NEW YORK TIMES CO - FORM 8-K - EX-99.1 - UNAUDITED PRO FORMA FINANCIAL STATEMENT INFORMATION - January 11, 2012

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8-K - FORM 8-K - NEW YORK TIMES COd279727d8k.htm

Exhibit 99.1

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA FINANCIAL STATEMENT INFORMATION

On January 6, 2012, The New York Times Company (the “Company”) and certain of its subsidiaries completed the sale (the “Transaction”) of substantially all of the assets of the Company’s Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses (the “Business”), and all real, personal and mixed, tangible and intangible assets, properties and rights owned, leased and used in connection with the operation of the Business to Halifax Media Holdings LLC (the “Purchaser”), pursuant to the terms of an Asset Purchase Agreement (the “Agreement”) dated as of December 27, 2011.

The Company received cash consideration in the amount of $143 million, subject to certain working capital and other adjustments pursuant to the Agreement.

The unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 25, 2011 is based on the Company’s balance sheet as of September 25, 2011, after giving effect to the Transaction as if it had occurred as of September 25, 2011. The unaudited Pro Forma Condensed Consolidated Statements of Operations for the 2010, 2009 and 2008 fiscal years and for the nine months ended September 25, 2011 and September 26, 2010, give effect to the Transaction as if it had occurred on December 31, 2007.

The unaudited Pro Forma Condensed Consolidated Statements of Operations for the 2010, 2009 and 2008 fiscal years have been derived from the audited Consolidated Financial Statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended December 26, 2010. The unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 25, 2011 and September 26, 2010, and the unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 25, 2011 have been derived from the unaudited Condensed Consolidated Financial Statements of the Company included in its Quarterly Report on Form 10-Q for the quarter ended September 25, 2011. The unaudited pro forma financial statement information is based upon available information and assumptions that the Company believes are reasonable.

The unaudited pro forma financial statement information has been provided for informational purposes only. The pro forma information is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Transaction occurred as of the dates indicated. In addition, the unaudited pro forma financial statement information does not purport to project the future financial position or operating results of the Company. The unaudited pro forma financial statement information, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Annual Report on 10-K for the fiscal year ended December 26, 2010 and its Quarterly Report on Form 10-Q for the quarter ended September 25, 2011, that have been filed with the Securities and Exchange Commission.

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

($ in thousands, except share data)

 

     As of September 25, 2011  
     Historical     (1)     

 

 Pro forma  

adjustments

   

  

     Pro forma       
  

 

 

    

 

 

    

 

 

  

Assets

       

Current assets

       

Cash and cash equivalents

    $ 93,685      $ 138,112  (2)   $ 231,797   

Short-term investments

      169,764        -        169,764   

Restricted cash

      28,628        -        28,628   

Accounts receivable, net

      250,921        (20,779 )(3)      230,142   

Inventories:

       

Newsprint and magazine paper

      14,956        (2,403 )(3)      12,553   

Other inventory

      4,060        (1,036 )(3)      3,024   
  

 

 

    

 

 

    

 

 

  

Total inventories

      19,016        (3,439 )      15,577   

Deferred income taxes

      68,875        -        68,875   

Other current assets

      49,186        (1,849 )(3)      47,337   
  

 

 

    

 

 

    

 

 

  

Total current assets

      680,075        112,045        792,120   

Other assets

       

Investments in joint ventures

      85,206        -        85,206   

Property, plant and equipment, net

      1,099,734        (150,757 )(3)      948,977   

Intangible assets acquired:

       

Goodwill, net

      491,944        -        491,944   

Other intangible assets acquired, net

      22,239        (359 )(3)      21,880   
  

 

 

    

 

 

    

 

 

  

Total intangible assets acquired

      514,183        (359 )      513,824   

Deferred income taxes

      273,946        26,111  (4)      300,057   

Miscellaneous assets

      181,817        (283 )(3)      181,534   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 2,834,961      $ (13,243 )    $ 2,821,718   
  

 

 

    

 

 

    

 

 

  

Liabilities and stockholders’ equity

       

Current liabilities

       

