Untitled

We are increasing our operational efficiency and reducing both

fixed and variable costs; and

Over the past year, we have been adapting and transforming

The New York Times Company to improve its financial performance

and position it for success well into the future. Our strategy is centered

upon five critical areas that address the changes in our markets:

We are enhancing the positions of our strong brands through

the introduction of innovative new products and services

across media platforms;

And we are proud to say that we are successfully executing on all

of these fronts.

We are aggressively pursuing leadership positions in key

content verticals, both in print and online;

We are continuing to rebalance our portfolio of properties

and to exercise financial discipline as we allocate capital for the

benefit of our shareholders.

We are building a vibrant, long-term innovation capability

that helps us anticipate consumer preferences and create ways

of satisfying them;

The New York

imes Company

Strategy

THE NEW YORK TIMES COMPANY P. 1

COST SAVINGS

As a result

of steps we have

taken over the

past two years,

we have reduced

costs and realized

productivity

gains of

$120 million. This

work continues.

Consolidating our

printing plants

Continuing our

process engi-

neering initiatives

Reconfiguring

our workforce

Decreasing our

newsprint

consumption

improving

opera-

tional

efficiency

and

reducing

costs has

been a

priority

for us.

We are proud of what we have

accomplished, but we also recog-

nize much more needs to be done to

improve our financial performance.

As we are well aware, our chal-

lenges are considerable as reflected

in last year’s results. For 2006, we

reported a net loss of $543 million

or $3.76 per share (on a diluted

basis) as a result of a non-cash

charge of $814 million ($736 million

or $5.09 per share) for the write-

down of assets at our New England

Media Group (NEMG). In 2005,

diluted earnings per share (EPS)

were $1.74, which included a gain

on the sale of real estate of $0.46 per

share. Excluding the effects of the

NEMG charge and the real estate

gains, our EPS were $1.33 for 2006

compared with $1.28 for 2005.

As a result of the significant

decline in current and projected

operating results and cash flows

of the NEMG due to, among

other factors, advertiser consoli-

dation and increased competition

with online media, the accounting

rules required the Company to

write down intangible assets of the

Group. Despite this charge, we

continue to view these properties

as important assets, and we

remain acutely focused on

improving their performance

and value.

Our optimism is rooted in the

fact that our Company is enhancing

its competitive position by making

more changes than at any time in

its 156-year history. Over the past

year, we have introduced many

new products, re-engineered our

operations and management

processes, and both acquired and

sold businesses and investments

based on their strategic fit.

Our journalistic colleagues

continue to demonstrate their

unwavering commitment to

reporting, editing and photo-

graphy of the highest quality. Over

the past year these efforts were rec-

ognized with numerous awards,

including three Pulitzer Prizes, a

Polk and an Alfred I. duPont-

Columbia University Award.

ADHERING TO OUR STRATEGY

Media leadership in the first

decade of our new century has

required that we embrace a disci-

plined and expansive planning

process, and we are doing exactly

that with a five-part strategy:

– Enhancing the positions of our

strong brands through the intro-

duction of innovative new

products and services across

media platforms;

– Aggressively pursuing leader-

ship positions in key content

verticals, both in print and online;

– Building a vibrant long-term

innovation capability that helps

us anticipate consumer prefer-

ences and create ways of

satisfying them;

– Increasing our operational effi-

ciency and reducing both fixed

and variable costs; and

– Continuing to rebalance our

portfolio of properties and to

exercise financial discipline as

we allocate capital for the bene-

fit of our shareholders.

ENHANCING OUR STRONG

BRANDS

The Company’s powerful and

trusted print brands remain a

strategic cornerstone. Traditional

print newspaper audiences, on a

daily basis, are still significantly

larger than their Web counter-

parts, and print commands high

levels of reader engagement.

Consequently, we have pro-

duced a range of exciting new

magazines, including:

– PLAY, The New York Times

Sports Magazine;

– KEY, The Times’s new luxury

real estate publication; and

– Design New England, the

Globe’s magazine devoted to

home and garden.

Other new product introductions

include new zoned and special

sections across the Company; new

ad placements, including section

fronts at nearly all of our newspa-

pers; and new weekly newspapers

at our Regional Media Group.

The New York Times Company, like

many other companies in our industry, is in the midst of an extra-

ordinary transformation unlike any we have seen in our lifetimes.

Well-respected, long-standing organizations successfully endure by

closely adhering to what has always made them great while making

the changes necessary to compete in a rapidly evolving world. Our

colleagues understand what it takes to succeed in this era, and are working

hard to create exceptional journalism while mastering new technologies.

arthur

sulzberger, jr.

Chairman

janet l.

robinson

President and CEO

TO OUR FELLOW SHAREHOLDERS:

The New York

Times received

three Pulitzer

Prizes in 2006:

James Risen and

Eric Lichtblau

for national reporting

for their coverage

of the U.S.

government’s

secret eavesdrop-

ping program.

Joseph Kahn and

Jim Yardley for inter-

national reporting for

their examination of

China’s legal system.

Nicholas Kristof for

commentary bring-

ing the genocide in

Darfur to the

world’s attention.

In addition, Times

journalist Lydia

Polgreen won a

George Polk Award

for her coverage

of Darfur.

Just as we have a leadership posi-

tion in print so too do we online.

The New York Times Company had

the ninth largest presence on the

Web, with 44.2 million unique visi-

tors in the United States alone in

December 2006. We expect this

audience to grow as we extend our

digital offerings. We are aggres-

sively developing new online

products and building out our

online verticals. Our approach is to

attract more users, deepen their

engagement through relevant con-

tent and increasingly monetize the

traffic from those users:

– We redesigned NYTimes.com,

the No.1 newspaper Web site. We

streamlined navigation, added

more content,

tools, video and

other multimedia.

This January we

re-launched the

Travel vertical, which

now features over

1,000 redesigned

global destination

guides, each

containing reviews

and suggestions

from New York

Times journalists and

readers, as well

as guidebook infor-

mation from

Frommer’s. Page

views are up

in key areas of the

vertical and user

response has been

tremendous.

Last year on the

Real Estate vertical

we launched “Great

Homes,” a branded

national online

luxury environment

targeting the

aspirational browser

and the luxury buyer,

and “Home Finance

Center,” which posi-

tions NYTimes.com

as a trusted and

objective online

advisor to streamline

and simplify the

mortgage process.

P. 4 2006 ANNUAL REPORT

allow us to operate more effi-

ciently and effectively.

We are further decreasing our

newsprint consumption, and later

this year The Times will reduce the

width of the paper, providing us

with more than $10 million in

annualized savings.

This spring, we are moving to

our new corporate headquarters,

and our capital spending for it

will come to an end shortly there-

after. The midtown Manhattan

real estate market has improved

significantly since we began this

project, and our new building’s

value is now considerably more

than our cost. With the staff reduc-

tions that have taken place and

with some departments working

in lower cost office space, we are

planning to lease five floors,

totaling approximately 155,000

square feet, which is one-fifth of

our space.

REBALANCING OUR

PORTFOLIO & EFFECTIVELY

ALLOCATING CAPITAL

Our fifth area of strategic focus is

rebalancing our portfolio and exer-

cising financial discipline as we

allocate our capital for the benefit

of our shareholders. We continu-

ously evaluate our businesses to

determine if they are meeting their

targets for financial performance,

growth and return on investment,

and remain relevant to our strategy.

Over the past year, we sold our

50% investment in the Discovery

Times Channel for $100 million;

we announced an agreement to

sell the Broadcast Media Group

for $575 million; and in the first

quarter of this year, we expect to

finalize the sale of our radio station

WQEW-AM for $40 million.

With the completion of our new

headquarters and the restruc-

turing of our portfolio, we will

create additional value for our

shareholders by being very disci-

plined with the use of our free

cash. Our priorities include:

– Investing in high-return capital

projects that will improve oper-

ations, increase revenues and

reduce costs, such as our plant

consolidation and web-width

reduction projects;

– Making acquisitions and invest-

ments that are both financially

and strategically sound as

demonstrated by our acquisi-

tions of About.com and Baseline;

– Reducing our debt to allow for

financing flexibility in the future;

– Providing our shareholders with

a competitive dividend; and

– Repurchasing our stock.

These first two items are critically

important as they enable us to grow

revenues and reduce costs, and

thereby improve the Company’s

long-term results. We are also bal-

ancing our goals of maintaining

appropriate debt levels and paying

a competitive dividend with that of

repurchasing our shares.

SUPPORTING OUR DUAL

CLASS STRUCTURE

Our dual class structure has been

in place since we went public and

was designed specifically to

protect the journalistic indepen-

dence and integrity of The Times.

We are proud of this ownership

model, and are glad—especially

in light of what is happening with

some of our esteemed media

colleagues—that we have a dual

class structure. It provides our

newspapers and Web sites with

the freedom to pursue the great

journalism that our readers in this

country and around the world

want and expect.

BEING A 21ST CENTURY LEADER

The digital age is changing our

market in innumerable ways and

the need for quality news, infor-

mation and analysis is more

important than ever, underscoring

our central value proposition.

The foundation of all our efforts

is our staff, readers, viewers, lis-

teners, advertisers, shareholders,

communities and our board of

directors, and we want to thank

them for their loyalty and support.

We also want to thank Cathy

Sulzberger, who has decided not

to stand for reelection, for her ded-

ication, committee service and

many contributions to our Com-

pany, and welcome Dan Cohen to

the board. As a fourth-generation

family member, he brings a deep

understanding of our Company’s

historic mission and its long-term

business objectives.

As we contemplate the many

challenges of this very fluid

business environment, we are con-

fident that we have the financial

wherewithal, the technological

competence and the professional

commitment to provide our audi-

ences throughout the world with

an even more compelling brand of

multiplatform journalism in the

years to come.

arthur sulzberger, jr.

Chairman

janet l. robinson

President and CEO

FORM 10-K

FACTORS THAT COULD AFFECT OPERATING RESULTS

Except for the historical information, the matters discussed in this Annual Report are forward-looking

statements that involve risks and uncertainties that could cause actual results to differ materially from

those predicted by such forward-looking statements. These risks and uncertainties include national and

local conditions, as well as competition, that could influence the levels (rate and volume) of retail,

national and classified advertising and circulation generated by the Company’s various markets, and

material increases in newsprint prices. They also include other risks detailed from time to time in the

Company’s publicly filed documents, including its Annual Report on Form 10-K for the fiscal year

ended December 31, 2006, which is included in this Annual Report. The Company undertakes no

obligation to publicly update any forward-looking statement, whether as a result of new information,

future events, or otherwise.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 31, 2006 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.)

229 West 43rd Street, New York, N.Y. 10036

(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 and (2) has been subject to such

filing requirements for the past 90 days. 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, or a non-

accelerated filer. Large accelerated filer Accelerated filer Non-accelerated filer

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 23, 2006, the last business day of the registrant’s most recently completed second quarter, as

reported on the New York Stock Exchange, was approximately $3.2 billion. As of such date, non-affiliates held

84,494 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 23, 2007, was

as follows: 143,092,644 shares of Class A Common Stock and 832,572 shares of Class B Common Stock.

Document incorporated by reference Part

Proxy Statement for the 2007 Annual Meeting of Stockholders III

ITEM NO.

Explanatory Note

PART I Forward-Looking Statements 1

1 Business 1

Introduction 1

News Media Group 2

Advertising Revenue 2

The New York Times Media Group 2

New England Media Group 4

Regional Media Group 5

About.com 5

Broadcast Media Group 6

Forest Products Investments and Other Joint Ventures 7

Raw Materials 7

Competition 8

Employees 9

Labor Relations 9

1A Risk Factors 10

1B Unresolved Staff Comments 13

2 Properties 14

3 Legal Proceedings 14

4 Submission of Matters to a Vote of Security Holders 15

Executive Officers of the Registrant 15

PART II 5 Market for the Registrant’s Common Equity, Related Stockholder

Matters and Issuer Purchases of Equity Securities 17

6 Selected Financial Data 20

7 Management’s Discussion and Analysis of

Financial Condition and Results of Operations 25

7A Quantitative and Qualitative Disclosures About Market Risk 48

8 Financial Statements and Supplementary Data 49

9 Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure 111

9A Controls and Procedures 111

9B Other Information 112

PART III 10 Directors, Executive Officers and Corporate Governance 113

11 Executive Compensation 113

12 Security Ownership of Certain Beneficial Owners and

Management and Related Stockholder Matters 113

13 Certain Relationships and Related Transactions, and Director Independence 113

14 Principal Accounting Fees and Services 113

PART IV 15 Exhibits and Financial Statement Schedules 114

INDEX TO THE NEW YORK TIMES COMPANY 2006 ANNUAL REPORT ON FORM 10-K

EXPLANATORY NOTE

In this Annual Report on Form 10-K, we are restating

the Consolidated Balance Sheet as of December 25,

2005 and the Consolidated Statements of Operations,

Consolidated Statements of Cash Flows, and

Consolidated Statements of Changes in Stockholders’

Equity for the 2005 and 2004 fiscal years and related

disclosures. This Annual Report on Form 10-K also

reflects the restatement of:

–

“Selected Financial Data” for our 2002 through

2005 fiscal years in Item 6,

–

“Management’s Discussion and Analysis of

Financial Condition and Results of Operations” for

our 2005 and 2004 fiscal years in Item 7, and

–

“Quarterly Information (Unaudited)” for the first

three quarters of fiscal 2006 and all of fiscal 2005.

See “Item 7 – Management’s Discussion and

Analysis of Financial Condition and Results of

Operations” and Note 2 (Restatement of Financial

Statements) of the Notes to the Consolidated

Financial Statements for more detailed information

regarding the restatement and the changes to previ-

ously issued financial statements.

The previously issued financial statements

are being restated because we have determined that

they contain errors in accounting for pension and

postretirement liabilities. The reporting errors arose

principally from the treatment of pension and bene-

fits plans established pursuant to collective

bargaining agreements between The New York Times

Company and its subsidiaries, on the one hand, and

The New York Times Newspaper Guild, on the other,

as multi-employer plans. The plans’ participants

include employees of The New York Times and a

Company subsidiary, as well as employees of the

plans’ administrator. We have concluded that, under

accounting principles generally accepted in the

United States of America, the plans should have been

accounted for as single-employer plans. The main

effect of the change is that we must account for the

present value of projected future benefits to be pro-

vided under the plans. Previously, we had recorded

the expense of our annual contributions to the plans.

The restatement also reflects the effect of

other unrecorded adjustments previously deter-

mined to be immaterial, mainly related to accounts

receivable allowances and accrued expenses.

The impact of the restatement is not mate-

rial from an income and cash flows statement

perspective. For 2005, the impact was a $.04 reduc-

tion in diluted earnings per share. However, the

impact is material from a balance sheet perspective.

The cumulative effect of the restatement resulted in

a reduction in stockholders’ equity of approximately

$65 million as of December 25, 2005.

Previously filed annual reports on

Form 10-K and quarterly reports on Form 10-Q

affected by the restatement have not been amended

and, as such, should not be relied upon. On

January 31, 2007, we filed a Current Report on

Form 8-K announcing that the Audit Committee of

our Board had concluded that our previously issued

financial statements should no longer be relied upon.

2006 ANNUAL REPORT – Explanatory Note

This Annual Report on Form 10-K, including the

sections titled “Item 1A – Risk Factors” and “Item 7 –

Management’s Discussion and Analysis of Financial

Condition and Results of Operations,” contains

forward-looking statements that relate to future

events or our future financial performance. We may

also make written and oral forward-looking state-

ments in our Securities and Exchange Commission

(“SEC”) filings and otherwise. We have tried, where

possible, to identify such statements by using words

such as “believe,” “expect,” “intend,” “estimate,”

“anticipate,” “will,” “project,” “plan” and similar

expressions in connection with any discussion of

future operating or financial performance. Any

forward-looking statements are and will be based

upon our then-current expectations, estimates and

assumptions regarding future events and are applica-

ble only as of the dates of such statements. We

undertake no obligation to update or revise any

forward-looking statements, whether as a result of

new information, future events or otherwise.

By their nature, forward-looking statements

are subject to risks and uncertainties that could cause

actual results to differ materially from those antici-

pated in any forward-looking statements. You should

bear this in mind as you consider forward-looking

statements. Factors that, individually or in the aggre-

gate, we think could cause our actual results to differ

materially from expected and historical results

include those described in “Item 1A-Risk Factors”

below as well as other risks and factors identified

from time to time in our SEC filings.

INTRODUCTION

The New York Times Company (the “Company”)

was incorporated on August 26, 1896, under the laws

of the State of New York. The Company is a diversi-

fied media company that currently includes

newspapers, Internet businesses, television and radio

stations, investments in paper mills and other invest-

ments. Financial information about our segments can

be found in “Item 7 – Management’s Discussion and

Analysis of Financial Condition and Results of

Operations” and in Note 18 of the Notes to the

Consolidated Financial Statements. The Company

and its consolidated subsidiaries are referred to col-

lectively in this Annual Report on Form 10-K as “we,”

“our” and “us.”

Our Annual Report on Form 10-K, Quarterly

Reports on Form 10-Q, Current Reports on Form 8-K,

and all amendments to those reports, and the Proxy

Statement for our Annual Meeting of Stockholders

are made available, free of charge, on our Web site

http:/ /www.nytco.com, as soon as reasonably practica-

ble after such reports have been filed with or

furnished to the SEC.

In 2006, we classified our businesses based

on our operating strategies into two segments, the

News Media Group and About.com.

The News Media Group consists of the following:

–

The New York Times Media Group, which includes

The New York Times (“The Times”), NYTimes.com,

the International Herald Tribune (the “IHT”),

IHT.com, a newspaper distributor in the New York

City metropolitan area, news, photo and graphics

services, news and features syndication and our

two New York City radio stations, WQXR-FM and

WQEW-AM (expected to be sold in the first quarter

of 2007);

–

the New England Media Group, which includes

The Boston Globe (the “Globe”), Boston.com, the

Worcester Telegram & Gazette, in Worcester, Mass.

(the “T&G”), and the T&G’s Web site,

Telegram.com; and

–

the Regional Media Group, which includes 14 daily

newspapers in Alabama, California, Florida,

Louisiana, North Carolina and South Carolina and

related print and digital businesses.

About.com, which we acquired on March 18,

2005, is one of the Web’s most comprehensive con-

sumer solutions sources, and provides users with

information and advice on thousands of topics.

On January 3, 2007, we entered into an agree-

ment to sell our Broadcast Media Group, consisting of

nine network-affiliated television stations, their

related Web sites and the digital operating center, to

Oak Hill Capital Partners, for $575 million. The trans-

action is subject to regulatory approvals and is

expected to close in the first half of 2007. The

Broadcast Media Group previously represented a sep-

arate reportable segment of the Company. In

accordance with Statement of Financial Accounting

Standards (“FAS”) No. 144, Accounting for the

Impairment or Disposal of Long-Lived Assets, the

Broadcast Media Group’s results of operations are

presented as discontinued operations and certain

assets and liabilities are classified as held for sale for

all periods presented (see Note 5 of the Notes to the

Consolidated Financial Statements). For purposes of

comparability, certain prior year information has been

reclassified to conform with the 2006 presentation.

ITEM 1. BUSINESS

FORWARD-LOOKING STATEMENTS

Part I – THE NEW YORK TIMES COMPANY P. 1

PART I

Additionally, we own equity interests in a

Canadian newsprint company and a supercalendered

paper manufacturing partnership in Maine; New

England Sports Ventures, LLC (“NESV”), which

owns the Boston Red Sox, Fenway Park and adjacent

real estate, approximately 80% of New England

Sports Network (the regional cable sports network

that televises the Red Sox games) and 50% of Roush

Fenway Racing, a leading NASCAR team; and Metro

Boston LLC (“Metro Boston”), which publishes a free

daily newspaper catering to young professionals and

students in the Boston metropolitan area.

In October 2006, we sold our 50% ownership

interest in Discovery Times Channel, a digital cable

channel, for $100 million.

Revenue from individual customers and

revenues, operating profit and identifiable assets of

foreign operations are not significant.

Seasonal variations in advertising revenues

cause our quarterly results to fluctuate. Second-quar-

ter and fourth-quarter advertising volume is typically

higher than first- and third-quarter volume because

economic activity tends to be lower during the winter

and summer.

NEWS MEDIA GROUP

The News Media Group segment consists of The New

York Times Media Group, the New England Media

Group and the Regional Media Group.

Advertising Revenue

The majority of the News Media Group’s revenue is

derived from advertising sold in its newspapers and

other publications and on its Web sites, as discussed

below. We divide such advertising into three basic cat-

egories: national, retail and classified. Advertising

revenue also includes preprints, which are advertising

supplements. Advertising revenue and print volume

information for the News Media Group appears under

“Item 7 – Management’s Discussion and Analysis of

Financial Condition and Results of Operations.”

P. 2 2006 ANNUAL REPORT – Part I

Below is a percentage breakdown of 2006 advertising revenue by division:

Classified

Retail Other

and Help Real Total Advertising

National Preprint Wanted Estate Auto Other Classified Revenue Total

The New York Times

Media Group 64

(1)

14 5 10 3 2 20 2 100

New England Media Group 26 31 11 13 9 5 38 5 100

Regional Media Group 3 48 13 15 10 5 43 6 100

Total News Media Group 45 24 8 12 5 3 28 3 100

(1)

Includes all advertising revenue of the IHT.

The New York Times Media Group

The New York Times

The Times, a standard-size daily (Monday through

Saturday) and Sunday newspaper, commenced pub-

lication in 1851.

Circulation

The Times is circulated in each of the 50 states, the

District of Columbia and worldwide. Approximately

48% of the weekday (Monday through Friday) circu-

lation is sold in the 31 counties that make up the

greater New York City area, which includes New

York City, Westchester, Long Island, and parts of

upstate New York, Connecticut, New Jersey and

Pennsylvania; 52% is sold elsewhere. On Sundays,

approximately 44% of the circulation is sold in the

greater New York City area and 56% elsewhere.

According to reports filed with the Audit Bureau of

Circulations (“ABC”), an independent agency that

audits the circulation of most U.S. newspapers and

magazines, for the six-month period ended

September 30, 2006, The Times had the largest daily

and Sunday circulation of all seven-day newspapers

in the United States.

The Times’s average net paid weekday and

Sunday circulation for the years ended December 31,

2006, and December 25, 2005, are shown below:

(Thousands of copies) Weekday (Mon. - Fri.) Sunday

2006 1,103.6 1,637.7

2005 1,135.8 1,684.7

Change (32.2) (47.0)

The decreases in weekday and Sunday copies sold in

2006 compared with 2005 were due to declines in sin-

gle copy sales.

Approximately 62% of the weekday and

69% of the Sunday circulation was sold through

home delivery in 2006; the remainder was sold pri-

marily on newsstands.

According to Nielsen//NetRatings, an

Internet traffic measurement service, The Times

reaches 17.3 million unduplicated readers in the

United States every month via the weekday and

Sunday newspaper, and NYTimes.com.

Advertising

According to data compiled by TNS Media

Intelligence, an independent agency that measures

advertising sales volume and estimates advertising

revenue, The Times had a 49.6% market share in 2006

in advertising revenue among a national newspaper

set that includes USA Today, The Wall Street Journal

and The New York Times. Based on recent data pro-

vided by TNS Media Intelligence and The Times’s

internal analysis, The Times believes that it ranks first

by a substantial margin in advertising revenue in the

general weekday and Sunday newspaper field in the

New York City metropolitan area.

Production and Distribution

The Times is printed at its production and distribution

facilities in Edison, N.J., and College Point, N.Y., as

well as under contract at 19 remote print sites across

the United States and one in Toronto, Canada.

On July 18, 2006, we announced plans to

consolidate our New York metro area printing into

our newer facility in College Point, N.Y., and close

our older Edison, N.J., facility. The plant consolida-

tion is expected to be completed in the second

quarter of 2008.

Our subsidiary, City & Suburban Delivery

Systems, Inc. (“City & Suburban”), operates a whole-

sale newspaper distribution business that distributes

The Times and other newspapers and periodicals in

New York City, Long Island (N.Y.), New Jersey and

the counties of Westchester (N.Y.) and Fairfield

(Conn.). In other markets in the United States and

Canada, The Times is delivered through various

newspapers and third-party delivery agents.

NYTimes.com

The Times’s Web site, NYTimes.com, reaches wide

audiences across the New York metropolitan region,

the nation and around the world. According to

Nielsen//NetRatings, average monthly unique users

in the United States visiting NYTimes.com reached

12.4 million in 2006 compared with 11.0 million in

2005. According to NYTimes.com internal metrics,

in 2006, NYTimes.com had 14.8 million average

monthly unique users worldwide.

NYTimes.com derives its revenue primarily

from the sale of advertising. Advertising is sold to

both national and local customers and includes online

display advertising (banners, half-page units, rich

media), classified advertising (help-wanted, real

estate, automobiles) and contextual advertising (links

supplied by Google). In 2005, The Times introduced

TimesSelect, a product offering subscribers exclusive

online access to columnists of The Times and the IHT

and to The Times’s extensive archives, previews of

various sections, and tools for tracking and storing

news and information. TimesSelect is priced annually

at $49.95 or monthly at $7.95, but is available to home-

delivery subscribers at no additional fee. TimesSelect

currently has approximately 627,000 subscribers, with

about 66% receiving TimesSelect as a benefit of their

home-delivery subscriptions and about 34% receiving

it from online-only subscriptions.

On August 28, 2006, we acquired Baseline

StudioSystems (“Baseline”), a leading online data-

base and research service for information on the film

and television industries. Baseline is part of

NYTimes.com.

International Herald Tribune

The IHT, a daily (Monday through Saturday) newspa-

per, commenced publishing in Paris in 1887, is printed

at 34 sites throughout the world and is sold in more

than 185 countries. The IHT’s average circulation for

the years ended December 31, 2006, and December 25,

2005, were 242,000 (estimated) and 242,184. These fig-

ures follow the guidance of Diffusion Controle, an

agency based in Paris and a member of the

International Federation of Audit Bureaux of

Circulations that audits the circulation of most of

France’s newspapers and magazines. The final

2006 figure will not be available until April 2007. In 2006,

60% of the circulation was sold in Europe, the Middle

East and Africa, 38% was sold in the Asia Pacific

region and 2% was sold in the Americas.

Radio

Our two radio stations, WQXR-FM and WQEW-AM,

serve the New York City metropolitan area. In addi-

tion, the recently launched New York Times Radio

News, a new department of WQXR producing news-

casts heard on the station, is working with

NYTimes.com and The Times’s News Services

Division to expand the distribution of Times-branded

news and information on a variety of audio

Part I – THE NEW YORK TIMES COMPANY P. 3

platforms, through The Times’s own resources and in

collaboration with strategic partners.

WQXR, The Times’s classical music station,

receives revenues through advertising sales, often in

conjunction with The Times’s selling effort. WQEW

receives revenues under a time brokerage agreement

with Radio Disney New York, LLC (ABC, Inc.’s suc-

cessor in interest), that provides substantially all of

WQEW’s programming. On January 25, 2007, Radio

Disney New York, LLC entered into an agreement to

acquire WQEW for $40 million. The sale is currently

expected to close in the first quarter of 2007 and is

subject to Federal Communications Commission

(“FCC”) approval.

The radio stations are operated under

licenses from the FCC and are subject to FCC regula-

tion. Radio license renewals are typically granted for

terms of eight years. The license renewal applications

for the radio stations were timely filed on January 31,

2006, four months before the scheduled expiration

date of the licenses. The WQEW application was

granted for an eight-year term expiring June 1, 2014.

We anticipate that the WQXR application, which is

currently pending, will be renewed for a term expir-

ing June 1, 2014.

Other Businesses

The New York Times Media Group’s other businesses

include The New York Times Index, which produces

and licenses The New York Times Index, a print publi-

cation, Digital Archive Distribution, which licenses

electronic archive databases to resellers of that infor-

mation in the business, professional and library

markets, and The New York Times News Services

Division. The New York Times News Services Division

is made up of Syndication Sales, which transmits arti-

cles, graphics and photographs from The Times, the

Globe and other publications to over 1,000 newspapers

and magazines in the United States and in more than

80 countries worldwide, and markets other supple-

mental news services and feature material, graphics

and photographs from The Times and other leading

news sources to newspapers and magazines around

the world; and Business Development, which com-

prises Photo Archives, Book Development, Rights &

Permissions, licensing and a small publication unit.

New England Media Group

The Globe, Boston.com, the T&G, and Telegram.com

constitute our New England Media Group. The Globe

is a daily (Monday through Saturday) and Sunday

newspaper, which commenced publication in 1872. The

T&G is a daily (Monday through Saturday) newspaper,

which began publishing in 1866. Its Sunday compan-

ion, the Sunday Telegram, began in 1884.

Circulation

The Globe is distributed throughout New England,

although its circulation is concentrated in the Boston

metropolitan area. According to ABC, for the six-

month period ended September 30, 2006, the Globe

ranked first in New England for both daily and

Sunday circulation volume.

The Globe’s average net paid weekday and

Sunday circulation for the years ended December 31,

2006, and December 25, 2005, are shown below:

(Thousands of copies) Weekday (Mon. - Fri.) Sunday

2006 389.2 588.2

2005 413.3 646.4

Change (24.1) (58.2)

The decreases in weekday and Sunday copies sold in

2006 compared with 2005 were due in part to a

directed effort to reduce the Globe’s other paid circu-

lation (primarily third-party bulk sponsored copies

but also hotel copies), as well as continuing adverse

effects of telemarketing legislation.

Approximately 76% of the Globe’s weekday

circulation and 71% of its Sunday circulation was sold

through home delivery in 2006; the remainder was

sold primarily on newsstands.

According to a 2005/2006 Gallup Poll, in the

United States, the Globe reaches 3.3 million undupli-

cated readers every month via the weekday and

Sunday newspaper, and Boston.com.

The T&G, the Sunday Telegram and several

Company-owned non-daily newspapers – some pub-

lished under the name of Coulter Press – circulate

throughout Worcester County and northeastern

Connecticut. The T&G’s average net paid weekday

and Sunday circulation, for the years ended

December 31, 2006, and December 25, 2005, are

shown below:

(Thousands of copies) Weekday (Mon. - Fri.) Sunday

2006 91.3 105.6

2005 99.2 115.1

Advertising

Based on information supplied by major daily news-

papers published in New England and assembled by

the New England Newspaper Association, Inc. for the

year ended December 31, 2006, the Globe ranked first

P. 4 2006 ANNUAL REPORT – Part I

The average weekday and Sunday circulation for the year ended December 31, 2006, for each of the daily

newspapers are shown below:

Circulation Circulation

Daily Newspapers Daily Sunday Daily Newspapers Daily Sunday

The Gadsden Times (Ala.) 20,700 21,600 The Ledger (Lakeland, Fla.) 69,800 85,200

The Tuscaloosa News (Ala.) 33,600 35,100 The Courier (Houma, La.) 18,600 20,000

TimesDaily (Florence, Ala.) 29,900 31,800 Daily Comet (Thibodaux, La.) 10,700 N/A

The Press Democrat (Santa Rosa, Calif.) 83,600 84,300 The Dispatch (Lexington, N.C.) 11,000 N/A

Sarasota Herald-Tribune (Fla.) 108,000 123,900 Times-News (Hendersonville, N.C.) 18,500 18,700

Star-Banner (Ocala, Fla.) 49,100 51,900 Wilmington Star-News (N.C.) 51,500 57,700

The Gainesville Sun (Fla.) 47,600 52,300 Herald-Journal (Spartanburg, S.C.) 46,200 53,600

and the T&G ranked sixth in advertising inches

among all daily newspapers in New England.

Production and Distribution

All editions of the Globe are printed and prepared for

delivery at its main Boston plant or its Billerica, Mass.

satellite plant. Virtually all of the Globe’s home-

delivered circulation was delivered in 2006 by a

third-party service provider.

Boston.com

The Globe’s Web site, Boston.com, reaches wide audi-

ences in the New England region, the nation and

around the world. In the United States, according to

Nielsen//NetRatings, average unique users visiting

Boston.com reached 4.0 million per month in 2006

compared with 3.5 million per month in 2005.

Boston.com primarily derives its revenue

from the sale of advertising. Advertising is sold to

both national and local customers and includes Web

site display advertising, classified advertising and

contextual advertising.

Regional Media Group

The Regional Media Group includes 14 daily newspa-

pers, of which 12 publish on Sunday, one paid weekly

newspaper, related print and digital businesses, free

weekly newspapers, and the North Bay Business

Journal, a weekly publication targeting business lead-

ers in California’s Sonoma, Napa and Marin counties.

Part I – THE NEW YORK TIMES COMPANY P. 5

The Petaluma Argus-Courier, in Petaluma, Calif., our

only paid subscription weekly newspaper, had an

average weekly circulation for the year ended

December 31, 2006, of 7,400. The North Bay Business

Journal, a weekly business-to-business publication,

had an average weekly circulation for the year ended

December 31, 2006, of 4,972.

ABOUT.COM

About.com is one of the Web’s most comprehensive

consumer solutions sources, providing users with

information and advice on thousands of topics. One of

the top 15 most visited Web sites in 2006, About.com

has 32.2 million average monthly unique visitors in

the United States (per Nielsen//NetRatings) and

47.5 million average monthly unique visitors world-

wide (per About internal metrics). Over 500 topical

advisors or “Guides” write about more than 57,000

topics and have generated over 1.5 million pieces of

original content. About.com does not charge a sub-

scription fee for access to its Web site. It generates

revenues through display advertising relevant to the

adjacent content, cost-per-click advertising (spon-

sored links for which About.com is paid when a user

clicks on the ad) and e-commerce (including sales

lead generation).

On September 14, 2006, we acquired

Calorie-Count.com (“Calorie-Count”), a site that

offers weight loss tools and nutritional information.

Calorie-Count is part of About.com.

P. 6 2006 ANNUAL REPORT – Part I

How About.com Generates Revenues

BROADCAST MEDIA GROUP

On January 3, 2007, we entered into an agreement to sell our Broadcast Media Group, consisting of nine net-

work-affiliated television stations, their related Web sites and the digital operating center, to Oak Hill Capital

Partners for $575 million. The transaction is subject to regulatory approvals and is expected to close in the first

half of 2007. Our television stations are operated under licenses from the FCC and are subject to FCC regula-

tions. In 2006, the television stations within the Broadcast Media Group were as shown below:

Market’s Nielsen Network

Station License Expiration Date Ranking

(1)

Affiliation Band

WTKR-TV (Norfolk, Va.) October 1, 2012 42 CBS VHF

WREG-TV (Memphis, Tenn.) August 1, 2013 44 CBS VHF

KFOR-TV (Oklahoma City, Okla.) June 1, 2014 45 NBC VHF

KAUT-TV (Oklahoma City, Okla.) June 1, 2006

(3)

45 My Network TV UHF

WNEP-TV (Scranton, Penn.) August 1, 2007 53 ABC UHF

(2)

WHO-TV (Des Moines, Iowa) February 1, 2014 73 NBC VHF

WHNT-TV (Huntsville, Ala.) April 1, 2005

(3)

84 CBS UHF

(2)

WQAD-TV (Moline, Ill.) December 1, 2013 96 ABC VHF

KFSM-TV (Ft. Smith, Ark.) June 1, 2013 102 CBS VHF

(1)

According to Nielsen Media Research’s 2006/2007 Designated Market Area Market Rankings from fall 2006. Nielsen Media Research

is a research company that measures audiences for television stations.

(2)

All other stations in this market are also in the UHF band.

(3)

Application for renewal of license pending.

The television stations generally have three principal

sources of revenue: local advertising (sold to adver-

tisers in the immediate geographic areas of the

stations), national spot advertising (sold to national

clients by individual stations rather than networks),

and compensation paid by the networks for carrying

commercial network programs. Network compensa-

tion has declined at all stations over the past several

years and will eventually be eliminated.

FOREST PRODUCTS INVESTMENTS AND OTHER

JOINT VENTURES

We have ownership interests in one newsprint mill

and one mill producing supercalendered paper, a

high finish paper used in some magazines and

preprinted inserts, which is a higher-value grade than

newsprint (the “Forest Products Investments”), as

well as in NESV and Metro Boston. These invest-

ments are accounted for under the equity method and

reported in “Investments in Joint Ventures” in our

Consolidated Balance Sheets. For additional informa-

tion on our investments, see Note 7 of the Notes to the

Consolidated Financial Statements.

Forest Products Investments

We have a 49% equity interest in a Canadian

newsprint company, Donohue Malbaie Inc.

(“Malbaie”). The other 51% is owned by Abitibi-

Consolidated (“Abitibi”), a global manufacturer of

paper. Malbaie purchases pulp from Abitibi and man-

ufactures newsprint from this raw material on the

paper machine it owns within the Abitibi paper mill

at Clermont, Quebec. Malbaie is wholly dependent

upon Abitibi for its pulp. In 2006, Malbaie produced

215,000 metric tons of newsprint, of which approxi-

mately 47% was sold to us, with the balance sold to

Abitibi for resale.

We have a 40% equity interest in a partner-

ship operating a supercalendered paper mill in

Madison, Maine, Madison Paper Industries

(“Madison”). Madison purchases the majority of its

wood from local suppliers, mostly under long-term

contracts. In 2006, Madison produced 193,000 metric

tons, of which approximately 9% was sold to us.

Malbaie and Madison are subject to compre-

hensive environmental protection laws, regulations

and orders of provincial, federal, state and local

authorities of Canada or the United States (the

“Environmental Laws”). The Environmental Laws

impose effluent and emission limitations and require

Malbaie and Madison to obtain, and operate in compli-

ance with the conditions of, permits and other

governmental authorizations (“Governmental

Authorizations”). Malbaie and Madison follow poli-

cies and operate monitoring programs designed to

ensure compliance with applicable Environmental

Laws and Governmental Authorizations and to mini-

mize exposure to environmental liabilities. Various

regulatory authorities periodically review the status of

the operations of Malbaie and Madison. Based on the

foregoing, we believe that Malbaie and Madison are in

substantial compliance with such Environmental

Laws and Governmental Authorizations.

Other Joint Ventures

We own an interest of approximately 17% in NESV,

which owns the Boston Red Sox, Fenway Park and adja-

cent real estate, approximately 80% of New England

Sports Network, a regional cable sports network, and

50% of Roush Fenway Racing, a leading NASCAR team.

We own a 49% interest in Metro Boston,

which publishes a free daily newspaper catering to

young professionals and students in the Greater

Boston area.

In October 2006, we sold our 50% ownership

interest in Discovery Times Channel, a digital cable

channel, for $100 million.

RAW MATERIALS

The primary raw materials we use are newsprint and

supercalendered paper. We purchase newsprint from

a number of North American producers. A significant

portion of such newsprint is purchased from Abitibi,

North America’s largest producer of newsprint.

Part I – THE NEW YORK TIMES COMPANY P. 7

In 2006 and 2005, we used the following types and quantities of paper (all amounts in metric tons):

Coated,

Supercalendered

Newsprint and Other Paper

2006 2005 2006 2005

The New York Times Media Group

(1,2)

257,000 288,000 32,600 30,100

New England Media Group

(1,2)

97,000 112,000 4,300 4,900

Regional Media Group

(1)

80,000 84,000 — —

Tot al 434,000 484,000 36,900 35,000

(1)

During 2005 we converted substantially all of our newspapers from 48.8 gram newsprint to 45 gram newsprint.

(2)

The Times and the Globe use coated, supercalendered or other paper for The New York Times Magazine and the Globe’s

Sunday Magazine.

The paper used by The New York Times Media

Group, the New England Media Group and the

Regional Media Group was purchased from unrelated

suppliers and related suppliers in which we hold

equity interests (see “Forest Products Investments”).

As part of our efforts to reduce our

newsprint consumption, we plan to reduce the size of

all editions of The Times, with the printed page

decreasing from 13.5 by 22 inches to 12 by 22 inches.

The reduction is expected to be completed in the third

quarter of 2007.

COMPETITION

Our media properties and investments compete for

advertising and consumers with other media in their

respective markets, including paid and free newspa-

pers, Web sites, broadcast, satellite and cable

television, broadcast and satellite radio, magazines,

direct marketing and the Yellow Pages.

The Times competes for advertising and cir-

culation with newspapers of general circulation in New

York City and its suburbs, national publications such as

The Wall Street Journal and USA Today, other daily and

weekly newspapers and television stations in markets

in which it circulates, and some national magazines.

The IHT’s key competitors include all inter-

national sources of English language news, including

The Wall Street Journal’s European and Asian

Editions, the Financial Times, Time, Newsweek

International and The Economist, satellite news

channels CNN, CNNi, Sky News and BBC, and vari-

ous Web sites.

The Globe competes primarily for advertis-

ing and circulation with other newspapers and

television stations in Boston, its neighboring suburbs

and the greater New England region, including,

among others, The Boston Herald (daily and Sunday).

Our other newspapers compete for advertis-

ing and circulation with a variety of newspapers and

other media in their markets.

NYTimes.com and Boston.com primarily

compete with other advertising-supported news

and information Web sites, such as Yahoo! News and

CNN.com, and classified advertising portals.

WQXR-FM competes for listeners and

advertising in the New York metropolitan area pri-

marily with two all-news commercial radio stations

and with WNYC-FM, a non-commercial station,

which features both news and classical music. It com-

petes for advertising revenues with many

adult-audience commercial radio stations and other

media in New York City and surrounding suburbs.

About.com competes with large-scale

portals, such as AOL, MSN, and Yahoo!. About.com

also competes with smaller targeted Web sites whose

content overlaps with that of its individual channels,

such as WebMD, CNET, Wikipedia and iVillage.

NESV competes in the Boston (and through

its interest in Roush Fenway Racing, in the national)

consumer entertainment market primarily with other

professional sports teams and other forms of live,

film and broadcast entertainment.

P. 8 2006 ANNUAL REPORT – Part I

Employee Category Expiration Date

The Times Mailers March 30, 2006 (expired)

Stereotypers March 30, 2007

Plumbers March 30, 2008

New Jersey operating engineers May 31, 2008

New York operating engineers May 31, 2008

Machinists March 30, 2009

Electricians March 30, 2009

Carpenters March 30, 2009

New York Newspaper Guild March 30, 2011

Paperhandlers March 30, 2014

Typographers March 30, 2016

Pressmen March 30, 2017

Drivers March 30, 2020

City & Suburban Building maintenance employees May 31, 2009

Drivers March 30, 2020

The Globe Paperhandlers, machinists and garage mechanics December 31, 2004 (expired)

Boston Mailers Union December 31, 2005 (expired)

Technical services group and electricians December 31, 2005 (expired)

Engravers December 31, 2005 (expired)

Warehouse employees December 31, 2007

Drivers December 31, 2008

Boston Newspaper Guild (representing non-production employees) December 31, 2008

Typographers December 31, 2010

Pressmen December 31, 2010

Part I – THE NEW YORK TIMES COMPANY P. 9

The IHT has approximately 323 employees world-

wide, including approximately 207 located in France,

whose terms and conditions of employment are

established by a combination of French National

Labor Law, industry-wide collective agreements and

company-specific agreements.

NYTimes.com and WQXR-FM also have

unions representing some of their employees.

Approximately one-third of the 630 employ-

ees of the T&G are represented by four unions. Labor

agreements with three production unions expired or

expire on August 31, 2006, October 8, 2007 and

November 30, 2016. The labor agreements with the

Providence Newspaper Guild, representing news-

room and circulation employees, expire on

August 31, 2007.

Of the 362 full-time employees at The Press

Democrat, 130 are represented by three unions. The

labor agreement with the Pressmen expires in

December 2008. The labor agreement with the

Newspaper Guild expires in December 2011 and the

labor agreement with the Teamsters, which repre-

sents certain employees in the circulation

department, expires in April 2007. There is no longer

EMPLOYEES

As of December 31, 2006, we had approximately

11,585 full-time equivalent employees.

Employees

The New York Times Media Group 4,610

New England Media Group 2,700

Regional Media Group 2,910

Broadcast Media Group

(1)

875

About.com 125

Corporate/Shared Services 365

Total Company 11,585

(1)

On January 3, 2007, we entered into an agreement to sell our

Broadcast Media Group.

Labor Relations

Approximately 2,700 full-time equivalent employees

of The Times and City & Suburban are represented by

14 unions with 15 labor agreements. Approximately

1,900 full-time equivalent employees of the Globe are

represented by 10 unions with 12 labor agreements.

