Good day and welcome to the New York Times Company fourth quarter 2006 earnings conference call. (Operator Instructions) For opening remarks and introductions, I will turn the conference over to Ms. Catherine Mathis. Please go ahead, ma'am. Catherine Mathis: Thank you and good morning, everyone. Welcome to our earnings conference call. We have members from our senior management team here to discuss our results with you. They include Janet Robinson, our President and CEO; Jim Follo, our Senior Vice President and Chief Financial Officer; Scott Heekin-Canedy, President and General Manager of the New York Times; Martin Nisenholtz, Senior Vice President of Digital Operations; Jim Lessersohn, Senior Vice President Corporate Development; Stu Stoller, our Senior Vice President of Process Engineering; George Barrios, Vice President and Treasurer; and Tony Benton, our Vice President and Corporate Controller. Our discussion today will include forward-looking statements and our actual results may differ from those predicted. Some of the factors that may cause them to differ are included in our 2005 10-K. Our presentation today will include non-GAAP financial measures and we have provided reconciliations to the most comparable GAAP measures in our earnings and revenue press releases, which are available on our website, nytco.com. This conference call is being webcast and an archive will also be available on our website, as will a transcript and a version that is downloadable to an MP3 player. An audio replay will also be available and the directions for it are in our earnings press release. With that, I am going to turn the call over to Janet Robinson. Janet Robinson: Thank you, Catherine and good morning, everyone. Before Jim and I delve into the details of the quarter, I first want to address the non-cash charge included in our fourth quarter results. It is related to the writedown…

(Operator Instructions) We will have our first question from John Janedis - Wachovia. John Janedis - Wachovia: Good morning. Janet, looking back to last year, you saw some pretty strong growth from the real estate category, and you're able to post positive growth at the Times. As you think about this year, your comments about January -- which sounds like it is not trending too well -- are there any categories that you're feeling better about as you start the year? Janet Robinson: I will have Scott give you an overview in regards to the Times and then I will jump in with regard to the New England Group, and the regionals as well.

John, let me address the real estate question first. Real estate display is continuing to grow, and we expect it to do so over the course of the year. The AGAT part of real estate is up against very significant comps and we are seeing declines in the AGAT side of that category. But we're seeing growth, some strength in January from live entertainment, advocacy, American and international fashion, cosmetics, books, financial services. We're seeing significant challenges, as Janet has already indicated, in automotive, telecom, and the AGAT categories. We expect to see challenges in those categories over the course of the year. But as we look out across the year, all of the things we've said in the past couple of years about limited visibility and significant volatility we expect to continue to define the dynamics of this marketplace, but there are a broad array of categories where we expect to see positive trends. Again, the biggest challenge is coming in automotive, telecom, and AGAT. Studios, which was a very significant challenge for us last year, we expect to see a moderation of that trend in 2007 and we're already seeing that in January. We saw it in December of last year. Janet Robinson: In regard to New England, in January we're seeing some strong pharmaceutical activity, packaged goods; and in the media side of things, department stores, continue to remain a bit challenged, again as I noted, we are cycling still up against the Filene's business that ran in January last year. Real estate is soft, as is help wanted. But there are some interesting conditions that seem to be noticeable in Boston that I think are important for us to share with you. I noted that indeed a lot of new retailers are coming into the Boston…

We will have our next question from Steven Barlow - Prudential. Steven Barlow - Prudential: Thank you. Could you talk about any discussions you've had internally with the various Yahoo! and Google deals that have been out there in terms of help wanted, et cetera on the Yahoo! side and any remnant things with Google? Martin Nisenholtz: Let me start by saying that we have a very significant agreement with Google in place already. We are one of their largest partners, and that agreement is expiring in the fall, at the end of October. So we are in negotiations now with a number of parties. I wouldn't want to be specific as to exactly who, but I think you can probably imagine who that might be, to renegotiate that contract. So we already have a very large relationship. In addition we, as you may know, are a participant in the Google print experiment, which uses remnant print inventory in their auction-based pricing mechanisms so we're also a partner with them there. With respect to the Yahoo! agreement with the seven smaller newspaper companies, we have had discussions with Yahoo! as well as with others, and we're continuing to have those discussions both in relation to help wanted, and in relation to other potential partnerships. Janet Robinson: It is also important to note, Steve, in regard to the Google print contract, that the New York Times is the only national newspaper in that beta test. The Boston Globe is also part of that test as well. Steven Barlow - Prudential: Martin, on a follow-up side on the Yahoo! side, obviously you were probably approached at this point and you basically have taken a pass? Martin Nisenholtz: No. At this point, we have not taken a pass. We are still evaluating the…

