESOURCES

We believe our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to meet our financing needs over the next twelve months. Although there is uncertainty related to the anticipated effect of the COVID-19 pandemic on our business (see “—Executive Overview— Impact of COVID-19 Pandemic” and “Part II—Item 1A—Risk Factors”), given the strength of our balance sheet, we do not expect the pandemic to materially impact our liquidity position. As of ~~September~~March 29, ~~2019,~~2020, we had cash, cash equivalents and short- and long-term marketable securities of ~~$877.9 million and total debt of $246.2 million. Accordingly, our cash, cash equivalents, and marketable securities exceeded total debt by $631.7~~$686.9 million. Our cash and investment balances have increased since the end of ~~2018,~~2019, primarily due to cash proceeds from operating activities and ~~lower capital expenditures,~~proceeds from sale of investments, partially offset by capital expenditures, share based compensation tax withholding, costs associated with the acquisition of a business and dividend payments.

We have paid quarterly dividends ~~of $0.04 per share~~ on the Class A and Class B Common Stock ~~from~~since late ~~2013 through early 2019.~~2013. In February ~~2019,~~2020, the Board of Directors approved ~~an increase in the quarterly dividend to $0.05 per share, which was paid in April 2019. In June and September 2019, the Board of Directors declared~~ a quarterly dividend of ~~$0.05~~$0.06 per share, onan increase of $0.01 per share from the ~~Class A and Class B Common Stock, which was paid in July and October 2019.~~previous quarter. We currently expect to continue to pay comparable cash dividends in the future, although changes in our dividends will be considered by our Board of Directors in light of our earnings, capital requirements, financial condition and other factors considered relevant.

In March 2009, we entered into an agreement to sell and simultaneously lease back the Condo Interest in the Company Headquarters. The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds of approximately $211 million. In December 2019, we expect to repurchase the Condo Interest for $245.3 million and fund the purchase from our existing cash and marketable securities.

~~In addition, on August 1, 2019, using existing cash, we purchased the previously leased land at our College Point, N.Y., printing and distribution facility for $6.9 million.~~

In September 2019, the Company entered into a $250.0 million five-year revolving credit facility. Certain of the Company’s domestic subsidiaries have guaranteed the Company’s obligations under the credit facility. As of September 29, 2019, there were no outstanding borrowings under the credit facility.

We expect to receive a final cash distribution of approximately $5 million to $8 million related to the wind down of our Madison investment. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for more information on the Company’s investment in Madison.

Capital Resources

Sources and Uses of Cash

Cash flows provided by/(used in) by category were as follows:


	For the Nine Months Ended								For the Three Months Ended
(In thousands)	September 29, 2019			September 30, 2018			% Change		March 29, 2020			March 31, 2019			% Change
Operating activities	$	121,600		$	116,376		4.5	%	$	38,851		$	25,184		54.3	%
Investing activities	$	(37,258	)	$	(103,809	)	(64.1	)%	$	(33,423	)	$	(12,980	)	*
Financing activities	$	(43,139	)	$	11,427		*		$	(18,845	)	$	(19,150	)	(1.6	)%

* Represents a change equal to or in excess of 100% or not meaningful

Operating Activities

Cash from operating activities is generated by cash receipts from subscriptions, advertising sales and other revenue. Operating cash outflows include payments for employee compensation, pension and other benefits, raw materials, marketing expenses, interest and income taxes.

Net cash provided by operating activities increased in the first ~~nine months~~quarter of ~~2019~~2020 compared with the same prior-year period due to higher cash collections from customers, lower ~~interest expense~~other receivable and ~~lower incentive compensation payments,~~higher cash received from subscriptions, partially offset by higher cash ~~tax~~ payments made to settle accounts payable, accrued payroll and ~~lower cash received from subscriptions.~~other liabilities.

Investing Activities

Cash from investing activities generally includes proceeds from marketable securities that have matured and the sale of assets, investments or a business. Cash used in investing activities generally includes purchases of marketable securities, payments for capital projects and acquisitions of new businesses and investments.

Net cash used in investing activities in the first ~~nine months~~quarter of ~~2019~~2020 was primarily related to ~~approximately $33~~$15.2 million in capital expenditures payments, ~~and $7~~$14.8 million in net purchases of marketable ~~securities.~~

securities, and $8.1 million cash outflow for the acquisition of a business.

Financing Activities

Cash from financing activities generally includes borrowings under third-party financing arrangements, the issuance of long-term debt and funds from stock option exercises. Cash used in financing activities generally includes the repayment of amounts outstanding under third-party financing arrangements, the payment of dividends, the payment of long-term debt and finance lease obligations and share-based compensation tax withholding.

