Delivering Information and Inspiration home family food health home family food health home family Across Media Platforms print broadcast online video print broadcast online video print Annual Report 2007 Meredith Corporation Profile Meredith (NYSE: MDP) (www.meredith.com ) is one of the nation’s leading media and marketing companies with businesses centering on magazine and book publishing, television broadcasting, integrated marketing and interactive media. The Meredith Publishing Group features 25 subscription magazines-including Better Homes and Gardens, Ladies’ Home Journal, Family Circle, Parents, American Baby, Fitness, and More-and approximately 180 special interest publications. Meredith owns 13 television stations, including properties in top-25 markets Atlanta, Phoenix and Portland. Additionally, Meredith has an extensive Internet presence that includes more than 40 Web sites and strategic alliances with leading Internet destinations. Meredith has more than 400 books in print and has established marketing relationships with some of America’s leading companies such as The Home Depot®, Kraft, DaimlerChrysler, Wal-Mart and Carnival Cruise Lines. Meredith’s consumer database, which contains approximately 85 million names, is one of the largest domestic databases among media companies and enables magazine and television advertisers to target marketing campaigns. Meredith Hispanic Ventures publishes five Spanish-language titles, making Meredith the leading publisher serving Hispanic women in the United States. Contents Page The heart and soul of any company are its people, and I’m grateful Financial Highlights 1 for the ability to work with so many talented professionals. Shareholder Letter 2 Like most companies, we face our own set of unique challenges Board of Directors 7 in a rapidly changing environment. What sets us apart is the talent, dedication and camaraderie of our Meredith team. Corporate Information and Corporate Officers inside back cover Steve Lacy President and CEO, Meredith Corporation Form 10-K included in this report Financial Highlights Years Ended June 30 (In millions except per share data and stock prices) GAAP Results 2007 2006 2005 Revenues $ 1,616 $ 1,561 $ 1,217 Income from operations 288 267 228 Net earnings 162 145 129 Diluted earnings per share 3.31 2.86 2.52 Total assets 2,090 2,041 1,491 Debt 475 565 250 Dividends per share 0.69 0.60 0.52 Stock price High 63.41 56.83 55.51 Low 45.04 46.50 44.51 Non-GAAP Results EBITDA1 $ 337 $ 312 $ 263 Comparison of Shareholder Return2 Diluted earnings per share $180 $169 $3.31 166 160 $2.86 $2.52 140 123 120 100 2002 2003 2004 2005 2006 2007 2005 2006 2007 Meredith S&P 500 Peers (1) EBITDA = Earnings from continuing operations before interest, taxes, depreciation and amortization, and does not include Book Group restructuring charges in fiscal 2007. Non-GAAP amounts are not in accordance with GAAP (accounting principles generally accepted in the United States of America). While management believes these measures contribute to an understanding of the Company’s financial performance, they should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. See “Reconciliation of Non-GAAP Financial Measure” in Appendix 1 immediately following the included Form 10-K. (2) The graph compares the performance of the Company’s common stock during the period July 1, 2002, to June 30, 2007, with the S&P 500 Index and with a Peer Group of nine companies engaged in multimedia businesses primarily with publishing and/or television broadcasting in common with the Company. The S&P 500 Index includes 500 United States companies in the industrial, transportation, utilities, and financial sectors and is weighted by market capitalization. The Peer Group selected by the Company for comparison, which is also weighted by market capitalization, is comprised of Belo Corp.; Gannett Co., Inc.; Hearst-Argyle Television, Inc.; The McGraw-Hill Companies, Inc.; Media General, Inc.; The New York Times Company; The E. W. Scripps Company; Tribune Company; and The Washington Post Company. The Reader’s Digest Association, Inc., which had been included in the Peer Group in prior years, is no longer a publicly traded company and has been removed. The graph depicts the results for investing $100 in the Company’s common stock, the S&P 500 Index, and the Peer Group at closing prices on June 30, 2002, as- suming dividends were reinvested. Delivering Information and Inspiration 1 To Our Shareholders In fiscal 2007, Meredith For a more detailed analysis of our financial perfor- delivered the highest mance and that of our operating groups, we encourage earnings in our 105-year you to read the Form 10-K included in this report. history. Meredith’s reach extends across 