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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 1-5837
THE NEW YORK TIMES COMPANY
(Exact name of registrant as specified in its charter)
| | | | | | | | |
New York | | 13-1102020 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
620 Eighth Avenue, New York, New York 10018
(Address and zip code of principal executive offices)
Registrant’s telephone number, including area code 212-556-1234
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Class A Common Stock | | NYT | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | |
Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | | |
Smaller reporting company | ☐ | Emerging growth company | ☐ | | | | |
If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Number of shares of each class of the registrant’s common stock outstanding as of November 1, 2024 (exclusive of treasury shares):
| | | | | | | | |
Class A Common Stock | 163,173,722 | | shares |
Class B Common Stock | 780,724 | | shares |
THE NEW YORK TIMES COMPANY
INDEX
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| | | | |
PART I | | | | Financial Information | | |
Item | 1 | | Financial Statements | | |
| | | Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 | | |
| | | Condensed Consolidated Statements of Operations (unaudited) for the quarters and nine months ended September 30, 2024 and September 30, 2023 | | |
| | | Condensed Consolidated Statements of Comprehensive Income (unaudited) for the quarters and nine months ended September 30, 2024 and September 30, 2023 | | |
| | | Condensed Consolidated Statements of Changes In Stockholders’ Equity (unaudited) for the quarters and nine months ended September 30, 2024 and September 30, 2023 | | |
| | | Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2024 and September 30, 2023 | | |
| | | Notes to the Condensed Consolidated Financial Statements | | |
Item | 2 | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | |
Item | 3 | | Quantitative and Qualitative Disclosures About Market Risk | | |
Item | 4 | | Controls and Procedures | | |
| |
PART II | | | | Other Information | | |
Item | 1 | | Legal Proceedings | | |
Item | 1A | | Risk Factors | | |
Item | 2 | | Unregistered Sales of Equity Securities and Use of Proceeds | | |
Item | 5 | | Other Information | | |
Item | 6 | | Exhibits | | |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (Unaudited) | | |
Assets | | | | |
Current assets | | | | |
Cash and cash equivalents | | $ | 204,620 | | | $ | 289,472 | |
Short-term marketable securities | | 288,325 | | | 162,094 | |
Accounts receivable (net of allowances of $11,770 as of September 30, 2024 and $12,800 as of December 31, 2023) | | 188,947 | | | 242,488 | |
Prepaid expenses | | 44,927 | | | 59,712 | |
Other current assets | | 68,161 | | | 27,887 | |
Total current assets | | 794,980 | | | 781,653 | |
Other assets | | | | |
Long-term marketable securities | | 327,435 | | | 257,633 | |
Property, plant and equipment (less accumulated depreciation and amortization of $903,880 as of September 30, 2024 and $870,329 as of December 31, 2023) | | 495,056 | | | 514,245 | |
Goodwill | | 416,782 | | | 416,098 | |
Intangible assets, net | | 264,810 | | | 285,490 | |
Deferred income taxes | | 131,497 | | | 114,505 | |
Miscellaneous assets | | 331,541 | | | 344,971 | |
Total assets | | $ | 2,762,101 | | | $ | 2,714,595 | |
See Notes to Condensed Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS-(Continued)
(In thousands, except share and per share data)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | (Unaudited) | | |
Liabilities and stockholders’ equity | | | | |
Current liabilities | | | | |
Accounts payable | | $ | 137,104 | | | $ | 116,942 | |
Accrued payroll and other related liabilities | | 146,105 | | | 174,316 | |
Unexpired subscriptions revenue | | 177,215 | | | 172,772 | |
| | | | |
Accrued expenses and other | | 129,174 | | | 147,529 | |
Total current liabilities | | 589,598 | | | 611,559 | |
Other liabilities | | | | |
| | | | |
Pension benefits obligation | | 211,334 | | | 219,451 | |
Postretirement benefits obligation | | 18,770 | | | 19,402 | |
Other | | 90,347 | | | 100,964 | |
Total other liabilities | | 320,451 | | | 339,817 | |
Stockholders’ equity | | | | |
Common stock of $.10 par value: | | | | |
Class A – authorized: 300,000,000 shares; issued: as of September 30, 2024 – 177,746,886; as of December 31, 2023 – 176,951,162 (including treasury shares: as of September 30, 2024 – 14,442,932; as of December 31, 2023 – 13,189,925) | | 17,776 | | | 17,697 | |
Class B – convertible – authorized and issued shares: as of September 30, 2024 – 780,724; as of December 31, 2023 – 780,724 | | 78 | | | 78 | |
Additional paid-in capital | | 334,601 | | | 301,287 | |
Retained earnings | | 2,222,977 | | | 2,117,839 | |
Common stock held in treasury, at cost | | (381,569) | | | (320,820) | |
Accumulated other comprehensive loss, net of income taxes: | | | | |
