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 March 29, 2020

Commission file number 1-5837

THE NEW YORK TIMES COMPANY

(Exact name of registrant as specified in its charter)

 

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

620 Eighth Avenue, New York, New York 10018

(Address and zip code of principal executive offices)

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 May 1, 2020 (exclusive of treasury shares): 

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

THE NEW YORK TIMES COMPANY

INDEX

PART I		Financial Information	1
Item	1	Financial Statements	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 ended March 29, 2020 and March 31, 2019	3
		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 Stockholders’ Equity (unaudited) for the quarters ended March 29, 2020 and March 31, 2019	5
		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	7
Item	2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item	3	Quantitative and Qualitative Disclosures about Market Risk	30
Item	4	Controls and Procedures	31
PART II		Other Information	32
Item	1	Legal Proceedings	32
Item	1A	Risk Factors	32
Item	2	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item	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)

	March 29, 2020		December 29, 2019
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	218,316	$	230,431
Short-term marketable securities	216,658		201,785
Accounts receivable (net of allowances of $14,617 in 2020 and $14,358 in 2019)	157,680		213,402
Prepaid expenses	29,834		29,089
Other current assets	31,209		42,124
Total current assets	653,697		716,831
Other assets
Long-term marketable securities	251,926		251,696
Property, plant and equipment (less accumulated depreciation and amortization of $963,664 in 2020 and $950,881 in 2019)	622,113		627,121
Goodwill	138,450		138,674
Deferred income taxes	113,480		115,229
Miscellaneous assets	243,804		239,587
Total assets	$	2,023,470	$	2,089,138

 See Notes to Condensed Consolidated Financial Statements.

1

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS-(Continued)

(In thousands, except share and per share data)

	March 29, 2020			December 29, 2019
	(Unaudited)
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	99,162		$	116,571
Accrued payroll and other related liabilities	60,581			108,865
Unexpired subscriptions revenue	99,116			88,419
Accrued expenses and other	112,185			123,840
Total current liabilities	371,044			437,695
Other liabilities
Pension benefits obligation	304,251			313,655
Postretirement benefits obligation	36,497			37,688
Other	118,104			126,237
Total other liabilities	458,852			477,580
Stockholders’ equity
Common stock of $.10 par value:
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	199,933			208,028
Retained earnings	1,635,473			1,612,658
Common stock held in treasury, at cost	(171,211		)	(171,211		)
Accumulated other comprehensive loss, net of income taxes:
Foreign currency translation adjustments	3,252			3,438
Funded status of benefit plans	(494,383		)	(498,986		)
Net unrealized gain on available-for-sale securities	1,098			572
Total accumulated other comprehensive loss, net of income taxes	(490,033		)	(494,976		)
Total New York Times Company stockholders’ equity	1,191,714			1,172,003
Noncontrolling interest	1,860			1,860
Total stockholders’ equity	1,193,574			1,173,863
Total liabilities and stockholders’ equity	$	2,023,470		$	2,089,138

 See Notes to Condensed Consolidated Financial Statements.

2

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	For the Quarters Ended
	March 29, 2020		March 31, 2019
	(13 weeks)
Revenues
Subscription	$	285,434	$	270,810
Advertising	106,137		125,088
Other	52,065		43,164
Total revenues	443,636		439,062
Operating costs
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	15,185		14,918
Total operating costs	416,316		404,464
Operating profit	27,320		34,598
Other components of net periodic benefit costs	2,314		1,835
Interest income/(expense) and other, net	13,854		(1,303		)
Income from continuing operations before income taxes	38,860		31,460
Income tax expense	6,006		1,304
Net income	32,854		30,156
Net income attributable to The New York Times Company common stockholders	$	32,854	$	30,156
Average number of common shares outstanding:
Basic	166,549		165,674
Diluted	167,845		167,129
Basic earnings per share attributable to The New York Times Company common stockholders	$	0.20	$	0.18
Diluted earnings per share attributable to The New York Times Company common stockholders	$	0.20	$	0.18
Dividends declared per share	$	0.06	$	0.05

See Notes to Condensed Consolidated Financial Statements.

3

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	For the Quarters Ended
	March 29, 2020			March 31, 2019
	(13 weeks)
Net income	$	32,854		$	30,156
Other comprehensive income, before tax:
Loss on foreign currency translation adjustments	(254		)	(1,649		)
Pension and postretirement benefits obligation	6,397			4,896
Net unrealized gain on available-for-sale securities	715			2,074
Other comprehensive income, before tax	6,858			5,321
Income tax expense	1,915			1,399
Other comprehensive income, net of tax	4,943			3,922
Comprehensive income attributable to The New York Times Company common stockholders	$	37,797		$	34,078

 See Notes to Condensed Consolidated Financial Statements.

4

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Quarters Ended March 29, 2020 and 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, 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

5

THE NEW YORK TIMES COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the Quarters Ended
	March 29, 2020			March 31, 2019
	(13 weeks)
Cash flows from operating activities
Net income	$	32,854		$	30,156
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,185			14,918
Amortization of right of use asset	2,347			1,691
Stock-based compensation expense	2,455			3,827
Gain on non-marketable equity investment	(10,074		)	(1,886		)
Long-term retirement benefit obligations	(4,469		)	(5,754		)
Fair market value adjustment on life insurance products	3,469			(1,428		)
Other-net	3,064			(7,280		)
Changes in operating assets and liabilities:
Accounts receivable-net	55,722			42,409
Other assets	6,826			(4,329		)
Accounts payable, accrued payroll and other liabilities	(79,225		)	(55,835		)
Unexpired subscriptions	10,697			8,695
Net cash provided by operating activities	38,851			25,184
Cash flows from investing activities
Purchases of marketable securities	(142,024		)	(112,029		)
Maturities of marketable securities	127,291			108,792
Business acquisitions	(8,055		)	—
Proceeds from sale of investments – net	2,965			41
Capital expenditures	(15,217		)	(10,473		)
Other-net	1,617			689
Net cash used in investing activities	(33,423		)	(12,980		)
Cash flows from financing activities
Long-term obligations:
Repayment of debt and finance lease obligations	—			(138		)
Dividends paid	(8,344		)	(6,601		)
Capital shares:
Proceeds from stock option exercises	931			2,965
Share-based compensation tax withholding	(11,432		)	(15,376		)
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	32			(338		)
Cash, cash equivalents and restricted cash at the beginning of the period	247,518			259,799
Cash, cash equivalents and restricted cash at the end of the period	$	234,133		$	252,515

 See Notes to Condensed Consolidated Financial Statements.

6

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 March 29, 2020, and December 29, 2019, and the results of operations, changes in stockholders’ equity and cash flows of the Company for the periods ended March 29, 2020, and 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 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 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 March 29, 2020, our significant accounting policies, which are detailed in our Annual Report on Form 10-K for the year ended December 29, 2019, have not changed materially.

7

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recently 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.	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. 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 have a material impact on the Company’s consolidated financial statements.
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.	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. The Company adopted this ASU on December 30, 2019. The adoption did not have a material impact on the 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.	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. 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 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.

8

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 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 offerings sold directly to marketers by our advertising sales team. A significantly smaller and diminishing proportion of our total advertising 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 our platforms. Other print advertising revenue primarily includes classified advertising revenue. Other digital advertising revenue primarily includes creative services 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.

Other revenues primarily consist of revenues from licensing, the leasing of floors in the 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.

Subscription, advertising and other revenues were as follows:

	For the Quarters Ended
(In thousands)	March 29, 2020		March 31, 2019
Subscription	$	285,434	$	270,810
Advertising	106,137		125,088
Other (1)	52,065		43,164
Total	$	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 for the quarters ended March 29, 2020 and March 31, 2019, respectively.

The following table summarizes print and digital subscription revenues, which are components of subscription revenues above, for the quarters ended March 29, 2020, and March 31, 2019:

	For the Quarters Ended
(In thousands)	March 29, 2020		March 31, 2019
Print subscription revenues	$	155,424	$	160,951
Digital-only subscription revenues:
News product subscription revenues(1)	118,958		102,346
Other product subscription revenues(2)	11,052		7,513
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.
(2) Includes revenues from standalone subscriptions to the Company’s Crossword, Cooking and audio products.

