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, 2000
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 (I.R.S. Employer
incorporation or organization) 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 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, 2000
there were 59,341,756 of the Registrant's Class A Common Shares outstanding
and 19,216,913 of the Registrant's Common Voting Shares outstanding.
<PAGE>
INDEX TO THE E. W. SCRIPPS COMPANY
REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000
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
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.
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.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation arising in the ordinary course of
business, such as defamation actions and various governmental and
administrative proceedings relating to 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 2000 Annual Meeting of Shareholders.
<TABLE>
<CAPTION>
Broker
Description of Matters Submitted In Favor Against Abstain Non-Votes
<S> <C> <C> <C> <C>
Class A Common Shares:
Election of Directors:
Daniel J. Meyer 53,904,126 158,432
Nicholas B. Paumgarten 53,904,196 158,362
Ronald W. Tysoe 53,904,196 158,362
Julie A. Wrigley 53,904,107 158,451
Common Voting Shares:
Election of Directors:
William R. Burleigh 18,013,133
John H. Burlingame 18,013,133
Kenneth W. Lowe 18,013,133
Nackey E. Scagliotti 18,013,133
Charles E. Scripps 18,013,133
Edward W. Scripps 18,013,133
Paul K. Scripps 18,013,133
Julie A. Wrigley 18,013,133
Amend the 1997 Long-Term Incentive Plan 18,013,133
Approve the Executive Bonus Plan 18,013,133
</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.
<PAGE>
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 3, 2000 BY: D. J. Castellini
D. J. Castellini
Senior Vice President and
Chief Financial Officer
<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 Comprehensive Income and
Stockholders' Equity F-6
Notes to Consolidated Financial Statements F-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Forward Looking Statements F-13
Results of Operations F-13
Newspapers F-16
Category Media F-17
Broadcast Television F-18
Liquidity and Capital Resources F-19
Market Risk F-20
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands ) As of
June 30, December 31, June 30,
2000 1999 1999
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 15,326 $ 10,456 $ 12,386
Accounts and notes receivable (less
allowances -$12,990, $11,266, $10,721) 286,011 280,829 239,719
Program rights and production costs 80,502 93,001 81,811
Network distribution fees 18,601 17,899 15,854
Inventories 15,766 16,235 14,086
Deferred income taxes 27,443 27,769 25,136
Miscellaneous 32,088 31,095 34,128
Total current assets 475,737 477,284 423,120
Investments 241,007 205,864 171,056
Property, Plant and Equipment 482,497 485,596 478,506
Goodwill and Other Intangible Assets 1,208,648 1,191,718 1,189,988
Other Assets:
Program rights and production costs (less current portion) 81,320 75,702 41,117
Network distribution fees (less current portion) 48,342 50,066 53,038
Miscellaneous 27,128 33,974 34,560
Total other assets 156,790 159,742 128,715
TOTAL ASSETS $ 2,564,679 $ 2,520,204 $ 2,391,385
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands, except share data ) As of
June 30, December 31, June 30,
2000 1999 1999
(Unaudited) (Unaudited)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 260,170 $ 267,600 $ 271,383
Accounts payable 91,918 116,201 72,357
Customer deposits and unearned revenue 41,078 40,583 39,520
Accrued liabilities:
Employee compensation and benefits 43,581 46,464 45,200
Network distribution fees 46,696 41,712 39,453
Miscellaneous 65,127 64,908 61,239
Total current liabilities 548,570 577,468 529,152
Deferred Income Taxes 147,275 143,912 127,726
Long-Term Debt (less current portion) 501,855 501,847 503,295
Other Long-Term Obligations and Minority Interests (less current portion) 132,791 132,702 122,952
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: 59,306,189; 58,925,449; and 58,933,789 shares 593 589 589
Voting - authorized: 30,000,000 shares; issued and
outstanding: 19,216,913; 19,216,913; and 19,218,913 shares 192 192 192
Total 785 781 781
Additional paid-in capital 152,395 136,731 140,160
Retained earnings 1,030,735 973,432 924,613
Unrealized gains on securities available for sale 59,317 57,298 48,542
Foreign currency translation adjustment 700 973 164
Unvested restricted stock awards (9,744) (4,940) (6,000)
Total stockholders' equity 1,234,188 1,164,275 1,108,260
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,564,679 $ 2,520,204 $ 2,391,385
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME ( UNAUDITED )
<CAPTION>
( in thousands, except per share data )
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Operating Revenues:
Advertising $ 345,926 $ 299,112 $ 663,625 $ 582,089
Circulation 36,314 37,939 74,663 78,363
Licensing 17,409 15,285 33,660 31,051
Affiliate fees 14,535 12,702 29,165 24,639
Joint operating agency distributions 12,266 13,430 23,149 24,347
Other 12,774 12,817 25,821 27,056
Total operating revenues 439,224 391,285 850,083 767,545
Operating Expenses:
Employee compensation and benefits 129,314 123,031 256,606 241,011
Newsprint and ink 39,429 34,282 76,621 71,585
Amortization of purchased programming 29,332 22,160 57,370 45,747
Other operating expenses 119,774 101,771 237,046 207,435
Depreciation 17,185 14,051 34,259 30,404
Amortization of intangible assets 10,071 9,716 19,805 19,352
Total operating expenses 345,105 305,011 681,707 615,534
Operating Income 94,119 86,274 168,376 152,011
Other Credits (Charges):
Interest expense (13,481) (11,026) (26,117) (22,099)
Investment results, net of expenses (1,449) 581 (10,511) 515
Net gains on divested operations 6,269
Miscellaneous, net 45 1,071 991 2,439
