ANNUAL
REPORT
2021
$2,264
$1,713
$2,977
$3,189
$2,849
$307
$245
$399
$219
$150
$251
$199
$363
$184
$97
Financial Highlights
GAAP Results
GAAP Results
Revenues
$2,977
$2,849
$3,189
$2,264
$1,713
Income (loss) from operations(1)
561
(94)
287
87
308
Earnings (loss) from continuing operations(1)(2)
307
(209)
129
114
189
Earnings (loss) per share from
continuing operations(1)(2)(3)
6.27
(9.85)
1.12
1.79
4.16
Total assets
5,566
5,510
6,137
6,771
2,730
Total outstanding debt
2,791
3,045
2,370
3,196
701
Non-GAAP Results
Non-GAAP Results
Adjusted EBITDA(4)
$683
$548
$706
$423
$362
Years Ended June 30 (In millions except per share data)
Non-GAAP amounts are not in accordance with GAAP (accounting principles generally accepted in the United States of America). While management believes
these measures contribute to an understanding of the Company’s financial performance, they should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. See “Reconciliation of Non-GAAP Financial Measures” in the Appendix immediately following
the included Form 10-K.
(1) Impairment of goodwill and other long-lived assets of $389 million for 2020, $42 million for 2019, $23 million for 2018, $6 million for 2017;
and gain on sale of assets of $98 million for 2021, $9 million for 2020, $11 million for 2019, $15 million for 2018, are included in results.
(2) Fiscal 2019 results include an additional $4 million gain on the sale of assets, which was recorded in the non-operating income (expense),
net financial statement line.
(3) Fiscal 2020 results reflect the redemption of the Series A preferred stock.
(4) Adjusted EBITDA - Earnings (loss) from continuing operations before interest expense, income taxes, depreciation, amortization, and special items.
(5) Free cash flow – Net cash provided by operating activities less capital expenditures.
Facing page sources include: comScore Multi-platform/MRI Fusion (11-20/S20), Google Analytics (June 2021),
Top 150 Global Licensors Report (June 2021), Nielsen TV Household Universe Estimates (2021).
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
Revenue
5-Year CAGR: 12%
Cash from Operating Activities
5-Year CAGR: 13%
$3,500
3,000
2,500
2,000
1,500
1,000
500
0
2017
2018
2019
2020
2021
$ in millions
$4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
$4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Free Cash Flow(5)
5-Year CAGR: 15%
2017
2018
2019
2020
2021
$ in millions
2017
2018
2019
2020
2021
$ in millions
National
Media Group
Trusted brands that lead
150 million average monthly
unique visitors, led by PEOPLE,
Allrecipes, InStyle, and Southern
Living. #2 brand licensor worldwide.
Robust performance marketing
generating more than $1 billion in
annual retail sales.
#1 U.S. magazine publisher
Consumer
Reach
More than 185 million
unduplicated American consumers.
Approximately 95% of U.S.
adult women.
Local
Media Group
Delivering news and
information that matters
17 television stations in 12 markets
reaching 11% of U.S. households.
Delicious One-Bowl Desserts
The C l
Brighter rooms, warmer
spaces, and happier homes
FRESH
IDEAS
GREAT
BARBECUE
SAUCES
p. 106
2 | Meredith Corporation 2021 Annual Report
Looking back on fiscal 2021, I see a year of
remarkable transformation.
Despite navigating the COVID-19 pandemic throughout the year,
we delivered strong operational performance and continued
progress on our strategic priorities. This includes advancing our
digital advertising and consumer-focused capabilities, enhancing
our competitive position across our media businesses, and
strengthening our financial position.
We achieved 5 percent revenue growth and the 2nd highest
results in Meredith’s history. Our record free cash flow enabled
repayment of more than $250 million of our debt. As a result of
this performance, we ended fiscal 2021 in a stronger financial and
competitive position than when we started.
We also deepened the relationships between our iconic brands
and the 190 million American consumers we serve. Our
consumers continue to focus on celebrity and entertainment
news, house and home, food, style, health, fitness, and
parenting, as well as news and information about their local
communities. These fundamental categories are Meredith’s
cornerstone, and they are increasingly relevant in today’s market.
We are proud of these accomplishments, of course, but
what made fiscal 2021 transformative were two significant
strategic events:
Digital advertising revenues surpassing magazine
for the first time. This moment has been years in
the making, and it arrived in fiscal 2021.
Agreeing to sell the Local Media Group for $2.825 billion,
representing a 10x valuation. We expect this transaction
will accelerate our top financial priorities, including
materially reducing debt, freeing capital to invest in
future high-potential growth opportunities, and enabling
capital returns to shareholders.
The combination of these events sets the stage for
post-transaction Meredith to be positioned as a ‘digital-first’
media company with low leverage and the capacity to invest in
future growth and return capital to shareholders.
Key operational achievements in fiscal 2021 included:
Record performance from our digital businesses, driven by:
– Our launch of the Meredith Data Studio, which brings together
our valuable first-party data and predictive insights to help
customers improve returns on their advertising investments.
Both the Meredith Data Studio and our new digital platform
have been key factors in large client expansions with Walmart
and Kroger, among others. National Media Group digital
advertising revenues grew 31 percent in fiscal 2021.
– Our strong brand relationships, including those with Apple and
Walmart. Meredith is a leading participant in Apple’s News+
product, an immersive magazine experience that brings
together more than 300 popular magazines into a curated
and convenient experience within the Apple News app. With
To Our Shareholders
Walmart, Meredith offers sales of branded products at retail,
particularly those carrying our Better Homes & Gardens brand.
Meredith retained its position as the world’s second-largest
licensor for the 6th straight year, according to License Global.
Additionally, our multi-year partnership with Clorox, which
includes our deep data and insights, has recently been
expanded to licensing with the launch of the Real Simple Home
Cleaning Collection available at The Container Store. Licensing
revenues grew 27 percent in fiscal 2021.
– Our performance marketing activities, in particular our
relationship with Amazon, along with key retail partnerships
with Walmart, Target, and Nike. In total, our performance
marketing efforts drove $1 billion in retail sales for our partners
during the year. Digital and other consumer driven revenues
grew 26 percent in fiscal 2021.
Enhancements to our competitive position across
our media businesses.
Local Media Group achievements included:
– Record financial performance, driven by $192 million of
political advertising related revenues and continued growth in
retransmission consent revenues.
– Launching PEOPLE (the TV Show!), which debuted across our
Local Media Group stations in September and became one of
the most successful new shows of the season, contributing
to its renewal through 2024.
– Debuting a new OTT app in each local market that
gives viewers a seamless viewing experience between
mobile, tablet and smart TV. The app uses both a local
recommendation engine and follow-my-device technology to
give users a personalized and seamless experience.
FY17
FY18
FY19
FY20
FY21
31%
34%
36%
54%
40%
DIGITAL REVENUES
Meredith’s National Media Group reached an important strategic
milestone in fiscal 2021 as digital advertising revenues grew 31
percent, surpassing print for the first time in the company’s history.
Our digital advertising gains are being driven by our engaged
and growing audience, as sessions to Meredith’s sites grew
12 percent. They are also being driven by our proprietary
technology platform, which brings together strong content and
trusted brands, unique taxonomy, and first-party data.
NMG Digital Advertising Revenue
As a percentage of digital + magazine advertising
60%
50%
40%
30%
20%
10%
0%
MEREDITH SALES TO GRAY AND IAC
After careful consideration with our Board of Directors and
advisors, Meredith agreed to sell its Local Media Group to
Gray Television during fiscal 2021 for $2.825 billion, and early
in fiscal 2022 agreed to sell its remaining digital and magazine
activities to IAC’s Dotdash for approximately $2.7 billion.
We expect these transactions, which we believe unlock
significant value for Meredith shareholders, to close in the
fourth quarter of calendar 2021.
We are enthusiastic at the opportunity to further
strengthen our brands and consumer relationships as
part of Gray and IAC.
Meredith Corporation 2021 Annual Report | 3
– Creating three new hubs focused on creative services,
promotional content, and graphic design. These hubs
increase our output and efficiency by strengthening our
creativity and focus.
– Merging our master control hubs in Atlanta and Phoenix into
a single Atlanta hub, improving efficiencies.
National Media Group achievements included:
– Delivering more than 4 percentage points of magazine
advertising market share, bringing our total to more than
36 percent.
– Expanding the Meredith Audience Action Guarantee (MAAG)
program. The new MAAG provides that a specific number
of readers will take action as a result of seeing a brand
campaign in Meredith magazines.
– Selling 20 million magazines produced by Meredith Premium
Publishing, our newsstand specials business, compared
to 18.8 million in fiscal 2020. Our strong consumer data
capabilities and high-quality brands are competitive
advantages, giving us the ability to adapt quickly to changing
trends and produce content consumers want under brands
that have strong consumer recognition.
– Continuing to advance our video and audio strategies with
exciting programming slates, including the launch of six new
podcasts and nine podcast seasons.
We had several recent social and environmental
accomplishments. For example:
– We made Sustainability Accounting Standards Board
disclosures available publicly for the first time, and completed
the Carbon Disclosure Project’s Forests and Climate
questionnaires for the second year.
– We earned Gender Fair certification for achieving standards in
leadership and opportunity, employee policies, advertising and
communications, diversity reporting, and social impact related
to women empowerment.
– We’ve been recognized by 50/50 Women on Boards as having
a gender-balanced board.
– We created a Business Diversity and Social Responsibility
program to facilitate alignment with suppliers that share
our values.
– We also launched our Good Impressions program that brings
Meredith’s media and marketing consultation services to
bear for minority owned small businesses in the communities
we serve.
Finally, we strengthened our financial position and flexibility
in fiscal 2021, including:
– Producing a record $363 million of free cash flow.
– Reducing net debt by more than $360 million.
– Delivering a greater-than-one-turn reduction of our net
leverage ratio to 3.7x at June 30, 2021, compared to the
prior year.
– Finishing fiscal 2021 with $240 million cash in the bank.
Progress toward near-term priorities
We are pursuing several strategies to best position Meredith
going forward.
First, we are focused on ensuring completion of the
agreed upon sale of the Local Media Group. As mentioned
previously, we expect this transaction will enable material
debt reduction as well as free capital to both invest in future
growth opportunities and return capital to shareholders.
Next, we agreed in early fiscal 2022 to sell our remaining
digital and magazine activities to IAC’s Dotdash for
approximately $2.7 billion and we are focused on closing this
transaction as well.
We will continue to expand our digital capabilities to more deeply
engage consumers and support our advertising partners.
From a consumer standpoint, we will leverage our digital
platform and robust first party data to strengthen our content,
inform our product development strategy, and deliver a better
user experience.
From an advertiser standpoint, we will provide real-time insights
to our clients about changing consumer habits and trends. These
capabilities enable us to help our clients best tailor their creative
campaigns to create direct consumer connections and drive
product sales.
4 | Meredith Corporation 2021 Annual Report
Consumer demand for our brands and services remains strong,
and we believe consumers offer a large growth opportunity.
Consumer related revenues have grown to nearly 50 percent of
total company revenues from approximately 25 percent more
than a decade ago. To drive further growth, we are expanding
our brand licensing and performance marketing activities, and
launching new consumer-focused products.
Finally, we will continue optimizing our cash and costs while
allocating appropriate capital toward promising growth
opportunities. We have a well-established track record of careful
expense management, and we will continue that discipline to the
extent possible.
Final Thoughts
Our competitive advantage derives from our trusted and powerful
brands focused on women, proprietary technology platform,
strong commercial partnerships, and our large audience reach.
These assets are unique in the marketplace and form the basis of
our differentiation.
While we expect to be part of larger organizations at Gray and
IAC’s Dotdash in the future, we will continue positioning our
brands and businesses for long-term success by:
Building out our digital capabilities and leveraging
our portfolio across media platforms;
Increasing our opportunities to monetize
consumer relationships through great content
and value-added services;
Maximizing our opportunity to capture
advertising revenues; and
Maintaining a strong balance sheet and
practicing prudent capital allocation.
Vital to Meredith’s continuing success are our talented and
creative employees, who we believe are the best in the
media industry. This includes our editorial, product, and technical
teams, sales and marketing professionals, support groups,
and management.
In closing, fiscal 2021 was remarkable and challenging. I am
proud of the way we responded, capitalizing on opportunities to
deliver the second-highest results in the Company’s history.
We have a large audience deeply engaged with our trusted brands;
our digital businesses are delivering record performance; and we
are excited at the opportunity to join Gray and IAC’s Dotdash.
We have a long history of prudent capital stewardship. We pledge
to protect and grow the value of your investment in Meredith, as
we work to reward the trust placed in us by all our stakeholders.
ESG LEADERSHIP
We are enhancing our environmental, social and governance
(ESG) strategies based on input from our stakeholders and
guided by an ESG Leadership Council composed of the most
senior leaders at Meredith. This council is charged with bringing
greater intentionality and energy to our work, and is focused on
the following areas:
Planet – Becoming more environmentally sound in our daily
operations, value chain, and procurement processes.
People – Hiring and retaining a diverse staff that reflects the
population of the U.S. while providing exciting opportunities for
the next generation of media professionals and continuing our
support of local communities through our many philanthropic
efforts and donations.
Responsibility – Demonstrating the highest standards of ethical
conduct and expecting our business partners to do the same.
Please visit meredith.com/esg to read more about our
ESG strategies.
Thomas H. Harty
Chairman & Chief Executive Officer
Mell Meredith Frazier
Vice Chairman
2021 Form 10-K
MEREDITH CORPORATION
NATIONAL MEDIA
LOCAL MEDIA
KANSAS CITY
LAS VEGAS
GREENVILLE - ASHEVILLE
HARTFORD - NEW HAVEN
MOBILE - PENSACOLA
FLINT - SAGINAW
SPRINGFIELD - HOLYOKE
TM
ATLANTA
PHOENIX
ST. LOUIS
PORTLAND
NASHVILLE
(This page has been left blank intentionally.)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2021
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __ to __
Commission file number 1-5128
MEREDITH CORPORATION
(Exact name of registrant as specified in its charter)
Iowa
42-0410230
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1716 Locust Street,
Des Moines,
Iowa
50309-3023
(Address of principal executive offices)
(ZIP Code)
Registrant’s telephone number, including area code: (515) 284-3000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol
Name of each exchange on which registered
Common Stock, par value $1
MDP
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Title of class
Class B Common Stock, par value $1
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ Yes o No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ No
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 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. þ Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and emerging growth company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes þ No
The registrant estimates that the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant at December 31, 2020, (the last
business day of the most recently completed second fiscal quarter) was approximately $750 million based upon the closing price on the New York Stock Exchange at
that date.
Shares of stock outstanding at August 31, 2021
Common shares ..............................................
40,719,945
Class B shares .................................................
5,061,358
Total common and class B shares ..................
45,781,303
DOCUMENT INCORPORATED BY REFERENCE
Certain portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on
December 29, 2021, are incorporated by reference into Part III of this Form 10-K to the extent described therein.
TABLE OF CONTENTS
Page
Part I
Item 1.
Business ..................................................................................................................
1
Description of Business
National Media ..................................................................................................
3
Local Media .......................................................................................................
7
Information about our Executive Officers ..............................................................
11
Human Capital Resources ......................................................................................
12
Other .......................................................................................................................
14
Available Information .............................................................................................
15
Forward-Looking Statements .................................................................................
15
Item 1A.
Risk Factors ............................................................................................................
15
Item 1B.
Unresolved Staff Comments ...................................................................................
29
Item 2.
Properties ................................................................................................................
29
Item 3.
Legal Proceedings ...................................................................................................
29
Item 4.
Mine Safety Disclosures .........................................................................................
29
Part II
Item 5.
Market for Registrant’s Common Equity, Related Shareholder Matters, and
Issuer Purchases of Equity Securities ................................................................
29
Item 6.
[Reserved] ...............................................................................................................
31
Item 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations .........................................................................................
32
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk ...............................
58
Item 8.
Financial Statements and Supplementary Data ......................................................
59
Item 9.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure ..........................................................................................
123
Item 9A.
Controls and Procedures .........................................................................................
123
Item 9B.
Other Information ...................................................................................................
124
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ...................
124
Part III
Item 10.
Directors, Executive Officers, and Corporate Governance ....................................
124
Item 11.
Executive Compensation ........................................................................................
125
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters .............................................................................
125
Item 13.
Certain Relationships and Related Transactions, and Director Independence .......
125
Item 14.
Principal Accountant Fees and Services .................................................................
125
Part IV
Item 15.
Exhibits and Financial Statement Schedules ..........................................................
126
Item 16.
Form 10-K Summary ..............................................................................................
132
Signatures .......................................................................................................................................
133
Meredith Corporation and its consolidated subsidiaries are referred to in this Annual Report on Form 10-K
(Form 10-K) as Meredith, the Company, we, our, and us.
PART I
ITEM 1. BUSINESS
GENERAL
Meredith Corporation has been committed to service journalism since its inception in 1902 as an agricultural
publisher. In 1924, the Company published the first issue of Better Homes & Gardens. The Company entered the
television broadcasting business in 1948. Today Meredith uses multiple media platforms—including print, digital,
video, audio, and broadcast television—to provide consumers with content and experiences they desire and to
deliver the messages of our advertising and marketing partners. Nationally, Meredith serves approximately 190
million unduplicated American consumers, including nearly 95 percent of all United States (U.S.) women.
Meredith’s broadcast television stations reach 11 percent of U.S. households.
The Company is incorporated under the laws of the State of Iowa. Our common stock is listed on the New York
Stock Exchange under the ticker symbol MDP.
The Company operates two business segments: national media and local media. Our national media segment
includes leading national consumer media brands delivered across print magazines, digital media, brand licensing
activities, performance marketing, database-related activities, affinity marketing, business-to-business marketing
products and services, and other related operations. Our focus is on the entertainment, food, lifestyle, parenting, and
home categories, which include brands such as People, Better Homes & Gardens, InStyle, Allrecipes, Real Simple,
Shape, Southern Living, and Martha Stewart Living among others. In addition to subscription magazines, in fiscal
2021, we published over 300 special interest publications. Most of our brands are also available as digital editions
on one or more of the major digital newsstands and on major tablet devices. The national media segment’s extensive
digital presence consists of 39 websites and applications (apps) reaching more than 150 million consumers every
month.
Our local media segment consists of 17 television stations located across the U.S. concentrated in fast-growing
markets with related digital media assets. The television stations include seven CBS affiliates, five FOX affiliates,
two MyNetworkTV affiliates, one NBC affiliate, one ABC affiliate, and two independent stations. Local media’s
digital presence includes 12 websites and 12 apps focused on news, sports, and weather-related information. In
addition, the local media segment sells geographically and demographically targeted advertising programs to third
parties.
Financial information about industry segments can be found in Item 7-Management’s Discussion and Analysis of
Financial Condition and Results of Operations and Item 8-Financial Statements and Supplementary Data, under
Note 19.
The Company’s largest revenue source is advertising. National and local economic conditions affect the magnitude
of our advertising revenues. Both national media and local media revenues and operating results can be affected by
changes in the demand for advertising and consumer demand for our products. Television advertising is seasonal
and cyclical to some extent, traditionally generating higher revenues in the second and fourth fiscal quarters and
during key political contests and major sporting events. Magazine circulation revenues are generally affected by
national and regional economic conditions and competition from other forms of media.
1
BUSINESS DEVELOPMENTS
Pending Merger Transaction
As of May 3, 2021, and as amended on June 2, 2021, Meredith, Gray Television, Inc. (Gray), and Gray Hawkeye
Stations, Inc., a wholly-owned subsidiary of Gray, entered into a definitive merger agreement pursuant to which
Gray will acquire Meredith for $2.825 billion (the Merger) immediately after and subject to the consummation of
the Spin-Off (as described below). Immediately prior to the consummation of the merger, Meredith intends to
separate its local media group and national media group into two independent companies by distributing (the
Distribution) to Meredith’s shareholders, on a pro rata basis, the issued and outstanding capital stock of Meredith
Holdings Corporation, a wholly-owned subsidiary of Meredith (NMG SpinCo), which will hold the Company’s
national media group and corporate segments following the separation (collectively, the Spin-Off). Following the
Spin-Off, NMG SpinCo will focus on its national media group portfolio and accelerating the growth of its iconic
brands including People, Better Homes & Gardens, and Allrecipes. The transaction is expected to close prior to the
end of calendar year 2021.
Other Business Developments
In August 2020, Meredith launched Meredith Data Studio, a suite of advertising solutions leveraging the Company's
vast, proprietary, first-party data, and predictive insights capabilities to help inform its partners' marketing, product,
and business strategies. The offerings feature full-service data solutions, predictive analytics, consulting, and self-
service tools, all powered by Meredith's 360 platform, which provides end-to-end audience insights and predictive
capabilities to analyze billions of intent signals and engagements to trends and purchase intent in order to deliver
precisely targeted audience and contextual advertising.
In September 2020, the Company debuted People (The TV Show!), which was the top-rated new syndicated show of
the Fall 2020 season in the 12 markets where it airs. Meredith is currently selling the show to our markets for an
anticipated launch nationally in Fall 2022. The show has been renewed for three additional seasons, through 2024.
Effective October 2020, Meredith named Evolution USA as our North America, Australia, and New Zealand
licensing and brand management agency for the LIFE brand and The LIFE Picture Collection. Accelerating the next
step in monetizing and managing these iconic assets, Evolution USA actively seeks new licensing and brand
expansion opportunities for LIFE and its massive photo archive in a variety of product classifications and consumer
experiences. These include apparel, accessories, home furnishings, housewares, gifts and collectibles, food and
beverage, stationery and paper goods, brand and artist collaborations, hospitality, location-based entertainment
experiences, gaming, and promotions.
As a result of strong consumer demand and success on the newsstand, Meredith re-launched home delivery
subscriptions for Traditional Home, Coastal Living, and Cooking Light with their Winter 2020 issues and Rachel
Ray in Season with its Winter/Spring 2021 issue. These titles’ subscription models had been discontinued in a
previous year and were most recently newsstand only titles.
In January 2021, Meredith sold the Travel + Leisure trademark and other related assets, including the Travel +
Leisure travel clubs. Meredith entered into a 30-year royalty-free licensing relationship to license back the Travel +
Leisure brand and continues to publish the magazine and operate the Travel + Leisure media platforms.
In April 2021, Meredith announced the premiere of season two of The Southern Living Show, new episodes of
Allrecipes Eating In!, and new specials from Better Homes & Gardens. The programming airs on the LMG local
broadcast TV stations. The Southern Living Show originally launched in April 2020 celebrates the Southern
lifestyle, covering food, home, travel, and style.
2
In May 2021, Meredith announced the launch of PawPrint, the largest consumer magazine dedicated to pet families,
according to MediaRadar. PawPrint is a companion to DailyPaws.com, which launched in 2020 as Meredith's
digital brand, publishing high-quality pet care content.
In June 2021, the Company launched People in the '90s, a weekly podcast that takes a nostalgic look at the stars and
stories that defined a decade. Each of the 12 episodes focuses on one print issue of People from 1990 through 1999,
along with the news and events that occurred during the week the issue hit newsstands. It is the third podcast from
the brand, which launched the daily People Every Day podcast in February 2021.
COVID-19 Pandemic
The COVID-19 pandemic has impacted our results, positively in some areas and negatively in others. In the face of
unprecedented business conditions caused by the COVID-19 pandemic, we leveraged our core values, agility,
connection to tens of millions of consumers, and relationships with advertisers and marketers to quickly adapt to
changing business conditions. We believe our connection to consumers has strengthened, as visits to our websites,
response rates to our magazine solicitation offers, sales of our licensed products, and our performance marketing
activities all increased. In the first half of fiscal 2021, digital advertising revenues grew strongly, as economic
uncertainty caused advertising clients to favor platforms with short lead times and flexibility. Magazine advertising
revenues, which have relatively long lead times, were negatively impacted, particularly those focused on categories
that have been most impacted by the pandemic, including travel and luxury.
As we have progressed through the pandemic, quantifying the specific impact becomes more challenging. The
Company estimates that the COVID-19 impact on total revenues was a net decrease of revenues of approximately
$100.0 million to $150.0 million in fiscal 2021.
In response to the pandemic, the Company introduced a number of measures to strengthen its financial position,
preserve liquidity, and improve its financial flexibility. These included pausing Meredith Corporation’s dividend,
refinancing our preferred equity with less expensive term debt, reducing capital expenditures, improving working
capital, and temporarily reducing pay for Meredith Corporation’s Board of Directors, executives, and approximately
60 percent of its employees. Full pay was reinstated for all parties in early September 2020.
At this time, we have not experienced a negative impact on our liquidity due to COVID-19, and we believe we have
sufficient liquidity to satisfy our cash needs for the foreseeable future.
We continue to monitor the ongoing and evolving situation. There may be developments outside our control
requiring us to adjust our operating plan. There remains the risk that COVID-19 could have material adverse
impacts on our future revenue growth as well as our overall profitability.
For additional details regarding the impacts and risks to our business from the COVID-19 pandemic, refer to Item 1-
Risk Factors and Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Form 10-K.
DESCRIPTION OF BUSINESS
National Media
National media contributed 68 percent of Meredith’s consolidated revenues and 53 percent of the combined
operating profit from national media and local media operations in fiscal 2021. People and Better Homes &
Gardens, our flagship brands, together account for a significant percentage of revenues and operating profit of the
national media segment and the Company.
3
Magazines
Information for our major subscription magazine titles as of June 30, 2021, is as follows:
Better Homes & Gardens
bhg.com
Women’s service
12
7,600,000
People
people.com
Celebrity
56
3,400,000
Southern Living
southernliving.com
Travel and lifestyle
11
2,800,000
Shape
shape.com
Women’s lifestyle
10
2,500,000
Parents
parents.com
Parenting
12
2,200,000
Martha Stewart Living
marthastewart.com
Women’s service
10
2,050,000
Real Simple
realsimple.com
Women’s service
12
1,975,000
EatingWell
eatingwell.com
Food
10
1,775,000
InStyle
instyle.com
Women’s lifestyle
12
1,700,000
Entertainment Weekly
ew.com
Entertainment
12
1,500,000
Allrecipes
allrecipes.com
Food
6
1,400,000
Health
health.com
Women’s lifestyle
10
1,350,000
Midwest Living
midwestliving.com
Travel and lifestyle
6
950,000
Travel + Leisure
travelandleisure.com
Travel and lifestyle
12
950,000
Food & Wine
foodandwine.com
Food
12
925,000
People en Español
peopleenespanol.com
Celebrity
9
500,000
Successful Farming
agriculture.com
Farming business
13
390,000
Title
Related Websites
Description
Frequency
per Year
Year-end
Rate Base
1
1
Rate base is the circulation guaranteed to advertisers. Actual circulation generally exceeds rate base and, for most of the Company’s
titles, is tracked by the Alliance for Audited Media, which issues periodic statements for audited magazines.
In addition to these major magazine titles, we published 300 special interest publications under a variety of brands
in fiscal 2021. The titles are issued from one to six times annually and sold primarily on newsstands. A limited
number of special interest publication subscriptions are also sold.
Magazine Advertising—Advertising revenues are generated primarily from sales to clients engaged in consumer
marketing. Many of Meredith’s larger magazines offer regional and demographic editions that contain similar
editorial content but allow advertisers to customize messages to specific markets or audiences. The Company sells
two primary types of magazine advertising: display and direct response. Advertisements are either run-of-press
(printed along with the editorial portions of the magazine) or inserts (preprinted pages). Most of the national media
segment’s advertising revenues are derived from run-of-press display advertising. Meredith also possesses strategic
marketing capabilities, which provide clients and their agencies with access to all of Meredith’s media platforms
and capabilities, including print, television, digital, video, consumer events, and custom marketing. Our team of
creative and marketing experts deliver innovative solutions across multiple media channels that meet each client’s
unique advertising and promotional requirements.
The rates at which we sell print advertising depend on each magazine’s rate base, which is the circulation of the
magazine that we guarantee to our advertisers, as well as our audience size and composition. If we are not able to
meet our committed rate base, the price paid by advertisers is generally subject to downward adjustments, including
in the form of future credits or discounts. Our published rates for each of our magazines are subject to negotiation
with each of our advertisers. We sell digital advertising primarily on a flat rate/sponsorship basis or on a cost per
thousand, or CPM, basis. Flat rate/sponsorship deals are sold on an exclusive basis to advertisers giving them access
to our major events and/or adjacent to prominent and specific areas of our websites. CPM deals are sold on an
impression basis with a guarantee that we will deliver the negotiated volume commitment. If we are not able to meet
the impression goal, we will extend the campaign or provide alternative placements.
4
Magazine Circulation—Most of our magazines are sold primarily by subscription and delivered to subscribers
through the mail. Subscriptions obtained through direct-mail solicitation, agencies, insert cards, the internet, and
other means are Meredith’s largest source of circulation revenues. Revenue per subscription and related expenses
can vary significantly by source. The majority of subscription magazines are also sold by single copy. Single copies
sold on newsstands are distributed primarily through magazine wholesalers, who have the right to receive credit
from the Company for magazines returned to them by retailers.
Newsstand sales include sales through traditional newsstands as well as supermarkets, convenience stores,
pharmacies, and other retail outlets. We also publish branded books, including soft-cover “bookazines.” These are
distributed through magazine-style “check-out pockets” at retail outlets and traditional trade book channels. We
publish books on a diverse range of topics aligned with our brands, including special commemorative and
biographical books. We also publish books under various licensed third-party brands and a number of original titles.
Our Oxmoor House imprint publishes a variety of home, cooking, and health books under our lifestyle-oriented
brands as well as licensed third-party brands.
Digital Media
National media’s 39 websites and apps provide information, ideas, and inspiration to more than 150 million unique
monthly visitors, including approximately three-quarters of all American women. These branded websites focus on
the topics that women care about most—celebrity, entertainment, food, home, health, beauty, style, and wellness.
Our brands also engage on all major social platforms, through robust newsletter programs, audio products, and
connected devices. For example, Allrecipes.com and People.com are No. 1 in their respective categories in terms of
monthly visitors and engage consumers across all major social platforms, multiple podcasts, and Amazon Alexa
skills. In fiscal 2021, our brands had 5 billion video views and reached approximately 88 million Facebook fans, 48
million Twitter followers, 48 million Instagram followers, over 15 million Pinterest followers, and over 10 million
YouTube subscribers. Meredith brands also sent nearly 2 billion emails each month and have 17 podcasts across 11
brands.
Powering our digital business is our proprietary technology platform that houses all of our content, our unique
taxonomy, our first-party data and insights, and our user identity graph. This platform allows us to have a unified
view of our consumers and how they interact with our content and products, a universal taxonomy for our brands,
and first-party data. This combination provides us with deep predictive insights into user behavior that can be used
to power our content and product development strategy and it, in turn, drives advertising and performance
marketing dollars. Through this platform, Meredith captures billions of rich first-party contextual and intent signals
each year, making our capabilities and scale even more valuable as third-party cookies grow obsolete.
Other Sources of Revenues
Other revenues are derived from digital and customer relationship marketing, other custom publishing projects,
brand licensing agreements, and ancillary products and services.
Affinity Marketing—Synapse Group, Inc., a wholly-owned subsidiary of Meredith, is an affinity marketing
company that partners with publishers, brick and mortar retailers, digital partners, airline frequent flier programs,
and customer service and direct response call centers. It is a major marketer of magazine subscriptions in the U.S.
Building on its continuity marketing expertise, Synapse has diversified its business to also market other products
and services. Meredith also owns magazines.com and magazine.store, websites focused on the sales of Meredith and
third-party magazine subscriptions.
Brand Licensing—Meredith Brand Licensing generates revenue through multiple long-term trademark licensing
agreements with retailers, manufacturers, publishers, and service providers. Our licensing programs extend the
reach of Meredith brands into additional consumer channels in the U.S. and abroad. Currently the world’s second-
largest global licensor, Meredith has direct-to-retail partnerships with leading companies, including Better Homes &
Gardens at Walmart, Southern Living at Dillard’s, and InStyle-branded hair salons in select JC Penney stores and
several manufacturers and service providers who sell licensed product to a variety of retailers.
5
Our most significant partnership is Better Homes & Gardens-branded products sold at Walmart stores in the U.S.
and at Walmart.com. The brand is represented by more than 3,000 products across multiple categories in the home
décor, outdoor living, DIY and home improvement, and garden space. Meredith also has a long-term agreement to
license the Better Homes & Gardens brand to Realogy Corporation, which is entering its 14th year as a residential
real estate franchise system operating as Better Homes and Gardens Real Estate, LLC. The real estate network now
includes more than 350 offices and more than 12,500 real estate professionals across the U.S., Canada, Bahamas,
Jamaica, Australia, and New Zealand. Also, in the real estate sector, the Southern Living and Coastal Living brands
include networks of hotels and inspired residential communities in the southeastern U.S. and Belize.
