News Releases

Meredith Corporation Announces Completion Of Time Inc. Acquisition And Reports Fiscal 2018 Second Quarter And First Half Results

DES MOINES, Iowa, Jan. 31, 2018 /PRNewswire/ -- Meredith Corporation (NYSE: MDP; meredith.com) announced today it has completed its acquisition of Time Inc., and that February 1, 2018, will be the first day of operations for the combined company. Time Inc. shareholders received $18.50 per share in an all-cash transaction valued at $2.8 billion originally announced on November 26, 2017.

Meredith introduces an updated market positioning and logo that reflect the strength of Meredith's national and local consumer media brands as well as its expanded portfolio of marketing solutions. (PRNewsFoto/Meredith Corporation) (PRNewsfoto/Meredith Corporation)

Meredith also announced fiscal 2018 second quarter and first half results today. The details are included later in this release.

"With this acquisition, we are creating a premier media and marketing company serving 200 million American consumers that's positioned for growth across industry-leading digital, television, print, video, mobile, and social platforms," said Meredith Corporation Chairman and CEO Stephen M. Lacy. "The combined portfolio joins the rich content-creation capabilities of many of the media industry's strongest national brands with a powerful local television business that is generating record earnings."

"I want to welcome our new employees to Meredith," said Meredith President and Chief Operating Officer Tom Harty. "Together, we are eager to start serving consumers and advertisers alike with trusted, premium multi-platform content and innovative marketing solutions. Since our announcement, teams from Meredith and Time have been developing an integration plan that has positioned us to hit the ground running. We look forward to delivering on our pledge to achieve the identified synergies and grow shareholder value."

Key Strategic and Financial Benefits of the Time Inc. Acquisition:

  • Creates an unparalleled portfolio of national media brands with greater scale and efficiency – Combined, Meredith's brands now have a readership of more than 135 million and paid circulation of nearly 60 million, with leading positions in entertainment, food, lifestyle, news and sports, parenting, and home content creation, as well as enhanced positions in the beauty, fashion, and luxury advertising categories.
  • Continues the strong and growing contribution from Meredith's Local Media Group Meredith's portfolio of 17 high-performing television stations in 12 markets is a consistent generator of strong cash flow. Meredith's stations — which reach 11 percent of U.S. television households — are primarily Big 4 network affiliates located in fast-growing markets.
  • Advances Meredith's digital position by adding significant scale – Meredith is now a Top 10 digital media company with approximately 170 million monthly unique visitors in the U.S., over 10 billion annual video views, and nearly $700 million in annualized digital advertising revenues. Meredith is well-positioned to benefit from fast-growing advertising platforms, including native, video, shopper marketing, programmatic and social. It now operates the No. 1 premium content digital network for American consumers with unmatched reach to Millennials, including 85 percent of U.S. Millennial women.
  • Provides consumer revenue diversification and growth – Meredith expects to increase consumer revenue from diversified streams, including bundled circulation activities that leverage its reach to nearly 60 million individual magazine subscribers; brand licensing; and e-commerce.
  • Enhances financial strength and flexibility – Meredith expects the acquisition will be accretive to free cash flow in the first full year of operations. Meredith anticipates generating annual cost synergies at the high end of its previously stated range of $400 million to $500 million in the first two full years of combined operations. Meredith has an excellent track record of achieving cost synergies with prior acquisitions, and is confident in its ability to optimize the cost structure of the combined business.
  • Increases Total Shareholder Return Meredith remains committed to delivering top-third Total Shareholder Return. On January 27, 2018, Meredith raised its annual dividend 4.8 percent to $2.18 per share, the 25th straight year it has raised its dividend. Meredith has now paid a dividend for 71 consecutive years.

"This portfolio of media assets offers advertisers and marketers unparalleled reach to American consumers," Harty said. "In particular, we are creating a powerful digital media business that enhances Meredith's leadership position in reaching Millennials."