Collective bargaining agreements, covering the fol-

lowing categories of employees, with the expiration

dates noted below, are either in effect or have expired,

and negotiations for new contracts are ongoing. We

cannot predict the timing or the outcome of the vari-

ous negotiations described below.

a labor agreement with the Typographical Union as

the last bargaining unit member retired in 2006.

You should carefully consider the risk factors

described below, as well as the other information

included in this Annual Report on Form 10-K. Our

business, financial condition or results of operations

could be materially adversely affected by any or all of

these risks or by other risks that we currently cannot

identify.

All of our businesses face substantial competition

for advertisers.

Most of our revenues are from advertising. We face for-

midable competition for advertising revenue in our

various markets from free and paid newspapers, mag-

azines, Web sites, television and radio, other forms of

media, direct marketing and the Yellow Pages.

Competition from these media and services affects our

ability to attract and retain advertisers and consumers

and to maintain or increase our advertising rates.

This competition has intensified as a result

of digital media technologies. Distribution of news,

entertainment and other information over the

Internet, as well as through cellular phones and other

devices, continues to increase in popularity. These

technological developments are increasing the num-

ber of media choices available to advertisers and

audiences. As media audiences fragment, we expect

advertisers to allocate a portion of their advertising

budgets to nontraditional media, such as Web sites

and search engines, which can offer more measurable

returns than traditional print media through pay-for-

performance and keyword-targeted advertising.

In recent years, Web sites that feature help

wanted, real estate and/or automobile advertising

have become competitors of our newspapers and Web

sites for classified advertising, contributing to signifi-

cant declines in print advertising. We may experience

greater competition from specialized Web sites in other

areas, such as travel and entertainment advertising.

We are aggressively developing online offer-

ings, both through internal growth and acquisitions.

However, while the amount of advertising on our own

Web sites has continued to increase, we will experience a

decline in advertising revenues if we are unable to attract

advertising to our Web sites in volumes sufficient to off-

set declines in print advertising, for which rates are

generally higher than for internet advertising.

Our Internet advertising revenues depend in part on

our ability to generate traffic.

Our ability to attract advertisers to our Web sites

depends partly on our ability to generate traffic to our

Web sites and the rate at which users click through on

advertisements. Advertising revenues from our Web

sites may be negatively affected by fluctuations or

decreases in our traffic levels.

About.com, our online consumer informa-

tion provider, relies on search engines for a

substantial amount of its traffic. We believe approxi-

mately 90% of About.com’s traffic is generated

through search engines, while an estimated 1% of its

users enter through its home page. Our other Web

sites also rely on search engines for traffic, although

to a lesser degree than About.com. Search engines

(including Google, the primary search engine direct-

ing traffic to About.com and our other sites) may, at

any time, decide to change the algorithms responsible

for directing search queries to the Web pages that are

most likely to contain the information being sought

by Internet users. Such changes could lead to a signif-

icant decrease in traffic and, in turn, Internet

advertising revenues.

Decreases, or slow growth, in circulation adversely

affect our circulation and advertising revenues.

Advertising and circulation revenues are affected by

circulation and readership levels. Our newspaper

properties, and the newspaper industry as a whole,

are experiencing difficulty maintaining and increas-

ing print circulation and related revenues. This is due

to, among other factors, increased competition from

new media formats and sources other than traditional

newspapers (often free to users), and shifting prefer-

ences among some consumers to receive all or a

portion of their news other than from a newspaper.

These factors could affect our ability to institute circu-

lation price increases for our print products.

A prolonged decline in circulation copies

would have a material effect on the rate and volume

of advertising revenues (as rates reflect circulation

and readership, among other factors). To maintain

our circulation base, we may incur additional costs,

and we may not be able to recover these costs through

circulation and advertising revenues. Recently, we

have sought to reduce our other-paid circulation and

to focus promotional spending on individually paid

circulation, which is generally more valued by adver-

tisers. If we stop or slow those promotional efforts or

if they are unsuccessful, we may see further declines.

ITEM 1A. RISK FACTORS

P.10 2006 ANNUAL REPORT – Part I

Difficult economic conditions in the United States,

the regions in which we operate or in specific eco-

nomic sectors could adversely affect the profitability

of our businesses.

National and local economic conditions, particularly

in the New York City and Boston metropolitan

regions, affect the levels of our retail, national and

classified advertising revenue. Future negative eco-

nomic conditions in these and other markets would

adversely affect our level of advertising revenues.

Our advertising revenues are affected by

economic and competitive changes in significant

advertising categories. These revenues may be

adversely affected if key advertisers change their

advertising practices, as a result of shifts in spending

patterns or priorities, structural changes, such as con-

solidations, or the cessation of operations. Help

wanted and automotive classified advertising rev-

enues, which are important categories at all of our

newspaper properties, have declined as less expen-

sive or free online alternatives have proliferated. We

have also experienced depressed levels of advertising

in studio entertainment, which in 2006 represented

approximately 12% of The New York Times Media

Group’s advertising revenues, as the focus of studio

marketing budgets has shifted to broadcast and

online media.

The success of our business depends substantially on

our reputation as a provider of quality journalism

and content.

We believe that our products have excellent reputa-

tions for quality journalism and content. These

reputations are based in part on consumer percep-

tions and could be damaged by incidents that erode

consumer trust. To the extent consumers perceive the

quality of our content to be less reliable, our ability to

attract readers and advertisers may be hindered.

The proliferation of nontraditional media,

largely available at no cost, challenges the traditional

media model, in which quality journalism has prima-

rily been supported by print advertising revenues. If

consumers fail to differentiate our content from other

content providers, on the Internet or otherwise, we

may experience a decline in revenues.

Seasonal variations cause our quarterly advertising

revenues to fluctuate.

Advertising spending, which principally drives our

revenue, is generally higher in the second and fourth

quarters and lower in the first and third fiscal quar-

ters as consumer activity slows during those periods.

If a short-term negative impact on our business were

to occur during a time of high seasonal demand, there

could be a disproportionate effect on the operating

results of that business for the year.

Our potential inability to execute cost-control meas-

ures successfully could result in total costs and

expenses that are greater than expected.

We have taken steps to lower our expenses by reduc-

ing staff and employee benefits and implementing

general cost-control measures, and we expect to con-

tinue cost-control efforts. If we do not achieve

expected savings as a result or if our operating costs

increase as a result of our growth strategy, our total

costs and expenses may be greater than anticipated.

Although we believe that appropriate steps have

been and are being taken to implement cost-control

efforts, if not managed properly, such efforts may

affect the quality of our products and our ability to

generate future revenue. In addition, reductions in

staff and employee benefits could adversely affect

our ability to attract and retain key employees.

The price of newsprint has historically been volatile,

and a significant increase would have an adverse

effect on our operating results.

The cost of raw materials, of which newsprint is the

major component, represented 11% of our total costs

in 2006. The price of newsprint has historically been

volatile and, in recent years, increased as a result of

various factors, including:

–

consolidation in the North American newsprint

industry, which has reduced the number of suppliers;

–

declining newsprint supply as a result of paper

mill closures and conversions to other grades of

paper; and

–

a strengthening Canadian dollar, which has adversely

affected Canadian suppliers, whose costs are incurred

in Canadian dollars but whose newsprint sales are

priced in U.S. dollars.

In 2007, we expect newsprint prices to

decline modestly as a result of increased supply.

However, our operating results would be adversely

affected if newsprint prices increased significantly in

the future.

A significant portion of our employees are unionized,

and our results could be adversely affected if labor

negotiations were to restrict our ability to maximize

the efficiency of our operations.

More than 40% of our full-time work force is union-

ized. As a result, we are required to negotiate the

wages, salaries, benefits, staffing levels and other

terms with many of our employees collectively.

Although we have in place long-term contracts for a

substantial portion of our unionized work force, our

Part I – THE NEW YORK TIMES COMPANY P.11

results could be adversely affected if future labor

negotiations were to restrict our ability to maximize

the efficiency of our operations. If we were to experi-

ence labor unrest, our ability to produce and deliver

our most significant products could be impaired. In

addition, our ability to make short-term adjustments

to control compensation and benefits costs is limited

by the terms of our collective bargaining agreements.

We continue to develop new products and services for

evolving markets. There can be no assurance of the

success of these efforts due to a number of factors,

some of which are beyond our control.

There are substantial uncertainties associated with

our efforts to develop new products and services for

evolving markets, and substantial investments may

be required. These efforts are to a large extent depend-

ent on our ability to acquire, develop, adopt, and

exploit new and existing technologies to distinguish

our products and services from those of our competi-

tors. The success of these ventures will be determined

by our efforts, and in some cases by those of our part-

ners, fellow investors and licensees. Initial timetables

for the introduction and development of new prod-

ucts or services may not be achieved, and price and

profitability targets may not prove feasible. External

factors, such as the development of competitive alter-

natives, rapid technological change, regulatory

changes and shifting market preferences, may cause

new markets to move in unanticipated directions.

We may not be able to protect intellectual property

rights upon which our business relies, and if we lose

intellectual property protection, we may lose valu-

able assets.

We own valuable brands and content, which we

attempt to protect through a combination of copy-

right, trade secret, patent and trademark law and

contractual restrictions, such as confidentiality agree-

ments. We believe our proprietary trademarks and

other intellectual property rights are important to our

continued success and our competitive position.

Despite our efforts to protect our propri-

etary rights, unauthorized parties may attempt to

copy or otherwise obtain and use our services, tech-

nology and other intellectual property, and we cannot

be certain that the steps we have taken will prevent

any misappropriation or confusion among con-

sumers and merchants, or unauthorized use of these

rights. If we are unable to procure, protect and

enforce our intellectual property rights, then we may

not realize the full value of these assets, and our busi-

ness may suffer.

We may buy or sell different properties as a result of

our evaluation of our portfolio of businesses. Such

acquisitions or divestitures would affect our costs,

revenues, profitability and financial position.

From time to time, we evaluate the various compo-

nents of our portfolio of businesses and may, as a

result, buy or sell different properties. These acquisi-

tions or divestitures affect our costs, revenues,

profitability and financial position. We may also con-

sider the acquisition of specific properties or

businesses that fall outside our traditional lines of

business if we deem such properties sufficiently

attractive.

Each year, we evaluate the various compo-

nents of our portfolio in connection with annual

impairment testing, and we may record a non-cash

charge if the financial statement carrying value of an

asset is in excess of its estimated fair value. Fair value

could be adversely affected by changing market con-

ditions within our industry. In 2006, we recorded a

non-cash charge of $814.4 million ($735.9 million after

tax, or $5.09 per share) due to the impairment of

goodwill and other intangible assets of the New

England Media Group.

Acquisitions involve risks, including diffi-

culties in integrating acquired operations, diversions

of management resources, debt incurred in financing

these acquisitions (including the related possible

reduction in our credit ratings and increase in our

cost of borrowing), differing levels of internal control

effectiveness at the acquired entities and other unan-

ticipated problems and liabilities. Competition for

certain types of acquisitions, particularly Internet

properties, is significant. Even if successfully negoti-

ated, closed and integrated, certain acquisitions or

investments may prove not to advance our business

strategy and may fall short of expected return on

investment targets.

Divestitures also have inherent risks, includ-

ing possible delays in closing transactions (including

potential difficulties in obtaining regulatory

approvals), the risk of lower-than-expected sales pro-

ceeds for the divested businesses, and potential

post-closing claims for indemnification.

From time to time, we make non-controlling

minority investments in private entities. We may

have limited voting rights and an inability to influ-

ence the direction of such entities. Therefore, the

success of these ventures may be dependent upon the

efforts of our partners, fellow investors and licensees.

These investments are generally illiquid, and the

absence of a market restricts our ability to dispose of

them. If the value of the companies in which we

P.12 2006 ANNUAL REPORT – Part I

Part I – THE NEW YORK TIMES COMPANY P.13

invest declines, we may be required to take a charge

to earnings.

Changes in our credit ratings may affect our borrow-

ing costs.

Our short- and long-term debt is rated investment

grade by the major rating agencies. These invest-

ment-grade credit ratings afford us lower borrowing

rates in both the commercial paper markets and in

connection with senior debt offerings. To maintain

our investment-grade ratings, the credit rating agen-

cies require us to meet certain financial performance

ratios. Increased debt levels and/or decreased earn-

ings could result in downgrades in our credit ratings,

which, in turn, could impede access to the debt mar-

kets, reduce the total amount of commercial paper we

could issue, raise our commercial paper borrowing

costs and/or raise our long-term debt borrowing

rates. Our ability to use debt to fund major new

acquisitions or capital intensive internal initiatives

will be limited to the extent we seek to maintain

investment-grade credit ratings for our debt.

Sustained increases in costs of providing pension

and employee health and welfare benefits may

reduce our profitability.

Employee compensation and benefits, including pen-

sion expense, account for slightly more than 40% of

our total operating expenses. As a result, our prof-

itability is substantially affected by costs of pension

benefits and other employee benefits. We have

funded, qualified non-contributory defined benefit

retirement plans that cover substantially all employ-

ees, and non-contributory unfunded supplemental

executive retirement plans that supplement the cov-

erage available to certain executives. Two significant

elements in determining pension income or pension

expense are the expected return on plan assets and

the discount rate used in projecting benefit obliga-

tions. Large declines in the stock market and lower

rates of return could increase our expense and cause

additional cash contributions to the pension plans. In

addition, a lower discount rate driven by lower inter-

est rates would increase our pension expense.

Our Class B stock is principally held by descendants

of Adolph S. Ochs, through a family trust, and this

control could create conflicts of interest or inhibit

potential changes of control.

We have two classes of stock: Class A Common Stock

and Class B Common Stock. Holders of Class A

Common Stock are entitled to elect 30% of the Board

of Directors and to vote, with Class B common stock-

holders, on the reservation of shares for equity grants,

certain material acquisitions and the ratification of

the selection of our auditors. Holders of Class B

Common Stock are entitled to elect the remainder of

the Board and to vote on all other matters. Our

Class B Common Stock is principally held by descen-

dants of Adolph S. Ochs, who purchased The Times

in 1896. A family trust holds 88% of the Class B

Common Stock. As a result, the trust has the ability to

elect 70% of the Board of Directors and to direct the

outcome of any matter that does not require a vote of

the Class A Common Stock. Under the terms of the trust

agreement, trustees are directed to retain the Class B

Common Stock held in trust and to vote such stock

against any merger, sale of assets or other transaction

pursuant to which control of The Times passes from

the trustees, unless they determine that the primary

objective of the trust can be achieved better by the

implementation of such transaction. Because this con-

centrated control could discourage others from

initiating any potential merger, takeover or other

change of control transaction that may otherwise be

beneficial to our businesses, the market price of our

Class A Common Stock could be adversely affected.

Regulatory developments may result in increased costs.

All of our operations are subject to government regu-

lation in the jurisdictions in which they operate. Due

to the wide geographic scope of its operations, the

IHT is subject to regulation by political entities

throughout the world. In addition, our Web sites are

available worldwide and are subject to laws regulat-

ing the Internet both within and outside the United

States. We may incur increased costs for expenses

necessary to comply with existing and newly

adopted laws and regulations or penalties for any

failure to comply.

None.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

The general character, location, terms of occupancy and approximate size of our principal plants and other

materially important properties as of December 31, 2006, are listed below.

Approximate Area in Approximate Area in

General Character of Property Square Feet (Owned) Square Feet (Leased)

News Media Group

Printing plants, business and editorial offices, garages and warehouse space located in:

New York, N.Y. 825,000

(1)

871,164

(1)

College Point, N.Y. — 515,000

(2)

Edison, N.J. — 1,300,000

(3)

Boston, Mass. 703,217 24,474

Billerica, Mass. 290,000 —

Other locations 1,600,600 561,353

Broadcast Media Group

(4)

Business offices, studios and transmitters at various locations 339,823 14,545

About.com — 41,260

Total 3,758,640 3,327,796

(1)

The 871,164 square feet leased includes 714,000 square feet in our existing New York City headquarters, at 229 West 43rd St., which

we sold and leased back on December 27, 2004. The 825,000 square feet owned consists of space we own in our new headquarters,

which is currently under construction, and which we plan to occupy in the second quarter of 2007.

(2)

We are leasing a 31-acre site in College Point, N.Y., where our printing and distribution plant is located, and have the option to purchase

the property at any time prior to the end of the lease in 2019.

(3)

The Edison production and distribution facility is occupied pursuant to a long-term lease with renewal and purchase options. We plan to close

the Edison facility (see “Item 1 - Business – News Media Group – The New York Times Media Group – Production and Distribution,” above).

(4)

On January 3, 2007, we entered into an agreement to sell our Broadcast Media Group.

ITEM 2. PROPERTIES

We sold our existing New York City headquarters on

December 27, 2004. Pursuant to the terms of the sale

agreement, we are leasing back our existing head-

quarters through the third quarter of 2007. Our new

headquarters, which is currently being constructed in

the Times Square area and which we expect to occupy

in the second quarter of 2007, will contain approxi-

mately 1.54 million gross square feet of space, of

which 825,000 gross square feet is owned by us. We

plan to lease five floors, totaling approximately

155,000 square feet. For additional information on the

new headquarters, see Note 19 of the Notes to the

Consolidated Financial Statements.

There are various legal actions that have arisen in the

ordinary course of business and are now pending

against us. Such actions are usually 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 such actions with our legal counsel

that the ultimate liability that might result from such

actions will not have a material adverse effect on our

consolidated financial statements.

ITEM 3. LEGAL PROCEEDINGS

P.14 2006 ANNUAL REPORT – Part I

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Name Age Employed By Recent Position(s) Held as of March 1, 2007

Registrant Since

Corporate Officers

Vice President (since 2002) and General Counsel (since

2006); Deputy General Counsel (2001 to 2005); Vice

President and General Counsel, New York Times Digital

(1999 to 2003)

198355Kenneth A. Richieri

Vice President (since 2003); Corporate Controller (since

January 8, 2007); Treasurer (2001 to January 8, 2007);

Assistant Treasurer (1997 to 2001)

198943R. Anthony Benten

Senior Vice President, Human Resources (since 2006); Vice

President, Human Resources, Starwood Hotels & Resorts,

and Executive Vice President, Starwood Hotels & Resorts

Worldwide, Inc. (2000 to 2006)

200651David K. Norton

Senior Vice President, Digital Operations (since 2005); Chief

Executive Officer, New York Times Digital (1999 to 2005)

199551Martin A. Nisenholtz

Senior Vice President and Chief Financial Officer (since

January 8, 2007); Chief Financial and Administrative Officer,

Martha Stewart Living Omnimedia, Inc. (2001 to 2006)

200747James M. Follo

Vice Chairman (since 1997); Publisher of the IHT (since

2003); Senior Vice President (1997 to 2004)

198457Michael Golden

President and Chief Executive Officer (since 2005); Executive

Vice President and Chief Operating Officer (2004); Senior

Vice President, Newspaper Operations (2001 to 2004);

President and General Manager of The Times (1996 to 2004)

198356Janet L. Robinson

Chairman (since 1997) and Publisher of The Times

(since 1992)

197855Arthur Sulzberger, Jr.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Part I – THE NEW YORK TIMES COMPANY P.15

Name Age Employed By Recent Position(s) Held as of March 1, 2007

Registrant Since

Operating Unit Executives

(1)

Mr. Heekin-Canedy left the Company in 1989 and returned in 1992.

President and Chief Operating Officer, Regional Media Group

(since September 12, 2006); President and General Manager,

The Globe (2005 to September 12, 2006); President and

Chief Executive Officer, Fort Wayne Newspapers and

Publisher, News Sentinel (2002 to 2005)

200550Mary Jacobus

President and General Manager of The Times (since 2004);

Senior Vice President, Circulation of The Times (1999 to

2004)

1987

(1)

55Scott H. Heekin-Canedy

Publisher of The Globe (since September 12, 2006);

President and Chief Operating Officer, Regional Media Group

(2003 to September 12, 2006); Senior Vice President,

Regional Media Group (1999 to 2002)

198254P. Steven Ainsley

P.16 2006 ANNUAL REPORT – Part I

(a) MARKET INFORMATION

The Class A Common Stock is listed on the New York Stock Exchange. The Class B Common Stock is unlisted

and is not actively traded.

The number of security holders of record as of February 23, 2007, was as follows: Class A Common

Stock: 9,083; Class B Common Stock: 33.

Both classes of our common stock participate equally in our quarterly dividends. In 2006, dividends

were paid in the amount of $.165 per share in March and in the amount of $.175 per share in June,

September and December. In 2005, dividends were paid in the amount of $.155 per share in March and in the

amount of $.165 per share in June, September and December.

The market price range of Class A Common Stock was as follows:

Quarters Ended 2006 2005

High Low High Low

March $28.90 $25.30 $40.80 $35.56

June 25.70 22.88 36.58 30.74

September 24.54 21.58 34.59 30.00

December 24.87 22.29 30.17 26.36

Year 28.90 21.58 40.80 26.36

EQUITY COMPENSATION PLAN INFORMATION

Number of securities Number of securities remaining

to be issued upon Weighted average available for future issuance

exercise of outstanding exercise price of under equity compensation

options, warrants outstanding options, plans (excluding securities

Plan category and rights warrants and rights reflected in column (a))

(a) (b) (c)

Equity compensation

plans approved by

security holders

Stock options 32,192,000

(1)

$40 4,075,000

(2)

Employee Stock Purchase

Plan — — 7,992,000

(3)

Stock awards 750,000

(4)

— 474,000

(5)

Total 32,942,000 — 12,541,000

Equity compensation

plans not approved by

security holders None None None

(1)

Includes shares of Class A stock to be issued upon exercise of stock options granted under our 1991 Executive Stock Incentive Plan (the

“NYT Stock Plan”), our Non-Employee Directors’ Stock Option Plan and our 2004 Non-Employee Directors’ Stock Incentive Plan (the

“2004 Directors’ Plan”).

(2)

Includes shares of Class A stock available for future stock options to be granted under the NYT Stock Plan and the 2004 Directors’ Plan.

The 2004 Directors’ Plan provides for the issuance of up to 500,000 shares of Class A stock in the form of stock options or restricted

stock awards. The amount reported for stock options includes the aggregate number of securities remaining (approximately 368,000 as

of December 31, 2006) for future issuances under that plan.

(3)

Includes shares of Class A stock available for future issuance under our Employee Stock Purchase Plan.

(4)

Includes shares of Class A stock to be issued upon conversion of restricted stock units and retirement units under the NYT Stock Plan.

(5)

Includes shares of Class A stock available for stock awards under the NYT Stock Plan.

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Part II – THE NEW YORK TIMES COMPANY P.17

PART II

UNREGISTERED SALES OF EQUITY SECURITIES

On October 2, 2006, we issued 30 shares of Class A

Common Stock to a holder of 30 shares of

Class B Common Stock upon the conversion of such

Class B shares into Class A shares. The conversion,

which was in accordance with our Certificate of

Incorporation, did not involve a public offering and was

exempt from registration pursuant to Section 3(a)(9) of

the Securities Act of 1933, as amended.

Stock Performance Comparison Between S&P 500, The New York Times

Company's Class A Common Stock and Peer Group Common Stock

$140

130

120

110

12/31/01 12/31/0612/31/02 12/31/03 12/31/04 12/31/05

113

107

100

132

113

124

111

117

135

100

Peer Group

NYT

S&P 500

P.18 2006 ANNUAL REPORT – Part II

PERFORMANCE PRESENTATION

The following graph shows the annual cumulative

total stockholder return for the five years ending

December 31, 2006, on an assumed investment of

$100 on December 31, 2001, in the Company, the

Standard & Poor’s S&P 500 Stock Index and an index

of peer group communications companies. The peer

group returns are weighted by market capitalization

at the beginning of each year. The peer group is com-

prised of the Company and the following other

communications companies: Dow Jones & Company,

Inc., Gannett Co., Inc., Media General, Inc., The

McClatchy Company, Tribune Company and The

Washington Post Company. The five-year cumulative

total return graph excludes Knight Ridder, Inc. as a

result of its acquisition by The McClatchy Company

in 2006. Stockholder return is measured by dividing

(a) the sum of (i) the cumulative amount of dividends

declared for the measurement period, assuming

monthly reinvestment of dividends, and (ii) the dif-

ference between the issuer’s share price at the end

and the beginning of the measurement period by

(b) the share price at the beginning of the measure-

ment period. As a result, stockholder return includes

both dividends and stock appreciation.

(1)

Maximum Number

(or Approximate

Total Number of Dollar Value)

Shares of Class A of Shares of

Average Common Stock Class A Common

Total Number of Price Paid Purchased Stock that May

Shares of Class A Per Share of as Part of Publicly Yet Be Purchased

Common Stock Class A Announced Plans Under the Plans

Purchased Common Stock or Programs or Programs

Period (a) (b) (c) (d)

September 25, 2006-

October 29, 2006 427,432 $22.80 427,200 $98,450,000

October 30, 2006-

November 26, 2006 71,405 $23.47 71,200 $96,779,000

November 27, 2006-

December 31, 2006 172,481 $24.25 130,300 $93,692,000

Total for the fourth quarter of 2006 671,318

(2)

$23.24 628,700 $93,692,000

(1)

Except as otherwise noted, all purchases were made pursuant to our publicly announced share repurchase program. On April 13, 2004,

our Board of Directors (the “Board”) authorized repurchases in an amount up to $400 million. As of February 23, 2007, we had authoriza-

tion from the Board to repurchase an amount of up to approximately $94 million of our Class A Common Stock. The Board has authorized

us to purchase shares from time to time as market conditions permit. There is no expiration date with respect to this authorization.

(2)

Includes 42,618 shares withheld from employees to satisfy tax withholding obligations upon the vesting of restricted shares/stock units

awarded under the NYT Stock Plan. The shares were repurchased by us pursuant to the terms of the plan and not pursuant to our publicly

announced share repurchase program.

Part II – THE NEW YORK TIMES COMPANY P.19

The information presented in the following table of Selected Financial Data has been adjusted to reflect the

restatement of our financial results that is described in the Explanatory Note immediately preceding Part I of

this Annual Report on Form 10-K. We have not amended our previously filed Annual Reports on Form 10-K

for the periods affected by this restatement. The financial information that has been previously filed or other-

wise reported for those periods is superseded by the information in this Annual Report, and the financial

statements and related financial information contained in such previously filed reports should no longer be

relied upon.

See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of

Operations” and Note 2 (Restatement of Financial Statements) of the Notes to the Consolidated Financial

Statements for more detailed information regarding the restatement.

The Selected Financial Data should be read in conjunction with “Management’s Discussion and

Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and

the related Notes. The Broadcast Media Group’s results of operations have been presented as discontinued

operations, and certain assets and liabilities are classified as held for sale for all periods presented (see Note 5

of the Notes to the Consolidated Financial Statements). The page following the table shows certain items

included in Selected Financial Data. All per share amounts on that page are on a diluted basis.

As of and for the Years Ended

December 31, December 25, December 26, December 28, December 29,

(In thousands, except per 2006 2005 2004 2003 2002

share and employee data) (Restated)

(1)

(Restated)

(1)

(Restated)

(1)

(Restated)

(1)

Statement of Operations Data

Revenues $3,289,903 $3,231,128 $3,159,412 $3,091,546 $2,938,997

Total expenses 2,996,081 2,911,578 2,696,799 2,595,215 2,446,045

Impairment of intangible assets 814,433 ————

Gain on sale of assets — 122,946 — — —

Operating (loss)/profit (520,611) 442,496 462,613 496,331 492,952

Interest expense, net 50,651 49,168 41,760 44,757 45,435

(Loss)/income from continuing

operations before income taxes

and minority interest (551,922) 407,546 429,305 456,628 440,187

(Loss)/income from continuing

operations (568,171) 243,313 264,985 277,731 264,917

Discontinued operations,

net of income taxes –

Broadcast Media Group 24,728 15,687 22,646 16,916 29,265

Cumulative effect of a change

in accounting principle,

net of income taxes — (5,527) — — —

Net (loss)/income (543,443) 253,473 287,631 294,647 294,182

Balance Sheet Data

Property, plant and equipment – net $ 1,375,365 $1,401,368 $1,308,903 $1,215,265 $ 1,170,721

Total assets 3,855,928 4,564,078 3,994,555 3,854,659 3,697,491

Total debt, including

commercial paper, capital lease

obligations and construction loan 1,445,928 1,396,380 1,058,847 955,302 958,249

Stockholders’ equity 819,842 1,450,826 1,354,361 1,353,585 1,229,303

P.20 2006 ANNUAL REPORT – Selected Financial Data

ITEM 6. SELECTED FINANCIAL DATA

As of and for the Years Ended

December 31, December 25, December 26, December 28, December 29,

(In thousands, except per 2006 2005 2004 2003 2002

share and employee data) (Restated)

(1)

(Restated)

(1)

(Restated)

(1)

(Restated)

(1)

Per Share of Common Stock

Basic (loss)/earnings per share

(Loss)/income from continuing

operations $ (3.93) $ 1.67 $ 1.80 $ 1.85 $ 1.75

Discontinued operations,

net of income taxes –

Broadcast Media Group 0.17 0.11 0.15 0.11 0.19

Cumulative effect of a change

in accounting principle,

net of income taxes — (0.04) — — —

Net (loss)/income $ (3.76) $ 1.74 $ 1.95 $ 1.96 $ 1.94

Diluted (loss)/earnings per share

(Loss)/income from continuing

operations $ (3.93) $ 1.67 $ 1.78 $ 1.82 $ 1.71

Discontinued operations,

net of income taxes –

Broadcast Media Group 0.17 0.11 0.15 0.11 0.19

Cumulative effect of a change

in accounting principle,

net of income taxes — (0.04) — — —

Net (loss)/income $ (3.76) $ 1.74 $ 1.93 $ 1.93 $ 1.90

Dividends per share $.69$ .65 $ .61 $ .57 $ .53

Stockholders’ equity per share $5.67 $ 9.95 $ 9.07 $ 8.86 $ 7.94

Average basic shares outstanding 144,579 145,440 147,567 150,285 151,563

Average diluted shares outstanding 144,579 145,877 149,357 152,840 154,805

Key Ratios

Operating (loss)/profit to revenues –16% 14% 15% 16% 17%

Return on average common

stockholders’ equity –48% 18% 21% 23% 25%

Return on average total assets –13% 6% 7% 8% 8%

Total debt to total capitalization 64% 49% 44% 41% 44%

Current assets to current liabilities .91 .95 .84 1.23 1.22

Ratio of earnings to fixed charges –

(2)

6.22 8.11 8.65 8.51

Full-Time Equivalent Employees 11,585 11,965 12,300 12,400 12,150

(1)

The Selected Financial Data has been adjusted to reflect the restatement described in Note 2 of the Notes to the Consolidated Financial

Statements. The beginning Retained Earnings adjustment for fiscal 2002 was $14.2 million.

(2)

Earnings were inadequate to cover fixed charges by $573 million for the year ended December 31, 2006, as a result of a non-cash

impairment charge of $814.4 million ($735.9 million after tax).

Selected Financial Data – THE NEW YORK TIMES COMPANY P.21

The items below are included in the Selected

Financial Data.

2006 (53-week fiscal year)

The items below had an unfavorable effect on our

results of $877.3 million or $5.34 per share.

–

an $814.4 million pre-tax, non–cash charge

($735.9 million after tax, or $5.09 per share) for the

impairment of goodwill and other intangible assets

at the New England Media Group.

–

a $34.3 million pre-tax charge ($19.6 million after

tax, or $.14 per share) for staff reductions.

–

a $20.8 million pre-tax charge ($11.5 million after

tax, or $.08 per share) for accelerated depreciation

of certain assets at the Edison, N.J., printing plant,

which we are in the process of closing.

–

a $7.8 million pre-tax loss ($4.3 million after tax, or

$.03 per share) from the sale of our 50% ownership

interest in Discovery Times Channel.

2005

The items below increased net income by $5.2 million

or $.04 per share.

–

a $122.9 million pre-tax gain resulting from the

sales of our current headquarters ($63.3 million

after tax, or $.43 per share) as well as property in

Florida ($5.0 million after tax, or $.03 per share).

–

a $57.8 million pre-tax charge ($35.3 million after

tax, or $.23 per share) for staff reductions.

–

a $32.2 million pre-tax charge ($21.9 million after

tax, or $.15 per share) related to stock-based

compensation expense. The expense in 2005 was

significantly higher than in prior years due to our

adoption of Financial Accounting Standards Board

(“FASB”) Statement of Financial Accounting

Standards (“FAS”) No. 123 (revised 2004), Share-

Based Payment (“FAS 123-R”), in 2005.

–

a $9.9 million pre-tax charge ($5.5 million after tax, or

$.04 per share) for costs associated with the cumula-

tive effect of a change in accounting principle related

to the adoption of FASB Interpretation No.

(“FIN”) 47, Accounting for Conditional Asset

Retirement Obligations – an interpretation of FASB

Statement No. 143. A portion of the charge has been

reclassified to conform to the 2006 presentation of the

Broadcast Media Group as a discontinued operation.

2004

There were no items of the type discussed here in 2004.

2003

The item below increased net income by $8.5 million,

or $.06 per share.

–

a $14.1 million pre-tax gain related to a reimburse-

ment of remediation expenses at one of our

printing plants.

2002

The item below reduced net income by $7.7 million,

or $.05 per share.

–

a $12.6 million pre-tax charge for staff reductions.

P.22 2006 ANNUAL REPORT – Selected Financial Data

Impact of Restatement – THE NEW YORK TIMES COMPANY P.23

IMPACT OF RESTATEMENT

The impact of the restatement and a comparison to the amounts originally reported are detailed in the follow-

ing tables. The Broadcast Media Group’s results of operations have been presented as discontinued operations

and certain assets and liabilities are classified as held for sale for all periods presented (see Note 5 of the Notes

to the Consolidated Financial Statements). In order to more clearly disclose the impact of the restatement on

reported results, the impact of this reclassification is separately shown below in the column labeled

“Discontinued Operations.”

As of and for the Years Ended

December 25, 2005 December 26, 2004

(In thousands, except

As Discontinued Restatement Reclassified As Discontinued Restatement Reclassified

per share data)

Reported Operations Adjustments and Restated Reported Operations Adjustments and Restated

Statement of Operations Data

Revenues $ 3,372,775 $ (139,055) $ (2,592) $3,231,128 $3,303,642 $ (145,627) $ 1,397 $3,159,412

Total expenses 3,014,667 (111,914) 8,825 2,911,578 2,793,689 (107,244) 10,354 2,696,799

Gain on sale of assets 122,946 – – 122,946 – – – –

Operating profit 481,054 (27,141) (11,417) 442,496 509,953 (38,383) (8,957) 462,613

Interest expense, net 49,168 – – 49,168 41,760 – – 41,760

Income from continuing

operations before income

taxes and minority interest 446,104 (27,141) (11,417) 407,546 476,645 (38,383) (8,957) 429,305

Income from continuing

operations 265,605 (16,012) (6,280) 243,313 292,557 (22,646) (4,926) 264,985

Discontinued operations,

net of income taxes –

Broadcast Media Group – 15,687 – 15,687 – 22,646 – 22,646

Cumulative effect of a change

in accounting principle,

net of income taxes (5,852) 325 – (5,527) – – – –

Net income 259,753 – (6,280) 253,473 292,557 – (4,926) 287,631

Balance Sheet Data

Property, plant and

equipment – net $1,468,403 $ (67,035) $ – $1,401,368 $ 1,367,384 $ (58,481) $ – $1,308,903

Total assets 4,533,037 – 31,041 4,564,078 3,949,857 – 44,698 3,994,555

Total debt, including

commercial paper and

capital lease obligations 1,396,380 – – 1,396,380 1,058,847 – – 1,058,847

Stockholders’ equity 1,516,248 – (65,422) 1,450,826 1,400,542 – (46,181) 1,354,361

Per Share of Common Stock

Basic earnings per share

Income from

continuing operations $ 1.83 $ (0.11) $ (0.05) $ 1.67 $ 1.98 $ (0.15) $ (0.03) $ 1.80

Discontinued operations,

net of income taxes –

Broadcast Media Group – 0.11 – 0.11 – 0.15 – 0.15

Cumulative effect of a change

in accounting principle,

net of income taxes (0.04) – – (0.04) – – – –

Net income $ 1.79 $ – $ (0.05) $ 1.74 $ 1.98 $ – $ (0.03) $ 1.95

Diluted earnings per share

Income from continuing

operations $ 1.82 $ (0.11) $ (0.04) $ 1.67 $ 1.96 $ (0.15) $ (0.03) $ 1.78

Discontinued operations,

net of income taxes –

Broadcast Media Group – 0.11 – 0.11 – 0.15 – 0.15

Cumulative effect of a change

in accounting principle,

net of income taxes (0.04) – – (0.04) – – – –

Net income $ 1.78 $ – $ (0.04) $ 1.74 $ 1.96 $ – $ (0.03) $ 1.93

Dividends per share $ .65 N/A N/A $ .65 $ .61 N/A N/A $ .61

Stockholders’ equity

per share $ 10.39 N/A N/A $ 9.95 $ 9.38 N/A N/A $ 9.07

Average basic shares

outstanding 145,440 N/A N/A 145,440 147,567 N/A N/A 147,567

Average diluted shares

outstanding 145,877 N/A N/A 145,877 149,357 N/A N/A 149,357

As of and for the Years Ended

December 28, 2003 December 29, 2002

(In thousands, except

As Discontinued Restatement Reclassified As Discontinued Restatement Reclassified

per share data)

Reported Operations Adjustments and Restated Reported Operations Adjustments and Restated

Statement of Operations Data

Revenues $ 3,227,200 $(129,196) $ (6,458) $3,091,546 $ 3,079,007 $(139,636) $ (374) $2,938,997

Total expenses 2,687,650 (100,537) 8,102 2,595,215 2,534,139 (97,838) 9,744 2,446,045

Operating profit 539,550 (28,659) (14,560) 496,331 544,868 (41,798) (10,118) 492,952

Interest expense, net 44,757 – – 44,757 45,435 – – 45,435

Income from continuing

operations before income

taxes and minority interest 499,847 (28,659) (14,560) 456,628 492,103 (41,798) (10,118) 440,187

Income from continuing

operations 302,655 (16,916) (8,008) 277,731 299,747 (29,265) (5,565) 264,917

Discontinued operations,

net of income taxes –

Broadcast Media Group – 16,916 – 16,916 – 29,265 – 29,265

Net income 302,655 – (8,008) 294,647 299,747 – (5,565) 294,182

Balance Sheet Data

Property, plant and

equipment – net $1,275,128 $ (59,863) $ – $1,215,265 $1,233,658 $ (62,937) $ – $ 1,170,721

Total assets 3,801,716 – 52,943 3,854,659 3,633,842 – 63,649 3,697,491

Total debt, including

commercial paper and

capital lease obligations 955,302 – – 955,302 958,249 – – 958,249

Stockholders’ equity 1,392,242 – (38,657) 1,353,585 1,269,307 – (40,004) 1,229,303

Per Share of Common Stock

Basic earnings per share

Income from continuing

operations $ 2.01 $ (0.11) $ (0.05) $ 1.85 $ 1.98 $ (0.19) $ (0.04) $ 1.75

Discontinued operations,

net of income taxes –

Broadcast Media Group – 0.11 – 0.11 – 0.19 – 0.19

Net income $ 2.01 $ – $ (0.05) $ 1.96 $ 1.98 $ – $ (0.04) $ 1.94

Diluted earnings per share

Income from continuing

operations $ 1.98 $ (0.11) $ (0.05) $ 1.82 $ 1.94 $ (0.19) $ (0.04) $ 1.71

Discontinued operations,

net of income taxes –

Broadcast Media Group – 0.11 – 0.11 – 0.19 – 0.19

Net income $ 1.98 $ – $ (0.05) $ 1.93 $ 1.94 $ – $ (0.04) $ 1.90

Dividends per share $ .57 N/A N/A $ .57 $ .53 N/A N/A $ .53

Stockholders’ equity

per share $ 9.11 N/A N/A $ 8.86 $ 8.20 N/A N/A $ 7.94

Average basic shares

outstanding 150,285 N/A N/A 150,285 151,563 N/A N/A 151,563

Average diluted shares

outstanding 152,840 N/A N/A 152,840 154,805 N/A N/A 154,805

P.24 2006 ANNUAL REPORT – Impact of Restatement

RESTATEMENT OF FINANCIAL STATEMENTS

The following “Management’s Discussion and

Analysis of Financial Condition and Results of

Operations” reflects the restatements discussed below

and in Note 2 of the Notes to the Consolidated

Financial Statements.

In this Annual Report on Form 10-K, we are

restating the Consolidated Balance Sheet as of

December 25, 2005, the Consolidated Statements of

Operations, Consolidated Statements of Cash Flows

and Consolidated Statements of Changes in

Stockholders’ Equity for the 2005 and 2004 fiscal years,

and Quarterly Information (Unaudited) for the first

three quarters of 2006 and all of fiscal 2005. We have not

amended our previously filed Annual Reports on

Form 10-K for the periods affected by this restatement.

See “Item 6 – Selected Financial Data” and Note 2

(Restatement of Financial Statements) of the Notes to

the Consolidated Financial Statements for more

detailed information regarding the restatement and the

changes to the previously issued financial statements.

The previously issued financial statements

are being restated because we have determined that

they contain errors in accounting for pension and

postretirement liabilities. The reporting errors arose

principally from the treatment of pension and benefits

plans established pursuant to collective bargaining

agreements between the Company and its subsidiaries,

on the one hand, and The New York Times Newspaper

Guild, on the other, as multi-employer plans. The

plans’ participants include employees of The New York

Times and a Company subsidiary, as well as employees

of the plans’ administrator. We have concluded that,

under accounting principles generally accepted in the

United States of America (“GAAP”), the plans should

have been accounted for as single-employer plans. The

main effect of the change is that we must account for

the present value of projected future benefits to be pro-

vided under the plans. Previously, we had recorded the

expense of our annual contributions to the plans. While

the calculations will increase our reported expense, the

accounting changes will not materially increase our

funding obligations, which are regulated by our collec-

tive bargaining agreements with the union.

The restatement also reflects the effect of

other unrecorded adjustments that were previously

determined to be immaterial, mainly related to

accounts receivable allowances and accrued expenses.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – THE NEW YORK TIMES COMPANY P.25

The annual and quarterly earnings per share (“EPS”) impact of the restatement for the three-year period

ending December 31, 2006, is as follows:

Quarter

First Second Third Fourth Year

2006 Basic and Diluted EPS

As Reported – Basic$0.24 $0.42 $0.10 N/A N/A

As Restated – Basic$0.22 $0.41 $0.09 N/A N/A

As Reported – Diluted $0.24 $0.42 $0.10 N/A N/A

As Restated – Diluted $0.22 $0.41 $0.09 N/A N/A

2005 Basic and Diluted EPS

As Reported – Basic$0.76 $ 0.42 $0.16 $0.45 $1.79

As Restated – Basic$0.75 $0.41 $0.15 $0.44 $1.74

As Reported – Diluted $0.76 $ 0.42 $0.16 $0.45 $1.78

As Restated – Diluted $0.75 $0.41 $0.15 $0.43 $1.74

2004 Basic and Diluted EPS

As Reported – Basic$0.39 $0.51 $0.33 $0.76 $1.98

As Restated – Basic$0.38 $0.50 $0.32 $0.75 $1.95

As Reported – Diluted $0.38 $0.50 $0.33 $0.75 $1.96

As Restated – Diluted $0.38 $0.49 $0.32 $0.74 $1.93

The cumulative effect of the restatement resulted in a

reduction in stockholder’s equity of approximately

$65 million as of December 25, 2005. See Note 2 of the

Notes to the Consolidated Financial Statements.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW

We are a leading media and news organization serving our audiences through print, online and mobile tech-

nology. Our segments and divisions are:

News Media Group

The New York Times Media Group, including:

The New York Times,

NYTimes.com,

the International Herald Tribune and

WQXR-FM and WQEW-AM, two New York City radio stations

New England Media Group, including:

The Boston Globe,

Boston.com and

the Worcester Telegram & Gazette

Regional Media Group, including:

14 daily newspapers and their related digital and print operations.

About.com

Our revenues were $3.3 billion in 2006. The percent-

age of revenues contributed by division is below.

News Media Group

The News Media Group generates revenues princi-

pally from print, online, and radio advertising and

through circulation. Other revenues, which make up

the remainder of its revenues, primarily consist of

revenues from wholesale delivery operations, news

services, digital archives, TimesSelect, commercial

printing and direct marketing. The News Media

Group’s main operating expenses are employee-

related costs and raw materials, primarily newsprint.

