Good day and welcome to the New York Times second quarter 2007 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. Catherine Mathis: Thank you and good morning, everyone. Welcome to our second quarter earnings conference call. We have several members of our senior management team here today to discuss our results with you and they include Janet Robinson, our President and CEO; Jim Follo, our SVP and CFO; Scott Heekin-Canedy, President and General Manager of The New York Times; and Martin Nisenholtz, SVP, Digital Operations. 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 2006 10-K. Our presentation will also include non-GAAP financial measures and we've provided reconciliations to the most comparable GAAP measures in our earnings press release which is available on www.nytco.com. This conference call is being webcast and an archive will be available on our web site as will a transcript and a version that's downloadable to an MP3 player. An audio replay will be available and the directions for it are in our press release. With that, let me turn the call over to Janet Robinson.

Thank you, Catherine and good morning, everyone. Today, we reported second quarter earnings per share from continuing operations on a GAAP basis of $0.15 compared with $0.37 in the same period a year ago. We had three special items in the quarter. A $0.29 loss on the sale of our New Jersey printing facility, a $0.15 gain on the sale of a radio station and $0.05 of accelerated depreciation expense. In total, these special items reduced earnings by $0.19 per share. Excluding the special items, we earned $0.34 per share from continuing operations compared with $0.37 in the second quarter last year. In addition, we recorded a pretax gain of $191.2 million, $94.3 million after tax or $0.66 per share from the sale of our broadcast media group. These amounts are reflected in discontinued operations. Despite a 3.7% decline in revenues from continuing operations in the quarter, operating profit excluding depreciation and amortization and special items declined just 2.7% as we remained very disciplined on costs. While the advertising environment remains difficult, we continue to make progress executing on our strategy of introducing new products both in print and online, building our innovation capability, aggressively managing costs and rebalancing our portfolio of businesses. I will briefly review what we accomplished in each of these areas in the quarter. First, developing innovative new products and services across platforms. This quarter, we added an issue of Teen Beauty, an issue of Design New England, the Globe's high end magazine devoted to home and garden, and in May we introduced Fashion Boston, the Globe's new magazine which will appear monthly beginning in August. These publications have demonstrated strong appeal for both readers and advertisers. In the digital arena, there has been a tremendous amount of innovation and new product development. We have continued…

Thank you, Janet. As Janet mentioned, we continued to tightly manage expenses in the second quarter. Operating costs excluding depreciation and amortization declined 3.9% primarily because of lower newsprint, staff reduction and other costs. Newsprint expense decreased 22.9% due to a combination of low prices and decreased consumption. In August, the Times will reduce its web width and the Globe expects to complete its web width reduction in the fourth quarter, further decreasing our newsprint consumption. Depreciation and amortization in the quarter totaled $46.6 million versus $35.6 million in the same period last year. The reason for the significant increase was a $13.1 million accelerated depreciation we incurred as a result of our plant consolidation. You'll recall that we plan to merge our New York metro area printing into our newest facility in College Point, Queens and to close our older Edison, New Jersey, facility. Originally, we planned to sublet Edison to 2018, the term of our original lease. We decided, however, that would be more financially prudent for us to buy the Edison facility, sell it and then lease it back for the short amount of time before the two plants are consolidated in early 2008. These actions relieve the company of rental terms that were above the market as well as restoration obligations under the lease. As a result of the purchase and sale, we had a pre-tax net loss of $68.2 million in the quarter. The plant consolidation has significant savings associated with it, approximately $30 million per year lower expenses. In addition, we have avoided the need for capital expenditures at Edison of $50 million over the next ten years. We anticipate a double-digit return on this project which is expected to be completed in the second quarter of 2008. Our tax rate in the quarter…

(Operator Instructions) Your first question comes from John Janedis - Wachovia. John Janedis – Wachovia: Good morning and thank you. With the addition of some of the recent acquisitions within the About segment, how can we think of margins there going forward? Can you talk about standalone growth at About relative to where we've seen it. I know it has come down a bit, but was it much different from the 24% you reported in June? Thanks.

