News Releases

Meredith Reports Fiscal 2009 First Quarter Earnings
PRNewswire-FirstCall
DES MOINES, Iowa
(NYSE:MDP)

DES MOINES, Iowa, Oct. 29 /PRNewswire-FirstCall/ -- Meredith Corporation (NYSE: MDP), the leading media and marketing company serving American women, today reported fiscal 2009 first quarter earnings per share of $0.41 and revenues of $370 million, in-line with expectations. This compares to fiscal 2008 first quarter earnings per share of $0.68 and revenues of $404 million.

"The weak economy continues to significantly impact the demand for advertising. However, other fundamentals of our business remain strong," said Stephen M. Lacy, Meredith's President and Chief Executive Officer. "Our circulation metrics and news ratings are solid. Our non-advertising related businesses, particularly Meredith Integrated Marketing and brand licensing, are posting strong revenue and profit growth. Additionally, political advertising revenues are meeting expectations."

Lacy noted that Meredith is continuing to execute a performance improvement plan that is focused on gaining market share, growing new revenue streams and practicing aggressive expense control. Meredith's expenses declined approximately 3 percent during the fiscal first quarter compared to the year-ago period, even with a 22 percent increase in paper prices. Excluding acquisitions, total company expenses declined 5 percent.

"We have a solid balance sheet, modest levels of debt at a low cost of funds and adequate liquidity supported by strong free cash flow," Lacy said. "We have maintained this rock-solid financial position for years, and it is even more important in this period of economic uncertainty."

  OPERATING RESULTS

  Publishing

Fiscal 2009 first quarter Publishing operating profit was $33 million and revenues were $300 million, compared to operating profit of $55 million and revenues of $330 million in the year-ago period. Advertising revenues were $148 million, versus $181 million in the first quarter of fiscal 2008, when Publishing advertising revenues grew 13 percent.

Companies that operate in Meredith's endemic advertising categories -- including food and beverages, prescription and non-prescription drugs, and home -- have been impacted greatly by the current economic downturn. Combined, Meredith magazine advertising revenues in these categories declined over 25 percent in the first quarter, according to Publishers Information Bureau (PIB).

"These categories have consistently outpaced advertising industry growth rates," Lacy said. "We're confident they will serve us well in the long-term."

Meredith has put increased emphasis on diversifying its advertising categories, and that strategy has partially offset year-to-date weakness. For example, Meredith increased advertising revenues and outperformed the industry in several non-core categories in the quarter, including beauty, travel, entertainment and apparel. Combined, Meredith's advertising revenues in these categories increased more than 25 percent in the first quarter of fiscal 2009 compared to the prior-year quarter, according to PIB.

"We've taken steps to strengthen our sales organizations and better leverage our scale and the efficiency of our reach," Lacy said. "This has enabled us to increase our share of budgets in more diverse advertising categories as well as grow net advertising revenue per magazine page, which was up approximately 3 percent in the quarter."

Meredith's profit contribution and related margin in its subscription activities increased during the quarter. Total circulation revenues declined, due to softer retail sales and Meredith's plan to publish fewer newsstand-only Special Interest titles in the quarter.

Meredith Integrated Marketing delivered another outstanding quarter, as operating profit rose 30 percent. Results were driven primarily by strong performance in the core custom publishing business, along with increased contributions from acquisitions made over the last two years.

Brand licensing operating profit rose more than 30 percent. During the quarter, more than 550 Better Homes and Gardens-branded home-related products were rolled out at Walmart stores across the country. This initiative -- along with a very successful licensing agreement with Universal Furniture and the launch of the Better Homes and Gardens Real Estate Service by Realogy -- helped Better Homes and Gardens take the No. 1 spot on Adweek magazine's 2008 Magazine Brand Leaders list.

Broadcasting

Fiscal 2009 first quarter Broadcasting operating profit was $11 million, compared to $14 million in the year-ago period. Revenues were $70 million, versus $75 million in the prior-year quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $17 million, compared to $20 million in the prior-year quarter.

Fiscal 2009 first quarter net political revenues were $6 million, as expected, compared to net political revenues of $1 million in the prior-year quarter. The Olympics were not a major factor for Meredith, as its sole NBC station in Nashville generated approximately $1 million in Olympic-related revenues during the quarter.

Ongoing industry-wide weakness in core television advertising categories such as automotive, professional services, restaurants, retail and furnishings impacted Broadcasting performance in the quarter. Combined advertising revenues in these categories declined nearly 20 percent.

The Meredith Broadcasting Group is also putting increased emphasis on growing non-core advertising categories in this period of economic weakness. For example, combined advertising revenues increased more than 15 percent in categories such as entertainment, electronics, travel and utilities during the quarter.

