|
|
|
|
|
|
|
|
|
|
|
|
|
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, 1995
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 1-16914
THE E.W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 51-0304972
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1105 N. Market Street
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 478-4141
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 the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date. As of July 13, 1995 the registrant had
outstanding 60,013,230 shares of Class A Common stock and
19,990,833 shares of Common Voting stock.
<PAGE>
INDEX TO THE E.W. SCRIPPS COMPANY
REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
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
PART II - OTHER INFORMATION
1 Legal Proceedings 3
2 Changes in Securities 3
3 Defaults Upon Senior Securities 3
4 Submission of Matters to a Vote of Security Holders 4
5 Other Information 4
6 Exhibits and Reports on Form 8-K 4
<PAGE>
PART I
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.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation arising in the
ordinary course of business, such as defamation actions. In
addition, the Company is involved from time to time in
various governmental and administrative proceedings relating
to, among other things, renewal of broadcast licenses, none
of which is expected to result in material loss.
ITEM 2. CHANGES IN SECURITIES
There were no changes in the rights of security holders
during the quarter for which this report is filed.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There were no defaults upon senior securities during the
quarter for which this report is filed.
<PAGE>
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 1995 Annual
Meeting of Shareholders.
<TABLE>
<CAPTION>
Broker
Description of Matter Submitted In Favor Against Abstain Non-Votes
<S> <C> <C> <C>
Class A Common stock:
Election of Directors
David R. Huhn 54,729,702 437,559 4,519,258
Daniel J. Meyer 54,729,602 437,659 4,519,258
Nicholas B. Paumgarten 54,729,801 437,460 4,519,258
Common voting stock:
Election of Directors 18,075,995 2,098,838
Adopt Stock Option Plan for
Non-Employee Directors 18,075,995 2,098,838
</TABLE>
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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.
Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for
which this report is filed.
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: July 21, 1995 BY:/s/ Daniel J. Castellini
D. J. Castellini
Senior Vice President,
Finance & Administration
<PAGE>
THE E.W. SCRIPPS COMPANY
Index to Financial Information
Item Page
Consolidated Balance Sheets F-2
Consolidated Statements of Income F-4
Consolidated Statements of Cash Flows F-5
Consolidated Statements of Stockholders' Equity F-6
Notes to Consolidated Financial Statements F-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations F-10
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands ) As of
June 30, December 31, June 30,
1995 1994 1994
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 25,073 $ 16,609 $ 12,483
Accounts and notes receivable (less
allowances - $5,434, $5,653, $5,819) 157,843 155,917 139,833
Program rights and production costs 20,205 35,073 36,812
Inventories 27,488 22,201 24,712
Refundable income taxes 18,115 25,214
Deferred income taxes 24,598 22,007 18,651
Miscellaneous 23,213 20,007 23,471
Total current assets 296,535 297,028 255,962
Investments 41,152 35,146 60,323
Property, Plant, and Equipment 716,609 713,763 713,686
Goodwill and Other Intangible Assets 603,047 616,113 542,301
Other Assets:
Program rights and production costs (less current portion) 31,298 38,779 36,622
Miscellaneous 10,418 22,131 22,058
Total other assets 41,716 60,910 58,680
TOTAL ASSETS $ 1,699,059 $ 1,722,960 $ 1,630,952
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands, except share data ) As of
June 30, December 31, June 30,
1995 1994 1994
(Unaudited) (Unaudited)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 47,046 $ 10,985
Accounts payable 57,954 $ 131,592 67,596
Customer deposits and unearned revenue 22,214 23,846 18,179
