UNITED STATES SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 |
For the quarterly period ended | December 31, 2020 |
MEREDITH CORPORATION | |||||
(Exact name of registrant as specified in its charter) | |||||
Iowa | 42-0410230 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1716 Locust Street, | Des Moines, | Iowa | 50309-3023 | |||||||||||
(Address of principal executive offices) | (ZIP Code) |
Registrant’s telephone number, including area code:
|
(515) | 284-3000 | ||||||
Former name, former address, and former fiscal year, if changed since last report: Not applicable
|
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||||||||
Common Stock, par value $1 | MDP | New York Stock Exchange |
Shares of stock outstanding at January 31, 2021 | |||||
Common shares | 40,565,853 | ||||
Class B shares | 5,068,657 | ||||
Total common and class B shares | 45,634,510 |
TABLE OF CONTENTS | |||||||||||
Page | |||||||||||
Part I - Financial Information | |||||||||||
Item 1. | Financial Statements (Unaudited) | ||||||||||
Condensed Consolidated Balance Sheets as of December 31, 2020 and June 30, 2020
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Condensed Consolidated Statements of Earnings for the Three and Six Months Ended December 31, 2020 and 2019
|
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Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended December 31, 2020 and 2019
|
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Condensed Consolidated Statements of Shareholders' Equity for the Three and Six Months Ended December 31, 2020 and 2019
|
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2020 and 2019
|
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Notes to Condensed Consolidated Financial Statements | |||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||||||||
Item 4. | Controls and Procedures | ||||||||||
Part II - Other Information | |||||||||||
Item 1A. | Risk Factors | ||||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||||
Item 5. | Other information | ||||||||||
Item 6. | Exhibits | ||||||||||
Signature | |||||||||||
Meredith Corporation and its consolidated subsidiaries are referred to in this Quarterly Report
on Form 10-Q (Form 10-Q) as Meredith, the Company, we, our, and us.
|
PART I | FINANCIAL INFORMATION |
Item 1. | Financial Statements |
Assets | December 31, 2020 |
June 30,
2020 |
|||||||||
(In millions except per share data) | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 379.1 | $ | 132.4 | |||||||
Accounts receivable, net | 542.3 | 461.9 | |||||||||
Inventories | 33.8 | 34.2 | |||||||||
Current portion of subscription acquisition costs | 222.1 | 213.2 | |||||||||
Other current assets | 62.9 | 43.1 | |||||||||
Total current assets | 1,240.2 | 884.8 | |||||||||
Property, plant, and equipment | 894.7 | 883.3 | |||||||||
Less accumulated depreciation | (517.3) | (483.4) | |||||||||
Net property, plant, and equipment | 377.4 | 399.9 | |||||||||
Operating lease assets | 387.6 | 404.6 | |||||||||
Subscription acquisition costs | 212.8 | 221.6 | |||||||||
Other assets | 242.4 | 232.4 | |||||||||
Intangible assets, net | 1,586.3 | 1,647.5 | |||||||||
Goodwill | 1,719.6 | 1,719.3 | |||||||||
Total assets | $ | 5,766.3 | $ | 5,510.1 | |||||||
Liabilities and Shareholders' Equity | |||||||||||
Current liabilities | |||||||||||
Current portion of long-term debt | $ | 4.1 | $ | 4.1 | |||||||
Current portion of operating lease liabilities | 35.7 | 35.2 | |||||||||
Accounts payable | 124.4 | 121.1 | |||||||||
Accrued expenses and other liabilities | 225.2 | 168.1 | |||||||||
Current portion of unearned revenues | 402.3 | 403.2 | |||||||||
Total current liabilities | 791.7 | 731.7 | |||||||||
Long-term debt | 2,985.2 | 2,981.8 | |||||||||
Operating lease liabilities | 449.4 | 466.7 | |||||||||
Unearned revenues | 254.6 | 267.5 | |||||||||
Deferred income taxes | 468.7 | 463.8 | |||||||||
Other noncurrent liabilities | 206.8 | 210.4 | |||||||||
Total liabilities | 5,156.4 | 5,121.9 | |||||||||
Shareholders' equity | |||||||||||
Series preferred stock, par value $1 per share
|
— | — | |||||||||
Common stock, par value $1 per share
|
40.5 | 40.3 | |||||||||
Class B stock, par value $1 per share
|
5.1 | 5.1 | |||||||||
Additional paid-in capital | 240.0 | 227.6 | |||||||||
Retained earnings | 390.5 | 197.6 | |||||||||
Accumulated other comprehensive loss | (66.2) | (82.4) | |||||||||
Total shareholders' equity | 609.9 | 388.2 | |||||||||
Total liabilities and shareholders' equity | $ | 5,766.3 | $ | 5,510.1 |
Three Months | Six Months | |||||||||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Advertising related | $ | 525.1 | $ | 427.3 | $ | 883.6 | $ | 806.9 | ||||||||||||||||||
Consumer related | 358.0 | 348.9 | 676.7 | 672.0 | ||||||||||||||||||||||
Other | 18.4 | 34.3 | 34.7 | 56.8 | ||||||||||||||||||||||
Total revenues | 901.5 | 810.5 | 1,595.0 | 1,535.7 | ||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||
Production, distribution, and editorial | 266.5 | 280.1 | 507.6 | 553.8 | ||||||||||||||||||||||
Selling, general, and administrative | 332.6 | 338.4 | 643.8 | 669.2 | ||||||||||||||||||||||
Acquisition, disposition, and restructuring related activities | 4.2 | (0.5) | 18.3 | 13.6 | ||||||||||||||||||||||
Depreciation and amortization | 49.8 | 58.6 | 98.8 | 117.1 | ||||||||||||||||||||||
Impairment of long-lived assets | — | — | — | 5.2 | ||||||||||||||||||||||
Total operating expenses | 653.1 | 676.6 | 1,268.5 | 1,358.9 | ||||||||||||||||||||||
Income from operations | 248.4 | 133.9 | 326.5 | 176.8 | ||||||||||||||||||||||
Non-operating income (expense), net | 0.2 | (7.2) | 5.8 | 1.4 | ||||||||||||||||||||||
Interest expense, net | (43.1) | (36.9) | (86.6) | (75.8) | ||||||||||||||||||||||
Earnings from continuing operations before income taxes | 205.5 | 89.8 | 245.7 | 102.4 | ||||||||||||||||||||||