Foreign currency translation adjustments | | 1,087 | | | 910 | |
Funded status of benefit plans | | (346,021) | | | (353,286) | |
Net unrealized gain/(loss) on available-for-sale securities | | 3,123 | | | (486) | |
Total accumulated other comprehensive loss, net of income taxes | | (341,811) | | | (352,862) | |
| | | | |
| | | | |
Total stockholders’ equity | | 1,852,052 | | | 1,763,219 | |
Total liabilities and stockholders’ equity | | $ | 2,762,101 | | | $ | 2,714,595 | |
See Notes to Condensed Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarters Ended | | For the Nine Months Ended |
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
| | | | |
Revenues | | | | | | | | |
Subscription | | $ | 453,327 | | | $ | 418,577 | | | $ | 1,321,654 | | | $ | 1,225,709 | |
Advertising | | 118,370 | | | 117,113 | | | 341,244 | | | 341,124 | |
Other | | 68,481 | | | 62,655 | | | 196,392 | | | 183,104 | |
Total revenues | | 640,178 | | | 598,345 | | | 1,859,290 | | | 1,749,937 | |
Operating costs | | | | | | | | |
Cost of revenue (excluding depreciation and amortization) | | 331,839 | | | 311,135 | | | 971,480 | | | 927,910 | |
Sales and marketing | | 69,131 | | | 62,635 | | | 195,568 | | | 191,910 | |
Product development | | 61,030 | | | 57,433 | | | 186,435 | | | 170,542 | |
General and administrative | | 76,209 | | | 81,870 | | | 231,894 | | | 235,194 | |
Depreciation and amortization | | 20,622 | | | 21,475 | | | 61,865 | | | 64,173 | |
Generative AI Litigation Costs | | 4,620 | | | — | | | 7,592 | | | — | |
Impairment charges | | — | | | 2,503 | | | — | | | 15,239 | |
Multiemployer pension plan liability adjustment | | — | | | (2,273) | | | — | | | (2,273) | |
Total operating costs | | 563,451 | | | 534,778 | | | 1,654,834 | | | 1,602,695 | |
Operating profit | | 76,727 | | | 63,567 | | | 204,456 | | | 147,242 | |
Other components of net periodic benefit (costs)/income | | (1,050) | | | 684 | | | (3,124) | | | 2,053 | |
| | | | | | | | |
Interest income and other, net | | 9,366 | | | 5,736 | | | 26,449 | | | 13,426 | |
Income before income taxes | | 85,043 | | | 69,987 | | | 227,781 | | | 162,721 | |
Income tax expense | | 20,900 | | | 16,372 | | | 57,681 | | | 40,211 | |
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| | | | | | | | |
| | | | | | | | |
Net income | | $ | 64,143 | | | $ | 53,615 | | | $ | 170,100 | | | $ | 122,510 | |
Average number of common shares outstanding: | | | | | | | | |
Basic | | 164,419 | | | 164,568 | | | 164,535 | | | 164,752 | |
Diluted | | 165,847 | | | 165,406 | | | 165,834 | | | 165,436 | |
Basic earnings per share attributable to common stockholders | | $ | 0.39 | | | $ | 0.33 | | | $ | 1.03 | | | $ | 0.74 | |
Diluted earnings per share attributable to common stockholders | | $ | 0.39 | | | $ | 0.32 | | | $ | 1.03 | | | $ | 0.74 | |
Dividends declared per share | | $ | 0.13 | | | $ | 0.11 | | | $ | 0.39 | | | $ | 0.33 | |
See Notes to Condensed Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarters Ended | | For the Nine Months Ended |
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
Net income | | $ | 64,143 | | | $ | 53,615 | | | $ | 170,100 | | | $ | 122,510 | |
Other comprehensive income, before tax: | | | | | | | | |
Gain/(loss) on foreign currency translation adjustments | | 2,675 | | | (2,333) | | | 241 | | | (1,199) | |
Pension and postretirement benefits obligation | | 3,287 | | | 1,550 | | | 9,890 | | | 4,656 | |
Net unrealized gain on available-for-sale securities | | 5,556 | | | 1,886 | | | 4,889 | | | 5,984 | |
Other comprehensive income, before tax | | 11,518 | | | 1,103 | | | 15,020 | | | 9,441 | |
Income tax expense | | 3,017 | | | 290 | | | 3,969 | | | 2,463 | |
Other comprehensive income, net of tax | | 8,501 | | | 813 | | | 11,051 | | | 6,978 | |
| | | | | | | | |
| | | | | | | | |
Comprehensive income attributable to common stockholders | | $ | 72,644 | | | $ | 54,428 | | | $ | 181,151 | | | $ | 129,488 | |
See Notes to Condensed Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Quarters Ended September 30, 2024 and September 30, 2023
(Unaudited)
(In thousands, except share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital Stock - Class A and Class B Common | Additional Paid-in Capital | Retained Earnings | Common Stock Held in Treasury, at Cost | Accumulated Other Comprehensive Loss, Net of Income Taxes | Total New York Times Company Stockholders’ Equity | Non- controlling Interest | Total Stock- holders’ Equity |
|
Balance, June 30, 2023 | $ | 17,751 | | $ | 267,975 | | $ | 1,991,029 | | $ | (319,858) | | $ | (351,682) | | $ | 1,605,215 | | $ | 2,005 | | $ | 1,607,220 | |
Net income | — | | — | | 53,615 | | — | | — | | 53,615 | | — | | 53,615 | |
Dividends | — | | — | | (18,340) | | — | | — | | (18,340) | | — | | (18,340) | |
Other comprehensive loss | — | | — | | — | | — | | 813 | | 813 | | — | | 813 | |
Issuance of stock-based awards, net of withholding taxes: | | | | | | | | |
| | | | | | | | |