Accrued liabilities:
Employee compensation and benefits 28,220 32,648 33,143
Artist and author royalties 9,805 8,177 10,338
Copyright and programming costs 7,907 7,522 7,059
Interest 1,953 1,999 2,649
Income taxes 3,006 2,507 19,249
Miscellaneous 46,081 50,533 39,249
Total current liabilities 224,186 258,824 208,447
Deferred Income Taxes 155,694 150,968 171,483
Long-Term Debt (less current portion) 63,433 110,431 151,582
Other Long-Term Obligations and Minority Interests 118,621 119,269 193,978
Stockholders' Equity:
Preferred stock, $.01 par - authorized: 25,000,000 shares;
none outstanding
Common stock, $.01 par:
Class A - authorized: 120,000,000 shares; issued and
outstanding: 59,996,430, 59,671,242,
and 54,618,754 shares 600 597 546
Voting - authorized: 30,000,000 shares; issued and
outstanding: 19,990,833, 20,174,833,
and 20,174,833 shares 200 202 202
Total 800 799 748
Additional paid-in capital 251,785 248,098 98,740
Retained earnings 869,282 823,204 790,451
Unrealized gains on securities available for sale 15,952 12,518 15,429
Unvested restricted stock awards (2,028) (2,036) (821)
Foreign currency translation adjustment 1,334 885 915
Total stockholders' equity 1,137,125 1,083,468 905,462
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,699,059 $ 1,722,960 $ 1,630,952
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>
( in thousands, except share data ) Three Six
months months
ended ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Revenues:
Advertising $ 116,315 $ 108,748 $ 224,566 $ 209,492
Circulation 31,165 29,189 62,485 58,745
Other newspaper revenue 13,632 13,828 25,668 25,565
Total newspapers 161,112 151,765 312,719 293,802
Broadcast television 77,080 73,892 144,048 134,245
Cable television 69,750 63,266 136,745 125,651
Entertainment 21,115 18,676 47,809 39,654
Total operating revenues 329,057 307,599 641,321 593,352
Operating Expenses:
Employee compensation and benefits 95,242 89,849 190,064 177,972
Program rights and production costs 29,929 29,726 62,666 56,950
Newsprint and ink 29,381 22,131 56,252 42,788
Other operating expenses 77,328 71,991 151,492 140,613
Depreciation 23,527 23,154 45,648 44,566
Amortization of intangible assets 7,041 7,506 14,706 15,119
Total operating expenses 262,448 244,357 520,828 478,008
Operating Income 66,609 63,242 120,493 115,344
Other Credits (Charges):
Interest expense (2,913) (4,613) (6,400) (9,272)
Gain on sale of Garfield copyrights 31,621 31,621
Miscellaneous, net 375 (374) 2,002 (252)
Net other credits (charges) (2,538) 26,634 (4,398) 22,097
Income Before Income Taxes and Minority Interests 64,071 89,876 116,095 137,441
Provision for Income Taxes 27,064 39,174 49,039 59,526
Income Before Minority Interests 37,007 50,702 67,056 77,915
Minority Interests 868 2,878 1,803 4,994
Net Income $ 36,139 $ 47,824 $ 65,253 $ 72,921
Per Share of Common Stock:
Net income $0.45 $0.64 $0.82 $0.98
Dividends declared $0.13 $0.11 $0.24 $0.22
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
( in thousands ) Six
months
ended
June 30,
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 65,253 $ 72,921
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation and amortization 60,354 59,685
Deferred income taxes 286 2,057
Minority interests in income of subsidiary companies 1,803 4,994
Gain on sale of Garfield copyrights (31,621)
Changes in certain working capital accounts, net of effects
from subsidiary companies purchased and sold (70,666) 6,687
Miscellaneous, net 21,400 7,010
Net operating activities 78,430 121,733
Cash Flows from Investing Activities:
Additions to property, plant, and equipment (49,624) (39,096)
Purchase of subsidiary companies and investments (5,125) (19,099)
Sale of subsidiary companies, copyrights, and investments 2,729 33,626
Miscellaneous, net 1,264 827
Net investing activities (50,756) (23,742)
Cash Flows from Financing Activities:
Payments on long-term debt (26) (85,426)
Dividends paid (19,175) (16,448)
Dividends paid to minority interests (832) (1,770)
Miscellaneous, net 823 (470)
Net financing activities (19,210) (104,114)
Increase (Decrease) in Cash and Cash Equivalents 8,464 (6,123)
