SEC Filing | E.W. Scripps Company

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number 0-16914 THE E. W. SCRIPPS COMPANY (Exact name of registrant as specified in its charter) Ohio 31-1223339 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 312 Walnut Street Cincinnati, Ohio 45202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (513) 977-3000 Not Applicable (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of October 31, 1999 there were 58,890,296 of the Registrant's Class A Common Shares outstanding and 19,218,913 of the Registrant's Common Voting Shares outstanding.

INDEX TO THE E. W. SCRIPPS COMPANY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999 Item No. Page PART I - FINANCIAL INFORMATION 1 Financial Statements 3 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 3 PART II - OTHER INFORMATION 1 Legal Proceedings 3 2 Changes in Securities 3 3 Defaults Upon Senior Securities 3 4 Submission of Matters to a Vote of Security Holders 4 5 Other Information 4 6 Exhibits and Reports on Form 8-K 4

PART I ITEM 1. FINANCIAL STATEMENTS The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q. PART II ITEM 1. LEGAL PROCEEDINGS The Company is involved in litigation arising in the ordinary course of business, such as defamation actions and various governmental and administrative proceedings relating to renewal of broadcast licenses, none of which is expected to result in material loss. ITEM 2. CHANGES IN SECURITIES There were no changes in the rights of security holders during the quarter for which this report is filed. ITEM 3. DEFAULTS UPON SENIOR SECURITIES There were no defaults upon senior securities during the quarter for which this report is filed.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders during the quarter for which this report is filed. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits The information required by this item is filed as part of this Form 10-Q. See Index to Exhibits at page E-1 of this Form 10-Q. Reports on Form 8-K No reports on Form 8-K were filed during the quarter for which this report is filed.

SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE E. W. SCRIPPS COMPANY Dated: November 8, 1999 BY: D. J. Castellini D. J. Castellini Senior Vice President and Chief Financial Officer

THE E. W. SCRIPPS COMPANY Index to Financial Information Item Page Consolidated Balance Sheets F-2 Consolidated Statements of Income F-4 Consolidated Statements of Cash Flows F-5 Consolidated Statements of Comprehensive Income and Stockholders' Equity F-6 Notes to Consolidated Financial Statements F-7 Management's Discussion and Analysis of Financial Condition and Results of Operations F-13

