Hawkeye Acquisition (MDP) 10-Q 2006 Q2 Quarterly report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2005 Commission file number 1-5128

MEREDITH CORPORATION

(Exact name of registrant as specified in its charter)

Iowa	42-0410230
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1716 Locust Street, Des Moines, Iowa	50309-3023
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code:  (515) 284-3000

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 is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Securities Exchange Act. (Check one):

          Large accelerated filer [X]                    Accelerated filer [_]                    Non-accelerated filer [_]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).           Yes  [_]     No  [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
	Shares of stock outstanding at December 31, 2005
	Common shares	39,687,403
	Class B shares	9,569,505
	Total common and Class B shares	49,256,908

TABLE OF CONTENTS
			Page
Part I - Financial Information
Item 1.	Financial Statements
		Condensed ConsolidatedBalance Sheets as of December 31, 2005, and June 30, 2005	3
		Condensed Consolidated Statements ofEarnings for the Three Months and Six Months Ended December 31, 2005 and 2004	5
		Condensed Consolidated Statement ofShareholders' Equity for the Six Months Ended December 31, 2005	6
		Condensed Consolidated Statements ofCash Flows for the Six Months Ended December 31, 2005 and 2004 .	7
		Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.	Controls and Procedures		26
Part II - Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 4.	Submission of Matters to a Vote of Security Holders		27
Item 6.	Exhibits		28
Signature			29
Index to Attached Exhibits			30

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Meredith Corporation and Subsidiaries
Condensed Consolidated Balance Sheets

Assets			(Unaudited) December 31, 2005			June 30, 2005
(In thousands)
Current assets
Cash and cash equivalents		$	15,093		$	29,788
	Accounts receivable, net		249,590			176,669
Inventories			56,106			41,562
Current portion of subscription acquisition costs			83,762			27,777
Current portion of broadcast rights			19,194			13,539
Other current assets			23,487			15,160
Total current assets			447,232			304,495
Property, plant and equipment			415,500			398,882
Less accumulated depreciation			(218,956	)		(205,926	)
Net property, plant and equipment			196,544			192,956
Subscription acquisition costs			73,472			24,722
Broadcast rights			9,624			7,096
Other assets			70,234			58,589
Intangibles, net			813,090			707,068
Goodwill			430,476			196,382
Total assets		$	2,040,672		$	1,491,308

See accompanying Notes to Condensed Consolidated Financial Statements.

Meredith Corporation and Subsidiaries
Condensed Consolidated Balance Sheets(continued)

Liabilities and Shareholders' Equity			(Unaudited) December 31, 2005			June 30, 2005
(In thousands except per share data)
Current liabilities
Current portion of long-term debt		$	75,000		$	125,000
Current portion of broadcast rights payable			23,410			18,676
Accounts payable			46,769			48,462
Accrued expenses and other liabilities			131,469			119,526
Current portion of unearned subscription revenues			205,051			127,416
Total current liabilities			481,699			439,080
Long-term debt			520,000			125,000
Long-term broadcast rights payable			18,679			17,208
Unearned subscription revenues			176,723			112,358
Deferred income taxes			108,004			93,929
Other noncurrent liabilities			44,298			51,906
Total liabilities			1,349,403			839,481
Shareholders' equity
Series preferred stock, par value $1 per share
	Authorized 5,000 shares; none issued		-			-
Common stock, par value $1 per share
	Authorized 80,000 shares; issued and outstanding 39,687 shares (excluding 28,885 treasury shares) and 39,700 shares (excluding 28,439 treasury shares), respectively		39,687			39,700
Class B stock, par value $1 per share, convertible to  common stock
	Authorized 15,000 shares; issued and outstanding 9,570 shares and 9,596 shares, respectively		9,570			9,596
Additional paid-in capital			61,996			55,346
Retained earnings			585,480			550,115
Accumulated other comprehensive loss			(1,025	)		(1,025	)
Unearned compensation			(4,439	)		(1,905	)
Total shareholders' equity			691,269			651,827
Total liabilities and shareholders' equity		$	2,040,672		$	1,491,308

See accompanying Notes to Condensed Consolidated Financial Statements.

Meredith Corporation and Subsidiaries Condensed Consolidated Statements of Earnings (Unaudited)
			Three Months						Six Months
Period ended December 31,			2005			2004			2005			2004
(In thousands except per share data)
Revenues
Advertising		$	232,141		$	176,421		$	465,371		$	357,175
Circulation			87,697			55,861			182,580			114,087
All other			66,145			62,271			128,297			112,154
	Total revenues		385,983			294,553			776,248			583,416
Operating costs and expenses
Production, distribution and editorial			164,393			123,403			341,154			252,576
Selling, general and administrative			154,548			113,703			305,490			220,989
Depreciation and amortization			11,533			8,746			22,912			17,177
	Total operating costs and expenses		330,474			245,852			669,556			490,742
Income from operations			55,509			48,701			106,692			92,674
Interest income			190			223			367			440
Interest expense			(7,904	)		(5,170	)		(15,924	)		(10,342	)
	Earnings before income taxes and cumulative effect of change in accounting principle		47,795			43,754			91,135			82,772
Income taxes			18,642			16,932			35,545			32,033
Earnings before cumulative effect of change    in accounting principle			29,153			26,822			55,590			50,739
Cumulative effect of change in accounting    principle, net of taxes			-			893			-			893
Net earnings		$	29,153		$	27,715		$	55,590		$	51,632
Basic earnings per share
Before cumulative effect of change in    accounting principle		$	0.59		$	0.54		$	1.13		$	1.01
Cumulative effect of change in accounting    principle			-			0.02			-			0.02
Net basic earnings per share		$	0.59		$	0.56		$	1.13		$	1.03
Basic average shares outstanding			49,243			49,912			49,280			50,090
Diluted earnings per share
Before cumulative effect of change in    accounting principle		$	0.58		$	0.52		$	1.10		$	0.98
Cumulative effect of change in accounting    principle			-			0.02			-			0.02
Net diluted earnings per share		$	0.58		$	0.54		$	1.10		$	1.00
Diluted average shares outstanding			50,663			51,469			50,694			51,667
Dividends paid per share		$	0.140		$	0.120		$	0.280		$	0.240

See accompanying Notes to Condensed Consolidated Financial Statements.

