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Meredith Reports Fiscal 2014 Third Quarter And Nine Month Results

Companies mentioned in this article: Meredith Corporation

DES MOINES, Iowa, April 24, 2014 /PRNewswire/ -- Meredith Corporation (NYSE:MDP; www.meredith.com) today reported fiscal 2014 third quarter earnings per share of $0.41, compared to $0.65 in the prior-year period. Total company revenues were $367 million, compared to $370 million. Excluding special items in both periods, fiscal 2014 third quarter earnings per share were $0.70, compared to $0.72 in the prior-year quarter (See Tables 1 - 4).

"Growth in retransmission, circulation, and brand licensing revenues partially offset a difficult ad environment for Meredith and our media industry peers," said Meredith Chairman and Chief Executive Officer Stephen M. Lacy. "However, our advertising outlook is significantly better for the fourth quarter of fiscal 2014, with expected gains in our television and digital businesses, and improving magazine advertising trends."

Fiscal 2014 third quarter results include special items of $13 million after tax, or $0.29 per share. The special items include transaction-related expenses resulting from previously announced agreements to purchase broadcast assets; selected workforce reductions, including those associated with transitioning Ladies' Home Journal to a special interest publication and closing the Company's sales force training practice; and certain other non-cash items. Prior-year third quarter earnings per share included a special item of $3 million after tax, or $0.07 per share, for professional fees and expenses related to a transaction that didn't materialize.

Lacy noted the following fiscal 2014 third quarter highlights compared to the prior-year period:

    --  Local Media Group revenues increased 14 percent to $98 million, and
        operating profit grew 11 percent to $27 million, both records for a
        fiscal third quarter. Growth was driven by increased
        retransmission-related revenues and strong performance from Meredith
        television stations in Nashville, Phoenix and Las Vegas.
    --  Meredith began its ownership of KMOV-TV in St. Louis, the newest
        addition to its broadcasting portfolio. The CBS affiliate has tremendous
        news and advertising sales momentum.
    --  National Media Group non-advertising business performance was strong, as
        circulation and brand licensing revenues each grew in the
        mid-single-digits. Growth was driven by the launch of Allrecipes
        magazine and initiatives to grow its rate base, along with continued
        strong sales of Better Homes and Gardens' licensed products at Walmart.
        This performance partially offset a weak advertising environment.
    --  Meredith continued to demonstrate its commitment to Total Shareholder
        Return, increasing its dividend 6 percent to $1.73 on an annualized
        basis, a yield of approximately 4 percent. Additionally, Meredith
        repurchased 200,000 shares of its stock in the third quarter, and has
        repurchased 1.4 million shares in the first nine months of fiscal 2014.

Fiscal 2014 nine month earnings per share were $1.61, compared to $2.00 in the prior-year period. Excluding special items in both periods, fiscal 2014 nine month earnings per share were $1.92, compared to $2.17 (See Tables 1 - 4). Meredith recorded $37 million, or $0.49 per share, less of political advertising revenues in the first nine months of fiscal 2014, as expected in an off-election year. Total revenues were approximately even at $1.1 billion for both periods.

OPERATING GROUP DETAIL

NATIONAL MEDIA GROUP

Meredith's National Media Group includes leading national consumer media brands delivered over multiple platforms, offering clients access to 100 million unduplicated American women every month - a reach unmatched in the industry. It also features robust brand licensing activities and innovative business-to-business marketing services.

Fiscal 2014 third quarter National Media Group operating profit was $14 million ($33 million excluding special items), compared to $43 million. Revenues were $270 million, compared to $284 million.

Looking more closely at performance in the third quarter of fiscal 2014 compared to the prior-year period:

    --  Total advertising revenues were $112 million, compared to $129 million.
        The food, beauty and financial services categories were weaker, while
        the pets, non-prescription drug and entertainment categories were
        stronger. Meredith also expanded its innovative Meredith Sales Guarantee
        program to digital platforms.
    --  Meredith grew its share of magazine advertising revenues in its
        competitive set by one share point to 40 percent, according to the most
        recent data from Publishers Information Bureau.
    --  Circulation revenues grew 5 percent to $96 million, due primarily to the
        launch of Allrecipes magazine and initiatives to grow its rate base,
        along with strong performance from Meredith's parenthood brands and
        Better Homes and Gardens.
    --  Brand Licensing revenues grew 6 percent, led by continued strong sales
        of over 3,000 SKU's of Better Homes and Gardens' licensed products at
        more than 4,000 Walmart stores nationwide.

Meredith's connection with consumers strengthened during the third quarter of fiscal 2014. Meredith's monthly magazine audience was an impressive 116 million, and average household income of Meredith's audience grew over the prior-year period, according to the most current data from Mediamark Research and Intelligence.

