Meredith Corporation (Meredith or the Company) is the leading media and marketing company serving American women. The Company also has 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 and compete against similar media and other types of media on both a local and national basis. Publishing accounted for 80 percent of the Company's $1.1 billion in revenues in the first nine months of fiscal 2009 while broadcasting revenues totaled 20 percent.

PUBLISHING

Advertising revenues made up 47 percent of publishing's first nine months' 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 nine 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 28 percent of publishing revenues came from a variety of activities that included integrated marketing services and the sale of books 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-95 percent in the first nine 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 NINE MONTHS FISCAL 2009 FINANCIAL OVERVIEW

· 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 36 percent, respectively. Broadcasting revenues and operating profit declined 12 percent and 43 percent, respectively.

· In December 2008, management committed to a performance improvement plan that included a companywide workforce reduction and the closing of Country Home magazine. In connection with this plan, the Company recorded a pre-tax restructuring charge in the second quarter of fiscal 2009 of $15.8 million including severance and benefit costs of $10.0 million, the write-down of various assets of Country Home magazine of $5.6 million, and other accruals of $0.2 million. Of the $15.8 million charge, $6.8 million is recorded in discontinued operations on the Condensed Consolidated Statement of Earnings.

· Diluted earnings per share declined 48 percent to $1.25 from prior-year first nine months' earnings of $2.40.

· We generated $138.6 million in operating cash flow. We spent $21.8 million to repurchase 880,000 shares of our common stock.

· The quarterly dividend was increased 5 percent from 21.5 cents per share to 22.5 cents per share effective with the March 2009 payment.

DISCONTINUED OPERATIONS

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 (MD&A) relates to continuing operations. Therefore, results of Country Home magazine, Child magazine, and WFLI are excluded for all periods covered by this report.

USE OF NON-GAAP FINANCIAL MEASURES

These condensed 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 MD&A 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 March 31,                   2009        2008    Change
(In thousands except per share data)
Total                                      $ 337,594   $ 392,278     (14)%
revenues
Operating                                    294,234     314,312      (6)%
expenses
Income from                                $  43,360   $  77,966     (44)%
operations
Earnings from continuing operations        $  24,874   $  46,182     (46)%
Net                                           25,428      46,084     (45)%
earnings
Diluted earnings per share from
  continuing                                    0.55        0.97     (43)%
operations
Diluted earnings per                            0.56        0.97     (42)%
share

Nine Months Ended March 31,                      2009          2008    Change
(In thousands except per share data)
Total                                      $ 1,062,948   $ 1,176,173     (10)%
revenues
Operating                                      945,487       973,219      (3)%
expenses
Income from                                $   117,461   $   202,954     (42)%
operations
Earnings from continuing operations        $    61,345   $   114,411     (46)%
Net                                             56,608       115,513     (51)%
earnings
Diluted earnings per share from
  continuing                                      1.36          2.38     (43)%
operations
Diluted earnings per                              1.25          2.40     (48)%
share

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 quarter and nine months ended March 31, 2009, compared with the prior-year periods. 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 March 31,                               2009        2008    Change
(In thousands)
Advertising revenues                                   $ 132,159   $ 149,919    (12)%
Circulation revenues                                      72,869      83,236    (12)%
Other revenues                                            75,292      81,577     (8)%
Total revenues                                           280,320     314,732    (11)%
Operating expenses                                       232,349     250,423     (7)%
Operating profit                                       $  47,971   $  64,309    (25)%
Operating profit margin                                   17.1 %      20.4 %




Nine Months Ended March 31,                                2009        2008    Change
(In thousands)
Advertising revenues                                   $ 396,544   $ 472,466    (16)%
Circulation revenues                                     211,086     231,105     (9)%
Other revenues                                           243,265     232,868      4 %
Total revenues                                           850,895     936,439     (9)%
Operating expenses                                       745,826     772,926     (4)%
Operating profit                                       $ 105,069   $ 163,513    (36)%
Operating profit margin                                   12.3 %       17.5%

Revenues
For the third quarter of fiscal 2009, advertising and circulation revenues both declined 12 percent and other revenues were down 8 percent. For the nine-month period, declines in advertising and circulation revenues of 16 percent and 9 percent, respectively, more than offset a 4 percent increase in other revenues.

