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Previous: SEARS MUNICIPAL TRUST CALIFORNIA PORTFOLIO SERIES 59, 485BPOS, 1995-10-19 |
Next: PRIDE PETROLEUM SERVICES INC, 424B3, 1995-10-19 |
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 September 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
September 30, 1995 the registrant had outstanding 60,028,980 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 SEPTEMBER 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
There were no matters submitted to a vote of security holders during
the quarter for which this report is filed.
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: October 19, 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
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands ) As of
September 30, December 31, September 30,
1995 1994 1994
( Unaudited ) ( Unaudited )
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 14,579 $ 16,609 $ 12,705
Short-term investments 38,000
Accounts and notes receivable (less
allowances - $5,377, $5,653, $5,741) 154,087 155,917 136,726
Program rights and production costs 46,199 35,073 51,899
Inventories 31,790 22,201 25,110
Refundable income taxes 23,255 25,214 5,007
Deferred income taxes 23,771 22,007 19,650
Miscellaneous 22,651 20,007 21,885
Total current assets 354,332 297,028 272,982
Investments 52,375 35,146 51,164
Property, Plant, and Equipment 712,904 713,763 710,658
Goodwill and Other Intangible Assets 595,979 616,113 637,046
Other Assets:
Program rights and production costs (less current portion) 55,577 38,779 38,118
Miscellaneous 9,907 22,131 20,308
Total other assets 65,484 60,910 58,426
TOTAL ASSETS $ 1,781,074 $ 1,722,960 $ 1,730,276
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands, except share data ) As of
September 30, December 31, September 30,
1995 1994 1994
( Unaudited ) ( Unaudited )
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 47,043 $ 26,884
Accounts payable 91,414 $ 131,592 79,312
Customer deposits and unearned revenue 23,248 23,846 18,277
Accrued liabilities:
Employee compensation and benefits 31,322 32,648 31,578
Artist and author royalties 9,277 8,177 9,723
Copyright and programming costs 7,523 7,522 6,780
Interest 2,297 1,999 2,182
Income taxes 2,345 2,507 2,339
Miscellaneous 47,243 50,533 38,744
Total current liabilities 261,712 258,824 215,819
Deferred Income Taxes 161,393 150,968 178,708
Long-Term Debt (less current portion) 63,461 110,431 110,358
Other Long-Term Obligations and Minority Interests 133,461 119,269 151,706
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: 60,028,980, 59,671,242,
and 59,620,618 shares 600 597 596
Voting - authorized: 30,000,000 shares; issued and
outstanding: 19,990,833, 20,174,833,
and 20,174,833 shares 200 202 202
Total 800 799 798
Additional paid-in capital 252,655 248,098 246,656
Retained earnings 886,515 823,204 808,325
Unrealized gains on securities available for sale 21,997 12,518 18,205
Unvested restricted stock awards (1,823) (2,036) (1,195)
Foreign currency translation adjustment 903 885 896
Total stockholders' equity 1,161,047 1,083,468 1,073,685
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,781,074 $ 1,722,960 $ 1,730,276
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>
( in thousands, except share data ) Three Nine
months months
ended ended
September September
30, 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Revenues:
Advertising $ 112,668 $ 105,809 $ 337,234 $ 315,301
Circulation 30,757 28,853 93,242 87,598
Other newspaper revenue 12,488 12,483 38,156 38,048
Total newspapers 155,913 147,145 468,632 440,947
Broadcast television 67,663 68,200 211,711 202,445
Cable television 71,110 63,944 207,855 189,595
Entertainment 21,155 16,689 68,964 56,343
Total operating revenues 315,841 295,978 957,162 889,330
Operating Expenses:
Employee compensation and benefits 95,209 87,189 285,273 265,161
Program rights and production costs 31,770 28,894 94,436 85,844
Newsprint and ink 32,008 23,586 88,260 66,374
Other operating expenses 76,307 74,190 227,799 214,803
Depreciation 23,441 20,870 69,089 65,436
Amortization of intangible assets 6,842 7,443 21,548 22,562
Total operating expenses 265,577 242,172 786,405 720,180