Restricted stock units vested – 87,054 Class A shares | 10 | | (2,641) | | — | | — | | — | | (2,631) | | — | | (2,631) | |
| | | | | | | | |
| | | | | | | | |
Stock-based compensation | — | | 14,563 | | — | | — | | — | | 14,563 | | — | | 14,563 | |
Balance, September 30, 2023 | $ | 17,761 | | $ | 279,897 | | $ | 2,026,304 | | $ | (319,858) | | $ | (350,869) | | $ | 1,653,235 | | $ | 2,005 | | $ | 1,655,240 | |
| | | | | | | | |
Balance, June 30, 2024 | $ | 17,848 | | $ | 320,111 | | $ | 2,180,425 | | $ | (363,086) | | $ | (350,312) | | $ | 1,804,986 | | $ | — | | $ | 1,804,986 | |
Net income | — | | — | | 64,143 | | — | | — | | 64,143 | | — | | 64,143 | |
Dividends | — | | — | | (21,591) | | — | | — | | (21,591) | | — | | (21,591) | |
Other comprehensive income | — | | — | | — | | — | | 8,501 | | 8,501 | | — | | 8,501 | |
Issuance of stock-based awards, net of withholding taxes: | | | | | | | | |
| | | | | | | | |
Restricted stock units vested – 64,699 Class A shares | 6 | | (2,500) | | — | | — | | — | | (2,494) | | — | | (2,494) | |
| | | | | | | | |
| | | | | | | | |
Share repurchases – 341,456 Class A shares | — | | — | | — | | (18,483) | | — | | (18,483) | | — | | (18,483) | |
Stock-based compensation | — | | 16,990 | | — | | — | | — | | 16,990 | | — | | 16,990 | |
Balance, September 30, 2024 | $ | 17,854 | | $ | 334,601 | | $ | 2,222,977 | | $ | (381,569) | | $ | (341,811) | | $ | 1,852,052 | | $ | — | | $ | 1,852,052 | |
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Nine Months Ended September 30, 2024 and September 30, 2023
(Unaudited)
(In thousands, except share data) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital Stock - Class A and Class B Common | Additional Paid-in Capital | Retained Earnings | Common Stock Held in Treasury, at Cost | Accumulated Other Comprehensive Loss, Net of Income Taxes | Total New York Times Company Stockholders’ Equity | Non- controlling Interest | Total Stock- holders’ Equity |
|
Balance, December 31, 2022 | $ | 17,707 | | $ | 255,515 | | $ | 1,958,859 | | $ | (276,267) | | $ | (357,847) | | $ | 1,597,967 | | $ | 2,005 | | $ | 1,599,972 | |
Net income | — | | — | | 122,510 | | — | | — | | 122,510 | | — | | 122,510 | |
Dividends | — | | — | | (55,065) | | — | | — | | (55,065) | | — | | (55,065) | |
Other comprehensive income | — | | — | | — | | — | | 6,978 | | 6,978 | | — | | 6,978 | |
Issuance of stock-based awards, net of withholding taxes: | | | | | | | | |
Restricted stock units vested – 416,289 Class A shares | 44 | | (11,226) | | — | | — | | — | | (11,182) | | — | | (11,182) | |
Performance-based awards – 106,419 Class A shares | 10 | | (3,108) | | — | | — | | — | | (3,098) | | — | | (3,098) | |
Share repurchases – 1,161,017 Class A shares | — | | — | | — | | (43,591) | | — | | (43,591) | | — | | (43,591) | |
Stock-based compensation | — | | 38,716 | | — | | — | | — | | 38,716 | | — | | 38,716 | |
Balance, September 30, 2023 | $ | 17,761 | | $ | 279,897 | | $ | 2,026,304 | | $ | (319,858) | | $ | (350,869) | | $ | 1,653,235 | | $ | 2,005 | | $ | 1,655,240 | |
| | | | | | | | |
Balance, December 31, 2023 | $ | 17,775 | | $ | 301,287 | | $ | 2,117,839 | | $ | (320,820) | | $ | (352,862) | | $ | 1,763,219 | | $ | — | | $ | 1,763,219 | |
Net income | — | | — | | 170,100 | | — | | — | | 170,100 | | — | | 170,100 | |
Dividends | — | | — | | (64,962) | | — | | — | | (64,962) | | — | | (64,962) | |
Other comprehensive income | — | | — | | — | | — | | 11,051 | | 11,051 | | — | | 11,051 | |
Issuance of stock-based awards, net of withholding taxes: | | | | | | | | |
Restricted stock units vested – 597,221 Class A shares | 60 | | (18,448) | | — | | — | | — | | (18,388) | | — | | (18,388) | |
Performance-based awards – 85,703 Class A shares | 8 | | (2,696) | | — | | — | | — | | (2,688) | | — | | (2,688) | |
Employee stock purchase plan – 112,800 Class A shares | 11 | | 4,578 | | — | | — | | — | | 4,589 | | — | | 4,589 | |
Share repurchases – 1,253,007 Class A shares | — | | — | | — | | (60,749) | | — | | (60,749) | | — | | (60,749) | |
Stock-based compensation | — | | 49,880 | | — | | — | | — | | 49,880 | | — | | 49,880 | |
Balance, September 30, 2024 | $ | 17,854 | | $ | 334,601 | | $ | 2,222,977 | | $ | (381,569) | | $ | (341,811) | | $ | 1,852,052 | | $ | — | | $ | 1,852,052 | |
THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
| | | | | | | | | | | | | | |
| | For the Nine Months Ended |
| | September 30, 2024 | | September 30, 2023 |
Cash flows from operating activities | | | | |
Net income | | $ | 170,100 | | | $ | 122,510 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| | | | |
| | | | |
Depreciation and amortization | | 61,865 | | | 64,173 | |
| | | | |
Amortization of right of use asset | | 6,773 | | | 7,184 | |
Stock-based compensation expense | | 49,880 | | | 38,716 | |
Multiemployer pension plan liability adjustment | | — | | | (2,273) | |
Impairment charges | | — | | | 15,239 | |
| | | | |
| | | | |