25 subscription We produced a strong magazines, 13 broadcast television stations, over 16 percent growth in 40 web sites, approximately 180 special interest earnings per share. Income publications, more than 400 books, and custom William T. Kerr from operations rose 8 marketing programs for some of America’s largest Chairman of the Board percent to $288 million, and companies. Additionally, we operate an 85-million- earnings before interest, name consumer database, which includes at least taxes, depreciation and 300 data points on seven out of ten home-owning amortization (EBITDA) households in the United States. also increased 8 percent to Today, consumers are increasingly willing and $337 million. Total revenues able to choose how and when they access media. increased 3 percent to $1.6 We have embraced these trends by developing and billion, including a 6 percent successfully executing clear strategies for growth, increase in advertising increasing earnings per share at an 18 percent revenues. compound annual growth rate from fiscal 2004 to Our Publishing Group fiscal 2007. Stephen M. Lacy President and posted solid advertising We continue to invest in existing and new media Chief Executive Officer growth, particularly in the platforms, further empowering our consumers while second half of the year, aggregating meaningful audiences for advertisers. led by key brands such as Better Homes and Gardens, Our fiscal 2007 performance reflected operational and Family Circle and More. Our Broadcasting Group managerial strengths that have made Meredith one of delivered improved profit margins by strengthening America’s top performing media companies. ratings and producing record political advertising Going forward, we will pursue the following revenues. Online revenues and audience metrics growth strategies. soared across all lines of business, and we positioned ourselves for future growth through key strategic •First, we will strengthen our publishing investments, particularly in the online and broadband businesses and brands. areas. •Second, we will capture the margin upside at We continued to return capital to our shareholders our television stations and capitalize on our through dividends and share repurchases. In January video content and production capabilities. 2007, the Board of Directors raised the quarterly dividend rate 16 percent, following a 14 percent •Third, we will enhance our growing online increase the year before. Meredith repurchased 1.1 presence to serve increasing numbers of million shares in fiscal 2007. As of September 1, 2007, consumers and advertisers alike. there were 2.7 million shares outstanding under current repurchase authorizations. 2 Meredith Corporation 2007 Annual Report Strengthening Publishing Businesses and Brands Enhancing Our Capabilities Meredith is clearly the leading publisher serving Over the past two years, we have made a series of strategic women, reaching 75 million women every month and acquisitions to enhance and expand our online capabilities. easily surpassing the female reach of our competitors. From new home owners to new mothers to affluent April 2006 empty nesters, we reach a wide spectrum of consumers O’Grady Meyers across life’s stages. We provide the information and Capabilities: online customer relationship management strategy, online promotions and E-branding. Focus on inspiration that fuels their key passions in the areas of consumer packaged goods companies. home, family and their health and well-being. In Better Homes and Gardens, Ladies’ Home Journal, January 2007 Family Circle and Parents, we own four of the most Genex vibrant and recognized brands in the industry. Many Capabilities: Web site design, online customer relationship of our other titles have tremendous upside potential, management, E-commerce. Focus on automotive and financial companies. especially More, Fitness and Siempre Mujer, our Spanish language lifestyle magazine. During the year, New Media Strategies we achieved several accomplishments that further Capabilities: Word-of-mouth marketing campaigns and establish our reputation as the leading publisher online brand promotion. Strong presence in entertainment serving women. and public affairs industries. Our flagship title,Better Homes and Gardens, surged in the second half of fiscal 2007, as initiatives June 2007 implemented by the new creative and sales leadership Healia took hold. A mid-year redesign was well-received by Capabilities: Health-focused consumer search engine. readers and advertisers alike. Second-half advertising Makes health-related searches easier and more efficient. revenues increased more than 10 percent, and overall fiscal 2007 net revenues per advertising page increased more than 3 percent.