Income tax expense | (57.0) | (27.7) | (54.9) | (28.2) | ||||||||||||||||||||||
Earnings from continuing operations | 148.5 | 62.1 | 190.8 | 74.2 | ||||||||||||||||||||||
Loss from discontinued operations, net of income taxes | — | (24.3) | — | (30.3) | ||||||||||||||||||||||
Net earnings | $ | 148.5 | $ | 37.8 | $ | 190.8 | $ | 43.9 | ||||||||||||||||||
Diluted earnings attributable to common shareholders | $ | 140.6 | $ | 19.0 | $ | 181.2 | $ | 4.2 | ||||||||||||||||||
Basic earnings (loss) per share attributable to common shareholders | ||||||||||||||||||||||||||
Continuing operations | $ | 3.04 | $ | 0.93 | $ | 3.93 | $ | 0.75 | ||||||||||||||||||
Discontinued operations | — | (0.54) | — | (0.66) | ||||||||||||||||||||||
Basic earnings per common share | $ | 3.04 | $ | 0.39 | $ | 3.93 | $ | 0.09 | ||||||||||||||||||
Basic average common shares outstanding | 46.2 | 45.7 | 46.1 | 45.7 | ||||||||||||||||||||||
Diluted earnings (loss) per share attributable to common shareholders | ||||||||||||||||||||||||||
Continuing operations | $ | 3.04 | $ | 0.91 | $ | 3.92 | $ | 0.75 | ||||||||||||||||||
Discontinued operations | — | (0.51) | — | (0.66) | ||||||||||||||||||||||
Diluted earnings per common share | $ | 3.04 | $ | 0.40 | $ | 3.92 | $ | 0.09 | ||||||||||||||||||
Diluted average common shares outstanding | 46.3 | 47.3 | 46.2 | 45.7 | ||||||||||||||||||||||
Three Months | Six Months | |||||||||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Net earnings | $ | 148.5 | $ | 37.8 | $ | 190.8 | $ | 43.9 | ||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||
Pension and other postretirement benefit plans activity, net of income taxes | (1.6) | 0.4 | (2.6) | 0.9 | ||||||||||||||||||||||
Foreign currency translation adjustment | 10.7 | 9.2 | 18.8 | 4.3 | ||||||||||||||||||||||
Total other comprehensive income | 9.1 | 9.6 | 16.2 | 5.2 | ||||||||||||||||||||||
Comprehensive income | $ | 157.6 | $ | 47.4 | $ | 207.0 | $ | 49.1 |
(In millions except per share data) |
Common
Stock - $1
par value
|
Class B
Stock - $1
par value
|
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other
Comprehensive
Income (Loss)
|
Total | ||||||||||||||||||||
Balance at June 30, 2020 | $ | 40.3 | $ | 5.1 | $ | 227.6 | $ | 197.6 | $ | (82.4) | $ | 388.2 | ||||||||||||||
Net earnings | — | — | — | 42.3 | — | 42.3 | ||||||||||||||||||||
Other comprehensive income, net of income taxes | — | — | — | — | 7.1 | 7.1 | ||||||||||||||||||||
Shares issued under incentive plans, net of forfeitures | 0.1 | — | 0.3 | — | — | 0.4 | ||||||||||||||||||||
Purchases of Company stock | — | — | (0.4) | — | — | (0.4) | ||||||||||||||||||||
Share-based compensation | — | — | 8.8 | — | — | 8.8 | ||||||||||||||||||||
Cumulative effect adjustment for adoption of Accounting Standards Update 2016-13
|
— | — | — | 2.1 | — | 2.1 | ||||||||||||||||||||
Balance at September 30, 2020 | 40.4 | 5.1 | 236.3 | 242.0 | (75.3) | 448.5 | ||||||||||||||||||||
Net earnings | — | — | — | 148.5 | — | 148.5 | ||||||||||||||||||||
Other comprehensive income, net of income taxes | — | — | — | — | 9.1 | 9.1 | ||||||||||||||||||||
Shares issued under incentive plans, net of forfeitures | 0.2 | — | 0.3 | — | — | 0.5 | ||||||||||||||||||||
Purchases of Company stock | (0.1) | — | (0.4) | — | — | (0.5) | ||||||||||||||||||||
Share-based compensation | — | — | 3.8 | — | — | 3.8 | ||||||||||||||||||||
Balance at December 31, 2020 | $ | 40.5 | $ | 5.1 | $ | 240.0 | $ | 390.5 | $ | (66.2) | $ | 609.9 | ||||||||||||||
(In millions except per share data) |
Common
Stock - $1
par value
|
Class B
Stock - $1
par value
|
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other
Comprehensive
Income (Loss)
|
Total | ||||||||||||||||||||
Balance at June 30, 2019 | $ | 40.1 | $ | 5.1 | $ | 216.7 | $ | 759.0 | $ | (46.3) | $ | 974.6 | ||||||||||||||
Net earnings | — | — | — | 6.1 | — | 6.1 | ||||||||||||||||||||
Other comprehensive loss, net of income taxes | — | — | — | — | (4.4) | (4.4) | ||||||||||||||||||||
Stock issued under various incentive plans, net of forfeitures | 0.1 | — | 0.4 | — | — | 0.5 | ||||||||||||||||||||
Purchases of Company stock | (0.1) | — | (1.7) | — | — | (1.8) | ||||||||||||||||||||
Share-based compensation | — | — | 7.5 | — | — | 7.5 | ||||||||||||||||||||
Dividends paid | ||||||||||||||||||||||||||
Common stock ($0.575 dividend per share)
|
— | — | — | (24.3) | — | (24.3) | ||||||||||||||||||||
Class B stock ($0.575 dividend per share)
|
— | — | — | (2.9) | — | (2.9) | ||||||||||||||||||||
Series A preferred stock ($22.19 dividend per share)
|
— | — | — | (14.4) | — | (14.4) | ||||||||||||||||||||
Accretion of Series A preferred stock | (4.5) | (4.5) | ||||||||||||||||||||||||
Cumulative effect adjustment for adoption of Accounting Standards Update 2016-02
|
— | — | — | (7.8) | — | (7.8) | ||||||||||||||||||||
Balance at September 30, 2019 | 40.1 | 5.1 | 222.9 | 711.2 | (50.7) | 928.6 | ||||||||||||||||||||
Net earnings | — | — | — | 37.8 | — | 37.8 | ||||||||||||||||||||
Other comprehensive income, net of income taxes | — | — | — | — | 9.6 | 9.6 | ||||||||||||||||||||
Stock issued under various incentive plans, net of forfeitures | 0.1 | — | 0.5 | — | — | 0.6 | ||||||||||||||||||||
Purchases of Company stock | — | — | (2.4) | — | — | (2.4) | ||||||||||||||||||||
Share-based compensation | — | — | 2.2 | — | — | 2.2 | ||||||||||||||||||||
Dividends paid | ||||||||||||||||||||||||||
Common stock ($0.575 dividend per share)
|
— | — | — | (24.5) | — | (24.5) | ||||||||||||||||||||
Class B stock ($0.575 dividend per share)
|
— | — | — | (3.0) | — | (3.0) | ||||||||||||||||||||
Series A preferred stock ($21.72 dividend per share)
|
— | — | — | (14.1) | — | (14.1) | ||||||||||||||||||||
Accretion of Series A preferred stock | — | — | — | (4.5) | — | (4.5) | ||||||||||||||||||||
Balance at December 31, 2019 | $ | 40.2 | $ | 5.1 | $ | 223.2 | $ | 702.9 | $ | (41.1) | $ | 930.3 | ||||||||||||||
Six months ended December 31, | 2020 | 2019 | |||||||||
(In millions) | |||||||||||
Cash flows from operating activities | |||||||||||
Net earnings | $ | 190.8 | $ | 43.9 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|||||||||||
Depreciation | 37.6 | 39.4 | |||||||||
Amortization | 61.2 | 77.7 | |||||||||
Non-cash lease expense | 17.7 | 19.6 | |||||||||
Share-based compensation | 12.6 | 9.7 | |||||||||
Deferred income taxes | 3.1 | 6.1 | |||||||||
Amortization of original issue discount and debt issuance costs | 6.3 | 3.3 | |||||||||
Amortization of broadcast rights | 8.4 | 9.6 | |||||||||
Gain on sale of assets, net
|
(2.9) | (9.4) | |||||||||
Write-down of impaired assets | — | 21.2 | |||||||||
Fair value adjustments to contingent consideration | 0.3 | 0.3 | |||||||||
Changes in assets and liabilities, net of acquisitions | (73.3) | (149.3) | |||||||||
Net cash provided by operating activities | 261.8 | 72.1 | |||||||||
Cash flows from investing activities | |||||||||||
Acquisitions of and investments in businesses and assets, net of cash acquired | — | (23.0) | |||||||||
Net proceeds from disposition of assets, net of cash sold | 5.2 | 33.8 | |||||||||
Additions to property, plant, and equipment | (17.9) | (34.5) | |||||||||
Other | 0.7 | — | |||||||||
Net cash used in investing activities | (12.0) | (23.7) | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of long-term debt | — | 280.0 | |||||||||
Repayments of long-term debt | (2.0) | (260.0) | |||||||||
Dividends paid | — | (83.2) | |||||||||
Purchases of Company stock | (0.9) | (4.2) | |||||||||
Proceeds from common stock issued | 0.9 | 1.1 | |||||||||
Payment of acquisition-related contingent consideration | (1.0) | — | |||||||||
Financing lease payments | (0.7) | (0.7) | |||||||||
Net cash used in financing activities | (3.7) | (67.0) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 0.6 | (0.1) | |||||||||
Change in cash in assets held-for-sale | — | (5.1) | |||||||||
Net increase (decrease) in cash and cash equivalents | 246.7 | (23.8) | |||||||||
Cash and cash equivalents at beginning of period | 132.4 | 45.0 | |||||||||
Cash and cash equivalents at end of period | $ | 379.1 | $ | 21.2 |
Meredith Corporation and Subsidiaries | |||||
Notes to Condensed Consolidated Financial Statements | |||||
(Unaudited) |
(In millions) | December 31, 2020 | June 30, 2020 | ||||||||||||
Raw materials | $ | 16.6 | $ | 21.0 | ||||||||||
Work in process | 14.6 | 10.6 | ||||||||||||
Finished goods | 2.6 | 2.6 | ||||||||||||
Inventories | $ | 33.8 | $ | 34.2 |
Periods ended December 31, 2019 | Three Months | Six Months | ||||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||
Revenues | $ | 25.3 | $ | 110.8 | ||||||||||||||||||||||
Costs and expenses | (20.9) | (107.6) | ||||||||||||||||||||||||
Impairment of goodwill | (11.8) | (16.0) | ||||||||||||||||||||||||
Interest expense | (0.8) | (2.0) | ||||||||||||||||||||||||
Gain on disposal | 3.0 | 3.0 | ||||||||||||||||||||||||
Loss before income taxes | (5.2) | (11.8) | ||||||||||||||||||||||||
Income tax expense | (19.1) | (18.5) | ||||||||||||||||||||||||
Loss from discontinued operations, net of income taxes | $ | (24.3) | $ | (30.3) | ||||||||||||||||||||||
Loss per share from discontinued operations | ||||||||||||||||||||||||||
Basic | $ | (0.54) | $ | (0.66) | ||||||||||||||||||||||
Diluted | (0.51) | (0.66) |
December 31, 2020 | June 30, 2020 | |||||||||||||||||||||||||||||||||||||
(In millions) |
Gross
Amount |
Accumulated
Amortization |
Net
Amount |
Gross
Amount |
Accumulated
Amortization |
Net
Amount |
||||||||||||||||||||||||||||||||
Intangible assets
subject to amortization |
||||||||||||||||||||||||||||||||||||||
National media | ||||||||||||||||||||||||||||||||||||||
Advertiser relationships | $ | 211.0 | $ | (205.2) | $ | 5.8 | $ | 211.0 | $ | (170.0) | $ | 41.0 | ||||||||||||||||||||||||||
Publisher relationships | 132.8 | (53.2) | 79.6 | 132.8 | (43.9) | 88.9 | ||||||||||||||||||||||||||||||||
Partner relationships | 98.2 | (46.8) | 51.4 | 98.2 | (38.7) | 59.5 | ||||||||||||||||||||||||||||||||
Customer relationships | 8.0 | (3.1) | 4.9 | 71.3 | (65.6) | 5.7 | ||||||||||||||||||||||||||||||||
Other | 23.9 | (16.3) | 7.6 | 26.3 | (16.9) | 9.4 | ||||||||||||||||||||||||||||||||
Local media | ||||||||||||||||||||||||||||||||||||||
Network affiliation agreements | 229.3 | (164.7) | 64.6 | 229.3 | (161.5) | 67.8 | ||||||||||||||||||||||||||||||||
Advertiser relationships | 12.5 | (12.2) | 0.3 | 12.5 | (10.1) | 2.4 | ||||||||||||||||||||||||||||||||
Retransmission agreements | 10.6 | (6.5) | 4.1 | 27.9 | (23.1) | 4.8 | ||||||||||||||||||||||||||||||||
Other | 0.7 | (0.6) | 0.1 | 1.7 | (1.6) | 0.1 | ||||||||||||||||||||||||||||||||
Total | $ | 727.0 | $ | (508.6) | 218.4 | $ | 811.0 | $ | (531.4) | 279.6 | ||||||||||||||||||||||||||||
Intangible assets not
subject to amortization |
||||||||||||||||||||||||||||||||||||||
National media | ||||||||||||||||||||||||||||||||||||||
Trademarks | 706.7 | 706.7 | ||||||||||||||||||||||||||||||||||||
Internet domain names | 8.3 | 8.3 | ||||||||||||||||||||||||||||||||||||
Local media | ||||||||||||||||||||||||||||||||||||||
FCC licenses | 652.9 | 652.9 | ||||||||||||||||||||||||||||||||||||
Total | 1,367.9 | 1,367.9 | ||||||||||||||||||||||||||||||||||||
Intangible assets, net | $ | 1,586.3 | $ | 1,647.5 |
Six months ended December 31, | 2020 | 2019 | ||||||||||||||||||||||||||||||
(In millions) | Goodwill | Accumulated Impairment Loss | Net Carrying Amount | Goodwill | Accumulated Impairment Loss | Net Carrying Amount | ||||||||||||||||||||||||||
National media | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 1,855.4 | $ | (252.7) | $ | 1,602.7 | $ | 1,862.8 | $ | — | $ | 1,862.8 | ||||||||||||||||||||
Acquisitions | — | — | — | 7.1 | — | 7.1 | ||||||||||||||||||||||||||
Acquisition adjustments | (0.1) | — | (0.1) | — | — | — | ||||||||||||||||||||||||||
Disposals | — | — | — | (16.7) | — | (16.7) | ||||||||||||||||||||||||||
Foreign currency translation | 0.4 | — | 0.4 | — | — | — | ||||||||||||||||||||||||||
Balance at end of period | 1,855.7 | (252.7) | 1,603.0 | 1,853.2 | — | 1,853.2 | ||||||||||||||||||||||||||
Local media | ||||||||||||||||||||||||||||||||
Balance at beginning of period | 116.6 | — | 116.6 | 116.6 | — | 116.6 | ||||||||||||||||||||||||||
Activity | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at end of period | 116.6 | — | 116.6 | 116.6 | — | 116.6 | ||||||||||||||||||||||||||
Total | $ | 1,972.3 | $ | (252.7) | $ | 1,719.6 | $ | 1,969.8 | $ | — | $ | 1,969.8 |
Amount Accrued in the Period | Total Amount Expected to be Incurred | |||||||||||||||||||
Three Months | Six Months | |||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
National media | $ | 0.5 | $ | — | $ | 5.1 | $ | 8.8 | $ | 5.1 | ||||||||||
Local media | — | 1.7 | 7.2 | 2.4 | 7.2 | |||||||||||||||
Unallocated Corporate | — | 2.1 | 0.6 | 2.5 | 0.6 | |||||||||||||||
$ | 0.5 | $ | 3.8 | $ | 12.9 | $ | 13.7 | $ | 12.9 | |||||||||||
Six months ended December 31, | 2020 | 2019 | |||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | 10.7 | $ | 43.7 | |||||||||||||||||||||||||
Accruals | 12.9 | 13.7 | |||||||||||||||||||||||||||
Cash payments | (11.5) | (36.0) | |||||||||||||||||||||||||||
Reversal of excess accrual | (2.1) | — | |||||||||||||||||||||||||||
Balance at end of period | $ | 10.0 | $ | 21.4 |
December 31, 2020 | June 30, 2020 | |||||||||||||||||||||||||
(In millions) | Principal Balance | Unamortized Discount and Debt Issuance Costs |
Carrying
Value |
Principal Balance | Unamortized Discount and Debt Issuance Costs |
Carrying
Value |
||||||||||||||||||||
Variable-rate credit facility | ||||||||||||||||||||||||||
Senior credit facility term loan, due January 31, 2025 | $ | 1,062.5 | $ | (11.7) | $ | 1,050.8 | $ | 1,062.5 | $ | (13.1) | $ | 1,049.4 | ||||||||||||||
Senior credit facility incremental term loan, due January 31, 2025 | 408.0 | (20.5) | 387.5 | 410.0 | (22.7) | 387.3 | ||||||||||||||||||||
Revolving credit facility of $350 million, due January 31, 2023
|
— | — | — | — | — | — | ||||||||||||||||||||
Senior Unsecured Notes | ||||||||||||||||||||||||||
6.875% senior notes, due February 1, 2026
|
1,272.9 | (17.4) | 1,255.5 | 1,272.9 | (18.7) | 1,254.2 | ||||||||||||||||||||
Senior Secured Notes | ||||||||||||||||||||||||||
6.500% senior notes, due July 1, 2025
|
300.0 | (4.5) | 295.5 | 300.0 | (5.0) | 295.0 | ||||||||||||||||||||
Total long-term debt | 3,043.4 | (54.1) | 2,989.3 | 3,045.4 | (59.5) | 2,985.9 | ||||||||||||||||||||
Current portion of long-term debt | (4.1) | — | (4.1) | (4.1) | — | (4.1) | ||||||||||||||||||||
Long-term debt | $ | 3,039.3 | $ | (54.1) | $ | 2,985.2 | $ | 3,041.3 | $ | (59.5) | $ | 2,981.8 | ||||||||||||||
• | Level 1 | Quoted prices (unadjusted) in active markets for identical assets or liabilities; | ||||||||||||
• | Level 2 | Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and | ||||||||||||
• | Level 3 | Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. |
December 31, 2020 | June 30, 2020 | |||||||||||||||||||||||||
(In millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||
Broadcast rights payable | $ | 16.1 | $ | 15.1 | $ | 12.7 | $ | 11.7 | ||||||||||||||||||
Total long-term debt | 2,989.3 | 3,030.1 | 2,985.9 | 2,753.6 |
December 31, 2020 | ||||||||||||||||||||||||||||||||
(In millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
Recurring fair value measurements | ||||||||||||||||||||||||||||||||
Cash and cash equivalents - cash equivalents | $ | 101.8 | $ | 101.8 | $ | — | $ | — | ||||||||||||||||||||||||
Accrued expenses | ||||||||||||||||||||||||||||||||
Contingent consideration | $ | 2.5 | $ | — | $ | — | $ | 2.5 | ||||||||||||||||||||||||
Deferred compensation plans | 3.0 | — | 3.0 | — | ||||||||||||||||||||||||||||
Other noncurrent liabilities | ||||||||||||||||||||||||||||||||
Contingent consideration | 1.7 | — | — | 1.7 | ||||||||||||||||||||||||||||
Deferred compensation plans | 14.4 | — | 14.4 | — | ||||||||||||||||||||||||||||
Total recurring liability fair value measurements | $ | 21.6 | $ | — | $ | 17.4 | $ | 4.2 | ||||||||||||||||||||||||
June 30, 2020 | Six months ended December 31, 2019 | |||||||||||||||||||||||||||||||
(In millions) | Total | Level 1 | Level 2 | Level 3 | Total Losses | |||||||||||||||||||||||||||
Recurring fair value measurements | ||||||||||||||||||||||||||||||||
Cash and cash equivalents - cash equivalents | $ | 115.2 | $ | 115.2 | $ | — | $ | — | ||||||||||||||||||||||||
Accrued expenses | ||||||||||||||||||||||||||||||||
Contingent consideration | $ | 1.3 | $ | — | $ | — | $ | 1.3 | ||||||||||||||||||||||||
Deferred compensation plans | 3.4 | — | 3.4 | — | ||||||||||||||||||||||||||||
Other noncurrent liabilities | ||||||||||||||||||||||||||||||||
Contingent consideration | 3.6 | — | — | 3.6 | ||||||||||||||||||||||||||||
Deferred compensation plans | 13.5 | — | 13.5 | — | ||||||||||||||||||||||||||||
Total recurring liability fair value measurements | $ | 21.8 | $ | — | $ | 16.9 | $ | 4.9 | ||||||||||||||||||||||||
Nonrecurring fair value measurements | ||||||||||||||||||||||||||||||||
Intangible assets, net 1
|
$ | — | $ | — | $ | — | $ | — | $ | (5.2) | ||||||||||||||||||||||
1 |
Represents the fair value of a national media trademark fully impaired at September 30, 2019. The impairment charge was recorded in the impairment of long-lived assets line on the Condensed Consolidated Statements of Earnings. For further discussion, refer to Note 4.