Accounts payable

    $ 102,298      $ (5,271 )(3)    $ 97,027   

Accrued payroll and other related liabilities

      104,494        (54 )(3)      104,440   

Unexpired subscriptions

      75,046        (11,642 )(3)      63,404   

Accrued expenses and other

      158,484        (12,152 )(3),(4),(5)      146,332   
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      440,322        (29,119 )      411,203   

Other liabilities

       

Long-term debt and capital lease obligations

      771,991        -        771,991   

Pension benefits obligation

      707,710        -        707,710   

Postretirement benefits obligation

      127,812        -        127,812   

Other

      194,444        (705 )(3)      193,739   
  

 

 

    

 

 

    

 

 

  

Total other liabilities

      1,801,957        (705 )      1,801,252   

Stockholders’ equity

       

Common stock of $.10 par value:

       

Class A – authorized 300,000,000 shares; issued 149,967,099 (including treasury shares 3,340,711)

      14,997        -        14,997   

Class B – convertible – authorized and issued shares: 818,885 (including treasury shares: none)

      82        -        82   

Additional paid-in capital

      42,029        -        42,029   

Retained earnings

      1,027,680        26,484  (3),(6)      1,054,164   

Common stock held in treasury, at cost

      (119,534 )      -        (119,534 ) 

Accumulated other comprehensive loss, net of income taxes

      (376,206 )      (9,903 )(7)      (386,109 ) 
  

 

 

    

 

 

    

 

 

  

Total New York Times Company stockholders’ equity

      589,048        16,581        605,629   
  

 

 

    

 

 

    

 

 

  

Noncontrolling interest

      3,634        -        3,634   
  

 

 

    

 

 

    

 

 

  

Total stockholders’ equity

      592,682        16,581        609,263   
  

 

 

    

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 2,834,961      $ (13,243 )    $ 2,821,718   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed financial statements.

 

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share data)

 

     For the Nine Months Ended September 25, 2011  
     Historical     (8)     
 		 Pro forma      
adjustments    		   
(9) 		     Pro forma       
  

 

 

    

 

 

    

 

 

  

Revenues

       

Advertising

    $ 862,954      $ 116,973      $ 745,981   

Circulation

      699,898        58,981        640,917   

Other

      117,589        14,542        103,047   
  

 

 

    

 

 

    

 

 

  

Total revenues

      1,680,441        190,496        1,489,945   

Operating costs

       

Production costs:

       

Raw materials

      118,040        16,943        101,097   

Wages and benefits

      373,127        47,644        325,483   

Other

      222,211        17,528        204,683   
  

 

 

    

 

 

    

 

 

  

Total production costs

      713,378        82,115        631,263   

Selling, general and administrative costs

      763,878        85,306        678,572   

Depreciation and amortization

      87,597        8,822        78,775   
  

 

 

    

 

 

    

 

 

  

Total operating costs

      1,564,853        176,243        1,388,610   

Impairment of assets

      161,318        152,093        9,225   

Pension withdrawal expense

      4,228        -        4,228   
  

 

 

    

 

 

    

 

 

  

Operating (loss)/profit

      (49,958 )      (137,840 )      87,882   

Gain on sale of investments

      71,171        -        71,171   

Loss from joint ventures

      (4,026 )      -        (4,026 ) 

Premium on debt redemption

      46,381        -        46,381   

Interest expense, net

      69,782        -        69,782   
  

 

 

    

 

 

    

 

 

  

(Loss)/income from continuing operations before income taxes

      (98,976 )      (137,840 )      38,864   

Income tax expense/(benefit)

      153        (16,815 )      16,968   
  

 

 

    

 

 

    

 

 

  

(Loss)/income from continuing operations

      (99,129 )      (121,025 )      21,896   

Net loss attributable to the noncontrolling interest

      515        -        515   
  

 

 

    

 

 

    

 

 

  
Net (loss)/income attributable to The New York Times Company common stockholders    $ (98,614 )    $ (121,025 )    $ 22,411   
  

 

 

    

 

 

    

 

 

  

Average number of common shares outstanding:

       

Basic

      147,103          147,103   
  

 

 

      

 

 

  

Diluted

      147,103          152,424   
  

 

 

      

 

 

  

Basic (loss)/earnings per share

    $ (0.67 )      $ 0.15   
  

 

 

      

 

 

  

Diluted (loss)/earnings per share

    $ (0.67 )      $ 0.15   
  

 

 

      

 

 

  

See accompanying notes to unaudited pro forma condensed financial statements.

