Paula Schwartz - Assistant Director of Investor Relations & Online Communications Mark Thompson - Chief Executive Officer, President and Director James M. Follo - Chief Financial Officer and Executive Vice President Denise F. Warren - Executive Vice President of Digital Products & Services Group

John Janedis - UBS Investment Bank, Research Division Craig Huber William G. Bird - Lazard Capital Markets LLC, Research Division Alexia S. Quadrani - JP Morgan Chase & Co, Research Division Kannan Venkateshwar - Barclays Capital, Research Division

Good day, and welcome to the New York Times Company Second Quarter 2013 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to your host, Ms. Paula Schwartz. You may begin.

Thank you. Good morning, and welcome to our second quarter 2013 earnings conference call. On the call today are: Mark Thompson, President and Chief Executive Officer; Jim Follo, Executive Vice President and Chief Financial Officer; and Denise Warren, Executive Vice President, Digital Products and Services. All comparisons on this conference call will be for the second quarter of 2013 to the second quarter of 2012, unless otherwise stated. Our discussion 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 2012 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 our corporate website at www.nytco.com under Investor Relations. And now, I would like to turn the call over to Mark Thompson.

Thanks, Paula. Hello, and good morning, everyone. In summary, our second quarter results reflect significant progress, both in the immediate run rates of our business and in the rollout of our medium-term strategy for The New York Times Company. The company's operating profit before depreciation, amortization and severance for Q2 2013 was $77.8 million. That compares to $68.8 million in the same period of 2012, and represents an increase of 13% year-on-year. In the quarter, we saw a continued increase in digital subscribers, a marked improvement in both print and digital advertising compared to Q1, and are on course to deliver key elements of the growth strategy I outlined in our last earnings call. Let me begin with the digital subscription story. Since digital consumer revenues are an important and growing part of our business, we have decided, starting this quarter, to provide some new financial information on this revenue stream. In the second quarter, revenues from digital-only subscriptions were approximately $38 million, an increase of about 44% from the same quarter in 2012. For the first half of 2013, digital-only subscriptions totaled around $75 million, up nearly 52% compared to the same period last year. The number of digital subscribers continued to grow, and at quarter-end, paid digital subscriptions across the company were approximately 738,000, an increase of nearly 40% year-on-year. We did see some slowing in the number of net new adds to our digital subscriber base in the quarter. We attribute this deceleration to a combination of seasonality, a relative lack of major news stories and the law of large numbers as we enter the third year of our pay model. As you know, we are currently working on a suite of new paid products and services. That roadmap includes enhancements to the existing core digital product, which we believe will increase its attractiveness to potential subscribers. In the meantime, we expect the net new digital adds in Q3 to be roughly in line with the Q2 numbers. Advertising performance was significantly better in Q2 than Q1. Although we continued to see substantial volatility month-to-month, especially on the print side, company-wide advertising declined by 6% versus the prior year, compared to an 11% decline in the first quarter. This relative improvement, combined with strong circulation revenue and further progress on cost reduction, accounts for the increase in operating profits in the quarter. Jim will discuss the advertising and cost numbers in more detail in a few minutes. Last quarter, I laid out my initial thinking on a strategy to put The Times Company on a path to revenue and profitability growth. We're making good progress and are on track with these strategic growth initiatives. We will rebrand the International Herald Tribune as the International New York Times at the beginning of the fourth quarter. The first edition of the International New York Times will be on October 15. As I've already said, we are well underway on the development of a series of new paid digital products and services to attract a wider audience of subscribers. At this early stage, we're very pleased with how the product design and development work is progressing. On the video front, we're looking to create significantly more high-quality content to meet the growing demand of users and advertisers. Just last week, we published our first Times-branded documentary, and we have a number of innovative video projects that we will be sharing with users over the next couple of months. Our strategy also includes aggregating high-quality videos from other organizations. A recent example of our success is our collaboration with Retro Report, a documentary news organization to showcase its video series, which re-examines major new stories of the past few decades. The quality and subject matter of Retro Report is a perfect match for The Times. To expand the awareness of our video presence, and to grow our streams, we've began offering free unlimited access to the Times online video section during the second quarter. Earlier this week, Meredith Kopit Levien joined the company as the new Executive Vice President for Advertising. Meredith comes to us with a proven track record as a highly skilled executive known for success, energy and creativity in all of the advertising arenas important to the Times, mainly print, digital and live events. She'll oversee the generation of all advertising revenue across The Times' multi-platform products and services, and will provide great leadership to our already excellent