Good day and welcome to the New York Times second quarter 2008 earnings conference call. (Operator Instructions) For opening remarks and introductions, I would like to turn the call over to Ms. Catherine Mathis. Please go ahead, Madam.

Thank you and welcome to our second quarter earnings conference call. We have several members of our senior management team here to discuss our results with you, and they include: Janet Robinson, our President and CEO; Jim Follo, our Senior Vice President and Chief Financial Officer; Martin Nisenholtz, Senior Vice President, Digital Operations; Denise Warren, Senior Vice President and Chief Advertising Officer for The New York Times Media Group; and Roland Caputo, Chief Financial Officer for The New York Times Media Group. Denise and Roland are sitting in for Scott Heekin-Canedy, who is traveling today. Our discussion 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 2007 10-K. Our presentation will also include non-GAAP financial measures and we have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our corporate website, www.nytco.com. An archive of this call will be available on our website, as will a transcript and a version that’s downloadable to an MP3 player. With that, let me turn the call over to Janet Robinson.

Thank you, Catherine and good morning, everyone. The results we announced today reflect both a slowdown in the United States economy as well as secular forces affecting our industry. Second quarter EPS from continuing operations was $0.15 per share, compared with $0.15 in the second quarter of 2007. We had no special items this past quarter but in the comparable quarter last year, we had two -- a $0.29 loss on the sale of our New Jersey printing facility, and a $0.15 gain on the sales of our radio station. In total, these special items reduced EPS by $0.14 per share in the second quarter of 2007. Therefore, excluding the special items, EPS from continuing operations was $0.29 in the second quarter of last year. Since most analyst exclude buy-out costs in making their EPS estimates, I should point out that ours totaled $0.11 in the second quarter of 2008, $0.09 a share more than we recorded in the same period last year. In the midst of this softening economy and the litany of tough numbers that it spawns, it is no surprise that our business is challenged. In light of that, we want to make sure that several key points that are important to our future are not lost. First, continued strength of the Times’ brand is evident in our ability to raise home delivery and newsstand prices, which in turn is reflected in the growth of our circulation revenues. It is also reflected in our ability to increase our print revenues in the luxury advertising category. Second, as we continued our transformation, Internet revenues grew strongly, and our digital innovations position us well for the future. And last, we have been and will continue to be very disciplined in reducing costs. This quarter, our operating cost excluding depreciation,…

Thank you, Janet. We continue to tightly manage our expenses in the second quarter. Operating costs excluding depreciation and amortization and buy-outs declined 3.6%, mainly as a result of lower compensation costs and newsprint expense. Depreciation and amortization in the quarter totaled $32.6 million versus $46.6 million in the same period a year earlier. The decrease was mainly due to the fact that we had no accelerated depreciation this quarter. In the second quarter of last year, we had $13.1 million in accelerated depreciation with the consolidation of our New York area printing plans, which we completed in March of this year. As Janet mentioned, buy-out costs increased in the quarter and totaled $27.6 million, versus $5 million, a swing of $22.6 million or $0.09 per share. You’ll note in our guidance that we increased the amount we expect to spend on buy-outs this year from a range of $30 million to $35 million to a range of $40 million to $50 million. In the first half of this year, we spent a total of $38.8 million on buy-outs. Compensation costs declined in the quarter due to lower incentive compensation and a reduced workforce. Newsprint expense decreased 10.1%, with 16.8% from lower consumption, offset in part by a 6.7% increase in prices. The Times reduced the width of its printed pages last August and the Globe did so in the fourth quarter, further decreasing our newsprint consumption. In May, we reduced the width of our Florence, Alabama paper to a 44-inch web width and we are planning to move six other regional newspapers to that size. These initiatives are expected to result in newsprint savings of approximately $12 million on an annualized basis. We are executing well on our program to reduce our cash cost base. We had previously stated…

(Operator Instructions) We’ll take our first question from Alexia Quadrani with J.P. Morgan.

Thank you. Just a couple of questions; first on the digital side, you continue to have very good growth in the online advertising businesses. Could you give us a sense of how pricing is trending on the display side of the business there? Are you seeing any push-back now that the budgets are getting a bit more tighter?