Net other credits (charges) (14,885) (9,374) (29,368) (19,145)
Income Before Taxes and Minority Interests 79,234 76,900 139,008 132,866
Provision for Income Taxes 32,551 31,556 57,665 54,488
Income Before Minority Interests 46,683 45,344 81,343 78,378
Minority Interests 1,063 1,113 2,119 2,146
Net Income $ 45,620 $ 44,231 $ 79,224 $ 76,232
Net Income per Share of Common Stock:
Basic $.58 $.57 $1.01 $.98
Diluted .58 .56 1.00 .96
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS ( UNAUDITED )
<CAPTION>
( in thousands )
Six months ended
June 30,
2000 1999
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 79,224 $ 76,232
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation and amortization 54,064 49,756
Deferred income taxes 2,597 5,958
Minority interests in income of subsidiary companies 2,119 2,146
Network distribution fee amortization greater (less) than payments 5,165 (9,067)
Program cost amortization greater (less) than payments (15,400) (22,841)
Other changes in certain working capital accounts, net (22,625) (25,672)
Miscellaneous, net 10,496 6,409
Net operating activities 115,640 82,921
Cash Flows from Investing Activities:
Additions to property, plant and equipment (26,145) (36,301)
Purchase of subsidiary company and long-term investments (87,058) (30,851)
Sale of subsidiary companies and long-term investments 26,910
Change in short-term investments, net 20,166
Miscellaneous, net 4,347 7,596
Net investing activities (81,946) (39,390)
Cash Flows from Financing Activities:
Increase in long-term debt 55 5,668
Payments on long-term debt (7,490) (1,694)
Repurchase Class A Common shares (28,217)
Dividends paid (21,921) (21,934)
Dividends paid to minority interests (785) (784)
Miscellaneous, net (primarily employee stock compensation) 1,317 397
Net financing activities (28,824) (46,564)
Increase (Decrease) in Cash and Cash Equivalents 4,870 (3,033)
Cash and Cash Equivalents:
Beginning of year 10,456 15,419
End of period $ 15,326 $ 12,386
Supplemental Cash Flow Disclosures:
Interest paid, excluding amounts capitalized $ 25,784 $ 21,892
Income taxes paid 55,665 43,647
Destin newspaper traded for Fort Pierce newspaper (see Note 2) 3,857
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
AND STOCKHOLDERS' EQUITY ( UNAUDITED )
<CAPTION>
( in thousands, except share data )
Accumulated Unvested Comprehensive
Additional Other Restricted Total Income for the
Common Paid-in Retained Comprehensive Stock Stockholders' Three Months
Stock Capital Earnings Income Awards Equity Ended June 30
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1998 $ 785 $ 161,878 $ 870,315 $ 39,485 $ (3,731) $ 1,068,732
Comprehensive income:
Net income 76,232 76,232 $ 44,231
Unrealized gains, net of deferred tax
of $5,254 and $1,001 9,696 9,696 1,798
Less: reclassification adjustment for gains
in income, net of deferred tax of $31 (58) (58)
Increase in unrealized gains on securities 9,638 9,638 1,798
Foreign currency translation adjustments (417) (417) (156)
Total 76,232 9,221 85,453 $ 45,873
Dividends: declared and paid - $.28 per share (21,934) (21,934)
Repurchase 636,600 Class A Common Shares (6) (28,211) (28,217)
Compensation plans, net: 273,651 shares issued;
28,229 shares repurchased 2 4,265 (2,269) 1,998
Tax benefits of compensation plans 2,228 2,228
Balances at June 30, 1999 $ 781 $ 140,160 $ 924,613 $ 48,706 $ (6,000) $ 1,108,260
Balances at December 31, 1999 $ 781 $ 136,731 $ 973,432 $ 58,271 $ (4,940) $ 1,164,275
Comprehensive income:
Net income 79,224 79,224 $ 45,620
Unrealized gains, net of deferred tax
of $1,525 and ($22,753) 2,824 2,824 (42,256)
Less: reclassification adjustment for gains
in income, net of deferred tax of ($433) (805) (805)
Increase in unrealized gains on securities 2,019 2,019 (42,256)
Foreign currency translation adjustments (273) (273) (246)
Total 79,224 1,746 80,970 $ 3,118
Dividends: declared and paid - $.28 per share (21,921) (21,921)
Compensation plans, net: 407,851 shares issued;
1,500 shares forfeited; 25,611 shares repurchased 4 14,404 (4,804) 9,604
Tax benefits of compensation plans 1,260 1,260
Balances at June 30, 2000 $ 785 $ 152,395 $1,030,735 $ 60,017 $ (9,744) $ 1,234,188
See notes to consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States of America for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. 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, 1999, has not changed materially unless
otherwise disclosed herein. Financial information as of December 31,
1999, 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 are not necessarily indicative of the results
that may be expected for future interim periods or for the full year.
Joint Operating Agencies - The Company is currently a partner in
newspaper joint operating agencies ("JOAs") in three markets. A JOA
combines all but the editorial operations of two competing newspapers in
a market in order to reduce aggregate expenses and take advantage of
economies of scale, thereby allowing the continuing operation of both
newspapers in that market. The Newspaper Preservation Act of 1970
("NPA") provides a limited exemption from anti-trust laws, generally
permitting the continuance of JOAs in existence prior to the enactment
of the NPA and the formation, under certain circumstances, of new JOAs
between newspapers.
On May 12, 2000, the Company and MediaNews Group Inc. filed an
application with the U.S. Department of Justice to form a JOA between
the Company's Denver Rocky Mountain News and MediaNews Group Inc.'s
Denver Post. The 50-year agreement would create a new entity called
the Denver Newspaper Agency L.L.C., which would be 50%-owned by each
partner. Both partners would contribute certain assets used in the
operations of their newspapers to the new entity. In addition, the
Company will pay $60,000,000 to MediaNews Group Inc.
Net Income Per Share - The following table presents additional
information about basic and diluted weighted-average shares
outstanding:
<TABLE>
<CAPTION>
( in thousands )
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Basic weighted-average shares outstanding 78,115 77,937 78,078 78,017
Effect of dilutive securities:
Unvested restricted stock held by employees 135 177 125 184
Stock options held by employees 745 836 739 837
Diluted weighted-average shares outstanding 78,995 78,950 78,942 79,038
</TABLE>
<PAGE>
Recently Issued Accounting Standards - The Financial Accounting
Standards Board issued FAS No. 133 - Accounting for Derivative
Instruments and Hedging Activities. The standard, which must be
adopted by January 1, 2001, will not have a material effect on the
Company's financial position or its results of operations. Under the
new standard changes in the fair value of foreign currency forward and
option contracts will be initially reported as a separate component of
comprehensive income and reclassified into earnings when the related
licensing revenue is earned. Newsprint forward contracts will be
recorded at fair value and changes in the value of the contracts will
be initially reported as a separate component of comprehensive income
and reclassified into earnings when the newsprint is consumed. The
Company's accounting for put options and zero-cost collars will not
change under the new standard.
The Emerging Issues Task Force reached a consensus on Issue 00-2 -
Accounting for Web Site Development Costs at its March 2000 meeting.
The consensus requires capitalization of certain costs incurred in the
development of Internet sites. The Company currently capitalizes the
cost of computer hardware and software used in the operation of its
Internet sites, however all other development costs, such as graphics
and other design costs, have been expensed as incurred. The Company
will adopt Issue 00-2 effective with the beginning of the third
quarter of 2000. The effect on the Company's results of operations in
the second half of 2000 is expected to be immaterial.
Reclassifications - For comparative purposes, certain 1999 amounts have
been reclassified to conform to 2000 classifications.
2. ACQUISITIONS AND DIVESTITURES
Acquisitions
2000 - In the first quarter the Company acquired the daily newspaper
in Fort Pierce, Florida, in exchange for its newspaper in Destin,
Florida, and cash, and acquired television station KMCI in
Lawrence, Kansas, which the Company had previously operated under
a Local Management Agreement.
1999 - In the first quarter the Company acquired the 70% of Colorado
Real Estate On-Line, a provider of real estate listings on the
Internet, that it did not already own and acquired an additional
1.86% interest in The Television Food Network.
The following table presents additional information about the acquisitions:
<TABLE>
<CAPTION>
( in thousands )
Six months ended June 30,
2000 1999
<S> <C> <C>
Goodwill and other intangible assets acquired $ 40,357 $ 4,250
Other assets acquired 6,518 58
Total 46,875 4,308
Fair value of Destin newspaper (3,857)
Liabilities assumed (38) (806)
Cash paid $ 42,980 $ 3,502
</TABLE>
The acquisitions have been accounted for as purchases. The
allocations of the purchase prices are based on preliminary appraised
values of the assets acquired and liabilities assumed, and are
therefore subject to change. The operating results of the Fort Pierce
newspaper are included in the Consolidated Statements of Income from
the date of acquisition. Pro forma results are not presented because
the combined results of operations would not be significantly
different than the reported amounts. The operating results for KMCI
were included in the Consolidated Statements of Income while the
Company operated the station under the LMA.
<PAGE>
Divestitures
2000 - In the first quarter the Company sold its independent
telephone directories in Memphis, Tennessee; Kansas City,
Missouri; and North Palm Beach, Florida, and traded its Destin,
Florida, newspaper and cash for the daily newspaper in Fort
Pierce, Florida. The sales and trade resulted in net gains of
$6,300,000, $3,800,000 after-tax ($.05 per share).
Included in the consolidated financial statements are the following
results of divested operations (excluding gains on sales):
<TABLE>
<CAPTION>
( in thousands )
Three months Six months
ended ended
June 30, June 30,
1999 2000 1999
<S> <C> <C> <C>
Operating revenues $ 2,690 $ 5,505 $ 7,887
Operating income (loss) (56) 293 229
</TABLE>
3. UNUSUAL CREDITS AND CHARGES
In addition to the gains on divested operations described in Note 2,
the Company's 2000 net investment income includes recognized net
investment losses totaling $4,300,000 for the quarter and $6,300,000
year-to-date. Accrued incentive compensation for Scripps Ventures
I's portfolio managers was decreased $3,300,000 in the second quarter,
to $10,800,000 in conjunction with the decrease in the net gain on
Scripps Ventures I's portfolio of $22,000,000, to $72,000,000. In
the first half of the year accrued incentive compensation was increased
$3,800,000 in conjunction with the $25,000,000 increase in the net gain.
Net investment results reduced net income $1,000,000 ($.01 per share)
for the quarter and $6,800,000 ($.09 per share) year-to-date.
The combined effect of unusual credits and charges was to reduce 2000
net income $1,000,000 ($.01 per share) for the quarter and $3,100,000
($.04 per share) year-to-date.
4. LONG-TERM DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
( in thousands ) As of
June 30, December 31, June 30,
2000 1999 1999
<S> <C> <C> <C>
Variable rate credit facilities, including commercial paper $ 559,950 $ 565,689 $ 570,515
$100 million, 6.625% note, due in 2007 99,894 99,887 99,880
$100 million, 6.375% note, due in 2002 99,954 99,944 99,935
Other notes 2,227 3,927 4,348
Total long-term debt 762,025 769,447 774,678
Current portion of long-term debt 260,170 267,600 271,383
Long-term debt (less current portion) $ 501,855 $ 501,847 $ 503,295
</TABLE>
The Company has a Competitive Advance and Revolving Credit Facility
Agreement, which permits aggregate borrowings up to $700,000,000 (the
"Variable Rate Credit Facilities"). The Variable Rate Credit
Facilities are comprised of two unsecured lines, one limited to
$400,000,000 principal amount maturing in 2000, and the other limited
to $300,000,000 principal amount maturing in 2002. Borrowings under
the Variable Rate Credit Facilities are available on a committed
revolving credit basis at the Company's choice of three short-term
rates or through an auction procedure at the time of each borrowing.
The Variable Rate Credit Facilities are also used by the Company in
whole or in part, in lieu of direct borrowings, as credit support for
its commercial paper. The weighted-average interest rates on the
Variable Rate Credit Facilities were 6.7% at June 30, 2000, 6.0% at
December 31, 1999, and 5.0% at June 30, 1999.
<PAGE>
5. INVESTMENTS
Investments consisted of the following:
<TABLE>
<CAPTION>
( in thousands ) As of
June 30, December 31, June 30,
2000 1999 1999
<S> <C> <C> <C>
Securities available for sale (at market value):
Time Warner common stock (1,344,000 shares) $ 102,185 $ 97,227 $ 97,648
Centra Software (1,792,500 common shares) 17,030
garden.com Inc. (2,414,000 common shares and 276,000 warrants) 5,797 22,636
iVillage Inc. (270,000 common shares) 5,412 5,897
Other 4,819 9,177 5,723
Total available-for-sale securities 135,243 134,937 103,371
Investments accounted for using the equity method 7,270 7,578 6,333
Other (primarily investments in private companies, at adjusted cost) 98,494 63,349 61,352
Total investments $ 241,007 $ 205,864 $ 171,056
Unrealized gains on securities available for sale $ 91,323 $ 88,214 $ 74,727
</TABLE>
Investments available for sale represent securities in publicly traded
companies, and are recorded at fair value. Fair value is based upon the
closing price of the security on the reporting date. In the first
quarter of 2000 Centra Software completed an initial public offering of
its common stock. In the third quarter of 1999 garden.com completed an
initial public offering of its common stock and the Company sold its
interest in Family Point, Inc. to iVillage for cash and stock. These
investments had previously been included in the other category.
The Company intends to sell its iVillage investment in 2000, at the end
of the mandatory lock-up period. The Company has executed a zero-cost
collar on 229,000 iVillage shares, giving the company the right to sell
those shares at prices between $21.02 and $22.65 and giving the counter
party the right to purchase the shares at prices between $24.35 and
$26.24. The closing price of iVillage common stock was $8.44 on
June 30, 2000.
The values of several of the Company's investments in available for sale
securities declined below historical cost during the second quarter.
Investment results (see Note 3) in the year-to-date period
include a total of $6,200,000 in write-downs to market value for such
investments.
Securities of private companies do not trade in public markets, so they
do not have readily determinable fair values. However, if fair value is
assumed to be the price from the most recent round of financing or,
for some securities, less based on management's judgment of the
circumstances, then the total estimated value of these investments was
$156,000,000 on June 30, 2000, and $91,000,000 on December 31, 1999.
There can be no assurance as to the amounts the Company would receive
if these securities were sold.
The Company's Scripps Ventures Funds I and II invest in new businesses
focusing primarily on new media technology. Scripps Ventures I invested
$50,000,000. The managers' compensation includes a share of the
portfolio's cumulative net gain (realized and unrealized) through June
2001 if a specified minimum return is achieved. This incentive
compensation, which will be paid in 2001, was $10,800,000 at June 30,
2000, based on the portfolio's net gain of $72,000,000. Scripps
Ventures II is authorized to invest up to $100,000,000, and $29,200,000
was invested as of June 30, 2000. The managers have a minority equity
interest in the return on Scripps Ventures II's investments if a
specified minimum return is achieved.
<PAGE>
6. SEGMENT INFORMATION
The Company's reportable segments are strategic businesses that offer
different products and services. The Company primarily evaluates the
operating performance of its segments based on earnings before
interest, income taxes, depreciation and amortization ("EBITDA"),
excluding unusual items and all credits and charges classified as non-
operating in the Consolidated Statements of Income. No single
customer provides more than 10% of the Company's revenue. The Company
derives less than 10% of its revenues from markets outside of the U.S.
Financial information for the Company's business segments is as
follows:
<TABLE>
<CAPTION>
( in thousands )
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
OPERATING REVENUES
Newspapers $ 239,273 $ 227,865 $ 470,183 $ 450,442
Category media 86,466 57,586 159,789 105,786
Broadcast television 87,471 81,605 164,158 156,972
Licensing and other media 26,014 24,229 55,953 54,345
Total $ 439,224 $ 391,285 $ 850,083 $ 767,545
EBITDA
Newspapers $ 64,016 $ 69,992 $ 126,609 $ 135,400
Category media 25,179 14,290 40,517 19,284
Broadcast television 32,910 27,709 56,464 49,157
Licensing and other media 4,005 2,524 8,411 6,775
Corporate (4,735) (4,474) (9,561) (8,849)
Total $ 121,375 $ 110,041 $ 222,440 $ 201,767
DEPRECIATION
Newspapers $ 10,359 $ 8,383 $ 20,404 $ 17,760
Category media 1,584 634 3,441 2,449
Broadcast television 4,725 4,408 9,409 9,103
Licensing and other media 250 375 501 601
Corporate 267 251 504 491
Total $ 17,185 $ 14,051 $ 34,259 $ 30,404
AMORTIZATION OF INTANGIBLE ASSETS
Newspapers $ 5,787 $ 5,593 $ 11,378 $ 11,239
Category media 1,873 1,608 3,600 3,182
Broadcast television 2,356 2,374 4,708 4,740
Licensing and other media 55 141 119 191
Total $ 10,071 $ 9,716 $ 19,805 $ 19,352
OPERATING INCOME
Newspapers $ 47,870 $ 56,016 $ 94,827 $ 106,401
Category media 21,722 12,048 33,476 13,653
Broadcast television 25,829 20,927 42,347 35,314
Licensing and other media 3,700 2,008 7,791 5,983
Corporate (5,002) (4,725) (10,065) (9,340)
Total $ 94,119 $ 86,274 $ 168,376 $ 152,011
OTHER NONCASH ITEMS
Category media $ (4,665) $ (12,772) $ (10,089) $ (32,720)
Broadcast television 198 522 (146) 812
Total $ (4,467) $ (12,250) $ (10,235) $ (31,908)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
( in thousands )
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT
Newspapers $ 4,234 $ 6,463 $ 7,648 $ 15,163
Category media 916 7,193 1,822 8,421
Broadcast television 3,799 6,488 12,474 9,561
Licensing and other media 2,110 434 3,908 921
Corporate 72 1,525 293 2,235
Total $ 11,131 $ 22,103 $ 26,145 $ 36,301
BUSINESS ACQUISITIONS AND OTHER ADDITIONS TO LONG-LIVED ASSETS
Newspapers $ 805 $ 32,806 $ 1,129
Category media 8,415 $ 2,058 8,992 16,797
Broadcast television 55 15 14,660 70
Licensing and other media 37,106 23,463 46,062 29,514
Total $ 46,381 $ 25,536 $ 102,520 $ 47,510
ASSETS
Newspapers $1,225,825 $1,225,291
Category media 488,931 406,463
Broadcast television 491,055 475,567
Licensing and other media 302,178 230,279
Corporate 56,690 53,785
Total $2,564,679 $2,391,385
</TABLE>
Other noncash items include programming and program production
expenses in excess of (less than) the amounts paid, and, for category
media, amortization of network distribution fees in excess of (less
than) distribution fee payments. Other additions to long-lived assets
include investments and network distribution fees. Corporate assets
are primarily cash, investments, and refundable and deferred income
taxes.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company operates in three reportable segments: newspapers, category
media, and broadcast television.
FORWARD-LOOKING STATEMENTS
This discussion and the information contained in the notes to the
consolidated financial statements contain certain forward-looking
statements that are based on management's current expectations.
Forward-looking statements are subject to certain risks, trends and
uncertainties that could cause actual results to differ materially
from the expectations expressed in the forward-looking statements.
Such risks, trends and uncertainties, which in most instances are
beyond the Company's control, include changes in advertising demand
and other economic conditions; consumers' taste; newsprint prices;
program costs; labor relations; technological developments;
competitive pressures; interest rates; regulatory rulings; and
reliance on third-party vendors for various products and services.
The words "believe," "expect," "anticipate," "estimate," "intend" and
similar expressions identify forward-looking statements. All forward-
looking statements, which are as of the date of this filing, should be
evaluated with the understanding of their inherent uncertainty.
RESULTS OF OPERATIONS
All per share disclosures included in management's discussion and
analysis of financial condition and results of operation are on a
diluted basis. Consolidated results of operations were as follows:
<TABLE>
<CAPTION>
( in thousands, except per share data ) Quarterly Period Year-to-Date
2000 Change 1999 2000 Change 1999
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Newspapers $ 239,273 5.5 % $ 226,819 $ 469,297 4.6 % $ 448,571
Category media 86,466 50.2 % 57,586 159,789 51.0 % 105,786
Broadcast television 87,471 7.2 % 81,605 164,158 4.6 % 156,972
Licensing and other media 26,014 15.2 % 22,585 51,334 6.2 % 48,329
Total 439,224 13.0 % 388,595 844,578 11.2 % 759,658
Divested operating units 2,690 5,505 7,887
Total operating revenues $ 439,224 12.3 % $ 391,285 $ 850,083 10.8 % $ 767,545
Operating income:
Newspapers $ 47,870 (14.2)% $ 55,795 $ 94,744 (10.7)% $ 106,077
Category media 21,722 80.3 % 12,048 33,476 145.2 % 13,653
Broadcast television 25,829 23.4 % 20,927 42,347 19.9 % 35,314
Licensing and other media 3,700 61.9 % 2,285 7,581 24.7 % 6,078
Corporate (5,002) (5.9)% (4,725) (10,065) (7.8)% (9,340)
Total 94,119 9.0 % 86,330 168,083 10.7 % 151,782
Divested operating units (56) 293 229
Total operating income 94,119 9.1 % 86,274 168,376 10.8 % 152,011
Interest expense (13,481) (11,026) (26,117) (22,099)
Investment results, net of expenses (1,449) 581 (10,511) 515
Net gains on divested operations 6,269
Miscellaneous, net 45 1,071 991 2,439
Income taxes (32,551) (31,556) (57,665) (54,488)
Minority interest (1,063) (1,113) (2,119) (2,146)
Net income $ 45,620 3.1 % $ 44,231 $ 79,224 3.9 % $ 76,232
Per share of common stock:
Net income $.58 3.6 % $.56 $1.00 4.2 % $.96
Adjusted net income (excluding investment results
and net gains on divested operations) $.59 5.4 % $.56 $1.04 8.3 % $.96
</TABLE>
<PAGE>
Other financial and statistical data, excluding divested operations, is
as follows:
<TABLE>
<CAPTION>
( in thousands ) Quarterly Period Year-to-Date
2000 Change 1999 2000 Change 1999
<S> <C> <C> <C> <C> <C> <C>
Total advertising revenues $ 345,926 16.6 % $ 296,741 $ 658,368 14.5 % $ 574,757
Advertising revenues as a
percentage of total revenues 78.8 % 76.4 % 78.0 % 75.7 %
EBITDA:
Newspapers $ 64,016 (8.2)% $ 69,726 $ 126,477 (6.3)% $ 134,985
Category media 25,179 76.2 % 14,290 40,517 110.1 % 19,284
Broadcast television 32,910 18.8 % 27,709 56,464 14.9 % 49,157
Licensing and other media 4,005 44.7 % 2,769 8,179 20.2 % 6,806
Corporate (4,735) (5.8)% (4,474) (9,561) (8.0)% (8,849)
Total $ 121,375 10.3 % $ 110,020 $ 222,076 10.3 % $ 201,383
Effective income tax rate 41.1 % 41.0 % 41.5 % 41.0 %
Weighted-average shares outstanding 78,995 0.1 % 78,950 78,942 (0.1)% 79,038
Net cash provided by operating activities $ 58,323 $ 22,824 $ 115,640 $ 82,921
Capital expenditures (11,131) (22,017) (26,122) (36,201)
Business acquisitions and other
additions to long-lived assets (46,381) (25,536) (102,520) (47,510)
Increase (decrease) in long-term debt (13,941) 40,042 (7,435) 3,974
Dividends paid, including minority interests (11,363) (11,356) (22,706) (22,718)
Purchase and retirement of common stock (11,508) (28,217)
</TABLE>
Earnings before interest, income taxes, depreciation and amortization
("EBITDA") is included in the discussion of results of operations
because:
Management believes the year-over-year change in EBITDA, combined
with information on past and future capital spending, is a more
useful and reliable measure of year-over-year performance than the
change in operating income.
Banks and other lenders use EBITDA to determine the Company's
borrowing capacity.
Financial analysts and acquirors use EBITDA, combined with capital
spending requirements, to value communications media companies.
EBITDA should not, however, be construed as an alternative measure of
the amount of the Company's income or cash flows from operating
activities.
In the first quarter of 2000 the Company acquired the daily newspaper in
Fort Pierce, Florida, in exchange for its newspaper in Destin, Florida,
and cash, and acquired television station KMCI in Lawrence, Kansas,
which the Company had previously operated under a Local Management
Agreement. In the first quarter of 1999 the Company acquired the 70% of
Colorado Real Estate On-line, a provider of real estate listings on the
Internet, that it did not already own and acquired an additional
1.86% interest in The Television Food Network. In the first quarter of
2000 the Company also sold its independent telephone directories in
Memphis, Tennessee, Kansas City, Missouri, and North Palm Beach,
Florida. The sales and trade of the Destin newspaper resulted in net
gains of $6.3 million, $3.8 million after-tax ($.05 per share).
Net investment results in 2000 include i) recognized net investment
gains and losses and ii) adjustments to accrued incentive compensation
related to changes in the net gains (realized and estimated unrealized)
on the Scripps Ventures I portfolio. Net investment results reduced net
income $1.0 million ($.01 per share) in the second quarter and $6.8
million ($.09 per share) year-to-date. See Notes 3 and 5 to the
Consolidated Financial Statements.
Excluding the items described above, which management believes is
required to determine earnings from core operations, net income per
share for the second quarter was $.59 in 2000 and $.56 in 1999.
Earnings from core operations for the year-to-date period were $1.04 in
2000 and $.96 in 1999.
<PAGE>
The company announced during the quarter that it has asked the U.S.
Attorney General to approve a joint operating agreement between the
Denver Rocky Mountain News and The Denver Post, which is owned by
privately held MediaNews Group Inc. Such agreements are allowed under
the Newspaper Preservation Act of 1970. The agreement calls for the
creation of the Denver Newspaper Agency, a third party entity to be owned
equally by Scripps and MediaNews, to handle all of the business
functions of the two Denver newspapers. Both newspapers will maintain
independent news operations. Implementation of the agreement requires
the Attorney General's approval.
Excluding operating losses at the Denver Rocky Mountain News, second
quarter earnings per share from core operations were $.66 in 2000 and
$.58 in 1999 and for the year-to-date period were $1.19 in 2000 and
$1.03 in 1999.
Operating results for each of the Company's reportable segments,
excluding divested operating units, are presented on the following
pages. Interest expense increased primarily due to higher rates on the
Company's variable rate borrowings.
<PAGE>
NEWSPAPERS - Operating results, excluding divested operations, were as
follows:
<TABLE>
<CAPTION>
( in thousands ) Quarterly Period Year-to-Date
2000 Change 1999 2000 Change 1999
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Local $ 69,080 6.7 % $ 64,729 $ 136,457 3.5 % $ 131,835
Classified 78,264 8.2 % 72,324 152,051 8.7 % 139,923
National 10,093 7.1 % 9,421 18,872 6.5 % 17,713
Preprint and other 29,529 16.9 % 25,267 56,920 15.5 % 49,288
Newspaper advertising 186,966 8.9 % 171,741 364,300 7.5 % 338,759
Circulation 36,314 (4.1)% 37,879 74,603 (4.7)% 78,249
Joint operating agency distributions 12,266 (8.7)% 13,430 23,149 (4.9)% 24,347
Other 3,727 (1.1)% 3,769 7,245 0.4 % 7,216
Total operating revenues 239,273 5.5 % 226,819 469,297 4.6 % 448,571
Operating expenses, excluding depreciation and
amortization:
Editorial and newspaper content 26,763 0.1 % 26,745 53,581 2.6 % 52,224
Newsprint and ink 38,490 15.8 % 33,248 74,720 7.4 % 69,573
Other press and production 25,132 6.8 % 23,528 48,910 7.5 % 45,507
Circulation and distribution 28,400 14.4 % 24,830 56,531 15.5 % 48,937
Commercial printing and other 9,582 53.0 % 6,261 17,823 48.7 % 11,984
Advertising sales and marketing 22,164 7.2 % 20,676 44,242 9.1 % 40,554
General and administrative 23,701 9.2 % 21,709 45,320 1.5 % 44,642
Total 174,232 11.0 % 156,997 341,127 8.8 % 313,421
EBITDA 65,041 (6.8)% 69,822 128,170 (5.2)% 135,150
Share of pre-tax earnings of equity-method investment (1,025) (96) (1,693) (165)
Total EBITDA 64,016 (8.2)% 69,726 126,477 (6.3)% 134,985
Depreciation and amortization 16,146 15.9 % 13,931 31,733 9.8 % 28,908
Operating income $ 47,870 (14.2)% $ 55,795 $ 94,744 (10.7)% $ 106,077
Other Financial and Statistical Data:
Percent of operating revenues:
EBITDA 26.8 % 30.7 % 27.0 % 30.1 %
Operating income 20.0 % 24.6 % 20.2 % 23.6 %
Capital expenditures $ 4,234 $ 6,411 $ 7,648 $ 15,097
Business acquisitions and other
additions to long-lived assets 805 32,806 1,129
</TABLE>
Circulation revenue decreased primarily due to promotions and
discounts offered in the Denver market. Circulation and distribution
costs increased primarily due to the effort to gain market share in
Denver. Costs related to the application for the Denver JOA increased
general and administrative expenses by approximately $1.0 million in
the second quarter. Excluding Denver, EBITDA decreased 1.5% in the
quarter and was flat year-to-date.
Newsprint prices increased 8% year-over-year in the second quarter.
The newspapers' Internet businesses had EBITDA of $(1.5) million,
compared to $(0.2) million in the second quarter of 1999. Year-to-
date the newspapers' Internet businesses had EBITDA of $(2.5) million,
compared to $(0.5) million in 1999.
<PAGE>
CATEGORY MEDIA - Operating results were as follows:
<TABLE>
<CAPTION>
( in thousands ) Quarterly Period Year-to-Date
2000 Change 1999 2000 Change 1999
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Advertising $ 70,702 63.7 % $ 43,203 $ 128,177 67.1 % $ 76,708
Affiliate fees 14,535 14.4 % 12,702 29,165 18.4 % 24,639
Other 1,229 (26.9)% 1,681 2,447 (44.9)% 4,439
Total operating revenues 86,466 50.2 % 57,586 159,789 51.0 % 105,786
Operating expenses, excluding depreciation and
amortization:
Programming and production 21,516 49.4 % 14,404 41,474 39.3 % 29,774
Operations and distribution 7,852 26.9 % 6,188 16,368 37.5 % 11,904
Amortization of distribution fees 4,628 29.9 % 3,564 9,024 14.4 % 7,886
Sales and marketing 17,963 46.4 % 12,273 32,549 38.4 % 23,510
General and administrative 10,039 31.3 % 7,646 21,527 47.0 % 14,645
Total 61,998 40.7 % 44,075 120,942 37.9 % 87,719
EBITDA - consolidated networks 24,468 13,511 38,847 18,067
Share of pre-tax earnings of equity-method investment 711 779 1,670 1,217
Total EBITDA 25,179 14,290 40,517 19,284
Depreciation and amortization 3,457 54.2 % 2,242 7,041 25.0 % 5,631
Operating income (loss) $ 21,722 $ 12,048 $ 33,476 $ 13,653
Other Financial and Statistical Data:
Percent of operating revenues:
EBITDA 29.1 % 24.8 % 25.4 % 18.2 %
Operating income 25.1 % 20.9 % 21.0 % 12.9 %
Payments for programming and network
distribution fees less than (greater than)
amounts recognized as expense $ (4,665) $ (12,772) $ (10,089) $(32,720)
Capital expenditures 916 7,193 1,822 8,421
Business acquisitions and other
additions to long-lived assets 8,415 2,058 8,992 16,797
</TABLE>
According to the Nielsen Homevideo Index ("Nielsen"), HGTV was
distributed to 62.9 million homes in June 2000, up 7.7 million from
June 1999 and up 2.4 million in the second quarter. Food Network was
distributed to 49.1 million homes in June 2000, up 8.4 million from
June 1999 and up 2.7 million in the quarter.
The Company launched DIY, its third network, in the fourth quarter of
1999. DIY had EBITDA of $(2.5) million in the second quarter of 2000,
$(4.6) million year-to-date compared to $(0.9) million in the second
quarter of 1999, $(1.2) million year-to-date.
During the second quarter the Company announced that it will launch a
fourth cable television and Internet network, Fine Living, in the
second half of 2001. Fine Living will be a 24-hour cable TV network,
with companion Web site, targeting higher income viewers and the $200
billion-plus luxury consumer goods and services market. Fine Living's
impact on EBITDA is expected to be negligible in 2000 and is expected
to reduce EBITDA by up to $12 million in 2001.
<PAGE>
BROADCAST TELEVISION - Operating results were as follows:
<TABLE>
<CAPTION>
( in thousands ) Quarterly Period Year-to-Date
2000 Change 1999 2000 Change 1999
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Local $ 48,072 6.5 % $ 45,138 $ 89,151 3.1 % $ 86,441
National 33,362 5.4 % 31,651 63,414 4.7 % 60,590
Political 2,165 165 3,906 529
Other 3,872 (16.7)% 4,651 7,687 (18.3)% 9,412
Total operating revenues 87,471 7.2 % 81,605 164,158 4.6 % 156,972
Operating expenses, excluding depreciation and
amortization:
Programming and station operations 36,826 (1.0)% 37,199 74,113 (1.1)% 74,925
Sales and marketing 11,258 7.7 % 10,455 21,149 6.8 % 19,810
General and administrative 6,477 3.8 % 6,242 12,432 (5.0)% 13,080
Total 54,561 1.2 % 53,896 107,694 (0.1)% 107,815
EBITDA 32,910 18.8 % 27,709 56,464 14.9 % 49,157
Depreciation and amortization 7,081 4.4 % 6,782 14,117 2.0 % 13,843
Operating income $ 25,829 23.4 % $ 20,927 $ 42,347 19.9 % $ 35,314
Other Financial and Statistical Data:
Percent of operating revenues:
EBITDA 37.6 % 34.0 % 34.4 % 31.3 %
Operating income 29.5 % 25.6 % 25.8 % 22.5 %
Capital expenditures $ 3,799 $ 6,488 $ 12,474 $ 9,561
Business acquisitions and other
additions to long-lived assets 55 15 14,660 70
</TABLE>
EBITDA improved primarily due to increased political advertising and
cost containment initiatives. In the second half of the last
congressional election year, 1998, the Company's television stations
carried $16.6 million in political advertising. A similar amount is
expected in the second half of 2000.
Other revenue is primarily network compensation. The Company's network
compensation revenues decreased $1.3 million in the second quarter of
2000, and decreased $2.5 million year-to-date. Network compensation
revenues are expected to be down approximately $0.6 million year-over-
year in the third quarter and flat in the fourth quarter.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company generates significant cash flow from operating activities.
There are no significant legal or other restrictions on the transfer
of funds among the Company's business segments. Cash flow provided by
operating activities in excess of capital expenditures is used
primarily to fund corporate expenditures or to invest in new
businesses. Management expects total cash flow from operating
activities in 2000 will be sufficient to meet the Company's expected
total capital expenditures, required interest payments and dividend
payments.
A 1998 authorization by the Board of Directors allows for the repurchase
of an additional 2.2 million Class A Common shares.
The Company's Scripps Ventures Funds invest in new businesses focusing
primarily on new media technology. See Note 5 to the Consolidated
Financial Statements. The Board of Directors has authorized up to
$150 million of such investments. At June 30, 2000, an additional $71
million remains to be invested under the authorization.
If the Denver JOA is approved, the Company will make a $60 million
payment to MediaNews.
Fine Living is expected to launch in the second half of 2001. The
cash required will exceed start-up EBITDA.
Net debt (borrowings less cash equivalent and other short-term
investments) decreased $7.6 million in the first half of 2000, to $762
million at June 30, 2000. Management expects to extend or refinance
the $400 million one-year portion of the variable rate credit
facility.
Management believes the Company's cash flow from operations and
substantial borrowing capacity, taken together, provide adequate
resources to fund expansion of existing businesses and the development
or acquisition of new businesses.
<PAGE>
MARKET RISK
The Company's earnings and cash flow can be affected by, among other
things, interest rate changes, foreign currency fluctuations (primarily
in the exchange rate for the Japanese yen) and changes in the price of
newsprint. The information disclosed in Market Risk in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999, has not
changed materially unless otherwise disclosed here-in.
The Company may use foreign currency forward and option contracts to
hedge its cash flow exposures denominated in Japanese yen and forward
contracts to reduce the risk of changes in the price of newsprint on
anticipated newsprint purchases. The Company held no foreign currency
or newsprint forward contracts at June 30, 2000, or December 31, 1999.
The following table presents additional information about the Company's
market-risk-sensitive financial instruments:
<TABLE>
<CAPTION>
( in thousands ) As of June 30, 2000 As of December 31, 1999
Cost Fair Cost Fair
Basis Value Basis Value
<S> <C> <C> <C> <C>
Financial instruments subject to interest rate risk:
Variable rate credit facilities, including commercial paper $ 559,950 $ 559,950 $ 565,689 $ 565,689
$100 million, 6.625% note, due in 2007 99,894 94,500 99,887 94,668
$100 million, 6.375% note, due in 2002 99,954 97,900 99,944 98,107
Other notes 2,227 1,050 3,927 2,836
Total long-term debt $ 762,025 $ 753,400 $ 769,447 $ 761,300
Financial instruments subject to market value risk:
Time Warner common stock (1,344,000 shares) $ 27,814 $ 102,185 $ 27,816 $ 97,227
Centra Software (1,792,500 common shares) 3,652 17,030
garden.com Inc. (2,414,000 common shares
and 276,000 warrants) 5,797 5,797 9,625 22,636
iVillage Inc. (270,000 common shares) 5,412 5,412 5,897 5,897
Other available-for-sale securities 1,245 4,819 3,385 9,177
Total investments in publicly-traded companies 43,920 135,243 46,723 134,937
Investments in private companies 98,494 (a) 63,349 (a)
(a) Securities of private companies do not trade in public markets,
so they do not have readily determinable fair values. However,
if fair value is assumed to be the price from the most recent
round of financing or, for some securities, less based on
management's judgment of the circumstances, then the estimated
value of these investments was $156,000,000 on June 30, 2000,
and $91,000,000 on December 31, 1999. There can be no assurance
as to the amounts the Company would receive if these secruities
were sold.
</TABLE>
The Company manages interest rate risk primarily by maintaining a mix of
fixed-rate and variable-rate debt. The Company currently does not use
interest rate swaps, forwards or other derivative financial instruments
to manage its interest rate risk. See Note 4 to the Consolidated
Financial Statements. The weighted-average interest rate on borrowings
under the Variable Rate Credit Facilities was 6.7% at June 30, 2000, and
6.0% at December 31, 1999.
The Company holds 1,792,500 shares of Centra Software, which became
publicly traded in January 2000. The Company's investment in Centra
Software had previously been included in private companies in the
above table. The estimated fair value of the Centra Software
investment on December 31, 1999, was $6 million.
Several of the Company's investments in available for sale securities
declined below historical cost during the second quarter of 2000 and
were written down to fair value.
<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