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Scripps Networks Interactive 2016 Annual Report

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Scripps Networks Interactive 2016 Annual Report Letter to Shareholders (Continued) STRENGTHEN AND GROW OUR CORE BUSINESS Our lifestyle brands in the United States have strong appeal with consumers. The shows we air are consistent, relevant, family friendly and promote co-viewing, where families engage in our content together. Our strategy to strengthen our brands is working. All six of our U.S. networks were up for total day in the C-3 viewing window, a key metric for our advertisers. Our family of networks was the only U.S. media group to have ALL of its networks improve in this timeslot, something we’re incredibly proud of. For powerhouse brand HGTV, 2016 was the network’s highest rated and most watched year ever. HGTV ¿QLVKHG WKH \HDU UDQNHG WKLUG DPRQJ DOO FDEOH QHWZRUNV IRU DGXOWV WKH KLJKHVW UDQNLQJ IRU WKLV DXGLHQFH in its history. Also, for the tenth consecutive year HGTV was the number one cable network among upscale women. Driven by premieres of hit shows like Fixer Upper, Flip or Flop, Brother vs. Brother andd Beachfront Bargain Hunt, HGTV continues to lead the way for engaging and entertaining lifestyle programming. Food Network, our most widely distributed brand, claimed a Top 10 position in 2016 for its target audience of women aged 25 to 54. Additionally, the network grew its total-day ratings for adults. Food Network gained momentum in the fourth quarter as ratings for adults 25 to 54 improved 2%. Top-rated programs on Food Network in 2016 were Worst Cooks in America, Food Network Star, Kids Baking Championship andd Halloween Wars. Travel Channel delivered an 11% increase in adult 25 to 54 ratings and a 3% increase in impressions compared to 2015. Travel Channel’s programming, which takes its inspiration from virtual and active travelers and their SDVVLRQ IRU WUDYHO FRQWLQXHV WR PDNH FRQVLVWHQW SURJUHVV EHQH¿WWLQJ IURP RXU UHFHQW FRQWHQW LQYHVWPHQWV Strong showings of Expedition Unknown, Mysteries at the Museum and Bizarre Foods with Andrew Zimmern helped drive Travel Channel’s growth. DIY Network delivered its highest rated and most watched year ever in 2016. Ratings for adults 25 to 54 improved 12% and ratings for women 25 to 54 surged 24%. Top performing programs included Texas Flip N Move, Tiny Luxury and Barnwood Builders. Cooking Channel continued its strong growth as adult 25 to 54 ratings were up 13% compared to 2015 while impressions delivery grew 36%. Top-rated shows in 2016 included popular re-airs of Food Network programming such as Holiday Baking Championship, Halloween Wars and Worst Cooks in America. Original series Cake Hunters, Cheap Eats and Food, Fact or Fiction also helped drive ratings gains. Consolidated Revenue by Brand 32% HGTV (&', 3126 3125 ' ' # #(.-' .3%828 .3%699 27% Food Network # ++- 439 :1 (-! )38* )24* 9% Travel Channel "! #)*&' .4%129 .3%776 10% DIY Network, Cooking Channel, ! Great American Country ' ' # #'*') .2%448 .2%379 16% International # '&& 42 (53 ''(! )233* )215* 6% Digital and Other #'*&' .2%357 .2%233 1RWH2SHUDWLQJUHYHQXHVDQGVHJPHQWSUR¿W ORVV UHSUHVHQWWKHPHDVXUHVXVHGWRHYDOXDWHWKHRSHUDWLQJSHUIRUPDQFHRIRXUEXVLQHVV VHJPHQWVLQDFFRUGDQFHZLWK¿QDQFLDODFFRXQWLQJVWDQGDUGVIRUGLVFORVXUHVDERXWVHJPHQWVRIDQHQWHUSULVHDQGUHODWHGLQIRUPDWLRQ 6HJPHQWSUR¿WLVQRWFDOFXODWHGLQDFFRUGDQFHZLWK*HQHUDOO\$FFHSWHG$FFRXQWLQJ3ULQFLSOHVLQWKH8QLWHG6WDWHVRI$PHULFD ³*$$3´ )RUDUHFRQFLOLDWLRQWRWKHPRVWFRPSDUDEOH¿QDQFLDOPHDVXUHFDOFXODWHGLQDFFRUGDQFHZLWK*$$3UHIHUWRWKHEXVLQHVVVHJPHQWUHVXOWV LQWKH³0DQDJHPHQW¶V'LVFXVVLRQDQG$QDO\VLVRI)LQDQFLDO&RQGLWLRQDQG5HVXOWVRI2SHUDWLRQV´ZLWKLQWKLVGRFXPHQW$GGLWLRQDOO\VLQFH VHJPHQWSUR¿WLVDQRQ*$$3PHDVXUHLWVKRXOGEHFRQVLGHUHGLQDGGLWLRQWREXWQRWDVDVXEVWLWXWHIRURSHUDWLQJLQFRPHDQGRWKHU PHDVXUHVRI¿QDQFLDOSHUIRUPDQFHUHSRUWHGLQDFFRUGDQFHZLWK*$$3 2.
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