In the July 2008 book, five Meredith stations grew ratings in adults 25-54 in their evening and late newscasts, including Phoenix, Nashville and Kansas City. "Our top priorities are growing news ratings and strengthening our local brands, which will help drive higher advertising revenues over time," Lacy said.

The Better show, which features content inspired by Meredith's publishing brands and is produced by Meredith Video Solutions, debuted in 30 additional markets this fall, increasing its national distribution to more than 40 markets. Earlier this month, Meredith reached agreements to distribute Better to stations in three Top 20 markets -- San Francisco (#5), Cleveland (#17) and Denver (#18). Content from the Better show is also available online at http://www.better.tv/ and http://www.parents.tv/, Meredith's broadband video channels.

OTHER FINANCIAL INFORMATION

Meredith's total debt was $465 million and its weighted average interest rate was approximately 4.5 percent as of September 30, 2008. Meredith's debt- to-EBITDA ratio was a conservative 1.6 to 1. The company has repurchased approximately 750,000 shares in fiscal 2009, leaving 1.6 million shares remaining under current share repurchase authorizations.

"We are well-positioned to weather the current softness in advertising and the turbulence in the financial markets, as well as make acquisitions and investments when opportunities arise," Lacy said. "We have a strong balance sheet with a low level of debt, and are exercising prudent cash management."

All earnings per share figures in the text of this release are diluted. Both basic and diluted earnings per share can be found in the attached condensed consolidated statements of earnings.

OUTLOOK

Many of Meredith's largest advertisers continue to face a challenging economic environment. The resulting advertising weakness, partially offset by political advertising at Meredith's television stations, will impact the company's revenue performance at least through the second quarter of fiscal 2009. In addition, operating results will continue to be impacted by significantly higher paper prices.

Currently, fiscal 2009 second quarter Publishing advertising revenues are down in the high teens, compared to 8 percent growth in the second quarter of fiscal 2008. Broadcasting non-political advertising pacings are currently down in the high 20s, compared to 6 percent growth in the second quarter of fiscal 2008. Meredith expects approximately $15 million in political advertising revenues at its television stations in the second fiscal quarter, in-line with expectations.

Meredith expects paper prices in the fiscal second quarter of 2009 will average approximately 20 percent higher than in the year-ago period. Meredith's average tax rate is expected to be approximately 41.8 percent in the second quarter, and 39.5 percent for full fiscal 2009.

Currently, Meredith expects full year earnings per share of $2.50 to $2.85. Second quarter earnings per share are expected to range from approximately $0.47 to $0.52.

A number of uncertainties remain that may affect our outlook as stated in this press release for results in the second quarter and full fiscal year. These include the duration and severity of the current economic downturn and its impact on calendar 2009 advertising budgets; the performance of the Company's retail businesses; and paper prices. These and other uncertainties are referenced below under "Safe Harbor" and in certain of the Company's SEC filings.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on Oct. 29, 2008, at 11 a.m. EDT (10 a.m. CDT) to discuss fiscal first quarter results. A live webcast will be accessible to the public on the Company's web site, http://www.meredith.com/, and a replay will be available for one week after the call. A transcript will be available within 48 hours following the conference call on http://www.meredith.com/.

RATIONALE FOR USE AND ACCESS TO NON-GAAP MEASURES

Management uses and presents GAAP and non-GAAP results to evaluate and communicate the performance of the Company. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA and free cash flow are common supplemental measures of performance used by investors and financial analysts. Management believes that EBITDA and free cash flow provide additional analytical tools to clarify the Company's results from core operations and delineate underlying trends. Meredith does not use EBITDA or free cash flow as a measure of liquidity or funds available for management's discretionary use because they include certain contractual and non- discretionary expenditures.

Reconciliations of non-GAAP to GAAP measures are included in the attached tables. The attached consolidated financial statements and reconciliation tables will be made available on the Company's web site, http://www.meredith.com/. Please click on "Non-GAAP/GAAP Reconciliation."

