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 Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes [X]     No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).     Yes [X]     No [  ] 

The registrant estimates that the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant at December 31, 2002, was $1,520,000,000 based upon the closing price on the New York Stock Exchange at that date.

3

The Company was founded by Edwin Thomas Meredith in 1902 as an agricultural publisher and incorporated in Iowa in 1905. Meredith Corporation became public in 1946 and entered the television broadcasting business in 1948. It has been listed on the New York Stock Exchange since 1965 and currently has approximately 50 million shares of common and class B stock outstanding. The Company had 2,633 employees (including 124 part-time employees) at June 30, 2003.

The Company has two business segments: publishing and broadcasting. Financial information about industry segments can be found in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and in Item 8, "Financial Statements and Supplementary Data" under Note 16. These segments had no material expenses for research and development during the past three fiscal years.

The publishing segment is focused on the home and family market. It consists of 17 magazine brands, including Better Homes and Gardens, Ladies' Home Journal, and American Baby, as well as approximately 170 special interest publications; book publishing with nearly 300 books in print; integrated marketing relationships with some of America's leading companies; a large consumer database; an extensive Internet presence, including 24 web sites and strategic alliances with leading Internet destinations; brand licensing relationships; and other related operations.

The broadcasting segment includes the operations of 11 network-affiliated television stations located across the continental United States. These stations consist of five CBS affiliates, four FOX affiliates, one NBC affiliate, and one UPN affiliate.

The Company's largest revenue source is magazine and television advertising. Television advertising is to some extent seasonal, traditionally generating higher revenues in the second and fourth fiscal quarters and during key political contests, major sporting events, etc.

Name recognition and the public image of the Company's trademarks (e.g., Better Homes and Gardens and Ladies'Home Journal ) and television station call letters are vital to the success of ongoing operations and to the introduction of new business. The Company protects its interests by aggressively defending its trademarks and call letters.

Compliance with federal, state, and local provisions relating to the discharge of materials into the environment and to the protection of the environment has no material effect on capital expenditures, earnings, or the competitive position of the Company.

4

In December 2002, Meredith Corporation purchased American Baby magazine and related assets (American Baby Group) from Primedia Inc. for $117.6 million ($115.0 million plus certain costs). American Baby magazine, introduced in 1938, is published monthly and has a circulation of 2 million. Other American Baby Group properties acquired include Childbirth and First Year of Life magazines, three Hispanic titles and related marketing programs, the American Baby television program currently shown on The Discovery Channel® television network, web sites, custom publications, and other related programs. Operating results of the properties are included in Meredith's consolidated results from the date of acquisition.

5

Publishing represented 75 percent of the Company's consolidated revenues in fiscal 2003.

Key advertising and circulation information for major subscription titles among the Company's 17 magazine brands follows:

6

Better Homes and Gardens magazine, the Company's flagship, accounts for a significant percentage of revenues and operating profit of the publishing segment and the Company. Meredith's other magazines brands not listed in the preceding table are Country Gardens; Renovation Style; Creative Home; Decorating; Do It Yourself; Garden, Deck & Landscape; Garden Shed; and American Patchwork & Quilting. Meredith also has a 50 percent interest in a monthly Australian edition of Better Homes and Gardens magazine.

The Company publishes a group of Special Interest Publications, primarily under the Better Homes and Gardens and Creative Collection banners, that are issued from one to six times a year and primarily sold on newsstands. Titles published quarterly or every other month include the aforementioned Creative Home; Decorating; Do It Yourself; Garden, Deck & Landscape; Garden Shed; and American Patchwork & Quilting as well as Beautiful New Homes , Bedroom & Bath , Home Planning Ideas, Kitchen and Bath Ideas, 100 Ideas series , Paint Decor, Quick & Easy Decorating, Remodeling Ideas, Scrapbooks etc., and Window & Wall Ideas. Approximately 170 issues were published in fiscal 2003.

Meredith Interactive Media has extended many of the Company's magazine brands to the Internet. The flagship home and family site - bhg.com - is a leader in providing unique content and applications in its core content areas of decorating, food, home improvement, and remodeling. The Company has established multi-year alliance agreements with two of the leading Internet providers, driving additional traffic to the Company's sites. These web sites are additional sources of advertising and other revenues; more importantly, they hold the potential for significant cost reductions through online magazine subscription orders.

Advertising revenues are generated primarily from sales to clients engaged in consumer marketing. Many of Meredith's larger magazines offer different regional and demographic editions that contain the same basic editorial material but allow advertisers to concentrate on specific markets or specific audiences. The Company sells two primary types of magazine advertising: display and direct-response. Advertisements are either run-of-press (printed along with the editorial portions of the magazine) or inserts (preprinted forms). Most of the publishing segment's advertising revenues are derived from run-of-press display advertising. Meredith Corporate Solutions brings together all of the Company's resources to create multi-platform marketing programs that meet each client's unique advertising and promotional requirements.

Subscriptions obtained through direct-mail solicitation, agencies, insert cards, the Internet, and other means are Meredith's largest source of circulation revenues, but single-copy sales are also important. All of the Company's subscription magazines except Successful Farming and American Baby are sold by single copy as well. Single-copy sales are distributed through magazine wholesalers, who have the right to receive credit from the Company for magazines that retailers return to them.