CONSOLIDATED BALANCE SHEETS ( in thousands ) As of September 30, December 31, September 30, 1999 1998 1998 (Unaudited) (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 14,726 $ 15,419 $ 14,966 Short-term investments 66 20,551 2,529 Accounts and notes receivable (less allowances -$11,358, $7,689, $7,742) 235,014 226,683 194,777 Program rights and production costs 102,782 68,870 80,961 Network distribution fees 16,649 18,729 17,531 Inventories 15,387 15,009 15,896 Deferred income taxes 27,725 24,140 24,180 Miscellaneous 31,329 29,926 28,089 Total current assets 443,678 419,327 378,929 Investments 216,258 131,230 104,547 Property, Plant and Equipment 482,436 479,286 473,985 Goodwill and Other Intangible Assets 1,181,638 1,204,469 1,217,887 Other Assets: Program rights and production costs (less current portion) 68,530 50,763 49,619 Network distribution fees (less current portion) 53,972 43,204 33,192 Miscellaneous 34,758 31,095 22,819 Total other assets 157,260 125,062 105,630 TOTAL ASSETS $ 2,481,270 $ 2,359,374 $ 2,280,978 See notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEETS ( in thousands, except share data ) As of September 30, December 31, September 30, 1999 1998 1998 (Unaudited) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 257,158 $ 268,780 $ 231,019 Accounts payable 115,428 101,870 101,686 Customer deposits and unearned revenue 44,971 42,094 41,849 Accrued liabilities: Employee compensation and benefits 50,032 40,816 45,129 Network distribution fees 39,329 35,520 15,931 Miscellaneous 47,972 57,687 54,877 Total current liabilities 554,890 546,767 490,491 Deferred Income Taxes 140,830 115,577 101,358 Long-Term Debt (less current portion) 501,869 501,877 501,842 Other Long-Term Obligations and Minority Interests (less current portion) 141,212 126,421 124,224 Stockholders' Equity: Preferred stock, $.01 par - authorized: 25,000,000 shares; none outstanding Common stock, $.01 par: Class A - authorized: 120,000,000 shares; issued and outstanding: 58,989,873; 59,324,967; and 60,404,819 shares 590 593 604 Voting - authorized: 30,000,000 shares; issued and outstanding: 19,218,913 shares 192 192 192 Total 782 785 796 Additional paid-in capital 141,577 161,878 206,448 Retained earnings 938,559 870,315 837,677 Unrealized gains on securities available for sale 65,969 38,904 22,528 Foreign currency translation adjustment 710 581 63 Unvested restricted stock awards (5,128) (3,731) (4,449) Total stockholders' equity 1,142,469 1,068,732 1,063,063 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,481,270 $ 2,359,374 $ 2,280,978 See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF INCOME ( UNAUDITED ) ( in thousands, except per share data ) Three months ended Nine months ended September 30, September 30, 1999 1998 1999 1998 Operating Revenues: Advertising $ 280,999 $ 256,447 $ 862,941 $ 791,422 Circulation 34,237 37,803 106,793 116,084 Licensing 14,520 13,914 45,571 44,520 Joint operating agency distributions 12,479 11,836 36,826 35,879 Affiliate fees 13,012 9,491 37,651 27,565 Other 14,652 13,932 41,853 41,680 Total operating revenues 369,899 343,423 1,131,635 1,057,150 Operating Expenses: Employee compensation and benefits 123,647 112,388 364,658 339,954 Newsprint and ink 32,775 36,100 104,360 109,406 Program, production and copyright costs 33,531 26,095 92,121 74,624 Other operating expenses 97,846 86,073 286,629 266,555 Depreciation 17,240 15,019 47,644 46,354 Amortization of intangible assets 9,443 10,292 28,795 30,139 Total operating expenses 314,482 285,967 924,207 867,032 Operating Income 55,417 57,456 207,428 190,118 Other Credits (Charges): Interest expense (11,279) (11,712) (33,378) (35,471) Miscellaneous, net (214) 285 2,740 (238) Net other credits (charges) (11,493) (11,427) (30,638) (35,709) Income Before Taxes and Minority Interests 43,924 46,029 176,790 154,409 Provision for Income Taxes 17,954 18,852 72,442 63,191 Income Before Minority Interests 25,970 27,177 104,348 91,218 Minority Interests 1,077 1,099 3,223 3,638 Net Income $ 24,893 $ 26,078 $ 101,125 $ 87,580 Net Income per Share of Common Stock: Basic $.32 $.33 $1.30 $1.09 Diluted .32 .32 1.28 1.08 See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS ( UNAUDITED ) ( in thousands ) Nine months ended September 30, 1999 1998 Cash Flows from Operating Activities: Net income $ 101,125 $ 87,580 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 76,439 76,493 Deferred income taxes 7,116 4,758 Minority interests in income of subsidiary companies 3,223 3,638 Network distribution fee amortization greater (less) than payments (6,719) (6,904) Program cost amortization greater (less) than payments (28,389) (12,812) Other changes in certain working capital accounts, net (16,626) 22,798 Miscellaneous, net 5,766 2,904 Net operating activities 141,935 178,455 Cash Flows from Investing Activities: Additions to property, plant and equipment (58,613) (42,873) Purchase of subsidiary company and long-term investments (43,435) (14,614) Change in short-term investments, net 20,485 576 Miscellaneous, net 11,777 10,698 Net investing activities (69,786) (46,213) Cash Flows from Financing Activities: Increase in long-term debt 3,865 Payments on long-term debt (15,557) (40,369) Repurchase Class A Common shares (29,101) (62,161) Dividends paid (32,881) (32,232) Dividends paid to minority interests (1,176) (1,189) Miscellaneous, net (primarily exercise of stock options) 2,008 4,259 Net financing activities (72,842) (131,692) Increase (Decrease) in Cash and Cash Equivalents (693) 550 Cash and Cash Equivalents: Beginning of year 15,419 14,416 End of period $ 14,726 $ 14,966 Supplemental Cash Flow Disclosures: Interest paid, excluding amounts capitalized $ 29,674 $ 31,490 Income taxes paid 79,224 61,223 See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND STOCKHOLDERS' EQUITY ( UNAUDITED ) ( in thousands, except share data ) Accumulated Unvested Comprehensive Additional Other Restricted Total Income for the Common Paid-in Retained Comprehensive Stock Stockholders' Three Months Stock Capital Earnings Income Awards Equity Ended Sept. 30 Balances at December 31, 1997 $ 806 $ 259,739 $ 782,329 $ 11,690 $ (5,602) $ 1,048,962 Comprehensive income: Net income 87,580 87,580 $ 26,078 Unrealized gains, net of deferred tax of $6,206 and $395 11,570 11,570 733 Less: reclassification adjustment for gains in income, net of deferred tax of $212 and ($105) (439) (439) 195 Increase in unrealized gains on securities 11,131 11,131 928 Foreign currency translation adjustments (230) (230) 4 Total 87,580 10,901 98,481 $ 27,010 Dividends: declared and paid - $.40 per share (32,232) (32,232) Convert 114,798 Voting Shares to Class A Shares Repurchase 1,269,800 Class A Common Shares (13) (62,148) (62,161) Compensation plans, net: 284,735 shares issued, 1,500 shares forfeited and 19,571 shares repurchased 3 5,567 1,153 6,723 Tax benefits of compensation plans 3,290 3,290 Balances at September 30, 1998 $ 796 $ 206,448 $ 837,677 $ 22,591 $ (4,449) $ 1,063,063 Balances at December 31, 1998 $ 785 $ 161,878 $ 870,315 $ 39,485 $ (3,731) $ 1,068,732 Comprehensive income: Net income 101,125 101,125 $ 24,893 Unrealized gains, net of deferred tax of $14,620 and $9,366 27,123 27,123 17,427 Less: reclassification adjustment for gains in income, net of deferred tax of $31 (58) (58) Increase in unrealized gains on securities 27,065 27,065 17,427 Foreign currency translation adjustments 129 129 546 Total 101,125 27,194 128,319 $ 42,866 Dividends: declared and paid - $.42 per share (32,881) (32,881) Repurchase 655,100 Class A Common Shares (6) (29,095) (29,101) Compensation plans, net: 348,435 shares issued; 200 shares forfeited; 28,229 shares repurchased 3 6,204 (1,397) 4,810 Tax benefits of compensation plans 2,590 2,590 Balances at September 30, 1999 $ 782 $ 141,577 $ 938,559 $ 66,679 $ (5,128) $ 1,142,469 See notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information disclosed in the notes to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998, has not changed materially unless otherwise disclosed herein. Financial information as of December 31, 1998, included in these financial statements has been derived from the audited consolidated financial statements included in that report. In management's opinion all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the interim periods have been made. Results of operations are not necessarily indicative of the results that may be expected for future interim periods or for the full year. Net Income Per Share - The following table presents additional information about basic and diluted weighted-average shares outstanding: ( in thousands ) Three months ended Nine months ended September 30, September 30, 1999 1998 1999 1998 Basic weighted-average shares outstanding 77,874 79,874 77,969 80,212 Effect of dilutive securities: Unvested restricted stock held by employees 170 191 180 195 Stock options held by employees 881 976 851 1,041 Diluted weighted-average shares outstanding 78,925 81,041 79,000 81,448 Recently Issued Accounting Standards - The Financial Accounting Standards Board issued FAS No. 133 - Accounting for Derivative Instruments and Hedging Activities. As market conditions warrant, the Company uses foreign currency forward and option contracts to reduce the risk of changes in the exchange rate for the Japanese yen on the Company's anticipated net licensing receipts and forward contracts to reduce the risk of changes in the price of newsprint on anticipated purchases. The new standard, which must be adopted by January 1, 2001, will not have a material effect on the Company's financial position or its results of operations. Foreign currency forward and option contracts are currently recognized at fair value, however changes in the fair value of such contracts, which under current accounting rules are recognized immediately, will be initially reported as a separate component of comprehensive income and reclassified into earnings when the related licensing revenue is earned. Newsprint forward contracts, when used, are not recorded in the Company's balance sheet and gains and losses are deferred and recognized in income as the newsprint is consumed. Under the new standard newsprint forward contracts will be recorded at fair value and changes in the value of the contracts will be initially reported as a separate component of comprehensive income and reclassified into earnings when the newsprint is consumed. Use of Estimates - In the first quarter of 1999 the Company increased the estimated useful lives of network distribution fees to the greater of five years or the remaining terms of the distribution contracts. Because of the previous uncertainty regarding the conditions under which the distribution contracts would be renewed, such fees had been amortized over the terms of the contracts. The Company has committed to pay certain cable television system operators additional distribution fees to carry the networks on systems not included in the original distribution contracts. Management believes the expanded distribution of the networks will increase affiliate fee and advertising revenue beyond the remaining terms of the original distribution contracts. The change in the estimated amortization period was made to better match revenue and expense. Also in the first quarter of 1999 the Company increased the estimated useful lives of certain newspaper presses from 20 years to 30 years. The changes in estimated useful lives of the network distribution fees and the newspaper presses were made prospectively. The effect of these changes was to increase operating income $2,800,000 and net income $1,800,000 ($.02 per share) for the third quarter of 1999. The year-to-date increases were operating income, $9,100,000 and net income, $5,700,000 ($.07 per share). The effect of the changes on the full year 1999 will be to increase net income per share by approximately $.10. Reclassifications - For comparative purposes, certain 1998 amounts have been reclassified to conform to 1999 classifications.