global ad sales team. We've also been hiring new technology talent to support the building phase of our new initiatives. And we also made progress in our efforts to sell the New England Media Group, which Jim will touch on in a minute. Lastly, we are aware that capital allocation remains a key topic of interest to our shareholders. While we have had a good quarter, and have improved our financial position, the advertising market remains volatile, and our growth initiatives are at an early stage of their gestation. For the present, we believe it is in the best interest of the company to maintain a conservative balance sheet, but we will keep this position and the question of capital return under close review as we go forward. In conclusion then, this was a quarter in which we made progress on several fronts, though we also know that much work lies ahead. I look forward to updating you on future calls, but for now, I'd like to turn the call over to Jim Follo. James M. Follo: Thanks, Mark, and good morning, everyone. Our company's positive results in the second quarter were truly an organizational-wide effort, which contributions from virtually every area of the business, enabling us to deliver operating profit before depreciation, amortization and severance of $78 million, an increase of 13% compared to the second quarter of 2012. This progress was the result of continued growth in our digital subscription initiatives on the Circulation side; moderation of losses on the Advertising side that led to the best print trends in more than a year; and another strong showing on cost performance. The continued growth of The New York Times digital subscription numbers, combined with the price increases of both The Times and The Boston Globe, together enabled Circulation revenues to largely offset advertising losses, resulting in total revenues down about 1% in the quarter. Circulation revenues rose 5% for the company, and 7% for the Times Media Group in the second quarter, with the monetization of our digital products as the largest contributor to the growth. Advertising revenues trends improved in the second quarter relative to the first, with Print Advertising down 7%, and Digital Advertising revenues down 3%, leading to an aggregate advertising decline of 6% versus the prior year, compared to an 11% total advertising decline in the first quarter. Despite this sequential improvement, advertising revenue continues to be affected by secular trends, economic factors and an increasingly complex digital marketplace that is facing a widespread shift towards programmatic buying channels, as we have discussed here over the past quarters. Rounding out our results for the quarter, operating expenses before depreciation, amortization and severance decreased about 3%, and on a GAAP basis, costs were also down 3%. We reported an operating profit of $53 million, up 21% over the second quarter of 2012. Diluted earnings per share, excluding severance and a 2012 special item, was $0.14 in the second quarter compared to $0.11 in the second quarter of 2012. Now let me provide some additional detail on our second quarter results. Total advertising revenues decreased 6% year-over-year and were down 2% in April, 12% in May, and 4% in June, a pattern that demonstrates the significant month-to-month volatility and short-term volume decisions we continue to see in the market. Second quarter print advertising revenues decreased in the National, Retail and Classified categories, with National and Retail equally driving the decline. Digital Advertising revenues also decreased as growth in Automotive and Classified categories was offset by declines in National and Retail, and remaining Classified categories. Mobile Advertising reversed course from last year and saw robust growth. Turning to the Times Media Group, total revenues were up 1% in the quarter, with circulation revenues up 7% and advertising down 5%. Other revenues were down 7% as a result of our exit from our Education business at the end of last year, part of our continued effort to focus on our core New York Times brand. The overall advertising revenue decline was largely a result of print losses in all 3 major advertising categories: National, Retail and Classified, with Retail experiencing the largest year-over-year percentage decline. While the National and Retail categories saw growth on the Digital side, they are outweighed by losses in the real estate and recruitment classified categories. Digital Display Advertising continued to experience challenges in the quarter from programmatic buying issues, along with pricing pressures caused by the glut of available ad inventory across the market. The Times Media Group aims to return to digital advertising revenue growth by focusing more heavily on opportunities in video, tablet and unique custom advertising. As our paid product strategy moves into the next phase, The Times' digital focus remains on growing its subscriber base, while expanding -- extending its brand across platforms. As of the end of the quarter, the Times Media Group, including subscribers to The Times and the IHT digital packages, had about 699,000 paid digital-only subscribers, an increase of 37% year-over-year. Digital subscription acquisition growth moderated in the second quarter, but we are confident our new initiatives will enable us -- enable continued progress and assure that we remain industry leader on this front. In the meantime, we expect net digital subscriber additions in third quarter to be roughly in line with the second quarter increase. Moving to The New England Media Group. Total revenues were down 7% in the second quarter, with circulation revenues down 2%, and advertising revenues down 10%. Other revenues were down 14%, largely a result of lower revenues from commercial printing and distribution and direct mail advertising services. In the second quarter, The Globe began to cycle against higher commercial printing and distribution revenues, and the associated