Financing Highlights:

To finance the transaction, Meredith secured the following:

  • $1.8 billion of senior secured term loans (Term Loan B) maturing in 2025 and priced at LIBOR plus 3.00 percent
  • $1.4 billion of senior unsecured notes maturing in 2026 and priced at 6.875 percent
  • $350 million of a five-year senior secured revolving credit facility that is currently undrawn
  • $650 million investment from a private equity firm

These proceeds were used to finance the acquisition, refinance existing debt and pay transaction costs.

MEREDITH REPORTS FISCAL 2018 SECOND QUARTER AND FIRST HALF RESULTS

Meredith today reported fiscal 2018 second quarter earnings per share were $3.49, compared to $1.58 per share in the prior-year period. Fiscal 2018 second quarter results included the following special items:

  • A benefit of $2.92 per share related to changes to the U.S. corporate income tax rate
  • Transaction expenses of $0.23 per share related to Meredith's acquisition of Time Inc.
  • A charge of $0.34 per share related to the impairment of a trademark and a realignment in Meredith's National Media Group

Excluding these special items, fiscal 2018 second quarter earnings per share were $1.14. This compares to earnings per share excluding special items of $1.30 in the prior-year period. As expected in an off-election year, Meredith recorded $38 million, or $0.52 per share, less of high-margin incremental political advertising revenues in the second quarter of fiscal 2018 than in the prior year. (See Tables 1-4 for supplemental disclosures regarding non-GAAP financial measures.)

"We were quite pleased to report record earnings per share for a non-political second quarter and first half, driven by strong growth in non-political advertising revenue in our Local Media Group, along with record digital performance and solid expense discipline in our National Media Group," said Lacy.

Looking more closely at Meredith's fiscal 2018 second quarter results compared to the prior-year period:

  • Local Media Group revenues were $170 million. Non-political advertising revenues grew 13 percent to $104 million, driven by strong performance in the Phoenix, Atlanta and Las Vegas markets. Other revenues increased 25 percent, primarily due to growth in retransmission revenues. Operating profit was $51 million, a record for a non-political second quarter.
  • National Media Group revenues were $247 million. Operating profit was $12 million, compared to $47 million. Excluding special items in both periods, operating profit increased 2 percent to $35 million, driven primarily by lower operating expenses in Meredith's magazine business, along with revenue growth from its digital and circulation activities.
  • Total Company digital advertising revenues were a record for any fiscal quarter. Traffic across Meredith's digital properties averaged 89 million monthly unique visitors. Digital advertising revenues accounted for 44 percent of the National Media Group's advertising revenues.
  • Total revenues were $418 million, compared to $443 million in the prior-year period, reflecting the absence of $38 million of political advertising revenue.

Fiscal 2018 first half earnings per share were $4.23, or $1.83 excluding special items. In comparison, prior-year earnings per share were $2.33, or $2.05 excluding special items. Meredith recorded $53 million, or $0.72 per share, less of high-margin incremental political advertising revenues in the first half of fiscal 2018 than in the prior year, as expected in an off-election year. Total company revenues were $810 million, compared to $843 million in the prior-year period.

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. All fiscal 2018 second quarter and first half comparisons are against the comparable prior-year period unless otherwise stated.

IMPACT OF TAX REFORM

The "Tax Cuts and Jobs Act of 2017" (the Act) was signed into law on December 22, 2017.  The Act reduces the federal corporate tax rate from 35 percent to 21 percent effective for taxable years beginning on or after January 1, 2018. Meredith will have a blended federal rate of 28 percent retroactive to the beginning of its fiscal 2018.

The reduced rate resulted in an adjustment to lower fiscal 2018 first quarter tax expense by $4 million. Meredith recorded this adjustment in its fiscal 2018 second quarter. In addition, absent the Act, Meredith estimates that second quarter tax expense on second quarter earnings would have been $4 million higher.

