Martha Stewart Living Omnimedia 10-Q 2011 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

¨ 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 001-15395

MARTHA STEWART LIVING OMNIMEDIA, INC.

(Exact name of registrant as specified in its charter)

Delaware	52-2187059
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
601 West 26th Street, New York, NY	10001
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number, including area code)(212) 827-8000

(Former name, former address and former fiscal year, if changed since last report)

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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

Class	Outstanding as of August 3, 2011
Class A, $0.01 par value		29,282,466
Class B, $0.01 par value		25,984,625
Total		55,267,091

Martha Stewart Living Omnimedia, Inc.

Index to Form 10-Q

		Page
Part I.	Financial Information
	Item 1.  Financial Statements.		3
	Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.		14
	Item 3.  Quantitative and Qualitative Disclosures About Market Risk.		28
	Item 4.  Controls and Procedures.		29
Part II.	Other Information
	Item 1.  Legal Proceedings.		29
	Item 1A. Risk Factors.		29
	Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.		30
	Item 5.  Other Information.		30
	Item 6.  Exhibits.		31
	Signatures		32

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

MARTHA STEWART LIVING OMNIMEDIA, INC.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	June 30, 2011			December 31, 2010
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	23,187		$	23,204
Short-term investments		11,116			10,091
Accounts receivable, net		43,274			59,250
Inventory		6,147			5,309
Deferred television production costs		2,933			2,413
Other current assets		4,548			4,772
Total current assets		91,205			105,039
PROPERTY AND EQUIPMENT, net		14,247			14,507
GOODWILL, net		45,107			45,107
OTHER INTANGIBLE ASSETS, net		46,541			46,547
OTHER NONCURRENT ASSETS, net		10,104			11,114
Total assets	$	207,204		$	222,314
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	24,363		$	30,062
Accrued payroll and related costs		6,162			6,541
Current portion of deferred subscription revenue		15,655			18,734
Current portion of other deferred revenue		5,242			4,732
Current portion of loan payable		1,500			1,500
Total current liabilities		52,922			61,569
DEFERRED SUBSCRIPTION REVENUE		4,351			4,529
OTHER DEFERRED REVENUE		4,651			1,413
LOAN PAYABLE		4,500			7,500
DEFERRED INCOME TAX LIABILITY		5,201			4,527
OTHER NONCURRENT LIABILITIES		3,961			3,743
Total liabilities		75,586			83,281
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Class A Common Stock, $.01 par value, 350,000,000 shares authorized; 29,156,887 and 28,753,212 shares outstanding in 2011 and 2010, respectively		292			288
Class B Common Stock, $.01 par value, 150,000,000 shares authorized; 25,984,625 and 26,317,960 shares outstanding in 2011 and 2010, respectively		260			263
Capital in excess of par value		298,170			295,576
Accumulated deficit		(166,216	)		(156,201	)
Accumulated other comprehensive loss		(113	)		(118	)
		132,393			139,808
Less: Class A Treasury Stock – 59,400 shares at cost		(775	)		(775	)
Total shareholders’ equity		131,618			139,033
Total liabilities and shareholders’ equity	$	207,204		$	222,314

The accompanying notes are an integral part of these consolidated financial statements.

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MARTHA STEWART LIVING OMNIMEDIA, INC.

Consolidated Statements of Operations

(unaudited, in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
REVENUES
Publishing	$	34,141		$	35,292		$	68,817		$	66,627
Broadcasting		7,801			8,190			15,570			20,281
Merchandising		12,918			11,817			23,147			21,626
Total revenues		54,860			55,299			107,534			108,534
OPERATING COSTS AND EXPENSES
Production, distribution and editorial		30,510			29,124			61,718			56,653
Selling and promotion		13,029			13,479			27,320			28,086
General and administrative		12,883			12,559			25,839			25,905
Depreciation and amortization		924			940			1,920			2,062
Total operating costs and expenses		57,346			56,102			116,797			112,706
OPERATING LOSS		(2,486	)		(803	)		(9,263	)		(4,172	)
OTHER (EXPENSE) / INCOME
Interest expense, net		(14	)		(27	)		(126	)		(108	)
(Loss) / income on equity securities		(14	)		(19	)		205			(19	)
Total other (expense) / income		(28	)		(46	)		79			(127	)
LOSS BEFORE INCOME TAXES		(2,514	)		(849	)		(9,184	)		(4,299	)
Income tax provision		(424	)		(400	)		(831	)		(814	)
NET LOSS	$	(2,938	)	$	(1,249	)	$	(10,015	)	$	(5,113	)
LOSS PER SHARE – BASIC AND DILUTED
Net loss	$	(0.05	)	$	(0.02	)	$	(0.18	)	$	(0.09	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic and diluted		54,766			54,389			54,741			54,360

The accompanying notes are an integral part of these consolidated financial statements.

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MARTHA STEWART LIVING OMNIMEDIA, INC.

Consolidated Statement of Shareholders’ Equity

For the Six Months Ended June 30, 2011

(unaudited, in thousands)

	Class A Common Stock					Class B Common Stock															Class A Treasury Stock
	Shares			Amount		Shares			Amount			Capital in excess of par value			Accumulated deficit			Accumulated other comprehensive income			Shares			Amount			Total
Balance at January 1, 2011		28,753		$	288		26,318		$	263		$	295,576		$	(156,201	)	$	(118	)		(59	)	$	(775	)	$	139,033
Comprehensive loss:
Net loss		—			—		—			—			—			(10,015	)		—			—			—			(10,015	)
Other comprehensive income:
Unrealized gain on securities		—			—		—			—			—			—			5			—			—			5
Total comprehensive loss																												(10,010	)
Conversion of shares		333			3		(333	)		(3	)		—			—			—			—			—			—
Issuance of shares of stock in conjunction with stock option exercises		81			1		—			—			224			—			—			—			—			225
Issuance of shares of stock and restricted stock, net of cancellations and tax withholdings		(10	)		—		—			—			(22	)		—			—			—			—			(22	)
Non-cash equity compensation		—			—		—			—			2,392			—			—			—			—			2,392
Balance at June 30, 2011		29,157		$	292		25,985		$	260		$	298,170		$	(166,216	)	$	(113	)		(59	)	$	(775	)	$	131,618

The accompanying notes are an integral part of these consolidated financial statements.

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MARTHA STEWART LIVING OMNIMEDIA, INC.

Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Six Months Ended June 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(10,015	)	$	(5,113	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash revenue		(432	)		(5,390	)
Depreciation and amortization		1,920			2,062
Amortization of deferred television production costs		11,712			10,148
Non-cash equity compensation		2,414			3,470
Deferred income tax expense		674			688
(Income) / loss on equity securities		(205	)		19
Other non-cash charges, net		306			342
Changes in operating assets and liabilities
Accounts receivable, net		15,976			17,551
Inventory		(838	)		790
Deferred television production costs		(12,232	)		(10,850	)
Accounts payable and accrued liabilities		(5,699	)		(4,911	)
Accrued payroll and related costs		(379	)		(1,287	)
Deferred subscription revenue		(3,257	)		(1,628	)
Deferred revenue		4,142			1,266
Other changes		1,467			945
Total changes in operating assets and liabilities		(820	)		1,876
Net cash provided by operating activities		5,554			8,102
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(1,656	)		(3,226	)
Purchases of short-term investments		(4,856	)		(12,688	)
Sales of short-term investments		3,716			12,775
Net cash used in investing activities		(2,796	)		(3,139	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt		(3,000	)		(1,500	)
Proceeds received from stock option exercises		225			63
Net cash used in financing activities		(2,775	)		(1,437	)
Net (decrease) / increase in cash		(17	)		3,526
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		23,204			25,384
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	23,187		$	28,910

The accompanying notes are an integral part of these consolidated financial statements.

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Martha Stewart Living Omnimedia, Inc.

Notes to Consolidated Financial Statements

(unaudited)

1. General

Martha Stewart Living Omnimedia, Inc., together with its subsidiaries, is herein referred to as “we,” “us,” “our,” or the “Company.”

The information included in the foregoing interim consolidated financial statements is unaudited. In the opinion of management, all adjustments, all of which are of a normal recurring nature and necessary for a fair presentation of the results of operations for the interim periods presented, have been reflected therein. The results of operations for interim periods do not necessarily indicate the results to be expected for the entire year. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) with respect to the Company’s fiscal year ended December 31, 2010 (the “2010 10-K”) which may be accessed through the SEC’s website at http://www.sec.gov.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management does not expect such differences to have a material effect on the Company’s consolidated financial statements.