Change in long-term retirement benefit obligations | | (18,110) | | | (21,339) | |
| | | | |
| | | | |
Contingent consideration fair value adjustment | | 294 | | | 2,813 | |
Other – net | | (4,493) | | | (2,839) | |
Changes in operating assets and liabilities: | | | | |
Accounts receivable – net | | 53,541 | | | 53,494 | |
Other assets | | 7,035 | | | 9 | |
Accounts payable, accrued payroll and other liabilities | | (77,094) | | | (59,698) | |
Unexpired subscriptions | | 4,443 | | | 690 | |
Other noncurrent assets and liabilities | | 4,582 | | | 5,421 | |
Net cash provided by operating activities | | 258,816 | | | 224,100 | |
Cash flows from investing activities | | | | |
Purchases of marketable securities | | (337,107) | | | (186,018) | |
Maturities of marketable securities | | 159,464 | | | 100,515 | |
| | | | |
| | | | |
| | | | |
Capital expenditures | | (21,115) | | | (16,539) | |
Other – net | | 1,299 | | | 4,754 | |
Net cash used in investing activities | | (197,459) | | | (97,288) | |
Cash flows from financing activities | | | | |
Long-term obligations: | | | | |
| | | | |
Dividends paid | | (61,500) | | | (51,360) | |
Payment of contingent consideration | | (1,724) | | | (2,586) | |
Capital shares: | | | | |
| | | | |
Repurchases | | (60,341) | | | (43,591) | |
Share-based compensation tax withholding | | (21,076) | | | (14,279) | |
Net cash used in financing activities | | (144,641) | | | (111,816) | |
Net (decrease)/increase in cash, cash equivalents and restricted cash | | (83,284) | | | 14,996 | |
Effect of exchange rate changes on cash | | (1,025) | | | (310) | |
Cash, cash equivalents and restricted cash at the beginning of the period | | 303,172 | | | 235,173 | |
Cash, cash equivalents and restricted cash at the end of the period | | $ | 218,863 | | | $ | 249,859 | |
See Notes to Condensed Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
In the opinion of management of The New York Times Company (the “Company”), the Condensed Consolidated Financial Statements present fairly the financial position of the Company as of September 30, 2024, and December 31, 2023, and the results of operations, changes in stockholders’ equity and cash flows of the Company for the periods ended September 30, 2024, and September 30, 2023. The Company and its consolidated subsidiaries are referred to collectively as “we,” “us” or “our.” All adjustments necessary for a fair presentation have been included and are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The financial statements were prepared in accordance with the requirements of the United States Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from these interim financial statements. These financial statements, therefore, should be read in conjunction with the Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December 31, 2023. Due to the seasonal nature of our business, operating results for the interim periods are not necessarily indicative of a full year’s operations. The first nine months of 2024 includes an additional day compared with the first nine months of 2023 as a result of 2024 being a leap year.
The Company has two reportable segments: The New York Times Group (“NYTG”) and The Athletic.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements. Actual results could differ from these estimates.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As of September 30, 2024, our significant accounting policies, which are detailed in our Annual Report on Form 10-K for the year ended December 31, 2023, have not changed.
Recently Issued Accounting Pronouncements
| | | | | | | | | | | |
Accounting Standard Updates | Topic | Effective Period | Summary |
2023-09 | Income Taxes (Topic 740): Improvements to Income Tax Disclosures | Fiscal years, beginning after December 15, 2024. Early adoption is permitted. | Requires entities to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid. We are currently in the process of evaluating the impact of this guidance on the Company’s disclosures. |
2023-07 | Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures | Fiscal years, beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. | Requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. The amendments in this update also expand the interim segment disclosure requirements. We expect this ASU to impact only our disclosures with no impact to our statement of operations, cash flows and balance sheet. |
The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations.
NOTE 3. REVENUE
We generate revenues principally from subscriptions and advertising.
Subscription revenues consist of revenues from subscriptions to our digital and print products (which include our news product, as well as The Athletic and our Cooking, Games and Wirecutter products), and single-copy and bulk sales of our print products. Subscription revenues are based on both the number of digital-only subscriptions and copies of the printed newspaper sold, and the rates charged to the respective customers.
Advertising revenue is generated principally from advertisers (such as technology, financial and luxury goods companies) promoting products, services or brands on digital platforms in the form of display ads, audio and video, and in print in the form of column-inch ads. Advertising revenue is generated primarily from offerings sold directly to marketers by our
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
advertising sales teams. A smaller proportion of our total advertising revenues is generated through open-market programmatic auctions run by third-party ad exchanges. Advertising revenue is primarily determined by the volume (e.g., impressions), rate and mix of advertisements. Digital advertising includes our core digital advertising business and other digital advertising. Our core digital advertising business includes direct-sold website, mobile application, podcast, email and video advertisements (including direct-sold programmatic advertising). Direct-sold display advertising, a component of core digital advertising, includes offerings on websites and mobile applications sold directly to marketers by our advertising sales teams. Other digital advertising includes open-market programmatic advertising and creative services fees. Print advertising includes revenue from column-inch ads and classified advertising as well as preprinted advertising, also known as freestanding inserts. NYTG has revenue from all categories discussed above. The Athletic has revenue from direct-sold display advertising, podcast, email and video advertisements (including direct-sold programmatic advertising) and open-market programmatic advertising. There is no print advertising revenue generated from The Athletic.
Other revenues primarily consist of revenues from licensing, Wirecutter affiliate referrals, commercial printing, the leasing of floors in the New York headquarters building located at 620 Eighth Avenue, New York, New York (the “Company Headquarters”), our live events business, books, television and film, retail commerce and our student subscription sponsorship program.
Subscription, advertising and other revenues were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarters Ended | | For the Nine Months Ended |
(In thousands) | | September 30, 2024 | | As % of total | | September 30, 2023 | | As % of total | | September 30, 2024 | | As % of total | | September 30, 2023 | | As % of total |
Subscription | | $ | 453,327 | | | 70.8 | % | | $ | 418,577 | | | 70.0 | % | | $ | 1,321,654 | | | 71.1 | % | | $ | 1,225,709 | | | 70.0 | % |
Advertising | | 118,370 | | | 18.5 | % | | 117,113 | | | 19.6 | % | | 341,244 | | | 18.4 | % | | 341,124 | | | 19.5 | % |
Other (1) | | 68,481 | | | 10.7 | % | | 62,655 | | | 10.4 | % | | 196,392 | | | 10.5 | % | | 183,104 | | | 10.5 | % |
Total | | $ | 640,178 | | | 100.0 | % | | $ | 598,345 | | | 100.0 | % | | $ | 1,859,290 | | | 100.0 | % | | $ | 1,749,937 | | | 100.0 | % |
(1) Other revenues include building rental revenue, which is not under the scope of Revenue from Contracts with Customers (Topic 606). Building rental revenue was $6.6 million and $6.8 million for the third quarters of 2024 and 2023, respectively, and $19.9 million and $20.5 million for the first nine months of 2024 and 2023, respectively.
The following table summarizes digital and print subscription revenues, which are components of subscription revenues above, for the third quarters and first nine months ended September 30, 2024, and September 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarters Ended | | For the Nine Months Ended |
(In thousands) | | September 30, 2024 | | As % of total | | September 30, 2023 | | As % of total | | September 30, 2024 | | As % of total | | September 30, 2023 | | As % of total |
Digital-only subscription revenues (1) | | $ | 322,198 | | | 71.1 | % | | $ | 282,228 | | | 67.4 | % | | $ | 919,677 | | | 69.6 | % | | $ | 810,770 | | | 66.1 | % |
Print subscription revenues (2) | | 131,129 | | | 28.9 | % | | 136,349 | | | 32.6 | % | | 401,977 | | | 30.4 | % | | 414,939 | | | 33.9 | % |
Total subscription revenues | | $ | 453,327 | | | 100.0 | % | | $ | 418,577 | | | 100.0 | % | | $ | 1,321,654 | | | 100.0 | % | | $ | 1,225,709 | | | 100.0 | % |
(1) Includes revenue from bundled and standalone subscriptions to our news product, as well as to The Athletic and our Cooking, Games and Wirecutter products. |
(2) Includes domestic home-delivery subscriptions, which include access to our digital products. Also includes single-copy, NYT International and Other subscription revenues. |
The following table summarizes digital and print advertising revenues, which are components of advertising revenues above, for the third quarters and first nine months ended September 30, 2024, and September 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarters Ended | | For the Nine Months Ended |
(In thousands) | | September 30, 2024 | | As % of total | | September 30, 2023 | | As % of total | | September 30, 2024 | | As % of total | | September 30, 2023 | | As % of total |
Advertising revenues: | | | | | | | | | | | | | | | | |
Digital | | $ | 81,564 | | | 68.9 | % | | $ | 75,001 | | | 64.0 | % | | $ | 224,166 | | | 65.7 | % | | $ | 210,076 | | | 61.6 | % |
Print | | 36,806 | | | 31.1 | % | | 42,112 | | | 36.0 | % | | 117,078 | | | 34.3 | % | | 131,048 | | | 38.4 | % |
Total advertising | | $ | 118,370 | | | 100.0 | % | | $ | 117,113 | | | 100.0 | % | | $ | 341,244 | | | 100.0 | % | | $ | 341,124 | | | 100.0 | % |
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Performance Obligations
We have remaining performance obligations related to digital archive and other licensing and certain advertising contracts. As of September 30, 2024, the aggregate amount of the transaction price allocated to the remaining performance obligations for contracts with a duration greater than one year was approximately $174 million. The Company will recognize this revenue as performance obligations are satisfied. We expect that approximately $33 million, $91 million and $50 million will be recognized in the remainder of 2024, 2025 and thereafter through 2030, respectively.
