JP Morgan Investor Dinner
New York City
June 3, 2010
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Safe Harbor
This presentation and management’s public commentary contain certain forward-looking statements
that are subject to risks and uncertainties. These statements are based on management’s current
knowledge and estimates of factors affecting the Company’s operations. Statements in this presentation
that are forward-looking include, but are not limited to, the statements regarding broadcast pacings,
publishing advertising revenues, as well as any guidance related to the Company’s financial
performance.
that are subject to risks and uncertainties. These statements are based on management’s current
knowledge and estimates of factors affecting the Company’s operations. Statements in this presentation
that are forward-looking include, but are not limited to, the statements regarding broadcast pacings,
publishing advertising revenues, as well as any guidance related to the Company’s financial
performance.
Actual results may differ materially from those currently anticipated. 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 or insolvency of one or more major clients; the integration of acquired
businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in
paper, postage, printing, or syndicated programming costs; changes in television network affiliation
agreements; technological developments affecting products or the methods of distribution; changes in
government regulations affecting the Company’s industries; unexpected changes in interest rates; and
the consequences of any acquisitions and/or dispositions. The Company undertakes no obligation to
update any forward-looking statement, whether as a result of new information, future events, or
otherwise.
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 or insolvency of one or more major clients; the integration of acquired
businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in
paper, postage, printing, or syndicated programming costs; changes in television network affiliation
agreements; technological developments affecting products or the methods of distribution; changes in
government regulations affecting the Company’s industries; unexpected changes in interest rates; and
the consequences of any acquisitions and/or dispositions. The Company undertakes no obligation to
update any forward-looking statement, whether as a result of new information, future events, or
otherwise.
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Broad Media and Marketing Footprint
National
Media Brands
Media Brands
Meredith
Integrated
Marketing
Integrated
Marketing
Local Media
Brands
Brands
Revenues:
$960 million
Revenues:
$175 million
Revenues:
$275 million
Five Things to Know About Meredith
1. The largest media company serving U.S. women
• Reach 75 million women who make the majority of household
purchasing decisions, regardless of economic climate
purchasing decisions, regardless of economic climate
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Agenda
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Her Family
Her Home
Her Self
Delivering The Largest Adult Female Audience
Five Things to Know About Meredith
1. The largest media company serving U.S. women
2. Strong consumer connection across multiple platforms
• Magazines, Internet, Television, Retail, Mobile
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Agenda
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Growing Readership
Source: Spring 2000 & 2010 MRI Reports
* Traditional Home and Midwest Living
2000 | 2010 | |
Better Homes and Gardens | 34 | 40 |
Family Circle | 21 | 19 |
Parents | 12 | 16 |
Ladies’ Home Journal | 15 | 13 |
Fitness | 6 | 7 |
American Baby | 6 | 7 |
More | NA | 2 |
Other* | 6 | 9 |
TOTAL | 100 | 113 |
+13%
Readership in Millions
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Growing Online Consumer Connection
Source: Meredith, in millions
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National Media Group Average Monthly Unique Visitors
33% CAGR
12
9
7
2
9
220
260
270
380
400
Increased Hours of Locally Produced News Programming
Morning news hours up 40% over 5 years
Adding 4 p.m. news across group
Building 24-hour multi-platform news culture
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Growing Presence in Brand Licensing
– Sales meeting expectations
– SKUs doubled to 2,000 from prior year
– Introduced line of paint
– Expanded to Canada
Garden
Interior decor
Canada
Paint
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Meredith’s Approach to Mobile for Consumers
• Smart device adoption rate growing
• Early-adopter marketers showing interest
Trends we see:
• Business to business:
- Developing mobile apps, web sites and marketing
campaigns for corporate clients
campaigns for corporate clients
• Business to consumer:
- Launching mobile versions of our brands
- Next Issue Media initiative among publishers
- Pearl initiative among broadcasters
What we’re doing (two-pronged approach):
Five Things to Know About Meredith
1. The largest media company serving U.S. women
• Multi-platform assets are a competitive advantage
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Agenda
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Online: Meredith
Women’s Network
Women’s Network
Magazines: Home, Family,
Health & Well-being
Health & Well-being
Consumer Events
Custom Marketing
Database Marketing
Video Studios
Brand Licensing
Emphasize 360° Marketing Approach
Mobile
E-Reader
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Improving Advertising Performance
Quarter ended | Total Meredith Advertising |
6/30/09 | (14.9)% |
9/30/09 | (9.5)% |
12/31/09 | (6.9)% |
3/31/10 | +8.1% |
6/30/10* | +7 to 8% |
* = Forecast
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Source: Publishers Information Bureau (April - March issues)
Magazine Advertising Revenue Performance
Trailing 12 Months
Meredith
7%
Time, Inc.
Martha Stewart
Readers Digest
Hachette
Rodale
Hearst
Industry
Conde Nast
(4)%
(5)%
(6)%
(10)%
(10)%
(11)%
(15)%
(21)%
Quarter ended | Meredith PIB | Industry PIB | Variance (pct pts) |
3/31/09 | (1.3)% | (21.5)% | +20.2 |
6/30/09 | 3.2% | (20.9)% | +24.1 |
9/30/09 | 10.5% | (18.3)% | +28.8 |
12/31/09 | 10.7% | (8.6)% | +19.3 |
3/31/10 | 9.0% | (1.4)% | +10.5 |
Source: Publishers Information Bureau
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National Media Advertising Performance vs. Industry
Year-over-Year Comparison
% of Total Revenues | Trailing 12 months Category Performance | |||
Meredith | Industry | Meredith | Industry | |
Food-Beverage | 23% | 13% | 15% | 3% |
Toiletries & Cosmetics | 13% | 13% | 21% | Flat |
DTC Pharma | 12% | 6% | 26% | Flat |
Retail | 7% | 7% | 12% | (16)% |
Home | 6% | 3% | (4)% | (20)% |
Media-Entertainment | 6% | 9% | (6)% | (16)% |
Direct Response | 5% | 7% | (14)% | (18)% |
Non-DTC Pharma | 5% | 4% | (19)% | (16)% |
Household Supplies | 5% | 2% | 14% | 9% |
Business-Finance | 4% | 8% | 8% | (23)% |
Meredith Top 10 Ad Category Revenues vs. Industry
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Source: Publishers Information Bureau (trailing 4 quarters)
% of Total Revenues | Industry Category Performance | |||
Industry | Meredith | 1-Year | 2-Year | |
Toiletries & Cosmetics | 13% | 13% | Flat | (4)% |
Food-Beverage | 13% | 23% | 3% | (12)% |
Media-Entertainment | 9% | 6% | (16)% | (21)% |
Business-Finance | 8% | 4% | (23)% | (37)% |
Apparel | 8% | 2% | (23)% | (32)% |
Retail | 7% | 7% | (16)% | (27)% |
Direct Response | 7% | 5% | (18)% | (30)% |
DTC Pharma | 6% | 12% | Flat | (25)% |
Automotive | 6% | 2% | (19)% | (40)% |
Non-DTC Pharma | 4% | 5% | (16)% | (18)% |
Source: Publishers Information Bureau (trailing 4 quarters)
Industry Top 10 Ad Category Revenues vs. Meredith
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Source: Television Bureau of Advertising
Spot only revenue
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Local Media Non-Political Ad Performance vs. Industry
Year-over-Year Comparison
Quarter ended | Meredith Internal | Industry TvB | Variance (pct pts) |
6/30/09 | (25)% | (25)% | -- |
9/30/09 | (13)% | (19)% | +6 |
12/31/09 | 5% | 4% | +1 |
3/31/10 | 17% | 16% | +1 |
Source Meredith
•Pacings at 4/27/10
Spot only
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Local Media Non-Political Ad Category Performance
Category | Quarter ended 6/30/09 | Quarter ended 9/30/09 | Quarter ended 12/31/09 | Quarter ended 3/31/10 | Quarter ended 6/30/10* |
Auto | (57)% | (39)% | (6)% | 61% | 75% |
Prof. Srvs. | (12)% | 1% | 7% | 11% | 10% |
Restaurants | (14)% | (5)% | (7)% | 3% | (1)% |
Furnishings | (15)% | (12)% | (15)% | (1)% | 13% |
Retail | (21)% | (20)% | 13% | 39% | 41% |
Total | (26)% | (13)% | 5% | 17% | Up high teens |
Year-over-Year Comparison
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Election Year Outlook Bright
Governor races:
• Open seats in CT, GA, KS, MI, OR, SC, TN,
• Incumbents facing tough races in AZ, MA, NV
Senate races:
• Open seats in CT, KS, MO
• Incumbents facing tough races in AZ, NC, NV
House races:
• Open seats in AZ, KS, TN, WA
• Incumbents facing tough races in CT, KS, MO, NV
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Advertising Summary: Environment Strengthening
Magazines:
• Have significantly outperformed industry for 5-straight quarters
• Driven by favorable category mix and better execution
• Strong comparables and anticipated rebound in weaker categories will
likely move near-term industry performance ahead of Meredith
likely move near-term industry performance ahead of Meredith
Television:
• Have delivered strong growth and tracked above industry
• Automotive is central to recovery but other categories are rebounding
• Expect strong political advertising season - Fall 2010
Five Things to Know About Meredith
1. The largest media company serving U.S. women
• Revenues more than doubled in five years
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Agenda
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Marketing Services Industry Spending Growing
Forecast
$ in billions; Source: VSS September 2009
Database
Mobile
Digital
Word of
mouth
mouth
Healthcare
Assembling Array of Custom Marketing Capabilities
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24% CAGR
$ in millions
Delivering Strong Revenue Growth Over Time
iFood Assistant
Database
Digital Magazine
Video
Magazines
Emails
Social Marketing
Online
Case Study: Evolution of the Kraft CRM
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Five Things to Know About Meredith
1. The largest media company serving U.S. women
5. Strong balance sheet and financial position
• Strong cash flow, low debt and consistent dividend growth
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Agenda
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Fiscal Third Quarter Highlights
Quarter ended 3/31/10 | Quarter ended 3/31/09 | % var | |
Total Company revenue | $353 | $338 | +5% |
Operating Profit | $56 | $43 | +30% |
Operating Profit Margin | 16% | 13% | +300 bps |
Earnings per share | $0.73* | $0.56 | +30% |
In millions except per share data and profit margin
* Includes a benefit of $0.04 from special items, primarily the
resolution of an income tax contingency
resolution of an income tax contingency
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Consistently Generate Strong Cash Flow
12% CAGR
$ in millions; fiscal years
$131
$160
$163
$171
$194
$211
$256
$181
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200
Stock Option Exercises
$1,800
Utilization of Cash
100
Net Debt
300
Capital Expenditures
600
Acquisitions, Net of Dispositions
$1,800
Available Cash
$1,600
Operating Cash Flow
200
Dividends
$ in millions
$600
Share Repurchases
$800
SUBTOTAL
Use of Cash: Fiscal 2001 through 2009
$ in millions; fiscal years
Assumes revolving facilities are renewed upon expiration.
Assumes revolving facilities are renewed upon expiration.
Consistent Debt Reduction
$130
Illustration of Meredith’s debt balance
assuming current maturity schedule
assuming current maturity schedule
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$305
$205
$485
$155
$255
$380
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Track Record of Dividend Increases
12% CAGR
Calendar years
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Quarter ended 6/30/10 | |
Total Company advertising revenue | +7 to 8% |
National Media advertising revenue | Flat to up Slightly |
Local Media advertising revenue | Up high teens |
Earnings per share* | $0.61 to $0.66 |
Fiscal Fourth Quarter and Full Year Outlook
* Excludes special items
Fiscal 2010 earnings per share* | $2.13 to $2.18 |
Five Things to Know About Meredith
1. The largest media company serving U.S. women
2. Strong consumer connection across multiple platforms
3. 360° Sales & Marketing Approach to Marketplace
4. Growing marketing solutions business
5. Strong balance sheet and financial position
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Appendix
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Total Company Revenue Growth
8% CAGR
$ in millions; fiscal years
39
Total National Media Revenue Growth
9% CAGR
$ in millions; fiscal years
40
National Media Advertising Revenue Growth
11% CAGR
$ in millions; fiscal years
41
Total Local Media Revenue Growth
4% CAGR
$ in millions; fiscal years
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Local Media Advertising Revenue Growth
4% CAGR
$ in millions; fiscal years
43
National Media Operating Profit
10% CAGR
$ in millions; fiscal years; before special charges
44
Local Media Operating Profit
23% CAGR
$ in millions; fiscal years; before special charges; from continuing operations before
special charges
special charges
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Earnings Per Share
20% CAGR
$ in millions; fiscal years