Digital traffic averaged 51 million unique visitors, a record for a fiscal third quarter. The Meredith Women's Network is now No. 1 in comScore's Lifestyle category, the first time Meredith has topped the rankings. In addition, Allrecipes continues to lead in comScore's Food category. Meredith generated 4.6 million digital orders for print magazine subscriptions during the first nine months of fiscal 2014, an increase of nearly 20 percent compared to the prior year.

"Growth in circulation and brand licensing revenues, as well as digital traffic again demonstrated the strong relationships our brands have with individual consumers," said National Media Group President Tom Harty. "We grew market share among our competitive set in a challenging advertising environment, and we continued to attract new participants to the Meredith Sales Guarantee program."

Fiscal 2014 first nine month National Media Group operating profit was $70 million, compared to $95 million in the prior-year period. Excluding special items in both periods, operating profit was $90 million, compared to $100 million. Revenues were $786 million, compared to $801 million.

LOCAL MEDIA GROUP

Meredith's Local Media Group consists of leading television stations, many in fast-growing markets, and a video content creation unit that produces nationally syndicated broadcast and custom video programming.

Fiscal 2014 third quarter Local Media Group operating profit was $27 million ($28 million excluding special items), compared to $24 million in the prior-year period, and EBITDA margin was 35 percent in the current period. Revenues increased 14 percent to $98 million.

Looking more closely at performance in the third quarter of fiscal 2014 compared to the prior-year period:

    --  Non-political advertising revenues grew 6 percent to $70 million.
        Results reflect strength from the restaurant, home and retail
        categories, along with one month of operations of KMOV.
    --  Digital advertising revenues grew 27 percent, driven by increased
        traffic across the desktop and video platforms, the launch of new mobile
        apps and one month of operations of KMOV.
    --  Other revenues and operating expenses both increased, due primarily to
        growth in retransmission revenues from subscription television operators
        and programming fees paid to affiliated networks.

On December 23, 2013, Meredith announced agreements to purchase the broadcast assets of KTVK and KASW in Phoenix, and KMOV in St. Louis. The St. Louis transaction closed on February 28, 2014, and Meredith anticipates the Phoenix transactions will close in the fourth quarter of fiscal 2014.

Meredith's connection with viewers strengthened in the third quarter of fiscal 2014. Nearly all of Meredith's stations grew morning news viewership during the most recent February ratings period, with Hartford, Saginaw, Portland and Las Vegas leading their markets. St. Louis, Portland and Las Vegas were No. 1 in late news, while Hartford and Saginaw were No. 1 in sign-on to sign-off.

The Better Show, the daily syndicated program produced by Meredith Video Studios, was renewed for an eighth season in syndication. It's currently available in 160 markets across the United States, and also airs in 90 million homes on the Hallmark Channel.

"We're pleased to deliver another quarter of record operating results," said Local Media Group President Paul Karpowicz. "We're excited to have KMOV in St. Louis as part of the Meredith portfolio. KMOV's addition - along with improving non-political advertising, growth in digital advertising and an anticipated robust political advertising cycle - point to a strong calendar 2014 for our business."

Fiscal 2014 first nine month Local Media Group operating profit was $88 million, compared to $96 million in the prior-year period. Excluding special items in both periods, operating profit was $91 million, compared to $98 million, and EBITDA margin was 38 percent in the current period. Revenues increased 3 percent to $292 million. Meredith recorded $37 million less of political advertising revenues in the first nine months of fiscal 2014, as expected in an off-election year.

OTHER FINANCIAL INFORMATION

Consistent with its Total Shareholder Return strategy, Meredith repurchased more than 1.4 million shares of its stock in the first nine months of fiscal 2014. At March 31, 2014, $16 million remained under the current repurchase authorization. Key elements of Meredith's TSR strategy are (1) An annual dividend of $1.73 per share, which reflects a 6 percent increase in the annual dividend over the prior year, and a 70 percent increase since launching its TSR strategy in October 2011; (2) A $100 million share repurchase program; and (3) Ongoing investments to scale the business and increase shareholder value.

Total debt was $525 million at March 31, 2014, and the weighted average interest rate was 2.6 percent. Meredith's debt-to-EBITDA ratio for the 12 months ended March 31, 2014, was 2.0 to 1.

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 2014 third quarter and first nine month comparisons are against the prior-year periods.

OUTLOOK

Looking more closely at the fourth quarter of fiscal 2014 compared to the prior-year period, excluding operating results and transaction expenses related to the pending acquisition of television stations in Phoenix:

    --  Total company revenues are expected to be up low-single digits.
    --  Total Local Media Group revenues are expected to be up high teens.
    --  Total National Media Group revenues are expected to be down mid-single
        digits.
    --  Meredith expects fiscal 2014 fourth quarter earnings per share to range
        from $0.81 to $0.86, compared to $0.75 in the prior-year period.