7

Other revenues are derived from book sales, integrated marketing, other custom publishing projects, ancillary products and services, and brand licensing agreements.

The Company publishes and markets nearly 300 consumer home and family service books. They are published under the Better Homes and Gardens trademark and under licensed trademarks such as Ortho® books and The Home Depot ® books. Meredith also has a contract to produce three books based on the popular Trading Spaces® decorating show on The Learning Channel® cable network. The first of these books was released in March 2003, and the remaining two books were released in August 2003. Beginning in fiscal 2004, Meredith will publish a series of books based on the popular HGTV Home and Garden Television® network. The Company's books are sold through retail book and specialty stores, mass merchandisers, and other channels. During fiscal 2003, 69 new or revised titles were published, including the 12th edition of the Better Homes and Gardens New Cook Book.

Meredith Integrated Marketing, which offers integrated promotional strategies that combine all of the Company's custom capabilities, and Meredith's consumer database, which can make more than 75 million names available to magazine and television advertisers, are important because they provide revenue sources that are independent of advertising and circulation. Fiscal 2003 clients included Carnival Cruise Lines, DaimlerChrysler, Iams, and Hunter Douglas.

The major raw materials essential to the publishing segment are coated publication and book-grade papers. Meredith supplies all of the paper for its magazine production and most of the paper for its book production. Despite some increases in the third and fourth quarters, average paper prices were lower in fiscal 2003 than in fiscal 2002. The price of paper is driven by overall market conditions and is therefore difficult to predict, but management anticipates paper prices will rise as demand grows over the next year. The Company has contractual agreements with major paper manufacturers to ensure adequate supplies for planned publishing requirements.

Meredith has printing contracts with several major printers for all of its magazine titles. The Company's published books are manufactured by outside printers under contracts that are generally on a title-by-title basis.

Because of the large volume of magazine and subscription promotion mailings, the Company continually seeks the most economical and effective methods for mail delivery, including cost-saving measures such as pre-sorting and drop-shipping to central postal centers. The United States Postal Service raised rates effective June 29, 2002, resulting in a cost increase of nearly 10 percent. The Postmaster General has stated that no further rate increases will be requested until at least 2006. Meredith continues to work with others in the industry and through trade organizations to encourage the Postal Service to implement efficiencies and contain rate increases. The Company cannot, however, predict future changes in the Postal Service and postal rates or the impact they will have on its publishing business.

Paper, printing, and postage costs for the magazine and book operations accounted for approximately 40 percent of the publishing segment's fiscal 2003 operating expenses.

8

Fulfillment services for Meredith's magazine operations are provided by third parties. National newsstand distribution services are provided by another third party through a multi-year agreement.

Publishing is a highly competitive business. The Company's magazines, books, and related publishing products and services compete with other mass media, including the Internet, and many other types of leisure-time activities. Competition for readers is based principally on price, editorial content, marketing skills, and customer service. Competition for advertising dollars is based primarily on advertising rates, circulation levels, reader demographics, advertiser results, and sales team effectiveness.

Gaining market share for newer magazines and specialty publications is extremely competitive. Competition is also intense for established titles. Better Homes and Gardens and Ladies' Home Journal , for example, must compete for readers and advertisers with other women's service magazines such as Family Circle®, Good Housekeeping®, Redbook®, and Woman's Day® magazines, which are published by other companies. According to the Publisher's Information Bureau, the combined fiscal 2003 advertising revenue market share of Better Homes and Gardens and Ladies' Home Journal magazines totaled approximately 43 percent of the women's service magazine market.

9

Television broadcasting represented 25 percent of Meredith's consolidated revenues in fiscal 2003. Pertinent information about the Company's 11 television stations follows:

Advertising is the principal source of revenues for the broadcasting segment. The stations sell commercial time to both local/regional and national advertisers. Rates for spot advertising are influenced primarily by the market size, number of in-market broadcasters, audience share, and audience demographics. The larger a station's share in any particular daypart, the more leverage a station has in setting advertising rates. As the market fluctuates with supply and demand, so does a station's rates. Most national advertising is sold by independent representative firms. The sales staff at each station generates local/regional advertising revenues.

Typically 25 to 35 percent of a market's television advertising revenues is generated by local news. The Company's stations have increased the number of hours of local news programming significantly over the last several years and are continually working to improve their news operations and ratings.

The national network affiliations of Meredith's 11 television stations influence advertising rates. Generally a network affiliation agreement provides a station the exclusive right to broadcast network programming in its local service area. In return, the network has the right to sell most of the commercial advertising aired during network programs. In some instances, the network compensates the local stations in accordance with the television station's network affiliation agreement. Conversely, affiliated stations make payments to the network for certain specified programming such as professional football. As a standard practice, the FOX and UPN networks make no cash payments to affiliates. The Company's FOX affiliates, however, pay the FOX network for additional advertising spots in prime-time programming.

