Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 7, 2008
THE E.W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
| Ohio | 0-16914 | 31-1223339 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer 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 or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of
the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
THE E.W. SCRIPPS COMPANY
INDEX TO CURRENT REPORT ON FORM 8-K
| Item No. | Page | |||||||
| Results of Operations and Financial Condition | 3 | |||||||
| Financial Statements and Exhibits | 3 | |||||||
| EX-99 | ||||||||
Table of Contents
Item 2.02. Results of Operations and Financial Condition
On November 7, 2008, we released information regarding results of operations for the quarter and
year-to-date periods ended September 30, 2008. A copy of the press release is filed as Exhibit 99.
The discussion and the information contained in the press release contain certain forward-looking
statements related to the company’s businesses that are based on our current expectations.
Forward-looking statements are subject to certain risks, trends, and uncertainties that could cause
actual results to differ materially from the expectations expressed in the forward-looking
statements. Such risks, trends and uncertainties, which in most instances are beyond our control,
include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint
prices; program costs; labor relations; technological developments; competitive pressures; interest
rates; regulatory rulings; and reliance on third-party vendors for various products and services.
The words “believe,” “expect,” “anticipate,” “estimate,” “intend,” and similar expressions identify
forward-looking statements. All forward-looking statements, which are as of the date of this
filing, should be evaluated with the understanding of their inherent uncertainty. We undertake no
obligation to publicly update any forward-looking statement to reflect events or circumstances
after the date the statement is made.
Item 9.01. Financial Statements and Exhibits
| (d) | Exhibits | ||
| 99 Press release dated November 7, 2008. |
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE E.W. SCRIPPS COMPANY |
||||
| BY: /s/ Douglas F. Lyons | ||||
| Douglas F. Lyons | ||||
| Vice President and Controller | ||||
Dated: November 7, 2008
| PRESS RELEASE | EXHIBIT 99 |
Scripps reports third-quarter results
Board suspends dividend; restructuring announced at company’s newspapers
Board suspends dividend; restructuring announced at company’s newspapers
| For immediate release November 7, 2008 |
(NYSE: SSP) |
CINCINNATI – The E.W. Scripps Company today reported third-quarter operating results for its
television, newspaper, and licensing and syndication businesses. The operations that formerly
comprised the company’s Scripps Networks and interactive media divisions, which were spun off into
a separate publicly traded company on July 1, 2008, are reported in previous periods as discontinued operations.
Third-quarter results reflect continued weakness in advertising sales at the company’s newspapers
and television stations. The company’s revenue decreased 9.0 percent to $230 million, compared with
$253 million in the third quarter of 2007.
The company reported a loss from continuing operations of $21.0 million, or 39 cents per share,
compared with income of $16.6 million, or 31 cents per share in the year-ago quarter. The per-share
figures are adjusted for a 1-for-3 reverse stock split that was approved on July 15, 2008. The loss
from continuing operations in the 2008 quarter was increased by costs related to the separation of
the Scripps Networks and interactive media businesses totaling $22.0 million, as well as a $24.9
million non-cash charge to further write down the investment in our Denver newspaper partnership.
“Behind all the accounting noise related to the separation is a healthy company built upon a
collection of solid media businesses in attractive local markets,” said Rich Boehne, president and
CEO of Scripps. “Even through these challenging economic times, Scripps is fortunate to be able to
focus on the opportunities ahead as local media markets adjust to the full impact of the Internet
and other digital media platforms.
“To put Scripps in the best possible position to exploit opportunities and build value for
shareholders during this period of economic uncertainty, we’ve made a series of decisions -
including headcount reductions, suspension of the dividend and other expense reductions — that will
keep our debt low and balance sheet healthy. These are unusual times, not without difficulty and
peril. But we believe dedication to strong financial health in the short term will yield outsized
returns over the long term for those in position to exploit the transformation of our industry.”
Now that Scripps is a standalone organization focused on local media, it will disclose results with
the following reporting segments: 1) Newspapers (enterprises managed solely by Scripps), 2) Joint
operating agreements (JOA) and newspaper partnerships (encompassing the JOA in Denver, and the
newspaper partnerships in Colorado and New Mexico), 3) Television, and 4) Licensing and other
media.
Third-quarter results by segment are as follows:
Newspapers
Year-over-year revenue from newspapers operated solely by Scripps fell 17 percent to $131 million.
Advertising revenue was down 20 percent to $101 million.
Advertising revenue broken down by category was:
| • | Local, down 16 percent to $27.3 million | ||
| • | Classified, down 28 percent to $33.6 million | ||
| • | National, down 31 percent to $5.9 million | ||
| • | Preprint and other, down 10 percent to $24.8 million | ||
| • | Online, down 12 percent to $9.1 million |
The decline in online ad revenue is attributable to the weakness in print classified advertised, to
which most of the online advertising is tied. Revenue from pure-play advertisers who only purchase
ads on the company’s newspaper Web sites rose 13.4 percent in the period.
Circulation revenue was $26.6 million, down 7.6 percent.
Due to significantly lower usage, newsprint expense declined 2.6 percent to $15.7 million, despite
an increase in pricing of about 32 percent over the prior-year period.
Cash expenses for Scripps newspapers were down 6.7 percent from the prior year, including the
favorable impact of a $3.0 million adjustment for self-insured health care and disability claims.
Segment profit at newspapers managed solely by the company was $14.0 million, compared with $32.7
million in the third quarter of 2007.
JOA / Newspaper Partnerships
The Scripps share of income from the Denver JOA and newspaper partnerships fell to $2.1 million in
the third quarter, compared with $8.0 million in the prior-year period. JOA editorial costs and
expenses fell 19 percent to $5.1 million.
The segment loss of $3.1 million compared with segment profit of $1.7 million in the 2007 quarter.
Television
Revenue from the company’s television stations was $76.9 million in the third quarter, an increase
of 5.0 percent over the third quarter of 2007.
Revenue broken down by category was:
| • | Local, down 6.4 percent to $42.4 million | ||
| • | National, down 14.6 percent to $19.5 million | ||
| • | Political, $10.3 million compared with $700,000 in the 2007. |
The company’s three NBC affiliates – in Kansas City, Mo., West Palm Beach, Fla., and Tulsa, Okla. –
benefitted from Olympics-related programming in August. The three stations booked $4.7 million in
revenue tied to the summer games, compared with $3.2 million during the Olympic period in 2004.
Cash expenses for the station group were $60.0 million, including a favorable adjustment of $1.2
million for self-insured health care and disability claims. In the 2007 quarter, cash expenses were
$60.0 million.
Segment profit for the broadcast television division was $17.0 million in the third quarter, a 28
percent increase over the 2007 quarter.
Licensing and Other Media
Revenue was $22.2 million, compared with $21.2 million in the prior-year period. Cash expenses were
flat year over year, resulting in segment profit that increased from $1.3 million to $1.5 million.
Year-To-Date Snapshot
Revenue from continuing operations through the first three quarters of the year was
$737 million, compared with $797 million in 2007.
The year-to-date results reflect the impairment of goodwill and certain equity investments in the
company’s newspaper segment, as mentioned in an Aug. 11, 2008, announcement. The non-cash charges
totaled of $899 million.
Through the first nine months of the year, the company reported a loss from continuing operations
of $621 million. Excluding the effects of the separation costs and impairment charges, income from
continuing operations in the first three quarters would have been $26.8 million, or 48 cents per
share, compared with $28.2 million, or 52 cents per share, in the same period a year ago.
Dividend
Management previously has indicated that 2009 will be a challenging year for the company, with
broad economic uncertainty and advertising weakness projected to continue into next year, newsprint
prices at historical highs, the relative lack of political advertising, and the final year of
higher-than-normal capital expenditures to complete the newspaper production facility that will
serve the high-growth markets of Naples and Bonita Springs, Fla.
To improve the company’s financial flexibility and position Scripps to seize potential
opportunities during this period, the board of directors has suspended the company’s quarterly
dividend.
On Sept. 10, 2008, the company paid a quarterly dividend of 15 cents per share.
Share Repurchases
During the third quarter, Scripps repurchased 790,500 shares of its Class A Common stock at an
average price of $7.16. From Oct. 1 to Oct. 15 the company repurchased an additional 329,500 shares
at an average price of $5.74, completing a share repurchase program initiated on Aug. 15 and
exhausting the company’s current board authorization.
Newspaper restructuring
The company’s fourth-quarter operating income will include a one-time cash charge of approximately
$5 million for severance and other expenses related to restructurings at the company’s newspapers.
Scripps publishers notified affected employees yesterday.
The restructurings, sought by the publishers in a continuing effort to reduce costs in response to
the rapidly changing business conditions in their local newspaper markets, will be completed in the
fourth quarter. The workforce reduction affects approximately 400 employees, resulting in annual
payroll and benefits savings of roughly $15 million.
“Our publishers were careful to maintain our commitment to a strong local news product, and they
retain the ability to fully serve the needs of our advertisers,” said Boehne. “These restructurings
will allow us to continue building audience and revenue in print, online and through niche
products. We regret that this action was necessary, but our customers should view this announcement
as a signal of our dedication to serving these markets for the long term.”
The employee population at newspapers owned solely by Scripps has been declining steadily in recent
years. Since 2006, excluding the job reductions announced today, more than 625 employees, or 13
percent of the newspaper workforce, have exited Scripps newspapers, largely through attrition,
voluntary separation packages and consolidation of functions. The employee count in the newspaper
division at the end of 2008 will be under 4,000.
Outlook
Fast-changing economic conditions, which weigh heavily on the decisions of advertisers, complicate
the forecasting of fourth-quarter performance. Management believes that the third-quarter revenue
and expense trends will continue into the fourth quarter.
Conference call
The senior management of The E.W. Scripps Company will discuss the company’s third-quarter results
during a telephone conference call at 10 a.m. EDT today. Scripps will offer a live audio webcast of
the conference call. To access the webcast, visit www.scripps.com, choose “Shareholders”
then follow the link in the “Upcoming Events” section.
To access the conference call by telephone, dial 1-800-288-8960 (U.S.) or 1-612-234-9959
(International), approximately 10 minutes before the start of the call. Callers will need the name
of the call (“third-quarter earnings report”) to be granted access.
Callers also will be asked to
provide their name and company affiliation. The media and general public are provided access to the
conference call on a listen-only basis.
A replay line will be open from noon EST Nov. 7 until 11:59 p.m. EST Nov. 14. The domestic number
to access the replay is 1-800-475-6701 and the international number is 1-320-365-3844. The access
code for both numbers is 964814.
A replay of the conference call will be archived and available online for an extended period of
time following the call. To access the audio replay, visit www.scripps.com approximately
four hours after the call, choose “Shareholders” then follow the “audio archives” link on the left
navigation bar.
Forward-looking statements
This press release contains certain forward-looking statements related to the company’s businesses
that are based on management’s current expectations. Forward-looking statements are subject to
certain risks, trends and uncertainties, including changes in advertising demand and other economic
conditions that could cause actual results to differ materially from the expectations expressed in
forward-looking statements. All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty. The company’s written policy on forward-looking
statements can be found on page F-5 of its 2007 SEC Form 10K. We undertake no obligation to
publicly update any forward-looking statements to reflect events or circumstances after the date
the statement is made.
About Scripps
The E.W. Scripps Company is a diverse, 130-year-old media enterprise with interests in television
stations, newspapers, local news and information web sites, and licensing and syndication. The
company’s portfolio of locally focused media properties includes: 10 TV stations (six ABC
affiliates, three NBC affiliates and one independent); daily and community newspapers in 15 markets
and the Washington, D.C.-based Scripps Media Center, home of the Scripps Howard News Service; and
United Media, the licensor and syndicator of Peanuts, Dilbert and approximately 150 other features
and comics. For a full listing of Scripps media companies and their associated Web sites, visit
www.scripps.com.
