Exhibit 99.1
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TEXT OF PRESENTATION AT MID-YEAR MEDIA REVIEW CONFERENCE ON DECEMBER 6, 2001.
The company's presentation is accessible to the public on the company's Web
site, meredith.com. It will remain there until January 4, 2002.
{graphic omitted}
Bill Kerr
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Good morning. We are pleased to present to you today. Thanks to Lee
Westerfield for inviting us. With me presenting are Steve Lacy, our Publishing
Group president; Kevin O'Brien, our new Broadcasting Group president; and Suku
Radia, our chief financial officer.
{graphic omitted}
Before beginning, let me remind you that we will be discussing forward-looking
information that is subject to certain risks and uncertainties based on
management's current knowledge and estimates of factors impacting the company's
operations. Please see the full disclosure on this slide and in your handout.
{graphic omitted}
For many months now, most of us in this room have been focused on the
advertising recession -- both you who are investors and we who are responsible
for managing our companies in this time of uncertainty.
I've been involved with media businesses for more than a quarter century, and I
can tell you that I have never seen an advertising downturn that is so
pervasive and so difficult to forecast.
We've been taking steps for over a year now to deal with this situation -- and
we've tried to communicate our thoughts and actions to you as precisely and
helpfully as we can.
We are working hard to manage through this recession -- and we are trying to do
it in a way that will both (1) produce immediate results and (2) not detract
from the enduring value of our impressive array of assets.
I believe we've had some success to date -- and we expect to have more as we go
forward.
- 1 -
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Through a combination of cost controls (staffing is down 8 percent
year-over-year) and revenue programs, we were developing some good traction
against the advertising recession pre-September 11.
In fact, in publishing:
- -- Comparable publishing ad revenues were up 2 percent in the first fiscal
quarter.
- -- Newsstand revenues were up in a down industry.
In broadcasting:
- -- Advertising pacings were running even with the prior year.
- -- And we were actually pacing up 6 percent without political.
- -- We were only one of a few broadcasters achieving this kind of performance.
Then, like everyone else, our position changed on September 11.
{graphic omitted}
As we discussed on our October 29 conference call, we were affected in a
variety of ways by September 11.
1. Broadcast pacings collapsed immediately. From flat, they went to minus 20
percent for September (without political), reflecting four days without
commercials and the cancellation and redirection of orders. This decline
continues.
2. Magazine newsstand sales declined but recovered by month end -- with Better
Homes and Gardens having its best October issue since 1998.
3. Since our magazine issues were closed through November, we did not see an
advertising drop until our December issues. That drop was sharp and
dramatic.
4. Finally, small subscription mailings were down a bit, but subsequent larger
mailings are right on track.
This caused us to guide our second quarter performance downward on October 29.
Suku will update our outlook at the end of this presentation.
- 2 -
{graphic omitted}
Before I turn the program over to my colleagues, I simply want to stress how
focused we are at Meredith to ensure that we're building our business so that
we're well-positioned for the eventual economic recovery. We do this by
starting with a tremendous set of assets.
In publishing:
- -- We are the No. 1 home and family publisher, with a commanding 39 percent
share in the women's service field.
- -- We are leaders in creating sophisticated advertising and marketing programs
for our clients.
- -- Our newsstand business continues to outperform the industry, posting sales
increases while the industry is down.
- -- And I believe that our management team, under Steve Lacy's leadership, is
one of the best in the business.
In broadcasting, we have a very strategic set of markets, covering many
fast-growing regions. In the past, our Broadcasting Group has underdelivered
on those markets. With Kevin O'Brien on board, we have one of the best
executives in broadcasting running our business. Kevin has a great reputation,
especially in two particular elements: (1) a history of producing results and
(2) a history of building teams that produce results. You can read more about
his background in the news release in your packets.
{graphic omitted}
In both of our businesses we are implementing a variety of programs to
strengthen our company and drive revenue growth. Steve and Kevin will address
them in their sections, but here are some highlights.
