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As Of Filer Filing As/For/On Docs:Pgs Issuer Agent 8/08/07 Scripps E W Co/DE 10-Q 6/30/07 6:162 RR Donnelley/FA
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 997K 2: EX-12 Ratio of Earnings to Fixed Charges HTML 17K 3: EX-31.(A) Section 302 Ceo Certification HTML 12K 4: EX-31.(B) Section 302 Cfo Certification HTML 12K 5: EX-32.(A) Section 906 Ceo Certification HTML 6K 6: EX-32.(B) Section 906 Cfo Certification HTML 6K
| Quarterly Report |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2007
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
For the transition period from ________________ to ________________
Commission File Number 0-16914
THE E. W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
| Ohio | 31-1223339 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| 312 Walnut Street Cincinnati, Ohio |
45202 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (513) 977-3000
Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of July 31, 2007 there were 126,611,996 of the Registrant’s Class A Common shares outstanding and 36,568,226 of the Registrant’s Common Voting shares outstanding.
INDEX TO THE E. W. SCRIPPS COMPANY
REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2007
| Item No. |
Page | |||
| PART I - FINANCIAL INFORMATION | ||||
| 1 | 3 | |||
| 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
3 | ||
| 3 | 3 | |||
| 4 | 3 | |||
| PART II - OTHER INFORMATION | ||||
| 1 | 3 | |||
| 1A | 3 | |||
| 2 | 4 | |||
| 3 | 4 | |||
| 4 | 5 | |||
| 5 | 5 | |||
| 6 | 5 | |||
| 6 | ||||
2
As used in this Quarterly Report on Form 10-Q, the terms “we,” “our,” “us” or “Scripps” may, depending on the context, refer to The E. W. Scripps Company, to one or more of its consolidated subsidiary companies or to all of them taken as a whole.
| ITEM 1. | FINANCIAL STATEMENTS |
The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.
| ITEM 4. | CONTROLS AND PROCEDURES |
The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.
| ITEM 1. | LEGAL PROCEEDINGS |
We are involved in litigation arising in the ordinary course of business, such as defamation actions, employment and employee relations and various governmental and administrative proceedings, none of which is expected to result in material loss.
| ITEM 1A. | RISK FACTORS |
There have been no material changes to the factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2006.
3
| ITEM 2. | UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS |
There were no sales of unregistered equity securities during the quarter for which this report is filed.
The following table provides information about Company purchases of Class A shares during the quarter ended June 30, 2007:
| Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares that May Yet Be Purchased Under the Plans Or Programs | |||||
| 4/1/07 - 4/30/07 |
130,000 | $ | 44.42 | 130,000 | 2,343,000 | ||||
| 5/1/07 - 5/31/07 |
143,000 | $ | 43.86 | 143,000 | 2,200,000 | ||||
| 6/1/07 - 6/30/07 |
2,200,000 | ||||||||
| Total |
273,000 | $ | 44.12 | 273,000 | 2,200,000 | ||||
Under a share repurchase program authorized by the Board of Directors on October 28, 2004, we were authorized to repurchase up to 5.0 million Class A Common shares. There is no expiration date for the program and we are under no commitment or obligation to repurchase any particular amount of Class A Common shares under the program.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
There were no defaults upon senior securities during the quarter for which this report is filed.
4
| ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
The following table presents information on matters submitted to a vote of security holders at the May 4, 2007 Annual Meeting of Shareholders:
| Description of Matters Submitted |
In Favor | Authority Witheld | ||
| 1. Election of Directors: |
||||
| Class A Common Shares: |
||||
| David A. Galloway |
110,191,115 | 4,364,489 | ||
| Nicholas B. Paumgarten |
109,965,150 | 4,590,454 | ||
| Ronald W. Tysoe |
102,832,335 | 11,723,269 | ||
| Julie A. Wrigley |
109,893,503 | 4,662,101 | ||
| Common Voting Shares: |
||||
| William R. Burleigh |
35,593,746 | 770,000 | ||
| John H. Burlingame |
36,363,746 | |||
| Kenneth W. Lowe |
36,363,746 | |||
| Jarl Mohn |
36,363,746 | |||
| Jeffrey Sagansky |
36,363,746 | |||
| Nackey E. Scagliotti |
36,363,746 | |||
| Edward W. Scripps |
36,363,746 | |||
| Paul K. Scripps |
36,363,746 |
| ITEM 5. | OTHER INFORMATION |
None.