costs in connection with the printing and delivery of their local competitor that began last year. As of the end of the quarter, BostonGlobe.com had about 39,000 paid digital-only subscribers, an increase of about 70% year-over-year. And The Globe raised print home delivery prices in May. We are deep in our efforts to sell The New England Media Group, and we expect to have more to share on this topic before the end of the third quarter. Now that we have a better sense of the structure the transaction might take on, we can say pretty confidently that the pension obligations are unlikely to be included in the sale. We expect that a sale will help the company's overall operating EBITDA margins, based upon past performance and absent any other factors that impact our margins. There's not much more we can share now, but we hope to be revisiting this topic with you soon, when we have something more concrete to say. Moving on to costs. The company's performance on expense management was strong in the second quarter, as we again found ways to trim across a broad spectrum of cost categories, resulting in a decline in operating cost of approximately $14 million. Lower compensation and benefit costs, primarily lower pension expense and lower raw material expenses, were the largest contributor to the decline. We will continue to be diligent in trimming expenses and managing legacy costs, but we'll also remain prepared to invest where necessary. The cost associated with our new strategic initiatives will accelerate in the second half of the year, and into 2014, as we begin to market these efforts domestically and internationally. That said, we continue to expect that the contribution to operating profit connected with these initiatives will turn positive in late 2014, and that we'll see full year growth in 2015. As we have previously stated, we estimate total -- that operating profit will be negatively impacted by about $20 million to $25 million in 2013, as a result of these initiatives, with a modest contribution to revenues, while we make significant investments in these growth initiatives. Raw materials declined 14% in the second quarter, mainly due to new -- lower newsprint consumption and lower newsprint prices. Moving to the balance sheet. At the end of the second quarter, our cash and marketable securities totaled approximately $918 million, exceeding total debt by approximately $224 million. The increase in our cash balance was the result of cash flows from operations as we continue to generate meaningful cash. In the quarter, we also repurchased approximately $5 million principal amount of our 6 5/8% senior notes. As discussed in the press release this morning, in the second quarter, we recorded an adjustment of our prior-period pension benefit obligation, related to an error in the actuarial valuation of accrued benefits. The correction of these pension obligations reduces our GAAP underfunded status by approximately $50 million, and reduces operating cost by approximately $3 million annually. As of June 30, 2013, taking into account this adjustment, as well as the recent developments in the interest rate environment, year-to-date asset performance and the pension contributions we made earlier this year, we believe that our underfunded status for the qualified plans has improved from year-end, and is now estimated to be approximately $150 million on a pre-tax basis. As such, we do not plan to make any further contributions this year beyond the $7 million in mandatory requirements we are still committed to, which we expect to bring our full-year total to about $75 million. Also on the pension front, as we get closer to fully-funded status, we are shifting our asset portfolio increasingly towards fixed income investments, which positions us well from a liability matching perspective going forward. On the flip side, that shift also means the potential impact of future rate changes on our overall funded status will be somewhat moderated. Looking further at the balance sheet. We have seen substantial and growing interest in the value of our headquarters building in recent months. While we're not in the commercial real estate business, and therefore don't want to speculate on the potential value of the building, I'd like to quickly review some of the details around our March 2009 sale-leaseback transaction. The transaction encompassed 21 floors, or approximately 750,000 square-feet. We still own outright 7 floors or approximately 216,000 square-feet, which were not included in the transaction, 6 of which we now lease to a third-party and one that we still occupy, but have the option of renting -- of renting out. And rental income we receive on the 6 floors we lease is recorded in other revenues. The structure of the sale-leaseback transaction allows us to repurchase the 750,000 square-feet in 2019 at $250 million. Given that we believe the value of the underlying real estate far exceeds the $250 million liability associated with the repurchase option, it is almost certain that the option would be exercised at that time. We believe that the value of the real estate we own, combined with the real estate subject to the repurchase option, significantly exceeds the liability we carry associated with the real estate on our balance sheet as of June 30. Moving on to our outlook. Third quarter Circulation revenues are expected to increase in the low- to mid-single digits, as we expect to see continued benefit from our digital subscription initiatives, as well as from the most recent price increases at The Times and at The Globe. Third quarter advertising is typically very difficult to forecast, since advertising revenues tend to be so concentrated in September. And the trends in the third quarter continue to be affected by volatility compared to the first half of 2013. In the third quarter, our operating costs are expected to be in line with the same period last year. And with that, we'd be happy to open it up for questions.