Also as a result of the Act, Meredith remeasured its deferred tax assets, deferred tax liabilities, and tax reserves during its second fiscal quarter, resulting in a net tax benefit of $133 million that Meredith reported as a special item.

OUTLOOK

Meredith is temporarily altering its outlook practices due to the following factors:

  • The ongoing review of the combined Company's media portfolio, following today's closing of its acquisition of Time Inc.
  • The impact of tax reform on the combined company
  • The timing of the identified synergies
  • Evaluation of Time Inc.'s balance sheet as part of the purchase accounting process, including performing fair value calculations

Meredith expects to resolve these items and provide a more definitive outlook, including expectations for revenue and profit for the balance of its fiscal 2018, when it reports fiscal 2018 third quarter results in late April.

Meredith expects to return to its traditional guidance methodology in July when it reports full year fiscal 2018 results and updates expectations for its fiscal 2019.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on January 31, 2018, at 4:30 pm EST to discuss the closing and integration of the Time Inc. acquisition and fiscal 2018 second quarter results. A live webcast will be accessible to the public on the Company's website, and a replay will be available for two weeks. A transcript will be available within 48 hours of the call at meredith.com.

RATIONALE FOR USE AND ACCESS TO NON-GAAP RESULTS

Management uses and presents GAAP and non-GAAP results to evaluate and communicate its performance. Non-GAAP measures should not be construed as alternatives to GAAP measures. EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin are common supplemental measures of performance used by investors and financial analysts. Management believes that EBITDA provides an additional analytical tool to clarify the Company's results from core operations and delineate underlying trends. Management does not use EBITDA as a measure of liquidity or funds available for management's discretionary use because it excludes certain contractual and non-discretionary expenditures. Adjusted EBITDA is defined as EBITDA excluding special items.

Results excluding special items are supplemental non-GAAP financial measures. While these adjusted results are not a substitute for reported results under GAAP, management believes this information is useful as an aid in further understanding Meredith's current performance, performance trends and financial condition. Reconciliations of GAAP to non-GAAP measures are attached to this press release and available at meredith.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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 the Company and its operations. Statements in this release that are forward-looking include, but are not limited to, the expected benefits of the acquisition of Time Inc., including the expected synergies from the transaction and the combined company's prospects for growth and increasing shareholder value.

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 or vendors; the integration of acquired businesses; changes in consumer reading, purchasing and/or television viewing patterns; increases in paper, postage, printing, syndicated programming or other costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in government regulations affecting the Company's industries; increases in interest rates; the consequences of acquisitions and/or dispositions; the risks associated with the Company's recent acquisition of Time Inc., including: (1) litigation challenging the acquisition; (2) the Company's ability to retain key personnel; (3) competitive responses to the acquisition; (4) unexpected costs, charges or expenses resulting from the acquisition; (5) adverse reactions or changes to business relationships resulting from the acquisition; (6) the Company's ability to realize the benefits of the acquisition of Time Inc.; (7) delays, challenges and expenses associated with integrating the businesses; and (8) the Company's ability to comply with the terms of the debt and equity financings entered into in connection with the acquisition; and the risk factors contained in the Company's most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, which are available on the SEC's website at www.sec.gov. The Company 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; meredith.com) has been committed to service journalism for more than 115 years. Today, Meredith uses multiple distribution platforms — including broadcast television, print, digital, mobile and video — to provide consumers with content they desire and to deliver the messages of its advertising and marketing partners.

Meredith's National Media Group reaches nearly 200 million unduplicated American consumers every month, including 85 percent of U.S. Millennial women. Meredith is a leader in creating content across media platforms and life stages in key consumer interest areas such as entertainment, food, lifestyle, home, parenting, beauty, fashion, news and sports. Meredith also features robust brand licensing activities including more than 3,000 SKUs of branded products at 5,000 Walmart stores across the U.S. and at walmart.com, as well as innovative business-to-business marketing solutions provided by Meredith Xcelerated Marketing.

Meredith's Local Media Group includes 17 television stations reaching more than 11 percent of U.S. households. Meredith's portfolio is concentrated in large, fast-growing markets, with seven stations in the nation's Top 25 and 13 in Top 50 markets. Meredith's stations produce more than 700 hours of local news and entertainment content each week, and operate leading local digital destinations.

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)



Three Months


Six Months

Periods ended December 31,

2017


2016


2017


2016

(In thousands except per share data)








Revenues








Advertising

$

231,815



$

267,129



$

441,064



$

493,018


Circulation

67,672



66,805



136,599



135,473


All other

118,211



108,708



232,806



214,030


Total revenues

417,698



442,642



810,469



842,521


Operating expenses








Production, distribution, and editorial

158,746



148,625



314,548



298,853


Selling, general, and administrative

189,384



170,643



357,005



345,636


Depreciation and amortization

12,458



13,549



25,008



27,445


Impairment of long-lived assets

19,765





19,765




Total operating expenses

380,353



332,817



716,326



671,934


Income from operations

37,345



109,825



94,143



170,587


Interest expense, net

(5,171)



(4,679)



(10,249)



(9,428)


Earnings before income taxes

32,174



105,146



83,894



161,159


Income tax benefit (expense)

127,134



(33,341)



108,855



(55,381)


Net earnings

$

159,308



$

71,805



$

192,749



$

105,778










Basic earnings per share

$

3.55



$

1.61



$

4.30



$

2.38


Basic average shares outstanding

44,857



44,511



44,818



44,535










Diluted earnings per share

$

3.49



$

1.58



$

4.23



$

2.33


Diluted average shares outstanding

45,601



45,378



45,603



45,385










Dividends paid per share

$

0.520



$

0.495



$

1.040



$

0.990


 

Meredith Corporation and Subsidiaries

Segment Information (Unaudited)



Three Months


Six Months

Periods ended December 31,

2017


2016


2017


2016

(In thousands)








Revenues








National media








Advertising

$

125,770



$

135,103



$

245,853



$

260,455


Circulation

67,672



66,805



136,599



135,473


Other revenues

53,999



57,437



103,949



110,710


  Total national media

247,441



259,345



486,401



506,638


Local media








Non-political advertising

103,951



91,958



191,736



176,142


Political advertising

2,094



40,068



3,475



56,421


Other revenues

64,212



51,271



128,857



103,320


  Total local media

170,257



183,297



324,068



335,883


Total revenues

$

417,698



$

442,642



$

810,469



$

842,521










Operating profit








National media

$

12,247



$

46,757



$

40,503



$

70,868


Local media

50,515



76,815



91,457



127,437


Unallocated corporate

(25,417)



(13,747)



(37,817)



(27,718)


Income from operations

$

37,345



$

109,825



$

94,143



$

170,587










Depreciation and amortization








National media

$

3,789



$

4,330



$

7,776



$

8,848


Local media

7,886



8,865



15,824



17,855


Unallocated corporate

783



354



1,408



742


Total depreciation and amortization

$

12,458



$

13,549



$

25,008



$

27,445










EBITDA 1








National media

$

16,036



$

51,087



$

48,279



$

79,716


Local media

58,401



85,680



107,281



145,292


Unallocated corporate

(24,634)



(13,393)



(36,409)



(26,976)


Total EBITDA 1

$

49,803



$

123,374



$

119,151



$

198,032



1 EBITDA is net earnings before interest, taxes, depreciation, and amortization.

 

Meredith Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


Assets

December 31,
2017


June 30,
2017

(In thousands)




Current assets




Cash and cash equivalents

$

34,976



$

22,287


Accounts receivable, net

297,388



289,052


Inventories

21,410



21,890


Current portion of subscription acquisition costs

141,155



144,896


Current portion of broadcast rights

16,453



7,853


Other current assets

31,531



19,275


Total current assets

542,913



505,253


Property, plant, and equipment

555,265



549,536


Less accumulated depreciation

(354,395)



(359,670)


Net property, plant, and equipment

200,870



189,866


Subscription acquisition costs

77,384



79,740


Broadcast rights

23,397



21,807


Other assets

69,056



69,616


Intangible assets, net

926,809



955,883


Goodwill

907,558



907,458


Total assets

$

2,747,987



$

2,729,623






Liabilities and Shareholders' Equity




Current liabilities




Current portion of long-term debt

$

65,625



$

62,500


Current portion of long-term broadcast rights payable

16,847



9,206


Accounts payable

83,919



66,598


Accrued expenses and other liabilities

105,087



116,907


Current portion of unearned subscription revenues

202,249



204,459


Total current liabilities

473,727



459,670


Long-term debt

631,552



635,737


Long-term broadcast rights payable

24,623



22,454


Unearned subscription revenues

107,901



106,506


Deferred income taxes

263,242



384,726


Other noncurrent liabilities

100,104



124,558


Total liabilities

1,601,149



1,733,651


Shareholders' equity




Common stock

39,625



39,433


Class B stock

5,109



5,119


Additional paid-in capital

58,926



54,726


Retained earnings

1,060,614



915,703


Accumulated other comprehensive loss

(17,436)



(19,009)


Total shareholders' equity

1,146,838



995,972


Total liabilities and shareholders' equity

$

2,747,987



$

2,729,623


 

Meredith Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)


Six months ended December 31,

2017


2016

(In thousands)




Net cash provided by operating activities

$

101,572



$

117,281






Cash flows from investing activities




Acquisitions of and investments in businesses

(3,000)



(11,819)


Additions to property, plant, and equipment

(28,809)



(10,949)


Proceeds from disposition of assets, net of cash sold

2,193




Net cash used in investing activities

(29,616)



(22,768)






Cash flows from financing activities




Proceeds from issuance of long-term debt

60,000



270,000


Repayments of long-term debt

(61,250)



(288,125)


Dividends paid

(47,196)



(44,823)


Purchases of Company stock

(24,532)



(26,453)


Proceeds from common stock issued

17,812



16,988


Payment of acquisition related contingent consideration

(4,000)



(4,000)


Excess tax benefits from share-based payments



2,883


Other

(101)



(1,465)


Net cash used in financing activities

(59,267)



(74,995)


Net increase in cash and cash equivalents

12,689



19,518


Cash and cash equivalents at beginning of period

22,287



24,970


Cash and cash equivalents at end of period

$

34,976



$

44,488


 

Table 1

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following tables show results of operations as reported under accounting principles generally accepted in the United States of America (GAAP) and excluding the special items. Results of operations excluding the special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.


Three months ended December 31, 2017

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands except per share data)





Operating profit

$

12,247


$

50,515


$

(25,417)


$

37,345


Special items





Transaction costs



12,059


12,059


Write-down of impaired assets

19,765




19,765


Severance and related benefit costs

2,956




2,956


Reversal of previously accrued restructuring costs

(242)




(242)


Other

125




125


Total special items

22,604



12,059


34,663


Operating profit excluding special items (non-GAAP)

$

34,851


$

50,515


$

(13,358)


$

72,008







Diluted earnings per share

$

3.49


Per share impact of special items


Per share impact of remeasurement of deferred tax assets and liabilities

(2.92)


Per share impact of special items of $34,663 ($25,802 after tax)

0.57


Total per share impact of special items

(2.35)


Earnings per share excluding special items (non-GAAP)

$

1.14




Six months ended December 31, 2017

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands except per share data)





Operating profit

$

40,503


$

91,457


$

(37,817)


$

94,143


Special items





Transaction costs



12,059


12,059


Write-down of impaired assets

19,765




19,765


Severance and related benefit costs

2,956




2,956


Gain on sale of Family Circle Cup Tennis Center

(3,282)