2. ACQUISITIONS AND DIVESTITURES Acquisitions 1999 - In the first quarter the Company acquired the 70% of Colorado Real Estate On-Line, a provider of real estate listings on the Internet, that it did not already own for $1,100,000 and acquired an additional 1.86% interest in The Television Food Network for $2,400,000. 1998 - In the second quarter the Company acquired independent yellow page directories in Memphis, Tennessee, and Kansas City, Missouri, for $2,200,000. Divestitures 1998 - The Company sold Scripps Howard Productions, its program television production operation based in Los Angeles, in the second quarter and the Dallas, Texas, community newspapers, including the Plano daily in the fourth quarter. No material gain or loss was realized on either divestiture as proceeds approximated the book value of the net assets sold. Included in the consolidated financial statements are the following results of divested operations (excluding gains on sales): ( in thousands ) Three months Nine months ended ended September 30, September 30, 1998 1998 Operating revenues $ 3,400 $ 10,900 Operating income (loss) 200 (400) 3. UNUSUAL CREDITS AND CHARGES In addition to the change in accounting estimates, unusual items that affected the comparability of the Company's results of operations included the following: 1999 - In the third quarter the Company reduced revenue by $2,500,000 for "make goods" to Home & Garden Television ("HGTV") advertisers related to possible under delivery of audience levels since 1997. The accrual of make goods reduced net income by $1,600,000 ($.02 per share). In the third quarter the Company made severance payments totaling $1,200,000 to certain television station employees, reducing net income $700,000 ($.01 per share). The Company expects to incur additional severance costs totaling approximately $900,000 in the fourth quarter. In the third quarter the Company incurred costs totaling $800,000 to move the Television Food Network's operations to a different location in Manhattan, reducing net income $500,000 ($.01 per share). In the third quarter Scripps Ventures sold its interest in Family Point Inc. to iVillage Inc. for cash and stock, resulting in a gain of $8,600,000. Scripps Ventures also accrued $9,600,000 of incentive compensation for its managers in the third quarter. The incentive compensation is based on the Scripps Ventures portfolio's net gain (realized and estimated unrealized) of $71,000,000 as of September 30, 1999. The incentive compensation will be paid in 2001 based on the portfolio's return through June 2001. The estimated value of the portfolio on September 30, 1999, was $111,000,000 (see Note 5). The net effect of the gain and accrual was to reduce net income $700,000 ($.01 per share).

4. LONG-TERM DEBT Long-term debt consisted of the following: ( in thousands ) As of September 30, December 31, September 30, 1999 1998 1998 Variable rate credit facilities, including commercial paper $ 555,474 $ 567,561 $ 501,138 $100 million, 6.625% note, due in 2007 99,883 99,872 99,869 $100 million, 6.375% note, due in 2002 99,940 99,925 99,920 $30 million, 7.375% notes, due in 1998 29,826 Other notes 3,730 3,299 2,108 Total long-term debt 759,027 770,657 732,861 Current portion of long-term debt 257,158 268,780 231,019 Long-term debt (less current portion) $ 501,869 $ 501,877 $ 501,842 The Company has a Competitive Advance and Revolving Credit Facility Agreement, which permits aggregate borrowings up to $700,000,000 (the "Variable Rate Credit Facilities"). The Variable Rate Credit Facilities are comprised of two unsecured lines, one limited to $400,000,000 principal amount maturing in 2000, and the other limited to $300,000,000 principal amount maturing in 2002. Borrowings under the Variable Rate Credit Facilities are available on a committed revolving credit basis at the Company's choice of three short-term rates or through an auction procedure at the time of each borrowing. The Variable Rate Credit Facilities are also used by the Company in whole or in part, in lieu of direct borrowings, as credit support for its commercial paper. The weighted average interest rates on the Variable Rate Credit Facilities were 5.52% at September 30, 1999, 5.25% at December 31, 1998, and 5.59% at September 30, 1998.

5. INVESTMENTS Investments consisted of the following: ( in thousands ) As of September 30, December 31, September 30, 1999 1998 1998 Securities available for sale: Time Warner common stock (1,344,000 shares) $ 81,681 $ 83,446 $ 58,867 Garden.com Inc. (2,414,000 common shares and 276,000 warrants) 50,175 iVillage Inc. (270,000 common shares) 9,510 Other 9,069 5,075 7,446 Total securities available for sale 150,435 88,521 66,313 Investments accounted for using the equity method 6,582 5,599 6,050 Other 59,241 37,110 32,184 Total investments $ 216,258 $ 131,230 $ 104,547 Unrealized gains on securities available for sale $ 101,520 $ 59,866 $ 34,672 The Company records its investments at fair value, except for equity securities accounted for under the equity method or issued by private companies. All investments recorded at fair value have been classified as available for sale. The fair value of available-for-sale investments is determined by quoted market prices. The difference between cost and fair value, net of related tax effects, is recorded in the accumulated other comprehensive income component of stockholders' equity. In the third quarter of 1999 Scripps Ventures sold its interest in Family Point Inc. to iVillage Inc. (see Note 3). Also in the third quarter Garden.com Inc. completed an initial public offering of its common stock. The Company's investments in Garden.com Inc. and Family Point Inc. were previously included in other investments. Other investments are primarily venture capital investments in private companies. Because no quoted market prices are available, such investments are recorded at cost, net of impairment write-downs. However, based upon prices paid for shares in those companies by other investors in the most recent round of financings, the indicated value of those investments exceeds their recorded amount by $27,000,000, however, there is no assurance that the Company could sell these investments at the indicated values. 6. SEGMENT INFORMATION The Company's reportable segments are strategic businesses that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. The Company primarily evaluates the operating performance of its segments based on earnings before interest, income taxes, depreciation and amortization ("EBITDA"). EBITDA also excludes all credits and charges classified as non-operating in the Consolidated Statements of Income. No single customer provides more than 10% of the Company's revenue. The Company derives less than 10% of its revenues from markets outside of the U.S.