|
|||||||||||||||||||||||||||||||
Six months ended December 31, | 2020 | 2019 | ||||||||||||
(In millions) | ||||||||||||||
Contingent consideration | ||||||||||||||
Balance at beginning of period | $ | 4.9 | $ | 0.8 | ||||||||||
Additions due to acquisitions | — | 4.1 | ||||||||||||
Payments | (1.0) | — | ||||||||||||
Fair value adjustment of contingent consideration | 0.3 | 0.3 | ||||||||||||
Balance at end of period | $ | 4.2 | $ | 5.2 |
Three months ended December 31, 2020 |
National
Media |
Local
Media |
Intersegment
Elimination |
Total | |||||||||||||
(In millions) | |||||||||||||||||
Advertising related | |||||||||||||||||
Digital | $ | 161.2 | $ | 4.9 | $ | — | $ | 166.1 | |||||||||
Magazine | 120.4 | — | — | 120.4 | |||||||||||||
Non-political spot | — | 75.3 | — | 75.3 | |||||||||||||
Political spot | — | 117.7 | — | 117.7 | |||||||||||||
Third party sales | 13.8 | 34.7 | (2.9) | 45.6 | |||||||||||||
Total advertising related | 295.4 | 232.6 | (2.9) | 525.1 | |||||||||||||
Consumer related | |||||||||||||||||
Subscription | 144.8 | — | — | 144.8 | |||||||||||||
Retransmission | — | 91.9 | — | 91.9 | |||||||||||||
Newsstand | 40.3 | — | — | 40.3 | |||||||||||||
Licensing | 34.5 | — | — | 34.5 | |||||||||||||
Affinity marketing | 18.5 | — | — | 18.5 | |||||||||||||
Digital and other consumer driven | 27.7 | 0.3 | — | 28.0 | |||||||||||||
Total consumer related | 265.8 | 92.2 | — | 358.0 | |||||||||||||
Other | |||||||||||||||||
Projects based | 11.1 | — | — | 11.1 | |||||||||||||
Other | 3.7 | 3.6 | — | 7.3 | |||||||||||||
Total other | 14.8 | 3.6 | — | 18.4 | |||||||||||||
Total revenues | $ | 576.0 | $ | 328.4 | $ | (2.9) | $ | 901.5 |
Three months ended December 31, 2019 |
National
Media |
Local
Media |
Intersegment
Elimination |
Total | |||||||||||||
(In millions) | |||||||||||||||||
Advertising related | |||||||||||||||||
Digital | $ | 132.2 | $ | 4.9 | $ | — | $ | 137.1 | |||||||||
Magazine | 149.4 | — | — | 149.4 | |||||||||||||
Non-political spot | — | 89.5 | — | 89.5 | |||||||||||||
Political spot | — | 4.4 | — | 4.4 | |||||||||||||
Third party sales | 20.4 | 27.2 | (0.7) | 46.9 | |||||||||||||
Total advertising related | 302.0 | 126.0 | (0.7) | 427.3 | |||||||||||||
Consumer related | |||||||||||||||||
Subscription | 159.8 | — | — | 159.8 | |||||||||||||
Retransmission | — | 85.1 | — | 85.1 | |||||||||||||
Newsstand | 37.7 | — | — | 37.7 | |||||||||||||
Licensing | 24.4 | — | — | 24.4 | |||||||||||||
Affinity marketing | 20.0 | — | — | 20.0 | |||||||||||||
Digital and other consumer driven | 21.9 | — | — | 21.9 | |||||||||||||
Total consumer related | 263.8 | 85.1 | — | 348.9 | |||||||||||||
Other | |||||||||||||||||
Projects based | 15.1 | — | — | 15.1 | |||||||||||||
Other | 16.3 | 2.9 | — | 19.2 | |||||||||||||
Total other | 31.4 | 2.9 | — | 34.3 | |||||||||||||
Total revenues | $ | 597.2 | $ | 214.0 | $ | (0.7) | $ | 810.5 |
Six months ended December 31, 2020 |
National
Media |
Local
Media |
Intersegment
Elimination |
Total | ||||||||||
(In millions) | ||||||||||||||
Advertising related | ||||||||||||||
Digital | $ | 266.3 | $ | 9.2 | $ | — | $ | 275.5 | ||||||
Magazine | 228.9 | — | — | 228.9 | ||||||||||
Non-political spot | — | 132.1 | — | 132.1 | ||||||||||
Political spot | — | 169.4 | — | 169.4 | ||||||||||
Third party sales | 27.8 | 53.0 | (3.1) | 77.7 | ||||||||||
Total advertising related | 523.0 | 363.7 | (3.1) | 883.6 | ||||||||||
Consumer related | ||||||||||||||
Subscription | 278.2 | — | — | 278.2 | ||||||||||
Retransmission | — | 183.3 | — | 183.3 | ||||||||||
Newsstand | 75.4 | — | — | 75.4 | ||||||||||
Licensing | 58.6 | — | — | 58.6 | ||||||||||
Affinity marketing | 32.9 | — | — | 32.9 | ||||||||||
Digital and other consumer driven | 47.8 | 0.5 | — | 48.3 | ||||||||||
Total consumer related | 492.9 | 183.8 | — | 676.7 | ||||||||||
Other | ||||||||||||||
Projects based | 21.0 | — | — | 21.0 | ||||||||||
Other | 6.8 | 6.9 | — | 13.7 | ||||||||||
Total other | 27.8 | 6.9 | — | 34.7 | ||||||||||
Total revenues | $ | 1,043.7 | $ | 554.4 | $ | (3.1) | $ | 1,595.0 |
Six months ended December 31, 2019 |
National
Media |
Local
Media |
Intersegment
Elimination |
Total | ||||||||||
(In millions) | ||||||||||||||
Advertising related | ||||||||||||||
Digital | $ | 223.8 | $ | 9.1 | $ | — | $ | 232.9 | ||||||
Magazine | 309.8 | — | — | 309.8 | ||||||||||
Non-political spot | — | 166.3 | — | 166.3 | ||||||||||
Political spot | — | 7.0 | — | 7.0 | ||||||||||
Third party sales | 39.4 | 52.7 | (1.2) | 90.9 | ||||||||||
Total advertising related | 573.0 | 235.1 | (1.2) | 806.9 | ||||||||||
Consumer related | ||||||||||||||
Subscription | 310.3 | — | — | 310.3 | ||||||||||
Retransmission | — | 164.7 | — | 164.7 | ||||||||||
Newsstand | 80.3 | — | — | 80.3 | ||||||||||
Licensing | 44.4 | — | — | 44.4 | ||||||||||
Affinity marketing | 33.9 | — | — | 33.9 | ||||||||||
Digital and other consumer driven | 38.4 | — | — | 38.4 | ||||||||||
Total consumer related | 507.3 | 164.7 | — | 672.0 | ||||||||||
Other | ||||||||||||||
Projects based | 29.5 | — | — | 29.5 | ||||||||||
Other | 20.3 | 7.0 | — | 27.3 | ||||||||||
Total other | 49.8 | 7.0 | — | 56.8 | ||||||||||
Total revenues | $ | 1,130.1 | $ | 406.8 | $ | (1.2) | $ | 1,535.7 |
Three Months | Six Months | |||||||||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Domestic Pension Benefits | ||||||||||||||||||||||||||
Service cost | $ | 2.3 | $ | 2.5 | $ | 4.6 | $ | 5.0 | ||||||||||||||||||
Interest cost | 0.8 | 1.3 | 1.6 | 2.7 | ||||||||||||||||||||||
Expected return on plan assets | (1.9) | (2.4) | (3.9) | (4.8) | ||||||||||||||||||||||
Prior service cost amortization | 0.1 | 0.2 | 0.2 | 0.3 | ||||||||||||||||||||||
Actuarial loss amortization | 0.7 | 0.6 | 1.4 | 1.2 | ||||||||||||||||||||||
Settlement charge | 1.8 | 8.8 | 1.8 | 8.8 | ||||||||||||||||||||||
Net periodic benefit costs | $ | 3.8 | $ | 11.0 | $ | 5.7 | $ | 13.2 | ||||||||||||||||||
International Pension Benefits | ||||||||||||||||||||||||||
Interest cost | $ | 2.3 | $ | 3.7 | $ | 4.6 | $ | 7.3 | ||||||||||||||||||
Expected return on plan assets | (3.9) | (4.7) | (7.7) | (9.3) | ||||||||||||||||||||||
Prior service credit amortization | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||||||||||||
Net periodic benefit credit | $ | (1.5) | $ | (0.9) | $ | (3.0) | $ | (1.9) | ||||||||||||||||||