2. Significant Accounting Policies

The Company’s significant accounting policies are discussed in detail in the 2010 10-K, especially under the heading Note 2, “Summary of Significant Accounting Policies.”

3. Fair Value Measurements

The Company categorizes its assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

• Level 1: Observable inputs such as quoted prices for identical assets and liabilities in active markets obtained from independent sources.

• Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair value of the Company’s level 2 financial assets is primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case a weighted average market price is used.

• Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the asset or liability.

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The following tables present the Company’s assets that are measured at fair value on a recurring basis:

	June 30, 2011
(in thousands)	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Short-term investments:
U.S. government and agency securities	$	—	$	2,687	$	—	$	2,687
Corporate obligations		—		5,988		—		5,988
Other fixed income securities		—		1,236		—		1,236
International securities		—		1,205		—		1,205
Total	$	—	$	11,116	$	—	$	11,116
	December 31, 2010
(in thousands)	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Short-term investments:
U.S. government and agency securities	$	—	$	1,637	$	—	$	1,637
Corporate obligations		—		5,977		—		5,977
Other fixed income securities		—		2,140		—		2,140
International securities		—		337		—		337
Total	$	—	$	10,091	$	—	$	10,091

The Company has no liabilities that are measured at fair value on a recurring basis.

Assets measured at fair value on a nonrecurring basis

The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment, as well as cost method investments, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized. Such impairment charges incorporate fair value measurements based on level 3 inputs.

4. Inventory

Inventory is comprised of paper stock. The inventory balances at June 30, 2011 and December 31, 2010 were $6.1 million and $5.3 million, respectively.

5. Investments in Other Non-Current Assets

The Company has investments in preferred stock which it carries at cost. As of June 30, 2011, the Company’s aggregate carrying value of these investments was $5.7 million and was included within other noncurrent assets in the consolidated balance sheet. The Company has determined that certain of these investments represent interests in

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variable interest entities. As of June 30, 2011, the Company’s investments in the entities were substantially equal to its maximum exposure to loss. There are no future contractual funding commitments. The Company has determined that the Company is not the primary beneficiary of these entities since the Company does not have the power to direct the activities that most significantly impact the entities’ economic performance. Accordingly, the Company does not consolidate these entities and accounts for these investments under the cost method.

6. Credit Facilities

The Company has a line of credit with Bank of America in the amount of $5.0 million, which is generally used to secure letters of credit. The line was renewed as of June 30, 2011 for a one-year period. The renewal did not include any substantive changes from the prior year’s terms. The Company was compliant with the debt covenants as of June 30, 2011. The Company had no outstanding borrowings under this facility as of June 30, 2011 and had letters of credit outstanding of $2.6 million.

In April 2008, the Company entered into a loan agreement (subsequently amended and restated on August 7, 2009) with Bank of America for a term loan in the amount of $30.0 million related to the acquisition of certain assets of Emeril Lagasse. The loan is secured by substantially all of the assets of the Emeril business that the Company acquired. The loan agreement requires equal principal payments of $1.5 million and accrued interest to be paid by the Company quarterly for the duration of the loan term, approximately 5 years. As of June 30, 2011, the Company had paid $24 million in principal, including prepayment of the $4.5 million due through March 31, 2012, such that $6.0 million was outstanding at June 30, 2011.Only one principal payment of $1.5 million due as of June 30, 2012 is reflected as a current liability in the consolidated balance sheet as of June 30, 2011. The interest rate on all outstanding amounts is equal to a floating rate of 1-month London Interbank Offered Rate (“LIBOR”) plus 2.85%.

The loan terms have required the Company to be in compliance with certain financial and other covenants, failure with which to comply would result in an event of default and would permit Bank of America to accelerate and demand repayment of the loan in full. On June 29, 2011, the Company and Bank of America executed an amendment to the loan agreement, which eliminated the financial covenants that had previously required the Company to maintain a Funded Debt to EBITDA Ratio equal to or less than 2.0 and a Parent Guarantor Basic Fixed Charge Ratio equal to or greater than 2.75. The amendment also reduced the minimum level of consolidated Tangible Net Worth required to be maintained by the Company from $40 million to $30 million. Additionally, the amendment added a requirement that the Company maintain at all times cash and certain cash equivalents with an aggregate market value of not less than an amount equal to 200% of the outstanding loan principal. This cash and cash equivalents balance cannot be subject to any lien, security interest or other encumbrance, nor can it be held by the Company in order to comply with any other liquidity or other similar covenant under any agreement in respect of indebtedness or other obligations of the Company.

As of June 30, 2011, the Company was compliant with the debt covenants. A current summary of the most significant financial covenants is as follows:

Financial Covenant
Tangible Net Worth	At least $30.0 million
Quick Ratio	Equal to or greater than 1.0
Unencumbered Cash and Designated Cash Equivalents	Equal to or greater than 200% of the loan balances

The Company expects to be compliant with all debt covenants through 2011. While the maintenance of a minimum level of cash balances has now become a financial covenant, the Company currently has cash balances well in excess of the loan principal which gives the Company the current ability to repay the outstanding principal in full in the event of default or to prevent default.

The loan agreement also contains a variety of other customary affirmative and negative covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional debt, suffer the creation of liens on their assets, pay dividends or repurchase stock, make investments or loans, sell assets, enter into transactions with affiliates other than on arm’s length terms in the ordinary course of business, make capital expenditures, merge into or acquire other entities or liquidate. The negative covenants expressly permit the Company to, among other things: incur an additional $15 million of debt to finance permitted investments or acquisitions; incur an additional $15 million of earnout liabilities in connection with permitted acquisitions; spend up to $30 million repurchasing the

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Company’s stock or paying dividends thereon (so long as no default or event of default existed at the time of or would result from such repurchase or dividend payment and the Company would be in pro forma compliance with the above-described financial covenants assuming such repurchase or dividend payment had occurred at the beginning of the most recently-ended four-quarter period); make investments and acquisitions (so long as no default or event of default existed at the time of or would result from such investment or acquisition and the Company would be in pro forma compliance with the above-described financial covenants assuming the acquisition or investment had occurred at the beginning of the most recently-ended four-quarter period); make up to $15 million in capital expenditures in fiscal year 2008 and $7.5 million in each subsequent fiscal year, provided that the Company can carry over any unspent amount to any subsequent fiscal year (but in no event may the Company make more than $15 million in capital expenditures in any fiscal year); sell one of the Company’s investments (or any asset the Company might receive in conversion or exchange for such investment); and sell assets during the term of the loan comprising, in the aggregate, up to 10% of the Company’s consolidated shareholders’ equity, provided the Company receives at least 75% of the consideration in cash.

7. Income taxes

The Company follows Accounting Standards Codification (“ASC”) Topic 740,Income Taxes (“ASC 740”). Under the asset and liability method of ASC 740, deferred assets and liabilities are recognized for the future costs and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company periodically reviews the requirements for a valuation allowance and makes adjustments to such allowances when changes in circumstances result in changes in the Company’s judgment about the future realization of deferred tax assets. ASC 740 places more emphasis on historical information, such as the Company’s cumulative operating results and its current year results than it places on estimates of future taxable income. Therefore, the Company has added $4.0 million to its valuation allowance in the six months ended June 30, 2011, resulting in a cumulative balance of $80.9 million as of June 30, 2011. In addition, the Company has recorded $0.8 million of tax expense during the six months ended June 30, 2011 which is primarily attributable to differences between the financial statement carrying amounts of past acquisitions of certain indefinite-lived intangible assets and their respective tax bases, which resulted in a net deferred tax liability of $5.2 million at June 30, 2011. The Company intends to maintain a valuation allowance until evidence would support the conclusion that it is more likely than not that the deferred tax asset could be realized.

ASC 740 further establishes guidance on the accounting for uncertain tax positions. As of June 30, 2011, the Company had an ASC 740 liability balance of $0.3 million, of which $0.2 million represented unrecognized tax benefits, which if recognized at some point in the future would favorably impact the effective tax rate, and $0.1 million represented interest. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for the years before 2005 and state examinations for the years before 2003. The Company anticipates that as a result of audit settlements and statute closures over the next twelve months, the liability will be reduced through cash payments of approximately $0.2 million.