Cash and Cash Equivalents:
Beginning of year 16,609 18,606
End of period $ 25,073 $ 12,483
Supplemental Cash Flow Disclosures:
Interest paid, excluding amounts capitalized $ 6,378 $ 9,290
Income taxes paid 39,862 44,598
Increase in program rights and related liabilities 10,778 6,164
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
<CAPTION>
( in thousands, except share data )
Unrealized
Gains on Unvested Foreign
Additional Securities Restricted Currency
Common Paid-in Retained Available Stock Translation
Stock Capital Earnings for Sale Awards Adjustment
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1993 $ 748 $ 97,945 $ 733,978 $ 27,381 $ (1,009) $ 592
Net income 72,921
Dividends: declared and
paid - $.22 per share (16,448)
Class A Common shares issued pursuant to
compensation plans, net:
37,975 shares issued,
and 5,716 shares repurchased 688
Tax benefits on compensation plans 107
Amortization of restricted stock awards 188
Foreign currency translation adjustment 323
Increase (decrease) in unrealized gains
on securities available for sale, net
of deferred income taxes of ($6,436) (11,952)
Balances at June 30, 1994 $ 748 $ 98,740 $ 790,451 $ 15,429 $ (821) $ 915
Balances at December 31, 1994 $ 799 $ 248,098 $ 823,204 $ 12,518 $ (2,036) $ 885
Net income 65,253
Dividends: declared and
paid - $.24 per share (19,175)
Conversion of 184,000 Voting common shares
to 184,000 Class A common shares
Class A Common shares issued pursuant to
compensation plans, net:
157,950 shares issued,
and 16,762 shares repurchased 1 3,194 (492)
Tax benefits on compensation plans 493
Amortization of restricted stock awards 500
Foreign currency translation adjustment 449
Increase in unrealized gains on
securities available for sale, net
of deferred income taxes of $1,849 3,434
Balances at June 30, 1995 $ 800 $ 251,785 $ 869,282 $ 15,952 $ (2,028) $ 1,334
See notes to consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________________________________________________
_______________________
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The financial statements
have been prepared in accordance with generally
accepted accounting principles for interim
financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Except
as disclosed herein, there has been no material
change in the information disclosed in the notes to
consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year
ended December 31, 1994. Financial information as
of December 31, 1994 included in these financial
statements has been derived from the audited
consolidated financial statements included in that
report. In management's opinion all adjustments
(consisting of normal recurring accruals) necessary
for a fair presentation of the interim periods have
been made.
Results of operations for the quarter and year-to-
date periods are not necessarily indicative of the
results that may be expected for future interim
periods or for the full year.
Net Income Per Share - Net income per share computations
are based upon the weighted average common shares
outstanding. The weighted average common shares
outstanding were as follows:
<TABLE>
<CAPTION>
( in thousands ) Three Six
months months
ended ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Weighted average shares outstanding 79,927 74,776 79,891 74,769
</TABLE>
Reclassification - For comparison purposes certain
1994 items have been reclassified to conform with
1995 classifications.
<PAGE>
2. ACQUISITIONS AND DIVESTITURES
A. Acquisitions
1995 - The Company acquired a cable television
system.
1994 - The Company acquired Cinetel Productions (an
independent producer of programs for cable
television).
The following table presents additional information about
the acquisitions:
<TABLE>
<CAPTION>
( in thousands ) Six months
ended
June 30,
1995 1994
<S> <C> <C>
Goodwill and other intangible assets acquired $ 143 $ 3,445
Other assets acquired 79 14,772
Liabilities assumed (899)
Cash paid $ 222 $ 17,318
</TABLE>
The acquisitions have been accounted for as
purchases, and accordingly purchase prices were
allocated to assets and liabilities based on the
estimated fair value as of the dates of acquisition.