SAFE HARBOR

This release contains 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 Meredith's operations. Statements in this announcement that are forward-looking include, but are not limited to, the statements regarding broadcasting pacings and publishing advertising revenues, along with Meredith's earnings per share outlook. 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 expenses; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting Meredith's industries; unexpected changes in interest rates; and the consequences of acquisitions and/or dispositions. Meredith undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT MEREDITH CORPORATION

Meredith Corporation (NYSE: MDP:)(NYSE: http://www.meredith.com) is the leading media and marketing company serving American women. Meredith combines well- known national brands -- including Better Homes and Gardens, Parents, Ladies' Home Journal, Family Circle, American Baby, Fitness and More -- with local television brands in fast growing markets. Meredith is the industry leader in creating content in key consumer interest areas such as home, family, health and wellness and self-development. Meredith then uses multiple distribution platforms -- including print, television, online, mobile and video -- to give consumers content they desire and to deliver the messages of its marketing partners. Additionally, Meredith uses its many assets to create powerful custom marketing solutions for many of the nation's top brands and companies. The goals of these programs are to increase consumer loyalty and produce repeated consumer interaction. In the last two years, Meredith has significantly added to its capabilities in this area through the acquisition of cutting-edge companies in areas such as online, word-of-mouth and database marketing. Meredith employs more than 3,000 people throughout the United States. Meredith's fiscal 2008 revenues were $1.6 billion.

  Meredith Corporation and Subsidiaries
  Consolidated Statements of Earnings (Unaudited)

  Three Months Ended September 30,                2008              2007
  (In thousands except per share data)
  Revenues
  Advertising                                   $215,536          $254,335
  Circulation                                     74,022            80,286
  All other                                       80,880            69,452
    Total revenues                               370,438           404,073
  Operating expenses
  Production, distribution, and editorial        173,212           175,708
  Selling, general, and administrative           148,923           155,570
  Depreciation and amortization                   10,858            12,118
    Total operating expenses                     332,993           343,396
  Income from operations                          37,445            60,677
  Interest income                                    120               352
  Interest expense                                (5,434)           (6,163)
    Earnings from continuing operations
     before income taxes                          32,131            54,866
  Income taxes                                    13,494            21,398
    Earnings from continuing operations           18,637            33,468
  Loss from discontinued operations,
   net of taxes                                        -               (98)
  Net earnings                                   $18,637           $33,370

  Basic earnings per share
  Earnings from continuing operations              $0.41             $0.70
  Discontinued operations                            -                 -
  Basic earnings per share                         $0.41             $0.70
  Basic average shares outstanding                45,241            47,795

  Diluted earnings per share
  Earnings from continuing operations              $0.41             $0.68
  Discontinued operations                            -                 -
  Diluted earnings per share                       $0.41             $0.68
  Diluted average shares outstanding              45,368            48,828

  Dividends paid per share                        $0.215            $0.185



  Meredith Corporation and Subsidiaries
  Segment Information (Unaudited)

  Three Months Ended September 30,                2008              2007
  (In thousands)
  Revenues
  Publishing                                    $300,035          $329,522
  Broadcasting
    Non-political advertising                     61,648            72,492
    Political advertising                          5,871             1,072
    Other revenues                                 2,884               987
      Total broadcasting                          70,403            74,551
  Total revenues                                $370,438          $404,073

  Operating profit
  Publishing                                     $33,184           $55,433
  Broadcasting                                    10,696            13,577
  Unallocated corporate                           (6,435)           (8,333)
  Income from operations                         $37,445           $60,677

  Depreciation and amortization
  Publishing                                      $3,828            $5,200
  Broadcasting                                     6,069             6,378
  Unallocated corporate                              961               540
  Total depreciation and amortization            $10,858           $12,118

  EBITDA(1)
  Publishing                                     $37,012           $60,633
  Broadcasting                                    16,765            19,955
  Unallocated corporate                           (5,474)           (7,793)
  Total EBITDA(1)                                $48,303           $72,795

  (1) EBITDA is earnings from continuing operations before interest, taxes,
      depreciation, and amortization.



  Meredith Corporation and Subsidiaries
  Condensed Consolidated Balance Sheets (Unaudited)

                                             September  30,       June 30,
  Assets                                          2008              2008
  (In thousands)
  Current assets
  Cash and cash equivalents                      $28,670           $37,644
  Accounts receivable, net                       225,647           230,978
  Inventories                                     50,111            44,085
  Current portion of subscription
   acquisition costs                              57,525            59,939
  Current portion of broadcast rights             21,845            10,779
  Other current assets                            20,519            19,665
  Total current assets                           404,317           403,090
  Property, plant, and equipment                 454,207           446,935
  Less accumulated depreciation                 (252,538)         (247,147)
  Net property, plant, and equipment             201,669           199,788
  Subscription acquisition costs                  62,053            60,958
  Broadcast rights                                 7,781             7,826
  Other assets                                    71,721            74,472
  Intangible assets, net                         778,532           781,154
  Goodwill                                       532,407           532,332
  Total assets                                $2,058,480        $2,059,620