On the margin side, I'll let Martin answer the others but on a margin side, the acquisition of ConsumerSearch was an acquisition of a profitable high-margin business and those margins approximate the margins of the three About acquisitions so that will have little to no impact. Some of the margin contraction you saw in the quarter was really related to investments in some ventures which had some costs ahead of some revenue opportunities we see there. Martin Nisenholtz: With respect to the revenue picture, I think what we saw in the second quarter was improvements in the CPC side. We saw some volume issues in the first quarter which turned around in the second quarter and was, I think, a pretty significant improvement there in stabilization. The display piece remained strong through the year. John Janedis – Wachovia: Speaking of display, I know that you referenced a couple of campaigns that won't repeat online. Is that a temporary thing? Are you finding that some advertising is actually moving out of display? Martin Nisenholtz: That is a temporary thing, just July. John Janedis – Wachovia: Finally, I know it is early but can you talk about any anecdotal evidence that you're seeing increased job postings from employers rather than just the traffic at this point at the Times? Martin Nisenholtz: It is pretty early to talk about either one. I mean we're only three weeks into the Times experience. I think it is safe to say we have seen some improvement in Boston. But I don't think I can say at this point that we've seen significant new job postings.

That said, John, though, I think it is important to reiterate what we said about increase in traffic and increase in revenue and that is really across all three areas of the news media group: the regionals, Boston, and the Times. Martin Nisenholtz: It is very early.

We will take our next question from Lisa Monaco - Morgan Stanley. Lisa Monaco - Morgan Stanley: Janet, if you could elaborate on the weakness seen in the retail category in June? Jim, if you could give us an idea in terms of what one-time costs you expect to achieve this cost savings that you outlined.

I'll handle the Globe and the regionals and then I'll hand it over to Scott for the retail at the Times. In regard to the Globe, we are continuing to cycle against Filene’s which are difficult comparisons. That is pretty much over in regard to July. Going forward, we do have, as I noted in my remarks, some openings that we think will deliver some additional advertising, Neiman Marcus and Nordstrom's opening in Natick are strong. I said this at the beginning of the year, that with strong store openings and mall openings in the latter part of the year, that we expected after this difficult cycling comparison to the Filene’s comparisons, that we would see stronger opportunities for growth in the second half of the year. There's also another mall opening in Foxboro that is a lifestyle mall. It is called Patriot's Mall. That, we think, will also deliver incremental revenues, as well. In addition, as far as the regionals are concerned, they are seeing softness in the retail category. A lot of that is directly related to the Florida properties which, of course, are directly related to the real estate downturn that we have been seeing. Many of the retail categories have been adversely affected primarily because of that real estate decline, particularly home furnishings and the home stores. Scott? Scott Heekin-Canedy : Looking to department stores as maybe the signal indicator of what's going on in retail, we believe that the softness we have seen, especially in Q2, represents a shift in spending into the later part of the year. That is consistent with all of our discussions with department stores. We expect to get much of this back, if not more, in the back part of the year.

One time charge as related to the cost savings would be principally buyouts. We don't anticipate any material other one-time charges at this time. Lisa Monaco - Morgan Stanley: Is there any way to quantify that, Jim?

It's hard; it's hard. There's a lot of variables that go into that calculation. I wouldn't say it is a material part of our savings we expect in our results.

Your next question comes from Alexia Quadrani - Bear Stearns. Alexia Quadrani - Bear Stearns: Just a follow-up on your comment about the retail environment. You mentioned just now the pullback in the department store spending shifting to the back half of the year. Should we assume then from that commentary that it is not a question of these dollars in department stores going to other media, it is just really they're holding back on their marketing funds right now? Scott Heekin-Canedy : That is consistent with our discussions. For example, Lord & Taylor is under new ownership and it is repositioning its brand and will support it in the back half of the year. There are similar explanations for the other leading department stores. Alexia Quadrani - Bear Stearns: Shifting gears to the New England media group, we did see some improvement or some stabilization earlier this year and it looks like it has taken another turn for the worse. What really do you think caused that second change?

Alexia, I think it is predominantly the classified categories that we're continuing to see softness. Real estate, as you hear from everyone in our industry, is really having a major effect. Boston is not escaping that. Certainly help wanted and automotive as well. But in the second half of the year, not only are we seeing the store openings that I noted before in regard to retail, you're also seeing banking, all of the effects I said earlier in the year in regard to increased competition in banking take effect as well. For example, there will be a lot of Citibank activity in the second half of the year as they push their openings out and Bank of America is launching an affinity card that we know will have a great deal of effort put behind it. That competition is really heating up the activity with a lot of the other banks as well; Citizens, sovereign. So, we think that those two categories, in addition to another category which is telecom where we see a very heated competition bubbling up between Verizon and Comcast and branding continuing with AT&T and Cingular really adding to the opportunities in the second half. It is predominantly a classifieds story in regard to the softness that we've seen in New England but there are some categories in the retail and national sector that we see as having opportunity for us in the second half. Alexia Quadrani - Bear Stearns: Just going back to an earlier question on the two large campaigns that don't seem to be with you in July. Are those two large campaigns, do you find that those businesses are going to other sites or just being pulled for the month of July? Scott Heekin-Canedy : They just didn't repeat. They were special last year. They were launches last year. They're not going to other sites, no. Alexia Quadrani - Bear Stearns: But you feel the outlook, I know you mentioned easy comparisons but also the demand, you find the outlook on the interactive and August onward still being very strong?