Financial information for the Company's business segments is as follows: ( in thousands ) Three months ended Nine months ended September 30, September 30, 1999 1998 1999 1998 OPERATING REVENUES Newspapers $ 221,999 $ 214,390 $ 666,632 $ 649,593 Broadcast television 72,205 72,615 229,177 236,163 Category television 51,468 35,838 157,254 102,033 Licensing and other media 24,227 20,580 78,572 69,361 Total $ 369,899 $ 343,423 $1,131,635 $1,057,150 EBITDA Newspapers $ 67,181 $ 63,589 $ 202,581 $ 191,936 Broadcast television 18,257 20,229 67,414 78,196 Category television (1,163) 1,347 18,121 1,163 Licensing and other media 1,892 2,116 8,667 8,249 Corporate (4,067) (4,514) (12,916) (12,933) Total $ 82,100 $ 82,767 $ 283,867 $ 266,611 DEPRECIATION Newspapers $ 10,595 $ 10,009 $ 28,355 $ 30,207 Broadcast television 4,367 3,466 13,470 11,220 Category television 1,447 1,065 3,896 3,537 Licensing and other media 540 200 1,141 624 Corporate 291 279 782 766 Total $ 17,240 $ 15,019 $ 47,644 $ 46,354 AMORTIZATION OF INTANGIBLE ASSETS Newspapers $ 5,440 $ 5,797 $ 16,679 $ 17,283 Broadcast television 2,367 2,405 7,107 7,215 Category television 1,574 2,093 4,756 5,639 Licensing and other media 62 (3) 253 2 Total $ 9,443 $ 10,292 $ 28,795 $ 30,139 OPERATING INCOME Newspapers $ 51,146 $ 47,783 $ 157,547 $ 144,446 Broadcast television 11,523 14,358 46,837 59,761 Category television (4,184) (1,811) 9,469 (8,013) Licensing and other media 1,290 1,919 7,273 7,623 Corporate (4,358) (4,793) (13,698) (13,699) Total $ 55,417 $ 57,456 $ 207,428 $ 190,118 OTHER NONCASH ITEMS Broadcast television $ 1,923 $ 1,673 $ 2,735 $ 243 Category television (5,123) 479 (37,843) (19,701) Licensing and other media (8) (258) Total $ (3,200) $ 2,144 $ (35,108) $ (19,716) Other noncash items include programming and program production expenses in excess of (less than) the amounts paid, and, for category television, amortization of network distribution fees in excess of (less than) distribution fee payments.

( in thousands ) Three months ended Nine months ended September 30, September 30, 1999 1998 1999 1998 ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT Newspapers $ 6,510 $ 5,447 $ 21,673 $ 17,446 Broadcast television 5,964 8,931 15,525 20,927 Category television 6,901 1,717 15,322 2,852 Licensing and other media 2,706 803 5,580 920 Corporate 231 168 513 728 Total $ 22,312 $ 17,066 $ 58,613 $ 42,873 BUSINESS ACQUISITIONS AND OTHER ADDITIONS TO LONG-LIVED ASSETS Newspapers $ 107 $ 113 $ 1,236 $ 893 Broadcast television 35 73 105 298 Category television 6,044 460 29,841 4,050 Licensing and other media 12,443 1,641 34,957 13,423 Total $ 18,629 $ 2,287 $ 66,139 $ 18,664 ASSETS Newspapers $1,222,443 $1,272,555 Broadcast television 503,194 500,477 Category television 432,868 313,034 Licensing and other media 264,008 143,983 Corporate 58,757 50,929 Total $2,481,270 $2,280,978 Other additions to long-lived assets include investments and network distribution fees. Corporate assets are primarily cash, short-term investments, and refundable and deferred income taxes.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The E. W. Scripps Company ("Company") operates in three reportable segments: Newspapers, Broadcast Television and Category Television. The newspaper segment includes 19 daily newspapers in the U.S. The broadcast television segment includes nine network-affiliated stations. The category television segment includes Home & Garden Television ("HGTV"), The Television Food Network ("Food Network"), Do It Yourself Network ("DIY") and the Company's 12% equity interest in FOX Sports South, a regional cable television network. Licensing and Other Media aggregates operating segments that are too small to warrant separate reporting, including syndication and licensing of news features and comics and publication of independent telephone directories. Earnings before interest, income taxes, depreciation and amortization ("EBITDA") is included in the discussion of results of operations because: Management believes the year-over-year change in EBITDA is a more useful measure of year-over-year economic performance than the change in operating income because, combined with information on capital spending plans, it is more reliable. Changes in amortization and depreciation have no impact on economic performance. Depreciation is a function of capital spending, the plan for which is important information so it is separately disclosed. Banks and other lenders use EBITDA to determine the Company's borrowing capacity. Financial analysts and acquirors use EBITDA, combined with capital spending requirements, to value communications media companies. EBITDA should not, however, be construed as an alternative measure of the amount of the Company's income or cash flows from operating activities. Consolidated results of operations were as follows: ( in thousands, except per share data ) Quarterly Period Year-to-Date 1999 Change 1998 1999 Change 1998 Operating revenues: Newspapers $ 221,999 5.2 % $ 210,941 $ 666,632 4.4 % $ 638,709 Broadcast television 72,205 (0.6)% 72,615 229,177 (3.0)% 236,163 Category television 51,468 43.6 % 35,838 157,254 54.1 % 102,033 Licensing and other media 24,227 17.7 % 20,580 78,572 13.3 % 69,361 Total 369,899 8.8 % 339,974 1,131,635 8.2 % 1,046,266 Divested operating units 3,449 10,884 Total operating revenues $ 369,899 7.7 % $ 343,423 $1,131,635 7.0 % $1,057,150 Operating income: Newspapers $ 51,146 7.4 % $ 47,612 $ 157,547 9.5 % $ 143,905 Broadcast television 11,523 (19.7)% 14,358 46,837 (21.6)% 59,761 Category television (4,184) (1,811) 9,469 (8,013) Licensing and other media 1,290 (32.8)% 1,919 7,273 (14.8)% 8,541 Corporate (4,358) (4,793) (13,698) (13,699) Total 55,417 (3.3)% 57,285 207,428 8.9 % 190,495 Divested operating units 171 (377) Total operating income 55,417 (3.5)% 57,456 207,428 9.1 % 190,118 Interest expense (11,279) (11,712) (33,378) (35,471) Miscellaneous, net (214) 285 2,740 (238) Income taxes (17,954) (18,852) (72,442) (63,191) Minority interest (1,077) (1,099) (3,223) (3,638) Net income $ 24,893 (4.5)% $ 26,078 $ 101,125 15.5 % $ 87,580 Per share of common stock: Net income $.32 $.32 $1.28 18.5 % $1.08 All per share disclosures are on a diluted basis.

