News Releases

As Bill said, the new magazines hold significant profit improvement potential. The changes needed lie well within our skill set. We are highly confident that we will enhance the market position and the financial performance of these businesses over time.

Advertising

For our first quarter, total Publishing advertising revenues increased 50 percent. On a comparable basis, excluding the new magazines, Publishing advertising revenues grew 4 percent. In particular, Better Homes and Gardens, Ladies' Home Journal, Traditional Home, More and American Baby delivered solid advertising revenue gains.

More magazine continues to provide advertisers with an outstanding vehicle to reach affluent women 40 and over. The magazine's advertising pages grew 11 percent in the first quarter, which was on top of growth in excess of 30 percent in the prior-year quarter. In September, we raised More's rate base to 1.1 million. More is an excellent example of our ability to launch and develop a successful magazine business.

We experienced strength in most of our largest advertising categories in the first quarter. The largest gains were in cosmetics, pharmaceuticals, direct response and food. These gains were partially offset by weakness in the home and retail categories. We also grew advertising revenues in key target categories, including business, automotive and travel.

Looking forward, advertising is continuing to improve. For the second quarter, we expect advertising revenues for our comparable magazines to increase in the low-double digits. We believe this performance will be better than the industry as a whole. In particular, we are seeing strength in pharmaceuticals, food and cosmetics.

Circulation

In the first quarter, we continued to increase comparable circulation profit due primarily to strong performance from our retail based businesses.

Questionable circulation practices by some magazine publishers have continued to receive media attention as the Audit Bureau of Circulation has redefined acceptable circulation sources.

In contrast, Meredith's long-term direct-to-publisher circulation strategy is highly profitable, has produced trusted circulation for our magazines for many years, and has established us as a market leader. We have already begun to transition our newly-acquired magazines to this model.

We are confident that our direct-to-publisher model and our 85 million plus name database will improve the circulation profit and margin of the new magazines over time. We will continue our direct-mail acquisition campaigns in the second and third quarters of fiscal 2006.

Siempre Mujer

Let me conclude my discussion of our magazine operations by telling you about Siempre Mujer, our new Spanish-language women's lifestyle magazine. We launched the magazine in September with a rate base of 350,000. The first two issues met our expectations and we were pleased by the breadth of participating advertisers, including Procter & Gamble, Kraft, General Motors and Verizon. We are very optimistic about the growth potential of this new business.

Non-magazine Operations

Our book business continued its aggressive launch activity, grew revenues in excess of 25 percent in the first quarter and produced strong profit growth. Top selling books included the limited edition "Pink Plaid" Better Homes and Gardens New Cook Book; Today's Kitchen Cookbook, which includes top chefs featured on the Today show; several books in the 1-2-3 series that we publish for The Home Depot; and three books based on popular Food Network host Sandra Lee.

We expect a strong second quarter for our book business based on projected sales of The Sonoma Diet book; the "Pink Plaid" Better Homes and Gardens New Cook Book, sales of which support the Susan G. Komen Breast Cancer Foundation; and licensed children's books for the holiday season.

Our integrated marketing operations produced another strong quarter as well, growing revenues in excess of 25 percent and more than doubling profit. The quarter's top performers were programs for existing clients such as DIRECTV, Nestlé, Chrysler, Carnival Cruise Lines and Hyundai. New programs for PepsiCo, Procter & Gamble and Porsche also contributed to the strong results.

At a time when many clients are looking beyond traditional advertising for total marketing solutions, Meredith is particularly well-suited to capture this growing business. We are offering clients a greater breadth of direct marketing services, including expanded customer relationship marketing programs with online and database components. These broader services are proving effective in helping clients reach their target audiences more effectively.

In summary, we are pleased to report an outstanding quarter for our Publishing Group. The integration of our new magazines is progressing well. We are experiencing strong advertising gains in our magazine portfolio, and our book and integrated marketing operations are continuing to produce strong results.