(3,282)


Reversal of previously accrued restructuring costs

(242)




(242)


Other

125




125


Total special items

19,322



12,059


31,381


Operating profit excluding special items (non-GAAP)

$

59,825


$

91,457


$

(25,758)


$

125,524







Diluted earnings per share

$

4.23


Per share impact of special items


Per share impact of remeasurement of deferred tax assets and liabilities

(2.92)


Per share impact of special items of $31,381 ($23,784 after tax)

0.52


Total per share impact of special items

(2.40)


Earnings per share excluding special items (non-GAAP)

$

1.83


 

Table 2

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


Special Items - The following tables show results of operations as reported under (GAAP) and excluding the special items. Results of operations excluding special items are non-GAAP measures. Management's rationale for presenting non-GAAP measures is included in the text of this earnings release.


Three months ended December 31, 2016

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands except per share data)





Operating profit

$

46,757


$

76,815


$

(13,747)


$

109,825


Special items





Write-down of contingent consideration payable

(19,580)




(19,580)


Severance and related benefit costs

6,695


445


438


7,578


Write-down of impaired assets


1,678



1,678


Other

397




397


Total special items

(12,488)


2,123


438


(9,927)


Operating profit excluding special items (non-GAAP)

$

34,269


$

78,938


$

(13,309)


$

99,898







Diluted earnings per share

$

1.58


Per share impact of special items


Per share impact of the resolution of certain federal and state tax matters

(0.15)


Per share impact of special items of $9,927 ($6,105 after tax)

(0.13)


Total per share impact of special items

(0.28)


Earnings per share excluding special items (non-GAAP)

$

1.30












Six Months Ended December 31, 2016

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands except per share data)





Operating profit

$

70,868


$

127,437


$

(27,718)


$

170,587


Special items





Write-down of contingent consideration payable

(19,580)




(19,580)


Severance and related benefit costs

6,695


445


438


7,578


Write-down of impaired assets


1,678



1,678


Other

397




397


Total special items

(12,488)


2,123


438


(9,927)


Operating profit excluding special items (non-GAAP)

$

58,380


$

129,560


$

(27,280)


$

160,660







Diluted earnings per share

$

2.33


Per share impact of special items


Per share impact of the resolution of certain federal and state tax matters

(0.15)


Per share impact of special items of $9,927 ($6,105 after tax)

(0.13)


Total per share impact of special items

(0.28)


Earnings per share excluding special items (non-GAAP)

$

2.05


 

Table 3

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


EBITDA

Consolidated EBITDA, which is reconciled to net earnings in the following table, is defined as net earnings before interest, taxes, depreciation, and amortization.

Segment EBITDA is a measure of segment earnings before depreciation and amortization.

Segment EBITDA margin is defined as segment EBITDA divided by segment revenues.


Adjusted EBITDA

Consolidated adjusted EBITDA, which is reconciled to net earnings in the following table, is defined as net earnings before interest, taxes, depreciation, amortization, and special items.

Segment adjusted EBITDA is a measure of segment earnings before depreciation, amortization, and special items.

Segment adjusted EBITDA margin is defined as segment adjusted EBITDA divided by segment revenues.


Three months ended December 31, 2017

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands)





Revenues

$

247,441


$

170,257


$


$

417,698







Net earnings

$

159,308


Net interest expense

5,171


Income tax benefit

(127,134)


Operating profit

$

12,247


$

50,515


$

(25,417)


37,345


Depreciation and amortization

3,789


7,886


783


12,458


EBITDA

16,036


58,401


(24,634)


49,803


Special items





Transaction costs



12,059


12,059


Write-down of impaired assets

19,765




19,765


Severance and related benefit costs

2,956




2,956


Reversal of previously accrued restructuring costs

(242)




(242)


Other

125




125


Total special items

22,604



12,059


34,663


Adjusted EBITDA

$

38,640


$

58,401


$

(12,575)