Unexpired Subscriptions
Payments for subscriptions are typically due upfront and the revenue is recognized ratably over the subscription period. The proceeds are recorded within Unexpired subscriptions revenue in the Condensed Consolidated Balance Sheet. Total unexpired subscriptions as of December 31, 2023, were $172.8 million, of which approximately $161 million was recognized as revenues during the nine months ended September 30, 2024.
Contract Assets
As of September 30, 2024, and December 31, 2023, the Company had $3.3 million and $3.5 million, respectively, in contract assets recorded in the Condensed Consolidated Balance Sheets related to digital archiving licensing revenue. The contract asset is reclassified to Accounts receivable when the customer is invoiced based on the contractual billing schedule.
NOTE 4. MARKETABLE SECURITIES
The Company accounts for its marketable securities as available for sale (“AFS”). The Company recorded $4.2 million and $0.7 million of pre-tax net unrealized gains and losses, respectively, in Accumulated other comprehensive income (“AOCI”) as of September 30, 2024, and December 31, 2023, respectively.
The following tables present the amortized cost, gross unrealized gains and losses, and fair market value of our AFS securities as of September 30, 2024, and December 31, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2024 |
(In thousands) | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
| | | | | | | | |
Short-term AFS securities | | | | | | | | |
U.S. Treasury securities | | $ | 167,580 | | | $ | 614 | | | $ | (8) | | | $ | 168,186 | |
Corporate debt securities | | 114,689 | | | 527 | | | (10) | | | 115,206 | |
U.S. governmental agency securities | | 4,945 | | | — | | | (12) | | | 4,933 | |
| | | | | | | | |
Total short-term AFS securities | | $ | 287,214 | | | $ | 1,141 | | | $ | (30) | | | $ | 288,325 | |
Long-term AFS securities | | | | | | | | |
Corporate debt securities | | $ | 186,724 | | | $ | 1,906 | | | $ | (13) | | | $ | 188,617 | |
U.S. Treasury securities | | 137,605 | | | 1,228 | | | (15) | | | 138,818 | |
| | | | | | | | |
Total long-term AFS securities | | $ | 324,329 | | | $ | 3,134 | | | $ | (28) | | | $ | 327,435 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2023 |
(In thousands) | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
Short-term AFS securities | | | | | | | | |
U.S. Treasury securities | | $ | 48,721 | | | $ | 55 | | | $ | (667) | | | $ | 48,109 | |
Corporate debt securities | | 109,891 | | | 6 | | | (1,828) | | | 108,069 | |
U.S. governmental agency securities | | 6,000 | | | — | | | (84) | | | 5,916 | |
| | | | | | | | |
Total short-term AFS securities | | $ | 164,612 | | | $ | 61 | | | $ | (2,579) | | | $ | 162,094 | |
Long-term AFS securities | | | | | | | | |
Corporate debt securities | | $ | 103,061 | | | $ | 886 | | | $ | (5) | | | $ | 103,942 | |
U.S. Treasury securities | | 148,878 | | | 1,023 | | | (42) | | | 149,859 | |
U.S. governmental agency securities | | 3,857 | | | — | | | (25) | | | 3,832 | |
Total long-term AFS securities | | $ | 255,796 | | | $ | 1,909 | | | $ | (72) | | | $ | 257,633 | |
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following tables represent the AFS securities as of September 30, 2024, and December 31, 2023, that were in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2024 |
| | Less than 12 Months | | 12 Months or Greater | | Total |
(In thousands) | | Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses |
Short-term AFS securities | | | | | | | | | | | | |
U.S. Treasury securities | | $ | 4,926 | | | $ | — | | | $ | 6,286 | | | $ | (8) | | | $ | 11,212 | | | $ | (8) | |
Corporate debt securities | | 10,543 | | | (3) | | | 6,143 | | | (7) | | | 16,686 | | | (10) | |
U.S. governmental agency securities | | — | | | — | | | 4,933 | | | (12) | | | 4,933 | | | (12) | |
| | | | | | | | | | | | |
Total short-term AFS securities | | $ | 15,469 | | | $ | (3) | | | $ | 17,362 | | | $ | (27) | | | $ | 32,831 | | | $ | (30) | |
Long-term AFS securities | | | | | | | | | | | | |
Corporate debt securities | | $ | 13,277 | | | $ | (13) | | | $ | — | | | $ | — | | | $ | 13,277 | | | $ | (13) | |
U.S. Treasury securities | | 13,950 | | | (15) | | | — | | | — | | | 13,950 | | | (15) | |
| | | | | | | | | | | | |
Total long-term AFS securities | | $ | 27,227 | | | $ | (28) | | | $ | — | | | $ | — | | | $ | 27,227 | | | $ | (28) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2023 |
| | Less than 12 Months | | 12 Months or Greater | | Total |
(In thousands) | | Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses |
| | | | | | | | | | | | |
Short-term AFS securities | | | | | | | | | | | | |
U.S. Treasury securities | | $ | 995 | | | $ | (1) | | | $ | 24,978 | | | $ | (666) | | | $ | 25,973 | | | $ | (667) | |
Corporate debt securities | | 5,819 | | | (5) | | | 99,504 | | | (1,823) | | | 105,323 | | | (1,828) | |
U.S. governmental agency securities | | — | | | — | | | 5,916 | | | (84) | | | 5,916 | | | (84) | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total short-term AFS securities | | $ | 6,814 | | | $ | (6) | | | $ | 130,398 | | | $ | (2,573) | | | $ | 137,212 | | | $ | (2,579) | |
Long-term AFS securities | | | | | | | | | | | | |
Corporate debt securities | | $ | 2,451 | | | $ | — | | | $ | 245 | | | $ | (5) | | | $ | 2,696 | | | $ | (5) | |
U.S. Treasury securities | | 14,792 | | | (36) | | | 290 | | | (6) | | | 15,082 | | | (42) | |
U.S. governmental agency securities | | 3,832 | | | (25) | | | — | | | — | | | 3,832 | | | (25) | |
| | | | | | | | | | | | |
Total long-term AFS securities | | $ | 21,075 | | | $ | (61) | | | $ | 535 | | | $ | (11) | | | $ | 21,610 | | | $ | (72) | |
We assess our AFS securities for impairment on a quarterly basis or more often if a potential loss-triggering event occurs.