BROADCASTING

Now, I'll move to Broadcasting. As Bill said, operating profit and EBITDA declined 11 and 5 percent, respectively. Total revenues declined 2 percent to $71.8 million. These results reflect the absence of $6.4 million in net political advertising, partially offset by growth in non-political advertising, and disciplined expense management.

We increased non-political advertising revenues 7 percent in the quarter. As Bill noted earlier, that performance ranks among the best of the broadcasters who have reported to date. We were particularly pleased with our local advertising sales efforts. Overall, local advertising revenue grew 5 percent in the quarter, or 8 percent excluding political revenue. Despite a weak national market for the industry, our national non-political revenues grew 3 percent.

Auto advertising at both the national and local level was particularly strong in the quarter, increasing by 7 percent overall.

Improving news ratings and share is critical to the continued growth of Meredith Broadcasting. We improved audience share for our late news in certain key markets in the July 2005 rating book, compared with the July 2004 book, for the key adult 25-54 demographic group. Let me provide a few examples:

We continued to post strong results for morning news in key markets as well:

With that review of our news improvements, let me discuss our other sales initiatives. We continued to build our innovative Cornerstone programs, which leverage our publishing assets to create proprietary advertising packages for our stations.

In the first quarter we generated nearly $9.4 million in combined revenues from Cornerstones, Internet sales and marketing initiatives focused on local interests and events.

In the next few months we will create new Cornerstones, leveraging content from our new magazine brands. In particular, we believe Parents and Fitness will resonate well with advertisers targeting younger viewers of our FOX, UPN and WB affiliates.

We completed our acquisition of KSMO-TV, the WB affiliate in Kansas City. Together with KCTV, our powerful CBS station, we now operate a strong duopoly in that market. This positions us to serve advertisers seeking either the younger skewing WB audience or the powerful CBS audience with its top-rated primetime and sports programming, as well as our market-leading news.

We have already made programming changes at KSMO to improve its performance. Earlier this month, we launched a 9 p.m. weekday newscast. As in most markets, approximately one-third of the revenue in Kansas City is related to news. Now, KSMO will have the ability to capture a growing share of that revenue.

We have begun airing Kansas City Chiefs pre- and post-game shows on KSMO. The Chiefs are very popular and these shows will be some of the highest rated programming on the station each week. We will look for additional opportunities to improve the station's programming.

We strengthened our station management as well, naming sales oriented general managers to lead our stations in Portland and Hartford and promoting one of our strongest general managers to lead our station in Nashville. All three of these stations possess outstanding news operations. In Hartford and Nashville, we will continue our market-leading sales efforts. In Portland, we are confident that we will capitalize on the audience share and monetize these ratings with increased revenues over time.

In summary, our Broadcasting Group produced a solid quarter despite difficult political comparisons and a weak national market. We continued to increase audience share for news in key markets and grew both national and local non-political revenues.

Outlook

With that review of our two business groups, let's look ahead.

For the second quarter of fiscal 2006, we believe the current First Call mean estimate of $0.56 per share is achievable. On a comparable basis, Publishing advertising revenues are expected to grow in the low-double digits. Total Publishing advertising revenues are expected to increase significantly primarily due to the addition of the new magazines.

Broadcast pacings, which are a snapshot in time and change frequently, are currently down in the mid-single digits in the second quarter. Broadcast pacings reflect the absence of $12.2 million in net political advertising, which was booked in the second quarter of fiscal 2005.

For the fiscal year, we believe the current First Call mean estimate of $2.83 is achievable. This would represent a 13 percent increase from the $2.50 we earned in fiscal 2005 before the $0.02 cumulative benefit of a change in accounting principle related to option expensing. This would be particularly strong performance in a year where we face the challenge of replacing nearly $19 million in net political advertising revenues.

Now, I'll turn it back to Bill for some final comments.

BILL KERR

Thanks, Steve. Before taking your questions, I want to share a few closing comments.

Earlier I told you about Meredith's significant growth potential. I'll close by reminding you of our excellent track record of executing our growth strategies: