Meredith Corporation (Meredith or the Company) is one of the nation's leading media and marketing companies, one of the leading magazine publishers serving women, and a broadcaster with television stations in top markets such as Atlanta, Phoenix, and Portland. Each month we reach more than 85 million American consumers through our magazines, books, custom publications, websites, and television stations.

Meredith operates two business segments. Publishing consists of magazine and book publishing, integrated marketing, interactive media, database-related activities, brand licensing, and other related operations. Broadcasting consists of 12 network-affiliated television stations, one radio station, related interactive media operations, and video related operations. Both segments operate primarily in the United States (U. S.) and compete against similar media and other types of media on both a local and national basis. Publishing accounted for 81 percent of the Company's $370.4 million in revenues in the first three months of fiscal 2009 while broadcasting revenues totaled 19 percent.

PUBLISHING

Advertising revenues made up 49 percent of publishing's first quarter revenues. These revenues were generated from the sale of advertising space in the Company's magazines and on websites to clients interested in promoting their brands, products, and services to consumers. Circulation revenues accounted for 25 percent of publishing's fiscal 2009 first three months' revenues. Circulation revenues result from the sale of magazines to consumers through subscriptions and by single copy sales on newsstands, primarily at major retailers and grocery/drug stores. The remaining 26 percent of publishing revenues came from a variety of activities that included the sale of books and integrated marketing services as well as brand licensing, and other related activities. Publishing's major expense categories are production and delivery of publications and promotional mailings and employee compensation costs.

BROADCASTING

Broadcasting derives almost all of its revenues-96 percent in the first three months of fiscal 2009-from the sale of advertising, both on the air and on our stations' websites. The remainder comes from television retransmission fees, television production services, and other services. Political advertising revenues are cyclical in that they are significantly greater during biennial election campaigns (which take place primarily in odd-numbered fiscal years) than at other times. Broadcasting's major expense categories are employee compensation and programming costs.

FIRST QUARTER FISCAL 2009 FINANCIAL OVERVIEW

º Both magazine and broadcasting advertising revenues were affected by a nationwide slowdown in the demand for advertising. As a result, publishing revenues and operating profit decreased 9 percent and 40 percent, respectively; broadcasting revenues and operating profit declined 6 percent and 21 percent, respectively.

º Other revenues increased a strong 16 percent reflecting growth in revenues in our integrated marketing operation and in broadcasting retransmission fees. Other revenues increased from 17 percent of revenues in the first quarter of fiscal 2008 to 22 percent of revenues in the first quarter of fiscal 2009.

º We spent $15.8 million to repurchase 581,000 shares of our common stock.

DISCONTINUED OPERATIONS

In fiscal 2008, the Company completed the sale of WFLI, the CW affiliate serving the Chattanooga, Tennessee market. Loss from discontinued operations represents the operating results, net of taxes, of WFLI. The revenues and expenses, along with associated taxes, were removed from continuing operations and reclassified into a single line item amount on the Condensed Consolidated Statements of Earnings titled loss from discontinued operations, net of taxes. Unless stated otherwise, as in the section titled Discontinued Operations, all of the information contained in Management's Discussion and Analysis of Financial Condition and Results of Operations relates to continuing operations.

USE OF NON-GAAP FINANCIAL MEASURES

These consolidated financial statements, including the related notes, are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Our analysis of broadcasting segment results includes references to earnings from continuing operations before interest, taxes, depreciation, and amortization (EBITDA). EBITDA and EBITDA margin are non-GAAP measures. We use EBITDA along with operating profit and other GAAP measures to evaluate the financial performance of our broadcasting segment. EBITDA is a common measure of performance in the broadcasting industry and is used by investors and financial analysts, but its calculation may vary among companies. Broadcasting segment EBITDA is not used as a measure of liquidity, nor is it necessarily indicative of funds available for our discretionary use.

We believe the non-GAAP measures used in Management's Discussion and Analysis of Financial Condition and Results of Operations contribute to an understanding of our financial performance and provide an additional analytic tool to understand our results from core operations and to reveal underlying trends. These measures should not, however, be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

                             RESULTS OF OPERATIONS

            Three Months Ended September 30,     2008      2007    Change
            (In thousands)
            Total revenues                   $ 370,438 $ 404,073     (8)%
            Operating expenses                 332,993   343,396     (3)%
            Income from operations           $  37,445 $  60,677    (38)%
            Net earnings                     $  18,637 $  33,370    (44)%
            Diluted earnings per share       $    0.41 $    0.68    (40)%

The following sections provide an analysis of the results of operations for the publishing and broadcasting segments and an analysis of the consolidated results of operations for the three months ended September 30, 2008, compared with the prior-year period. This commentary should be read in conjunction with the interim condensed consolidated financial statements presented elsewhere in this report and with the Company's Annual Report on Form 10-K for the year ended June 30, 2008.

PUBLISHING

Publishing operating results were as follows:

            Three Months Ended September 30,     2008      2007    Change
            (In thousands)
            Advertising revenue              $ 148,017 $ 180,771    (18)%
            Circulation revenue                 74,022    80,286     (8)%
            Other revenue                       77,996    68,465     14 %
            Total revenues                     300,035   329,522     (9)%
            Operating expenses                 266,851   274,089     (3)%
            Operating profit                 $  33,184 $  55,433    (40)%
            Operating profit margin             11.1 %    16.8 %

Revenues
Declines in advertising revenue and circulation revenue of 18 percent and 8 percent, respectively, more than offset a 14 percent increase in other revenue.

While magazine advertising pages and revenues were down at nearly all titles, average net revenue per page grew at most titles. Overall average net revenue per page increased 3 percent in the first quarter. Total magazine advertising pages were down 21 percent in the quarter; magazine advertising revenues were down 19 percent. Among our core advertising categories, toiletries and cosmetics showed strength while demand was weaker for most other categories. Online advertising revenues in our interactive media operations declined 8 percent due to the slowdown in demand.

Magazine circulation revenues decreased 8 percent, reflecting a decline of 3 percent in subscription revenue and a decline of 20 percent in newsstand revenues. The continued decrease in subscription revenues was anticipated due to the Company's ongoing initiative to move Family Circle, Parents, and Fitness to our direct-to-publisher circulation model. These three titles accounted for the entire decrease in subscription revenues. The decrease in newsstand revenues is primarily due to a decline in the newsstand revenues of Family Circle due to rack spending, a change in the mix of and a reduction in the number of special interest publications and craft titles, and a weaker newsstand market that affected our large and mid-size books' newsstand revenues.

Integrated marketing revenues increased 45 percent in the quarter due to the acquisition of Big Communications in June 2008, and growth in the traditional and on-line integrated marketing operations from expanding certain relationships. Revenues from other sources, such as magazine royalties and licensing, also increased in the first quarter of fiscal 2009. The introduction of the Better Homes and Gardens line of home products, available now exclusively at Wal-Mart, fueled this growth. These increases were partially offset by decreases in book revenues in Meredith Retail. Book revenues declined over 40 percent as compared to the prior year first quarter primarily due to a significant reduction in the number of new book releases. As previously announced, our book business is now focusing operations on its core content areas of cooking, gardening, remodeling, and decorating on behalf of our owned and clients' brands. As a result of the changes in integrated marketing, brand licensing, and book operations, other publishing revenues increased 14 percent in the first quarter of fiscal 2009.

Operating Expenses
Publishing operating costs decreased 3 percent. Paper, processing, postage and other delivery expenses, subscription acquisition costs, book manufacturing costs, and amortization expense declined in the quarter. Decreases in paper consumption due to a decline in advertising pages sold more than offset increases in paper prices of 22 percent. These costs reductions were partially offset by a higher inventory LIFO reserve and increased depreciation expense. Employee compensation costs were up as a result of higher staff levels due to the integrated marketing acquisitions and higher compensation levels due to annual merit increases, while performance-based incentive expense declined. Integrated marketing production expenses also increased due to the growth in integrated marketing revenues.

BROADCASTING

Broadcasting operating results were as follows:

            Three Months Ended September 30,      2008     2007    Change
            (In thousands)
            Non-political advertising revenues $ 61,648 $ 72,492    (15)%
            Political advertising revenues        5,871    1,072    448 %
            Other revenues                        2,884      987    192 %
            Total revenues                       70,403   74,551     (6)%
            Operating expenses                   59,707   60,974     (2)%
            Operating profit                   $ 10,696 $ 13,577    (21)%
            Operating profit margin              15.2 %   18.2 %

Revenues
Broadcasting revenues declined 6 percent. Net political advertising revenues totaled $5.9 million in the current quarter compared with $1.1 million in net political advertising revenues in the prior-year quarter. Fluctuations in political advertising revenues at our stations and throughout the broadcasting industry generally follow the biennial cycle of election campaigns. Political advertising displaces a certain amount of non-political advertising; therefore, the revenues are not entirely incremental. Non-political advertising revenues decreased 15 percent. As compared to the prior year, local non-political advertising declined 13 percent while national non-political advertising decreased 20 percent. Online advertising, a small but growing percentage of broadcasting advertising revenues, increased more than 20 percent as compared to the prior-year. Online advertising revenues were flat as compared to the prior-year quarter.

Operating Expenses
Broadcasting costs decreased 2 percent in the first quarter of fiscal 2009 primarily due to a credit to expenses for a gain on the Sprint Nextel Corporation equipment exchange. This gain represents the difference between the fair value of the digital equipment we received and the book value of the analog equipment we exchanged. Lower performance-based incentive accruals and share-based compensation, depreciation expense, machinery repairs and maintenance, legal expenses, and advertising and promotion expenses were offset by higher employee compensation costs, bad debt expense, and studio production expenses.

Operating Profit
Broadcasting operating profit declined 21 percent compared with the prior-year period. The decline reflected weakened economic conditions and their effect on non-political advertising revenues.

                Three Months Ended September 30,    2008     2007
                (In thousands)
                Revenues                         $ 70,403 $ 74,551
                Operating profit                 $ 10,696 $ 13,577
                Depreciation and amortization       6,069    6,378
                EBITDA                           $ 16,765 $ 19,955
                EBITDA margin                      23.8 %   26.8 %

UNALLOCATED CORPORATE EXPENSES

Unallocated corporate expenses are general corporate overhead expenses not attributable to the operating groups. These expenses were as follows:

Unallocated corporate expenses decreased 23 percent as decreases in performance-based incentive expenses and Meredith Foundation charitable contributions more than offset increases in pension costs, legal expenses, share-based compensation, and consulting fees. The increase in share-based compensation is due to certain employees becoming retirement eligible in the current fiscal year and thus their share-based compensation expense is being fully expensed during the current fiscal year.

CONSOLIDATED

Consolidated Operating Expenses
Consolidated operating expenses were as follows:

        Three Months Ended September 30,            2008      2007    Change
        (In thousands)
        Production, distribution, and editorial $ 173,212 $ 175,708     (1)%
        Selling, general, and administrative      148,923   155,570     (4)%
        Depreciation and amortization              10,858    12,118    (10)%
        Operating expenses                      $ 332,993 $ 343,396     (3)%

First quarter production, distribution, and editorial costs decreased 1 percent. Declines in paper, processing, postage and other delivery expenses, and book manufacturing more than offset increases in integrated marketing production expenses, LIFO reserve expense, and broadcasting production expenses.

First quarter selling, general, and administrative expenses decreased 4 percent primarily due to declines in performance-based incentive accruals, Meredith Foundation charitable contributions, and subscription acquisition costs. Partially offsetting these declines were increases in pension costs, legal expenses, consulting fees, and bad debt expense.

Income from Operations
Income from operations decreased 38 percent in the first quarter of fiscal 2009 reflecting weakened economic conditions and their effect on advertising revenues in the quarter partially offset by strong growth in the integrated marketing business and reduced operating expenses.

Net Interest Expense
Net interest expense declined to $5.3 million in the fiscal 2009 first quarter compared with $5.8 million in the comparable prior-year quarter due to lower average interest rates. Average long-term debt outstanding was approximately $470 million in both the current and prior year quarter.

Income Taxes
Our effective tax rate was 42.0 percent in the first quarter of fiscal 2009 as compared to 39.0 percent in the prior-year first quarter. While the effective rate is expected to fluctuate quarter to quarter, on a full year basis the Company estimates its fiscal 2009 annual effective tax rate will be approximately 39.5 percent. The Company projects the effective tax rate for the year and then, based upon projected operating income for each quarter, raises or lowers the tax expense recorded in that quarter to reflect the projected tax rate.

Earnings from Continuing Operations and Earnings per Share from Continuing Operations
Earnings from continuing operations were $18.6 million ($0.41 per diluted share), a decrease of 44 percent from fiscal 2008 first quarter earnings from continuing operations of $33.5 million ($0.68 per diluted share). The decline primarily reflected weakened economic conditions and their effect on advertising revenues and an increased effective tax rate partially offset by strong growth in the integrated marketing business and reduced operating expenses.

Discontinued Operations
In April 2008, the Company completed its sale of WFLI, the CW affiliate serving
the Chattanooga, Tennessee market. Loss from discontinued operations represents
the operating results, net of taxes, of WFLI. For fiscal 2008, the revenues and
expenses, along with associated taxes, were removed from continuing operations
and reclassified into a single line item on the Condensed Consolidated Statement
of Earnings titled loss from discontinued operations, net of taxes. Revenues and
expenses related to discontinued operations were as follows:

             Three Months Ended September 30,                 2007
             (In thousands except per share data)
             Revenues                                       $   421
             Costs and expenses                                (582 )
             Loss before income taxes                          (161 )
             Income taxes                                        63
             Loss from discontinued operations              $   (98 )
             Income from discontinued operations per share:
               Basic                                        $    -
               Diluted                                           -

Net Earnings and Earnings per Share
Net earnings were $18.6 million ($0.41 per diluted share) in the quarter ended September 30, 2008, down 44 percent from $33.4 million ($0.68 per diluted share) in the comparable prior-year quarter. The decline in the quarter reflected primarily weakened economic conditions and their effect on advertising revenues partially offset by strong growth in the integrated marketing business. In addition, lower net earnings were partially offset by the accretive effect of the reduction in Meredith's average diluted shares outstanding. Average basic shares outstanding decreased 5 percent as a result of our ongoing share repurchase program and average diluted shares outstanding decreased 7 percent as a result of our share repurchase program and lower dilutive effects from potential common stock equivalents.

                        LIQUIDITY AND CAPITAL RESOURCES

       Three Months Ended September 30,              2008        2007    Change
       (In thousands)
       Net earnings                              $  18,637   $  33,370    (44)%
       Cash flows from operations                $  44,549   $  61,806    (28)%
       Cash flows used in investing                 (9,698 )    (4,273 )  127 %
       Cash flows used in financing                (43,825 )   (71,270 )  (39)%
       Net decrease in cash and cash equivalents $  (8,974 )   (13,737 )  (35)%

OVERVIEW

Meredith's primary source of liquidity is cash generated by operating activities. Debt financing is typically used for significant acquisitions. We expect cash on hand, internally generated cash flow, and available credit from financing agreements will provide adequate funds for operating and recurring cash needs (e.g., working capital, capital expenditures, debt repayments, and cash dividends) into the foreseeable future. We have up to $30 million remaining available under our revolving credit facility and up to $55 million available under our asset-backed commercial paper facility. While there are no guarantees that we will be able to replace current credit agreements when they expire, we expect to be able to do so.