Steve will discuss our strong home and family positioning, with particular
emphasis on how we're growing existing products. He'll also talk about how
we're creating new and diversified revenue streams, with a focus on
nonadvertising businesses. Finally, he'll take a look at how we're expanding
beyond traditional distribution channels through brand management and
technology.
Kevin will give you his initial observations about the Broadcasting Group.
He'll then focus on initiatives related to sales and news. He'll talk about
his expectations for the group and how he plans to run the business.
- 3 -
{graphic omitted}
Those of you who have followed Meredith for a number of years know the
tremendous job we did to position ourselves for superior growth coming out of
the 1991 recession. We believe we can do that again.
In that earlier recession, we took very bold and direct marketing steps to give
us a large share of mind and share of voice with advertisers.
One of the things we're doing right now is running a trade advertising campaign
to remind the advertising community of our leadership position and our unique
ability to serve the valuable home and family market segment. Many of the
pictures you see on the agenda slides are from this campaign, and we used these
photos in our 2001 annual report (copies our latest annual report are available
in the foyer).
We believe this marketing campaign is critical to the ongoing success of our
business, especially at a time like this when others are pulling back.
I'll now turn the program over to Steve, who will discuss our leadership role
in the home and family market, our diversified revenue streams and our focus on
brand management and technology.
{graphic omitted}
STEVE
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Thanks, Bill. Strong and sustaining brands are invaluable assets in economic
slowdowns. Meredith's magazine business has been a leader in the home and
family market since 1902. Meredith Corporation reaches 75 million Americans
each month, with our magazines accounting for more than 50 million of those
impressions.
This is a very valuable audience to marketers and advertisers. American home
ownership is at an all-time high and spending on remodeling approaches $180
billion per year. We reach the decision makers in the home, giving us an
advantage as we serve both the individual consumer and advertiser in this
lucrative marketplace.
- 4 -
{graphic omitted}
Our homes have become more important in today's unsettled world. With their
sense of security badly shaken and the economy worsening, Americans are
"burrowing," according to a new survey by Wirthlin Worldwide.
Patricia Kidd, Advertising and Communications Practice Leader for Wirthlin
Worldwide, stated, "Savvy marketers are taking close note of this seismic shift
in the American psyche. We've spent a decade trying to explore the edges of
life. Now, Americans are telling us they want to go home, cook dinner and
watch television." This is a clear advantage for Meredith in both of our core
businesses.
She also said marketers should keep in mind that consumers are looking to the
familiar, and that this could be a great time for established brands,
especially those that reconnect with times of earlier innocence. These trends
will clearly benefit Meredith, given our strong brands and our home and family
expertise.
{graphic omitted}
Two of our most well-established and recognized brands serving the home and
family market are Better Homes and Gardens and Ladies' Home Journal. They lead
the women's service field with a 39 percent ad revenue market share, making
them two of the most valuable brands in the media marketplace.
{graphic omitted}
Better Homes and Gardens was first published in 1922 and Ladies' Home Journal
in 1883. The two magazines have a combined monthly circulation of nearly 12
million, and readership of more than 40 million. They are megabrands that
consistently deliver their respective home and family target audiences year in
and year out.
As Bill mentioned earlier, the October issue of Better Homes and Gardens
pictured here is the best-selling October issue at newsstand since 1998.
- 5 -
{graphic omitted}
Better Homes and Gardens ranked first in total PIB advertising revenue among
monthly magazines for the most recent trailing 12 months, surpassing such
well-known names as Good Housekeeping, Reader's Digest, Cosmopolitan, In Style
and Martha Stewart Living.
{graphic omitted}
In addition, our Country Home, Traditional Home and MORE magazine franchises
are performing well. These are very distinct lifestyle brands with loyal
subscriber bases.
We are increasing the frequency of Country Home to 10 times a year, and its
rate base will grow 10 percent to 1.1 million -- effective January 2002.
Country Home's share of advertising pages in its field grew by nearly two
points for fiscal 2001, while its revenue share grew by more than three points.
Traditional Home has also been a successful, growing franchise. We will
publish the magazine eight times in calendar 2002, versus six times in calendar
2001. We are also raising its rate base to 825,000. That makes Traditional
Home's rate base the second highest in the upscale home furnishings category,
after HOUSE BEAUTIFUL and ahead of ARCHITECTURAL DIGEST.