Net cash used in financing activities in the first ~~nine months~~quarter of ~~2019~~2020 was primarily related to ~~dividend payments of $23.3 million,~~ stock-based compensation tax withholding payments of ~~$15.6~~$11.4 million and ~~the purchase~~dividend payments of ~~previously leased land at our College Point, N.Y., printing and distribution facility for $6.9 million, partially offset by proceeds from stock option exercises of approximately $3~~$8.3 million.

Restricted Cash

We were required to maintain ~~$17.0~~$15.8 million of restricted cash as of ~~September~~March 29, ~~2019,~~2020, and ~~$18.3~~$17.1 million as of December ~~30, 2018,~~29, 2019, substantially all of which is set aside to collateralize workers’ compensation obligations.

Capital Expenditures

Capital expenditures totaled approximately ~~$33~~$12 million and ~~$48~~$11 million in the first ~~nine months~~quarter of ~~2019~~2020 and ~~2018,~~2019, respectively. The ~~decrease~~increase in capital expenditures was primarily driven by higher expenditures in the first ~~nine months~~quarter of ~~2018~~2020 related to the ~~redesign and consolidation~~build-out of additional office space in ~~the Company Headquarters.~~Long Island City, N.Y. The cash payments related to capital expenditures totaled approximately ~~$33~~$15 million and ~~$62~~$10 million in the first ~~nine months~~quarter of ~~2019~~2020 and ~~2018,~~2019, respectively.

Third-Party Financing

As of September 29, 2019, our current indebtedness primarily consisted of the repurchase option related to a sale-leaseback of a portion of the Company Headquarters. See Note 7 of the Notes to the Condensed Consolidated Financial Statements for information regarding our total debt and finance lease obligations. See Note 9 of the Notes to the Condensed Consolidated Financial Statements for information regarding the fair value of our short-term debt.

In September 2019, we entered into a ~~$250.0~~$250 million five-year unsecured credit facility (the “Credit Facility”). Certain of our domestic subsidiaries have guaranteed our obligations under the Credit Facility. As of ~~September~~March 29, ~~2019,~~2020, there were no outstanding borrowings under the Credit ~~Facility.~~

~~The Credit~~ Facility ~~contains various customary affirmative~~ and ~~negative covenants, including certain financial covenants and various incurrence-based negative covenants described below.~~

The interest coverage ratio financial covenant provides that the Loan Parties (as defined in the Credit Facility) will be required to maintain on a trailing four-quarter basis a Consolidated Interest Coverage Ratio of not less than 3.00:1.00. Consolidated Interest Coverage Ratio is defined as the ratio of (i) Consolidated EBITDA (as defined by the credit agreement) to (ii) Consolidated Interest Charges (as defined by the credit agreement) for such period.

The leverage ratio financial covenant provides that the Loan Parties will be required to maintain on a trailing four-quarter basis a Consolidated Leverage Ratio of not more than 2.50:1.00. Consolidated Leverage Ratio is defined as the ratio of (i) Consolidated Funded Indebtedness (as defined by the credit agreement) (less the Encumbered Property Escrow Amount (as defined by the credit agreement)) to (ii) Consolidated EBITDA for such period.

~~In addition, the Credit Facility contains incurrence-based negative covenants that, subject to various exceptions, limit the ability of~~ the Company ~~or its subsidiaries to, among other things:~~

~~incur debt (directly or by third party guarantees);~~

~~grant liens;~~

~~pay dividends;~~

~~make investments;~~

~~make acquisitions or dispositions; and~~

~~prepay debt.~~

~~The Credit Facility generally permits the Company to continue to pay its regular quarterly dividend, and to make other restricted payments so long as it is~~was in ~~pro forma~~ compliance with the financial covenants ~~and no default has occurred or would result from such other restricted payment. In addition,~~contained in the Company and its subsidiaries may (in addition to other customary exceptions and baskets), (i) incur indebtedness secured by liens on its headquarters building or its College Point, N.Y., printing and distribution facility, and (ii) incur indebtedness so long as the Company does not exceed, on a pro forma basis, a Consolidated Leverage Ratio of 2.25:1.00 and no default has occurred or would occur from such indebtedness incurrence.

Credit Facility.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are detailed in our Annual Report on Form 10-K for the year ended December ~~30, 2018.~~29, 2019. Other than as described in Note 2 of the Notes to the Condensed Consolidated Financial Statements, as of ~~September~~March 29, ~~2019,~~2020, our critical accounting policies have not changed from December ~~30, 2018.~~29, 2019.

