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

THE NEW YORK TIMES COMPANY

(Exact name of registrant as specified in its charter)

620 EIGHTH AVENUE, NEW YORK, NEW YORK

(Address of principal executive offices)

10018

(Zip Code)

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

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

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

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

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

Number of shares of each class of the registrant’s common stock outstanding as of May 2, 2008 (exclusive of treasury shares):

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

See Notes to Condensed Consolidated Financial Statements.

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THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

See Notes to Condensed Consolidated Financial Statements.

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THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

See Notes to Condensed Consolidated Financial Statements.

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THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

See Notes to Condensed Consolidated Financial Statements.

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THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1.                         GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

In the opinion of The New York Times Company’s (the “Company”) management, the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of March 30, 2008, and December 30, 2007, and the results of operations and cash flows of the Company for the periods ended March 30, 2008, and April 1, 2007.  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 Company’s Condensed Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2007.  Due to the seasonal nature of the Company’s 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 first-quarter periods.

As of March 30, 2008, the Company’s significant accounting policies, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 30, 2007, have not changed materially.

The Company adopted Emerging Issues Task Force (“EITF”) No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements (“EITF 06-4”), on December 31, 2007 (the first day of the Company’s 2008 fiscal year).  EITF 06-4 was issued to clarify the accounting for the deferred compensation and postretirement aspects of endorsement split-dollar life insurance arrangements.  It required the Company to recognize a liability for future benefits in accordance with Statement of Financial Accounting Standards (“FAS”) No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions (“FAS 106”).  Accordingly, the Company recorded a liability, which is included in “Other Liabilities—Other” in the Company’s Condensed Consolidated Balance Sheet, for its endorsement split-dollar life insurance arrangement of approximately $9 million through a cumulative-effect adjustment to retained earnings on December 31, 2007.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FAS No. 157, Fair Value Measurements (“FAS 157”), which establishes a common definition for fair value in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and establishes a framework for measuring fair value and expands disclosure requirements about such fair value measurements.

In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”).  FSP 157-2 delayed the effective date of FAS 157 to fiscal years beginning after November 15, 2008, for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).  The partial delay is intended to provide all relevant parties additional time to consider the effect of various implementation issues that have arisen, or that may arise, from the application of FAS 157.

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In accordance with FSP 157-2, the Company partially adopted FAS 157 in the first quarter of 2008.  Therefore, in 2008, the Company’s financial statements will reflect the requirements of FAS 157 for any financial assets and liabilities and for any nonfinancial assets and liabilities recognized or disclosed at fair value in the financial statements on a recurring basis.  As of March 30, 2008, the Company does not have any material nonfinancial assets or liabilities for which the requirements under FAS 157 were not applied because of the partial delay under FSP 157-2.

As of March 30, 2008, the Company does not have any assets measured at fair value that fall within the scope of FAS 157 and FSP 157-2.  The Company does have a liability for a Company-sponsored deferred executive compensation plan (the “DEC plan”) that falls within the scope of FAS 157 and FSP 157-2, as of March 30, 2008.  The DEC plan enables certain eligible executives to defer a portion of their compensation on a pre-tax basis.  Employees’ contributions earn income based on the performance of investment funds they select.  The DEC plan liability is the amount due to the respective executives and is recorded at fair value on a recurring basis utilizing observable market data (Level 2 under FAS 157).  The fair value of the liability, which is included in “Other Liabilities—Other” in the Company’s Condensed Consolidated Balance Sheet, was approximately $130 million as of March 30, 2008.

In February 2007, the FASB issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115 (“FAS 159”), which is effective in fiscal 2008 and permits entities to choose to measure many financial instruments and certain other items at fair value.  The Company did not elect the fair value option for any items under FAS 159.