We recently raised the frequency of MORE magazine to 10 times a year, and are
raising its rate base to 700,000 in February 2002. Advertising revenues for
MORE continued their growth trend during the fiscal 2002 first quarter.
Our goal is to build these franchises into megabrands as well.
{graphic omitted}
Turning to new magazine development, to date we have published two test issues
of Living Room, a lifestyle and decorating magazine that targets women in their
late 20s and 30s. We're currently conducting focus groups and plan a
circulation dry test in the spring of 2002. Based on those activities, we'll
determine next steps for this potential new magazine.
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Our special interest publications are a megabrand in their own right. They are
sold primarily on newsstands. In fiscal 2001, we published 46 titles and 120
issues. Together, they are the No. 2 profit center in our Publishing Group.
We continue to expand this franchise, developing new products like the recently
published 100 Decorating Ideas Under $100. It performed very well at
newsstand, delivering meaningful revenue and operating profit.
{graphic omitted}
To more effectively sell pages across our lineup of strong titles, we formed
Meredith Corporate Solutions. It is designed to use the full range of our
company assets, providing clients with comprehensive advertising and marketing
programs. Additionally, Corporate Solutions has been successful at aggregating
complementary assets from other media companies -- such as Viacom Plus -- to
meet client needs.
On this slide you see an example of a program that Meredith Corporate Solutions
developed at retail for Toyota and The Home Depot. This was an important
aspect of the launch of the Toyota Tundra pickup truck.
We have nearly 20 of these cross-platform programs in the proposal stage with a
wide variety of major clients, including pharmaceutical companies, auto
manufacturers, appliance makers and carpet suppliers.
In addition, our recently launched home solutions initiative is designed to
increase our market share and revenues in the shelter advertising category by
taking a coordinated approach to selling specific accounts. As part of this
initiative we recently signed a significant program with Marvin Windows,
expanding an existing relationship with this important client.
- 7 -
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To wrap up this section, I want to highlight some encouraging recent data.
According to the PIB Group Publishers Report, for January through October 2001
Meredith showed a greater increase in magazine advertising revenue (at over 5
percent) than 19 of the top 20 reported companies.
So as you can see, our magazines are wonderful engines for growth, with
well-established brands, a history of serving the home and family market,
organic growth through rate base and frequency increases, and favorable
demographics.
Now let's move to our second agenda item. For some time we have recognized the
importance of leveraging our brands to broaden our revenue streams, while
reducing our exposure to the volatile advertising market. I'd like to take a
look at our nonadvertising businesses to help you understand how we've moved
well beyond selling advertising pages to providing broader programs for our
corporate customers.
{graphic omitted}
Approximately 55 percent of the Publishing Group revenue comes from
nonadvertising sources. This is obviously an important fact in light of the
current weak advertising market.
Sources of nonadvertising revenues include integrated marketing, book
publishing, and brand licensing. I'll discuss each of these areas in my
comments that follow, saving the discussion of our industry-leading newsstand
performance -- which is also an important nonadvertising revenue stream -- for
the next section.
{graphic omitted}
But first, I want to set up this section with a discussion of our database,
because it works across all of our businesses to help us more effectively reach
individual consumers.
Our 60-million name database contains information on about 70 percent of U.S.
home-owning households. It is one of our greatest strengths. We use it
primarily for targeting circulation mailings and launching new magazines.
Increasingly, we are using it to meet the marketing needs of our customers,
especially in the Integrated Marketing business.
- 8 -
{graphic omitted}
Turning to integrated marketing, our knowledge of and access to the home and
family market allow us to partner with companies to create marketing programs
that not only reach -- but directly influence their target consumer audiences.
We combine the full range of Meredith resources with direct consumer access to
produce measurable results for our clients. In return we establish long-term
revenue streams with limited exposure to the advertising market. Let me give
you a few examples.
We are currently working with both Carnival Cruise Lines and United Healthcare
to publish and distribute company newsletters and customer loyalty magazines.
