CRITICAL ACCOUNTING POLICIES Off-Balance Sheet Arrangements Ratings Long-Lived Assets P. 46 – THE NEW YORK TIMES COMPANY If we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying  value, in the first step we compare the fair value of the reporting unit with its carrying amount, including goodwill.  Fair value is calculated by a combination of a discounted cash flow model and a market approach model. In  calculating fair value for each reporting unit, we generally weigh the results of the discounted cash flow model more  heavily than the market approach because the discounted cash flow model is specific to our business and long-term  projections. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount  exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. In the  second step, we compare the implied fair value of the reporting unit’s goodwill with the carrying amount of that  We test for goodwill impairment at the reporting unit level, which is our operating segment. We first perform a  qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less  than its carrying value. The qualitative assessment includes, but is not limited to, the results of our most recent  quantitative impairment test, consideration of industry, market and macroeconomic conditions, cost factors, cash  flows, changes in key management personnel and our share price. The result of this assessment determines whether it  is necessary to perform the goodwill impairment two-step test. For the 2014 annual impairment testing, based on our  qualitative assessment, we concluded that it is more likely than not that goodwill is not impaired. T he impairment analysis is considered critical because of the significance of long-lived assets to our  Consolidated Balance Sheets. We evaluate whether there has been an impairment of goodwill on an annual basis or in an interim period if  certain circumstances indicate that a possible impairment may exist. All other long-lived assets are tested for  impairment if certain circumstances indicate that a possible impairment exists. We believe our critical accounting policies include our accounting for long-lived assets, retirement benefits,  income taxes, self-insurance liabilities and accounts receivable allowances. Specific risks related to our critical  accounting policies are discussed below. We continually evaluate the policies and estimates we use to prepare our Consolidated Financial Statements. In  general, management’s estimates are based on historical experience, information from third-party professionals and  various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results may  differ from those estimates made by management.  Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these  financial statements requires management to make estimates and assumptions that affect the amounts reported in the  Consolidated Financial Statements for the periods presented. We did not have any material off-balance sheet arrangements as of December 28, 2014. The Company’s senior notes are currently rated B1 by Moody’s Investors Service with a stable outlook. In April  2014, Standard & Poor’s upgraded its rating on the Company’s senior notes to BB from BB- and revised favorably the  recovery prospects for the senior notes, changing its recovery rating on these senior notes to 1 from 2, based on its  anticipation of a lower balance of priority debt outstanding. The Company’s overall rating remains B1 at Moody’s  Investors Service with a stable outlook, and B+ at Standard & Poor’s with a stable outlook.  (In thousands) December 28, 2014 December 29, 2013 Property, plant and equipment, net $ 665,758 $ 713,356 Goodwill 116,422 125,871 Long-lived assets $ 782,180 $ 839,227 Total assets $ 2,566,474 $ 2,572,552 Percentage of long-lived assets to total assets 30% 33%