When adding fourth quarter expected results to the $1.92 (before special items) generated in the first nine months, Meredith expects fiscal 2014 full year earnings per share to be approximately at the mid-point of the $2.60 to $2.95 range established at the beginning of fiscal 2014. As a reminder, these amounts are before special items, and exclude operating results and transaction expenses related to the pending acquisition of television stations in Phoenix.

CONFERENCE CALL WEBCAST

Meredith will host a conference call on April 24, 2014 at 11 a.m. EDT to discuss fiscal 2014 third quarter and nine month results. A live webcast will be accessible to the public on the Company's website, www.meredith.com, and a replay will be available for two weeks. A transcript will be available within 48 hours of the call at www.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 and 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 includes certain contractual and non-discretionary expenditures.

Results excluding the 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 better understanding Meredith's current performance, performance trends and financial condition. Reconciliations of non-GAAP to GAAP measures are attached to this press release and will be made available at www.meredith.com.

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 the Company and its operations. Statements in this release that are forward-looking include, but are not limited to, the Company's revenue and earnings per share outlook for the fourth quarter and full year fiscal 2014.

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, 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; and the consequences of acquisitions and/or dispositions. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

ABOUT MEREDITH CORPORATION

Meredith Corporation (NYSE: MDP; www.meredith.com) is the leading media and marketing company serving American women. Meredith reaches 100 million American women every month through well-known national brands including Better Homes and Gardens, Parents, Family Circle, Allrecipes, Every Day with Rachael Ray and FamilyFun. Meredith is the industry leader in creating content in key consumer interest areas such as home, family, food, health and wellness and self-development. Meredith uses media platforms including print, television, digital, mobile, tablets and video to give consumers content they desire and to deliver the messages of its advertising and marketing partners. Meredith owns or operates 14 television stations that reach more than 10 percent of U.S. television households. Additionally, Meredith Xcelerated Marketing serves the nation's top brands and companies with deep expertise in digital, mobile, social, healthcare, analytics and international marketing.

A hallmark of Meredith's business model and financial profile is its ability to consistently generate substantial free cash flow by leveraging the strength of its multi-platform portfolio. Meredith is committed to increasing Total Shareholder Return through dividend payments, share repurchases and strategic business investments. Meredith has paid a dividend for 67 straight years and increased its dividend for 21 consecutive years. Meredith currently pays an annual dividend of $1.73 per share that yields approximately 4 percent.


    Meredith Corporation and Subsidiaries

    Condensed Consolidated Statements of Earnings (Unaudited)


                                   Three Months          Nine Months
                                   ------------          -----------

     Periods
     ended
     March
     31,                                     2014                  2013       2014       2013
     -------                                 ----                  ----       ----       ----

    (In
     thousands
     except
     per
     share
     data)

    Revenues

    Advertising                          $182,175              $195,243   $574,253   $619,459

    Circulation                            96,078                91,458    239,545    234,345

    All
     other                                 89,161                82,914    264,116    230,563

       Total
        revenues                          367,414               369,615  1,077,914  1,084,367
       ---------                          -------               -------  ---------  ---------

     Operating
     expenses

     Production,
     distribution,
     and
     editorial                            144,766               141,605    417,759    416,333

     Selling,
     general,
     and
     administrative                       168,386               166,873    487,799    481,245

     Depreciation
     and
     amortization                          23,033                11,091     46,418     33,985

       Total
        operating
        expenses                          336,185               319,569    951,976    931,563
       ----------                         -------               -------    -------    -------

    Income
     from
     operations                            31,229                50,046    125,938    152,804

     Interest
     expense,
     net                                   (3,408)               (3,228)    (8,676)   (10,230)
    ---------                              ------                ------     ------    -------

     Earnings
     before
     income
     taxes                                 27,821                46,818    117,262    142,574

    Income
     taxes                                 (9,335)              (17,397)   (44,166)   (52,727)
    ------                                 ------               -------    -------    -------

    Net
     earnings                             $18,486               $29,421    $73,096    $89,847
    ---------                             -------               -------    -------    -------


    Basic
     earnings
     per
     share                                  $0.41                 $0.66      $1.64      $2.02
    ---------                               -----                 -----      -----      -----

    Basic
     average
     shares
     outstanding                           44,649                44,404     44,665     44,436
    ------------                           ------                ------     ------     ------


     Diluted
     earnings
     per
     share                                  $0.41                 $0.65      $1.61      $2.00
     --------                               -----                 -----      -----      -----

     Diluted
     average
     shares
     outstanding                           45,376                45,079     45,462     45,021
     -----------                           ------                ------     ------     ------


     Dividends
     paid
     per
     share                                $0.4325               $0.4075    $1.2475    $1.1725
     ---------                            -------               -------    -------    -------


    Meredith Corporation and Subsidiaries

    Segment Information (Unaudited)


                                        Three Months               Nine Months
                                        ------------               -----------