I’ll start out and then turn it over to Denise for some commentary at NYTimes.com. In general, pricing has held firm. In fact, through the first half of the year, we’ve seen reasonably decent price increases on the major display units across the company. There are -- there has been a bifurcation -- that’s the way we’ve been characterizing it in the past -- between what I would call premium positions on the web and the more general remnant inventory that exists and is characterized in large part by banner advertising. So that bifurcation is meaningful in different ways at our different sites. At NYTimes.com, for example, we don’t see much cannibalization, if any cannibalization of the premium side, either in rate or in our sell-throughs based on our remnant business, which has been growing quite nicely. On the contrary at About.com, we have seen softness in the display categories, in part because we think we have had execution issues there and to Jim’s earlier point, we’ve invested behind those issues in building the sales team over the last half of the year. So in general, to date I think we’ve seen a strength on the rate side.

At NYTimes.com, about 50% of our overall revenue is priced on a CPM basis and we have seen increases year-to-date year over year in the CPM price business. In addition, as Martin alluded to, we try to maximize all of our revenue and all of our inventory, so we do sell some of our inventory out at the networks and we’ve seen substantial increases in the CPM that we’ve been able to generate from the ad networks. And the fixed price units that we saw, which account for about 30% of our overall revenue, we’ve also seen rate increases in as well this year.

Okay, thank you. And just switching gears over to the print side and looking at that weakness in the Boston Globe, which appeared to have its challenges really before the economy really got tough, looking at that and I guess the performance year-to-date or in the quarter, do you think at this point the weakness of the Boston Globe is really just economy driven, or do you think that’s still a challenging market longer term?

I think it certainly is economy driven, and you are right to note that indeed their decline started before the economy began to turn. I think that marketplace has been experiencing more recessionary like behavior for a longer period of time than the national economy, and as we’ve noted often because of the strong broadband penetration in Boston and many categories with major advertisers leaving that market in recent years, that has added to the declines, needless to say, that we have seen. It remains a challenged market. Our group up there did some very fine work and is continuing to in regard to capturing as many dollars out of the market as possible, but it certainly is a challenged area of the country.

And then just lastly, the remaining buy-out expense expected for the year, should we assume that’s going to fall into Q3?

It will occur both in the Q3 and Q4 about equal amounts.

Thank you.

Our next question will come from John Janedis with Wachovia.

Thank you. Jim, just as an expense follow-up, I think you said the D&A and the buy-outs at operating costs were off something like 3.6% in the quarter. When factoring in the balance of the cuts into the second half of the year, is that a decent range, if you will, for 3Q and 4Q, with the increase in newsprint, knowing that’s going higher?

Just to repeat a comment I made earlier -- we are going to experience higher and accelerating newsprint price increases the back half of the year. Despite that, we’re expecting to see good strong cost performance. While we haven’t given a specific number, we think that -- you know, we are getting some benefits of having some executed some plans early part of the year that we will have some benefits in the back half, so that will give us some benefits that didn’t exist in the front-half. So we continue to be confident in our ability to deliver some good strong numbers but I’m reluctant to put out a specific number.

Okay, and along those lines, is there any kind of impact you can quantify as it relates to increasing gas costs on delivery?

You know, we look at that often. I mean, it’s easier to do in the distribution side of the business and we think that could be a couple or a few million dollars. It’s much harder to do when it works its way into vendors who ultimately pass through price increases to us, so it’s really a very hard number to put a precise number on.

Okay. And Janet, I think that historically, some of the national auto players, and maybe to some extent the airlines were on annual contracts at the Times, and I’m wondering, is that the case for this year? And does that mean you maybe see a pick-up in rate if they don’t reach frequency during the second half?

I’m going to have Denise answer that for the Times.

Very few of those advertisers are on contracts at this point in time.

Okay, and then along those lines, can you help us think about the impact of oil on some of those advertisers? Meaning, is there some sort of level in price where we could maybe see a recovery from the airlines and others?

It’s going to be hard to predict at what level there would be a recovery. I mean, as of right now, oil prices remain very high and it’s impacting industries across the board. To the extent they remain in the range that they’ve been in, we expect it to continue to impact our performance across the board.

Okay. All right, thanks a lot.

Our next question will come from Edward Atorino with Benchmark.