The combined periodicals of both companies account for more than 15 million
direct-to-the-consumer mailings annually.
For Hunter Douglas, the nation's leading maker of window fashions, we recently
published a 144-page book focusing on helpful window treatment solutions for
consumers.
And for Sub-Zero, the manufacturer of premium refrigerators and other
appliances, we are producing a high-end kitchen design book called Great
American Kitchens.
These are just a few recent examples of how we are partnering with blue-chip
companies to help them market their products and services directly to
consumers. We are a leader in this marketplace, and we have significant room
for growth in the future.
{graphic omitted}
Another Meredith nonadvertising business is book publishing. We have 300
titles in print sold primarily through retail distribution channels.
Last year, we sold more than 9 million books. Some of our top titles include
the Better Homes and Gardens line of home decorating, cooking and gardening
books, as well as co-branded titles with Ortho and The Home Depot. Like our
magazines, our book business has a very strong position in the home and family
market.
We have a copy of one of our books for each of you. Feel free to pick one up
at the exit after our presentation.
- 9 -
{graphic omitted}
We currently have a significant garden and outdoor living brand licensing
relationship with Wal-Mart.
Building on that strong base, we believe there are opportunities to expand our
current relationships, develop new licensing arrangements and generate new
revenue and profit streams.
This slide highlights the categories where we have consumer permission to
participate at retail, including decorating, seasonal products, and building
and remodeling. We believe there is great potential for expansion of our brand
licensing initiatives.
We also see the opportunity to increase product sales to the individual
consumer through the pages of certain magazines and SIPs.
{graphic omitted}
With that look at our nonadvertising revenue sources, I'd like to now discuss
how we're expanding our publishing business with brand management and
technology. In this section, I want to highlight our ability to move beyond
traditional channels to grow our business.
{graphic omitted}
Extending the Better Homes and Gardens brand has been a cornerstone of this
effort. It has a powerful connection to readers, marketers and advertisers.
For every revenue dollar generated by Better Homes and Gardens magazine, nearly
an additional dollar is generated by the products and services under its
umbrella. This chart details some Better Homes and Gardens brand extensions.
- 10 -
{graphic omitted}
We've been able to apply that branding expertise to the work we do for other
companies, building brand extensions for them as well. This effort has
increased our distribution channels, greatly expanding the number of outlets
where consumers can purchase Meredith products.
For Ortho, we have published 50 new or revamped titles since we took over the
business in 1997. This relationship has given us access to home and garden
centers as a greatly expanded distribution channel.
We've also added partnerships with Waverly and Stanley Works. And we recently
created a cornerstone book for Jo-Ann Stores that contains comprehensive
information about crafting. It is being sold at more than 1,000 Jo-Ann stores
around the country, at major book retailers and on the Internet.
In fiscal 2001 we introduced four new books for The Home Depot. That's in
addition to the six titles we produced over the past five years. We are now
the category manager for books and magazines for The Home Depot, allowing for
expansion of our retail reach from their 1000 stores.
{graphic omitted}
We're also expanding our distribution channels through the strong growth of our
newsstand sales. As this chart indicates, we have expanded our newsstand
revenues and unit sales, while the industry has experienced declines.
Additionally, our sell-though increased during the period, while sell through
for the industry declined.
And, we enjoy very strong pricing power at the newsstand, a particularly unique
attribute in any economic slowdown. For example, our weighted average cover
price in fiscal 2001 was $4.40, versus $2.76 for the industry.
Our newsstand sales are supported by our strong stable of magazines and our
special interest publications, along with nearly 100,000 additional check-out
pockets (bringing our total to more than 600,000).
As Bill mentioned earlier, our newsstand unit sales declined the week after the
September 11 attacks, according to a survey that tracks our leading retailers
and a cross section of supermarkets. They have since recovered and are running
ahead of levels experienced prior to September 11.
- 11 -
{graphic omitted}
In addition to developing alternate distribution channels, we are finding new
ways to more efficiently generate subscriptions through improved technology.
