2005 Annual Report
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RESULTS Matter 2005 Annual Report The E.W. Scripps Company Mission The E.W.The Company Scripps 2005 Annual Report The E.W. Scripps Company strives for excellence in the products and services we produce and responsible service to the communities in which we operate. Our purpose is to continue to engage in successful, growing enterprises in the fields of information and entertainment. The company intends to expand, develop and acquire new products and services, and to pursue new market opportunities. Our focus shall be long-term growth for the benefit of shareholders and employees. P.O. Box 5380 Cincinnati, Ohio 45201 www.scripps.com The E. W. Scripps Company 2005 Annual Report Board of Directors RESULTS do matter and they’re what The E.W. Scripps 123456 Company is all about. Millions of engaged media consumers, and the advertisers and merchants who want to reach them, turn to 7 8 9 10 11 12 Scripps every day for a growing range of innovative information services that excel at delivering outstanding results. 1 William R. Burleigh, 70 3 Paul K. Scripps, 60 6 David A. Galloway, 62 8 Ronald W. Tysoe, 52 11 Jarl Mohn, 54 Chairman of the company since May 1999 and Chairman Retired Vice President/ Corporate Director; Vice Chairman, Trustee, Mohn of the Executive Committee since October 2000. He joined Newspapers, The E.W. retired President and Federated Department Family Trust; retired the Board of Directors in 1990. He served as President and Scripps Company. CEO, Torstar Corp. Stores Inc. Director President & Chief Chief Executive Officer from May 1996 until September 2000 Director since 1986. Director since 2002. since 1996. Executive Officer, and was President and Chief Operating Officer from 1994 4 Edward W. Scripps, 47 7 Nicholas B. 9 Julie A. Wrigley, 57 Liberty Digital Inc. until 1996. He was elected Executive Vice President in March Emeritus Trustee, Paumgarten, 60 President and CEO, Director since 2002. 1990. Before joining the corporate staff in 1984, he was Scripps Howard Chairman, Wrigley Investments 12 Jeffrey Sagansky, 54 Editor and President of The Evansville Press and Editor of Foundation. Trustee, The Corsair Capital LLC. LLC. Director since Chairman, Ardustry The Cincinnati Post. He was promoted to Senior Vice Edward W. Scripps Trust. Director since 1988. 1997. Home Entertainment; President/Newspapers and Publishing in 1985. Director since 1998. 10 Nackey E. Chairman, People’s 2 Kenneth W. Lowe, 55 5 John H. Scagliotti, 60 Choice Cable TV; President and CEO of The E. W. Scripps Company since Burlingame, 72 Chairman, Board Former President, October 2000. He was named President, Chief Operating Retired Partner, of Directors, CBS Entertainment. Officer and a Director of the company in January 2000. He Baker & Hostetler. The Union Leader Corp. Former CEO, Paxson previously was chairman and CEO of Knoxville-based Scripps Director since 1988. Trustee, The Edward W. Communications. Networks. He joined Scripps in 1980 and in 1988 became Scripps Trust. Director since 2003. Vice President/Programming, Promotion and Marketing for Director since 1999. the company’s network-affiliated television stations before founding HGTV in 1994. Corporate Officers 1234Mark G. Contreras, 44 Mary Denise Kuprionis, 49 Vice President/ Vice President, Corporate Newspaper Operations Secretary and Director Mark S. Hale, 46 of Legal Affairs Vice President/ Mark Schuermann, 34 Technology Operations Assistant Treasurer 5678Lori A. Hickok, 42 Timothy E. Stautberg, 43 Vice President and Vice President/ Controller Communications and Investor Relations E. John Wolfzorn, 60 Vice President and Treasurer 1 Richard A. Boehne, 49 3 Tim A. Peterman, 38 6 John F. Lansing, 48 Executive Vice President since 1999. He served as Vice Senior Vice President/Interactive Media since November Senior Vice President and President, Scripps Networks. President/Communications and Investor Relations from 2005. Joined Scripps in 2002 as Vice President/Corporate Executive Vice President, Scripps Networks, from January 2004 1995 to 1999. He joined the corporate staff in 1988 as Development after serving three years at Interactive Corp., to January 2005; Senior Vice President/Scripps Television Manager/Corporate Communications and was promoted first as Chief Financial Officer, Broadcast, and then as Chief Station Group, 2002 to 2004. Vice President/Scripps Television to Director/Corporate Communications and Investor Financial Officer, Cable Television. Prior to Interactive Corp., Station Group, 2001 to 2002. He served as Vice President/ Relations in 1989. Before moving to headquarters, he was held senior financial management positions at Sinclair General Manager of WEWS-TV, Cleveland, 1997 to 2001; a business reporter and editor at The Cincinnati Post. Communications Inc. and Tribune Company. Peterman Vice President/Station Manager, WXYZ-TV, Detroit, 1995 2 Joseph G. NeCastro, 49 is a Certified Public Accountant. to 1997. News director, WBBM-TV, Chicago, 1993 to 1995. Senior Vice President and Chief Financial Officer. Joined 4 William B. Peterson, 62 News director, WCCO-TV Minneapolis, 1990 to 1993. Scripps in 2002 after serving four years as Chief Financial Senior Vice President/Scripps Television Station Group 7 Jennifer L. Weber, 39 Officer for Penton Media Inc. in Cleveland. From 1995 to since May 2004. Vice President/Station Operations, Senior Vice President/Human Resources since September 2005. 