We are a leading global, multimedia news and information company that currently includes newspapers, digital businesses, investments in paper mills and other investments. We classify our businesses based on our operating strategies into two reportable segments, the News Media Group and the About Group. Our segments and divisions are:
News Media Group (consisting of The New York Times Media Group, which includes The New York Times ("The Times"), the International Herald Tribune (the "IHT"), NYTimes.com, and related businesses; and the New England Media Group, which includes The Boston Globe (the "Globe"), BostonGlobe.com, Boston.com, the Worcester Telegram & Gazette (the "T&G"), Telegram.com, and related businesses. The News Media Group generates revenues principally from advertising and circulation. Other revenues primarily consist of revenues from news services/syndication, rental income, digital archives, commercial printing and direct mail advertising services. The News Media Group's main operating costs are employee-related costs and raw materials, primarily newsprint. About Group (consisting of About.com, ConsumerSearch.com, CalorieCount.com and related businesses). The About Group generates revenues through cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad), display advertising and e-commerce (including sales lead generation). Almost all of its revenues (95% in the first quarter of 2012) are derived from the sale of cost-per-click and display advertising. Cost-per-click advertising accounted for 56% of the About Group's total advertising revenues in the first quarter of 2012. The About Group's main operating costs are employee-related costs and content and hosting costs.
Joint Ventures Our investments accounted for under the equity method are as follows:
? a 49% interest in Metro Boston LLC, which publishes a free daily newspaper in the greater Boston area;

? a 49% interest in a Canadian newsprint company, Donohue Malbaie Inc.;

? a 40% interest in a partnership, Madison Paper Industries, operating a supercalendered paper mill in Maine; and

? a 25% interest in quadrantONE LLC, an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Web sites.

We have a 4.97% interest in Fenway Sports Group, which owns the Boston Red Sox baseball club; Liverpool Football Club (a soccer team in the English Premier League); approximately 80% of New England Sports Network (a regional cable sports network); and 50% of Roush Fenway Racing (a leading NASCAR team). Effective with the sale of 100 of our units in Fenway Sports Group on February 3, 2012, given our reduced ownership level and lack of influence on the operations of Fenway Sports Group, we changed the accounting for this investment from the equity method to the cost method. Therefore, we no longer recognize our proportionate share of the operating results of Fenway Sports Group in joint venture results in our Condensed Consolidated Statements of Operations. See the "Recent Developments" section for additional information on the sale of a portion of our ownership interest in Fenway Sports Group.
During the first quarter of 2012, total revenues decreased 0.3% compared with the same prior-year period, as a 9.7% growth in circulation revenues could not offset an 8.1% decline in total advertising revenues.
The advertising marketplace remained challenging in the first quarter of 2012, reflecting the uneven U.S. economic environment and uncertain global conditions. Compared with the prior-year period, total advertising revenues decreased 8.1% in the first quarter of 2012 as print advertising revenues declined 7.2% and digital advertising revenues declined 10.3%. The decrease in digital advertising revenues was driven mainly by declines at the About Group.
At the News Media Group, advertising revenues decreased 6.1% in the first quarter of 2012 compared with the same prior-year period, due to a 7.2% reduction in print advertising revenues, which was similar to the level experienced in the fourth quarter of 2011, and a 2.3% decline in digital advertising revenues. We expect advertising revenue trends at the News Media Group in the second quarter of 2012 to be similar to the level experienced in the first quarter of 2012.
About Group advertising revenues decreased in the first quarter of 2012 compared with the same prior-year period mainly as a result of declines in both cost-per-click and display advertising. Cost-per-click advertising revenues decreased due to lower click-through rates and cost-per-click advertising rates. The declines in cost-per-click advertising rates were in line with the marketplace. However, the About Group began to see a positive impact on traffic in the fourth quarter of 2011, and that trend continued into the first quarter of 2012. Following the rebuilding of About.com's sales team, display advertising revenues improved slightly in the first quarter of 2012. In the second quarter of 2012, we expect advertising revenue trends at the About Group to improve modestly from the level experienced in the first quarter of 2012, although we do not expect to see a meaningful improvement in revenue trends until the second half of 2012 when we expect display advertising revenues will return to growth.