We operate 26 branded Web sites, spanning our magazine and broadcasting
properties. BHG.com is consistently ranked in the top ten of all magazine
sites in terms of traffic. It reaches 1 million unique visitors monthly, and
last year it generated more than 300 million page views.
Traffic across our publishing sites during November increased significantly
versus the prior year with page views reaching nearly 40 million and nearly 3
million unique visitors coming to our sites during the month.
{graphic omitted}
That growth in traffic is critical in facilitating our efforts to acquire
subscription orders over the Internet. Today, the industry cost of acquiring a
subscription through direct mail is about $20. We believe over time we can
reduce our subscription acquisition costs significantly by shifting orders to
the Internet.
Our goal is to generate 1.5 million gross online subscriptions by 2003. We
generated close to 300,000 new magazine subscription orders via the web in
fiscal 2001, and we are on track to meet and possibly exceed our three-year
goal.
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{graphic omitted}
Before I turn the program over to Kevin, I want to reiterate our Publishing
Group strengths and growth initiatives:
1. We are the leading publisher serving the growing home and family market.
2. We are skilled at developing and executing sophisticated marketing programs
for clients, and we are the undisputed leader in newsstand performance.
3. We have a top-notch management team that I believe is skillfully
negotiating a difficult business environment.
4. We will grow our existing products and add new, diversified revenue streams
with a particular emphasis on nonadvertising businesses.
5. And we will expand beyond traditional distribution channels through brand
management and technology.
As a result, I believe we are positioned exceptionally well for growth when we
see the recovery of the current advertising market.
{graphic omitted}
Now Kevin will turn to our television broadcasting business, where we think
there is a major development opportunity.
As many of you know, Kevin joined us from Cox Broadcasting, where he served as
Executive Vice President of the Cox Television Independent Group, supervising
five Cox stations around the country. At the same time, he served as Vice
President and General Manager of KTVU, Cox's very successful FOX affiliate in
San Francisco. Previously, he also served as vice president/general manager at
leading stations in New York City, Washington, D.C. and Cincinnati.
KEVIN
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Thanks, Steve. It's very good to be here today as a part of the Meredith team.
I'm going to begin my remarks by discussing some of my initial observations
about the Meredith Broadcasting Group, followed by some thoughts about my
strategy going forward.
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{graphic omitted}
First, Meredith's markets are outstanding. Eight of our 12 stations are
located in the nation's top-36 markets. And, the majority of them are located
in fast-growing regions, with our top-three markets among the most attractive
in the nation.
While the group's financial performance is clearly unsatisfactory, our revenue
performance is outpacing the industry in calendar 2001, according to TVB
figures. This is an indication that the local sales initiatives underway when
I joined the company are beginning to pay off. This is a good start, but we
can do more. Every employee at each of our stations needs to be focused on
generating revenue. It's a change in culture -- a change in thinking -- that I
will instill in the stations.
I'll get into the details in a moment.
{graphic omitted}
In addition to our geographic strength, we're affiliated with growing networks.
Fox and CBS were among the most successful in growing ratings in the November
book. This bodes well for our stations. Remember that five of our stations
are affiliated with CBS, including our top-two stations in Atlanta and Phoenix.
Six of our stations are affiliated with FOX, and our other station is an NBC
affiliate.
I firmly believe a major development opportunity exists for the Meredith
Broadcasting Group, and my focus must be in two areas: sales (or generating
more revenue) and programming (more specifically news).
During the past year, Meredith implemented programs that should improve the
long-term growth of our Broadcasting Group. We embarked on a concentrated
sales improvement effort, and in fiscal 2001 completed our multi-year news
expansion effort. Those initiatives provide a strong base as I implement my
performance improvement initiatives. I'll get to the news opportunities in a
moment.
I don't want to make the picture sound too rosy. Much, much work still needs
to be done to fix this group. I didn't come here to sit back and bark orders.
I intend to roll up my sleeves and make improvements so we'll be a leader in
our industry. Let me tell you how I will build upon this foundation to greatly
improve the group's performance.
- 14 -
{graphic omitted}
Let me begin with sales.