[Operator Instructions] And we will go first to John Janedis with UBS. John Janedis - UBS Investment Bank, Research Division: Can you talk a little bit more about the digital subscriber base at The New York Times, meaning as the sub growth [ph] flows as you get larger, how have your subscriber acquisition costs changed, and are your current promotional rates similar to the last year or 2? Denise F. Warren: So in terms of the acquisition cost, I mean it does get slightly more expensive to acquire users as you get further into the model. So there is a slight upward trend in the costs. And I'm sorry, you had another part of that question, which I blanked on. John Janedis - UBS Investment Bank, Research Division: On the promotional side, are you being more promotional today versus a year or 2 ago? Or is that not necessary? Denise F. Warren: No. We're very, very actively always testing and learning around promotions. But I would say that the promotions that we've pretty much started with, tend to be the winners, in terms of what works. But we're constantly learning and testing around the fringes on that. John Janedis - UBS Investment Bank, Research Division: Maybe a related question, just on advertising more broadly. Can you help me understand the ad outlook a little bit better, meaning the gap from the first quarter to the second quarter was pretty wide. And so, does the third quarter commentary mean that somewhere between the first and second quarter, and maybe from a category perspective, what are you seeing from categories like Movies, Retail, Tech and Financial?

It's Mark. I'll answer that. Yes, I think our guidance would be -- although as Jim said in his remarks, visibility into September, which is, by far, the biggest factor in Q3, is limited. Our guidance would be that we currently expect Q3 the out-turn year-on-year to July between Q1 and Q2. In terms of categories, in Q2, first of all, strong -- there was strength in luxury American fashion and international fashion and transportation. Some relative weakness in corporate advocacy, no election this year. And you mentioned studios. Studios were soft through Q2, though we're seeing some returning and better trends for studios in Q3. The other factor in Q3 is the presence of the London Olympic Games in 2012, and of some non-repeating business that has been on the digital side in Q3. So far in Q3, stronger categories have been Telecoms, Health Care, again, Transportation. Again, in the early part of Q3, Studios, Entertainment, in other words, some are weak, though we're still seeing slightly strengthening trends there, and some weakness in media as well.

And we will now go to Craig Huber with Huber Research Partners.

A couple of housekeeping questions first, if I could. On the news print side, what's the percent change for newsprint cost, and also the average price percent change in the consumption? The first question. James M. Follo: Yes, Craig. So the total raw material cost, as we broke out in our press release, was down, say 4.7 -- about $4.7 million. I would say about 2/3 of that was volume related, and about 1/3 was rate related. In general, on a year-over-year basis, price per ton, which last year, and these are risi [ph] numbers, we won't disclose our actual numbers. But it is a pretty good proxy. The risi number was 640 last year, and they're off about 5% this year, so that on a rate basis, about 5% lower prices.

What is your guys' outlook for newsprint prices for the remainder of the year? James M. Follo: It's hard to say. I mean, obviously, demand continues to be an issue for manufacturers, but the supply issue -- some of the suppliers will -- are continuing to manage aggressively, outputs. So I'd say, generally, we think it's going to be somewhat benign. Again, the price decline from quarter 1 to quarter 2 went from like 3% to 5% down, but I think we would call for somewhat stable pricing, off of the Q2 numbers for the remainder of the year.

Okay, then on the Circulation side for print, with the Daily and Sunday performance there year-over-year for your flagship papers, as well as The Globe? Denise F. Warren: Craig, it's Denise. For The New York Times, Daily was down 6.3% and Sunday was down 1.7%. James M. Follo: Yes, and on The Globe, Daily and Sunday were down both in the neighborhood of 8%.

Okay, and then further, given the $900 million plus on your -- cash on your balance sheet, Mark, can you just talk a little further about what you think you need -- what you need to see here, from your operations to make you more comfortable to put back in place a quarterly dividend, which you obviously, you guys got rid of back in early 2009. What's holding you back here? Because I get this question all the time from investors.