We expect to have a strong quarter.

Your next question comes from Fred Searby - JP Morgan. Fred Searby - JP Morgan: I wondered if you could just tell us what of the $130 million in cost savings next year, that's a gross number, what the net number is that we should expect; and also for the 230, what the net number will be. Thank you.

Well, you know, we said that is the gross number and the two offsets for that would be whatever inflationary costs are and what the buyout costs would be. We don't see any other offsets against that. You can make a judgment as to what the inflation impact is but again, we expect a significant net contribution to our profitability after both of those. But at this point, buyout numbers would be very hard to predict. Our cost structure, non-raw material cost structure is $2.5 billion, so apply some reasonable factors against that you can see that we would be netting a significant portion of that in our bottom line. Fred Searby - JP Morgan: Just one follow-up. The New York real estate market has been anomalously strong and resilient. I wondered on the real estate classifieds, you cited it as an area of weakness, I am sure it has outperformed the rest of the country, but what is that trending down in June, if you could just break that out? Thank you. Martin Nisenholtz: The real estate declines in the second quarter were in the mid teens. June was consistent with the overall trend in the quarter. A little bit higher for print and in high single-digit territory for the digital.

Your next question comes from Paul Ginocchio - Deutsche Bank. Paul Ginocchio - Deutsche Bank: The regional group declines were slightly less in June than May. Should we read anything into that? Do you think we're through the worst? Second, can we go back to the question of the organic growth in About in June for the second quarter without the new acquisitions? Thanks.

I think as far as the regionals are concerned, it is very, very hard to predict. The classifieds continue to be under pressure and particularly in the real estate category, Sarasota is really the major issue for the real estate decline in the Florida market. As I noted earlier, that does affect some of the retail categories as well. I think going forward, I think that once indeed we cycle through these real estates issues which I know you have focused on, Paul, I think there is an opportunity for us to see some incremental growth but I think it is very hard to predict what that opportunity will be until we see some relief of the pressure on the real estate side. Martin Nisenholtz: As far as contribution from acquisitions, the principal contributor through acquisitions would have been ConsumerSearch and that really contributed a few points to the revenue growth and also quite a few points to the operating profit growth as well. Paul Ginocchio - Deutsche Bank: Have you had any comments from Macy's post the CMO change? Maybe they're reviewing how they need to work on their legacy May stores? Scott Heekin-Canedy : We're in constant communications with Macy's and we have an excellent relationship with them. They view us and we view them as a strategic partner. The CMO change has not really affected the way they spend with the New York Times. Paul Ginocchio - Deutsche Bank: And in Boston?

In regard to Boston, again the relationship is very similar to how it is in New York. There is a strong focus in regard to how they use the papers and how they will continue to use the papers both in regard to ROP and preprints.

Your next question comes from Craig Huber - Lehman Brothers. Craig Huber - Lehman Brothers: Can we just focus for a minute on the July trend you're seeing so far across your three main groups? Is there any significant change one way or the other versus what we saw in June?

I'll talk about Boston and the regionals. As I noted earlier, Craig, there are some categories that we see competition heating up. I noted that telecom with Verizon and Comcast and the branding programs with AT&T's Cingular we think will have an opportunity for us to show some incremental growth in that category. Healthcare, because it has become mandatory on July 1st in Massachusetts has also spurred activity in the healthcare area. That provides us an opportunity, we believe. The banking category as I noted earlier with competition heating up there. There has also been quite a bit of activity already thus far this year in the hotel category with the Ritz-Carlton being renamed under the TAJ umbrella and new hotels opening, Intercontinental and Liberty. That provides us with some is opportunity going forward, and the retail category that I noted earlier with the store openings. That said, we still are under pressure in regard to the classified side but those opportunities could provide us with additional opportunities for growth in the second half. As far as the regional categories, there is a lot of activity there in regard to the new products that they've introduced all of their magazines, all of their weekly newspapers, and a very heavy concentration on some of the categories that are showing growth. There are areas of other regional group that are showing growth in real estate but you know, it is very select markets and the dependence or I should say the large percentage of growth of revenues rather that come out of our California and Florida properties which is really total revenue, about 65%, those properties, because they are experiencing softness on the real estate side, that will affect their performance going forward. But as soon as we see some pressure of…

If I could just get maybe five or six numbers for you. I'm curious, the six largest advertisers for your flagship. What was the percent change in ad revenues there in the second quarter, if you could quantify that, please?