    Periods ended
     March 31,                          2014          2013           2014           2013
    -------------                       ----          ----           ----           ----

    (In thousands)

    Revenues

    National media

       Advertising                  $111,847      $128,770       $360,074       $381,567

       Circulation                    96,078        91,458        239,545        234,345

       Other revenues                 61,755        64,000        186,654        184,722

          Total national
           media                     269,680       284,228        786,273        800,634
          --------------             -------       -------        -------        -------

    Local media

       Non-political
        advertising                   69,796        66,118        212,418        199,619

       Political
        advertising                      532           355          1,761         38,273

       Other revenues                 27,406        18,914         77,462         45,841

          Total local
           media                      97,734        85,387        291,641        283,733
          -----------                 ------        ------        -------        -------

    Total revenues                  $367,414      $369,615     $1,077,914     $1,084,367
    --------------                    ------      --------       --------       --------


    Operating profit

    National media                   $13,614       $42,991        $69,760        $94,592

    Local media                       26,696        24,085         87,597         96,440

    Unallocated
     corporate                        (9,081)      (17,030)       (31,419)       (38,228)

    Income from
     operations                      $31,229       $50,046       $125,938       $152,804
    -----------                      -------       -------       --------       --------


    Depreciation and amortization

    National media                   $15,622        $4,593        $25,355        $14,458

    Local media                        7,009         6,093         19,841         18,265

    Unallocated
     corporate                           402           405          1,222          1,262

    Total
     depreciation
     and
     amortization                    $23,033       $11,091        $46,418        $33,985
    -------------                    -------       -------        -------        -------


    EBITDA(1)

    National media                   $29,236       $47,584        $95,115       $109,050

    Local media                       33,705        30,178        107,438        114,705

    Unallocated
     corporate                        (8,679)      (16,625)       (30,197)       (36,966)

    Total
     EBITDA(1)                       $54,262       $61,137       $172,356       $186,789
    ----------                       -------       -------       --------       --------


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


    Meredith Corporation and Subsidiaries

    Condensed Consolidated Balance Sheets (Unaudited)


                                            March 31,       June 30,

    Assets                                            2014           2013
    ------                                            ----           ----

    (In thousands)

    Current assets

    Cash and cash equivalents                      $22,121        $27,674

    Accounts receivable, net                       240,846        232,305

    Inventories                                     26,478         28,386

    Current portion of subscription
     acquisition costs                             104,081         97,982

    Current portion of broadcast
     rights                                          5,523          2,831

    Other current assets                            19,201         18,514

    Total current assets                           418,250        407,692
    --------------------                           -------        -------

    Property, plant, and equipment                 481,073        464,255

    Less accumulated depreciation                 (292,261)      (277,938)
    -----------------------------                 --------       --------

    Net property, plant, and
     equipment                                     188,812        186,317

    Subscription acquisition costs                 101,162         99,433

    Broadcast rights                                 2,698          3,634

    Other assets                                    74,844         69,848

    Intangible assets, net                         660,244        584,281

    Goodwill                                       857,196        788,854

    Total assets                                $2,303,206     $2,140,059
    ------------                                ----------       --------


    Liabilities and Shareholders'
     Equity
    -----------------------------

    Current liabilities

    Current portion of long-term
     debt                                          $75,000        $50,000

    Current portion of long-term
     broadcast rights payable                        5,427          4,089

    Accounts payable                                60,531         78,458

    Accrued expenses and other
     liabilities                                   128,982        132,676

    Current portion of unearned
     subscription revenues                         189,076        191,448
    ---------------------------                    -------        -------

    Total current liabilities                      459,016        456,671

    Long-term debt                                 450,000        300,000

    Long-term broadcast rights
     payable                                         3,941          5,096

    Unearned subscription revenues                 155,828        163,809

    Deferred income taxes                          258,660        247,487

    Other noncurrent liabilities                   107,706        112,700

    Total liabilities                            1,435,151      1,285,763
    -----------------                            ---------      ---------

    Shareholders' equity

    Common stock                                    36,880         36,242

    Class B stock                                    7,706          8,324

    Additional paid-in capital                      45,920         50,170

    Retained earnings                              792,963        775,901

    Accumulated other comprehensive
     loss                                          (15,414)       (16,341)

    Total shareholders' equity                     868,055        854,296
    --------------------------                     -------        -------

    Total liabilities and
     shareholders' equity                       $2,303,206     $2,140,059
    ---------------------                       ----------       --------


    Meredith Corporation and Subsidiaries

    Condensed Consolidated Statements of Cash Flows (Unaudited)



    Nine months ended March
     31,                                          2014                  2013
    -----------------------                       ----                  ----

    (In thousands)

    Net cash provided by
     operating activities                      $91,357              $113,302
    ---------------------                      -------              --------


    Cash flows from investing
     activities

       Acquisitions of and
        investments in
        businesses                            (188,654)               (7,410)