Recent Accounting Pronouncements

In December 2007, the FASB issued FAS No. 141(R), Business Combinations (“FAS 141(R)”) and FAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51 (“FAS 160”).  Changes for business combination transactions pursuant to FAS 141(R) include, among others, expensing acquisition-related transaction costs as incurred, the recognition of contingent consideration arrangements at their acquisition date fair value and capitalization of in-process research and development assets acquired at their acquisition date fair value.  Changes in accounting for noncontrolling (minority) interests pursuant to FAS 160 include, among others, the classification of noncontrolling interest as a component of consolidated stockholders’ equity and the elimination of “minority interest” accounting in results of operations.  FAS 141(R) and FAS 160 are required to be adopted simultaneously and are effective for fiscal years beginning on or after December 15, 2008.  The adoption of FAS 141(R) will affect the accounting for the Company’s acquisitions that occur after the adoption date.  Based on the Company’s current structure, FAS 160 will be immaterial to the Company’s financial statements.

NOTE 2.                         DISCONTINUED OPERATIONS

On May 7, 2007, the Company sold its Broadcast Media Group, which consisted of nine network-affiliated television stations, their related Web sites and digital operating center, for approximately $575 million.  In 2007, the Company recognized a pre-tax gain on the sale of $190.0 million ($94.0 million after tax).  In accordance with FAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Broadcast Media Group’s results of operations and the gain on sale are presented as discontinued operations.  In the first quarter of 2008,

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the Company recorded a post-closing adjustment reducing the gain by $0.6 million.  The results of operations presented as discontinued operations are summarized below.

NOTE 3.                         GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is the excess of cost over the fair market value of tangible and other intangible assets acquired.  Goodwill is not amortized but tested for impairment annually or if certain circumstances indicate a possible impairment may exist, in accordance with FAS No. 142, Goodwill and Other Intangible Assets.

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

The Company performs its annual impairment testing in the fourth quarter of its fiscal year.

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

In March 2008, the Company acquired certain assets of the Winter Haven News Chief (“News Chief”), a regional newspaper in Winter Haven, Fla., for $2.5 million.  Also in March 2008, the Company purchased additional Class A units of BehNeem, LLC (“BehNeem”), increasing its total investment to $4.3 million for a 53% ownership interest.  BehNeem licenses the Epsilen Environment, an integrated online course content, portfolio and communications tool for the education community.  The operating results of the News Chief are included in the results of the Regional Media Group and the operating results of BehNeem are included in the results of The New York Times Media Group, both of which are part of the News Media Group.

Based on preliminary valuations of the News Chief and BehNeem, the Company has allocated the excess of the respective purchase prices over the carrying value of the net assets acquired of $1.3 million to goodwill and $0.6 million to other intangible assets (primarily customer lists) for the News Chief, and net assets acquired of $2.9 million to goodwill for BehNeem.

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Other intangible assets acquired were as follows:

As of March 30, 2008, the remaining weighted-average amortization period was seven years for customer lists and six years for other amortizable intangible assets acquired included in the table above.

Amortization expense related to other intangible assets acquired that are subject to amortization was approximately $3 million in the first quarter of 2008, and is expected to be approximately $12 million for the fiscal year 2008.  Estimated annual amortization expense for the next five years related to these intangible assets is expected to be as follows:

NOTE 4.                         DEBT OBLIGATIONS

The Company’s total debt, including borrowings under revolving credit agreements and capital lease obligations, was $1.1 billion as of March 30, 2008, and including these items and commercial paper, was $1.0 billion as of December 30, 2007.

The Company’s $800.0 million revolving credit agreements ($400.0 million credit agreement maturing in May 2009 and $400.0 million credit agreement maturing in June 2011) are used for general corporate purposes and may be used to support its commercial paper program.  In addition, these revolving credit agreements provide a facility for the issuance of letters of credit.  Of the total $800.0 million available under the two revolving credit agreements, the Company has issued letters of credit of approximately $25 million as of March 30, 2008.  The Company had $370.0 million outstanding under its revolving credit agreements, with a weighted-average interest rate of 3.1%, as of March 30, 2008.  As of December 30, 2007, the Company had $195.0 million outstanding under its revolving credit agreements, with a weighted-average interest rate of 5.3%.  Any borrowings under the revolving credit agreements bear interest at specified margins based on the Company’s credit rating, over various floating rates selected by the Company.

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The revolving credit agreements each contain a covenant that requires a specified level of stockholders’ equity (as defined in the agreements).  As of March 30, 2008, the amount of stockholders’ equity in excess of the required levels was approximately $599 million.