First, I must keep our sales teams focused on growing our revenue share. Doing
things the way they have always been done in broadcasting is unacceptable to
me. We need to find the best way to work with the rep firms to grow national
advertising. More importantly, however, each employee at each station must
focus on ways to generate revenues -- whether directly through sales or
indirectly through support.
Second, we must expand our advertiser base. We will find new local
advertisers, including those advertisers who are nontraditional or
new-to-television. We will also place more emphasis on cause marketing --
finding organizations that have marketing or other promotional dollars but have
not necessarily allocated them to television. We've been successful with that
effort in Greenville, where we aired advertisements related to the Greenville
Library, and in Orlando, where we promoted a road construction safety campaign.
Finally, I believe strongly in rewarding good work. I expect the best and
reward the best, which will in turn attract the best. Conversely, employees
understand that if they do not perform, changes will be made. I believe in
putting together a team and making a collegial effort to accomplish goals. My
job is to find the players, help set the goals, and reward success.
{graphic omitted}
Turning to news, there is major potential at our stations in Atlanta and
Phoenix (both are CBS affiliates, and they are our two largest markets).
Right now, these two stations trail their competitors. I see that as a great
opportunity. I will instill fundamentals related to news and reporting that
will lead to ratings growth over time. Given the size of these markets, share
growth can be very profitable. I want to have more local news crews out in our
communities doing more live shots. I want to demonstrate to viewers that we
are a part of our local communities.
I also believe strongly in conducting solid research studies to tell us exactly
what the viewers like and dislike about our newscasts, along with their
expectations of local news. I'll discuss research more in a moment.
Again, people are critical to this business. I will find and retain the best
news personnel possible to ensure top news performance.
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{graphic omitted}
I believe it will be critical to establish the KOB (Kevin O'Brien) culture at
each of our stations. Without exception, I will expect each of our employees
to adhere to these principles:
1. Relentless execution of all initiatives, large or small. Every employee
must give his or her all, including me.
2. Sales orientation in all that we do. For each task we perform, we have to
ask, "does this generate more revenue?"
3. Total client orientation. We are not a sales force. We must be partners
with our advertisers. We need to understand their businesses, and help
them expand.
As a result of the short-term initiatives I've highlighted, we will bring in
more money directly and through higher ratings (particularly in news), and set
a management structure in place to assure a revenue-building environment in the
future.
{graphic omitted}
Now let's take a look at some longer-term initiatives. First, I believe that
branding local news is imperative. Research is critical. We need to know what
the viewers want, then give it to them. And then, most importantly, we need to
tell them we are delivering on their request.
I'm currently in negotiations with two of the best news consultants in
broadcasting. These organizations will enable us to tie research and market
data together in order to establish tactics and strategies to move our
newscasts forward.
I want to get this process moving immediately, so we can make the necessary
adjustments to our newscasts as soon as possible.
- 16 -
{graphic omitted}
I will soon begin an intensive budgeting process that will allow me to set
optimistic, yet achievable goals and objectives with regard to sales, ratings
and news.
I mentioned the KOB culture earlier. Part of that culture is that I expect
each of my stations to strive for No. 1 status in sales, ratings and news. I
achieved that when I managed KTVU TV in San Francisco, so I know it's possible.
Obviously I can't guarantee that all 12 of our stations will be No. 1 in
everything all the time. However, I can instill a culture in the group that
will make it possible to get there, and that will encourage employees to reach
for those goals. I don't like excuses. I want results. I am going to instill
a culture where we are focused on winning.
As I get to know our stations and their markets better, I'll be able to put
together specific thresholds. Some stations will have short-term goals and
others will be longer-term. The key is that my expectations will be high.
{graphic omitted}
And finally, the many regulatory changes in the broadcasting industry mean that
we must be nimble, as opportunities may come up for us to realign our portfolio
of stations through trades, acquisitions or duopolies.
{graphic omitted}
Let me close my section by telling you my mantra for the Meredith Broadcasting
Group:
Each station employee will work each and every day to maximize the profits of
the Broadcasting Group. Each station will initiate and cultivate an atmosphere
of a collegial management style with good morale; clear, achievable objectives
and relentless execution on a daily basis.
