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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 EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File Number 0-300
SCRIPPS HOWARD BROADCASTING COMPANY
(Exact name of registrant as specified in its charter)
Ohio 31-0438675
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
312 Walnut Street
Cincinnati, Ohio 45201
(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 a 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
April 15, 1994 the registrant had outstanding 10,325,788 shares of
Common Stock, $.25 par value.
<PAGE>
INDEX TO SCRIPPS HOWARD BROADCASTING COMPANY
REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1994
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 3
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.
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.
<PAGE>
ITEM 5.OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
None.
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.
SCRIPPS HOWARD BROADCASTING COMPANY
Dated: May 11, 1994 BY: /s/ D. J. Castellini
D. J. Castellini
Treasurer
<PAGE>
SCRIPPS HOWARD BROADCASTING COMPANY
Index to Financial Information
Item Page
Consolidated Balance Sheets F-2
Consolidated Statements of Income and Retained Earnings F-3
Consolidated Statements of Cash Flows F-4
Notes to Consolidated Financial Statements F-5
Management's Discussion and Analysis of Financial
Condition and Results of Operations F-11
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
( in thousands, except share data ) As of
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 3,019 $ 2,131 $ 2,283
Accounts and notes receivable (less
allowances - $1,512, $1,595, $1,863) 52,104 66,273 52,490
Program rights and production costs 41,016 42,388 43,096
Deferred income taxes 2,612 2,735 2,504
Miscellaneous 9,244 7,989 8,632
Total current assets 107,995 121,516 109,005
Property, Plant, and Equipment 198,199 191,272 195,881
Goodwill and Other Intangible Assets 253,477 253,592 276,791
Other Assets:
Program rights and production costs (less current portion) 45,715 43,084 40,364
Miscellaneous 10,788 12,444 10,089
Total other assets 56,503 55,528 50,453
TOTAL ASSETS $ 616,174 $ 621,908 $ 632,130
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Program rights payable $ 33,843 $ 30,640 $ 38,193
Accounts payable 9,964 12,422 9,514
Accrued liabilities:
Copyright and programming costs 3,779 4,166 4,271
Employee compensation and benefits 3,060 3,524 3,057
Interest 3,277 1,577 5,667
Income taxes 11,398 13,247 5,829
Miscellaneous 7,320 7,895 4,789
Total current liabilities 72,641 73,471 71,320
Deferred Income Taxes 83,951 85,653 60,173
Advances From Parent Company 97,881 99,926 219,873
Other Long-term Obligations 51,920 59,841 58,473
Stockholders' Equity:
Common stock, $.25 par-authorized: 25,000,000 shares;
issued and outstanding: 10,325,788 shares 2,582 2,582 2,582
Retained earnings 307,199 300,435 219,709
Total stockholders' equity 309,781 303,017 222,291
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 616,174 $ 621,908 $ 632,130
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<CAPTION>
( in thousands, except share data ) Three months ending
March 31,
1994 1993
<S> <C> <C>
Operating Revenues:
Broadcasting $ 60,353 $ 61,845
Cable television 28,049 28,470
Total operating revenues 88,402 90,315
Operating Expenses:
Employee compensation and benefits 22,596 24,151
Programming and production costs 19,361 19,219
Other operating expenses 17,090 13,750
Depreciation 7,107 7,191
Amortization of intangible assets 3,366 3,376
Total operating expenses 69,520 67,687
Operating Income 18,882 22,628
Other Credits (Charges):
Interest on advances from parent company (1,877) (4,436)
Other interest expense (98) (128)
Miscellaneous, net (67) 18
Net other credits (charges) (2,042) (4,546)
Income Before Income Taxes 16,840 18,082
Provision for Income Taxes 6,978 7,755
Net Income 9,862 10,327
Retained Earnings, Beginning of Period 300,435 212,480
Total 310,297 222,807
Dividends (3,098) (3,098)
Retained Earnings, End of Period $ 307,199 $ 219,709
Per Share of Common Stock:
Net Income $0.96 $1.00
Dividends Declared $0.30 $0.30
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
( in thousands ) Three months ending
March 31,
1994 1993
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 9,862 $ 10,327