8. Equity compensation

Prior to May 2008, the Company had several stock incentive plans that permitted the Company to grant various types of share-based incentives to key employees, directors and consultants. The primary types of incentives granted under these plans were stock options and restricted shares of common stock. The Compensation Committee of the Board of Directors was authorized to grant up to a maximum of 10,000,000 underlying shares of Class A Common Stock under the Martha Stewart Living Omnimedia, Inc. Amended and Restated 1999 Stock Incentive Plan (the “1999 Option Plan”), and up to a maximum of 600,000 underlying shares of Class A Common Stock under the Company’s Non-Employee Director Stock and Option Compensation Plan (the “Non-Employee Director Plan”).

In April 2008, the Company’s Board of Directors (the “Board”) adopted the Martha Stewart Living Omnimedia, Inc. Omnibus Stock and Option Compensation Plan (the “New Stock Plan”), which was approved by the Company’s stockholders at the Company’s 2008 annual meeting. The New Stock Plan has 10,000,000 shares available for issuance. The New Stock Plan replaced the 1999 Option Plan and Non-Employee Director Plan (together, the “Prior Plans”), which together had an aggregate of approximately 1,850,000 shares still available for issuance. Therefore, the total net effect of the replacement of the Prior Plans and adoption of the New Stock Plan was an increase of approximately 8,150,000 shares of Class A Common Stock available for issuance under the Company’s stock plans.

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On March 1, 2011, the Company made awards to certain employees pursuant to the New Stock Plan. The awards consisted, in the aggregate, of options to purchase 1,025,000 shares of Class A Common Stock at an exercise price of $3.95 per share (the closing price on the date of grant), which options vest as to 33% of the shares on each of March 1, 2012 and 2013 and as to 34% of the shares on March 1, 2014, and 145,000 restricted stock units, each of which represents the right to a share of Class A Common Stock, of which 140,000 restricted stock units vest 50% on each of March 1, 2012 and March 1, 2013 and 5,000 vest 25% on each of the first four anniversaries. The Company has measured the grant date fair value of these awards as of the date of issuance and recognizes the fair value over the remaining service period of the awards.

On June 6, 2011, the Company made awards to Lisa Gersh, President and Chief Operating Officer, as provided in her employment agreement. Certain awards include service period vesting triggers and consist of an option to purchase 300,000 shares of Class A Common Stock at an exercise price of $4.85 (the closing price on the date of grant), which option vests as to 100,000 shares on each of June 6, 2013, 2014, and 2015, and 200,000 restricted stock units, each of which represents the right to one share of Class A Common Stock, of which 66,667 restricted stock units vest on June 6, 2013 and 2014, and 66,666 vest on June 6, 2015. The Company has measured the grant date fair value of these awards as of the grant date and will recognize the fair value over the remaining service periods of the awards. The Company also made awards which include price-based vesting triggers. The price-based option awards consist of options to purchase 400,000 shares of Class A Common Stock, an option for 100,000 shares of which has an exercise price of $6 per share and vests only at such time as the trailing average closing price of the Class A Common Stock during any 30 consecutive trading days during the term of the employment agreement has been at least $6, an option for 100,000 shares of which has an exercise price of $8 per share and vests only at such time as such trailing average has been at least $8, an option for 100,000 shares of which has an exercise price of $10 per share and vests only at such time as such trailing average has been at least $10, and an option for 100,000 shares of which has an exercise price of $12 per share and vests only at such time as such trailing average has been at least $12. The price-based restricted stock unit award consists of the right to receive 200,000 shares of Class A Common Stock, which restricted stock units will vest as to 50,000 of the shares at such time as such trailing average has been at least $6, as to an additional 50,000 of the shares at such time as such trailing average has been at least $8, as to an additional 50,000 of the shares at such time as such trailing average has been at least $10, and as to the final 50,000 of the shares at such time as such trailing average has been at least $12. The Company has measured the grant date fair value of these awards as of the date of issuance and will recognizes the fair value over the remaining service periods of the awards.

On March 1, 2010, the Company granted awards to multiple recipients. The awards consisted of, in the aggregate, options to purchase 700,000 shares of Class A Common Stock at an exercise price of $5.48 per share (the closing price on the date of grant), which options vest over a four-year period, and 550,000 restricted stock units, each of which represented the right to a share of Class A Common Stock if the Company achieved targets over a performance period.

During 2010, in recognition of changing economic conditions and to ensure the continued retention and motivation of key employees, the Company’s Compensation Committee approved modifications to the performance conditions associated with the restricted stock units issued during 2010. The modifications effectively replaced performance condition vesting triggers with service period vesting triggers. Consistent with requirements of ASC Topic 718,Compensation – Stock Compensation, the awards are being amortized over the requisite service period on a prospective basis from the date the Compensation Committee approved the removal of the performance conditions (December 3, 2010), which is deemed to be the grant date for accounting purposes.

9. Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss includes net loss and unrealized gains and losses on available-for-sale securities. Total comprehensive loss for the six months ended June 30, 2011 and 2010 was $10.0 million and $4.5 million, respectively.

10. Other

Production, distribution and editorial expenses; selling and promotion expenses; and general and administrative expenses are all presented exclusive of depreciation and amortization, which is shown separately within “Operating Costs and Expenses.”

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Certain prior year financial information has been reclassified to conform with fiscal 2011 financial statement presentation. Prior years’ results of the former Internet segment have been combined with those of the Publishing segment in connection with the Company’s revised identification of operating segments.

11. Industry Segments

In 2010, the Company announced its plan to report the results of operations from its former Publishing and Internet operating segments as one operating segment titled “Publishing.” The Company has been continuing to execute its strategy to leverage its core content across its print and digital platforms more efficiently by further centralizing the creative process. In addition, during the fourth quarter of 2010, the Company reorganized its advertising sales force to centralize selling efforts across all media. As a result of these fundamental changes in the way it views its business, the Company evaluated its operating segments and determined that the print and digital platforms no longer met the definition of separate operating segments in accordance with ASC 280,Segment Reporting. The new Publishing segment provides management with a more meaningful assessment of the operating performance of the Company’s print and digital platforms.

The Publishing segment primarily consists of the Company’s operations related to its magazines and books, as well as its digital operations which includes the content-driven website,marthastewart.com. The Broadcasting segment primarily consists of the Company’s television production operations and its satellite radio operations. The Merchandising segment consists of the Company’s operations related to the design of merchandise and related promotional and packaging materials that are distributed by its retail and manufacturing partners.

The accounting policies for the Company’s business segments are discussed in more detail in the 2010 10-K, especially under the heading “Note 2. Summary of Significant Accounting Policies.”

Segment information for the quarters ended June 30, 2011 and 2010 is as follows:

(in thousands)	Publishing			Broadcasting			Merchandising			Corporate			Consolidated
2011
Revenues	$	34,141		$	7,801		$	12,918		$	—		$	54,860
Non–cash equity compensation		188			2			(271	)		1,052			971
Depreciation and amortization		131			113			8			672			924
Operating income/(loss)		(1,915	)		(482	)		8,782			(8,871	)		(2,486	)
2010
Revenues	$	35,292		$	8,190		$	11,817		$	—		$	55,299
Non–cash equity compensation		231			44			312			1,095			1,682
Depreciation and amortization		234			72			11			623			940
Operating income/(loss)		1,887			(1,458	)		7,329			(8,561	)		(803	)

Segment information for the six months ended June 30, 2011 and 2010 is as follows:

(in thousands)	Publishing			Broadcasting			Merchandising		Corporate			Consolidated
2011
Revenues	$	68,817		$	15,570		$	23,147	$	—		$	107,534
Non–cash equity compensation		327			26			11		2,050			2,414
Depreciation and amortization		350			231			15		1,324			1,920
Operating income/(loss)		(3,765	)		(2,295	)		14,017		(17,220	)		(9,263	)
2010
Revenues	$	66,627		$	20,281		$	21,626	$	—		$	108,534
Non–cash equity compensation		465			215			685		2,105			3,470
Depreciation and amortization		669			136			22		1,235			2,062
Operating income/(loss)		(677	)		1,720			12,653		(17,868	)		(4,172	)

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12. Subsequent Events

On July 26, 2011, the Company and Charles A. Koppelman, the Executive Chairman of the Company, modified the terms of Mr. Koppelman’s existing employment agreement with the Company. As modified, the agreement will end on the earlier of December 31, 2011 or the date on which the President and Chief Operating Officer of the Company will begin to report directly to the Board, a date defined as the “Transition Date” in the modified agreement. On that date, which will be the expiration of his employment term (it had been December 31, 2012), all outstanding equity awards (other than Performance Shares if they have not vested by their own terms) will vest and/or become exercisable, and the period for exercising any vested stock options shall be extended to the later of one year from the end date of Mr. Koppelman’s employment or one year from the date Mr. Koppelman’s service as a director ends (but in no event beyond the remaining term of the option). On the Transition Date, and upon his execution of a general release of the Company, Mr. Koppelman also will be entitled to a severance payment which is consistent with the amount of severance under his existing agreement of $1,466,923. The other material terms of the employment agreement were not modified, although the Company is obligated to pay Mr. Koppelman’s legal expenses in connection with the modification (up to $35,000).