Operating Income 50,264 53,806 170,757 169,150
Other Credits (Charges):
Interest expense (2,475) (3,919) (8,875) (13,191)
Gain on sale of Garfield copyrights 31,621
Miscellaneous, net 1,413 (195) 3,415 (447)
Net other credits (charges) (1,062) (4,114) (5,460) 17,983
Income Before Income Taxes and Minority Interests 49,202 49,692 165,297 187,133
Provision for Income Taxes 20,784 21,358 69,823 80,884
Income Before Minority Interests 28,418 28,334 95,474 106,249
Minority Interests 784 2,229 2,587 7,223
Net Income $ 27,634 $ 26,105 $ 92,887 $ 99,026
Per Share of Common Stock:
Net income $0.35 $0.35 $1.16 $1.32
Dividends declared $0.13 $0.11 $0.37 $0.33
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
( in thousands ) Nine
months
ended
September
30,
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 92,887 $ 99,026
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation and amortization 90,637 87,998
Deferred income taxes 3,557 6,788
Minority interests in income of subsidiary companies 2,587 7,223
Gain on sale of Garfield copyrights (31,621)
Changes in certain working capital accounts, net of effects
from subsidiary companies purchased and sold (67,825) (10,337)
Miscellaneous, net 18,551 8,019
Net operating activities 140,394 167,096
Cash Flows from Investing Activities:
Additions to property, plant, and equipment (70,911) (57,904)
Purchase of subsidiary companies and investments (44,529) (27,968)
Sale of subsidiary companies, copyrights, and investments 2,729 47,591
Miscellaneous, net 2,971 3,417
Net investing activities (109,740) (34,864)
Cash Flows from Financing Activities:
Payments on long-term debt (38) (111,038)
Dividends paid (29,576) (24,679)
Dividends paid to minority interests (1,274) (2,655)
Miscellaneous, net (1,796) 239
Net financing activities (32,684) (138,133)
Increase (Decrease) in Cash and Cash Equivalents (2,030) (5,901)
Cash and Cash Equivalents:
Beginning of year 16,609 18,606
End of period $ 14,579 $ 12,705
Supplemental Cash Flow Disclosures:
Acquisition of remaining minority interest in Scripps Howard Broadcasting
Company in exchange for 4,952,659 shares of Class A Common stock $ 146,723
Interest paid, excluding amounts capitalized $ 8,476 13,592
Income taxes paid 63,062 82,251
Increase in program rights and related liabilities 75,373 32,746
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 99,026
Dividends: declared and
paid - $.33 per share (24,679)
Acquisition of minority interest in
Scripps Howard Broadcasting Company
in exchange for 4,952,659 shares of
Class A Common stock 49 146,674
Class A Common shares issued pursuant to
compensation plans, net:
88,525 shares issued,
2,810 shares forfeited,
and 4,251 shares repurchased 1 1,839 (517)
Tax benefits on compensation plans 198
Amortization of restricted stock awards 331
Foreign currency translation adjustment 304
Increase (decrease) in unrealized gains
on securities available for sale, net
of deferred income taxes of ($4,941) (9,176)
Balances at September 30, 1994 $ 798 $ 246,656 $ 808,325 $ 18,205 $ (1,195) $ 896
Balances at December 31, 1994 $ 799 $ 248,098 $ 823,204 $ 12,518 $ (2,036) $ 885
Net income 92,887
Dividends: declared and
paid - $.37 per share (29,576)
Conversion of 184,000 Voting common shares
to 184,000 Class A common shares
Class A Common shares issued pursuant to
compensation plans, net:
191,750 shares issued,
1,250 shares forfeited,
and 16,762 shares repurchased 1 3,950 (538)
Tax benefits on compensation plans 607
Amortization of restricted stock awards 751
Foreign currency translation adjustment 18
Increase in unrealized gains on
securities available for sale, net
of deferred income taxes of $5,104 9,479
Balances at September 30, 1995 $ 800 $ 252,655 $ 886,515 $ 21,997 $ (1,823) $ 903
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 Nine
months months
ended ended
September September
30, 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Weighted average shares outstanding 80,010 75,638 79,930 75,059
</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 - In September the Company acquired the 14% minority
interest in Scripps Howard Broadcasting Company in
exchange for $4,952,659 shares of Class A Common stock.
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 ) Nine months
ended
September 30,
1995 1994
<S> <C> <C>
Goodwill and other intangible assets acquired $ 167 $ 105,701
Other assets acquired 92 14,683
Reduction in minority interests 45,468
Total 259 165,852
Class A Common stock issued (146,723)
Liabilities assumed (899)
Cash paid $ 259 $ 18,230
</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
September 30, December 31, September 30,
1995 1994 1994
<C> <C> <C> <C>
Variable Rate Credit Facility $ 18,500
7.375% notes, due in 1998 $ 61,272 $ 61,161 61,125
9.0% notes, due in 1996 47,000 47,000 47,000
8.5% notes, payable through 1994 8,334
Other notes 2,232 2,270 2,283
Total long-term debt 110,504 110,431 137,242
Current portion of long-term debt 47,043 26,884
Long-term debt (less current portion) $ 63,461 $ 110,431 $ 110,358
Weighted average interest rate on Variable Rate
Credit Facility at balance sheet date 5.5%
</TABLE>
The Company has a Competitive Advance/Revolving Credit Agreement
("Variable Rate Credit Facility") which expires in September 1996
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 $ 155,913 6.6 % $ 146,198 $ 468,338 6.9 % $ 438,222
Broadcast television 67,663 (0.8)% 68,200 211,711 4.6 % 202,445
Cable television 71,110 11.2 % 63,944 207,855 9.6 % 189,595
Entertainment 21,155 26.8 % 16,689 68,964 22.4 % 56,343
Continuing operations 315,841 7.1 % 295,031 956,868 7.9 % 886,605
Divested operations 947 294 2,725
Total operating revenues $ 315,841 6.7 % $ 295,978 $ 957,162 7.6 % $ 889,330
Operating income:
Newspapers $ 24,214 (15.2)% $ 28,553 $ 88,491 (2.5)% $ 90,776
Broadcast television 16,269 (20.7)% 20,504 57,455 (8.0)% 62,455
Cable television 16,738 59.3 % 10,510 45,081 64.4 % 27,414
Entertainment (3,254) (1,752) (7,905) (752)
Corporate (3,703) (4,043) (12,235) (10,679)
Continuing operations 50,264 (6.5)% 53,772 170,887 1.0 % 169,214
Divested operations 34 (130) (64)
Total operating income 50,264 (6.6)% 53,806 170,757 1.0 % 169,150
Interest expense (2,475) (3,919) (8,875) (13,191)
Gain on sale of Garfield copyrights 31,621
Miscellaneous, net 1,413 (195) 3,415 (447)
Income taxes (20,784) (21,358) (69,823) (80,884)
Minority interest (784) (2,229) (2,587) (7,223)
Net income $ 27,634 $ 26,105 $ 92,887 $ 99,026
Per share of common stock:
Net income $.35 $.35 $1.16 $1.32
Garfield gain ( .23)
Adjusted net income per share $.35 $.35 $1.16 6.4 % $1.09
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 $ 186,100 5.5 % $ 176,336 $ 563,848 7.7 % $ 523,579
Advertising revenues as a
percentage of total revenues 58.9 % 59.8 % 58.9 % 59.1 %
EBITDA:
Newspapers $ 33,662 (9.9)% $ 37,365 $ 116,009 (1.1)% $ 117,342
Broadcast television 22,888 (10.8)% 25,660 76,710 (1.4)% 77,794
Cable television 29,881 23.1 % 24,275 86,086 20.1 % 71,678
Entertainment (2,335) (1,336) (5,680) 543
Corporate (3,549) (3,891) (11,604) (10,235)
Continuing operations 80,547 (1.9)% 82,073 $ 261,521 1.7 % $ 257,122
Effective income tax rate 42.2 % 43.0 % 42.2 % 43.2 %
Weighted average shares outstanding 80,010 5.8 % 75,638 79,930 6.5 % 75,059
Total capital expenditures $ 21,287 13.2 % $ 18,808 $ 70,911 22.5 % $ 57,903
</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.
<PAGE>
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 $10,500,000, $6,400,000 after-tax, $.08 per share in
1995 and $3,500,000, $1,900,000 after-tax, $.03 per share in 1994.
Operating losses for the quarterly periods were $3,900,000, $2,300,000
after-tax, $.03 per share in 1995 and $2,000,000, $1,100,000 after-
tax, $.01 per share in 1994.
In the third quarter of 1994 the Company acquired the 14% minority
interest in Scripps Howard Broadcasting Company ("SHB") in exchange
for 4,952,659 shares of Class A Common stock.
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 SHB.
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 $ 45,772 4.1 % $ 43,976 $ 141,270 4.4 % $ 135,328
Classified 47,458 10.7 % 42,876 136,146 11.3 % 122,272
National 3,700 3.4 % 3,579 12,014 3.1 % 11,653
Preprint 15,738 7.5 % 14,639 47,576 8.2 % 43,956
Newspaper advertising 112,668 7.2 % 105,070 337,006 7.6 % 313,209
Circulation 30,757 7.1 % 28,713 93,192 6.9 % 87,173
Joint operating agency distributions 10,051 (5.3)% 10,618 31,732 (1.0)% 32,064
Other 2,437 35.6 % 1,797 6,408 10.9 % 5,776
Total operating revenues 155,913 6.6 % 146,198 468,338 6.9 % 438,222
Operating expenses:
Employee compensation and benefits 54,830 3.3 % 53,088 164,177 1.3 % 162,064
Newsprint and ink 32,008 36.2 % 23,502 88,235 33.4 % 66,130
Other 35,413 9.8 % 32,243 99,917 7.8 % 92,686
Depreciation and amortization 9,448 7.2 % 8,812 27,518 3.6 % 26,566
Total operating expenses 131,699 11.9 % 117,645 379,847 9.3 % 347,446
Operating income $ 24,214 (15.2)% $ 28,553 $ 88,491 (2.5)% $ 90,776
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ 33,662 (9.9)% $ 37,365 $ 116,009 (1.1)% $ 117,342
Percent of operating revenues:
Operating income 15.5 % 19.5 % 18.9 % 20.7 %
EBITDA 21.6 % 25.6 % 24.8 % 26.8 %
Capital expenditures $ 4,686 58.5 % $ 2,956 $ 14,696 11.2 % $ 13,214
Advertising inches:
Local 1,511 (3.8)% 1,570 4,883 (1.5)% 4,955
Classified 2,789 0.7 % 2,770 8,119 2.9 % 7,893
National 75 75 242 3.0 % 235
Total full run ROP 4,375 (0.9)% 4,415 13,244 1.2 % 13,083
</TABLE>
EBITDA for the newspaper division decreased as the sharp rise in the
price of newsprint more than offset the rise in advertising revenues.
Year-over-year newsprint consumption decreased 8% in the quarter and
4% 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 $ 33,871 3.9 % $ 32,607 $ 108,199 4.9 % $ 103,124
National 29,485 (1.5)% 29,936 91,090 3.8 % 87,768
Political 387 3,520 758 5,121
Other 3,920 83.4 % 2,137 11,664 81.3 % 6,432
Total operating revenues 67,663 (0.8)% 68,200 211,711 4.6 % 202,445
Operating expenses:
Employee compensation and benefits 22,663 22.3 % 18,532 66,666 21.2 % 55,015
Program rights 10,583 (15.5)% 12,518 31,488 (16.3)% 37,603
Other 11,529 0.3 % 11,490 36,847 15.0 % 32,033
Depreciation and amortization 6,619 28.4 % 5,156 19,255 25.5 % 15,339
Total operating expenses 51,394 7.8 % 47,696 154,256 10.2 % 139,990
Operating income $ 16,269 (20.7)% $ 20,504 $ 57,455 (8.0)% $ 62,455
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ 22,888 (10.8)% $ 25,660 $ 76,710 (1.4)% $ 77,794
Percent of operating revenues:
Operating income 24.0 % 30.1 % 27.1 % 30.9 %
EBITDA 33.8 % 37.6 % 36.2 % 38.4 %
Capital expenditures $ 4,717 (33.2)% $ 7,063 $ 15,042 16.2 % $ 12,940
</TABLE>
Local and national advertising revenues slowed at the Company's
television stations in the third quarter.
In 1994 the Company negotiated 10-year affiliation agreements with ABC
to replace Fox affiliations at its Phoenix and Tampa television
stations and changed its Kansas City affiliation from Fox to NBC.
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 SHB.
<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 $ 46,741 13.0 % $ 41,378 $ 137,092 10.8 % $ 123,730
Premium programming services 13,521 10.3 % 12,261 38,945 6.9 % 36,447
Other monthly service 4,186 (1.5)% 4,249 13,055 2.6 % 12,720
Advertising 3,405 11.1 % 3,066 9,428 19.0 % 7,925
Installation and miscellaneous 3,257 8.9 % 2,990 9,335 6.4 % 8,773
Total operating revenues 71,110 11.2 % 63,944 207,855 9.6 % 189,595
Operating expenses:
Employee compensation and benefits 10,348 5.0 % 9,852 32,359 5.5 % 30,673
Program costs 17,689 15.3 % 15,337 52,286 14.8 % 45,529
Other 13,192 (8.9)% 14,480 37,124 (11.0)% 41,715
Depreciation and amortization 13,143 (4.5)% 13,765 41,005 (7.4)% 44,264
Total operating expenses 54,372 1.8 % 53,434 162,774 0.4 % 162,181
Operating income $ 16,738 59.3 % $ 10,510 $ 45,081 64.4 % $ 27,414
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ 29,881 23.1 % $ 24,275 $ 86,086 20.1 % $ 71,678
Percent of operating revenues:
Operating income 23.5 % 16.4 % 21.7 % 14.5 %
EBITDA 42.0 % 38.0 % 41.4 % 37.8 %
Capital expenditures $ 11,311 71.8 % $ 6,582 $ 30,119 4.8 % $ 28,753
Average number of basic subscribers 753.0 4.7 % 719.4 750.0 5.3 % 712.5
Average monthly revenue
per basic subscriber $ 31.48 6.2 % $ 29.63 $ 30.79 4.1 % $ 29.57
Homes passed at end of period 1,184.4 1.8 % 1,163.0
Basic subscribers at end of period 758.5 4.8 % 724.1
Penetration rate 64.0 % 62.3 %
</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 $ 11,103 4.3 % $ 10,650 $ 38,682 1.7 % $ 38,054
Syndication 4,788 12.9 % 4,240 13,613 0.5 % 13,545
Film and television programming 2,110 1,653 8,921 4,422
Other 3,154 146 7,748 322
Total operating revenues 21,155 26.8 % 16,689 68,964 22.4 % 56,343
Operating expenses:
Employee compensation and benefits 4,995 60.9 % 3,104 14,603 47.2 % 9,920
Artists' royalties 7,922 3.7 % 7,639 26,663 1.1 % 26,360
Programming and production costs 3,498 1,039 10,662 2,712
Other 7,075 13.3 % 6,243 22,716 35.1 % 16,808
Depreciation and amortization 919 120.9 % 416 2,225 71.8 % 1,295
Total operating expenses 24,409 32.4 % 18,441 76,869 34.6 % 57,095
Operating income $ (3,254) $ (1,752) $ (7,905) $ (752)
Other Financial and Statistical Data:
Earnings before interest,
income taxes, depreciation,
and amortization ("EBITDA") $ (2,335) $ (1,336) $ (5,680) $ 543
Percent of operating revenues:
Operating income (15.4)% (10.5)% (11.5)% (1.3)%
EBITDA (11.0)% (8.0)% (8.2)% 1.0 %
Capital expenditures $ 436 $ 2,079 $ 9,549 $ 2,581
</TABLE>
Year-to-date operating losses for HGTV totaled $10,500,000 in 1995 and
$3,500,000 in 1994. Operating losses for the quarterly periods were
$3,900,000 in 1995 and $2,000,000 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 U.S. Acres copyrights in the
second quarter of 1994. 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
$1,900,000 in the year-to-date period and $300,000 in the quarterly
period.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities was $140,000,000 in 1995 compared
to $167,000,000 in 1994.
Cash flow from operating activities in 1995 was used primarily for
capital expenditures of $70,900,000, acquisitions and investments of
$44,500,000, and dividend payments of $30,900,000.
In the third quarter the Company 1) announced an agreement to form a
joint venture with Hyperion Telecommunications to build and operate a
competitive access telecommunications system in Knoxville and
Chattanooga and 2) reached an agreement to acquire cable television
systems adjacent to its Knoxville and Chattanooga systems. The
Company expects to finance its capital requirements, the cable
television acquisition, and investments in the joint venture and HGTV
primarily through cash flow from operations.
<PAGE>
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
<PAGE>
<TABLE>
RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT
12
<CAPTION>
( in thousands ) Three Nine
months months
ended ended
September September
30, 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 $ 49,774 $ 50,274 $ 171,690 $ 190,138
Fixed charges excluding capitalized interest and
preferred stock dividends of majority-owned
subsidiary companies 3,724 5,440 12,689 17,425
Earnings as defined $ 53,498 $ 55,714 $ 184,379 $ 207,563
FIXED CHARGES AS DEFINED:
Interest expense, including amortization of
debt issue costs $ 2,475 $ 3,919 $ 8,875 $ 13,191
Interest capitalized 183 270
Portion of rental expense representative
of the interest factor 1,249 1,209 3,814 3,512
Preferred stock dividends of majority-owned
subsidiary companies 20 20 60 60
Share of interest expense related to guaranteed debt
50%-owned affiliated company 312 722
Fixed charges as defined $ 3,927 $ 5,460 $ 13,019 $ 17,485
RATIO OF EARNINGS TO FIXED CHARGES 13.62 10.20 14.16 11.87
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 14,579
<SECURITIES> 38,000
<RECEIVABLES> 159,464
<ALLOWANCES> 5,377
<INVENTORY> 31,790
<CURRENT-ASSETS> 354,332
<PP&E> 1,315,015
<DEPRECIATION> 602,111
<TOTAL-ASSETS> 1,781,074
<CURRENT-LIABILITIES> 261,712
<BONDS> 63,461
<COMMON> 800
0
0
<OTHER-SE> 1,160,247
<TOTAL-LIABILITY-AND-EQUITY> 1,781,074
<SALES> 0
<TOTAL-REVENUES> 957,162
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 779,660
<LOSS-PROVISION> 6,745
<INTEREST-EXPENSE> 8,875
<INCOME-PRETAX> 165,297
<INCOME-TAX> 69,823
<INCOME-CONTINUING> 92,887
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,887
<EPS-PRIMARY> $1.16
<EPS-DILUTED> $1.16
</TABLE>
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