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share data)

 

      For the Nine Months Ended September 26, 2010  
     Historical     (8)     
 		 Pro forma      
adjustments    		   
(9) 		     Pro forma       
  

 

 

    

 

 

    

 

 

  

Revenues

       

Advertising

    $ 914,518      $ 129,339      $ 785,179   

Circulation

      700,819        60,649        640,170   

Other

      116,450        14,192        102,258   
  

 

 

    

 

 

    

 

 

  

Total revenues

      1,731,787        204,180        1,527,607   

Operating costs

       

Production costs:

       

Raw materials

      114,962        17,197        97,765   

Wages and benefits

      376,204        49,896        326,308   

Other

      223,869        19,108        204,761   
  

 

 

    

 

 

    

 

 

  

Total production costs

      715,035        86,201        628,834   

Selling, general and administrative costs

      781,044        89,974        691,070   

Depreciation and amortization

      90,816        9,526        81,290   
  

 

 

    

 

 

    

 

 

  

Total operating costs

      1,586,895        185,701        1,401,194   

Impairment of assets

      16,148        -        16,148   

Pension withdrawal expense

      6,268        -        6,268   
  

 

 

    

 

 

    

 

 

  

Operating profit

      122,476        18,479        103,997   

Gain on sale of investment

      9,128        -        9,128   

Income from joint ventures

      22,271        -        22,271   

Interest expense, net

      61,825        -        61,825   
  

 

 

    

 

 

    

 

 

  

Income from continuing operations before income taxes

      92,050        18,479        73,571   

Income tax expense

      50,444        7,853        42,591   
  

 

 

    

 

 

    

 

 

  

Income from continuing operations

      41,606        10,626        30,980   

Net income attributable to the noncontrolling interest

      (1,054 )      -        (1,054 ) 
  

 

 

    

 

 

    

 

 

  

Net income attributable to The New York Times Company common stockholders

    $ 40,552      $ 10,626      $ 29,926   
  

 

 

    

 

 

    

 

 

  

Average number of common shares outstanding:

       

Basic

      145,533          145,533   
  

 

 

      

 

 

  

Diluted

      153,092          153,092   
  

 

 

      

 

 

  

Basic earnings per share

    $ 0.28        $ 0.21   
  

 

 

      

 

 

  

Diluted earnings per share

    $ 0.26        $ 0.20   
  

 

 

      

 

 

  

See accompanying notes to unaudited pro forma condensed financial statements.

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share data)

 

      Year Ended December 26, 2010  
     Historical     (10)     
 		 Pro forma      
adjustments    		   
(9) 		     Pro forma       
  

 

 

    

 

 

    

 

 

  

Revenues

       

Advertising

    $ 1,300,361      $ 177,056      $ 1,123,305   

Circulation

      931,493        80,416        851,077   

Other

      161,609        19,187        142,422   
  

 

 

    

 

 

    

 

 

  

Total revenues

      2,393,463        276,659        2,116,804   

Operating costs

       

Production costs:

       

Raw materials

      160,422        23,783        136,639   

Wages and benefits

      498,270        64,511        433,759   

Other

      303,086        25,830        277,256   
  

 

 

    

 

 

    

 

 

  

Total production costs

      961,778        114,124        847,654   

Selling, general and administrative costs

      1,054,199        122,575        931,624   

Depreciation and amortization

      120,950        12,655        108,295   
  

 

 

    

 

 

    

 

 

  

Total operating costs

      2,136,927        249,354        1,887,573   

Impairment of assets

      16,148        -        16,148   

Pension withdrawal expense

      6,268        -        6,268   
  

 

 

    

 

 

    

 

 

  

Operating profit

      234,120        27,305        206,815   

Gain on sale of investment

      9,128        -        9,128   

Income from joint ventures

      19,035        -        19,035   

Interest expense, net

      85,062        -        85,062   
  

 