The Company’s $725.0 million commercial paper program is supported by the revolving credit agreements.  Commercial paper issued by the Company is unsecured and can have maturities of up to 270 days, but generally matures within 90 days.  The Company did not have commercial paper outstanding as of March 30, 2008, and had $111.7 million outstanding as of December 30, 2007.

“Interest expense, net” in the Company’s Condensed Consolidated Statements of Operations was as follows:

NOTE 5.                         INCOME TAXES

The Company’s effective income tax rate was 105.0% in the first quarter of 2008 compared with 51.0% in the first quarter of 2007.  The effective income tax rates were affected by a $4.6 million adjustment to reduce the Company’s reserve for uncertain tax positions in the first quarter of 2008, and an unfavorable tax adjustment of $4.5 million for a change in New York State tax law (effective January 1, 2007) that required a revaluation of existing deferred tax balances in the first quarter of 2007.

NOTE 6.                         COMMON STOCK

On April 22, 2008, the Board of Directors authorized a $.23 per share quarterly dividend on the Company’s Class A and Class B Common Stock.  The dividend is payable on June 11, 2008, to shareholders of record on June 2, 2008.

NOTE 7.                         PENSION AND POSTRETIREMENT BENEFITS

Pension

The Company sponsors several pension plans and makes contributions to several others, in connection with collective bargaining agreements, that are considered multi-employer pension plans.  These plans cover substantially all employees.

The Company-sponsored plans include qualified (funded) plans as well as non-qualified (unfunded) plans. These plans provide participating employees with retirement benefits in accordance with benefit formulas detailed in each plan.  The Company’s non-qualified plans provide retirement benefits only to certain highly compensated employees of the Company.

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The Company also has a foreign-based pension plan for certain International Herald Tribune (“IHT”) employees (the “Foreign plan”).  The information for the Foreign plan is combined with the information for U.S. non-qualified plans.  The benefit obligation of the Foreign plan is immaterial to the Company’s total benefit obligation.

The components of net periodic pension cost of all Company-sponsored pension plans were as follows:

Although the Company does not have any quarterly funding requirements in 2008 (under the Employee Retirement Income Security Act of 1974, as amended, and Internal Revenue Code requirements), the Company will make contractual funding contributions of approximately $18 million (approximately $2 million was made in the first quarter of 2008) for The New York Times Newspaper Guild pension plan.  The Company does not expect to make additional contributions to its other pension plans in 2008.

Postretirement Benefits

The Company provides health and life insurance benefits to retired employees and their eligible dependents, who are not covered by any collective bargaining agreements, if the employees meet specified age and service requirements.  In addition, the Company contributes to a postretirement plan under the provisions of a collective bargaining agreement.  The Company’s policy is to pay its portion of insurance premiums and claims from Company assets.

In accordance with FAS 106, the Company accrues the costs of postretirement benefits during the employees’ active years of service.

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

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NOTE 8.                         OTHER

Impairment of Assets

In the first quarter of 2008, the Company recorded a non-cash charge of $18.3 million for the write-down of assets for a systems project at the News Media Group.  The Company reduced the scope of a major advertising and circulation project to decrease capital spending, which resulted in the write-down of previously capitalized costs.

quadrantONE

In February 2008, the Company invested $1.9 million for a 25% ownership interest in quadrantONE LLC, a consortium online advertising network that sells bundled premium, targeted display advertising from local newspaper Web sites and other affiliates.  The Company’s investment is accounted for under the equity method of accounting.  The Web sites of the Company’s New England and Regional Media Groups are participating in this network.

Buyouts

The Company recognized buyout charges of $11.2 million in the first quarter of 2008 and $7.8 million in the first quarter of 2007.  Most of the charges in both periods were recognized at the News Media Group.  These charges are primarily recorded in “Selling, general and administrative costs” in the Company’s Condensed Consolidated Statements of Operations.  As of March 30, 2008, the Company had a buyout liability of approximately $21 million included in “Accrued expenses” in the Company’s Condensed Consolidated Balance Sheet.