The Allrecipes licensing program with Lifetime Brands, Inc. offered at Kroger stores and Kroger.com for
approximately 85 kitchenware items, plus launched Allrecipes spice sets which are available on amazon.com.
The Company expands its international reach primarily through international licensing agreements. Meredith’s
national media brands are currently distributed, including a localized presence, in multiple countries. The Company
continues to pursue activities that will serve consumers and advertisers while also extending and strengthening the
reach and vitality of our brands.
Meredith has granted distribution rights for backlist titles of our consumer-leading brands, including the powerful
Better Homes & Gardens imprint, to a book publisher. Meredith creates book content and retains all approval and
content rights while the distributor is responsible for reprinting, sales and marketing, distribution, and inventory
management. Meredith receives revenue based on sales less a 20 percent distributor fee.
The Foundry 360—The Foundry 360 is a creative content studio serving clients across a broad range of industries.
The services include using our content creation expertise to develop content marketing programs across multiple
platforms, including native advertising that enables clients to engage new consumers and build long-term
relationships with existing customers.
Production and Delivery
Paper, printing, and postage costs accounted for 21 percent of the national media segment’s fiscal 2021 operating
expenses. Coated and supercalendered publication paper is the major raw material essential to the national media
segment. We directly purchase all the paper for our magazine production and custom publishing business. The
Company has contractual agreements with major paper manufacturers to ensure adequate supplies for planned
publishing requirements. The price of paper is driven by overall market conditions and is therefore difficult to
predict. In fiscal 2021, average paper prices decreased 15 percent, whereas in fiscal 2020, average paper prices
decreased 4 percent. In fiscal 2019, average paper prices increased 10 percent. Management anticipates an increase
in paper prices of approximately 11 percent in fiscal 2022.
As a result of significant consolidation in the printing industry, at present there is one printer in the United States
with the capability and capacity to handle a substantial portion of Meredith’s magazine print production. We have a
long-term contract with that printer through 2030, creating extended price stability for our print manufacturing
prices.
Postage is a significant expense of the national media segment. We continually seek the most economical and
effective methods for mail delivery, including cost-saving strategies that leverage work-sharing opportunities
offered within the postal rate structure.
In general, postage rate changes are capped by law at the rate of inflation, as measured by the Consumer Price Index
(CPI), but may be above-CPI price increases on the basis of certain factors. Postage prices have risen in each of the
last three years. In January 2021, the United States Postal Service (USPS) increased rates by approximately 1.8
percent for First-Class Mail and 1.5 percent for other categories. The most recent rate change was an increase of
approximately 6.9 percent effective August 2021. The USPS has also announced proposed temporary rate
adjustments for the 2021 holiday season. Under the revised rate authority methodology, Meredith expects above-
CPI price increases for the foreseeable future. Meredith continues to work independently as well as with others to
6
encourage and assist the USPS find and implement efficiencies to contain rate increases. We cannot, however,
predict future changes in the postal rates or the impact they will have on our national media business.
Subscription fulfillment services for Meredith's national media brands are provided by third parties. National
magazine newsstand distribution services are also provided by third parties through multi-year agreements.
Competition
Our business is characterized by continuously evolving technology, frequent product evolution, and changing
preferences from consumers, advertisers, and marketers. Media is intensely competitive, particularly for women’s
attention and for spending from advertisers and marketers. Our magazines and related publishing products and
services compete with other mass media, including the internet and many other leisure-time activities. Our digital
businesses compete against diversified multi-platform media companies, ‘pure-play’ digital companies, news
aggregators, search engines, social media platforms, and large digital platform operators. Competition for consumer
attention is based principally on editorial content, marketing skills, price, and customer service. Competition for
advertising dollars is based primarily on advertising rates, circulation levels, reader demographics and engagement,
advertiser results, and sales team effectiveness. While competition is strong for established titles, gaining readership
for newer magazines and specialty publications is especially competitive. We believe our primary competitive
differentiators are our large reach to American consumers, particularly women; our expertise at creating content and
experiences that drive meaningful consumer engagement; our trusted and iconic brands; our proprietary technology
and analytics platform; and our long-standing relationships with advertisers and marketers.
Local Media
Local media contributed 32 percent of Meredith’s consolidated revenues and 47 percent of the combined operating
profit from national media and local media operations in fiscal 2021. Information about the Company’s television
stations at June 30, 2021, is as follows:
WGCL-TV
7
CBS
cbs46.com
July 2023
46
April 2029
4.8 %
Atlanta, GA
WPCH-TV
7
Independent
n/a
n/a
17
April 2029
0.8 %
Atlanta, GA
KPHO-TV
11
CBS
azfamily.com
July 2023
5
October 2022
6.4 %
Phoenix, AZ
KTVK
11
Independent
azfamily.com
n/a
3
October 2022
3.8 %
Phoenix, AZ
KPTV
21
FOX
kptv.com
July 2022
12
February 2023
6.4 %
Portland, OR
KPDX
21
MyNetworkTV
n/a
September 2022
49
February 2023
1.4 %
Portland, OR
KMOV
23
CBS
kmov.com
July 2023
4
February 2022
11.1%
St. Louis, MO
WSMV-TV
29
NBC
wsmv.com
December 2021
4
August 2029
6.1%
Nashville, TN
Station,
Market
DMA
National
Rank 1
Network
Affiliation
Related Website
Expiration
Date of Network
Affiliation
Virtual
Channel
Expiration
Date of FCC
License
Average
Audience
Share 2
7
WFSB
32
CBS
wfsb.com
July 2023
3
April 2023
10.5 %
Hartford, CT
New Haven, CT
KCTV
34
CBS
kctv5.com
July 2023
5
February 2022
9.3 %
Kansas City, MO
KSMO-TV
34
MyNetworkTV
n/a
September 2022
62
February 2022
0.8 %
Kansas City, MO
WHNS
35
FOX
foxcarolina.com
July 2022
21
December 2028
3.8 %
Greenville, SC
Spartanburg, SC
Asheville, NC
Anderson, SC
KVVU-TV
40
FOX
fox5vegas.com
July 2022
5
October 2022
5.4 %
Las Vegas, NV
WALA-TV
57
FOX
fox10tv.com
July 2022
10
April 2029
5.8 %
Mobile, AL
Pensacola, FL
WNEM-TV
73
CBS
wnem.com
July 2023
5
October 2021
13.5 %
Flint, MI
Saginaw, MI
Bay City, MI
WGGB-TV
116
ABC
westernmassnews.com
August 2023
40
April 2023
5.6 %
Springfield, MA
FOX
July 2022
40.2
2.1 %
Holyoke, MA
WSHM-LD
116
CBS
westernmassnews.com
July 2023
3
April 2023
3.4 %
Springfield, MA
Holyoke, MA
n/a Not applicable
1 Designated Market Area (DMA) is a registered trademark of, and is defined by, Nielsen Media Research. The national rank is from the 2020-2021
DMA ranking.
2 Average audience share represents the estimated percentage of households using television tuned to the station in the DMA. The percentages shown reflect
the average total day shares (6:00 a.m. to 2:00 a.m.) for the November 2020, February 2021, and May 2021 measurement periods.
Station,
Market
DMA
National
Rank 1
Network
Affiliation
Related Website
Expiration
Date of Network
Affiliation
Virtual
Channel
Expiration
Date of FCC
License
Average
Audience
Share 2
Operations
The principal sources of the local media segment’s revenues are 1) retransmission of our television signals by cable,
satellite, telecommunications, and over-the-top service providers; 2) local non-political advertising focusing on the
immediate geographic area of the stations; 3) national non-political advertising; 4) political advertising which is
cyclical with peaks occurring in our odd-numbered fiscal years (e.g., fiscal 2019, fiscal 2021) and particularly in our
second fiscal quarter of those fiscal years; 5) geographic and demographic-targeted digital and print advertising
programs sold to third parties; and 6) digital advertising on the stations’ websites, mobile-optimized websites, and
apps.
The stations sell commercial time to both local/regional and national advertisers. Rates for spot advertising are
influenced primarily by the market size, number of media competitors, including in-market broadcasters, and
audience ratings and demographics. Generally, the larger a station’s audience in any particular daypart or program,
the higher the advertising rates it can command. As supply and demand fluctuate in the market, so do a station’s
8
advertising rates. Independent representative firms sell most national advertising while the sales staff at each station
sell local/regional advertising.
Typically, 40 to 60 percent of a market’s television advertising revenue is generated during local newscasts. Stations
are continually working to increase the number of newscasts and additionally grow their news ratings, which in turn
increase advertising revenues.
Meredith’s 16 national network affiliation agreements also influence advertising rates. A network affiliation
agreement provides a station the exclusive right to broadcast network programming in its local service area. In
return, the network has the right to sell most of the commercial advertising aired during network programs and
receives programming fees from the station.
Retransmission consent revenue is generated from cable, satellite, telecommunications, and over-the-top service
providers who pay Meredith for access to our television station signals so that they may retransmit our signals and
charge their subscribers for this programming. These fees increased in each of the last three fiscal years, primarily
due to renegotiations of expiring contracts and negotiated rate increases on existing contracts effective during the
year.
Programming fees paid to the networks are, in essence, a portion of those retransmission consent fees. Programming
fees paid to the networks increased 12 percent in fiscal 2021, 15 percent in fiscal 2020, and 20 percent in fiscal 2019
due to renegotiations of expiring contracts.
Stations sometimes also pay networks for certain marquee sports programming (professional football, college
basketball, and Olympics) and news services. While Meredith’s relations with the networks historically have been
very good, the Company can make no assurances they will remain so over time.
The Federal Communications Commission (FCC) has permitted broadcast television station licensees to use their
digital spectrum for a wide variety of services such as high-definition television programming, audio, data, mobile
applications, and other types of communication, subject to the requirement that each broadcaster provide at least one
free video channel equal in quality to the current technical standards. All of our stations are broadcasting one or
more additional programming streams on their digital channels: one airs the Fox network; two of our markets have
MyNetworkTV; ten carry Cozi TV; six broadcast the Court TV Mystery and Circle networks; three air the Bounce
and Grit networks; and four air the LAFF, DABL, and Court TV networks.
The costs of television programming are significant. In addition to network fees, there are two principal
programming costs for Meredith: locally produced programming, including local news, and purchased syndicated
programming. The Company continues to increase our locally produced news and entertainment programming to
control content and costs and to attract advertisers. Syndicated programming costs are based largely on demand
from stations in the market and can fluctuate significantly.
Local media’s operations also include MNI Targeted Media (MNI). Through MNI, we provide clients with a single
point of contact for a range of targeted digital and print advertising programs primarily on a local and regional level.
Digital products include programmatic offerings and custom display advertising on local and national websites.
Print products include customized geographic and demographic-targeted advertising programs in approximately 35
top U.S. magazines, including our own national media magazines and those of other leading magazine publishers.
Competition
Meredith’s television stations compete directly for advertising dollars and programming in their respective markets
with other local television stations, radio stations, cable/satellite systems, newspapers, outdoor advertising, local
magazines, direct mail, and their related websites and apps. The stations further compete against these media
competitors and other local and national digital media properties. Advertisers compare audience viewership/
consumption, market share, audience demographics, and advertising rates, whether local, network, or syndicated,
when making advertising decisions.
9
Regulation
The ownership, operation, and sale of broadcast television stations, including those licensed to the Company, are
subject to the jurisdiction of the FCC, which engages in extensive regulation of the broadcasting industry under
authority granted by the Communications Act of 1934, as amended (Communications Act), and has the authority to
promulgate rules and regulations governing broadcasting. The Communications Act requires broadcasters to serve
the public interest. Among other things, the FCC assigns frequency bands; determines stations’ locations and
operating parameters; issues, renews, revokes, and modifies station licenses; regulates and limits changes in
ownership or control of station licenses; regulates equipment used by stations; regulates station employment
practices; regulates certain program and advertising content, including commercial matters in children’s
programming; regulates the retransmission of television stations by multichannel video programming distributors;
has the authority to impose penalties for violations of its rules or the Communications Act; and imposes annual fees
on stations. Reference should be made to the Communications Act, as well as to the FCC’s rules, public notices, and
rulings for further information concerning the nature and extent of federal regulation of broadcast stations.
Broadcast licenses are granted for terms of up to eight years. The Communications Act directs the FCC to renew a
broadcast license if the station has served the public interest and is in substantial compliance with the provisions of
the Communications Act and FCC rules and policies. Management believes the Company is in substantial
compliance with all applicable provisions of the Communications Act and FCC rules and policies and knows of no
reason why Meredith’s broadcast station licenses will not be renewed.
The FCC has, on occasion, changed the rules related to ownership of media assets, including rules relating to the
ownership of one or more television stations in a market. The FCC’s media ownership rules remain subject to
further review by the FCC, various court appeals, petitions for reconsideration before the FCC, and possible actions
by Congress. We cannot predict the impact of any of these developments on our business.
The Communications Act and the FCC also regulate relationships between television broadcasters and cable,
satellite, and telecommunications television providers. Under these provisions, most cable systems must devote a
specified portion of their channel capacity to the carriage of the signals of local television stations that elect to
exercise this right to mandatory carriage. Alternatively, television stations may elect to restrict cable systems from
carrying their signals without their written permission, which is referred to as retransmission consent. Congress and
the FCC have established and implemented generally similar market-specific requirements for mandatory carriage
of local television stations by satellite television providers when those providers choose to provide a market’s local
television signals and grants of retransmission consent to satellite television providers. These rules, including
existing related rules on exclusivity and good faith bargaining, and proposed rules governing “over-the-top”
carriage by Internet video programming distributors are subject to further review by the FCC and possible actions
by Congress. Carriage of local television stations by multichannel video programming distributors is also governed
by U.S. copyright law, including the Copyright Act of 1976, as amended, which is subject to revision by Congress
and interpretation by the courts. We cannot predict further changes in the laws or rules governing these relationships
or the impact of any such developments on our business.
The FCC proposed a plan, called the National Broadband Plan, to increase the amount of spectrum available in the
U.S. for wireless broadband use. In furtherance of the National Broadband Plan, Congress authorized the FCC to
conduct a “reverse auction” for which television broadcast licensees could submit bids to receive compensation in
return for relinquishing all or a portion of their rights in the television spectrum of their full service and/or Class A
stations. Under the law, the FCC was permitted to hold one reverse auction and a follow-up auction for the newly
freed spectrum. The FCC completed both auctions in calendar year 2017.
Even if a television licensee did not participate in the reverse auction, Congress granted the FCC the authority to
force a television station to change channels and/or modify its coverage area to allow the FCC to rededicate certain
channels within the television band for wireless broadband use. Following the incentive auction, the FCC released a
list of television stations that were required to change their facilities by a specified date as part of this “repacking”
process. Several of our stations were among the hundreds of stations selected for repacking of the television band.
All our stations selected for repacking completed their move and commenced operations on their new channels on
10
or before the FCC’s deadline. We completed the repack in fiscal 2021 and received reimbursements from the FCC’s
special fund covering 80 percent of the total cost of the repack.
Congress, certain States, and the FCC have under consideration, and in the future may adopt, new laws, regulations,
and policies regarding a wide variety of other matters that also could affect, directly or indirectly, the operation,
ownership transferability, and profitability of the Company’s broadcast stations and affect the ability of the
Company to acquire additional stations. In addition to the matters noted above, these could include, among other
things, spectrum usage fees, regulation of political advertising rates, restrictions on the advertising of certain
products (such as pharmaceuticals, alcoholic beverages, or gambling), program content restrictions, and ownership
rule changes.
Other matters that could potentially affect the Company’s broadcast properties include, but are not limited to,
technological innovations and developments generally affecting competition in the mass communications industry
for viewers or advertisers, such as home video recording devices and players, satellite radio and television services,
cable television systems, newspapers, outdoor advertising, and internet-delivered video programming services. For
example, the FCC approved a proposal to allow the voluntary transition of television broadcasters to ATSC 3.0,
known as Next Generation Television. We launched one of the first ATSC 3.0 transitions in Portland, Oregon. We
cannot predict whether or how this process will ultimately affect the Company or our television stations.
Large mass communication transactions have also increased the scrutiny of federal and state antitrust enforcement
on the mass communications industry. The Company, along with other major broadcasters, is subject to a Consent
Decree with the U.S. Department of Justice entered in 2019 restricting the exchange of pacing and other information
between stations. In entering the Consent Decree, the Company did not admit liability and was not required to pay
any fine or other penalty. We cannot predict whether or how this Consent Decree will ultimately affect the
broadcast industry, the Company, or our television stations.
The information provided in this section is not intended to be inclusive of all regulatory provisions currently in
effect. Statutory provisions and FCC regulations are subject to change, and any such changes could affect future
operations and profitability of the Company’s local media segment. Management cannot predict what regulations or
legislation may be adopted, nor can management estimate the effect any such changes would have on the
Company’s television broadcasting operations.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Executive officers are elected to one-year terms each November. The current executive officers of the Company are:
Thomas H. Harty—President and Chief Executive Officer (February 2018 - present) and a director of the
Company since August 2017. Formerly President and Chief Operating Officer (August 2016 - February 2018) and
President, National Media Group (2010 - August 2016). Mr. Harty received his MBA from Iona College and his
bachelor’s degree from Castleton University. Age 58.
Catherine A. Levene—President, National Media Group (November 2020 - present). Formerly President/Chief
Digital Officer National Media Group (March 2019 - November 2020) and Chief Strategy Officer (January 2019 -
March 2019). Prior to joining Meredith, Ms. Levene served as an independent consultant (2016 - 2019). Ms. Levene
received her MBA from Harvard University and her Bachelor’s degrees from the University of Pennsylvania.
Age 51.
Patrick J. McCreery—President, Local Media Group (July 2018 - present). Formerly Local Media Group
Executive Vice President (January 2018 - July 2018), and Vice President of News and Marketing (2014 - January
2018). Mr. McCreery received his bachelor’s degree from Ohio State University. Age 50.
11
Jason M. Frierott—Chief Financial Officer (March 2020 - present). Prior to joining Meredith, Mr. Frierott served
as Chief Financial Officer of Wabtec Freight, a segment of Wabtec Corporation (2019). Before Wabtec Corporation
acquired GE Transportation, a business unit of General Electric Company, Mr. Frierott served as GE
Transportation’s Chief Financial Officer (2015 - 2019). Mr. Frierott received his Bachelor’s degree from the
University of Arizona. Age 47.
John S. Zieser—Chief Development Officer/General Counsel and Secretary (2006 - present). Mr. Zieser earned his
Juris Doctor from Cornell University. Mr. Zieser earned both MBA and BBA degrees from the University of Iowa.
Age 62.
HUMAN CAPITAL RESOURCES
Meredith operates under the guiding principle that our employees are the Company’s most important resource. Our
human resources initiatives are therefore designed to attract, develop, and retain a diverse group of highly qualified
employees who embody values such as integrity, creativity, courage, initiative, passion, energy, teamwork,
inclusiveness, and respect for others. We focus on both the end result of an employee’s work, as well as how that
end result is achieved. Our culture at Meredith is centered on workplace community, collaboration, communication,
and a shared sense of purpose.
Workforce Demographics
As of June 30, 2021, Meredith had approximately 5,050 full-time and 70 part-time employees of whom
approximately 4,750 were located in the U.S., approximately 365 in India, and approximately 5 in other locations.
Less than 10 percent of our workforce is unionized. We have various arrangements with our international
employees that we believe to be customary for multinational corporations. We have had no strikes or work
stoppages during the last five years and consider relations with our employees to be good.
Diversity, Equity, and Inclusion
We have published detailed workforce diversity statistics in our Corporate Social Responsibility Report, available
on our website. The following reflects selected diversity data for our employees. As of June 30, 2021, 59.1 percent
of our workforce identifies as women and 24.4 percent as people of color. In fiscal 2021, 59.6 percent of new hires
were women and 41.1 percent of new hires were people of color.
Diversity, equity, and inclusion are at the heart of Meredith’s core values, and we have made it a priority to foster a
work environment where every employee feels welcomed and valued. We are committed to these components of
our diversity efforts:
•
Increasing employee diversity across the organization;
•
Facilitating inclusion efforts within the workplace;
•
Creating education and awareness opportunities; and
•
Effectively communicating our diversity, equity, and inclusion initiatives and strategies inside and outside
of the organization.
We believe having a diverse organization will create even greater results and allow us to better serve our
increasingly diverse consumer base.
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We believe in and strive for an environment based on respect for all individuals, and we provide equal employment
opportunity to all people, regardless of race, color, national origin/ethnicity, gender identity/gender expression,
creed, religion, age, disability, sexual orientation, marital status, military service, or any other characteristic.
We created a Diversity, Equity, & Inclusion team led by a Vice President, Diversity, Equity, & Inclusion and that
team, supported by our Employee Resource Groups, is responsible for connecting current activities to a larger
Diversity, Equity, and Inclusion strategy that we believe will allow us to continually embed these principles into all
of our functions. This strategy is focused around the pillars of Education, Recruitment, Retention, and
Communication, which are discussed in more detail in our Corporate Social Responsibility Report.
Talent Management
In addition to our Diversity, Equity, and Inclusion initiatives, we prioritize our people and the communities in which
we operate in several ways, including:
•
Compensation and Benefits. We deliver a total rewards package (compensation and benefits) to attract,
retain, and motivate our employees. Competitive compensation is a Meredith cornerstone, and we have
strong practices in place to support the well-being of all employees. Our pay programs are designed to
recognize and reward individual performance. We participate annually in industry surveys to benchmark
our pay programs and ensure overall pay levels are commensurate with the marketplace. We utilize outside
consultants to conduct pay studies to ensure compensation is administered fairly and equitably across all
employees. We also offer a broad slate of competitive employee benefits, including, but not limited to, a
401(k) plan with a generous Company matching contribution and no vesting requirement, an Employee
Stock Purchase Plan, tuition reimbursement, an education loan program for parents, a student-loan
refinancing program for employees and family members, generous time off policies, as well as robust health
benefits and an extensive and award-winning health and financial wellness program available to employees
and their spouses/domestic partners. Meredith also offers virtual and onsite healthcare consultation through
its health centers in Des Moines and New York. Finally, in addition to our own corporate donations to
nonprofit organizations, we also offer to match employee donations (up to $5,000 each fiscal year for each
employee) and contribute funds based on hours employees volunteer with qualifying charities.
•
Employee Engagement. In order to better inform the development of, and the resulting impact from, our
human resources initiatives, we survey our employees periodically to monitor their satisfaction and
engagement. The most recent employee survey was distributed in September 2020 and covered a range of
topics, including Productivity & Collaboration; Transparency & Communication; Employee Well-Being
and Diversity, Equity and Inclusion. Additionally, our Chairman and Chief Executive Officer regularly
communicates with and responds to employee questions and concerns in Company-wide town hall
meetings, with questions and answers posted on the Company’s intranet following meetings. In each case,
the feedback is carefully reviewed by our human resources team and used to develop and refine our human
resources initiatives.
•
Talent Development and Training. Meredith prides itself on having a culture of highly engaged employees,
which we believe is largely driven by our approach to performance management. We have a tried-and-true
approach, which starts with employees collaborating with their managers to set meaningful, actionable, and
impactful goals at the beginning of the year. Throughout the year, managers and employees have regular
dialogue regarding progress against those goals. At the end of the year, employees and managers complete a
performance appraisal, which includes a discussion about goal attainment. It is a two-way conversation
where employees are encouraged to provide their manager feedback on how he, she, or they can best
support day-to-day activities and interactions while helping employees achieve their longer-term career
goals. This approach enhances employee engagement but also ensures that performance standards are
applied fairly and reasonably and that they maintain a focus on continuous improvement. Demonstrated
successful performance is rewarded with appropriate increases in pay and promotional opportunities, when
they arise. In addition to performance management, we know that employees capable of motivating and
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developing others have a significant positive impact on employee performance, retention, engagement, and
overall business performance. We designed a learning portal with engaging video-based learning for all
employees that focuses on growth and career development. We believe our employee development and
training programs are an important investment in Meredith’s future.
COVID-19 Response
We have adopted a multi-pronged approach to managing the COVID-19 pandemic. Much of our focus has been on
deploying timely and engaging content, deep consumer connections, and broad reach to provide important
communications, inspire families to make the most of their time at home, and help consumers – and Meredith
employees – manage the stress associated with this unprecedented situation. For our employees, in particular, our
extensive and award-winning wellness program has provided important resources to them and their families in order
to help them manage their physical, mental, and financial health during this crisis. We have taken the following
actions to help protect the health, safety, and well-being of our employees in response to the COVID-19 pandemic:
•
We moved all nonessential employees to a remote work environment and implemented additional safety
measures for all essential employees, including the provision of necessary protective equipment, the
creation of sanitizing locations, daily entry questionnaires, trainings, and the adoption of distancing and
testing protocols to align with regulatory guidelines.
•
We provided Telehealth benefits at no cost to employees through September 2020.
•
We offered additional assistance with back-up dependent care, including reimbursement for emergency
childcare expenses, and additional paid time off for employees with children at home due to schools and
childcare providers closing.
•
We provided employees access to a free 12-month premium membership to MyLife, a meditation app
designed to help individuals manage their stress.
•
We co-facilitated a series of Company-wide discussions about developing strategies for self-care during
turbulent times with our Employee Assistance Program, which also hosts free webinars about managing
stress and offers employees 24/7 confidential access to professional counselors.
•
In an effort to encourage employees to get vaccinated, we secured partnerships with pharmacies and vaccine
clinics in our Des Moines and Birmingham locations, and provided paid time off for employees to receive
their COVID-19 vaccines.
OTHER
Name recognition and the public image of the Company’s trademarks (for example, People, Better Homes &
Gardens, Parents) and television station call letters are vital to the success of our ongoing operations and to the
introduction of new businesses. The Company protects our brands by aggressively defending our trademarks and
call letters.
The Company had no material expenses for research and development during the past three years. Revenues from
individual customers and revenues, operating profits, and identifiable assets of foreign operations were not
significant. Compliance with federal, state, and local provisions relating to the discharge of materials into the
environment and to the protection of the environment had no material effect on capital expenditures, earnings, or the
Company’s competitive position.
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AVAILABLE INFORMATION
The Company’s corporate website at meredith.com and our Investor Relations website at ir.meredith.com contain a
significant amount of information about Meredith. We encourage investors to visit these websites from time to time,
as information is updated and new information is posted. Additional information on non-financial matters, including
environmental and social matters and diversity and inclusion initiatives, is available at www.meredith.com/about-us/
corporate-social-responsibility. Website references in this report are provided as a convenience and do not
constitute, and should not be viewed as, incorporation by reference of the information contained on, or available
through, the websites. Therefore, such information should not be considered part of this report.
Meredith makes available free of charge through our website our Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and amendments to those reports filed or furnished to the United States Securities
and Exchange Commission (SEC) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as
soon as reasonably practical after such documents are electronically filed with or furnished to the SEC.
Additionally, the SEC maintains an internet site that contains reports, proxy and information statements, and other
information. The address of the SEC’s website is www.sec.gov. Meredith also makes available on our website our
corporate governance information, including charters of all our Board Committees, our Corporate Governance
Guidelines, our Code of Ethics, and our Bylaws. Copies of such documents are also available free of charge upon
written request.
FORWARD-LOOKING STATEMENTS
This Form 10-K, including the sections titled Item 1-Business, Item 1A-Risk Factors, and Item 7-Management’s
Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements
that relate to future events or our future financial performance. We may also make written and oral forward-looking
statements in our SEC filings and elsewhere. By their nature, forward-looking statements involve risks, trends, and
uncertainties that could result in actual results that are materially different than those anticipated in any forward-
looking statements. Such factors include, but are not limited to, those items described in Item 1A-Risk Factors, those
identified elsewhere in this document, and other risks and factors identified from time to time in our SEC filings.
We have tried, where possible, to identify such statements by using words such as may, should, expects, provides,
anticipates, assumes, can, will, meets, could, likely, intends, might, predicts, seeks, would, believes, estimates, plans,
continues, guidance, or outlook, or variations of these words or similar expressions in connection with any
discussion of future operating or financial performance. Any forward-looking statements are and will be based upon
our then-current expectations, estimates, and assumptions regarding future events and are applicable only as of the
dates of such statements. Readers are cautioned not to place undue reliance on such forward-looking statements that
are part of this filing; actual results may differ materially from those currently anticipated. Such risk factors may be
amplified by the COVID-19 pandemic and its potential impact on the Company’s business and the global economy.
The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of
new information, future events, or otherwise.
ITEM 1A. RISK FACTORS
In addition to the other information contained or incorporated by reference into this Form 10-K, investors should
consider the following risk factors carefully when investing in our securities. In addition to the risks described
below, there may be additional risks that we have not yet perceived or that we currently believe are immaterial.
Risks Relating to the Separation, Distribution, and Spin-Off
Meredith’s and Gray’s inability to obtain all material authorizations, consents, approvals and clearances of
third parties including U.S. federal agencies (Third-Party Approvals) in connection with the Distribution and
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merger may have a material adverse effect on Meredith’s ability to consummate the Distribution. There are
numerous Third-Party Approvals that Meredith and Gray must obtain in connection with the Distribution and the
restructuring of Meredith’s business in connection therewith, including approvals by regulatory authorities. In some
cases, these approvals must be obtained before the Distribution can be completed. Although Meredith and Gray
have commenced the process of seeking the necessary Third-Party Approvals required in connection with the
distribution, they currently do not have all the necessary Third-Party Approvals. There is no assurance that Meredith
and Gray will be able to obtain these Third-Party Approvals.
The Merger may not be completed on the terms or timeline currently contemplated or at all. Failure to
complete the transaction could negatively impact the stock price and the future business and financial results
of Meredith. The completion of the Merger is subject to certain conditions, including (1) approval by Meredith
shareholders, (2) the expiration or termination of the required waiting period under the HSR Act, (3) the receipt of
FCC consent, (4) the absence of certain legal impediments, (5) a cash payment by NMG SpinCo to Meredith, (6)
completion of the Spin-Off, and (7) other customary closing conditions, as well as conditions unique to Gray and its
subsidiary Gray Hawkeye Stations, Inc., on the one hand, or the Company, on the other hand.
Completion of the Spin-Off (and therefore the Merger) is subject to certain conditions, including (1) the satisfaction
or waiver of the conditions to the consummation of the Merger (other than those conditions that by their nature are
satisfied at the closing), (2) consummation of the SpinCo debt financing, (3) effectiveness of a Registration
Statement on Form 10 regarding NMG SpinCo Common Stock, (4) receipt by the Company and NMG SpinCo of a
solvency opinion, (5) the acceptance of NMG SpinCo Common Stock for listing on the New York Stock Exchange,
(5) the absence of certain legal impediments, and (6) other customary closing conditions.
We cannot assure you that the Merger and Spin-Off will be consummated on the terms or timeline currently
contemplated, or at all. We have expended and will continue to expend a significant amount of time and resources
on the transaction, and a failure to consummate the transaction as currently contemplated, or at all, could have a
material adverse effect on Meredith’s business and results of operations. If the Merger is not completed, the ongoing
business of Meredith may be adversely affected and Meredith will be subject to several risks, including the
following:
•
the Spin-Off will not be completed;
•
being required, under certain circumstances, to pay Gray a termination fee of $73 million;
•
being required, under certain circumstances, to pay Gray a termination fee of $113 million;
•
being required, under certain circumstances, to reimburse certain of Gray’s expenses up to $10 million;
•
having to pay substantial other costs and expenses relating to the proposed transaction, such as legal,
accounting, financial advisor, filing, printing and mailing fees, and integration costs that have already been
incurred and will continue to be incurred until closing;
•
the focus of management of Meredith on the Merger instead of on pursuing other opportunities that could
be beneficial to Meredith;
•
the market price of Meredith could decline to the extent that the current market price reflects a market
assumption that the Merger will be completed; and
•
if the transaction agreement is terminated and Meredith’s Board of Directors seeks another business
combination, shareholder of Meredith cannot be certain that Meredith will be able to find a party willing to
enter into a business combination or other strategic transaction on terms equivalent to or more attractive
than the terms that Gray has agreed to in the Merger Agreement and Spin-Off Agreements;
in each case, without realizing any of the anticipated benefits of having the Merger and Spin-Off completed. In
addition, if the Merger is not completed, Meredith may experience negative reactions from the financial markets and
from its customers and employees. Meredith could also be subject to litigation related to any failure to complete the
Merger and Spin-Off or to enforcement proceedings commenced against Meredith to perform its obligations under
the Merger Agreement and Spin-Off Agreements. If the Merger and Spin-Off are not completed, Meredith cannot
assure its shareholders that these risks will not materialize and will not materially affect the business, financial
results, and stock price of Meredith.