News Media Group revenues in 2006 by cat-

egory and percentage share are below.

About.com

About.com generates revenues from display adver-

tising that is relevant to its adjacent content,

cost-per-click advertising (sponsored links for which

About.com is paid when a user clicks on the ad), and

e-commerce. Almost all of its revenues (95% in 2006)

are derived from the sale of advertisements (display

and cost-per-click advertising). Cost-per-click adver-

tising accounted for 50% of About.com’s total

advertising revenues. About.com’s main operating

expenses are employee-related costs and content and

hosting costs.

28%

Circulation Revenues

Other Revenues

65%

Advertising Revenues

63%

The New York Times

Media Group

19%

New England Media Group

15%

Regional Media Group

About.com

P.26 2006 ANNUAL REPORT – Executive Overview

Broadcast Media Group

On January 3, 2007, we entered into an agreement to

sell our Broadcast Media Group, consisting of nine net-

work-affiliated television stations, their related Web

sites and the digital operating center, for $575 million.

The transaction is subject to regulatory approvals and

is expected to close in the first half of 2007. The results

of the Broadcast Media Group are reported as discon-

tinued operations.

Joint Ventures

The Company’s investments accounted for under the

equity method are as follows:

–

a 49% interest in Metro Boston LLC, which publishes

a free daily newspaper catering to young profession-

als and students 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, and

–

an approximately 17% interest in New England

Sports Ventures, which owns the Boston Red Sox,

Fenway Park and adjacent real estate, approxi-

mately 80% of the New England Sports Network, a

regional cable sports network, and 50% of Roush

Fenway Racing, a leading NASCAR team.

Business Environment

We operate in the highly competitive media industry.

We believe that a number of factors and industry trends

have had, and will continue to have, a fundamental

effect on our business and prospects. These include:

Increasing competition

Competition for advertising revenue that our busi-

nesses face affects our ability both to attract and

retain advertisers and consumers and to maintain or

increase our advertising rates. We expect technologi-

cal developments will continue to increase the

number of media choices, intensifying the challenges

posed by audience fragmentation.

We have expanded and will continue to

expand our online and mobile offerings; however,

most of our revenues are currently from traditional

print products. Our print advertising revenues have

declined. We believe that this decline, particularly in

classified advertising, is due to a shift to online media

or to other forms of media and marketing.

Economic conditions

Our advertising revenues, which account for

approximately 65% of our News Media Group

revenues, are susceptible to economic swings.

National and local economic conditions, particularly

in the New York City and Boston metropolitan

regions, affect the level of our national, classified and

retail advertising revenue.

In addition, a significant portion of our

advertising revenues comes from the studio enter-

tainment, department store, and automotive sectors.

Consolidation among key advertisers in these and

other categories as well as changes in spending prac-

tices or priorities has depressed, and may continue to

depress, our advertising revenue. We believe that cat-

egories that have historically generated significant

amounts of advertising revenues for our businesses

are likely to continue to be challenged in 2007. These

include studio entertainment, telecommunications,

and help-wanted and automotive classified advertis-

ing and, within the New England Media Group,

department store advertising.

Circulation

Circulation is another significant source of revenue for

us. In recent years, we, along with the newspaper

industry as a whole, have experienced difficulty

increasing circulation volume and revenues. This is due

to, among other factors, increased competition from

new media formats and sources, and shifting prefer-

ences among some consumers to receive all or a portion

of their news from sources other than a newspaper.

Expenses

Our most significant expenses are for

compensation–related costs and raw materials, which

account for approximately 52% of total costs and

expenses. Changes in the price of newsprint or in

compensation–related expenses can materially affect

our operating results.

For a discussion of these and other factors

that could affect our results of operations and finan-

cial conditions, see “Forward-Looking Statements”

and “Item 1A – Risk Factors.”

Our Strategy

We anticipate that these challenges will continue, and

we believe that the following elements are key to our

efforts to address them.

New products and services

We are addressing the increasingly fragmented

media landscape by building on the strength of our

brands, particularly of The New York Times. To fur-

ther leverage these brands, we have introduced and

will continue to introduce a number of new products

and services in print and online. In 2006, these

included new specialty magazines in New York and

Boston, zoned and special sections across other

properties, new ad placements, including section

Executive Overview – THE NEW YORK TIMES COMPANY P.27

fronts at nearly all of our newspapers, and new

weekly newspapers in our Regional Media Group.

Online, we redesigned NYTimes.com,

increased editorial content at About.com

through increased guides, launched a local search

product on Boston.com, and acquired Baseline

StudioSystems, the primary business-to-business

supplier of proprietary entertainment information

to the film and television industries.

On February 14, 2007, we announced a

strategic alliance with Monster Worldwide, Inc. to

further build our online recruitment product offering.

We expect our revenues from Internet-

related businesses, including About.com,

NYTimes.com, Boston.com, iht.com and the sites

associated with our regional newspapers, to grow

approximately 30 percent to approximately $350 mil-

lion in 2007, mainly from organic growth.

Leadership in content categories

In addition to reinforcing our leadership in our indi-

vidual properties, we seek to maintain and develop

leadership in key content categories, such as enter-

tainment, luxury real estate and travel, categories we

believe appeal to our distinctive audience and will

deepen their engagement with our products.

Through the 2005 acquisition of About.com,

we gained leadership in a number of online “verti-

cals.” One of the top 15 most visited Web sites in 2006,

About.com is the third-largest commercial health

channel and third-largest food channel on the

Internet, according to Nielsen//NetRatings. In

September, we strengthened its health offerings by

acquiring Calorie-Count.com, a site that offers weight

loss tools and nutritional information.

Innovation

In 2006, we implemented a research and develop-

ment capability to better help us anticipate consumer

preferences. This initiative is closely linked to our

operating units so that its work can have both near-

and long-term business impact. As a result of these

efforts, in 2006, we launched new mobile Web sites in

New York, Boston and Gainesville.

Rebalanced portfolio

We continuously evaluate our businesses to determine

whether they are meeting their targets for financial

performance, growth and return on investment and

whether they remain relevant to our strategy.

As a result of this analysis, in October 2006,

we sold our investment in Discovery Times Channel.

On January 3, 2007, we entered into an agreement

to sell our Broadcast Media Group to allow us to focus

on developing our print and digital businesses. In the

first quarter of 2007, we expect to complete the sale of

one of our two radio stations.

At the same time, we have made selective

acquisitions and investments, such as the acquisi-

tions of Baseline and Calorie-Count.com.

Expense management

Managing expenses is a key component of our strat-

egy. We continuously review our expense structure to

ensure that we are operating our businesses effi-

ciently. We focus on reducing costs by streamlining

our operations, freeing up resources and achieving

cost benefits from productivity gains.

In 2006, our cost-control efforts principally

addressed employee-related costs and newsprint

expense, our main operating expenses. We have

implemented staff reductions, partially offset by

increases from acquisitions and hiring in critical

areas. We continually monitor newsprint prices,

which are subject to supply and demand market con-

ditions, and have adopted a number of measures to

reduce newsprint consumption.

As part of our efforts to reduce costs, in July

2006, we announced plans to consolidate our New York

metro area printing into our newer facility in College

Point, N.Y., and to close our older Edison, N.J., facility.

We also announced that we would reduce the size of all

editions of The Times, with the printed page decreasing

from 13.5 by 22 inches to 12 by 22 inches. We expect to

complete the reduction in the third quarter of 2007 and

the plant consolidation in the second quarter of 2008.

With the plant consolidation, we expect to

save $30 million in lower operating costs annually and

to avoid the need for approximately $50 million in

capital investment at the Edison facility over the next

10 years. We expect to incur capital expenditures of

$135 million related to the plant consolidation.

As part of the plant consolidation, we expect

a workforce reduction of approximately 250 full-time

equivalent employees. We have identified total costs

to close the Edison facility in the range of $104 million

to $128 million, principally consisting of accelerated

depreciation charges, as well as staff reduction

charges and plant restoration costs. We expect to exit

the facility in the second quarter of 2008 and, depend-

ing on the disposition of the property, may recognize

additional charges with respect to our lease, which

continues through 2018.

With the web-width reduction, we expect

to save more than $10 million annually from

decreased newsprint consumption. We expect to

incur capital expenditures of $15 million related

to the reduction.

P.28 2006 ANNUAL REPORT – Executive Overview

2007 Expectations

The key financial measures for 2007 discussed in the table below are computed under GAAP.

Item 2007 Expectation

Newsprint cost per ton Decline in the low-single digits

Depreciation & amortization $195 to $205 million

(1)

Net income from joint ventures $10 to $15 million

Interest expense $48 to $52 million

Capital expenditures $340 to $370 million

(2)

Cost savings and productivity gains $65 to $75 million

(3)

(1)

Includes $45 to $48 million of accelerated depreciation expense associated with the consolidation of the New York metro area printing

plants and depreciation expense of approximately $16 to $19 million for the new headquarters building in the second half of 2007.

(2)

Includes $170 to $190 million for our new headquarters building and $75 million for the plant consolidation.

(3)

Excludes certain one-time expenses, mainly staff reduction costs.

Executive Overview – THE NEW YORK TIMES COMPANY P.29

We are nearing completion of our new head-

quarters building in New York City, which we expect

to occupy in the second quarter of 2007. The midtown

Manhattan real estate market has improved

significantly since we began development. Because of

staff reductions and the housing of some depart-

ments in lower cost office space, we are now planning

to lease five floors, totaling approximately 155,000

square feet, or one-fifth of our space.

RESULTS OF OPERATIONS

Overview

Unless stated otherwise, all references to 2006, 2005 and 2004 refer to our fiscal years ended, or the dates as of,

December 31, 2006, December 25, 2005, and December 26, 2004. Fiscal year 2006 comprises 53 weeks and fiscal

years 2005 and 2004 each comprise 52 weeks. The effect of the 53rd week (“additional week”) on revenues,

costs and expenses is discussed below.

The results for the fiscal year 2006 include the effect of a non-cash charge for the impairment of good-

will and other intangible assets at the New England Media Group. See “– Impairment of Intangible Assets”

below for a detailed discussion of the impairment charge. The following discussion reflects the restatements

discussed above and in Note 2 of the Notes to the Consolidated Financial Statements.

% Change

2006 2005 2004 05-04

(In thousands) (Restated) (Restated) 06-05 (Restated)

Revenues

Advertising $2,153,936 $2,139,486 $ 2,053,378 0.74.2

Circulation 889,722 873,975 883,995 1.8(1.1)

Other 246,245 217,667 222,039 13.1(2.0)

Total revenues 3,289,903 3,231,128 3,159,412 1.82.3

Costs and expenses

Production costs:

Raw materials 330,833 321,084 296,594 3.08.3

Wages and benefits 665,304 652,216 635,087 2.02.7

Other 533,392 495,588 474,978 7.64.3

Total production costs 1,529,529 1,468,888 1,406,659 4.14.4

Selling, general and

administrative expenses 1,466,552 1,442,690 1,290,140 1.711.8

Total costs and expenses 2,996,081 2,911,578 2,696,799 2.98.0

Impairment of intangible

assets 814,433 ——N/AN/A

Gain on sale of assets — 122,946 — N/A N/A

Operating (loss)/profit (520,611) 442,496 462,613 * (4.3)

Net income from joint ventures 19,340 10,051 240 92.4*

Interest expense, net 50,651 49,168 41,760 3.017.7

Other income — 4,167 8,212 N/A (49.3)

(Loss)/income from continuing

operations before income

taxes and minority interest (551,922) 407,546 429,305 * (5.1)

Income taxes 16,608 163,976 163,731 (89.9) 0.1

Minority interest in net loss/

(income) of subsidiaries 359 (257) (589) * (56.4)

(Loss)/income from continuing

operations (568,171) 243,313 264,985 * (8.2)

Discontinued operations,

net of income taxes-

Broadcast Media Group 24,728 15,687 22,646 57.6(30.7)

Cumulative effect of a change

in accounting principle,

net of income taxes — (5,527) — N/A N/A

Net (loss)/income $ (543,443) $ 253,473 $ 287,631 * (11.9)

Represents an increase or decrease in excess of 100%.

P.30 2006 ANNUAL REPORT – Results of Operations

Revenues

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

% Change

2006 2005 2004 06-05 05-04

(In millions) (Restated) (Restated) (Restated)

Revenues

News Media Group $3,209.7 $ 3,187.2 $3,159.40.70.9

About.com (from March 18, 2005) 80.2 43.9—82.5N/A

Total $3,289.9 $3,231.1 $3,159.41.82.3

News Media Group

Advertising, circulation and other revenues by division of the News Media Group and for the Group as a

whole were as follows:

% Change

2006 2005 2004 06-05 05-04

(In millions) (Restated) (Restated) (Restated)

The New York Times Media Group

Advertising $1,268.6 $1,262.2 $1,222.10.53.3

Circulation 637.1 615.5 615.93.5(0.1)

Other 171.6 157.0 165.09.3(4.8)

Total $2,077.3 $2,034.7 $2,003.02.11.6

New England Media Group

Advertising $ 425.7 $467.6$481.6(9.0) (2.9)

Circulation 163.0 170.7 181.0(4.5) (5.7)

Other 46.6 37.038.025.9(2.6)

Total $ 635.3 $675.3$700.6(5.9) (3.6)

Regional Media Group

Advertising $383.2 $367.5 $ 349.74.35.1

Circulation 89.6 87.887.12.10.8

Other 24.3 21.919.011.114.8

Total $497.1 $ 477.2 $ 455.84.24.7

Total News Media Group

Advertising $2,077.5 $ 2,097.3 $2,053.4(0.9) 2.1

Circulation 889.7 874.0 884.01.8(1.1)

Other 242.5 215.9 222.012.3(2.8)

Total $3,209.7 $ 3,187.2 $3,159.40.70.9

Advertising Revenue

Advertising revenue is primarily determined by the

volume, rate and mix of advertisements. In 2006,

News Media Group advertising revenues decreased

compared to 2005 primarily due to lower print vol-

ume, which was partially offset by the effect of the

additional week in fiscal 2006 as well as higher rates

and higher online advertising revenues. Print

advertising revenues declined 2.7% while online

advertising revenues increased 27.1%.

In 2005, advertising revenues increased due

to higher advertising rates and a 29.5% growth in

online advertising revenues, partially offset by lower

print volume due to a weak print advertising market.

Results of Operations – THE NEW YORK TIMES COMPANY P.31

During the last few years, our results have been adversely affected by a weak print advertising environment.

Print advertising volume for the News Media Group was as follows:

(Inches in thousands, preprints % Change

in thousands of copies) 2006 2005 2004 06-05 05-04

News Media Group

National 2,399.5 2,468.4 2,512.4(2.8) (1.7)

Retail 6,396.3 6,511.7 6,541.8(1.8) (0.5)

Classified 9,509.4 9,532.2 9,675.5(0.2) (1.5)

Part Run/Zoned 1,989.8 2,087.3 2,215.6(4.7) (5.8)

Total 20,295.0 20,599.6 20,945.3(1.5) (1.7)

Preprints 2,963,946 2,979,723 2,897,241 (0.5) 2.8

Advertising revenues (print and online) by category for the News Media Group were as follows:

% Change

2006 2005 2004 06-05 05-04

(In millions) (Restated) (Restated) (Restated)

News Media Group

National $938.2 $ 948.4 $ 926.3(1.1) 2.4

Retail 495.4 499.8 490.5(0.9) 1.9

Classified 578.7 590.5 579.5(2.0) 1.9

Other 65.2 58.657.111.42.6

Total $2,077.5 $2,097.3 $2,053.4(0.9) 2.1

The New York Times Media Group

Advertising revenues were slightly higher in 2006

than 2005 primarily due to higher rates and the effect

of the additional week partially offset by lower print

volume. Online advertising increased in the retail,

national and classified categories. These increases

were offset by declines in the automotive and help-

wanted classified categories, as well as national and

retail print advertising categories.

In 2006, national advertising, which

represented 64% of the Group’s advertising revenues,

was on a par with the prior year. This was principally

the result of reduced spending in the studio entertain-

ment and national automotive categories offset by

revenues from the additional week as well as growth in

a number of national ad categories including advocacy,

American fashion and pharmaceutical. Classified

advertising, which represented 20% of the Group’s

advertising revenues, was on a par with the prior year

as weakness in automotive and help-wanted advertis-

ing offset strong gains in real estate advertising and

revenues from the additional week. Retail advertising,

which represented 14% of the Group’s advertising rev-

enues, was on a par with the prior year mainly because

of revenues from the additional week.

Advertising revenues were higher in 2005

than 2004 mainly due to increases in the retail and

national advertising categories and growth in our

online revenue partially offset by lower print classi-

fied advertising revenues.

In 2005, national advertising, which repre-

sented 65% of the Group’s advertising revenues,

increased as strength in financial services, corporate

and national automotive advertising offset weakness

in the telecommunications, studio entertainment and

technology products categories. Classified advertis-

ing, which represented 20% of the Group’s

advertising revenues, rose as gains in real estate

advertising offset softness in automotive and help-

wanted. Retail advertising, which represented 14% of

the Group’s advertising revenues, rose as growth in

fashion/jewelry store advertising offset weakness in

home furnishing store advertising.

New England Media Group

Advertising revenues were lower in 2006 primarily

due to lower print volume and rates. Print advertising

declines in the national, retail, classified and other

advertising categories were partially offset by incre-

mental revenues from the additional week and

growth in all online categories.

In 2006, classified advertising, which repre-

sented 38% of the Group’s advertising revenues,

decreased due to weakness in help-wanted, automo-

tive and real estate advertising. Retail advertising,

which represented 31% of the Group’s advertising

revenues in 2006, declined primarily due to a decrease

in department store advertising as a result of the con-

solidation of two large retailers. National advertising,

which represented 26% of the Group’s advertising

P.32 2006 ANNUAL REPORT – Results of Operations

Results of Operations – THE NEW YORK TIMES COMPANY P.33

revenues, declined mainly because of weakness in

national automotive, telecommunications, travel and

financial services advertising.

Advertising revenues were lower in 2005 than

2004 mainly due to decreases in all advertising cate-

gories partially offset by increases in online advertising.

In 2005, classified advertising, which repre-

sented 39% of the Group’s advertising revenues,

decreased as weakness in automotive advertising off-

set growth in real estate and help-wanted advertising.

Retail advertising, which represented 30% of the

Group’s advertising revenues, declined primarily due

to softness in the home furnishing store, department

store and apparel/footwear categories. National

advertising, which represented 26% of the Group’s

advertising revenues, declined mainly because of

weakness in travel, studio entertainment, telecommu-

nications and national automotive advertising.

Regional Media Group

Advertising revenues were higher in 2006 primarily

due to increased revenues in the real estate classified

and retail advertising categories, growth in online

advertising and the effect of the additional week.

In 2006, retail advertising, which represented

48% of the Group’s advertising revenues, increased

due to growth in home improvement advertising and

gains in a number of other retail categories offset by

softness in telecommunications and department store

advertising. Classified advertising, which represented

43% of the Group’s advertising revenues, increased as

strong growth in real estate advertising and the addi-

tional week offset weakness in automotive and

help-wanted advertising.

Advertising revenues were higher in 2005

than 2004 mainly due to increases in the help-wanted

classified and retail advertising categories and the

growth in our online revenues partially offset by

lower automotive classified advertising revenues.

In 2005, retail advertising, which represented

49% of the Group’s advertising revenues, increased as

strength in home furnishing advertising and gains in a

number of other retail categories offset weakness in

grocery store and department store advertising.

Classified advertising, which represented 42% of the

Group’s advertising revenues, increased as growth in

help-wanted and real estate advertising offset weak-

ness in automotive advertising.

Circulation Revenue

Circulation revenue is based on the number of copies

sold and the subscription rates charged to customers.

Circulation revenues increased in 2006 primarily as a

result of the increase in home delivery rates at The

New York Times and the effect of the additional week

in fiscal 2006, partially offset by fewer copies sold. At

the New England Media Group, circulation revenues

decreased primarily due to lower volume. At the

Regional Media Group, circulation revenues increased

primarily due to the effect of the additional week.

Circulation revenues in 2005 decreased

slightly compared with 2004 mainly due to a decrease

in copies sold at the Globe. Circulation revenues at

The New York Times Media Group and Regional

Media Group were flat in 2005 compared with 2004.

Other Revenues

Other revenues increased in 2006 primarily due to the

introduction of TimesSelect, a fee-based product that

charges non-print subscribers for access to our

columnists and archives, increased revenues from

wholesale delivery operations and revenues from

Baseline, which we acquired in August 2006.

In 2005, other revenues decreased com-

pared to 2004, primarily due to lower revenues from

wholesale delivery operations.

About.com

In 2006, its first full year under our ownership,

About.com’s revenue increased 82.5% from 2005,

which reflected revenues from the acquisition date

(March 18, 2005). The increase was due to the inclu-

sion of a full year of revenues as well as an increase

in display, cost-per-click advertising revenues and

other revenues.

Costs and Expenses

Below is a chart of our consolidated costs and expenses. The information for 2005 and 2004 reflects the restate-

ment described above.

Components of Consolidated Consolidated Costs and Expenses

Costs and Expenses as a Percentage of Revenues

Costs and expenses were as follows:

% Change

2006 2005 2004 06-05 05-04

(In millions) (Restated) (Restated) (Restated)

Production costs:

Raw materials $330.8 $ 321.1$296.63.08.3

Wages and benefits 665.3 652.2 635.12.02.7

Other 533.4 495.6475.07.64.3

Total production costs 1,529.5 1,468.9 1,406.74.14.4

Selling, general and

administrative expenses 1,466.6 1,442.7 1,290.11.711.8

Total costs and expenses $2,996.1 $2,911.6$2,696.82.98.0

Raw Materials

Other Operating Costs

Depreciation & Amortization

Wages and Benefits

2006

2005

2004

100%

Raw Materials

Other Operating Costs

Depreciation & Amortization

Wages and Benefits

2006

2005

2004

100%

P.34 2006 ANNUAL REPORT – Results of Operations

Production Costs

Total production costs in 2006 increased 4.1%

($60.6 million) compared to 2005 primarily due to

higher depreciation expense ($22.3 million), compen-

sation-related expenses ($13.1 million), editorial and

outside printing costs ($11.7 million) and raw materi-

als expense ($9.7 million). Increases in editorial and

outside printing costs and newsprint expense were

primarily due to the effect of the additional week in

our fiscal year 2006. The additional week contributed

a total of approximately $31.7 million in additional

production costs. Depreciation expense increased

due to the accelerated depreciation for certain assets

at our Edison, N.J., printing plant, which we are in the

process of closing. Newsprint expense rose 2.2% in

2006 compared with 2005 due to an 8.9% increase

from higher prices partially offset by a 6.7% decrease

from lower consumption.

Total production costs in 2005 were unfavor-

ably affected by the acquisition of About.com and

incremental stock-based compensation expense result-

ing from the adoption of FAS 123-R. Total production

costs increased 4.4% ($62.2 million) in 2005 compared

with 2004 primarily due to increased raw materials

expense ($24.5 million), compensation-related expenses

($17.1 million) and outside printing costs ($12.6 million).

Newsprint expense rose 6.7% in 2005 compared with

2004, due to an 8.0% increase from higher prices par-

tially offset by a 1.3% decrease from lower consumption.

Selling, General and Administrative Expenses

Total selling, general and administrative expenses

(“SGA”) increased 1.7% ($23.9 million) primarily due

to increased compensation-related expenses

($19.8 million), distribution and promotion expenses

($15.8 million) and depreciation and amortization

expense ($4.5 million), which were partially offset by

lower staff reduction expenses ($25.0 million).

Increases in compensation-related expenses were pri-

marily due to higher incentive and benefit costs

News Media Group

In 2006, costs for the News Media Group increased

2.3% ($66.0 million) compared to 2005 primarily due

to increased compensation-related expenses ($29.3

million), depreciation and amortization expense

($24.4 million), and outside printing and distribution

expense ($20.4 million), which were partially offset

by lower staff reduction costs ($22.9 million).

Increases in compensation-related expenses were pri-

marily due to higher incentive and benefit costs

partially offset by savings due to staff reductions.

Depreciation expense increased primarily due to the

accelerated depreciation for certain assets at our

Edison, N.J., printing plant, which we are in the

process of closing ($20.8 million).

In 2005, costs and expenses for the News

Media Group increased 6.7% ($178.3 million) due to

staff reduction expenses ($53.5 million) and the recogni-

tion of stock-based compensation (21.9 million) expense

as well as increased distribution ($22.2 million), promo-

tion and outside printing expenses ($32.6 million),

mainly because of circulation initiatives, and higher

newsprint ($24.5 million) and compensation-related

expense ($14.5 million).

About.com

Costs and expenses for About.com increased 53.1%

from $32.3 million to $49.4 million primarily due to

higher compensation-related expenses ($5.2 million),

and editorial costs ($4.3 million). Additionally, 2006

reflected costs for the entire year, while 2005 only

included costs from the date of acquisition.

Corporate

Costs and expenses for Corporate increased in 2006

compared with 2005 primarily due to increased com-

pensation-related expenses partially offset by decreases

in professional fees.

Costs and expenses for Corporate increased

in 2005 compared with 2004 primarily due to

increased compensation-related expenses (including

stock-based compensation).

Results of Operations – THE NEW YORK TIMES COMPANY P.35

partially offset by savings due to staff reductions. The

additional week contributed approximately $5.1 million

in additional SGA expenses.

In 2005, SGA expenses increased 11.8%

($152.6 million) compared with 2004 primarily due to

increased staff reduction expenses ($54.6 million),

incremental stock-based compensation expense

($24.8 million) as a result of the adoption of FAS 123-R,

distribution expense ($21.8 million), promotion

expense ($19.3 million) and expenses from

About.com, which was acquired in March 2005.

The following table sets forth consolidated costs and expenses by reportable segment, Corporate and the

Company as a whole.

% Change

(In millions) 2006 2005 2004 06-05 05-04

Costs and expenses

News Media Group $2,892.5 $2,826.5 $2,648.32.36.7

About.com (from March 18, 2005) 49.4 32.3—53.1N/A

Corporate 54.2 52.848.52.68.8

Total $2,996.1 $2,911.6 $2,696.82.98.0

Depreciation and Amortization

Consolidated depreciation and amortization by reportable segment, Corporate and the Company as a whole,

were as follows:

% Change

(In millions) 2006 2005 2004 06-05 05-04

Depreciation and Amortization

News Media Group $143.7 $119.3 $124.620.4(4.3)

About.com (from March 18, 2005) 11.9 9.2—30.1N/A

Corporate 6.7 7.09.4(4.0) (25.6)

Total Depreciation and

Amortization $162.3 $135.5 $134.019.81.0

P.36 2006 ANNUAL REPORT – Results of Operations

In 2006, depreciation and amortization increased

compared to 2005 primarily due to the accelerated

depreciation for certain assets at our Edison, N.J.,

printing plant, which we are in the process of closing.

Impairment of Intangible Assets

Our annual impairment tests resulted in a non-cash

impairment charge of $814.4 million ($735.9 million

after tax, or $5.09 per share) related to the write-down

of intangible assets of the New England Media

Group. The New England Media Group, which

includes the Globe, Boston.com and the Worcester

Telegram & Gazette, is part of our News Media

Group reportable segment. The majority of the charge

is not tax deductible because the 1993 acquisition of

the Globe was structured as a tax-free stock transac-

tion. The impairment charge, which is included in the

line item “Impairment of intangible assets” in our

2006 Consolidated Statement of Operations, is pre-

sented below by intangible asset:

(In millions) Pre-tax Tax After-tax

Goodwill $782.3$65.0$717.3

Customer list 25.610.814.8

Newspaper masthead 6.52.73.8

Total $814.4$78.5$735.9

The impairment of the intangible assets mainly

resulted from declines in current and projected oper-

ating results and cash flows of the New England

Media Group due to, among other factors, advertiser

consolidations in the New England area and

increased competition with online media. These fac-

tors resulted in the carrying value of the intangible

assets being greater than their fair value, and there-

fore a write-down to fair value was required.

The fair value of goodwill is the residual fair

value after allocating the total fair value of the New

England Media Group to its other assets, net of liabili-

ties. The total fair value of the New England Media

Group was estimated using a combination of a dis-

counted cash flow model (present value of future cash

flows) and two market approach models (a multiple

of various metrics based on comparable businesses

and market transactions).

The fair value of the customer list and mast-

head was calculated by estimating the present value

of future cash flows associated with each asset.

Gain on Sale of Assets

In the first quarter of 2005, we recognized a pre-tax gain

of $122.9 million from the sale of our existing New York

City headquarters as well as property in Florida.

Operating Profit

Consolidated operating profit by reportable segment, Corporate and the Company as a whole, were as follows:

% Change

2006 2005 2004 06-05 05-04

(In millions) (Restated) (Restated) (Restated)

Operating Profit (Loss):

News Media Group $317.2 $360.6 $511.1 (12.1) (29.4)

About.com (from March 18, 2005) 30.8 11.7—*N/A

Corporate (54.2) (52.7) (48.5) 2.68.8

Impairment of intangible assets (814.4) ——N/AN/A

Gain on sale of assets — 122.9—N/AN/A

Total Operating

(Loss)/Profit $(520.6) $442.5$462.6*(4.3)

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

We discuss the reasons for the year-to-year changes in

each segment’s and Corporate’s operating profit in the

“Revenues” and “Costs and Expenses” sections above.

NON-OPERATING ITEMS

Net Income/(Loss) from Joint Ventures

We have investments in Metro Boston, two paper

mills (Malbaie and Madison) and NESV, which are

accounted for under the equity method. Our

proportionate share of these investments is recorded

in “Net income from joint ventures” in our

Consolidated Statements of Operations. See Note 7 of

the Notes to the Consolidated Financial Statements

for additional information regarding these invest-

ments. In October 2006, we sold our 50% ownership

interest in Discovery Times Channel, a digital

cable channel, for $100 million, resulting in a pre-

tax loss of $7.8 million.

Net income from joint ventures increased in

2006 to $19.3 million from $10.1 million in 2005. While

2006 included a loss of $7.8 million from the sale of

our interest in Discovery Times Channel, it was more

than offset by higher results from all of our equity

investments.

We recorded income from joint ventures of

$10.1 million in 2005 and $0.2 million in 2004. The

increase in 2005 was primarily due to improved per-

formance at Discovery Times Channel and NESV.

Interest Expense, Net

Interest expense, net, was as follows:

(In millions) 2006 2005 2004

Interest expense $73.5 $60.0 $51.4

Loss from extinguishment

of debt — 4.8—

Interest income (7.9) (4.4) (2.4)

Capitalized interest (14.9) (11.2) (7.2)

Interest expense, net $50.7 $49.2 $41.8

“Interest expense, net” increased in 2006 compared

with 2005 and in 2005 compared with 2004 due to

higher levels of debt outstanding and higher short-

term interest rates. The increases were partially offset

by higher levels of capitalized interest related to our

new headquarters as well as higher interest income.

Interest income was primarily related to funds we

advanced on behalf of our development partner for

the construction of our new headquarters.

Other Income

“Other income” in our Consolidated Statements of

Operations includes the following items:

(In millions) 2005 2004

Non-compete agreement $4.2$5.0

Advertising credit—3.2

Other income $4.2$8.2

We entered into a five-year $25 million non-compete

agreement in connection with the sale of the Santa

Barbara News-Press in 2000. This income was recog-

nized on a straight-line basis over the life of the

agreement, which ended in October 2005. The adver-

tising credit relates to credits for advertising that we

issued that were not used within the allotted time by

the advertiser.

Income Taxes

In 2006, the effective income tax rate was 3.0%

because the majority of the non-cash impairment

charge of $814.4 million at the New England Media

Group is non-deductible for tax purposes. Excluding

the non-cash charge, the effective income tax rate

would have been 36.2% in 2006 compared with

40.2% in 2005 and 38.1% in 2004. The decrease in the

effective income tax rate in 2006 compared to 2005 is

primarily due to non-taxable income related to our

retiree drug subsidy and higher non-taxable income

from our corporate-owned life insurance plan. The

increase in the effective income tax rate in 2005 com-

pared to 2004 is primarily due to the tax effect of the

gain from selling our current headquarters in 2005.

Discontinued Operations

In January 2007, we entered into an agreement to sell

our Broadcast Media Group, consisting of nine

network-affiliated television stations, their Web sites

and the digital operating center, for $575 million in

cash. This decision was a result of our ongoing analy-

sis of our business portfolio and will allow us to place

an even greater emphasis on developing and integrat-

ing our print and growing digital resources. The

transaction is subject to regulatory approvals and is

expected to close in the first half of 2007.

In accordance with the provisions of FAS

No. 144, Accounting for the Impairment of Long-

Lived Assets (“FAS 144”), the Broadcast Media

Group’s results of operations are presented as

discontinued operations and certain assets and liabil-

ities are classified as held for sale for all periods

presented in our Consolidated Financial Statements.

The results of operations presented as discontinued

operations are summarized below.

See Note 5 of the Notes to the Consolidated

Financial Statements for additional information

regarding discontinued operations.

(In millions) 2006 2005 2004

Revenues $156.8 $139.0 $145.6

Total costs and

expenses 115.4 111.9107.2

Pre-tax income 41.4 27.138.4

Income taxes 16.7 11.115.7

Cumulative effect of a

change in accounting

principle, net of

income taxes — (0.3) —

Discontinued

operations, net

of income taxes $24.7 $15.7$22.7

Cumulative Effect of a Change in

Accounting Principle

In March 2005, the FASB issued FASB Interpretation

No. (“FIN”) 47, Accounting for Conditional Asset

Retirement Obligations—an Interpretation of FASB

Results of Operations – THE NEW YORK TIMES COMPANY P.37

Statement No. 143 (“FIN 47”). FIN 47 requires an entity

to recognize a liability for the fair value of a conditional

asset retirement obligation if the fair value can be rea-

sonably estimated. FIN 47 was effective no later than

the end of fiscal year ending after December 15, 2005.

We adopted FIN 47 effective December 2005 and

accordingly recorded an after tax charge of $5.5 million

or $.04 per diluted share ($9.9 million pre-tax) as a

cumulative effect of a change in accounting principle

in our Consolidated Statement of Operations. A

portion of the 2005 charge has been reclassified to con-

form to the 2006 presentation of the Broadcast Media

Group as a discontinued operation.

See Note 8 of the Notes to the Consolidated

Financial Statements for additional information regard-

ing the cumulative effect of this accounting change.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The following table presents information about our

financial position as of December 2006 and

December 2005.

Financial Position Summary

2006 2005 % Change

(In millions) (Restated) 06-05

Cash and cash equivalents $72.4 $44.961.1

Short-term debt

(1)

650.9 498.130.7

Long-term debt

(1)

795.0 898.3 (11.5)

Stockholders’ equity 819.8 1450.8(43.5)

Ratios:

Total debt to total capitalization 64% 49% 30.6

Current ratio .91 .95 (4.2)

(1)

Short-term debt includes the current portion of long-term debt

(none in 2005), commercial paper outstanding and current por-

tion of capital lease obligations and, in 2006, a construction loan

discussed below. Long-term debt also includes the long-term

portion of capital lease obligations.

In 2007 we expect our cash balance, cash provided

from operations, and available third-party financing,

described below, to be sufficient to meet our normal

operating commitments and debt service

requirements, to fund planned capital expenditures,

to pay dividends to our stockholders, to repurchase

shares of our Class A Common Stock and to make con-

tributions to our pension plans. In addition, we expect

to use the proceeds from the sales of the Broadcast

Media Group and WQEW to reduce our debt, which

will increase our borrowing capacity in the future for

potential acquisitions, investments or capital projects.

We repurchase Class A Common Stock

under our stock repurchase program from time to

time either in the open market or through private

transactions. These repurchases may be suspended

from time to time or discontinued. In 2006 we repur-

chased 2.2 million shares of Class A Common Stock at

a cost of approximately $51 million, and in 2005 we

repurchased 1.7 million shares of Class A Common

Stock at a cost of approximately $57 million.

For the June 2006 dividend on our Class A

and Class B Common Stock, the Board of Directors

authorized a $.01 per share increase in the quarterly

dividend on our Class A and Class B Common Stock

to $.175 per share from $.165 per share. Subsequent

quarterly dividend payments in September and

December 2006 were also made at this rate. We paid

dividends of approximately $100 million in 2006,

$95 million in 2005 and $90 million in 2004.

In 2006 and 2005 we made contributions of

$15.3 million and $54.0 million, respectively to our

qualified pension plans.

Plant Consolidation

In July 2006, we announced plans to consolidate our

New York metro area printing into our newer facility

in College Point, N.Y., and to close our older Edison,

N.J., facility. We expect to save $30 million in lower

operating costs annually and to avoid the need for

approximately $50 million in capital investment at

the Edison facility over the next 10 years. We expect

to incur capital expenditures of $135 million related

to the plant consolidation. We have identified total

costs to close the Edison facility in the range of

$104 million to $128 million, principally consisting of

accelerated depreciation charges, as well as staff

reduction charges and plant restoration costs. We

expect to exit the facility in the second quarter of 2008

and, depending on the disposition of the property,

may recognize additional charges with respect to our

lease, which continues through 2018.

P.38 2006 ANNUAL REPORT – Liquidity and Capital Resources

New Headquarters Building

We are nearing completion of our new headquarters

building in New York City (the “Building”), which

we expect to occupy in the second quarter of 2007. In

August 2006, the Building was converted to a lease-

hold condominium, and one of our wholly owned

subsidiaries (“NYT”) and a subsidiary of Forest City

Ratner Companies (“FC”), our development partner,

each acquired ownership of its respective leasehold

condominium units. See Note 19 of the Notes to the

Consolidated Financial Statements for additional

information regarding the Building.

Before the Building was converted to a

leasehold condominium, the leasehold interest in the

Building was held by a limited liability company in

which NYT and FC are members (the “Building

Partnership”). Because the Company has a majority

interest in the Building Partnership, FC’s interest in

the Building was consolidated in our financial state-

ments. As a result of the Building’s conversion to a

leasehold condominium, the Building Partnership no

longer holds any leasehold interest in the Building,

and FC’s condominium units and capital expendi-

tures (see below) are no longer consolidated in our

financial statements.

Actual and anticipated capital expenditures

in connection with the Building, including both core

and shell and interior construction costs, are detailed

in the table below.

Capital Expenditures

(In millions) NYT

2001-2006 $434

2007 $ 170-$190

Total $604-$624

Less: net sale proceeds

(1)

$106

Total, net of sale proceeds $498-$518

(2)

(1)

Represents cash proceeds from the sale of our existing head-

quarters, net of income taxes and transaction costs.

(2)

Includes estimated capitalized interest and salaries of $40 to

$50 million.

FC’s capital expenditures were consolidated in our

financial statements through August 2006, when the

Building was converted to a leasehold condominium.

FC’s actual capital expenditures from 2001, the begin-

ning of the project, through August 2006 were

approximately $239 million.

In addition to other sources of liquidity

described below under “– Third-Party Financing,”

our investment in the Building also represents a

potential source of funding for us. After substantial

completion, which we expect will be in the third

quarter of 2007, we may consider whether to enter

into financing arrangements for our condominium

interest, such as mortgage financing. The decision of

whether or not to do so will depend upon our capital

requirements, market conditions and other factors.

Liquidity and Capital Resources – THE NEW YORK TIMES COMPANY P.39

Capital Resources

Sources and Uses of Cash

Cash flows by category were as follows:

% Change

2006 2005 2004 06-05 05-04

(In millions) (Restated) (Restated) (Restated)

Operating activities $ 422.3 $ 294.3 $ 444.0 43.5 (33.7)

Investing activities $(288.7) $(495.5) $(192.1) (41.7) *

Financing activities $(106.2) $ 204.4 $(249.2) **

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

P.40 2006 ANNUAL REPORT – Liquidity and Capital Resources

Our current priorities for use of cash are:

–

Investing in high-return capital projects that will

improve operations, increase revenues and

reduce costs,

–

Construction of the Building,

–

Making acquisitions and investments that are both

financially and strategically sound,

–

Reducing our debt to allow for financing flexibility

in the future,

–

Providing our shareholders with a competitive

dividend, and

–

Repurchasing our stock.

Operating Activities

The primary source of our liquidity is cash flows from

operating activities. The key component of operating

cash flow is cash receipts from advertising customers.

Advertising has provided approximately 65% of total

revenues over the past three years. Operating cash

inflows also include cash receipts from circulation

sales and other revenue transactions such as

TimesSelect, wholesale delivery operations, news

services, direct marketing, digital archives, and

commercial printing. Operating cash outflows

include payments to vendors for raw materials, serv-

ices and supplies, payments to employees, and

payments of interest and income taxes.

Net cash provided by operating activities

increased approximately $128 million in 2006 com-

pared with 2005. In 2006, accounts receivable

collections were higher than in 2005 due to the addi-

tional week in our 2006 fiscal year, which resulted in

increased collections from our customers. In 2005,

we paid higher income taxes related to the gain on

the sale of our current headquarters and made

higher pension contributions to our qualified pen-

sion plans. Our contributions to our qualified

pension plans decreased in 2006 primarily due to an

increase in interest rates and better performance of

our pension assets.

Net cash provided by operating activities

decreased in 2005 primarily due to lower cash earn-

ings. In 2005, while revenues increased

approximately 2% over 2004, this increase was more

than offset by an 8% increase in costs and expenses. In

addition, income taxes paid were higher in 2005 com-

pared with 2004 due to the gain on the sale of our

current headquarters.

Investing Activities

Cash from investing activities generally includes pro-

ceeds from the sale of assets or a business. Cash used

in investment activities generally includes payments

for the acquisition of new businesses, equity invest-

ments and capital expenditures.

Net cash used in investing activities

decreased in 2006 compared with 2005, primarily due

to lower acquisition activity. In 2006 we acquired

Baseline and Calorie-Count for approximately $35 mil-

lion and in 2005 we acquired About.com, KAUT-TV

and North Bay Business Journal for approximately

$438 million. In 2005, we also received proceeds of

approximately $183 million from the sale of our cur-

rent New York headquarters and property in Sarasota,

Fla. In 2006, we received $100 million from the sale of

our 50% ownership interest in Discovery Times

Channel, and we had additional capital expenditures

primarily related to the construction of the Building.

Net cash used in investing activities

increased in 2005 compared with 2004 primarily due

to the acquisitions and investment made in 2005 par-

tially offset by proceeds from the sale of assets.

Capital expenditures (on an accrual basis)

were $358.4 million in 2006, $229.5 million in 2005

and $211.2 million in 2004. The 2006, 2005 and 2004

amounts include costs related to the Building of

approximately $192 million, $87 million and $58 mil-

lion as well as our development partner’s costs, of

$55 million, $54 million and $42 million, respectively.

See Note 19 of the Notes to the Consolidated

Financial Statements for additional information

regarding the Building.

Financing Activities

Cash from financing activities generally includes bor-

rowings under our commercial paper program, the

issuance of long-term debt and funds from stock

option exercises. Cash used in financing activities

generally includes the repayment of commercial

paper and long-term debt, the payment of dividends

and the repurchase of our Class A Common Stock.

Net cash used in financing activities in 2006

was primarily for the payment of dividends

($100.1 million), the repayment of commercial paper

borrowings ($74.4 million) and stock repurchases

($52.3 million), which were partially offset by bor-

rowings under a construction loan, attributable to our

development partner, in connection with the con-

struction of the Building. See Note 19 of the Notes to

the Consolidated Financial Statements.

Net cash provided by financing activities in

2005 was primarily from the issuance of commercial

paper and long-term debt ($658.6 million) to finance

the acquisition of About.com, partially offset by the

repayment of long-term debt ($323.5 million), the

payment of dividends ($94.5 million) and stock

repurchases ($57.4 million). In 2004, net cash used in

financing activities was primarily due to stock repur-

chases ($293.2 million) and the payment of dividends

($90.1 million).

See our Consolidated Statements of Cash

Flows for additional information on our sources and

uses of cash.

Third-Party Financing

We have the following financing sources available to

supplement cash flows from operations:

–

a commercial paper facility,

–

revolving credit agreements and

–

medium-term notes.

Total unused borrowing capacity under all

financing arrangements was $572.1 million as of

December 2006.

Our total debt, including commercial paper,

capital lease obligations, and a construction loan, was

$1.4 billion as of December 2006 and 2005. See Note 9

of the Notes to the Consolidated Financial Statements

for additional information.

Our short- and long-term debt is rated invest-

ment grade by the major rating agencies. In May 2006,

Moody’s Investors Service lowered its rating on our

long-term debt to Baa1 from A2 and lowered its rating

on our short-term debt to P2 from P1. In July 2006,

Standard and Poor’s lowered its rating on our long-

term debt to A- from A and lowered its rating on our

short-term debt to A-2 from A-1. In December 2006,

Standard and Poor’s lowered its rating on our long-

term debt and senior unsecured debt to BBB+ from A-.

We have no liabilities subject to accelerated payment

upon a ratings downgrade and do not expect the

downgrades of our long-term and short-term debt rat-

ings to have any material impact on our ability to

borrow. However, as a result of these downgrades, we

may incur higher borrowing costs for any future long-

term and short-term issuances. We do not currently

expect these to be significant.

Commercial Paper

Our liquidity requirements are primarily funded

through the issuance of commercial paper. In the third

quarter of 2006, we increased the amount available

under our commercial paper program, which is sup-

ported by the revolving credit agreements described

below, to $725 million from $600 million. Our commer-

cial paper is unsecured and can have maturities of up

to 270 days.

We had $422.0 million in commercial paper

outstanding as of December 2006, with a weighted

average interest rate of 5.5% per annum and an

average of 63 days to maturity from original issuance.

We had $496.5 million in commercial paper outstand-

ing as of December 2005, with a weighted average

interest rate of 4.3% per annum and an average of 53

days to maturity from original issuance.

Revolving Credit Agreements

The primary purpose of our $800 million revolving

credit agreements is to support our commercial paper

program. In addition, these revolving credit

agreements provide a facility for the issuance of letters

of credit. In June 2006, we replaced our $270 million

multi-year credit agreement with a $400 million credit

agreement maturing in June 2011. Of the total

$800.0 million available under the two revolving

credit agreements ($400 million credit agreement

maturing in May 2009 and $400 million credit agree-

ment maturing in June 2011), we have issued letters

of credit of approximately $31 million. The remaining

balance of approximately $769 million supports our

commercial paper program discussed above. There

were no borrowings outstanding under the revolving

credit agreements as of December 2006.

Any borrowings under the revolving credit

agreements bear interest at specified margins based

on our credit rating, over various floating rates

selected by us.

The revolving credit agreements contain a

covenant that requires specified levels of stockholders’

equity (as defined in the agreements). The amount of

stockholders’ equity in excess of the required levels was

approximately $618 million as of December 2006. The

lenders under the revolving credit agreements have

waived, effective December 31, 2006, any defaults that

may have arisen under the agreements due to inclusion

in previously issued financial statements of the report-

ing errors that led to the restatement described above

and in Note 2 of the Notes to the Consolidated

Financial Statements.

Medium-Term Notes

Our liquidity requirements may also be funded through

the public offer and sale of notes under our $300.0 mil-

lion medium-term note program. As of December 2006,

we had issued $75.0 million of medium-term notes

under this program. Under our current effective shelf

registration, $225.0 million of medium-term notes

may be issued from time to time.

Construction Loan

Until January 2007, we were a co-borrower under a

$320 million non-recourse construction loan in con-

nection with the construction of the Building. We did

not draw down on the construction loan, which is

being used by our development partner. However, as

a co-borrower, we were required to record the

amount outstanding of the construction loan on our

financial statements. We also recorded a receivable

Liquidity and Capital Resources – THE NEW YORK TIMES COMPANY P.41

In addition to the pension and postretirement liabili-

ties included in the table above, “Other

Liabilities-Other” in our Consolidated Balance Sheets

include liabilities related to i) deferred compensation,

primarily consisting of our deferred executive com-

pensation plan (the “DEC plan”), ii) tax contingencies

and iii) various other liabilities. These liabilities are

not included in the table above primarily because the

future payments are not determinable. The DEC plan

enables certain eligible executives to elect to defer a

portion of their compensation on a pre-tax basis.

While the deferrals are initially for a period of a mini-

mum of two years (after which time taxable

distributions must begin), the executive has the

option to extend the deferral period. Therefore, the

future payments under the DEC plan are not deter-

minable. Our tax contingency liability is related to

various current and potential tax audit issues. This

liability is determined based on our estimate of

whether additional taxes will be due in the future.

Any additional taxes due will be determined only

upon the completion of current and future tax audits,

and the timing of such payments, which are not

expected within one year, cannot be determined. See

Note 14 of the Notes to the Consolidated Financial

Statements for additional information on “Other

Liabilities-Other.”

We have a contract with a major paper sup-

plier to purchase newsprint. The contract requires us

to purchase annually the lesser of a fixed number of

tons or a percentage of our total newsprint require-

ment at market rate in an arms-length transaction.

Since the quantities of newsprint purchased annually

under this contract are based on our total newsprint

requirement, the amount of the related payments for

these purchases are excluded from the table above.

Off-Balance Sheet Arrangements

We have outstanding guarantees on behalf of a third

party that provides circulation customer service, tele-

marketing and home-delivery services for The Times

and the Globe and on behalf of third parties that

provide printing and distribution services for

The Times’s National Edition. As of December 2006, the

aggregate potential liability under these guarantees

was approximately $30 million. See Note 19 of the

Notes to the Consolidated Financial Statements for

additional information regarding our guarantees as

well as our commitments and contingent liabilities.

CRITICAL ACCOUNTING POLICIES

Our Consolidated Financial Statements are prepared

in accordance with GAAP. The preparation of these

financial statements requires management to make

Contractual Obligations

The information provided is based on management’s best estimate and assumptions as of December 2006.

Actual payments in future periods may vary from those reflected in the table.

Payment due in

(In millions) Total 2007 2008-2009 2010-2011 Later Years

Long-term debt

(1)

$ 825.5 $102.0 $148.5 $250.0 $325.0

Capital leases

(2)

119.7 7.9 18.7 19.1 74.0

Operating leases

(2)

86.9 19.4 19.8 12.5 35.2

Benefit plans

(3)

984.3 82.0 169.1 180.9 552.3

Total $2,016.4 $211.3 $356.1 $462.5 $986.5

(1)

Excludes commercial paper of $422.0 million as of December 2006. This amount will be paid in 2007. See Note 9 of the Notes to the

Consolidated Financial Statements for additional information related to our commercial paper program and long-term debt.

(2)

See Note 19 of the Notes to the Consolidated Financial Statements for additional information related to our capital and operating leases.

(3)

Includes estimated benefit payments, net of plan participant contributions, under our sponsored pension and postretirement plans. The

liabilities related to both plans are included in “Pension benefits obligation” and “Postretirement benefits obligation” in our Consolidated

Balance Sheets. Payments included in the table above have been estimated over a ten-year period; therefore the amounts included in the

“Later Years” column include payments for the period of 2011-2015. While benefit payments under these plans are expected to continue

beyond 2015, we believe that an estimate beyond this period is unreasonable. See Notes 12 and13 of the Notes to the Consolidated

Financial Statements for additional information related to our pension and postretirement plans.

P.42 2006 ANNUAL REPORT – Critical Accounting Policies

due from our development partner for the same

amount outstanding under the construction loan. As

of December 2006, $124.7 million was outstanding

under the construction loan. See Notes 9 and 19 of the

Notes to the Consolidated Financial Statements for

additional information. In January 2007, through an

amendment to the construction loan, we were

released as a co-borrower, although the construction

lender remains obligated to continue to fund the

balance of the construction loan required to complete

construction of the Building. See Note 20 of the Notes

to the Consolidated Financial Statements.

estimates and assumptions that affect the amounts

reported in the Consolidated Financial Statements for

the periods presented.

We continually evaluate the policies and

estimates we use to prepare our Consolidated

Financial Statements. In general, management’s esti-

mates are based on historical experience, information

from third-party professionals and various other

assumptions that are believed to be reasonable under

the facts and circumstances. Actual results may differ

from those estimates made by management.

We believe our critical accounting policies

include our accounting for long-lived assets, retirement

benefits, stock-based compensation, income taxes, self-

insurance liabilities and accounts receivable allowances.

Additional information about these policies can be

found in Note 1 of the Notes to the Consolidated

Financial Statements. Specific risks related to our critical

accounting policies are discussed below.

Long-Lived Assets

Goodwill and other intangible assets not amortized are

tested for impairment in accordance with FAS No. 142,

Goodwill and Other Intangible Assets (“FAS 142”),

and all other long-lived assets are tested for impair-

ment in accordance with FAS 144.

Long-Lived Assets

2006 2005

(In millions) (Restated)

Long-lived assets $2,160 $2,977

Total assets 3,856 $4,564

Percentage of long-lived assets

to total assets 56% 65%

The impairment analysis is considered critical to our

segments because of the significance of long-lived

assets to our Consolidated Balance Sheets.

We evaluate whether there has been an

impairment of goodwill or intangible assets not amor-

tized on an annual basis or if certain circumstances

indicate that a possible impairment may exist. All

other long-lived assets are tested for impairment if

certain circumstances indicate that a possible impair-

ment exists. We test for goodwill impairment at the

reporting unit level as defined in FAS 142. This test is a

two-step process. The first step of the goodwill

impairment test, used to identify potential impair-

ment, compares the fair value of the reporting unit

with its carrying amount, including goodwill. If the

fair value, which is based on future cash flows,

exceeds the carrying amount, goodwill is not consid-

ered impaired. If the carrying amount exceeds the fair

value, the second step must be performed to measure

the amount of the impairment loss, if any. The second

step compares the fair value of the reporting unit’s

goodwill with the carrying amount of that goodwill.

An impairment loss would be recognized in an

amount equal to the excess of the carrying amount of

the goodwill over the fair value of the goodwill. In the

fourth quarter of each year, we evaluate goodwill on a

separate reporting unit basis to assess recoverability,

and impairments, if any, are recognized in earnings.

Intangible assets that are not amortized

(e.g., mastheads and FCC licenses) are tested for

impairment at the asset level by comparing the fair

value of the asset with its carrying amount. If the fair

value, which is based on future cash flows, exceeds

the carrying amount, the asset is not considered

impaired. If the carrying amount exceeds the fair

value, an impairment loss would be recognized in an

amount equal to the excess of the carrying amount of

the asset over the fair value of the asset.

All other long-lived assets (intangible assets

that are amortized, such as a subscriber list, and prop-

erty, plant and equipment) are tested for impairment

at the asset level associated with the lowest level of

cash flows. An impairment exists if the carrying value

of the asset is i) not recoverable (the carrying value of

the asset is greater than the sum of undiscounted cash

flows) and ii) is greater than its fair value.

The significant estimates and assumptions

used by management in assessing the recoverability

of long-lived assets are estimated future cash flows,

present value discount rate, as well as other factors.

Any changes in these estimates or assumptions could

result in an impairment charge. The estimates of

future cash flows, based on reasonable and support-

able assumptions and projections, require

management’s subjective judgment. Depending on

the assumptions and estimates used, the estimated

future cash flows projected in the evaluations of long-

lived assets can vary within a range of outcomes.

In addition to the testing above, which is

done on an annual basis, management uses certain

indicators to evaluate whether the carrying value of

its long-lived assets may not be recoverable, such as

i) current-period operating or cash flow declines

combined with a history of operating or cash flow

declines or a projection/forecast that demonstrates

continuing declines in the cash flow of an entity or

inability of an entity to improve its operations to fore-

casted levels and ii) a significant adverse change in

the business climate, whether structural or technolog-

ical, that could affect the value of an entity.

Management has applied what it believes to

be the most appropriate valuation methodology for

each of its reporting units.

Critical Accounting Policies – THE NEW YORK TIMES COMPANY P.43

Retirement Benefits

Our pension plans and postretirement benefit plans

are accounted for using actuarial valuations required

by FAS No. 87, Employers’ Accounting for Pensions

(“FAS 87”), FAS No. 106, Employers’ Accounting for

Postretirement Benefits Other Than Pensions

(“FAS 106”), and FAS No. 158, Employers’ Accounting

for Defined Benefit Pension and Other Postretirement

Plans (“FAS 158”).

We adopted FAS 158 as of December 31, 2006.

FAS 158 requires an entity to recognize the funded sta-

tus of its defined benefit plans – measured as the

difference between plan assets at fair value and the

benefit obligation – on the balance sheet and to recog-

nize changes in the funded status, that arise during the

period but are not recognized as components of net

periodic benefit cost, within other comprehensive

income, net of income taxes.

As of December 31, 2006, our pension obliga-

tion was approximately $390 million (net of a pension

asset of approximately $8 million), including approxi-

mately $142 million, representing the underfunded

status of our qualified pension plans, and approxi-

mately $248 million, representing the unfunded status

of our non-qualified pension plans. Of the total net pen-

sion obligation, approximately $322 million is recorded

through accumulated other comprehensive income, of

which approximately $310 million represents unrecog-

nized actuarial losses and approximately $12 million

represents unrecognized prior service costs.

As of December 31, 2006, our postretirement

obligation was approximately $270 million, repre-

senting the unfunded status of our postretirement

plans. Approximately $4 million of income is

recorded through accumulated other comprehensive

income, of which approximately $81 million repre-

sents unrecognized prior service credits, partially

offset by approximately $77 million of unrecognized

actuarial losses.

The amounts recorded within accumulated

other comprehensive income will be recognized through

pension or postretirement expense in future periods. See

Notes 12 and 13 of the Notes to the Consolidated

Financial Statements for additional information.

Pension & Postretirement Liabilities

2006 2005

(In millions) (Restated)

Pension & postretirement

liabilities $668 $ 649

Total liabilities $3,030 $2,924

Percentage of pension &

postretirement liabilities

to total liabilities 22% 22%

We consider accounting for retirement plans critical to

all of our operating segments because management is

required to make significant subjective judgments

about a number of actuarial assumptions, which

include discount rates, health-care cost trend rates,

salary growth, long-term return on plan assets and

mortality rates.

Depending on the assumptions and esti-

mates used, the pension and postretirement benefit

expense could vary within a range of outcomes and

could have a material effect on our Consolidated

Financial Statements.

Our key retirement benefit assumptions are

discussed in further detail under “– Pension and

Postretirement Benefits.”

Stock-Based Compensation

We account for stock-based compensation in accor-

dance with the fair value recognition provisions of

FAS 123-R. Under the fair value recognition provi-

sions of FAS 123-R, stock-based compensation cost is

measured at the grant date based on the value of the

award and is recognized as expense over the appro-

priate vesting period. Determining the fair value of

stock-based awards at the grant date requires judg-

ment, including estimating the expected term of stock

options, the expected volatility of our stock and

expected dividends. In addition, judgment is required

in estimating the amount of stock-based awards that

are expected to be forfeited. If actual results differ sig-

nificantly from these estimates or different key

assumptions were used, it could have a material effect

on our Consolidated Financial Statements. See Note

16 of the Notes to the Consolidated Financial

Statements for additional information regarding

stock-based compensation expense.

Income Taxes

Income taxes are accounted for in accordance with FAS

No. 109, Accounting for Income Taxes (“FAS 109”).

Under FAS 109, income taxes are recognized for the

following: i) amount of taxes payable for the current

year and ii) deferred tax assets and liabilities for the

future tax consequence of events that have been recog-

nized differently in the financial statements than for

tax purposes. Deferred tax assets and liabilities are

established using statutory tax rates and are adjusted

for tax rate changes. FAS 109 also requires that

deferred tax assets be reduced by a valuation

allowance if it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

We consider accounting for income taxes

critical to our operations because management is

required to make significant subjective judgments in

P.44 2006 ANNUAL REPORT – Critical Accounting Policies

developing our provision for income taxes, including

the determination of deferred tax assets and liabilities,

and any valuation allowances that may be required

against deferred tax assets.

In addition, we operate within multiple tax-

ing jurisdictions and are subject to audit in these

jurisdictions. These audits can involve complex

issues, which could require an extended period of

time to resolve. The completion of these audits could

result in an increase to or a refund of amounts previ-

ously paid to the taxing jurisdictions. We do not

expect the completion of these audits to have a mate-

rial effect on our Consolidated Financial Statements.

Self-Insurance

We self-insure for workers’ compensation costs, cer-

tain employee medical and disability benefits, and

automobile and general liability claims. The recorded

liabilities for self-insured risks are primarily calcu-

lated using actuarial methods. The liabilities include

amounts for actual claims, claim growth and claims

incurred but not yet reported. Actual experience,

including claim frequency and severity as well as

health-care inflation, could result in different liabili-

ties than the amounts currently recorded. The

recorded liabilities for self-insured risks were

approximately $71 million as of December 2006 and

$68 million as of December 2005.

Accounts Receivable Allowances

Credit is extended to our advertisers and sub-

scribers based upon an evaluation of the customers’

financial condition, and collateral is not required

from such customers. We use prior credit losses as a

percentage of credit sales, the aging of accounts

receivable and specific identification of potential

losses to establish reserves for credit losses on

accounts receivable. In addition, we establish

reserves for estimated rebates, rate adjustments and

discounts based on historical experience.

Accounts Receivable Allowances

2006 2005

(In millions) (Restated)

Accounts receivable allowances $36 $40

Accounts receivable-net 403 440

Accounts receivable-gross $439 $480

Total current assets $1,185 $1,015

Percentage of accounts receivable

allowances to gross accounts

receivable 8% 8%

Percentage of net accounts

receivable to current assets 34% 43%

We consider accounting for accounts receivable

allowances critical to all of our operating segments

because of the significance of accounts receivable to

our current assets and operating cash flows. If the

financial condition of our customers were to deterio-

rate, resulting in an impairment of their ability to

make payments, additional allowances might be

required, which could have a material effect on our

Consolidated Financial Statements.

PENSION AND POSTRETIREMENT BENEFITS

Pension Benefits

We sponsor several pension plans, and make contri-

butions to several others that are considered

multi-employer pension plans, in connection with

collective bargaining agreements. These plans cover

substantially all employees.

Our 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 provision formulas detailed in each plan.

Our non-qualified plans provide retirement benefits

only to certain highly compensated employees.

We also have a foreign-based pension plan

for certain 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 our

total benefit obligation.

Prior to the fourth quarter of 2006, a pension

plan between the Company and its subsidiaries, on

the one hand, and The New York Times Newspaper

Guild, on the other, was accounted for as a multi-

employer pension plan. We have concluded that it

should have been accounted for as a single-employer

pension plan and have restated prior periods to

account for the plan under FAS 87. See Note 2 of the

Notes to the Consolidated Financial Statements.

Pension expense is calculated using a num-

ber of actuarial assumptions, including an expected

long-term rate of return on assets (for qualified plans)

and a discount rate. Our methodology in selecting

these actuarial assumptions is discussed below.

Long-Term Rate of Return on Assets

In determining the expected long-term rate of

return on assets, we evaluated input from our

investment consultants, actuaries and investment

management firms, including their review of asset

class return expectations, as well as long-term his-

torical asset class returns. Projected returns by such

consultants and economists are based on broad

equity and bond indices. Additionally, we

Pension and Postretirement Benefits – THE NEW YORK TIMES COMPANY P.45

considered our historical 10-year and 15-year com-

pounded returns, which have been in excess of our

forward-looking return expectations.

The expected long-term rate of return deter-

mined on this basis was 8.75% in 2006. We anticipate

that our pension assets will generate long-term

returns on assets of at least 8.75%. The expected long-

term rate of return on plan assets is based on an asset

allocation assumption of 65% to 75% with equity

managers, with an expected long-term rate of return

on assets of 10%, and 25% to 35% with fixed

income/real estate managers, with an expected long-

term rate of return on assets of 6%.

Our actual asset allocation as of December

2006 was in line with our expectations. We regularly

review our actual asset allocation and periodically

rebalance our investments to our targeted allocation

when considered appropriate.

We believe that 8.75% is a reasonable expected

long-term rate of return on assets. Our plan assets had a

rate of return of approximately 16% for 2006 and 12%

for the three years ended December 2006.

Our determination of pension expense or

income is based on a market-related valuation of

assets, which reduces year-to-year volatility. This mar-

ket-related valuation of assets recognizes investment

gains or losses over a three-year period from the year

in which they occur. Investment gains or losses for this

purpose are the difference between the expected

return calculated using the market-related value of

assets and the actual return based on the market-

related value of assets. Since the market-related value

of assets recognizes gains or losses over a three-year

period, the future value of assets will be affected as

previously deferred gains or losses are recorded.

If we had decreased our expected long-term

rate of return on our plan assets by 0.5% in 2006, pen-

sion expense would have increased by approximately

$6 million in 2006 for our qualified pension plans. Our

funding requirements would not have been materially

affected.

See Note 12 of the Notes to the Consolidated

Financial Statements for additional information

regarding our pension plans.

Discount Rate

We select a discount rate utilizing a methodology that

equates the plans’ projected benefit obligations to a

present value calculated using the Citigroup Pension

Discount Curve.

The methodology described above includes

producing a cash flow of annual accrued benefits as

defined under the Projected Unit Cost Method as pro-

vided by FAS 87. For active participants, service is

projected to the end of the current measurement date

and benefit earnings are projected to the date of ter-

mination. The projected plan cash flow is discounted

to the measurement date using the Annual Spot Rates

provided in the Citigroup Pension Discount Curve. A

single discount rate is then computed so that the pres-

ent value of the benefit cash flow (on a projected

benefit obligation basis as described above) equals

the present value computed using the Citigroup

annual rates. The discount rate determined on this

basis increased to 6.00% as of December 2006 from

5.50% as of December 2005.

If we had decreased the expected discount rate

by 0.5% in 2006, pension expense would have increased

by approximately $15 million for our qualified pen-

sion plans and $1 million for our non-qualified pension

plans. Our funding requirements would not have been

materially affected.

We will continue to evaluate all of our actu-

arial assumptions, generally on an annual basis,

including the expected long-term rate of return on

assets and discount rate, and will adjust as necessary.

Actual pension expense will depend on future invest-

ment performance, changes in future discount rates,

the level of contributions we make and various other

factors related to the populations participating in the

pension plans.

Postretirement Benefits

We provide 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. Our policy is to pay our portion

of insurance premiums and claims from our assets.

In addition, we contribute to a postretire-

ment plan under the provisions of a collective

bargaining agreement. Prior to the fourth quarter of

2006, a postretirement plan between the Company

and its subsidiaries, on the one hand, and The New

York Times Newspaper Guild, on the other, was

accounted for as a multi-employer plan. We have con-

cluded that it should have been accounted for as a

single-employer plan and have restated prior periods

to account for this plan under FAS 106. See Note 2 of

the Notes to the Consolidated Financial Statements.

P.46 2006 ANNUAL REPORT – Pension and Postretirement Benefits

In accordance with FAS 106, we accrue the

costs of postretirement benefits during the employ-

ees’ active years of service.

The annual postretirement expense was

calculated using a number of actuarial assumptions,

including a health-care cost trend rate and a discount

rate. The health-care cost trend rate range used to

calculate the 2006 postretirement expense

decreased to 5% to 10.5% from 5% to 11.5%. A 1%

increase/decrease in the health-care cost trend rates

range would result in an increase of approximately

$4 million or a decrease of approximately $3 million in

our 2006 service and interest costs, respectively, two

factors included in the calculation of postretirement

expense. A 1% increase/decrease in the health-care

cost trend rates would result in an increase of approxi-

mately $32 million or a decrease of approximately $26

million, in our accumulated benefit obligation as of

December 2006. Our discount rate assumption for

postretirement benefits is consistent with that used in

the calculation of pension benefits. See “– Pension

Benefits” above for a discussion about our discount

rate assumption.

In February 2006 we announced amendments,

such as the elimination of retiree-medical benefits to new

employees and the elimination of life insurance benefits

to new retirees, to our postretirement benefit plans effec-

tive January 1, 2007. In addition, effective February 1,

2007 certain retirees at the New England Media Group

were moved to a new benefits plan. In connection with

this change, the insurance premiums were reduced with

benefits comparable to that of the previous benefits plan.

These changes will reduce our future obligations and

expense under these plans.

See Note 13 of the Notes to the Consolidated

Financial Statements for additional information

regarding our postretirement plans.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, FASB issued FIN No. 48, Accounting for

Uncertainty in Income Taxes—an interpretation of

FASB Statement No. 109 (“FIN 48”), which clarifies

the accounting for uncertainty in income tax positions

(“tax positions”). FIN 48 requires that we recognize in

our financial statements the impact of a tax position if

that tax position is more likely than not of being sus-

tained on audit, based on the technical merits of the

tax position. The provisions of FIN 48 are effective as

of the beginning of our 2007 fiscal year, with the

cumulative effect of the change in accounting princi-

ple recorded as an adjustment to opening retained

earnings. We estimate that a cumulative effect adjust-

ment of approximately $21 to $26 million will be

charged to retained earnings to increase reserves for

uncertain tax positions. This estimate is subject to

revision as we complete our analysis.

In September 2006, FASB issued FAS

No. 157, Fair Value Measurements (“FAS 157”).

FAS 157 establishes a common definition for fair value

under GAAP, establishes a framework for measuring

fair value and expands disclosure requirements about

such fair value measurements. FAS 157 is effective for

fiscal years beginning after November 15, 2007. We

are currently evaluating the impact of adopting

FAS 157 on our financial statements.

In February 2007, 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”). FAS 159 permits entities

to choose to measure many financial instruments and

certain other items at fair value. FAS 159 is effective for

fiscal years after November 15, 2007. We are currently

evaluating the impact of adopting FAS 159 on our

financial statements.

Recent Accounting Pronouncements – THE NEW YORK TIMES COMPANY P.47

Our market risk is principally associated with

the following:

–

Interest rate fluctuations related to our debt obliga-

tions, which are managed by balancing the mix of

variable- versus fixed-rate borrowings. Based on

the variable-rate debt included in our debt portfo-

lio, a 75 basis point increase in interest rates would

have resulted in additional interest expense of

$3.4 million (pre-tax) in 2006 and $3.7 million (pre-

tax) in 2005.

–

Newsprint is a commodity subject to supply and

demand market conditions. We have equity invest-

ments in two paper mills, which provide a partial

hedge against price volatility. The cost of raw mate-

rials, of which newsprint expense is a major

component, represented 11% of our total costs and

expenses in 2006 and 2005. Based on the number of

newsprint tons consumed in 2006 and 2005, a $10

per ton increase in newsprint prices would have

resulted in additional newsprint expense of approxi-

mately $4 million (pre-tax) in 2006 and

approximately $5 million in 2005.

–

A significant portion of our employees are

unionized and our results could be adversely

affected if labor negotiations were to restrict our

ability to maximize the efficiency of our operations.

In addition, if we experienced labor unrest, our abil-

ity to produce and deliver our most significant

products could be impaired.

See Notes 7, 9, 10 and 19 of the Notes to the

Consolidated Financial Statements.

P.48 2006 ANNUAL REPORT

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

THE NEW YORK TIMES COMPANY 2006 FINANCIAL REPORT

INDEX PAGE

Management’s Responsibilities Report 50

Report of Independent Registered Public Accounting Firm on Consolidated

Financial Statements 51

Report of Independent Registered Public Accounting Firm on Internal Control Over

Financial Reporting 52

Consolidated Statements of Operations for the fiscal years ended December 31, 2006,

December 25, 2005 (restated) and December 26, 2004 (restated) 54

Consolidated Balance Sheets as of December 31, 2006 and December 25, 2005 (restated) 55

Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2006,

December 25, 2005 (restated) and December 26, 2004 (restated) 57

Consolidated Statements of Changes in Stockholders’ Equity for the fiscal years ended

December 31, 2006, December 25, 2005 (restated) and December 26, 2004 (restated) 59

Notes to the Consolidated Financial Statements 62

Quarterly Information (unaudited) 100

Schedule II - Valuation and Qualifying Accounts for the fiscal years ended

December 31, 2006, December 25, 2005 (restated) and December 26, 2004 (restated) 110

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

THE NEW YORK TIMES COMPANY P.49

THE NEW YORK TIMES COMPANY THE NEW YORK TIMES COMPANY

BY:JANET L. ROBINSON BY:JAMES M. FOLLO

President and Chief Executive Officer Senior Vice President and Chief Financial Officer

March 1, 2007 March 1, 2007

P.50 2006 ANNUAL REPORT – Management’s Responsibilities Report

MANAGEMENT’S RESPONSIBILITIES REPORT

The Company’s consolidated financial statements were prepared by management, who is responsible for their

integrity and objectivity. The consolidated financial statements have been prepared in accordance with

accounting principles generally accepted in the United States of America (“GAAP”) and, as such, include

amounts based on management’s best estimates and judgments.

Management is further responsible for establishing and maintaining adequate internal control over

financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The

Company’s internal control over financial reporting is designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accor-

dance with GAAP. The Company follows and continuously monitors its policies and procedures for internal

control over financial reporting to ensure that this objective is met (see “Management’s Report on Internal

Control Over Financial Reporting” in “Item 9A – Controls and Procedures”).

The consolidated financial statements were audited by Deloitte & Touche LLP, an independent regis-

tered public accounting firm. Their audit was conducted in accordance with the standards of the Public

Company Accounting Oversight Board (United States) and their report is shown on page 51.

The Audit Committee of the Board of Directors, which is composed solely of independent directors,

meets regularly with the independent registered public accounting firm, internal auditors and management to

discuss specific accounting, financial reporting and internal control matters. Both the independent registered

public accounting firm and the internal auditors have full and free access to the Audit Committee. Each year

the Audit Committee selects, subject to ratification by stockholders, the firm which is to perform audit and

other related work for the Company.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON CONSOLIDATED

FINANCIAL STATEMENTS

To the Board of Directors and Stockholders of

The New York Times Company

New York, NY

We have audited the accompanying consolidated balance sheets of The New York Times Company (the

“Company”) as of December 31, 2006 and December 25, 2005, and the related consolidated statements of oper-

ations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006.

Our audits also included the financial statement schedule listed at Item 15(A)(2) of the Company’s 2006

Annual Report on Form 10-K. These financial statements and the financial statement schedule are the respon-

sibility of the Company’s management. Our responsibility is to express an opinion on these financial

statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting

Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reason-

able assurance about whether the financial statements are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An

audit also includes assessing the accounting principles used and significant estimates made by management,

as well as evaluating the overall financial statement presentation. We believe that our audits provide a reason-

able basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the

financial position of The New York Times Company as of December 31, 2006 and December 25, 2005, and the

results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in

conformity with accounting principles generally accepted in the United States of America. Also, in our opin-

ion, such financial statement schedule, when considered in relation to the basic consolidated financial

statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, in 2005 the Company adopted

Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment,” as revised, effective

December 27, 2004. Also, as discussed in Note 8 to the consolidated financial statements, in 2005 the Company

adopted FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations – an interpre-

tation of FASB Statement No. 143,” effective December 25, 2005. Also, as discussed in Note 1 to the

consolidated financial statements, in 2006 the Company adopted Statement of Financial Accounting

Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,”

relating to the recognition and related disclosure provisions, effective December 31, 2006.

As discussed in Note 2, the accompanying 2005 and 2004 consolidated financial statements have

been restated.

We have also audited, in accordance with the standards of the Public Company Accounting

Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting

as of December 31, 2006, based on the criteria established in Internal Control – Integrated Framework issued

by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1,

2007 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s

internal control over financial reporting and an adverse opinion on the effectiveness of the Company’s inter-

nal control over financial reporting because of a material weakness.

New York, NY

March 1, 2007

Report of Independent Registered Public Accounting Firm – THE NEW YORK TIMES COMPANY P.51

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER

FINANCIAL REPORTING

To the Board of Directors and Stockholders of

The New York Times Company

New York, NY

We have audited management’s assessment, included in the accompanying Management’s Report on Internal

Control over Financial Reporting (see Item 9A), that The New York Times Company (the “Company”) did not

maintain effective internal control over financial reporting as of December 31, 2006, because of the effect of the

material weakness identified in management’s assessment based on criteria established in Internal Control –

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The

Company’s management is responsible for maintaining effective internal control over financial reporting and

for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to

express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s inter-

nal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting

Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reason-

able assurance about whether effective internal control over financial reporting was maintained in all material

respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluat-

ing management’s assessment, testing and evaluating the design and operating effectiveness of internal

control, and performing such other procedures as we considered necessary in the circumstances. We believe

that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervi-

sion of, the company’s principal executive and principal financial officers, or persons performing similar

functions, and effected by the company’s board of directors, management, and other personnel to provide rea-

sonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external purposes in accordance with generally accepted accounting principles. A company’s internal con-

trol over financial reporting includes those policies and procedures that (1) pertain to the maintenance of

records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of

the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit prepara-

tion of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and

directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of

unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the

financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibil-

ity of collusion or improper management override of controls, material misstatements due to error or fraud

may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of

the internal control over financial reporting to future periods are subject to the risk that the controls may

become inadequate because of changes in conditions, or that the degree of compliance with the policies or pro-

cedures may deteriorate.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results

in more than a remote likelihood that a material misstatement of the annual or interim financial statements

will not be prevented or detected. The following material weakness has been identified and included in man-

agement’s assessment: The Company did not design control procedures to appropriately consider the

multi-employer versus single-employer status of collectively-bargained pension and benefit plans, leading to

inappropriate accounting for certain plan liabilities in accordance with generally accepted accounting princi-

ples. Such material weakness resulted in material adjustments to certain plan liabilities within the current and

prior period financial statements. This material weakness was considered in determining the nature, timing,

and extent of audit tests applied in our audit of the consolidated financial statements and financial statement

schedule as of and for the year ended December 31, 2006, of the Company and this report does not affect our

report on such financial statements and financial statement schedule.

P.52 2006 ANNUAL REPORT – Report of Independent Registered Public Accounting Firm

In our opinion, management’s assessment that the Company did not maintain effective internal con-

trol over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the

criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission. Also in our opinion, because of the effect of the material weak-

ness described above on the achievement of the objectives of the control criteria, the Company has not

maintained effective internal control over financial reporting as of December 31, 2006, based on the criteria

established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of

the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting

Oversight Board (United States), the consolidated financial statements and financial statement schedule as of

and for the year ended December 31, 2006, of the Company and our report dated March 1, 2007 expresses an

unqualified opinion and includes an explanatory paragraph referring to the Company’s adoption of

Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension

and Other Postretirement Plans,” relating to the recognition and related disclosure provisions, effective

December 31, 2006, and includes an explanatory paragraph regarding the restatement of the consolidated

financial statements as discussed in Note 2 to the consolidated financial statements.

Deloitte & Touche LLP

New York, NY

March 1, 2007

Report of Independent Registered Public Accounting Firm – THE NEW YORK TIMES COMPANY P.53

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended

2006 2005 2004

(Restated) (Restated)

(In thousands, except per share data) (See Note 2) (See Note 2)

Revenues

Advertising $2,153,936 $2,139,486 $2,053,378

Circulation 889,722 873,975 883,995

Other 246,245 217,667 222,039

Tot al 3,289,903 3,231,128 3,159,412

Costs and Expenses

Production costs

Raw materials 330,833 321,084 296,594

Wages and benefits 665,304 652,216 635,087

Other 533,392 495,588 474,978

Total production costs 1,529,529 1,468,888 1,406,659

Selling, general and administrative expenses 1,466,552 1,442,690 1,290,140

Total costs and expenses 2,996,081 2,911,578 2,696,799

Impairment of intangible assets 814,433 ——

Gain on sale of assets — 122,946 —

Operating (Loss)/Profit (520,611) 442,496 462,613

Net income from joint ventures 19,340 10,051 240

Interest expense, net 50,651 49,168 41,760

Other income — 4,167 8,212

(Loss)/income from continuing operations before income

taxes and minority interest (551,922) 407,546 429,305

Income taxes 16,608 163,976 163,731

Minority interest in net loss/(income) of subsidiaries 359 (257) (589)

(Loss)/income from continuing operations (568,171) 243,313 264,985

Discontinued operations, net of income taxes – Broadcast Media Group 24,728 15,687 22,646

Cumulative effect of a change in accounting principle,

net of income taxes — (5,527) —

Net (loss)/income $ (543,443) $ 253,473 $ 287,631

Average number of common shares outstanding

Basic 144,579 145,440 147,567

Diluted 144,579 145,877 149,357

Basic (loss)/earnings per share:

(Loss)/income from continuing operations $ (3.93) $ 1.67 $ 1.80

Discontinued operations, net of income taxes – Broadcast Media Group 0.17 0.11 0.15

Cumulative effect of a change in accounting principle,

net of income taxes — (0.04) —

Net (loss)/income $ (3.76) $1.74 $1.95

Diluted (loss)/earnings per share:

(Loss)/income from continuing operations $ (3.93) $ 1.67 $ 1.78

Discontinued operations, net of income taxes – Broadcast Media Group 0.17 0.11 0.15

Cumulative effect of a change in accounting principle,

net of income taxes — (0.04) —

Net (loss)/income $ (3.76) $1.74 $1.93

Dividends per share $.69 $ .65 $ .61

See Notes to the Consolidated Financial Statements

P.54 2006 ANNUAL REPORT – Consolidated Statements of Operations

CONSOLIDATED BALANCE SHEETS

December

2006 2005

(Restated)

(In thousands, except share and per share data) (See Note 2)

Assets

Current Assets

Cash and cash equivalents $ 72,360 $ 44,927

Accounts receivable (net of allowances: 2006 - $35,840; 2005 - $39,654) 402,639 439,966

Inventories 36,696 32,100

Deferred income taxes 73,729 68,118

Assets held for sale 357,028 359,152

Other current assets 242,591 70,323

Total current assets 1,185,043 1,014,586

Investments in Joint Ventures 145,125 238,369

Property, Plant and Equipment

Land 65,808 61,021

Buildings, building equipment and improvements 718,061 705,652

Equipment 1,359,496 1,398,616

Construction and equipment installations in progress 529,546 501,544

Total - at cost 2,672,911 2,666,833

Less: accumulated depreciation and amortization (1,297,546) (1,265,465)

Property, plant and equipment - net 1,375,365 1,401,368

Intangible Assets Acquired

Goodwill 650,920 1,399,337

Other intangible assets acquired (less accumulated amortization of $224,487 in

2006 and $168,319 in 2005) 133,448 176,572

Tot al 784,368 1,575,909

Deferred income taxes 125,681 –

Miscellaneous Assets 240,346 333,846

Total Assets $3,855,928 $4,564,078

Liabilities and Stockholders’ Equity

Current Liabilities

Commercial paper outstanding $ 422,025 $ 496,450

Accounts payable 242,528 208,520

Accrued payroll and other related liabilities 121,240 100,390

Accrued expenses 200,030 180,488

Unexpired subscriptions 83,298 81,870

Current portion of long-term debt and capital lease obligations 104,168 1,630

Construction loan 124,705 –

Total current liabilities 1,297,994 1,069,348

Other Liabilities

Long-term debt 720,790 821,962

Capital lease obligations 74,240 76,338

Deferred income taxes – 26,278

Pension benefits obligation 384,277 380,257

Postretirement benefits obligation 256,740 268,569

Other 296,078 281,524

Total other liabilities 1,732,125 1,854,928

Minority Interest 5,967 188,976

Consolidated Balance Sheets – THE NEW YORK TIMES COMPANY P.55

See Notes to the Consolidated Financial Statements

December

2006 2005

(Restated)

(In thousands, except share and per share data) (See Note 2)

Stockholders’ Equity

Serial preferred stock of $1 par value - authorized 200,000 shares - none issued $—$—

Common stock of $.10 par value:

Class A - authorized 300,000,000 shares; issued: 2006 – 148,026,952; 2005 –

150,939,371 (including treasury shares: 2006 – 5,000,000; 2005 - 6,558,299) 14,804 15,094

Class B - convertible - authorized 832,592 shares; issued: 2006 – 832,592 and

2005 - 834,242 (including treasury shares: 2006 - none and 2005 - none) 82 83

Additional paid-in capital – 55,148

Retained earnings 1,111,006 1,815,199

Common stock held in treasury, at cost (158,886) (261,964)

Accumulated other comprehensive income/(loss), net of income taxes:

Foreign currency translation adjustments 20,984 11,498

Funded status of benefit plans (168,148) –

Unrealized derivative gain on cash-flow hedges — 1,262

Minimum pension liability – (185,215)

Unrealized loss on marketable securities – (279)

Total accumulated other comprehensive loss, net of income taxes (147,164) (172,734)

Total stockholders’ equity 819,842 1,450,826

Total Liabilities and Stockholders’ Equity $3,855,928 $4,564,078

See Notes to the Consolidated Financial Statements

P.56 2006 ANNUAL REPORT – Consolidated Balance Sheets

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended

2006 2005 2004

(Restated) (Restated)

(In thousands) (See Note 2) (See Note 2)

Cash Flows from Operating Activities

Net (loss) income $(543,443) $ 253,473 $ 287,631

Adjustments to reconcile net (loss)/income to net cash provided by

operating activities:

Impairment of intangible assets 814,433 ——

Depreciation 140,667 113,480 118,893

Amortization 29,186 30,289 23,635

Stock-based compensation 22,658 34,563 4,261

Cumulative effect of a change in accounting principle – 5,852 —

(Undistributed earnings)/excess distributed earnings of affiliates (5,965) (919) 14,750

Minority interest in net (loss)/income of subsidiaries (359) 257 589

Deferred income taxes (139,904) (34,772) (484)

Long-term retirement benefit obligations 39,057 12,136 760

Gain on sale of assets – (122,946) —

Excess tax benefits from stock-based awards (1,938) (5,991) —

Other - net 9,499 2,572 (17,153)

Changes in operating assets and liabilities, net of

acquisitions/dispositions:

Accounts receivable - net 37,486 (35,088) (3,418)

Inventories (7,592) 554 (3,702)

Other current assets (1,085) 29,743 (2,300)

Accounts payable 23,272 (3,870) 489

Accrued payroll and accrued expenses (9,900) 20,713 7,049

Accrued income taxes 14,828 (9,934) 11,746

Unexpired subscriptions 1,428 4,199 1,292

Net cash provided by operating activities 422,328 294,311 444,038

Cash Flows from Investing Activities

Acquisitions (35,752) (437,516) —

Capital expenditures (332,305) (221,344) (188,451)

Investments sold/(made) 100,000 (19,220) —

Proceeds on sale of assets – 183,173 —

Other investing payments (20,605) (604) (3,697)

Net cash used in investing activities (288,662) (495,511) (192,148)

Cash Flows from Financing Activities

Commercial paper borrowings - net (74,425) 161,100 107,370

Construction loan 61,120 ——

Long-term obligations:

Increase – 497,543 —

Reduction (1,640) (323,490) (1,824)

Capital shares:

Issuance 15,988 14,348 41,090

Repurchases (52,267) (57,363) (293,222)

Dividends paid to stockholders (100,104) (94,535) (90,127)

Excess tax benefits from stock-based awards 1,938 5,991 —

Other financing proceeds/(payments) - net 43,198 811 (12,525)

Net cash (used in)/provided by financing activities (106,192) 204,405 (249,238)

Net increase in cash and cash equivalents 27,474 3,205 2,652

Effect of exchange rate changes on cash and cash equivalents (41) (667) 290

Cash and cash equivalents at the beginning of the year 44,927 42,389 39,447

Cash and cash equivalents at the end of the year $ 72,360 $ 44,927 $ 42,389

See Notes to the Consolidated Financial Statements

Consolidated Statements of Cash Flows – THE NEW YORK TIMES COMPANY P.57

SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flow Information

Years Ended

2006 2005 2004

(Restated) (Restated)

(In thousands) (See Note 2) (See Note 2)

SUPPLEMENTAL DATA

Cash payments

–

Interest $ 71,812 $ 46,149 $ 47,900

–

Income taxes, net of refunds $ 152,178 $ 231,521 $ 166,497

P.58 2006 ANNUAL REPORT – Supplemental Disclosures to Consolidated Statements of Cash Flows

Acquisitions and Investments

–

See Note 3 of the Notes to the Consolidated

Financial Statements.

Other

–

In August 2006, the Company’s new headquarters

building was converted to a leasehold condominium,

with the Company and its development partner

acquiring ownership of their respective leasehold

condominium units (see Note 19). The Company’s

capital expenditures include those of its development

partner through August 2006. Cash capital expendi-

tures attributable to the Company’s development

partner’s interest in the Company’s new headquar-

ters were approximately $55 million in 2006,

$49 million in 2005 and $34 million in 2004.

–

Investing activities—Other investing payments

include cash payments by our development part-

ner for deferred expenses related to their leasehold

condominium units of approximately $20 million

in 2006.

–

Financing activities—Other financing proceeds/

(payments)-net include cash received from the

development partner for the repayment of the

Company’s loan receivable of approximately

$43 million in 2006 and for capital expenditures of

$1 million in 2005 and $12 million in 2004. The cash

received in 2004 was offset by cash payments made

by the Company to its development partner for

excess capital contributions made of approximately

$25 million in 2004.