Plant Consolidation

In 2006, the Company announced plans to consolidate the printing operations of a facility it leased in Edison, N.J., into its newer facility in College Point, N.Y.  As part of the consolidation, the Company purchased the Edison facility and then sold it, with two adjacent properties it already owned, to a third party.  The purchase and sale of the Edison facility closed in the second quarter of 2007, relieving the Company of rental terms that were above market as well as certain restoration obligations under the original lease.  As a result of the sale, the Company recognized a pre-tax loss of $68.2 million ($41.3 million after tax) in the second quarter of 2007.

The Company has substantially completed the consolidation of its two New York area printing plants.  The costs to close the Edison facility are estimated to be $90 to $94 million, principally consisting of accelerated depreciation charges ($68.5 million), buyout costs ($16 to $20 million) and plant restoration costs ($5.3 million).   The majority of these costs, approximately $86 million (approximately $6 million in the first quarter of 2008), have been recognized as of March 30, 2008.

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NOTE 9.                         EARNINGS PER SHARE

Basic and diluted earnings per share have been computed as follows:

The difference between basic and diluted shares is generally due to the assumed exercise of stock options and the assumed vesting of restricted stock units included in the diluted earnings per share computation.

Stock options with exercise prices that exceeded the average fair market value of the Company’s Common Stock had an antidilutive effect and, therefore, were excluded from the computation of diluted earnings per share.  Approximately 31 million stock options with exercise prices ranging from $20.24 to $48.54 were excluded from the computation in the first quarter of 2008, and approximately 32 million stock options with exercise prices ranging from $23.83 to $48.54 were excluded from the computation in the first quarter of 2007.

NOTE 10.                  COMPREHENSIVE INCOME

Comprehensive income was as follows:

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The “Accumulated other comprehensive loss, net of income taxes” in the Company’s Condensed Consolidated Balance Sheets was net of a deferred income tax benefit of approximately $49 million as of March 30, 2008, and approximately $53 million as of December 30, 2007.

NOTE 11.                  SEGMENT INFORMATION

The Company’s reportable segments consist of the News Media Group and the About Group.  These segments are evaluated regularly by management in assessing performance and allocating resources.

Below is a description of the Company’s reportable segments:

News Media Group (consisting of The New York Times Media Group, which principally includes The New York Times (“The Times”), NYTimes.com, the IHT and WQXR-FM; the New England Media Group, which principally includes The Boston Globe (the “Globe”), Boston.com and the Worcester Telegram & Gazette; and the Regional Media Group, which includes 15 daily newspapers and their related digital operations); and

About Group (consisting of the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com).

The Broadcast Media Group, which was sold on May 7, 2007, is classified as a discontinued operation and is no longer included as a reportable segment (see Note 2).

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NOTE 12.                  CONTINGENT LIABILITIES

Third-Party Guarantees

The Company has outstanding guarantees on behalf of a third party that provides circulation customer service, telemarketing and home-delivery services for The Times and the Globe, and on behalf of two third parties that provide printing and distribution services for The Times’s National Edition.  The guarantees are for payments under a credit facility and property and equipment leases, and for certain debt and costs related to any default.  The total amount of the guarantees was approximately $27 million as of March 30, 2008.  In accordance with GAAP, the contingent obligations related to these guarantees are not reflected in the Company’s Condensed Consolidated Balance Sheets as of March 30, 2008 and December 30, 2007.

Other

The Company also has letters of credit of approximately $30 million, which are primarily to satisfy requirements by insurance companies, to provide support for the Company’s workers’ compensation liability.  The workers’ compensation liability (approximately $53 million) is included in the Company’s Condensed Consolidated Balance Sheet as of March 30, 2008.

There are various legal actions that have arisen in the ordinary course of business and are now pending against the Company.  These actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made.  It is the opinion of management after reviewing these actions with legal counsel to the Company that the ultimate liability that might result from these actions would not have a material adverse effect on the Company’s Condensed Consolidated Financial Statements.

