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Scripps E W Co/DE · 10-Q · For 6/30/07

Filed On 8/8/07 5:07pm ET   ·   SEC File 0-16914   ·   Accession Number 1193125-7-175748

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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

Quarterly Report   ·   Form 10-Q
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10-Q   ·   Quarterly Report
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page
"Table of Contents
"Financial Statements
"Management s Discussion and Analysis of Financial Condition and Results of Operations
"Quantitative and Qualitative Disclosures About Market Risk
"Controls and Procedures
"Legal Proceedings
"Risk Factors
"Unregistered Sales of Equity and Use of Proceeds
"Defaults Upon Senior Securities
"Submission of Matters to a Vote of Security Holders
"Other Information
"Exhibits
"Signatures
"Condensed Consolidated Balance Sheets
"Condensed Consolidated Statements of Income
"Condensed Consolidated Statements of Cash Flows
"Condensed Consolidated Statements of Comprehensive Income and Shareholders Equity
"Condensed Notes to Consolidated Financial Statements
"Forward-Looking Statements
"Executive Overview
"Critical Accounting Policies and Estimates
"Results of Operations
"Consolidated Results of Operations
"Discontinued Operations
"Continuing Operations
"Business Segment Results
"Scripps Networks
"Newspapers
"Broadcast Television
"Interactive Media
"Liquidity and Capital Resources

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  Quarterly Report  
Table of Contents

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.

 



Table of Contents

 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   

Financial Statements

   3
2   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

   3
3   

Quantitative and Qualitative Disclosures About Market Risk

   3
4   

Controls and Procedures

   3
   PART II - OTHER INFORMATION   
1   

Legal Proceedings

   3
1A   

Risk Factors

   3
2   

Unregistered Sales of Equity and Use of Proceeds

   4
3   

Defaults Upon Senior Securities

   4
4   

Submission of Matters to a Vote of Security Holders

   5
5   

Other Information

   5
6   

Exhibits

   5
  

Signatures

   6

 

2


Table of Contents

 PART I

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.

 PART II

 

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


Table of Contents
 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


Table of Contents
 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


Table of Contents

 SIGNATURES

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


Table of Contents

 THE E. W. SCRIPPS COMPANY

Index to Financial Information

 

Item

   Page

Condensed Consolidated Balance Sheets

   F-2

Condensed Consolidated Statements of Income

   F-4

Condensed Consolidated Statements of Cash Flows

   F-5

Condensed Consolidated Statements of Comprehensive Income and Shareholders’ Equity

   F-6

Condensed Notes to Consolidated Financial Statements

   F-7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

Forward-Looking Statements

   F-29

Executive Overview

   F-29

Critical Accounting Policies and Estimates

   F-31

Results of Operations

  

Consolidated Results of Operations

   F-32

Discontinued Operations

   F-32

Continuing Operations

   F-33

Business Segment Results

   F-34

Scripps Networks

   F-37

Newspapers

   F-39

Broadcast Television

   F-42

Interactive Media

   F-43

Liquidity and Capital Resources

   F-44

Quantitative and Qualitative Disclosures About Market Risk

   F-45

Controls and Procedures

   F-47

 

F-1


Table of Contents

 CONDENSED CONSOLIDATED BALANCE SHEETS

 

(in thousands)

  

June 30,

2007

(Unaudited)

  

As of

December 31,

2006

  

June 30,

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


Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share data)

  

June 30,

2007

(Unaudited)

   

As of

December 31,

2006

   

June 30,

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


Table of Contents

 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      <