Particularly from analysts, more than investors. But -- so the answer is, you'll recall in the last earnings call, we said there were a number of factors we were looking at. Volatility, and we just -- Jim's just given you month-to-month numbers on Q2, which show the value, see significant volatility as between Q1 and Q2 on Advertising, which remains a very important revenue stream for us. Volatility of performance in terms of that revenue is a factor. We've outlined -- I outlined in the last earnings call a growth strategy. We're at work on that, but I'd be the first person to say we're in an early stage in the development of the growth strategy. I want to see more development there. And as a company, as you know, we're in the process of selling The New England Media Group and The Globe. As we become a smaller company, our obligations become larger. But clearly, I'm not stupid, I'm aware of the growing strength in the balance sheet. And I've said today that we're going to keep this topic under very close scrutiny over the coming months.

Then my final question, if I could. Denise, you guys mentioned about programmatic digital ad revenue becoming a larger piece of your the overall pie. What is that percentage right now of your Digital Ad revenue versus, say, a year ago? Denise F. Warren: Craig, I'm sorry. I don't -- we've never said that programmatic's a large percentage of our business. It's actually quite a small percentage of our business, just to clarify. And we don't disclose the actual amount.

Yes. I mean, what we have said is that the broader pressures of programmatic, as part of the broader supply and demand pressures are playing out, and having an impact on our digital business. But we -- and that's one thing, it is worth saying, however as we've appointed during the quarter, a new head of programmatic sales at The Times. And certainly, both here and in particular, our new Executive Vice President for Advertising, Meredith Levien, will definitely be focusing on how best to optimize the opportunities in the programmatic sphere, as well as every other aspect of our advertising.

And we will now go to William Bird with Lazard Capital Markets. William G. Bird - Lazard Capital Markets LLC, Research Division: I was wondering if you could talk about what additional cost areas you're likely to attack next. And how much of the $20 million to $25 million in operating losses in '13 from new initiatives are still ahead of us? James M. Follo: The spending for 2013 is largely ahead of us. We really haven't spent more than a couple of million dollars against that. A lot of that spending is around hiring. It just takes a lot of the ramp-up. But we -- we're still -- we think we're on track just to -- we're on track on those projects, and therefore I expect that money to be spent this year. And obviously, we'll see meaningful pickup in spending. And that's embedded in the guidance, so kind of flat, quarterly expense performance in this year. We're down $14 million, I'm not suggesting it's necessarily $14 million, but it does grow significantly off of Q2. And then Q4 even accelerates beyond that. But look, we'll see a lot of the same contributors now. Some of things we saw, and look, I think our core business, likely on the cost side, likely to -- performs pretty consistent throughout the year, meaning a lot of things that have contributed to these costs will likely continue. Some of the big numbers, obviously, raw material, that will continue. Pensions was a pretty meaningful contributor in the quarter as well, and that's a recurring issue we expect through the rest of the year. And then once you get below that, it's just been a long list of areas. Everything from production efficiencies and distribution, we'll continue to focus on that. And quite frankly, part of the way we've reorganized, where we've got a kind of a dedicated head over print products and services, a big part of that job is to really wring out some real cost efficiencies out of the distribution manufacturing process. So we think there's more to go there as well. But it's likely to continue to be a fairly long list. I mean, the headcount side, our headcount was modestly down in the quarter. We'll continue to look at areas. But I think it's likely to -- going to continue to just be finding efficiencies wherever we can throughout the company, and that's consistent with what we've seen the first half of this year. William G. Bird - Lazard Capital Markets LLC, Research Division: And Mark, you alluded to a number of kind of strategic initiatives that will come later in the year. Can you share with us, what's on that punchlist, and to give us a sense of kind of upcoming events?