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

We are a leading media and news organization serving our audiences through print, online, mobile and radio technology.  Our segments and divisions are:

News Media Group (consisting of The New York Times Media Group, which principally includes The New York Times (“The Times”), NYTimes.com, the International Herald Tribune and WQXR-FM; the New England Media Group, which principally includes The Boston Globe (“The Globe”), Boston.com and the Worcester Telegram & Gazette; and the Regional Media Group, which includes 15 daily newspapers and their related digital operations).  The News Media Group generates revenues principally from print, online and radio advertising and through circulation.  Other revenues, which make up the remainder of revenues, primarily consist of revenues from wholesale delivery operations, commercial printing, news services/syndication, digital archives, advertising service revenue, rental income and an online subscription database and research service.  The News Media Group’s main operating costs are employee-related costs and raw materials, primarily newsprint.

About Group (consisting of the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com).  The About Group principally generates revenues from cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad), display advertising that is relevant to its adjacent content, and e-commerce (including sales lead generation).  Almost all of its revenues (93% in the first quarter of 2008) are derived from the sale of advertisements (cost-per-click and display advertising).  Cost-per-click advertising accounts for 59% of the About Group’s total advertising revenues.  The About Group’s main operating costs are employee-related costs and content and hosting costs.

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

·                 a 49% interest in Metro Boston LLC, which publishes a free daily newspaper in the Greater Boston area,

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

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

·                  a 25% interest in quadrantONE LLC, a consortium online advertising network that sells bundled premium, targeted display advertising from local newspaper Web sites and other affiliates.  Our investment of $1.9 million was made in February 2008, and

·                  an approximately 17.5% interest in New England Sports Ventures, which owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80% of the New England Sports Network, a regional cable sports network, and 50% of Roush Fenway Racing, a leading NASCAR team.

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RECENT DEVELOPMENTS

Acquisitions

In March 2008, we acquired certain assets of the Winter Haven News Chief (“News Chief”), a regional newspaper in Winter Haven, Fla., for $2.5 million.  Also in March 2008, we purchased additional Class A units of BehNeem, LLC (“BehNeem”), increasing our total investment to $4.3 million for a 53% ownership interest. BehNeem licenses the Epsilen Environment, an integrated online course content, portfolio and communications tool for the education community.  The operating results of the News Chief are included in the results of the Regional Media Group and the operating results of BehNeem are included in the results of The New York Times Media Group, both of which are part of the News Media Group.

See Note 3 of the Notes to the Condensed Consolidated Financial Statements.

Impairment of Assets

In the first quarter of 2008, we recorded a non-cash charge of $18.3 million for the write-down of assets for a systems project at the News Media Group.  We reduced the scope of a major advertising and circulation project to decrease capital spending, which resulted in the write-down of previously capitalized costs.

Plant Consolidation

In 2006, we announced plans to consolidate the printing operations of a facility we leased in Edison, N.J., into our newer facility in College Point, N.Y.  As part of the consolidation, we purchased the Edison facility and then sold it, with two adjacent properties we already owned, to a third party.  The purchase and sale of the Edison facility closed in the second quarter of 2007, relieving us of rental terms that were above market as well as certain restoration obligations under the original lease.  As a result of the sale, we recognized a pre-tax loss of $68.2 million ($41.3 million after tax) in the second quarter of 2007.

We have substantially completed the consolidation of our two New York area printing plants.  The costs to close the Edison facility are estimated to be $90 to $94 million, principally consisting of accelerated depreciation charges ($68.5 million), buyout costs ($16 to $20 million) and plant restoration costs ($5.3 million).  The majority of these costs, approximately $86 million (approximately $6 million in the first quarter of 2008), have been recognized as of March 30, 2008.

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2008 EXPECTATIONS

Expectations regarding key financial measures for 2008 are in the table below.  These expectations have not changed since detailed in our earnings press release for the first quarter of 2008 except for our expectations for depreciation and amortization and the inclusion of our expectations on buyouts.

In addition, we believe that we can achieve a reduction in costs from our year-end 2007 cash cost base of a total of approximately $230 million in 2008 and 2009, excluding the effects of inflation, buyout costs and one-time costs.  About $130 million of these savings are expected in 2008.

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RESULTS OF OPERATIONS

The following table presents our consolidated financial results.

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

 Revenues

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

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News Media Group

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