Our first-quarter 2012 results reflect the strength of the circulation side of our business as we continue to execute on our digital strategy, expanding our digital subscription base and further developing our new consumer revenue stream. Circulation revenues increased 9.7% in the first quarter of 2012 compared with the first quarter of 2011 as the addition of digital subscription offerings and the increase in home-delivery and weekday single-copy prices in January 2012 at The Times offset a decline in print copies sold across the News Media Group. In addition, during the first quarter of 2012, the rate of home-delivery circulation volume declines moderated at The Times following the launch of digital subscriptions due to new orders and improved retention rates. We expect circulation revenues to increase in the high-single digits in the second quarter of 2012 because of growth in digital subscriptions as well as from the print price increases implemented at The Times and the Globe in the first and second quarters of 2012, respectively.
One year after launching digital subscriptions, paid subscribers to digital subscription packages, e-readers and replica editions of The Times and the IHT totaled approximately 454,000 as of March 18, 2012, an increase of approximately 16% since the end of the fourth quarter of 2011. Paid digital subscribers to BostonGlobe.com and the Globe's e-readers and replica editions totaled approximately 18,000 as of March 18, 2012, up approximately 13% since the end of the fourth quarter of 2011. Therefore, our total paid subscribers to digital products across our Company were approximately 472,000 one year following The Times launch and we continue to refine and build upon our digital subscription initiatives.
Operating costs increased 1.1% in the first quarter of 2012 compared with the same period in 2011 primarily due to accelerated depreciation expense recognized for certain assets at the T&G's facility in Millbury, Mass., higher severance, compensation and other costs, offset in part by lower benefits and outside printing expense. We expect operating costs to increase in the low-single digits in the second quarter of 2012 and modestly for the 2012 full year. We plan to increase spending as we continue to invest in our digital capabilities and subscription acquisition efforts, invest in the About Group's sales and marketing efforts, and reset our variable compensation targets, even as we expect cost savings in our production and distribution operations and from further leveraging our centralized processes and resources.
Since the fourth quarter of 2011, our liquidity position improved further as we finished the first quarter of 2012 with cash, cash equivalents and short-term investments of approximately $431 million in large part due to proceeds from the sales of the Regional Media Group and 100 of our units in Fenway Sports Group. As of March 25, 2012, our total debt and capital lease obligations were approximately $774 million and our total debt and capital lease obligations, net of cash, cash equivalents and short-term investments, or "net debt," were approximately $343 million. We believe net debt provides a useful measure of our liquidity and overall debt position. As of March 25, 2012, we had no outstanding borrowings under our $125.0 million asset-backed five-year revolving credit facility. See the "Recent Developments" section for additional information on the sales of the Regional Media Group and a portion of our ownership interest in Fenway Sports Group.
We expect the following on a pre-tax basis in 2012:
? Results from joint ventures: $8 to $10 million,

? Depreciation and amortization: $105 to $110 million,

? Interest expense, net: $60 to $65 million, and

? Capital expenditures: $50 to $60 million.

RECENT DEVELOPMENTS

Impairment of Investments
In the first quarter of 2012, we recorded a non-cash impairment charge of $4.9 million to reduce the carrying value of certain investments to fair value. The impairment charge was primarily related to our investment in Ongo Inc., a consumer service for reading and sharing digital news and information from multiple publishers.

Gain on Sale of Investment
On February 3, 2012, we sold 100 of our units in Fenway Sports Group for an aggregate price of $30.0 million. We recorded a pre-tax gain on the sale of $17.8 million in the first quarter of 2012. Following the sale, we own 210 units, or 4.97%, of Fenway Sports Group. We continue to market our remaining 210 units in Fenway Sports Group for sale, in whole or in parts. Sale of Regional Media Group - Discontinued Operations On January 6, 2012, we completed the sale of the Regional Media Group, consisting of 16 regional newspapers, other print publications and related businesses, to Halifax Media Holdings LLC for approximately $140 million in cash. The sale resulted in an after-tax gain of $30.2 million in the first quarter of 2012. The net after-tax proceeds from the sale, including a tax benefit, were approximately $150 million, which we are using for general corporate purposes.
The results for the Regional Media Group, which had previously been included in the News Media Group reportable segment, have been classified as discontinued operations for all periods presented.

