Revenue Recognition  Income Taxes Stock-Based Compensation THE NEW YORK TIMES COMPANY – P. 69 We establish fair value for our stock-based awards to determine our cost and recognize the related expense over  the appropriate vesting period. We recognize stock-based compensation expense for outstanding stock-settled long- term performance awards, stock-settled and cash-settled restricted stock units, stock options and stock appreciation  rights. See Note 15 for additional information related to stock-based compensation expense.  We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can  involve complex issues, which could require an extended period of time to resolve. Until formal resolutions are  reached between us and the tax authorities, the timing and amount of a possible audit settlement for uncertain tax  benefits is difficult to predict. We recognize in our financial statements the impact of a tax position if that tax position is more likely than not  of being sustained on audit, based on the technical merits of the tax position. This involves the identification of  potential uncertain tax positions, the evaluation of tax law and an assessment of whether a liability for uncertain tax  positions is necessary. Different conclusions reached in this assessment can have a material impact on our  Consolidated Financial Statements. We assess whether our deferred tax assets should be reduced by a valuation allowance if it is more likely than  not that some portion or all of the deferred tax assets will not be realized. Our process includes collecting positive  (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence and assessing, based on the  evidence, whether it is more likely than not that the deferred tax assets will not be realized. Income taxes are recognized for the following: (1) amount of taxes payable for the current year and (2) deferred  tax assets and liabilities for the future tax consequence of events that have been recognized differently in the financial  statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates and are  adjusted for tax rate changes in the period of enactment. Other revenues are recognized when the related service or product has been delivered.  Rate adjustments primarily represent credits given to customers related to billing or production errors and  discounts represent credits given to customers who pay an invoice prior to its due date. Rate adjustments and  discounts are accounted for as a reduction of revenues, based on the amount of estimated rate adjustments or  discounts related to the underlying revenues during the period. Measurement of rate adjustments and discount  obligations are estimated based on historical experience of credits actually issued. We recognize a rebate obligation as a reduction of revenues, based on the amount of estimated rebates that will  be earned and claimed, related to the underlying revenue transactions during the period. Measurement of the rebate  obligation is estimated based on the historical experience of the number of customers that ultimately earn and use the  rebate. Advertising revenues are recognized when advertisements are published in newspapers or placed on digital  platforms or, with respect to certain digital advertising, each time a user clicks on certain advertisements, net of  provisions for estimated rebates, rate adjustments and discounts. Circulation revenues include single-copy and subscription revenues. Circulation revenues are based on the  number of copies of the printed newspaper (through home-delivery subscriptions and single-copy sales) and digital  subscriptions sold and the rates charged to the respective customers. Single-copy revenue is recognized based on date  of publication, net of provisions for related returns. Proceeds from subscription revenues are deferred at the time of  sale and are recognized in earnings on a pro rata basis over the terms of the subscriptions. When our digital  subscriptions are sold through third parties, we are a principal in the transaction and, therefore, revenues and related  costs to third parties for these sales are reported on a gross basis. Several factors are considered to determine whether  we are a principal, most notably whether we are the primary obligor to the customer and have determined the selling  price and product specifications.