We will go next to Lisa Monaco - Morgan Stanley. Lisa Monaco - Morgan Stanley: Janet, if you could just provide us with a little bit more specifics in terms of the Times improvement in December. What specific category showed improvement? More specifically in January in your comments there, are we to assume that trends are not as favorable at the flagship paper in January as they were in December? I just wanted to confirm that is the case, and if so, if it is classifieds? On New England, you cited several categories which are showing positive trends. The fact is that the ad revenue is still down double-digits, and realizing we will cycle through the Filene's in March, how are you thinking about trends for the balance of the year on the top line there, post the cycling through Filene's? Thanks. Janet Robinson: Let me take the Globe question first and then I will turn the Times question over to Scott for further amplification in regard to the January categories. I didn't say that indeed the Globe advertising was moving in a positive trend. I said conditions were such that we were expecting that indeed advertising has the opportunity to increase. What I did say was that with all of the new retailers coming into the market, competition is heating up, they are entering in the market after the Filene's exit, that should give us a broader advertising base going forward. The same holds true in regard to the banking industry. When you did see the consolidation between Fleet and Bank of Boston into B of A, many of the smaller banks and the mid-sized banks retreated quite a bit. Now, what you see is a stronger competitive opportunity that we think could bode well for us going forward. In addition, we are seeing increased competition in regard to the hotel industry there, primarily because of two new hotels that have entered into the market, Western Waterfront and the Intercontinental, but also the Taj with the rename of the old Ritz, really providing full-page advertisements, for example, even as they are renaming. And as I noted, there is improvement in regard to the airline industry that has the ability to translate into better performance. So I think what I'm saying, Lisa, is that there are elements that we're seeing in Boston that point to increased competition that could be beneficial in regard to the increase of the advertiser base. That said, it is very clear that the pressure is still on in regard to advertising in New England, and that we still will see challenges in regard to the advertising climate there, but that we are going to do all we can with new product development, and with a very strong drive on revenue to improve our performance there.

In December, we saw some strength coming from the luxury goods categories, as we saw all year long. Pharmaceuticals, which was a strong category for us last year, finished very, very strong. Advocacy, alcoholic beverages, books were all strong; transportation, which has been on a volatile track for the last couple of years, came in on the positive side. The pressure on our results came from the categories that were challenging and troublesome for us all year with a couple of exceptions. But the pressure came from automotive, technology, the AGAT categories, telecom. The exceptions were recruitment where we saw moderation of the trends that we have been seeing for the prior several months, and then studios was significantly moderated from the downward trend we had seen throughout the year. Excluding the 53rd week, we are about even with the prior year, and then obviously adding in the 53rd week, which was the holiday week, added quite significantly to the overall results. We're seeing that kind of balance carrying over into January, strength coming from essentially the same categories that I cited, and the challenges from the ones I've already cited as challenging for us. Lisa Monaco - Morgan Stanley: Can we assume that January, on an overall basis at the Times is similar to December or slightly weaker?

I should point out that we're up against quite different comps. The fourth quarter of '05 saw some quite robust growth for the Times. That was true in December as well as the entire quarter of '05. So that comparison is quite different than our January comparison. So January, all in, we would probably end up slightly down year-over-year. Lisa Monaco - Morgan Stanley: Thank you.