Contemporaneously with their execution of the modified employment agreement, the Company and Mr. Koppelman entered into a services agreement that provides for Mr. Koppelman’s continued service as a director of the Company following the end of his employment and for his renomination as a director in connection with the 2012 annual meeting. The services agreement also provides that Mr. Koppelman will make himself available to provide an orderly transition of his responsibilities. So long as he remains a director, Mr. Koppelman will have the title of Non-Executive Chairman, Vice Chairman or Special Committee Chairman and have the duties and responsibilities assigned by the Board.

During the term of the services agreement, Mr. Koppelman is entitled to receive Board fees on the same terms as the independent members of the Board, including an initial grant of restricted stock units representing the right to receive shares of Class A Common Stock valued at $50,000 on the Transition Date, which restricted stock units will vest one year after they are awarded. In addition, in consideration of his serving as Non-Executive Chairman, Vice Chairman or Special Committee Chairman and assisting with the transition, Mr. Koppelman will be entitled to receive, on that date, price-based restricted stock units representing 100,000 shares of Class A Common Stock, 50,000 of which will vest at such time as the trailing average closing price of the Class A Common Stock during any 30 consecutive days through December 31, 2012 has been at least $6, and 50,000 of which will vest at such time as such trailing average has been at least $8.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-looking Statements and Risk Factors

Unless otherwise noted, “we,” “us,” “our” or the “Company” refers to Martha Stewart Living Omnimedia, Inc. and its subsidiaries.

Except for historical information contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”), the statements in this Quarterly Report are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent only our current beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. These statements often can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “potential” or “continue” or the negative of these terms or other comparable terminology. Our actual results may differ materially from those projected in these statements, and factors that could cause such differences include the following among others:

• adverse reactions to publicity relating to Martha Stewart or Emeril Lagasse by consumers, advertisers and business partners;

• loss of the services of Ms. Stewart or Mr. Lagasse;

• loss of the services of other key personnel;

• softening of or increased competition in the portion of the domestic advertising market in which we compete;

• failure by the economy to sustain any meaningful recovery, including particularly the housing market and other developments that limit consumers’ discretionary spending or affect the value of our assets or access to credit or other funds;

• loss or failure of merchandising and licensing programs;

• failure in acquiring or developing new brands or realizing the benefits of acquisitions;

• inability to attract anticipated levels of viewers to our programming on Hallmark Channel;

• failure to protect our intellectual property;

• changes in consumer reading, purchasing, digital and/or television viewing patterns;

• increases in paper, postage, freight or printing costs;

• weakening in circulation;

• operational or financial problems at any of our business partners;

• our inability to successfully and profitably develop or introduce new products or the recall of products;

• failure of our branded products to successfully compete with comparable offerings;

• failure to predict, respond to and influence trends in consumer taste, shifts in business strategies, inability to add to our partnerships or capitalize on existing partnerships or the termination of such partnerships; and

• changes in government regulations affecting the Company’s industries.

These and other factors are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (the “2010 10-K”) under the heading “Part I, Item 1A. Risk Factors.”

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of new information, future events or otherwise.

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EXECUTIVE SUMMARY

We are an integrated media and merchandising company providing consumers with inspiring lifestyle content and programming, and well-designed, high-quality products. We are organized into three business segments with Publishing and Broadcasting representing our media platforms that are complemented by our Merchandising segment. Summarized below are our operating results for the three and six months ended June 30, 2011 and 2010.

	Three Months Ended June  30, 2011			Three Months Ended June  30, 2010			Six Months Ended June  30, 2011			Six Months Ended June  30, 2010
Total Revenues	$	54,860		$	55,299		$	107,534		$	108,534
Total Operating Costs and Expenses		57,346			56,102			116,797			112,706
Total Operating Loss	$	(2,486	)	$	(803	)	$	(9,263	)	$	(4,172	)

We generate revenue from various sources such as advertisers, licensing partners and magazine consumers. Publishing is our largest business segment, accounting for 64% of our total revenues for the six months ended June 30, 2011. The primary source of Publishing segment revenue is advertising from our magazines, which includeMartha Stewart Living,Martha Stewart Weddings,Everyday Food andWhole Living. Magazine subscriptions, advertising revenue generated from our digital properties and newsstand sales, along with royalties from our book business, account for most of the balance of Publishing segment revenue. Broadcasting segment revenue is derived primarily from our television advertising and license fees, as well as satellite radio advertising and license fees. Television programming is comprised ofThe Martha Stewart Show, a daily home and lifestyle show,Martha Bakes and other holiday and interview specials featuring Martha Stewart. In addition, we produce television programming featuring other talent, including programs featuring Chef Emeril Lagasse, Mad Hungry with Lucinda Scala Quinn andPetkeeping with Marc Morrone. The satellite radio programming that we produce is onMartha Stewart Living Radio channel on Sirius XM Radio. Merchandising segment revenues are generated from the licensing of our trademarks and designs for a variety of products sold at multiple price points through a wide range of distribution channels. Our retail partnerships include ourMartha Stewart Living program at The Home Depot and ourMartha Stewart Collection at Macy’s. We have manufacturing partnerships with Wilton Properties Inc. for ourMartha Stewart Crafts program and Age Group for ourMartha Stewart Pets line, as well as a variety of manufacturing partnerships to produce products under the Emeril Lagasse brand.

We incur expenses primarily consisting of compensation and related charges across all segments. In addition, we incur expenses related to the physical costs associated with producing magazines (including related direct mail and other marketing expenses), the editorial costs associated with creating content across our media platforms, the technology costs associated with our digital properties and the costs associated with producing our television programming. We also incur general overhead costs, including facilities and related expenses.

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Detailed segment operating results for the three months and six months ended June 30, 2011 and 2010 are summarized below.

	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Segment Revenues:
Publishing Segment	$	34,141		$	35,292		$	68,817		$	66,627
Broadcasting Segment		7,801			8,190			15,570			20,281
Merchandising Segment		12,918			11,817			23,147			21,626
TOTAL REVENUES		54,860			55,299			107,534			108,534
Segment Operating Costs and Expenses:
Publishing Segment		36,056			33,405			72,582			67,304
Broadcasting Segment		8,283			9,648			17,865			18,561
Merchandising Segment		4,136			4,488			9,130			8,973
TOTAL OPERATING COSTS AND EXPENSES BEFORE CORPORATE EXPENSES		48,475			47,541			99,577			94,838
Operating Income / (Loss):
Publishing Segment		(1,915	)		1,887			(3,765	)		(677	)
Broadcasting Segment		(482	)		(1,458	)		(2,295	)		1,720
Merchandising Segment		8,782			7,329			14,017			12,653
Total Segment Operating Income Before Corporate Expenses		6,385			7,758			7,957			13,696
Corporate Expenses *		(8,871	)		(8,561	)		(17,220	)		(17,868	)
TOTAL OPERATING LOSS	$	(2,486	)	$	(803	)	$	(9,263	)	$	(4,172	)

* Corporate expenses include unallocated costs of certain items such as compensation and related costs for certain departments such as executive, finance, legal, human resources, office services and information technology, as well as allocated portions of rent and related expenses for these departments that reflect current utilization of office space. Unallocated expenses are recorded as Corporate expenses because these items are directed and controlled by central management and not our segment management and therefore should not be included as part of our segment operating performance.