| ITEM 6. | EXHIBITS |
Exhibits
The information required by this item is filed as part of this Form 10-Q. See Index to Exhibits at page E-1 of this Form 10-Q.
5
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| THE E. W. SCRIPPS COMPANY | ||||||||
| Dated: August 8, 2007 | BY: | /s/ Joseph G. NeCastro | ||||||
| Joseph G. NeCastro | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
6
Index to Financial Information
| Item |
Page | |
| F-2 | ||
| F-4 | ||
| F-5 | ||
| Condensed Consolidated Statements of Comprehensive Income and Shareholders’ Equity |
F-6 | |
| F-7 | ||
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
||
| F-29 | ||
| F-29 | ||
| F-31 | ||
| F-32 | ||
| F-32 | ||
| F-33 | ||
| F-34 | ||
| F-37 | ||
| F-39 | ||
| F-42 | ||
| F-43 | ||
| F-44 | ||
| F-45 | ||
| F-47 |
F-1
CONDENSED CONSOLIDATED BALANCE SHEETS
| (in thousands) |
2007 (Unaudited) |
As of 2006 |
2006 (Unaudited) | ||||||
| ASSETS |
|||||||||
| Current assets: |
|||||||||
| Cash and cash equivalents |
$ | 18,778 | $ | 30,450 | $ | 33,733 | |||
| Short-term investments |
2,064 | 2,872 | 1,110 | ||||||
| Accounts and notes receivable (less allowances - $14,586, $15,477, $16,253) |
538,211 | 535,901 | 524,164 | ||||||
| Programs and program licenses |
201,736 | 179,887 | 191,171 | ||||||
| Deferred income taxes |
20,005 | 21,744 | 32,666 | ||||||
| Assets of discontinued operations |
61,237 | 175,478 | |||||||
| Miscellaneous |
34,687 | 43,228 | 36,488 | ||||||
| Total current assets |
815,481 | 875,319 | 994,810 | ||||||
| Investments |
220,639 | 225,349 | 231,399 | ||||||
| Property, plant and equipment |
528,326 | 511,738 | 475,633 | ||||||
| Goodwill and other intangible assets: |
|||||||||
| Goodwill |
1,955,285 | 1,961,051 | 1,940,374 | ||||||
| Other intangible assets |
309,441 | 309,243 | 324,041 | ||||||
| Total goodwill and other intangible assets |
2,264,726 | 2,270,294 | 2,264,415 | ||||||
| Other assets: |
|||||||||
| Programs and program licenses (less current portion) |
272,820 | 249,184 | 189,748 | ||||||
| Unamortized network distribution incentives |
146,004 | 155,578 | 164,303 | ||||||
| Prepaid pension |
9,133 | 9,130 | 54,442 | ||||||
| Miscellaneous |
45,905 | 47,742 | 45,898 | ||||||
| Total other assets |
473,862 | 461,634 | 454,391 | ||||||
| TOTAL ASSETS |
$ | 4,303,034 | $ | 4,344,334 | $ | 4,420,648 | |||
See notes to condensed consolidated financial statements.