SOURCES AND USES OF CASH

Cash and cash equivalents decreased $9.0 million in the first three months of fiscal 2009; they decreased $13.7 million in the comparable period of fiscal 2008. In both periods, net cash provided by operating activities was used for common stock repurchases, capital investments, debt repayments, and dividends.

Operating Activities
The largest single component of operating cash inflows is cash received from advertising customers. Other sources of operating cash inflows include cash received from magazine circulation sales and other revenue transactions such as book, integrated marketing, and licensing. Operating cash outflows include payments to vendors and employees and interest, pension, and income tax payments. Our most significant vendor payments are for production and delivery of publications and promotional mailings, broadcasting programming rights, employee compensation costs and benefits, and other services and supplies.

Cash provided by operating activities totaled $44.5 million in the first three months of fiscal 2009 compared with $61.8 million in the first three months of fiscal 2008. The decrease in cash provided by operating activities was due primarily to lower net earnings, a decrease in the add back for depreciation and amortization expense, and the recording of a non-cash gain on the disposal of assets in the current quarter.

Investing Activities
Investing cash inflows generally include proceeds from the sale of assets or a business. Investing cash outflows generally include payments for the acquisition of new businesses; investments; and additions to property, plant, and equipment.

Net cash used by investing activities increased to $9.7 million in the first three months of fiscal 2009 from $4.3 million in the prior-year period. The increase primarily reflected more cash spent on the acquisition of property, plant, and equipment due to the digital and high definition conversions being completed at the Company's broadcast stations.

Net cash used by financing activities totaled $43.8 million in the three months ended September 30, 2008, compared with $71.3 million for the three months ended September 30, 2007. In the first quarter of fiscal 2009, $15.8 million was used to purchase common stock and long-term debt was reduced by a net $20 million, whereas in the first quarter of fiscal 2008, $49.8 million was used to purchase common stock and long-term debt was reduced by a net $15 million.

Long-term Debt
At September 30, 2008, long-term debt outstanding totaled $465 million ($275 million in fixed-rate unsecured senior notes, $120 million outstanding under a revolving credit facility, and $70 million under an asset-backed commercial paper facility). Of the senior notes, $100 million is due in the next 12 months. We expect to repay these senior notes with cash from operations and credit available under existing credit agreements. The weighted average effective interest rate for the fixed-rate notes was 4.71 percent. The interest rate on the asset-backed commercial paper facility changes monthly and is based on the average commercial paper cost to the lender plus a fixed spread. The asset-backed commercial paper facility has a capacity of up to $125 million and renews annually until April 2, 2011, the facility termination date. The interest rate on the revolving credit facility is variable based on LIBOR and Meredith's debt to trailing 12 month EBITDA ratio. The weighted average effective interest rate for the revolving credit facility was 4.72 percent at September 30, 2008, after taking into account the effect of outstanding interest rate swap agreements. Under the swaps, the Company will, on a quarterly basis, pay fixed rates of interest (average 4.69 percent) and receive variable rates of interest based on the three-month LIBOR rate (average of 3.76 percent at September 30, 2008) on $100 million notional amount of indebtedness. This facility has capacity for up to $150 million outstanding with an option to request up to another $150 million. The revolving credit facility expires on October 7, 2010.

All of our debt agreements include financial covenants, and failure to comply with any such covenants could result in the debt becoming payable on demand. The Company was in compliance with all debt covenants at September 30, 2008, and expects to remain so in the future.

Contractual Obligations
As of September 30, 2008, there had been no material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended June 30, 2008.

Share Repurchase Program
As part of our ongoing share repurchase program, we spent $15.8 million in the . . .