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Three months ended June 30, 2011 Operating Results Compared to Three Months ended June 30, 2010 Operating Results

For the three months ended June 30, 2011, total revenues decreased 1% from the prior-year period due to lower television and print advertising revenues, as well as the inclusion in the three months ended June 30, 2010 of royalties and a one-time $2.2 million termination payment from 1-800-Flowers.com, an agreement that ended in June 2010. Largely offsetting these items were an increase in Merchandising segment revenues from higher sales, higher television revenue from license fees related to our new programming on Hallmark Channel, higher book revenue reflecting the delivery of higher value manuscripts, higher digital advertising revenue and higher magazine subscription revenue.

For the three months ended June 30, 2011, our operating costs and expenses before Corporate expenses increased 2% from the prior-year period predominantly due to higher content creation costs and higher paper, printing and distribution expenses in our Publishing segment driven by increases in prices. In our Merchandising segment, production, distribution and editorial expenses increased to support our new merchandising relationships. These increases in costs were partially offset by lower television production and distribution costs related to season 6 ofThe Martha Stewart Show in our Broadcasting segment.

Corporate general and administrative expenses increased in the three months ended June 30, 2011 as compared to the prior-year period due to higher compensation costs and professional fees. These increases were partially offset by the reallocation of facilities-related expenses primarily to the Publishing segment, as described further in the segment discussion below.

Six months ended June 30, 2011 Operating Results Compared to Six Months ended June 30, 2010 Operating Results

For the six months ended June 30, 2011, total revenues decreased 1%, compared to the six months ended June 30, 2010 due predominantly to the inclusion of certain one-time items in the prior-year period. These items included substantially all of the exclusive license fee of approximately $5.0 million from Hallmark Channel for a significant portion of our library of programming, as well as royalties related to our Kmart and 1-800-Flowers.com agreements, which ended in January 2010 and June 2010, respectively, and the $2.2 million termination payment from 1-800-Flowers.com. In addition, the prior-year period included a $1.0 million one-time payment received from a manufacturing partner. These items, as well as lower television and print advertising revenue in the current period, were largely offset by higher Merchandising segment revenues from new relationships and increased sales, higher television revenue from license fees related to our new programming on Hallmark Channel, higher digital advertising sales and higher magazine subscription revenue.

For the six months ended June 30, 2011, our operating costs and expenses before Corporate expenses increased 5% from the prior-year period predominantly due to higher content creation costs and higher paper, printing and distribution expenses in our Publishing segment driven by increases in prices. These increases in costs were partially offset by lower television production and distribution costs related to season 6 ofThe Martha Stewart Show in our Broadcasting segment.

Corporate general and administrative expenses decreased in the six months ended June 30, 2011 as compared to the prior-year period due to lower rent expense as a result of the consolidation of certain offices and the reallocation of facilities-related expenses primarily to the Publishing segment, as described further in the segment discussion below. Partially offsetting these decreases in Corporate expenses were higher compensation costs and professional fees.

Liquidity

During the first half of 2011, our overall cash, cash equivalents and short-term investments increased $1.0 million from December 31, 2010 due primarily to positive net cash provided by operations, partially offset by principal pre-payments on our term loan and capital expenditures in the first half of 2011. Cash, cash equivalents and short-term investments were $34.3 million and $33.3 million at June 30, 2011 and December 31, 2010, respectively.

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Comparison of Three Months Ended June 30, 2011 to Three Months Ended June 30, 2010

PUBLISHING SEGMENT

(in thousands)

	Three Months Ended June 30,
	2011 (unaudited)			2010 (unaudited)		Better / (Worse)
Publishing Segment Revenues
Print advertising	$	16,591		$	18,475	$	(1,884	)
Digital advertising		4,871			4,652		219
Circulation		11,250			11,165		85
Books		1,087			783		304
Other		342			217		125
Total Publishing Segment Revenues		34,141			35,292		(1,151	)
Publishing Segment Operating Costs and Expenses
Production, distribution and editorial		22,241			20,010		(2,231	)
Selling and promotion		11,584			11,526		(58	)
General and administrative		2,100			1,635		(465	)
Depreciation and amortization		131			234		103
Total Publishing Segment Operating Costs and Expenses		36,056			33,405		(2,651	)
Operating (Loss) / Income	$	(1,915	)	$	1,887	$	(3,802	)

Publishing segment revenues decreased 3% for the three months ended June 30, 2011, compared to the three months ended June 30, 2010. Print advertising revenue decreased $1.9 million due to a decrease in advertising pages inMartha Stewart Living andEveryday Food, partially offset by higher advertising rates atWhole Living andMartha Stewart Living. Digital advertising revenue increased $0.2 million due to a modest increase in sold advertising volume, partially offset by slightly lower advertising rates. Circulation revenue increased $0.1 million due to higher volume of subscription copies served ofMartha Stewart Living at higher revenues per copy, although this was partially offset by lower newsstand sales across most titles. Revenue related to our books business increased $0.3 million primarily due to the delivery and acceptance of higher value manuscripts related to our multi-book agreements with Clarkson Potter/Publishers for Martha Stewart books.

Magazine Publication Schedule	Three months ended June 30, 2011	Three Months ended June 30, 2010
Martha Stewart Living	Three Issues	Three Issues
Martha Stewart Weddings	One Issue	One Issue
Everyday Food	Three Issues	Three Issues
Whole Living	Three Issues	Three Issues

Production, distribution and editorial expenses increased $2.2 million due to higher art and editorial compensation and story costs to support the print and digital magazines, books, websites and other digital initiatives, as well as higher paper, printing and distribution prices. Selling and promotion expenses increased $0.1 million due to the timing of newsstand marketing costs and an increase in certain subscriber acquisition costs. These increases in these items were largely offset by lower staff costs primarily from the restructuring of our advertising sales department, as well as lower commission expenses. General and administrative expenses increased $0.5 million largely due to higher facilities-related expenses from the reallocation of rent charges to reflect current utilization of office space, as well as higher compensation expense. The increase in our Publishing segment rent allocation was offset by a decrease in Corporate rent.

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BROADCASTING SEGMENT

(in thousands)

	Three Months Ended June 30,
	2011 (unaudited)			2010 (unaudited)			Better / (Worse)
Broadcasting Segment Revenues
Advertising	$	3,892		$	6,092		$	(2,200	)
Radio licensing		875			875			—
Television licensing and other		3,034			1,223			1,811
Total Broadcasting Segment Revenues		7,801			8,190			(389	)
Broadcasting Segment Operating Costs and Expenses
Production, distribution and editorial		5,970			7,282			1,312
Selling and promotion		530			888			358
General and administrative		1,670			1,406			(264	)
Depreciation and amortization		113			72			(41	)
Total Broadcasting Segment Operating Costs and Expenses		8,283			9,648			1,365
Operating Loss	$	(482	)	$	(1,458	)	$	976

Broadcasting segment revenues decreased 5% for the three months ended June 30, 2011, compared to the three months ended June 30, 2010. Advertising revenue decreased $2.2 million primarily due to the decline in household ratings, as well as lower rates, for season 6 ofThe Martha Stewart Show on Hallmark Channel as compared to season 5 ofThe Martha Stewart Show in syndication. Advertising revenue also declined due to sales of integrations at lower rates. Television licensing and other revenue increased $1.8 million primarily due to licensing revenues associated with the delivery of new television programming to Hallmark Channel as part of the companion programming toThe Martha Stewart Show, which include holiday and other specials andMad Hungry with Lucinda Scala Quinn, partially offset by the timing of delivery of television programming featuring Emeril Lagasse.

Production, distribution and editorial expenses decreased $1.3 million due to lower television production costs related to season 6 ofThe Martha Stewart Show on Hallmark Channel and the absence of distribution fees, which were payable under the season 5 syndication agreement forThe Martha Stewart Show. Selling and promotion expenses decreased $0.4 million primarily due to lower staff costs from the restructuring of our advertising sales department. General and administrative expenses increased $0.3 million primarily due to higher compensation expense.

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MERCHANDISING SEGMENT

(in thousands)

	Three Months Ended June 30,
	2011 (unaudited)		2010 (unaudited)		Better / (Worse)
Merchandising Segment Revenues
Royalty and other	$	12,918	$	11,817	$	1,101
Total Merchandising Segment Revenues		12,918		11,817		1,101
Merchandising Segment Operating Costs and Expenses
Production, distribution and editorial		2,299		1,832		(467	)
Selling and promotion		915		1,065		150
General and administrative		914		1,580		666
Depreciation and amortization		8		11		3
Total Merchandising Segment Operating Costs and Expenses		4,136		4,488		352
Operating Income	$	8,782	$	7,329	$	1,453

Merchandising segment revenues increased 9% for the three months ended June 30, 2011, compared to the three months ended June 30, 2010. Royalty and other revenues increased $1.1 million primarily due to higher sales from certain of our existing partners. The increase in royalty and other revenues was partially offset by the inclusion in the prior-year period of royalties and a one-time $2.2 million termination payment from 1-800-Flowers.com, an agreement that ended in June 2010.