Meredith Corporation and Subsidiaries Condensed Consolidated Statement of Shareholders' Equity (Unaudited)
(In thousands)	Common Stock	Class B Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Unearned Compensa- tion	Total

Balance at June 30, 2005

$ 39,700 

$ 9,596 

$ 55,346 

$ 550,115 

$ (1,025)    

$ (1,905)  

$ 651,827 

Net earnings Net earnings

-  

-  

-  

55,590 

-      

-    

55,590 

Other comprehensive income, net of tax

-  

-  

-  

-  

-      

-    

-  

Total comprehensive income

      

55,590 

        

Stock issued under various incentive

        

plans, net of forfeitures

494 

-  

9,742 

-  

-      

(915)  

9,321 

Issuance of restricted stock units

-  

-  

2,517 

-  

-      

(2,517)  

-  

Purchases of Company stock

(528)

(5)

(19,520)

(6,414)

-      

-    

(26,467)

Share-based compensation

-  

-  

7,642 

-  

-      

898   

8,540 

Conversion of Class B to common stock

21 

(21)

-  

-  

-      

-    

-  

        

Dividends paid, 28 cents per share

        

Common stock

-  

-  

-  

(11,114)

-      

-    

(11,114)

 

Class B stock

-  

-  

-  

(2,697)

-      

-    

(2,697)

        

Tax benefit from incentive plans

-  

-  

6,269 

-  

-      

-    

6,269 

Balance at December 31, 2005

$ 39,687 

$ 9,570 

$ 61,996 

$ 585,480 

$ (1,025)    

$ (4,439)  

$ 691,269 

     

See accompanying Notes to Condensed Consolidated Financial Statements.

   

Meredith Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months ended December 31,			2005			2004
(In thousands)
Cash flows from operating activities
Net earnings		$	55,590		$	51,632
Adjustments to reconcile net earnings to net cash provided
by operating activities
	Depreciation		15,944			14,399
	Amortization		6,968			2,778
	Share-based compensation		8,540			4,192
	Deferred income taxes		17,555			14,408
	Amortization of broadcast rights		15,222			15,668
	Payments for broadcast rights		(17,614	)		(16,521	)
	Gains from dispositions of property, plant and equipment		-			(866	)
	Excess tax benefits from share-based payments		(6,269	)		(1,821	)
	Changes in assets and liabilities, net of acquisitions
	Accounts receivable		(28,162	)		(13,430	)
	Inventories		(2,971	)		(6,376	)
	Other current assets		(7,723	)		(4,452	)
	Subscription acquisition costs		(1,605	)		6,668
	Other assets		(10,896	)		(155	)
	Accounts payable		(5,609	)		(1,712	)
	Accrued expenses and other liabilities		13,800			(8,357	)
	Unearned subscription revenues		4,182			(2,840	)
	Other noncurrent liabilities		(16,909	)		1,683
Net cash provided by operating activities			40,043			54,898
Cash flows from investing activities
	Acquisitions of businesses		(359,459	)		(35,262	)
	Additions to property, plant and equipment		(15,005	)		(9,806	)
	Proceeds from dispositions of property, plant and equipment		-			2,050
	Other		-			(250	)
Net cash used in investing activities			(374,464	)		(43,268	)
Cash flows from financing activities
	Proceeds from issuance of long-term debt		455,000			-
	Repayments of long-term debt		(110,000	)		-
	Excess tax benefits from share-based payments		6,269			1,821
	Proceeds from common stock issued		9,438			14,861
	Purchases of Company stock		(26,467	)		(49,132	)
	Dividends paid		(13,811	)		(12,000	)
	Other financing activities		(703	)		(247	)
Net cash provided by (used in) financing activities			319,726			(44,697	)
Net decrease in cash and cash equivalents			(14,695	)		(33,067	)
Cash and cash equivalents at beginning of period			29,788			58,723
Cash and cash equivalents at end of period		$	15,093		$	25,656

See accompanying Notes to Condensed Consolidated Financial Statements.

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.  Basis of Presentation

The condensed consolidated financial statements include the accounts of Meredith Corporation and its wholly owned subsidiaries (Meredith or the Company), after eliminating all significant intercompany balances and transactions. Meredith does not have any off-balance sheet arrangements. The Company's use of special-purpose entities is limited to Meredith Funding Corporation, whose activities are fully consolidated in Meredith's condensed consolidated financial statements.

The condensed consolidated financial statements as of December 31, 2005, and for the three and six months ended December 31, 2005 and 2004, are unaudited but, in management's opinion, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of interim periods. Certain prior-year amounts have been reclassified to conform with current-year presentation. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

The interim period consolidated financial statements, including the related notes, are condensed and presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These interim period condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements, which are included in Meredith's Annual Report on Form 10-K for the year ended June 30, 2005, filed with the United States Securities and Exchange Commission.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. The Company bases its estimates on historical experience, management expectations for future performance and other assumptions, as appropriate. Key areas affected by estimates include: the assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows; the determination of the net realizable value of broadcast rights, which is based on estimated future revenues; provisions for returns of magazines and books sold, which are based on historical experience and current marketplace conditions; pension and postretirement benefit expenses, which are actuarially determined and include assumptions regarding discount rates, expected return on plan assets and rates of increase in compensation and healthcare costs; and share-based compensation expense, which is based on numerous assumpt ions including future stock price volatility and employees' expected exercise and post-vesting employment termination behavior. The Company re-evaluates its estimates on an ongoing basis. Actual results may vary from those estimates.

As disclosed in Meredith's 2005 Annual Report on Form 10-K, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004),Share-Based Payment(SFAS 123R) effective October 1, 2004. As a result, in the second quarter of fiscal 2005, the Company recorded the cumulative effect of a change in accounting principle of $1.5 million ($0.9 million after tax), or $0.02 per share, to reduce compensation expense recognized in previous periods.

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

2.  Acquisition

On July 1, 2005, Meredith acquiredParents (including its related special interest publications, BabyandExpecting), Family Circle, Fitness, ChildandSer Padres magazines from Gruner + Jahr Printing & Publishing Co. (Gruner + Jahr) for $350 million in cash. Meredith's results of operations include the new publications beginning July 1, 2005. The cash purchase price, including transaction costs, was $353.7 million. The allocation of the purchase price to assets acquired and liabilities assumed is preliminary pending finalization of management's restructuring plan pertaining to the acquired business. Management's purchase price allocation resulted in goodwill of $234.1 million, identifiable intangible assets of $113.0 million, tangible assets of $4.7 million, net working capital of $46.1 million and assumed liabilities of $44.2 million. The identifiable intangible assets include trade names of $76.3 million, subscriber relationships of $15.9 million, advertiser re lationships of $18.4 million and other miscellaneous intangibles of $2.4 million. The tangible and intangible assets have been valued based on an independent third-party valuation. Goodwill and trade names will not be subject to amortization. Other intangible assets will be amortized over their estimated useful lives, which range from 3 to 7 years.

The transaction was financed primarily through a new $300 million private placement of fixed-rate senior notes with a weighted average interest rate of 4.56 percent. The remaining $50 million was financed under our existing credit facilities. The new private placement debt will mature in staggered terms over the next two to five years.