 

    

 

 

    

 

 

  

Income from continuing operations before income taxes

      177,221        27,305        149,916   

Income tax expense

      68,516        10,783        57,733   
  

 

 

    

 

 

    

 

 

  

Income from continuing operations

      108,705        16,522        92,183   

Net income attributable to the noncontrolling interest

      (1,014 )      -        (1,014 ) 
  

 

 

    

 

 

    

 

 

  

Net income attributable to The New York Times Company common stockholders

    $ 107,691      $ 16,522      $ 91,169   
  

 

 

    

 

 

    

 

 

  

Average number of common shares outstanding:

       

Basic

      145,636          145,636   
  

 

 

      

 

 

  

Diluted

      152,600          152,600   
  

 

 

      

 

 

  

Basic earnings per share

    $ 0.74        $ 0.63   
  

 

 

      

 

 

  

Diluted earnings per share

    $ 0.71        $ 0.60   
  

 

 

      

 

 

  

See accompanying notes to unaudited pro forma condensed financial statements.

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share data)

 

     Year Ended December 27, 2009  
     Historical     (10)     
 		 Pro forma      
adjustments    		   
(9) 		     Pro forma       
  

 

 

    

 

 

    

 

 

  

Revenues

       

Advertising

    $ 1,336,291      $ 192,924      $ 1,143,367   

Circulation

      936,486        85,043        851,443   

Other

      167,662        18,956        148,706   
  

 

 

    

 

 

    

 

 

  

Total revenues

      2,440,439        296,923        2,143,516   

Operating costs

       

Production costs:

       

Raw materials

      166,387        25,126        141,261   

Wages and benefits

      524,782        70,873        453,909   

Other

      330,061        29,234        300,827   
  

 

 

    

 

 

    

 

 

  

Total production costs

      1,021,230        125,233        895,997   

Selling, general and administrative costs

      1,152,874        132,477        1,020,397   

Depreciation and amortization

      133,696        14,893        118,803   
  

 

 

    

 

 

    

 

 

  

Total operating costs

      2,307,800        272,603        2,035,197   

Impairment of assets

      4,179        -        4,179   

Pension withdrawal expense

      78,931        -        78,931   

Net pension curtailment gain

      53,965        -        53,965   

Loss on leases and other

      34,633        -        34,633   

Gain on sale of assets

      5,198        5,198        -   
  

 

 

    

 

 

    

 

 

  

Operating profit

      74,059        29,518        44,541   

Income from joint ventures

      20,667        -        20,667   

Interest expense, net

      81,701        -        81,701   

Premium on debt redemption

      9,250        -        9,250   
  

 

 

    

 

 

    

 

 

  

Income/(loss) from continuing operations before income taxes

      3,775        29,518        (25,743 ) 

Income tax expense/(benefit)

      2,206        13,122        (10,916 ) 
  

 

 

    

 

 

    

 

 

  

Income/(loss) from continuing operations

      1,569        16,396        (14,827 ) 

Net income attributable to the noncontrolling interest

      (10 )      -        (10 ) 
  

 

 

    

 

 

    

 

 

  

Net income/(loss) attributable to The New York Times Company common stockholders

    $ 1,559      $ 16,396      $ (14,837 ) 
  

 

 

    

 

 

    

 

 

  

Average number of common shares outstanding:

       

Basic

      144,188          144,188   
  

 

 

      

 

 

  

Diluted

      146,367          144,188   
  

 

 

      

 

 

  

Basic earnings/(loss) per share

    $ 0.01        $ (0.10 ) 
  

 

 

      

 

 

  

Diluted earnings/(loss) per share

    $ 0.01        $ (0.10 ) 
  

 

 

      

 

 

  

See accompanying notes to unaudited pro forma condensed financial statements.