Production, distribution and editorial expenses increased $0.5 million primarily due to higher compensation expenses as a result of an increase in headcount to support our new merchandising relationships. General and administrative expenses decreased $0.7 million largely due to a one-time benefit in non-cash compensation expense related to certain executive departures in the Merchandising segment.

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CORPORATE

(in thousands)

	Three Months Ended June 30,
	2011 (unaudited)			2010 (unaudited)			Better / (Worse)
Corporate Operating Costs and Expenses
General and administrative	$	8,199		$	7,938		$	(261	)
Depreciation and amortization		672			623			(49	)
Total Corporate Operating Costs and Expenses		8,871			8,561			(310	)
Operating Loss	$	(8,871	)	$	(8,561	)	$	(310	)

Corporate operating costs and expenses increased 4% for the three months ended June 30, 2011, compared to the three months ended June 30, 2010. General and administrative expenses increased $0.3 million due to higher compensation expenses and professional fees. Partially offsetting the increases in general and administrative expenses was the reallocation of rent charges to reflect current utilization of office space. This decrease in Corporate costs related to allocated facilities-related expenses was offset by an increase in these costs in our Publishing segment.

OTHER ITEMS

Interest expense, net.Interest expense, net, was $0.01 million and $0.03 million for the three months ended June 30, 2011 and 2010, respectively.

Loss on equity securities.Loss on equity securities was $0.01 million and $0.02 million for the three months ended June 30, 2011 and 2010, respectively. The expense was the result of marking certain assets to fair value in accordance with accounting principles governing financial instruments.

Income tax expense. Income tax expense was $0.4 million for both the three months ended June 30, 2011 and 2010.

Net loss. Net loss was $2.9 million for the three months ended June 30, 2011, compared to net loss of $1.2 million for the three months ended June 30, 2010, as a result of the factors described above.

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Comparison of Six Months Ended June 30, 2011 to Six Months Ended June 30, 2010

PUBLISHING SEGMENT

(in thousands)

	Six Months Ended June 30,
	2011 (unaudited)			2010 (unaudited)			Better / (Worse)
Publishing Segment Revenues
Print advertising	$	34,261		$	35,751		$	(1,490	)
Digital advertising		9,524			7,654			1,870
Circulation		23,094			21,795			1,299
Books		1,235			847			388
Other		703			580			123
Total Publishing Segment Revenues		68,817			66,627			2,190
Publishing Segment Operating Costs and Expenses
Production, distribution and editorial		43,599			38,970			(4,629	)
Selling and promotion		24,383			24,424			41
General and administrative		4,250			3,241			(1,009	)
Depreciation and amortization		350			669			319
Total Publishing Segment Operating Costs and Expenses		72,582			67,304			(5,278	)
Operating Loss	$	(3,765	)	$	(677	)	$	(3,088	)

Publishing revenues increased 3% for the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Print advertising revenue decreased $1.5 million due to a decrease in advertising pages inMartha Stewart Living andEveryday Food, partially offset by higher advertising rates atWhole Living and higher advertising pages inMartha Stewart Weddings. Digital advertising revenue increased $1.9 million due to an increase in sold advertising volume. Circulation revenue increased $1.3 million due to higher volume of subscription copies served ofMartha Stewart Living at higher revenues per copy. Revenue related to our books business increased $0.4 million primarily due to the delivery and acceptance of higher value manuscripts related to our multi-book agreements with Clarkson Potter/Publishers for Martha Stewart books.

Magazine Publication Schedule	First Half 2011	First Half 2010
Martha Stewart Living	Six Issues	Six Issues
Martha Stewart Weddings	Two Issues	Two Issues
Everyday Food	Six Issues	Six Issues
Whole Living	Five Issues	Five Issues

Production, distribution and editorial expenses increased $4.6 million due to higher art and editorial compensation and story costs to support the print and digital magazines, books, websites and other digital initiatives, as well as higher paper, printing and distribution prices. Selling and promotion expenses decreased slightly due to lower staff costs primarily from the restructuring of our advertising sales department and lower advertising marketing expenses, although these lower costs were largely offset by higher subscriber acquisition costs and higher digital marketing and advertising operations costs supporting the increase in digital advertising revenues. General and administrative expenses increased $1.0 million largely due to higher facilities-related expenses from the reallocation of rent charges to reflect current utilization of office space, as well as higher compensation expense. The increase in our Publishing segment rent allocation was offset by a decrease in Corporate rent. Depreciation and amortization expenses decreased $0.3 million primarily due to the full depreciation by the second quarter of 2010 of the costs associated with the 2007 launch of our redesigned website.

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BROADCASTING SEGMENT

(in thousands)

	Six Months Ended June 30,
	2011 (unaudited)			2010 (unaudited)		Better / (Worse)
Broadcasting Segment Revenues
Advertising	$	7,726		$	10,842	$	(3,116	)
Radio licensing		1,750			1,750		—
Television licensing and other		6,094			7,689		(1,595	)
Total Broadcasting Segment Revenues		15,570			20,281		(4,711	)
Broadcasting Segment Operating Costs and Expenses
Production, distribution and editorial		13,459			14,073		614
Selling and promotion		928			1,594		666
General and administrative		3,247			2,758		(489	)
Depreciation and amortization		231			136		(95	)
Total Broadcasting Segment Operating Costs and Expenses		17,865			18,561		696
Operating (Loss) / Income	$	(2,295	)	$	1,720	$	(4,015	)

Broadcasting segment revenues decreased 23% for the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Advertising revenue decreased $3.1 million primarily due to the decline in household ratings, as well as lower rates, for season 6 ofThe Martha Stewart Show on Hallmark Channel as compared to season 5 ofThe Martha Stewart Show in syndication. Advertising revenue also declined due to sales of integrations at lower rates. Television licensing and other revenue decreased $1.5 million primarily due to the inclusion in the first quarter of 2010 of substantially all of the exclusive license fee of approximately $5.0 million from Hallmark Channel for a significant portion of our library of programming. The absence of this fee was partially offset by licensing revenues associated with the delivery of new television programming to Hallmark Channel as part of the companion programming toThe Martha Stewart Show includingMartha Bakes,Mad Hungry with Lucinda Scala Quinn and holiday and other specials.

Production, distribution and editorial expenses decreased $0.6 million due to lower television production costs related to season 6 ofThe Martha Stewart Show on Hallmark Channel and the absence of distribution fees, which were payable under the season 5 syndication agreement forThe Martha Stewart Show. These savings were partially offset by higher television production costs related to the new programming on Hallmark Channel. Selling and promotion expenses decreased $0.7 million primarily due to lower staff costs from the restructuring of our advertising sales department. General and administrative expenses increased $0.5 million primarily due to higher compensation expense.

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MERCHANDISING SEGMENT

(in thousands)

	Six Months Ended June 30,
	2011 (unaudited)		2010 (unaudited)		Better / (Worse)
Merchandising Segment Revenues
Royalty and other	$	23,147	$	20,441	$	2,706
Kmart earned royalty		—		114		(114	)
Kmart minimum guarantee true-up		—		1,071		(1,071	)
Total Merchandising Segment Revenues		23,147		21,626		1,521
Merchandising Segment Operating Costs and Expenses
Production, distribution and editorial		4,660		3,610		(1,050	)
Selling and promotion		2,009		2,068		59
General and administrative		2,446		3,273		827
Depreciation and amortization		15		22		7
Total Merchandising Segment Operating Costs and Expenses		9,130		8,973		(157	)
Operating Income	$	14,017	$	12,653	$	1,364

Merchandising segment revenues increased 7% for the six months ended June 30, 2011, compared to the six months ended June 30, 2010. Royalty and other revenues, which exclude revenues from Kmart in the prior-year period, increased $2.7 million primarily due to the contributions of our new merchandising relationships and increased sales from certain of our existing partners. The increase in royalty and other revenues was partially offset by the inclusion in the prior-year period of royalties and a one-time $2.2 million termination payment from 1-800-Flowers.com, an agreement that ended in June 2010. In addition, the prior-year period included a one-time $1.0 million payment received from a manufacturing partner.