Pro forma results of Meredith's operations for the six-month period ended December 31, 2004, are based on unaudited carve-out financial statements prepared by Gruner + Jahr. Since Gruner + Jahr did not publicly report on a quarterly basis, there can be no assurances that these carve-out financial statements include all adjustments required to properly state results for the six-month period. On a pro forma basis as if the acquisition had occurred on July 1, 2004, Meredith would have had revenue of $739.9 million, net earnings of $49.7 million, basic earnings per share of $0.99 and diluted earnings per share of $0.96, for the six-month period ended December 31, 2004. This pro forma financial information should not be considered indicative of the actual results that would have been achieved had the acquisition been completed on the date indicated and does not purport to indicate results of operations as of any future date or any future period.

The acquisition helps implement Meredith's previously articulated corporate strategies of broadening its magazine portfolio, attracting younger women readers to Meredith magazines and capturing the potential in the Hispanic market. As a result of the acquisition, Meredith has the largest female reach in the magazine industry. Including the new publications, Meredith now has a circulation of nearly 30 million, making Meredith the second largest consumer magazine publisher in the United States, according to data gathered from the Audit Bureau of Circulations and BPA Worldwide.

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

3.  Inventories

Major components of inventories are summarized below. Of total inventory values shown, approximately 23 percent are under the LIFO method at December 31, 2005, and 33 percent at June 30, 2005.

		December 31, 2005				June 30, 2005
(In thousands)
Raw materials	$		22,794	$	16,111
Work in process			26,898		21,094
Finished goods			14,891		11,775
			64,583		48,980
Reserve for LIFO cost valuation			(8,477	)	(7,418		)
Inventories	$		56,106	$	41,562

4.  Intangible Assets and Goodwill

Intangible assets and goodwill consisted of the following:

		December 31, 2005							June 30, 2005
(In thousands)		Gross Amount		Accumulated Amortization				Net Amount	Gross Amount		Accumulated Amortization				Net Amount
Intangible assets
subject to amortization
Publishing Group
	Noncompete agreements	$	2,534	$	(1,945	)	$	589	$	2,534	$	(1,652	)	$	882
	Advertiser relationships	18,400			(1,314	)		17,086	-			-			-
	Customer lists	17,763			(4,513	)		13,250	1,863			(1,863	)		-
	Other	2,390			(240	)		2,150	-			-			-
Broadcasting Group
	Network affiliation
	agreements	218,651			(80,900	)		137,751	218,651			(78,452	)		140,199
	Customer lists	91			(57	)		34	91			(34	)		57
Total		$	259,829	$	(88,969	)		170,860	$	223,139	$	(82,001	)		141,138
Intangible assets not
subject to amortization
Publishing Group
	Trademarks							124,431							48,131
Broadcasting Group
	FCC licenses							517,799							517,799
Total								642,230							565,930
Intangibles, net							$	813,090						$	707,068

Amortization expense for intangible assets was $7.0 million for the six months ended December 31, 2005. Annual amortization expense for intangible assets is expected to be as follows:  $14.0 million in fiscal 2006, $14.0 million in fiscal 2007, $13.9 million in fiscal 2008, $8.6 million in fiscal 2009, $7.8 million in fiscal 2010 and $7.7 million in fiscal 2011.

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The changes in the carrying amounts of goodwill during the first six months of fiscal 2006 and 2005 are as follows:

Six Months ended December 31,		2005					2004
(In thousands)	Publishing Group		Broadcasting Group			Total	Publishing Group	Broadcasting Group			Total
Balance at beginning of period	$110,325			$86,057	$196,382		$110,325		$80,978	$191,303
Acquisitions	234,094			-	234,094		-		5,079	5,079
Balance at end of period	$344,419			$86,057	$430,476		$110,325		$86,057	$196,382

5.  Long-term Debt

Long-term debt consists of the following:

	December 31, 2005			June 30, 2005
(In thousands)
Variable-rate credit facilities
Asset-backed commercial paper facility of $100 million due 4/9/2007	$	100,000		$	25,000
Revolving credit facility of $150 million due 10/7/2010		20,000			-
Private placement notes
6.57% senior notes, due 9/1/2005		-			50,000
6.65% senior notes, due 3/1/2006		75,000			75,000
6.39% senior notes, due 4/1/2007		50,000			50,000
6.62% senior notes, due 4/1/2008		50,000			50,000
4.42% senior notes, due 7/1/2007		50,000			-
4.50% senior notes, due 7/1/2008		75,000			-
4.57% senior notes, due 7/1/2009		100,000			-
4.70% senior notes, due 7/1/2010		75,000			-
Total long-term debt		595,000			250,000
Current portion of long-term debt		(75,000	)		(125,000	)
Long-term debt	$	520,000		$	125,000

In connection with the asset-backed commercial paper facility, Meredith entered into a revolving agreement to sell all of its rights, title and interest in the majority of its accounts receivable related to advertising, book and miscellaneous revenues to Meredith Funding Corporation, a special purpose entity established to purchase accounts receivable from Meredith. At December 31, 2005, $224.8 million of accounts receivable, net of reserves, was outstanding under the agreement. Meredith Funding Corporation in turn sells receivable interests to an asset-backed commercial paper conduit administered by a major national bank. In consideration of the sale, Meredith receives cash and a subordinated note, bearing interest at the prime rate 7.25 percent at December 31, 2005, from Meredith Funding Corporation. The agreement is structured as a true sale under which the creditors of Meredith Funding Corporation will be entitled to be satisfied out of the assets of Meredith Funding Corporation prior to any value being returned to Meredith or its creditors. The accounts of Meredith Funding Corporation are fully consolidated in Meredith's condensed consolidated financial statements. The asset-backed commercial paper facility renews annually until April 9, 2007, the facility termination date.

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

6.  Pension and Postretirement Benefit Plans

The following tables present the components of net periodic benefit cost:

		Three Months						Six Months
Period ended December 31,		2005			2004			2005			2004
(In thousands)
Pension benefits
Service cost	$	1,364		$	1,340		$	2,728		$	2,681
Interest cost		1,209			1,121			2,418			2,243
Expected return on plan assets		(1,648	)		(1,581	)		(3,297	)		(3,163	)
Prior service cost amortization		171			171			341			341
Actuarial loss amortization		118			34			236			68
Net periodic pension expense	$	1,214		$	1,085		$	2,426		$	2,170
Postretirement benefits
Service cost	$	109		$	214		$	218		$	427
Interest cost		246			321			492			643
Prior service cost amortization		(174	)		(71	)		(349	)		(143	)
Actuarial loss amortization		27			17			54			35
Net periodic postretirement expense	$	208		$	481		$	415		$	962

7.  Earnings per Share

The following table presents the calculations of earnings per share:

		Three Months				Six Months
Period ended December 31,		2005		2004		2005		2004
(In thousands except per share data)
Earnings before cumulative effect of change in    accounting principle	$	29,153	$	26,822	$	55,590	$	50,739
Basic average shares outstanding		49,243		49,912		49,280		50,090
Dilutive effect of stock options		1,420		1,557		1,414		1,577
Diluted average shares outstanding		50,663		51,469		50,694		51,667
Earnings per share before cumulative effect of    change in accounting principle
Basic	$	0.59	$	0.54	$	1.13	$	1.01
Diluted		0.58		0.52		1.10		0.98

For the three months ended December 31, antidilutive options excluded from the above calculations totaled 1,381,000 options in 2005 (with a weighted average exercise price of $49.72) and 2,055,000 options in 2004 (with a weighted average exercise price of $47.86). For the six months ended December 31, antidilutive options excluded from the above calculations totaled 1,254,000 options in 2005 (with a weighted average exercise price of $49.76) and 1,911,000 options in 2004 (with a weighted average exercise price of $47.60).