Sure. So we've got 4 major themes. Development of our advertising business, in particular, looking hard at digital advertising, really represents a fixed theme, and Meredith Levine who started on Monday, is going to be leading that work. But our 4 growth themes are the development of new paid products and services, Denise here is leading that work. It's going well. It's in early stage. We expect, in the first half of next year to be rolling out a number of new subscription intended flavors -- new flavors, new products from The New York Times, as part of our efforts to exploit a broader part of the demand curve of proven and expressed demand for paid products from The New York Times. As I've mentioned in my remarks, the international [indiscernible] gets underway, in earnest, in the middle of October, with the rebranding of the International Herald Tribune into The International New York Times, and that's part of a broad attempt to solidify and unify our products and service internationally, both in print and in digital, on the web, apps and indeed, live conferences under a single brand to find new audiences, new customers for The New York Times, special focus there on trying to, just as with paid products, but this time internationally to find new reservoirs, potential subscribers for the times. We're also working hard on video. One of the stories in Q2 is of, both a really striking increase -- more than 100% increase year-on-year and video impressions for The Times, but -- and also a more effective monetization of those impressions. But we are still in the position where advertising demand for opportunities for video advertising from The Times is outstripping the supply. Rebecca Howard who we hired from AOL, our new General Manager of Video, again in Denise's division is working hard on that strategic initiative. I think making progress, but more on that, I hope through the course of this year and into next year. And finally, we're working on a series of brand extensions, developing -- we hope a broader based Games business, based on the franchise and indeed, the consumer expectations associated with The New York Times crossword. E-commerce opportunities, and also, as I mentioned trying to develop our Conference business, we've -- we're this year, having more conferences both at home and abroad than any previous year in The Times' history, and we think there's a real opportunity to develop that as a business as well.

And we will now go to Alexia Quadrani with JPMorgan. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Just a couple questions. The first one, following up on your commentary on the newspaper advertising trends there. Can you give us some color of what you're seeing in July? Does it look a bit more like June or the softness you saw in May?

Well, I mean, when I talked about those trends, saying that we were seeing strength in Telecoms, Health Care and Transportation, and more challenge in Entertainment and American Fashion, I didn't mention [indiscernible] there. Just in July, a little minor variation there, and Media. That's been the picture. And as is -- I also said about July this isn't just on the digital side, I think some -- it's partly drawn on the print side as well, is that there were some specifics around The Olympic Games, The London Games last year, which are non-repeating this year, I would say that broadly, without going into too much detail, August is looking distinctly better than July on the print side. And as I've said, and the reason that we're being fairly limited in our guidance, we don't yet feel we have enough visibility into September, that's available to offer reliable guidance at this stage about September, and that's what we're limiting our guidance to the quarter to guidance that we expect the -- our term to be, between Q1 and Q2. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Okay. And then on the digital sub outlook, I understand your guidance for the upcoming quarter to be similar in terms of number, but incremental subs, but if you look longer-term, I guess, should we be looking at sort of early 2014, or maybe even later in 2014 when you have these new initiatives in place, as the reason for potentially seeing maybe a reacceleration in the digital sub number? Or is that a fair statement? Denise F. Warren: Yes, Alexia, it's Denise. I think that's exactly right, the whole idea, is that we're really launching this next phase of growth for our digital subscription plan. And we do think that there's substantial growth to exploit along the demand curve. But again, as you point out, we're going to start with rolling out those initiatives, sort of probably at the end of the first quarter of next year, maybe the beginning of the second quarter, so you won't start to see the steady state of that, until several quarters later. But we're excited about that, and we think there's a lot of opportunity. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: And then, should we assume an incremental cost beside this $20 million to $25 million, maybe in 2014? Or do you think this initial investment really should be the bulk of it? James M. Follo: Well, I think the costs go up because you really -- most of it is concentrated in the half year. So you'll have a full-year of spending. And I've said just a few minutes ago, fourth quarter will be higher than third. So -- but we'll start seeing revenues. So I would say, from a kind of a net loss perspective, we begin to moderate pretty quickly, and we see profitability in the latter part of 2014. So we're at the high point of kind of net investment this year, the cost we would expect to grow off of this year.

There will be -- there will be some ongoing costs associated with these products. And in, I mean, obviously, part of the idea of the products is, as far as possible, to exploit the underlying and existing and paid-for high-quality journalism from our newsroom. But there will be some ongoing continued costs associated with continuing to offer these products. James M. Follo: Sure, no doubt. And I -- just to be clear, I'd there's not -- the cost we're spending this year is not highly, kind of onetime cost. I mean, we do have some onetime costs, some of those get capitalized. But there's a lot of people involved. There's -- we have people in the newsroom involved, we have ad sales people, we have many technology people that are -- will be hired and will support the ongoing product, and probably products yet to be decided on. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: And then just lastly, Denise, if you have any comments on the digital advertising outlook. I mean, should we just assume, sort of a low-single digit decline for now? Is that sort of what we should expect in the industry for a while?