Other financial and statistical data, excluding divested operations, is as follows: ( in thousands ) Quarterly Period Year-to-Date 1999 Change 1998 1999 Change 1998 Total advertising revenues $ 280,999 10.9 % $ 253,412 $ 862,941 10.3 % $ 782,228 Advertising revenues as a percentage of total revenues 76.0 % 74.5 % 76.3 % 74.8 % EBITDA: Newspapers $ 67,181 6.1 % $ 63,305 $ 202,581 6.2 % $ 190,787 Broadcast television 18,257 (9.7)% 20,229 67,414 (13.8)% 78,196 Category television (1,163) 1,347 18,121 1,163 Licensing and other media 1,892 2,116 8,667 (5.1)% 9,135 Corporate (4,067) (4,514) (12,916) (12,933) Total $ 82,100 (0.5)% $ 82,483 $ 283,867 6.6 % $ 266,348 Effective income tax rate 40.9 % 41.0 % 41.0 % 40.9 % Weighted-average shares outstanding 78,925 (2.6)% 81,041 79,000 (3.0)% 81,448 Cash provided by operating activities $ 59,014 $ 53,798 $ 141,935 $ 178,455 Capital expenditures (22,312) (17,018) (58,613) (42,674) Business acquisitions and other additions to long-lived assets (18,629) (2,287) (66,139) (18,664) Increase (decrease) in long-term debt (15,666) 8,195 (11,692) (40,369) Repurchase Class A Common shares (884) (48,272) (29,101) (62,161) Dividends paid, including minority interests (11,339) (11,621) (34,057) (33,421) In order to accurately assess underlying operating trends, management believes that the results of operations for each period should be analyzed after excluding the effects of certain unusual items, nonrecurring gains and losses, and divested operations. The following discussion and analysis focuses on amounts and trends excluding the impact of such unusual items and divested operations. The Company sold Scripps Howard Productions ("SHP"), the Company's television program production operation based in Los Angeles in the second quarter of 1998 and the Dallas, Texas, community newspapers, including the Plano daily, in the fourth quarter of 1998. No material gain or loss was realized on either as proceeds approximated the book value of the net assets sold. Unusual items and non-recurring gains and losses in the third quarter of 1999 that affected the comparability of reported results include the following: Category Television revenues were reduced by $2.5 million for "make goods" to HGTV advertisers related to possible under delivery of audience levels since 1997. In addition, the Company incurred costs totaling $0.8 million to move the Food Network operations to a different location in Manhattan. The accrual of make goods and the moving costs reduced EBITDA by $3.3 million and net income by $2.1 million ($.03 per share). Broadcast Television EBITDA was reduced $1.2 million by severance payments to certain television station employees, reducing net income $0.7 million ($.01 per share). The Company expects to incur additional severance costs totaling approximately $0.9 million in the fourth quarter. The Company sold its interest in Family Point Inc. to iVillage Inc. for cash and stock, resulting in a gain of $8.6 million, and accrued $9.6 million of incentive compensation for the managers of its venture capital fund (see Note 3). The net effect of the gain and accrual was to reduce net income $0.7 million ($.01 per share). Excluding the unusual items described above, third quarter earnings per share were $.36 in 1999 versus $.32 in 1998.

In the first quarter of 1999 the Company increased the estimated useful lives of network distribution fees to the greater of five years or the remaining terms of the distribution contracts. Also in the first quarter of 1999 the Company increased the estimated useful lives of certain newspaper presses from 20 years to 30 years. The changes in estimated useful lives were made prospectively. The effect of these changes was to increase EBITDA $1.8 million, operating income $2.8 million, and net income $1.8 million ($.02 per share) for the third quarter of 1999. The year-to-date increases were EBITDA, $5.9 million; operating income, $9.1 million; and net income, $5.7 million ($.07 per share). The effect of the changes on the full year 1999 will be to increase net income per share by approximately $.10. Excluding the change in accounting estimates, the divested operations, and the unusual items previously described, EBITDA increased 2.9% and operating income was flat in the third quarter. Year-to-date EBITDA increased 6.1% and operating income increased 6.5%. Operating results for the Company's reportable segments, excluding Divested Operations, are presented on the following pages. Interest expense decreased $2.1 million year-to-date as lower average interest rates more than offset increased average borrowings. The monthly average balance of interest-bearing obligations increased $23 million to $777 million. In the first quarter of 1999 the Company acquired the 70% of Colorado Real Estate On-Line, a provider of real estate listings on the Internet, that it did not already own for $1.1 million in cash and acquired an additional 1.86% interest in The Television Food Network for $2.4 million. In the second quarter of 1998 the Company acquired independent yellow page directories in Memphis, Tennessee, and Kansas City, Missouri, for $2.2 million.

NEWSPAPERS - Operating results, excluding Divested Operations, were as follows: ( in thousands ) Quarterly Period Year-to-Date 1999 Change 1998 1999 Change 1998 Operating revenues: Local $ 63,817 4.8 % $ 60,919 $ 197,934 4.3 % $ 189,761 Classified 74,306 10.6 % 67,186 214,057 7.8 % 198,604 National 7,629 7.5 % 7,099 24,499 24.9 % 19,618 Preprint and other 25,626 13.6 % 22,563 74,816 11.5 % 67,071 Newspaper advertising 171,378 8.6 % 157,767 511,306 7.6 % 475,054 Circulation 34,237 (8.8)% 37,561 106,793 (7.4)% 115,352 Joint operating agency distributions 12,479 5.4 % 11,836 36,826 2.6 % 35,879 Other 3,905 3.4 % 3,777 11,707 (5.8)% 12,424 Total operating revenues 221,999 5.2 % 210,941 666,632 4.4 % 638,709 Operating expenses: Employee compensation and benefits 74,319 7.1 % 69,413 219,674 4.7 % 209,774 Newsprint and ink 32,775 (8.0)% 35,617 104,360 (3.4)% 108,006 Other 47,724 12.0 % 42,606 140,017 7.6 % 130,142 Depreciation and amortization 16,035 2.2 % 15,693 45,034 (3.9)% 46,882 Total operating expenses 170,853 4.6 % 163,329 509,085 2.9 % 494,804 Operating income $ 51,146 7.4 % $ 47,612 $ 157,547 9.5 % $ 143,905 Other Financial and Statistical Data: EBITDA $ 67,181 6.1 % $ 63,305 $ 202,581 6.2 % $ 190,787 Percent of operating revenues: Operating income 23.0 % 22.6 % 23.6 % 22.5 % EBITDA 30.3 % 30.0 % 30.4 % 29.9 % Capital expenditures $ 6,510 $ 5,399 $ 21,673 $ 17,247 Business acquisitions and other additions to long-lived assets 107 113 1,236 893 Newspaper results continue to be affected negatively by the effort to gain market share in Denver. Circulation revenue decreased primarily due to promotions and discounts offered in the Denver market. Increased newspaper distribution, subscriber solicitation and marketing costs account for 65% of the increase in third quarter other cash expenses. Excluding Denver, EBITDA increased 9% in the third quarter and 9.5% year-to-date. Newsprint costs decreased in the third quarter due to a 20% decrease in newsprint prices, which was partially offset by a 13% increase in newsprint consumed. The increase in consumption is primarily due to a 19% year-over-year increase in circulation in the Denver market. The change in the maximum estimated lives of newspaper presses from 20 years to 30 years reduced depreciation expense by approximately $0.9 million in the third quarter and $2.6 million year-to-date. The change will have a similar effect on fourth quarter depreciation.