Non-Cash

–

In August 2006, in connection with the conversion

of the Company’s new headquarters to a leasehold

condominium, the Company made a non-cash dis-

tribution of its development partner’s net assets of

approximately $260 million. Beginning in

September 2006, the Company recorded a non-

cash receivable and loan payable for the amount

that the Company’s development partner drew

down on the construction loan (see Note 19). The

non-cash receivable and loan payable recorded for

2006 was approximately $64 million. See Note 19

for additional information regarding the

Company’s new headquarters.

–

Accrued capital expenditures were approximately

$51 million in 2006, $25 million in 2005 and

$22 million in 2004.

See Notes to the Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Accumulated

Capital Stock

Common Other

Stock Comprehensive

Class A and Additional Held in Loss, Net

(In thousands, except Class B Paid-in Retained Treasury, Deferred of Income

share and per share data) Common Capital Earnings at Cost Compensation Tax Total

Balance, December 2003

As Previously Reported $15,856 $ 53,645 $1,790,801 $(381,004) $ (8,037) $ (79,019) $1,392,242

Restatement Adjustments — — 642 — — (39,299) (38,657)

Balance, December 2003

(Restated) $15,856 $ 53,645 $1,791,443 $(381,004) $ (8,037) $(118,318) $1,353,585

Comprehensive income:

Net income (Restated) — — 287,631 — — — 287,631

Foreign currency

translation gain — — — — — 8,384 8,384

Unrealized derivative gain

on cash-flow hedges

(net of tax expense of $340) — — — — — 485 485

Minimum pension liability

(net of tax benefit of

$2,333) (Restated) — — — — — (2,937) (2,937)

Unrealized loss on

marketable securities

(net of tax benefit of $164) — — — — — (199) (199)

Comprehensive income

(Restated) — — — — — — 293,364

Dividends, common - $.61

per share — — (90,127) — — — (90,127)

Issuance of shares:

Retirement units - 9,810

Class A shares — (334) — 429 — — 95

Employee stock purchase

plan - 953,679 Class A

shares — (8,295) — 41,585 — — 33,290

Restricted shares - 515,866

Class A shares — (1,997) — 22,530 (20,533) — —

Stock options - 1,599,621

Class A shares 160 52,956 — — — — 53,116

Stock-based compensation

expense - Restricted

Class A shares — — — — 4,261 — 4,261

Repurchase of stock -

6,852,643 Class A

shares — — — (293,222) — — (293,222)

Treasury stock retirement -

9,232,565 Class A

shares (923) (95,975) (308,377) 405,275 — — —

Balance, December 2004

(Restated) 15,093 — 1,680,570 (204,407) (24,309) (112,585) 1,354,362

Consolidated Statements of Changes in Stockholders’ Equity – THE NEW YORK TIMES COMPANY P.59

See Notes to the Consolidated Financial Statements

Accumulated

Capital Stock

Common Other

Stock Comprehensive

Class A and Additional Held in Loss, Net

(In thousands, except Class B Paid-in Retained Treasury, Deferred of Income

share and per share data) Common Capital Earnings at Cost Compensation Tax Total

Comprehensive income:

Net income (Restated) — — 253,473 — — — 253,473

Foreign currency translation

loss — — — — — (7,918) (7,918)

Unrealized derivative gain

on cash-flow hedges

(net of tax expense of

$1,120) — — — — — 1,386 1,386

Minimum pension liability

(net of tax benefit of

$41,164) (Restated) — — — — — (53,537) (53,537)

Unrealized loss on marketable

securities (net of tax

benefit of $62) — — — — — (80) (80)

Comprehensive income

(Restated) — — — — — — 193,324

Dividends, common -

$.65 per share — — (94,535) — — — (94,535)

Issuance of shares:

Retirement units – 10,378

Class A shares — (345) — 445 — — 100

Employee stock purchase

plan – 833 Class A

shares — 31 — — — — 31

Stock options - 847,816

Class A shares 84 20,260 — — — — 20,344

Stock conversions - 6,074

Class B shares to

A shares — — — — — — —

Restricted shares forfeited -

14,927 Class A shares — 639 — (639) — — —

Reversal of deferred

compensation — — (24,309) — 24,309 — —

Stock-based compensation

expense — 34,563 — — — — 34,563

Repurchase of stock -

1,734,099 Class A

shares — — — (57,363) — — (57,363)

Balance, December 2005

(Restated) 15,177 55,148 1,815,199 (261,964) — (172,734) 1,450,826

P.60 2006 ANNUAL REPORT – Consolidated Statements of Changes in Stockholders’ Equity

See Notes to the Consolidated Financial Statements

Accumulated

Capital Stock

Common Other

Stock Comprehensive

Class A and Additional Held in Loss, Net

(In thousands, except Class B Paid-in Retained Treasury, Deferred of Income

share and per share data) Common Capital Earnings at Cost Compensation Tax Total

Comprehensive loss:

Net loss – – (543,443) – – – (543,443)

Foreign currency

translation gain – – – – – 9,487 9,487

Unrealized derivative loss on

cash-flow hedges (net of

tax benefit of $1,023) – – – – – (1,263) (1,263)

Minimum pension liability

(net of tax expense of

$79,498) – – – – – 105,050 105,050

Unrealized gain on marketable

securities (net of tax

expense of $16) – – – – – 36 36

Reclassification adjustment

for losses included in

net loss (net of tax

benefit of $210) — — — — — 242 242

Comprehensive loss (429,891)

Adjustment to apply FAS 158

(net of tax benefit

of $89,364) – – – – – (87,982) (87,982)

Dividends, common -

$.69 per share – – (100,104) – – – (100,104)

Issuance of shares:

Retirement units - 9,396

Class A shares – (217) – 311 – – 94

Stock options - 813,930

Class A shares 81 16,973 – – – – 17,054

Stock conversions - 1,650

Class B shares to A

shares – – – – – – –

Restricted shares forfeited -

19,905 Class A shares – 658 – (658) – – –

Restricted stock

units exercises - 44,685

Class A shares – (2,024) – 1,478 – – (546)

Stock-based compensation

expense – 22,658 – – – – 22,658

Repurchase of stock -

2,203,888 Class A

shares – – – (52,267) – – (52,267)

Treasury stock retirement -

3,728,011 Class A shares (372) (93,196) (60,646) 154,214 – – –

Balance, December 2006 $14,886 $ – $1,111,006 $(158,886) $ – $(147,164) $ 819,842

See Notes to the Consolidated Financial Statements.

Consolidated Statements of Changes in Stockholders’ Equity – THE NEW YORK TIMES COMPANY P.61

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Nature of Operations

The New York Times Company (the “Company”) is a

diversified media company currently including news-

papers, Internet businesses, television and radio

stations, investments in paper mills and other invest-

ments. The Company also has equity interests in

various other companies (see Note 7). The Company’s

major source of revenue is advertising, predominantly

from its newspaper business. The newspapers gener-

ally operate in the Northeast, Southeast and

California markets in the United States.

Principles of Consolidation

The Consolidated Financial Statements include the

accounts of the Company after the elimination of

material intercompany items.

Fiscal Year

The Company’s fiscal year end is the last Sunday in

December. Fiscal year 2006 comprises 53 weeks and

fiscal years 2005 and 2004 each comprise 52 weeks.

Unless specifically stated otherwise, all references to

2006, 2005 and 2004 refer to our fiscal years ended, or

the dates as of, December 31, 2006, December 25, 2005

and December 26, 2004.

Cash and Cash Equivalents

The Company considers all highly liquid debt instru-

ments with original maturities of three months or less

to be cash equivalents.

Accounts Receivable

Credit is extended to the Company’s advertisers and

subscribers based upon an evaluation of the customer’s

financial condition, and collateral is not required from

such customers. Allowances for estimated credit losses,

rebates, rate adjustments and discounts are generally

established based on historical experience.

Inventories

Inventories are stated at the lower of cost or current

market value. Inventory cost is generally based on the

last-in, first-out (“LIFO”) method for newsprint and the

first-in, first-out (“FIFO”) method for other inventories.

Investments

Investments in which the Company has at least a 20%,

but not more than a 50%, interest are generally

accounted for under the equity method. Investment

interests below 20% are generally accounted for under

the cost method, except if the Company could exercise

significant influence, the investment would be

accounted for under the equity method. The Company

has an investment interest below 20% in a limited liabil-

ity company (“LLC”) which is accounted for under the

equity method (see Note 7).

Property, Plant and Equipment

Property, plant and equipment are stated at cost.

Depreciation is computed by the straight-line method

over the shorter of estimated asset service lives or lease

terms as follows: buildings, building equipment and

improvements—10 to 40 years; equipment—3 to 30

years. The Company capitalizes interest costs and cer-

tain staffing costs as part of the cost of constructing

major facilities and equipment.

Goodwill and Intangible Assets Acquired

Goodwill and other intangible assets are accounted

for in accordance with Statement of Financial

Accounting Standards (“FAS”) No. 142, Goodwill

and Other Intangible Assets (“FAS 142”).

Goodwill is the excess of cost over the fair

market value of tangible and other intangible net

assets acquired. Goodwill is not amortized but tested

for impairment annually or if certain circumstances

indicate a possible impairment may exist in accor-

dance with FAS 142.

Other intangible assets acquired consist pri-

marily of mastheads and licenses on various acquired

properties, customer lists, as well as other assets.

Other intangible assets acquired that have indefinite

lives (mastheads and licenses) are not amortized but

tested for impairment annually or if certain circum-

stances indicate a possible impairment may exist.

Certain other intangible assets acquired (customer

lists and other assets) are amortized over their esti-

mated useful lives and tested for impairment if certain

circumstances indicate an impairment may exist.

The Company tests for goodwill impairment

at the reporting unit level as defined in FAS 142. This

test is a two-step process. The first step of the goodwill

impairment test, used to identify potential impair-

ment, compares the fair value of the reporting unit

with its carrying amount, including goodwill. If the

fair value, which is based on future cash flows,

exceeds the carrying amount, goodwill is not consid-

ered impaired. If the carrying amount exceeds the fair

value, the second step must be performed to measure

the amount of the impairment loss, if any. The second

step compares the fair value of the reporting unit’s

goodwill with the carrying amount of that goodwill.

An impairment loss would be recognized in an

amount equal to the excess of the carrying amount of

P.62 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.63

the goodwill over the fair value of the goodwill. In the

fourth quarter of each year, we evaluate goodwill on a

separate reporting unit basis to assess recoverability,

and impairments, if any, are recognized in earnings.

Intangible assets that are not amortized are

tested for impairment at the asset level by comparing

the fair value of the asset with its carrying amount. If

the fair value, which is based on future cash flows,

exceeds the carrying amount, the asset is not consid-

ered impaired. If the carrying amount exceeds the fair

value, an impairment loss would be recognized in an

amount equal to the excess of the carrying amount of

the asset over the fair value of the asset.

Intangible assets that are amortized are

tested for impairment at the asset level associated

with the lowest level of cash flows. An impairment

exists if the carrying value of the asset is i) not recov-

erable (the carrying value of the asset is greater than

the sum of undiscounted cash flows) and ii) is greater

than its fair value.

The significant estimates and assumptions

used by management in assessing the recoverability of

goodwill and other intangible assets are estimated

future cash flows, present value discount rate, and

other factors. Any changes in these estimates or

assumptions could result in an impairment charge. The

estimates of future cash flows, based on reasonable and

supportable assumptions and projections, require man-

agement’s subjective judgment. Depending on the

assumptions and estimates used, the estimated future

cash flows projected in the evaluations of long-lived

assets can vary within a range of outcomes.

In addition to the testing above which is

done on an annual basis, management uses certain

indicators to evaluate whether the carrying value of

goodwill and other intangible assets may not be

recoverable, such as i) current-period operating or

cash flow declines combined with a history of operat-

ing or cash flow declines or a projection/forecast that

demonstrates continuing declines in the cash flow of

an entity or inability of an entity to improve its opera-

tions to forecasted levels and ii) a significant adverse

change in the business climate, whether structural or

technological, that could affect the value of an entity.

Self-Insurance

The Company self-insures for workers’ compensation

costs, certain employee medical and disability bene-

fits, and automobile and general liability claims. The

recorded liabilities for self-insured risks are primarily

calculated using actuarial methods. The liabilities

include amounts for actual claims, claim growth and

claims incurred but not yet reported.

Pension and Postretirement Benefits

The Company sponsors several pension plans and

makes contributions to several other multi-employer

pension plans in connection with collective bargain-

ing agreements. The Company also provides health

and life insurance benefits to retired employees who

are not covered by collective bargaining agreements.

The Company’s pension and postretirement

benefit costs are accounted for using actuarial

valuations required by FAS No. 87, Employers’

Accounting for Pensions (“FAS 87”), and FAS No.

106, Employers’ Accounting for Postretirement

Benefits Other Than Pensions (“FAS 106”).

The Company adopted FAS No. 158,

Employers’ Accounting for Defined Benefit Pension

and Other Postretirement Plans (“FAS 158”) as of

December 31, 2006. FAS 158 requires an entity to rec-

ognize the funded status of its defined pension plans

on the balance sheet and to recognize changes in the

funded status, that arise during the period but are not

recognized as components of net periodic benefit

cost, within other comprehensive income, net of

income taxes. See Note 12 and 13 for additional infor-

mation regarding the adoption of FAS 158.

Revenue Recognition

–

Advertising revenue is recognized when advertise-

ments are published, broadcast or placed on the

Company’s Web sites or, with respect to certain

Web advertising, each time a user clicks on certain

ads, net of provisions for estimated rebates, rate

adjustments and discounts.

–

Rebates are accounted for in accordance with

Emerging Issues Task Force (“EITF”) 01-09,

Accounting for Consideration Given by a Vendor

to a Customer (including Reseller of the Vendor’s

Product) (“EITF 01-09”). The Company recognizes

a rebate obligation as a reduction of revenue, based

on the amount of estimated rebates that will be

earned and claimed, related to the underlying rev-

enue transactions during the period. Measurement

of the rebate obligation is estimated based on the

historical experience of the number of customers

that ultimately earn and use the rebate.

–

Rate adjustments primarily represent credits given

to customers related to billing or production errors

and discounts represent credits given to customers

who pay an invoice prior to its due date. Rate

adjustments and discounts are accounted for in

accordance with EITF 01-09 as a reduction of rev-

enue, based on the amount of estimated rate

adjustments or discounts related to the underlying

revenue during the period. Measurement of rate

P.64 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

adjustments and discount obligations are esti-

mated based on historical experience of credits

actually issued.

–

Circulation revenue includes single copy and home

delivery subscription revenue. Single copy revenue

is recognized based on date of publication, net of

provisions for related returns. Proceeds from

home-delivery subscriptions are deferred at the

time of sale and are recognized in earnings on a pro

rata basis over the terms of the subscriptions.

–

Other revenue is recognized when the related serv-

ice or product has been delivered.

Income Taxes

Income taxes are accounted for in accordance with

FAS No. 109, Accounting for Income Taxes

(“FAS 109”). Under FAS 109 income taxes are recog-

nized for the following: i) amount of taxes payable for

the current year, and ii) deferred tax assets and liabili-

ties for the future tax consequence of events that have

been recognized differently in the financial statements

than for tax purposes. Deferred tax assets and liabili-

ties are established using statutory tax rates and are

adjusted for tax rate changes. FAS 109 also requires

that deferred tax assets be reduced by a valuation

allowance if it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

Stock-Based Compensation

Stock-based compensation is accounted for in accor-

dance with FAS No. 123 (revised 2004), Share-Based

Payment (“FAS 123-R”). The Company adopted

FAS 123-R at the beginning of 2005. The Company

establishes fair value for its equity awards to deter-

mine its cost and recognizes the related expense over

the appropriate vesting period. The Company recog-

nizes expense for stock options, restricted stock units,

restricted stock, shares issued under the Company’s

employee stock purchase plan (only in 2005) and

other long-term incentive plan awards. Before the

adoption of FAS 123-R, the Company applied

Accounting Principles Board Opinion (“APB”)

No. 25, Accounting for Stock Issued to Employees

(“APB 25”) to account for its stock-based awards. See

Note 16 for additional information related to stock-

based compensation expense.

Earnings/(Loss) Per Share

The Company calculates earnings/(loss) per share in

accordance with FAS No. 128, Earnings Per Share.

Basic earnings per share is calculated by dividing net

earnings available to common shares by average

common shares outstanding. Diluted earnings/(loss)

per share is calculated similarly, except that it

includes the dilutive effect of the assumed exercise of

securities, including the effect of shares issuable

under the Company’s stock-based incentive plans.

All references to earnings/(loss) per share

are on a diluted basis unless otherwise noted.

Foreign Currency Translation

The assets and liabilities of foreign companies are

translated at year-end exchange rates. Results of

operations are translated at average rates of exchange

in effect during the year. The resulting translation

adjustment is included as a separate component of

the Consolidated Statements of Changes in

Stockholders’ Equity, and in the Stockholders’ Equity

section of the Consolidated Balance Sheets, in the

caption “Accumulated other comprehensive loss, net

of income taxes.”

Use of Estimates

The preparation of financial statements in conformity

with accounting principles generally accepted in the

United States of America (“GAAP”) requires

management to make estimates and assumptions that

affect the amounts reported in the Company’s

Consolidated Financial Statements. Actual results

could differ from these estimates.

Reclassifications

For comparability, certain prior year amounts have

been reclassified to conform with the 2006 presenta-

tion, specifically reclassifications related to a

discontinued operation (see Note 5).

Recent Accounting Pronouncements

In September 2006, the Financial Accounting

Standards Board (“FASB”) issued FAS No. 157, Fair

Value Measurements (“FAS 157”). FAS 157 estab-

lishes a common definition for fair value under

GAAP, establishes a framework for measuring fair

value and expands disclosure requirements about

such fair value measurements. FAS 157 is effective for

fiscal years beginning after November 15, 2007. The

Company is currently evaluating the impact of

adopting FAS 157 on its financial statements.

In June 2006, FASB issued FASB

Interpretation (“FIN”) No. 48, Accounting for

Uncertainty in Income Taxes—an interpretation of

FASB Statement No. 109 (“FIN 48”), which clarifies

the accounting for uncertainty in income tax positions

(“tax positions”). FIN 48 requires the Company to

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.65

recognize in its financial statements the impact of a tax

position if that tax position is more likely than not of

being sustained on audit, based on the technical

merits of the tax position. The provisions of FIN 48 are

effective as of the beginning of the Company’s 2007

fiscal year, with the cumulative effect of the change in

accounting principle recorded as an adjustment to

opening retained earnings. The Company estimates

that a cumulative effect adjustment of approximately

$21 to $26 million will be charged to retained earnings

to increase reserves for uncertain tax positions. This

estimate is subject to revision as the Company

completes its analysis.

In February 2007, 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”). FAS 159 permits

entities to choose to measure many financial instru-

ments and certain other items at fair value. FAS 159 is

effective for fiscal years beginning after November 15,

2007. The Company is currently evaluating the impact

of adopting FAS 159 on its financial statements.

2. Restatement of Financial Statements

Subsequent to the issuance of its 2005 consolidated

financial statements, the Company determined that

there were errors in accounting for certain pension

and postretirement plans.

The reporting errors arose principally from

the Company’s treatment of pension and benefits

plans established pursuant to collective bargaining

agreements between the Company and its

subsidiaries, on the one hand, and The New York

Times Newspaper Guild, on the other, as multi-

employer plans. The plans’ participants include

employees of The New York Times and a Company

subsidiary, as well as employees of the plans’ admin-

istrator. The Company has concluded that, under

GAAP, the plans should have been accounted for as

single-employer plans. The main effect of the change

is that the Company must account for the present

value of projected future benefits to be provided

under the plans. Previously, the Company had

recorded the expense of its annual contributions to the

plans. While the calculations will increase the

Company’s reported expense, the accounting changes

will not materially increase the Company’s funding

obligations, which are regulated by collective bargain-

ing agreements with the union.

The Company restated the Consolidated

Balance Sheet as of December 2005, and the

Consolidated Statements of Operations, Consolidated

Statements of Cash Flows and Consolidated

Statements of Changes in Stockholders’ Equity for the

2005 and 2004 fiscal years.

The restatement also reflects the effect of

unrecorded adjustments that were previously deter-

mined to be immaterial, mainly related to accounts

receivable allowances and accrued expenses.

The following tables show the impact of the

restatement. The Broadcast Media Group’s results of

operations have been presented as discontinued

operations, and certain assets and liabilities are classi-

fied as held for sale for all periods presented (see

Note 5). In order to more clearly disclose the impact

of the restatement on reported results, the impact of

this reclassification is separately shown below in the

column labeled “Discontinued Operations.”

P.66 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

Consolidated Statements of Operations

Year Ended December 2005

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues

Advertising $2,278,239 $(136,161) $ (2,592) $2,139,486

Circulation 873,975 — — 873,975

Other 220,561 (2,894) — 217,667

Total 3,372,775 (139,055) (2,592) 3,231,128

Costs and expenses

Production costs

Raw materials 321,084 — — 321,084

Wages and benefits 690,754 (38,538) — 652,216

Other 528,546 (32,958) — 495,588

Total production costs 1,540,384 (71,496) — 1,468,888

Selling, general and administrative expenses 1,474,283 (40,418) 8,825 1,442,690

Total costs and expenses 3,014,667 (111,914) 8,825 2,911,578

Gain on sale of assets 122,946 — — 122,946

Operating profit 481,054 (27,141) (11,417) 442,496

Net income from joint ventures 10,051 — — 10,051

Interest expense, net 49,168 — — 49,168

Other income 4,167 — — 4,167

Income from continuing operations before income

taxes and minority interest 446,104 (27,141) (11,417) 407,546

Income taxes 180,242 (11,129) (5,137) 163,976

Minority interest in net income of subsidiaries (257) — — (257)

Income from continuing operations 265,605 (16,012) (6,280) 243,313

Discontinued operations, net of income taxes –

Broadcast Media Group — 15,687 — 15,687

Cumulative effect of a change in accounting principle,

net of income taxes (5,852) 325 — (5,527)

Net income $ 259,753 $ — $ (6,280) $ 253,473

Average number of common shares outstanding

Basic 145,440 145,440 145,440 145,440

Diluted 145,877 145,877 145,877 145,877

Basic earnings per share:

Income from continuing operations $ 1.83 $ (0.11) $ (0.05) $ 1.67

Discontinued operations, net of income taxes –

Broadcast Media Group — 0.11 — 0.11

Cumulative effect of a change in accounting

principle, net of income taxes (0.04) — — (0.04)

Net income $ 1.79 $ – $ (0.05) $ 1.74

Diluted earnings per share:

Income from continuing operations $ 1.82 $ (0.11) $ (0.04) $ 1.67

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.11 — 0.11

Cumulative effect of a change in accounting

principle, net of income taxes (0.04) — — (0.04)

Net income $ 1.78 $ – $ (0.04) $ 1.74

Dividends per share $ .65 — — $ .65

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.67

Year Ended December 2004

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues

Advertising $2,194,644 $(142,663) $ 1,397 $ 2,053,378

Circulation 883,995 — — 883,995

Other 225,003 (2,964) — 222,039

Total 3,303,642 (145,627) 1,397 3,159,412

Costs and expenses

Production costs

Raw materials 296,594 — — 296,594

Wages and benefits 672,901 (37,814) — 635,087

Other 506,053 (31,075) — 474,978

Total production costs 1,475,548 (68,889) — 1,406,659

Selling, general and administrative expenses 1,318,141 (38,355) 10,354 1,290,140

Total costs and expenses 2,793,689 (107,244) 10,354 2,696,799

Operating profit 509,953 (38,383) (8,957) 462,613

Net income from joint ventures 240 — — 240

Interest expense, net 41,760 — — 41,760

Other income 8,212 — — 8,212

Income from continuing operations before income

taxes and minority interest 476,645 (38,383) (8,957) 429,305

Income taxes 183,499 (15,737) (4,031) 163,731

Minority interest in net income of subsidiaries (589) — — (589)

Income from continuing operations 292,557 (22,646) (4,926) 264,985

Discontinued operations, net of income taxes –

Broadcast Media Group — 22,646 — 22,646

Net income $ 292,557 $ — $ (4,926) $ 287,631

Average number of common shares outstanding

Basic 147,567 147,567 147,567 147,567

Diluted 149,357 149,357 149,357 149,357

Basic earnings per share:

Income from continuing operations $ 1.98 $ (0.15) $ (0.03) $ 1.80

Discontinued operations, net of income taxes —

Broadcast Media Group — 0.15 — 0.15

Net income $ 1.98 $ — $ (0.03) $ 1.95

Diluted earnings per share:

Income from continuing operations $ 1.96 $ (0.15) $ (0.03) $ 1.78

Discontinued operations, net of income taxes —

Broadcast Media Group — 0.15 — 0.15

Net income $ 1.96 $ — $ (0.03) $ 1.93

Dividends per share $ .61 — — $ .61

P.68 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

Consolidated Balance Sheet

As of December 2005

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Assets

Current Assets

Cash and cash equivalents $ 44,927 $ — $ — $ 44,927

Accounts receivable (net of allowances: 2005 - $39,654) 435,273 — 4,693 439,966

Inventories 32,100 — — 32,100

Deferred income taxes 68,118 — — 68,118

Assets held for sale – 359,152 — 359,152

Other current assets 77,328 (5,255) (1,750) 70,323

Total current assets 657,746 353,897 2,943 1,014,586

Investments in Joint Ventures 238,369 — — 238,369

Property, Plant and Equipment

Land 66,475 (5,454) — 61,021

Buildings, building equipment and improvements 735,561 (29,909) — 705,652

Equipment 1,529,785 (131,169) — 1,398,616

Construction and equipment installations in progress 504,769 (3,225) — 501,544

Total – at cost 2,836,590 (169,757) — 2,666,833

Less: accumulated depreciation and amortization (1,368,187) 102,722 — (1,265,465)

Property, plant and equipment – net 1,468,403 (67,035) — 1,401,368

Intangible Assets Acquired

Goodwill 1,439,881 (40,544) — 1,399,337

Other intangible assets acquired (less accumulated

amortization of $168,319) 411,106 (234,534) — 176,572

Total 1,850,987 (275,078) — 1,575,909

Miscellaneous Assets 317,532 (11,784) 28,098 333,846

Total Assets $4,533,037 $ – $ 31,041 $4,564,078

Liabilities and Stockholders’ Equity

Current Liabilities

Commercial paper outstanding $ 496,450 $ — $ — $ 496,450

Accounts payable 201,119 11,782 (4,381) 208,520

Accrued payroll and other related liabilities 100,390 — — 100,390

Accrued expenses 185,063 — (4,575) 180,488

Unexpired subscriptions 81,870 — — 81,870

Current portion of long-term debt and capital lease

obligations 1,630 — — 1,630

Total current liabilities 1,066,522 11,782 (8,956) 1,069,348

Other Liabilities

Long-term debt 821,962 — — 821,962

Capital lease obligations 76,338 — — 76,338

Deferred income taxes 79,806 — (53,528) 26,278

Pension benefits obligation 272,597 – 107,660 380,257

Postretirement benefits obligation 217,282 – 51,287 268,569

Other 293,306 (11,782) – 281,524

Total other liabilities 1,761,291 (11,782) 105,419 1,854,928

Minority Interest 188,976 — — 188,976

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.69

As of December 2005

As Previously Discontinued Restatement Restated and

(In thousands, except share and per share data) Reported Operations Adjustments Reclassified

Stockholders’ Equity

Serial preferred stock of $1 par value – authorized

200,000 shares – none issued

Common stock of $.10 par value:

Class A – authorized 300,000,000 shares; issued:

2005 – 150,939,371 (including treasury shares:

2005 - 6,558,299) $ 15,094 $ – $ — $ 15,094

Class B – convertible – authorized 834,242 shares;

issued: 2005 – 834,242 (including treasury

shares: 2005 - none) 83 – — 83

Additional paid-in capital 55,148 – — 55,148

Retained earnings 1,825,763 – (10,564) 1,815,199

Common stock held in treasury, at cost (261,964) – — (261,964)

Accumulated other comprehensive income/(loss),

net of income taxes:

Foreign currency translation adjustments 11,498 – — 11,498

Unrealized derivative gain on cash-flow hedges 1,262 – — 1,262

Minimum pension liability (130,357) – (54,858) (185,215)

Unrealized loss on marketable securities (279) – — (279)

Total accumulated other comprehensive loss, net of

income taxes (117,876) – (54,858) (172,734)

Total stockholders’ equity 1,516,248 – (65,422) 1,450,826

Total Liabilities and Stockholders’ Equity $ 4,533,037 $ – $ 31,041 $4,564,078

P.70 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

Consolidated Statements of Cash Flows

Year Ended December 2005

As Previously Restatement

(In thousands) Reported Adjustments Restated

Cash Flows from Operating Activities

Net income $ 259,753 $ (6,280) $ 253,473

Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation 113,480 – 113,480

Amortization 30,289 – 30,289

Stock-based compensation 34,563 – 34,563

Cumulative effect of a change in accounting principle 5,852 – 5,852

Undistributed earnings of affiliates (919) – (919)

Minority interest in net income of subsidiaries 257 – 257

Deferred income taxes (29,635) (5,137) (34,772)

Long-term retirement benefit obligations 2,458 9,678 12,136

Gain on sale of assets (122,946) – (122,946)

Excess tax benefits from stock-based awards (5,991) – (5,991)

Other – net 2,572 – 2,572

Changes in operating assets and liabilities, net of acquisitions/dispositions:

Accounts receivable – net (41,265) 6,177 (35,088)

Inventories 554 – 554

Other current assets 29,993 (250) 29,743

Accounts payable (1,021) (2,849) (3,870)

Accrued payroll and accrued expenses 22,052 (1,339) 20,713

Accrued income taxes (9,934) – (9,934)

Unexpired subscriptions 4,199 – 4,199

Net cash provided by operating activities 294,311 – 294,311

Cash Flows from Investing Activities

Acquisitions (437,516) – (437,516)

Capital expenditures (221,344) – (221,344)

Investments (19,220) – (19,220)

Proceeds on sale of assets 183,173 – 183,173

Other investing payments (604) – (604)

Net cash used in investing activities (495,511) – (495,511)

Cash Flows from Financing Activities

Commercial paper borrowings – net 161,100 – 161,100

Long-term obligations:

Increase 497,543 – 497,543

Reduction (323,490) – (323,490)

Capital shares:

Issuance 14,348 – 14,348

Repurchases (57,363) – (57,363)

Dividends paid to stockholders (94,535) – (94,535)

Excess tax benefits from stock-based awards 5,991 – 5,991

Other financing proceeds – net 811 – 811

Net cash provided by financing activities 204,405 – 204,405

Net increase in cash and cash equivalents 3,205 – 3,205

Effect of exchange rate changes on cash and cash equivalents (667) – (667)

Cash and cash equivalents at the beginning of the year 42,389 – 42,389

Cash and cash equivalents at the end of the year $ 44,927 $ – $ 44,927

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.71

Year Ended December 2004

As Previously Restatement

(In thousands) Reported Adjustments Restated

Cash Flows from Operating Activities

Net income $ 292,557 $(4,926) $ 287,631

Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation 118,893 – 118,893

Amortization 23,635 – 23,635

Stock-based compensation 4,261 – 4,261

Excess distributed earnings of affiliates 14,750 – 14,750

Minority interest in net income of subsidiaries 589 – 589

Deferred income taxes 3,547 (4,031) (484)

Long-term retirement benefit obligations (8,981) 9,741 760

Other – net (17,153) – (17,153)

Changes in operating assets and liabilities, net of acquisitions/dispositions:

Accounts receivable – net (3,036) (382) (3,418)

Inventories (3,702) – (3,702)

Other current assets (2,050) (250) (2,300)

Accounts payable 114 375 489

Accrued payroll and accrued expenses 7,576 (527) 7,049

Accrued income taxes 11,746 – 11,746

Unexpired subscriptions 1,292 – 1,292

Net cash provided by operating activities 444,038 – 444,038

Cash Flows from Investing Activities

Capital expenditures (188,451) – (188,451)

Other investing payments (3,697) – (3,697)

Net cash used in investing activities (192,148) – (192,148)

Cash Flows from Financing Activities

Commercial paper borrowings – net 107,370 – 107,370

Long-term obligations:

Reduction (1,824) – (1,824)

Capital shares:

Issuance 41,090 – 41,090

Repurchases (293,222) – (293,222)

Dividends paid to stockholders (90,127) – (90,127)

Other financing payments – net (12,525) – (12,525)

Net cash used in financing activities (249,238) – (249,238)

Net increase in cash and cash equivalents 2,652 – 2,652

Effect of exchange rate changes on cash and cash equivalents 290 – 290

Cash and cash equivalents at the beginning of the year 39,447 – 39,447

Cash and cash equivalents at the end of the year $ 42,389 $ – $ 42,389

P.72 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

3. Acquisitions and Dispositions

Calorie-Count.com

In September 2006, the Company acquired Calorie-

Count, a site that offers weight loss tools and

nutritional information, for approximately $1 million,

the majority of which was allocated to goodwill.

Calorie-Count is part of About.com.

Baseline

In August 2006, the Company acquired Baseline, a

leading online database and research service for infor-

mation on the film and television industries, for

$35.0 million. Baseline is part of NYTimes.com, which

is part of the News Media Group.

The Calorie-Count and Baseline acquisitions

in 2006 will further expand the Company’s online

content and functionality as well as continue to diver-

sify the Company’s online revenue base.

Based on a preliminary independent valua-

tion of Baseline, the Company has allocated the

excess of the purchase price over the carrying amount

of net assets acquired as follows: $25.1 million to

goodwill and $10.1 million to other intangible assets

(primarily content, a customer list and technology).

The preliminary purchase price allocation

for Baseline is subject to adjustment when addi-

tional information concerning asset and liability

valuations is obtained. The final asset and liability

fair values may differ from those included in the

Company’s Consolidated Balance Sheet at

December 2006; however, the changes are not

expected to have a material effect on the Company’s

Consolidated Financial Statements.

KAUT-TV

In November 2005, the Company acquired KAUT-TV,

a television station in Oklahoma City, for approxi-

mately $23 million. KAUT-TV, which is located in the

same television market as the Company’s station

KFOR-TV (a “duopoly”), is part of the Broadcast

Media Group.

In January 2007, the Company entered into

an agreement to sell its Broadcast Media Group (see

Note 5). The goodwill and other intangible assets for

KAUT-TV have been reclassified to “Assets held for

sale” in the Company’s Consolidated Balance Sheets

(see Note 5).

About.com

In March 2005, the Company acquired About.com for

approximately $410 million to broaden its online con-

tent offering, strengthen and diversify its online

advertising, extend its reach among Internet users

and provide an important platform for future growth.

These factors contributed to establishing the pur-

chase price and supported the premium paid over the

fair value of tangible and intangible assets. The acqui-

sition was completed after a competitive auction

process.

North Bay Business Journal

In February 2005, the Company acquired the North Bay

Business Journal , a weekly publication targeting

business leaders in California’s Sonoma, Napa and Marin

counties, for approximately $3 million. North Bay is

included in the News Media Group as part of the

Regional Media Group.

Based on independent valuations of

About.com and North Bay the Company has allo-

cated the excess of the purchase prices over the

carrying value of the net assets acquired as follows:

About.com- $343.4 million to goodwill and $62.2 mil-

lion to other intangible assets (primarily content,

customer lists); North Bay – $2.1 million to goodwill

and $0.9 million to other intangible assets (primarily

customer lists).

The Company’s Consolidated Financial

Statements include the operating results of these

acquisitions subsequent to their date of acquisition.

The acquisitions in 2006 and 2005 were

funded through a combination of short-term and

long-term debt and did not have a material impact on

the Company’s Consolidated Financial Statements

for the periods presented herein.

Sale of Discovery Times Channel Investment

In October 2006, the Company sold its 50% owner-

ship interest in Discovery Times Channel, a digital

cable channel, for $100 million. The sale resulted in

the Company liquidating its investment of approxi-

mately $108 million, which was included in

“Investments in joint ventures” in the Company’s

Consolidated Balance Sheet, and recording a loss of

approximately $8 million in “Net income from joint

ventures” in the Company’s Consolidated Statement

of Operations.

4. Goodwill and Other Intangible Assets

Goodwill is the excess of cost over the fair market

value of tangible and other intangible net assets

acquired. Goodwill is not amortized but tested for

impairment annually or if certain circumstances indi-

cate a possible impairment may exist in accordance

with FAS 142.

Other intangible assets acquired consist pri-

marily of mastheads and licenses on various acquired

properties, customer lists, as well as other assets.

Other intangible assets acquired that have indefinite

lives (mastheads and licenses) are not amortized but

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.73

tested for impairment annually or if certain circum-

stances indicate a possible impairment may exist.

Certain other intangible assets acquired (customer lists

and other assets) are amortized over their estimated

useful lives. See Note 1 for the Company’s policy of

goodwill and other intangibles impairment testing.

In 2006, the Company’s annual impairment

tests resulted in a non-cash impairment charge of

$814.4 million ($735.9 million after tax, or $5.09 per

share) related to a write-down of intangible assets of

the New England Media Group. The New England

Media Group, which includes The Boston Globe (the

“Globe”), Boston.com and the Worcester Telegram &

Gazette, is part of the News Media Group reportable

segment. The majority of the charge is not tax

deductible because the 1993 acquisition of the Globe

was structured as a tax-free stock transaction. The

impairment charge, which is included in the line item

“Impairment of intangible assets” in the 2006

Consolidated Statement of Operations, is presented

below by intangible asset:

(In thousands) Pre-tax Tax After-tax

Goodwill $782,321 $65,009 $ 717,312

Customer list 25,597 10,751 14,846

Newspaper masthead 6,515 2,736 3,779

Total $814,433 $78,496 $ 735,937

The impairment of the intangible assets above mainly

resulted from declines in current and projected oper-

ating results and cash flows of the New England

Media Group due to, among other factors, advertiser

consolidations in the New England area and

increased competition with online media. These fac-

tors resulted in the carrying value of the intangible

assets being greater than their fair value, and there-

fore a write-down to fair value was required.

The fair value of goodwill is the residual fair

value after allocating the total fair value of the New

England Media Group to its other assets, net of

liabilities. The total fair value of the New England

Media Group was estimated using a combination of a

discounted cash flow model (present value of future

cash flows) and two market approach models (a

multiple of various metrics based on comparable

businesses and market transactions).

The fair value of the customer list and news-

paper masthead was calculated by estimating the

present value of future cash flows associated with

each asset.

The changes in the carrying amount of

Goodwill in 2006 and 2005 were as follows:

News Media

(In thousands) Group About.com Total

Balance as of

December 2004 $1,063,883 $ — $1,063,883

Goodwill acquired

during year 2,114 343,689 345,803

Foreign currency

translation (10,349) — (10,349)

Balance as of

December 2005 1,055,648 343,689 1,399,337

Goodwill acquired

during year 25,147 926 26,073

Goodwill adjusted

during year — (259) (259)

Impairment (782,321) — (782,321)

Foreign currency

translation 8,090 — 8,090

Balance as of

December 2006 $ 306,564 $344,356 $ 650,920

Goodwill acquired in 2006 resulted from the acquisition

of Baseline and Calorie-Count (see Note 3).

Goodwill acquired in 2005 resulted from the

acquisition of About.com and North Bay (see Note 3).

The foreign currency translation line item

reflects changes in Goodwill resulting from fluctuat-

ing exchange rates related to the consolidation of the

International Herald Tribune (the “IHT”).

The Broadcast Media Group’s results of

operations have been presented as discontinued

operations, and certain assets and liabilities are classi-

fied as held for sale for all periods presented (see

Note 5).

Other intangible assets acquired as of December 2006 and 2005 were as follows:

December 2006 December 2005

Gross Gross

Carrying Accumulated Carrying Accumulated

(In thousands) Amount Amortization Net Amount Amortization Net

Amortized other

intangible assets:

Customer lists $ 220,935 $(196,268) $ 24,667 $218,326 $(155,763) $ 62,563

Other 63,777 (21,704) 42,073 55,018 (12,556) 42,462

Tot al 284,712 (217,972) 66,740 273,344 (168,319) 105,025

Unamortized other

intangible assets:

Newspaper mastheads 73,223 (6,515) 66,708 71,547 — 71,547

Total other intangible

assets acquired $ 357,935 $(224,487) $133,448 $344,891 $(168,319) $176,572

P.74 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The table above includes other intangible assets

related to the acquisitions of About.com, North Bay

and Baseline (see Note 3). Additionally, certain

amounts in the table above include the foreign cur-

rency translation adjustment related to the

consolidation of the IHT.

As of December 2006, the remaining

weighted-average amortization period is eight years

for customer lists and seven years for other intangible

assets acquired included in the table above.

Accumulated amortization includes write-

downs of $25.6 million in customer lists and

$6.5 million in newspaper mastheads related to the

impairment charge. Amortization expense related to

amortized other intangible assets acquired was

$24.4 million in 2006, $24.9 million in 2005 and

$17.3 million in 2004. Amortization expense for the

next five years related to these intangible assets is

expected to be as follows:

(In thousands)

Year Amount

2007 $13,400

2008 10,500

2009 8,700

2010 8,500

2011 8,200

5. Discontinued Operations

In January 2007, the Company entered into an agree-

ment to sell its Broadcast Media Group, which consists

of nine network-affiliated television stations, their

related Web sites and the digital operating center, for

$575 million. This decision was a result of the

Company’s ongoing analysis of its business portfolio

and will allow the Company to place an even greater

emphasis on developing and integrating its print and

growing digital resources. The sale is subject to regula-

tory approvals and is expected to close in the first half

of 2007.

In accordance with the provisions of

FAS 144, the Broadcast Media Group’s results of oper-

ations are presented as discontinued operations and

certain assets and liabilities are classified as held for

sale for all periods presented. The results of opera-

tions presented as discontinued operations and the

assets and liabilities classified as held for sale are

summarized below.

(In thousands) 2006 2005 2004

Revenues $156,791 $139,055 $145,627

Total costs and expenses 115,370 111,914 107,244

Pre-tax income 41,421 27,141 38,383

Income taxes 16,693 11,129 15,737

Cumulative effect of

a change in

accounting principle,

net of income taxes — (325) —

Discontinued operations,

net of income taxes $ 24,728 $ 15,687 $ 22,646

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.75

December

(In thousands) 2006 2005

Property, plant & equipment, net $ 64,309 $ 67,035

Goodwill 41,658 40,544

Other intangible assets, net 234,105 234,534

Other assets 16,956 17,039

Assets held for sale 357,028 359,152

Program rights liability

(1)

14,931 15,604

Net assets held for sale $342,097 $343,548

(1)

Included in “Accounts payable” in the Consolidated

Balance Sheets.

6. Inventories

Inventories as shown in the accompanying

Consolidated Balance Sheets were as follows:

December

(In thousands) 2006 2005

Newsprint and magazine paper $32,594 $28,190

Other inventory 4,102 3,910

Total $36,696 $32,100

Inventories are stated at the lower of cost or

current market value. Cost was determined utilizing

the LIFO method for 78% of inventory in 2006 and

77% of inventory in 2005. The replacement cost of

inventory was approximately $45 million as of

December 2006 and $40 million as of December 2005.

7. Investments in Joint Ventures

As of December 2006, the Company’s investments in

joint ventures consisted of equity ownership interests

in the following entities:

Approximate

Company % Ownership

Donohue Malbaie Inc. (“Malbaie”) 49%

Metro Boston LLC (“Metro Boston”) 49%

Madison Paper Industries (“Madison”) 40%

New England Sports Ventures, LLC (“NESV”) 17%

The Company’s investments above are

accounted for under the equity method, and are

recorded in “Investments in Joint Ventures” in the

Company’s Consolidated Balance Sheets. The

Company’s proportionate shares of the operating

results of its investments are recorded in “Net income

from joint ventures” in the Company’s Consolidated

Statements of Operations and in “Investments in

Joint Ventures” in the Company’s Consolidated

Balance Sheets.

In October 2006, the Company sold its 50%

ownership interest in Discovery Times Channel (see

Note 3).

In March 2005, the Company invested

$16.5 million to acquire a 49% interest in Metro

Boston, which publishes a free daily newspaper

catering to young professionals and students in the

Greater Boston area.

The Company owns an interest of approxi-

mately 17% in NESV, which owns the Boston Red

Sox, Fenway Park and adjacent real estate, approxi-

mately 80% of the New England Sports Network, a

regional cable sports network, and 50% of Roush

Fenway Racing, a leading NASCAR team.

The Company also has investments in a

Canadian newsprint company, Malbaie, and a part-

nership operating a supercalendered paper mill in

Maine, Madison (together, the “Paper Mills”).

The Company and Myllykoski Corporation,

a Finnish paper manufacturing company, are part-

ners through subsidiary companies in Madison. The

Company’s percentage ownership of Madison,

which represents 40%, is through an 80%-owned

consolidated subsidiary. Myllykoski Corporation

owns a 10% interest in Madison through a 20%

minority interest in the consolidated subsidiary of

the Company. Myllykoski Corporation’s proportion-

ate share of the operating results of Madison is also

recorded in “Net income from joint ventures” in the

Company’s Consolidated Statements of Operations

and in “Investments in Joint Ventures” in the

Company’s Consolidated Balance Sheets.

Myllykoski Corporation’s minority interest is

included in “Minority interest in net loss/(income)

of subsidiaries” in the Company’s Consolidated

Statements of Operations and in “Minority Interest”

in the Company’s Consolidated Balance Sheets.

The Company received distributions from

Madison of $5.0 million in 2006, $5.0 million in 2005

and $10.0 million in 2004.

The Company received distributions from

Malbaie of $3.8 million in 2006, $4.1 million in 2005

and $5.0 million in 2004.

During 2006, 2005 and 2004, the Company’s

News Media Group purchased newsprint and super-

calendered paper from the Paper Mills at competitive

prices. Such purchases aggregated $80.4 million in

2006, $76.3 million for 2005 and $61.2 million for 2004.

8. Other

Other Income

“Other income” in the Company’s Consolidated

Statements of Operations includes the following items:

(In thousands) 2005 2004

Non-compete agreement $4,167 $5,000

Advertising credit — 3,212

Other income $4,167 $8,212

P.76 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The Company entered into a five-year $25

million non-compete agreement in connection with

the sale of the Santa Barbara News-Press in 2000. This

income was recognized on a straight-line basis over

the life of the agreement, which ended in

October 2005. The advertising credit relates to credits

for advertising the Company issued that were not

used within the allotted time by the advertiser.

Staff Reductions

In 2006, the Company recognized staff reduction

charges of $34.3 million ($19.7 million after tax, or

$.14 per share). In 2005, staff reductions resulted in a

total pre-tax charge of $57.8 million ($35.3 million after

tax or $.23 per share). Most of the charges in 2006 and

2005 were recognized at the News Media Group.

These charges are recorded in “Selling, general and

administrative expenses” in the Company’s

Consolidated Statements of Operations. The Company

had a staff reduction liability of $17.9 million and

$38.2 million included in “Accrued expenses” in the

Company’s Consolidated Balance Sheets as of

December 2006 and December 2005, respectively.

Other Current Assets

In the second quarter of 2006, the Company’s develop-

ment partner began to repay the Company for its share

of costs associated with the Company’s new headquar-

ters that the Company previously paid on the

development partner’s behalf (see Note 19).

The amount due to the Company is expected to be fully

repaid within one year, and therefore this amount was

reclassified from “Miscellaneous assets” to “Other cur-

rent assets” in the Company’s Consolidated Balance

Sheet as of December 2006. The amount due to the

Company was approximately $66 million as of

December 2006.

The Company also has a receivable due

from its development partner that is associated with

borrowings under a construction loan attributable to

the Company’s development partner (see Note 9).

The amount due to the Company is approximately

$125 million and is recorded in “Other current assets”

in the Company’s Consolidated Balance Sheet as of

December 2006.

Cumulative Effect of a Change in Accounting Principle

In March 2005, FASB issued FIN 47, Accounting for

Conditional Asset Retirement Obligations—an inter-

pretation of FASB Statement No. 143 (“FIN 47”).

FIN 47 requires an entity to recognize a liability for the

fair value of a conditional asset retirement obligation

if the fair value can be reasonably estimated. FIN 47

states that a conditional asset retirement obligation is

a legal obligation to perform an asset retirement

activity in which the timing or method of settlement

are conditional upon a future event that may or may

not be within the control of the entity. FIN 47 was

effective no later than the end of fiscal year ending

after December 15, 2005. The Company adopted

FIN 47 effective December 2005 and accordingly

recorded an after-tax charge of $5.5 million or $.04 per

diluted share ($9.9 million pre-tax) as a cumulative

effect of a change in accounting principle in the

Consolidated Statement of Operations. A portion of

the 2005 charge has been reclassified to conform to the

2006 presentation of the Broadcast Media Group as a

discontinued operation.

The charge relates primarily to those lease

agreements that require the Company to restore the

land or facilities to their original condition at the end

of the leases. The Company was uncertain of the

timing of payment for these asset retirement obliga-

tions; therefore a liability was not previously

recognized in the financial statements under GAAP.

On a prospective basis, this accounting change

requires recognition of these costs ratably over the

lease term. The adoption of FIN 47 resulted in a non-

cash addition to Land, buildings and equipment of

$12.3 million with a corresponding increase in long-

term liabilities.

The assets recorded as of December 2005

were $7.3 million, consisting of gross assets of

$12.3 million less accumulated depreciation of

$5.0 million. The asset retirement obligation as of

December 2006 was $18.7 million, consisting of a lia-

bility of $12.3 million and accretion expense of

$6.4 million and as of December 2005 was $17.8 mil-

lion, consisting of a liability of $12.3 million and

accretion expense of $5.5 million. As of

December 2004, on a pro forma basis, the asset retire-

ment obligation would have been $16.9 million had

FIN 47 been applied during the year, consisting of a

liability of $12.3 million and accretion expense of

$4.6 million. In future periods, when cash is paid

upon the settlement of the asset retirement obliga-

tion, the payments will be classified as a component

of operating cash flow in the Consolidated

Statements of Cash Flows.

Sale of Assets

In the first quarter of 2005, the Company recognized a

$122.9 million pre-tax gain from the sale of assets. The

Company completed the sale of its current headquarters

in New York City for $175.0 million and entered into a

lease for the building with the purchaser/lessor through

2007, when the Company expects to occupy its new

headquarters (see Note 19). This transaction has been

accounted for as a sale-leaseback. The sale resulted in a

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.77

total pre-tax gain of $143.9 million, of which

$114.5 million ($63.3 million after tax or $.43 per share)

was recognized in the first quarter of 2005. The remain-

der of the gain is being deferred and amortized over the

lease term. The lease requires the Company to pay rent

over the lease term to the purchaser/lessor and will

result in rent expense that will be offset by the amount of

the gain being deferred and amortized. In addition, the

Company sold property in Sarasota, Fla., which resulted

in a pre-tax gain in the first quarter of 2005 of $8.4 million

($5.0 million after tax or $.03 per diluted share).

9. Debt

Long-term debt consists of the following:

December

(In thousands) 2006 2005

4.625%-7.125% Series I Medium-Term

Notes due 2007 through 2009,

net of unamortized debt costs of

$372 in 2006 and $612 in 2005

(1)

$250,128 $249,888

4.5% Notes due 2010, net of

unamortized debt costs

of $1,452 in 2006 and

$1,860 in 2005

(2)

248,548 248,140

4.610% Medium-Term Notes Series II

due 2012, net of unamortized

debt costs of $691 in 2006

and $793 in 2005

(3)

74,309 74,207

5.0% Notes due 2015, net of

unamortized debt costs

of $249 in 2006 and

$273 in 2005

(2)

249,751 249,727

Total notes and debentures 822,736 821,962

Less: current portion (101,946) —

Total long-term debt $720,790 $821,962

(1)

On August 21, 1998, the Company filed a $300.0 million shelf reg-

istration on Form S-3 with the Securities and Exchange

Commission (“SEC”) for unsecured debt securities to be issued by

the Company from time to time. The registration statement became

effective August 28, 1998. On September 24, 1998, the Company

filed a prospectus supplement to allow the issuance of up to

$300.0 million in medium-term notes (Series I) of which no amount

remains available as of December 2006.

(2)

On March 17, 2005, the Company issued $250.0 million 5-year

notes maturing March 15, 2010, at an annual rate of 4.5%, and

$250.0 million 10-year notes maturing March 15, 2015, at an

annual rate of 5.0%. Interest is payable semi-annually on

March 15 and September 15 on both series of notes.

(3)

On July 26, 2002, the Company filed a $300.0 million shelf reg-

istration statement on Form S-3 with the SEC for unsecured debt

securities that may be issued by the Company from time to time.

The registration statement became effective on August 6, 2002.

On September 17, 2002, the Company filed a prospectus supple-

ment to allow the issuance of up to $300.0 million in

medium-term notes (Series II). As of December 2006, the

Company had issued $75.0 million of medium-term notes under

this program.

The Company’s total debt, including commercial

paper, capital lease obligations and a construction

loan (see below), amounted to $1.4 billion as of

December 2006 and December 2005. Total unused

borrowing capacity under all financing arrangements

was $572.1 million as of December 2006.

Until January 2007, the Company was a co-

borrower under a $320 million non-recourse

construction loan in connection with the construction

of its new headquarters. The Company did not draw

down on the construction loan, which is being used

by its development partner. However, as a co-

borrower, the Company was required to record the

amount outstanding of the construction loan on its

financial statements. The Company also recorded a

receivable, due from its development partner, for the

same amount outstanding under the construction

loan. As of December 2006, $124.7 million was out-

standing under the construction loan. See Notes 19

and 20 for additional information related to the

Company’s new headquarters.

In the third quarter of 2006, the Company

increased the amount available under its commercial

paper program, which is supported by the revolving

credit agreements described below, to $725 million

from $600 million. Commercial paper issued by the

Company is unsecured and can have maturities of up

to 270 days. The Company had $422.0 million in com-

mercial paper outstanding as of December 2006, with

an annual weighted average interest rate of 5.5% and

an average of 63 days to maturity from original

issuance. The Company had $496.5 million in commer-

cial paper outstanding as of December 2005, with an

annual weighted average interest rate of 4.3% and an

average of 53 days to maturity from original issuance.

The primary purpose of the Company’s

revolving credit agreements is to support the

Company’s commercial paper program. In addition,

these revolving credit agreements provide a facility

for the issuance of letters of credit. In June 2006, the

Company replaced its $270 million multi-year credit

agreement with a $400 million credit agreement

maturing in June 2011. Of the total $800 million avail-

able under the two revolving credit agreements

($400 million credit agreement maturing in May 2009

and $400 million credit agreement maturing in

June 2011), the Company has issued letters of credit of

approximately $31 million. The remaining balance

of approximately $769 million supports the

Company’s commercial paper program discussed

above. There were no borrowings outstanding under

P.78 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

the revolving credit agreements as of December 2006

or 2005.

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.

The revolving credit agreements contain a

covenant that requires specified levels of stockhold-

ers’ equity (as defined in the agreements). As of

December 2006, the amount of stockholders’ equity

in excess of the required levels was approximately

$618 million. The lenders under the revolving credit

agreements have waived, effective December 31,

2006, any defaults that may have arisen under the

agreements due to inclusion in previously issued

financial statements of the reporting errors that led

to the restatement described in Note 2.

The Company’s five-year 5.350% Series I

medium-term notes aggregating $50 million mature

on April 16, 2007, and its five-year 4.625% Series I

medium-term notes aggregating $52 million mature

on June 25, 2007.

On March 15, 2005, the Company redeemed

all of its $71.9 million outstanding 8.25% debentures,

callable on March 15, 2005, and maturing on

March 15, 2025, at a redemption price of 103.76% of

the principal amount. The redemption premium and

unamortized issuance costs resulted in a loss from the

extinguishment of debt of $4.8 million and is

included in “Interest expense-net” in the Company’s

2005 Consolidated Statement of Operations.

Based on borrowing rates currently available

for debt with similar terms and average maturities,

the fair value of the Company’s long-term debt was

$801.0 million as of December 2006 and $812.3 million

as of December 2005.

The aggregate face amount of maturities of

long-term debt over the next five years and thereafter

is as follows:

(In thousands) Amount

2007 $102,000

2008 49,500

2009 99,000

2010 250,000

2011 –

Thereafter 325,000

Total face amount of maturities 825,500

Less: Current portion of long-term debt (101,946)

Total long-term debt 723,554

Less: Unamortized debt costs (2,764)

Carrying value of long-term debt $720,790

Interest expense, net, as shown in the accompanying

Consolidated Statements of Operations was as

follows:

(In thousands) 2006 2005 2004

Interest expense $73,512 $60,018 $51,372

Loss from

extinguishment of debt — 4,767 —

Interest income (7,930) (4,462) (2,431)

Capitalized interest (14,931) (11,155) (7,181)

Interest expense, net $50,651 $49,168 $41,760

10. Derivative Instruments

In 2006 and 2005, the Company terminated forward

starting swap agreements designated as cash-flow

hedges as defined under FAS No. 133, as amended,

Accounting for Derivative Instruments and Hedging

Activities (“FAS 133”), because the debt for which

these agreements were entered into was not issued.

The termination of these agreements resulted in a

gain of approximately $1 million in 2006.

In the first quarter of 2005, the Company ter-

minated its forward starting swap agreements entered

into in 2004 that were designated as cash-flow hedges as

defined under FAS 133. The forward starting swap

agreements, which had notional amounts totaling

$90.0 million, were intended to lock in fixed interest

rates on the issuance of debt in March 2005. The

Company terminated the forward starting swap agree-

ments in connection with the issuance of its 10-year

$250.0 million notes maturing on March 15, 2015. The

termination of the forward starting swap agreements

resulted in a gain of approximately $2 million, which is

being amortized into income through March 2015 as a

reduction of interest expense related to the Company’s

10-year notes.

In the first quarter of 2005, the Company’s

interest rate swap agreements (“swap agreements”),

designated as fair-value hedges as defined under

FAS 133, expired in connection with the Company’s

repayment of its 10-year $250.0 million notes that

matured March 15, 2005. These swap agreements,

which had notional amounts totaling $100.0 million,

were entered into to exchange the fixed interest rate on

a portion of the Company’s 10-year notes for a variable

interest rate. On the maturity date of the 10-year notes,

the fair value of the swap agreements decreased to

zero.

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.79

The components of income tax expense as shown in

the Consolidated Statements of Operations were

as follows:

(In thousands) 2006 2005 2004

Current tax expense

Federal $ 112,586 $157,828 $137,128

Foreign 739 675 683

State and local 43,187 40,245 26,404

Total current

tax expense 156,512 198,748 164,215

Deferred tax expense/

(benefit)

Federal (89,367) (21,841) 9,781

Foreign (10,918) (3,017) (7,864)

State and local (39,619) (9,914) (2,401)

Total deferred tax (benefit)/

expense (139,904) (34,772) (484)

Income tax expense $ 16,608 $ 163,976 $163,731

State tax operating loss carryforwards (“loss carryfor-

wards”) totaled $2.3 million as of December 2006 and

$3.5 million as of December 2005. Such loss carryfor-

wards expire in accordance with provisions of

applicable tax laws and have remaining lives generally

ranging from 1 to 5 years. Certain loss carryforwards are

likely to expire unused. Accordingly, the Company has

valuation allowances amounting to $1.2 million as of

December 2006 and $2.2 million as of December 2005.

In 2006 the Company’s valuation allowance

decreased by $1 million due primarily to the write-off

of a loss carryforward that had expired.

In 2005 the Company established a

$0.4 million valuation allowance against loss carry-

forwards, resulting in an increase in tax expense by

this amount.

The components of the net deferred tax

assets and liabilities recognized in the Company’s

Consolidated Balance Sheets were as follows:

December

(In thousands) 2006 2005

Deferred tax assets

Retirement, postemployment

and deferred compensation plans $371,859 $328,350

Accruals for other employee

benefits, compensation,

insurance and other 52,903 50,331

Accounts receivable allowances 9,100 9,940

Other 120,215 97,269

Gross deferred tax assets 554,077 485,890

Valuation allowance (1,227) (2,184)

Net deferred tax assets $552,850 $ 483,706

Deferred tax liabilities

Property, plant and equipment $226,435 $245,416

Intangible assets 69,507 132,496

Investments in joint ventures 21,137 33,539

Other 36,361 30,415

Gross deferred tax liabilities 353,440 441,866

Net deferred tax asset $199,410 $ 41,840

Amounts recognized in the

Consolidated Balance

Sheets

Deferred tax asset – current $ 73,729 $ 68,118

Deferred tax asset – long term 125,681

Deferred tax liability – long term – 26,278

Net deferred tax asset $199,410 $ 41,840

Income tax benefits related to the exercise of equity

awards reduced current taxes payable and increased

additional paid-in capital by $1.9 million in 2006,

$6.0 million in 2005 and $13.5 million in 2004.

11. Income Taxes

Income tax expense for each of the years presented is determined in accordance with FAS 109.

Reconciliations between the effective tax rate on income before income taxes and the federal statutory rate

are presented below.

2006 2005 2004

% of % of % of

(In thousands) Amount Pretax Amount Pretax Amount Pretax

Tax at federal statutory rate $(193,173) 35.0% $142,642 35.0% $150,257 35.0%

State and local taxes - net 2,319 (0.4) 19,714 4.8 16,447 3.8

Impairment of nondeductible

goodwill 219,638 (39.8) —— ——

Other – net (12,176) 2.2 1,620 0.4 (2,973) (0.7)

Income tax expense $ 16,608 (3.0%) $163,976 40.2% $163,731 38.1%

P.80 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

As of December 2006 and 2005, “Accumulated

other comprehensive income, net of income taxes” in

the Company’s Consolidated Balance Sheets and for the

years then ended in the Consolidated Statements of

Changes in Stockholders’ Equity was net of a deferred

income tax asset of approximately $152 million and

$142 million, respectively.

The Internal Revenue Service has completed

its examination of federal income tax returns through

2003. In addition, there are various state and local

audits in progress for periods from 2000 through

2005. The Company does not believe that the comple-

tion of these audits will have a material effect on the

Company’s Consolidated Financial Statements.

The Company’s policy is to establish a tax

contingency liability for potential tax audit issues.

The tax contingency liability is based on the

Company’s estimate of whether additional taxes will

be due in the future. Any additional taxes due will be

determined only upon the completion of current and

future tax audits. The timing of such payments can-

not be determined, but the Company expects that

they will not be made within one year. Therefore, the

tax contingency liability is included in “Other

Liabilities—Other” in the Company’s Consolidated

Balance Sheets.

12. Pension Benefits

The Company sponsors several pension plans and

makes contributions to several others, in connection

with collective bargaining agreements, that are con-

sidered 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 employ-

ees of the Company.

The Company also has a foreign-based pen-

sion plan for certain IHT employees (the “Foreign

plan”). The information for the Foreign plan is com-

bined 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 information included in this Note

reflects, for all periods presented, a pension plan

between the Company and its subsidiaries, on the one

hand, and The New York Times Newspaper Guild, on

the other. Prior to the fourth quarter of 2006, this pen-

sion plan was accounted for as a multi-employer

pension plan. The Company has concluded that it

should have been accounted for as a single-employer

pension plan. Therefore, the Company has restated all

prior period information to account for this plan

under FAS 87 (see Note 2).

The Company adopted FAS 158, on

December 31, 2006. FAS 158 requires an entity to rec-

ognize the funded status of its defined pension

plans – measured as the difference between plan

assets at fair value and the benefit obligation – on the

balance sheet and to recognize changes in the funded

status, that arise during the period but are not recog-

nized as components of net periodic benefit cost,

within other comprehensive income, net of income

taxes. Since the full recognition of the funded status

of an entity’s defined benefit pension plan is recorded

on the balance sheet, an additional minimum liability

(“AML”) is no longer recorded under FAS 158.

However, because the recognition provisions of FAS

158 were adopted as of December 31, 2006, the

Company first measured and recorded changes to its

previously recognized AML through other compre-

hensive income and then applied the recognition

provisions of FAS 158 through accumulated other

comprehensive income to fully recognize the funded

status of the Company’s defined benefit pension

plans.

The following table provides the incremental effect of applying FAS 158 on individual balance sheet line items.

Pre-FAS 158 & FAS 158

without AML 2006 AML Adoption

(In thousands) Adjustment Adjustment Adjustment Ending Balance

Noncurrent-pension asset $ 13,517 $ — $ (5,600) $ 7,917

Noncurrent-intangible pension asset 13,990 (5,704) (8,286) —

Current-pension benefits obligation — — (13,340) (13,340)

Deferred income tax asset

(a)

141,426 (79,405) 78,071 140,092

Noncurrent-pension benefits obligation (420,488) 190,006 (153,795) (384,277)

Accumulated other comprehensive loss,

net of income taxes 184,060 (104,897) 102,950 182,113

(a)

Represents deferred tax asset netted within accumulated other comprehensive loss.

Net periodic pension cost and other amounts recognized in other comprehensive income for all Company-

sponsored pension plans were as follows:

2006 2005 2004

Non- Non- Non-

Qualified Qualified Qualified Qualified Qualified Qualified

(In thousands) Plans Plans All Plans Plans Plans All Plans Plans Plans All Plans

Components of net

periodic pension cost

Service cost $ 51,797 $ 2,619 $ 54,416 $ 47,601 $ 2,342 $ 49,943 $ 43,076 $ 2,155 $ 45,231

Interest cost 89,013 12,164 101,177 85,070 11,435 96,505 81,455 11,160 92,615

Expected return on plan assets (112,607) – (112,607) (102,956) – (102,956) (94,865) – (94,865)

Recognized actuarial loss 23,809 6,665 30,474 22,763 4,795 27,558 22,957 4,111 27,068

Amortization of prior

service cost 1,457 70 1,527 1,493 70 1,563 1,493 259 1,752

Effect of curtailment 512 – 512 ––––––

Effect of special

termination benefits ––– –796796–––

Net periodic pension cost $ 53,981 $ 21,518 $ 75,499 $ 53,971 $19,438 $ 73,409 $ 54,116 $17,685 $ 71,801

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.81

The estimated actuarial loss and prior service cost

that will be amortized from accumulated other com-

prehensive income into net periodic pension cost

over the next fiscal year are $16.2 million and

$1.5 million, respectively.

In connection with collective bargaining

agreements, the Company contributes to several

multi-employer pension plans. Contributions are

made in accordance with the formula in the relevant

agreements. Pension cost for these plans is not

reflected above and was approximately $16 million in

2006 and 2005 and $17 million in 2004.

P.82 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The changes in the benefit obligation and plan assets as of December 2006 and December 2005, for all

Company-sponsored pension plans, were as follows:

2006 2005

Non- Non-

Qualified Qualified Qualified Qualified

(In thousands) Plans Plans All Plans Plans Plans All Plans

Change in benefit obligation

Benefit obligation at beginning of year $1,652,890 $ 228,129 $1,881,019 $1,495,141 $ 202,403 $ 1,697,544

Service cost 51,797 2,619 54,416 47,601 2,342 49,943

Interest cost 89,013 12,164 101,177 85,070 11,435 96,505

Plan participants’ contributions 67 – 67 71 – 71

Actuarial (gain)/loss (110,148) 18,615 (91,533) 86,641 23,849 110,490

Special termination benefits/curtailments (1,864) (425) (2,289) –796796

Benefits paid (78,122) (13,605) (91,727) (61,634) (12,307) (73,941)

Effects of change in currency conversion – 332 332 –(389)(389)

Benefit obligation at end of year 1,603,633 247,829 1,851,462 1,652,890 228,129 1,881,019

Change in plan assets

Fair value of plan assets at beginning of year 1,329,264 – 1,329,264 1,262,152 – 1,262,152

Actual return on plan assets 195,278 – 195,278 74,123 – 74,123

Employer contributions 15,275 13,605 28,880 54,552 12,307 66,859

Plan participants’ contributions 67 – 67 71 71

Benefits paid (78,122) (13,605) (91,727) (61,634) (12,307) (73,941)

Fair value of plan assets at end of year 1,461,762 – 1,461,762 1,329,264 – 1,329,264

Funded status (141,871) (247,829) (389,700) (323,626) (228,129) (551,755)

Unrecognized actuarial loss –––428,996 88,222 517,218

Unrecognized prior service cost –––12,605 1,334 13,939

Net amount recognized $ (141,871) $ (247,829)$ (389,700)$ 117,975 $(138,573)$ (20,598)

Amount recognized in the Consolidated Balance Sheets

Noncurrent assets $7,917$ –$7,917$–$–$–

Current liabilities – (13,340) (13,340) –––

Noncurrent liabilities (149,788) (234,489) (384,277) –––

Pension asset –––20,182 – 20,182

Accrued benefit cost –––(182,305) (197,952) (380,257)

Intangible asset –––12,656 1,334 13,990

Accumulated other comprehensive loss –––267,442 58,045 325,487

Net amount recognized $ (141,871) $ (247,829)$ (389,700)$ 117,975 $ (138,573)$ (20,598)

Amount recognized in Accumulated other

comprehensive income

Actuarial loss $ 210,505 $ 99,801 $ 310,306 $–$–$–

Prior service cost 10,635 1,264 11,899 –––

Total $ 221,140 $ 101,065 $ 322,205 $–$–$–

The accumulated benefit obligation for all pension

plans was $1.7 billion as of December 2006

and December 2005.

Information for pension plans with an accu-

mulated benefit obligation in excess of plan assets as of

December 2006 and December 2005 was as follows:

(In thousands) 2006 2005

Projected benefit obligation $568,666 $1,881,019

Accumulated benefit obligation $512,444 $1,689,267

Fair value of plan assets $230,218 $1,329,264

Additional information about the Company’s pension

plans were as follows:

(In thousands) 2006 2005

(Decrease)/Increase in minimum

pension liability included in other

comprehensive income $(184,303) $94,440

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.83

Weighted-average assumptions used in the actuarial

computations to determine benefit obligations as of

December 2006 and December 2005, were as follows:

(Percent) 2006 2005

Discount rate 6.00% 5.50%

Rate of increase in

compensation levels 4.50% 4.50%

Weighted-average assumptions used in the actuarial

computations to determine net periodic pension cost

were as follows:

(Percent) 2006 2005 2004

Discount rate 5.50% 5.75% 6.00%

Rate of increase in

compensation levels 4.50% 4.50% 4.50%

Expected long-term

rate of return on assets 8.75% 8.75% 8.75%

The Company selects its discount rate utilizing a

methodology that equates the plans’ projected benefit

obligations to a present value calculated using the

Citigroup Pension Discount Curve.

The methodology described above includes

producing a cash flow of annual accrued benefits as

defined under the Projected Unit Cost Method as pro-

vided by FAS 87. For active participants, service is

projected to the end of the current measurement date

and benefit earnings are projected to the date of ter-

mination. The projected plan cash flow is discounted

to the measurement date using the Annual Spot Rates

provided in the Citigroup Pension Discount Curve. A

single discount rate is then computed so that the pres-

ent value of the benefit cash flow (on a projected

benefit obligation basis as described above) equals

the present value computed using the Citigroup

annual rates. The discount rate determined on this

basis increased to 6.00% as of December 2006 from

5.50% as of December 2005.

In determining the expected long-term rate

of return on assets, the Company evaluated input

from its investment consultants, actuaries and invest-

ment management firms, including their review of

asset class return expectations, as well as long-term

historical asset class returns. Projected returns by

such consultants and economists are based on broad

equity and bond indices. Additionally, the Company

considered its historical 10-year and 15-year

compounded returns, which have been in excess of

the Company’s forward-looking return expectations.

The Company’s pension plan weighted-

average asset allocations as of December 2006 and

December 2005, by asset category, were as follows:

Percentage of Plan Assets

Asset Category 2006 2005

Equity securities 76% 75%

Debt securities 20% 22%

Real estate 4% 3%

Total 100% 100%

The Company’s investment policy is to maximize the

total rate of return (income and appreciation) with a

view to the long-term funding objectives of the

pension plans. Therefore, the pension plan assets are

diversified to the extent necessary to minimize risks

and to achieve an optimal balance between risk and

return and between income and growth of assets

through capital appreciation.

The Company’s policy is to allocate pension

plan funds within a range of percentages for each

major asset category as follows:

% Range

Equity securities 65-75%

Debt securities 17-28%

Real estate 0-5%

Other 0-5%

The Company may direct the transfer of assets

between investment managers in order to rebalance

the portfolio in accordance with asset allocation

ranges above to accomplish the investment objectives

for the pension plan assets.

In 2006 and 2005, the Company made contri-

butions of $15.3 million and $54.6 million,

respectively, to its qualified pension plans. Although

the Company does not have any quarterly funding

requirements in 2007 (under the Employee

Retirement Income Security Act of 1974, as amended,

and Internal Revenue Code requirements), the

Company will make contractual funding contribu-

tions of approximately $13 million in connection with

The New York Times Newspaper Guild pension plan.

We may elect to make additional contributions to our

other pension plans. The amount of these contribu-

tions, if any, would be based on the results of the

January 1, 2007 valuation, market performance and

interest rates in 2007 as well as other factors.

Assuming that the Company achieves an 8.75%

return on pension assets, that interest rates are stable

P.84 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

and that there are no changes to the Company’s

benefits structure in 2007, it expects making contribu-

tions in 2007 in the same range as the contributions

made in 2006.

The following benefit payments (net of plan

participant contributions for non-qualified plans)

under the Company’s pension plans, which reflect

expected future services, are expected to be paid:

Plans

Non-

(In thousands) Qualified Qualified Total

2007 $ 54,325 $ 13,340 $ 67,665

2008 55,694 13,455 69,149

2009 57,656 13,812 71,468

2010 59,426 14,061 73,487

2011 61,834 14,586 76,420

2012-2016 375,340 86,210 461,550

The amount of cost recognized for defined contribu-

tion benefit plans was $14.3 million for 2006,

$13.4 million for 2005 and $13.0 million for 2004.

13. Postretirement and Postemployment Benefits

The Company provides health and life insurance ben-

efits to retired employees (and their eligible

dependents) who are not covered by any collective

bargaining agreements if the employees meet speci-

fied age and service requirements. The Company’s

policy is to pay its portion of insurance premiums

and claims from Company assets.

In addition, the Company contributes to a

postretirement plan under the provisions of a collec-

tive bargaining agreement. The information included

in this Note reflects, for all periods presented, a

postretirement plan between the Company and its

subsidiaries, on the one hand, and The New York

Times Newspaper Guild, on the other. Prior to the

fourth quarter of 2006, this postretirement plan was

accounted for as a multi-employer plan. The

Company has concluded that it should have been

accounted for as a single-employer plan. Therefore,

the Company has restated all prior periods to account

for this plan under FAS 106 (see Note 2). The

Company’s postretirement liability to the Guild

union employees is capped at the present value of

expected future contributions allocated to retiree cov-

erage under the collective bargaining agreement.

In accordance with FAS 106, the Company

accrues the costs of postretirement benefits during

the employees’ active years of service.

The Company adopted FAS 158 on

December 31, 2006. FAS 158 requires an entity to

recognize the funded status of its postretirement

plans on the balance sheet and to recognize changes

in the funded status, that arise during the period but

are not recognized as components of net periodic

benefit cost, within other comprehensive income, net

of income taxes. The 2006 disclosure below includes

the recognition provisions of FAS 158. The following

table provides the incremental effect of applying

FAS 158 on individual balance sheet line items.

FAS 158

Pre-FAS 158 Adoption Post-FAS 158

(In thousands) Adjustment Adjustment Adjustment

Current-

postretirement

benefits

obligation $ — $(13,205) $ (13,205)

Deferred

income tax

asset

(a)

— 11,293 11,293

Noncurrent-

postretirement

benefits

obligation (273,620) 16,880 (256,740)

Accumulated

other

comprehensive

loss, net of

income taxes — (14,968) (14,968)

(a)

Represents deferred tax asset netted within accumulated other

comprehensive loss.

In accordance with the adoption of FAS 158, the

Company recorded income of $3.7 million (before

deferred taxes) to accumulated other comprehensive

income. Included within this amount is an actuarial gain

related to the Retiree Drug Subsidy (see below) which is

non-taxable. Therefore, the deferred tax amount

included in the table above does not include deferred

taxes on the gain related to the Retiree Drug Subsidy.

Net periodic postretirement cost was as follows:

(In thousands) 2006 2005 2004

Components of net

periodic

postretirement

benefit cost

Service cost $ 9,502 $ 8,736 $ 8,104

Interest cost 14,668 14,594 14,393

Expected return on

plan assets (40) (108) (171)

Recognized actuarial loss 2,971 4,724 1,956

Amortization of prior

service credit (7,176) (6,176) (6,409)

Net periodic

postretirement

benefit cost $19,925 $21,770 $17,873

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.85

The estimated actuarial loss and prior service credit

that will be amortized from accumulated other

comprehensive income into net periodic benefit

cost over the next fiscal year is $3.6 million and

$8.3 million, respectively.

In connection with collective bargaining

agreements, the Company contributes to several wel-

fare plans. Contributions are made in accordance with

the formula in the relevant agreement. Postretirement

costs related to these welfare plans are not reflected

above and were approximately $24 million in 2006,

$23 million in 2005 and $21 million in 2004.

The accrued postretirement benefit liability

and the change in benefit obligation as of

December 2006 and December 2005 were as follows:

(In thousands) 2006 2005

Change in benefit obligation

Benefit obligation at beginning of year $ 284,646 $260,701

Service cost 9,502 8,736

Interest cost 14,668 14,594

Plan participants’ contributions 2,855 2,370

Plan amendments (28,628) –

Benefits paid (19,569) (17,527)

Medicare subsidies received 905 –

Actuarial loss 5,566 15,772

Benefit obligation at the end of year 269,945 284,646

Change in plan assets

Fair value of plan assets at

beginning of year 1,135 2,194

Actual return on plan assets (178) (467)

Employer contributions 14,852 14,565

Plan participants’ contributions 2,855 2,370

Benefits paid (19,569) (17,527)

Medicare subsidies received 905 –

Fair value of plan assets at end of year – 1,135

Funded status (269,945) (283,511)

Unrecognized actuarial loss – 74,207

Unrecognized prior service credit – (59,265)

Net amount recognized $(269,945) $(268,569)

Amount recognized in the

Consolidated Balance Sheets

Current liabilities $ (13,205) $–

Noncurrent liabilities (256,740) –

Accrued benefit cost – (268,569)

Net amount recognized $(269,945) $(268,569)

Amount recognized in

Accumulated other

comprehensive income

Prior service credit $ (80,718) $–

Actuarial loss 77,043 –

Total $ (3,675) $–

The Company adopted FASB Staff Position No. 106-2,

in connection with the Medicare Prescription Drug

Improvement and Modernization Act of 2003

(“Medicare Reform Act”). Pursuant to the Medicare

Reform Act, through December 2005, the Company

integrated its postretirement benefit plan with

Medicare (the “Integration Method”). Under this

option benefits paid by the Company are offset by

Medicare. Beginning in 2006, the Company elected to

receive the Medicare retiree drug subsidy (“Retiree

Drug Subsidy”) instead of the benefit under the

Integration Method. The Company’s accumulated

benefit obligation was reduced by $47.5 million due to

the Retiree Drug Subsidy.

The Retiree Drug Subsidy reduced net peri-

odic postretirement benefit cost in 2006 as follows:

Service cost $2,060

Interest cost 2,817

Net amortization and deferral of actuarial loss 2,128

Total $ 7,005

In February 2006 the Company announced amend-

ments, such as the elimination of retiree-medical

benefits to new employees and the elimination of life

insurance benefits to new retirees, to its postretire-

ment benefit plan effective January 1, 2007. In

addition, effective February 1, 2007 certain retirees at the

New England Media Group were moved to a new bene-

fits plan. In connection with this change, the insurance

premiums were reduced while benefits remained com-

parable to that of the previous benefits plan. These

changes will reduce the future obligations and

expense to the Company under these plans.

Weighted-average assumptions used in the

actuarial computations to determine the postretire-

ment benefit obligations as of December 2006 and

December 2005 were as follows:

2006 2005

Discount rate 6.00% 5.50%

Estimated increase in

compensation level 4.50% 4.50%

Weighted-average assumptions used in the actuarial

computations to determine net periodic postretire-

ment cost were as follows:

2006 2005 2004

Discount rate 5.50% 5.75% 6.00%

Estimated increase in

compensation level 4.50% 4.50% 4.50%

P.86 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The assumed health-care cost trend rates as of

December 2006 and December 2005, were as follows:

2006 2005

Health-care cost

trend rate assumed

for next year:

Medical 6.75%-8.50% 7.00%-9.00%

Prescription 10.50% 11.50%

Rate to which the cost

trend rate is assumed to

decline (ultimate trend rate) 5.00% 5.00%

Year that the rate reaches

the ultimate trend rate 2013 2013

Assumed health-care cost trend rates have a signifi-

cant effect on the amounts reported for the

health-care plans. A one-percentage point change in

assumed health-care cost trend rates would have the

following effects:

One-Percentage Point

(In thousands) Increase Decrease

Effect on total service and

interest cost for 2006 $ 3,547 $ (2,854)

Effect on accumulated

postretirement benefit

obligation as of December 2006 $32,094 $(25,766)

The following benefit payments (net of plan partici-

pant contributions) under the Company’s

postretirement plan, which reflect expected future

services, are expected to be paid:

(In thousands) Amount

2007 $ 14,328

2008 13,896

2009 14,602

2010 15,208

2011 15,783

2012-2016 90,709

The Company expects to receive cash payments of

approximately $18 million related to the Retiree Drug

Subsidy from 2007 through 2016. The benefit

payments in the above table are not reduced for the

Retiree Drug Subsidy.

In accordance with FAS No. 112, Employers’

Accounting for Postemployment Benefits, the

Company accrues the cost of certain benefits

provided to former or inactive employees after

employment but before retirement (such as workers’

compensation, disability benefits and health-care

continuation coverage) during the employees’ active

years of service. The accrued cost of these benefits

amounted to $9.8 million as of December 2006 and

$10.1 million as of December 2005.

14. Other Liabilities

The components of the “Other Liabilities—Other”

balance in the Company’s Consolidated Balance

Sheets were as follows:

December

2006 2005

Deferred compensation (see below) $142,843 $137,973

Other liabilities 153,235 143,551

Total $296,078 $281,524

Deferred compensation consists primarily of defer-

rals under a Company-sponsored deferred executive

compensation plan (the “DEC plan”). The DEC plan

obligation is recorded at fair market value and was

$137.0 million as of December 2006 and $130.1 million

as of December 2005.

The DEC plan enables certain eligible execu-

tives to elect to defer a portion of their compensation

on a pre-tax basis. The deferrals are initially for a

period of a minimum of two years after which time

taxable distributions must begin unless the period is

extended by the participant. Employees’ contribu-

tions earn income based on the performance of

investment funds they select.

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.87

In 2005 and 2004, the difference between basic and

diluted shares is primarily due to the assumed exercise

of stock options included in the diluted earnings per

share computation. In 2006, potential common shares

were not included in diluted shares because the loss

from continuing operations makes them antidilutive.

Stock options with exercise prices that

exceeded the fair market value of the Company’s com-

mon stock had an antidilutive effect and, therefore, were

excluded from the computation of diluted earnings per

share. Approximately 27 million stock options with

exercise prices ranging from $32.89 to $48.54 were

excluded from the computation in 2005. Approximately

13 million stock options with exercise prices ranging

from $44.23 to $48.54 were excluded from the computa-

tion in 2004.

16. Stock-Based Awards

Under the Company’s 1991 Executive Stock Incentive

Plan (the “1991 Executive Stock Plan”) and the

1991 Executive Cash Bonus Plan (together, the “1991

Executive Plans”), the Board of Directors may author-

ize awards to key employees of cash, restricted and

unrestricted shares of the Company’s Class A

Common Stock (“Common Stock”), retirement units

(stock equivalents) or such other awards as the Board

of Directors deems appropriate.

The Company invests deferred compensa-

tion in life insurance products designed to closely

mirror the performance of the investment funds that

the participants select. The Company’s investments

in life insurance products are recorded at fair market

value and are included in “Miscellaneous Assets” in

the Company’s Consolidated Balance Sheets, and

were $137.6 million as of December 2006 and $129.3

million as of December 2005.

Other liabilities in the preceding table above

primarily include the Company’s tax contingency

and worker’s compensation liability.

15. Earnings Per Share

Basic and diluted earnings per share were as follows:

(In thousands, except per share data) 2006 2005 2004

BASIC (LOSS)/EARNINGS PER SHARE COMPUTATION

Numerator

(Loss)/income from continuing operations $(568,171) $243,313 $264,985

Discontinued operations, net of income taxes – Broadcast Media Group 24,728 15,687 22,646

Cumulative effect of a change in accounting principle, net of income taxes — (5,527) —

Net (loss)/income $(543,443) $ 253,473 $ 287,631

Denominator

Average number of common shares outstanding 144,579 145,440 147,567

(Loss)/income from continuing operations $ (3.93) $1.67 $1.80

Discontinued operations, net of income taxes – Broadcast Media Group 0.17 0.11 0.15

Cumulative effect of a change in accounting principle, net of income taxes — (0.04) —

Net (loss)/income $ (3.76) $ 1.74 $ 1.95

DILUTED (LOSS)/EARNINGS PER SHARE COMPUTATION

Numerator

(Loss)/income from continuing operations $(568,171) $243,313 $264,985

Discontinued operations, net of income taxes – Broadcast Media Group 24,728 15,687 22,646

Cumulative effect of a change in accounting principle, net of income taxes — (5,527) —

Net (loss)/income $(543,443) $ 253,473 $ 287,631

Denominator

Average number of common shares outstanding 144,579 145,440 147,567

Incremental shares for assumed exercise of securities — 437 1,790

Total shares 144,579 145,877 149,357

(Loss)/income from continuing operations $ (3.93) $ 1.67 $ 1.78

Discontinued operations, net of income taxes – Broadcast Media Group 0.17 0.11 0.15

Cumulative effect of a change in accounting principle, net of income taxes — (0.04) —

Net (loss)/income $ (3.76) $ 1.74 $ 1.93

P.88 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The 2004 Non-Employee Directors’ Stock

Incentive Plan (the “2004 Directors’ Plan”) provides

for the issuance of up to 500,000 shares of Common

Stock in the form of stock options or restricted stock

awards. Under the 2004 Directors’ Plan, each non-

employee director of the Company has historically

received annual grants of non-qualified options with

10-year terms to purchase 4,000 shares of Common

Stock from the Company at the average market price

of such shares on the date of grant. Additionally,

shares of restricted stock may be granted under the

plan. Restricted stock has not been awarded under

the 2004 Directors’ Plan.

In December 2004, the FASB issued

FAS 123-R. FAS 123-R is a revision of FAS No. 123, as

amended, Accounting for Stock-Based Compensation

(“FAS 123”), and supersedes APB 25. FAS 123-R elim-

inates the alternative of using the intrinsic value

method of accounting that was provided in FAS 123,

which generally resulted in no compensation expense

recorded in the financial statements related to the

issuance of stock options or shares issued under the

Company’s Employee Stock Purchase Plan (“ESPP”).

FAS 123-R requires that the cost resulting from all

share-based payment transactions be recognized in

the financial statements. FAS 123-R establishes fair

value as the measurement objective in accounting for

share-based payment arrangements and requires all

companies to apply a fair-value-based measurement

method in accounting for generally all share-based

payment transactions with employees.

At the beginning of 2005, the Company

adopted FAS 123-R. While FAS 123-R was not

required to be adopted until the first annual reporting

period beginning after June 15, 2005, the Company

elected to adopt it before the required effective date.

The Company adopted FAS 123-R using a modified

prospective application, as permitted under

FAS 123-R. Accordingly, prior period amounts have

not been restated. Under this application, the

Company is required to record compensation

expense for all awards granted after the date of adop-

tion and for the unvested portion of previously

granted awards that remain outstanding at the date

of adoption.

Before the adoption of FAS 123-R, the

Company applied APB 25 to account for its stock-based

compensation expense. Under APB 25, the Company

generally only recorded stock-based compensation

expense for restricted stock and long-term incentive

plan awards (“LTIP awards”). Under APB 25, the

Company was not required to recognize compensation

expense for the cost of stock options or shares issued

under the Company’s ESPP. In accordance with the

adoption of FAS 123-R, the Company records stock-

based compensation expense for the cost of stock

options, restricted stock units, restricted stock, shares

issued under the ESPP (in 2005 only) and LTIP awards

(together, “Stock-Based Awards”). Stock-based com-

pensation expense in 2006 was $23.4 million

($13.6 million after tax or $.09 per basic and diluted

share) and in 2005 was $32.2 million ($21.9 million after

tax or $.15 per basic and diluted share).

FAS 123-R requires that stock-based com-

pensation expense be recognized over the period

from the date of grant to the date when the award is

no longer contingent on the employee providing

additional service (the “substantive vesting period”).

The Company’s 1991 Executive Stock Plan and the

2004 Directors’ Plan provide that awards generally

vest over a stated vesting period, and upon the

retirement of an employee/Director. In periods

before the Company’s adoption of FAS 123-R (pro

forma disclosure only), the Company recorded

stock-based compensation expense for awards to

retirement-eligible employees over the awards’

stated vesting period (the “nominal vesting period”).

With the adoption of FAS 123-R, the Company will

continue to follow the nominal vesting period

approach for the unvested portion of awards granted

before the adoption of FAS 123-R and follow the sub-

stantive vesting period approach for awards granted

after the adoption of FAS 123-R.

The following table details the effect on net

(loss)/income and loss/earnings per share had stock-

based compensation expense for the Stock-Based

Awards been recorded in 2004 based on the fair-value

method under FAS 123. The reported and pro forma net

(loss)/income and loss/earnings per share for 2006 and

2005 in the table below are the same since stock-based

compensation expense is calculated under the

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.89

provisions of FAS 123-R. These amounts are included in

the table below only to provide the detail for a compar-

ative presentation to 2004.

(In thousands,

except per share data) 2006 2005 2004

Reported net (loss)/

income $(543,443) $253,473 $287,631

Add

Total stock-based

compensation expense

included in reported

net (loss)/income, net of

related tax effects 13,584 21,850 1,478

Deduct

Total stock-based

compensation expense

determined under

fair-value method for

all awards, net of related

tax effects (13,584) (21,850) (63,563)

Pro forma net

(loss)/income $(543,443) $253,473 $225,546

(Loss)/earnings per share

Basic – reported $ (3.76) $ 1.74 $ 1.95

Basic – pro forma $ (3.76) $ 1.74 $ 1.53

Diluted – reported $ (3.76) $ 1.74 $ 1.93

Diluted – pro forma $ (3.76) $ 1.74 $ 1.51

In June 2004 the Company accelerated the vesting of

certain employee stock options where the exercise

price of the stock options was above the Company’s

stock price. The acceleration of vesting resulted in

additional stock-based compensation expense of

$20.5 million (net of income taxes) that would have

otherwise been reflected in the table above in periods

after 2004 and $7.7 million in periods after 2005. The

decrease in stock-based compensation expense in

2005 compared with 2004 is due to a series of actions

taken by the Company over the past three years such

as reducing awards granted to employees,

accelerating the vesting of certain stock options in

2004 and changing the terms of future awards.

Had the Company not adopted FAS 123-R in

2005, stock-based compensation expense would have

excluded the cost of stock options and shares issued

under the ESPP. The incremental stock-based com-

pensation expense for these awards, due to the

adoption of FAS 123-R, caused income before income

taxes and minority interest to decrease by $21.3 mil-

lion, net income to decrease by $15.2 million and

basic and diluted earnings per share to decrease by

$.10 per share. In addition, in connection with the

adoption of FAS 123-R, net cash provided by operat-

ing activities decreased and net cash provided by

financing activities increased in 2005 by approxi-

mately $6 million related to excess tax benefits from

Stock-Based Awards.

In 2005, the Company adopted FASB Staff

Position FAS 123(R)-3, (“FSP 123-R”). FSP 123 (R)-3

allows a “short cut” method of calculating its pool of

excess tax benefits (“APIC Pool”) available to absorb

tax deficiencies recognized subsequent to the adop-

tion of FAS 123-R. The Company calculated its APIC

Pool utilizing the short cut method under

FSP 123 (R)3. The Company’s APIC Pool is approxi-

mately $43 million as of December 31, 2006.

Stock Options

The 1991 Executive Stock Plan provides for grants of

both incentive and non-qualified stock options prin-

cipally at an option price per share of 100% of the fair

market value of the Common Stock on the date of

grant. Stock options have generally been granted

with a 3-year vesting period and a 6-year term, or a

4-year vesting period and a 10-year term. The stock

options vest in equal annual installments over the

nominal vesting period or the substantive vesting

period, whichever is applicable.

The 2004 Directors’ Plan provides for grants

of stock options to non-employee Directors at an

option price per share of 100% of the fair market

value of Common Stock on the date of grant. Stock

options are granted with a 1-year vesting period and

a 10-year term. The stock options vest over the nomi-

nal vesting period or the substantive vesting period,

whichever is applicable. The Company’s Directors

are considered employees under the provisions of

FAS 123-R.

P.90 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The total intrinsic value for stock options exercised

was approximately $4 million in 2006 and $13 million

in 2005.

The amount of cash received from the exer-

cise of stock options was approximately $16 million

and the related tax benefit was approximately

$2 million in 2006.

The fair value of the stock options granted

was estimated on the date of grant using a Black

Scholes option valuation model that uses the assump-

tions noted in the following table. The risk-free rate is

based on the U.S. Treasury yield curve in effect at the

time of grant. Beginning in 2005, with the adoption of

FAS 123-R, the expected life (estimated period of time

outstanding) of stock options granted was estimated

using the historical exercise behavior of employees

for grants with a 10-year term. Stock options have

historically been granted with this term, and there-

fore information necessary to make this estimate was

available. The expected life of stock options granted

with a 6-year term was determined using the average

of the vesting period and term, an accepted method

under the SEC’s Staff Accounting Bulletin No. 107,

Share-Based Payment. Expected volatility was based

on historical volatility for a period equal to the stock

option’s expected life, ending on the date of grant,

and calculated on a monthly basis.

Changes in the Company’s stock options in 2006 were as follows:

2006

Weighted

Weighted Average Aggregate

Average Remaining Intrinsic

Exercise Contractual Value

(Shares in thousands) Options Price Term (Years) $(000s)

Options outstanding, beginning of year 31,200 $41

Granted 2,676 24

Exercised (813) 19

Forfeited (871) 43

Options outstanding, end of year 32,192 $40 5 $1,414

Options exercisable, end of year 27,893 $42 5 $ 156

2006 2005 2004

Term (In years) 6 10 10 6 10 10 6 10

Vesting (In years) 3 1 4 31431& 4

Risk-free interest rate 4.64% 4.87% 4.63% 4.40% 3.96% 4.40% 3.33% 3.62%

Expected life 4.5 years 5 years 6 years 4.5 years 5 years 5 years 4 years 5 years

Expected volatility 17.29% 19.20% 18.82% 19.27% 19.66% 19.07% 19.09% 19.65%

Expected dividend yield 3.04% 2.65% 3.04% 2.43% 2.11% 2.43% 1.50% 1.50%

Weighted average fair value $3.65 $4.85 $4.38 $4.90 $6.28 $5.10 $6.64 $8.09

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.91

For grants prior to 2005 (before the adoption of

FAS 123-R), the fair value for stock options with 10-

year terms and different vesting periods was

calculated on a combined basis. For grants made

beginning in 2005, with the adoption of FAS 123-R,

the fair value for stock options granted with different

vesting periods was calculated separately.

Restricted Stock

The 1991 Executive Stock Plan also provides for

grants of restricted stock. The Company did not grant

restricted stock in 2005 or 2006 but rather granted

restricted stock units. Restricted stock vest at the end

of the nominal vesting period or the substantive vest-

ing period, whichever is applicable. The fair value of

restricted stock is the excess of the average market

price of Common Stock at the date of grant over the

exercise price, which is zero.

Changes in the Company’s restricted stock

in 2006 were as follows:

2006

Weighted

Average

Restricted Grant-Date

(Shares in thousands) Shares Fair Value

Unvested restricted stock at

beginning of period 711 $41

Granted ——

Vested (122) 43

Forfeited (20) 40

Unvested restricted stock at

end of period 569 $41

The weighted average grant date fair value in 2004

was approximately $40.

Under the provisions of FAS 123-R, the

recognition of deferred compensation, representing

the amount of unrecognized restricted stock expense

that is reduced as expense is recognized, at the date

restricted stock is granted, is no longer required.

Therefore, in the first quarter of 2005, the amount that

had been in “Deferred compensation” in the

Consolidated Balance Sheet was reversed to zero.

Restricted Stock Units

The 1991 Executive Stock Plan also provides for

grants of other awards, including restricted stock

units. In 2005 and 2006, the Company granted

restricted stock units with a 3-year vesting period and

a 5-year vesting period. Each restricted stock unit rep-

resents the Company’s obligation to deliver to the

holder one share of Common Stock upon vesting.

Restricted stock units vest at the end of the nominal

vesting period or the substantive vesting period,

whichever is applicable. The fair value of restricted

stock units is the excess of the average market price of

Common Stock at the date of grant over the exercise

price, which is zero.

Changes in the Company’s restricted stock

units in 2006 were as follows:

2006

Weighted

Average

Restricted Grant-Date

(Shares in thousands) Stock Units Fair Value

Unvested restricted stock units

at beginning of period 530 $27

Granted 270 24

Vested (63) 26

Forfeited (18) 27

Unvested restricted stock units

at end of period 719 $26

The weighted average grant date fair value in 2005

was approximately $27.

ESPP

Under the ESPP, participating employees purchase

Common Stock through payroll deductions.

Employees may withdraw from an offering before the

purchase date and obtain a refund of the amounts with-

held through payroll deductions plus accrued interest.

In 2006, there was one 12-month offering

with an undiscounted purchase price, set at 100% of

the average market price on December 29, 2006. With

these modifications, the ESPP is not considered a

compensatory plan, and therefore compensation

expense was not recorded for shares issued under the

ESPP in 2006.

In 2005, there were two 6-month ESPP offer-

ings with a purchase price set at a 15% discount of

the average market price at the beginning of the

offering period. There were no shares issued under

the 2005 offerings because the market price of the

stock on the purchase date was lower than the offer-

ing price. Participants’ contributions (plus accrued

interest) were automatically refunded under the

terms of the offerings.

In 2004 and prior offerings, the offering

period was generally 12 months and the purchase

price was the lesser of 85% of the average market

price of the Common Stock on the date the offering

commenced or the date the offering ended.

Approximately 1 million shares were issued under

the ESPP in 2004.

P.92 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

The fair value of the offerings was esti-

mated on the date of grant using a Black-Scholes

option valuation model that uses the assumptions

noted in the following table. The risk-free rate is

based on the U.S. Treasury yield curve in effect at the

time of grant. Expected volatility was based on the

implied volatility on the day of grant.

LTIP Awards

The Company’s 1991 Executive Plans provide for

grants of cash awards to key executives payable at the

end of a multi-year performance period. The target

award is determined at the beginning of the period

and can increase to a maximum of 175% of the target

or decrease to zero.

For awards granted for cycles beginning prior

to 2006, the actual payment, if any, is based on a key

performance measure, Total Shareholder Return

(“TSR”). TSR is calculated as stock appreciation plus

reinvested dividends. At the end of the period, the LTIP

payment will be determined by comparing the

Company’s TSR to the TSR of a predetermined peer

group of companies. For awards granted for the cycle

beginning in 2006, the actual payment, if any, will

depend on two performance measures. Half of the

award is based on the TSR of a predetermined peer

group of companies during the performance period

and half is based on the percentage increase in the

Company’s revenue in excess of the percentage

increase in costs and expenses during the same period.

Achievement with respect to each element of the award

is independent of the other. All payments are subject to

approval by the Board’s Compensation Committee.

The LTIP awards based on TSR are classified

as liability awards under the provisions of FAS 123-R

because the Company incurs a liability, payable in

cash, indexed to the Company’s stock price. The LTIP

award liability is measured at its fair value at the end

of each reporting period and, therefore, will fluctuate

based on the operating results and the performance of

the Company’s TSR relative to the peer group’s TSR.

Based on an independent valuation of its

LTIP awards, the Company recorded an expense of

$0.8 million in 2006 and a favorable adjustment

of $2.4 million in 2005. The fair value of the LTIP

awards was calculated by comparing the Company’s

TSR against a predetermined peer group’s TSR over

the performance period. The LTIP awards are valued

using a Monte Carlo simulation. This valuation tech-

nique includes estimating the movement of stock

prices and the effects of volatility, interest rates, and

dividends. These assumptions are based on historical

data points and are taken from market data sources.

The payout of the LTIP awards are based on relative

performance; therefore, correlations in stock

price performance among the peer group companies

also factor into the valuation. There were no LTIP

awards paid in 2006 and 2005 in connection with the

performance period ending in 2005 or 2004.

For awards granted for the cycle beginning in

2007, the actual payment, if any, will no longer have a

performance measure based on TSR. Thus, LTIP

awards granted for the cycle beginning in 2007 will not

be classified as liability awards.

As of December 2006, unrecognized com-

pensation expense related to the unvested portion of

the Company’s Stock-Based Awards was approxi-

mately $31 million and is expected to be recognized

over a weighted-average period of approximately

3 years.

The Company generally issues shares for the

exercise of stock options from unissued reserved shares

and issues shares for restricted stock units and shares

under the ESPP from treasury shares.

Shares of Class A Common Stock reserved

for issuance were as follows:

December

(In thousands) 2006 2005

Stock options

Outstanding 32,192 31,200

Available 4,075 5,880

Employee Stock Purchase Plan

Available 7,992 7, 9 9 2

Restricted stock units,

retirement units and other

awards

Outstanding 750 633

Available 474 644

Total Outstanding 32,942 31,833

Total Available 12,541 14,516

2005

January June 2004

Risk-free interest rate 2.36% 3.25% 1.27%

Expected life 6 months 6 months 1.2 years

Expected volatility 21.39% 21.46% 28.63%

Expected dividend yield 1.51% 2.12% 1.75%

Weighted-average fair value $6.65 $5.04 $8.13

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.93

In addition to the shares available in the table above,

as of December 2006 and December 2005, there were

approximately 833,000 and 834,000 shares of Class B

Common Stock available for conversion into shares

of Class A Common Stock.

17. Stockholders’ Equity

Shares of the Company’s Class A and Class B

Common Stock are entitled to equal participation in

the event of liquidation and in dividend declarations.

The Class B Common Stock is convertible at the hold-

ers’ option on a share-for-share basis into Class A

Common Stock. Upon conversion, the previously

outstanding shares of Class B Common Stock are

automatically and immediately retired, resulting in a

reduction of authorized Class B Common Stock. As

provided for in the Company’s Certificate of

Incorporation, the Class A Common Stock has limited

voting rights, including the right to elect 30% of the

Board of Directors, and the Class A and Class B

Common Stock have the right to vote together on the

reservation of Company shares for stock options and

other stock-based plans, on the ratification of the

selection of a registered public accounting firm and,

in certain circumstances, on acquisitions of the stock

or assets of other companies. Otherwise, except as

provided by the laws of the State of New York, all vot-

ing power is vested solely and exclusively in the

holders of the Class B Common Stock.

The Adolph Ochs family trust holds 88% of

the Class B Common Stock and as a result, has the

ability to elect 70% of the Board of Directors and to

direct the outcome of any matter that does not require

a vote of the Class A Common Stock.

The Company repurchases Class A

Common Stock under its stock repurchase program

from time to time either in the open market or

through private transactions. These repurchases may

be suspended from time to time or discontinued. The

Company repurchased 2.2 million shares in 2006 at an

average cost of $23.67 per share, 1.7 million shares in

2005 at an average cost of $33.08 per share and

6.8 million shares in 2004 at an average cost of $42.79

per share. The cost associated with these repurchases

were $51.1 million in 2006, $57.2 million in 2005 and

$293.0 million in 2004.

The Company retired 3.7 million shares

from treasury stock in 2006. The 2006 retirement

resulted in a reduction of $154.2 million in treasury

stock, $0.4 million in Class A Common Stock,

$93.2 million in additional paid-in capital and

$60.6 million in retained earnings.

The Company did not retire any shares from

treasury stock in 2005. The Company retired 9.2 mil-

lion shares from treasury stock in 2004. The 2004

retirement resulted in a reduction of $405.3 million in

treasury stock, $0.9 million in Class A Common Stock,

$96.0 million in additional paid-in capital and

$308.4 million in retained earnings.

The Board of Directors is authorized to set

the distinguishing characteristics of each series of pre-

ferred stock prior to issuance, including the granting

of limited or full voting rights; however, the consider-

ation received must be at least $100 per share. No

shares of serial preferred stock have been issued.

18. Segment Information

The Company’s reportable segments consist of the

News Media Group and About.com. These segments

are evaluated regularly by key management in

assessing performance and allocating resources.

In September 2006, the Company acquired

Calorie-Count, which is included in the results

of About.com.

In August 2006, the Company acquired

Baseline. Baseline is included in the results of

NYTimes.com, which is part of the News Media Group.

In March 2005, the Company acquired

About, Inc. About.com is a separate reportable seg-

ment of the Company.

In February 2005, the Company acquired

North Bay. North Bay is included in the results of the

News Media Group under the Regional Media Group.

The results of Calorie-Count, Baseline,

About.com and North Bay have been included in the

Company’s Consolidated Financial Statements since

their respective acquisition dates.

Beginning in fiscal 2005, the results of the

Company’s two New York City radio stations, WQXR-

FM and WQEW-AM, formerly part of the Broadcast

Media Group (now a discontinued operation (see Note

5), are included in the results of the News Media

Group as part of The New York Times Media Group.

WQXR, the Company’s classical music radio station, is

working with The New York Times News Services

division to expand the distribution of Times-branded

news and information on a variety of radio platforms,

through The Times’s own resources and in collabora-

tion with strategic partners. WQEW receives revenues

under a time brokerage agreement with Radio Disney

New York, LLC (ABC, Inc.’s successor in interest),

which currently provides substantially all of WQEW’s

programming (see Note 20 for information on the

anticipated sale of WQEW). 2004 information has been

reclassified to conform with the current presentation.

P.94 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

Revenues from individual customers and

revenues, operating profit and identifiable assets of

foreign operations are not significant.

Below is a description of the Company’s

reportable segments:

–News Media Group

The New York Times Media Group, which includes The

New York Times, NYTimes.com, the IHT and the two

New York City radio stations; the New England Media

Group, which includes the Globe, Boston.com and the

Worcester Telegram & Gazette; and the Regional Media

Group, which includes 14 daily newspapers and their

related digital businesses.

–About.com

About.com is an online consumer information

provider.

The Company’s Statements of Operations by segment and Corporate were as follows:

(In thousands) 2006 2005 2004

Revenues

News Media Group $3,209,704 $ 3,187,180 $3,159,412

About.com (from March 18, 2005) 80,199 43,948 —

Tot al $3,289,903 $3,231,128 $3,159,412

Operating (Loss)/Profit

News Media Group $317,157 $ 360,633 $ 511,117

About.com (from March 18, 2005) 30,819 11,685 —

Corporate (54,154) (52,768) (48,504)

Impairment of intangible assets (see Note 4) (814,433) ——

Gain on sale of assets — 122,946 —

Tot al $ (520,611) $ 442,496 $ 462,613

Net income from joint ventures 19,340 10,051 240

Interest expense, net 50,651 49,168 41,760

Other income — 4,167 8,212

(Loss)/income from continuing operations before income

taxes and minority interest (551,922) 407,546 429,305

Income taxes 16,608 163,976 163,731

Minority interest in net loss/(income) of subsidiaries 359 (257) (589)

(Loss)/income from continuing operations (568,171) 243,313 264,985

Discontinued operations, net of income taxes –

Broadcast Media Group 24,728 15,687 22,646

Cumulative effect of a change in accounting principles,

net of income taxes — (5,527) —

Net (loss)/income $(543,443) $253,473 $287,631

Operating profit for the News Media Group and Corporate included a charge of $34.2 million and

$0.1 million, respectively, in 2006 related to staff reduction expenses (see Note 8).

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.95

Advertising, circulation and other revenue, by division of the News Media Group, were as follows:

(In thousands) 2006 2005 2004

The New York Times Media Group

Advertising $ 1,268,592 $1,262,168 $1,222,061

Circulation 637,094 615,508 615,891

Other 171,571 157,037 165,005

Total $ 2,077,257 $2,034,713 $2,002,957

New England Media Group

Advertising $ 425,743 $ 467,608 $ 481,615

Circulation 163,019 170,744 181,009

Other 46,572 36,991 37,971

Total $ 635,334 $ 675,343 $ 700,595

Regional Media Group

Advertising $ 383,207 $ 367,522 $ 349,702

Circulation 89,609 87,723 87,095

Other 24,297 21,879 19,063

Total $ 497,113 $ 477,124 $ 455,860

Total News Media Group

Advertising $ 2,077,542 $ 2,097,298 $2,053,378

Circulation 889,722 873,975 883,995

Other 242,440 215,907 222,039

Total $3,209,704 $ 3,187,180 $3,159,412

The Company’s segment and Corporate depreciation and amortization, capital expenditures and assets recon-

ciled to consolidated amounts were as follows:

(In thousands) 2006 2005 2004

Depreciation and Amortization

News Media Group $ 143,671 $ 119,293 $ 124,640

About.com 11,920 9,165 —

Corporate 6,740 7,022 9,441

Total $ 162,331 $ 135,480 $ 134,081

Capital Expenditures

News Media Group $ 343,776 $ 217,312 $ 199,890

About.com 3,156 1,713 —

Corporate 5,881 2,522 4,252

Total $ 352,813 $ 221,547 $ 204,142

Assets

News Media Group $ 2,537,031 $ 3,273,175 $3,163,066

Broadcast Media Group (see Note 5) 391,209 392,915 355,496

About.com 416,811 419,004 —

Corporate 365,752 240,615 257,084

Investments in joint ventures 145,125 238,369 218,909

Total $ 3,855,928 $4,564,078 $3,994,555

P.96 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

19. Commitments and Contingent Liabilities

New Headquarters Building

The Company is in the process of constructing a

1.54 million square foot condominium office building

(the “Building”) in New York City that will serve as

its new headquarters.

In December 2001, a wholly owned sub-

sidiary of the Company (“NYT”) and FC Lion LLC (a

partnership between an affiliate of the Forest City

Ratner Companies and an affiliate of ING Real Estate)

became the sole members of The New York Times

Building LLC (the “Building Partnership”), a New

York limited liability company established for the

purpose of constructing the Building.

In August 2006, the Building was converted

to a leasehold condominium, and NYT and FC Lion

LLC each acquired ownership of its respective lease-

hold condominium units. Also in August 2006, Forest

City Ratner Companies purchased the ownership

interest in FC Lion LLC of the ING Real Estate affiliate.

In turn, FC Lion LLC assigned its ownership interest in

the Building Partnership and the FC Lion LLC condo-

minium units to FC Eighth Ave., LLC (“FC”).

NYT’s condominium interests represent

approximately 58% of the Building, and FC’s condo-

minium interests represent approximately 42%.

NYT’s and FC’s percentage interests in the Building

Partnership are also approximately 58% and 42%. The

Building Partnership will remain in effect until sub-

stantial completion of the Building’s core and shell.

Before the Building was converted to a

leasehold condominium, the leasehold interest in the

Building was held by the Building Partnership, and,

because of the Company’s majority interest in the

Building Partnership, FC’s interest in the Building

was consolidated in the Company’s financial state-

ments. As a result of the Building’s conversion to a

leasehold condominium, the Building Partnership no

longer holds any leasehold interest in the Building,

and, as a result, FC’s condominium units and capital

expenditures (see below) are not consolidated in the

Company’s financial statements. Accordingly, the

assets and interest in the Building Partnership attrib-

utable to FC, which were included in “Property, plant

and equipment” and “Minority Interest,” were

reversed and are no longer included in the

Company’s Consolidated Balance Sheet as of

December 2006.

In December 2001, the Building Partnership

entered into a land acquisition and development

agreement (“LADA”) for the Building site with a

New York State agency, which subsequently acquired

title to the site through a condemnation proceeding.

Pursuant to the LADA, the Building Partnership was

required to fund all costs of acquiring the Building

site, including the purchase price of approximately

$86 million, and certain additional amounts (“excess

site acquisition costs”) to be paid in connection with

the condemnation proceeding. NYT and FC were

required to post letters of credit for these acquisition

costs. As of December 2006, approximately $14 mil-

lion remained undrawn on a letter of credit posted by

the Company on behalf of NYT and approximately

$11 million remained undrawn on a letter of credit

posted by Forest City Enterprises, Inc. (“FCE”) on

behalf of FC.

The New York State agency leased the site to

the Building Partnership under a 99-year lease (the

“Ground Lease”) dated December 12, 2001.

Concurrently, the Building Partnership entered into

99-year subleases with NYT and FC Lion LLC with

respect to their portions of the Building (the “Ground

Subleases”). On September 24, 2003, the New York

State agency conveyed vacant possession of the

Building site to the Building Partnership.

In connection with the condominium decla-

ration, the Building Partnership’s interest as lessee

under the Ground Lease and as lessor under the

Ground Subleases was assigned to the New York State

agency, and the Ground Subleases now constitute

direct subleases between the New York State agency,

as landlord, and NYT and FC, respectively, as tenants.

Under the terms of the Ground Subleases,

no fixed rent is payable, but NYT and FC, respec-

tively, must make payments in lieu of real estate taxes

(“PILOT”), pay percentage (profit) rent with respect

to retail portions of the Building, and make certain

other payments over the term of the Ground

Subleases. NYT and FC receive credits for allocated

excess site acquisition costs against 85% of the PILOT

payments. The Ground Subleases give NYT and FC,

or their designees, the option to purchase the

Building, which option must be exercised jointly, at

any time after the initial 29 years of the term of the

Ground Subleases for nominal consideration.

Pursuant to the condominium declaration, NYT has

the sole right to determine when the purchase option

will be exercised, provided that FC may require the

exercise of the purchase option if NYT has not done

so within five years prior to the expiration of the 99-

year terms of the Ground Subleases.

In August 2004, the Building Partnership

commenced construction of the Building and, under

the Ground Subleases, NYT and FC are required to

complete construction of the Building’s core and shell

within 36 months following construction commence-

ment, subject to certain extensions. The Company

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.97

and FCE have guaranteed the obligation to complete

construction of the Building in accordance with the

Ground Subleases.

Pursuant to the Operating Agreement of the

Building Partnership, dated December 12, 2001, as

amended June 25, 2004, August 15, 2006, and

January 29, 2007 (the “Operating Agreement”),

the funds for construction of the Building are being

provided through a construction loan and capital

contributions of NYT and FC. On June 25, 2004, the

Building Partnership closed a construction loan with

Capmark Finance, Inc. (formerly GMAC Commercial

Mortgage Corporation) (the “construction lender”),

which is providing a non-recourse loan of up to

$320 million (the “construction loan”), secured by the

Building, for construction of the Building’s core and

shell as well as other development costs. NYT elected

not to borrow any portion of its share of the total costs

of the Building through this construction loan and,

instead, has made and will make capital contribu-

tions to the Building Partnership for its share of

Building costs. FC’s share of the total costs of

the Building are being funded through capital contri-

butions and the construction loan.

In connection with the condominium decla-

ration, the Building Partnership, NYT and FC became

co-borrowers under the construction loan, secured by

NYT’s and FC’s respective condominium interests.

As a co-borrower, the Company was required to

record the amount outstanding of the construction

loan on its financial statements (see Note 9). The

Company also recorded a receivable, due from its

development partner, for the same amount outstand-

ing under the construction loan (see Note 9). As of

December 2006, $124.7 million was outstanding

under the construction loan.

Under the terms of the Operating

Agreement and the construction loan, NYT was

required to fund all of its construction equity related

to construction of the core and shell as well as other

development costs prior to the funding of the con-

struction loan. In May 2006, NYT completed the

funding of its required construction equity and FC

began drawing down on the construction loan to pay

its share of the costs. Because NYT funded its con-

struction equity first, a portion of its funds was used

to fund FC’s share of Building costs (the “FC funded

share”) prior to commencement of funding of the

construction loan. The FC funded share bears interest

at the construction loan rate and is being repaid to

NYT out of construction loan draws. FC’s interest in

the Building Partnership and all of the membership

interests in FC have been pledged to NYT to secure

repayment of the FC funded share.

The construction loan, made through a

building loan agreement and a project loan

agreement, bears interest at an initial annual rate of

LIBOR plus 265 basis points and will mature on

July 1, 2008, subject to the borrowers’ right to extend

the maturity date for two six-month periods upon the

satisfaction of certain terms and conditions. FCE has

provided the construction lender with a guaranty of

completion with respect to the Building conditioned

upon the availability of the construction loan and

NYT construction capital contributions.

Under the terms of the Operating Agreement

and the construction loan, the lien of the construction

loan was scheduled to be released from the NYT con-

dominium units upon substantial completion of the

Building’s core and shell but was to remain upon the

FC condominium units until the construction loan was

repaid in full. If FC was unable to obtain other financ-

ing to repay the construction loan upon substantial

completion of the Building’s core and shell, the agree-

ments required the Company to make a loan (the

“extension loan”) to FC of approximately $119.5 mil-

lion to pay a portion of the construction loan balance.

In January 2007, the construction loan was

amended, and NYT was released as a borrower, its

condominium units were released from the related

lien, and the Company was released from a guarantee

of NYT’s obligation to complete the interior construc-

tion of the Company’s portions of the Building as

well as its guarantee of certain non-recourse carve-

outs. The Company was also released from its

obligation to make the extension loan (see Note 20).

The Company’s actual and anticipated capi-

tal expenditures in connection with the Building, net

of proceeds from the sale of the Company’s existing

headquarters, including both core and shell and inte-

rior construction costs, are detailed in the table below.

Capital Expenditures

(In millions) NYT

2001-2006 $434

2007 $ 170-$190

Total $604-$624

Less: net sale proceeds

(1)

$106

Total, net of sale proceeds $498-$518

(2)

(1)

Represents cash proceeds from the sale of the Company’s exist-

ing headquarters (see Note 8), net of income taxes and

transaction costs.

(2)

Includes estimated capitalized interest and salaries of $40 to

$50 million.

P.98 2006 ANNUAL REPORT – Notes to the Consolidated Financial Statements

FC’s capital expenditures were consolidated in the

Company’s financial statements through

August 2006, when the Building was converted to a

leasehold condominium. FC’s actual capital

expenditures from 2001 through August 2006 were

approximately $239 million.

Operating Leases

Operating lease commitments are primarily for office

space and equipment. Certain office space leases pro-

vide for rent adjustments relating to changes in real

estate taxes and other operating expenses.

Rental expense amounted to $35.0 million in

2006, $35.8 million in 2005 and $32.9 million in 2004.

The approximate minimum rental commitments

under noncancelable leases as of December 2006 were

as follows:

(In thousands) Amount

2007 $19,432

2008 10,618

2009 9,219

2010 6,641

2011 5,815

Later years 35,213

Total minimum lease payments $86,938

The table above includes lease payments in connec-

tion with the leaseback of the Company’s existing

headquarters.

Capital Leases

Future minimum lease payments for all cap-

ital leases, and the present value of the minimum

lease payments as of December 2006, were as follows:

(In thousands) Amount

2007 $ 7,867

2008 9,099

2009 9,595

2010 9,558

2011 9,552

Later years 74,020

Total minimum lease payments 119,691

Less: imputed interest (43,229)

Present value of net minimum lease payments

including current maturities $76,462

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 (the “circulation servicer”),

and on behalf of two third parties that provide print-

ing and distribution services for The Times’s National

Edition (the “National Edition printers”). In accor-

dance with GAAP, contingent obligations related to

these guarantees are not reflected in the Company’s

Consolidated Balance Sheets as of December 2006

and December 2005.

The Company has guaranteed the payments

under the circulation servicer’s credit facility and any

miscellaneous costs related to any default thereunder

(the “credit facility guarantee”). The total amount of

the credit facility guarantee was approximately

$20 million as of December 2006. The amount out-

standing under the credit facility, which expired in

April 2006 and was renewed, was approximately

$17 million as of December 2006. The credit facility

guarantee was made by the Company to allow the cir-

culation servicer to obtain more favorable financing

terms. The circulation servicer has agreed to reim-

burse the Company for any amounts the Company

pays under the credit facility guarantee and has

granted the Company a security interest in all of its

assets to secure repayment of any amounts the

Company pays under the credit facility guarantee.

In addition, the Company has guaranteed

the payments of two property leases of the circulation

servicer and any miscellaneous costs related to any

default thereunder (the “property lease guarantees”).

The total amount of the property lease guarantees

was approximately $2 million as of December 2006.

One property lease expires in June 2008 and the other

expires in May 2009. The property lease guarantees

were made by the Company to allow the circulation

servicer to obtain space to conduct business.

The Company would have to perform the

obligations of the circulation servicer under the credit

facility and property lease guarantees if the circula-

tion servicer defaulted under the terms of its credit

facility or lease agreements.

The Company has guaranteed a portion of

the payments of an equipment lease of a National

Edition printer and any miscellaneous costs related to

any default thereunder (the “equipment lease

guarantee”). The total amount of the equipment lease

guarantee was approximately $2 million as of

December 2006. The equipment lease expires in

March 2011. The Company made the equipment lease

guarantee to allow the National Edition printer to

obtain lower cost of lease financing.

The Company has also guaranteed certain

debt of one of the two National Edition printers and

any miscellaneous costs related to any default there-

under (the “debt guarantee”). The total amount of

the debt guarantee was approximately $5 million as

of December 2006. The debt guarantee, which

expires in May 2012, was made by the Company to

allow the National Edition printer to obtain a lower

cost of borrowing.

The Company has obtained a secured guar-

antee from a related party of the National Edition

printer to repay the Company for any amounts that it

would pay under the debt guarantee. In addition, the

Company has a security interest in the equipment

that was purchased by the National Edition printer

with the funds it received from its debt issuance, as

well as other equipment and real property.

The Company would have to perform the

obligations of the National Edition printers under

the equipment and debt guarantees if the National

Edition printers defaulted under the terms of their

equipment leases or debt agreements.

Other

The Company has letters of credit of approximately

$33 million, that are required by insurance compa-

nies, to provide support for the Company’s workers’

compensation liability that is included in the

Company’s Consolidated Balance Sheet as of

December 2006.

There are various legal actions that have

arisen in the ordinary course of business and are now

pending against the Company. These actions are gen-

erally for amounts greatly in excess of the payments,

if any, that may be required to be made. It is the opin-

ion of management after reviewing these actions with

legal counsel to the Company that the ultimate liabil-

ity that might result from these actions would not

have a material adverse effect on the Company’s

Consolidated Financial Statements.

Note 20. Subsequent Events

Broadcast Media Group Sale

On January 3, 2007, the Company entered into an

agreement to sell the Broadcast Media Group,

consisting of nine network-affiliated television

stations, their related Web sites and the digital operat-

ing center, for $575 million. The transaction is subject

to regulatory approvals and is expected to close in the

first half of 2007.

WQEW Sale

One of the Company’s New York City radio stations,

WQEW-AM (“WQEW”), receives revenues under a

time brokerage agreement with Radio Disney New

York, LLC (ABC, Inc.’s successor in interest) that pro-

vides substantially all of WQEW’s programming. On

January 25, 2007, Radio Disney New York, LLC

entered into an agreement to acquire WQEW for

$40 million. The sale is currently expected to close in

the first quarter of 2007 and is subject to Federal

Communications Commission approval. At closing,

the Company will recognize a significant portion of

the sale price as a gain because the net book value of

WQEW’s net assets being sold is nominal.

Construction Loan Amendment

Effective as of January 29, 2007, the construction loan

was amended to release NYT as a borrower, release

NYT’s condominium units from the related lien, and

release the Company from a guarantee of NYT’s obli-

gation to complete the interior construction of the

Company’s portions of the Building as well as its

guarantee of certain non-recourse carve-outs. The

Company was also released from its obligation to

make an extension loan (see Note 19). The construc-

tion lender remains obligated to continue to fund to

the Building Partnership the balance of the construc-

tion loan required to complete construction of the

Building.

In connection with the amendments, the

construction lender funded to NYT $11.6 million, rep-

resenting additional consideration payable by FC

under the Operating Agreement for the purchase

price of the land for the Building.

Notes to the Consolidated Financial Statements – THE NEW YORK TIMES COMPANY P.99

QUARTERLY INFORMATION (UNAUDITED)

As described in Note 2 of the Notes to the Consolidated Financial Statements, the Company has restated pre-

viously issued financial statements. The following tables of quarterly information (unaudited) reflect the

restatements for 2005 and the first three quarters of 2006 and provide information on the restatement adjust-

ments. The Broadcast Media Group’s results of operations have been presented as discontinued operations,

and certain assets and liabilities are classified as held for sale for all periods presented (see Note 5 of the Notes

to the Consolidated Financial Statements). In order to more clearly disclose the impact of the restatement on

reported results, the impact of this reclassification is separately shown below in the columns labeled

“Discontinued Operations.”

2006 Quarters

(3)

First Second Third Fourth Year

(Restated (Restated (Restated

and and and

(In thousands, except per share data) Reclassified) Reclassified) Reclassified)

Revenues $799,197 $ 819,636 $ 739,586 $ 931,484 $ 3,289,903

Costs and expenses 738,732 733,393 721,701 802,255 2,996,081

Impairment of intangible assets – – – 814,433 814,433

Operating profit/(loss) 60,465 86,243 17,885 (685,204) (520,611)

Net income from joint ventures 1,967 8,770 7,348 1,255 19,340

Interest expense, net 12,524 13,234 13,267 11,626 50,651

Income/(loss) from continuing operations before

income taxes and minority interest 49,908 81,779 11,966 (695,575) (551,922)

Income taxes expense/(benefit) 19,475 28,156 3,926 (34,949) 16,608

Minority interest in net (income)/loss of

subsidiaries 93 244 267 (245) 359

Income/(loss) from continuing operations 30,526 53,867 8,307 (660,871) (568,171)

Discontinued operations, net of income taxes –

Broadcast Media Group 1,886 5,714 4,290 12,838 24,728

Net income/(loss) $ 32,412 $ 59,581 $ 12,597 $(648,033) $ (543,443)

Average number of common shares outstanding

Basic 145,165 144,792 144,454 143,906 144,579

Diluted 145,361 144,943 144,568 143,906 144,579

Basic earnings/(loss) per share:

Income/(loss) from continuing operations $ 0.21 $ 0.37 $ 0.06 $ (4.59) $ (3.93)

Discontinued operations, net of income taxes –

Broadcast Media Group 0.01 0.04 0.03 0.09 0.17

Net income/(loss) $ 0.22 $ 0.41 $ 0.09 $ (4.50) $ (3.76)

Diluted earnings/(loss) per share:

Income/(loss) from continuing operations $ 0.21 $ 0.37 $ 0.06 $ (4.59) $ (3.93)

Discontinued operations, net of income taxes –

Broadcast Media Group 0.01 0.04 0.03 0.09 0.17

Net income/(loss) $ 0.22 $ 0.41 $ 0.09 $ (4.50) $ (3.76)

Dividends per share $ .165 $ .175 $ .175 $ .175 $ .69

P.100 2006 ANNUAL REPORT – Quarterly Information

For the Quarter Ended March 26, 2006

(3)

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues $ 831,772 $(31,954) $ (621) $799,197

Costs and expenses 763,496 (28,757) 3,993 738,732

Operating profit 68,276 (3,197) (4,614) 60,465

Net income from joint ventures 1,967 – – 1,967

Interest expense – net 12,524 – – 12,524

Income from continuing operations before

income taxes and minority interest 57,719 (3,197) (4,614) 49,908

Income taxes 22,857 (1,311) (2,071) 19,475

Minority interest 93 – – 93

Income from continuing operations 34,955 (1,886) (2,543) 30,526

Discontinued operations, net of income taxes –

Broadcast Media Group – 1,886 – 1,886

Net income $ 34,955 $ – $(2,543) $ 32,412

Basic earnings per share:

Income from continuing operations $ 0.24 $ (0.01) $ (0.02) $ 0.21

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.01 – 0.01

Net income $ 0.24 $ – $ (0.02) $ 0.22

Diluted earnings per share:

Income from continuing operations $ 0.24 $ (0.01) $ (0.02) $ 0.21

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.01 – 0.01

Net income $ 0.24 $ – $ (0.02) $ 0.22

For the Quarter Ended June 25, 2006

(3)

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues $858,748 $(39,112) $ – $819,636

Costs and expenses 759,675 (29,427) 3,145 733,393

Operating profit 99,073 (9,685) (3,145) 86,243

Net income from joint ventures 8,770 – – 8,770

Interest expense – net 13,234 – – 13,234

Income from continuing operations before

income taxes and minority interest 94,609 (9,685) (3,145) 81,779

Income taxes 33,540 (3,971) (1,413) 28,156

Minority interest 244 – – 244

Income from continuing operations 61,313 (5,714) (1,732) 53,867

Discontinued operations, net of income taxes –

Broadcast Media Group – 5,714 – 5,714

Net income $ 61,313 $ – $ (1,732) $ 59,581

Basic earnings per share:

Income from continuing operations $ 0.42 $ (0.04) $ (0.01) $ 0.37

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.04 – 0.04

Net income $ 0.42 $ – $ (0.01) $ 0.41

Diluted earnings per share:

Income from continuing operations $ 0.42 $ (0.04) $ (0.01) $ 0.37

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.04 – 0.04

Net income $ 0.42 $ – $ (0.01) $ 0.41

Quarterly Information – THE NEW YORK TIMES COMPANY P.101

For the Quarter Ended September 24, 2006

(3)

As Previously Restatement

(In thousands, except per share data) Reported Adjustments Restated

Revenues $739,586 $ — $739,586

Costs and expenses 719,110 2,591 721,701

Operating profit 20,476 (2,591) 17,885

Net income from joint ventures 7,348 – 7,348

Interest expense – net 13,267 – 13,267

Income from continuing operations before

income taxes and minority interest 14,557 (2,591) 11,966

Income taxes 5,091 (1,165) 3,926

Minority interest 267 – 267

Income from continuing operations 9,733 (1,426) 8,307

Discontinued operations, net of income taxes –

Broadcast Media Group 4,290 – 4,290

Net income $ 14,023 $ (1,426) $ 12,597

Basic earnings per share:

Income from continuing operations $ 0.07 $ (0.01) $ 0.06

Discontinued operations, net of income taxes –

Broadcast Media Group 0.03 – 0.03

Net income $ 0.10 $ (0.01) $ 0.09

Diluted earnings per share:

Income from continuing operations $ 0.07 $ (0.01) $ 0.06

Discontinued operations, net of income taxes –

Broadcast Media Group 0.03 – 0.03

Net income $ 0.10 $ (0.01) $ 0.09

P.102 2006 ANNUAL REPORT – Quarterly Information

2005 Quarters

(3)

First Second Third Fourth Year

(Restated (Restated (Restated (Restated (Restated

and and and and and

(In thousands, except per share data) Reclassified) Reclassified) Reclassified) Reclassified) Reclassified)

Revenues $773,618 $ 807,237 $ 757,155 $ 893,118 $3,231,128

Costs and expenses 695,398 712,715 720,621 782,844 2,911,578

Gain on sale of assets

(1)

122,946 – – – 122,946

Operating profit 201,166 94,522 36,534 110,274 442,496

Net (loss)/income from joint ventures (248) 3,138 5,000 2,161 10,051

Interest expense, net 14,248 11,844 11,677 11,399 49,168

Other income 1,250 1,250 1,250 417 4,167

Income from continuing operations before income

taxes and minority interest 187,920 87,066 31,107 101,453 407,546

Income taxes 80,712 33,067 13,121 37,076 163,976

Minority interest in net (income)/loss of subsidiaries (119) (161) 167 (144) (257)

Income from continuing operations 107,089 53,838 18,153 64,233 243,313

Discontinued operations, net of income taxes 2,390 5,407 3,358 4,532 15,687

Cumulative effect of a change in accounting

principle, net of income taxes

(2)

— — — (5,527) (5,527)

Net income $109,479 $ 59,245 $ 21,511 $ 63,238 $ 253,473

Average number of common shares outstanding

Basic 145,868 145,524 145,214 145,153 145,440

Diluted 146,771 146,003 145,602 145,407 145,877

Basic earnings per share:

Income from continuing operations $ 0.73 $ 0.37 $ 0.13 $ 0.44 $ 1.67

Discontinued operations, net of income taxes –

Broadcast Media Group 0.02 0.04 0.02 0.04 0.11

Cumulative effect of a change in accounting

principle, net of income taxes – – – (0.04) (0.04)

Net income $ 0.75 $ 0.41 $ 0.15 $ 0.44 $ 1.74

Diluted earnings per share:

Income from continuing operations $ 0.73 $ 0.37 $ 0.13 $ 0.44 $ 1.67

Discontinued operations, net of income taxes –

Broadcast Media Group 0.02 0.04 0.02 0.03 0.11

Cumulative effect of a change in accounting

principle, net of income taxes – – – (0.04) (0.04)

Net income $ 0.75 $ 0.41 $ 0.15 $ 0.43 $ 1.74

Dividends per share $ .155 $ .165 $ .165 $ .165 $ .65

Quarterly Information – THE NEW YORK TIMES COMPANY P.103

For the Quarter Ended March 27, 2005

(3)

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues $805,583 $(31,317) $ (648) $773,618

Costs and expenses 720,457 (27,266) 2,207 695,398

Gain on sale of assets

(1)

122,946 – – 122,946

Operating profit 208,072 (4,051) (2,855) 201,166

Net income from joint ventures (248) – – (248)

Interest expense – net 14,248 – – 14,248

Other income 1,250 – – 1,250

Income from continuing operations before

income taxes and minority interest 194,826 (4,051) (2,855) 187,920

Income taxes 83,658 (1,661) (1,285) 80,712

Minority interest (119) – – (119)

Income from continuing operations 111,049 (2,390) (1,570) 107,089

Discontinued operations, net of income taxes –

Broadcast Media Group – 2,390 – 2,390

Net income $111,049 $ – $(1,570) $109,479

Basic earnings per share:

Income from continuing operations $ 0.76 $ (0.02) $ (0.01) $ 0.73

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.02 – 0.02

Net income $ 0.76 $ – $ (0.01) $ 0.75

Diluted earnings per share:

Income from continuing operations $ 0.76 $ (0.02) $ (0.01) $ 0.73

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.02 – 0.02

Net income $ 0.76 $ – $ (0.01) $ 0.75

P.104 2006 ANNUAL REPORT – Quarterly Information

For the Quarter Ended June 26, 2005

(3)

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues $845,069 $ (37,184) $ (648) $ 807,237

Costs and expenses 738,527 (28,019) 2,207 712,715

Operating profit 106,542 (9,165) (2,855) 94,522

Net income from joint ventures 3,138 – – 3,138

Interest expense – net 11,844 – – 11,844

Other income 1,250 – – 1,250

Income from continuing operations before

income taxes and minority interest 99,086 (9,165) (2,855) 87,066

Income taxes 38,110 (3,758) (1,285) 33,067

Minority interest (161) – – (161)

Income from continuing operations 60,815 (5,407) (1,570) 53,838

Discontinued operations, net of income taxes –

Broadcast Media Group – 5,407 – 5,407

Net income $ 60,815 $ – $(1,570) $ 59,245

Basic earnings per share:

Income from continuing operations $ 0.42 $ (0.04) $ (0.01) $ 0.37

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.04 – 0.04

Net income $ 0.42 $ – $ (0.01) $ 0.41

Diluted earnings per share:

Income from continuing operations $ 0.42 $ (0.04) $ (0.01) $ 0.37

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.04 – 0.04

Net income $ 0.42 $ – $ (0.01) $ 0.41

Quarterly Information – THE NEW YORK TIMES COMPANY P.105

For the Quarter Ended September 25, 2005

(3)

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues $791,083 $(33,280) $ (648) $ 757,155

Costs and expenses 746,004 (27,588) 2,205 720,621

Operating profit 45,079 (5,692) (2,853) 36,534

Net income from joint ventures 5,000 – – 5,000

Interest expense – net 11,677 – – 11,677

Other income 1,250 – – 1,250

Income from continuing operations before

income taxes and minority interest 39,652 (5,692) (2,853) 31,107

Income taxes 16,738 (2,334) (1,283) 13,121

Minority interest 167 – – 167

Income from continuing operations 23,081 (3,358) (1,570) 18,153

Discontinued operations, net of income taxes –

Broadcast Media Group – 3,358 – 3,358

Net income $ 23,081 $ – $(1,570) $ 21,511

Basic earnings per share:

Income from continuing operations $ 0.16 $ (0.02) $ (0.01) $ 0.13

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.02 – 0.02

Net income $ 0.16 $ – $ (0.01) $ 0.15

Diluted Earnings per share:

Income from continuing operations $ 0.16 $ (0.02) $ (0.01) $ 0.13

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.02 – 0.02

Net income $ 0.16 $ – $ (0.01) $ 0.15

P.106 2006 ANNUAL REPORT – Quarterly Information

For the Quarter Ended December 25, 2005

(3)

As Previously Discontinued Restatement Restated and

(In thousands, except per share data) Reported Operations Adjustments Reclassified

Revenues $931,040 $ (37,274) $ (648) $893,118

Costs and expenses 809,679 (29,041) 2,206 782,844

Operating profit 121,361 (8,233) (2,854) 110,274

Net income from joint ventures 2,161 – – 2,161

Interest expense – net 11,399 – – 11,399

Other income 417 – – 417

Income from continuing operations before

income taxes and minority interest 112,540 (8,233) (2,854) 101,453

Income taxes 41,736 (3,376) (1,284) 37,076

Minority interest (144) – – (144)

Income from continuing operations 70,660 (4,857) (1,570) 64,233

Discontinued operations, net of income taxes –

Broadcast Media Group – 4,532 – 4,532

Cumulative effect of a change in accounting principle,

net of income taxes (5,852) 325 – (5,527)

Net income $ 64,808 $ – $(1,570) $ 63,238

Basic earnings per share:

Income from continuing operations $ 0.49 $ (0.04) $ (0.01) $ 0.44

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.04 – 0.04

Cumulative effect of a change in accounting principle,

net of income taxes (0.04) – – (0.04)

Net income $ 0.45 $ – $ (0.01) $ 0.44

Diluted earnings per share:

Income from continuing operations $ 0.49 $ (0.03) $ (0.02) $ 0.44

Discontinued operations, net of income taxes –

Broadcast Media Group – 0.03 – 0.03

Cumulative effect of a change in accounting principle,

net of income taxes (0.04) – – (0.04)

Net income $ 0.45 $ – $ (0.02) $ 0.43

(1)

The first quarter of 2005 includes a $122.9 million pre-tax gain from the sale of assets. The Company completed the sale of its current headquar-

ters in New York City for $175.0 million, which resulted in a total pre-tax gain of $143.9 million, of which $114.5 million ($63.3 million after tax or

$0.43 per diluted share) was recognized in the first quarter of 2005. The remainder of the gain is being deferred and amortized over the lease term

in accordance with GAAP. In addition, the Company sold property in Sarasota, Fla., which resulted in a pre-tax gain in the first quarter of 2005 of

$8.4 million ($5.0 million after tax or $0.03 per diluted share). See Note 8 of the Notes to the Consolidated Financial Statements.