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation 7,107 7,191
Amortization of intangible assets 3,366 3,376
Deferred income taxes (1,579) (198)
Changes in certain working capital accounts,
net of effects from subsidiary companies purchased 9,661 5,512
Miscellaneous, net 1,568 1,818
Net operating activities 29,985 28,026
Cash Flows from Investing Activities:
Additions to property, plant, and equipment (6,251) (6,369)
Purchase of subsidiary companies, net of cash acquired (17,970) (42)
Miscellaneous, net 267 71
Net investing activities (23,954) (6,340)
Cash Flows from Financing Activities:
Increase in advances from parent company 43,569
Payments on advances from parent company (2,045) (62,500)
Dividends paid (3,098) (3,098)
Miscellaneous, net (3)
Net financing activities (5,143) (22,032)
Increase (Decrease) in Cash and Cash Equivalents 888 (346)
Cash and Cash Equivalents:
Beginning of year 2,131 2,629
End of period $ 3,019 $ 2,283
Supplemental Cash Flow Disclosures:
Interest paid $ 191 $ 3,732
Income taxes paid 10,006 4,299
Increase in program rights and related liabilities 6,713 3,575
See notes to consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_____________________________________________________________________________
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company is approximately 86% owned by
Scripps Howard, Inc. ("SHI"), a wholly-owned subsidiary of
The E.W. Scripps Company ("EWS").
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, 1993. 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 three-month periods ending
March 31, 1994 are not necessarily indicative of the results
that may be expected for future interim periods or for the
year ending December 31, 1994.
Program Rights and Production Costs - Program rights are
recorded at the time such programs become available for
broadcast. Amortization is computed using the straight-line
method based on the license period or based on usage,
whichever yields the greater accumulated amortization for
each program. The liability for program rights is not
discounted for imputed interest.
Production costs represent costs incurred in the production
of programming for distribution. Amortization of capitalized
costs is based on the percentage of current period revenues
to anticipated total revenues for each program.
Program and production costs are stated at the lower of
unamortized cost or fair value. The portion of the
unamortized balance expected to be amortized within one year
is classified as a current asset.
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 months ending
March 31,
1994 1993
<S> <C> <C>
Weighted average shares outstanding 10,326 10,326
</TABLE>
Reclassification - For comparison purposes certain 1993 items
have been reclassified to conform with 1994 classifications.
<PAGE>
2.ACQUISITIONS AND DIVESTITURES
A.Acquisitions
1994 - The Company acquired Cinetel Productions (an
independent producer of programs for cable television).
1993 - The Company purchased a cable television system.
The following table presents additional information about the
acquisitions:
<TABLE>
<CAPTION>
( in thousands ) Three months ending
March 31,
1994 1993
<S> <C> <C>
Goodwill and other intangible assets acquired $ 3,245 $ 27
Other assets acquired 14,725 15
Cash paid $ 17,970 $ 42
</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
1993 - The Company sold its Memphis television station and
its radio stations in the fourth quarter.
Included in the consolidated financial statements are the
following results of divested operations:
<TABLE>
<CAPTION>
( in thousands ) Three
months
ending
March 31,
1993
<S> <C>
Operating revenues $ 6,900
Operating income 1,500
</TABLE>
<PAGE>
3.UNUSUAL ITEMS
In the first quarter of 1993 management changed the estimate
of the additional amount of copyright fees the Company would
owe when a dispute between the television industry and the
American Society of Composers, Authors and Publishers
("ASCAP") was resolved. The adjustment increased 1993 first
quarter operating income $4,300,000 and net income
$2,700,000, $.26 per share.
4.INCOME TAXES
The Internal Revenue Service is currently examining the
consolidated income tax returns of EWS for the years 1985 through
1990. Management believes that adequate provision for income taxes
has been made for all open years.
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
( in thousands ) Three months ending
March 31,
1994 1993
<S> <C> <C>
Current:
Federal $ 7,108 $ 7,053
State and local 1,449 900
Total current 8,557 7,953
Deferred:
Federal (725) (783)
State and local (854) 585
Total deferred (1,579) (198)
Provision for income taxes $ 6,978 $ 7,755
</TABLE>
<PAGE>
5.ADVANCES FROM PARENT COMPANY
Advances from SHI consisted of the following:
<TABLE>
<CAPTION>
( in thousands ) As of
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
Advance under credit facility, payable 1995 $ 17,881 $ 19,926 $ 59,873
8.5% advance, payable 1995 - 1996 80,000 80,000 160,000
Advances from parent company $ 97,881 $ 99,926 $ 219,873
Weighted average interest rate on
credit facility at balance sheet date 3.5% 3.4% 3.6%
</TABLE>
The Company has a credit facility with SHI which permits maximum
borrowings up to $75,000,000 ("Credit Facility"). Maximum
borrowing under the Credit 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 expires in
September 1995 and may be extended upon mutual agreement.
<PAGE>
6.PROPERTY, PLANT, AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant, and equipment consisted of the following:
<TABLE>
<CAPTION>
( in thousands ) As of
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
Land and improvements $ 12,154 $ 10,023 $ 10,731
Buildings and improvements 35,489 32,401 34,086
Equipment 356,248 347,289 346,279
Total 403,891 389,713 391,096
Accumulated depreciation 205,692 198,441 195,215
Net property, plant, and equipment $ 198,199 $ 191,272 $ 195,881
</TABLE>
Goodwill and other intangible assets consisted of the following:
<TABLE>
<CAPTION>
( in thousands ) As of
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
Goodwill $ 190,177 $ 190,132 $ 205,223
Cable television franchise costs 10,824 10,819 10,810
Customer lists 58,212 56,712 56,712
Licenses and copyrights 28,221 28,221 28,221
Non-competition agreements 19,415 19,415 19,575
Other 30,965 29,265 30,100
Total 337,814 334,564 350,641
Accumulated amortization 84,337 80,972 73,850
Net goodwill and other intangible assets $ 253,477 $ 253,592 $ 276,791
</TABLE>
<PAGE>
7.SEGMENT INFORMATION
Broadcasting operating income was increased in the first
quarter of 1993 by $4,300,000 as a result of the change in
estimate of the additional amount of copyright fees owed
ASCAP (see Note 3).
Financial information relating to the Company's business segments
is as follows:
<TABLE>
<CAPTION>
( in thousands ) Three months ending
March 31,
1994 1993
<S> <C> <C>
OPERATING REVENUES
Broadcasting $ 60,353 $ 61,845
Cable television 28,049 28,470
Total operating revenues $ 88,402 $ 90,315
OPERATING INCOME
Broadcasting $ 15,908 $ 17,131
Cable television 4,133 6,673
Entertainment (253)
Corporate (906) (1,176)
Total operating income $ 18,882 $ 22,628
DEPRECIATION
Broadcasting $ 2,167 $ 2,439
Cable television 4,940 4,752
Total depreciation $ 7,107 $ 7,191
AMORTIZATION OF INTANGIBLE ASSETS
Broadcasting $ 2,745 $ 2,848
Cable television 621 528
Total amortization of intangible assets $ 3,366 $ 3,376
CAPITAL EXPENDITURES
Broadcasting $ 2,692 $ 3,362
Cable television 3,557 3,007
Entertainment 2
Total capital expenditures $ 6,251 $ 6,369
</TABLE>
<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 ) Year-to-date
1994 Change 1993
<S> <C> <C>
Operating revenues:
Broadcasting $ 60,353 (2.4)% $ 61,845
Cable television 28,049 (1.5)% 28,470
Total operating revenues $ 88,402 (2.1)% $ 90,315
Operating income:
Broadcasting $ 15,908 (7.1)% $ 17,131
Cable television 4,133 (38.1)% 6,673
Entertainment (253)
Corporate (906) 23.0 % (1,176)
Total operating income 18,882 (16.6)% 22,628
Interest expense (1,975) (4,564)
Miscellaneous, net (67) 18
Income taxes (6,978) (7,755)
Net income $ 9,862 (4.5)% $ 10,327
Net income per share of common stock $0.96 (4.0)% $1.00
Weighted average shares outstanding 10,326 10,326
Effective income tax rate 41.4 % 42.9 %
</TABLE>
<PAGE>
The following items affected the comparability of the Company's
reported results of operations:
(i)In 1993 the Company sold its Memphis television station and
its radio stations. The stations are hereinafter referred
to as the "Divested Operations." See Note 2B to the
Consolidated Financial Statements.
The following items related to Divested Operations affected
the comparability of the Company's reported results of
operations:
<TABLE>
<CAPTION>
( in thousands ) Three
months
ending
March 31,
1993
<S> <C>
Operating revenues $ 6,900
Operating income 1,500
</TABLE>
(ii)In the first quarter of 1993 management changed the
estimate of the additional amount of copyright fees the
Company would owe when a dispute between the television
industry and the American Society of Composers, Authors and
Publishers ("ASCAP") was resolved. The adjustment ("ASCAP
Adjustment") increased 1993 first quarter operating income
$4,300,000 and net income $2,700,000, $.26 per share. See
Note 3 to the Consolidated Financial Statements.
The items above are excluded from the consolidated and segment
operating results presented in the following pages of this
Management's Discussion and Analysis. Management believes they
are not relevant to understanding the Company's ongoing
operations.
Net income per share was as follows:
<TABLE>
<CAPTION>
Year-to-Date
1994 Change 1993
<S> <C> <C> <C>
Reported net income per share $ .96 (4.0)% $ 1.00
Note Ref.
(ii) ASCAP Adjustment ( .26)
Adjusted net income per share $ .96 29.7 % $ .74
</TABLE>
The Company's average advances from parent company in the first
quarter of 1994 were $130 million lower than in the first quarter of
1993, resulting in the decrease in interest expense.
<PAGE>
RESULTS OF OPERATIONS
CONSOLIDATED - Operating results, excluding the Divested Operations
and ASCAP Adjustment, were as follows:
<TABLE>
<CAPTION>
( in thousands ) Year-to-date
1994 Change 1993
<S> <C> <C> <C>
Operating revenues:
Broadcast television $ 60,353 9.9 % $ 54,926
Cable television 28,049 (1.5)% 28,470
Total operating revenues $ 88,402 6.0 % $ 83,396
Operating income:
Broadcast television $ 15,908 40.6 % $ 11,317
Cable television 4,133 (38.1)% 6,673
Entertainment (253)
Corporate (906) 23.0 % (1,176)
Total operating income $ 18,882 12.3 % $ 16,814
Other Financial and Statistical Data:
Total advertising revenues $ 61,357 10.0 % $ 55,775
Advertising revenues as a
percentage of total revenues 69.4 % 66.9 %
Total capital expenditures $ 6,251 (0.5)% $ 6,282
</TABLE>
Start-up costs for the Home & Garden Television Network ("Home &
Garden"), a 24-hour cable television channel scheduled for launch in
late 1994, totaled $250,000 in the first quarter of 1994.
SEGMENTS - Operating results, excluding the Divested Operations and
the ASCAP Adjustment, for the broadcast television and cable
television business segments are presented on the following pages.
Earnings before interest, income taxes, depreciation, and amortization
("EBITDA") is included in the discussion of segment results because:
Acquisitions of communications media businesses are based on
multiples of EBITDA.
Financial analysts use EBITDA to value communications media
companies.
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.
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>
BROADCAST TELEVISION - Operating results for the broadcasting segment,
excluding the Divested Operations and the ASCAP Adjustment, were as
follows:
<TABLE>
<CAPTION>
( in thousands ) Year-to-date
1994 Change 1993
<S> <C> <C> <C>
Operating revenues:
Local $ 32,487 10.4 % $ 29,417
National 25,325 9.2 % 23,182
Political 362 176
Other 2,179 1.3 % 2,151
Total operating revenues 60,353 9.9 % 54,926
Operating expenses:
Employee compensation and benefits 17,938 4.9 % 17,099
Program costs 12,026 0.1 % 12,016
Other 9,569 0.4 % 9,531
Depreciation and amortization 4,912 (1.0)% 4,963
Total operating expenses 44,445 1.9 % 43,609
Operating income $ 15,908 40.6 % $ 11,317
Other Financial and Statistical Data:
Earnings before interest, income taxes,
depreciation, and amortization ("EBITDA") $ 20,820 27.9 % $ 16,280
Percent of operating revenues:
Operating income 26.4% 20.6%
EBITDA 34.5% 29.6%
Capital expenditures $ 2,692 (17.8)% $ 3,275
</TABLE>
Revenues increased at all of the Company's television stations.
<PAGE>
CABLE TELEVISION - Operating results for the cable television segment
were as follows:
<TABLE>
<CAPTION>
( in thousands, except per subscriber information ) Year-to-date
1994 Change 1993
<S> <C> <C> <C>
Operating revenues:
Basic services $ 16,182 (11.1)% $ 18,198
Premium programming services 6,492 10.8 % 5,857
Other monthly service 2,792 22.2 % 2,285
Advertising 1,004 18.3 % 849
Installation and miscellaneous 1,579 23.3 % 1,281
Total operating revenues 28,049 (1.5)% 28,470
Operating expenses:
Employee compensation and benefits 4,544 9.0 % 4,167
Program costs 7,335 10.4 % 6,647
Other 6,476 13.6 % 5,703
Depreciation and amortization 5,561 5.3 % 5,280
Total operating expenses 23,916 9.7 % 21,797
Operating income $ 4,133 (38.1)% $ 6,673
Other Financial and Statistical Data:
Earnings before interest, income taxes,
depreciation, and amortization ("EBITDA") $ 9,694 (18.9)% $ 11,953
Percent of operating revenues:
Operating income 14.7% 23.4%
EBITDA 34.6% 42.0%
Capital expenditures $ 3,557 18.3 % $ 3,007
Average number of basic subscribers 293.1 4.4 % 280.7
Average monthly revenue per basic subscriber $31.90 (5.6)% $33.81
Homes passed at end of period 551.4 1.5 % 543.4
Basic subscribers at end of period 294.9 4.9 % 281.2
Penetration rate 53.5% 51.7%
</TABLE>
Re-regulation of the cable television industry significantly affected
the Company's cable television operations. New rules which are
expected to further reduce regulated rates are scheduled to become
effective in July. Based upon the revised rules, year-over-year
declines in revenues and EBITDA are expected to increase in magnitude
in the third quarter of 1994.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities was $30,000,000 in 1994
compared to $28,000,000 in 1993. Cash flow from operating
activities in 1994 was used primarily for capital expenditures
of $6,300,000, acquisitions of $18,000,000, reduction of
advances of $2,000,000, and dividend payments of $3,100,000.
The debt to total capitalization ratio at March 31 was .24 in
1994 and .50 in 1993.
Consolidated capital expenditures are expected to total approximately
$45,000,000 for the remainder of 1994, including Home & Garden. The
Company expects to finance its capital requirements and start-up costs
for Home & Garden primarily through cash flow from operations.
PROPOSED MERGER
On April 7, 1994 the board of directors of the Company approved a
merger proposal from The E.W. Scripps Company ("EWS"), which through
Scripps Howard, Inc. (its wholly-owned subsidiary) owns 86.1% of the
Company's common stock. Under the terms of the proposed merger EWS
would exchange 3.45 shares of its Class A Common stock for each of the
Company's shares. A definitive merger agreement was executed on May
4, 1994. The merger is subject to regulatory approvals and a vote of
SHB shareholders. There can be no assurance that the merger will be
entered into or that any transaction will be consummated.
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