In September 2002, Meredith moved the FOX affiliation in Portland from KPDX to KPTV. The Portland UPN affiliation was moved to KPDX under an affiliation agreement that expires in September 2004 . Meredith's affiliation agreements for all FOX-affiliated stations expire in June 2007. The Company's five CBS affiliates have agreements that expire from November 2004 to April 2006. The Company's Nashville station has an affiliation agreement with NBC that expires in December 2006. While Meredith's relations with the networks historically have been good, the Company can make no assurances these relationships will continue in the same manner over time.

The costs of locally produced and purchased syndicated programming are significant. Syndicated programming costs are based largely on uncontrollable market factors, primarily demand from other stations in the market. The Company has been emphasizing its locally produced news and entertainment programming, not only to attract advertisers but also to gain greater control of content and costs. Recent changes in Federal Communication Commission (FCC) regulations (see "Regulation") may lead to increased ownership consolidation, which in turn could affect local market competition for syndicated programming and lead to higher costs.

In April 2000, Meredith and other broadcasters dedicated a portion of their digital spectrum to create a wireless infrastructure to deliver content to consumers. Meredith owns a minority position in this new venture, iBlast Networks, and will share in its revenues and operating results. iBlast is currently testing distribution using selected television stations in Los Angeles, San Francisco/San Jose, Washington, Baltimore, Atlanta, Phoenix, San Diego, and Seattle/Tacoma. No official announcement has been made as to the anticipated rollout schedule affecting other iBlast markets or member stations.

11

Television broadcasting operations are subject to regulation by the FCC under the Communications Act of 1934 as amended (Communications Act). Under the Communications Act, the FCC grants station licenses and determines regulations and policies that affect the ownership, operations, programming, and employment practices of broadcast stations. Because the commission must approve all television licenses, compliance with FCC regulations is essential to the operation of this segment. Further, a broadcast license may not be assigned or transferred to another licensee without prior FCC approval.

Television broadcast licenses are granted for eight-year periods. A license must be renewed by the FCC if the station has served the public interest and is in substantial compliance with the provisions of the Communication Act and FCC regulations. Management believes the Company is in substantial compliance with all applicable provisions of the Communications Act and FCC regulations and knows of no reason why Meredith's television station licenses will not be renewed.

FCC regulations issued in June of 2003 would allow broadcast companies to own an unlimited number of television stations as long as the combined service areas of such stations do not include more than 45 percent of U.S. television households. The previous limit was 35 percent. As of June 30, 2003, the Company's household coverage was approximately 7.3 percent (per the FCC calculation method, which includes 50 percent of the market size for UHF stations owned). The June 2003 FCC regulations also eased restrictions on the number of television stations an entity can own in a local market. The change allows more duopolies (ownership of two stations in a local market) and permits triopolies (ownership of three stations) in some of the largest local markets. In September 2003, a federal appeals court issued an order staying the effective date of the FCC's June 2003 media ownership regulations pending completion of judicial review of the regulations. Legislation to repeal all or some of the new regulations is pending in Congress. The Company cannot predict when or how this matter will eventually be resolved.

The FCC also has various regulations governing the relationships between broadcasters and cable and satellite television providers. Among these regulations is a requirement that cable systems devote a specified portion of their channel capacity to the carriage of the signals of local television stations and permit television stations to elect between having a right to mandatory carriage on local cable systems, referred to as "must-carry rights," or a right to restrict or prevent cable systems from carrying the station's signal without the station's permission, referred to as "retransmission consent." Congress and the FCC have established and implemented similar market-specific requirements for mandatory carriage of local television stations by satellite television providers when those providers choose to provide any local signals.

The FCC regulations for the implementation of digital television (DTV) service were announced in April 1997. DTV permits broadcasters to transmit video images with a higher resolution than that of existing analog signals. For an eight-year transition period, the FCC assigned the operator of every full-power television station a second channel on which to provide separate DTV programming or to simulcast the analog programming while continuing analog broadcasts on the original channel. Stations were required to construct their DTV facilities and be on the air with a digital signal according to a schedule set in accordance with station type and market size.

All of the Company's television stations with the exception of KFXO, which is a low-power station and therefore not subject to these requirements, are currently transmitting digital signals on their assigned second channels. At the end of the transition period, each station will be required to return one of the two channels to the FCC and transmit exclusively in the digital format. The FCC expects to complete the transition to DTV by the end of 2006 or when 85 percent of viewers have a means to receive a digital signal, whichever is later. The FCC has announced it will review the progress of DTV every two years and adjust the 2006 target date if necessary.

12

The FCC has not yet issued final regulations governing some aspects of DTV operation. These include the obligation of cable television systems and other multichannel video providers to carry DTV signals and any additional public-interest obligations that may be imposed on broadcasters' use of DTV. FCC regulations require broadcasters transmitting subscription-based services over a DTV channel to pay the government a fee equal to 5 percent of gross revenues collected from such services.

The information given in this section is not intended to be inclusive of all regulatory provisions currently in effect. FCC regulations are subject to change, and any such changes could affect future operations and profitability of the Company's broadcasting segment, as could Congressional legislation or litigation. Management cannot predict what regulations or legislation may be adopted, nor can management estimate the effect any such changes would have on the Company's television broadcasting operations.