The acquired operations have been included in the
consolidated statements of income from the dates of
acquisition. Pro forma results are not presented
because the combined results of operations would not
be significantly different from the reported amounts.
B. Divestitures
1995 - The Company sold its Watsonville, California,
daily newspaper. The sale had no material effect on
the results of operations.
<PAGE>
3.LONG-TERM DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
( in thousands ) As of
June 30, December 31, June 30,
1995 1994 1994
<S> <C> <C> <C>
Variable Rate Credit Facility $ 2,600
7.375% notes, due in 1998 $ 61,235 $ 61,161 99,338
9.0% notes, due in 1996 47,000 47,000 50,000
8.5% notes, payable through 1994 8,334
Other notes 2,244 2,270 2,295
Total long-term debt 110,479 110,431 162,567
Current portion of long-term debt 47,046 10,985
Long-term debt (less current portion) $ 63,433 $ 110,431 $ 151,582
Weighted average interest rate on Variable Rate
Credit Facility at balance sheet date 5.0%
</TABLE>
The Company has a Competitive Advance/Revolving Credit
Agreement ("Variable Rate Credit Facility") which expires
in September 1995 and permits maximum borrowing up to
$50,000,000. The maximum borrowings under the facility
is changed as the Company's anticipated needs change and
is not indicative of the Company's short-term borrowing
capacity. The credit facility may be extended upon
mutual agreement.
Certain long-term debt agreements contain maintenance
requirements on net worth and coverage of interest
expense and restrictions on dividends and incurrence of
additional indebtedness.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Consolidated results of operations were as follows:
<TABLE>
<CAPTION>
( in thousands, except per share data ) Quarterly Year-to-
Period Date
1995 Change 1994 1995 Change 1994
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Newspapers $ 161,112 6.8 % $ 150,814 $ 312,425 7.0 % $ 292,024
Broadcast television 77,080 4.3 % 73,892 144,048 7.3 % 134,245
Cable television 69,750 10.2 % 63,266 136,745 8.8 % 125,651
Entertainment 21,115 13.1 % 18,676 47,809 20.6 % 39,654
Continuing operations 329,057 7.3 % 306,648 641,027 8.4 % 591,574
Divested operations 951 294 1,778
Total operating revenues $ 329,057 7.0 % $ 307,599 $ 641,321 8.1 % $ 593,352
Operating income:
Newspapers $ 34,755 1.9 % $ 34,105 $ 64,277 3.3 % $ 62,223
Broadcast television 24,890 (4.9)% 26,161 41,186 (1.8)% 41,951
Cable television 14,879 101.6 % 7,379 28,343 67.7 % 16,904
Entertainment (3,807) (1,045) (4,651) 1,000
Corporate (4,086) (3,359) (8,532) (6,636)
Continuing operations 66,631 5.4 % 63,241 120,623 4.5 % 115,442
Divested operations (22) 1 (130) (98)
Total operating income 66,609 5.3 % 63,242 120,493 4.5 % 115,344
Interest expense (2,913) (4,613) (6,400) (9,272)
Gain on sale of Garfield copyrights 31,621 31,621
Miscellaneous, net 375 (374) 2,002 (252)
Income taxes (27,064) (39,174) (49,039) (59,526)
Minority interest (868) (2,878) (1,803) (4,994)
Net income $ 36,139 $ 47,824 $ 65,253 $ 72,921
Per share of common stock:
Net income $.45 $.64 $.82 $.98
Garfield gain ( .23) ( .23)
Adjusted net income per share $.45 9.8 % $.41 $.82 10.8 % $.74
The sum of the reported net income per share and the per share effect of net gains and unusual items may not
equal the adjusted net income per share as each is computed independently based on the weighted average shares
outstanding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
( in thousands ) Quarterly Year-to-
Period Date
1995 Change 1994 1995 Change 1994
<S> <C> <C> <C> <C> <C> <C>
Other Financial and Statistical Data:
Total advertising revenues $ 198,935 7.8 % $ 184,609 $ 377,748 8.8 % $ 347,243
Advertising revenues as a
percentage of total revenues 60.5 % 60.2 % 58.9 % 58.7 %
EBITDA:
Newspapers $ 43,718 1.7 % $ 42,990 $ 82,347 3.0 % $ 79,977
Broadcast television 31,307 (0.0)% 31,314 53,822 3.2 % 52,134
Cable television 29,018 25.4 % 23,136 56,205 18.6 % 47,403
Entertainment (3,069) (363) (3,345) 1,879
Corporate (3,775) (3,215) (8,055) (6,344)
Continuing operations 97,199 3.6 % 93,862 $ 180,974 3.4 % $ 175,049
Effective income tax rate 42.2 % 43.6 % 42.2 % 43.3 %
Weighted average shares outstanding 79,927 6.9 % 74,776 79,891 6.9 % 74,769
Total capital expenditures $ 29,293 57.0 % $ 18,662 $ 49,624 26.9 % $ 39,095
</TABLE>
Earnings before interest, income taxes, depreciation, and
amortization ("EBITDA") is included in the discussion of
segment results because:
Changes in depreciation and amortization are often
unrelated to current performance. Management believes
the year-over-year change in EBITDA is a more useful
measure of year-over-year performance than the change
in operating income because, combined with information
on capital spending plans, it is a more reliable
indicator of results that may be expected in future
periods.
Banks and other lenders use EBITDA to determine the
Company's borrowing capacity.
Financial analysts use EBITDA to value communications
media companies.
Acquisitions of communications media businesses are
based on multiples of EBITDA.
EBITDA should not, however, be construed as an alternative
measure of the amount of the Company's income or cash flows
from operating activities.
The Company sold its Watsonville, California, daily
newspaper in the first quarter of 1995.
Year-to-date operating losses for the Home & Garden
Television network ("HGTV") totaled $6,600,000, $4,100,000
after-tax, $.05 per share in 1995 and $1,500,000, $900,000
after-tax, $.01 per share in 1994. Operating losses for the
quarterly periods were $3,400,000, $2,100,000 after-tax,
$.03 per share in 1995 and $1,200,000, $700,000 after-tax,
$.01 per share in 1994.
The Company sold its worldwide Garfield and U.S. Acres
copyrights in the second quarter of 1994. The sale resulted
in a pre-tax gain of $31,600,000, $17,400,000 after-tax,
$.23 per share.
Interest expense decreased as a result of reduced
borrowings. Minority interests decreased as a result of the
September 1994 acquisition of the remaining minority
interest in Scripps Howard Broadcasting Company.
Operating results, excluding the Watsonville newspaper, are
presented on the following pages. The results of the
divested operation are excluded from the segment operating
results because management believes it is not relevant to
understanding the Company's ongoing operations.
<PAGE>
NEWSPAPERS - Operating results for the newspaper segment,
excluding the Watsonville newspaper, were as follows:
<TABLE>
<CAPTION>
( in thousands, except newsprint information ) Quarterly Year-to-
Period Date
1995 Change 1994 1995 Change 1994
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Local $ 48,683 5.1 % $ 46,306 $ 95,498 4.5 % $ 91,352
Classified 46,594 10.1 % 42,324 88,688 11.7 % 79,396
National 4,425 8.2 % 4,089 8,314 3.0 % 8,074
Preprint 16,613 8.6 % 15,299 31,838 8.6 % 29,317
Newspaper advertising 116,315 7.7 % 108,018 224,338 7.8 % 208,139
Circulation 31,165 7.3 % 29,046 62,435 6.8 % 58,460
Joint operating agency distributions 11,508 (1.5)% 11,680 21,681 1.1 % 21,446
Other 2,124 2.6 % 2,070 3,971 (0.2)% 3,979
Total operating revenues 161,112 6.8 % 150,814 312,425 7.0 % 292,024
Operating expenses:
Employee compensation and benefits 54,567 (0.7)% 54,971 109,347 0.3 % 108,976
Newsprint and ink 29,381 33.3 % 22,045 56,227 31.9 % 42,628
Other 33,446 8.6 % 30,808 64,504 6.7 % 60,443
Depreciation and amortization 8,963 0.9 % 8,885 18,070 1.8 % 17,754
Total operating expenses 126,357 8.3 % 116,709 248,148 8.0 % 229,801
Operating income $ 34,755 1.9 % $ 34,105 $ 64,277 3.3 % $ 62,223
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ 43,718 1.7 % $ 42,990 $ 82,347 3.0 % $ 79,977
Percent of operating revenues:
Operating income 21.6 % 22.6 % 20.6 % 21.3 %
EBITDA 27.1 % 28.5 % 26.4 % 27.4 %
Capital expenditures $ 6,816 62.9 % $ 4,185 $ 10,010 (2.4)% $ 10,258
Advertising inches:
Local 1,666 (0.7)% 1,678 3,372 (0.4)% 3,385
Classified 2,771 0.5 % 2,757 5,330 4.0 % 5,123
National 84 2.4 % 82 167 4.4 % 160
Total full run ROP 4,521 0.1 % 4,517 8,869 2.3 % 8,668
</TABLE>
EBITDA for the newspaper division improved as increased
advertising revenues and cost control measures more than
offset the sharp rise in the price of newsprint. Year-over-
year newsprint consumption decreased 4.3% in the quarter and
1.5% year-to-date.
<PAGE>
BROADCAST TELEVISION - Operating results for the broadcast
television segment were as follows:
<TABLE>
<CAPTION>
( in thousands ) Quarterly Year-to-
Period Date
1995 Change 1994 1995 Change 1994
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Local $ 39,072 2.7 % $ 38,030 $ 74,328 5.4 % $ 70,517
National 33,937 4.4 % 32,507 61,605 6.5 % 57,832
Political 310 1,239 371 1,601
Other 3,761 77.7 % 2,116 7,744 80.3 % 4,295
Total operating revenues 77,080 4.3 % 73,892 144,048 7.3 % 134,245
Operating expenses:
Employee compensation and benefits 22,293 20.2 % 18,545 44,003 20.6 % 36,483
Program rights 10,555 (19.2)% 13,059 20,905 (16.7)% 25,085
Other 12,925 17.8 % 10,974 25,318 23.2 % 20,543
Depreciation and amortization 6,417 24.5 % 5,153 12,636 24.1 % 10,183
Total operating expenses 52,190 9.3 % 47,731 102,862 11.5 % 92,294
Operating income $ 24,890 (4.9)% $ 26,161 $ 41,186 (1.8)% $ 41,951
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ 31,307 (0.0)% $ 31,314 $ 53,822 3.2 % $ 52,134
Percent of operating revenues:
Operating income 32.3 % 35.4 % 28.6 % 31.2 %
EBITDA 40.6 % 42.4 % 37.4 % 38.8 %
Capital expenditures $ 6,008 88.6 % $ 3,185 $ 10,325 75.7 % $ 5,877
</TABLE>
Local and national advertising revenues increased sharply at
the Company's Phoenix and Tampa television stations. In
1994 the Company negotiated 10-year affiliation agreements
with ABC to replace those stations' Fox affiliations. Also
in 1994, the Company's Baltimore television station signed
an agreement to change to ABC from NBC in January 1995, and
the ABC affiliation agreements at the Cleveland and Detroit
television stations were extended. The increase in other
revenue is primarily due to the new and extended affiliation
agreements with ABC.
The increase in employee costs, other expenses, depreciation
and amortization, and capital expenditures is due primarily
to the Company's expanded schedules of local news programs
at the former Fox affiliates. The decrease in program
rights expense is due to the availability of more network
programming at the former Fox affiliates.
Depreciation and amortization also increased as a result of
the acquisition of the remaining minority interest in
Scripps Howard Broadcasting Company.
<PAGE>
CABLE TELEVISION - In March 1995 the Company engaged Merrill
Lynch & Company to assist with the development of a long-
term strategy for the Company's cable television division,
which could include seeking joint ventures, selling some or
all of the Company's systems, or acquiring additional
systems.
Operating results for the cable television segment were as
follows:
<TABLE>
<CAPTION>
( in thousands, except per subscriber information) Quarterly Year-to-
Period Date
1995 Change 1994 1995 Change 1994
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Basic services $ 46,408 12.3 % $ 41,315 $ 91,076 10.6 % $ 82,352
Premium programming services 12,921 6.0 % 12,189 25,424 5.1 % 24,186
Other monthly service 3,780 (11.2)% 4,257 8,144 (3.9)% 8,471
Advertising 3,441 27.5 % 2,699 6,023 24.0 % 4,859
Installation and miscellaneous 3,200 14.0 % 2,806 6,078 5.1 % 5,783
Total operating revenues 69,750 10.2 % 63,266 136,745 8.8 % 125,651
Operating expenses:
Employee compensation and benefits 11,009 7.2 % 10,272 22,011 5.7 % 20,821
Program costs 17,406 14.1 % 15,253 34,597 14.6 % 30,192
Other 12,317 (15.7)% 14,605 23,932 (12.1)% 27,235
Depreciation and amortization 14,139 (10.3)% 15,757 27,862 (8.6)% 30,499
Total operating expenses 54,871 (1.8)% 55,887 108,402 (0.3)% 108,747
Operating income $ 14,879 101.6 % $ 7,379 $ 28,343 67.7 % $ 16,904
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ 29,018 25.4 % $ 23,136 $ 56,205 18.6 % $ 47,403
Percent of operating revenues:
Operating income 21.3 % 11.7 % 20.7 % 13.5 %
EBITDA 41.6 % 36.6 % 41.1 % 37.7 %
Capital expenditures $ 11,115 4.4 % $ 10,650 $ 18,808 (15.2)% $ 22,171
Average number of basic subscribers 751.5 5.4 % 712.9 748.3 5.5 % 709.1
Average monthly revenue
per basic subscriber $ 30.94 4.6 % $ 29.58 $ 30.46 3.1 % $ 29.53
Homes passed at end of period 1,181.8 2.2 % 1,156.3
Basic subscribers at end of period 750.4 4.8 % 715.7
Penetration rate 63.5 % 61.9 %
</TABLE>
Other expenses in 1994 includes charges for special rebates
to the Company's Sacramento system customers and related
legal costs. The rebates were awarded by a federal court in
connection with litigation concerning the system's pricing
policies in the late 1980s.
<PAGE>
ENTERTAINMENT - Operating results for the entertainment
segment were as follows:
<TABLE>
<CAPTION>
( in thousands ) Quarterly Year-to-
Period Date
1995 Change 1994 1995 Change 1994
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Licensing $ 12,097 4.3 % $ 11,596 $ 27,579 0.6 % $ 27,404
Syndication 4,401 (4.1)% 4,591 8,825 (5.2)% 9,305
Film and television programming 1,897 2,313 6,811 2,769
Other 2,720 176 4,594 176
Total operating revenues 21,115 13.1 % 18,676 47,809 20.6 % 39,654
Operating expenses:
Employee compensation and benefits 5,013 38.8 % 3,611 9,608 41.0 % 6,816
Artists' royalties 8,456 4.7 % 8,080 18,741 0.1 % 18,721
Programming and production costs 1,968 1,414 7,164 1,673
Other 8,747 47.4 % 5,934 15,641 48.0 % 10,565
Depreciation and amortization 738 8.2 % 682 1,306 48.6 % 879
Total operating expenses 24,922 26.4 % 19,721 52,460 35.7 % 38,654
Operating income $ (3,807) $ (1,045) $ (4,651) $ 1,000
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ (3,069) $ (363) $ (3,345) $ 1,879
Percent of operating revenues:
Operating income (18.0)% (5.6)% (9.7)% 2.5 %
EBITDA (14.5)% (1.9)% (7.0)% 4.7 %
Capital expenditures $ 4,920 $ 471 $ 9,113 $ 502
</TABLE>
Year-to-date operating losses for the Home & Garden
Television network ("HGTV") totaled $6,600,000 in 1995 and
$1,500,000 in 1994. Operating losses for the quarterly
periods were $3,400,000 in 1995 and $1,200,000 in 1994.
The Company acquired Cinetel Productions in Knoxville,
Tennessee, on March 31, 1994. Cinetel is one of the largest
independent producers of programs for cable television.
Cinetel's results of operations are included in the
Entertainment segment from the date of acquisition.
The Company sold its "Garfield" and "US Acres" copyrights in
the second quarter of 1994, resulting in the decrease in
syndication revenues in the quarter and year-to-date
periods. Excluding "Garfield" from 1994 results, licensing
revenues increased approximately 22% in the second quarter
and year-to-date periods. The Japanese market contributed
most of the increase in licensing revenues. The year-over-
year change in the exchange rate for the Japanese yen
increased licensing revenues $1,700,000 in the year-to-date
period and $1,000,000 in the quarterly period.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities was $78,000,000 in 1995
compared to $122,000,000 in 1994.
Cash flow from operating activities in 1995 was used
primarily for capital expenditures of $49,600,000,
acquisitions and investments of $5,100,000, and dividend
payments of $20,000,000.
In July the Company announced an agreement to form a
joint venture with Hyperion Telecommunications to build and
operate a competitive access telecommunications system in Knoxville
and Chattanooga. The Company expects to finance its capital
requirements and investments in the joint venture and HGTV
primarily through cash flow from operations.
THE E.W. SCRIPPS COMPANY
Index to Exhibits
Exhibit
No. Item Page
12 Ratio of Earnings to Fixed Charges E-2
27 Financial Data Schedule E-3
<TABLE>
RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12
<CAPTION>
( in thousands ) Three Six
months months
ended ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
EARNINGS AS DEFINED:
Earnings from operations before income taxes after
eliminating undistributed earnings of 20%- to
50%-owned affiliates $ 64,827 $ 91,190 $ 121,916 $ 139,864
Fixed charges excluding capitalized interest and
preferred stock dividends of majority-owned
subsidiary companies 4,114 5,985 8,965 11,985
Earnings as defined $ 68,941 $ 97,175 $ 130,881 $ 151,849
FIXED CHARGES AS DEFINED:
Interest expense, including amortization of
debt issue costs $ 2,913 $ 4,613 $ 6,400 $ 9,272
Interest capitalized 54 87
Portion of rental expense representative
of the interest factor 1,201 1,156 2,565 2,303
Preferred stock dividends of majority-owned
subsidiary companies 20 20 40 40
Share of interest expense related to guaranteed debt
50%-owned affiliated company 216 410
Fixed charges as defined $ 4,188 $ 6,005 $ 9,092 $ 12,025
RATIO OF EARNINGS TO FIXED CHARGES 16.46 16.18 14.40 12.63
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 25,073
<SECURITIES> 0
<RECEIVABLES> 163,277
<ALLOWANCES> 5,434
<INVENTORY> 27,488
<CURRENT-ASSETS> 296,535
<PP&E> 1,303,121
<DEPRECIATION> 586,512
<TOTAL-ASSETS> 1,699,059
<CURRENT-LIABILITIES> 224,186
<BONDS> 63,433
<COMMON> 800
0
0
<OTHER-SE> 1,136,325
<TOTAL-LIABILITY-AND-EQUITY> 1,699,059
<SALES> 0
<TOTAL-REVENUES> 641,321
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 516,794
<LOSS-PROVISION> 4,034
<INTEREST-EXPENSE> 6,400
<INCOME-PRETAX> 116,095
<INCOME-TAX> 49,039
<INCOME-CONTINUING> 65,253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,253
<EPS-PRIMARY> $.82
<EPS-DILUTED> $.82
</TABLE>
|
|