BROADCAST TELEVISION - Operating results were as follows: ( in thousands ) Quarterly Period Year-to-Date 1999 Change 1998 1999 Change 1998 Operating revenues: Local $ 39,248 6.8 % $ 36,749 $ 125,689 3.4 % $ 121,503 National 27,758 0.5 % 27,613 88,348 (5.6)% 93,618 Political 979 (74.0)% 3,767 1,508 (79.2)% 7,249 Other 4,220 (5.9)% 4,486 13,632 (1.2)% 13,793 Total operating revenues 72,205 (0.6)% 72,615 229,177 (3.0)% 236,163 Operating expenses: Employee compensation and benefits 27,240 4.9 % 25,971 80,614 1.8 % 79,180 Syndicated programs and copyrights 14,618 5.0 % 13,925 42,809 5.4 % 40,609 Other 12,090 (3.2)% 12,490 38,340 0.4 % 38,178 Depreciation and amortization 6,734 14.7 % 5,871 20,577 11.6 % 18,435 Total operating expenses 60,682 4.2 % 58,257 182,340 3.4 % 176,402 Operating income $ 11,523 (19.7)% $ 14,358 $ 46,837 (21.6)% $ 59,761 Other Financial and Statistical Data: EBITDA $ 18,257 (9.7)% $ 20,229 $ 67,414 (13.8)% $ 78,196 Percent of operating revenues: Operating income 16.0 % 19.8 % 20.4 % 25.3 % EBITDA 25.3 % 27.9 % 29.4 % 33.1 % Capital expenditures $ 5,964 $ 8,931 $ 15,525 $ 20,927 Business acquisitions and other additions to long-lived assets 35 73 105 298 Year-over-year revenue comparisons improved in the third quarter, partly due to the softness of the prior year period. Third quarter 1998 revenues were 5.6% less than 1997, despite $3.8 million of political advertising in the 1998 period compared to $0.4 million in the 1997 period. Comparisons in the fourth quarter will be difficult because of the $12.8 million in political advertising revenue in the 1998 period. Other revenue is primarily network compensation. The Company's network compensation revenues decreased $1.1 million year-to-date, and are expected to be down approximately $3.0 million, to $13.0 million, for the full year of 1999. Network compensation revenues are expected to be approximately $10.0 million in 2000 and 2001. These reductions in network compensation will be partially offset by advertising revenue from additional spots provided to the stations for local sales. Employee compensation and benefits in the third quarter of 1999 includes termination benefits totaling $1.2 million. The Company expects to incur employee termination costs of approximately $0.9 million in the fourth quarter. Excluding the termination benefits, employee compensation and benefits were flat.

CATEGORY TELEVISION - Operating results were as follows: ( in thousands ) Quarterly Period Year-to-Date 1999 Change 1998 1999 Change 1998 Operating revenues: Advertising $ 34,849 52.5 % $ 22,847 $ 111,557 68.8 % $ 66,099 Affiliate fees 13,012 37.1 % 9,491 37,651 36.6 % 27,565 Other 3,607 3.1 % 3,500 8,046 (3.9)% 8,369 Total operating revenues 51,468 43.6 % 35,838 157,254 54.1 % 102,033 Operating expenses: Employee compensation and benefits 13,065 60.9 % 8,121 36,851 55.7 % 23,665 Programming and production 18,913 56.1 % 12,117 49,312 46.0 % 33,766 Network distribution 3,721 0.4 % 3,708 11,607 (1.1)% 11,742 Other 16,932 60.6 % 10,545 41,363 30.5 % 31,697 Depreciation and amortization 3,021 (4.3)% 3,158 8,652 (5.7)% 9,176 Total operating expenses 55,652 47.8 % 37,649 147,785 34.3 % 110,046 Operating income (loss) $ (4,184) $ (1,811) $ 9,469 $ (8,013) Other Financial and Statistical Data: EBITDA $ (1,163) $ 1,347 $ 18,121 $ 1,163 Payments for programming and network distribution fees less than (greater than) amounts recognized as expense (5,123) 479 (37,843) (19,701) Capital expenditures 6,901 1,717 15,322 2,852 Business acquisitions and other additions to long-lived assets 6,044 460 29,841 4,050 In the third quarter of 1999 the Company reduced revenue $2.5 million for potential make goods to HGTV advertisers related to possible under delivery of audience levels since 1997. Excluding the accrual of the make goods, advertising revenue increased 63%. Based upon advance advertising sales, advertising revenues in the fourth quarter of 1999 are expected to increase approximately 85% over the fourth quarter of 1998. According to the Nielsen Homevideo Index ("Nielsen"), HGTV was distributed to 57.9 million homes in September 1999, up 12.8 million from September 1998 and up 2.7 million in the quarter. According to Nielsen, Food Network was distributed to 42.4 million homes in September 1999, up 7.9 million from September 1998 and up 1.6 million in the quarter. Program and production costs have increased as the Company improves the quality and variety of programming and expands the hours of original programming presented on its networks. Third quarter 1999 other cash expenses include $0.8 million to move Food Network's operations to a different location in Manhattan. Excluding the accrual of the make goods and the moving costs, EBITDA increased 59% to $2.1 million in the third quarter of 1999. Third quarter EBITDA for HGTV was $3.4 million in 1999 and $0.9 million in 1998. Year-to-date EBITDA was $18.2 million in 1999 and $6.1 million in 1998. EBITDA for Food Network was a loss of $1.8 million in 1999 compared to a loss of $2.3 million in 1998. Year-to-date EBITDA was $2.0 million in 1999 compared to a loss of $6.5 million in 1998. The increase in additions to long-lived assets is primarily due to fees paid for expanded distribution of the networks and investments in Internet ventures. The Company expects to continue to expand distribution of HGTV and Food Network. Such expansion may require the payment of distribution fees to obtain carriage on additional cable television systems. Network distribution represents the amortization of those fees over the estimated lives of the distribution agreements. In the first quarter of 1999 the Company increased the amortization period of such fees to the greater of five years or the remaining terms of the initial distribution contracts. The change in estimated lives reduced network distribution $1.8 million in the third quarter and $5.9 million year-to-date.