I think we'll have to get back to you on that with the specifics, Craig.

If I could ask a more mundane question. Excluding these two large one-time items in your newsprint division in the quarter, what was your non-newsprint cash cost percent change? What was the average price change for your newsprint and also consumption change? Thanks.

Our total expenses companywide were down 3.9%. About 3% of that was as a result of lower raw material costs. About half of that decline or about 1.5% would be rate and the other would be volume.

Maybe strip out the two one-time items and get down to pure, non-newsprint cash costs?

The one-time items we have in the quarter on a cash basis where we had buyout costs which had declined I think about $4 million or so and we had costs going the other way. So, those two largely offset so, I think the 3.9% would be a good proxy. Now, I would also say that About.com's costs were up fairly dramatically. So, if you looked at the news group costs, they were down 4.5%, not 3.9%. So, it was a fairly large increase in our costs to support the growth of revenues in some of our other new initiatives in About that drove costs higher.

Your next question comes from Peter Appert - Goldman Sachs. Peter Appert - Goldman Sachs: Janet, is it possible to quantify specifically the revenue benefit you see associated with the opening of the new retail locations in Boston, specifically does that get you to a positive comp in the retail category in the fourth quarter? Jim, this is a follow on I think to what Fred was asking earlier. I just want to make sure we're on the same page here in terms of cost dynamic in '08. Rough calculations imply, I think, that based on the $130 million cost savings, we'll give you a pass on the severance cost, you would be looking at total operating expenses down in the 4% to 5% range. Add a couple percent for inflation still implies total costs may be down a couple of percent next year. Is that how you were thinking about it, Jim?

That's fair.

As far as the retail, let me just give you a little bit more color on that, Peter. There is quite a bit of activity going on in New England in regard to the retail category. This Natick Collection, the name of the mall opening in early September, advertising will probably start late August. With Neiman Marcus and Nordstrom's both going in and this is the first Nordstrom's in the area, so, it is a very, very big play for them. With two major stores of their caliber in that mall, there is a lot of activity and I think a lot of opportunity for us in that area. In addition, with the other mall opening again in the third quarter in September, the Patriot Mall in Foxboro, that again offers some real opportunities. There are a number of stores that are going in that area. But then there is another phenomenon going on in regard to Bloomingdale's and Macy's. Bloomingdale's has expanded its store in Chestnut Hill and it is very high market. That has an opportunity. It was only one store and now it really classifies almost as a two-store property in that mall. Macy's certainly has quite a bit of activity with their advertising in Boston and will continue to as they've expanded their base there as well with the rename. Filene’s Basement has also opened in Boston which causes an opportunity for us to think about more incremental growth there. From a standpoint of other malls that have either upgraded or added stores, L.L. Bean has entered the market in a fairly big way. That provides us with more opportunity, as well. So, with all of that activity in place, we think that there is an opportunity, particularly with easier comps in the second half for us to see retail opportunity for growth. To predict it is very difficult, but because we're cycling off Filene’s and because the comps are easier, we think there is opportunity for growth.

Your next question comes from Edward Atorino - Benchmark. Edward Atorino – Benchmark: Do you have any sort of advance commitments on some of these stores? Can you give us an update on your thinking regarding refinancing the building? I know that's a speculation from time to time. But if you would just update us on your thinking about that.

There are very large programs in front of these advertisers as far as the store openings. I believe that there are some bookings but I can't confirm that. But from a standpoint of the programs that are in front of them, I know that they really are very expansive in regard to store opening opportunities.

With respect to the building, I really don't have an update to what we previously have said other than we continue to evaluate the building as a valuable asset. We weigh factors such as market conditions and so on.

Since we have no further questions at this time. I would like to turn the conference back over to you, Catherine Mathis, for any additional or closing remarks. Catherine Mathis: Thank you all for joining us. If there are any additional questions, please give me a call. Bye now.