We will go next to William Bird - Citigroup. William Bird - Citigroup: Janet, I was just wondering if you could talk about how important acquisitions are as you look to repositioning the business, and what are your future goals for digital as a percent of revenues? Thank you. Janet Robinson: I have noted that indeed there has been a strong push particularly in the last year, Bill, in regard to rebalancing the portfolio. Our move on Discovery Times, our very attractive sale price of the Broadcast Group, and the pending sale also of WQEW provides us with in excess of about $700 million. With that money, we have outlined before that indeed we have five things that we're going to be looking at in disciplining ourselves in regard to the use of that cash. We are very focused on only high return capital projects. We're making sure that that is an important part of our future. Acquisitions and investments are important to us. Certainly with the discipline and the success that we've had with the recent acquisitions, small and large -- About certainly being a strong example -- we feel that there are strategic acquisitions that we can make that will enhance our growth, particularly in the digital arena and we are proactive in looking at those. We have an opportunity to reduce our debt. We have an opportunity to provide shareholders with a competitive dividend and we have an opportunity to repurchase our stock. The acquisition discipline that you have seen on this exhibit with About, not only in the way in which we have integrated it very successfully into our operations, but also how that acquisition has benefited our other digital sites is the kind of acquisitions we're going to be continuing to look at -- making…

We will go next to Lauren Fine - Merrill Lynch. Lauren Fine - Merrill Lynch: Thank you. Just a few quick ones. I'm wondering on the news media segment if you could tell us in the fourth quarter what the cost performance was excluding the extra week and the staff reduction charges? Secondly, I'm wondering if you could give us an indication of what kind of a tax rate you expect for 2007? Jim Follo: The tax rate is going to be a little hard to predict. As you know, there are new accounting rules that are going to impact that. We think the rate will likely go a little bit higher. We haven't finished our analysis. FIN 48 is somewhat complicated. I will be working through that over the next several months. Lauren Fine - Merrill Lynch: The cost performance for news media? Jim Follo: Cost performance for news media, let me pull that out and I will get right back to you. Janet Robinson: What we can tell you, Lauren, is that excluding the extra week in '04, the total cost and expenses were down 2.3%. excluding the reductions in staff, and the extra week for the News Media Group. Lauren Fine - Merrill Lynch: But that's total company, correct? Janet Robinson: Excluding the extra week, it was down 2.3%, due to the lower staff reduction for the News Media Group. Lauren Fine - Merrill Lynch: Could you tell us of your online revenues, what percent is classifieds and what the other major categories are at this point? Martin Nisenholtz: Yes, I can do that for you. In 2006, we had a very diverse set of revenues, Lauren, about 45% of our revenues were from display, about 15% were CPC, about 24% were classifieds, 5% were from paid products including Time Select, a sliver, about a percent was from e-commerce, mostly at About. We had about 8% coming from syndication, which is our business to business line. Then for the period of the time we owned the business, about 1% from Baseline, and 1% from all others. So the big base is still display at the Times Company with a relatively lower dependency on classifieds. That's, as I'm sure you know, in contrast to most of the other newspaper companies. Lauren Fine - Merrill Lynch: Great. Thank you very much.

We will go next to Frederick Searby - JP Morgan. Frederick Searby - JP Morgan: With real estate classifieds weakening, it is understandable given the tough comps around the country, but you in the past have talked about the Goldilocks scenario and looking at all the inventory; and the fact that New York has held steady I'm just wondering why specifically -- ex-ing out the New England properties -- why New York would be weakening right now and what the outlook is.

New York is not weakening as a marketplace. The AGAT portion of the business is up against difficult comps. We are continuing to see growth online, and as I said earlier on, the display part of this business is expected to continue to grow at a nice pace. That's reflective of the continuing strength in the New York marketplace. Their inventory is at an all-time high. There is more inventory that is expected to come online which all is supportive of the display outlook. Frederick Searby - JP Morgan: Thank you.