LIQUIDITY AND CAPITAL RESOURCES The Company generates significant cash flow from operating activities, primarily from its newspaper and broadcast television operating segments. There are no significant legal or other restrictions on the transfer of funds among the Company's business segments. Cash flow provided by the operating activities of the newspaper and broadcast television segments in excess of the capital expenditures of those segments is used primarily to invest in the category television segment, to fund corporate expenditures, or to invest in new businesses. Management expects total cash flow from operating activities in 1999 will be sufficient to meet the Company's expected total capital expenditures, required interest payments and dividend payments. Cash flow from operating activities was $142 million in year-to-date 1999 compared to $178 million in 1998. Increases in working capital employed by the category television segment combined with increased spending to improve programming and to expand distribution of HGTV and Food Network were the primary causes of the decrease. Net debt (borrowings less cash equivalent and other short-term investments) totaled $759 million at September 30, 1999. The Company currently intends to repay debt only when there are not more productive uses for excess cash. Cash flow from operating activities and the increase in net debt was used for capital expenditures of $58.6 million, dividend payments of $34.1 million, business acquisitions and other investments of $43.4 million, and the repurchase of 0.7 million Class A Common Shares at a cost of $29.1 million. The 1998 authorization by the Board of Directors allows for the repurchase of an additional 2.4 million shares. Management believes the Company's cash flow from operations and substantial borrowing capacity, taken together, provide adequate resources to fund expansion of existing businesses and the development or acquisition of new businesses. YEAR 2000 READINESS Items disclosed herein constitute "Y2000 Readiness Disclosures" under the Year 2000 Information and Readiness Disclosure Act. Description and Company Plans The Year 2000 ("Y2K") issue results from computer programs, computer equipment and certain embedded chips using two digits rather than four to define the year. Computer applications and equipment that use date- sensitive software or date-sensitive embedded chips may recognize a date of "00" as the year 1900 instead of the year 2000. As a result, those computer applications may fail or improperly process financial transactions. The term "Y2K compliant" as used throughout this document means that the relevant hardware, software, embedded chips or interfaces specifically referenced herein will correctly process, provide and receive date data within and between the 20th and 21st centuries. The Company's Y2K remediation project includes the following phases: identifying and assessing the Y2K issue, determining required revisions to or replacements of affected computer applications and equipment, testing of those revisions and replacements, developing contingency plans in the event that revisions and replacements are not completed timely or do not fully remediate the Y2K issues.

Identification and Assessment of Y2K Issues The identification and assessment phase was completed in 1998. This phase included a comprehensive inventory of internally developed computer applications, computer applications and computer hardware purchased or licensed from third parties (which includes the majority of the Company's computer software applications), and other equipment with embedded chips. The inventoried applications and equipment were evaluated to identify Y2K issues. Y2K issues were identified based upon review of applications and equipment by the Company and/or communication with the vendor. This phase also included an assessment of the impact of failing to remediate identified Y2K issues on the Company's business operations, results of operations, and financial condition. Based upon the identification of Y2K issues and assessment of the effect of those issues, each of the computer applications and items of equipment with embedded chips were assigned to one of the following categories: 1) applications and equipment that, if they were to fail, would seriously impair the Company's ability to operate its business, 2) applications and equipment that, if they were to fail, would affect business operations but would not prevent the Company from inserting advertising, printing and delivering newspapers, or broadcasting its programs, 3) applications and equipment that, if they were to fail, would have little or no effect on business operations. The Company created a central data base identifying all inventoried applications and equipment, Y2K issues identified, the priority of remediation based upon the perceived business risk, the method of remediation (upgrade or replace), and targeted remediation completion date. Approximately 40% of the Company's applications were classified in the highest priority and 33% in the second priority. The identification and assessment phase also included communications with significant vendors, suppliers and customers to determine the extent to which the Company's systems and business operations are vulnerable if those third parties fail to remediate their own Y2K issues. Y2K Remediation Efforts The Company's plan of remediation includes a mix of installing new applications and equipment, upgrading existing applications and equipment, retiring obsolete systems and equipment, testing compliant and remediated systems and equipment, and confirming significant third party compliance. A discussion of the identified Y2K issues that could materially affect each of the Company's business segments and the Company's plan of remediation follows. Newspapers The Company uses a variety of newspaper circulation, advertising and editorial computer systems in the production of its newspapers. The Company began replacing most of its internally developed software with applications developed by third-party software vendors and upgrading other applications several years ago. Most of these systems have been installed and implemented. Vendors have either certified their applications to be Y2K compliant or have Y2K-compliant upgrades currently available. Equipment and applications used in producing, printing, sorting and distributing newspapers use software or embedded chips that are not Y2K compliant. Management has determined that in many instances this equipment is not date dependent and the internal calendars can be set back to an earlier year without affecting the operation of the equipment. Other equipment and software will have to be upgraded or replaced. As of early November, the Company had verified compliance or completed upgrades or replacements of 93% of newspaper systems included in the highest priority, and 93% of those included in the second priority. Remediation of the remaining systems is expected to be completed by mid-November. Management anticipates increasing its newsprint inventories in the latter part of 1999 to mitigate the effect of any temporary disruption in the delivery of newsprint or any disruption in the operation of newsprint mills. The Company's Cincinnati, Birmingham and Albuquerque newspapers operate under joint operating agreements ("JOAs") whereby the Company receives a portion of the JOA profits from the managing party. The Company has discussed Y2K issues with the managing parties to ensure the managing parties are addressing their Y2K issues. The Company's share of JOA profits could be adversely affected if those managing parties experience a significant disruption in business operations; however management believes the possibility of a significant disruption is unlikely.