RESULTS OF OPERATIONS

The following table presents our consolidated financial results.

                                                            For the Quarters Ended
                                                    March 25,        March 27,
(In thousands)                                         2012            2011        % Change
Revenues
Advertising                                       $    237,868     $   258,931        (8.1 )
Circulation                                            226,994         206,928         9.7
Other                                                   34,514          34,805        (0.8 )
Total revenues                                         499,376         500,664        (0.3 )
Operating costs
Production costs:
Raw materials                                           33,363          34,153        (2.3 )
Wages and benefits                                     111,787         112,460        (0.6 )
Other                                                   68,042          68,393        (0.5 )
Total production costs                                 213,192         215,006        (0.8 )
Selling, general and administrative costs              234,278         234,066         0.1
Depreciation and amortization                           32,290          25,673        25.8
Total operating costs                                  479,760         474,745         1.1
Operating profit                                        19,616          25,919       (24.3 )
Gain on sale of investment                              17,848           5,898           *
Impairment of investments                                4,900               -         N/A
Loss from joint ventures                                    29           5,749       (99.5 )
Interest expense, net                                   15,452          24,591       (37.2 )
Income from continuing operations before income
taxes                                                   17,083           1,477           *
Income tax expense/(benefit)                             4,076            (596 )         *
Income from continuing operations                       13,007           2,073           *
Income from discontinued operations, net of
income taxes                                            29,070           3,153           *
Net income                                              42,077           5,226           *
Net loss attributable to the noncontrolling
interest                                                    53             193       (72.5 )
Net income attributable to The New York Times
Company common stockholders                       $     42,130     $     5,419           *

Revenues

Revenues by reportable segment and for the Company as a whole were as follows:

                          For the Quarters Ended
                    March 25,     March 27,
(In thousands)        2012          2011       % Change
News Media Group   $  475,432    $  469,522        1.3
About Group            23,944        31,142      (23.1 )
Total revenues     $  499,376    $  500,664       (0.3 )

News Media Group

Advertising, circulation and other revenues by division of the News Media Group
and for the Group as a whole were as follows:

                                        For the Quarters Ended
                                  March 25,     March 27,
(In thousands)                      2012          2011       % Change
The New York Times Media Group
Advertising                      $  173,359    $  181,546       (4.5 )
Circulation                         189,967       168,362       12.8
Other                                20,723        23,195      (10.7 )
Total                            $  384,049    $  373,103        2.9
New England Media Group
Advertising                      $   41,875    $   47,719      (12.2 )
Circulation                          37,027        38,566       (4.0 )
Other                                12,481        10,134       23.2
Total                            $   91,383    $   96,419       (5.2 )
Total News Media Group
Advertising                      $  215,234    $  229,265       (6.1 )
Circulation                         226,994       206,928        9.7
Other                                33,204        33,329       (0.4 )
Total                            $  475,432    $  469,522        1.3

Advertising Revenues
Advertising revenues are primarily determined by the volume, rate and mix of advertisements. Advertising spending, which drives a significant portion of revenues, is susceptible to economic conditions and the ongoing transformation in our industry. During the first quarter of 2012, the advertising marketplace remained challenging as advertisers continued to exercise caution in response to the uneven U.S. economic environment and uncertain global conditions. Changes in spending patterns and marketing strategies of our advertisers in response to such conditions and alternative digital advertising platforms contributed to the declines in both our print and digital advertising revenues during the first quarter of 2012. Print advertising revenue trends in the first quarter of 2012 were similar to those in the fourth quarter of 2011, while digital advertising revenues declined in the first quarter of 2012 compared with the same period in 2011. Digital advertising revenues were under pressure in January and February, but returned to growth in March 2012.
Total News Media Group advertising revenues decreased 6.1% in the first quarter of 2012 compared with the first quarter of 2011 due to lower print and digital advertising revenues across most advertising categories. Print advertising revenues represented approximately 77% of total advertising revenues for the News Media Group. In the first quarter of 2012, print advertising revenues declined 7.2% and digital advertising revenues declined 2.3% mainly due to lower national and classified advertising revenues, compared with the same prior-year period.
Advertising revenues (print and digital) by category for the News Media Group were as follows:

For the Quarters Ended

                  March 25,     March 27,
(In thousands)      2012          2011       % Change
National         $  145,397    $  154,668       (6.0 )
Retail               34,301        34,588       (0.8 )
Classified           30,293        33,673      (10.0 )
Other                 5,243         6,336      (17.3 )
Total            $  215,234    $  229,265       (6.1 )

Below is a percentage breakdown of advertising revenues in the first quarter of 2012 (print and digital) by division.

                                                                     Classified
                                         Retail                                                                       Other
                                          and         Help-       Real       Auto-                    Total        Advertising
                           National     Preprint     Wanted      Estate      motive      Other      Classified      Revenues      Total
The New York Times
Media Group                   77 %         12 %         3 %         4 %         1 %        2 %          10 %             1 %       100 %
New England Media Group       28 %         30 %         6 %         6 %        11 %        9 %          32 %            10 %       100 %
Total News Media Group        68 %         16 %         3 %         5 %         3 %        3 %          14 %             2 %       100 %

The New York Times Media Group

Total advertising revenues decreased in the first quarter of 2012 compared with the same period in 2011 due to lower print and digital advertising revenues. Print advertising revenues were affected by declines in advertiser spending in most advertising categories, reflecting the continued uneven U.S. economic environment, uncertain global conditions and secular transformation of our industry. Reduced spending on digital platforms, primarily in the real estate classified and national advertising categories, contributed to lower digital advertising revenues.

During the first quarter of 2012, the declines in total national and classified advertising revenues were offset in part by higher print and digital retail advertising revenues, compared with the first quarter of 2011. The decrease in total national advertising revenues was mainly driven by declines in the corporate, national automotive and telecommunications categories offset in part by growth in the luxury category. The declines in total classified advertising revenues were primarily in the real estate category. Total retail advertising revenues increased as advertisers increased spending mainly in the department stores category.

New England Media Group

Total advertising revenues declined in the first quarter of 2012 compared with the same period in 2011 due to declines in both print and digital advertising revenues. The decline in print advertising revenues was driven by lower advertising in all categories, reflecting uncertain national and local economic conditions and secular forces in our industry. The decrease in digital advertising revenues was mainly due to reduced spending in the national category partially offset by higher spending in the automotive classified category.

During the first quarter of 2012, total advertising revenues declined due to lower national, retail and classified advertising revenues. The declines in total national advertising revenues were mainly driven by lower advertiser spending in the banks and telecommunications categories. The uncertain national and local economic conditions continued to negatively affect total retail advertising revenues, as retailers cut spending mainly in the electronics/appliance and department stores categories. The soft economic environment coupled with secular changes in our industry contributed to declines in total classified advertising revenues, primarily in the real estate and automotive categories.

Circulation Revenues

Circulation revenues are based on the number of copies of the printed newspaper (through home-delivery subscriptions and single-copy and bulk sales) and digital subscriptions sold and the rates charged to the respective customers. Total circulation revenues consist of revenues from our print and digital products, including The Times digital subscription packages on NYTimes.com and across other digital platforms, which began in the second quarter of 2011, as well as BostonGlobe.com and digital subscription packages at the IHT, which started in the fourth quarter of 2011.

Circulation revenues increased 9.7% in the first quarter of 2012 compared with the first quarter of 2011 as the addition of digital subscription offerings and the increase in home-delivery and weekday single-copy prices in January 2012 at The Times offset a decline in print copies sold across the News Media Group. In addition, during the first quarter of 2012, the rate of home-delivery circulation volume declines moderated at The Times following the launch of digital subscriptions due to new orders and improved retention rates.