$

84,466







Segment EBITDA margin

6.5

%

34.3

%



Segment adjusted EBITDA margin

15.6

%

34.3

%













Six Months Ended December 31, 2017

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands)





Revenues

$

486,401


$

324,068


$


$

810,469







Net earnings

$

192,749


Net interest expense

10,249


Income tax benefit

(108,855)


Operating profit

$

40,503


$

91,457


$

(37,817)


94,143


Depreciation and amortization

7,776


15,824


1,408


25,008


EBITDA

48,279


107,281


(36,409)


119,151


Special items





Transaction costs



12,059


12,059


Write-down of impaired assets

19,765




19,765


Severance and related benefit costs

2,956




2,956


Gain on sale of Family Circle Cup Tennis Center

(3,282)




(3,282)


Reversal of previously accrued restructuring costs

(242)




(242)


Other

125




125


Total special items

19,322



12,059


31,381


Adjusted EBITDA

$

67,601


$

107,281


$

(24,350)


$

150,532







Segment EBITDA margin

9.9

%

33.1

%



Segment adjusted EBITDA margin

13.9

%

33.1

%








 

Table 4

Meredith Corporation and Subsidiaries

Supplemental Disclosures Regarding Non-GAAP Financial Measures


EBITDA

Consolidated EBITDA, which is reconciled to net earnings in the following table, is defined as net earnings before interest, taxes, depreciation, and amortization.

Segment EBITDA is a measure of segment earnings before depreciation and amortization.

Segment EBITDA margin is defined as segment EBITDA divided by segment revenues.


Three months ended December 31, 2016

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands)





Revenues

$

259,345


$

183,297


$


$

442,642







Net earnings

$

71,805


Net interest expense

4,679


Income taxes

33,341


Operating profit

$

46,757


$

76,815


$

(13,747)


109,825


Depreciation and amortization

4,330


8,865


354


13,549


EBITDA

$

51,087


$

85,680


$

(13,393)


$

123,374


Special items





Write-down of contingent consideration payable

(19,580)




(19,580)


Severance and related benefit costs

6,695


445


438


7,578


Write-down of impaired assets


1,678



1,678


Other

397




397


Total special items

(12,488)


2,123


438


(9,927)


Adjusted EBITDA

$

38,599


$

87,803


$

(12,955)


$

113,447




Segment EBITDA margin

19.7

%

46.7

%



Segment adjusted EBITDA margin

14.9

%

47.9

%













Six Months Ended December 31, 2016

National

Media

Local

Media

Unallocated

Corporate

Total

(In thousands)





Revenues

$

506,638


$

335,883


$


$

842,521







Net earnings

$

105,778


Net interest expense

9,428


Income taxes

55,381


Operating profit

$

70,868


$

127,437


$

(27,718)


170,587


Depreciation and amortization

8,848


17,855


742


27,445


EBITDA

79,716


145,292


(26,976)


198,032


Special items





Write-down of contingent consideration payable

(19,580)




(19,580)


Severance and related benefit costs

6,695


445


438


7,578


Write-down of impaired assets


1,678



1,678


Other

397




397


Total special items

(12,488)


2,123


438


(9,927)


Adjusted EBITDA

$

67,228


$

147,415


$

(26,538)


$

188,105







Segment EBITDA margin

15.7

%

43.3

%



Segment adjusted EBITDA margin

13.3

%

43.9

%



 


SOURCE Meredith Corporation

For further information: Shareholder/Financial Analyst, Mike Lovell, Director of Investor Relations, Phone: (515) 284-3622, E-mail: Mike.Lovell@meredith.com or Media Contact: Art Slusark, Chief Communications Officer, Phone: (515) 284-3404, E-mail: Art.Slusark@meredith.com
Key Media Contacts
Art Slusark
Corporate
515.284.3404
Liz Malone
Senior Publicist
212-551-7172