As of September 30, 2024, and December 31, 2023, we did not intend to sell and it was not likely that we would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. Unrealized losses related to these investments are primarily due to interest rate fluctuations as opposed to changes in credit quality. Therefore, as of September 30, 2024, and December 31, 2023, we have recognized no impairment losses or allowance for credit losses related to AFS securities.
As of September 30, 2024, our short-term and long-term marketable securities had remaining maturities of less than one month to 12 months and 13 months to 27 months, respectively. See Note 8 for more information regarding the fair value of our marketable securities.
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. GOODWILL AND INTANGIBLES
The changes in the carrying amount of goodwill as of September 30, 2024, and since December 31, 2022, were as follows:
| | | | | | | | | | | | | | | | | | | | |
(In thousands) | | NYTG | | The Athletic | | Total |
Balance as of December 31, 2022 | | $ | 162,686 | | | $ | 251,360 | | | $ | 414,046 | |
Foreign currency translation | | 2,052 | | | — | | | 2,052 | |
Balance as of December 31, 2023 | | 164,738 | | | 251,360 | | | 416,098 | |
Foreign currency translation | | 684 | | | — | | | 684 | |
Balance as of September 30, 2024 | | $ | 165,422 | | | $ | 251,360 | | | $ | 416,782 | |
The foreign currency translation line item reflects changes in goodwill resulting from fluctuating exchange rates related to the consolidation of certain international subsidiaries.
As of September 30, 2024 and December 31, 2023, the gross book value and accumulated amortization of the intangible assets with definite lives were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2024 |
(In thousands) | | Gross Book Value | | Accumulated Amortization | | Net Book Value | | Remaining Weighted-Average Useful Life (Years) |
Trademark | | $ | 162,618 | | | $ | (23,951) | | | $ | 138,667 | | | 17.6 |
Existing subscriber base | | 136,500 | | | (31,500) | | | 105,000 | | | 9.5 |
Developed technology | | 38,401 | | | (20,885) | | | 17,516 | | | 2.4 |
Content archive | | 5,751 | | | (4,601) | | | 1,150 | | | 1.9 |
Total finite-lived intangibles | | $ | 343,270 | | | $ | (80,937) | | | $ | 262,333 | | | 13.3 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2023 |
(In thousands) | | Gross Book Value | | Accumulated Amortization | | Net Book Value | | Remaining Weighted-Average Useful Life (Years) |
Trademark | | $ | 162,618 | | | $ | (17,767) | | | $ | 144,851 | | | 18.3 |
Existing subscriber base | | 136,500 | | | (23,062) | | | 113,438 | | | 10.2 |
Developed technology | | 38,401 | | | (15,381) | | | 23,020 | | | 3.2 |
Content archive | | 5,751 | | | (4,047) | | | 1,704 | | | 2.5 |
Total finite-lived intangibles | | $ | 343,270 | | | $ | (60,257) | | | $ | 283,013 | | | 13.7 |
Amortization expense for intangible assets included in Depreciation and amortization in our Condensed Consolidated Statements of Operations was $6.8 million and $7.3 million for the third quarters of 2024 and 2023, respectively, and $20.7 million and $22.0 million for the first nine months of 2024, and 2023, respectively. The estimated aggregate amortization expense for the remainder of 2024 and each of the following fiscal years ending December 31 is presented below:
| | | | | | | | |
(In thousands) | | |
Remainder of 2024 | | $ | 6,799 | |
2025 | | 27,213 | |
2026 | | 26,960 | |
2027 | | 20,171 | |
2028 | | 19,335 | |
Thereafter | | 161,855 | |
Total amortization expense | | $ | 262,333 | |
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The aggregate carrying amount of intangible assets of $264.8 million, which includes an indefinite-lived intangible of $2.5 million, is included in Intangible assets, net in our Condensed Consolidated Balance Sheet as of September 30, 2024.
NOTE 6. INVESTMENTS
Non-Marketable Equity Securities
Our non-marketable equity securities are investments in privately held companies/funds without readily determinable market values. Gains and losses on non-marketable equity securities revalued, sold or impaired are recognized in Interest income and other, net in our Condensed Consolidated Statements of Operations.