We will go next to Craig Huber - Lehman Brothers. Craig Huber - Lehman Brothers: Good morning. What was the percent change in your full-time equivalent employees adjusting for acquisitions and divestitures for 2006? What might that percent change be for 2007 that you're budgeting? Janet Robinson: Hold on one minute, Craig. We will get that number for you. Catherine Mathis: Craig, we don't have that readily available, but what I can do is get back to you after the conference call. I think in our discussions at CF and UBS conferences, we expected that year-end would be down over 2004, around 6%. Craig Huber - Lehman Brothers: That's from 2004, you said? Janet Robinson: Yes. Craig Huber - Lehman Brothers: From two years ago? Catherine Mathis: Yes. Craig Huber - Lehman Brothers: And what is your plan for 2007, the FTEs? Catherine Mathis: We don't have an estimate at this point. Craig Huber - Lehman Brothers: You have roughly 45% of your circulation for your regionals in the Florida market. Would you say your real estate pressure there is very similar to what was described yesterday that's added significant pressure to that whole group on the ad revenue fund? Janet Robinson: There certainly is real estate pressure in regard to our Florida properties, particularly Sarasota, but they are doing a lot of good work in regard to their weekly newspapers and new product development, that we think can offset some of the losses that we may be seeing, or some of the declines that we may be seeing in the real estate market. It is predominantly Sarasota that is feeling that weakness, rather than the other Florida properties. Craig Huber - Lehman Brothers: How would you describe the other advertising categories for your Florida papers? Janet Robinson: Well retail,…

We will go next to Peter Appert - Goldman Sachs. Peter Appert - Goldman Sachs: Good morning. Janet, first, is your expectation that the New York Times Company is going to actively oppose the merger of Abitibi and Bowater and do you have any thoughts on whether NAA might get involved in this? Janet Robinson: It is not our intent to oppose the merger. We certainly have been in touch with our contacts at Abitibi. We feel that indeed it is not a surprise to see this merger happen, Peter. I think that from a standpoint of what Jim said earlier in regard to newsprint pricing short term, we feel that is definitely the case, and I think from a standpoint going forward, we are going to closely monitor what the situation is with this merger. I really could not comment in regard to the NAA. I think that they certainly have always taken a proactive role in regard to monitoring anything that affects the industry. I would suspect that they will closely monitor this as well. Peter Appert - Goldman Sachs: Secondly, I just wanted to confirm that the write-off in Boston is specifically of the non-amortizable goodwill; and therefore, no earnings impact in terms of ongoing earnings impact from lower amortization expense associated with this write-off? Jim Follo: The substantial portion of the write-off was goodwill, which is non-amortizable. There will be a small impact going forward, but it is fairly negligible. It is about $3 million per year. Peter Appert - Goldman Sachs: In amortization expense benefit? Jim Follo: Yes, that's correct. Peter Appert - Goldman Sachs: Great. Thank you. A follow-up for Martin on the prior question. You've been at the Google print deal now for a little while so anything you can share with us,…

We will go next to Debra Schwartz - Credit Suisse. Debra Schwartz - Credit Suisse: Hi, great. Thank you. I was just wondering if you could give us some more color on what you're seeing in entertainment advertising? First, can you tell us what percent of ad revenue came from the entertainment category in 2006? Second, was the improvement you saw in December an improvement in print or are you starting to capture more of the studios online spending? Finally, can you just comment on the sustainability on the improvement that you saw in December? Thanks. Martin Nisenholtz: In 2006, studio entertainment was about 11% of our core revenue base. The relative strength we saw in December, was print, but we've been seeing healthy growth in the digital side of it, all through 2006. And the sustainability, I would characterize it as a moderation of the trend we saw last year. Again, there is significant volatility in this category, it is being helped/strengthened by the Oscar season, and the comps we're up against. Jim Follo: Just on entertainment, entertainment is the fourth largest category at NYTimes.com and it was up 66% last year online. So it is not only is it a large category, but it was up dramatically. Debra Schwartz - Credit Suisse: Could you just tell us how much the category online was down in 2006? Jim Follo: How much it was down? Debra Schwartz - Credit Suisse: Yes, do you have that? Jim Follo: It was down into the significant double-digits, 20% range. Debra Schwartz - Credit Suisse: Thank you.