Both magazine advertising pages and revenues were down approximately 13 percent for the third quarter and approximately 16 percent for the nine months as average net revenue per page was approximately flat. Among our advertising categories, non-prescription drugs, household supplies, pets, and consumer electronics showed strength, while demand continued to be weaker for most other categories. While declining 12 percent for the nine-month period, online advertising revenues in our interactive media operations increased 7 percent in the third quarter.

Magazine circulation revenues decreased 12 percent in the third quarter and 9 percent in the first nine months of fiscal 2009, reflecting primarily declines in newsstand revenues. While subscription revenues were down in the low single digits on a percentage basis for both the three and nine months, the percentage increase in subscription contribution was in the double digits for both periods. The decrease in newsstand revenues was primarily due to a weaker retail market that affected most of our magazines' newsstand revenues and a change in the mix of and a reduction in the number of special interest publications and craft titles.

Integrated marketing revenues increased 7 percent in the third quarter and more than 25 percent for the first nine months of fiscal 2009. For the nine months, the acquisition of Big Communications in June 2008, and growth in the traditional and on-line integrated marketing operations from expanding certain relationships fueled the increased revenues. For the third quarter, the acquisition of Big Communications more than offset a reduction in revenues at some of Integrated Marketing's on-line businesses. Revenues from magazine royalties and licensing decreased 1 percent in the third quarter primarily due to real estate related licensing activities, but were up over 20 percent in the first nine months 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. Book revenues declined 35 percent in the third quarter and the nine-month period, primarily due to a significant reduction in the number of new book releases. In December 2008, Meredith announced a licensing agreement granting John Wiley & Sons, Inc. (Wiley) exclusive global rights to publish and distribute books based on Meredith's consumer-leading brands, including the powerful Better Homes and Gardens imprint. Under the agreement, which was effective March 1, 2009, Meredith continues to create book content and retain all approval and content rights. Wiley is responsible for book layout and design, printing, sales and marketing, distribution, and inventory management. Wiley pays Meredith royalties based on net sales. The aggregate effect of the changes in integrated marketing, brand licensing, and book operations was that other publishing revenues decreased 8 percent for the third quarter, but increased 4 percent for the first nine months of fiscal 2009.

Operating Expenses
Publishing operating costs decreased 7 percent in the third quarter; they declined 4 percent in the first nine months of fiscal 2009. Affecting the nine-month period were severance and related benefit costs of $6.0 million recorded on the publishing segment in the second quarter of fiscal 2009 related to the companywide reduction in workforce. With regard to on-going operating expenses, processing, postage and other delivery expenses, amortization expense, advertising and promotion, and travel and entertainment expenses declined. Book manufacturing, art, and separations expense decreased due to the changes made in the book business. Subscription and newsstand expenses also declined. Employee compensation costs increased for the nine-month period, but decreased for the third quarter due to staff reductions and expense control efforts. While performance-based incentive expense was higher for the quarter, it was down for the nine-month period. Paper expense rose for both the three- and nine-month periods as increases in paper costs of approximately 7 percent and 14 percent, respectively, more than offset decreases in paper consumption due to a decline in advertising pages sold.

Operating Profit
Publishing operating profit decreased 25 percent in the third quarter and 36 percent in the first nine months of fiscal 2009 compared with the respective prior-year periods. The declines primarily reflected the weak demand for advertising partially offset by increased operating profits in our book and integrated marketing operations. In addition, the severance charges discussed above accounted for 4 percent of the decline in publishing operating profit in the first nine months of fiscal 2009.

BROADCASTING

Broadcasting operating results were as follows:

Three Months Ended March 31,                2009       2008    Change
(In thousands)
Non-political advertising revenues       $ 51,778   $ 74,016     (30)%
Political advertising                         245      1,432     (83)%
revenues
Other                                       5,251      2,098     150 %
revenues
Total                                      57,274     77,546     (26)%
revenues
Operating                                  55,926     58,857      (5)%
expenses
Operating                                $  1,348   $ 18,689     (93)%
profit




Nine Months Ended March 31,                  2009        2008    Change
(In thousands)
Non-political advertising revenues       $ 178,143   $ 231,676     (23)%
Political advertising                       23,121       3,940     487 %
revenues
Other                                       10,789       4,118     162 %
revenues
Total                                      212,053     239,734     (12)%
revenues
Operating                                  177,680     179,904      (1)%
expenses
Operating                                $  34,373   $  59,830     (43)%
profit

Revenues
Broadcasting revenues decreased 26 percent in the third quarter and 12 percent in the first nine months of fiscal 2009 compared with the respective prior-year periods. Net political advertising revenues related to the November 2008 elections totaled $23.1 million in the nine-month period compared with $3.9 million in the first nine months of the prior year. The fluctuations in political advertising revenues at our stations, and in the broadcasting industry, generally follow the biennial cycle of election campaigns. Political advertising may displace a certain amount of non-political advertising; therefore, the revenues may not be entirely incremental. The recessionary economy continues to impact non-political broadcasting advertising.
Non-political advertising revenues decreased 30 percent in the third quarter and 23 percent for the nine-month period. For the third quarter and the first nine months of fiscal 2009, local non-political advertising revenues declined 31 percent and 23 percent, respectively, while national non-political advertising revenues decreased 29 percent in the third quarter and 23 percent in the nine-month period. Online advertising declined 12 percent in the third quarter and were flat as compared to the prior-year nine-month period.

Operating Expenses
Broadcasting operating expenses decreased 5 percent in the third quarter and 1 percent in the first nine months of fiscal 2009. Affecting the nine-month period were severance and related benefit costs of $2.0 million recorded on the broadcasting segment in the second quarter of fiscal 2009 related to the companywide reduction in workforce. For the three and nine-month periods, performance-based incentive accruals, advertising and promotion expenses, and film amortization declined. While lower for the three months, legal expenses and bad debt expense increased as compared to the nine-month period in the prior year. For the nine-month period, a credit to expenses for a gain on the Sprint Nextel Corporation equipment exchange contributed to the decrease. 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.

Operating Profit
Broadcasting operating profit declined 93 percent in the third quarter and 43 percent in the first nine months of fiscal 2009 as compared to the same periods in fiscal 2008. The decline reflected weakened economic conditions and their effect on non-political advertising revenues, which more than offset the strength of political advertising revenues in the second quarter of fiscal 2009.

Supplemental Disclosure of Broadcasting EBITDA Meredith's broadcasting EBITDA is defined as broadcasting segment operating profit plus depreciation and amortization expense. EBITDA is not a GAAP financial measure and should not be considered in isolation or as a substitute for GAAP financial measures. See the discussion of management's rationale for the use of EBITDA in the preceding Executive Overview section. Broadcasting EBITDA and EBITDA margin were as follows:

Three Months Ended March 31,     2009     2008
(In thousands)
Revenues                      $ 57,274 $ 77,546
Operating profit              $  1,348 $ 18,689
Depreciation and amortization    6,471    6,262
EBITDA                        $  7,819 $ 24,951
EBITDA margin                   13.7 %   32.2 %




Nine Months Ended March 31,       2009      2008
(In thousands)
Revenues                      $ 212,053 $ 239,734
Operating profit              $  34,373 $  59,830
Depreciation and amortization    18,988    18,969
EBITDA                        $  53,361 $  78,799
EBITDA margin                    25.2 %    32.9 %

UNALLOCATED CORPORATE EXPENSES

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

                                                          2009        2008    Change
             (In thousands)
             Three months ended                        $  5,959    $  5,032      18 %
             March 31,
             Nine months ended                           21,981      20,389       8 %
             March 31,

Unallocated corporate expenses increased 18 percent in the third quarter and 8 percent in the first nine months of fiscal 2009. In the second quarter of fiscal 2009, severance and related benefit costs of $1.0 million were recorded in unallocated corporate expenses related to the companywide reduction in workforce. Increases in pension costs, consulting fees, share-based compensation, and legal services expenses approximately offset decreases in travel and entertainment and depreciation expense. While lower for the nine-month period, performance-based incentive expenses increased in the third quarter. 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 March 31,                     2009         2008    Change
(In thousands)
Production, distribution, and editorial      $ 159,197    $ 166,822      (5)%
Selling, general, and administrative           124,323      135,638      (8)%
Depreciation and                                10,714       11,852     (10)%
amortization
Operating                                    $ 294,234    $ 314,312      (6)%
expenses



Nine Months Ended March 31,                      2009         2008    Change
(In thousands)
Production, distribution, and editorial      $ 491,618    $ 501,271      (2)%
Selling, general, and administrative           421,523      435,962      (3)%
Depreciation and                                32,346       35,986     (10)%
amortization
Operating                                    $ 945,487    $ 973,219      (3)%
expenses

Fiscal 2009 production, distribution, and editorial costs decreased 5 percent in the third quarter and 2 percent in the first nine months of fiscal 2009. Book manufacturing, art, and separation expense decreased due to changes in our book operations discussed above. In addition, declines in processing, postage and other delivery expenses, and film amortization more than offset increases in paper costs.