       Additions to property,
        plant, and equipment                   (16,483)              (18,854)

    Net cash used in
     investing activities                     (205,137)              (26,264)
    ---------------------                     --------               -------


    Cash flows from financing
     activities

       Proceeds from issuance of
        long-term debt                         386,000                65,000

       Repayments of long-term
        debt                                  (211,000)              (90,000)

       Purchases of Company
        stock                                  (67,820)              (39,908)

       Dividends paid                          (56,034)              (52,305)

       Proceeds from common
        stock issued                            54,903                26,357

       Excess tax benefits from
        share-based payments                     4,092                 3,258

       Other                                    (1,914)                 (770)

    Net cash provided by
     (used in) financing
     activities                                108,227               (88,368)
    --------------------                       -------               -------

    Net decrease in cash and
     cash equivalents                           (5,553)               (1,330)

    Cash and cash equivalents
     at beginning of period                     27,674                25,820
    -------------------------                   ------                ------

    Cash and cash equivalents
     at end of period                          $22,121               $24,490
    -------------------------                  -------               -------



    Meredith Corporation and Subsidiaries                                                                                                                                                  Table 1

    Supplemental Disclosures Regarding Non-GAAP Financial Measures


    Special Items - The following table shows results of operations excluding special items and as reported with the difference being 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.


    Periods
     Ended March
     31, 2014                                   Three Months                                        Nine Months
    ------------                                ------------                                        -----------

                                             Excluding Special
                                                   Items                 Special Items                  As Reported                 Excluding               Special Items         As Reported
                                                                                                                                  Special Items
                                                                                                                                                                                               ---

    (In thousands except per share data)

    Revenues

    Advertising                                         $182,175             $          -                       $182,175                   $574,253             $          -              $574,253

    Circulation                                           96,078                        -                         96,078                    239,545                        -               239,545

    All other                                             89,161                        -                         89,161                    264,116                        -               264,116

       Total
        revenues                                         367,414                        -                        367,414                  1,077,914                        -             1,077,914
       ---------                                         -------                      ---                        -------                  ---------                      ---             ---------

    Operating expenses

    Production,
     distribution,
     and
     editorial                                           144,521                      245  (a)                   144,766                    417,514                      245  (a)          417,759

    Selling,
     general,
     and
     administrative                                      158,862                    9,524  (b)                   168,386                    476,710                   11,089  (c)          487,799

    Depreciation
     and
     amortization                                         11,831                   11,202  (d)                    23,033                     35,216                   11,202  (d)           46,418
                                                                                           ---                                                                                ---

       Total
        operating
        expenses                                         315,214                   20,971                        336,185                    929,440                   22,536               951,976
       ----------                                        -------                   ------                        -------                    -------                   ------               -------

    Income from
     operations                                           52,200                  (20,971)                        31,229                    148,474                  (22,536)              125,938

    Interest
     expense,
     net                                                  (2,772)                    (636) (e)                    (3,408)                    (8,040)                    (636) (e)           (8,676)
    ---------                                             ------                     ----  ---                    ------                     ------                     ----  ---           ------

    Earnings
     before
     income
     taxes                                                49,428                  (21,607)                        27,821                    140,434                  (23,172)              117,262

    Income taxes                                         (17,654)                   8,319                         (9,335)                   (53,088)                   8,922               (44,166)
    ------------                                         -------                    -----                         ------                    -------                    -----               -------

    Net earnings                                         $31,774                 $(13,288)                       $18,486                    $87,346                 $(14,250)              $73,096
    ------------                                         -------                 --------                        -------                    -------                 --------               -------


    Basic
     earnings
     per share                                             $0.71                   $(0.30)                         $0.41                      $1.96                   $(0.32)                $1.64
    ----------

    Basic
     average
     shares
     outstanding                                          44,649                   44,649                         44,649                     44,665                   44,665                44,665
    ------------                                          ------                   ------                         ------                     ------                   ------                ------


    Diluted
     earnings
     per share                                             $0.70                   $(0.29)                         $0.41                      $1.92                   $(0.31)                $1.61
    ----------

    Diluted
     average
     shares
     outstanding                                          45,376                   45,376                         45,376                     45,462                   45,462                45,462
    ------------                                          ------                   ------                         ------                     ------                   ------                ------

    (a)     Write-down of art and
            manuscript inventory

    (b)     Severance costs of $8.5
            million, acquisition
            transaction costs of
            $1.5 million, and
            accrued costs of $0.8
            million partially offset
            by a $1.3 million
            reduction in previously
            accrued restructuring
            charges

    (c)     Severance costs of $8.5
            million, acquisition
            transaction costs of
            $3.1 million, and
            accrued costs of $0.8
            million partially offset
            by a $1.3 million
            reduction in previously
            accrued restructuring
            charges

    (d)     Write-down of Ladies'
            Home Journal trademark
            of $9.3 million and
            write-down of sales
            force training business
            assets of $1.9 million

    (e)     Write-off of deferred
            financing costs related
            to refinancing of
            revolving credit
            agreement



    Meredith Corporation and Subsidiaries                                                                                                                                               Table 2

    Supplemental Disclosures Regarding Non-GAAP Financial Measures


    Special Items - The following table shows results of operations excluding special items and as reported with the difference being 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.


    Periods Ended
     March 31, 2014                       Three Months                                        Nine Months
    ---------------                       ------------                                        -----------

                                       Excluding Special
                                             Items                 Special Items                  As Reported                  Excluding                Special Items         As Reported
                                                                                                                             Special Items
                                                                                                                                                                                            ---

    (In thousands)

    Revenues

    National media group

       Advertising                                $111,847             $          -                       $111,847                     $360,074             $          -               $360,074

       Circulation                                  96,078                        -                         96,078                      239,545                        -                239,545

       Other revenues                               61,755                        -                         61,755                      186,654                        -                186,654

          Total national
           media group                             269,680                        -                        269,680                      786,273                        -                786,273
          --------------                           -------                      ---                        -------                      -------                      ---                -------

    Local media group

       Non-political
        advertising                                 69,796                        -                         69,796                      212,418                        -                212,418

       Political
        advertising                                    532                        -                            532                        1,761                        -                  1,761

       Other revenues                               27,406                        -                         27,406                       77,462                        -                 77,462

          Total local
           media group                              97,734                        -                         97,734                      291,641                        -                291,641
          ------------                              ------                      ---                         ------                      -------                      ---                -------

    Total revenues                                $367,414             $          -                       $367,414                   $1,077,914             $          -             $1,077,914
    --------------                                --------             ------------                       --------                   ----------             ------------             ----------


    Operating profit

    National media
     group                                         $33,381                 $(19,767) (a)                   $13,614                      $89,527                 $(19,767) (a)           $69,760

    Local media
     group                                          28,206                   (1,510) (b)                    26,696                       90,672                   (3,075) (b)            87,597

    Unallocated
     corporate                                      (9,387)                     306  (c)                    (9,081)                     (31,725)                     306  (c)           (31,419)

    Income from
     operations                                    $52,200                 $(20,971)                       $31,229                     $148,474                 $(22,536)              $125,938
    -----------                                    -------                 --------                        -------                     --------                 --------               --------


    Depreciation and amortization

    National media
     group                                          $4,420                  $11,202  (d)                   $15,622                      $14,153                  $11,202  (d)           $25,355

    Local media
     group                                           7,009                        -                          7,009                       19,841                        -                 19,841

    Unallocated
     corporate                                         402                        -                            402                        1,222                        -                  1,222

    Total
     depreciation
     and
     amortization                                  $11,831                  $11,202                        $23,033                      $35,216                  $11,202                $46,418
    -------------                                  -------                  -------                        -------                      -------                  -------                -------


    EBITDA(1)

    National media
     group                                         $37,801                  $(8,565)                       $29,236                     $103,680                  $(8,565)               $95,115

    Local media
     group                                          35,215                   (1,510)                        33,705                      110,513                   (3,075)               107,438

    Unallocated
     corporate                                      (8,985)                     306                         (8,679)                     (30,503)                     306                (30,197)

    Total EBITDA(1)                                $64,031                  $(9,769)                       $54,262                     $183,690                 $(11,334)              $172,356
    --------------                                 -------                  -------                        -------                     --------                 --------               --------

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


    (a)                                Write-down of Ladies' Home
                                       Journal trademark of $9.3
                                       million, severance costs of
                                       $8.5 million, write-down
                                       of other assets of $2.1
                                       million, and
                                       accrued costs of $0.8
                                       million partially offset by
                                       a $1.0 million reduction in
                                       previously accrued
                                       restructuring charges

    (b)                                Acquisition transaction
                                       costs

    (c)                                Reversal of previously
                                       accrued restructuring
                                       charges

    (d)                                Write-down of Ladies' Home
                                       Journal trademark of $9.3
                                       million and write-down of
                                       sales force training
                                       business assets of $1.9
                                       million



    Meredith Corporation and Subsidiaries                                                                                                                                             Table 3

    Supplemental Disclosures Regarding Non-GAAP Financial Measures


    Special Items - The following table shows results of operations excluding special items and as reported with the difference being 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.