Our agreement with Kmart ended in January 2010. The pro-rata portion of revenues related to the contractual minimum amounts from Kmart covering the specified periods are listed separately above as Kmart minimum guarantee true-up.

Production, distribution and editorial expenses increased $1.1 million primarily due to higher compensation expenses as a result of an increase in headcount to support our new merchandising relationships. General and administrative expenses decreased $0.8 million largely due to a one-time benefit in non-cash compensation expense related to certain executive departures in the Merchandising segment.

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CORPORATE

(in thousands)

	Six Months Ended June 30,
	2011 (unaudited)			2010 (unaudited)			Better / (Worse)
Corporate Operating Costs and Expenses
General and administrative	$	15,896		$	16,633		$	737
Depreciation and amortization		1,324			1,235			(89	)
Total Corporate Operating Costs and Expenses		17,220			17,868			648
Operating Loss	$	(17,220	)	$	(17,868	)	$	648

Corporate operating costs and expenses decreased 4% for the six months ended June 30, 2011, compared to the six months ended June 30, 2010. General and administrative expenses decreased $0.7 million due to lower rent expense as a result of the consolidation of certain offices and reallocating rent charges to reflect current utilization of office space. The decrease in Corporate costs related to allocated facilities-related expenses was offset by an increase in these costs in our Publishing segment. Partially offsetting the decreases in general and administrative expenses were higher compensation expenses and professional fees.

OTHER ITEMS

Interest expense, net.Interest expense, net, was $0.1 million for both the six months ended June 30, 2011 and 2010.

Income / (Loss) on equity securities.Income on equity securities was $0.2 million for the six months ended June 30, 2011 compared to a loss on equity securities of $(0.02) million for the prior-year period. Income/(loss) on equity securities was the result of marking certain assets to fair value in accordance with accounting principles governing financial instruments.

Income tax expense. Income tax expense was $0.8 million for both the six months ended June 30, 2011 and 2010.

Net Loss. Net loss was $10.0 million for the six months ended June 30, 2011, compared to net loss of $5.1 million for the six months ended June 30, 2010, as a result of the factors described above.

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Liquidity and Capital Resources

Overview

During the six months ended June 30, 2011, our overall cash, cash equivalents and short-term investments increased $1.0 million from December 31, 2010. The increase was due predominantly to positive net cash provided by operations, partially offset by $3.0 million in principal pre-payments on our term loan with Bank of America and $1.7 million in capital expenditures. Cash, cash equivalents and short-term investments were $34.3 million and $33.3 million at June 30, 2011 and December 31, 2010, respectively.

We believe that our available cash balances and short-term investments will be sufficient to meet our cash needs for working capital and capital expenditures, as well as loan payments and maintenance of certain debt covenants for at least the next twelve months.

Cash Flows from Operating Activities

Our cash inflows from operating activities are generated by our business segments from revenues, as described previously in the business segment discussions, which include cash from advertisers, licensing partners and magazine consumers. Operating cash outflows generally include employee and related costs, the physical costs associated with producing magazines, the editorial costs associated with creating content across our media platforms, the technology costs associated with our digital properties, the production costs incurred for our television programming and the cash costs of facilities.

Cash provided by operating activities was $5.6 million and $8.1 million for the six months ended June 30, 2011, and 2010, respectively. In the six months ended June 30, 2011, cash from operations increased despite our operating loss, as discussed earlier. However, our operating loss included the impact of certain non-cash charges such as non-cash equity compensation and depreciation and amortization. Cash from our operating activities was primarily provided by the satisfaction of advertising, television license fee and newsstand receivables and the receipt of an upfront advance payment related to our new multi-book agreement with Clarkson Potter/Publishers for Martha Stewart books. These increases in cash from operations were partially offset by cash used to pay certain accounts payable and accrued liabilities and television production costs.

Cash Flows from Investing Activities

Our cash inflows from investing activities generally include proceeds from the sale of short-term investments. Investing cash outflows generally include payments for short-term investments and additions to property and equipment.

Cash used in investing activities was $(2.8) million and $(3.1) million for the six months ended June 30, 2011 and 2010, respectively. In the six months ended June 30, 2011, cash flow used in investing activities was primarily for capital improvements to our information technology infrastructure, as well as certain costs associated with our websites.

Cash Flows from Financing Activities

Our cash inflows from financing activities generally include proceeds from the exercise of stock options for our Class A Common Stock issued under our equity incentive plans. Cash outflows from financing activities generally include principal repayments on outstanding debt.

Cash flows used in financing activities were $(2.8) million and $(1.4) million for the six months ended June 30, 2011 and 2010. In the six months ended June 30, 2011, we made $3.0 million in principal pre-payments on our term loan with Bank of America.

Debt

We have a line of credit with Bank of America in the amount of $5.0 million, which is generally used to secure letters of credit. The line was renewed as of June 30, 2011 for a one-year period. The renewal did not include any substantive changes from the prior year’s terms. We were compliant with the debt covenants as of June 30, 2011.

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We had no outstanding borrowings under this facility as of June 30, 2011 and had letters of credit outstanding of $2.6 million.

In April 2008, we entered into a loan agreement (subsequently amended and restated on August 7, 2009) with Bank of America for a term loan in the amount of $30.0 million related to the acquisition of certain assets of Emeril Lagasse. The loan is secured by substantially all of the assets of the Emeril business that we acquired. The loan agreement requires equal principal payments of $1.5 million and accrued interest to be paid by us quarterly for the duration of the loan term, approximately 5 years. As of June 30, 2011, we had paid $24 million in principal, including prepayment of the $4.5 million due through March 31, 2012, such that $6.0 million was outstanding at June 30, 2011.Only one principal payment of $1.5 million due as of June 30, 2012 is reflected as a current liability in the consolidated balance sheet as of June 30, 2011. The interest rate on all outstanding amounts is equal to a floating rate of 1-month London Interbank Offered Rate (“LIBOR”) plus 2.85%.

The loan terms have required us to be in compliance with certain financial and other covenants, failure with which to comply would result in an event of default and would permit Bank of America to accelerate and demand repayment of the loan in full. On June 29, 2011, we and Bank of America executed an amendment to the loan agreement, which eliminated the financial covenants that had previously required us to maintain a Funded Debt to EBITDA Ratio equal to or less than 2.0 and a Parent Guarantor Basic Fixed Charge Ratio equal to or greater than 2.75. The amendment also reduced the minimum level of consolidated Tangible Net Worth required to be maintained by us from $40 million to $30 million. Additionally, the amendment added a requirement that we maintain at all times cash and certain cash equivalents with an aggregate market value of not less than an amount equal to 200% of the outstanding loan principal. This cash and cash equivalents balance cannot be subject to any lien, security interest or other encumbrance, nor can it be held by us in order to comply with any other liquidity or other similar covenant under any agreement in respect of indebtedness or other obligations of us.

As of June 30, 2011, we were compliant with the debt covenants. A current summary of the most significant financial covenants is as follows:

Financial Covenant
Tangible Net Worth	At least $30.0 million
Quick Ratio	Equal to or greater than 1.0
Unencumbered Cash and Designated Cash Equivalents	Equal to or greater than 200% of the loan balances

We expect to be compliant with all debt covenants through 2011. While the maintenance of a minimum level of cash balances has now become a financial covenant, we currently have cash balances well in excess of the loan principal which gives us the current ability to repay the outstanding principal in full in the event of default or to prevent default.