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

In the six months ended December 31, 2005 and 2004, options were exercised to purchase 442,000 shares and 432,000 shares, respectively.

8.  Comprehensive Income

Comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from nonowner sources. Comprehensive income includes net earnings as well as items of other comprehensive income.Total comprehensive income for the three months ended December 31, 2005 and 2004, was $29.2 million and $27.8 million, respectively.Total comprehensive income for the six months ended December 31, 2005 and 2004, was $55.6 million and $51.8 million, respectively.

9.  Segment Information

Meredith Corporation is a diversified media company primarily focused on the home and family marketplace. Based on products and services, the Company has established two reportable segments:  publishing and broadcasting. The publishing segment includes magazine and book publishing, integrated marketing, interactive media, database-related activities, brand licensing and other related operations. The broadcasting segment includes 14 network-affiliated television stations and one AM radio station. There are no material intersegment transactions. There have been no changes in the basis of segmentation since June 30, 2005.

There are two principal financial measures reported to the chief executive officer for use in assessing segment performance and allocating resources. Those measures are operating profit and earnings before interest, taxes, depreciation and amortization (EBITDA). Operating profit for segment reporting, disclosed below, is revenues less operating costs excluding interest income and expense and unallocated corporate expenses. Segment operating costs include allocations of certain centrally incurred costs such as employee benefits, occupancy, information systems, accounting services, internal legal staff and human resources administration expenses. These costs are allocated based on actual usage or other appropriate methods, primarily number of employees. Unallocated corporate expenses are corporate overhead expenses not attributable to the operating groups. In accordance with SFAS 131,Disclosures about Segments of an Enterprise and Related Information, EBITDA is not presented below.

MEREDITH CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

		Three Months						Six Months
Period ended December 31,		2005			2004			2005			2004
(In thousands)
Revenues
Publishing	$	301,469		$	204,663		$	619,943		$	420,241
Broadcasting		84,514			89,890			156,305			163,175
Total revenues	$	385,983		$	294,553		$	776,248		$	583,416
Operating profit
Publishing	$	37,178		$	24,817		$	84,923		$	62,640
Broadcasting		26,317			32,186			39,068			46,439
Unallocated corporate		(7,986	)		(8,302	)		(17,299	)		(16,405	)
Income from operations	$	55,509		$	48,701		$	106,692		$	92,674
Depreciation and amortization
Publishing	$	4,775		$	2,416		$	9,483		$	4,761
Broadcasting		6,114			5,822			12,161			11,315
Unallocated corporate		644			508			1,268			1,101
Total depreciation and amortization	$	11,533		$	8,746		$	22,912		$	17,177

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE OVERVIEW

Meredith Corporation (Meredith or the Company) is one of America's leading media and marketing companies. We are one of the leading magazine publishers serving women and a broadcaster with television stations in top markets such as Atlanta and Phoenix. Each month we reach more than 80 million American consumers through our magazines, books, custom publications, web sites and television stations.

Meredith operates in two business segments. Publishing consists of magazine and book publishing, Integrated Marketing, Interactive Media, database-related activities, brand licensing and other related operations. Broadcasting consists of 14 network-affiliated television stations and one radio station. Both segments operate primarily in the United States and compete against similar media and other types of media on both a local and national basis. Publishing accounted for 80 percent of the Company's revenues in the first six months of fiscal 2006 while broadcasting revenues totaled 20 percent.

PUBLISHING
Advertising revenues made up 50 percent of publishing's revenues in the first six months of fiscal 2006. These revenues are generated from the sale of advertising space in the Company's magazines and on web sites to clients interested in promoting their brands, products and services to consumers. Circulation revenues accounted for 30 percent of publishing's fiscal 2006 first six months revenues. Circulation revenues result from the sale of magazines to consumers through subscriptions and by single copy sales on newsstands, primarily at major retailers and grocery/drug stores. The remaining 20 percent of publishing revenues came from a variety of activities that included the sale of books and integrated marketing services as well as brand licensing, product sales and other related activities. Publishing's major expense categories are production and delivery of publications and promotional mailings and employee compensation costs.

BROADCASTING
Broadcasting derives almost all of its revenues-98 percent in the first six months of fiscal 2006-from the sale of advertising. The remainder comes from television rebroadcast rights fees, network compensation, television production services and other services. Political advertising revenues are cyclical in that they are significantly greater during biennial election campaigns (which take place in odd-numbered fiscal years) than at other times. Broadcasting's major expense categories are employee compensation and programming costs.

FIRST SIX MONTHS FISCAL 2006 HIGHLIGHTS

• On July 1, 2005, Meredith completed its acquisition ofParents,(including its related special interest publications, BabyandExpecting), Family Circle, Fitness,Child andSer Padres (collectively referred to as the G+J Consumer Titles) from Gruner + Jahr Printing and Publishing Co.

• Revenues increased 33 percent from the prior-year first six months reflecting strong advertising revenue growth for the existing magazines, growth in online advertising revenues and increased broadcasting non-political revenues as well as increased revenues from the G+J Consumer Titles, which offset the cyclical decline in political advertising at the television stations.

• On a comparable basis, excluding the G+J Consumer Titles, publishing revenues and operating profit increased 9 percent and 16 percent, respectively, as compared with the same six-month period in the prior year. Broadcasting revenues and operating profit decreased 4 percent and 16 percent, respectively, as compared to the first six months of the prior year.

• Diluted earnings per share increased 12 percent to $1.10 from prior-year first half earnings of $0.98 (before the cumulative effect of a change in accounting principle). The increase primarily reflected the improved performance of the ongoing publishing segment. In addition, for the six months ended December 31, 2005, the G+J Consumer Titles were modestly accretive.

• We spent $26.5 million to repurchase shares of our common stock in the first half of fiscal 2006.