    Periods
     Ended March
     31, 2013                                   Three Months                           Nine Months
    ------------                                ------------                           -----------

                                             Excluding Special
                                                   Items               Special Items                       As Reported                 Excluding        Special Items        As Reported
                                                                                                                                     Special Items
                                                                                                                                                                                          ---

    (In thousands except per share data)

    Revenues

    Advertising                                         $195,243            $        -                             $195,243                   $619,459       $        -              $619,459

    Circulation                                           91,458                     -                               91,458                    234,345                -               234,345

    All other                                             82,914                     -                               82,914                    230,563                -               230,563

       Total
        revenues                                         369,615                     -                              369,615                  1,084,367                -             1,084,367
       ---------                                         -------                   ---                              -------                  ---------              ---             ---------

    Operating expenses

    Production,
     distribution,
     and
     editorial                                           141,605                     -                              141,605                    416,333                -               416,333

    Selling,
     general,
     and
     administrative                                      161,778                 5,095  (a)                         166,873                    469,107           12,138  (b)          481,245

    Depreciation
     and
     amortization                                         11,091                     -                               11,091                     33,985                -                33,985

       Total
        operating
        expenses                                         314,474                 5,095                              319,569                    919,425           12,138               931,563
       ----------                                        -------                 -----                              -------                    -------           ------               -------

    Income from
     operations                                           55,141                (5,095)                              50,046                    164,942          (12,138)              152,804

    Interest
     expense,
     net                                                  (3,228)                    -                               (3,228)                   (10,230)               -               (10,230)
    ---------                                             ------                   ---                               ------                    -------              ---               -------

       Earnings
        before
        income
        taxes                                             51,913                (5,095)                              46,818                    154,712          (12,138)              142,574

    Income taxes                                         (19,359)                1,962                              (17,397)                   (57,401)           4,674               (52,727)
    ------------                                         -------                 -----                              -------                    -------            -----               -------

    Net earnings                                         $32,554               $(3,133)                             $29,421                    $97,311          $(7,464)              $89,847
    ------------                                         -------               -------                              -------                    -------          -------               -------


    Basic
     earnings
     per share                                             $0.73                $(0.07)                               $0.66                      $2.19           $(0.17)                $2.02
    ----------

    Basic
     average
     shares
     outstanding                                          44,404                44,404                               44,404                     44,436           44,436                44,436
    ------------                                          ------                ------                               ------                     ------           ------                ------


    Diluted
     earnings
     per share                                             $0.72                $(0.07)                               $0.65                      $2.17           $(0.17)                $2.00
    ----------

    Diluted
     average
     shares
     outstanding                                          45,079                45,079                               45,079                     45,021           45,021                45,021
    ------------                                          ------                ------                               ------                     ------           ------                ------

    (a)     Professional fees and
            expenses related to a
            transaction that did not
            materialize

    (b)     Professional fees and
            expenses related to a
            transaction that did not
            materialize of $5.1
            million, severance costs
            of $7.4 million, and
            vacated lease accruals
            of $0.4 million
            partially offset by a
            $0.8 million reduction
            in previously accrued
            restructuring charges



    Meredith Corporation and Subsidiaries                                                                                                                                            Table 4

    Supplemental Disclosures Regarding Non-GAAP Financial Measures


    Special Items - The following table shows results of operations excluding special items and as reported with the difference being 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.


    Periods Ended
     March 31, 2013                       Three Months                                     Nine Months
    ---------------                       ------------                                     -----------

                                       Excluding Special
                                             Items               Special Items                 As Reported                  Excluding                Special Items         As Reported
                                                                                                                          Special Items
                                                                                                                                                                                         ---

    (In thousands)

    Revenues

    National media group

       Advertising                                $128,770            $        -                       $128,770                     $381,567             $          -               $381,567

       Circulation                                  91,458                     -                         91,458                      234,345                        -                234,345

       Other revenues                               64,000                     -                         64,000                      184,722                        -                184,722

          Total national
           media group                             284,228                     -                        284,228                      800,634                        -                800,634
          --------------                           -------                   ---                        -------                      -------                      ---                -------

    Local media group

       Non-political
        advertising                                 66,118                     -                         66,118                      199,619                        -                199,619

       Political
        advertising                                    355                     -                            355                       38,273                        -                 38,273

       Other revenues                               18,914                     -                         18,914                       45,841                        -                 45,841

          Total local
           media group                              85,387                     -                         85,387                      283,733                        -                283,733
          ------------                              ------                   ---                         ------                      -------                      ---                -------

    Total revenues                                $369,615            $        -                       $369,615                   $1,084,367             $          -             $1,084,367
    --------------                                --------            ----------                       --------                   ----------             ------------             ----------


    Operating profit

    National media
     group                                         $42,991            $        -                        $42,991                     $100,140                  $(5,548) (a)           $94,592

    Local media
     group                                          24,085                     -                         24,085                       97,935                   (1,495) (b)            96,440

    Unallocated
     corporate                                     (11,935)               (5,095) (c)                   (17,030)                     (33,133)                  (5,095) (c)           (38,228)

    Income from
     operations                                    $55,141               $(5,095)                       $50,046                     $164,942                 $(12,138)              $152,804
    -----------                                    -------               -------                        -------                     --------                 --------               --------