Below is a listing of the executive officers of the Company. Executive officers are elected to one-year terms of office each November and may be re-elected.

William T. Kerr
Chairman and Chief Executive Officer (1998 - present) and a director of the Company since 1994. Formerly: President and Chief Executive Officer (1997 - 1998); President and Chief Operating Officer (1994 - 1997); President - Magazine Group and Executive Vice President (1991 - 1994). Age 62.

Stephen M. Lacy
President - Publishing Group (2000 - present). Formerly: President - Interactive and Integrated Marketing Group (2000); Vice President - Chief Financial Officer (1998 - 2000). Age 49.

Jerome M. (Jerry) Kaplan
Executive Vice President - Publishing Group (2003 - present). Formerly: President - Magazine Group (2000 - 2003). Prior to being named an executive officer, Mr. Kaplan served as a Publishing Group vice president/ publishing director. His duties included direct responsibility for Better Homes and Gardens and Ladies' Home Journal magazines. Mr. Kaplan has announced his intention to retire in December 2003. Age 57.

John H. (Jack) Griffin, Jr.
President - Magazine Group (2003 - present). Prior to joining Meredith, Mr. Griffin had been President of Parade Publications, Inc. and Publisher of Parade magazine since 1999. Mr. Griffin spent five years with Meredith prior to joining Parade Publications. He served in a number of sales and marketing roles, including General Manager of Meredith Integrated Marketing and Meredith Custom Publishing, and Vice President of Marketing for the Meredith Broadcasting Group. Age 43.

Kevin P. O'Brien
President - Broadcasting Group (2001 - present). Prior to joining Meredith, Mr. O'Brien had worked for Cox Broadcasting for 15 years, most recently serving as executive vice president of the Cox Television Independent Group. In this capacity he supervised five Cox stations around the United States and also served as vice president and general manager of Cox's FOX affiliate in San Francisco. Age 60.

Suku V. Radia
Vice President - Chief Financial Officer (2000 - present). Prior to joining Meredith, Mr. Radia had served as managing partner of the Des Moines, Iowa office of KPMG LLP, a global professional services firm, since 1993. Age 52.

13

John S. Zieser
Vice President - Corporate and Employee Services/General Counsel and Secretary (2002 - present). Formerly: Vice President - General Counsel and Secretary (1999 - 2002). Prior to joining Meredith, Mr. Zieser had been group president of First Data Merchant Services Corporation, a division of First Data Corporation (FDC), a leading provider of transaction processing and information services. Mr. Zieser joined FDC in 1993 as legal counsel and was subsequently promoted to associate general counsel prior to his appointment to other senior management positions. Age 44.

Meredith is headquartered in Des Moines, Iowa. The Company owns buildings at 1716 and 1615 Locust Street and 1912 Grand Avenue and is the sole occupant of these buildings. These facilities are adequate for their intended use.

The publishing segment operates mainly from the Des Moines offices and from leased facilities at 125 Park Avenue in New York City. The New York facility is used primarily as an advertising sales office for all Meredith magazines and as headquarters for Ladies' Home Journal and MORE magazines and the American Baby Group properties. The publishing segment also maintains ad sales offices, which are leased, in Chicago, San Francisco, Los Angeles, Detroit and several other cities. These offices are adequate for their intended use.

The broadcasting segment operates from offices in the following locations: Atlanta, GA; Phoenix, AZ; Portland, OR; Hartford, CT; Nashville, TN; Kansas City, MO; Greenville, SC; Asheville, NC; Las Vegas, NV; Flint, MI; Saginaw, MI; and Bend, OR. All of these properties, except those noted below, are owned by the Company and are adequate for their intended use. The properties in Asheville, Flint and Bend are leased and are currently adequate for their intended use. Each of the broadcast stations also maintains an owned or leased transmitter site.

There are various legal proceedings pending against the Company arising from the ordinary course of business. In the opinion of management, liabilities, if any, arising from existing litigation and claims will not have a material effect on the Company's earnings, financial position or liquidity.

No matters have been submitted to a vote of shareholders since the Company's last annual meeting held on November 11, 2002.

14

The principal market for trading Meredith's common stock is the New York Stock Exchange (trading symbol MDP). There is no separate public trading market for Meredith's class B stock, which is convertible share-for-share at any time into common stock. Holders of both classes of stock receive equal dividends per share.

The range of trading prices for the Company's common stock and the dividends paid during each quarter of the past two fiscal years are presented below.

Stock of Meredith became publicly traded in 1946, and quarterly dividends have been paid continuously since 1947. Meredith has increased its dividend in each of the last 10 years. It is anticipated that comparable dividends will continue to be paid in the future.

On July 31, 2003, there were approximately 1,700 holders of record of the Company's common stock and 1,000 holders of record of class B stock.

Selected financial data for the years 1999 through 2003 is contained under the heading "Eleven-Year Financial History with Selected Financial Data" on pages 66-69 and is derived from financial statements for those years which were audited by KPMG LLP, independent accountants. The information contained in the "Selected Financial Data" is not necessarily indicative of the results of operations to be expected for future years, and should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.