Selling, general, and administrative expenses declined 8 percent in the third quarter and 3 percent in the nine-month period. In the second quarter of fiscal 2009, severance and related benefit costs of $9.0 million related to the companywide reduction in workforce were recorded in selling, general, and administrative expenses. With regard to other on-going operating expenses, declines in performance-based incentive accruals, advertising and promotion expenses, and travel and entertainment were partially offset by increases in pension costs, consulting fees, bad debt expenses, and legal expenses. Subscription and newsstand expenses also decreased.

Depreciation and amortization expenses decreased 10 percent in both the third quarter and in the nine-month period, primarily due to the customer list intangibles acquired in fiscal 2006 being fully amortized in fiscal 2008.

Income from Operations
Income from operations declined 44 percent in the third quarter; it decreased 42 percent in the first nine months of fiscal 2009. The declines reflect recessionary economic conditions and their effect on advertising revenues. In addition, the severance charges accounted for 4 percent of the decline in income from operations in the first nine months of fiscal 2009.

Net Interest Expense
Net interest expense was $4.8 million in the fiscal 2009 third quarter compared with $5.1 million in the prior-year quarter. For the nine months ended March 31, 2009, net interest expense was $15.4 million versus $16.4 million in the comparable prior-year period. The decline for both periods was primarily due to lower average interest rates. Average long-term debt outstanding was $455 million in the third quarter of fiscal 2009 and $462 million for the nine-month period compared with $424 million in the prior year third quarter and $442 million in the prior year nine-month period.

Income Taxes
Our effective tax rate was 35.5 percent in the third quarter and 39.9 percent in the first nine months of fiscal 2009 as compared to 36.6 percent in the third quarter and 38.7 percent in the first nine months of fiscal 2008. 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 40 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 $24.9 million ($0.55 per diluted share) for the third quarter, a decrease of 46 percent from fiscal 2008 third quarter earnings from continuing operations of $46.2 million ($0.97 per diluted share). For the nine months ended March 31, 2009, earnings were $61.3 million ($1.36 per diluted share), a decrease of 46 percent from prior-year nine month earnings of $114.4 million ($2.38 per diluted share). The declines reflect the economic recession and its effect on advertising revenues. In addition, the severance charges contributed to the nine month decline.

Discontinued Operations
Income (loss) from discontinued operations represents the combined operating results, net of taxes, of Country Home magazine and WFLI, the CW affiliate serving the Chattanooga, Tennessee market. Revenues and expenses for both of these properties have, along with associated taxes, been reclassified from continuing operations into a single line item amount on the Condensed Consolidated Statements of Earnings titled income (loss) from discontinued operations, net of taxes. In connection with the closing of Country Home magazine, the Company recorded a restructuring charge of $6.8 million in the second quarter of fiscal 2009 which included the write down of various assets of Country Home magazine of $5.8 million and severance and outplacement costs of $1.0 million. Most of the asset write-down charge related to the write-off of deferred subscription acquisition costs. These fiscal 2009 charges are reflected in the special items line in the following table of discontinued operations. In addition, income from discontinued operations in fiscal 2008 includes the effect of the reversal of a portion of the restructuring charge recorded in fiscal 2007 related to the discontinuation of the print operations of Child magazine. This reversal was a result of changes in the estimated net costs for vacated leased space and employee severance. It is reflected in the special items line in the following table.

Revenues and expenses related to discontinued operations were as follows:

                                           Three Months               Nine Months
     Periods Ended March 31,              2009       2008          2009        2008
     (In thousands except per share
     data)
     Revenues                          $  5,260   $  9,126      $  16,584   $  26,413
     Costs and expenses                  (4,351 )   (9,287 )      (17,587 )   (26,196 )
. . .