    Depreciation and amortization

    National media
     group                                          $4,593            $        -                         $4,593                      $14,458             $          -                $14,458

    Local media
     group                                           6,093                     -                          6,093                       18,265                        -                 18,265

    Unallocated
     corporate                                         405                     -                            405                        1,262                        -                  1,262

    Total
     depreciation
     and
     amortization                                  $11,091            $        -                        $11,091                      $33,985             $          -                $33,985
    -------------                                  -------            ----------                        -------                      -------             ------------                -------


    EBITDA(1)

    National media
     group                                         $47,584            $        -                        $47,584                     $114,598                  $(5,548) (a)          $109,050

    Local media
     group                                          30,178                     -                         30,178                      116,200                   (1,495) (b)           114,705

    Unallocated
     corporate                                     (11,530)               (5,095) (c)                   (16,625)                     (31,871)                  (5,095) (c)           (36,966)

    Total EBITDA(1)                                $66,232               $(5,095)                       $61,137                     $198,927                 $(12,138)              $186,789
    --------------                                 -------               -------                        -------                     --------                 --------               --------

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


    (a)     Severance costs of $5.9
            million and a vacated
            lease accrual of $0.4
            million partially offset
            by a $0.8 million
            reduction in previously
            accrued restructuring
            charges

    (b)    Severance costs

    (c)     Professional fees and
            expenses related to a
            transaction that did not
            materialize


    Meredith Corporation and Subsidiaries                                                                                                                                                                               Table 5

    Supplemental Disclosures Regarding Non-GAAP Financial Measures


    EBITDA

    Consolidated EBITDA, which is reconciled to net earnings in the following tables, 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 March 31, 2014                     Nine months ended March 31, 2014
                               ---------------------------------                     --------------------------------

                                            National                    Local              Unallocated Corporate               Total                  National           Local         Unallocated Corporate     Total
                                              Media                     Media                                                                           Media            Media
                                              -----                     -----                                                                           -----            -----

    (In thousands)

    Revenues                                            $269,680            $97,734                  $              -              $367,414                 $786,273         $291,641          $              -      $1,077,914
                                                        --------            -------                  ----------------              --------                 --------         --------          ----------------      ----------


    Operating
     profit                                              $13,614            $26,696                           $(9,081)              $31,229                  $69,760          $87,597                  $(31,419)       $125,938

     Depreciation
     and
     amortization                                         15,622              7,009                               402                23,033                   25,355           19,841                     1,222          46,418
                                                                                                                  ---                                                                                     -----

    EBITDA                                               $29,236            $33,705                           $(8,679)               54,262                  $95,115         $107,438                  $(30,197)        172,356
                                                         -------            -------                           -------                                        -------         --------                  --------

    Less:

    Depreciation and amortization                                                                                                   (23,033)                                                                            (46,418)

    Net interest expense                                                                                                             (3,408)                                                                             (8,676)

    Income taxes                                                                                                                     (9,335)                                                                            (44,166)

    Net earnings                                                                                                                    $18,486                                                                             $73,096
                                                                                                                                    -------                                                                             -------


    Segment
     EBITDA
     margin                                                 10.8%              34.5%                                                                            12.1%            36.8%
                                                            ----               ----                                                                             ----             ----


                               Three months ended March 31, 2013                     Nine months ended March 31, 2013
                               ---------------------------------                     --------------------------------

                                            National                    Local              Unallocated Corporate               Total                  National           Local         Unallocated Corporate     Total
                                              Media                     Media                                                                           Media            Media
                                              -----                     -----                                                                           -----            -----

    (In thousands)

    Revenues                                            $284,228            $85,387                  $              -              $369,615                 $800,634         $283,733       $                 -      $1,084,367
                                                        --------            -------                  ----------------              --------                 --------         --------       -------------------      ----------


    Operating
     profit                                              $42,991            $24,085                          $(17,030)              $50,046                  $94,592          $96,440                  $(38,228)       $152,804

     Depreciation
     and
     amortization                                          4,593              6,093                               405                11,091                   14,458           18,265                     1,262          33,985
                                                                                                                  ---                                                                                     -----

    EBITDA                                               $47,584            $30,178                          $(16,625)               61,137                 $109,050         $114,705                  $(36,966)        186,789
                                                         -------            -------                          --------                                       --------         --------                  --------

    Less:

    Depreciation and amortization                                                                                                   (11,091)                                                                            (33,985)

    Net interest expense                                                                                                             (3,228)                                                                            (10,230)

    Income taxes                                                                                                                    (17,397)                                                                            (52,727)

    Net earnings                                                                                                                    $29,421                                                                             $89,847
                                                                                                                                    -------                                                                             -------


    Segment
     EBITDA
     margin                                                 16.7%              35.3%                                                                            13.6%            40.4%
    -------                                                 ----               ----                                                                             ----             ----

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