USE OF NON-GAAP FINANCIAL MEASURES
Our analysis of broadcasting segment results includes references to earnings before interest, taxes, depreciation and amortization (EBITDA). EBITDA and EBITDA margin are non-GAAP measures. We use EBITDA along with operating profit and other GAAP measures to evaluate the financial performance of our broadcasting segment. EBITDA is a common alternative measure of performance in the broadcasting industry and is used by investors and financial analysts, but its calculation may vary among companies. Broadcasting segment EBITDA is not used as a measure of liquidity, nor is it necessarily indicative of funds available for our discretionary use.

We believe the non-GAAP measures used in Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contribute to an understanding of our financial performance. We believe the non-GAAP financial measures provide an additional analytic tool to understand our results from core operations and to reveal underlying trends. These measures should not, however, be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

RESULTS OF OPERATIONS

Three Months ended December 31,		2005	2004		Percent Change
(In thousands)
Total revenues	$	385,983	$	294,553	31 %
Operating costs and expenses		330,474		245,852	34 %
Income from operations	$	55,509	$	48,701	14 %
Earnings before cumulative effect of change in accounting principle	$	29,153	$	26,822	9 %
Net earnings	$	29,153	$	27,715	5 %
Diluted earnings per share
Before cumulative effect of change in accounting principle	$	0.58	$	0.52	12 %
Net earnings	$	0.58	$	0.54	7 %

Six Months ended December 31,		2005	2004		Percent Change
(In thousands)
Total revenues	$	776,248	$	583,416	33 %
Operating costs and expenses		669,556		490,742	36 %
Income from operations	$	106,692	$	92,674	15 %
Earnings before cumulative effect of change in accounting principle	$	55,590	$	50,739	10 %
Net earnings	$	55,590	$	51,632	8 %
Diluted earnings per share
Before cumulative effect of change in accounting principle	$	1.10	$	0.98	12 %
Net earnings	$	1.10	$	1.00	10 %

The following sections provide an analysis of the results of operations for the publishing and broadcasting segments followed by an analysis of the consolidated results of operations for the quarter and the six months ended December 31, 2005, compared with the respective prior-year periods. This commentary should be read in conjunction with the interim condensed consolidated financial statements presented elsewhere in this report and with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2005.

PUBLISHING
Publishing operating results were as follows:

Three Months ended December 31,		2005	2004		Percent Change
(In thousands)
Advertising revenues	$	148,808	$	88,101	69 %
Circulation revenues		87,697		55,861	57 %
Other revenues		64,964		60,701	7 %
Total revenues		301,469		204,663	47 %
Operating costs		264,291		179,846	47 %
Operating profit	$	37,178	$	24,817	50 %

Six Months ended December 31,		2005	2004		Percent Change
(In thousands)
Advertising revenues	$	311,800	$	197,013	58 %
Circulation revenues		182,580		114,087	60 %
Other revenues		125,563		109,141	15 %
Total revenues		619,943		420,241	48 %
Operating costs		535,020		357,601	50 %
Operating profit	$	84,923	$	62,640	36 %

Revenues
Publishing revenues, excluding revenues from the newly acquired G+J Consumer Titles, increased 8 percent in the second quarter compared with the prior year quarter as a result of higher advertising revenues from our magazine and Interactive Media operations. These increases were partially offset by lower revenues in our Integrated Marketing operations. In the first six months of fiscal 2006, comparable revenues increased 9 percent compared with the prior year period due to strong growth in advertising and Interactive Media revenues as well as solid growth in Meredith Books and Integrated Marketing revenues.

Comparable publishing advertising revenues, excluding revenues from the newly acquired G+J Consumer Titles, increased 16 percent in the second quarter and 9 percent in the first six months of fiscal 2006. The increase in both periods was attributable to both the sale of more advertising pages at most of our titles and higher average net revenues per page. Among our largest advertising categories, cosmetics, pharmaceutical and food showed strength while demand was weaker for the home and retail categories. We also grew advertising in target growth categories such as business, auto and apparel. Comparable online advertising revenues increased 110 percent in the quarter and 87 percent in the first six months of fiscal 2006 due to increased traffic, price increases and a more efficient utilization of advertising inventory. We continue to generate significant numbers of subscription, renewal and customer service transactions on the Web.

On a comparable basis, magazine circulation revenues declined 1 percent from the prior year second quarter and were up slightly for the first six months of fiscal 2006. For both the quarter and the six-month period, higher newsstand revenues were offset by decreases in subscription revenues. The increase in newsstand revenues was primarily due to an increase in the number of Special Interest Publications published, partially offset by a decrease in the average sales per issue. Subscription revenues were down in the low to mid single-digits on a percentage basis for both the second quarter and the six months ended December 31, 2005. The decrease was due in part to one issue ofCountry Home being shifted into the third quarter as compared to the prior year periods.

Other publishing revenues increased 5 percent on a comparable basis from the prior year second quarter and were up 13 percent in the six-month period primarily reflecting strong new business growth in Meredith books sales and in our other diversified publishing businesses. Lower revenues in the second quarter from the Integrated Marketing operations due to the timing of marketing programs were more than offset by growth in our other diversified publishing businesses. For the six months ended December 31, 2005, new integrated marketing programs for Hyundai, Nestlé and PepsiCo contributed to the increased revenues. In addition, Meredith Books grew revenues in the high teens on a percentage basis in first half of fiscal 2006. Top selling books includedThe Sonoma Diet book, the limited edition "Pink Plaid"Better Homes and GardensNew Cook Book,Food Network Favorites and children's books.

Operating Costs
Excluding G+J Consumer Titles operating costs, comparable second quarter publishing operating costs increased 6 percent from the fiscal 2005 quarter. In the six months ended December 31, 2005, comparable publishing operating costs increased 7 percent from the comparable prior year period. The increase reflected higher paper and postage costs and higher employee compensation costs. On a comparable basis, paper costs were up due to both an increase in paper consumption and higher paper prices. The increase in comparable paper consumption reflected higher sales volume of advertising pages. Postage expense increased approximately 7 percent for both the quarter and the six-month period also due primarily to the increased sales volumes of advertising pages. Employee compensation costs were up primarily as a result of increased payroll and stock based compensation expenses.

Operating Profit
Publishing operating profit increased 50 percent in the quarter (19 percent on a comparable basis) and 36 percent in the six-month period (16 percent on a comparable basis) compared with the respective prior year periods. This performance was due to the addition of the G+J Consumer Titles, strong advertising results at most of Meredith's magazines, and strong profit growth in Meredith Books and Interactive Media operations.