16
The existence of the pending Merger could have an adverse effect on our business, revenue, and results of
operations. While the Merger is pending, advertisers and other sources of revenue may decide to delay, defer, or
cancel purchases of our products and/or services, pending completion of the Merger or termination of the Merger
Agreement. If these decisions represent a significant portion of our anticipated revenue, our results of operations
and quarterly revenues could be substantially below the expectations of market analysts.
In addition, while the Merger is pending, we are subject to a number of risks that may adversely affect our business,
revenue, and results of operations, including:
•
the diversion of management and employee attention and the unavoidable disruption to our relationships
with customers and vendors may detract from our ability to grow revenues and minimize costs;
•
the fact that we have incurred and will continue to incur significant expenses related to the Merger;
•
the fact that, pursuant to the Merger Agreement, we must generally conduct our business in the ordinary
course and we are subject to a variety of other restrictions on the conduct of our business prior to the closing
or termination of the Merger Agreement; and
•
the fact that we may be unable to respond effectively to competitive pressures, industry developments, and
future opportunities.
If the Merger occurs, Meredith shareholders will not be able to participate in any upside to our local media
business and NMG SpinCo, the company you will receive shares in through the Distribution, may not enjoy
the same benefits that Meredith did prior to the Spin-Off. Upon consummation of the Merger, our shareholders
will receive $16.99 in cash per share, without interest and subject to applicable tax withholding, for each share of
Meredith common stock and Meredith class B stock owned by them, but will not receive any shares of Gray
common stock. As a result, if our local media business performs well following the Merger, our current
shareholders will not receive any additional consideration, and will therefore not receive any benefit from the
performance of the business. In addition, if the Merger occurs, shareholders of Meredith as of the record date set for
the Distribution will receive shares of common stock and class B common stock in NMG SpinCo on a one-for-one
basis. Following the Spin-Off, our national media and digital businesses (which will comprise NMG SpinCo
subsequent to the Spin-Off) will no longer operate as part of a larger Meredith that included the local media
business. Accordingly, compared to Meredith prior to the Merger, NMG SpinCo will have less collateral to secure
new financings, NMG SpinCo’s business will be less diversified, NMG SpinCo’s market capitalization will be
smaller than that of Meredith, and NMG SpinCo’s ability to take advantage of economies of scale may be adversely
impacted. For example, NMG SpinCo may experience an adverse impact on pricing for goods and services. There is
a risk that NMG SpinCo may be more susceptible to market fluctuations and other adverse events than if it
remained a part of the larger Meredith organizational structure.
Risks Relating to Business Operations
The COVID-19 pandemic has had and may continue to have an adverse impact on our business, financial
condition, and results of operations. We have experienced challenges in connection with the COVID-19 pandemic
including advertising cancellations and delays across our business as well as declines in our newsstand sales,
resulting in an adverse impact on our revenues and results of operations. To protect the health and well-being of our
employees, suppliers, and customers, we made substantial modifications to employee travel policies, implemented
office closures as employees were advised to work from home, and canceled or shifted our marketing events to
virtual-only.
The COVID-19 pandemic has impacted and may continue to impact our business operations, including our
employees, customers, partners, and communities. There is substantial uncertainty as to the nature and degree of the
continued effects of the pandemic over time. Our business, financial condition, operations, and prospects have been
and may continue to be adversely affected by the COVID-19 pandemic, which has adversely impacted our
advertising and marketing partners, consumers, and the markets in which we operate.
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While the potential future impact and duration of the COVID-19 pandemic on the global economy and our business,
in particular, may be difficult to assess or predict, to date the pandemic has resulted in and may continue to result in
significant disruption of aspects of our business. For example, we have experienced advertising cancellations and
delays across our business as well as declines in our newsstand sales, resulting in an adverse impact on our
revenues. In addition, we may experience unfavorable impacts on our operations as a result of COVID-19, including
but not limited to:
•
significant reductions or volatility in demand for one or more of our products, which may be caused by,
among other things: the temporary inability of consumers to purchase our products due to illness,
quarantine, or other travel restrictions, or financial hardship, shifts in demand away from one or more of our
products; if prolonged, such impacts may further increase the difficulty of planning for operations and may
negatively impact our results;
•
significant reductions in the availability of one or more of our products as a result of retailers or shippers
modifying restocking, fulfillment, and shipping practices;
•
failure of third parties on which we rely;
•
continued increases in commodity costs;
•
the inability of a significant portion of our workforce, including our management team, to work as a result
of illness;
•
shifts and volatility in consumer spending and purchasing behaviors; and
•
reduced availability of credit or financing upon acceptable terms or at all.
As a result of the impact of the COVID-19 pandemic, we have paused our common and class B stock dividends and
implemented a series of operational cost-control measures, including temporary reductions in Board of Director fees
and employee and executive salaries which were lifted in early September 2020, and have taken steps to
significantly reduce capital expenditures and optimize working capital. We may need to take further actions to
ensure the continuity of our business. In addition, due to market volatility and material declines in equity prices, in
fiscal 2020, we recorded material non-cash impairment charges related to certain indefinite-lived intangible assets,
including goodwill, trademarks, and FCC broadcast licenses.
The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot
be accurately predicted at this time, such as the severity and transmission rate of the virus, the emergence and
spread of variants, infection rates in areas where we operate, the extent and effectiveness of containment actions,
including the continued availability and effectiveness of vaccines in the markets where we operate, and the impact
of these and other factors on our employees, customers, suppliers, distributors, and manufacturers. Should these
conditions persist for a prolonged period, the COVID-19 pandemic, including any of the above factors and others
that are currently unknown, could have a material adverse effect on our business, financial condition, and results of
operations. The pandemic may also affect our business, operations, or financial condition in a manner that is not
presently known to us or that we currently do not consider to present significant risks. The impact of the COVID-19
pandemic may also exacerbate other risks discussed in this Item 1A, Risk Factors, any of which could have a
material effect on us.
Advertising related revenues represent the largest portion of our revenues, and advertising demand may
fluctuate from period to period. In fiscal 2021, 51 percent of our revenues were derived from advertising related
sources. Advertising related revenues constitute 48 percent of our national media revenues and 59 percent of our
local media revenues. Demand for advertising is highly dependent upon the strength of the U.S. economy. During
an economic downturn, demand for advertising may decrease. Since the outbreak of COVID-19, some of our
advertising and marketing partners have faced tremendous challenges, which has impacted Meredith. As a result,
during the fourth quarter of fiscal 2020, Meredith saw cancellations and delays in advertising campaigns, with
significant declines in local television non-political advertising, digital advertising, and print advertising revenues.
While digital advertising strengthened in fiscal 2021, we continued to see an adverse impact on print and local
television non-political advertising into fiscal 2021. While we are not able to estimate the continued impact of the
COVID-19 pandemic on revenues, we may continue to see an adverse impact on print advertising and do not know
when or if it will improve. In addition, political advertising revenues are cyclical in that they are significantly
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greater during biennial election campaigns (which take place primarily in odd-numbered fiscal years) than at other
times. The growth in alternative forms of media, particularly digital platforms, has increased the competition for
advertising dollars, which could, in turn, reduce expenditures for magazine and television advertising or suppress
advertising rates.
Circulation revenues represent a significant portion of our revenues. Magazine circulation is another significant
source of revenue, representing 24 percent of total revenues and 35 percent of national media revenues in fiscal
2021. Preserving the number of copies sold is critical for maintaining advertising sales. Magazines face increasing
competition from alternative forms of media and entertainment. As a result, sales of magazines through
subscriptions and at the newsstand could decline. As publishers compete for subscribers, subscription prices could
decrease and marketing expenditures may increase. Shelter-in-place and business closing orders related to
COVID-19 as well as significant declines in travel impacted Meredith particularly in the first half of fiscal 2021. As
a result, Meredith saw reductions in newsstand sales. While the Company is not able to estimate the ongoing impact
of the COVID-19 pandemic on newsstand revenues, we may experience further declines in newsstand sales.
Technology in the media industry continues to evolve rapidly. Advances in technology have led to an increasing
number of alternative methods for the delivery of content and have driven consumer demand and expectations in
unanticipated directions. If we are unable to exploit new and existing technologies to distinguish our products and
services from those of our competitors or adapt to new distribution methods that provide optimal user experiences,
our business, financial condition, and prospects may be adversely affected. Technology developments also pose
other challenges that could adversely affect our revenues and competitive position. New delivery platforms may
lead to pricing restrictions, the loss of distribution control, and the loss of a direct relationship with consumers. For
example, the largest broadcast television national networks have brought a copyright infringement lawsuit against
Locast, an entity that claims to be a non-profit and claims to have found a loophole allowing for uncompensated
online streaming of copyrighted television content. We may also be adversely affected if the use of technology
developed to block the display of advertising on websites proliferates. In addition, technologies such as subscription
streaming media services and video are increasing competition for household audiences and advertisers. This
competition may make it difficult for us to grow or maintain our broadcasting and print revenues, which we believe
may challenge us to expand the contribution of our digital businesses.
Our websites and internal networks may be vulnerable to unauthorized persons accessing our systems, which
could disrupt our operations. The Company uses computers and other technology in substantially all aspects of
our business operations, and our revenues are increasingly dependent on digital products. Such increases expose us
to potential cyber incidents resulting from deliberate attacks or unintentional events. Our website activities involve
the storage and transmission of proprietary information, which we strive to protect from unauthorized access.
However, it is possible that unauthorized persons may be able to circumvent our protections and misappropriate
proprietary information, corrupt data, or cause interruptions or malfunctions in our digital operations. The results of
these incidents could include, but are not limited to, business interruption, public disclosure of nonpublic
information, decreased advertising revenues, misstated financial data, liability for stolen assets or information,
increased cybersecurity protection costs, litigation, financial consequences, and reputational damage adversely
affecting customer or investor confidence, any or all of which could adversely affect our business. We invest in
security resources and technology to protect our data and business processes against risk of data security breaches
and cyber-attack, but the techniques used to attempt attacks are continually changing. A breach or successful attack
could have a negative impact on our operations or business reputation.
Evolving privacy and information security laws and regulations may impair our ability to market to
consumers. Meredith’s consumer database includes first-party data that is used to market our products to our
customers. In select circumstances, we share this first-party data with advertising and marketing clients and
partners. As public awareness increases and shifts to data gathering and usage, privacy rights, and data protection,
new laws and regulations may be passed or existing laws and regulations may be amended in ways that would limit
our collection and use of certain categories of data. The United States Congress, the Federal Trade Commission, and
state attorneys general continue to initiate investigations into the collection and use of consumer data, often with a
focus on the advertising industry. These investigations could lead to new transparency requirements, consumer
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controls, and other restrictions, and require ongoing review of new technologies and methods for delivering content
and advertising to ensure that all new products and advertising services comply with all of the regulatory
requirements imposed at the state, federal, and international level. In addition to the changing regulatory landscape,
new privacy controls implemented by platforms such as Facebook, Google, and Apple will limit our ability to
access and use data from consumers through those platforms, which we rely on for digital advertising and
marketing.
Currently, we must comply with increasingly complex and rigorous, and sometimes conflicting, regulatory
standards enacted to protect business and personal data in the U.S., Europe, and elsewhere. For example, the
European Union (E.U.) adopted the General Data Protection Regulation (the GDPR), which became effective on
May 25, 2018; and California passed the California Consumer Privacy Act (the CCPA), which became effective on
January 1, 2020. These laws impose additional obligations on companies regarding the handling of personal data
and provide certain individual privacy rights to persons whose data is processed.
The GDPR establishes requirements applicable to the processing of personal data, affords new data protection rights
to individuals (e.g., the right to erasure of personal data), and imposes penalties for serious data breaches.
Individuals also have a right to compensation under GDPR for financial or non-financial losses. Additionally, Brexit
took effect in January 2020, which will lead to further legislative and regulatory changes. While the Data Protection
Act of 2018, that “implements” and complements the GDPR achieved Royal Assent on May 23, 2018, and is now
effective in the United Kingdom (U.K.), it is still unclear whether transfer of data from the European Economic
Area (EEA) to the U.K. will remain lawful in the long term under GDPR. With the expiry of the transition period on
December 31, 2020, companies will have to comply with the GDPR and the GDPR as incorporated into U.K.
national law, which has the ability to separately fine up to the greater of £17.5 million or 4 percent of global
turnover.
If we do not comply with our obligations under the GDPR, we could be exposed to fines and penalties, which under
the GDPR could be as high as the greater of €20 million or 4 percent of our total global annual revenue in the event
of a significant breach. In addition, we may be the subject of litigation or adverse publicity, which could negatively
affect our business, financial condition, and results of operations. Similarly, the CCPA provides for civil penalties
for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.
Additionally, legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the
EEA to the U.S. could result in further limitations on the ability to transfer personal data across borders, particularly
if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data
transfers. Specifically, on July 16, 2020, the Court of Justice of the E.U. invalidated Decision 2016/1250 on the
adequacy of the protection provided by the EU-U.S. Privacy Shield Framework. We are certified under the EU-U.S.
Privacy Shield Framework but will not be able to rely on it in the future, which could increase our costs and limit
our ability to process personal data from the E.U. The same decision also casts doubt on the ability to use one of the
primary alternatives to the Privacy Shield, namely, the European Commission’s Standard Contractual Clauses, to
lawfully transfer personal data from Europe to the U.S. and most other countries. At present, there are few, if any,
viable alternatives to the Privacy Shield and the Standard Contractual Clauses. On June 28, 2021, the European
Commission announced a decision of “adequacy” concluding that the U.K. ensures an equivalent level of data
protection to the GDPR, which provides some relief regarding the legality of continued personal data flows from the
EEA to the U.K. Some uncertainty remains, however, as this adequacy determination must be renewed after four
years and may be modified or revoked in the interim. We cannot fully predict how the Data Protection Act, the U.K.
GDPR, and other U.K. data protection laws or regulations may develop in the medium to longer term nor the effects
of divergent laws and guidance regarding how data transfers to and from the U.K. will be regulated.
In the U.S., California voters approved a new privacy law, the California Privacy Rights Act (CPRA) in the
November 3, 2020 election. Effective starting on January 1, 2023, the CPRA will significantly modify the CCPA,
including by expanding consumers’ rights with respect to certain sensitive personal information. The CPRA also
creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.
New legislation proposed or enacted in various other states will continue to shape the data privacy environment
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nationally beyond the CCPA and CPRA. For example, on March 2, 2021, Virginia enacted the Virginia Consumer
Data Protection Act, or CDPA, which becomes effective on January 1, 2023, and on June 8, 2021, Colorado enacted
the Colorado Privacy Act, or CPA, which takes effect on July 1, 2023. The CPA and CDPA are similar to the CCPA
and CPRA, but aspects of these state privacy statutes remain unclear, resulting in further legal uncertainty and
potentially requiring us to modify our data practices and policies and to incur substantial additional costs and
expenses in an effort to comply. Complying with the GDPR, CCPA, CPRA, CDPA, CPA, or other laws,
regulations, amendments to, or re-interpretations of existing laws and regulations, and contractual or other
obligations relating to privacy, data protection, data transfers, data localization, or information security may require
us to make changes to our services to enable us or our customers to meet new legal requirements, incur substantial
operational costs, modify our data practices and policies, and restrict our business operations. Any actual or
perceived failure by us to comply with these laws, regulations, or other obligations may lead to significant fines,
penalties, regulatory investigations, lawsuits, significant costs for remediation, damage to our reputation, or other
liabilities.
Compliance with existing, proposed, and recently enacted laws (including implementation of the privacy and
process enhancements called for under GDPR and CCPA) and regulations can be costly and time consuming, and
any failure to comply with these regulatory standards could subject us to legal and reputational risks. In addition, all
50 states have security breach notification laws that generally require a business to give notice to consumers and (in
some cases) government agencies when certain information has been accessed or acquired by an unauthorized party
due to a security breach.
Misuse of or failure to secure personal information could result in violation of data privacy laws and regulations,
proceedings against the Company by governmental entities or others, imposition of fines by governmental
authorities, and damage to our reputation and credibility and could have a negative impact on revenues and profits.
World events may result in unexpected adverse operating results. Our results have been and in the future could
again be affected adversely by world events such as wars, political unrest, acts of terrorism, pandemics, and natural
disasters, as well as by adverse economic conditions such as prolonged economic downturn, lack of liquidity in the
capital markets, or increased inflation. In particular, such events can result in significant declines in advertising
revenues in our local media segment as the stations will not broadcast or will limit broadcasting of commercials
during times of crisis. In addition, our stations may have higher newsgathering costs related to coverage of the
events.
Our local media operations are subject to FCC regulation. Our broadcasting stations operate under licenses
granted by the FCC. The FCC regulates many aspects of television station operations, including employment
practices, political advertising, indecency and obscenity, programming, signal carriage, and various other technical
matters. Violations of these regulations could result in penalties and fines. Changes in these regulations could
impact the results of our operations. The FCC also regulates the ownership of television stations. Changes in the
ownership rules could adversely affect our ability to consummate future transactions or may favor our competitors.
Details regarding regulation and its impact on our local media operations are provided in Item 1-Business beginning
on page 10.
Loss of or changes in affiliation agreements could adversely affect operating results for our local media
segment. Further, our retransmission consent revenue may be adversely affected by renewals of
retransmission consent agreements or by declines in the number of subscribers to multichannel video
programming distributor (MVPD) services. Due to the quality of the programming provided by the networks,
stations that are affiliated with a network generally have higher ratings than unaffiliated independent stations in the
same market. As a result, it is important for stations to maintain their network affiliations. Most of our stations have
network affiliation agreements. Seven are affiliated with CBS, five with FOX, two with MyNetworkTV, one with
NBC, and one with ABC. These television networks produce and distribute programming in exchange for each of
our stations’ commitment to air the programming at specified times and for commercial announcement time during
the programming. We also make cash payments to the networks. These payments are, in essence, a portion of the
retransmission consent fees that Meredith receives from cable, satellite, and telecommunications service providers,
21
which pay Meredith to carry our television programming in our markets. These network relationships may also
include terms regarding over-the-top distribution. The non-renewal or termination of any of our network affiliation
agreements would prevent us from being able to carry programming of the affiliate network. This loss of
programming would require us to obtain replacement programming, which may involve higher costs and/or which
may not be as attractive to our audiences, resulting in reduced revenues.
Furthermore, the loss of or material reduction in retransmission consent revenues or further change in the current
retransmission consent regulations could adversely affect the economics of our relationship with the applicable
network(s), advertising revenues, and our local brands. Specifically, our retransmission consent revenue may be
adversely affected by renewals, non-renewals, or renewals on less favorable terms of retransmission consent
agreements, declines in the number of subscribers to MVPD services, or by new technologies for the distribution of
video programming. In recent years, the number of subscribers to MVPD services has declined as the growth of
direct internet streaming of video programming to televisions and mobile devices has led consumers to discontinue
their cable or satellite service subscriptions. As most retransmission consent agreements include payment terms by
subscriber numbers, reductions in the number of MVPD subscribers reduces the revenue we earn under our
retransmission agreements.
If renewed, our network affiliation agreements and our retransmission agreements may be renewed on terms that are
less favorable to us. Our FOX affiliation agreements expire in July 2022. Our MyNetworkTV affiliation agreements
expire in September 2022. Our NBC affiliation agreement expires in December 2021 and our ABC affiliation
agreement expires in August 2023. Our CBS affiliation agreements expire in July 2023.
Client relationships are important to our brand licensing and consumer relationship marketing businesses.
Our ability to maintain existing client relationships and generate new clients depends significantly on the quality of
our products and services, our reputation, and the continuity of Company and client personnel. Dissatisfaction with
our products and services, damage to our reputation, or changes in key personnel could result in a loss of business.
Increases in paper and postage prices, which are difficult to predict and control, could adversely affect our
results of operations. Paper and postage represent significant components of our total cost to produce, distribute,
and market our printed products. In fiscal 2021, these expenses accounted for 17 percent of national media’s
operating costs. Paper is a commodity and its price can be subject to significant volatility. All our paper supply
contracts currently provide for price adjustments based on prevailing market prices; however, we historically have
been able to realize favorable paper pricing through volume discounts. The USPS distributes substantially all our
subscription magazines and many of our marketing materials. Postal rates are dependent on the operating efficiency
of the USPS and on legislative mandates imposed upon the USPS. Although we work with others in the industry
and through trade organizations to encourage the USPS to implement efficiencies that will minimize rate increases,
we cannot predict with certainty the magnitude of future price changes for paper and postage. Further, we may not
be able to pass such increases on to our customers.
We are currently reliant on a single supplier for printing of our magazines. All our magazine printing is
performed by the only domestic supplier capable of producing the entirety of our work. Failure by such supplier to
provide printing services to us, or any disruption in such services, may adversely impact our business. We may
incur increased business disruption risk due to the dependence on a single supplier. If this supplier experienced
business difficulties or failed to meet our printing needs, then we may be unable to satisfy customer product
demands, lose revenues, and be unable to maintain customer relationships. Longer production lead times and
increased paper and postage costs may result if there is a need to move the printing to multiple other suppliers.
Without such single supplier continuing to print our magazines, we may have no other means of producing our
magazines until we are able to secure printing capabilities at multiple other facilities. This transition could be costly
and time consuming.
Acquisitions pose inherent financial and other risks and challenges. As a part of our strategic plan, we have
acquired businesses and we expect to continue acquiring businesses in the future. These acquisitions can involve a
number of risks and challenges, any of which could cause significant operating inefficiencies and adversely affect
22
our growth and profitability. Such risks and challenges include underperformance relative to our expectations and
the price paid for the acquisition; unanticipated demands on our management and operational resources; difficulty in
integrating personnel, operations, and systems; retention of customers of the combined businesses; assumption of
contingent liabilities; and acquisition-related earnings charges. If our acquisitions are not successful, we may record
impairment charges. Our ability to continue to make acquisitions will depend upon our success at identifying
suitable targets, which requires substantial judgment in assessing their values, strengths, weaknesses, liabilities, and
potential profitability, as well as the availability of suitable candidates at acceptable prices and whether restrictions
are imposed by regulations. Moreover, competition for certain types of acquisitions is significant, particularly in the
fields of broadcast stations and digital media. Even if successfully negotiated, closed, and integrated, certain
acquisitions may not advance our business strategy and may fall short of expected return on investment targets.
Impairment of goodwill and intangible assets is possible, depending upon future operating results and the
value of the Company’s stock. Although the Company wrote down its goodwill and intangible assets by $301.4
million in fiscal 2020 and $41.8 million in fiscal 2019, further impairment charges are possible. We test our
goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of every fiscal year and on
an interim basis if indicators of impairment exist. Factors that influence the evaluation include, among many things,
the Company’s stock price and expected future operating results. If the carrying value of a reporting unit or an
intangible asset is no longer deemed to be recoverable, a potentially material non-cash impairment charge could be
incurred. At June 30, 2021, goodwill and intangible assets totaled $3.3 billion, or 59 percent of Meredith’s total
assets, with $2.5 billion in the national media segment and $0.8 billion in the local media segment. The review of
goodwill is performed at the reporting unit level. The Company has two reporting units – national media and local
media. Changes in key assumptions about the economy or business prospects used to estimate fair value or other
changes in market conditions could result in additional impairment charges. Although these charges would be non-
cash in nature and would not affect the Company’s operations or cash flow, they would reduce stockholders’ equity
and reported results of operations in the period charged. Additionally, as goodwill and intangible assets of the
national media reporting unit were written down to their estimated fair values as of March 31, 2020, those amounts
are more susceptible to risk of impairment if business operating results or macroeconomic conditions deteriorate.
Failure to maintain effective internal control over financial reporting could have a material adverse effect on
the Company’s business, results of operations, financial condition, and/or cash flows. Maintaining effective
disclosure controls and procedures and effective internal control over financial reporting are necessary for us to
produce reliable consolidated financial statements. The Company cannot provide assurances that material
weaknesses or significant deficiencies will not occur in the future and that it will be able to remediate such
weaknesses or deficiencies in a timely manner, which could have a material adverse effect on the Company’s
business, prospects, results of operations, financial condition, and/or cash flows. The development of material
weaknesses in our internal control over financial reporting could result in material misstatements in our
consolidated financial statements and cause us to fail to meet our reporting and financial obligations, which in turn
could have a material adverse effect on our financial condition and the trading price of our common stock, and/or
result in litigation against us. In addition, those controls and procedures may not be adequate to prevent or identify
irregularities or facilitate the fair presentation of our consolidated financial statements or our periodic reports filed
with the SEC.
Adverse litigation judgments or settlements resulting from legal proceedings in which we are currently and,
in the future, may be involved could expose us to monetary damages or limit our ability to operate our
business. We are currently involved in and may in the future become involved in private actions, collective actions,
investigations, and various other legal proceedings by clients, employees, suppliers, competitors, government
agencies, or others. For example, on September 6, 2019, a shareholder filed a putative class action lawsuit in the
U.S. District Court for the Southern District of New York against the Company, its Chief Executive Officer, and its
Chief Financial Officer, seeking to represent a class of shareholders who acquired securities of the Company
between May 10, 2018, and September 4, 2019 (the New York Action). On September 12, 2019, a shareholder filed
a putative class action lawsuit in the U.S. District Court for the Southern District of Iowa against the Company, its
Chief Executive Officer, its Chief Financial Officer, and its Chairman of the Board seeking to represent a class of
shareholders who acquired securities of the Company between January 31, 2018, and September 5, 2019 (the Iowa
23
Action). Both complaints allege that the defendants made materially false and/or misleading statements and failed to
disclose material adverse facts about the Company’s business, operations, and prospects. Both complaints assert
claims under the federal securities laws and seek unspecified monetary damages and other relief. On November 12,
2019, the plaintiff shareholder withdrew the New York Action, and the action has been dismissed. On
November 25, 2019, the City of Plantation Police Officers Pension Fund was appointed to serve as lead plaintiff in
the Iowa Action. On March 9, 2020, the lead plaintiff filed an amended complaint in the Iowa Action, now seeking
to represent a class of shareholders who acquired securities of the Company between January 31, 2018, and
September 30, 2019. The defendants intend to vigorously oppose the Iowa Action. On June 22, 2020, the defendants
filed a motion to dismiss the Iowa Action. On October 28, 2020, a U.S. District Judge granted defendants’ motion to
dismiss, dismissing the Iowa Action with prejudice at plaintiffs’ cost due to plaintiffs’ failure to satisfy applicable
pleading requirements. Specifically, the court held that plaintiffs had failed to plead any actionable misstatement or
omission, scienter, or loss causation. On November 23, 2020, the lead plaintiff filed a notice of appeal of the District
Court’s dismissal. The parties have completed briefing in the Eighth Circuit Court of Appeals, and it appears likely
we will receive a decision on the appeal sometime in late 2021 or 2022. The results of any such litigation, including
the aforementioned class action lawsuits, investigations, and other legal proceedings are inherently unpredictable
and expensive. Any claims against us, whether meritorious or not, could be time consuming, result in costly
litigation, damage our reputation, require significant amounts of management time, and divert significant resources.
If any of these legal proceedings were to be determined adversely to us, or we were to enter into a settlement
arrangement, we could be exposed to monetary damages or limits on our ability to operate our business, which
could have an adverse effect on our business, financial condition, and operating results.
We have two classes of stock outstanding with different voting rights. We have two classes of stock
outstanding: common stock and class B stock. Holders of common stock are entitled to one vote per share and
account for 45 percent of the voting power. Holders of class B stock are entitled to ten votes per share and account
for the remaining 55 percent of the voting power. There are restrictions on who can own class B stock. Members of
Meredith’s founding family hold the majority of class B shares. Control by a limited number of holders may make
the Company a less attractive takeover target, which could adversely affect the market price of our common stock.
This voting control also prevents other shareholders from exercising significant influence over certain of the
Company’s business decisions.
Adverse changes in the equity markets or interest rates, changes in actuarial assumptions, and legislative or
other regulatory actions could substantially increase our U.K. pension costs and could result in a material
adverse effect on our business, financial condition, and results of operations. The Company sponsors the IPC
Media Pension Scheme (the IPC Plan), a U.K. defined benefit pension plan that is closed both to new participants
and to the future accrual of additional benefits for current participants. The majority of pensions in payment and
deferred pensions in excess of any guaranteed minimum pension are increased annually in line with the increase in
the retail price index up to a maximum of 5 percent.
The most recent triennial valuation of the IPC Plan under U.K. pension regulations was completed as of April 5,
2018. Under the assumptions used in such valuation, which are more conservative than the assumptions used to
determine a pension plan’s funded status in accordance with accounting principles generally accepted in the U.S.
(U.S. GAAP), the IPC Plan was deemed to be underfunded at that time by approximately £59 million.
Under the current deed of guarantee, the Company would be obligated to fund the IPC Plan’s “buyout deficit” (i.e.,
the amount that would be needed to purchase annuities to discharge the benefits under the plan) under certain
circumstances. Specifically, the Company would be required to deposit the buyout deficit into escrow if its debt in
excess of $50 million were not to be paid when due or were to come due prior to its stated maturity as a result of a
default (a Major Debt Acceleration) or if a Covenant Breach were to occur (as described below). The Company
would be permitted to recoup the escrowed funds under certain circumstances. However, if the Company, as the
sponsor, was to become insolvent, or if a Major Debt Acceleration were to occur (without being promptly cured),
any escrowed funds would be immediately contributed into the IPC Plan, and the Company would be obligated to
immediately contribute into the IPC Plan any shortfall in the buyout deficit amount.
24
In connection with the completion of the sale of all issued shares of Time Inc. (UK) Ltd (TIUK) on March 15, 2018,
and the substitution of another U.K. subsidiary of the Company as the sole sponsor under the IPC Plan, the deed of
guarantee was amended to remove requirements to deposit the buyout deficit as a result of certain credit rating
triggers. At the same time, the Company agreed that the same subsidiaries of the Company that guarantee the
Company’s initial $1.4 billion aggregate principal amount of 6.875 percent unsecured senior notes (2026 Unsecured
Senior Notes) would guarantee the obligations of the Company under the IPC Plan on a pari passu basis with the
obligations under the 2026 Unsecured Senior Notes. In addition, the Company agreed to incorporate the terms of
certain covenants under the indenture governing the 2026 Unsecured Senior Notes into the amended deed of
guarantee effective as of March 15, 2018. If a breach of such covenants by the Company or the subsidiary
guarantors occurs (after certain notice and cure periods) (a Covenant Breach), the Company would be required to
deposit the buyout deficit (less the amount of certain types of security in favor of the IPC Plan, currently provided in
the form of a surety bond) into escrow as described above.
If the Company had been required to fund the buyout deficit on June 30, 2021, the amount would have been
approximately £77 million. The amount of the buyout deficit changes daily and is determined by many factors,
including changes in the fair value of the IPC Plan assets and liabilities and interest rates.
It is possible that, following future valuations of the IPC Plan’s assets and liabilities or following future discussions
with the IPC Plan trustee, the annual funding obligation and/or the arrangements to ensure adequate funding for the
IPC Plan will change. The future valuations under the IPC Plan can be affected by a number of assumptions and
factors, including legislative changes; assumptions regarding interest rates, currency rates, inflation, mortality, and
retirement rates; the investment strategy and performance of the IPC Plan assets; and (in certain limited
circumstances) actions by the U.K. Pensions Regulator. Volatile economic conditions could increase the risk that
the funding requirements increase following the next triennial valuation. The U.K. Pensions Regulator also has
powers under the Pensions Act 2004 to impose a contribution notice or a financial support direction on the
Company (and other persons connected with the Company or the U.K. subsidiary which sponsors the IPC Plan) if,
in the case of a contribution notice, the U.K. Pensions Regulator reasonably believes such person has been party to
an act, or deliberate failure to act, intended to avoid pension liabilities or that is materially detrimental to the
pension plan, or, in the case of a financial support direction, if a plan employer is a service company or
insufficiently resourced and the Pensions Regulator considers it is reasonable to act against such a person. A
significant increase in the funding requirements for the IPC Plan or in the calculated “self-sufficiency deficit” or the
calculated “risk-free self-sufficiency deficit” could result in a material adverse effect on its business, financial
condition, and results of operations.
