Ny Times Statement of Cash Flows Analysis

NYTimes 2009 Statement of Cash Flow analysis:

When first looking at a Statement of Cash Flows my eyes always roam to the change in cash year over year. While it is not the end all indicator of a company’s financial health; given my druthers I would rather see cash increase or at the very least remain at a consistent level than see it decreasing for 3 straight years which it is in this case of the New York Times. Not a great start, but the story doesn’t seem to get much better when looking deeper.

Net cash provided by operating activities is positive and has increased year over year and that should be a good thing because if a company’s product or service is profitable it will reflect in cash from operating activities. There are two line items that are new in 2009 over the past 3 years and they made me raise my eye brow: “Pension withdrawal expense” and “Net pension curtail”. While I don’t know for sure, these items lead me to believe that the company is starting to offer accelerated retirements. I don’t have too much experience dealing with “Pension withdrawal expense” and “Net pension curtail” but I do know that it is usually associated with a company desperately trying to save money by removing higher/tenured salaries off of payroll. This past July the State of Connecticut offered “Golden Handshakes” to its employees that were approaching retirement as the financial health of the state and its respective pensions were suffering. It is no secret that the newspaper business is a dying business and no matter how strong the New York Times is as a news service, the newspaper is an endangered species. Another disheartening sign is that of the three largest contributors to positive operating income, only one, “accounts receivable”, is a reliable source of cash (I am assuming these are subscription commitments). The other two contributors (depreciation and deferred income taxes) are not cash generating activities that the company can rely on year over...