15

The following analysis of segment results includes the presentation of adjusted segment operating profit. Adjusted segment operating profit is defined as segment operating profit plus amortization expense that would not have been recorded had the amortization provisions of SFAS No. 142 been in effect. This presentation is not in accordance with GAAP and should not be considered in isolation or as a substitute for the GAAP operating profit analysis. See "Use of non-GAAP Financial Measures" for a discussion of management's rationale for the use of such measures.

The following table presents operating results for the Company's publishing segment, which includes magazine and book publishing, integrated marketing, interactive media, brand licensing, and other related operations.

Revenues
Publishing revenues increased 10 percent in fiscal 2003 due to strong growth in advertising and book revenues and the acquisition of the American Baby Group. Excluding the American Baby Group, revenues increased 6 percent. Publishing revenues declined 5 percent in fiscal 2002, reflecting weak advertising demand and the absence of revenues from discontinued operations. Adjusted for operations discontinued in fiscal 2001, revenues declined 2 percent in fiscal 2002. Discontinued operations included Golf for Women, Family Money, and Mature Outlook magazines and the California Tourism and American Park Network publications. To enhance comparability, the following discussion excludes revenue from the American Baby Group and the discontinued titles.

23

Comparable publishing advertising revenues increased 11 percent in fiscal 2003 following a 3 percent decline in fiscal 2002. The September 11, 2001 terrorist attacks and the resulting economic slowdown negatively affected advertising demand in fiscal 2002. The impact of the attacks and the slow recovery that followed was evident in quarterly results. All first quarter fiscal 2002 issues were closed prior to September 11, and comparable advertising revenues were up 2 percent for that quarter. They were down 13 percent in the second quarter, down 6 percent in the third, and up 5 percent in the fourth quarter. Improvement continued in fiscal 2003 with the year-over-year growth increasing in each quarter compared to the prior quarter.

The fiscal 2002 decline in advertising demand was widespread, affecting most categories of advertising and most of the Company's titles. Management took steps to build market share during these difficult times, which contributed to the recovery in revenues in the second half of fiscal 2002 and in fiscal 2003. These steps included initiatives designed to capture a greater share of advertisers' budgets, specific market share incentives for sellers, and a trade industry promotional program. These efforts achieved notable market share gains. The combined advertising revenue market share of Better Homes and Gardens and Ladies' Home Journal in the women's service field was over 43 percent in fiscal 2003 and has increased in each of the last two fiscal years. Country Home and Traditional Home magazines also increased advertising revenue share with respect to competing titles in fiscal 2002 and fiscal 2003.

Comparable magazine circulation revenues decreased 2 percent in fiscal 2003 following a 5 percent increase in fiscal 2002. Fiscal 2003 subscription revenues were affected by a slight decline in average revenue per copy for several titles due to an increase in the term of direct mail offers. Fiscal 2003 newsstand revenues increased from the prior year despite industrywide weakness in the second half of the fiscal year. The industry downturn coincided with the U.S. involvement in the conflict in Iraq. The growth in fiscal 2002 circulation revenues came primarily from increased newsstand sales of many titles, including Better Homes and Gardens Special Interest Publications , Creative Collection titles, and Ladies' Home Journal magazine. Subscription revenues increased in fiscal 2002 due to higher sales of newer titles such as MORE magazine and higher average prices for several titles. The fiscal 2002 circulation revenue increase included a favorable adjustment to an accrual for retailer allowances resulting from the final settlement of a discontinued program. Excluding that adjustment, comparable circulation revenues increased 4 percent in fiscal 2002.

Other publishing revenues increased 7 percent in fiscal 2003 on a comparable basis. This growth followed a 9 percent decline in fiscal 2002. Fiscal 2003's growth was primarily the result of an increase in the volume of book sales. Book revenues increased 27 percent largely due to the fall 2002 release of the 12th edition of the Better Homes and Gardens New Cook Book and the spring 2003 release of a book based on The Learning Channel® cable network's popular Trading Spaces® decorating show. Fiscal 2002 revenues from book sales declined 2 percent in part because of weak consumer demand following the September 11 attacks. A more significant factor in the decline in other publishing revenues in fiscal 2002 was lower sales volume in integrated marketing. In fiscal 2002 and, to a lesser extent, fiscal 2003, new integrated marketing business was insufficient to offset programs reduced or eliminated by existing clients. Integrated marketing new business sales improved significantly in fiscal 2003, but, due to long lead times, revenues from most new programs will not be recorded until fiscal 2004.

Operating costs
Costs increased 9 percent in fiscal 2003 after declining 4 percent in fiscal 2002. Excluding costs of the newly acquired American Baby Group in fiscal 2003 and amortization expense no longer required under SFAS No. 142 in fiscal 2002, costs increased 4 percent in fiscal 2003. The increase in comparable costs reflected higher sales volume in advertising pages and books, higher postal rates, and higher payroll and employee benefit costs. Partially offsetting these increases were lower sales volume from integrated marketing, lower paper prices, and lower magazine subscription acquisition costs. The fiscal 2002 decline reflected the absence of costs for discontinued titles, management's cost control initiatives, lower paper prices, and a smaller investment in interactive media operations. Partially offsetting these declines were higher postal rates and higher costs for employee benefits.