The loan agreement also contains a variety of other customary affirmative and negative covenants that, among other things, limit our and our subsidiaries’ ability to incur additional debt, suffer the creation of liens on their assets, pay dividends or repurchase stock, make investments or loans, sell assets, enter into transactions with affiliates other than on arm’s length terms in the ordinary course of business, make capital expenditures, merge into or acquire other entities or liquidate. The negative covenants expressly permit us to, among other things: incur an additional $15 million of debt to finance permitted investments or acquisitions; incur an additional $15 million of earnout liabilities in connection with permitted acquisitions; spend up to $30 million repurchasing our stock or paying dividends thereon (so long as no default or event of default existed at the time of or would result from such repurchase or dividend payment and we would be in pro forma compliance with the above-described financial covenants assuming such repurchase or dividend payment had occurred at the beginning of the most recently-ended four-quarter period); make investments and acquisitions (so long as no default or event of default existed at the time of or would result from such investment or acquisition and we would be in pro forma compliance with the above-described financial covenants assuming the acquisition or investment had occurred at the beginning of the most recently-ended four-quarter period); make up to $15 million in capital expenditures in fiscal year 2008 and $7.5 million in each subsequent fiscal year, provided that we can carry over any unspent amount to any subsequent fiscal year (but in no event may we make more than $15 million in capital expenditures in any fiscal year); sell one of our investments (or any asset we might receive in conversion or exchange for such investment); and sell assets during the term of the loan comprising, in the aggregate, up to 10% of our consolidated shareholders’ equity, provided we receive at least 75% of the consideration in cash.

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Seasonality and Quarterly Fluctuations

Our businesses can experience fluctuations in quarterly performance. Our Publishing segment results can vary from quarter to quarter due to publication schedules and seasonality of certain types of advertising. In addition, advertising revenue onmarthastewart.comand our other websites is tied to traffic among other key factors and is typically highest in the fourth quarter of the year. Advertising revenue from our Broadcasting segment is highly dependent on ratings which fluctuate throughout the television season following general viewer trends. Ratings tend to be highest during the fourth quarter and lowest in the summer months. Certain revenues and costs in our television business also fluctuate based on production and delivery schedules. Revenues from our Merchandising segment can vary significantly from quarter to quarter due to new product launches and the seasonality and performance of certain product lines.

Off-Balance Sheet Arrangements

At June 30, 2011, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had or are likely to have a material current or future effect on our financial statements. However, we could have indemnification obligations with respect to our officers and directors.

Critical Accounting Policies and Estimates

General

Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements in our 2010 10-K. We consider an accounting estimate to be critical if it required assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate or different estimates could have a material effect on our results of operations. These critical estimates include those related to revenue recognition, allowance for doubtful accounts and sales returns, television production costs, valuation of long-lived assets, goodwill and other intangible assets, income taxes, and non-cash equity compensation. We base our estimates on historical experience, current developments and on various other assumptions that we believe to be reasonable under these circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that cannot readily be determined from other sources. There can be no assurance that actual results will not differ from those estimates. There have been no changes to our critical accounting policies and estimates since the date of the 2010 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to certain market risks as the result of our use of financial instruments, in particular the potential market value loss arising from adverse changes in interest rates, as well as from adverse changes in stock prices, which impact our derivative financial instrument. We do not utilize financial instruments for trading purposes.

Interest Rates

We are exposed to market rate risk due to changes in interest rates on our loan agreement with Bank of America under which we borrowed $30.0 million to fund a portion of the acquisition of certain assets of Emeril Lagasse. Interest rates applicable to amounts outstanding under this facility are at variable rates based on the 1-month LIBOR rate plus 2.85%. A change in interest rates on this variable rate debt impacts the interest incurred and cash flows but does not impact the fair value of the instrument. We had outstanding borrowings of $6.0 million on the term loan at June 30, 2011 at an average rate of 3.1% for the quarter. A one percentage point increase in the interest rate would have increased interest expense by $0.02 million for the three months ended June 30, 2011.

We also have exposure to market rate risk for changes in interest rates as those rates relate to our investment portfolio. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. We attempt to protect and preserve our invested funds by limiting default, market and reinvestment risk. To achieve this objective, we invest our excess cash in debt instruments of the United States Government and its agencies and in high-quality corporate issuers (including bank instruments and money market funds) and, by internal policy, limit both the term and amount of credit exposure to any one issuer. As of June 30, 2011, net unrealized gains and losses on these investments were not material. However, in the second quarter of 2011, we recorded approximately $0.1 million in interest income. Our future

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investment income may fluctuate due to changes in interest rates, or we may suffer losses in principal if forced to sell securities that have declined in market value due to changes in interest rates.

We hold a financial instrument recorded at a fair value of $0.3 million as of June 30, 2011. We are not exposed to further market risk in excess of the fair value of the financial instrument.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) required by Exchange Act Rules 13a-15(b) or 15d-15(b), as of the end of the period covered by this report. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of that date to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we have determined that, during the second quarter of fiscal 2011, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is party to legal proceedings in the ordinary course of business, including product liability claims for which we are indemnified by our licensees. None of these proceedings is deemed material.

ITEM 1A. RISK FACTORS

There have been no material changes from risk factors as previously disclosed in the 2010 10-K, under the heading Part I, Item 1A, “Risk Factors.”

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(a) None.

(b) None.

(c) Issuer Purchases of Equity Securities

The following table provides information about our purchases of our Class A Common Stock during each month of the quarter ended June 30, 2011:

	(a)		(b)		(c)		(d)
Period	Total Number of Shares (or Units) Purchased (1)		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part  of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units)  that may yet be Purchased under the Plans or Programs
April 2011		—		—		Not applicable		Not applicable
May 2011		—		—		Not applicable		Not applicable
June 2011		1,031	$	5.23		Not applicable		Not applicable
Total for quarter ended June 30, 2011		1,031	$	5.23		Not applicable		Not applicable

(1) Represents shares withheld by, or delivered to, us pursuant to provisions in agreements with recipients of restricted stock granted under our stock incentive plan allowing us to withhold, or the recipient to deliver to us, the number of shares of our Class A Common Stock having the fair value equal to tax withholding due.

ITEM 5. OTHER INFORMATION.

On June 29, 2011, we and Bank of America executed an amendment to our loan agreement with Bank of America, which eliminated the financial covenants that had previously required us to maintain a Funded Debt to EBITDA Ratio equal to or less than 2.0 and a Parent Guarantor Basic Fixed Charge Ratio equal to or greater than 2.75. The amendment also reduced the minimum level of consolidated Tangible Net Worth required to be maintained by us from $40 million to $30 million. Additionally, the amendment added a requirement that we maintain at all times cash and certain cash equivalents with an aggregate market value of not less than an amount equal to 200% of the outstanding loan principal. This cash and cash equivalents balance cannot be subject to any lien, security interest or other encumbrance, nor can it be held by us in order to comply with any other liquidity or other similar covenant under any agreement in respect of indebtedness or other obligations of us.

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ITEM 6. EXHIBITS.

Exhibit Number	Exhibit Title
10.1	Form of Martha Stewart Living Omnimedia, Inc. Indemnification Agreement for Directors.
10.2	Amendment, dated as of June 29, 2011, to the Amended and Restated Loan Agreement, dated as of August 7, 2009 among MSLO Emeril Acquisition Sub LLC, Martha Stewart Living Omnimedia, Inc. and Bank of America, N.A.
10.3	Employment Agreement, dated as of May 24, 2011, between Martha Stewart Living Omnimedia, Inc. and Lisa Gersh.
31.1	Certification of Principal Executive Officer
31.2	Certification of Principal Financial Officer
32	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
101.INS *	XBRL Instance Document
101.SCH *	XBRL Taxonomy Extension Schema Document
101.CAL *	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *	XBRL Taxonomy Extension Label Linkbase Document
101.PRE *	XBRL Taxonomy Extension Presentation Linkbase Document

* In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MARTHA STEWART LIVING OMNIMEDIA, INC.
	Date:	August 9, 2011
		/s/ Allison Jacques
	Name:	Allison Jacques
	Title:	Principal Financial Officer
		(Principal Financial Officer and duly authorized officer)

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EXHIBIT INDEX

Exhibit Number	Exhibit Title
10.1	Form of Martha Stewart Living Omnimedia, Inc. Indemnification Agreement for Directors.
10.2	Amendment, dated as of June 29, 2011, to the Amended and Restated Loan Agreement, dated as of August 7, 2009 among MSLO Emeril Acquisition Sub LLC, Martha Stewart Living Omnimedia, Inc. and Bank of America, N.A.
10.3	Employment Agreement, dated as of May 24, 2011, between Martha Stewart Living Omnimedia, Inc. and Lisa Gersh.
31.1	Certification of Principal Executive Officer
31.2	Certification of Principal Financial Officer
32	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
101.INS *	XBRL Instance Document
101.SCH *	XBRL Taxonomy Extension Schema Document
101.CAL *	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *	XBRL Taxonomy Extension Label Linkbase Document
101.PRE *	XBRL Taxonomy Extension Presentation Linkbase Document

* In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

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