Good morning. My name is Chris and I'll be your conference operator today. At this time, I would like to welcome everyone to The New York Times Company Q2 2015 Conference Call. Thank you. Andrea Passalacqua, Director of Investor Relations, you may begin your conference.

Thank you, and welcome to The New York Times Company's second-quarter 2015 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 and Chief Revenue Officer. 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 2014 10-K. In addition, our presentation will 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 website at investors.nytco.com. With that, I will turn the call over to Mark Thompson. Mark J. T. Thompson - President, Chief Executive Officer & Director: Thanks Andrea and good morning everyone. In fact, I want to preface my remarks with a development that took place after the second quarter closed. A few days ago, our digital-only subscriber count passed through the 1 million mark. It's a very encouraging milestone for digital pay model which only launched in 2011 and which continues to grow strongly. It's also a first in world journalism. We believe that no other news organization has achieved digital subscriber numbers like ours or comparable digital subscription revenue, a great credit to the sheer quality of the work of our newsroom and editorial department and to the brilliant consumer marketing, product and technology teams who have made it possible. This digital-only subscriber number is of course in addition to our 1.1 million print and digital subscribers. This news is evidence of the progress we are making on the digital side of our business. That progress…

Your first question is from Doug Arthur with Huber Research. Your line is open.

Yeah. Thanks. Jim, when you say sequential improvement in the third quarter, you're talking about sort of nuances on mid single digit decline versus Q2, is that fair? James M. Follo - Chief Financial Officer & Executive Vice President: Well, I would suggest, I think that Q2 advertising number is down negative 5.5%, so we are suggesting it will be below that number, but it still puts it in the mid single digit down range.

Okay. And then just a follow-up, Mark, can you or Meredith talk about just sort of your initial experience with making New York Times Now free, how that sort of affected – what kind of traction it's getting? And obviously, it's not having much of an impact, I mean, bad impact in terms of digital sub growth, paid growth. So how is that playing out versus your expectation? Mark J. T. Thompson - President, Chief Executive Officer & Director: Just on the last point, on the digital subscription story. I think that we had a one-off effect obviously at flipping it from subscription to free. But actually, we were pretty happy with the conversion rate of Now subscribers. And the intention of doing it was to promote Now as a free experience of Times journalism and to encourage as many people to use it. We're pretty happy with the Now story. It had a slight impact on our Q2 overall subscriber ads. But to be honest, even with that impact, we've gotten a high number of net digital subscribers this year than we had a year ago at the point where Now was launching as a subscription product. So, I feel very good that the core subscription and our superior marketing tactics and in particular, the growing success we're having internationally means that the digital subscription story is very strong at the moment. And we've now freed Now to find its audience. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. Mark J. T. Thompson - President, Chief Executive Officer & Director: Do you want to talk about any initial thoughts about how Now is doing? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. Sure. I mean, I will just say that we did a bit better that we expected on converting I think slightly more than half of the Now subscribers to bundle A. So, that's good. And we see Now as part of a broader effort to grow audience with some limited amount of free content that brings new audiences to The Times. And we're excited about it. And I think the fact that we were able to put up a brisk second quarter in digital subs, while this is going on, is a very promising sign.

Great. Thank you.

The next question is from Bill Bird with FBR. Your line is open. Bill G. Bird - FBR Capital Markets & Co.: Good morning. I was wondering if you'd talk a little more about how the Facebook Instant Articles program is going. Could it enable another spurt in digital sub growth because of sampling. And then separately, with cash continuing to build, what are your thoughts on how you might deploy cash? Thank you. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: I'm happy to take Facebook. Jim can take cash. In general, I'll say, this is very much an experiment. We think it's a deliberate and important experiment for us. And that the basic idea is three-fold. One, to keep growing The Times, we know we have to keep growing the audience for The Times, and we see Facebook as a good way to do that. It's bringing new audiences to us. If we look at who uses us on Facebook, it tends to be folks who are not already subscribers to The Times. So, we're excited about that. And two, I would say, we are playing a long game here and trying to make sure we understand and have access to some of the best information at the frontier of consumer media experience, and how people engage with content on social platforms is a very important part of that. Mark J. T. Thompson - President, Chief Executive Officer & Director: And it's worth saying that, I mean, we're really focused on every bit of the funnel from the top to the bottom... Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. Mark J. T. Thompson - President, Chief Executive Officer & Director: All the way through from the first touch point we…

Your next question is from John Janedis with Jefferies. Your line is open.

Thank you. Meredith, this maybe is for you. You talked about plans – I think it was in the press, to introduce a video version of mobile ads. Can you talk more about that opportunity and what it could mean longer term for modernization to mobile? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Sure. We are hugely focused on mobile right now and Mark just talked about the Mobile Moments product that we launched this week. That is a product that is enabled for basically any format a marketer wants to use including video, and I expect we'll have a meaningful amount of video in that. We've also done some work on our tech stack to make – frankly selling mobile video advertising an easier thing here, so I'm optimistic about that. And then I would say in branded content, video has been one of the areas where we've been most successful. So video in two ways either developing short films with informed marketers or developing major multimedia storytelling instances that include video as a major part of them. And so it's a huge area of focus for us.

Got it. And Mark? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: And if you look at our most recent Paid Posts, most of them have video in them and most of them are optimized. They're all actually optimized for a mobile experience.

All right. Thanks, Meredith. Mark, you talked about your digital and print subscriber count. I think you're now at a point where your reach is probably something in the range of a top 10 cable network. And yeah I know there's no perfect overlap in advertisers, but is there any kind of opportunity to compete for wallet with cable networks given the ratings issues they're having more as your reach is more stable? Mark J. T. Thompson - President, Chief Executive Officer & Director: I think that's really interesting. And I mean, in a sense, I think part of this is a question about the counterparty, the advertising industry and to what extent the advertising industry is prepared to be more – and indeed ultimate for customers, marketers – are prepared to be open-minded. But as platforms come together, I think this kind of opportunity absolutely looms large for us, so yes, definitely I think. But, Meredith, do you want to add to that? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. I would agree with that. I would say the number of entities and the nature of entities that we're competing with is far more broad than it's ever been. And to the question I was just asked, video is becoming a much more meaningful part of our solution set for advertisers and it will continue to get bigger and that will put us in direct competition with those coming from the television space. Mark J. T. Thompson - President, Chief Executive Officer & Director: And what's interesting about this to me is, I think the traditional or kind of recent kind of fixed narrative about newspapers is that they are the victims of new entrants competing with them. I think your suggestion is a really good example there as where we can ourselves be disruptors and can get in and get dollars out of advertising markets, which were historically closed to us. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: That's right.

Thank you.

Your next question is from Craig Huber with Huber Research. Your line is open.

Yes. Good morning. I missed a little bit about what you said about the slower growth for digital ad revenue in at least the third quarter if not the back half of the year. You really talked about a new standard. I was wondering if you could just go over that a little bit further, please. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Sure. I'll take that and Jim, you can fill in anything I miss. So, we're coming off a full year of double digit digital advertising increases. And in the third quarter of last year, we grew 17%, so we're comping against very strong period of growth in Q3. In addition to that. James M. Follo - Chief Financial Officer & Executive Vice President: And it is 19% in Q4. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: 19%. Right. So, a full half year of strong growth. In addition to that, we have been working to make viewability a meaningful part of our ongoing operation, so essentially optimizing our site for the viewability standard that the ad market is seeking. And as we cycle through that, we expect viewability to have some impact in the near term on revenue, less so over time as it just becomes standard operating procedure. But those two things, and also frankly a whole lot of uncertainty about September, and it's always this way about September, because September is such a big month, lead us to give the guidance we've given. James M. Follo - Chief Financial Officer & Executive Vice President: Yeah. Mark J. T. Thompson - President, Chief Executive Officer & Director: It's worth saying then, I tried to say this in my remarks that we also feel that we've got real growth drivers in place in digital advertising. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Absolutely. Mark J. T. Thompson - President, Chief Executive Officer & Director: Lots of innovation. Our branded content business is going great guns. Really striking growth there. I mentioned Mobile Moments. That's part of a broader story of innovation in mobile advertising. We're very encouraged by the track of mobile advertising and the way the percentage of digital advertising coming to mobile is growing very rapidly. So, we've got one or two specific issues, which are to do with comps and viewability. The bigger story, we think, about digital advertising remains an extremely encouraging one. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. And I'll just add to that, on mobile specifically, we, in the second quarter, we actually went from about 10% of our digital advertising business coming from mobile to a full 15%. And we think that number should only go up as we launch this new suite of premium mobile products. So, we're very encouraged by what we're seeing there and there's a lot of demand in the market.

Along those same lines, please, could you also just talk about potentially how much of a problem it might be coming here with more and more people using these advertising blockers on mobile devices, and then also on desktop, and I understand that Apple with iPhone is likely going to allow that to be downloaded here soon? How much of a problem is that for your business, but also for the whole ecosystem as well that are advertising-focused? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. I think, it's a real issue for the ecosystem and I, we, like everybody else are trying to understand what impact it will have on our supply. It has not had a material impact on supply so far. Certainly becomes a bigger issue with what you've just described. But I think we feel pretty good about the fact that a lot of the new products we're putting out in the market are more native to the experience, to the journalistic experience, and that may allow us to get around some of the pressure that ad blockers would otherwise provide.