24

Paper, printing, and postage costs of the magazine and book operations account for approximately 40 percent of the publishing segment's operating costs. As a result of weaker market demand for paper and newly negotiated vendor relationships, the Company's average paper prices declined approximately 11 percent in fiscal 2002. Average paper prices remained steady early in fiscal 2003 and began to increase in the second half of the fiscal year. Because of the timing of the price changes, average paper prices were down approximately 8 percent in fiscal 2003. Paper prices are driven by overall market conditions and are difficult to predict, but management anticipates they will increase as paper demand grows during the next fiscal year.

Postal rates for periodicals rose 10 percent in June 2002 following increases of almost 3 percent in July 2001 and nearly 10 percent in January 2001. The Postmaster General has stated that no further rate increases will be requested until at least 2006. Meredith continues to work with others in the industry and through trade organizations to encourage the Postal Service to implement efficiencies and contain rates.

Operating profit and adjusted operating profit
Publishing operating profit increased 19 percent in fiscal 2003 following a 12 percent decline in fiscal 2002. The adoption of SFAS No. 142 effective July 1, 2002 eliminated much of the publishing segment's amortization expense for intangible assets and goodwill. Adjusted operating profit (stated as if the amortization provisions of SFAS No. 142 had been effective July 1, 2000) increased 17 percent in fiscal 2003. Major contributors were higher advertising revenues, increased book sales and operating profits, and lower paper prices. They were partially offset by higher postal rates and increased employee costs. The decline in fiscal 2002 adjusted operating profit was primarily a result of lower advertising revenues and lower integrated marketing sales. The revenue decline was partially offset by lower operating costs.

The following table presents operating results for the Company's broadcasting segment, which consists of network-affiliated television stations, including their interactive media operations.

Revenues
Broadcasting revenues increased 7 percent in fiscal 2003 following a 6 percent decline in fiscal 2002. On June 17, 2002, Meredith exchanged its Orlando and Ocala, FL television stations for KPTV in Portland, OR. The exchange negatively affected revenues in fiscal 2003, but did not have a material effect on operating profits because of cost savings associated with the duopoly in Portland. On a same-station basis, revenues increased 15 percent in fiscal 2003. Same-station comparisons include revenues of KPTV-Portland and exclude revenues of the two Florida stations in all periods.

The following tables provide reconciliations among segment operating profit, adjusted segment operating profit, and broadcasting segment EBITDA (a measure of segment earnings before depreciation and amortization). Broadcasting EBITDA margin is defined as segment EBITDA divided by segment revenues.

27

Meredith's primary source of funds for operations is cash generated by operating activities. Debt financing is typically used for acquisitions. The Company's core businesses-magazine and book publishing and television broadcasting-have been strong cash generators. Despite the introduction of many new technologies such as the Internet and cable and satellite television, management believes these businesses will continue to have strong market appeal for the foreseeable future. As with any business, operating results and cash flows are subject to changes in demand for the Company's products. Changes in the level of demand for magazine and television advertising and/or other products can have a significant effect on cash flows.

Historically, Meredith has been able to absorb normal business downturns without significant increases in debt, and management believes the Company will continue to do so. Management therefore expects that cash on hand, internally generated cash flow, and borrowings from credit agreements will provide funds for any additional operating and recurring cash needs (e.g., working capital, capital expenditures, and cash dividends) into the foreseeable future.

Cash and cash equivalents decreased $5.9 million in fiscal 2003; they decreased $8.0 million in fiscal 2002. Major factors affecting the change in cash usage included a 26 percent increase in cash provided by operations, the acquisition of the American Baby Group, and the effect of that acquisition on the change in net debt outstanding during the period.

Fiscal 2003 cash provided by operating activities grew to $172.4 million from $136.8 million in the prior fiscal year, reflecting an increase in earnings excluding the fiscal 2003 noncash charge for a change in accounting principle and the fiscal 2002 noncash gain from the television station swap for KPTV. Also contributing to the increase in cash provided by operating activities were favorable changes in deferred income taxes and unearned subscription revenues partially offset by an increase in accounts receivable.

The December 2002 acquisition of the American Baby Group for $117.6 million was financed with $100.0 million in debt from existing credit facilities and cash on hand. Debt outstanding decreased $10.0 million in fiscal 2003 in spite of the debt incurred for the acquisition. The Company reported an $85.0 million net decrease in debt outstanding during the previous fiscal year.

Tax deductible contributions to qualified pension plans totaled $12.0 million in fiscal 2003 compared with $5.7 million in fiscal 2002. Though not required to do so, the Company expects to contribute approximately $9.0 million to these plans in fiscal 2004.

Long-term debt
At June 30, 2003, long-term debt outstanding totaled $375.0 million. It consisted of $75.0 million under an asset-backed commercial paper facility and $300.0 million in fixed-rate unsecured senior notes.

28

In April 2002, Meredith entered into a revolving agreement to sell all of its rights, title, and interest in the majority of its accounts receivable related to advertising, book, and miscellaneous revenues to Meredith Funding Corporation, a special-purpose entity established to purchase accounts receivable from Meredith. At June 30, 2003, $133.1 million of accounts receivable, net of reserves, were outstanding under the agreement. Meredith Funding Corporation in turn sells receivable interests to an asset-backed commercial paper conduit administered by Bank One, N.A. In consideration of the sale, Meredith receives cash and a subordinated note that bears interest at the prime rate (4.00 percent at June 30, 2003) from Meredith Funding Corporation.

The revolving agreement is structured as a true sale under which the creditors of Meredith Funding Corporation will be entitled to be satisfied out of the assets of Meredith Funding Corporation prior to any value being returned to Meredith or its creditors. The accounts of Meredith Funding Corporation are fully consolidated in Meredith's consolidated financial statements. The asset-backed commercial paper facility has a capacity of up to $100 million and renews annually in April. Meredith has the ability and the intent to renew the facility each year. Hence, the principal is reflected as due on April 9, 2007, the facility termination date. The interest rate changes monthly and is based on a fixed spread over the average commercial paper cost to the lender. The interest rate was 1.54 percent in June 2003.

The fixed-rate unsecured senior notes are in amounts of $50 million and $75 million and are due from March 1, 2005 to April 1, 2008. Interest rates range from 6.39 percent to 6.65 percent.

Meredith has a revolving credit facility of $150 million that expires on April 5, 2007. At June 30, 2003, borrowings made under the revolving credit facility were subject to an interest rate of 1.85%. This rate is variable based on LIBOR and the Company's leverage ratio. No amount was borrowed under this facility at June 30, 2003.

All of the Company's debt agreements include financial covenants, and failure to comply with any such covenants could result in the debt becoming payable on demand. A summary of the Company's significant financial covenants and their status at June 30, 2003 follows:

The Company was in compliance with these and all other debt covenants at June 30, 2003 and expects to remain so in the future.

Meredith uses interest rate swap contracts to manage interest cost and risk associated with possible increases in variable interest rates. These contracts effectively fix the base interest rate on a substantial portion of the variable-rate credit facilities, but the applicable margins vary based on the Company's debt-to-EBITDA ratio. The swap contracts expire in June 2004. The average notional amount of indebtedness outstanding under the contracts was $166 million in fiscal 2003 and will be $132 million in fiscal 2004. The Company is exposed to credit-related losses in the event of nonperformance by counterparties to the contracts. Given the strong creditworthiness of the counterparties, management does not expect any of them to fail to meet their obligations. The weighted average interest rate on debt outstanding at June 30, 2003, including the effect of hedged interest rate swap contracts, was approximately 6.5 percent.

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As a result of the debt refinancing completed in April 2002 and subsequent debt repayments, Meredith had swap contracts that no longer met the qualifications for hedge accounting. These swap contracts were deemed to be ineffective and dedesignated as hedge contracts. Before the dedesignations, expense related to fair market value adjustments on the swap contracts had been recorded in other comprehensive income (loss). Upon the dedesignations, the loss was required to be amortized into earnings over the life of the swap contracts. Interest expense of $1.3 million was recorded in fiscal 2002 for such amortization and changes in fair market value. Subsequent to the dedesignations, management determined that it was probable the level of variable-rate debt would not increase to allow use of the dedesignated swaps over the term of the swap contracts. Therefore, $3.5 million remaining in accumulated other comprehensive loss related to the dedesignated swap contracts was reclassified as interest expense in the fourth quarter of fiscal 2002. Changes in the fair market value of the dedesignated swap contracts resulted in a $0.9 million reduction of interest expense in fiscal 2003.

Contractual obligations
The following table presents the long-term debt maturities, required payments under contractual agreements for broadcast rights and other purchase obligations, and future minimum lease payments under noncancelable leases as of June 30, 2003:

Funds for meeting contractual cash obligations are expected to come from cash generated by future operating activities. Debt agreements may be renewed or refinanced if the Company determines it is advantageous to do so. Contractual obligations for broadcast rights shown in the preceding table include $55.8 million for broadcast rights that are not currently available for airing and are therefore not included in the Consolidated Balance Sheet at June 30, 2003. Meredith also has commitments in the form of standby letters of credit and other guarantees totaling $1.6 million. Approximately half of the commitments expire within one year; the rest of them are long-term.

Share repurchase program
Meredith has maintained a program of Company share repurchases for more than ten years. In fiscal 2003, the Company spent $31.5 million to repurchase an aggregate of 761,000 shares of Meredith Corporation common stock at market prices. The Company spent $30.2 million to repurchase an aggregate of 877,000 shares in fiscal 2002. Meredith has spent more than $100 million on Company share repurchases over the past three fiscal years and, subject to market conditions, expects to repurchase additional shares from time to time in the foreseeable future. As of July 31, 2003, approximately 820,000 shares were authorized for repurchase. The status of the repurchase program is reviewed at each quarterly Board of Directors meeting.

Dividends
Meredith has paid quarterly dividends continuously since 1947. In February 2003, the Board of Directors increased the quarterly dividend 6 percent, or one-half cent per share, to 9.5 cents per share effective with the dividend payable on March 14, 2003. Given the current number of shares outstanding, this increase will result in additional dividend payments of approximately $1 million annually. Dividends paid in fiscal 2003 were $18.4 million, or 37 cents per share, compared with $17.3 million, or 35 cents per share, in fiscal 2002.

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Capital expenditures
Expenditures for property, plant, and equipment were $26.6 million in fiscal 2003 compared with $23.4 million in fiscal 2002. The increase reflected higher spending for equipment and remodeling associated with the consolidation of the Portland duopoly and for the initial transition to digital technology at five television stations. The Company has no material commitments for capital expenditures. Funds for capital expenditures are expected to come from operating activities or, if necessary, borrowings under credit agreements.

Outlook for fiscal 2004
First quarter publishing advertising revenues are running up in the mid-teens on a percentage basis. Excluding the American Baby Group, they are running up in the mid-single digits. Broadcasting advertising bookings are currently pacing up in the mid-single digits on a percentage basis from the prior first quarter total. Broadcasting pacing data are as of a moment in time and subject to change.

Fiscal 2003 results included $20.9 million in net political advertising revenues, of which $6.3 million were recorded in the first quarter and $14.1 million were recorded in the second quarter. This will create challenging comparisons, especially in the second quarter of fiscal 2004.

For the first quarter and the twelve months of fiscal 2004, management believes low double-digit earnings per share growth is realistic. In the first quarter of fiscal 2003, the Company reported earnings per share of $0.32 before the cumulative effect of a change in accounting principle related to SFAS No. 142.

Meredith is exposed to certain market risks as a result of its use of financial instruments, in particular the potential market value loss arising from adverse changes in interest rates. All of the Company's financial instruments subject to market risk are held for purposes other than trading.

Long-term debt
At June 30, 2003, Meredith had outstanding $75 million in variable-rate long-term debt and $300 million in fixed-rate long-term debt. There are no material earnings or liquidity risks associated with the Company's variable-rate debt because of interest rate swap contracts that reduce exposure to interest rate fluctuations by effectively converting variable-rate debt to fixed-rate debt. The fair market value of the variable-rate debt approximates the carrying amount. There also are no earnings or liquidity risks associated with the Company's fixed-rate debt. The fair market value of the fixed-rate debt (based on discounted cash flows reflecting borrowing rates currently available for debt with similar terms and maturities) varies with fluctuations in interest rates. A 10 percent decrease in interest rates would have changed the fair market value of the fixed-rate debt to $329.2 million from $325.7 million at June 30, 2003.

As a result of the April 2002 debt refinancing, Meredith also has interest rate swap contracts outstanding that are no longer designated as hedges against variable-rate debt obligations. While there is no liquidity risk associated with these swap contracts, changes in interest rates expose the Company to earnings risk because all changes in the fair market value of the swap contracts are recorded in interest expense. At June 30, 2003, a 10 percent decrease in interest rates would have increased the cost to terminate these swap contracts to $4.1 million from $3.9 million.

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To the Board of Directors and
Shareholders of Meredith Corporation:

We have audited the accompanying consolidated balance sheets of Meredith Corporation and subsidiaries as of June 30, 2003 and 2002, and the related consolidated statements of earnings, shareholders' equity and cash flows for each of the years in the three-year period ended June 30, 2003. In connection with our audits of the aforementioned financial statements, we also audited the related financial statement schedule (as listed in Part IV, Item 15 (a) 2 herein). These consolidated financial statements and financial statement schedule are the responsibility of company management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Meredith Corporation and subsidiaries as of June 30, 2003 and 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended June 30, 2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As described in Note 2 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets , on July 1, 2002.

/s/ KPMG LLP

KPMG LLP
Des Moines, Iowa
July 31, 2003

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To the Shareholders of Meredith Corporation:

Meredith management is responsible for the preparation, integrity and objectivity of the financial information included in this annual report to shareholders. We take this responsibility very seriously as we recognize the importance of having well informed, confident investors. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include amounts based on our informed judgments and estimates. We have adopted appropriate accounting policies and are fully committed to ensuring that those policies are applied properly and consistently. In addition, we strive to report our financial results in a manner that is relevant, complete and understandable. We welcome any suggestions from those who use our reports.

To meet our responsibility for financial reporting, internal control systems and accounting procedures are designed to provide reasonable assurance as to the reliability of financial records. In addition, the internal audit staff monitors and reports on compliance with Company policies, procedures and internal control systems.

The consolidated financial statements have been audited by independent auditors. In accordance with auditing standards generally accepted in the United States of America, the independent auditors conducted a review of the Company's internal accounting controls and performed tests and other procedures necessary to determine an opinion on the fairness of the Company's consolidated financial statements. The independent auditors were given unrestricted access to all financial records and related information, including all Board of Directors' and Board committees' minutes. The audit committee of the Board of Directors, which consists of five independent directors, meets with the independent auditors, management and internal auditors to review accounting, auditing and financial reporting matters. To ensure complete independence, the independent auditors have direct access to the audit committee without the presence of management representatives.

At Meredith, we have always placed a high priority on good corporate governance. We endorse the recent improvements in this area.

/s/ Suku V. Radia

Suku V. Radia
Vice President - Chief Financial Officer

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