Well, I was going to ask the cost question, which has been asked. On the circulation, the price hike, would you give sort of a -- is that about a $10 million annual rate, if I take 800,000 circ and rate per week, et cetera?

It’s a little bit more nuanced than that. We have contractual obligations with wholesalers, both within the NDM and outside the NDM and the price -- excuse me, the revenue that we net per copy varies. So we’re in the midst of refining our calculations but let me say this -- in the past, we’ve been very pleased with the bottom line impact of each and every one of our single copy price increases, up to and including the one that we implemented in July of 2007, and we expect the results of this one to be comparable to those in the past.

Second question, Janet sort of hinted at this -- the June trend was pretty bad. Is July any better, any worse, or can you be specific on that?

I think that -- I’m going to have Denise add to this, Ed -- I think it’s clear that many of the advertising budgets are tightening up. Not to say that they are totally going away. There may be more opportunity for those to loosen up at the end of the third quarter and the fourth, but right now I think people are tightening those budgets and really saving dollars to perhaps use at a later date. And I think that we have to plan accordingly, which is exactly why as Jim noted, we are focusing -- continuing to focus very much on the cost side of our business.

Last question -- any pop in the studio entertainment with the state of -- looks like some good movies coming out?

As you know, we’ve talked about this category from the standpoint of it being very volatile in terms of the release schedules and our having low visibility. The studios will spend when they do have hits on their hands, but it’s very hard to project whether or not the slate of movies coming out will be those that they will spend against or not, so I’m not at liberty at this time to give a projection on where we think that’s going to go. They still obviously recognize the New York Times as a wonderful place to advertise to get their message out, so that continues. But it really is subject to the vagaries of each individual movie and the box office performance and the competition.

Thank you.

Our next question will come from Craig Huber with Lehman Brothers.

Just to be a little clearer, your July comments for your newspapers, are the trends there -- I know we’re not done with the month -- are the trends there looking worse than what you saw in June for your two flagship papers on a percentage basis year over year?

We really can’t give you the specifics, but I think from the standpoint of what we’ve said, Craig, it really is the case. We see some tightening up in a variety of categories. I think the economy certainly has many of the major category clients very concerned and I think that you are going to see some softness across the board at all media companies in regard to the spending patterns, the newspaper media companies.

A couple of other nit-pick questions; you talked about coming in better than $230 million cost savings in total the next two years. Can you quantify or give us a range of how much better? Are you talking about $20 million, $50 million better, sort of in between?

We haven’t given a number. We are in --

Are you willing to now?

-- and I’m not willing to now, other than we’ve delivered on our numbers in the past and we will deliver on our comments going forward. I will only say that we continue our ongoing efforts and some of the areas that have led to that increase, we’re continuing to push on the production efficiency side, circulation efficiency side, unfortunately on the headcount side. We did pick up our buy-out number from our previous guidance that we gave on the last quarter, so we are pushing on all buttons and we will continue to do that as long as we need to. We think there’s more but we are not willing to specifically -- we’re not willing in a detailed way put -- move that --

Can you give me a sense -- your editorial staff, the size of your editorial staff at each of your flagship papers, how it compares today versus at the end of say 2006? Your New York Times, you took out what, 7.5% or so of your editorial staff earlier this year but for both staff, how much is down relative to the --

I can give you the numbers with regard to the New York Times. In total at the beginning of the year, we had approximately 1,350 in the New York Times newsroom. As you know, we did announce a buy-out earlier in the year for approximately 100 people, so it is down. It is still at a very high level. I should point out also that the New York Times newsroom has access, and we use the reporting of the IHT as well, which is between 100 and 150 people. So from a journalistic standpoint, our resources are very strong. I don’t have the numbers on the Boston Globe but if you call me later, I can certainly provide them.

Do you have the end of ’06 as well for Times?

Well basically in February, we announced a buy-out, so at the beginning of the year -- I’m sorry, at the end of ’06, I don’t. But I would say that the end of ’07 was the highest it’s ever been.

Okay, and then lastly, your non-newsprint cash costs in the quarter adjusting for the buy-outs and the one-time items last year, were they down about 4% in the quarter for newspapers?

It has a little impact on the 3.6%. I think on a pre raw material basis, it was actually 3.5%. I just want to make one point -- I mean, this is the first quarter that we’ve had a negative impact for newsprint prices. We have not seen that previously, so if you were to exclude the impact of prices, our actual performance was about 4.4% better year over year.

And then lastly, if I could, what should investors use for CapEx for your company for 2009?

We are still in the planning stages for 2009 but we’ve been very clear that we expect those numbers to be significantly lower than they are this year. There are three large projects this year that will not be repeating next year. We’ve got a fairly significant upgrade, we’ve got the building, which was completed early part of the year, and we’ve got the Edison plant consolidation. When you strip all those out, you are below $100 million. Haven’t given more detailed guidance than that but we expect [there to be] a pretty tight range on our CapEx going into next year.

Okay. Thank you.

Next we’ll hear from Peter Appert with Goldman Sachs.

Thanks. Janet, you gave us some color on categories that are stronger and weaker, but I’m noticing a pretty significant deterioration in the ad revenue trends at the New York Times over the last several months, so at the margin, which of the categories or which of the major advertisers that really cut back most substantially to drive that?

We did have a weakness in entertainment because of the tough comps that Janet referenced, so I think that’s probably impacting the June performance in a big way. Otherwise the trends are fairly similar to what they have been.

Okay, and my recollection is entertainment is maybe something like 10%, is that right?

Yeah, just about -- a little bit higher, actually.

Okay, and then Jim, in terms of the $130 million cost target for this year, is it possible for you to give us any sort of breakout of the composition of where that 130 comes from?

You’re asking for detail behind the 130? I certainly talked to you about the categories and we’ve done quite a bit of outsourcing this year. Our circulation efficiencies efforts has been a very large component of that.

When you say circulation efficiency, is that primarily just less promotion spending?

It’s some promotional spending but it’s also eliminating what we consider unprofitable circulation and the raw materials that go along with that as well.

What I was hoping for was maybe you could give us a rough breakout of percent from circ efficiency efforts versus headcount reduction versus other categories.

I can tell you, Peter, there is not one number that makes up the dominant portion of that $130 million, and there’s a long list of items that are on our list. Again, we continue to look at efficiencies in the delivery department of our business, consolidation of our [inaudible] production facilities. The web width reductions have played a meaningful role. As I’ve said, the Edison plant closing is a pretty big part, $30 million of that $130 million; web width is $12 million, so those are some of the bigger numbers in there and then there’s again a very long list of additional items. And we continue to focus and add more items to the list, things that have previously not been in that 130 are now on the list, and that’s what gives us the confidence that we are going to exceed those numbers.

Just a little color on the circulation, because I don’t want you to get the wrong idea that it’s just cutting promotion, but with the quality circulation strategy, you save money on acquisition, you save money on distribution, you save money on printing, you save money on newsprint, you save money on bad debt. So when you wrap that all together, that’s a very large item contributing to the cost savings. It’s not just about not spending promotion dollars. It’s not really about that at all. It’s about the efficiency of the acquisition.

It’s important to remember, Peter, also that we have off-shored circulation telemarketing and customer service functions, as well as financial back office, and that is ongoing and we are also looking at off-shoring in the IT area as well, and additional off-shoring is extending to [order to cash]. So all of the lists that Jim had noted, plus what Roland has just added, and the off-shoring I think really gives you a very sound list of the kind of efforts that are going on behind our cost reductions.

Fair enough, and Janet, this is a tough one but as you think preliminarily about 2009, I’m wondering how you think the ad cycle goes in the context of a macro environment that maybe is more or less the same as what we are seeing now. Can you get back to positive revenue comps next year, you think?

I think we certainly see a tough second half, if indeed the economy continues to act the way it’s acting right now. I think it’s very early for us to be looking at 2009. I think that there are signs certainly from some sources that say that the housing market will not improve until the latter part of 2009 at the earliest, so I think that there is still increased difficult in regard to the ad market going forward, but I think it’s very early for us to be projecting our thoughts regarding that, Peter.

Okay, fair enough. Last thing then, Janet -- any thoughts on the pending Newsday transaction and how that potentially could impact you guys?

I don’t think that there will be a huge impact. We certainly have readership on Long Island and there are people that live in the burroughs that read both the Times and Newsday. But I think from a standpoint of our focus, it will continue to be on the quality circulation that is here in the NDM and certainly on the national expansion efforts that continue to play a very strong role in regard to circulation revenue increases and also expansion of our national footprint.

Thank you.

Our next question will come from David Clark with Deutsche Bank.

Thank you. Good morning. A couple of circulation questions; first, what sort of trend are you expecting for Sunday circulation in the September six-month ABC period? I believe you said that a decent portion of the 9% decline in the March period was due to some deliberate factors, reduction of third party and such. What do you think the underlying rate for Sunday is?

I’m not prepared to give you a percentage but I will tell you that our last March ABC statement was the last period that comped against a period, a prior period that had material amounts of other paid, either third party bulk or bonus days, so that should help us in our comp coming September.

Would you expect it -- so you would expect the September period to be better than the 9% decline?

Given that piece of information, [I would].

Okay, and then I’m just curious, how much subscriber or reader overlap is there between the New York Times and the Wall Street Journal? Is that something you guys know?

It’s relatively small, David. I would say that it’s around 11% or so.

Okay, so 11% of your circulation area also subscribers to the Journal?

That’s correct.

Okay, and then just one final circulation question -- how many subscriptions roughly have you sold through the Amazon Kindle? Is it a meaningful amount? Is the trend there good?

It’s a small amount but we are under the terms of a confidentiality agreement, so we are not allowed to disclose it.

But the -- I’d say that the trends are good.

I guess following on that, do you see that, either the Kindle or other potential e-readers, do you see a meaningful opportunity there for increasing circulation?

These are R&D efforts. I think that it’s very early days on e-readers. Certainly the Kindle seems to be attracting a lot of attention. We are the number 11th or 12th most purchased product I believe on the Kindle these days, and that I think you can see by simply going into most popular. You can see that on whisper net. But I think it’s safe to say that it’s very early days for e-readers and I would characterize this more as an R&D effort than a meaningful revenue contributor.

Sure. Okay, appreciate that. Thank you.

Our next question will come from Scott [Whipperman] with Goldman Sachs.

This is Scott Marchakitus. I’m on the credit research side. I just have two quick questions for you. First of all, I just want to talk about the liquidity position. You have an $800 million revolver, half of which expires in mid-2009. I’m just wondering if you could tell us what’s drawn under the total revolver and if you are in negotiations with the banks to extend that facility, for at least the next year’s [debt maturing] for future years. And then secondly, there’s one financial covenant in the bank facility with regard to shareholder equity being $950 million. Can you talk about the add backs to get back to that number and where you stand related to that covenant today? Thanks a lot.

As far as the borrowings under our revolver, we’re out about $375 million out of a total capacity of $800 million. We are in discussions with our banks that one of our lines, revolvers expires in May of next year. We’re in discussions right now. Those discussions are [inaudible].

And regarding the covenant, we have a lot of room relative to that minimum stockholders equity covenant. We’ve [slowed] non-cash impairment charges, so if you add back the charges we had in ’06 and ’07, we’re well ahead of that minimum [inaudible] requirement.

Are the add backs $800 million in nature, or [that number you’ve disclosed]?

If you look at the 2006 impairment, it was about $814 million. In 2007, it was much smaller but we would add those back to our book equity, [the total equity].

And just a quick follow-up; we’ve seen a lot of downgrades by the agencies in the newspaper sector, particularly among some of the higher yielding names. Now, you stand at low Triple B. I’m just wondering if it’s really important for you to keep an investment grade rating in light of the shareholder demands for enhancing shareholder value, whether it’s restructuring the portfolio or buy-backs or that nature. Is keeping your investment grade rating critical anymore?

It’s historically been important to us and we consider -- it is the balance between increasing share value and cost of debt borrowing. We balance those two but we’ve historically enjoyed investment grade rating and we expect to do that in the future.

Thank you very much.

A follow-up question from Edward Atorino with Benchmark.

No, it’s been asked, thanks.

And that does conclude our Q&A session for today. I will turn the call back over to Ms. Catherine Mathis.

Thank you, everyone, for participating today and if you have other questions, give me a call. Thanks so much. Bye now.

And that does conclude our conference for today. Thank you for your participation and have a wonderful day.