We will go next to Edward Atorino - Benchmark. Edward Atorino - Benchmark: Hi, good morning. Regarding acquisitions, I know you don't talk specifically, but with the sale of broadcasting, and maybe some real estate activity, you would have some available power, so to speak, for acquisitions. What would be your appetite to take on additional debt for the right kind of deal? Jim Follo: Well, as Janet mentioned, the fact that we will be reducing debt in the early part of the year obviously will give us some more flexibility, so that will give us some additional borrowing capacity. So we look at that as a likely source of some acquisition capital. The building obviously also provides us with a source of low cost borrowing as well. So there is some capacity.

And the other thing is, obviously, we will be completing our headquarter spending by mid year and we will be completing the New York plant consolidation project in the early part of 2008. So our capital expenditures are winding down to a much lower level, and that will give us additional flexibility. Edward Atorino - Benchmark: Is there a debt equity target you would not want to go above or something like that?

I don't think we set a very specific target. Obviously, we have been a solid investment grade rated company in our history. We're building in balance sheet flexibility though to be able to do things that make sense strategically going forward. Edward Atorino - Benchmark: Is investment grade a critical variable for you?

It has been historically, yes. Edward Atorino - Benchmark: Thanks.

We will go next to Alexia Quadrani, Bear Stearns. Alexia Quadrani - Bear Stearns: I have a question about About.com. You've had some very impressive growth again in the fourth quarter. Could you give us any color on seasonality in this business to help us get a better sense of what growth we should expect in the first quarter? My second question is, at what point in the year in the newspaper side of the business, the print business, if it hasn't happened already yet, do you get an idea of any pushback on ad rate hikes or whether or not they have stuck to the fullest extent? Thank you. Martin Nisenholtz: Let me start with about. We have only actually operated the business for a full year. I think the seasonality actually is very close to the other businesses that we operate online, so you see robust growth of course in the fourth quarter, somewhat less robust, but good growth in the second quarter; the first quarter, tends to be a little bit lighter. But with respect to the business itself, we expect to see page view growth continue to grow, although probably moderating somewhat, because again, we're cycling now through the Times ownership, we're no longer in the other company’s ownership. As I said earlier, we will continue to see healthy growth rates on the rate side. So the business will continue to grow robustly.

We have enough experience so far to be confident that we can realize our rates and I would say by the end of March, we will have concluded any significant discussions that are still out there. Alexia Quadrani - Bear Stearns: Thank you.

We have a question from Steven Barlow - Prudential. Steven Barlow - Prudential: A follow-up here on the depreciation expense on Edison. How should we look at it for the next four quarters of '07? Jim Follo: It is about 11.5 a quarter. Steven Barlow - Prudential: Okay. And that will end as it goes through the first quarter of '08? Jim Follo: Yes. Steven Barlow - Prudential: Thanks.

We will go next to Matt Chesler - Deutsche Bank. Matt Chesler - Deutsche Bank: One follow-up on the writedown up in New England. Do you now have a tax asset of some sort that you can apply to future periods, either for operating income or perhaps a gain on sale? Jim Follo: No, the New England Media Group, the writedown there, it was a tax-free exchange when we acquired the Globe, so therefore we will not have any significant benefit there to apply against the broadcasting. Matt Chesler - Deutsche Bank: But is there a moderate benefit of some sort? Jim Follo: I wouldn't even say moderate.

There is a small element of the writedown which will be deductible. It is a fairly limited write-off. Matt Chesler - Deutsche Bank: Okay. And remind me what the tax basis was, if you would, on the TV Group? Janet Robinson: We didn't disclose it for the TV Group, but when we announce the closing of the transaction, we will provide some information at that point. Matt Chesler - Deutsche Bank: Great. Thank you very much.

And at this time we have no further questions in the queue. I will turn the conference back over to Ms. Mathis for any additional or closing remarks. Catherine Mathis: Thank you so much for joining us today. If you have any other questions, please give me a call.

That does conclude today's conference call.