BROADCASTING
Broadcasting operating results were as follows:

Three Months ended December 31,		2005	2004		Percent Change
(In thousands)
Non-political advertising revenues	$	83,248	$	76,119	9 %
Political advertising revenues		85		12,201	(99)%
Other revenues		1,181		1,570	(25)%
Total revenues		84,514		89,890	(6)%
Operating costs		58,197		57,704	1  %
Operating profit	$	26,317	$	32,186	(18)%

Six Months ended December 31,		2005	2004		Percent Change
(In thousands)
Non-political advertising revenues	$	153,407	$	141,583	8 %
Political advertising revenues		164		18,579	(99)%
Other revenues		2,734		3,013	(9)%
Total revenues		156,305		163,175	(4)%
Operating costs		117,237		116,736	- %
Operating profit	$	39,068	$	46,439	(16)%

Revenues
Broadcasting revenues declined 6 percent in the second quarter and 4 percent in the first six months of fiscal 2006 compared with the respective prior-year periods. Net political advertising revenues totaled $12.2 million in the prior-year second quarter and $18.6 million in the prior-year six-month period compared with less than $0.2 million in net political advertising revenues in both the second quarter and first six months of the current fiscal year. The fluctuations in political advertising revenues at Meredith's stations, and in the broadcasting industry, generally follow the biennial cycle of election campaigns. Political advertising displaces a certain amount of non-political advertising and therefore the revenues are not entirely incremental. Non-political advertising revenues increased 9 percent in the quarter and 8 percent in the six-month period reflecting growth in both national and local non-political advertising.

Operating Costs
Operating costs were flat in the quarter and the first half of fiscal 2006 compared with the respective prior-year periods. Management has emphasized efforts to reduce the amount and cost of broadcasting program rights purchases while maintaining or improving programming quality and these efforts have been successful. In the year-to-date period, and to a greater extent in the second quarter, these declines were offset by investments in local news and more aggressive sales and promotion efforts. Also, lower administrative expenses have been achieved through disciplined expense management.

Operating Profit
Broadcasting operating profit declined 18 percent in the second quarter and was down 16 percent in the first half of fiscal 2006 compared with the respective prior year periods. The declines primarily reflected lower revenues due to the cyclical nature of political advertising.

Supplemental Disclosure of Broadcasting EBITDA
Meredith's broadcasting EBITDA is defined as broadcasting segment operating profit plus depreciation and amortization expense. EBITDA is not a GAAP financial measure and should not be considered in isolation or as a substitute for GAAP financial measures. See the discussion of management's rationale for the use of EBITDA in the preceding Executive Overview section. The following table provides reconciliations between broadcasting segment operating profit and EBITDA. The EBITDA margin is defined as segment EBITDA divided by segment revenues.

Three Months ended December 31,		2005	2004
(In thousands)
Revenues	$	84,514	$	89,890
Operating profit	$	26,317	$	32,186
Depreciation and amortization		6,114		5,822
EBITDA	$	32,431	$	38,008
EBITDA margin		38.4 %		42.3 %

Six Months ended December 31,		2005	2004
(In thousands)
Revenues	$	156,305	$	163,175
Operating profit	$	39,068	$	46,439
Depreciation and amortization		12,161		11,315
EBITDA	$	51,229	$	57,754
EBITDA margin		32.8 %		35.4 %

UNALLOCATED CORPORATE EXPENSES
These expenses were as follows:

		2005	2004		Percent Change
(In thousands)
Three months ended December 31,	$	7,986		8,302	(4) %
Six months ended December 31,	$	17,299		16,405	5 %

Unallocated corporate expenses, which represent general corporate overhead expenses not attributable to the operating groups, declined 4 percent in the second quarter and were up 5 percent in the first six months of fiscal 2006 compared with the respective prior-year periods. The decline in expenses in the quarter reflected lower legal expenses as well as slightly lower expenses for postretirement benefits other than pensions. In the year-to-date period, employee medical insurance benefits expense increased as did incremental share-based compensation as compared to prior-year first half expense due to the immediate expensing of stock-based compensation awards for retirement eligible employees.

CONSOLIDATED

Consolidated Operating Costs and Expenses
Consolidated operating costs and expenses were as follows:

Three Months ended December 31,		2005	2004		Percent Change
(In thousands)
Production, distribution and editorial	$	164,393	$	123,403	33 %
Selling, general and administrative		154,548		113,703	36 %
Depreciation and amortization		11,533		8,746	32 %
Total operating costs and expenses	$	330,474	$	245,852	34 %

Six Months ended December 31,		2005	2004		Percent Change
(In thousands)
Production, distribution and editorial	$	341,154	$	252,576	35 %
Selling, general and administrative		305,490		220,989	38 %
Depreciation and amortization		22,912		17,177	33 %
Total operating costs and expenses	$	669,556	$	490,742	36 %

On a comparable basis, production, distribution and editorial costs for the second quarter and six-month period ended December 31, 2005, increased 7 percent and 8 percent, respectively, from the prior-year comparable periods. The largest factors in the increase were volume-related increases in paper, postage and production costs as well as higher paper prices.

Selling, general and administrative expenses increased 3 percent in both the second quarter and six-month period, when costs of the G+J Consumer Titles are excluded. A modest increase in publishing expenses and an increase in stock-based compensation expense as discussed previously were partially offset by decreased legal expenses.

Depreciation and amortization expenses increased 32 percent in the second quarter and 33 percent in the first half of fiscal 2006. The G+J Consumer Titles accounted for approximately 80 percent of the overall increase in both periods. On a comparable basis, excluding depreciation and amortization related to G+J Consumer Titles, the depreciation and amortization increased 6 percent for the second quarter and 7 percent for the first half of the year as compared to the same periods in the prior year reflecting the addition of replacements made in the ordinary course of business.

Income from Operations
Income from operations increased 14 percent in the second quarter and 15 percent in the first six months of fiscal 2006 reflecting the addition of the G+J Consumer Titles and strong growth in the publishing segment's core business.

Net Interest Expense
Net interest expense was $7.7 million in the fiscal 2006 second quarter compared with expense of $4.9 million in the prior-year quarter. For the six months ended December 31, 2005, net interest expense was $15.6 million versus $9.9 million in the comparable prior-year period. Monthly average long-term debt outstanding was approximately $600 million in the current periods compared with $300 million in the prior periods. The favorable average interest rate on the $300 million of fixed rate senior notes incurred for the acquisition of the G+J Consumer Titles has lowered Meredith's weighted average interest rate.

Income Taxes
Our effective tax rate was 39.0 percent in the second quarter and first half of fiscal 2006 as compared to 38.7 percent in the prior-year periods. The Company's effective tax rate was higher primarily due to an increase in state income taxes as a result of an expanding tax base.

Earnings and Earnings per Share
Earnings were $29.2 million ($0.58 per diluted share) in the quarter ended December 31, 2005, up 9 percent from $26.8 million ($0.52 per diluted share) in the comparable prior-year quarter (before the cumulative effect of a change in accounting principle). For the six months ended December 31, 2005, earnings were $55.6 million ($1.10 per diluted share), an increase of 10 percent from prior-year six month earnings of $50.7 million ($0.98 per diluted share) (before the cumulative effect of a change in accounting principle). The improvement reflected the addition of the G+J Consumer Titles and higher segment operating profit in the existing publishing segment offset by the absence of political advertising revenues and increased interest expense in the current year periods. Net earnings in the three- and six-month periods ended December 31, 2004, were $27.7 million ($0.54 per diluted share) and $51.6 million ($1.00 per diluted share), respectively, including the cumulative effect of a change i n accounting principle related to an adjustment for anticipated forfeitures of share-based compensation awards. Average basic and diluted shares outstanding decreased slightly in both the current quarter and six-month period due to the Company's share repurchase program.

LIQUIDITY AND CAPITAL RESOURCES

Six Months ended December 31,		2005	2004				Percent Change
(In thousands)
Net earnings	$	55,590	$		51,632		8 %
Cash flows from operations	$	40,043	$		54,898		(27)%
Cash flows used in investing		(374,464	)		(43,268	)	NM
Cash flows provided by (used in) financing		319,726			(44,697	)	NM
Net decrease in cash and cash equivalents	$	(14,695	)	$	(33,067	)	(56)%
NM = Not meaningful

OVERVIEW
Meredith's primary source of liquidity is cash generated by operating activities. Debt financing is typically used for acquisitions. We expect cash on hand, internally generated cash flow and available credit from third-party financing agreements will provide funds for operating and recurring cash needs (e.g., working capital, capital expenditures, debt repayments and cash dividends) into the foreseeable future. We have up to $130 million remaining available under our revolving credit facility. While there are no guarantees that we will be able to replace current credit agreements when they expire, we expect to be able to do so.

Meredith incurred additional debt of $350 million on July 1, 2005, to fund the acquisition of the G+J Consumer Titles. The debt consisted of $300 million in fixed rate unsecured notes and $50 million under the asset-backed commercial paper facility described below underSources and Uses of Cash - Long-term debt. The notes will mature in staggered terms over the next two to five years. Interest rates range from 4.42 to 4.70 percent with a weighted-average interest rate of 4.56 percent. The debt covenants are slightly more favorable than those of our existing debt agreements.

SOURCES AND USES OF CASH
Cash and cash equivalents decreased $14.7 million in the first six months of fiscal 2006; they decreased $33.1 million in the comparable period of fiscal 2005. In both periods, net cash provided by operating activities was used for purchases of Company stock, capital investments and dividends. In the current period, cash, which was provided by borrowings, was used to acquire the G+J Consumer Titles and the license assets of KSMO-TV.

Operating activities
The largest single component of operating cash inflows is cash received from advertising customers. Other sources of operating cash inflows include cash received from magazine circulation sales and other revenue transactions such as book, integrated marketing and product sales. Operating cash outflows include payments to vendors and employees and interest, pension and income tax payments. Our most significant vendor payments are for production and delivery of publications and promotional mailings, broadcasting programming rights, employee benefits and other services and supplies.

Cash provided by operating activities totaled $40.0 million in the first half of fiscal 2006 compared with $54.9 million in first half of fiscal 2005. Contributing to the decrease were the absence of income tax refunds received in the prior year as well as increased cash spending for pension and income tax payments. Factors offsetting the decrease were higher cash receipts from advertising and newsstand sales.

Investing activities
Investing cash inflows generally include proceeds from the sale of assets or a business. Investing cash outflows generally include payments for the acquisition of new businesses, investments and additions to property, plant and equipment.

Net cash used by investing activities increased to $374.5 million in the current six months from $43.3 million in the prior-year period. The increase reflected the use of cash for the acquisition of the G+J Consumer Titles and the license assets of KSMO-TV and increased spending for the purchase of property, plant and equipment in the current period.

Financing activities
Financing cash inflows generally include borrowings under debt agreements and proceeds from common stock issued under share-based payment plans. Financing cash outflows generally include the repayment of long-term debt, repurchases of Company stock and the payment of dividends.

Net cash provided by financing activities totaled $319.7 million in the six months ended December 31, 2005, compared with $44.7 million used in the six months ended December 31, 2004. The financing of the G+J Consumer Titles more than offset repayments of long-term debt and decreases in purchases of Company stock.

Long-term debt
At December 31, 2005, long-term debt outstanding totaled $595 million. The debt consisted of $475 million in fixed-rate unsecured senior notes, $100 million under an asset-backed commercial paper facility and $20 million outstanding under the revolving credit facility. Of this debt, $75 million is due in the next 12 months. We expect to repay this debt with cash from operations and credit available under existing credit agreements. The weighted average effective interest rate for the fixed-rate notes is 5.30 percent. The interest rate on the asset-backed commercial paper facility changes monthly and is based on a fixed spread over the average commercial paper cost to the lender. The interest rate was 4.55 percent in December 2005. The asset-backed commercial paper facility has a capacity of up to $100 million and renews annually until April 9, 2007, the facility termination date. The interest rate on the revolving credit facility is variable based on LIBOR and Meredith's debt to trailing 12 mon th EBITDA ratio. The weighted average effective interest rate for the revolving credit facility was 4.85 percent at December 31, 2005. This facility has capacity for up to $150 million outstanding with an option to request up to another $150 million. The revolving credit facility expires on October 7, 2010.

All of our debt agreements include financial covenants, and failure to comply with any such covenants could result in the debt becoming payable on demand. The Company was in compliance with all debt covenants at December 31, 2005, and expects to remain so in the future.

Contractual obligations
As of December 31, 2005, there had been no material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended June 30, 2005.

Share repurchase program
As part of our ongoing share repurchase program, we spent $26.5 million in the first half of fiscal 2006 to repurchase an aggregate of 533,000 shares of Meredith Corporation common and Class B stock at then current market prices. We spent $49.1 million to repurchase 965,000 shares in the first six months of fiscal 2005. We expect to continue repurchasing shares from time to time in the foreseeable future, subject to market conditions. As of December 31, 2005, future repurchases of approximately 1.6 million shares were authorized. The status of the repurchase program is reviewed at each quarterly Board of Directors meeting. See Part II, Item 2 (c), Issuer Repurchases of Equity Securities, of this Quarterly Report on Form 10-Q for detailed information on share repurchases during the quarter ended December 31, 2005.

Dividends
Dividends paid in the first six months of fiscal 2006 totaled $13.8 million, or 28 cents per share, compared with dividend payments of $12.0 million, or 24 cents per share, in the first six months of fiscal 2005.

Capital expenditures
Spending for property, plant and equipment totaled $15.0 million in the first six months of fiscal 2006 compared with prior-year first half spending of $9.8 million. Spending increased over the prior year primarily due to furniture and fixtures additions and leasehold improvements related to the acquisition of the G+J Consumer Titles and to purchases of broadcast equipment. We expect to spend approximately $22 million in fiscal 2006 and 2007 for a new facility for our television station in Hartford. We have no other material commitments for capital expenditures. We expect funds for future capital expenditures to come from operating activities or, if necessary, borrowings under credit agreements.

OTHER MATTERS

CRITICAL ACCOUNTING POLICIES
Meredith's critical accounting policies are summarized in our Annual Report on Form 10-K for the year ended June 30, 2005. As of December 31, 2005, the Company's critical accounting policies had not changed from June 30, 2005.

OUTLOOK 
The following statements reflect our current expectations for the third quarter and remainder of fiscal 2006.

On a comparable basis, Meredith expects Publishing advertising revenues to increase in the low single-digits in the third quarter. Broadcast pacings, which are a snapshot in time and change frequently, are currently up in the high single-digits for the third quarter.

As the Company stated at the beginning of fiscal 2006, it expected earnings per share (before the cumulative benefit of a change in accounting principle) to grow in the mid teens in the second half of fiscal 2006. Meredith continues to believe earnings per share will grow at this level. This would translate into earnings per share of approximately $0.80 for the third quarter and $2.86 for the full year, or a 14 percent increase from the $2.50 (before the cumulative benefit of a change in accounting principle) the Company earned in fiscal 2005.

We may update this guidance periodically during the fiscal year through our quarterly earnings releases or through management presentations to industry, investor and investment analyst groups. Copies of our quarterly earnings releases are available on our website (www.meredith.com) in the Investor Information section. Copies of the text of management presentations that may contain material non-public information are also posted on our website, typically for one week following the presentation. Copies of both earnings releases and such management presentations are also furnished to the Securities and Exchange Commission on Form 8-K and can be accessed through their website (www.sec.gov). The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

RISK FACTORS
Except for the historical information contained herein, the matters discussed in this quarterly report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These statements are based on management's current knowledge and estimates of factors affecting our operations. Readers are cautioned not to place undue reliance on such forward-looking information. Factors that could adversely affect future results include, but are not limited to, downturns in national and/or local economies; a softening of the domestic advertising market; world, national or local events that could disrupt broadcast television; increased consolidation among major advertisers or other events depressing the level of advertising spending; the unexpected loss of one or more major clients; the integration of the newly acquired businesses; changes in consumer reading, purchase and/or television viewing patterns; unan ticipated increases in paper, postage, printing or syndicated programming costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company's industries; unexpected changes in interest rates; and any acquisitions and/or dispositions. Meredith's Annual Report on Form 10-K for the year ended June 30, 2005, includes a more complete description of the risk factors that may affect our results.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Meredith is exposed to certain market risks as a result of its use of financial instruments, in particular the potential market value loss arising from adverse changes in interest rates. Readers are referred to Item 7A, Quantitative and Qualitative Disclosures about Market Risk of the Company's fiscal 2005 Annual Report on Form 10-K for a more complete discussion of these risks.

Long-term debt
At December 31, 2005, Meredith had outstanding $475 million in fixed-rate long-term debt. There are no earnings or liquidity risks associated with the Company's fixed-rate debt. The fair market value of the fixed-rate debt (based on discounted cash flows reflecting borrowing rates currently available for debt with similar terms and maturities) varies with fluctuations in interest rates. A 10 percent decrease in interest rates would have changed the fair market value of the fixed-rate debt to $478.5 million from $472.7 million at December 31, 2005.

Meredith also had $120 million in variable-rate long-term debt outstanding atDecember 31, 2005. The Company is subject to earnings and liquidity risks for changes in the interest rate on this debt. A 10 percent increase in interest rates would have no material effect on interest expense at December 31, 2005.

Broadcast rights payable
There has been no material change in the market risk associated with broadcast rights payable since June 30, 2005.

Item 4. Controls and Procedures

Meredith's Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that Meredith files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. There have been no significant changes in the Company's internal control over financial reporting in the quarter ended December 31, 2005, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Repurchases of Equity Securities

The following table sets forth information with respect to the Company's repurchases of common and Class B stock during the quarter ended December 31, 2005.

Period		(a) Total number of shares purchased1	(b) Average price paid per share	(c) Total number of shares purchased as part of publicly announced programs	(d) Maximum number of shares that may yet be purchased under programs
October 1 to October 31, 2005		147,255	$ 49.15	147,255	1,767,551
November 1 to November 30, 2005		85,003	$ 49.91	85,003	1,682,548
December 1 to December 31, 2005		99,461	$ 50.64	99,461	1,583,087
Total		331,719	$ 49.79	331,719	1,583,087
1	Column (a), Total number of shares purchased includes the following purchases of Class B stock:  4,831 shares in October 2005 and 807 shares in November 2005; and the following shares withheld upon the exercise of stock options:  20,512 in October 2005, 21,759 in November 2005 and 80,161 in December 2005.

In January 2005, Meredith announced the Board of Directors had authorized the repurchase of up to 2 million additional shares of the Company's stock through public and private transactions.

For more information on the Company's share repurchase program, see Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, under the heading "Share repurchase program."

Item 4. Submission of Matters to a Vote of Security Holders.

(a)	The Annual Meeting of Shareholders was held on November 8, 2005, at the Company's headquarters in Des Moines, Iowa.
(b)	The name of each director elected at the Annual Meeting is shown under Item 4(c)(1). The other directors whose terms of office continued after the meeting were:  Herbert M. Baum, Mary Sue Coleman, D. Mell Meredith Frazier, Frederick B. Henry, Joel W. Johnson, William T. Kerr, Stephen M. Lacy, and Nicholas L. Reding.

(c)	(1)	Proposal 1:  Election of four Class I directors for terms expiring in 2008. Each nominee was elected in uncontested elections by the votes cast as follows:
					Number of shareholder votes *
					For	Withheld
		Class I directors
			Robert E. Lee		120,595,558	1,478,633
			David J. Londoner		120,818,294	1,255,897
			Philip A. Marineau		119,954,303	2,119,888
			Charles D. Peebler, Jr.		105,746,652	16,327,539
		*  As specified on the proxy card, if no vote For or Withhold was specified, the shares were voted For the election of the named director.
(c)	(2)	Proposal 2:  To act upon a shareholder proposal to retain an investment banker to develop a plan for recapitalization. Proposal 2 was rejected by the votes cast as follows:
		For		Against	Abstentions	Broker Non-votes
		21,565,071		95,461,197	798,012	4,249,911

Item 6. Exhibits

31	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	SIGNATURE
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.
	MEREDITH CORPORATION
	Registrant
	/s/ Suku V. Radia
	Suku V. Radia
	Vice President - Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: January 24, 2006

INDEX TO ATTACHED EXHIBITS

Exhibit Number	Item
31	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

HIGHLIGHTS
Table of Contents
Financial Data:
	Balance Sheets
	Statement of Earnings
	Statement of Cash Flows
	Statement of Shareholders' Equity
	Notes
Management's Discussion and Analysis
Quantitative and Qualitative Disclosures about Market Risk
Controls and Procedures
Submission of Matters to a Vote
Index to Exhibits