The New York Times Company 2014 Annual Report to Our Fellow Shareholders
Total Page:16
File Type:pdf, Size:1020Kb
THE NEW YORK TIMES COMPANY 2014 ANNUAL REPORT TO OUR FELLOW SHAREHOLDERS, This past year was an important one for The New York Times Company. In 2014 we further sharpened our focus on deriving benefit from our core brand, by working to broaden and deepen the audience for our New York Times journalism, which remains at the heart of our mission and the cornerstone of our business. We delivered modest overall revenue growth during the year, fueled by strong progress in digital advertising and continued expansion of subscription revenues. In fact, we delivered digital advertising growth for all four quarters in 2014 and, as a result, despite continued secular challenges in print advertising, saw the most encouraging year-over-year trend in total advertising since 2005. Digital advertising results benefited greatly from the introduction of Paid Posts, our native advertising solution, which, in addition to being an important financial contributor, also won critical acclaim. Our advertising department built the studio that creates Paid Posts, completely independent of our newsroom, and the work it does now delivers the brand promise of excellent Times quality content for our advertising and marketing clients. We’re also pleased with the progress we made this year in advertising sales associated with mobile and video. And we introduced innovative print advertising solutions that deliver value for our advertisers in a manner that only The Times can. Notably, we unveiled a panoramic advertising unit that wraps the whole paper and introduced Paid Posts in print with a special execution that delivered beautifully. In 2015 we intend to focus on continued advertising innovations across all platforms. We had another good year in our digital consumer revenue business, finishing 2014 with 910,000 paid digital subscribers, an increase of 150,000 compared to the end of 2013. This puts us on track to exceed one million digital subscribers in 2015. Our journalists around the world continue to contribute mightily to our success and the excellence of their work remained undiminished in an incredible news year. Among the many honors received during 2014 were two Pulitzer Prizes, the highest award in journalism. The recipients were: • Tyler Hicks for breaking news photography for his compelling pictures that showed skill and bravery in documenting the unfolding terrorist attack at Westgate mall in Kenya, and • Josh Haner for feature photography for his moving essay on a Boston Marathon bomb blast victim who lost most of both legs and is now painfully rebuilding his life. In 2014, with the launch of NYT Now and NYT Cooking, we demonstrated that we have the capability to reach and engage new customers with great Times journalism packaged in different ways. NYT Now offers a faster way to get caught up on the news for users of our iPhone app and it has attracted a large group of younger readers that in many cases are completely new to The Times. Likewise, NYT Cooking is appealing to a similarly new group of readers by presenting The Times’s unmatched library of more than 17,000 recipes with beautiful photography and sortable collections in an elegant and easy-to-use design. Both NYT Now and NYT Cooking were named among the best apps of 2014 by Apple. We will continue to look for new products and platforms to present our world-class journalism to an expanding audience. And, expansion of our audience has become a key priority for The Times. As a result of our Innovation Report, published last spring, we have significantly increased our focus on further developing our strong and loyal readership and expanding the depth of their engagement with our content. We continue to believe that the best path to the deepest user engagement is great journalism and superb written and visual storytelling, and we’re putting more muscle behind ensuring that this journalism reaches readers on all digital platforms in all parts of the world. Success in this endeavor will benefit both of our digital revenue streams. 2014 annual report We also intend to invest — financially and in terms of time and attention — in those areas that we believe make The Times unique. This month we re-launched The New York Times Magazine with a new editorial vision and a strong advertising focus, and in April we will introduce a new men’s fashion and lifestyle section, our first new print section in 10 years, and one we believe will be well positioned to thrive and delight readers and advertisers. While investing for growth, we will also continue to aggressively manage our costs. We have worked diligently to strengthen our balance sheet, and continue to do so, and ended 2014 in a strong financial position. Tragically, we lost our colleague David Carr on February 12, 2015. David embodied Times values. His combination of formidable talent as a reporter and acute judgment made him an indispensable guide to modern media. He leaves behind a newsroom of colleagues dedicated to upholding his high journalistic ideals. The mission of The New York Times Company is to improve the world through great journalism. We continue to believe that our adherence to that mission is our key differentiator in the marketplace and is very good for our business. Looking ahead, we will continue to capitalize on the strategies we have put in place to continue to grow our business, with an eye toward increasing shareholder value. We thank our Board members and our colleagues for their dedication and we thank you, our shareholders, for your loyal support. We look forward to a successful 2015. Arthur Sulzberger, Jr. Chairman Mark Thompson President and CEO February 24, 2015 2014 annual report UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 28, 2014 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 (I.R.S. Employer incorporation or organization) Identification No.) 620 Eighth Avenue, New York, N.Y. 10018 (Address of principal executive offices) (Zip code) Registrant’s telephone number, including area code: (212) 556-1234 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A Common Stock of $.10 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Not Applicable Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No 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 No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate worldwide market value of Class A Common Stock held by non-affiliates, based on the closing price on June 27, 2014, the last business day of the registrant’s most recently completed second quarter, as reported on the New York Stock Exchange, was approximately $2.2 billion. As of such date, non-affiliates held 66,172 shares of Class B Common Stock. There is no active market for such stock. The number of outstanding shares of each class of the registrant’s common stock as of February 19, 2015 (exclusive of treasury shares), was as follows: 165,676,726 shares of Class A Common Stock and 816,635 shares of Class B Common Stock. Documents incorporated by reference Portions of the Proxy Statement relating to the registrant’s 2015 Annual Meeting of Stockholders, to be held on May 6, 2015, are incorporated by reference into Part III of this report. INDEX TO THE NEW YORK TIMES COMPANY 2014 ANNUAL REPORT ON FORM 10-K ITEM NO. PART I Forward-Looking Statements 1 1 Business 1 Overview 1 Circulation and Audience 2 Advertising 3 Print Production and Distribution 3 Other Businesses 4 Forest Products Investments 4 Raw Materials 4 Competition 5 Employees and Labor Relations 6 Available Information 6 1A Risk Factors