Other Revenues

Other revenues primarily consist of revenues from news services/syndication, rental income, digital archives, commercial printing and direct mail advertising services. Other revenues decreased in the first quarter of 2012 compared with the same period in 2011.

About Group

About Group revenues decreased in the first quarter of 2012 compared with the same period in 2011 mainly due to lower cost-per-click and display advertising. The declines in cost-per-click advertising revenues were due to lower click-through rates and cost-per-click advertising rates. The declines in cost-per-click advertising rates were in line with the marketplace. During the first quarter of 2012, lower display advertising revenues continued to result from competitive marketplace pressures as well as uneven economic conditions.

Operating Costs

Operating costs were as follows:

                                                   For the Quarters Ended
                                             March 25,     March 27,
(In thousands)                                 2012          2011       % Change
Production costs:
Raw materials                               $   33,363    $   34,153       (2.3 )
Wages and benefits                             111,787       112,460       (0.6 )
Other                                           68,042        68,393       (0.5 )
Total production costs                         213,192       215,006       (0.8 )
Selling, general and administrative costs      234,278       234,066        0.1
Depreciation and amortization                   32,290        25,673       25.8
Total operating costs                       $  479,760    $  474,745        1.1

Production Costs

Production costs decreased in the first quarter of 2012 compared with the same period in 2011 mainly due to lower benefits expense (approximately $4 million) and outside printing costs (approximately $3 million), offset in part by higher compensation costs (approximately $3 million) and various other costs. Benefits expense declined mainly due to lower pension benefits expense. Cost-saving initiatives primarily contributed to the decline in outside printing costs. Compensation costs increased mainly due to costs associated with our digital initiatives and annual salary increases.

Selling, General and Administrative Costs

Selling, general and administrative costs were flat in the first quarter of 2012 compared with the same period in 2011 as higher severance costs (approximately $5 million) were mostly offset by lower benefits expense (approximately $4 million) and compensation costs (approximately $1 million). The increase in severance costs was driven by the level of workforce reduction programs quarter-over-quarter at Corporate and the News Media Group. Benefits expense declined mainly due to lower pension benefits expense. Compensation costs declined mainly due to lower stock-based and variable compensation, offset in part by costs associated with our digital initiatives and annual salary increases.

Depreciation and Amortization

Total depreciation and amortization, by reportable segment and for the Company
as a whole, was as follows:

                                              For the Quarters Ended
                                       March 25,      March 27,
(In thousands)                            2012           2011       % Change
News Media Group                      $    30,116    $    22,923       31.4
About Group                                 2,174          2,750      (20.9 )
Total depreciation and amortization   $    32,290    $    25,673       25.8

Depreciation and amortization expense at the News Media Group increased in the first quarter of 2012 compared with the first quarter of 2011 primarily due to the $6.7 million of accelerated depreciation expense recognized for certain assets at the T&G's facility in Millbury, Mass., associated with the consolidation of most of T&G's printing into the Globe's facility in Boston, Mass., which was completed early in the second quarter of 2012.

Segment Operating Costs

The following table sets forth consolidated operating costs by reportable
segment, Corporate and the Company as a whole.

                               For the Quarters Ended
                         March 25,     March 27,
(In thousands)             2012          2011       % Change
News Media Group        $  452,358    $  443,646        2.0
About Group                 16,948        16,995       (0.3 )
Corporate                   10,454        14,104      (25.9 )
Total operating costs   $  479,760    $  474,745        1.1

News Media Group

Operating costs for the News Media Group increased in the first quarter of 2012 compared with the first quarter of 2011. This was primarily due to higher depreciation and amortization expense (approximately $7 million), compensation costs (approximately $6 million), severance costs (approximately $2 million) and promotion costs (approximately $1 million), offset in part by lower benefits (approximately $6 million) and outside printing expense (approximately $3 million). Depreciation and amortization expense increased primarily due to the accelerated depreciation expense recognized for certain assets at the T&G's . . .