Press Releases

Annual Reports

Form 10-K's



Investor FAQ's




Stock Quotes

SEC Filings


Risk Factors

Y2K Disclosure

Information Requests

Site Map  

Year 2000 Readiness Disclosure

The following discussion of the Company's plans and assessments with respect to the Year 2000 problem is from the Company's Form 10-Q for the period ended September 26, 1999.

As of September 26, 1999, 99% of all systems had been remediated and tested.

The Company has evaluated the potential impact of the situation commonly known as the "Year 2000 problem." The Year 2000 problem, which is common to most corporations, concerns the ability of information systems, primarily computer software programs, to properly recognize and process date-sensitive information related to the Year 2000.

The Company's State of Readiness

In April 1997 the Company began to identify all of its Year 2000 concerns for all facets of its operations. A Year 2000 Program Office was established, and a detailed inventory of all systems issues required to be addressed in connection with the Year 2000 was created. Information was gathered for each system including:

  • type of system and its relative importance
  • probable method and cost of remediation and
  • targeted start and end dates for addressing Year 2000 issues.

This inventory includes systems to:

  • create the Company's publications
  • operate the Company's production and distribution facilities
  • operate the Company's broadcast stations
  • operate the Company's business and financial applications and
  • control facility and infrastructure areas (building systems, utilities, security systems, etc.).

The systems identified in the inventory were further categorized into five priority classifications:

  • Shutdown -- highest priority. If these systems (e.g., editorial systems, presses, and utilities) were to fail, the Company's ability to continue its operations would be seriously impaired. Approximately 8% of the identified systems are in this category.
  • Impractical Workaround -- If these systems were to fail, the available alternatives are too expensive to implement. Approximately 9%.
  • Costly Workaround -- If these systems were to fail, a feasible but costly alternative exists. Approximately 28%.
  • Additional But Manageable Cost -- If these systems fail, an alternative solution exists at a moderate cost. Approximately 22%.
  • No Impact -- Little if any consequence to the business if these systems fail. Approximately 33%.

By October 1997 the Company had completed the inventory phase and turned its attention to the remediation phase. Target dates for each item in the inventory were identified and are continually monitored to ensure timely resolution of the issues. The remediation strategy involves a mix of purchasing new systems, modifying existing systems, retiring obsolete systems and confirming vendor compliance. As of September 26, 1999, 99% of all systems had been remediated and tested. Testing systems for Year 2000 compliance includes the use of dates that simulate transactions and environments, both prior and subsequent to the Year 2000, including specific testing for leap year.

The Company has communicated with most of its suppliers and other vendors, and is contacting its significant advertisers, seeking assurances that they will be Year 2000 compliant. Although there is no certainty that any major business partner will function without disruption in the Year 2000, the Company's goal is to obtain detailed information about its advertisers' and suppliers' Year 2000 plans and to identify those companies that could pose a significant risk of failure. The Company will make alternate arrangements where necessary.

Generally, the Company is not dependent on a single source for any products or services, except for products or services supplied by public utilities. In the event a significant supplier or other vendor is unable to provide products or services to the Company due to a Year 2000 failure, the Company believes it has adequate alternate sources for such products or services. There is no guarantee, however, that such alternate products or services would be available at the same terms and conditions or that the Company would not experience some adverse effects as a result of switching to alternate sources.

The Costs to Address the Company's Year 2000 Issues

To date, the Company has identified total estimated costs in connection with the Year 2000 problem of between $15.0 million and $20.0 million. This estimate does not include systems previously scheduled for replacement without regard to the Year 2000 issue. Of this amount, approximately $10.0 million will be for systems replacements involving capital outlays (which are not deducted as an expense on the Company's Consolidated Statements of Income). The remaining amount is being deducted as an expense on the Company's Consolidated Statements of Income through 1999. Approximately 75% of this expense total is attributable to the use of currently available internal resources. The cost of the Company's Year 2000 remediation efforts is being funded with cash flows from operations.

Risks of Year 2000 Issues

With respect to its internal operations, those over which the Company has direct control, the Company believes that all of its critical systems (i.e., those categorized in the shutdown or impractical workaround categories described above) will be remediated and tested by the end of the fourth quarter of 1999. Like most large business enterprises, the Company is reliant upon certain critical vendors. Certain of these vendors have yet to provide a Year 2000 compliant product, while services that are provided by certain other vendors cannot be tested (i.e., power and telecommunications). The Company believes the possibility of critical vendor failures to be remote based on the information supplied to date by such critical vendors.

Contingency Plans

The Company's Year 2000 strategies include contingency planning, encompassing business continuity both within the Company and in the external business environment. The planning effort encompasses all critical Company areas. The Company's contingency planning for the Year 2000 will address a variety of scenarios that could occur.

Because of the Company's extensive efforts to formulate and carry out an effective Year 2000 remediation program, the Company believes that such remediation will be completed on a timely basis and should effectively minimize any disruption to the Company's operations due to Year 2000 issues. The Company does not expect Year 2000 issues to have a material effect on its results of operations, liquidity or financial condition.

Copyright 1999 The New York Times Company. All Rights Reserved. Disclaimer   (Search does not include Press Releases and PDF files)