And then also a nitpick question, can you just talk a little further about how digital and print ad revenue did in the month of July, year-over-year? Can you quantify it for us, if you would? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Sure. Sure. We saw – we had a better-than-expected July in print. Actually, year-over-year, as a month, better performance than we had seen in some time. So, optimistic about that and we grew in digital in July as well. So, I think, in general, July will be a good month. James M. Follo - Chief Financial Officer & Executive Vice President: Yeah. And look, the comps on digital, really, I mean we're up 25%. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: 27%, yeah. James M. Follo - Chief Financial Officer & Executive Vice President: Yeah, 26% in July, so it's not a clean indicative month. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. James M. Follo - Chief Financial Officer & Executive Vice President: But as we've said, the month of September makes our quarter, it's 35 percentage of total revenues, it's not quite 50%, but it's in the 40s of the total revenue. So, you really got to be mindful of that. We don't have a ton of visibility there, but we're up to a decent start. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Pretty good start. James M. Follo - Chief Financial Officer & Executive Vice President: But that's somewhat embedded in our guidance that we gave this morning. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah.

Good. My last little question please. Daily and Sunday print circulation volume, what was that percent changes year-over-year please? Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Daily is down 6.8%. Sunday is down 5.1%, and I think that's consistent with the prior quarter.

Great. Thank you.

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

Thank you. Just one question from my side. Jim, on the margin side of it, now digital is, I think, close to $100 million for you guys in the quarter, and obviously, events is growing at a faster clip than the rest of the business. So, when you think about the contribution margin from the newer revenue sources versus the legacy revenue sources, how should we think about the impact of that on margins? Especially as you go more to mobile and video, and so on, and so forth. James M. Follo - Chief Financial Officer & Executive Vice President: I'd say it's a pretty complicated story, and it depends – look, I think, broadly speaking, obviously, digital as a business doesn't come with the big kind of legacy cost that digital does. But there's dynamics around digital and in certain cases that come with cost that maybe print doesn't, for example. Margin or certain aspects of digital advertising could be slightly lower to print. When we lose print advertising, we regularly say it comes out at 90%. Paid Posts, for example, is production cost behind that, but it's still very high-margin business. But 90% margin is 90% margin on print. So, look, I think – you know, look, we continue – as the digital business grows rapidly, we continue to invest quite a bit behind that. So, the payback on that investment comes a year or two years later. So, you don't fully feel the margin expansion early on in a growing business like you might otherwise. But, look, we're going to have to continue to be pretty aggressive in taking cost out on the print side. We're very focused on margin and protecting margin in the business. And we'll have to – we'll continue to be aggressive particularly on the print side in taking cost out. Meredith Kopit Levien - Executive Vice President & Chief Revenue Officer: Yeah. Mark J. T. Thompson - President, Chief Executive Officer & Director: Yeah. If I can just a second. I'm just saying, I mean you can see from the Q2 results that we are focusing very hard on the cost side, while investing enough to build digital business. We absolutely believe that the digital transition that we're going through in this company requires us to have a strategic view about our cost base, and about long-range future margin. And that's a large focus of management attention as well as the business of growing digital revenue. And I have seen nothing yet that suggests to me that it will not be possible for us to effectively defend margin as we make through some transition. And by the way, to do that whilst still maintaining the quality of the journalism that The Times produces.

Yeah. I mean, just to follow-up on that, I mean, if I look at the margin expansion that you saw this quarter or the – just in general the job that you guys have been doing with cost cuts, that's obviously helped a lot on the margin side of it. But the operating leverage that you would expect from the digital side initially is obviously capped by all the investments you guys have made, but as we go forward and as you lap those investments, just wondering from a timing perspective when we start seeing that operating leverage, now that costs to a certain extent are optimized and you continue that process and then you have these new revenue lines which keep adding on the margin side of it. So, when we go into 2016 and so on, should we expect the profile of the business from a margin perspective to be different compared to what it is today? James M. Follo - Chief Financial Officer & Executive Vice President: A lot of that tends to be driven by our view of advertising. And as I said because it's such a volatile ad market that the margin discussion tends to be around what our view of the mix of our business is between consumer and print. And then even within advertising, digital and print. And as I said earlier, when you lose a dollar or you gain a dollar of revenue, it's coming in at 90%. So, it has a big impact on the margin story. So, if we can grow advertising, you'll see margin expansion. When there's pressure on advertising, it puts a lot pressure as it costs out. Mark J. T. Thompson - President, Chief Executive Officer & Director: Without getting too philosophical about it, I think, another way to look at this is the question as to what extent you can grow your engaged audience. A significant number of the costs, your – for example, your journalism costs in a high-quality digital journalism business are relatively fixed costs. There are critical strategic questions about how much you can grow, not just your headline audience, but your engaged audience and your paying audience. And that's what a significant part of our focus on, what I described earlier as the funnel, is around issue of how you grow and how you accelerate growth in your audience. Because in the end, if you can get a strongly grown audience and maintaining engagement measured by time spent and are effectively marketing and managing the funnel with that audience, you have a chance of growing your audience sufficiently to get a great margin story.

Thank you.

There are no further questions at this time. We'll turn the call back over to Ms. Passalacqua for any closing remarks.

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