  Liabilities and Shareholders' Equity
  Current liabilities
  Current portion of long-term debt             $140,000           $75,000
  Current portion of long-term
   broadcast rights payable                       22,636            11,141
  Accounts payable                                83,842            79,028
  Accrued expenses and other
   liabilities                                   104,612           102,707
  Current portion of unearned
   subscription revenues                         170,509           175,261
  Total current liabilities                      521,599           443,137
  Long-term debt                                 325,000           410,000
  Long-term broadcast rights payable              17,518            17,186
  Unearned subscription revenues                 157,393           157,872
  Deferred income taxes                          146,509           139,598
  Other noncurrent liabilities                   107,606           103,972
  Total liabilities                            1,275,625         1,271,765
  Shareholders' equity
  Common stock                                    35,953            36,295
  Class B stock                                    9,164             9,181
  Additional paid-in capital                      49,711            52,693
  Retained earnings                              699,343           701,205
  Accumulated other comprehensive
   income (loss)                                 (11,316)          (11,519)
  Total shareholders' equity                     782,855           787,855
  Total liabilities and shareholders'
   equity                                     $2,058,480        $2,059,620



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

  Three Months Ended September 30,                  2008              2007
  (In thousands)
  Net cash provided by operating activities       $44,549           $61,806

  Cash flows from investing activities
    Acquisitions of businesses                       (726)                -
    Additions to property, plant, and equipment    (9,608)           (4,273)
    Proceeds from dispositions of assets              636                 -
  Net cash used in investing activities            (9,698)           (4,273)

  Cash flows from financing activities
    Proceeds from issuance of long-term debt      100,000            75,000
    Repayments of long-term debt                 (120,000)          (90,000)
    Purchases of Company stock                    (15,791)          (49,772)
    Dividends paid                                 (9,747)           (8,830)
    Proceeds from common stock issued                 860             2,293
    Excess tax benefits from share-based payments     853                39
  Net cash used in financing activities           (43,825)          (71,270)
  Net decrease in cash and cash equivalents        (8,974)          (13,737)
  Cash and cash equivalents at
   beginning of period                             37,644            39,220
  Cash and cash equivalents at end of period      $28,670           $25,483



  Meredith Corporation and Subsidiaries                          Tables
  Supplemental Disclosures Regarding Non-GAAP Financial Measures

  EBITDA
  Consolidated EBITDA, which is reconciled to earnings from continuing
  operations in the following tables, is defined as earnings from continuing
  operations before interest, taxes, depreciation, and amortization.
  Segment EBITDA is a measure of segment earnings before depreciation and
  amortization.


                               Three Months Ended September 30, 2008
                       Publishing   Broadcasting   Unallocated      Total
                                                    Corporate
  (In thousands)
  Revenues             $300,035       $70,403        $     -       $370,438

  Operating profit      $33,184       $10,696        $(6,435)       $37,445
  Depreciation and
   amortization           3,828         6,069            961         10,858
  EBITDA                $37,012       $16,765        $(5,474)        48,303
  Less:
  Depreciation and
   amortization                                                     (10,858)
  Net interest expense                                               (5,314)
  Income taxes                                                      (13,494)
  Earnings from continuing operations                               $18,637


                             Three Months Ended September 30, 2007
                       Publishing    Broadcasting    Unallocated     Total
                                                      Corporate
  (In thousands)
  Revenues              $329,522       $74,551        $    -       $404,073

  Operating profit       $55,433       $13,577        $(8,333)      $60,677
  Depreciation and
   amortization            5,200         6,378            540        12,118
  EBITDA                 $60,633       $19,955        $(7,793)       72,795
  Less:
  Depreciation and
   amortization                                                     (12,118)
  Net interest expense                                               (5,811)
  Income taxes                                                      (21,398)
  Earnings from
   continuing operations                                            $33,468



  FREE CASH FLOW
  Free cash flow, which is reconciled to earnings from continuing operations
  in the following tables, is defined as earnings from continuing operations
  plus depreciation and amortization less capital expenditures.

                                                   Three Months
  Period Ended September 30,                      2008      2007
  (In thousands)
  Free cash flow                                $19,887   $41,313
  Depreciation and amortization                 (10,858)  (12,118)
  Capital expenditures                            9,608     4,273
  Earnings from continuing operations           $18,637   $33,468

SOURCE: Meredith Corporation

CONTACT: Shareholder|Financial Analyst, Mike Lovell, Director of
Investor Relations, +1-515-284-3622, Mike.Lovell@Meredith.com, or Media, Art
Slusark, VP|Corporate Communications, +1-515-284-3404,
Art.Slusark@Meredith.com, both of Meredith Corporation

Web site: http://www.meredith.com/

Key Media Contacts
Art Slusark
Corporate
515.284.3404
Liz Malone
Senior Publicist
212-551-7172