###
Tim King, The E.W. Scripps Company, 513-977-3732
Email: tim.king@scripps.com
Email: tim.king@scripps.com
THE E. W. SCRIPPS COMPANY
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (in thousands, except per share data) | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||||||||
Operating revenues |
$ | 230,278 | $ | 253,102 | (9.0 | )% | $ | 736,866 | $ | 797,238 | (7.6 | )% | ||||||||||||
Costs and
expenses, excluding separation costs |
(209,173 | ) | (225,712 | ) | (7.3 | )% | (674,810 | ) | (706,803 | ) | (4.5 | )% | ||||||||||||
Separation costs |
(22,020 | ) | (257 | ) | (31,629 | ) | (257 | ) | ||||||||||||||||
Depreciation and amortization of intangibles |
(12,153 | ) | (11,330 | ) | 7.3 | % | (34,758 | ) | (33,299 | ) | 4.4 | % | ||||||||||||
Write-down of newspaper goodwill |
(778,900 | ) | ||||||||||||||||||||||
Gains (losses) on disposal of property, plant and
equipment |
(17 | ) | (188 | ) | 2,244 | (256 | ) | |||||||||||||||||
Operating income (loss) |
(13,085 | ) | 15,615 | (780,987 | ) | 56,623 | ||||||||||||||||||
Interest expense |
(8,856 | ) | (10,999 | ) | (29,123 | ) | (62.2 | )% | ||||||||||||||||
Equity in earnings of JOAs and other joint ventures |
1,902 | 7,978 | (76.2 | )% | 12,875 | 16,705 | (22.9 | )% | ||||||||||||||||
Write-down of investments in newspaper partnerships |
(24,908 | ) | (119,908 | ) | ||||||||||||||||||||
Loss on repurchases of debt |
(26,380 | ) | ||||||||||||||||||||||
Miscellaneous, net |
(320 | ) | 12,042 | 7,776 | 14,195 | |||||||||||||||||||
Income (loss) from continuing operations before income
taxes and minority interests |
(36,411 | ) | 26,779 | (917,623 | ) | 58,400 | ||||||||||||||||||
Benefit (provision) for income taxes |
15,486 | (9,983 | ) | 296,876 | (29,841 | ) | ||||||||||||||||||
Income (loss) from continuing operations before
minority interests |
(20,925 | ) | 16,796 | (620,747 | ) | 28,559 | ||||||||||||||||||
Minority interests |
(67 | ) | (202 | ) | (101 | ) | (335 | ) | ||||||||||||||||
Income (loss) from continuing operations |
(20,992 | ) | 16,594 | (620,848 | ) | 28,224 | ||||||||||||||||||
Income from discontinued operations, net of tax |
4,193 | 71,773 | 156,876 | 226,088 | ||||||||||||||||||||
Net income (loss) |
$ | (16,799 | ) | $ | 88,367 | $ | (463,972 | ) | $ | 254,312 | ||||||||||||||
Net income (loss) per basic share of common stock: |
||||||||||||||||||||||||
Income (loss) from continuing operations |
$ | (0.39 | ) | $ | 0.31 | $ | (11.44 | ) | $ | 0.52 | ||||||||||||||
Income from discontinued operations |
0.08 | 1.32 | 2.89 | 4.16 | ||||||||||||||||||||
Net income (loss) per basic share of common stock |
$ | (0.31 | ) | $ | 1.63 | $ | (8.55 | ) | $ | 4.68 | ||||||||||||||
Weighted average basic shares outstanding |
54,182 | 54,273 | 54,254 | 54,377 | ||||||||||||||||||||
Net income (loss) per share amounts may not foot since each is calculated independently.
See
notes to results of operations.
Notes
to Results of Operations
1. OTHER CHARGES AND CREDITS
Income (Loss) from continuing operations was affected by the following:
2008 - As a result of the spin-off of Scripps Networks Interactive (“SNI”), employees holding
share-based equity awards, received modified awards in E.W. Scripps and SNI’s stock. Under FAS
123R the adjustment to the outstanding share-based equity awards is a modification of the awards
and incremental compensation is recognized to the extent the fair value of the awards immediately
prior to the modification is less than the fair value of the modified awards. Compensation
associated with the modification totaled $19.6 million and is included in separation costs in our
third quarter results of operations. Separation costs increased loss from continuing operations by
$14.0 million in the third quarter, $.26 per share, and by $22.2 million year-to-date, $.41 per
share.
Due primarily to the continuing negative effects of the economy on our advertising revenues and
those of other publishing companies, and the difference between our stock price following the
spin-off of SNI to shareholders and the per share carrying value of our remaining net assets, we
determined that indications of impairment of goodwill related to our newspaper business segments
existed as of June 30, 2008. In the second quarter we recorded a $779 million, non-cash charge to
reduce the carrying value of goodwill. We also recorded a non-cash charge of $95 million to reduce
the carrying value of our investment in the Denver JOA and Colorado newspaper partnership to our
share of the estimated fair value of their net assets. In the third quarter we recorded an
additional $24.9 million charge related to continued declines in the value of our investment in the
Denver JOA. The impairment charges increased loss from continuing operations by $15.8 million,
$.29 per share, in the third quarter and by $599 million, $11.03 per share, in the year-to-date
period.
In the second quarter of 2008, we redeemed the remaining balances of our outstanding notes and
recorded a $26.4 million loss on the extinguishment of debt. Loss from continuing operations in
the year-to-date period was increased by $.48 per share.
Investment results, reported in the caption “Miscellaneous, net” in our Condensed Consolidated
Statements of Operations, include realized gains from the sale of certain investments in the
second quarter of 2008. Net loss was decreased by $4.3 million, $.08 per share.
2007 - A majority of our newspapers offered voluntary separation plans to eligible employees during
2007. In connection with the acceptance of the offer by 137 employees, we accrued severance related
costs of $8.9 million in the second quarter of 2007. Income from continuing operations was reduced
by $.10 per share.
2. SEGMENT INFORMATION
We determine our business segments based upon our management and internal reporting structure. Our
reportable segments are strategic businesses that offer different products and services.
Our newspaper business segment includes daily and community newspapers in 15 markets in the U.S.
Newspapers earn revenue primarily from the sale of advertising to local and national advertisers
and from the sale of newspapers to readers.
JOAs and newspaper partnerships include a newspaper that is operated pursuant to the terms of joint
operating agreement. The newspaper in the JOA maintains an independent editorial operation and
receives a share of the operating profits of the combined newspaper operations. This segment also
includes newspaper partnerships. We account for our share of the earnings of our JOA and newspaper
partnerships using the equity method of accounting. Our equity in earnings of our JOA and
newspaper partnerships is
included in “Equity in earnings of JOAs and other joint ventures” in our Condensed Consolidated
Statements of Operations.
Television includes six ABC-affiliated stations, three NBC-affiliated stations and one independent
station. Our television stations reach approximately 11% of the nation’s television households.
Television stations earn revenue primarily from the sale of advertising to local and national
advertisers.
Licensing and other media aggregates our operating segments that are too small to report
separately, and primarily includes syndication and licensing of news features and comics.
The accounting policies of each of our business segments are those described in Note 1 in our
Annual Report on Form 10-K for the year ended December 31, 2007.
In addition, certain corporate costs and expenses, including information technology, pensions and
other employee benefits, and other shared services, are allocated to our business segments. The
allocations are generally amounts agreed upon by management, which may differ from amounts that
would be incurred if such services were purchased separately by the business segment. Corporate
assets are primarily cash, cash equivalents and other short-term investments, property and
equipment primarily used for corporate purposes, and deferred income taxes.
Our chief operating decision maker (as defined by FAS 131 — Segment Reporting) evaluates the
operating performance of our business segments and makes decisions about the allocation of
resources to our business segments using a measure we call segment profit. Segment profit excludes
interest, income taxes, depreciation and amortization, impairment charges, divested operating
units, restructuring activities (including our proportionate share of JOA restructuring
activities), investment results and certain other items that are included in net income (loss)
determined in accordance with accounting principles generally accepted in the United States of
America.
Information regarding our business segments is as follows:
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (in thousands) | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||||||||
Segment operating revenues: |
||||||||||||||||||||||||
Newspapers |
$ | 131,103 | $ | 158,221 | (17.1 | )% | $ | 431,135 | $ | 493,695 | (12.7 | )% | ||||||||||||
JOAs and newspaper partnerships |
58 | 70 | (17.1 | )% | 172 | 176 | (2.3 | )% | ||||||||||||||||
Television |
76,919 | 73,278 | 5.0 | % | 233,458 | 234,325 | (0.4 | )% | ||||||||||||||||
Licensing and other media |
22,185 | 21,231 | 4.5 | % | 71,645 | 67,978 | 5.4 | % | ||||||||||||||||
Corporate |
13 | 302 | (95.7 | )% | 456 | 1,064 | (57.1 | )% | ||||||||||||||||
Total operating revenues |
$ | 230,278 | $ | 253,102 | (9.0 | )% | $ | 736,866 | $ | 797,238 | (7.6 | )% | ||||||||||||
Segment profit (loss): |
||||||||||||||||||||||||
Newspapers |
$ | 14,001 | $ | 32,656 | (57.1 | )% | $ | 58,625 | $ | 98,603 | (40.5 | )% | ||||||||||||
JOAs and newspaper partnerships |
(3,051 | ) | 1,714 | (3,768 | ) | (4,774 | ) | (21.1 | )% | |||||||||||||||
Television |
16,966 | 13,242 | 28.1 | % | 49,441 | 53,117 | (6.9 | )% | ||||||||||||||||
Licensing and other media |
1,547 | 1,298 | 19.2 | % | 6,088 | 5,797 | 5.0 | % | ||||||||||||||||
Corporate |
(6,456 | ) | (13,542 | ) | (52.3 | )% | (35,455 | ) | (45,603 | ) | (22.3 | )% | ||||||||||||
Depreciation and amortization of intangibles |
(12,153 | ) | (11,330 | ) | 7.3 | % | (34,758 | ) | (33,299 | ) | 4.4 | % | ||||||||||||
Write-down of newspaper goodwill |
(778,900 | ) | ||||||||||||||||||||||
Gains (losses) on disposal of property, plant and equipment |
(17 | ) | (188 | ) | 2,244 | (256 | ) | |||||||||||||||||
Interest expense |
(8,856 | ) | (10,999 | ) | (29,123 | ) | (62.2 | )% | ||||||||||||||||
Separation costs |
(22,020 | ) | (257 | ) | (31,629 | ) | (257 | ) | ||||||||||||||||
Write-down of investment in newspaper partnerships |
(24,908 | ) | (119,908 | ) | ||||||||||||||||||||
Loss on repurchases of debt |
(26,380 | ) | ||||||||||||||||||||||
Miscellaneous, net |
(320 | ) | 12,042 | 7,776 | 14,195 | |||||||||||||||||||
Income (loss) from continuing operations before
income taxes and minority interests |
$ | (36,411 | ) | $ | 26,779 | $ | (917,623 | ) | $ | 58,400 | ||||||||||||||
Certain items required to reconcile segment profitability to consolidated results of operations
determined in accordance with accounting principles generally accepted in the United States of
America are attributed to particular business segments. Significant reconciling items attributable
to each business segment are as follows:
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands) | 2008 | 2007 | 2008 | 2007 | ||||||||||||
Depreciation: |
||||||||||||||||
Newspapers |
$ | 5,517 | $ | 5,735 | $ | 16,327 | $ | 16,695 | ||||||||
JOAs and newspaper partnerships |
323 | 331 | 969 | 990 | ||||||||||||
Television |
4,788 | 4,265 | 13,925 | 12,707 | ||||||||||||
Licensing and other media |
242 | 121 | 478 | 356 | ||||||||||||
Corporate |
285 | 71 | 460 | 268 | ||||||||||||
Total depreciation |
$ | 11,155 | $ | 10,523 | $ | 32,159 | $ | 31,016 | ||||||||
Amortization of intangibles: |
||||||||||||||||
Newspapers |
$ | 525 | $ | 523 | $ | 1,563 | $ | 1,439 | ||||||||
JOAs and newspaper partnerships |
188 | 188 | ||||||||||||||
Television |
285 | 284 | 848 | 844 | ||||||||||||
Total amortization of intangibles |
$ | 998 | $ | 807 | $ | 2,599 | $ | 2,283 | ||||||||
Gains (losses) on disposal of
PP&E: |
||||||||||||||||
Newspapers |
$ | (3 | ) | $ | (40 | ) | (9 | ) | (80 | ) | ||||||
JOAs and newspaper partnerships |
(33 | ) | (1 | ) | ||||||||||||
Television |
(14 | ) | (127 | ) | 2,401 | (153 | ) | |||||||||
Licensing and other media
|
||||||||||||||||
Corporate |
(21 | ) | (115 | ) | (22 | ) | ||||||||||
Gains (losses) on disposal of
PP&E |
$ | (17 | ) | $ | (188 | ) | $ | 2,244 | $ | (256 | ) | |||||
The following is segment operating revenue for newspapers:
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (in thousands) | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||||||||
Segment operating
revenues: |
||||||||||||||||||||||||
Local |
$ | 27,272 | $ | 32,347 | (15.7 | )% | $ | 91,975 | $ | 104,644 | (12.1 | )% | ||||||||||||
Classified |
33,573 | 46,604 | (28.0 | )% | 113,917 | 147,143 | (22.6 | )% | ||||||||||||||||
National |
5,923 | 8,540 | (30.6 | )% | 20,599 | 25,793 | (20.1 | )% | ||||||||||||||||
Online |
9,058 | 10,337 | (12.4 | )% | 28,799 | 30,916 | (6.8 | )% | ||||||||||||||||
Preprint and other |
24,820 | 27,553 | (9.9 | )% | 77,411 | 82,447 | (6.1 | )% | ||||||||||||||||
Newspaper advertising |
100,646 | 125,381 | (19.7 | )% | 332,701 | 390,943 | (14.9 | )% | ||||||||||||||||
Circulation |
26,576 | 28,763 | (7.6 | )% | 85,079 | 89,220 | (4.6 | )% | ||||||||||||||||
Other |
3,881 | 4,077 | (4.8 | )% | 13,355 | 13,532 | (1.3 | )% | ||||||||||||||||
Total operating revenues |
$ | 131,103 | $ | 158,221 | (17.1 | )% | $ | 431,135 | $ | 493,695 | (12.7 | )% | ||||||||||||
The following is segment operating revenue for television:
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (in thousands) | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||||||||
Segment operating
revenues: |
||||||||||||||||||||||||
Local |
$ | 42,350 | $ | 45,229 | (6.4 | )% | $ | 138,519 | $ | 147,967 | (6.4 | )% | ||||||||||||
National |
19,539 | 22,887 | (14.6 | )% | 65,493 | 72,595 | (9.8 | )% | ||||||||||||||||
Political |
10,293 | 694 | 14,968 | 1,398 | ||||||||||||||||||||
Network compensation |
1,854 | 1,820 | 1.9 | % | 5,870 | 5,606 | 4.7 | % | ||||||||||||||||
Other |
2,883 | 2,648 | 8.9 | % | 8,608 | 6,759 | 27.4 | % | ||||||||||||||||
Total operating revenues |
$ | 76,919 | $ | 73,278 | 5.0 | % | $ | 233,458 | $ | 234,325 | (0.4 | )% | ||||||||||||
3. JOINT OPERATING AGREEMENT AND NEWSPAPER PARTNERSHIPS
Financial information related to our JOA and newspaper partnerships is as follows:
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (in thousands) | 2008 | 2007 | Change | 2008 | 2007 | Change | ||||||||||||||||||
Equity in earnings of JOAs and newspaper partnerships: |
||||||||||||||||||||||||
Denver |
$ | 1,253 | $ | 6,073 | (79.4 | )% | $ | 9,476 | $ | 10,226 | (7.3 | )% | ||||||||||||
Albuquerque |
599 | 2,886 | (79.2 | )% | 3,453 | 7,383 | (53.2 | )% | ||||||||||||||||
Colorado |
175 | (980 | ) | 71 | (581 | ) | ||||||||||||||||||
Other newspaper partnerships and joint ventures |
(323 | ) | ||||||||||||||||||||||
Total equity in earnings of JOAs |
2,027 | 7,979 | (74.6 | )% | 13,000 | 16,705 | (22.2 | )% | ||||||||||||||||
Operating revenues of JOAs and
newspaper partnerships |
58 | 70 | (17.1 | )% | 172 | 176 | (2.3 | )% | ||||||||||||||||
Total |
2,085 | 8,049 | (74.1 | )% | 13,172 | 16,881 | (22.0 | )% | ||||||||||||||||
JOA editorial costs and expenses |
5,136 | 6,335 | (18.9 | )% | 16,940 | 21,655 | (21.8 | )% | ||||||||||||||||
Contribution to segment profit (loss) |
$ | (3,051 | ) | $ | 1,714 | $ | (3,768 | ) | $ | (4,774 | ) | (21.1 | )% | |||||||||||