9

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 March 29, 2020, the aggregate amount of transaction price allocated to the remaining performance obligations for contracts with a duration greater than one year was approximately $131 million. The Company will recognize this revenue as performance obligations are satisfied. We expect that approximately $33 million, $32 million and $66 million will be recognized in the remainder of 2020, 2021 and thereafter, respectively.

Contract Assets

As of March 29, 2020, and December 29, 2019, the Company had $3.0 million and $3.4 million, respectively, in contract assets recorded in the Condensed Consolidated Balance 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 decrease in the contract assets balance of $0.4 million for the quarter ended March 29, 2020, is due to consideration that was reclassified to Accounts receivable when invoiced based on the contractual billing schedules for the period ended March 29, 2020.

NOTE 4. MARKETABLE SECURITIES

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

10

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 the length of time that individual securities have been in a continuous unrealized loss position:

	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	)

11

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	December 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
Corporate debt securities	$	20,975	$	(6	)	$	8,251	$	(3	)	$	29,226	$	(9	)
U.S. Treasury securities	13,296		(3		)	11,147		(8		)	24,443		(11		)
U.S. governmental agency securities	—		—			15,000		(4		)	15,000		(4		)
Total short-term AFS securities	$	34,271	$	(9	)	$	34,398	$	(15	)	$	68,669	$	(24	)
Long-term AFS securities
Corporate debt securities	$	35,891	$	(25	)	$	4,502	$	(4	)	$	40,393	$	(29	)
U.S. Treasury securities	60,935		(103		)	—		—			60,935		(103		)
U.S. governmental agency securities	34,167		(84		)	—		—			34,167		(84		)
Total long-term AFS securities	$	130,993	$	(212	)	$	4,502	$	(4	)	$	135,495	$	(216	)

We assess AFS securities on a quarterly basis or more often if a potential loss-triggering event occurs. For AFS securities in an unrealized loss position, we first assess whether we intend to sell, or if it is more likely than not that we will be required to sell the security before recovery of 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 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 of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit 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 March 29, 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 March 29, 2020, we have recognized no losses or allowance for credit losses related to AFS securities.

As of March 29, 2020, our short-term and long-term marketable securities had remaining maturities of less than 1 month to 12 months and 13 months to 35 months, respectively. See Note 8 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.

12

THE NEW YORK TIMES COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

(In thousands)	Total Company
Balance as of December 29, 2019	$	138,674
Foreign currency translation	(224		)
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 $2.2 million is included in Miscellaneous assets in our Condensed Consolidated Balance Sheets as of March 29, 2020.

NOTE 6. INVESTMENTS

Non-Marketable Equity Securities

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

As of March 29, 2020, and December 29, 2019, non-marketable equity securities included in Miscellaneous assets in our Condensed Consolidated Balance Sheets had a carrying value of $20.5 million and $13.4 million, respectively. During the first quarter of 2020, we recorded a $10.1 million 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 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 Condensed Consolidated Statements of Operations.

NOTE 7. OTHER

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 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 of a non-marketable equity security.

13

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 March 29, 2020, and December 29, 2019, from the Condensed Consolidated Balance Sheets to the Condensed Consolidated Statements of Cash Flows is as follows:

(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

Substantially all of the amount included in restricted cash is set aside to 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 March 29, 2020, there were no outstanding borrowings under the Credit Facility and the Company was in compliance with the financial covenants contained in the documents governing the Credit Facility.

Severance Costs

We recognized severance costs of $0.4 million and $1.4 million in the first quarters of 2020 and 2019, respectively, related to workforce reductions. These costs are recorded in General and administrative costs in our Condensed Consolidated Statements of Operations.

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

NOTE 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.

14

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 March 29, 2020, and December 29, 2019:

(In thousands)	March 29, 2020								December 29, 2019
	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	67,183		—		67,183		—		43,095		—		43,095		—
U.S. governmental agency securities	29,749		—		29,749		—		37,502		—		37,502		—
Commercial paper	18,779		—		18,779		—