F-2
CONDENSED CONSOLIDATED BALANCE SHEETS
| (in thousands, except share data) |
2007 (Unaudited) |
As of 2006 |
2006 (Unaudited) |
|||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
| Current liabilities: |
||||||||||||
| Accounts payable |
$ | 74,282 | $ | 77,945 | $ | 85,375 | ||||||
| Customer deposits and unearned revenue |
64,497 | 50,524 | 49,254 | |||||||||
| Accrued liabilities: |
||||||||||||
| Employee compensation and benefits |
60,491 | 76,744 | 67,221 | |||||||||
| Network distribution incentives |
4,388 | 3,755 | 7,969 | |||||||||
| Accrued income taxes |
31,311 | 36,798 | 10,203 | |||||||||
| Accrued marketing and advertising costs |
14,714 | 19,937 | 16,299 | |||||||||
| Accrued interest |
10,459 | 10,850 | 7,912 | |||||||||
| Miscellaneous |
61,527 | 68,346 | 65,892 | |||||||||
| Liabilities of discontinued operations |
19,719 | 44,964 | ||||||||||
| Other current liabilities |
32,932 | 34,650 | 30,854 | |||||||||
| Total current liabilities |
354,601 | 399,268 | 385,943 | |||||||||
| Deferred income taxes |
340,610 | 334,223 | 355,932 | |||||||||
| Long-term debt (less current portion) |
623,881 | 766,381 | 1,042,434 | |||||||||
| Other liabilities (less current portion) |
181,257 | 140,598 | 122,752 | |||||||||
| Minority interests |
114,311 | 122,429 | 97,783 | |||||||||
| Shareholders’ equity: |
||||||||||||
| Preferred stock, $.01 par - authorized: 25,000,000 shares; none outstanding |
||||||||||||
| Common stock, $.01 par: |
||||||||||||
| Class A - authorized: 240,000,000 shares; issued and outstanding: 126,881,611, 126,974,721; and 126,939,429 shares |
1,269 | 1,270 | 1,269 | |||||||||
| Voting - authorized: 60,000,000 shares; issued and outstanding: 36,568,226, 36,568,226 and 36,568,226 shares |
366 | 366 | 366 | |||||||||
| Total |
1,635 | 1,636 | 1,635 | |||||||||
| Additional paid-in capital |
461,563 | 431,432 | 395,614 | |||||||||
| Retained earnings |
2,210,303 | 2,145,875 | 2,008,434 | |||||||||
| Accumulated other comprehensive income (loss), net of income taxes: |
||||||||||||
| Unrealized gains on securities available for sale |
9,775 | 10,591 | 4,751 | |||||||||
| Pension liability adjustments |
(53,657 | ) | (54,863 | ) | (18,550 | ) | ||||||
| Foreign currency translation adjustment |
58,755 | 46,764 | 23,920 | |||||||||
| Total shareholders’ equity |
2,688,374 | 2,581,435 | 2,415,804 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 4,303,034 | $ | 4,344,334 | $ | 4,420,648 | ||||||
See notes to condensed consolidated financial statements.
F-3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| (in thousands, except per share data) |
2007 | 2006 | 2007 | 2006 | ||||||||||||
| Operating Revenues: |
||||||||||||||||
| Advertising |
$ | 459,245 | $ | 465,387 | $ | 874,434 | $ | 884,145 | ||||||||
| Referral fees |
59,176 | 64,531 | 121,261 | 122,684 | ||||||||||||
| Network affiliate fees, net |
58,672 | 49,247 | 116,524 | 97,533 | ||||||||||||
| Circulation |
29,579 | 30,423 | 60,457 | 62,957 | ||||||||||||
| Licensing |
17,421 | 17,580 | 35,694 | 36,510 | ||||||||||||
| Other |
15,981 | 14,746 | 33,128 | 27,814 | ||||||||||||
| Total operating revenues |
640,074 | 641,914 | 1,241,498 | 1,231,643 | ||||||||||||
| Costs and Expenses: |
||||||||||||||||
| Employee compensation and benefits |
180,711 | 164,284 | 364,656 | 333,456 | ||||||||||||
| Production and distribution |
71,207 | 74,407 | 142,968 | 148,416 | ||||||||||||
| Programs and program licenses |
70,209 | 58,249 | < | |||||||||||||