Postretirement Benefits | ||||||||||||||||||||||||||
Interest cost | $ | — | $ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||||||||||||||
Actuarial gain amortization | — | (0.2) | (0.1) | (0.3) | ||||||||||||||||||||||
Net periodic benefit credit | $ | — | $ | (0.1) | $ | — | $ | (0.2) |
Three Months | Six Months | |||||||||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||
Net earnings | $ | 148.5 | $ | 37.8 | $ | 190.8 | $ | 43.9 | ||||||||||||||||||
Participating warrants dividend | — | (1.0) | — | (1.9) | ||||||||||||||||||||||
Series A preferred stock dividend | — | (14.1) | — | (28.5) | ||||||||||||||||||||||
Accretion of Series A preferred stock | — | (4.5) | — | (9.0) | ||||||||||||||||||||||
Other securities dividends | — | (0.2) | — | (0.3) | ||||||||||||||||||||||
Undistributed earnings allocated to participating securities | (7.9) | — | (9.6) | — | ||||||||||||||||||||||
Basic earnings attributable to common shareholders | $ | 140.6 | $ | 18.0 | $ | 181.2 | $ | 4.2 | ||||||||||||||||||
Basic weighted average common shares outstanding | 46.2 | 45.7 | 46.1 | 45.7 | ||||||||||||||||||||||
Basic earnings per common share | $ | 3.04 | $ | 0.39 | $ | 3.93 | $ | 0.09 |
Three Months | Six Months | |||||||||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||
Basic weighted-average common shares outstanding | 46.2 | 45.7 | 46.1 | 45.7 | ||||||||||||||||||||||
Dilutive effect of stock options and equivalents | 0.1 | — | 0.1 | — | ||||||||||||||||||||||
Dilutive effect of participating warrants | — | 1.6 | — | — | ||||||||||||||||||||||
Diluted weighted-average shares outstanding | 46.3 | 47.3 | 46.2 | 45.7 | ||||||||||||||||||||||
Basic earnings attributable to common shareholders
|
$ | 140.6 | $ | 18.0 | $ | 181.2 | $ | 4.2 | ||||||||||||||||||
Dilutive security dividends | — | 1.0 | — | — | ||||||||||||||||||||||
Diluted earnings attributable to common shareholders | $ | 140.6 | $ | 19.0 | $ | 181.2 | $ | 4.2 | ||||||||||||||||||
Diluted earnings per common share | 3.04 | 0.40 | 3.92 | 0.09 |
Three Months | Six Months | |||||||||||||||||||||||||
Periods ended December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
National media | $ | 576.0 | $ | 597.2 | $ | 1,043.7 | $ | 1,130.1 | ||||||||||||||||||
Local media | 328.4 | 214.0 | 554.4 | 406.8 | ||||||||||||||||||||||
Total revenues, gross | 904.4 | 811.2 | 1,598.1 | 1,536.9 | ||||||||||||||||||||||
Intersegment revenue elimination | (2.9) | (0.7) | (3.1) | (1.2) | ||||||||||||||||||||||
Total revenues | $ | 901.5 | $ | 810.5 | $ | 1,595.0 | $ | 1,535.7 | ||||||||||||||||||
Segment profit
|
||||||||||||||||||||||||||
National media | $ | 114.3 | $ | 100.5 | $ | 145.8 | $ | 128.6 | ||||||||||||||||||
Local media | 151.7 | 54.8 | 215.5 | 93.2 | ||||||||||||||||||||||
Unallocated corporate | (17.6) | (21.4) | (34.8) | (45.0) | ||||||||||||||||||||||
Income from operations | 248.4 | 133.9 | 326.5 | 176.8 | ||||||||||||||||||||||
Non-operating income (expense), net | 0.2 | (7.2) | 5.8 | 1.4 | ||||||||||||||||||||||
Interest expense, net | (43.1) | (36.9) | (86.6) | (75.8) | ||||||||||||||||||||||
Earnings from continuing operations before income taxes | $ | 205.5 | $ | 89.8 | $ | 245.7 | $ | 102.4 | ||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
National media | $ | 40.6 | $ | 47.8 | $ | 80.6 | $ | 95.2 | ||||||||||||||||||
Local media | 8.7 | 9.9 | 17.3 | 19.5 | ||||||||||||||||||||||
Unallocated corporate | 0.5 | 0.9 | 0.9 | 2.4 | ||||||||||||||||||||||
Total depreciation and amortization | $ | 49.8 | $ | 58.6 | $ | 98.8 | $ | 117.1 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
Three months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions except per share data) | |||||||||||||||||
Total revenues | $ | 901.5 | $ | 810.5 | 11 | % | |||||||||||
Operating expenses | 653.1 | 676.6 | (3) | % | |||||||||||||
Income from operations | $ | 248.4 | $ | 133.9 | 86 | % | |||||||||||
Earnings from continuing operations | $ | 148.5 | $ | 62.1 | 139 | % | |||||||||||
Net earnings | 148.5 | 37.8 | 293 | % | |||||||||||||
Diluted earnings per common share from continuing operations | 3.04 | 0.91 | 234 | % | |||||||||||||
Diluted earnings per common share | 3.04 | 0.40 | n/m | ||||||||||||||
n/m - Not meaningful |
Six months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions except per share data) | |||||||||||||||||
Total revenues | $ | 1,595.0 | $ | 1,535.7 | 4 | % | |||||||||||
Operating expenses | |||||||||||||||||
Cost and expenses | 1,268.5 | 1,353.7 | (6) | % | |||||||||||||
Impairment of long-lived assets | — | 5.2 | (100) | % | |||||||||||||
Total operating expenses | 1,268.5 | 1,358.9 | (7) | % | |||||||||||||
Income from operations | $ | 326.5 | $ | 176.8 | 85 | % | |||||||||||
Earnings from continuing operations | $ | 190.8 | $ | 74.2 | 157 | % | |||||||||||
Net earnings | 190.8 | 43.9 | 335 | % | |||||||||||||
Diluted earnings per common share from continuing operations | 3.92 | 0.75 | 423 | % | |||||||||||||
Diluted earnings per common share | 3.92 | 0.09 | n/m | ||||||||||||||
n/m - Not meaningful |
Three months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Advertising related | |||||||||||||||||
Digital | $ | 161.2 | $ | 132.2 | 22 | % | |||||||||||
Magazine | 120.4 | 149.4 | (19) | % | |||||||||||||
Third party sales | 13.8 | 20.4 | (32) | % | |||||||||||||
Total advertising related | 295.4 | 302.0 | (2) | % | |||||||||||||
Consumer related | |||||||||||||||||
Subscription | 144.8 | 159.8 | (9) | % | |||||||||||||
Newsstand | 40.3 | 37.7 | 7 | % | |||||||||||||
Licensing | 34.5 | 24.4 | 41 | % | |||||||||||||
Affinity marketing | 18.5 | 20.0 | (8) | % | |||||||||||||
Digital and other consumer driven | 27.7 | 21.9 | 26 | % | |||||||||||||
Total consumer related | 265.8 | 263.8 | 1 | % | |||||||||||||
Other | |||||||||||||||||
Project based | 11.1 | 15.1 | (26) | % | |||||||||||||
Other | 3.7 | 16.3 | (77) | % | |||||||||||||
Total other | 14.8 | 31.4 | (53) | % | |||||||||||||
Total revenues | 576.0 | 597.2 | (4) | % | |||||||||||||
Operating expenses | 461.7 | 496.7 | (7) | % | |||||||||||||
Operating profit | $ | 114.3 | $ | 100.5 | 14 | % | |||||||||||
Operating profit margin | 19.8 | % | 16.8 | % | |||||||||||||