Risks Relating to Indebtedness
Our level of indebtedness and our ability to incur significant additional indebtedness could adversely affect
our business, financial condition, and results of operations. Our level of indebtedness could have important
consequences. For example, it could:
•
increase our vulnerability to general adverse economic and industry conditions;
•
limit our ability to obtain additional financing to fund future working capital, capital expenditures, and other
general corporate requirements or to carry out other aspects of our business;
•
increase our cost of borrowing;
•
make it more difficult for us to satisfy our obligations with respect to our debt;
•
require us to dedicate a substantial portion of our cash flow from operations to payments on indebtedness,
thereby reducing the availability of such cash flow to fund working capital, capital expenditures, and other
general corporate requirements or to carry out other aspects of our business;
•
limit our ability to make material acquisitions or take advantage of business opportunities that may arise;
•
expose us to fluctuations in interest rates, to the extent our borrowings bear variable rates of interest;
•
limit our flexibility in planning for, or reacting to, changes in our business and industry;
•
limit our ability to pay dividends;
25
•
place us at a potential disadvantage compared to our competitors that have less debt; and
•
affect our credit ratings.
Our ability to make scheduled payments on and to refinance our indebtedness will depend on and be subject to our
future financial and operating performance, which in turn is affected by general economic, financial, competitive,
business, and other factors beyond our control, including the availability of financing in the banking and capital
markets. Our business may fail to generate sufficient cash flow from operations or borrow funds in an amount
sufficient to enable us to make payments on our debt, to refinance our debt, or to fund our other liquidity needs. If
we were unable to make payments on or refinance our debt or obtain new financing under these circumstances, we
would have to consider other options, such as asset sales, equity issuances, or negotiations with our lenders to
restructure the applicable debt. The terms of our debt agreements and market or business conditions may limit our
ability to take some or all of these actions. In addition, if we incur additional debt, the related risks described above
could be exacerbated.
Our indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase
significantly or could prevent us from taking advantage of lower rates. A portion of our indebtedness consists
of term loans and revolving credit facility borrowings with variable rates of interest that expose us to interest rate
risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even
though the amount borrowed remains the same, and our net earnings and cash flows will correspondingly decrease.
Even if we enter into interest rate swaps in the future to reduce future interest rate volatility, we may not elect to
maintain such interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into
may not fully mitigate our interest rate risk. In addition, we have significant fixed-rate indebtedness that includes
prepayment penalties, which could prevent us from taking advantage of any future decrease in interest rates that
may otherwise be applicable to us.
To service our indebtedness, we will require a significant amount of cash and our ability to generate cash
depends on many factors beyond our control. Our ability to make cash payments on and to refinance our
indebtedness and to fund planned capital expenditures will depend on our ability to generate significant operating
cash flow in the future. Our ability to generate such cash flow is subject to general economic, financial, competitive,
legislative, regulatory, and other factors that are beyond our control.
Our business may not generate cash flow from operations in an amount sufficient to enable us to pay the principal,
premium, if any, and interest on our indebtedness, or to fund our other liquidity needs. If we cannot service our
indebtedness, we may have to take actions such as refinancing or restructuring our indebtedness, selling assets,
issuing equity, or reducing or delaying capital expenditures, strategic acquisitions, and investments. These actions,
if necessary, may not be effected on commercially reasonable terms or at all. Our ability to refinance or restructure
our debt will depend on the condition of the capital markets and our financial condition at the applicable time. Any
refinancing of our debt, if we are able to refinance our debt at all, could be at higher interest rates and may require
us to comply with more onerous covenants, which could further restrict our business operations. Further, the credit
agreement that governs the senior credit facilities, the indenture governing our initial $300.0 million aggregate
principal amount of 6.500 percent secured senior notes (2025 Secured Senior Notes), and the indenture governing
the 2026 Unsecured Senior Notes (collectively the Senior Notes) restricts our ability to undertake, or use the
proceeds from, such measures.
Our ability to repay our indebtedness is largely dependent on the generation of cash flow by our operating
subsidiaries and our operating subsidiaries’ ability to make cash available to us by dividend, intercompany loans,
advances, and other transactions, or otherwise. Our subsidiaries may not be able to or may not be permitted to
transfer cash to us to enable us to make payments in respect of our indebtedness. Each of our subsidiaries is a
distinct legal entity and, under certain circumstances, legal and contractual restrictions, as well as the financial
condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries.
Covenants under the indentures governing our Senior Notes and our credit agreement may restrict our
business and operations in many ways, and if we do not effectively manage our covenants, our financial
26
conditions and results of operations could be adversely affected. The indentures governing our Senior Notes and
our credit agreement impose various covenants that limit our ability and/or our restricted subsidiaries’ ability to,
among other things:
•
pay dividends or distributions, repurchase equity, prepay, redeem or repurchase certain debt, and make
certain investments;
•
incur additional debt and issue certain preferred stock;
•
provide guarantees in respect of obligations of other persons;
•
incur liens on assets;
•
engage in certain asset sales, including capital stock of our subsidiaries;
•
merge, consolidate with, or sell all or substantially all our assets to another person;
•
enter into transactions with affiliates;
•
enter into agreements that restrict distributions from our subsidiaries;
•
designate subsidiaries as unrestricted subsidiaries; and
•
prohibit certain restrictions on the ability of restricted subsidiaries to pay dividends or make other payments
to us.
These covenants may:
•
limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other
general business purposes;
•
limit our ability to use our cash flow or obtain additional financing for future working capital, capital
expenditures, acquisitions, or other general business purposes;
•
require us to use a substantial portion of our cash flow from operations to make debt service payments;
•
limit our flexibility to plan for, or react to, changes in our business and industry;
•
place us at a competitive disadvantage compared to less leveraged competitors; and
•
increase our vulnerability to the impact of adverse economic and industry conditions.
If we are unable to successfully manage the limitations and decreased flexibility on our business due to our
significant debt obligations, we may not be able to capitalize on strategic opportunities or grow our business to the
extent we would be able to without these limitations.
Our failure to comply with any of the covenants could result in a default under the credit agreement or the
indentures governing the Senior Notes, which could permit the administrative agent or the trustee, as applicable, or
permit the lenders or the holders of the Senior Notes to cause the administrative agent or the trustee, as applicable,
to declare all or part of any of our outstanding senior secured term loans or revolving loans or the Senior Notes to be
immediately due and payable or to exercise any remedies provided to the administrative agent or the trustee,
including, in the case of the credit agreement and the 2025 Secured Senior Notes, proceeding against the collateral
granted to secure our obligations under the credit agreement and the 2025 Secured Senior Notes. An event of default
under the credit agreement or the indentures governing the Senior Notes could also lead to an event of default under
the terms of certain of our other agreements. Any such event of default or any exercise of rights and remedies by our
creditors could seriously harm our business.
Discontinuation, reform, or replacement of LIBOR may adversely affect our variable rate debt. A substantial
portion of our long-term indebtedness bears interest at fluctuating interest rates based on the London Interbank
Offered Rate for deposits of U.S dollars (LIBOR). LIBOR tends to fluctuate based on general interest rates, rates set
by the U.S. Federal Reserve Board and other central banks, the supply of and demand for credit in the London
interbank market, and general economic conditions. In July 2017, the United Kingdom Financial Conduct Authority
(the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the
calculation of LIBOR after 2021. It is unclear whether new methods of calculating LIBOR will be established such
that it continues to exist after 2021. The U.S. Federal Reserve Board, in conjunction with the Alternative Reference
Rates Committee, is considering replacing U.S. dollar LIBOR with a newly created index, calculated with a broad
set of short-term repurchase agreements backed by treasury securities. It is not possible to predict the effect of these
27
changes, other reforms, or the establishment of alternative reference rates in the U.S. or elsewhere. To the extent
these interest rates increase, our interest expense will increase, in which event we may have difficulties making
interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements
may be adversely affected.
Risks Relating to Income Taxes
We may have exposure to additional tax liabilities. Our Company is subject to income taxes as well as non-
income taxes, in both the U.S. and various foreign jurisdictions. Significant uncertainties exist with respect to the
amount of our tax liabilities, including those arising from potential changes in laws in the countries in which we
have a presence and the possibility of adverse determinations with respect to the application of existing laws. Many
judgments are required in determining our provision for income taxes and other tax liabilities, and we are regularly
under audit by tax authorities, which often do not agree with positions taken by us on our tax returns. Any
unfavorable resolution of these uncertainties may have a significant adverse impact on our tax rate.
Increasingly, countries around the world are actively considering or have enacted changes in relevant tax,
accounting, and other laws, regulations, and interpretations. In particular, the U.S. Tax Cuts and Jobs Act of 2017
(the Tax Act) significantly changed how corporations are taxed in the U.S., which has an ongoing impact on our
provision for income taxes. While the Company’s accounting for the effects of the Tax Act was completed in fiscal
2019, and the Company believes those effects have been appropriately recorded, various interpretive issues remain
with respect to the Tax Act and additional regulatory guidance may be issued. Certain aspects of the Tax Act have
been modified by subsequent legislation, such as the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act).
The uncertainty in the application of the Tax Act and the CARES Act to our ongoing operations, potential future
increases in capital gains tax rates, as well as possible adverse future law changes attributable to changes in the U.S.
political landscape, create the potential for added volatility in our quarterly provision for income taxes and could
have an adverse impact on our future tax rate. Various legislative proposals would partially or wholly reverse
beneficial features of the Tax Act, such as by raising the U.S. corporate tax rate and increasing the tax on non-U.S.
income. Increased federal and state fiscal spending to fund COVID-19 relief measures, coupled with a drop in tax
revenue from pandemic-related reductions in economic activity, may add to the pressure to raise more tax revenue
from federal and state corporate income and other taxes or to enact new types of taxes on businesses and their
customers.
The Time business could have an indemnification obligation to Time Warner, which could materially
adversely affect our financial condition. The complete legal and structural separation of Time Warner Inc.’s
(Time Warner) magazine publishing and related business from Time Warner (the Time Spin-Off) was completed by
way of a pro rata dividend of Time Inc. shares held by Time Warner to its stockholders as of May 23, 2014, based
on a distribution ratio of one share of Time Inc. common stock for every eight shares of Time Warner common
stock held (the Distribution). If, due to any of Time Inc.’s representations being untrue or Time Inc.’s covenants
being breached, it was determined that the Distribution did not qualify for non-recognition of gain and loss under
Section 355 of the Internal Revenue Code, or that an excess loss account existed at the date of the Time Spin-Off,
Time Inc. could be required to indemnify Time Warner for the resulting taxes and related expenses. Any such
indemnification obligation could materially adversely affect our financial condition.
The preceding risk factors should not be construed as a complete list of factors that
may affect our future operations and financial results.
28
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The Company owns its headquarters located at 1716 and 1615 Locust Street (“Des Moines Campus”) in Des
Moines, Iowa, and is the sole occupant of the Des Moines Campus. The Company also leases property in New
York, New York, and believes these facilities, together with our other locations, are sufficient to meet our current
and expected future requirements. As a result of dispositions and cost-reduction initiatives, we have vacant leased
space, including two floors at our location in New York, New York. The vacant space is presently held with the
intent to sublease for the remainder of the lease term.
ITEM 3. LEGAL PROCEEDINGS
See the discussion of legal proceedings contained under the Legal Proceedings heading of Note 11 of the Notes to
Consolidated Financial Statements (Part II, Item 8 of this report).
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER
MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION, DIVIDENDS, AND HOLDERS
Meredith stock became publicly traded in 1946. The principal market for trading Meredith’s common stock is the
New York Stock Exchange (trading symbol MDP). There is no separate public trading market for Meredith’s
class B stock, which is convertible share for share at any time into common stock. Holders of both classes of stock
receive equal dividends per share.
As a result of operating performance being impacted by the COVID-19 pandemic, debt agreement covenant
compliance, and liquidity considerations, the Board of Directors paused dividend payments on the Company’s
common and class B stock after the March 13, 2020, payment. The Board remains committed to resuming the
dividend in the future when circumstances permit. Prior to June 2020, quarterly dividends had been paid
continuously since 1947.
29
On August 31, 2021, there were approximately 780 holders of record of the Company’s common stock and 435
holders of record of class B stock.
COMPARISON OF SHAREHOLDER RETURN
The following graph compares the performance of the Company’s common stock during the period July 1, 2016, to
June 30, 2021, with the Standard and Poor’s (S&P) SmallCap 600 Index and the Dow Jones US Media Index.
The graph depicts the results for investing $100 in the Company’s common stock, the S&P SmallCap 600 Index and
the Dow Jones US Media Index, assuming dividends were reinvested.
30
ISSUER PURCHASES OF EQUITY SECURITIES
The following table sets forth information with respect to the Company’s repurchases of common stock during the
quarter ended June 30, 2021.
Period
(a)
Total number
of shares
purchased 1, 2
(b)
Average price
paid
per share
(c)
Total number of
shares
purchased as part of
publicly announced
programs
(d)
Approximate dollar
value of shares
that may yet be
purchased under the
programs
(in millions)
April 1 to
April 30, 2021
—
$
—
—
$
45.5
May 1 to
May 31, 2021
—
—
—
45.5
June 1 to
June 30, 2021
42,257
39.90
2,538
45.4
Total
42,257
2,538
1 The number of shares purchased includes 2,538 shares in June 2021 delivered or deemed to be delivered to us in satisfaction
of tax withholding on the vesting of restricted shares. These shares are included as part of our repurchase program and reduce
the repurchase authority granted by our Board.
2 The number of shares purchased includes 39,719 shares in June 2021 deemed to be delivered to us on tender of stock in
payment for the exercise price of options. These shares do not reduce the repurchase authority granted by our board.
In May 2014, Meredith announced the Board of Directors had authorized the repurchase of up to $100.0 million in
additional shares of the Company’s common and class B stock through public and private transactions.
For more information on the Company’s common and class B share repurchase program, see Item 7-Management’s
Discussion and Analysis of Financial Condition and Results of Operations, under the heading “Share Repurchase
Program.”
ITEM 6. [RESERVED]
The Company has elected to early adopt the amendment to Item 301 of Regulation S-K and is no longer required to
provide five years of selected financial data.
31
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) consists of the
following sections:
Page
Executive Overview .............................................................
32
Results of Operations ...........................................................
37
Liquidity and Capital Resources ..........................................
51
Critical Accounting Policies ................................................
56
Accounting and Reporting Developments ...........................
58
MD&A should be read in conjunction with the other sections of this Form 10-K, including Item 1-Business, Item 6-
Selected Financial Data, and Item 8-Financial Statements and Supplementary Data. MD&A contains forward-
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements
are based upon our current expectations and could be affected by many risks, uncertainties, and changes in
circumstances, including the uncertainties and risk factors described throughout this filing, particularly in Item 1A-
Risk Factors. Important factors that could cause actual results to differ materially from those described in forward-
looking statements are set forth under the heading “Forward-Looking Statements” in Item 1-Business.
EXECUTIVE OVERVIEW
Meredith has been a leading media company for nearly 120 years. Meredith produces service journalism that
engages audiences with essential, inspiring, and trusted content reaching consumers where they are across multiple
platforms including digital, video, print, and broadcast television.
Meredith operates two business segments. The national media segment reaches nearly 95 percent of all U.S. women
and approximately 190 million unduplicated American consumers every month through such iconic brands as
People, Better Homes & Gardens, Allrecipes, Southern Living, and Real Simple. Meredith's premium digital
network reaches more than 150 million consumers each month. The company is the No. 1 U.S. magazine operator
with 36 million subscribers, and the No. 2 global licensor with robust brand licensing activities that include a Better
Homes & Gardens partnership with Walmart.
Meredith’s local media segment includes 17 television stations reaching 11 percent of U.S. households and more
than 30 million viewers. Meredith's portfolio is concentrated in large, fast-growing markets, with seven stations in
the nation's Top 25 markets—including Atlanta, Phoenix, St. Louis, and Portland—and 13 in Top 50 markets.
Both segments operate primarily in the U.S. and compete against similar media and other types of media on both a
local and national basis. In fiscal 2021, the national media segment accounted for 68 percent of the Company’s $3.0
billion in revenues while local media segment revenues contributed 32 percent.
32
Fiscal 2021 was a transformational year as the Company reached certain strategic events and operational milestones
positioning the Company for future growth. Highlights include:
•
Crossing an important milestone with digital advertising revenue surpassing magazine for the first time in
Meredith’s history.
•
Agreeing to sell our local media group segment, for $2.825 billion to Gray Television. The combination of
the pending sale and digital advertising surpassing magazine sets the stage for post-transaction Meredith to
be positioned as a ‘digital-first’ media company with low-leverage and the capacity to invest in future
organic and inorganic growth.
•
Our digital businesses delivered record revenues across the board, driven by:
◦
Our launch of the Meredith Data Studio, which brings together our valuable first-party data and
predictive insights to help clients improve returns on their advertising investments. Both the
Meredith Data Studio and our new digital platform have been key factors in large client expansions.
◦
Strong performance from our licensing relationships with Apple News+ and Walmart, and we
retained our position as the world’s second-largest licensor for the 6th straight year according to
License Global.
◦
Expanding performance marketing activities in fiscal 2021, in particular our relationship with key
retail partnerships. In total, our performance marketing efforts drove nearly $1 billion in retail sales
for our partners during the year.
•
While our magazine business endured COVID-19 all year, we gained more than 4 percentage points of
magazine advertising market share, bringing our total to 36 percent. In addition, we sold nearly 20 million
copies of our newsstand specials, one million more copies than the prior year. This is a substantial
accomplishment considering many newsstands were closed or operated at reduced capacity due to
COVID-19.
•
Our Local Media Group also delivered record results, driven by record political related advertising revenues
and continued growth in retransmission consent revenues.
•
Finally, we reduced long-term debt by redeeming $250.0 million of the 2026 Unsecured Senior Notes.
In addition to the many performance metrics, the Company had several recent social and environmental
accomplishments. For example:
•
We made Sustainability Accounting Standards Board disclosures available publicly for the first time, and
completed the Carbon Disclosure Project’s Forests and Climate questionnaires for the second year;
•
We earned Gender Fair certification for achieving standards in leadership and opportunity, employee
policies, advertising and communications, diversity reporting, and social impact related to women
empowerment;
•
We have been recognized by 50/50 Women on Boards as having a gender-balanced board;
•
We created a Business Diversity and Social Responsibility program to facilitate alignment with suppliers
that share our values; and
•
We launched our Good Impressions program that brings Meredith’s media and marketing consultation
services to bear for minority owned small businesses in the communities we serve.
33
We have a large audience deeply engaged with our trusted brands; our digital businesses are delivering record
performance; and the pending Local Media Group transaction will enhance our ability to invest in future growth and
return capital to shareholders.
NATIONAL MEDIA
Advertising related revenues made up 48 percent of fiscal 2021 national media revenues. These revenues were
generated from the sale of advertising space in our magazines and on our digital properties to clients interested in
promoting their brands, products, and services to consumers as well as revenue we generate selling advertising
space on third-party platforms. Changes in advertising related revenues tend to correlate with changes in the level of
economic activity in the U.S. Indicators of economic activity include changes in the level of gross domestic product,
consumer spending, housing starts, unemployment rates, auto sales, and interest rates. Circulation levels of
Meredith’s magazines, reader demographic data, and the advertising rates charged relative to other comparable
available advertising opportunities also affect the level of advertising related revenues.
Consumer related revenues accounted for 49 percent of fiscal 2021 national media revenues. Consumer related
revenue includes all revenues either driven by or otherwise linked to consumer buying decisions and include
circulation activities; magazine subscriptions sales for third-party publishers; brand licensing; digital lead
generation; affiliate marketing; and other e-commerce sales, product sales, and related activities. Circulation
revenues result from the sale of magazines to consumers through subscriptions and by single copy sales on
newsstands in print form, primarily at major retailers and grocery/drug stores, and in digital form on tablets and
other media devices. In the short term, subscription revenues, which accounted for 57 percent of consumer related
revenues, are less susceptible to economic changes because subscriptions are generally sold for terms of one to three
years. The same economic factors that affect advertising related revenues also can influence consumers’ response to
subscription offers and result in lower revenues and/or higher costs to maintain subscriber levels over time.
Subscription revenues per copy and related costs can also vary significantly by subscription source. Some
subscription sources generate lower revenues than other sources but have proportionately lower related costs. A key
factor in our subscription success is our industry-leading database. It contains an abundance of attributes on 185
million individuals, including 90 percent of U.S. millennial women. The size and depth of our database is a key to
our circulation model and allows more precise consumer targeting. Newsstand revenues are more volatile than
subscription revenues and can vary significantly month-to-month depending on economic and other factors. The
remaining consumer related revenues are generally affected by changes in the level of economic activity in the U.S.,
including changes in the level of gross domestic product, consumer spending, unemployment rates, and interest
rates.
The remaining 3 percent of national media revenues came from a variety of activities that included the sale of
customer relationship marketing products and services. In addition, for certain sold brands, Meredith has provided
consumer marketing, subscription fulfillment, paper purchasing, printing, and other services under outsourcing
agreements and records such revenue in other revenue.
National media’s major expense categories are employee compensation costs, subscription acquisition costs, and
production and delivery of publications and promotional mailings. Employee compensation, which includes benefits
expense, represented 26 percent of national media’s operating expenses in fiscal 2021. Compensation expense is
affected by salary and incentive levels, the number of employees, the costs of our various employee benefit plans,
and other factors. Subscription acquisition costs, which represent the cost of obtaining subscriptions from third-
party agents, accounted for 22 percent of the national media segment’s operating expenses in fiscal 2021.
Paper, postage, and production charges represented 21 percent of the segment’s operating expenses in fiscal 2021.
The price of paper can vary significantly on the basis of worldwide demand and supply for paper in general and for
specific types of paper used by Meredith. The printing of our publications is outsourced. We have a multi-year
contract for the printing of our magazines, a practice which reduces price fluctuations over the contract term. Postal
rates are dependent on the operating efficiency of the USPS and legislative mandates imposed on the USPS. In
January 2021, the USPS increased rates by approximately 1.8 percent for First-Class Mail and 1.5 percent for other
34
categories. The most recent rate change was an increase of approximately 6.9 percent effective August 2021. The
USPS has also announced proposed temporary rate adjustments for the 2021 holiday season. Meredith continues to
work independently and with others to encourage and help the USPS find and implement efficiencies to contain rate
increases.
The remaining 31 percent of fiscal 2021 national media expenses included depreciation and amortization, costs for
magazine newsstand distribution, advertising and promotional efforts, and overhead costs for facilities and
technology services.
LOCAL MEDIA
Local media derives the majority of its revenues—59 percent in fiscal 2021—from the sale of spot advertising on
our stations’ digital media properties as well as revenue we generate selling advertising space on third-party
platforms. The remainder comes from television retransmission consent fees, television production, and other
services.
The stations sell advertising to both local/regional and national accounts. 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. We generate additional revenues from digital activities and programs
focused on local interests such as community events and college and professional sports.
Changes in advertising related revenues tend to correlate with changes in the level of economic activity in the U.S.
and in the local markets in which we operate stations, and with the cyclical changes in political advertising
discussed previously. Programming content, audience share, audience demographics, and the advertising rates
charged relative to other available advertising opportunities also affect advertising revenues. On occasion, unusual
events necessitate uninterrupted television coverage and will adversely affect spot advertising revenues.
Local media’s major expense categories are programming fees paid to the networks and employee compensation.
Programming fees paid to the networks represented 36 percent of this segment’s fiscal 2021 expenses. Employee
compensation represented 29 percent of local media’s operating expenses in fiscal 2021 and is affected by the same
factors noted for national media. Sales and promotional activities, costs to produce local news programming, and
general overhead costs for facilities and technical resources accounted for most of the remaining 35 percent of local
media’s fiscal 2021 operating expenses.
COVID-19 UPDATE
During fiscal 2021, COVID-19 continued to negatively impact our results, particularly advertising related revenues
in our national media segment and our magazine advertising and non-political spot revenue streams. We see strong
consumer engagement with our brands in both the national and local media segments and across platforms. We are
also seeing performance improvement from our brands that focus on home and lifestyle. As the effects of public
health measures such as travel restrictions and previously mandated business closures continue to impact consumers
and the overall economy, we have seen negative performance trends continue within our brands focused on travel
and luxury. While the COVID-19 pandemic continues to depress levels of magazine advertising, we have seen
improvement in digital advertising. As we continue to progress through the pandemic, quantifying the specific
impact becomes more challenging. The Company estimates that the COVID-19 impact on total revenues was a net
decrease in revenues of approximately $100.0 million to $150.0 million in fiscal 2021.
The Company temporarily reduced the pay for our Board of Directors, our executives, and approximately 60 percent
of our employees in response to the COVID-19 pandemic. These reductions were lifted, and full pay was reinstated
for all parties in early September 2020.
We have not experienced a negative impact on our liquidity due to COVID-19, and we believe we have sufficient
liquidity to satisfy our cash needs for the foreseeable future.
35
We continue to monitor the ongoing and evolving situation. There may be developments outside our control
requiring us to adjust our operating plan. Due to the emergence of new variants and continued high case counts,
fiscal 2022 is expected to continue to be a time of uncertainty. While fiscal 2021 earnings increased as compared to
the prior year due to record political and digital advertising, there remains the risk that COVID-19 could have
material adverse impacts on our future revenue growth as well as our overall profitability. We will continue to
evaluate the nature and extent of the impact of COVID-19 on our business, consolidated results of operations,
financial condition, and liquidity. For additional discussion of the impacts and risks to our business from the
COVID-19 pandemic, refer to Item 1- Risk Factors in this Form 10-K.
FISCAL 2021 FINANCIAL OVERVIEW
•
During fiscal 2021, the Company made debt principal payments totaling $254.1 million including
redeeming, in the third quarter of fiscal 2021, $250.0 million of its senior unsecured notes. Those notes bore
the highest interest rate in the Company’s debt portfolio.
•
Local media revenues increased 25 percent compared to the prior year primarily due to increased political
spot revenues and digital political advertising revenues included in third party sales. These increases were
partially offset by decreases in non-political spot advertising revenues due primarily to political crowd-out
and the impact of COVID-19. Operating profit more than doubled primarily due to the additional high-
margin political advertising revenues as a result of the cyclical nature of political advertising.
•
The Company sold the Travel + Leisure trademark and other related assets, including the Travel + Leisure
travel clubs (collectively the Travel + Leisure Brand), and recognized a gain on the sale of $97.6 million.
•
National media revenues decreased 3 percent compared to the prior year primarily due to declines in
magazine advertising and subscription revenues resulting from portfolio changes and the impact of
COVID-19. These declines were partially offset by increases in digital advertising, licensing, and digital
and other consumer driven revenues. Digital advertising revenues surpassed magazine advertising revenues
for the first time. Operating profit was $351.2 million in fiscal 2021, which included the $97.6 million gain
on the sale of the Travel + Leisure Brand. Due primarily to non-cash impairment charges of $367.0 million,
the national media segment ended fiscal 2020 with an operating loss of $167.7 million.
•
As discussed above, COVID-19 continues to negatively impact our results, particularly magazine
advertising revenues in our national media segment. As we continue to progress through the pandemic,
quantifying the specific impact becomes more challenging. The Company estimates that the COVID-19
impact on total revenues was a net decrease in revenues of approximately $100.0 million to $150.0 million
in fiscal 2021.
•
Unallocated corporate expenses increased significantly primarily due to an increase in incentive-based
compensation expenses and transaction related costs.
•
The Company reported net earnings from continuing operations for fiscal 2021 of $306.6 million, which
includes the $97.6 million ($72.7 million after-tax) gain on the sale of the Travel + Leisure Brand. In fiscal
2020, the Company reported a net loss from continuing operations of $209.0 million reflecting non-cash
impairment charges of $389.3 million ($327.6 million after-tax). Absent the gain on the sale of the Travel +
Leisure Brand and the impairment charges, the Company would have had net earnings from continuing
operations of $233.9 million in fiscal 2021 and $118.6 million in fiscal 2020. The increase in net earnings
from continuing operations reflects the increased political and digital advertising.
•
In fiscal 2021, we generated $398.6 million in operating cash flows and invested $35.2 million in capital
improvements.
36
RESULTS OF OPERATIONS
Years ended June 30,
2021
Change
2020
Change
2019
(In millions except per share data)
Total revenues ..................................................................... $ 2,977.4
5 % $ 2,848.6
(11) % $ 3,188.5
Operating expenses
Costs and expenses ......................................................... (2,465.8)
(2) % (2,526.6)
(8) % (2,758.8)
Acquisition, disposition, and restructuring related
activities ..........................................................................
49.8
n/m
(26.8)
(73) %
(100.9)
Impairment of goodwill and other long-lived assets ......
—
n/m
(389.3)
n/m
(41.8)
Total operating expenses ............................................ (2,416.0)
(18) % (2,942.7)
1 % (2,901.5)
Income (loss) from operations ............................................ $
561.4
n/m $
(94.1)
n/m $
287.0
Net earnings (loss) from continuing operations .................. $
306.6
n/m $ (209.0)
n/m $
129.1
Net earnings (loss) ..............................................................
306.6
n/m
(234.3)
n/m
46.3
Diluted earnings (loss) per common share from
continuing operations ..........................................................
6.27
n/m
(9.85)
n/m
1.12
Diluted earnings (loss) per common share ..........................
6.27
n/m
(10.41)
n/m
(0.70)
n/m - Not meaningful
TRENDS AND UNCERTAINTIES
The following is a discussion of the trends and uncertainties that affected our businesses. Following the Overview is
an analysis of the results of operations for the national media and local media segments and an analysis of our
consolidated results of operations for the last three fiscal years.
Advertising revenues accounted for 51 percent of total revenues in fiscal 2021. Advertising demand is the
Company’s key uncertainty, and its fluctuation from period to period can have a material effect on operating results.
Demand for political advertising in the Company’s local media segment is cyclical in nature, generally following
the biennial cycle of election campaigns with peaks occurring in our odd fiscal years (e.g., fiscal 2021, fiscal 2019)
and particularly in our second quarter of those fiscal years. Other significant uncertainties that can affect operating
results include fluctuations in the cost of paper, postage rates, and over time, television programming rights. The
Company’s cash flows from operating activities, our primary source of liquidity, is adversely affected when the
advertising market is weak or when costs rise. One of our priorities is to manage our businesses prudently during
expanding and contracting economic cycles to maximize shareholder return over time. To manage the uncertainties
inherent in our businesses, we prepare monthly internal forecasts of anticipated results of operations and monitor the
economic indicators mentioned in the Executive Overview. See Item 1A-Risk Factors in this Form 10-K for further
discussion.
NATIONAL MEDIA
The following discussion reviews operating results for our national media segment, which includes magazine
publishing, digital media, digital and customer relationship marketing, affinity marketing, brand licensing, database-
related activities, and other related operations. The national media segment contributed 68 percent of Meredith’s
consolidated revenues and 53 percent of the combined operating profit from national media and local media
operations in fiscal 2021.
National media revenues decreased 3 percent in fiscal 2021. Operating costs and expenses decreased 6 percent.
Operating profit was $351.2 million in fiscal 2021, which included the $97.6 million gain on the sale of the Travel +
Leisure Brand.
37
Fiscal 2020 national media revenues declined 11 percent. Costs and expenses decreased 11 percent, and impairment
charges of $367.0 million were recorded in the national media segment. Due to the impairment charges, the national
media operations reported an operating loss of $167.7 million in fiscal 2020.
National media operating results for the last three fiscal years were as follows:
Years ended June 30,
2021
Change
2020
Change
2019
(In millions)
Revenues .............................................................................. $ 2,023.5
(3) % $ 2,081.6
(11) % $ 2,326.6
Operating expenses
Costs and expenses .......................................................... (1,763.8)
(6) % (1,879.9)
(11) % (2,104.5)
Acquisition, disposition, and restructuring related
activities ...........................................................................
91.5
n/m
(2.4)
(96) %
(54.3)
Impairment of goodwill and other long-lived assets .......
—
n/m
(367.0)
n/m
(41.8)
Total operating expenses ............................................ (1,672.3)
(26) % (2,249.3)
2 % (2,200.6)
Operating profit (loss) .......................................................... $
351.2
n/m $ (167.7)
n/m $
126.0
n/m - Not meaningful
Revenues
The table below presents the components of national media revenues for the last three fiscal years.
Years ended June 30,
2021
Change
2020
Change
2019
(In millions)
Advertising related
Digital .............................................................................. $
491.8
31 % $
376.8
(5) % $
394.9
Magazine .........................................................................
426.5
(23) %
553.5
(20) %
690.1
Third party sales ..............................................................
46.1
(27) %
63.1
(3) %
65.3
Total advertising related .............................................