CONTRACTUAL OBLIGATIONS & OFF-BALANCE SHEET ARRANGEMENTS

Our contractual obligations and off-balance sheet arrangements are detailed in our Annual Report on Form 10-K for the year ended December ~~30, 2018.~~29, 2019. As of ~~September~~March 29, ~~2019,~~2020, our contractual obligations and off-balance sheet arrangements have not changed materially from December ~~30, 2018.~~29, 2019.

FORWARD-LOOKING STATEMENTS

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

By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in any such statements. You should bear this in mind as you consider forward-looking statements. Factors that we think could, individually or in the aggregate, cause our actual results to differ materially from expected and historical results include those described under the heading “Part II-Item 1A-Risk Factors” in this report, in our Annual Report on Form 10-K for the year ended December ~~30, 2018,~~29, 2019, as well as other risks and factors identified from time to time in our SEC filings.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our Annual Report on Form 10-K for the year ended December ~~30, 2018,~~29, 2019, details our disclosures about market risk. As of ~~September~~March 29, ~~2019,~~2020, there were no material changes in our market risks from December ~~30, 2018.~~29, 2019.

3530

Item 4. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of ~~September~~March 29, ~~2019.~~2020. Based upon such evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting during the quarter ended ~~September~~March 29, ~~2019,~~2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced a material impact to our internal control over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continuing to monitor and evaluate the situation to minimize any impact of the pandemic on the design and operating effectiveness of our internal control over financial reporting.

3631

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various legal actions incidental to our business that are now pending against us. These actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. ~~See Note 16 of the Notes to the Condensed Consolidated Financial Statements for a description of certain matters, which is incorporated herein by reference.~~ Although the Company cannot predict the outcome of these matters, it is possible that an unfavorable outcome in one or more matters could be material to the Company’s consolidated results of operations or cash flows for an individual reporting period. However, based on currently available information, management does not believe that the ultimate resolution of these matters, individually or in the aggregate, is likely to have a material effect on the Company’s financial position.

Item 1A. Risk Factors

~~There have been no~~The following represents a material ~~changes to~~change in our risk factors as set forth in “Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December ~~30, 2018.~~29, 2019.

The global coronavirus (COVID-19) pandemic will continue to affect our industry, business and results of operations.

The global coronavirus (COVID-19) pandemic and attempts to contain it have created significant economic disruption, market volatility and uncertainty. As with many companies, the pandemic has disrupted our business and could continue to do so for the foreseeable future.

We derive substantial revenues from the sale of advertising (approximately 29% of our total revenues in 2019). Advertising spending is sensitive to overall economic conditions, and our advertising revenues are 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. The worldwide economic slowdown caused by the outbreak and spread of COVID-19 has materially affected our advertising revenues, and if these conditions were to persist for an extended period of time, our advertising revenues would continue to be adversely affected. Likewise, if social distancing measures continue, our revenues from live events and related services would continue to be adversely affected. It is possible that these revenues will not return to pre-pandemic levels once economic conditions improve.

We derive the majority of our revenues from the sale of subscriptions (approximately 60% of our total revenues in 2019). Although we have experienced significant growth in the number of subscriptions to our digital news and other products in the first quarter of 2020, this growth rate has been driven in part by an extraordinary increase in traffic given the current news environment, and may not be sustainable or indicative of results for future periods. In addition, the recent growth may reflect in part the shifting forward of growth that we would have otherwise seen in subsequent periods. Accordingly, growth in our subscriptions may slow due to slower acquisition and/or higher cancellations as the pandemic subsides and government and other restrictions are relaxed. Furthermore, to the extent that a prolonged weakening of global economic conditions leads consumers to reduce spending on discretionary activities, subscribers may increasingly shift to lower-priced subscription options or may forgo subscriptions altogether. In light of these factors, our ability to obtain new subscribers or to retain subscribers at their current or higher pricing levels could be hindered, reducing our subscription revenue. In addition, with reductions in travel and increases in those working from home, our revenues from the single-copy sales of our print newspaper (which, in 2019, represented less than 10% of our total subscription revenues) have significantly decreased.

In response to public health recommendations, government mandates and other concerns, we have altered certain aspects of our operations, including having the vast majority of our workforce work remotely. An extended period of remote work arrangements could introduce operational risk (including cybersecurity risk), result in a decline in productivity or otherwise negatively affect our ability to manage the business. In addition, if a significant portion of our workforce is unable to work, including because of illness, travel or government restrictions in connection with COVID-19 or shortages of necessary personal protective equipment, our operations may be negatively impacted. We will continue to actively monitor the issues raised by the COVID-19 pandemic and may take further actions that alter our business operations as may be required or that we determine are appropriate. We have enhanced certain employee benefits, and we expect to continue to incur additional costs, which may be significant, as we continue to implement operational changes in response to this pandemic. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our financial results.

The Times is printed at our production and distribution facility in College Point, N.Y., as well as under contract at remote print sites across the United States and throughout the world. While our College Point employees are currently exempted from “stay-at-home” mandates, if this designation were to change or if a significant percentage of our College Point employees were unable to work, our ability to print and distribute the newspaper and other commercial print products in the New York area could be negatively affected. To the extent our newsprint suppliers or print and distribution partners are affected by government “stay-at-home” mandates or recommendations, financial pressures, labor shortages or other circumstances relating to COVID-19 that lead to reduced operations or consolidations or closures of print sites and/or distribution routes, this could lead to an increase in costs to print and distribute our newspapers and/or a decrease in revenues if printing and distribution are

disrupted. Some of our print and distribution partners have taken steps to reduce the frequency with which newspapers are printed and distributed, and additional partners may take similar steps. Significant disruptions to operations at our College Point production and distribution facility or at our newsprint suppliers or print and distribution partners could adversely affect our operating results.

It is also possible that the COVID-19 pandemic may accelerate or worsen the other risks discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K. The extent to which the COVID-19 pandemic impacts us will depend on numerous evolving factors and future developments that we are not able to predict, including the severity of the virus; the duration of the outbreak; the impact of the pandemic on economic activity and the companies with which we do business; governmental, business and other actions; travel restrictions and social distancing measures, among many other factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In 2015, the Board of Directors approved an authorization of $101.1 million to repurchase shares of the Company’s Class A Common Stock. As of ~~September~~March 29, ~~2019,~~2020, repurchases under this authorization totaled $84.9 million (excluding commissions), and $16.2 million remained under this authorization. The Company did not repurchase any shares during the first ~~nine months~~quarter of ~~2019.~~2020. All purchases were made pursuant to our publicly announced share repurchase program. Our Board of Directors has authorized us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date with respect to this authorization.

3733

Item 6. Exhibits



Exhibit No.

10.1		~~Credit Agreement, dated as of September 10, 2019, among~~ The New York Times Company as borrower, the financial institutions party thereto, as lenders, Bank of America, N.A., as administrative agent, swing line lender and L/C Issuer, Wells Fargo Securities, LLC and J.P. Morgan Chase Bank, National Association, and BOFA Securities, Inc., as joint lead arrangers and joint book runners2020 Incentive Compensation Plan (filed as Exhibit ~~10.1~~4.1 to the Company’s Registration Statement on Form ~~8-K~~S-8 dated ~~September 11, 2019,~~April 22, 2020, and incorporated by reference herein).

10.2		Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Company’s 2020 Incentive Compensation Plan.

31.1		Rule 13a-14(a)/15d-14(a) Certification.

31.2		Rule 13a-14(a)/15d-14(a) Certification.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

3834

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		THE NEW YORK TIMES COMPANY
		(Registrant)

Date:	~~November 6, 2019~~May 7, 2020	/s/ Roland A. Caputo
		Roland A. Caputo Executive Vice President and Chief Financial Officer (Principal Financial Officer)

3935



(In thousands)	Classification in the Condensed Consolidated Balance Sheet	September 29, 2019
Operating lease right-of-use assets	Miscellaneous assets	$	54,909
Current operating lease liabilities	Accrued expenses and other	$	7,733
Noncurrent operating lease liabilities	Other	56,156
Total operating lease liabilities		$	63,889



	For the Quarter Ended		For the Nine Months Ended
(In thousands)	September 29, 2019
Operating lease cost	$	2,763	$	7,310
Short term and variable lease cost	442		1,454
Total lease cost	$	3,205	$	8,764



(In thousands, except lease term and discount rate)	September 29, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	6,818
Right-of-use assets obtained in exchange for operating lease liabilities⁽¹⁾	$	60,988
Weighted-average remaining lease term	9.9 years
Weighted-average discount rate	4.65		%



(In thousands)	Amount
2019 (3 months ending December 29, 2019)	$	2,284
2020	9,808
2021	9,026
2022	8,577
2023	7,970
Later Years	41,899
Total lease payments	$	79,564
Less: Interest	(15,675		)
Present value of lease liabilities	$	63,889