As of September 30, 2024, and December 31, 2023, non-marketable equity securities included in Miscellaneous assets in our Condensed Consolidated Balance Sheets had a carrying value of $29.7 million.
NOTE 7. OTHER
Capitalized Computer Software Costs
Amortization of capitalized computer software costs included in Depreciation and amortization in our Condensed Consolidated Statements of Operations was $1.7 million and $2.1 million for the third quarters of 2024 and 2023, respectively, and $5.3 million and $5.7 million for the first nine months of 2024 and 2023, respectively.
Interest income and other, net
Interest income and other, net, as shown in the accompanying Condensed Consolidated Statements of Operations, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarters Ended | | For the Nine Months Ended |
(In thousands) | | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
Interest income (1) | | $ | 9,626 | | | $ | 6,016 | | | $ | 27,212 | | | $ | 14,182 | |
| | | | | | | | |
| | | | | | | | |
Interest expense | | (260) | | | (280) | | | (763) | | | (756) | |
| | | | | | | | |
| | | | | | | | |
Total interest income and other, net | | $ | 9,366 | | | $ | 5,736 | | | $ | 26,449 | | | $ | 13,426 | |
(1) On December 9, 2020, we entered into an agreement to lease and subsequently sell approximately four acres of land at our printing and distribution facility in College Point, N.Y., subject to certain conditions. The lease commenced on April 11, 2022. At the time of the lease expiration in February 2025, we will sell the parcel to the lessee for approximately $36 million. The transaction is accounted for as a sales-type lease and, as a result, we recognized a gain of approximately $34 million (net of commissions) at the time of lease commencement. Interest income related to this lease was $0.4 million for each of the third quarters of 2024 and 2023, and $1.3 million for each of the first nine months of 2024 and 2023.
Restricted Cash
A reconciliation of cash, cash equivalents and restricted cash as of September 30, 2024, and September 30, 2023, from the Condensed Consolidated Balance Sheets to the Condensed Consolidated Statements of Cash Flows is as follows:
| | | | | | | | | | | | | | |
(In thousands) | | September 30, 2024 | | September 30, 2023 |
Reconciliation of cash, cash equivalents and restricted cash | | | | |
Cash and cash equivalents | | $ | 204,620 | | | $ | 235,566 | |
| | | | |
Restricted cash included within miscellaneous assets | | 14,243 | | | 14,293 | |
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows | | $ | 218,863 | | | $ | 249,859 | |
Substantially all of the amount included in restricted cash is set aside to collateralize workers’ compensation obligations.
Revolving Credit Facility
On July 27, 2022, the Company entered into an amendment and restatement of its previous credit facility that, among other changes, increased the committed amount to $350.0 million and extended the maturity date to July 27, 2027 (as amended and restated, the “Credit Facility”). Certain of the Company’s domestic subsidiaries have guaranteed the Company’s obligations under the Credit Facility. Borrowings under the Credit Facility bear interest at specified rates based on our utilization and consolidated leverage ratio. The Credit Facility contains various customary affirmative and negative covenants. In addition, the Company is obligated to pay a quarterly unused commitment fee at an annual rate of 0.20%.
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of September 30, 2024, and December 31, 2023, there were no borrowings and approximately $0.6 million in outstanding letters of credit, with the remaining committed amount available. As of September 30, 2024, the Company was in compliance with the financial covenants contained in the Credit Facility.
Severance Costs
We recognized $0.3 million and $3.1 million in severance costs for the third quarters of 2024 and 2023, respectively, and $6.2 million and $7.6 million for the first nine months of 2024 and 2023, respectively. These costs are recorded in General and administrative costs in our Condensed Consolidated Statements of Operations.
We had a severance liability of $5.4 million and $4.4 million included in Accrued expenses and other in our Condensed Consolidated Balance Sheets as of September 30, 2024, and December 31, 2023, respectively.
Generative AI Litigation Costs
In the third quarter and first nine months of 2024, the Company recorded $4.6 million and $7.6 million, respectively, of pre-tax litigation-related costs in connection with a lawsuit against Microsoft Corporation (“Microsoft”) and Open AI Inc. and various of its corporate affiliates (collectively, “OpenAI”), alleging unlawful and unauthorized copying and use of the Company’s journalism and other content in connection with their development of generative artificial intelligence products (“Generative AI Litigation Costs”). See Note 14 for additional information.
THE NEW YORK TIMES COMPANY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8. FAIR VALUE MEASUREMENTS
Fair value is the price that would be received upon the sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The transaction would be in the principal or most advantageous market for the asset or liability, based on assumptions that a market participant would use in pricing the asset or liability. The fair value hierarchy consists of three levels:
Level 1–quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;
Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3–unobservable inputs for the asset or liability.
Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024, and December 31, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | | September 30, 2024 | | December 31, 2023 |
| Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | | | | | | | | | | |
Short-term AFS securities (1) | | | | | | | | | | | | | | | | |
U.S Treasury securities | | $ | 168,186 | | | $ | — | | | $ | 168,186 | | | $ | — | | | $ | 48,109 | | | $ | — | | | $ | 48,109 | | | $ | — | |
Corporate debt securities | | 115,206 | | | — | | | 115,206 | | | — | | | 108,069 | | | — | | | 108,069 | | | — | |
U.S. governmental agency securities | | |