(2)

The Company adopted FIN 47 during the fourth quarter of 2005 and accordingly recorded an after-tax charge of $5.5 million or $0.04 per

diluted share ($9.9 million pre-tax). See Note 8 of the Notes to the Consolidated Financial Statements.

(3)

See Note 2 of the Notes to the Consolidated Financial Statements.

Earnings per share amounts for the quarters do not necessarily equal the respective year-end amounts for

earnings per share due to the weighted average number of shares outstanding used in the computations for

the respective periods. Earnings per share amounts for the respective quarters and years have been computed

using the average number of common shares outstanding.

The Company’s largest source of revenue is advertising. Seasonal variations in advertising revenues

cause the Company’s quarterly consolidated results to fluctuate. Second-quarter and fourth-quarter advertis-

ing volume is typically higher than first-quarter and third-quarter volume because economic activity tends to

be lower during the winter and summer. Quarterly trends are also affected by the overall economy and eco-

nomic conditions that may exist in specific markets served by each of the Company’s business segments as

well as the occurrence of certain international, national and local events.

Quarterly Information – THE NEW YORK TIMES COMPANY P.107

Condensed Consolidated Balance Sheets

As of March 26, 2006

(1)

As Previously Discontinued Restatement Restated and

(In thousands) Reported Operations Adjustments Reclassified

Assets

Current Assets $ 597,229 $ (3,945) $ 2,685 $ 595,969

Assets held for sale – 356,963 – 356,963

Investments in Joint Ventures 239,601 – – 239,601

Property, Plant and Equipment – net 1,502,875 (66,570) – 1,436,305

Goodwill 1,440,650 (40,579) – 1,400,071

Other Intangibles – net 404,332 (234,534) – 169,798

Miscellaneous Assets 340,076 (11,335) 26,160 354,901

Total Assets $ 4,524,763 $ – $ 28,845 $4,553,608

Liabilities and Stockholders’ Equity

Current Liabilities $ 1,024,787 $ 11,337 $ (7,773) $1,028,351

Other Liabilities 1,764,147 (11,337) 101,277 1,854,087

Minority Interest 208,719 – – 208,719

Common stockholders’ equity 1,527,110 – (64,659) 1,462,451

Total Liabilities and Stockholders’ Equity $ 4,524,763 $ – $ 28,845 $4,553,608

As of June 25, 2006

(1)

As Previously Discontinued Restatement Restated and

(In thousands) Reported Operations Adjustments Reclassified

Assets

Current Assets $ 735,788 $ (2,824) $ 2,747 $ 735,711

Assets held for sale – 354,082 – 354,082

Investments in Joint Ventures 245,914 – – 245,914

Property, Plant and Equipment – net 1,552,167 (64,456) – 1,487,711

Goodwill 1,444,621 (41,675) – 1,402,946

Other Intangibles – net 397,974 (234,222) – 163,752

Miscellaneous Assets 232,082 (10,905) 24,222 245,399

Total Assets $4,608,546 $ – $ 26,969 $4,635,515

Liabilities and Stockholders’ Equity

Current Liabilities $1,202,006 $ 10,931 $ (7,085) $1,205,852

Other Liabilities 1,636,893 (10,931) 97,134 1,723,096

Minority Interest 232,945 – – 232,945

Common stockholders’ equity 1,536,702 – (63,080) 1,473,622

Total Liabilities and Stockholders’ Equity $4,608,546 $ – $ 26,969 $4,635,515

P.108 2006 ANNUAL REPORT – Quarterly Information

As of September 24, 2006

(1)

As Previously Restatement

(In thousands) Reported Adjustments Restated

Assets

Current Assets $ 816,440 $ 2,611 $ 819,051

Assets held for sale 355,846 – 355,846

Investments in Joint Ventures 147,028 – 147,028

Property, Plant and Equipment – net 1,309,465 – 1,309,465

Goodwill 1,440,818 – 1,440,818

Other Intangibles – net 157,272 – 157,272

Miscellaneous Assets 223,309 22,282 245,591

Total Assets $ 4,450,178 $ 24,893 $ 4,475,071

Liabilities and Stockholders’ Equity

Current Liabilities $1,310,958 $ (6,901) $1,304,057

Other Liabilities 1,590,262 92,990 1,683,252

Minority Interest 5,617 – 5,617

Common stockholders’ equity 1,543,341 (61,196) 1,482,145

Total Liabilities and Stockholders’ Equity $ 4,450,178 $ 24,893 $ 4,475,071

(1)

See Note 2 of the Notes to the Consolidated Financial Statements.

Quarterly Information – THE NEW YORK TIMES COMPANY P.109

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

For the Three Years Ended December 31, 2006

Column A Column B Column C Column D Column E Column F

Additions Deductions for

charged to purposes for

Balance at costs and Additions which

beginning expenses or related to accounts were Balance at

Description (In thousands) of period revenues Acquisitions set up end of period

Year Ended December 31, 2006

Deducted from assets to which they apply

Accounts receivable allowances:

Uncollectible accounts $21,363 $20,020 $120 $26,543 $14,960

Rate adjustments and discounts 7,203 38,079 — 35,532 9,750

Returns allowance 11,088 894 — 852 11,130

Total $39,654 $58,993 $120 $ 62,927 $35,840

Year Ended December 25, 2005 (Restated)

Deducted from assets to which they apply

Accounts receivable allowances:

Uncollectible accounts $18,561 $23,398 $488 $21,084 $21,363

Rate adjustments and discounts 3,722 33,035 — 29,554 7,203

Returns allowance 10,423 2,780 — 2,115 11,088

Total $32,706 $59,213 $488 $ 52,753 $39,654

Year Ended December 26, 2004 (Restated)

Deducted from assets to which they apply

Accounts receivable allowances:

Uncollectible accounts $18,325 $22,286 $ — $22,050 $18,561

Rate adjustments and discounts 6,026 21,626 — 23,930 3,722

Returns allowance 6,284 8,471 — 4,332 10,423

Total $30,635 $52,383 $ — $50,312 $32,706

P.110 2006 ANNUAL REPORT – Schedule II-Valuation and Qualifying Accounts

Not applicable.

EVALUATION OF DISCLOSURE CONTROLS

AND PROCEDURES

We maintain disclosure controls and procedures that

are designed to ensure that information required to be

disclosed in the reports that we file or submit under

the Securities Exchange Act of 1934 is recorded,

processed, summarized and reported within the time

periods specified in the SEC’s rules and forms, and

that such information is accumulated and communi-

cated to our management, including our Chief

Executive Officer and Chief Financial Officer, as

appropriate, to allow timely decisions regarding

required disclosure.

As discussed elsewhere in this Annual

Report on Form 10-K, we are restating certain of our

previously issued financial statements. See “Item 6 –

Selected Financial Data”; “Item 7 – Management’s

Discussion and Analysis of Financial Condition and

Results of Operations” and Note 2 (Restatement of

Financial Statements) of the Notes to the Consolidated

Financial Statements for more detailed information

regarding the restatement.

In light of the need for this restatement, our

Chief Executive Officer and Chief Financial Officer

have identified a material weakness in our internal

control over financial reporting with respect to

accounting for pension and postretirement liabilities

arising under collectively-bargained pension and

benefit plans, further described below under

“Management’s Report on Internal Control Over

Financial Reporting.” As of December 31, 2006, Janet L.

Robinson, our Chief Executive Officer, and James M.

Follo, our Chief Financial Officer, have evaluated the

effectiveness of our disclosure controls and proce-

dures. Based upon, and as of the date of their

evaluation, the Chief Executive Officer and Chief

Financial Officer concluded that our disclosure con-

trols and procedures were not effective solely because

of this material weakness.

In order to remediate this material weak-

ness, management is in the process of designing,

implementing and enhancing controls to ensure the

proper accounting for our collectively-bargained

pension and benefit plans. These remedial actions

consist of:

–

An evaluation of control design and the implemen-

tation of appropriate control activities that focus

specifically on pension and postretirement

accounting at the Company’s operating units.

–

A review of the accounting treatment of all pension

and benefit plans applicable to unionized employees.

–

A more rigorous analysis of the multi-employer

versus single-employer status of our pension and

postretirement plans.

We expect to remediate the material weak-

ness by the end of the first quarter of 2007.

MANAGEMENT’S REPORT ON INTERNAL

CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for

establishing and maintaining adequate internal con-

trol over financial reporting as defined in

Rules 13a-15(f) and 15d-15(f) under the Securities

Exchange Act of 1934. The Company’s internal con-

trol over financial reporting is designed to provide

reasonable assurance regarding the reliability of

financial reporting and the preparation of financial

statements for external purposes in accordance with

GAAP. The Company’s internal control over financial

reporting includes those policies and procedures that:

–

pertain to the maintenance of records that, in rea-

sonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of

the Company;

–

provide reasonable assurance that transactions are

recorded as necessary to permit preparation of

financial statements in accordance with GAAP, and

that receipts and expenditures of the Company are

being made only in accordance with authorizations

of management and directors of the Company; and

–

provide reasonable assurance regarding prevention

or timely detection of unauthorized acquisition, use

or disposition of the Company’s assets that could

have a material effect on the financial statements.

Because of its inherent limitations, internal

control over financial reporting may not prevent or

detect misstatements. Also, projections of any evalua-

tion of effectiveness to future periods are subject to the

ITEM 9A. CONROLS AND PROCEDURES.

ITEM 9. CHANGES IN AND

DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL

DISCLOSURE.

Part II – THE NEW YORK TIMES COMPANY P.111

risk that controls may become inadequate because of

changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

As required by Section 404 of the Sarbanes-

Oxley Act of 2002, management assessed the

effectiveness of the Company’s internal control over

financial reporting as of December 31, 2006. In

making this assessment, management used the crite-

ria set forth by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO)

in Internal Control-Integrated Framework.

Management identified a material weakness

in the Company’s internal control over financial

reporting with respect to accounting for pension and

postretirement liabilities. Specifically, the Company

did not design control procedures to appropriately

consider the multi-employer versus single-employer

status of collectively-bargained pension and benefit

plans, leading to inappropriate accounting for certain

plan liabilities in accordance with GAAP. Based on

management’s assessment and the criteria discussed

above, and solely because of this material weakness,

management believes that the Company did not

maintain effective internal control over financial

reporting as of December 31, 2006.

The Company’s independent registered

public accounting firm, Deloitte & Touche LLP, has

audited management’s assessment of the Company’s

internal control over financial reporting as of

December 31, 2006, and its report is included in Item

8 of this Annual Report on Form 10-K.

CHANGES IN INTERNAL CONTROL OVER

FINANCIAL REPORTING

There were no changes in our internal control over

financial reporting during the quarter ended

December 31, 2006, that have materially affected or

are reasonably likely to materially affect, our internal

control over financial reporting.

However, we are taking remedial actions to

address the material weakness described above

under “Evaluation of Disclosure Controls and

Procedures.” We expect to implement these remedial

actions by the end of the first quarter of 2007.

Not applicable.

ITEM 9B. OTHER INFORMATION.

P.112 2006 ANNUAL REPORT – Part II

In addition to the information set forth under the cap-

tion “Executive Officers of the Registrant” in Part I of

this Annual Report on Form 10-K, the information

required by this item is incorporated by reference to

the sections titled “Section 16(a) Beneficial

Ownership Reporting Compliance,” “Proposal

Number 1 – Election of Directors,” “Interests of

Directors in Certain Transactions of the Company,”

“Board of Directors and Corporate Governance,”

beginning with the section titled “Independent

Directors,” but only up to and including the section

titled “Audit Committee Financial Experts,” and

“Board Committees” of our Proxy Statement for the

2007 Annual Meeting of Stockholders.

The Board has adopted a code of ethics that

applies not only to our CEO and senior financial offi-

cers, as required by the SEC, but also to our Chairman

and Vice Chairman. The current version of such code

of ethics can be found on the Corporate Governance

section of our Web site, http://www.nytco.com.

The information required by this item is incorporated

by reference to the sections titled “Compensation

Committee,” “Directors’ Compensation,” “Directors’

and Officers’ Liability Insurance” and “Compensation

of Executive Officers” of our Proxy Statement for the

2007 Annual Meeting of Stockholders.

In addition to the information set forth under the cap-

tion “Equity Compensation Plan Information” in

Item 5 above, the information required by this item is

incorporated by reference to the sections titled

“Principal Holders of Common Stock,” “Security

Ownership of Management and Directors” and “The

1997 Trust” of our Proxy Statement for the 2007

Annual Meeting of Stockholders.

The information required by this item is incorpo-

rated by reference to the sections titled “Interests of

Directors in Certain Transactions of the Company,”

“Board of Directors and Corporate Governance –

Independent Directors,” “Board of Directors and

Corporate Governance – Board Committees” and

“Board of Directors and Corporate Governance –

Policy on Transactions with Related Persons” of our

Proxy Statement for the 2007 Annual Meeting of

Stockholders.

The information required by this item is incorporated

by reference to the section titled “Proposal

Number 2 – Selection of Auditors,” beginning with

the section titled “Audit Committee’s Pre-Approval

Policies and Procedures,” but only up to and not

including the section titled “Recommendation and

Vote Required” of our Proxy Statement for the 2007

Annual Meeting of Stockholders.

ITEM 14. PRINCIPAL ACCOUNTING FEES

AND SERVICES.

ITEM 13. CERTAIN RELATIONSHIPS AND

RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE.

ITEM 12. SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED

STOCKHOLDER MATTERS.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 10. DIRECTORS, EXECUTIVE

OFFICERS AND CORPORATE

GOVERNANCE.

Part III – THE NEW YORK TIMES COMPANY P.113

PART III

(A) DOCUMENTS FILED AS PART OF THIS REPORT

(1) Financial Statements

As listed in the index to financial information in “Item 8 – Financial Statements and Supplementary Data.”

(2) Supplemental Schedules

The following additional consolidated financial information is filed as part of this Annual Report on

Form 10-K and should be read in conjunction with the Consolidated Financial Statements set forth in “Item 8 –

Financial Statements and Supplementary Data.” Schedules not included with this additional consolidated

financial information have been omitted either because they are not applicable or because the required infor-

mation is shown in the Consolidated Financial Statements.

Page

Consolidated Schedule for the Three Years Ended December 31, 2006:

II—Valuation and Qualifying Accounts 110

Separate financial statements and supplemental schedules of associated companies accounted for by the

equity method are omitted in accordance with the provisions of Rule 3-09 of Regulation S-X.

(3) Exhibits

An exhibit index has been filed as part of this Annual Report on Form 10-K and is incorporated herein by reference.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

P.114 2006 ANNUAL REPORT – Part IV

PART IV

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has

duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 1, 2007

THE NEW YORK TIMES COMPANY

(Registrant)

BY:/S/ RHONDA L. BRAUER

Rhonda L. Brauer,

Secretary and Corporate Governance Officer

We, the undersigned directors and officers of The New York Times Company, hereby severally constitute

Kenneth A. Richieri and Rhonda L. Brauer, and each of them singly, our true and lawful attorneys with full

power to them and each of them to sign for us, in our names in the capacities indicated below, any and all

amendments to this Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

Arthur Sulzberger, Jr. Chairman, Director March 1, 2007

Janet L. Robinson Chief Executive Officer, President and Director (Principal Executive Officer) March 1, 2007

Michael Golden Vice Chairman and Director March 1, 2007

Brenda C. Barnes Director March 1, 2007

R. Anthony Benten Vice President and Corporate Controller (Principal Accounting Officer) March 1, 2007

Raul E. Cesan Director March 1, 2007

Lynn G. Dolnick Director March 1, 2007

James M. Follo Senior Vice President and Chief Financial Officer (Principal Financial Officer) March 1, 2007

William E. Kennard Director March 1, 2007

James M. Kilts Director March 1, 2007

David E. Liddle Director March 1, 2007

Ellen R. Marram Director March 1, 2007

Thomas Middelhoff Director March 1, 2007

Cathy J. Sulzberger Director March 1, 2007

Doreen A. Toben Director March 1, 2007

SIGNATURES

P.115

P.116 2006 ANNUAL REPORT – Index to Exhibits

INDEX TO EXHIBITS

Exhibit numbers 10.36 through 10.45 are management contracts or compensatory plans or arrangements.

Exhibit Description of Exhibit

Number

(3.1) Certificate of Incorporation as amended and restated to reflect amendments effective June 19, 1998 (filed as an

Exhibit to the Company’s Form 10-Q dated August 11, 1998, and incorporated by reference herein).

(3.2) By-laws as amended through December 20, 2001 (filed as an Exhibit to the Company’s Form 10-K dated

February 22, 2002, and incorporated by reference herein).

(4) The Company agrees to furnish to the Commission upon request a copy of any instrument with respect to long-

term debt of the Company and any subsidiary for which consolidated or unconsolidated financial statements are

required to be filed, and for which the amount of securities authorized thereunder does not exceed 10% of the

total assets of the Company and its subsidiaries on a consolidated basis.

(10.1) Lease (short form) between the Company and Z Edison Limited Partnership, dated April 8, 1987 (filed as an

Exhibit to the Company’s Form 10-K dated March 27, 1988, and incorporated by reference herein).

(10.2) Amendment to Lease between the Company and Z Edison Limited Partnership, dated May 14, 1997 (filed as an

Exhibit to the Company’s Form 10-Q dated November 10, 1998, and incorporated by reference herein).

(10.3) Second Amendment to Lease between the Company and Z Edison Limited Partnership, dated June 30, 1998

(filed as an Exhibit to the Company’s Form 10-Q dated November 10, 1998, and incorporated by reference herein).

(10.4) Agreement of Lease, dated as of December 15, 1993, between The City of New York, Landlord, and the

Company, Tenant (as successor to New York City Economic Development Corporation (the “EDC”), pursuant to

an Assignment and Assumption of Lease With Consent, made as of December 15, 1993, between the EDC, as

Assignor, to the Company, as Assignee) (filed as an Exhibit to the Company’s Form 10-K dated March 21, 1994,

and incorporated by reference herein).

(10.5) Funding Agreement #4, dated as of December 15, 1993, between the EDC and the Company (filed as an Exhibit

to the Company’s Form 10-K dated March 21, 1994, and incorporated by reference herein).

(10.6) New York City Public Utility Service Power Service Agreement, made as of May 3, 1993, between The City of

New York, acting by and through its Public Utility Service, and The New York Times Newspaper Division of

the Company (filed as an Exhibit to the Company’s Form 10-K dated March 21, 1994, and incorporated by

reference herein).

(10.7) Agreement of Lease, dated December 12, 2001, between the 42nd St. Development Project, Inc., as Landlord,

and The New York Times Building LLC, as Tenant (filed as an Exhibit to the Company’s Form 10-K dated

February 22, 2002, and incorporated by reference herein).

(1)

(10.8) Operating Agreement of The New York Times Building LLC, dated December 12, 2001, between FC Lion LLC

and NYT Real Estate Company LLC* (filed as an Exhibit to the Company’s Form 10-Q dated August 5, 2004, and

incorporated by reference herein).

(10.9) First Amendment to Operating Agreement of The New York Times Building LLC, dated June 25, 2004, between

FC Lion LLC and NYT Real Estate Company LLC* (filed as an Exhibit to the Company’s Form 10-Q dated

August 5, 2004, and incorporated by reference herein).

(10.10) Second Amendment to Operating Agreement of The New York Times Building LLC, dated as of August 15, 2006,

between FC Eighth Ave., LLC and NYT Real Estate Company LLC (filed as an Exhibit to the Company’s

Form 10-Q dated November 3, 2006, and incorporated by reference herein).

(10.11) Third Amendment to Operating Agreement of The New York Times Building LLC, dated as of January 29, 2007,

between FC Eighth Ave., LLC and NYT Real Estate Company LLC (filed as an Exhibit to the Company’s Form 8-K

dated February 1, 2007, and incorporated by reference herein).

(10.12) Building Loan Agreement, dated as of June 25, 2004, among The New York Times Building LLC, New York State

Urban Development Corporation (d/b/a Empire State Development Corporation) and GMAC Commercial

Mortgage Corporation (filed as an Exhibit to the Company’s Form 10-Q dated August 5, 2004, and incorporated

by reference herein).

(10.13) First Amendment to Building Loan Agreement, dated as of December 8, 2004, between The New York Times

Building LLC and GMAC Commercial Mortgage Corporation (filed as an Exhibit to the Company’s Form 10-Q

dated November 3, 2006, and incorporated by reference herein).

Exhibit Description of Exhibit

Number

(10.14) Second Amendment to Building Loan Agreement, dated as of June 22, 2006, between The New York Times

Building LLC and Capmark Finance Inc. (formerly GMAC Commercial Mortgage Corporation) (filed as an Exhibit

to the Company’s Form 10-Q dated November 3, 2006, and incorporated by reference herein).

(10.15) Third Amendment to Building Loan Agreement, dated as of August 15, 2006, between The New York Times

Building LLC, NYT Real Estate Company LLC, FC Eighth Ave., LLC and Capmark Finance Inc. (formerly GMAC

Commercial Mortgage Corporation) (filed as an Exhibit to the Company’s Form 10-Q dated November 3, 2006,

and incorporated by reference herein).

(10.16) Fourth Amendment to Building Loan Agreement, dated as of January 29, 2007, between The New York Times

Building LLC, NYT Real Estate Company LLC, FC Eighth Ave., LLC and Capmark Finance Inc. (formerly GMAC

Commercial Mortgage Corporation) (filed as an Exhibit to the Company’s Form 8-K dated February 1, 2007, and

incorporated by reference herein).

(10.17) Project Loan Agreement, dated as of June 25, 2004, among The New York Times Building LLC, New York State

Urban Development Corporation (d/b/a Empire State Development Corporation) and GMAC Commercial

Mortgage Corporation (filed as an Exhibit to the Company’s Form 10-Q dated August 5, 2004, and incorporated

by reference herein).

(10.18) First Amendment to Project Loan Agreement, dated as of December 8, 2004, between The New York Times

Building LLC and GMAC Commercial Mortgage Corporation (filed as an Exhibit to the Company’s Form 10-Q

dated November 3, 2006, and incorporated by reference herein).

(10.19) Second Amendment to Project Loan Agreement, dated as of August 15, 2006, between The New York Times

Building LLC, NYT Real Estate Company LLC, FC Eighth Ave., LLC and Capmark Finance Inc. (formerly GMAC

Commercial Mortgage Corporation) (filed as an Exhibit to the Company’s Form 10-Q dated November 3, 2006,

and incorporated by reference herein).

(10.20) Third Amendment to Project Loan Agreement, dated as of January 29, 2007, between The New York Times

Building LLC, NYT Real Estate Company LLC, FC Eighth Ave., LLC and Capmark Finance Inc. (formerly GMAC

Commercial Mortgage Corporation) (filed as an Exhibit to the Company’s Form 8-K dated February 1, 2007, and

incorporated by reference herein).

(10.21) Construction Management Agreement, dated January 22, 2004, between The New York Times Building LLC and

AMEC Construction Management, Inc.* (filed as an Exhibit to the Company’s Form 10-Q dated August 5, 2004,

and incorporated by reference herein).

(10.22) Agreement of Sale and Purchase between The New York Times Company, Seller, and Tishman Speyer

Development, L.L.C., Purchaser, dated November 7, 2004 (filed as an Exhibit to the Company’s Form 8-K dated

November 12, 2004, and incorporated by reference herein).

(10.23) Letter Agreement, dated as of April 8, 2004, amending Agreement of Lease, between the 42nd St. Development

Project, Inc., as landlord, and The New York Times Building LLC, as tenant (filed as an Exhibit to the Company’s

Form 10-Q dated November 3, 2006, and incorporated by reference herein).

(1)

(10.24) Amended and Restated Agreement of Lease, dated as of August 15, 2006, between 42nd St. Development

Project, Inc., acting as landlord and tenant (filed as an Exhibit to the Company’s Form 10-Q dated

November 3, 2006, and incorporated by reference herein).

(1)

(10.25) Agreement of Sublease, dated as of December 12, 2001, between The New York Times Building LLC, as land-

lord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q dated

November 3, 2006, and incorporated by reference herein).

(1)

(10.26) First Amendment to Agreement of Sublease, dated as of August 15, 2006, between 42nd St. Development

Project, Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s

Form 10-Q dated November 3, 2006, and incorporated by reference herein).

(1)

(10.27) Second Amendment to Agreement of Sublease, dated as of January 29, 2007, between 42nd St. Development

Project, Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s

Form 8-K dated February 1, 2007, and incorporated by reference herein).

(10.28) Distribution Agreement, dated as of September 17, 2002, by and among the Company, J.P. Morgan Securities

Inc., Banc of America Securities LLC, and Banc One Markets, Inc. (filed as an Exhibit to the Company’s Form 8-K

dated September 18, 2002, and incorporated by reference herein).

Index to Exhibits – THE NEW YORK TIMES COMPANY P.117

Exhibit Description of Exhibit

Number

(10.29) Calculation Agent Agreement, dated as of September 17, 2002, by and between the Company and JPMorgan

Chase Bank (filed as an Exhibit to the Company’s Form 8-K dated September 18, 2002, and incorporated by ref-

erence herein).

(10.30) Indenture, dated March 29, 1995, between The New York Times Company and JPMorgan Chase Bank, N.A. (for-

merly known as Chemical Bank and The Chase Manhattan Bank), as trustee (filed as an Exhibit to the Company’s

registration statement on Form S-3 File No. 33-57403, and incorporated by reference herein).

(10.31) First Supplemental Indenture, dated August 21, 1998, between The New York Times Company and JPMorgan

Chase Bank, N.A. (formerly known as Chemical Bank and The Chase Manhattan Bank), as trustee (filed as an Exhibit

to the Company’s registration statement on Form S-3 File No. 333-62023, and incorporated by reference herein).

(10.32) Second Supplemental Indenture, dated July 26, 2002, between The New York Times Company and JPMorgan

Chase Bank, N.A., as trustee (filed as an Exhibit to the Company’s registration statement on Form S-3

File No. 333-97199, and incorporated by reference herein).

(10.33) Stock Purchase Agreement among the Company, PRIMEDIA Companies Inc. and PRIMEDIA Inc., in which the

Company agreed to purchase About, Inc., dated February 17, 2005 (filed as an Exhibit to the Company’s

Form 8-K dated March 10, 2005, and incorporated by reference herein).

(10.34) Guarantee of PRIMEDIA Inc. with respect to the obligations of PRIMEDIA Companies Inc. in favor of the

Company dated March 18, 2005 (filed as an Exhibit to the Company’s Form 8-K dated March 18, 2005, and

incorporated by reference herein).

(10.35) Asset Purchase Agreement, dated as of January 3, 2007, by and among NYT Broadcast Holdings, LLC, New York

Times Management Services, NYT Holdings, Inc., KAUT-TV, LLC, Local TV, LLC, Oak Hill Capital Partners II, L.P.

and The New York Times Company (filed as an Exhibit to the Company’s Form 8-K dated January 5, 2007, and

incorporated by reference herein).

(10.36) The Company’s 1991 Executive Stock Incentive Plan, as amended through February 16, 2006 (filed as an Exhibit

to the Company’s Form 8-K dated February 17, 2006, and incorporated by reference herein).

(10.37) The Company’s 1991 Executive Cash Bonus Plan, as amended through February 16, 2006 (filed as an Exhibit to

the Company’s Form 8-K dated February 17, 2006, and incorporated by reference herein).

(10.38) The Company’s Non-Employee Directors’ Stock Option Plan, as amended through September 21, 2000 (filed as

an Exhibit to the Company’s Form 10-Q dated November 8, 2000, and incorporated by reference herein).

(10.39) The Company’s Supplemental Executive Retirement Plan, as amended and restated through January 1, 2004

(filed as an Exhibit to the Company’s Form 10-Q dated August 5, 2004, and incorporated by reference herein).

(10.40) The Company’s Deferred Executive Compensation Plan, as amended December 22, 2005 (filed as an Exhibit to

the Company’s Form 8-K dated December 27, 2005, and incorporated by reference herein).

(10.41) The Company’s Non-Employee Directors Deferral Plan, as amended through February 17, 2005 (filed as an

Exhibit to the Company’s Form 8-K dated February 17, 2005, and incorporated by reference herein).

(10.42) 2004 Non-Employee Directors’ Stock Incentive Plan, effective April 13, 2004 (filed as an Exhibit to the

Company’s Form 10-Q dated May 5, 2004, and incorporated by reference herein).

(10.43) Letter Agreement, dated as of July 19, 2004, between the Company and Russell T. Lewis (filed as an Exhibit to

the Company’s Form 10-Q dated November 5, 2004, and incorporated by reference herein).

(10.44) Compensatory arrangements of James M. Follo (incorporated by reference to the Company’s Form 8-K dated

December 15, 2006).

(10.45) Consulting Agreement between The New York Times Company and Leonard P. Forman effective as of

January 1, 2007 (filed as an Exhibit to the Company’s Form 8-K dated December 15, 2006, and incorporated by

reference herein).

(12) Ratio of Earnings to Fixed Charges.

(14) Code of Ethics for the Chairman, Chief Executive Officer, Vice Chairman and Senior Financial Officers (filed as an

Exhibit to the Company’s Form 10-K dated February 20, 2004, and incorporated by reference herein).

(21) Subsidiaries of the Company.

(23) Consent of Deloitte & Touche LLP.

(24) Power of Attorney (included as part of signature page).

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

P.118 2006 ANNUAL REPORT – Index to Exhibits

Exhibit Description of Exhibit

Number

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

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

Act of 2002.

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

Act of 2002.

* Portions of these exhibits have been redacted pursuant to a confidential treatment request filed with the Securities and Exchange

Commission. Such redacted portions have been marked with an asterisk.

(1)

Effective August 15, 2006, the Agreement of Lease, dated December 12, 2001, between 42nd St. Development Project, Inc., as landlord,

and The New York Times Building LLC, as tenant, was amended, with 42nd St. Development Project, Inc. now acting as both landlord and

tenant. It was effectively superseded by the First Amendment to Agreement of Sublease, dated as of August 15, 2006, between 42nd St.

Development Project, Inc., as landlord, and NYT Real Estate Company LLC, as tenant, which agreement was formerly between The New

York Times Building LLC, as landlord, and NYT Real Estate Company LLC, as tenant.

Index to Exhibits – THE NEW YORK TIMES COMPANY P.119

EXHIBIT 12

The New York Times Company Ratio of Earnings to Fixed Charges (Unaudited)

For the Years Ended

December 31, December 25, December 26, December 28, December 29,

2006 2005 2004 2003 2002

(In thousands, except ratio) (Restated) (Restated) (Restated) (Restated)

Earnings from continuing

operations before fixed charges

(Loss)/income from continuing operations

before income taxes and income/loss

from joint ventures $ (571,262) $ 397,495 $429,065 $464,851 $452,517

Distributed earnings from less than

fifty-percent owned affiliates 13,375 9,132 14,990 9,299 6,459

Adjusted pre-tax earnings from

continuing operations (557,887) 406,627 444,055 474,150 458,976

Fixed charges less capitalized interest 69,245 64,648 54,222 56,886 59,225

Earnings from continuing operations

before fixed charges $(488,642) $471,275 $498,277 $531,036 $518,201

Fixed charges

Interest expenses, net of

capitalized interest $ 58,581 $ 53,630 $ 44,191 $ 46,704 $ 48,697

Capitalized interest 14,931 11,155 7,181 4,501 1,662

Portion of rentals representative

of interest factor 10,664 11,018 10,031 10,182 10,528

Total fixed charges $ 84,176 $ 75,803 $ 61,403 $ 61,387 $ 60,887

Ratio of earnings to fixed charges

(

)

– 6.22 8.11 8.65 8.51

Note: The Ratio of Earnings to Fixed Charges should be read in conjunction with the Consolidated Financial Statements and Management’s

Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K.

(

)

Earnings were inadequate to cover fixed charges by $573 million for the year ended December 31, 2006, as a result of a non-cash

impairment charge of $814.4 million ($735.9 million after tax).

P.120 2006 ANNUAL REPORT

EXHIBIT 21

Our Subsidiaries

(1)

Jurisdiction of

Incorporation or

Name of Subsidiary Organization

The New York Times Company New York

About, Inc. Delaware

About International Cayman Islands

About Information Technology (Beijing) Co., Ltd. China

Daypost, LLC Delaware

Baseline Acquisitions Corp. Delaware

Baseline, Inc. Delaware

Studio Systems, Inc. Delaware

Screenline Film-und Medieninformations GmbH Germany

IHT, LLC Delaware

International Herald Tribune S.A.S. France

IHT Kathimerini S.A. (50%) Greece

International Business Development (IBD) France

International Herald Tribune (Hong Kong) LTD. Hong Kong

International Herald Tribune (Singapore) Pte LTD. Singapore

International Herald Tribune (Thailand) LTD. Thailand

IHT (Malaysia) Sdn Bhd Malaysia

International Herald Tribune B.V. Netherlands

International Herald Tribune (Zurich) GmbH Switzerland

International Herald Tribune Ltd. (U.K.) UK

International Herald Tribune U.S. Inc. New York

RCS IHT S.R.L. (50%) Italy

The Herald Tribune - Ha’aretz Partnership (50%) Israel

London Bureau Limited United Kingdom

Madison Paper Industries (partnership) (40%) Maine

Media Consortium, LLC (25%) Delaware

New York Times Digital, LLC Delaware

Northern SC Paper Corporation (80%) Delaware

NYT Administradora de Bens e Servicos Ltda. Brazil

NYT Group Services, LLC Delaware

NYT Press Services, LLC Delaware

NYT Real Estate Company LLC New York

The New York Times Building, LLC (58%) New York

Rome Bureau S.r.l. Italy

New England Sports Ventures, LLC (16.7%) Delaware

NYT Capital, Inc. Delaware

City & Suburban Delivery Systems, Inc Delaware

Donohue Malbaie Inc. (49%) Canada

Globe Newspaper Company, Inc Massachusetts

Boston Globe Electronic Publishing LLC Delaware

Boston Globe Marketing, LLC Delaware

Community Newsdealers, LLC Delaware

Community Newsdealers Holdings, Inc. Delaware

GlobeDirect, LLC Delaware

Metro Boston LLC (49%) Delaware

New England Direct, LLC (50%) Delaware

Retail Sales, LLC Delaware

P.121

Jurisdiction of

Incorporation

Name of Subsidiary or Organization

Hendersonville Newspaper Corporation North Carolina

Hendersonville Newspaper Holdings, Inc. Delaware

Lakeland Ledger Publishing Corporation Florida

Lakeland Ledger Holdings, Inc. Delaware

Midtown Insurance Company New York

NYT Holdings, Inc. Alabama

NYT Broadcast Holdings, LLC

(2)

Delaware

KAUT-TV, LLC

(2)

Delaware

New York Times Management Services Massachusetts

NYT Management Services, Inc. Delaware

NYT Shared Service Center, Inc. Delaware

International Media Concepts, Inc. Delaware

The Dispatch Publishing Company, Inc. North Carolina

The Dispatch Publishing Holdings, Inc. Delaware

The Houma Courier Newspaper Corporation Delaware

The Houma Courier Newspaper Holdings, Inc Delaware

The New York Times Distribution Corporation Delaware

NYT Canada ULC Canada

The New York Times Radio Company Delaware

The New York Times Sales Company Massachusetts

The New York Times Syndication Sales Corporation Delaware

The Spartanburg Herald-Journal, Inc. Delaware

Times Leasing, Inc. Delaware

Times On-Line Services, Inc. New Jersey

Worcester Telegram & Gazette Corporation Massachusetts

Worcester Telegram & Gazette Holdings, Inc. Delaware

(1)

100% owned unless otherwise indicated.

(2)

On January 3, 2007, we entered into an agreement to sell our Broadcast Media Group.

P.122

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statement No. 333-43369, No. 333-43371,

No. 333-37331, No. 333-09447, No. 33-31538, No. 33-43210, No. 33-43211, No. 33-50465, No. 33-50467,

No.33-56219, No. 333-49722, No. 333-70280, No. 333-102041 and No. 333-114767 on Form S-8, Registration

Statement No. 333-97199 on Form S-3 and Amendment No. 1 to Registration Statement No. 333-123012 on

Form S-3 of our report on the consolidated financial statements and financial statement schedule of The New

York Times Company dated March 1, 2007, which expresses an unqualified opinion and includes (1) an

explanatory paragraph relating to the Company’s adoption of Statement of Financial Accounting Standards

No. 123(R), “Share-Based Payment,” as revised, effective December 27, 2004, the Company’s adoption of FASB

Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations – an interpretation of FASB

Statement No. 143,” effective December 25, 2005, and the Company’s adoption of Statement of Financial

Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other

Postretirement Plans,” relating to the recognition and related disclosure provisions, effective December 31,

2006 and (2) an explanatory paragraph relating to the Company’s restatement of its consolidated financial

statements as discussed in Note 2, and of our report on internal control over financial reporting dated March 1,

2007, (which report expresses an adverse opinion on the effectiveness of the Company’s internal control over

financial reporting because of a material weakness) appearing in this Annual Report on Form 10-K of The

New York Times Company for the year ended December 31, 2006.

/s/ Deloitte & Touche LLP

New York, New York

March 1, 2007

P.123

EXHIBIT 31.1

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

I, Janet L. Robinson, certify that:

1. I have reviewed this Annual Report on Form 10-K of The New York Times Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state

a material fact necessary to make the statements made, in light of the circumstances under which such state-

ments were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,

fairly present in all material respects the financial condition, results of operations and cash flows of the reg-

istrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over

financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to

be designed under our supervision, to ensure that material information relating to the registrant, includ-

ing its consolidated subsidiaries, is made known to us by others within those entities, particularly during

the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this

report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of

the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that

occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case

of an annual report) that has materially affected, or is reasonably likely to materially affect, the regis-

trant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of inter-

nal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s

board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,

process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a signifi-

cant role in the registrant’s internal control over financial reporting.

Date: March 1, 2007

/s/ JANET L. ROBINSON

Janet L. Robinson

Chief Executive Officer

P.124

EXHIBIT 31.2

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

I, James M. Follo, certify that: