Good morning, ladies and gentlemen, and welcome to The New York Times Company Q4 and Full-Year 2014 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please note that this call is being recorded today, Tuesday, February 3, 2015 at 11 a.m. Eastern Time. I would now like to turn the meeting over to your host for today’s call, Ms. Andrea Passalacqua, Director of Investor Relations of The New York Times. Please go ahead, Ms. Passalacqua.

Thank you, and welcome to The New York Times Company’s fourth quarter and full-year 2014 earnings conference call. On the call today we have, Mark Thompson, President and Chief Executive Officer; Jim Follo, Executive Vice President and Chief Financial Officer; and Meredith Kopit Levien, Executive Vice President of Advertising. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call, and our actual results could differ materially. Some of the risks and uncertainties that could impact our business are included in our 2013 10-K. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliation’s to the most comparable GAAP measures in our earnings press release, which is available on our website at investors.nytco.com. With that, I will turn the call over to Mark Thompson.

Thanks Andrea and good morning everyone. Before I turn to the detail of Q4, I would like to offer a few observations about 2014 as a whole. This was an encouraging year for The New York Times Company, we made enough progress with our digital revenues to more than offset the secular pressures on the print side of our business and to deliver modest overall revenue growth, especially pleasing with the progress on digital advertising. When I arrived to the company just over two years ago, digital advertising was in decline. In 2014, we reversed that with digital ad growth in all four quarters, which became double-digit growth in the second half with a 19% year-over-year gain in the fourth quarter. That great digital story meant that despite continued secular headwinds in print advertising total advertising revenue for the year was within a percentage point of flat. The decline was 0.7% compared to 2013. This was the most encouraging year-over-year trend for our advertising business since 2005. The digital growth came from the launch of Paid Posts, our native advertising solution, as well as strong growth in mobile and video. The digital advertising market continues to evolve rapidly with great new opportunity is alongside pressure on some existing parts of the business. That means that we do not currently expect 2015 to deliver quarterly year-on-year gains as high as some of those we enjoyed in 2014, but we have a strong team in place, we are actively developing further new ad solutions including in mobile and around sponsorship. And we believe there is immense further potential in Paid Posts both in terms of media revenue and the growing additional revenue, we are driving from T Brand Studio, the creative services team who produced much of the branded content for the…

Thank you, Mark and good morning everyone. As Mark highlighted, we closed 2014 on a solid note with notable digital revenue growth on both the advertising and consumer sides of the business. We’re beginning to see the benefits of our strategic initiatives insurance forming our organization although there was much to accomplish in the coming year. Despite print decline to both our advertising and circulation revenue streams in the fourth quarter the momentum in our digital business led to revenues that were up slightly overall. Expenses rose in the fourth quarter driven by severance expense related to workforce reductions announced in the quarter, as well as retirement costs. Costs related to our strategic initiatives are beginning to flatten out according to plan as we are now cycling a full-year of that spending. Our focus on reducing core costs remains a top priority. The cost reduction initiatives we recently implemented across the company should allow us to maintain stable or slightly lower costs in 2015 relative to 2014 levels. Adjusted operating profit was roughly flat in the quarter at a $104 million. We reported GAAP operating profit of approximately $62 million impacted by the severance expense and retirement cost I just referenced compared with operating profit of $69 million in the same period of 2013. Growth in digital advertising and digital subscription revenues helped total revenues finish up slightly for both the quarter and the full-year. Circulation revenues increased 1% in the fourth quarter, with our digital subscription revenue stream more than offsetting print declines. We benefited from 2014’s home-delivery price increases although higher revenue from the new rates was outweighed by overall volume declines. In the fourth quarter, digital only subscription revenue were approximately $44 million, an increase of 14% from the same quarter in 2013. We did put through…

[Operator Instructions] Your first question comes from the line of Doug Arthur with ISI Evercore. Your line is open.

Yes, thank you. Mark I think the last time you’ve guided on digital for the fourth quarter advertising, you said somewhat tougher comp and somewhat of a de-sell from the growth rate, the strong growth rate of the Q3, obviously that didn’t happen. So you accelerated. So I guess what cause that and I guess by turn as your Q1 guidance on digital, therefore positively conservative. And then a second question just I’m wondering if you can elaborate on the relaunch plans for sort of the desktop version of the low price digital sub package, thanks.

Okay, let me - Doug, good morning. Let me deal with the second one first and say that we are still working and are continuing to test options around the expression of the local cost offer in the kind of non-app environments desktop and also essentially mobile web as well. I mean that’s part of a broader look at our digital portfolio with a focus both on that, but also a focus on optimizing the way our products play out in mobile as well. As I said we’ll come back to you later in the year with some fresh thinking about that. On advertising, I mean I’ll let Meredith answer the question, but just to say, we are - the way we go about our guidance is to genuinely aim for a mid-case projection for the quarter that’s what we did in Q4. We outperformed that, we saw some real success both in the Paid Posts and elsewhere in our digital offering and we did better. Our guidance for Q1 2015 is absolutely a not to be artificially conservative for the mid-case projection, as our guidance was in Q4, but Meredith do you want to add any color to that.

Yes, I would agree with that and I would say, we did see in Q4, we saw Paid Posts continue to grow, we saw mobile and video continue to grow, we also had the benefit of some very large enterprise deals where a lot of the revenue was particularly in Q4. So I’m with Mark I stand by the guidance for Q1.

Okay, thank you.

Your next question comes from the line of Bill Bird with FBR. Your line in open.

Good morning, I was wondering if you could talk a bit about the digital subscription game plan for the year ahead, what are some of the things that you are looking to do to sustain your digital sub gains? Thank you.

Thanks, Bill. I mean you’ve heard us talking about them. We have a plan which we’re rolling out to boost international subscriptions that in currency capability is part of that. We’re also experimenting with other ways, which we’re going to be doing some experiments with in language versions of the times to see whether we can exploit that. We think there is considerable further development potential in both our corporate and educational businesses, we are exploring that. As I’ve said already, we’re looking fundamentally optimizing the core digital portfolio of products and services and we think that although as I said I think we’ve shown and we showed in 2014 an ability to continue to grow this business. We don’t yet think we’ve achieved its full potential.

And just a follow-up on the Paid Posts business, where do you think you are kind of a in a progression of developing that business, as your ad inventory at a fully distributed level where you feel that you are striking the right balance for the consumer.

Very good question. I think we’re still early days in the business, we’ve a lot of demand and we’re continuing to fulfill that demand, we’ve staffed up in T Brand Studio, which is where we produced a lot of the Paid Posts content and we’ll keep staffing up as that demand grows. We are also going to see Paid Posts grow in mobile and in video that will be a major components of the mobile and video ad solution and we’re generally optimistic about it in one sense to your inventory question Paid Posts are self generative of inventory. So they’re creating new inventory as they go.

It’s a really important point Meredith made that they’re additive to the existing digital advertising inventory. We think there is immense further potential…

Yes.

Immense further potential.

Absolutely.

Great, thank you. And just a follow-up for Jim, just point of clarification. Does your pension under funding necessitate a pension contribution this year?

No, it is not. We don’t anticipate any sort of discretionary contributions actually that probably holds for several years now, we’re well ahead of any required funding.

Okay, thank you.

Your next question comes from the line of Craig Huber with Huber Research Partners. Your line is open.

Yes, good morning, thank you. So few question, my first one, can you give us a sense please of the percent of our digital ad revenue I guess the fourth quarter that was Paid Posts mobile and video combined, just give us a sense?

I’ll say broadly we’re pleased with the trend so we said that mobile for the year is now slightly more than 10% of our digital ad revenue, video is a growth business smaller number, but had a similar growth trajectory and Paid Posts was inside of 10% of the overall business, but has a very strong growth trajectory. So we expect these to be three of the four, five things that will keep driving digital growth in 2015.

Yes, it’s fair to say on Paid Posts we expect to more at double, well all capability in T brand studio to make Paid Posts.

Exactly. And I’ll add to that, we expect to the creative work to be a meaningful line of that business.

Yes, so with Paid Posts is obviously there is a block of revenue which is associated with the media by and then in addition at those the revenue against the production fees we get for making the content in almost all the campaigns.

Right, for selling the creative work.

And then also the cost front as we look out beyond the first quarter through remaining part of the year, can you just maybe just help us give us some idea what to sort of think about this projection here for expenses for the second, third and fourth quarter year-over-year please?

Yes, well as I said in my remarks we expect cost to be kind of flat to slightly down that’s kind of a net number we’ll be investing as we said in some of the areas that Meredith talk about Paid Posts is dollars we’ve put against that audience development efforts and growing our digital audience cost against that but we’ll be taking cost out of kind of what we consider the core business, print will continue to see opportunity to reduce cost, reduce print we think will be favorable for us next year on the price basis. G&A will come down, but on the net-net basis we think flat to slightly down just probably good way to think about cost for the full-year.

And my last question, please just the housekeeping issue, for daily and Sunday print circulation volume what’s the present change there in the quarter year-over-year please?

In the fourth quarter our daily circulation was down about 6.7%, Sunday was down about 4.5%.

Great, thank you.

Your next question comes from the line of Alexia Quadrani with JP Morgan. Your line is open.

Thank you. Just two quick questions. One, thank you for giving the detail on the ad number by month in the fourth quarter. I assume that was total advertising, do you have those October, November, December just for print as well?

You just give us a second we’ll pull back.

Yes.

And then my second question as far as I guess you’re looking at up is really just a broader question on, we saw an impressive growth I think if you highlighted in the international digital sub growth in the quarter. I guess anyway you can size how significant opportunity that could be either longer-term registered in 2015?

Alexia, I don’t have much to answer to what I said in previous calls I mean the, around the third well traffic comes in your times from users outside the U.S. the kind of the base case two years ago in terms of the percentage of international subscribers was around 10%. So I think the one way of thinking about the opportunity is the delta between 10% and I feel like 33%. I am not suggesting that you can necessarily close that gap completely. But we’re very interested in – what we as you know now really since the middle of 2014 we’ve been very focused on audience development. And I think one thing I want to say is that we are very focused on international audience development and figuring out what combination of better tools to developing audience and figuring out ways algorithmically. But also with human editorial engagement we can make news report more relevant to users in different countries as a way of driving usage and not just overall reach, our unique users but also engagement. So, that you begin to drive those subscriptions. I think we have an answer on advertising.

The print number for October was – were down about 12.5%, November was down 6%, December was down 8%.

And any early readings of January or?

Yes, I think Jim already gave some guidance for Q1. I’ll just say its one of our hardest comps for the year. So we are…

We have these one-off events last year.

Super Bowl city in our city, a very strong Oscar race for the times and then some big corporate campaigns that aren’t repeating.

Okay. All right thank you very much.

Your next question comes from the line of John Janedis with Jefferies LLC. Your line is open.

Hi, thanks good morning. Just a couple of follow up, first on digital. To what extent have you been able to broaden your base of advertisers and what are you seeing on the pricing front in digital broadly and maybe Paid Post specifically now you have been selling them for a few quarters?

Sure. So on the first question I am happy to say I think we have a very broad base of advertising. So we get advertising from a lot of different categories. And we actually I think you will see in 2015, we will break into some new categories that we haven’t necessarily played in a meaningful way before. So that will continue to improve. On Paid Posts specifically I’m not sure if you are asking the same question, but you will see in the coming months, Paid Posts from new categories. So we have some stuff in the works coming from categories that haven’t been out there yet. But in Paid Posts generally one of the things that’s gone well, we are probably 40 advertisers and I want to say 50 or 51 campaigns in and they come from many different sectors luxury, financial services, corporate, automotive and so forth and that will continue to broaden that. And I think you had a third question in there as well.

Just on the pricing environment broadly speaking.

Pricing, so we are - in general we have not seen tremendous pressure on CPM and we remain confident that particularly – actually in both Print and Digital our product is sufficiently differentiated that we should be able to maintain that CPM.

Okay, thanks Meredith. And maybe Mark, you referenced corporate and education packages, has there been any change in promotions for the core digital subscription offering, rather maybe 1Q of this year, 4Q of last year relative to the prior year and as subs have increased has there been any change in churn?

Well, I mean there is a constantly kind of shifting set of promotional offers that we use. Our tactics change quarter-by-quarter. I think the ARPU number which you can derive from the numbers we give, gives you a sense of that overall track of the business. There was a slight decline in ARPU in 2014 as you would expect with the launch of lower priced offers and with success in corporate and educational sales, but we remain very pleased with ARPU, our ARPU remains higher than the sticker price as it were the main core digital subscription at somewhat over $15.

Yes I think on the churn side, look the DPU get into marketing products you see slight declines kind of retention rates, four months retention rates something we look at pretty carefully, but its very modest. And I would say it’s a consistent trend you’ve seen something in the model as the DPU get it kicks down just a little bit, we are still at a very healthy pretty good four months retention rate, we feel pretty good about it.

It’s fair to say we’ve done some experimentation in 2014 around pricing outside the U.S. in terms of promotions. Price sensitivity, you would expect to and indeed it doesn’t – did appear to vary by territory, so that’s been one feature of 2014.

Thank you.

Your next question comes from the line of Kannan Venkateshwar with Barclays. Your line is open.

Thank you. Just a couple of questions. The first is on Jim, I think you made – one of the comments you made was it the price increase overall had a negative impact on revenue on the Print side. Is there any way to get a sense of the transition between print and digital as you increase prices and what kind of an impact it has on contribution margins overall on the circulation side and the second question is in terms of frequent visitors, I think when you had launched the digital plan you had given us some sense of how many of your unique visitors are frequent visitors and so on. If you could just update us on that number that would be pretty useful and how the conversion rate on those frequent visitors incur?

The first question – I’m not sure, you have misread what I had said about price increase. We put through a price increase fairly beyond home-delivery about 5% that’s consistent with the pricing course you put in place for many years now, we're seeing kind of similar performance, so net-net those price increase have allowed us to maintain essentially a kind of a flat print consumer revenue line, this year was down a little bit, but mainly because of single copy sale, but we expect similar performance from the home delivery price increase, it has meaningful – it doesn’t just allow you to kind of keep constant – at least constant maybe a little growth in home-delivery, but you are also – there is a little bit of a benefit on copies produced, but the loss from a price increase we still feel is quite manageable I think that’s a good tactic for us.

Well let me struggle to answer the second question, I believe at the time that we launched the Digital subscription back in 2011 before my time, we said something like but 10% to 15% of unique users were in “heavy users.” I mean what is definitely true about nytimes.com and are the digital assets is in terms of engagement time spent across the board even with as it were an average of unique users, we do extremely well both in terms of time spent on individual articles and I believe also in terms of repeat business across the month. And we think the one of the reason we are both a strong advertising platform and have shown the ability to move more engaged users toward subscription is because the levels of engagement. I mean a large part of what were times do with audience development is to grow the breadth of the audience i.e. to increase the number of unique users in the U.S. and beyond, but without reducing the levels of engagement we’ve seen and I think one of the things that you can expect to see us doing in 2015 is looking quite closely at each stage as it were the funnel in terms of how you encourage already fairly engaged users to become more engaged and get them to the point where the value to derive from consumption of our digital assets is such that they think it make sense to subscribe. I don’t know if that helps still.

Could you give us some sense of the conversion rates on some of these visitors in terms of the frequent visitors that you’ve add in the past?

We’ve not, again we’ve not typically disclosed the final points of conversion.

Okay, all right. Thank you.

But its fair to say that there this no - I’m not aware any kind of as it were a decline in conversation rates at the point of gate as it were, when we can get engaged users to the movement when there are to subscribe conversion rates remind very steady over the course of the model.

All right. Thank you.

Your next question comes from the line of Edward Atorino with Benchmark. Your line is open.

Good morning. Did you talk about where the cost reductions have been concentrated, was it in the sales force, in a press room, et cetera. And secondly regarding the circulation trend, is there been such a – that’s been fairly static I guess in terms of this conversion and is there a difference much of a difference between let’s say the New York of pricing and circulation versus the rest of the country.

The pricing, the 5% price increase is pretty much across the board for all frequencies both kind of in market and out of market. You asked a question about where kind of the cost reductions were, they were broadly across the board. I think it was well reported, there was physicians coming out the News Room, we’ve had a 100 gross although we’ve added a number of physicians as well on that area around audience development for example and the launch of some magazine have added some resources there as well. Advertising has taken some physicians out of - we’ve invested elsewhere, but its pretty – as usual it’s pretty broad-based but it’s pretty strategic, we don’t take kind of a blunt instrument, we try to do it in the best way possible.

And really an important thing to say is that we are very aware that have to be incredibly mindful of the quality of the journalism we offer our users and although we have to look at every single part of the cost structure. We are anxious team and his colleagues in the newsroom and all of us are very anxious to make sure we are properly investing in Times journalism.

I think a year or so ago, you started a program of special content sections, I don’t know what you can call them, has that been maintained and can you give us an update on how it has been received by the readers.

So I’m assuming you are asking about the PAID POST business are the Branded Content business. And I would say that has been - it was definitely one of the big growth areas of 2014. And we expect it to continue to be.

Is there a separate circulation price to people to sort of take advantage of that program, is that sold separately?

Well I mean that the Paid Post are available to everyone who comes to digital assets anyone who comes to nytimes.com and to the apps can look at Paid Post. They are not part of the - they are behind the pay wall, obviously advertising partners who wants to take advantage of the program, have to pay us both to displayed that’s the media revenue and also most of them are paying us additional money to actually make the content which appears under that brand.

Thank you.

Your next question comes from the line Doug Arthur with ISI Evercore. Your line is open.

Yes, Jim just a clarification, you reported $0.26 from continuing ops which takes out a lot of these charges that includes the impairment change at the Madison plant.

Excludes it, we see that as a special non-recurring item, the $0.26 is kind of a pro forma number that would exclude, I’ll give you the component that it largely excludes, it largely excludes that item impairment charge, it largely excludes a fairly large tax benefit in the tax rate that we’ve gotten through a reversal of certain tax reserves, it excludes severance and it also excludes non-operating retirement cost, those are the exclusions to get to that number.

So what is the imputed normalized tax rate than excluding all these items?

Well, it’s always complicated, we still say for dollar we earn basically a tax of somewhere around 41%, 42% that tends to be quite lumpy but that’s the rate that we’ve largely guided to and we’ve done that for a while. I think when you back out all these things for a whole host of reason you actually get to a number which is probably close to about 45% rate.

Okay, all right thank you.

I would say on every incremental dollar its 42%.

Okay, thanks. End of Q&A

I will now turn the call back over to Ms. Andrea Passalacqua for any closing comments.

Thank you for joining us and we look forward to talking to you again next quarter.

Thank you everyone, good bye.

Ladies and gentlemen this concludes today’s conference call. You may now disconnect.