THE NEW YORK TIMES COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share data)

 

     Year Ended December 28, 2008  
     Historical     (10)     
 		 Pro forma      
adjustments    		   
(9) 		     Pro forma       
  

 

 

    

 

 

    

 

 

  

Revenues

       

Advertising

    $ 1,771,033      $ 276,463      $ 1,494,570   

Circulation

      910,154        87,824        822,330   

Other

      258,577        19,978        238,599   
  

 

 

    

 

 

    

 

 

  

Total revenues

      2,939,764        384,265        2,555,499   

Operating costs

       

Production costs:

       

Raw materials

      250,843        37,521        213,322   

Wages and benefits

      620,573        89,935        530,638   

Other

      438,927        33,127        405,800   
  

 

 

    

 

 

    

 

 

  

Total production costs

      1,310,343        160,583        1,149,760   

Selling, general and administrative costs

      1,328,432        152,498        1,175,934   

Depreciation and amortization

      144,301        17,015        127,286   
  

 

 

    

 

 

    

 

 

  

Total operating costs

      2,783,076        330,096        2,452,980   

Impairment of assets

      197,879        -        197,879   
  

 

 

    

 

 

    

 

 

  

Operating (loss)/profit

      (41,191 )      54,169        (95,360 ) 

Income from joint ventures

      17,062        -        17,062   

Interest expense, net

      47,790        -        47,790   
  

 

 

    

 

 

    

 

 

  

(Loss)/income from continuing operations before income taxes

      (71,919 )      54,169        (126,088 ) 

Income tax (benefit)/expense

      (5,979 )      20,629        (26,608 ) 
  

 

 

    

 

 

    

 

 

  

(Loss)/income from continuing operations

      (65,940 )      33,540        (99,480 ) 

Net income attributable to the noncontrolling interest

      (501 )      -        (501 ) 
  

 

 

    

 

 

    

 

 

  

Net (loss)/income attributable to The New York Times Company common stockholders

    $ (66,441 )    $ 33,540      $ (99,981 ) 
  

 

 

    

 

 

    

 

 

  

Average number of common shares outstanding:

       

Basic

      143,777          143,777   
  

 

 

      

 

 

  

Diluted

      143,777          143,777   
  

 

 

      

 

 

  

Basic loss per share

    $ (0.46 )      $ (0.70 ) 
  

 

 

      

 

 

  

Diluted loss per share

    $ (0.46 )      $ (0.70 ) 
  

 

 

      

 

 

  

See accompanying notes to unaudited pro forma condensed financial statements.

THE NEW YORK TIMES COMPANY

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

 

(1) Represents balances as reported in the unaudited Condensed Consolidated Balance Sheet included in the Company’s quarterly report on Form 10-Q for the quarter ended September 25, 2011.

 

(2) To record receipt of cash from the Purchaser of approximately $138 million. See note 6.

 

(3) To eliminate assets, liabilities and retained earnings related to the Regional Media Group.

 

(4) To record the income tax benefit of approximately $30 million resulting from the sale. The tax benefit in excess of the loss before income taxes is due to a tax deduction for goodwill.

 

(5) To record estimated non-recurring sale and separation costs of approximately $2 million, related primarily to severance costs.

 

(6) Represents the estimated gain on the sale to be recorded in the first quarter of 2012, computed as follows:

 

($ in thousands)       

Purchase price

    $ 143,000   

Closing adjustments

      (4,888 ) 
  

 

 

  

Cash received

    $ 138,112   

Net assets sold

      (156,390 ) 

Curtailment gain

      17,000   

Sale and separation costs

      (2,280 ) 
  

 

 

  

Loss before income taxes

      (3,558 ) 

Income tax benefit

      (30,042 ) 
  

 

 

  

Estimated net gain

    $ 26,484   
  

 

 

  

 

(7) Represents an estimated curtailment gain of approximately $10 million (net of taxes) associated with the Company’s retiree medical plan. The sale resulted in a significant reduction to the expected years of future service from current employees, resulting in the curtailment.

 

(8) Represents results of operations as reported in the unaudited Condensed Consolidated Statements of Operations in the Company’s quarterly report on Form 10-Q for the quarter ended September 25, 2011.

 

(9) Represents results of operations of the Regional Media Group. Tax effects have been determined based on the effective tax rates for the Regional Media Group in effect during the periods presented.

 

(10) Represents results of operations as reported in the audited Consolidated Statements of Operations in the Company’s Annual Report on Form 10-K for the year ended December 26, 2010.

NEW YORK TIMES CO Reports

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