Denise -- Alexia, Denise is not meant to be talking about this stuff anymore, because I've reorganized the company. So although, frankly, she could probably give you a better answer than me, I'm going to have a crack at it instead. And say, no, we are in the process of developing and innovating, we believe, in what we're doing in terms of mobile digital advertising. And we saw some good growth in Q2 there. We -- you've heard me talking about video. We have a new Video General Manager. We're making real strides, albeit from a very low base in terms of both numbers of impressions, and also the monetizing of those impressions. We got a new Executive Vice President of Advertising who's arrived this week. And we are very keen to improve the performance of The New York Times Company in digital advertising. And I actually do not think that we should be satisfied with a continued contraction of digital advertising revenue. We're looking for solutions, and that's an area where we -- which we want to restore to growth.

And we will take our last question from Kannan Venkateshwar with Barclays. Kannan Venkateshwar - Barclays Capital, Research Division: Just one question for me, which is, the circulation numbers on the Sunday side for you have been consistently improving, especially Sunday Home Delivery, but we haven't really seen any effect of that on the ad side. And given that Sunday accounts are a big proportion of all the print ads, what's keeping that back? James M. Follo: Here's what I would say, that there's not a direct one-for-one correlation between Circulation and Advertising, to be quite frank. By the way, the good news for us is, on the Circulation side, we make quite a bit of money from circulation, because we charge a premium price for premium products. So I'd say that's really the answer to that is, it's just not that one-for-one. We don't sell, for example, like a magazine or even a television program, where you're guaranteeing necessarily at rate. So I think that's probably the biggest...

So, I want to stay, I mean, within that, it's interesting, I mean, we've -- over the course of the calendar year, relaunched T Magazine, which is part of the Sunday offering, and with a genuinely brilliant editor, Deborah Needleman, both reshaping it editorially and also making it -- having both a great read for fans of the magazine, but also a great advertising platform for luxury goods. And what we are seeing, on T Magazine, is very significant year-on-year increases, both in ad pages and ad revenue. And I think the combination of the digital access arbitrage, which made some of the Home Delivery so attractive to consumers, the stability -- the relative stability of the Sunday numbers, I think, it has been, possibly defensively, but nonetheless, I think it's very effective in terms of making The New York Times on a Sunday to include these magazines. A very strong potential buy for advertisers. Kannan Venkateshwar - Barclays Capital, Research Division: Okay, and so one more question is on the Video side. You guys launched your first documentary recently. But -- so in terms of monetization, could you just detail for us, in terms of the opportunities out there, and how do you think the revenue line might look on the further video product, going forward?

I'm going to give you, I'm afraid, a kind of soft problem, a hard answer on this. But we're starting from a relatively low base, and a relatively low base of expectation from users of NYTimes.com, and our other digital assets, all video from The Times. But I think there are really quite encouraging signs over the last 9 to 12 months, but when we do get video right, be it a newsfeed for a big breaking story, some of the video used during the election campaign, the video included -- not all monetized, it must be said, during the Boston bombing or the video around stories like the selection of a new pope, we do well there. I think the partnership I mentioned, with Retro Report, aggregation of other high-quality video were successful. I think use of video in the multimedia story, Snow Fall, at the end of last year, are all examples. When we get it right, it can be very eye-grabbing. What Rebecca is now leading work on now, between the newsroom and the business side of The New York Times, is an integrated programming strategy for video. And although currently, the numbers for revenue video advertising are very low, the extraordinary rates of increase, 600%, 700%, 800% in some months of increase in revenue, and the creative potential and the appetite for advertisers mean, I think that in due course, the opportunity can be very large indeed. Over time, we expect, because we are not the only publishing house, interested in video, most of the world's content players are thinking hard about video. We expect to see [indiscernible] video to come down. But the appetite, specifically from advertisers, for opportunities to do video advertising on The New York Times are so great, that we think our -- the chance we have to grow our share of the video ad market is large indeed, even if rates over time, come down.

That does conclude today's question-and-answer session. Ms. Schwartz, at this time, I will turn the conference back to you for any additional or closing remarks.

Thank you for joining us today. We look forward to speaking to you again next quarter.

Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may now disconnect.