Here is the internal New York Times memo that followed the company's release of their third quarter financial results.

————— Forwarded message —————
Date: Thu, Oct 22, 2009 at 12:24 PM
Subject: On the Record . . . From Arthur + Janet

On the Record . . . From Arthur + Janet

Vol. 5 Our Third-Quarter Results.

This morning we released our third-quarter 2009 results and thought
we would use this edition of "On the Record" to provide perspective about
what we reported.

There was a lot of positive news to talk about and we are grateful to
all of you for your hard work in helping us meet our financial challenges.
In particular, as a result of our organization-wide commitment to cost
control, efficiency and productivity, The New York Times Company's
operating profit, excluding depreciation, amortization, severance and
special items, grew more than 30 percent to $80.6 million in the
third-quarter from $61.9 million in the third-quarter last year.

While this is a lot of accounting terminology, in our view it is a
useful way to look at our performance because it excludes those non-cash
and special items that we believe are not reflective of operating
activities in the quarter. Wall Street analysts who cover the Company also
generally exclude these items in evaluating quarterly performance.

But this, as we all know, is only part of the story. We also
discussed the persistent global economic downturn, the sustained
advertising slowdown and the continued lack of visibility about the future.
These were the reasons why earlier this week The Times announced that it
needed to reduce its newsroom staffing by 100 jobs and additional business
side positions by the end of the year. We made this move with reluctance
and only after ensuring we could manage the reduction without damaging the
quality of our news report and business operations. We also explained that
given all the uncertainties going forward, we would need to continue to
rigorously manage our news and business expenses.

We also reported in today's press release that on a GAAP basis, the
Company had an operating loss of $25.4 million compared with a loss of
$150.4 million in the third-quarter of 2008. This quarter's loss is
directly related to a special item and we will explain that below.

Here is what our third-quarter numbers also tell us:

We are cutting costs substantially. In the third-quarter, we reported
a 22 percent decline in operating costs. This has been a multi-year
process. With our many initiatives to operate more efficiently and
effectively across the Company, we are on course to achieve approximately
$475 million in savings this year. This is a truly remarkable, but painful,
accomplishment and you have all contributed to this effort.

We are growing our circulation revenue. While actual circulation
volume has declined, our circulation revenue increased 6.7 percent due to
price increases. Clearly, the demand for our quality journalism in print
remains substantial.

We have been managing our asset portfolio to strengthen our core
operations. Earlier this month, we completed the sale of WQXR-FM, our New
York City classical radio station, for gross proceeds of $45 million. The
proceeds from this sale were used to reduce our outstanding debt balance.
We are also moving ahead with the potential sale of our interest in New
England Sports Ventures, which includes the Boston Red Sox and New England
Sports Network, a highly rated regional cable channel.

As we continue to review and rebalance our portfolio, we are
encouraged by the continued strong performance of the About Group, whose
third-quarter operating profit rose more than 27 percent.

We also want to bring your attention to a special item that we
mentioned earlier.

This quarter, we had an estimated charge of $76.1 million for pension
withdrawal obligations under several multi-employer pension plans at The
Boston Globe, and a curtailment loss for a Company-sponsored pension plan
also at the Globe.

Here is a clearer way to explain it: after substantial negotiation,
we restructured several labor contracts at the Globe earlier this year.
These amendments to the contracts allowed us to withdraw from the
multi-employer pension plans and freeze a Company-sponsored pension plan.
As a result of these and other changes, we expect to save $20 million in
annual operating costs, placing the Globe on better financial footing.

We are, however, required to record an accounting charge related to
our existing obligations under the pension plans once an estimate of our
liability is determined. The good news is that related payments will be
made over a period of time that could extend to 20 years or more. By
taking this step, we are able to fix an obligation that would have
otherwise continued to grow over time.

While this special item affects how we report our results, it does
not take away from the fact that we are, by a number of different measures,
moving in the right direction.

As we look ahead to the remainder of the year, visibility for
advertising is limited. We have seen encouraging signs of improvement in
the overall economy and in discussions with advertisers. Early in the
fourth quarter, print advertising trends have improved modestly compared to
the third-quarter, while digital advertising trends are improving more

What is even more encouraging is all the commitment and innovation
that is in full display throughout the Company. Ultimately, it is your
extraordinary dedication that is allowing us to achieve the results that we
have reported today, particularly on expense reduction, and it is this same
dedication that will enable us to achieve our long-term goals and

For more information about our third-quarter earnings, including a
reconciliation to our GAAP results, please see the Company's release,
available at

Arthur & Janet