With that look at television broadcasting, Suku will now provide a financial
review.
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{graphic omitted}
SUKU
- ----
Thanks, Kevin. Let me begin by showing you our strong history of earnings per
share growth. We slowed in fiscal 2001 because of the advertising recession,
however we expect to restore EPS growth as our revenue growth and
cost-reduction initiatives kick in and -- more importantly -- as the country
recovers from the current advertising recession.
{graphic omitted}
We are committed to maintaining a strong balance sheet, as depicted on this
chart. At September 30, 2001, our debt-to-EBITDA ratio was 2.39 much lower
than the 3.81 industry average.
Our debt outstanding at the end of the first fiscal quarter was $455 million.
We have had no difficulty in satisfying our debt covenants and feel comfortable
managing our cost of debt in the current environment.
{graphic omitted}
We continue to be a strong generator of cash on a sustained basis. For
example, in fiscal 2001 we generated nearly $165 million in cash. We used that
to make $56 million in capital investments, pay $16 million in dividends,
reduce our debt by $35 million and repurchase $44 million in stock. I should
note that fiscal 2001 was an unusually high year in terms of capital
expenditures. Our more normalized level is in the mid $20 million range,
especially after this fiscal year when our conversion to digital will be
complete.
{graphic omitted}
In 2001 we repurchased 1.3 million Meredith shares.
We remain committed to our share repurchase program. During the first quarter
of fiscal 2002, we repurchased nearly half a million shares, up 10 percent from
the prior-year period. In the past three years we have purchased more than 4
million shares. We have nearly 2 million shares available in our current share
repurchase authorization.
- 18 -
{graphic omitted}
Let me briefly provide you with an update on business since our October 29
conference call.
Publishing -- On our October 29 conference call, we told you that our second
quarter advertising pages were down in the mid-single digits and revenues were
down in the low-double digits. Now, with most of the most of the second
quarter issues closed, pages are down in the high-single digits and revenues
are still down in the low-double digits.
Broadcasting -- On October 29 we told you that our second quarter television
pacings were down in the mid-teens. At this time, our second-quarter
television pacings are still down in the mid-teens, although without political,
they are flat. Remember that pacings are a snapshot in time and change
frequently.
External costs -- We remain concerned about the rising trends in external
costs, including healthcare, pension, postal and programming.
Taking all of this into consideration, we expect that second quarter earnings
will be in a range of 13 to 17 cents per share. This is consistent with the
guidance we provided on our October 29 conference call. Of course, that
estimate would change if events again interrupt broadcast television
programming.
At this time we don't have enough visibility to comment on the full year due to
the current political and economic uncertainties. However, we do not see any
signals of a near-term rebound in advertising demand.
While it's hard to predict the long-term effects of September 11 on our
business, let me reiterate Steve's message. The type of home and family
content and service journalism we provide will likely be even more relevant as
Americans embrace a lifestyle with more focus on their families and their
homes. Now I'll turn the program to Bill for our conclusion and the Q&A.
- 19 -
{graphic omitted}
BILL
- ----
In closing, let me provide some investment highlights.
- -- We are the leading media company serving the home and family market.
- -- We are successfully leveraging our leading media brands, our resources and
our reputation in the home and family market to expand our revenue streams.
- -- We are transforming our publishing business through brand management and
technology, and we see a major development opportunity in broadcasting.
- -- And finally, we are committed to maintaining a strong financial position,
generating significant cash flows, and producing profitable returns for
shareholders.
At this time we'll be happy to take your questions.
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INFORMATION RELATING TO
FORWARD-LOOKING STATEMENTS
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. 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; increased consolidation among major advertisers or other
events depressing the level of advertising spending; the unexpected loss of one
or more major clients; changes in consumer reading, purchasing and/or
television viewing patterns; unanticipated increases in paper, postage,
printing or syndicated programming costs; changes in television network
affiliation agreements and/or network affiliation relationships; technological
developments affecting products or methods of distribution such as the Internet
or e-commerce; changes in government regulations affecting the company's
industries; unexpected changes in interest rates; and any acquisitions and/or
dispositions.
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