Broadcast Television The Company receives network and syndicated programming via satellite. The Company's receipt of that programming is dependent upon the broadcast networks and program syndicators resolving their Y2K issues. The Company has completed tests of the affiliate networks with NBC and ABC. Based upon such tests the Company expects it will be able to receive programming from the networks after 1999. Management does not anticipate any disruption in receiving programming, but in the event of such a disruption the Company has alternative programming available. The Company uses advertising inventory management software to manage, schedule and bill advertising in each of the Company's broadcast television markets. This software is licensed from two different vendors. One system, which is used in three of the Company's markets, was certified Y2K-compliant by the vendor. The Company completed installation of a Y2K-compliant upgrade of the other system during the second quarter of 1999. In addition, the insertion of advertising into program breaks is automated by computer-controlled equipment. The Company has recently completed upgrades or installed new insertion equipment at its television stations. The Company can perform these functions manually in the event of unforeseen failure of the systems. The Company uses various broadcast and studio equipment to produce and transmit its broadcast signals. Although much of this equipment includes embedded chips, the Company's tests of this equipment indicate it will continue to operate after 1999. As of early November, the Company had verified compliance or completed upgrades or replacements of 96% of broadcast television systems included in the highest priority, and 100% of those included in the second priority. Remediation of the remaining systems is expected to be completed by mid-November. Category Television The Company uses advertising inventory management software to manage, schedule and bill advertising, and computer-controlled equipment is used to insert advertising into program breaks. Y2K-compliant upgrades of all non-compliant systems were installed in the second quarter of 1999. The Company can perform these functions manually in the event of unforeseen failure of the systems. The Company transmits its network programming to cable television and direct broadcast satellite systems via satellite. Management has determined that certain equipment, while noncompliant, will continue to function after 1999 and therefore does not need to be upgraded or replaced. As of early November, the Company had verified compliance or completed upgrades or replacements of 94% of category television systems included in the highest priority, and 97% of those included in the second priority. Remediation of the remaining systems is expected to be completed by mid-November. Management believes the satellites used in transmitting the Company's networks are Y2K compliant and has received written assurances to that effect. However, the Company understands that much of the headend equipment controlling set-top boxes for virtually all cable television subscribers had to be upgraded or replaced. Based upon Y2K disclosures of Company's in the cable television industry, management understands that equipment and set-top box manufacturers and the cable television industry have developed solutions that cable television systems have installed and successfully tested.

Testing of Upgrades and Replacements The Company's Y2K remediation program includes testing of applications and equipment identified by the Company as compliant or certified as compliant by the vendor. The Company's Y2K remediation program also includes testing of upgrades and replacements of noncompliant systems and equipment as those upgrades and replacements are installed and upon completion of the installations. As previously noted, the Company has completed testing of more than 90% of its two highest priority systems. Installation and testing of the remaining systems in those two priorities will be completed by mid-November. Testing of the Company's systems included the use of dates that simulated transactions and environments, both before and after the year 2000, including leap year. While that testing provided assurance that the upgrades and replacements installed by the Company perform as designed, it is not possible for the Company to completely simulate the effect of the year 2000 when testing the Company's systems, and certain embedded chips cannot be tested. Costs of Y2K Remediation Program The Company does not routinely accumulate costs of the Company's Y2K remediation program. The total costs of the program, including capital spending on equipment and computer software, are estimated at less than $10 million. This estimate does not include the costs of labor and other internal resources. The majority of these costs would have been incurred regardless of the Y2K issue, although the Y2K issue has slightly accelerated the Company's plans to replace certain equipment and computer software. Management believes the redeployment of internal resources and the acceleration of these projects has not had a material adverse effect on other business operations. Risks of Y2K Issues and Contingency Plans Like all large companies, the Company is dependent on the continued functioning of basic, heavily computerized services such as banking, telephony and electric power. Management has attempted to ensure that the third parties upon which the Company relies address their Y2K issues, but management has no direct knowledge of those issues and cannot estimate the costs to the Company if such issues are not remedied. Management believes the possibility of failure of these critical third party systems is unlikely. As part of normal business practices, the company maintains site- specific emergency plans to be followed during emergency circumstances, such as failure of editorial systems, printing presses or broadcast equipment. These emergency plans have been updated with a variety of internal and external scenarios that might occur as a result of the Y2K issue, and specify alternatives if any Y2K-related business disruption occurs. The Company will continue to update those plans throughout the remainder of 1999 based upon the progress of the Y2K remediation program. The Company has imposed a "quiet" period at the beginning of the fourth quarter of 1999 during which any installation or modification of systems that interface with other systems will be minimized. The Company has also frozen technology updates and installation of new systems, to the extent possible, until the first quarter of 2000. This "quiet" period permits the Company to continue testing in a stable environment and minimizes the impact that any new technology might have on Y2K issues. Management believes it has an effective program to resolve the Y2K issue in a timely manner and that its Y2K issues have been substantially remediated. Based upon assessment of its internal systems and the status of its Y2K remediation efforts, management does not expect the Y2K issue to pose significant problems for the Company's operations or to have a material effect on the Company's results of operations or financial condition. However, if the Company's Y2K remediation program does not fully remediate the effects of the Y2K issue, or if third parties fail to remediate their own Y2K issues, the Company could experience a material disruption in its business operations. In addition, disruptions in the general economy as a result of the Y2K issue could lead to a reduction of advertising spending which could adversely affect the Company.

THE E. W. SCRIPPS COMPANY Index to Exhibits Exhibit No. Item Page 12 Ratio of Earnings to Fixed Charges E-2

RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 ( in thousands ) Three months ended Nine months ended September 30, September 30, 1999 1998 1999 1998 EARNINGS AS DEFINED: Earnings from operations before income taxes after eliminating undistributed earnings of 20%- to 50%-owned affiliates $ 43,719 $ 45,014 $ 176,730 $ 154,177 Fixed charges excluding capitalized interest and preferred stock dividends of majority-owned subsidiary companies 12,639 13,039 37,421 39,249 Earnings as defined $ 56,358 $ 58,053 $ 214,151 $ 193,426 FIXED CHARGES AS DEFINED: Interest expense, including amortization of debt issue costs $ 11,279 $ 11,712 $ 33,378 $ 35,471 Interest capitalized 333 122 342 222 Portion of rental expense representative of the interest factor 1,360 1,327 4,043 3,778 Preferred stock dividends of majority-owned subsidiary companies 20 20 60 60 Fixed charges as defined $ 12,992 $ 13,181 $ 37,823 $ 39,531 RATIO OF EARNINGS TO FIXED CHARGES 4.34 4.40 5.66 4.89

5 1000 9-MOS DEC-31-1999 SEP-30-1999 14,726 66 246,372 11,358 15,387 443,678 940,944 458,508 2,481,270 554,890 501,869 0 0 782 1,141,687 2,481,270 0 1,131,635 0 0 916,650 7,557 33,378 176,790 72,442 101,125 0 0 0 101,125 $1.30 $1.28

5 1000 YEAR 9-MOS DEC-31-1998 DEC-31-1998 DEC-31-1998 SEP-30-1998 15,419 14,966 20,551 2,529 234,372 202,519 7,689 7,742 15,009 15,896 419,327 378,929 908,218 895,121 428,932 421,136 2,359,374 2,280,978 546,767 490,491 501,877 501,842 0 0 0 0 785 796 1,067,947 1,062,267 2,359,374 2,280,978 0 0 1,454,555 1,057,150 0 0 0 0 1,169,539 860,608 8,972 6,424 47,108 35,471 229,162 154,409 93,075 63,191 131,214 87,580 0 0 0 0 0 0 131,214 87,580 $1.65 $1.09 $1.62 $1.08