Six months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Advertising related | |||||||||||||||||
Digital | $ | 266.3 | $ | 223.8 | 19 | % | |||||||||||
Magazine | 228.9 | 309.8 | (26) | % | |||||||||||||
Third party sales | 27.8 | 39.4 | (29) | % | |||||||||||||
Total advertising related | 523.0 | 573.0 | (9) | % | |||||||||||||
Consumer related | |||||||||||||||||
Subscription | 278.2 | 310.3 | (10) | % | |||||||||||||
Newsstand | 75.4 | 80.3 | (6) | % | |||||||||||||
Licensing | 58.6 | 44.4 | 32 | % | |||||||||||||
Affinity marketing | 32.9 | 33.9 | (3) | % | |||||||||||||
Digital and other consumer driven | 47.8 | 38.4 | 24 | % | |||||||||||||
Total consumer related | 492.9 | 507.3 | (3) | % | |||||||||||||
Other | |||||||||||||||||
Project based | 21.0 | 29.5 | (29) | % | |||||||||||||
Other | 6.8 | 20.3 | (67) | % | |||||||||||||
Total other | 27.8 | 49.8 | (44) | % | |||||||||||||
Total revenues | 1,043.7 | 1,130.1 | (8) | % | |||||||||||||
Operating expenses | |||||||||||||||||
Costs and expenses | 897.9 | 996.3 | (10) | % | |||||||||||||
Impairment of long-lived assets | — | 5.2 | (100) | % | |||||||||||||
Total operating expenses | 897.9 | 1,001.5 | (10) | % | |||||||||||||
Operating profit | $ | 145.8 | $ | 128.6 | 13 | % | |||||||||||
Operating profit margin | 14.0 | % | 11.4 | % | |||||||||||||
Three months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Advertising related | |||||||||||||||||
Non-political spot | $ | 75.3 | $ | 89.5 | (16) | % | |||||||||||
Political spot | 117.7 | 4.4 | n/m | ||||||||||||||
Digital | 4.9 | 4.9 | 0 | % | |||||||||||||
Third party sales | 34.7 | 27.2 | 28 | % | |||||||||||||
Total advertising related | 232.6 | 126.0 | 85 | % | |||||||||||||
Consumer related | |||||||||||||||||
Retransmission | 91.9 | 85.1 | 8 | % | |||||||||||||
Digital and other consumer driven | 0.3 | — | n/m | ||||||||||||||
Consumer related | 92.2 | 85.1 | 8 | % | |||||||||||||
Other | 3.6 | 2.9 | 24 | % | |||||||||||||
Total revenues | 328.4 | 214.0 | 53 | % | |||||||||||||
Operating expenses | 176.7 | 159.2 | 11 | % | |||||||||||||
Operating profit | $ | 151.7 | $ | 54.8 | 177 | % | |||||||||||
Operating profit margin | 46.2 | % | 25.6 | % | |||||||||||||
n/m - Not meaningful |
Six months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Advertising related | |||||||||||||||||
Non-political spot | $ | 132.1 | $ | 166.3 | (21) | % | |||||||||||
Political spot | 169.4 | 7.0 | n/m | ||||||||||||||
Digital | 9.2 | 9.1 | 1 | % | |||||||||||||
Third party sales | 53.0 | 52.7 | 1 | % | |||||||||||||
Total advertising related | 363.7 | 235.1 | 55 | % | |||||||||||||
Consumer related | |||||||||||||||||
Retransmission | 183.3 | 164.7 | 11 | % | |||||||||||||
Digital and other consumer driven | 0.5 | — | n/m | ||||||||||||||
Consumer related | 183.8 | 164.7 | 12 | % | |||||||||||||
Other | 6.9 | 7.0 | (1) | % | |||||||||||||
Total revenues | 554.4 | 406.8 | 36 | % | |||||||||||||
Operating expenses | 338.9 | 313.6 | 8 | % | |||||||||||||
Operating profit | $ | 215.5 | $ | 93.2 | 131 | % | |||||||||||
Operating profit margin | 38.9 | % | 22.9 | % | |||||||||||||
n/m - Not meaningful |
Unallocated Corporate Expenses | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Three months ended December 31, | $ | 17.6 | $ | 21.4 | (18) | % | |||||||||||
Six months ended December 31, | 34.8 | 45.0 | (23) | % |
Three months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Production, distribution, and editorial | $ | 266.5 | $ | 280.1 | (5) | % | |||||||||||
Selling, general, and administrative | 332.6 | 338.4 | (2) | % | |||||||||||||
Acquisition, disposition, and restructuring related activities | 4.2 | (0.5) | n/m | ||||||||||||||
Depreciation and amortization | 49.8 | 58.6 | (15) | % | |||||||||||||
Operating expenses | $ | 653.1 | $ | 676.6 | (3) | % | |||||||||||
n/m - Not meaningful | |||||||||||||||||
Six months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Production, distribution, and editorial | $ | 507.6 | $ | 553.8 | (8) | % | |||||||||||
Selling, general, and administrative | 643.8 | 669.2 | (4) | % | |||||||||||||
Acquisition, disposition, and restructuring related activities | 18.3 | 13.6 | 35 | % | |||||||||||||
Depreciation and amortization | 98.8 | 117.1 | (16) | % | |||||||||||||
Impairment of long-lived assets | — | 5.2 | (100) | % | |||||||||||||
Operating expenses | $ | 1,268.5 | $ | 1,358.9 | (7) | % | |||||||||||
Periods ended December 31, 2019 | Three Months | Six Months | ||||||||||||||||||||||||
(In millions except per share data) | ||||||||||||||||||||||||||
Revenues | $ | 25.3 | $ | 110.8 | ||||||||||||||||||||||
Costs and expenses | (20.9) | (107.6) | ||||||||||||||||||||||||
Impairment of goodwill | (11.8) | (16.0) | ||||||||||||||||||||||||
Interest expense | (0.8) | (2.0) | ||||||||||||||||||||||||
Gain on disposal | 3.0 | 3.0 | ||||||||||||||||||||||||
Loss before income taxes | (5.2) | (11.8) | ||||||||||||||||||||||||
Income tax expense | (19.1) | (18.5) | ||||||||||||||||||||||||
Loss from discontinued operations, net of income taxes | $ | (24.3) | $ | (30.3) | ||||||||||||||||||||||
Loss per share from discontinued operations | ||||||||||||||||||||||||||
Basic | $ | (0.54) | $ | (0.66) | ||||||||||||||||||||||
Diluted | (0.51) | (0.66) |
Six months ended December 31, | 2020 | 2019 | Change | ||||||||||||||
(In millions) | |||||||||||||||||
Net earnings | $ | 190.8 | $ | 43.9 | 335 | % | |||||||||||
Net cash provided by operating activities | $ | 261.8 | $ | 72.1 | 263 | % | |||||||||||
Net cash used in investing activities | (12.0) | (23.7) | (49) | % | |||||||||||||
Net cash used in financing activities | (3.7) | (67.0) | (94) | % | |||||||||||||
Effect of exchange rate changes | 0.6 | (0.1) | n/m | ||||||||||||||
Change in cash in assets held-for-sale | — | (5.1) | (100) | % | |||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 246.7 | $ | (23.8) | n/m | ||||||||||||
n/m - Not meaningful | |||||||||||||||||
December 31, 2020 |
June 30,
2020 |
Change | |||||||||||||||
Cash and cash equivalents | $ | 379.1 | $ | 132.4 | 186 | % | |||||||||||
Total long-term debt | 3,043.4 | 3,045.4 | 0 | % | |||||||||||||
Summarized Balance Sheet | December 31, 2020 |
June 30,
2020 |
|||||||||
(In millions) | |||||||||||
Assets | |||||||||||
Current assets | $ | 1,198.3 | $ | 859.2 | |||||||
Intercompany receivable due from non-guarantor subsidiaries | 1,897.0 | 1,177.8 | |||||||||
Intangible assets, net | 1,577.6 | 1,637.4 | |||||||||
Goodwill | 1,691.7 | 1,691.7 | |||||||||
Other assets | 1,021.8 | 1,077.4 | |||||||||
Liabilities | |||||||||||
Current liabilities | 785.1 | 723.5 | |||||||||
Intercompany payable due to non-guarantor subsidiaries | 1,928.2 | 1,206.0 | |||||||||
Long-term debt | 2,985.2 | 2,981.8 | |||||||||
Other liabilities | 1,341.9 | 1,379.0 |
Summarized Statement of Earnings
|
Six months ended December 31, 2020 | ||||
(In millions) | |||||
Revenues | $ | 1,549.4 | |||
Operating expenses | 1,246.9 | ||||
Net earnings
|
170.8 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
PART II | OTHER INFORMATION |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(c) | Issuer Repurchases of Equity Securities |
Period |
(a)
Total number of
shares
purchased 1
|
(b)
Average price paid per share |
(c)
Total number of shares purchased as part of publicly announced programs |
(d)
Approximate dollar value of shares that may yet be purchased under programs |
||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
October 1 to
October 31, 2020 |
36,417 | $ | 12.89 | 36,417 | $ | 45.7 | ||||||||||||||||||||||||||
November 1 to
November 30, 2020 |
1,797 | 12.17 | 1,797 | 45.7 | ||||||||||||||||||||||||||||
December 1 to
December 31, 2020 |
— | — | — | 45.7 | ||||||||||||||||||||||||||||
Total | 38,214 | 38,214 |
1 | The number of shares purchased includes 36,417 shares in October and 1,797 shares in November delivered or deemed to be delivered to us in satisfaction of tax withholding on option exercises and the vesting of restricted shares. These shares are included as part of our repurchase program and reduce the repurchase authority granted by our Board of Directors. | ||||
Item 5. | Other Information |
Item 6. | Exhibits | |||||||||||||
The Company's Restated Articles of Incorporation, as amended, are incorporated herein by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the period ended December 31, 2003. | ||||||||||||||
The Restated Bylaws, as amended, are incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015. | ||||||||||||||
Articles of Amendment to the Restated Articles of Incorporation of Meredith Corporation, incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed November 16, 2020. | ||||||||||||||
Articles of Amendment to the Restated Articles of Incorporation of Meredith Corporation, incorporated herein by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed November 16, 2020. | ||||||||||||||
10.1 #
|
Meredith Corporation Employee Stock Purchase Plan of 2002, as amended is incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed November 16, 2020. | |||||||||||||
10.2 #
|
Employment Agreement dated December 1, 2020, between Meredith Corporation and Catherine Levene. | |||||||||||||
10.3 #
|
Amended and Restated Severance agreement dated December 2, 2020, between Meredith Corporation and Catherine Levene. | |||||||||||||
10.4 #
|
Amendment to employment agreement dated February 2, 2021, between Meredith Corporation and Patrick McCreery. | |||||||||||||
List of Guarantor Subsidiaries. | ||||||||||||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended. | ||||||||||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended. | ||||||||||||||
32 *
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
SIGNATURE | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
MEREDITH CORPORATION | ||||||||
Registrant | ||||||||
/s/ Jason Frierott | ||||||||
Jason Frierott | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Date: | February 4, 2021 |
MEREDITH CORPORATION
By: Dina Nathanson
Dated:
|
CATHERINE LEVENE
Dated:
|
|||||||
By: Dina Nathanson | ||||||||
/s/ Dina Nathanson | /s/ Catherine Levene | |||||||
Dated: 12/1/2020
|
Dated: 12/1/2020
|
If to the Company: | |||||
Meredith Corporation | |||||
1716 Locust Street | |||||
Des Moines, Iowa 50309-3023 | |||||
Attention: General Counsel | |||||
If to the Executive: | |||||
At the most recent address on file with the Company’s Human Resources Department. | |||||
MEREDITH CORPORATION | ||||||||
By: | Executive: | |||||||
/s/ Dina Nathanson |
/s/ Catherine Levene
|
|||||||
1 | Page
|
2 | Page
|
3 | Page
|
4 | Page
|
1. | I have reviewed this Quarterly Report on Form 10-Q of Meredith Corporation; | |||||||||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||||||||
3. | Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||||||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||||||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||||||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||||||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||||||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |||||||||||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | |||||||||||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and | |||||||||||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Thomas H. Harty | ||||||||
Thomas H. Harty, President, Chief Executive Officer, and Director
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Meredith Corporation; | |||||||||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||||||||
3. | Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||||||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |||||||||||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||||||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||||||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||||||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |||||||||||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | |||||||||||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and | |||||||||||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jason Frierott | ||||||||
Jason Frierott
Chief Financial Officer (Principal Financial and Accounting Officer) |
1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||||
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Thomas H. Harty | /s/ Jason Frierott | ||||||||||||||||
Thomas H. Harty | Jason Frierott | ||||||||||||||||
President, Chief Executive Officer, and Director
(Principal Executive Officer) |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
||||||||||||||||
Dated: | February 4, 2021 | Dated: | February 4, 2021 |