![]() When a pension is underfunded, the benefit obligations exceed the fair value of the plan’s assets. Adam LeBor Best Price: $11.05 Buy New $10.76 (as of 05:55 UTC - Details) These intangible assets total to $424.3 million which leaves the New York Times with tangible equity of $405.4 million at the quarter ending March 29, 2015-a troubling picture when considering the magnitude of the Times’ pension liabilities. Goodwill is another type of intangible asset and the Times is carrying $108.6 million of goodwill as a long-term asset. Deferred tax assets, for instance, are intangible and the Times has $315.7 million of such intangibles on its balance sheet. However, when applying some basic analysis to the Times’ balance sheet, tangible equity drops by over 50%. At the end of the first quarter of 2015, the Times is reporting $829.7 million of equity. To give The New York Times Company’s pension liabilities some context, let’s look at the Times’ tangible equity position. Keep in mind that these figures are carried on the balance sheet with $15.8 million accounted for as a current liability and $516.3 million as a long-term liability. For example, at fiscal year-end December 28, 2014, the Times’ pensions were underfunded by $532.1 million (per page 80 of the 2014 Annual Report, qualified plans were underfunded by $264.3 million while non-qualified plan liabilities were $267.8 million). sold the Boston Globe for $70 million, having paid $1.1 billion for it in 1993.Īlthough a declining trend in newspaper advertising revenue is a grave problem for the Times, the more immediate threat, to its financial health, pertains to the Times’ underfunded pensions. Just three days ago the New York Times Co. ![]() Some newspapers have been forced to slash costs and in some cases file for bankruptcy. Print newspaper ad revenues fell 55% between 20, according to the Newspaper Association of America, as advertisers and readers have defected to the Web. It comes as many newspapers are struggling to survive. On page 17 of the Times’ Ma10-Q, management acknowledged: “We remain in a challenging environment, reflecting an increasingly competitive and fragmented landscape, and visibility remains limited.” Management further stated: “We expect advertising trends to remain challenging and subject to significant month-to-month volatility.” Along these lines, when Jeff Bezos purchased the Washington Post, in 2013, an AugWall Street Journal article said the following about Bezos’ acquisition: ![]() To be sure, falling ad revenue is a serious issue for the Times. The more people you have on your staff, the more people who will retire, and the more people who retire, the greater are your losses. Pensions are inescapable sources of losses. ![]() …had to do with pensions and falling ad revenue. Swanson, Gerald Best Price: $4.58 Buy New $9.13 (as of 08:40 UTC - Details) North stated the Times’ loss The Hyperinflation Sur. What prompted me to dig deeper, into The New York Times Company’s pension woes, was a recent article written by Gary North. This sizable settlement charge made me curious so I went to The New York Times Company’s 2014 Annual Report and discovered, on page 10, the following statement: “Our qualified defined benefit pension plans were underfunded by approximately $264 million as of December 28, 2014.” On the same page, it was also mentioned that: “The underfunded status of our pension plans may adversely affect our operations, financial condition and liquidity.” When throwing in the Times’ participation in multiemployer pension plans, which subjects the Times to significant liabilities, then the Times is facing a financial double-whammy of declining print ad revenues and unsustainable pension liabilities. The Times would have been profitable, last quarter, had it not incurred a $40.3 million pension settlement charge. For the first quarter of 2015, The New York Times Company reported a net loss of $14.4 million.
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