1998, served as Chief Financial Officer for The Readers January 2004 to May 2005. Joined Scripps in 2001 as Joined Scripps after three years as managing partner of the Digest Association Inc.’s U.S. company, and Vice President Vice President/General Manager of WPTV-TV in West Palm Towers Perrin Human Resources Services office in Cincinnati. and Corporate Controller from 1993 to 1995. At U.S. Beach, Fla.; Vice President/General Manager, WRAL-TV, Served as Human Resources Consultant for Towers Perrin News & World Report, Vice President and Treasurer, the CBS network affiliate in Raleigh, N.C., 1999 to 2001. beginning in 1994; named Towers Perrin Partner in 2001. 1990 to 1993, and Director of Finance, 1987 to 1990. 5 Anatolio B. Cruz III, 47 8 Frank Gardner, 63 Senior Vice President and General Counsel since March Senior Vice President and Chairman of Scripps Networks, 2004. Came to Scripps from BET Holdings Inc. where he was retired, December 2005. Senior Vice President/Interactive Vice President, Deputy General Counsel and Assistant Media from 2000 to 2001. Senior Vice President/Television Secretary, beginning in 1999. Attorney practicing in media from 1993-2000. He returned to Scripps in 1993 from law and transactions with the law firm of Wiley, Rein & FOX Broadcasting Company, where he was Senior Vice Fielding before joining BET. Cruz is a captain in the U.S. President/News Programming. His FOX tenure followed an Design: ProWolfe Partners, St. Louis, MO Naval Reserve. affiliation with Scripps stations dating back to 1976, including Corporate Vice President in charge of news programming. The E. W. Scripps Company 2005 Annual Report 1 Acquired by Scripps in June, Shopzilla has emerged Scripps Then and Now The company’s profile continued to change during as America’s leading online product search and 2005 as a result of its deliberate diversification strategy and the rapid growth of its national lifestyle price comparison service. Like all of the company’s television networks. media businesses, Shopzilla aggregates an engaged audience, delivers valuable information and creates a highly efficient marketplace between consumers and merchants. 2001 2005 (Percentage of segment 36% Scripps Networks operating revenue) 29% Newspapers 49% Newspapers 14% Shop At Home 24% Scripps Networks 13% Broadcast TV 21% Broadcast TV 4% United Media 6% United Media 4% Shopzilla* * The percentage attributed to Shopzilla represents revenue from June 27, 2005, when the business was acquired by Scripps, through Dec. 31, 2005. Financial Highlights (Dollars in millions) Consolidated 2005 2004 2003 Segment operating revenues $ 2,514 $ 2,167 $ 1,875 Segment profits(1) 701 610 519 Growth Businesses Income from continuing operations 223 301 268 % Scripps Networks 40 Segment operating revenues $ 903 $ 724 $ 535 Scripps Networks and Segment profits(1) 414 304 204 Shopzilla, the company’s fastest growing busi- Segment profit margin 46% 42% 38% nesses, contributed 40% of total operating Newspapers revenue in 2005. Segment operating revenues $ 729 $ 704 $ 692 Segment profits(1) 223 241 264 Segment profit margin 31% 34% 38% Broadcast Television Segment operating revenues $ 318 $ 342 $ 304 Segment profits(1) 88 108 85 On a pro forma basis, as if Scripps had owned Segment profit margin 28% 32% 28% 155 Shopzilla for the full year, Shopzilla segment operating revenue and segment profit rose Segment operating revenues $ 99 $ — $ — sharply, year-over-year. Segment profits 28 — — Shop At Home 67 Segment operating revenues $ 359 $ 293 $ 238 (1) Segment (losses) (28) (22) (22) 41 United Media 11 05 05 04 Segment operating revenues $ 106 $ 104 $ 105 04 Segment profits(1) 19 17 19 Segment profit margin 18% 16% 18% Shopzilla Financial Performance (Dollars in millions) (1) Segment profit is used by the company’s chief operating decision maker to evaluate its business segments. Segment Profit See page F-11 of the company’s Form 10-K. Segment Operating Revenue Letter to our Shareholders “For more than a decade, our focus has been on investing capital in media businesses that hold the promise for outsized returns.” Kenneth W. Lowe (left) and William R. Burleigh To our shareholders: Getting good results is important to all of us 2.51 at Scripps. That’s why we’re never content to stand still. 2.17 Throughout our 128-year history, Scripps has successfully anticipated and capitalized on the changing habits of media consumers. +16% From newspapers, to licensing and syndication, to broadcast The company’s total television, to national lifestyle networks and, now, promising new operating revenues interactive media businesses, Scripps has earned a reputation increased 16 percent in 2005 from the for embracing industry trends and creating shareholder value in previous year.