964.4
(3) %
993.4
(14) % 1,150.3
Consumer related
Subscription ....................................................................
564.7
(8) %
611.8
(15) %
716.1
Newsstand .......................................................................
150.0
(1) %
150.8
(9) %
165.5
Licensing .........................................................................
124.9
27 %
98.0
3 %
95.2
Affinity marketing ...........................................................
62.3
(8) %
67.4
1 %
66.7
Digital and other consumer driven ..................................
90.9
25 %
72.8
28 %
56.8
Total consumer related ...............................................
992.8
(1) % 1,000.8
(9) % 1,100.3
Other
Project based ...................................................................
50.4
(11) %
56.7
12 %
50.5
Other ................................................................................
15.9
(48) %
30.7
20 %
25.5
Total other ..................................................................
66.3
(24) %
87.4
15 %
76.0
Total revenues ..................................................................... $ 2,023.5
(3) % $ 2,081.6
(11) % $ 2,326.6
Advertising Related Revenue
National media advertising related revenue includes all advertising in Meredith owned publications and on Meredith
owned websites as well as revenue generated from selling advertising space on third-party platforms. Advertising
related revenue decreased 3 percent in fiscal 2021.
Digital advertising revenue increased 31 percent in fiscal 2021. Meredith’s Data Studio, which launched in the first
quarter of fiscal 2021, offers advertising solutions that harness the Company’s proprietary first-party data and
38
predictive insights to help inform its clients’ marketing, product, and business strategies, providing the opportunity
to create multi-year integrated partnerships with our top clients. This has driven positive digital advertising results
across our brands. In fiscal 2021, sessions increased almost 15 percent and approximately 60 percent of digital
advertising was from direct sales while approximately 40 percent was open programmatic digital advertising.
People.com delivered the strongest year-over-year traffic growth as it continued to benefit from strong interest in
celebrity and entertainment-related information. We also delivered continued growth at Allrecipes.com, along with
our home sites, including Southern Living and Martha Stewart.
We believe certain trends resulting from the impact of COVID-19, such as increased cooking at home, redecorating,
and home remodeling, appear to be positively impacting web traffic, and the Company is seeing positive trends on
many of our sites, including Allrecipes.com and People.com. Growth in open programmatic advertising has been
driven by the combination of advertisers coming back into the market and increased sessions. In addition, the
Company saw a recovery in cost per thousand or CPM’s, which had been suppressed during the early stages of the
pandemic. While digital traffic to our sites has historically been strongest in our second quarter, the Company
continued to see increased consumer demand in the back half of fiscal 2021.
Digital advertising decreased 5 percent in fiscal 2020. While the Company saw increased digital advertising
revenues during the first eight months of fiscal 2020, the Company estimates that cancellations and delays in digital
advertising revenues due to the COVID-19 pandemic resulted in a $33.0 million adverse impact in fiscal 2020.
39
The following table presents advertising page information according to MediaRadar, an independent agency that
measures advertising sales volume, for our major subscription-based magazines for the last three fiscal years:
Years ended June 30,
2021
Change
2020
Change
2019
People ..............................................................................
1,612
(17) %
1,941
(16) %
2,303
Better Homes & Gardens ................................................
894
4 %
860
(9) %
942
Southern Living ................................................................
788
7 %
738
(10) %
816
Parents .............................................................................
776
11 %
701
(14) %
817
Real Simple ......................................................................
690
(7) %
738
1 %
733
InStyle ..............................................................................
550
(41) %
933
(14) %
1,081
Health ..............................................................................
489
(3) %
506
(1) %
510
Shape ...............................................................................
459
(9) %
504
(13) %
579
Food & Wine ...................................................................
450
(21) %
573
(8) %
620
Martha Stewart Living .....................................................
432
(5) %
453
(19) %
560
EatingWell .......................................................................
429
(7) %
461
12 %
410
Successful Farming ..........................................................
428
(8) %
464
(7) %
501
Travel + Leisure ..............................................................
403
(45) %
735
(4) %
764
Entertainment Weekly 2
....................................................
343
12 %
307
(37) %
491
People en Español ...........................................................
313
(17) %
375
(15) %
442
Allrecipes .........................................................................
282
(1) %
285
3 %
276
Midwest Living ................................................................
270
0 %
269
(11) %
302
Wood ................................................................................
171
(4) %
179
(16) %
214
Magnolia Journal ............................................................
165
11 %
148
17 %
126
Rachael Ray in Season 3
..................................................
31
(82) %
168
(57) %
392
Traditional Home 4
..........................................................
27
(61) %
69
(82) %
373
Cooking Light 5
................................................................
22
—
—
(100) %
273
Family Circle 1
.................................................................
—
(100) %
342
(54) %
750
Coastal Living 6
...............................................................
—
—
—
(100) %
75
1 Closed effective with the December 2019 issue.
2 Effective with the August 2019 issue, transitioned to a monthly subscription title.
3 Effective after the December 2019 issue, became a quarterly newsstand-only publication.
4 Effective after the Fall/Winter 2019 issue, became a quarterly newsstand-only bookazine. Effective with the Fall/Winter 2020 issue,
became a quarterly subscription title.
5 Merged into EatingWell effective January 2019 and became a newsstand-only bookazine. Effective with the Winter 2020 issue,
became a quarterly subscription title.
6 Effective March 2019, became a quarterly newsstand-only bookazine. Effective with the Winter 2020 issue, became a quarterly
subscription title.
During fiscal 2019 and fiscal 2020, Meredith has made changes to its portfolio of brands and titles intended to
enhance the consumer experience, provide more effective and efficient platforms for advertisers, and increase the
profitability of the portfolio. The fiscal 2020 changes included closing Family Circle magazine and transitioning
Traditional Home and Rachael Ray Every Day to premium newsstand titles, which resulted in declines in combined
print advertising revenues of approximately $20.7 million in fiscal 2021. Magazine advertising continues to be
negatively impacted by COVID-19, with the toiletries and cosmetics and the travel categories being impacted the
most. In addition, the food and beverage and prescription drug categories were negatively impacted in fiscal 2021.
Most titles experienced declines in advertising pages and related magazine advertising revenues as compared to the
prior year. The decline compared to the prior year was due to both the impact of COVID-19 and changing market
demands for magazine advertising.
40
The fiscal 2019 changes included closing the Money and Martha Stewart Weddings magazines, changing the
frequency of Entertainment Weekly to a monthly title, transitioning Coastal Living to a premium newsstand title,
and merging Cooking Light into Meredith’s popular EatingWell title, which resulted in declines in combined print
advertising revenues of approximately $60.0 million in fiscal 2020. Of the remaining decline in print advertising
revenues of $76.6 million, the Company estimates that advertising cancellations and delays due to the COVID-19
pandemic resulted in a $45.2 million adverse impact in fiscal 2020. The remaining decrease in print advertising
revenues is primarily due to changing market demands for print advertising.
The decrease in third-party sales of 27 percent in fiscal 2021 was primarily due to reductions in cover wrap sales as
well as decreases in advertising pages in publications the Company produces on behalf of others. These declines
were primarily due to a continued reluctance to handle printed material within doctor’s offices due to COVID-19.
The 3 percent decrease in third party sales in fiscal 2020 was primarily due to reductions in cover wrap sales as well
as decreases in advertising pages in publications the Company produces on behalf of others. The Company
estimates that cancellations and delays in digital third party sales due to the economic impacts of the COVID-19
pandemic resulted in a $3.5 million adverse impact during fiscal 2020.
Consumer Related Revenue
Consumer related revenue includes all revenues either driven by or otherwise linked to consumer buying decisions.
Fiscal 2021 consumer related revenues declined 1 percent as compared to the prior year.
For fiscal 2021, approximately 40 percent of the declines in subscription revenues were due to the portfolio changes
noted above. The remaining decreases in subscription revenues were due primarily to changes in subscriber source
mix. Subscriptions received directly by the Company tend to have lower subscription revenues, lower acquisition
costs, and higher renewal rates. Newsstand revenues decreased 1 percent as compared to fiscal 2020. Newsstand
sale trends continue to decline for both monthly and weekly ratebase titles. Meredith Premium Publishing total sale
units increased over the prior year primarily due to a large amount of tributes/political issues published in fiscal
2021 and a very weak fourth quarter in fiscal 2020 due to COVID-19. Licensing revenue increased primarily due to
an increase in royalties from Apple News+ and Walmart. Digital and other consumer driven revenue increased
primarily due to increases in ecommerce revenues.
Approximately 65 percent of the fiscal 2020 decline in subscription revenue was due to the portfolio changes
detailed above. In addition, a trade book line of business was closed, which resulted in a $5.4 million decrease in
subscription revenue in fiscal 2020. The remaining decrease in subscription revenue in fiscal 2020 was due
primarily to a change in mix to subscriptions received directly by the Company. Digital and other consumer driven
revenue increased primarily due to increases in ecommerce revenues from direct product sales and lead generation
referrals. The Company estimates that shelter-in-place orders and reductions in travel due to the COVID-19
pandemic resulted in a $17.6 million adverse impact on newsstand revenues in fiscal 2020.
While the Company is not able to estimate the impact of the COVID-19 pandemic on revenues into fiscal 2022, the
Company expects digital advertising to continue its strong performance while the recovery of other advertising and
certain consumer related revenues are expected to continue to lag, such as ratebase titles sold on the newsstand.
While many retail establishments have reopened and government restrictions have, in many locations, been
removed or lightened, the future impact of the COVID-19 pandemic remains highly uncertain.
Other Revenue
Fiscal 2021 other revenue decreased 24 percent primarily due to non-repeating project work, declines in revenues
from operational support agreements for the previously sold brands, decreases in other custom publishing projects,
and the negative impact of COVID-19 on consumer events.
41
Other revenue increased 15 percent in fiscal 2020 primarily due to the delivery of episodes of a streaming program
created for a third party. The Company estimates that the cancellation of events sponsored by the Company due to
the COVID-19 pandemic resulted in a $9.0 million adverse impact on other revenues in fiscal 2020.
Operating Expenses
Operating Costs and Expenses
Fiscal 2021 operating costs and expenses decreased 6 percent primarily due to lower amortization expense of $46.6
million, a reduction in subscription acquisition costs of $37.4 million, a decrease in paper expense of $17.7 million,
a decline in non-payroll related editorial costs of $17.4 million, lower occupancy-related costs of $13.7 million, a
reduction in distribution costs of $13.1 million, a decrease in bad debt expense of $12.9 million, a decline in travel
and entertainment expenses of $11.9 million, and a reduction in employee compensation costs of $9.9 million. The
portfolio changes noted above as well as the impact from COVID-19 contributed to the declines. These declines
were partially offset by an increase in performance-based compensation costs of $21.4 million, higher ad revenue-
related partner remittance of $18.5 million, an increase in outside sales commission expense of $12.2 million, and a
reduction of $10.6 million in revenues earned under Transition Service Agreements (TSAs) related to previously
sold brands, which were recorded as credits to operating expenses.
National media operating costs and expenses decreased 11 percent in fiscal 2020 primarily due to lower combined
production, distribution, and paper costs of $86.4 million, a reduction in employee-related compensation costs of
$54.1 million, a decline in non-payroll editorial costs of $48.0 million, and a reduction in depreciation and
amortization expense of $30.0 million.
The Company estimates the economic impacts of the COVID-19 pandemic resulted in a reduction in national media
operating costs and expenses of $52.8 million in fiscal 2020, relating to reductions in production, distribution,
editorial, employee-related compensation, performance-based compensation expenses, and selling expenses.
While the Company is not able to estimate the impact of the COVID-19 pandemic on operating costs and expenses
into fiscal 2022, the Company expects that to the extent print advertising revenues recover, related direct costs and
expenses will also increase.
Acquisition, Disposition, and Restructuring Related Activities
Fiscal 2021 acquisition, disposition, and restructuring related activities primarily represented a $97.6 million gain
on the sale of the Travel and Leisure Brand offset by $6.7 million in severance and related benefit costs.
National media acquisition, disposition, and restructuring related activities decreased $51.9 million in fiscal 2020
primarily due to declines in severance and related benefit expenses of $36.7 million and a reduction in integration
costs of $18.3 million.
Impairment of Goodwill and Other Long-Lived Assets
In the third quarter of fiscal 2020, the national media segment recorded a non-cash impairment of goodwill of
$252.7 million, non-cash impairments of an operating lease asset and associated leasehold improvements and
furniture and fixtures totaling $87.9 million, and non-cash impairments of trademarks of $21.2 million. In addition,
in the first quarter of fiscal 2020, the national media segment recorded a $5.2 million non-cash impairment of a
trademark. The magnitude of the impairments of goodwill and other long-lived assets recorded in the third quarter
of fiscal 2020 was unfavorably impacted by the recent volatility of the financial markets and the uncertainty
surrounding the long-term economic effects of the COVID-19 pandemic.
The national media segment recorded non-cash impairment charges of $41.8 million in fiscal 2019 related to
trademarks.
42
Operating Profit (Loss)
Fiscal 2021 operating profit grew to $351.2 million, which included the $97.6 million gain on the sale of the Travel
+ Leisure Brand. Absent this gain, national media operating profit would have been $253.6 million. National media
operations resulted in a $167.7 million loss in fiscal 2020 reflecting the $367.0 million non-cash impairment charges
to reduce the carrying value of goodwill and other long-lived assets. Absent the impairment charges, national media
operating profit would have been $199.3 million, an increase as compared to fiscal 2019. The fiscal 2021 increase
was primarily due to the increase in digital advertising revenues and the reduction of operating costs and expenses,
partially offset by the negative impact of COVID-19. The fiscal 2020 increase was primarily due to previously
executed restructuring activities and ongoing cost-savings initiatives reducing operating expenses partially offset by
a reduction in revenues as discussed above.
LOCAL MEDIA
The following discussion reviews operating results for the Company’s local media segment, which consists of 17
television stations and related digital media as well as MNI, which generates revenue through the sale of geographic
and demographic-targeted digital and print advertising programs sold to third parties. The local media segment
contributed 32 percent of Meredith’s consolidated revenues and 47 percent of the combined operating profit from
national media and local media operations in fiscal 2021.
Fiscal 2021 local media revenues rose 25 percent, and operating profit more than doubled primarily as a result of
increased cyclical political advertising.
Fiscal 2020 local media revenues declined 11 percent and operating profit decreased 48 percent primarily due to
lower political advertising due to the cyclical nature of such revenues, the impacts of the COVID-19 pandemic on
revenues, and a non-cash impairment charge.
Local media operating results for the last three fiscal years were as follows:
Years ended June 30,
2021
Change
2020
Change
2019
(In millions)
Revenues ............................................................................. $
958.8
25 % $
769.3
(11) % $
863.8
Operating expenses
Costs and expenses ..........................................................
(637.5)
6 %
(598.7)
2 %
(584.3)
Acquisition, disposition, and restructuring related
activities ..........................................................................
(7.3)
n/m
(2.3)
92 %
(1.2)
Impairment of long-lived assets ......................................
—
n/m
(22.3)
—
—
Total operating expenses ............................................
(644.8)
3 %
(623.3)
6 %
(585.5)
Operating profit ................................................................... $
314.0
n/m $
146.0
(48) % $
278.3
n/m - Not meaningful
43
Revenues
The table below presents the components of local media revenues for the last three fiscal years.
Years ended June 30,
2021
Change
2020
Change
2019
(In millions)
Advertising related
Non-political spot ............................................................ $
279.2
(2) % $
285.6
(12) % $
323.3
Political spot ....................................................................
175.4
n/m
23.9
n/m
102.9
Digital ..............................................................................
19.0
7 %
17.7
12 %
15.8
Third party sales ..............................................................
92.5
15 %
80.7
(16) %
96.2
Total advertising related .............................................
566.1
39 %
407.9
(24) %
538.2
Consumer related
Retransmission ................................................................
377.0
8 %
347.9
10 %
316.5
Digital and other consumer driven ..................................
0.8
n/m
0.0
—
0.0
Total consumer related ...............................................
377.8
9 %
347.9
10 %
316.5
Other ....................................................................................
14.9
10 %
13.5
48 %
9.1
Total revenues ..................................................................... $
958.8
25 % $
769.3
(11) % $
863.8
n/m - Not meaningful
Advertising Related Revenue
Local media revenues increased 25 percent in fiscal 2021. Advertising related revenues increased 39 percent.
Political advertising revenues increased primarily due to the November 2020 elections. Political spot advertising
revenues totaled $175.4 million in the current fiscal year compared with $23.9 million in the prior year. Fluctuations
in political spot advertising revenues at our stations and throughout the broadcasting industry generally follow the
biennial cycle of election campaigns. Political spot advertising displaces a certain amount of non-political spot
advertising; therefore, the revenues are not entirely incremental.
Non-political spot advertising revenues decreased 2 percent in fiscal 2021. Local non-political advertising revenues
declined 3 percent while national non-political advertising revenues were flat in fiscal 2021. Declines in non-
political spot revenues in fiscal 2021 were caused by both political crowd-out and COVID-19. While the Company
believes that COVID-19 continues to impact non-political spot advertising, quantifying the specific impact becomes
more challenging. In fiscal 2021, there were several categories that were negatively impacted by COVID-19 with
automotive, retail, furnishings, and restaurants being impacted the most. However, both the professional services
category, now our largest category, and home services were up, showing strong performances in spite of COVID-19
and political crowd out, and gaming was up significantly.
Fiscal 2020 local media revenues decreased 11 percent as compared to the prior year. Advertising related revenue
declined 24 percent. Political spot advertising revenues totaled $23.9 million in the current year compared with
$102.9 million in the prior year. Non-political spot advertising revenues declined 12 percent. Local non-political
spot advertising revenues decreased 13 percent and national non-political spot advertising revenues declined 9
percent in fiscal 2020. The Company estimates that cancellations and delays in non-political spot revenues due to
the economic impacts of the COVID-19 pandemic resulted in a $37.2 million adverse impact on non-political spot
revenues during fiscal 2020.
Digital advertising revenues grew 7 percent in fiscal 2021 and 12 percent in fiscal 2020 primarily due to increased
programmatic ad and video sales. The Company estimates that cancellations and delays in digital advertising
revenues due to the economic impacts of the COVID-19 pandemic resulted in a $0.8 million adverse impact on
digital advertising revenues during fiscal 2020.
44
Third party sales, which represent revenue generated through selling advertising space on third-party platforms,
increased 15 percent in fiscal 2021 primarily due to the increase in digital political advertising of $15.6 million
offset by reductions in third party sales primarily related to COVID-19. Third party sales declined 16 percent in
fiscal 2020 primarily due to decreased coverwrap and print insert sales. The Company estimates that cancellations
and delays in third party sales due to the economic impacts of the COVID-19 pandemic resulted in a $7.4 million
adverse impact on third party sales revenue during fiscal 2020.
As discussed above, COVID-19 negatively impacted our results, particularly non-political spot and non-political
third party advertising related revenues, for the year ended June 30, 2021. As the pandemic continues, quantifying
the specific impact becomes more challenging. While the Company is not able to estimate the impact of the
COVID-19 pandemic on revenues in fiscal 2022, the Company expects the COVID-19 pandemic to continue to
negatively impact non-political spot and third party sales advertising revenues into fiscal 2022. For example,
continued supply chain disruptions are expected to lower automotive-related advertising spending. While many
retail establishments have reopened and government restrictions have, in many locations, been removed or
lightened, the future impact of the COVID-19 pandemic remains highly uncertain.
Consumer Related Revenue
Consumer related revenues primarily represent retransmission consent fees from cable, satellite,
telecommunications operators, and streaming over-the-top (OTT) services (such as YouTube TV). Consumer
related revenues increased in fiscal 2021 and fiscal 2020 primarily due to renegotiated contracts and annual
escalators.
Other Revenue
Other revenue increased 10 percent in fiscal 2021 and 48 percent in fiscal 2020 primarily due to increased revenues
from programming streams on digital channels.
Operating Expenses
Operating Costs and Expenses
The fiscal 2021 increase in local media operating costs and expenses was primarily due to higher programming fees
paid to affiliated networks of $24.3 million, higher third party inventory acquisition costs of $12.1 million, an
increase in outside sales commissions expense of $7.4 million, and an increase in performance-based compensation
expenses of $7.1 million. The increases in third party inventory acquisition costs and outside sales commissions
were primarily due to the increase in political advertising revenues. These increases were partially offset by a
reduction in depreciation and amortization of $7.4 million and lower bad debt expense of $4.4 million.
Fiscal 2020 operating costs and expenses increased 2 percent primarily due to higher programming fees paid to
affiliated networks of $27.2 million partially offset by reductions in third party acquisition costs of $6.2 million and
performance-based compensation expenses of $3.8 million.
The Company estimates the economic impacts of the COVID-19 pandemic resulted in a reduction in local media
operating costs and expenses of $12.5 million in fiscal 2020. Of the reductions in third party acquisition costs and
performance-based compensation expenses noted above, the Company estimates that $5.4 million and $1.7 million,
respectively, were related to the economic impacts of the COVID-19 pandemic. The Company also estimates that
employee-related compensation expenses declined $3.9 million and other costs and expenses were lower by $1.5
million due to the economic impacts of the COVID-19 pandemic.
While the Company is not able to estimate the impact of the COVID-19 pandemic on operating costs and expenses
into fiscal 2022, the Company expects that, to the extent advertising related revenues recover, related direct costs
and expenses will also increase.
45
Acquisition, Disposition, and Restructuring Related Activities
Fiscal 2021 acquisition, disposition, and restructuring related activities more than doubled due to a $5.0 million
increase in severance and related benefit costs.
Impairment of Long-Lived Assets
In the third quarter of fiscal 2020, the Company recorded a non-cash impairment charge of $22.3 million to reduce
the value of one of the local media segment's FCC licenses.
Operating Profit
Local media operating profit more than doubled in fiscal 2021 primarily due to the increase in high-margin political
spot advertising revenues.
Fiscal 2020 operating profit declined 48 percent primarily due to lower political advertising revenues of $79.0
million, an estimated reduction in operating profit of $32.9 million due to the economic impacts of the COVID-19
pandemic, and the non-cash impairment charge of $22.3 million.
UNALLOCATED CORPORATE EXPENSES
Unallocated corporate expenses are general corporate overhead expenses not attributable to the operating groups.
These expenses for the last three fiscal years were as follows:
Years ended June 30,
2021
Change
2020
Change
2019
(In millions)
Costs and expenses ................................................................... $ 69.4
38 %
$ 50.3
(30) %
$ 71.9
Acquisition, disposition, and restructuring related activities ...
34.4
56 %
22.1
(51) %
45.4
Unallocated corporate expenses ............................................... $ 103.8
43 %
$ 72.4
(38) %
$ 117.3
Unallocated corporate expenses increased $31.4 million in fiscal 2021 primarily due to increases in performance-
based compensation expenses of $22.3 million and increases in transactions costs of $22.0 million partially offset
by a reduction in benefit-related expenses of $7.2 million and a $5.7 million decrease in integration and exit costs.
Unallocated corporate expenses decreased 38 percent in fiscal 2020 primarily due to decreases in integration and
exit costs of $22.7 million, performance-based compensation expenses of $17.2 million, employee-related
compensation costs of $6.1 million, and consulting services expenses of $4.3 million partially offset by increases in
other miscellaneous business expenses.
Of the $17.2 million reduction in performance-based compensation expenses in fiscal 2020, the Company estimates
that $4.4 million of that reduction was due to the impact of the COVID-19 pandemic on revenues and operating
results of the Company. Other than the reduction in performance-based compensation expenses and a reduction of
$1.1 million in other expenses, the Company estimates that the COVID-19 pandemic did not have a significant
impact on unallocated corporate operating costs and expenses during fiscal 2020 or fiscal 2021.
46
CONSOLIDATED
Consolidated Operating Expenses
Consolidated operating expenses for the last three fiscal years were as follows:
Years ended June 30,
2021
Change
2020
Change
2019
(In millions)
Production, distribution, and editorial ................................. $ 1,024.5
(2) % $ 1,047.6
(10) % $ 1,161.2
Selling, general, and administrative .................................... 1,278.3
2 % 1,259.1
(7) % 1,350.0
Acquisition, disposition, and restructuring related
activities ..............................................................................
(49.8)
(286) %
26.8
(73) %
100.9
Depreciation and amortization ............................................
163.0
(26) %
219.9
(11) %
247.6
Impairment of goodwill and other long-lived assets ...........
—
n/m
389.3
831 %
41.8
Operating expenses ............................................................. $ 2,416.0
(18) % $ 2,942.7
1 % $ 2,901.5
n/m - Not meaningful
Production, Distribution, and Editorial Costs
Fiscal 2021 production, distribution, and editorial costs decreased 2 percent as compared to fiscal 2020 primarily
due to a reduction in paper expense of $17.7 million, a decline in non-payroll related editorial costs of $17.4
million, lower distribution costs of $13.1 million, a reduction in custom publishing expenses of $5.6 million, and
lower travel and entertainment expenses of $3.5 million partially offset by an increase in programming fees paid to
affiliated networks of $24.3 million and MNI inventory expenses of $12.1 million.
Production, distribution, and editorial costs decreased 10 percent in fiscal 2020 primarily due to lower combined
production, distribution, and paper costs of $86.4 million and a decline in non-payroll related editorial costs of
$48.0 million partially offset by an increase in programming fees paid to affiliated networks of $27.2 million.
Selling, General, and Administrative Expenses
Fiscal 2021 selling, general, and administrative expenses increased 2 percent primarily due to higher performance-
based compensation costs of $51.0 million, an increase in outside sales commission expense of $19.6 million,
higher ad revenue-related partner remittance of $18.5 million, a reduction of $10.6 million in revenues earned under
TSAs, which were recorded as a credit to selling, general, and administrative expenses, and an increase in
consulting services expenses of $5.9 million. These increases were partially offset by lower subscription acquisition
costs of $37.4 million, a decline in bad debt expense of $17.3 million, a decline in travel and entertainment expenses
of $13.0 million, a decrease in occupancy-related costs of $14.7 million, and a decrease in employee compensation
costs of $11.5 million.
Selling, general, and administrative expenses declined 7 percent primarily due to a reduction in employee
compensation costs of $49.0 million, decreases in performance-based compensation expenses of $26.5 million, and
a reduction in third party acquisition costs of $17.5 million.
Acquisition, disposition, and restructuring related activities
Fiscal 2021 acquisition, disposition, and restructuring related activities were primarily made up of a gain on the sale
of the Travel and Leisure Brand of $97.6 million partially offset by professional service fees of $22.0 million,
severance and related benefit costs of $14.6 million, and integration and exit costs of $13.4 million.
The fiscal 2020 acquisition, disposition, and restructuring related activities primarily represented integration and
exit costs of $23.6 million and severance and related benefit costs of $14.2 million partially offset by the gain on the
sale of business assets of $8.8 million.
47
Fiscal 2019 acquisition, disposition, and restructuring related activities expense primarily included $51.5 million of
severance and related benefit costs and $64.6 million of integration costs partially offset by a credit for a gain on the
sale of the Company's 30 percent interest in Charleston Tennis of $6.4 million.
Depreciation and Amortization
Depreciation and amortization expense decreased 26 percent in fiscal 2021 primarily due to a reduction in advertiser
relationships amortization expense in our national media segment due to such intangible assets becoming fully
amortized during the prior fiscal year.
Depreciation and amortization expense decreased 11 percent in fiscal 2020 primarily due to reductions in
depreciation expense of $18.6 million and in amortization expense of $11.4 million in our national media segment.
Impairment of Goodwill and Other Long-lived Assets
The Company recorded a non-cash impairment charge of $252.7 million in fiscal 2020 to reduce the carrying value
of the national media segment's goodwill. In addition, the Company recognized a non-cash impairment charge of
$87.9 million in the national media segment related to vacant leased space at its location in New York City. The
Company also recorded non-cash impairment charges of $26.4 million to reduce the value of several of the national
media segment's trademarks and $22.3 million to reduce the value of one of the local media segment's FCC licenses.
The magnitude of the impairments of goodwill and other long-lived assets were unfavorably impacted by the
volatility of the financial markets and the uncertainty surrounding the long-term economic effects of the COVID-19
pandemic.
The impairment of long-lived assets recorded in fiscal 2019 related to non-cash impairments of trademarks in the
national media segment.
Operating Expenses
Employee compensation, including benefits, was the largest component of our operating expenses in fiscal 2021.
Employee compensation represented 29 percent of total operating expenses in fiscal 2021, compared to 23 percent
in fiscal 2020, and 26 percent in fiscal 2019. While subscription acquisition costs were the second largest
component of operating costs in fiscal 2021 at 15 percent, national media paper, production, and postage combined
expense accounted for 15 percent of fiscal 2021 operating costs and was the second largest component of our total
operating costs in fiscal 2020 at 13 percent and in fiscal 2019 at 15 percent.
Income (Loss) from Operations
Income from operations increased to $561.4 million in fiscal 2021, of which $97.6 million related to the gain on the
sale of the Travel + Leisure Brand. Absent this gain, fiscal 2021 income from operations would have been $463.8
million. Fiscal 2020 loss from operations was $94.1 million, reflecting the non-cash impairment charges of $389.3
million. Absent these impairment charges, fiscal 2020 income from operations would have been $295.2 million. The
increase in income from operations in fiscal 2021 was primarily due to higher operating profit in our local media
operations primarily as a result of the increased political advertising revenues, increases in digital advertising
revenues and a reduction in depreciation and amortization expense partially offset by the adverse impact of
COVID-19 on our national media business and an increase in performance-based compensation expenses.
Fiscal 2020 loss from operations of $94.1 million was a decrease of $381.1 million from fiscal 2019 income from
operations of $287.0 million. The decrease was primarily due to non-cash impairment charges of $389.3 million.
Absent impairment charges in both years, fiscal 2020 income from operations would have been $295.2 million, a
decrease of 10 percent compared to $328.8 million in fiscal 2019, primarily due to an estimated impact from the
COVID-19 pandemic of $83.1 million and a reduction in political revenues of $79.0 million more than offsetting a
reduction in acquisition, disposition, and restructuring related activities of $74.1 million, a decrease in depreciation
and amortization of $27.7 million, and a decline in performance-based compensation expenses of $17.3 million.
48
Non-operating Income (Expense), net
Net non-operating income was $10.8 million in fiscal 2021 compared to fiscal 2020 net non-operating expense of
$1.3 million. Fiscal 2021 net non-operating income related primarily to a pension and other postretirement plans
benefit credit of $8.3 million and the gain on the sale of an investment of $3.6 million partially offset by pension
settlement charges of $1.1 million. Fiscal 2020, net non-operating expense related primarily to pension settlement
charges of $13.0 million offset by an $8.0 million credit for the release of a lease guarantee and a pension and other
postretirement plans benefit credit of $4.8 million.
Fiscal 2020 net non-operating expense was $1.3 million as compared to fiscal 2019 net non-operating income of
$24.2 million. The change was primarily due to an increase in pension settlement charges of $16.4 million and the
reduction in the pension and other postretirement plans benefit credits of $10.7 million.
Interest Expense, net
Net interest expense was $178.6 million in fiscal 2021, $145.8 million in fiscal 2020, and $170.6 million in fiscal
2019. As a result of debt prepayments, an extinguishment loss of $11.9 million was recognized in the third quarter
of fiscal 2021. During fiscal 2019, the Company recorded $10.9 million of extinguishment losses related to the early
payment of debt and repricing of its senior secured term loan (Term Loan B). Average long-term debt outstanding
was $3.0 billion in fiscal 2021, $2.4 billion in fiscal 2020, and $2.7 billion in fiscal 2019. The Company’s
approximate weighted average interest rate was 5.6 percent in fiscal 2021, 6.1 percent in fiscal 2020, and 7.1
percent in fiscal 2019. The weighted average interest rates include the effects of extinguishment losses during fiscal
2021 and fiscal 2019. For the years ended June 30, 2020 and 2019, $2.1 million and $21.4 million, respectively, of
interest expense was allocated to discontinued operations and was included in the loss from discontinued operations,
net of income taxes line on the Consolidated Statements of Earnings (Loss).
Income Taxes
The Company’s effective tax rate was 22.1 percent in fiscal 2021, 13.3 percent in fiscal 2020, and 8.2 percent in
fiscal 2019.
In the third quarter of fiscal 2020, the Federal District Court ruled in the Company’s favor on a disputed Internal
Revenue Code Section 199 issue for fiscal years 2006 through fiscal 2012. In the first quarter of fiscal 2021, the
Department of Justice waived its right to appeal resulting in the finalization of the Federal District Court decision
and the release of the associated reserve for uncertain tax positions. Therefore, a tax benefit of $15.2 million was
recorded in the first quarter of fiscal 2021.
In fiscal 2021, the Company recorded tax expense of $87.0 million for an effective rate of 22.1 percent. The primary
impact to the fiscal 2021 effective tax rate was the favorable Code Section 199 court determination being finalized
and the release of $15.2 million of the associated reserve for uncertain tax positions.
Earnings (Loss) from Continuing Operations and Earnings (Loss) per Common Share from Continuing
Operations
Earnings from continuing operations were $306.6 million ($6.27 per diluted share) for the year ended June 30,
2021, compared to a loss from continuing operations of $209.0 million ($9.85 per diluted share) in the prior year.
The fiscal 2021 earnings included the gain on the sale of the Travel + Leisure Brand of $97.6 million ($72.7 million
after-tax). Absent this gain, fiscal 2021 earnings from continuing operations would have been $233.9 million. The
fiscal 2020 losses reflect the non-cash impairment charges of $389.3 million ($327.6 million after tax) recorded in
fiscal 2020. Absent these impairment charges, fiscal 2020 earnings from continuing operations would have been
$118.6 million. The increase in earnings from continuing operations was primarily due to the increase in political
advertising revenues partially offset by the adverse impact of COVID-19 on our business.
49
The fiscal 2020 loss from continuing operations was $209.0 million ($9.85 per diluted share) compared to earnings
from continuing operations of $129.1 million ($1.12 per diluted share) for fiscal 2019. The fiscal 2020 losses reflect
the non-cash impairment charges of $389.3 million ($327.6 million after tax) recorded in fiscal 2020. Absent
impairment charges in both years, fiscal 2020 earnings from continuing operations would have been $118.6 million,
a decrease of 26 percent from fiscal 2019 earnings from continuing operations of $160.3 million. This decrease is
primarily due to the impact of the COVID-19 pandemic and lower political advertising revenues partially offset by
ongoing cost-savings.
Loss from Discontinued Operations, Net of Income Taxes
Loss from discontinued operations represents the results of operations and gain/loss on the sales, net of income
taxes, of the properties that were held-for-sale during fiscal 2020 and fiscal 2019. The revenues and expenses of
Sports Illustrated; FanSided, a Sports Illustrated brand marketed separately from Sports Illustrated; and the
Company's investments in Viant and Xumo, which were sold in fiscal 2020, were included in loss from
discontinued operations, net of income taxes on the Consolidated Statements of Earnings (Loss) for the fiscal 2020
period prior to their sales.
The fiscal 2019 loss from discontinued operations represents the operating results of the TIME and Fortune brands
until their respective sale dates; the operations of Sports Illustrated as the Company continued to operate the brand
until its second close date in fiscal 2020, and its related impairment charge; and the operations of the properties that
were held-for-sale as of June 30, 2019.
The revenues and expenses for each of these properties have, along with associated income taxes, been removed
from continuing operations and reclassified into a single line item on the Consolidated Statements of Earnings
(Loss) titled loss from discontinued operations, net of income taxes for the years ended June 30, 2020 and 2019, as
follows:
Years ended June 30,
2020
2019
(In millions except per share data)
Revenues ...................................................................................................... $
112.1
$
423.4
Costs and expenses .......................................................................................
(108.6)
(408.5)
Impairment of goodwill ................................................................................
(16.0)
(8.5)
Interest expense ............................................................................................
(2.1)
(21.4)
Gain on disposal ...........................................................................................
12.3
2.1
Loss before income taxes .............................................................................
(2.3)
(12.9)
Income tax expense ......................................................................................
(23.0)
(69.9)
Loss from discontinued operations, net of income taxes ............................. $
(25.3)
$
(82.8)
Loss per common share from discontinued operations
Basic ...................................................................................................... $
(0.56)
$
(1.83)
Diluted ...................................................................................................
(0.56)
(1.82)
Net Earnings (Loss) and Earnings (Loss) per Share
Net earnings were $306.6 million in fiscal 2021 ($6.27 per diluted common share), compared to a net loss of $234.3
million ($10.41 per diluted common share) in the prior year. Fiscal 2021 net earnings included the gain on the sale
of the Travel + Leisure Brand of $97.6 million ($72.7 million after-tax). Absent this gain, fiscal 2021 net earnings
would have been $233.9 million. The prior year loss reflects the non-cash impairment charges of $389.3 million
($327.6 million after tax) recorded in fiscal 2020. Absent these impairment charges, fiscal 2020 net earnings would
have been $93.3 million. The increase in net earnings was primarily due to the increase in political advertising
revenues partially offset by the adverse impact of COVID-19 on our business. Both basic average common shares
outstanding and diluted average common shares outstanding increased slightly.
50
The net loss was $234.2 million in fiscal 2020 compared to net earnings of $46.3 million in fiscal 2019. Primarily
due to the effects of preferred stock dividends payable on redemption of the preferred stock, the Company had a net
loss attributable to common shareholders of $476.0 million ($10.41 per diluted common share) for the year ended
June 30, 2020, and a net loss attributable to common shareholders of $32.0 million ($0.70 per diluted common
share) for fiscal 2019. The fiscal 2020 losses reflect the non-cash impairment charges of $389.3 million ($327.6
million after tax) recorded in fiscal 2020. Absent the impairment charges in both years, fiscal 2020 net earnings
would have been $93.3 million, an increase of 20 percent from the prior year net earnings of $77.5 million. The
increase reflects previously executed restructuring activities and ongoing cost-savings initiatives reducing operating
expenses and smaller losses on discontinued operations partially offset by a reduction in revenues. Both basic
average common shares outstanding and diluted average common shares outstanding increased in fiscal 2020 as
compared to fiscal 2019.
LIQUIDITY AND CAPITAL RESOURCES
Years ended June 30,
2021
2020
2019
(In millions)
Cash flows from operating activities .................. $ 398.6
$ 306.6
$ 245.3
Cash flows from investing activities ..................
39.5
3.1
374.3
Cash flows from financing activities .................. (330.8)
(216.7)
(1,013.6)
Effect of exchange rate changes .........................
0.5
(0.5)
(1.4)
Change in cash held-for-sale ..............................
—
(5.1)
2.8
Net cash flows .................................................... $ 107.8
$
87.4
$ (392.6)
June 30,
2021
2020
2019
Cash and cash equivalents .................................. $ 240.2
$ 132.4
$
45.0
Total long-term debt ........................................... 2,791.3
3,045.4
2,370.4
Shareholders’ equity ...........................................
652.1
388.2
974.6
Debt to total capitalization .................................
81 %
89 %
71 %
OVERVIEW
Meredith’s primary source of liquidity is cash generated by operating activities. Debt financing is typically used for
significant acquisitions. Our core businesses—digital advertising, magazine advertising, and television broadcasting
—have been strong cash generators. Despite the introduction of many new technologies, we believe these
businesses will continue to have strong market appeal for the foreseeable future. As is true in any business, changes
in the level of demand for digital, magazine, and television advertising or our other products as well as changes in
costs can have a significant effect on operating results and cash flows.
Historically, Meredith has been able to absorb normal business downturns without significant increases in debt and
management believes the Company will continue to do so. 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, and debt repayments) into the foreseeable future. At June 30, 2021, we
had up to $347.3 million available under our revolving credit 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.
51
SOURCES AND USES OF CASH
Cash and cash equivalents increased $107.8 million in fiscal 2021, increased $87.4 million in fiscal 2020, and
decreased $392.6 million in fiscal 2019. Over the three-year period, net cash provided by operating activities was
used for acquisitions, debt repayments, dividends, stock repurchases, and capital investments.
Operating Activities
The largest single component of operating cash inflows is cash received from advertising customers. Advertising
related revenue accounted for approximately 50 percent of total revenues in each of the past three fiscal years. Other
sources of operating cash inflows include cash received from magazine circulation sales, retransmission consent
fees, performance marketing, affinity marketing, brand licensing, and product sales. Operating cash outflows
include payments to vendors and employees and payments of interest and income taxes. Our most significant
vendor payments are for production and delivery of publications and promotional mailings, network programming
fees, employee benefits (including pension plans), broadcast programming rights, and other services and supplies.
Cash provided by operating activities totaled $398.6 million in fiscal 2021 compared with $306.6 million in fiscal
2020. The increase in cash provided by operating activities was primarily due to an increase in net earnings and a
reduction in cash paid for severance and integration costs.
Cash provided by operating activities totaled $306.6 million in fiscal 2020 compared with $245.3 million in fiscal
2019. The increase in cash provided by operating activities was primarily due to working capital improvements and
a reduction in cash paid for severance and integration costs.
Changes in the Company’s cash contributions to qualified defined benefit pension plans can have a significant effect
on cash provided by operations. We did not make a pension contribution to our domestic plans in fiscal 2021, fiscal
2020, or fiscal 2019. We do not anticipate a required contribution for the domestic pension plans in fiscal 2022.
Every month during fiscal 2021, 2020, and 2019, we made a required £0.9 million per month contribution to the
IPC Plan defined benefit pension plan in the U.K. We expect to continue to make the required £0.9 million per
month contribution through fiscal 2022. In the event that on November 25, 2021, the IPC Plan has a funding deficit
valuing its liabilities with a gilts plus 50 basis point discount rate, the Company, as the sponsor of the IPC Plan, will
make a contribution equal to that funding deficit. The Company currently does not anticipate the IPC Plan to have
such a funding deficit on November 25, 2021. In the event that on November 25, 2025, the IPC Plan has a funding
deficit valuing its liabilities with a gilts flat discount rate, the Company will make a contribution equal to 50 percent
of that funding deficit. In the event that on November 25, 2026, the IPC Plan has a funding deficit valuing its
liabilities with a gilts flat discount rate, the Company will make a contribution equal to 50 percent of that funding
deficit. In the event that on November 25, 2027, the IPC Plan has a funding deficit valuing its liabilities with a gilts
flat discount rate, the Company will make a contribution equal to that funding deficit. Contributions shall cease to
be payable from the date that the IPC Plan is confirmed to be fully funded on a gilts flat basis.
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 provided by investing activities was $39.5 million in fiscal 2021 due to proceeds from the sale of the
Travel & Leisure brand, collections of notes receivables, and the sale of an investment, partially offset by capital
expenditures. Net cash provided by investing activities was $3.1 million in fiscal 2020 due to proceeds from the sale
of the Money and FanSided brands and our interests in Viant and Xumo. These proceeds were almost entirely offset
by cash paid for acquisitions and capital expenditures.
52
Net cash provided by investing activities was $3.1 million in fiscal 2020 due to proceeds from the sale of the Money
and FanSided brands and our interests in Viant and Xumo. These proceeds were almost entirely offset by cash paid
for acquisitions and capital expenditures. Net cash provided by investing activities was $374.3 million in fiscal 2019
due to proceeds from the sale of TIME, Fortune, and our remaining interest in Charleston Tennis LLC and proceeds
received in advance of the sale of Sports Illustrated.
Financing Activities
Financing cash inflows generally include borrowings under debt agreements and proceeds from the exercise of
common stock options issued under share-based compensation plans. Financing cash outflows generally include the
repayment of long-term debt, repurchases of Company stock, the payment of dividends, and the payment of
acquisition-related contingent consideration.
Net cash used in financing activities was $330.8 million in fiscal 2021, compared to $216.7 million in the prior year.
The increase in cash used in financing activities is primarily due to $262.7 million of debt repayments and $67.0
million to redeem outstanding warrants in fiscal 2021 compared to $675.0 million of net debt issuances in fiscal
2020. In fiscal 2020, we paid $722.0 million to redeem our Series A preferred stock and $26.6 million in original
issue discount and debt issuance costs, which offset the net debt proceeds received in fiscal 2020.
Net cash used in financing activities was $216.7 million in fiscal 2020, compared to $1.0 billion in fiscal 2019. The
reduction in cash used in financing activities is primarily due to $675.0 million of net debt issuances in fiscal 2020
as compared to $827.0 million of net debt repayments in fiscal 2019. In fiscal 2020, we paid $722.0 million to
redeem our Series A preferred stock and $26.6 million in original issue discount and debt issuance costs, which
offset the net debt proceeds received in fiscal 2020.
Long-term Debt
At June 30, 2021, total long-term debt outstanding was $2.8 billion consisting of $1.5 billion under variable-rate
term loans and $1.3 billion in fixed-rate senior notes.
The variable-rate credit facility includes the Term Loan B and an incremental secured term loan (Incremental Term
Loan) with $1.1 billion and $405.9 million of aggregate principal, respectively, and a five-year senior secured
revolving credit facility of $350.0 million, of which $175.0 million is available for the issuance of letters of credit
and $35.0 million of swingline loans. On June 30, 2021, there were no borrowings outstanding under the revolving
credit facility. There were $2.7 million of standby letters of credit issued under the revolving credit facility resulting
in availability of $347.3 million at June 30, 2021. The Incremental Term Loan amortizes at 1.0 percent per annum
in equal quarterly installments until the final maturity date, which is in 2025, at which time the remaining principal
on the Term Loan B will also mature. The interest rate under the Term Loan B is based on LIBOR plus 2.50 percent
and bore interest at a rate of 2.60 percent at June 30, 2021. The interest rate under the Incremental Term Loan is
based on LIBOR plus 4.25 percent with a floor of 1.00 percent for LIBOR and bore interest at a rate of 5.25 percent
at June 30, 2021.
Our credit agreements include a financial covenant that is applicable based on a certain utilization level of the
revolving credit line. Failure to comply with this covenant could result in the debt becoming payable on demand.
The covenant did not apply at June 30, 2021, as we were below the specified utilization level on the revolving credit
line. The revolving credit facility was amended in June 2020, and certain covenants and terms were modified during
the Covenant Relief Period, which is effective until March 31, 2022. During the Covenant Relief Period, the
revolving credit facility bears interest at LIBOR plus a spread ranging from 2.5 percent to 3.5 percent. After the
Covenant Relief Period, the revolving credit facility bears interest at LIBOR plus a spread ranging from 2.5 percent
to 3.0 percent. It also has a commitment fee ranging from 0.375 percent to 0.500 percent of the unused commitment.
All interest rates and commitment fees associated with this variable-rate revolving credit facility are derived from a
leverage-based pricing grid. The fixed-rate Senior Notes include the 2026 Unsecured Senior Notes with $1.0 billion
of aggregate principal and the 2025 Secured Senior Notes with $300.0 million of aggregate principal. The Senior
53
Unsecured Notes mature in 2026 with an interest rate of 6.875 percent per annum, and the Senior Secured Notes
mature in 2025 with an interest rate of 6.50 percent per annum. Total outstanding principal is due at the final
maturity dates.
Contractual Obligations
We enter into various contractual arrangements as a part of our continued operations. Many of these contractual
obligations are discussed in Item 8-Financial Statements and Supplementary Data, Notes to Consolidated Financial
Statements (Notes). As of June 30, 2021, material obligations discussed in the Notes included principal and interest
payments on our long-term debt discussed above and in Note 9, operating leases discussed in Note 6, pension and
postretirement benefits discussed above and in Note 14, broadcast rights discussed in Note 11, a tax indemnification
liability discussed in Note 10, and contingent consideration discussed in Note 12.
In addition, as of June 30, 2021, we have material network programming and purchase obligations. The network
programming obligations totaled $244.1 million due in fiscal 2022, $180.5 million in fiscal 2023, and $37.9 million
in the future. Purchase obligations represent legally binding agreements to purchase goods and services that specify
all significant terms. These obligations are $80.5 million in fiscal 2022, $48.7 million in fiscal 2023, and $19.8
million in the future. Outstanding purchase orders, which represent authorizations to purchase goods and services
but are not legally binding, are not included in purchase obligations. Projections of future cash flows are, however,
subject to substantial uncertainty as discussed throughout MD&A and particularly in Item 1A-Risk Factors
beginning on page 15. Debt agreements may be renewed or refinanced if we determine it is advantageous to do so.
Share Repurchase Program
We have maintained a program of Company share repurchases for 33 years. In fiscal 2021, we spent $2.9 million to
repurchase an aggregate of 120,000 shares of Meredith common and class B stock at then current market prices. We
spent $4.7 million to repurchase an aggregate of 120,000 shares in fiscal 2020 and $10.0 million to repurchase an
aggregate of 190,000 shares in fiscal 2019.
We expect to continue repurchasing shares from time to time subject to market conditions. In May 2014, the Board
of Directors authorized the repurchase of up to $100.0 million in additional shares of the Company’s stock through
public and private transactions. As of June 30, 2021, $45.4 million remained available under the current
authorization for future repurchases. See Item 5-Issuer Purchases of Equity Securities of this Form 10-K for detailed
information on share repurchases during the quarter ended June 30, 2021. Pursuant to the terms of our debt
facilities, we may be subject to certain limitations with respect to our ability to conduct share repurchases, as further
discussed under Item 1A-Risk Factors.
Dividends
Meredith had paid quarterly dividends continuously since 1947, and we increased our dividend annually for 27
consecutive years. The last increase occurred in February 2020 when the Board of Directors approved the quarterly
dividend of 0.595 cents per share effective with the dividend payable in March 2020. However, in April 2020, we
announced that in response to uncertainties surrounding the COVID‑19 pandemic, Meredith paused the common
and class B stock dividends. The Board remains committed to paying a dividend in the future when circumstances
permit and will consider the following factors, among others, when evaluating the Company’s dividend policy
going forward: seeing a path to economic recovery, including recovery of the advertising market, evaluating the
Company’s cash flow needs to support future growth, and ensuring compliance with terms of the Company’s debt
agreements.
Dividend payments on common and class B stock totaled $83.0 million, or $1.745 per share, in fiscal 2020,
compared to $106.0 million, or $2.240 per share, in fiscal 2019. The Series A preferred stock was paid a quarterly
dividend at a rate of 8.5 percent per annum. As the Series A preferred stock was redeemed in June 2020, there will
54
be no future dividend payments. Dividend payments on the Series A preferred stock totaled $56.5 million in fiscal
2020 and $55.9 million in fiscal 2019.
Pursuant to the terms of our debt facilities, we may be subject to certain limitations with respect to our ability to pay
dividends on our stock, as further discussed under Item 1A-Risk Factors.
Capital Expenditures
Spending for property, plant, and equipment totaled $35.2 million in fiscal 2021, $55.4 million in fiscal 2020, and
$46.4 million in fiscal 2019. Spending for all fiscal years primarily related to assets acquired in the normal course of
business. The Company incurred $0.5 million in fiscal 2021, $2.3 million in fiscal 2020, and $6.0 million in fiscal
2019, related to the spectrum repack required by the FCC. We completed the repack in fiscal 2021. We received
reimbursements from the FCC’s special fund of $0.6 million in fiscal 2021, $5.5 million in fiscal 2020, and $6.1
million in fiscal 2019, representing 80 percent of the total cost of the repack. We have no material commitments for
future capital expenditures. We expect funds for future capital expenditures to come from operating activities or, if
necessary, borrowings under credit agreements.
Off-Balance Sheet Arrangements
We did not have during the years presented, and we do not currently have, any off-balance sheet arrangements.
Guarantor Financial Information
The 2026 Unsecured Senior Notes are general unsecured senior obligations of Meredith Corporation (Parent Issuer)
and are guaranteed on a full, unconditional, joint, and several basis, by the combined “Guarantor Subsidiaries.” The
other subsidiaries (the Non-Guarantor Subsidiaries) of the Company do not guarantee the 2026 Unsecured Senior
Notes. Under the terms of the indenture governing the 2026 Unsecured Senior Notes, Meredith Corporation and the
Guarantor Subsidiaries each fully and unconditionally, jointly and severally, guarantee the payment of interest,
principal and premium, if any, on each of the notes included in the 2026 Unsecured Senior Notes.
The following summarized financial information presents summarized balance sheet information as of June 30,
2021, and 2020, and summarized statement of loss information for the year ended June 30, 2021, for Meredith
Corporation (Parent Issuer) and Guarantor Subsidiaries on a combined basis.
Summarized Balance Sheet
June 30, 2021
June 30, 2020
(In millions)
Assets
Current assets ....................................................................................................... $
1,074.8
$
859.2
Intercompany receivable due from non-guarantor subsidiaries ...........................
2,233.8
1,177.8
Intangible assets, net ............................................................................................
1,549.5
1,637.4
Goodwill ..............................................................................................................
1,691.7
1,691.7
Other assets ..........................................................................................................
1,002.7
1,077.4
Liabilities, Redeemable Convertible Preferred Stock, and Shareholders’
Equity
Current liabilities .................................................................................................
850.9
723.5
Intercompany payable due to non-guarantor subsidiaries ...................................
2,308.5
1,206.0
Long-term debt .....................................................................................................
2,741.9
2,981.8
Other liabilities .....................................................................................................
1,262.1
1,379.0
55
Summarized Statement of Earnings
Year ended
June 30, 2021
(In millions)
Revenues ........................................................................................................................................ $
2,889.4
Total operating expenses ...............................................................................................................
2,372.7
Net earnings ...................................................................................................................................
267.0
CRITICAL ACCOUNTING POLICIES
Meredith’s consolidated financial statements are prepared in accordance with U.S. GAAP. Our significant
accounting policies are summarized in Note 1 to the consolidated financial statements. The preparation of our
consolidated financial statements requires management to make estimates and assumptions that affect the amounts
reported on the consolidated financial statements and accompanying notes. Some of these estimates and
assumptions are inherently difficult to make and subjective in nature. We base our estimates on historical
experience, recent trends, our expectations for future performance, and other assumptions as appropriate. We
reevaluate our estimates on an ongoing basis; actual results, however, may vary from these estimates.
The following are the accounting policies that management believes are most critical to the preparation of our
consolidated financial statements and require management’s most difficult, subjective, or complex judgments. In
addition, there are other items within the consolidated financial statements that require estimation but are not
deemed to be critical accounting policies. Changes in the estimates used in these and other items could have a
material impact on the consolidated financial statements.
GOODWILL AND INTANGIBLE ASSETS
The Company has a significant amount of goodwill and indefinite-lived intangible assets that are reviewed at least
annually for impairment. At June 30, 2021, goodwill and intangible assets totaled $3.3 billion, or 59 percent of
Meredith’s total assets, with $2.5 billion in the national media segment and $0.8 billion in the local media segment.
The impairment analyses of these assets are considered critical because of their significance to the Company and
our national media and local media segments.
Management is required to evaluate goodwill and intangible assets with indefinite lives for impairment on an annual
basis or when events occur or circumstances change that would indicate the carrying value exceeds the fair value. In
reviewing goodwill for impairment, the Company may first assess qualitative factors to determine whether it is
more likely than not that the fair value of a reporting unit is less than its carrying amount.
Meredith uses the discounted cash flow and guideline public company methods for determining fair value. The
discounted cash flow model requires us to make significant estimates and assumptions to estimate the future cash
flows expected to be generated by the reporting unit or to result from the use of the assets. These estimates depend
upon assumptions about future revenues (including projections of overall market growth and our share of market),
estimated costs, and appropriate discount rates. Our assumptions are based on historical data, various internal
estimates, and a variety of external sources and are consistent with the assumptions used in both our short-term
financial forecasts and long-term strategic plans. Future cash flow projections can vary within a range of outcomes
depending on the assumptions and estimates used.
The Company performed its fiscal 2021 annual impairment review for the national media and local media reporting
units using qualitative assessments as of its measurement date of May 31, 2021. Based on the results of the
assessments, there was no indication of impairment.
During the third quarter of fiscal 2020, the Company determined that interim triggering events, including declines in
the price of its stock and the economic downturn caused by COVID-19 required an interim evaluation of goodwill at
March 31, 2020. The impairment test determined the carrying value of goodwill in the national media segment
56
exceeded its estimated fair value. As a result, the Company recorded a non-cash impairment charge of $252.7
million to reduce the carrying value of goodwill in the national media segment in the third quarter of fiscal 2020.
The Company recorded an income tax benefit of $26.9 million related to this goodwill impairment charge. In
addition, during the third quarter of fiscal 2020, the Company experienced revenue declines, primarily related to
advertising, as advertisers faced economic challenges caused by the COVID-19 pandemic. These declines caused
the Company to revise forecasts and to determine that it had a triggering event to test the value of intangible assets
not subject to amortization for impairment as of March 31, 2020. As a result, the national media segment recorded
non-cash impairment charges of $21.2 million to partially impair certain national media segment trademarks. In
addition, the local media segment recorded a non-cash impairment charge of $22.3 million to partially impair one of
its FCC licenses. During the first quarter of fiscal 2020, the Company also recorded an impairment charge of $5.2
million on a national media trademark. The fair values of the trademarks are determined based on significant inputs
not observable in the market.
As goodwill and intangible assets of the national media reporting unit were written down to their estimated fair
values as of March 31, 2020, those amounts are more susceptible to risk of impairment if business operating results
or macroeconomic conditions deteriorate. Changes in key assumptions about the national media and local media
businesses and their prospects or changes in market conditions could result in an impairment charge. See Item 1A.-
Risk Factors for other factors that could affect our assumptions.
In fiscal 2019, the Company’s decisions to discontinue the print publication of Money and transition Coastal Living
from a subscription magazine to a newsstand only title resulted in the impairment of these trademarks. The lack of
sales growth resulted in the carrying value of the trademarks for the Shape and Family Circle brands to exceed their
fair values. Accordingly, at May 31, 2019, the national media segment recorded non-cash impairments charge of
$41.8 million to fully impair the Money and Coastal Living brand trademarks and to partially impair the Shape and
Family Circle brand trademarks.
See Note 7 to the consolidated financial statements for additional information.
INCOME TAXES
Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax
assets and liabilities, which represent future tax consequences of events that have been recognized differently in the
financial statements than for tax purposes. Deferred tax assets and liabilities are established using the enacted
statutory tax rates and are adjusted for any changes in such rates in the period of change. Deferred tax assets are
reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will
not be realized.
Meredith’s tax rate for fiscal 2021 was 22.1 percent. Net deferred tax liabilities totaled $462.4 million, or 9 percent
of total liabilities, at June 30, 2021. The primary impact to the fiscal 2021 effective tax rate was the favorable Code
Section 199 court determination being finalized and the release of $15.2 million of the associated reserve for
uncertain tax positions.
We consider accounting for income taxes critical to our operations because management is required to make
significant subjective judgments in developing our provision for income taxes, including the determination of
deferred tax assets and liabilities, any valuation allowances that may be required against deferred tax assets, and
reserves for uncertain tax positions.
The Company operates in numerous taxing jurisdictions and is subject to audit in each of these jurisdictions. These
audits can involve complex issues that tend to require an extended period of time to resolve and may eventually
result in an increase or decrease to amounts previously paid to the taxing jurisdictions. Any such audits are not
expected to have a material effect on the Company’s consolidated financial statements.
57
ACCOUNTING AND REPORTING DEVELOPMENTS
ADOPTED OR PENDING ACCOUNTING PRONOUNCEMENTS
Accounting Standards Update 2016-13, Financial Instruments—Credit Losses, became effective for the Company
on July 1, 2020. The adoption of the update did not have a material impact on our consolidated financial position,
results of operations, or cash flows.
There were no other new accounting pronouncements issued or effective during the fiscal year which have had or
are expected to have a material impact on the consolidated financial statements in fiscal 2021. See Note 1 to the
accompanying consolidated financial statements for information related to our adoption of new accounting
standards and for information on our anticipated adoption of recently issued accounting standards.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Meredith is exposed to certain market risks as a result of our use of financial instruments, in particular, the potential
market value loss arising from adverse changes in interest rates. The Company does not utilize financial instruments
for trading purposes and does not hold any derivative financial instruments that could expose the Company to
significant market risk. There have been no significant changes in the market risk exposures since June 30, 2020.
Interest Rates
We generally manage our risk associated with interest rate movements through the use of a combination of variable
and fixed-rate debt. At June 30, 2021, Meredith had $1.3 billion in fixed-rate long-term debt outstanding. There
were no earnings or liquidity risks associated with the Company’s fixed-rate debt. The fair value of the fixed-rate
debt varies with fluctuations in interest rates. A 100-basis point decrease in interest rates would increase the fair
value of the fixed-rate debt of $1.4 billion by $54.2 million at June 30, 2021.
At June 30, 2021, $1.5 billion of our debt was variable-rate debt. The Company is subject to earnings and liquidity
risks for changes in the interest rate on this debt. A 100-basis point increase in LIBOR would increase annual
interest expense by $11.0 million.
Because the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced the desire to phase
out the use of LIBOR by the end of 2021, future borrowings under our Term Loan B, Incremental Term Loan, and
revolving credit facility could be subject to reference rates other than LIBOR.
Broadcast Rights Payable
The Company enters into broadcast rights contracts for our television stations. As a rule, these contracts are on a
market-by-market basis and subject to terms and conditions of the seller of the broadcast rights. These procured
rights generally are sold to the highest bidder in each market, and the process is very competitive. There are no
earnings or liquidity risks associated with broadcast rights payable. Fair values are determined using discounted
cash flows. At June 30, 2021, a 10 percent decrease in interest rates would have resulted in a $0.1 million increase
in the fair value of the available broadcast rights payable and the unavailable broadcast rights commitments.
58
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements and Supplementary Data
Page
Report of Management ........................................................................................................................................
61
Reports of Independent Registered Public Accounting Firm ..............................................................................
62
Financial Statements
Consolidated Balance Sheets as of June 30, 2021 and 2020 .........................................................................
66
Consolidated Statements of Earnings (Loss) for the Years Ended June 30, 2021, 2020, and 2019 .............
68
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended June 30, 2021, 2020,
and 2019 ........................................................................................................................................................
69
Consolidated Statements of Shareholders' Equity for the Years Ended June 30, 2021, 2020, and 2019 ......
70
Consolidated Statements of Cash Flows for the Years Ended June 30, 2021, 2020, and 2019 ....................
72
Notes to Consolidated Financial Statements .................................................................................................
74
Financial Statement Schedule
Schedule II-Valuation and Qualifying Accounts ..........................................................................................
122
59
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60
REPORT OF MANAGEMENT
To the Shareholders of Meredith Corporation:
Meredith management is responsible for the preparation, integrity, and objectivity of the financial information
included in this Annual Report on Form 10-K for the year ended June 30, 2021. We take this responsibility very
seriously as we recognize the importance of having well-informed, confident investors. The consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of
America and include amounts based on our informed judgments and estimates. We have adopted appropriate
accounting policies and are fully committed to ensuring that those policies are applied properly and consistently. In
addition, we strive to report our consolidated financial results in a manner that is relevant, complete, and
understandable. We welcome any suggestions from those who use our reports.
To meet our responsibility for financial reporting, our internal control systems and accounting procedures are
designed to provide reasonable assurance as to the reliability of financial records. In addition, our internal audit staff
monitors and reports on compliance with Company policies, procedures, and internal control systems.
The consolidated financial statements and the effectiveness of the Company’s internal control over financial
reporting have been audited by an independent registered public accounting firm in accordance with the standards of
the Public Company Accounting Oversight Board (United States). The independent registered public accounting
firm was given unrestricted access to all financial records and related information, including all Board of Directors
and Board committee minutes.
The Audit Committee of the Board of Directors is responsible for reviewing and monitoring the Company’s
accounting policies, internal controls, and financial reporting practices. The Audit Committee is also directly
responsible for the appointment, compensation, and oversight of the Company’s independent registered public
accounting firm. The Audit Committee consists solely of independent directors who regularly meet with the
independent registered public accounting firm, management, and internal auditors to review accounting, auditing,
and financial reporting matters. To ensure complete independence, the independent registered public accounting
firm has direct access to the Audit Committee without the presence of management representatives.
At Meredith, we have always placed a high priority on good corporate governance and will continue to do so in the
future.
Jason Frierott
Chief Financial Officer
61
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Meredith Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Meredith Corporation and subsidiaries (the
Company) as of June 30, 2021 and 2020, the related consolidated statements of earnings (loss), comprehensive
income (loss), shareholders’ equity, and cash flows for each of the years in the three‑year period ended June 30,
2021, and the related notes and financial statement schedule II - Valuation and Qualifying Accounts (collectively,
the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its
operations and its cash flows for each of the years in the three‑year period ended June 30, 2021, in conformity with
U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2021, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated September 10, 2021 expressed an unqualified
opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on these consolidated financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks
of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that:
(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
62
Sufficiency of audit evidence over revenue
As discussed in Notes 1 and 13 to the consolidated financial statements, the Company had $2,977.4 million in
revenues for the year ended June 30, 2021, of which $1,525.6 million was advertising related, $1,370.6 million
was consumer related, and $81.2 million was related to other revenue streams. Each of these categories of
revenue has multiple revenue streams, and the Company’s process for revenue recognition differs between these
discrete revenue streams.
We identified the sufficiency of audit evidence over revenue as a critical audit matter. This matter required
especially subjective auditor judgment because of the number of revenue streams, related revenue recognition
processes, number of information technology (IT) applications involved, and the need to involve IT
professionals to assist with the performance of certain procedures.
The following are the primary procedures we performed to address this critical audit matter. Based on our
knowledge of the Company, we applied auditor judgment to determine the nature and extent of procedures to be
performed over revenue, including the determination of the revenue streams over which those procedures were
performed. For each revenue stream where procedures were performed, we
•
evaluated the design and tested the operating effectiveness of certain internal controls related to the
processing and recording of revenue,
•
assessed the recorded revenue by selecting transactions and comparing the amounts recognized for
consistency with underlying documentation, including agreements and other relevant and reliable third-
party data, and
•
involved IT professionals with specialized skills and knowledge, who assisted in the identification and
testing of certain IT systems and related controls that are used by the Company in its revenue recognition
process.
We evaluated the sufficiency of the audit evidence obtained over revenue by assessing the results of procedures
performed, including the appropriateness of the nature and extent of such evidence.
We or our predecessor firms have served as the Company’s auditor since 1948.
Des Moines, Iowa
September 10, 2021
63
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Meredith Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited Meredith Corporation and subsidiaries’ (the Company) internal control over financial reporting as
of June 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2021 and 2020, the related
consolidated statements of earnings (loss), comprehensive income (loss), shareholders’ equity, and cash flows for
each of the years in the three-year period ended June 30, 2021, and the related notes and financial statement
schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report
dated September 10, 2021 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
64
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Des Moines, Iowa
September 10, 2021
65
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Meredith Corporation and Subsidiaries
Consolidated Balance Sheets
Assets
June 30,
2021
2020
(In millions)
Current assets
Cash and cash equivalents ........................................................................................... $
240.2
$
132.4
Accounts receivable
(net of allowances of $15.4 in 2021 and $29.2 in 2020) ........................................
501.1
461.9
Inventories ...................................................................................................................
29.3
34.2
Current portion of subscription acquisition costs ........................................................
225.6
213.2
Other current assets .....................................................................................................
115.9
43.1
Total current assets ...................................................................................................
1,112.1
884.8
Property, plant, and equipment
Land .............................................................................................................................
24.7
24.7
Buildings and improvements .......................................................................................
165.6
161.1
Machinery and equipment ...........................................................................................
363.0
374.2
Leasehold improvements .............................................................................................
144.0
142.7
Capitalized software ....................................................................................................
171.2
152.2
Construction in progress ..............................................................................................
15.3
28.4
Total property, plant, and equipment ..........................................................................
883.8
883.3
Less accumulated depreciation ....................................................................................
(523.2)
(483.4)
Net property, plant, and equipment ........................................................................
360.6
399.9
Operating lease assets ..................................................................................................
371.0
404.6
Subscription acquisition costs .....................................................................................
180.4
221.6
Other assets .................................................................................................................
265.6
232.4
Intangible assets, net ...................................................................................................
1,556.8
1,647.5
Goodwill ......................................................................................................................
1,719.3
1,719.3
Total assets ................................................................................................................. $
5,565.8
$
5,510.1
See accompanying Notes to Consolidated Financial Statements
66
Meredith Corporation and Subsidiaries
Consolidated Balance Sheets (continued)
Liabilities and Shareholders’ Equity
June 30,
2021
2020
(In millions except per share data)
Current liabilities
Current portion of long-term debt ............................................................................... $
4.1
$
4.1
Current portion of operating lease liabilities ...............................................................
36.2
35.2
Accounts payable ........................................................................................................
185.1
121.1
Accrued expenses
Compensation and benefits .....................................................................................
132.4
68.7
Distribution expenses ..............................................................................................
15.0
9.3
Other taxes and expenses ........................................................................................
90.3
90.1
Total accrued expenses ...........................................................................................
237.7
168.1
Current portion of unearned revenues .........................................................................
396.4
403.2
Total current liabilities .............................................................................................
859.5
731.7
Long-term debt ............................................................................................................
2,741.9
2,981.8
Operating lease liabilities ............................................................................................
432.1
466.7
Unearned revenues ......................................................................................................
218.8
267.5
Deferred income taxes .................................................................................................
462.4
463.8
Other noncurrent liabilities ..........................................................................................
199.0
210.4
Total liabilities ...........................................................................................................
4,913.7
5,121.9
Shareholders’ equity
Series preferred stock, par value $1 per share
Authorized 2.5 shares; none issued .........................................................................
—
—
Common stock, par value $1 per share
Authorized 80.0 shares; issued and outstanding 40.6 shares in 2021 (excluding
24.8 treasury shares) and 40.3 shares in 2020 (excluding 24.8 treasury shares) ....
40.6
40.3
Class B stock, par value $1 per share, convertible to common stock
Authorized 15.0 shares; issued and outstanding 5.1 shares in 2021 and 5.1
shares in 2020 ..........................................................................................................
5.1
5.1
Additional paid-in capital ............................................................................................
178.5
227.6
Retained earnings ........................................................................................................
506.3
197.6
Accumulated other comprehensive loss ......................................................................
(78.4)
(82.4)
Total shareholders’ equity ........................................................................................
652.1
388.2
Total liabilities and shareholders’ equity ................................................................ $
5,565.8
$
5,510.1
See accompanying Notes to Consolidated Financial Statements
67
Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Loss)
Years ended June 30,
2021
2020
2019
(In millions except per share data)
Revenues
Advertising related .............................................................................. $
1,525.6
$
1,399.0
$
1,686.6
Consumer related ................................................................................
1,370.6
1,348.7
1,416.8
Other ...................................................................................................
81.2
100.9
85.1
Total revenues ..............................................................................
2,977.4
2,848.6
3,188.5
Operating expenses
Production, distribution, and editorial .................................................
1,024.5
1,047.6
1,161.2
Selling, general, and administrative ....................................................
1,278.3
1,259.1
1,350.0
Acquisition, disposition, and restructuring related activities ..............
(49.8)
26.8
100.9
Depreciation and amortization ............................................................
163.0
219.9
247.6
Impairment of goodwill and other long-lived assets ...........................
—
389.3
41.8
Total operating expenses ..............................................................
2,416.0
2,942.7
2,901.5
Income (loss) from operations ..........................................................
561.4
(94.1)
287.0
Non-operating income (expense), net .................................................
10.8
(1.3)
24.2
Interest expense, net ............................................................................
(178.6)
(145.8)
(170.6)
Earnings (loss) from continuing operations before income taxes .......
393.6
(241.2)
140.6
Income tax benefit (expense) ..............................................................
(87.0)
32.2
(11.5)
Earnings (loss) from continuing operations ........................................
306.6
(209.0)
129.1
Loss from discontinued operations, net of income taxes ....................
—
(25.3)
(82.8)
Net earnings (loss) ............................................................................. $
306.6
$
(234.3)
$
46.3
Earnings (loss) attributable to common shareholders ................... $
291.4
$
(476.0)
$
(32.0)
Basic earnings (loss) per share attributable to common
shareholders
Continuing operations ......................................................................... $
6.31
$
(9.85)
$
1.12
Discontinued operations ......................................................................
—
(0.56)
(1.83)
Basic earnings (loss) per common share ......................................... $
6.31
$
(10.41)
$
(0.71)
Basic average common shares outstanding .........................................
46.2
45.7
45.3
Diluted earnings (loss) per share attributable to common
shareholders
Continuing operations ......................................................................... $
6.27
$
(9.85)
$
1.12
Discontinued operations ......................................................................
—
(0.56)
(1.82)
Diluted earnings (loss) per common share ...................................... $
6.27
$
(10.41)
$
(0.70)
Diluted average common shares outstanding ......................................
46.5
45.7
45.5
See accompanying Notes to Consolidated Financial Statements
68
Meredith Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
Years ended June 30,
2021
2020
2019
(In millions)
Net earnings (loss) .............................................................................................. $ 306.6
$ (234.3)
$
46.3
Other comprehensive income (loss), net of income taxes
Pension and other postretirement benefit plans activity, net of income taxes ...
(17.7)
(29.3)
(6.8)
Unrealized foreign currency translation adjustment ..........................................
21.7
(6.8)
(2.8)
Other comprehensive income (loss), net of income taxes .......................
4.0
(36.1)
(9.6)
Comprehensive income (loss) .......................................................................... $ 310.6
$ (270.4)
$
36.7
See accompanying Notes to Consolidated Financial Statements.
69
Meredith Corporation and Subsidiaries
Consolidated Statements of Shareholders’ Equity
(In millions except per share data)
Common
Stock - $1
par value
Class B
Stock - $1
par value
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Balance at June 30, 2018 ..................................... $
39.8 $
5.1 $
199.5 $
889.8
$
(36.7) $ 1,097.5
Net earnings
—
—
—
46.3
—
46.3
Other comprehensive loss, net of income taxes ....
—
—
—
—
(9.6)
(9.6)
Shares issued under various incentive plans, net
of forfeitures ..........................................................
0.5
—
4.1
—
—
4.6
Purchases of Company stock ................................
(0.2)
—
(9.8)
—
—
(10.0)
Share-based compensation ....................................
—
—
22.9
—
—
22.9
Dividends paid
Common stock, $2.240 per share ...................
—
—
—
(94.6)
—
(94.6)
Class B stock, $2.240 per share .....................
—
—
—
(11.4)
—
(11.4)
Series A preferred stock, $85.94 per share ....
—
—
—
(55.9)
—
(55.9)
Accretion of Series A preferred stock ...................
—
—
—
(17.6)
—
(17.6)
Cumulative effect adjustment for adoption of
Accounting Standards Update 2014-09 ................
—
—
—
2.4
—
2.4
Balance at June 30, 2019 .....................................
40.1
5.1
216.7
759.0
(46.3)
974.6
Net loss ..................................................................
—
—
—
(234.3)
—
(234.3)
Other comprehensive loss, net of income taxes ....
—
—
—
—
(36.1)
(36.1)
Shares issued under various incentive plans, net
of forfeitures ..........................................................
0.3
—
1.6
—
—
1.9
Purchases of Company stock ................................
(0.1)
—
(4.6)
—
—
(4.7)
Share-based compensation ....................................
—
—
13.9
—
—
13.9
Dividends paid
Common stock, $1.745 per share .....................
—
—
—
(74.1)
—
(74.1)
Class B stock, $1.745 per share ........................
—
—
—
(8.9)
—
(8.9)
Series A preferred stock, $86.89 per share .......
—
—
—
(56.5)
—
(56.5)
Accretion of Series A preferred stock ...................
—
—
—
(18.2)
—
(18.2)
Redemption of Series A preferred stock ...............
(163.6)
(163.6)
Cumulative effect adjustment for adoption of
Accounting Standards Update 2016-02 ................
—
—
—
(5.8)
—
(5.8)
Balance at June 30, 2020 .....................................
40.3
5.1
227.6
197.6
(82.4)
388.2
Net earnings ..........................................................
—
—
—
306.6
—
306.6
Other comprehensive income, net of income
taxes ......................................................................
—
—
—
—
4.0
4.0
Shares issued under various incentive plans, net
of forfeitures ..........................................................
0.4
—
3.2
—
—
3.6
Purchases of Company stock ................................
(0.1)
—
(2.8)
—
—
(2.9)
Share-based compensation ....................................
—
—
17.5
—
—
17.5
Redemption of warrants ........................................
—
—
(67.0)
—
—
(67.0)
Cumulative effect adjustment for adoption of
Accounting Standards Update 2016-13 ................
—
—
—
2.1
—
2.1
Balance at June 30, 2021 ..................................... $
40.6 $
5.1 $
178.5 $
506.3
$
(78.4) $
652.1
See accompanying Notes to Consolidated Financial Statements
70
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71
Meredith Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Years ended June 30,
2021
2020
2019
(In millions)
Cash flows from operating activities
Net earnings (loss) ......................................................................................... $
306.6
$
(234.3)
$
46.3
Adjustments to reconcile net earnings (loss) to net cash provided by
operating activities
Depreciation ............................................................................................
72.3
77.0
92.5
Amortization ...........................................................................................
90.7
142.9
155.1
Non-cash lease expense ..........................................................................
35.5
38.3
—
Share-based compensation ......................................................................
17.5
13.9
22.9
Amortization of original issue discount and debt issuance costs ............
12.6
6.8
7.8
Deferred income taxes ............................................................................
(10.9)
(48.7)
66.0
Amortization of broadcast rights ............................................................
15.8
19.0
20.0
Write-down of impaired assets ...............................................................
—
405.3
50.3
Loss on extinguishment of debt ..............................................................
11.9
—
18.4
Fair value adjustment to contingent consideration .................................
(0.1)
—
(5.3)
Gain on sale of assets, net .......................................................................
(98.6)
(13.4)
(10.2)
Other operating activities, net .................................................................
0.7
0.2
—
Changes in assets and liabilities, net of acquisitions/dispositions
Accounts receivable .........................................................................
(25.1)
161.6
(69.3)
Inventories ........................................................................................
4.9
28.5
(18.4)
Other current assets ..........................................................................
0.8
27.8
57.4
Subscription acquisition costs ..........................................................
28.9
33.2
(312.0)
Broadcast rights ................................................................................
(15.7)
(18.5)
(19.1)
Other assets ......................................................................................
(16.0)
(3.8)
(21.9)
Assets and liabilities held-for-sale ...................................................
—
14.6
(18.6)
Operating lease liabilities .................................................................
(35.6)
(36.1)
—
Accounts payable .............................................................................
62.8
(118.8)
36.2
Accrued expenses and other liabilities .............................................
1.9
(129.3)
(99.5)
Unearned subscription revenues .......................................................
(54.2)
(62.0)
251.6
Other noncurrent liabilities ...............................................................
(8.1)
2.4
(4.9)
Net cash provided by operating activities .....................................................
398.6
306.6
245.3
Cash flows from investing activities
Net proceeds from disposition of assets, net of cash sold ......................
64.3
78.3
349.1
Additions to property, plant, and equipment ..........................................
(35.2)
(55.4)
(46.4)
Proceeds received in advance of sale of business ...................................
—
—
90.0
Acquisitions of and investments in businesses, net of cash acquired .....
—
(23.1)
(18.4)
Other .......................................................................................................
10.4
3.3
—
Net cash provided by investing activities ......................................................
39.5
3.1
374.3
See accompanying Notes to Consolidated Financial Statements
72
Meredith Corporation and Subsidiaries
Consolidated Statements of Cash Flows (continued)
Years ended June 30,
2021
2020
2019
(In millions)
Cash flows from financing activities
Proceeds from issuance of long-term debt .............................................. $
—
$ 1,085.0
$
210.0
Repayments of long-term debt ................................................................
(262.7)
(410.0)
(1,037.0)
Redemption of preferred stock ...............................................................
—
(722.0)
—
Redemption of warrants ..........................................................................
(67.0)
—
—
Dividends paid ........................................................................................
—
(139.5)
(161.9)
Purchases of Company stock ..................................................................
(2.9)
(4.7)
(10.0)
Proceeds from common stock issued ......................................................
3.6
1.9
4.6
Payment of acquisition related contingent consideration .......................
(1.0)
—
(19.3)
Debt original issue discount and issuance costs .....................................
—
(26.6)
—
Financing lease payments .......................................................................
(0.8)
(0.8)
—
Net cash used in financing activities .............................................................
(330.8)
(216.7)
(1,013.6)
Effect of exchange rate changes on cash and cash equivalents .....................
0.5
(0.5)
(1.4)
Change in cash held-for-sale .........................................................................
—
(5.1)
2.8
Net increase (decrease) in cash and cash equivalents ...................................
107.8
87.4
(392.6)
Cash and cash equivalents at beginning of year ............................................
132.4
45.0
437.6
Cash and cash equivalents at end of year .................................................. $
240.2
$
132.4
$
45.0
Supplemental disclosures of cash flow information
Cash paid (received)
Interest .................................................................................................... $
166.8
$
135.0
$
171.9
Income taxes ...........................................................................................
172.2
43.3
(11.7)
See accompanying Notes to Consolidated Financial Statements
73
Meredith Corporation and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Nature of Operations—Meredith Corporation (Meredith or the Company) is a diversified media company. The
Company has two reporting segments: national media and local media. The Company’s national media segment
includes print magazines, digital media, brand licensing activities, affinity marketing, performance marketing,
database-related activities, business-to-business marketing products, and other related operations. The local media
segment includes 17 television stations and related digital media operations. Meredith’s operations are diversified
geographically primarily within the United States (U.S.), and the Company has a broad customer base.
Basis of Presentation—The consolidated financial statements include the accounts of Meredith and its wholly-
owned and majority-owned subsidiaries, after eliminating all significant intercompany balances and transactions.
Meredith does not have any off-balance sheet arrangements.
Use of Estimates—The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements. The Company bases its estimates on
historical experience, management expectations for future performance, and other assumptions as appropriate. Key
areas affected by estimates include the allowance for doubtful accounts, which is based on historical experience and
management’s views on trends in the overall receivable aging, the assessment of the recoverability of long-lived
assets, including goodwill and other intangible assets, which is based on such factors as estimated future cash flows;
the determination of the net realizable value of broadcast rights, which is based on estimated future revenues;
pension and postretirement benefit expenses, which are determined based, in large part, on actuarial assumptions
regarding discount rates, expected returns on plan assets, and healthcare costs; and share-based compensation
expense, which is based on numerous assumptions, including future stock price volatility and employees’ expected
exercise and post-vesting employment termination behavior. While the Company re-evaluates its estimates on an
ongoing basis, actual results may vary from those estimates.
Cash and Cash Equivalents—Cash and short-term investments with original maturities of three months or less are
considered to be cash and cash equivalents. Cash and cash equivalents are stated at cost, which approximates fair
value.
Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentrations of
credit risk are primarily cash and cash equivalent deposits. Cash equivalent balances consist of money market
mutual funds with original maturities of three months or less. These cash and cash equivalent deposits are
maintained with several financial institutions. The deposits held at the various financial institutions may exceed
federally insured limits. Exposure to this credit risk is reduced by placing such deposits with major financial
institutions and monitoring their credit ratings and, therefore, these deposits bear minimal credit risk. There is also
limited credit risk with respect to the money market mutual funds in which the Company invests as these funds all
have issuers, guarantors, and/or other counterparties of reputable credit.
At June 30, 2021, $218.4 million of cash and cash equivalents were held domestically, of which $101.8 million
were held in money market mutual funds. Of the total cash and cash equivalents, $21.8 million were held
internationally in India and Europe. Cash equivalents at June 30, 2021, were $112.6 million, which approximates
fair value due to their short-term nature and is considered a Level 1 measurement as defined in Note 12.
Accounts Receivable—The Company’s accounts receivable are primarily due from advertisers. Credit is extended
to clients based on an evaluation of each client’s creditworthiness and financial condition; collateral is not required.
Accounts receivable are recorded at the invoiced amount, less estimated adjustments for discounts, rebates, rate
adjustments, and returns. The allowance for uncollectible accounts is based on historical loss rates by the age of the
receivable in the national media group, historical loss rate by type of advertiser in our local media group, known
74
specific collectability exposures, and the current economic environment. Accounts are written off when deemed
uncollectible. Concentration of credit risk with respect to accounts receivable is generally limited due to the large
number of geographically diverse clients and individually small balances.
Inventories—Inventories consist mainly of paper stock, editorial content, books, and other merchandise and are
stated at the lower of cost or estimated net realizable value. Cost is determined using the first-in, first-out method
for books and weighted average cost method for paper and other merchandise.
Subscription Acquisition Costs—Subscription acquisition costs primarily represent magazine agency
commissions. These costs are deferred and amortized over the related subscription term, typically one to four years.
Property, Plant, and Equipment—Property, plant, and equipment are stated at cost. Costs of replacements and
major improvements are capitalized, while costs of maintenance and repairs are charged to operations as incurred.
Depreciation expense is determined primarily using the straight-line method over the estimated useful lives of the
assets: 5-45 years for buildings and improvements and 3-20 years for machinery and equipment. The costs of
leasehold improvements are amortized over the lesser of the useful lives of the improvements or the terms of the
respective leases. Depreciation and amortization of property, plant, and equipment was $72.3 million in fiscal 2021,
$77.0 million in fiscal 2020, and $92.5 million in fiscal 2019.
Capitalized Software—Capitalized software is a component of property, plant, and equipment. Expenditures for
major software purchases and software developed for internal use are capitalized and amortized over three to six
years on a straight-line basis. The Company's policy provides for the capitalization of external direct costs
associated with developing or obtaining internal use computer software. In addition, the Company also capitalizes
certain payroll and payroll-related costs for employees who are directly associated with internal use computer
software projects. The amount of capitalizable payroll costs with respect to these employees is limited to the time
directly spent on such projects. Costs associated with preliminary project stage activities, training, maintenance, and
all other post-implementation stage activities are expensed as incurred.
Operating Leases—Meredith's lessee portfolio is primarily comprised of real estate leases for the use of office
space, land, and broadcast station facilities. The portfolio also contains leases for equipment, vehicles, and antenna
and transmitter sites. The Company determines if an arrangement is or contains a lease at inception and begins
recording lease activity at the commencement date, which is generally the date at which the Company takes
possession of or controls the physical use of the asset. Right-of-use (ROU) assets and lease liabilities are recognized
based on the present value of lease payments over the lease term with lease expense generally recognized on a
straight-line basis. The Company's incremental borrowing rate is used to determine the present value of future lease
payments unless the implicit rate is readily determinable.
Lease agreements may contain rent escalation clauses, renewal or termination options, rent holidays, or certain
landlord incentives, including tenant improvement allowances. ROU assets include amounts for fixed scheduled
rent increases. The lease term includes the non-cancelable period of the lease and renewal periods subject to options
to extend or terminate the lease when it is reasonably certain the Company will exercise those options. The
remaining terms of the leases are three months to 29 years. Certain lease agreements include variable lease
payments, which adjust periodically for inflation as a result of changes in a published index, primarily the
Consumer Price Index, or are amounts paid to the lessor based on cost or consumption, such as maintenance and
utilities.
Accounting policy elections were made to exempt leases with an initial term of twelve months or less from balance
sheet recognition and not separate lease and non-lease components for any asset classes in the current portfolio.
Broadcast Rights—Broadcast rights consist principally of rights to broadcast syndicated programs, sports, and
feature films. The total cost of these rights is recorded as an asset and as a liability when programs become available
for broadcast. The current portion of broadcast rights represents those rights available for broadcast that are
expected to be amortized in the succeeding year. These rights are valued at the lower of unamortized cost or
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estimated net realizable value and are generally charged to operations on an accelerated basis over the contract
period. Impairments of unamortized costs to net realizable value are included in the production, distribution, and
editorial expenses line on the Consolidated Statements of Earnings (Loss). There were no material impairments of
unamortized costs in fiscal years 2021, 2020, or 2019. Future write-offs can vary based on changes in consumer
viewing trends and the availability and costs of other programming.
Current portion of broadcast rights were $4.6 million and $6.4 million at June 30, 2021 and 2020, respectively, and
are presented as other current assets on the Consolidated Balance Sheets. Noncurrent broadcast rights were
$3.7 million and $3.9 million at June 30, 2021 and 2020, respectively, and are reflected as other assets on the
Consolidated Balance Sheets. Amortization expense related to broadcast rights of $15.8 million, $19.0 million, and
$20.0 million for the years ended June 30, 2021, 2020, and 2019, respectively, was included in the production,
distribution, and editorial line on the Consolidated Statements of Earnings (Loss). Future amortization expense for
broadcast rights is expected to be as follows: $4.6 million in fiscal 2022, $1.5 million in fiscal 2023, and
$1.2 million in fiscal 2024. Actual future amortization expense could differ from these estimates due to future
purchases.
Intangible Assets and Goodwill—Amortizable intangible assets consist primarily of advertiser relationships,
publisher relationships, network affiliation agreements, partner relationships, customer lists, and retransmission
agreements. Intangible assets with finite lives are amortized over their estimated useful lives. The useful life of an
intangible asset is the period over which the asset is expected to contribute directly or indirectly to future cash
flows. Network affiliation agreements are amortized over the period of time the agreements are expected to remain
in place, assuming renewals without material modifications to the original terms and conditions (generally 25 to 40
years from the original acquisition date). Other intangible assets are amortized over their estimated useful lives,
ranging from 1 to 30 years.
Intangible assets with indefinite lives include trademarks, internet domain names, and Federal Communications
Commission (FCC) broadcast licenses. Those assets are evaluated annually for impairment. In addition, when
certain events or changes in operating conditions occur, an additional impairment assessment is performed, and
indefinite-lived assets may be adjusted to a determinable life. Broadcast licenses are granted for a term of up to
eight years but are renewable if the Company provides at least an average level of service to its customers and
complies with the applicable FCC rules and policies and the Communications Act of 1934. The Company has been
successful in every one of its past license renewal requests and has incurred only minimal costs in the process. The
Company expects the television broadcasting business to continue indefinitely; therefore, the cash flows from the
broadcast licenses are also expected to continue indefinitely.
The Company has acquired trademark brands that have been determined to have indefinite lives. Those assets are
evaluated annually for impairment. The Company evaluates a number of factors to determine whether an indefinite
life is appropriate, including the competitive environment, market share, brand history, and operating plans. In
addition, when certain events or changes in operating conditions occur, an additional impairment assessment is
performed, and indefinite-lived assets may be adjusted to a determinable life.
Goodwill and intangible assets that have indefinite lives are not amortized but are tested for impairment annually or
when events occur or circumstances change that indicate the carrying value may exceed the fair value. Goodwill
impairment testing is performed at the reporting unit level. The Company has two reporting units – national media,
and local media. The Company also assesses, at least annually, whether assets classified as indefinite-lived
intangible assets continue to have indefinite lives.
During the third quarter of fiscal 2020, the Company determined that interim triggering events, including declines in
the price of its stock and the economic downturn caused by COVID-19, required an interim evaluation of goodwill
and other long-lived intangibles at March 31, 2020. The impairment tests determined the carrying value of certain
national media trademarks and one of the local media segment’s FCC licenses exceeded their estimated fair values.
In addition, the impairment tests determined the carrying value of goodwill in the national media reporting unit
exceeded its estimated fair value. The Company performs its goodwill impairment analysis annually as of May 31.
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The Company performed its fiscal 2021 annual impairment review for the national media and local media reporting
units using qualitative assessments as of its measurement date of May 31, 2021. Based on the results of the
assessments, there was no indication of impairment.
A quantitative impairment test, performed for a goodwill reporting unit or indefinite-lived intangible assets,
involves determining the fair value of the reporting unit or asset, which is then compared to its carrying value. Fair
value to which carrying value is compared in the quantitative analysis is determined using a discounted cash flow
model, which requires us to estimate the future cash flows expected to be generated by the reporting unit or to result
from the use of the asset. These estimates include assumptions about future revenues (including projections of
overall market growth and share of market), estimated costs, and appropriate discount rates where applicable. These
assumptions are based on historical data, various internal estimates, and a variety of external sources and are
consistent with the assumptions used in both short-term financial forecasts and long-term strategic plans. Depending
on the assumptions and estimates used, future cash flow projections can vary within a range of outcomes. Changes
in key assumptions used and their prospects or changes in market conditions could result in additional impairment
charges.
Additional information regarding intangible assets and goodwill, including a discussion of impairment charges
taken on goodwill and other long-lived intangible assets is provided in Note 7.
Impairment of Long-lived Assets—Long-lived assets (primarily property, plant, and equipment; operating lease
assets; and amortizable intangible assets) are reviewed for impairment whenever events and circumstances indicate
the carrying value of an asset may not be recoverable. Recoverability is measured by comparison of the forecasted
undiscounted cash flows of the operation or asset group to which the assets relate to the carrying amount of the
assets. Tests for impairment or recoverability require significant management judgment, and future events affecting
cash flows and market conditions could result in impairment losses. See discussion of impairment charges to
operating lease assets and property, plant, and equipment in Note 6.
Foreign Currency Translation and Foreign Currency Transactions—The financial position and operating
results of the Company’s foreign operations are consolidated using primarily the local currency as the functional
currency. Local currency assets and liabilities are translated into U.S. dollars at the rates of exchange as of the
balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the
period. Translation gains or losses on assets and liabilities are included as a component of accumulated other
comprehensive loss in shareholders' equity.
The Company's foreign operations have various assets and liabilities, primarily cash and payables, which are
denominated in currencies other than their functional currency. These balance sheet items are subject to re-
measurement, the impact of which was recorded in the non-operating income (expense), net line on the
Consolidated Statements of Earnings (Loss).
Derivative Financial Instruments—Meredith does not engage in derivative or hedging activities, except at times
to hedge interest rate risk on debt.
Revenue Recognition—The Company’s primary source of revenue is advertising related. Other sources include
consumer related and other revenues.
At contract inception, Meredith assesses the obligations promised in its contracts with customers and identifies a
performance obligation for each promise to transfer a good or service or bundle that is distinct. To identify the
performance obligations, the Company considers all the promises in the contract, whether explicitly stated or
implied based on customary business practices. Revenue is recognized when, or as, the performance obligations are
satisfied, and control is transferred to the customer.
77
Determining when control transfers requires management to make judgments that affect the timing of revenue
recognized. The Company has determined that recognition of revenue at a point-in-time for certain products and
services provides a faithful depiction of the transfer of control to the customer.
Progress measurement requires management to make judgments that affect the timing of revenue recognized. The
Company has determined that the chosen methods provide a faithful depiction of the transfer of goods or services to
the customer that are recognized over time. For performance obligations recognized using a time-elapsed output
method, the Company’s efforts are expended evenly throughout the period.
For contracts that contain multiple performance obligations, the Company allocates the transaction price to each
performance obligation on a relative standalone-selling price basis. The standalone-selling price is the price at
which the Company would sell a promised good or service separately to the customer. In situations in which an
obligation is bundled with other obligations and the total amount of consideration does not reflect the sum of
individual observable prices, the Company allocates the discount to (1) a single obligation if the discount is
attributable to that obligation or (2) prorates across all obligations if the discount relates to the bundle. When
standalone-selling price is not directly observable, the Company estimates and considers all the information that is
reasonably available to the Company, including market conditions, entity-specific factors, customer information,
etc. The Company maximizes the use of observable inputs and applies estimation methods consistently in similar
circumstances.
As allowed by Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers
(Topic 606) , the Company does not impute interest to account for financing elements on contracts that have an
original duration of twelve months or less. The Company has not disclosed the transaction price for the remaining
performance obligations as of the end of each reporting period or when the Company expects to recognize this
revenue for all contracts with an original term of twelve months or less and for performance obligations tied to
sales-based or usage-based royalties. The Company excludes amounts collected from customers for sales taxes from
its transaction prices.
The following are detailed descriptions of the Company’s revenue recognition policies by each major product line:
Digital and Magazine Advertising—The Company sells advertising inventory on its websites and magazine media
directly to advertisers or through advertising agencies. The Company’s performance obligations related to digital
advertising are generally satisfied when the advertisement runs on owned or operated websites. The price for digital
advertising is determined by an agreed-upon pricing model such as CPC (cost per click), CPM (cost per 1,000
impressions), or flat fees. Revenue from the sale of digital advertising space based on impression pricing is
recognized when the advertisements are delivered consistent with the respective pricing model. Flat fee contracts
are recognized ratably over the contract period using a time-elapsed output method. The customer is invoiced the
agreed-upon price in the month following the month that the advertisements are delivered with normal trade terms.
The Company’s performance obligations related to magazine advertising are satisfied when the magazine in which
an advertisement appears is published, which is defined as an issue’s on-sale date. The customer is invoiced the
agreed-upon price when the advertisements are published under normal industry trade terms.
As part of the Company’s customary business practices, digital advertising contracts may include a guaranteed
number of impressions and magazine advertising contracts may include guaranteed circulation levels. Advertising
contracts may include sales incentives to its customers, including volume discounts, rebates, value added
impressions, bonus pages, etc. For all such contracts that include these types of variable consideration, the Company
estimates the variable consideration and factors in such an estimate when determining the transaction price.
Meredith has sufficient historical data and has established processes to reliably estimate these variable components
of the transaction price.
Barter revenues are included in advertising revenue and are also recognized when the advertisements are published
or the digital barter obligations have delivered. Barter advertising revenues and the offsetting expense are
78
recognized at the fair value of the advertising received or based on the Company’s standalone-selling price if the
fair value cannot be determined. Barter advertising revenues were not material in any period.
Non-political and Political Spot Advertising—The Company sells commercial time directly to political and non-
political advertisers or through advertising agencies. The Company’s performance obligations related to spot
advertising are satisfied when the advertisement is aired by the broadcasting station. Rates for spot advertising are
influenced primarily by the market size, number and type of competitors, audience share, and audience
demographics. The customer is invoiced the agreed-upon price at the end of the month in which the advertisements
were aired under normal trade terms. Political spot advertisements require payment in advance of airing. The
agreed-upon price may be adjusted for estimated provisions for rebates, rate adjustments, and discounts. As part of
the Company’s customary business practices, broadcast television advertising contracts may include gross rating
points goals and/or sales incentives to its customers. For all such contracts that include these types of variable
consideration, the Company estimates the variable consideration and factors in such an estimate when determining
the transaction price.
Third Party Sales—The Company sells a variety of advertising products to its advertising customers that are placed
on third-party platforms. The Company’s performance obligations related to these sales are generally satisfied, and
revenue is recognized, when the third party runs the advertisement, or a print product is placed on-sale, due to the
Company's obligation to reach a targeted audience demographic. The transaction price represents the cost of the
purchased media plus a mark-up. The customer is invoiced the agreed-upon price shortly after the advertisements
appear, under normal trade terms. The agreed-upon price is adjusted for estimated provisions for rebates, rate
adjustments, and discounts. As part of the Company’s customary business practices, contracts may include
guaranteed audience targets and several sales incentives to its customers, including volume discounts, rebates, value
added impressions, etc. For all such contracts that include these types of variable consideration, the Company
estimates the variable consideration in determining the transaction price.
Subscription—Meredith sells magazines and books to consumers through subscriptions. Each copy of a magazine
and book is determined to be a distinct performance obligation that is satisfied when the publication is sent to the
customer. Most of the Company’s subscription sales are prepaid at the time of order. Subscriptions may be canceled
at any time for a refund of the price paid for remaining issues. As the contract may be canceled at any time for a full
refund of the unserved copies, the contract term is determined to be on an issue-to-issue basis as these contracts do
not have substantive termination penalties. Revenues from subscriptions are deferred and recognized
proportionately as subscribers are served. Some magazine subscription offers contain more than one magazine title
in a bundle. Meredith allocates the total contract consideration to each distinct performance obligation, or magazine
title, based on a standalone-selling price basis. The transaction price is fixed upon establishment of the contract that
contains the final terms of the sale, including description, quantity, and price of each subscription purchased.
Retransmission—Meredith's local media segment has entered into agreements with cable, satellite, and
telecommunications service providers for licenses to access Meredith’s television station signals for retransmission.
These licenses are functional licenses under which revenue is recognized at a point-in-time when access to the
completed content is granted to the service provider. The transaction price for retransmission agreements generally
are on a per subscriber basis. The recognition pattern for retransmission contracts mirrors over-time revenue
recognition as Meredith delivers the signal to the service provider, which represents completed content, on an on-
going basis during the license period. Service providers are invoiced monthly and payment is due under industry
trade terms.
Newsstand—Meredith sells single copy magazines, or bundles of single copy magazines, to wholesalers for ultimate
resale on newsstands primarily at major retailers and grocery/drug stores, and in digital form on tablets and other
electronic devices. Publications sold to magazine wholesalers are sold with the right to receive credit from the
Company for magazines returned to the wholesaler by retailers. Revenue is recognized on the issue's on-sale date as
the date aligns most closely with the date that control is transferred to the customer. Meredith estimates the final
amount of returns based on historical data and current marketplace conditions. The transaction price is reduced at
79
contract inception to reflect this estimate of returns. Wholesalers are invoiced a percentage of estimated final sales
the month after the issue’s initial on-sale date. Final payments are settled under normal industry terms.
Licensing—Meredith has entered into various licensing agreements that provide third-party partners the right to
utilize the Company’s intellectual property. Licensing agreements include both symbolic and functional licenses.
Symbolic licenses include direct-to-retail product partnerships based on the Company’s national media brands, a
branded real estate program, and international magazine partnerships. Functional licenses consist of content
licensing. Revenues from symbolic licenses are in the form of a royalty based on the sale or usage of the branded
product, which is recognized over time when the sale or use occurs under the sales or usage-based royalty
exception. Generally, revenues are accrued based on estimated sales and adjusted as actual sales are reported by
partners. These adjustments are typically recorded within three months of the initial estimates and have not been
material. Any minimum guarantees are typically earned evenly over the year. Revenues from functional licenses are
recognized at a point-in-time when access to the completed content is granted to the partner. There is no variable
consideration related to functional licenses. Payment terms are contract specific and vary.
Affinity Marketing—Meredith partners with third parties to market and place magazine subscriptions for both
Meredith titles and third-party publisher magazine titles. Meredith acts as an agent in sales of third-party magazine
subscriptions and recognizes revenue in the net amount of consideration retained after paying the third-party
publishers. Meredith assumes credit risk related to refunds on these sales, for which a reserve is established. The
reserve is based on historical statistics at the time the cash is collected, which is after a risk-free trial period is over,
and is included in the transaction price. Revenue from the acquisition of a subscriber is recognized when the
subscriber name has been provided to the publisher and after any risk-free trial period has expired, if applicable. The
Company net settles with the publishers monthly.
Digital and Other Consumer Driven—Various digital and other consumer products utilize Meredith brands to drive
responses from individual customers resulting in the generation of revenue. Meredith digitally operates shop
channels, affiliate content, and a promotional codes site to monetize consumer spending. Meredith is paid on a
commission basis from affiliate networks that facilitate reporting and payments from retail partners, based on either
a CPC on content or consumer purchases. Meredith also operates a lead generation business that connects
consumers to a variety of services (home services, streaming, healthcare, etc.) from contractor networks. Revenue is
earned once the lead is accepted by the contractor network. Partners are invoiced monthly.
Meredith offers membership programs and applications (apps), which are determined to be distinct performance
obligations that are satisfied over the membership period, not exceeding twelve months. The majority are prepaid at
the time of order. Memberships may be canceled at any time for a refund of the price paid for the remaining
membership term. As the contract may be canceled at any time for a full refund, the contract term is determined to
be on a month-by-month basis, as these contracts do not have substantive termination penalties. Apps generally
cannot be cancelled for a refund, however, provide users with continuously updated content, and therefore the
contract term is determined to be the membership period. Other paid products are single-branded products sold to
consumers either on the Company’s websites or by third-party sponsors. Consideration is received and revenue is
recognized at the point-of-sale.
Projects Based—Meredith’s national media segment contains several business lines that are business-to-business
and project based. Such revenue may relate to any one or combination of the following activities; custom
publishing, content strategy and development, email marketing, social media, database marketing, and search engine
optimization. Revenue earned under Outsourcing Agreements (OAs) is also considered to be projects based. The
products and services delivered under these contracts are customized to each client and, therefore, do not have
alternative uses to Meredith or other clients. As a result, revenue under such contracts is generally recognized over
time based on project milestones until the delivery of the final product to the customer.
Other—The remaining revenues are generated from small programs, which are generally recognized at a point-in-
time as the performance obligations are transferred to the customer.
80
Contingent Consideration—The Company estimates and records the acquisition date estimated fair value of
contingent consideration as part of purchase price consideration for acquisitions. Additionally, each reporting
period, the Company estimates changes in the fair value of contingent consideration, and any change in fair value is
recognized in the Consolidated Statements of Earnings (Loss). An increase in the earn-out expected to be paid will
result in a charge to operations in the quarter that the anticipated fair value of contingent consideration increases,
while a decrease in the earn-out expected to be paid will result in a credit to operations in the quarter that the
anticipated fair value of contingent consideration decreases. The estimate of the fair value of contingent
consideration requires subjective assumptions to be made regarding future operating results, discount rates, and
probabilities assigned to various potential operating result scenarios. Future revisions to these assumptions could
materially change the estimate of the fair value of contingent consideration and, therefore, materially affect the
Company’s future financial results. Additional information regarding contingent consideration is provided in
Note 3.
Advertising Expenses—The majority of the Company’s advertising expenses relate to direct-mail costs for
magazine subscription acquisition efforts. Advertising is expensed the first time it takes place. Total advertising
expenses included in the Consolidated Statements of Earnings (Loss) were $122.6 million in fiscal 2021, $152.1
million in fiscal 2020, and $193.3 million in fiscal 2019.
Original Issue Discount and Deferred Financing Costs—Costs incurred to obtain financing are deferred and
amortized to interest expense, net on the Consolidated Statements of Earnings (Loss) over the related financing
period using the effective interest method. The Company records deferred financing costs as a direct reduction of
the carrying value of the related debt. Financing costs related to revolving debt instruments or lines of credit are
included in other assets on the Consolidated Balance Sheets.
Income Taxes—The income tax provision is calculated under the liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax basis and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in earnings in the period when such a change is enacted. The
Company recognizes the effect of income tax positions only if those positions are more likely than not of being
sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely
of being realized. Changes in recognition or measurement are reflected in the period in which the change in
judgment occurs.
Self-Insurance—The Company self-insures for certain medical claims, and its responsibility generally is capped
through the use of a stop loss contract with an insurance company at a certain dollar level. The dollar level varies
based on the insurance plan and is generally $500 thousand. Third-party administrators are used to process claims.
The Company uses actual claims data and estimates of claims incurred-but-not-reported to calculate estimated
liabilities for unsettled claims on an undiscounted basis. Although management re-evaluates the assumptions and
reviews the claims experience on an ongoing basis, actual claims paid could vary significantly from estimated
claims.
Pensions and Postretirement Benefits Other Than Pensions—Retirement benefits are provided to employees
through pension plans sponsored by the Company. Pension benefits are generally based on formulas that reflect
interest credits allocated to participants’ accounts based on years of benefit service and annual pensionable earnings.
The discount rate utilized is based on the investment yields of high quality corporate bonds available in the
marketplace with maturities equal to projected cash flows of future benefit payments as of the measurement date. It
is the Company’s policy to fund the qualified pension plans to at least the extent required to maintain their fully
funded status. In addition, the Company provides health care and life insurance benefits for certain retired
employees, the expected costs of which are accrued over the years that the employees render services. It is the
Company’s policy to fund postretirement benefits as claims are paid. Additional information is provided in Note 14.
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Share-based Compensation—The Company establishes fair value for its equity awards to determine their cost and
recognizes the related expense over the appropriate vesting period. The Company recognizes expense for stock
options, restricted stock, restricted stock units, and matching shares anticipated to be issued under the Company’s
employee stock purchase plan. See Note 15 for additional information related to share-based compensation expense.
Comprehensive Income (Loss)—Comprehensive income (loss) consists of net earnings and other gains and losses
affecting shareholders’ equity that, under U.S. GAAP, are excluded from net earnings. Other comprehensive income
(loss) includes changes in prior service costs and net actuarial losses from pension and postretirement benefit plans,
net of taxes; unrealized gains or losses resulting from foreign currency translation; and changes in the fair value of
interest rate swap agreements, net of taxes, to the extent that they are effective. As of June 30, 2021, there were no
amounts in other comprehensive income (loss) related to the interest rate swaps.
Earnings (Loss) per Share—Basic earnings (loss) per common share is calculated by dividing net earnings (loss)
attributable to common shareholders by the weighted average common and class B shares outstanding for the
period. Diluted earnings (loss) per common share calculation incorporates the shares utilized in the basic calculation
but also includes the dilutive effect, if any, of the assumed exercise or conversion of securities, including the effect
of shares issuable under the Company’s share-based incentive plans. Due to the Series A preferred stock, which was
outstanding until June 30, 2020, and outstanding detachable warrants, the Company has a two-class capital structure
and applies the two-class method in the calculation of earnings (loss) per share. The two-class method adjusts net
earnings (loss) to incorporate dividends declared on common stock, preferred stock, and other securities in
distributed earnings (loss). In addition, it also incorporates participating rights in other securities in undistributed
earnings (loss). Additional information is provided in Note 17.
Adopted Accounting Pronouncements—
ASU 2016-13—In June 2016, the Financial Accounting Standards Board (FASB) issued a standard that replaced the
then current incurred loss methodology for recognizing credit losses with a current expected credit loss
methodology. Under this standard, the establishment of an allowance for credit losses reflects all relevant
information about past events, current conditions, and reasonable supportable forecasts rather than delaying the
recognition of the full amount of a credit loss until the loss is probable of occurring. The new standard changed the
impairment model for most financial assets and certain other instruments, including trade receivables. The Company
implemented the new standard on July 1, 2020, on a modified retrospective basis. The adoption of this standard
resulted in a decrease in the allowance for doubtful accounts of $2.8 million and an increase in deferred tax
liabilities of $0.7 million, with a corresponding increase to retained earnings of $2.1 million. This standard did not
have a material impact on the Company's consolidated financial statements and related disclosures upon adoption.
ASU 2018-13—In August 2018, the FASB issued an accounting standards update which changed the fair value
measurement disclosure requirements. The update removes, modifies, and adds certain additional disclosures. The
Company adopted this pronouncement in the first quarter of fiscal 2021. The adoption required additional disclosure
on the Company's Level 3 measurements as defined in Note 12. There were no other impacts to the Company's
consolidated financial statements.
ASU 2018-14—In August 2018, the FASB issued an accounting standards update that adds, removes, and modifies
disclosure requirements related to defined benefit pension and other postretirement plans. The update amends only
annual disclosure requirements. The Company adopted the new standard retrospectively on July 1, 2020. The
adoption of this guidance required a change in disclosures only and did not have a material impact on the
Company's consolidated financial statements.
ASU 2019-02—In March 2019, the FASB issued an accounting standards update that aligned the accounting for
production costs of episodic television series with the accounting for production costs of films. In addition, the
update modified certain aspects of the capitalization, impairment, presentation, and disclosure requirements in the
accounting standards for entities in the film and broadcast entertainment industries. The update was prospectively
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adopted in the first quarter of fiscal 2021. Due to the nature of existing Company policies and the nature of its
episodic television series, the update had no impact on the Company's consolidated financial statements.
ASU 2019-12—In December 2019, the FASB issued an accounting standards update that simplifies the accounting
for income taxes by removing certain exceptions to and clarifying existing guidance to improve consistent
application. The Company prospectively adopted this standard in the fourth quarter of fiscal 2021. The adoption had
no impact on the Company’s consolidated financial statements.
ASU 2020-09—In October 2020, the FASB issued an accounting standards update to formally codify the new
disclosure requirements of an United States Securities and Exchange Commission (SEC) final rule issued in March
2020 related to certain registered securities under SEC Regulation S-X, Rule 3-10 (Rule 3-10). The most pertinent
portions of the final rule applicable to the Company include: (i) replacing the previous requirement under Rule 3-10
to provide condensed consolidated financial information in the registrant's financial statements with a requirement
to provide alternative financial disclosures (which include summarized financial information of the parent and any
issuers and guarantors, as well as other qualitative disclosures) in either the registrant's Management Discussion &
Analysis section or its financial statements; and, (ii) reducing the periods for which summarized financial
information is required to the most recent annual period and year-to-date interim period. The final rule was effective
for filings on or after January 4, 2021. The Company elected to early-adopt the provisions of the final rule during
the third quarter of fiscal 2020 and elected to provide the summarized financial information in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of Operations.
ASU 2020-10—In October 2020, the FASB issued an accounting standards update containing codification
improvements. These improvements include providing a consistent location for disclosure guidance and providing
clarification to other certain guidance sections. The Company early adopted this guidance retrospectively as of
July 1, 2020. The early adoption of this guidance did not materially impact the Company’s consolidated financial
statements.
Pending Accounting Pronouncements—
ASU 2020-04—In March 2020, the FASB issued an accounting standards update that provides optional expedients
and exceptions for reference rate reform related activities that impact debt, leases, derivatives, and other contracts
that reference London Interbank Offered Rate (LIBOR) or another rate that is expected to be discontinued. The
guidance was effective beginning on March 12, 2020, and the Company may elect to apply the amendments
prospectively through December 31, 2022. The Company does not expect this update will have a material impact on
its consolidated financial statements and related disclosures.
2. Pending Merger Transaction
As of May 3, 2021, and as amended on June 2, 2021, Meredith, Gray Television, Inc. (Gray), and Gray Hawkeye
Stations, Inc., a wholly-owned subsidiary of Gray (Merger Sub) entered into a definitive merger agreement under
which Gray will acquire Meredith immediately after and subject to the consummation of the Spin-Off (as described
below). Immediately prior to the consummation of the merger, Meredith intends to separate its local media group
and national media group into two independent companies by distributing (the Distribution) to Meredith’s
shareholders, on a pro rata basis, the issued and outstanding capital stock of Meredith Holdings Corporation, a
wholly-owned subsidiary of Meredith, which will hold the Company’s national media group businesses and
corporate functions following the separation (collectively, the Spin-Off). After the Spin-Off, the national media
group will be a stand-alone, publicly traded company owned 100 percent by pre-merger Meredith shareholders.
Immediately subsequent to and conditioned upon completion of the Distribution, Merger Sub will merge with and
into Meredith and Meredith will become a wholly-owned subsidiary of Gray, holding the assets relating to
Meredith’s local media group businesses.
83
The transaction has been approved by the Boards of Directors of the Company and Gray. As set forth in the merger
agreement, the closing of the merger agreement is subject to certain customary conditions, including but not limited
to, approval from the Federal Communications Commission, clearance under the Hart-Scott-Rodino antitrust act,
the absence of legal barriers to the closing of the merger, adoption of the agreement by the shareholders of
Meredith, and certain customary third party consents. The Company will hold a special shareholder meeting to vote
on the merger. The merger is expected to close in calendar 2021. The Company incurred $22.0 million of
investment banking, legal, accounting, and other professional fees and expenses in fiscal 2021 related to the pending
merger. These costs are included in the acquisition, disposition, and restructuring related activities line in the
Consolidated Statements of Earnings (Loss). The limited tax deductibility of certain of these merger-related
expenses also caused an increase in the fiscal 2021 effective tax rate. For more information concerning the merger,
refer to the Current Reports on Form 8‑K filed with the SEC on May 3, 2021, and June 3, 2021 and the preliminary
proxy statement filed with the SEC on August 17, 2021.
3. Acquisitions
Fiscal 2020
During fiscal 2020, Meredith paid a net $23.1 million primarily for the acquisitions of magazines.com and Stop,
Breathe & Think.
On September 1, 2019, Meredith completed an asset acquisition of certain intangible assets of magazines.com, a
website that promotes, markets, and sells print and electronic magazine subscriptions, for $15.9 million. The assets
were transitioned onto Meredith's digital platforms and integrated into the national media segment's existing affinity
marketing operations. The results of magazines.com have been included in the consolidated financial statements
since its acquisition date.
On October 29, 2019, Meredith completed the acquisition of Stop, Breathe & Think, an emotional wellness platform
intended to build the emotional strength of its users. The results of Stop, Breathe & Think have been included in the
consolidated financial statements since the acquisition date. The purchase price was $13.3 million, which consisted
of $9.2 million in cash and $4.1 million of contingent consideration. The contingent consideration requires the
Company to make contingent payments based on the achievement of certain operational and revenue targets, as
defined in the acquisition agreement, during fiscal 2020 through fiscal 2022. The contingent consideration is not
dependent on the continued employment of the sellers. The Company estimated the fair value of the contingent
consideration using a probability-weighted discounted cash flow model. The fair value is based on significant inputs
not observable in the market and thus represents a Level 3 measurement as defined in Note 12. To date, $1.0 million
of contingent consideration has been paid related to this acquisition. As of June 30, 2021, the Company estimates
the future payments will range from $1.0 million to $5.0 million.
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The following table summarizes the fair value of total consideration transferred and the recognized amounts of
identifiable assets acquired and liabilities assumed by the national media segment during the year ended June 30,
2020:
(In millions)
Consideration
Cash ................................................................................................................................. $
24.2
Payment in escrow ...........................................................................................................
0.9
Contingent consideration arrangement ............................................................................
4.1
Fair value of total consideration transferred .................................................................... $
29.2
Recognized amounts of identifiable assets acquired and liabilities assumed
Total identifiable assets acquired..................................................................................... $
23.3
Total liabilities assumed ..................................................................................................
(0.8)
Total identified net assets ................................................................................................
22.5
Goodwill ..........................................................................................................................
6.7
Fair value of total consideration transferred .................................................................... $
29.2
The following table provides details of the identifiable acquired intangible assets in the acquisitions:
(In millions)
magazines.com
Stop, Breathe
& Think
Intangible assets subject to amortization
Publisher relationships .............................................. $
7.8 $
—
Customer lists ...........................................................
—
2.9
Other .........................................................................
—
4.3
Total .............................................................................
7.8
7.2
Intangible assets not subject to amortization
Trademark .................................................................
7.6
—
Internet domain name ...............................................
0.5
—
Total .............................................................................
8.1
—
Total intangible assets .................................................. $
15.9 $
7.2
The Company accounted for the acquisition of Stop, Breathe & Think as a business combination under the
acquisition method of accounting. The above tables summarize the purchase price allocation of fair values of the
assets acquired and liabilities assumed at the date of acquisition. In fiscal 2021, the Company recorded purchase
price allocation adjustments related to the Stop, Breathe & Think acquisitions that reduced goodwill and deferred
income tax liabilities by $0.1 million. The measurement period is now closed.
The useful life of publisher relationships was nine years, customer lists was three years, and other intangibles
ranged from four to five years. The goodwill is attributable primarily to expected synergies and the assembled
workforce. Goodwill, with a value of $6.6 million, is not deductible for tax purposes.
Fiscal 2019
On February 28, 2019, Meredith acquired 100 percent of the membership interests in Linfield Media, LLC (Linfield
Media), a marketing business focused on online savings and deals, for $16.6 million in cash. The results of Linfield
Media have been included in the consolidated financial statements, within the national media group segment, since
that date.
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4. Inventories
Major components of inventories are summarized below.
June 30,
2021
2020
(In millions)
Raw materials ............................................... $
13.9
$
21.0
Work in process ............................................
13.2
10.6
Finished goods ..............................................
2.2
2.6
Inventories .................................................... $
29.3
$
34.2
5. Discontinued Operations and Dispositions
Discontinued Operations
A disposal of a component of an entity or a group of components of an entity is required to be reported as
discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s
operations and financial results when the components of an entity meets the criteria to be classified as held-for-sale.
When all of the criteria to be classified as held-for-sale are met, including management having the authority to
approve the action and committing to a plan to sell the entity, the major assets and liabilities are to be reported as
components of total assets and liabilities separate from those balances of the continuing operations. The
Consolidated Statements of Earnings (Loss) reported for current and prior periods shall report the results of
operations of the discontinued operations, including any gain or loss recognized, in the period in which a
discontinued operation either has been disposed of or is classified as held-for-sale. The results of all discontinued
operations, less applicable income taxes (benefit), shall be reported as a component of net earnings (loss) separate
from the net earnings (loss) from continuing operations.
Shortly after the Company’s acquisition of Time Inc. (Time) in fiscal 2018, it announced the planned sale of certain
brands and investments. Several of these brands and investments were held during fiscal 2020, and all sales were
completed by the end of the third quarter of fiscal 2020. In accordance with accounting guidance, a business that, on
acquisition, or within a short period following the acquisition (usually within three months), meets the criteria to be
classified as held-for-sale is also considered a discontinued operation. All of the required criteria for held-for-sale
classification were met after acquisition and continued to be met at June 30, 2019, for Sports Illustrated, FanSided,
Viant, and Xumo. The revenue and expenses, along with associated taxes, for these operations until their sale, were
included in the loss from discontinued operations, net of income taxes line on the Consolidated Statements of
Earnings (Loss) in fiscal 2020 and fiscal 2019. All discontinued operations relate to the national media segment.
On October 31, 2018, Meredith closed on the sale of the TIME brand to an unrelated third party for $190.0 million
in cash. On December 21, 2018, Meredith closed on the sale of the Fortune brand to an unrelated third party for
$150.0 million in cash. There was a gain of $2.1 million recognized on the sales. The results of TIME and Fortune
were included in the loss from discontinued operations, net of income taxes line on the Consolidated Statements of
Earnings (Loss) until the date of sale.
In May 2019, the first step of a two-step transaction to sell the Sports Illustrated brand was completed. At the time
of first close, $90.0 million was received from the buyer. Simultaneously, the Company entered into an agreement
to license back a portion of the Sports Illustrated brand to continue operating the publishing business. Although
under the agreement certain assets of the brand were sold for legal and tax purposes, because the Company retained
control of the publishing business until the second close, the legal transfer of those assets was not presented as a sale
within the consolidated financial statements during fiscal 2019. Based on the selling price of Sports Illustrated, an
impairment of goodwill for the Sports Illustrated brand of $8.5 million was recognized during the fourth quarter of
fiscal 2019. The second close took place on October 3, 2019. Based on the selling price at second close, an
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additional impairment of goodwill for the Sports Illustrated brand of $4.2 million was recorded in the first quarter of
fiscal 2020. At the second close, Meredith paid the buyer a working capital true-up of $0.7 million and accrued $7.6
million for the purchase of accounts receivable and accounts payable retained by Meredith, which was paid to the
buyer in January 2020. The agreement for the sale of Sports Illustrated includes an earn-out provision whereby the
buyer would pay Meredith up to $20.0 million should certain revenue targets (as defined in the agreement) be
achieved by the buyer by July 1, 2027. As receipt of such amounts is not deemed probable or estimable as of
June 30, 2021, no receivable amount has been recorded as of June 30, 2021. Also, in October 2019, Meredith sold
its interest in Viant to Viant’s founders for $25.0 million. A gain of $3.0 million was recognized on these sales in
the second quarter of fiscal 2020, which was recorded in the loss from discontinued operations, net of income taxes
line on the Consolidated Statements of Earnings (Loss).
In January 2020, Meredith sold FanSided to an unrelated third party for $16.4 million. Based on the selling price of
FanSided, an impairment of goodwill for the FanSided brand of $11.8 million was recognized during the second
quarter of fiscal 2020. In February 2020, Meredith sold Xumo to an unrelated third party for $37.4 million at close
and a $4.3 million note receivable, which was collected in fiscal 2021. There was a gain of $8.6 million recognized
on these sales in the third quarter of fiscal 2020, which was recorded in the loss from discontinued operations, net of
income taxes line on the Consolidated Statements of Earnings (Loss).
Meredith continued to provide accounting, finance, human resources, information technology, and certain support
services for a short period of time under Transition Services Agreements (TSAs) with certain buyers. In addition,
Meredith continues to provide consumer marketing, information technology, subscription fulfillment, paper
purchasing, printing, and other services under OAs with certain buyers. The services performed under the remaining
OA have a one year term, subject to renewal. Income of $2.3 million, $7.6 million, and $4.8 million for the years
ended June 30, 2021, 2020, and 2019, respectively, earned from performing services under the OAs was recorded in
the other revenue line on the Consolidated Statements of Earnings (Loss) while income of $0.1 million, $10.9
million, and $18.9 million for the years ended June 30, 2021, 2020, and 2019, respectively, earned from performing
services under the TSAs was recorded as a reduction to the selling, general, and administrative expense line on the
Consolidated Statements of Earnings (Loss).
Amounts applicable to discontinued operations in the Consolidated Statements of Earnings (Loss) were as follows:
Years ended June 30,
2020
2019
(In millions except per share data)
Revenues ........................................................................................... $ 112.1
$
423.4
Costs and expenses ...........................................................................
(108.6)
(408.5)
Impairment of goodwill ....................................................................
(16.0)
(8.5)
Interest expense .................................................................................
(2.1)
(21.4)
Gain (loss) on disposal ......................................................................
12.3
2.1
Loss before income taxes ..................................................................
(2.3)
(12.9)
Income tax expense ...........................................................................
(23.0)
(69.9)
Loss from discontinued operations, net of income taxes .................. $
(25.3)
$
(82.8)
Loss per common share from discontinued operations
Basic ........................................................................................... $
(0.56)
$
(1.83)
Diluted ........................................................................................
(0.56)
(1.82)
The Company did not allocate interest to discontinued operations unless the interest was directly attributable to the
discontinued operations or was interest on debt that was required to be repaid as a result of the disposal transaction.
Interest expense included in discontinued operations reflected an estimate of interest expense related to the debt that
was repaid with the proceeds from the sales of the businesses included in assets held-for-sale until the sale.
87
The discontinued operations did not have depreciation, amortization, or significant non-cash investing items for the
years ended June 30, 2020 and 2019. Share-based compensation expense related to discontinued operations was a
benefit of $0.8 million and expense of $0.5 million and was included in the calculation of net cash provided by
operating activities in the Consolidated Statements of Cash Flows for the years ended June 30, 2020 and 2019,
respectively.
Dispositions
In January 2021, Meredith sold the Travel + Leisure trademark and other related assets, including the Travel +
Leisure travel clubs, to an unrelated third party for $100.0 million, which included $35.0 million of cash at closing
and non-interest bearing note receivable of $65.0 million. Payments on the note receivable are due annually with
$20.0 million received in June 2021. The remaining payments will be completed by June 2024. The $65.0 million
note receivable was discounted by $3.7 million utilizing an interest rate reflecting the borrower’s specific credit risk.
The sale resulted in a gain of $97.6 million, which was recorded in the acquisition, disposition, and restructuring
related activities line on the Consolidated Statements of Earnings (Loss). Meredith entered into a 30-year royalty-
free licensing relationship to license back the Travel + Leisure brand and continues to publish the magazine and
operate the Travel + Leisure media platforms. Refer to Note 7 for additional information related to the intangible
assets associated with this sale.
In October 2019, Meredith sold the Money brand, to an unrelated third party for $24.9 million, which resulted in a
gain on the sale of $8.3 million. This gain was recorded in the acquisition, disposition, and restructuring related
activities line on the Consolidated Statements of Earnings (Loss).
In September 2018, Meredith sold its remaining 30 percent interest in Charleston Tennis LLC to an unrelated third
party. In return, Meredith received cash of $13.3 million, of which $5.1 million was for the Company's remaining
30 percent interest and $8.2 million was repayment of the principal and interest accrued on a note receivable
recorded upon the Company's sale of its 70 percent interest in July 2017. The Company recognized a gain on the
sale of $10.4 million, of which $4.1 million represented a gain on the Company's 30 percent interest and was
recorded in non-operating income (expense), net line on the Consolidated Statements of Earnings (Loss), while the
remainder was recorded in the acquisition, disposition, and restructuring related activities line on the Consolidated
Statements of Earnings (Loss), as it represented recovery of a previously impaired note receivable.
6. Operating Leases
Total lease cost for operating leases included within the selling, general, and administrative line on the Consolidated
Statements of Earnings (Loss) was as follows:
Years ended June 30,
2021
2020
(In millions)
Operating lease cost ...................................................... $
61.0
$
65.7
Variable lease cost ........................................................
0.9
3.0
Short term lease cost .....................................................
0.3
0.3
Sublease income ...........................................................
(10.9)
(11.2)
Total lease cost ............................................................. $
51.3
$
57.8
Rent expense under such leases was $67.6 million in fiscal 2019.
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The table below presents supplemental information related to operating leases:
Years ended June 30,
2021
2020
(In millions except for lease term and discount rate)
Operating cash flows for operating leases ........................................................... $
62.6
$
64.3
Noncash lease liabilities arising from obtaining operating lease assets ..............
1.9
6.3
Weighted average remaining lease term .............................................................
10.3 years
11.1 years
Weighted average discount rate ..........................................................................
5.4 %
5.4 %
Meredith purchased the underlying assets of a lease arrangement for $3.3 million during the second quarter of fiscal
2020, resulting in the derecognition of operating lease assets of $2.6 million and lease liabilities of $2.5 million.
During the third quarter of fiscal 2020, in connection with the sale of FanSided, $1.4 million of operating lease
assets and related lease liabilities, recorded within assets held-for-sale and liabilities associated with assets held-for-
sale on the Consolidated Balance Sheets prior to sale, were derecognized.
As discussed in Note 5, the Company completed the sale of certain businesses acquired in connection with the Time
acquisition. As a result of the dispositions and cost-reduction initiatives, the Company has two floors of vacant
leased space at its location in New York, New York. The vacant space is presently held with the intent to sublease
for the remainder of the lease term. The Company recognized an impairment charge of $87.9 million during the
third quarter of fiscal 2020 related to the vacant space. Fair value was estimated using an income approach based on
management's forecast of future cash flows expected to be derived from the property based on current sublease
market rent, which was negatively impacted by the effects of the COVID-19 pandemic. The charge was allocated on
a pro-rata basis, $64.5 million to operating lease assets and $23.4 million to leasehold improvements and furniture
and fixtures, and was recorded in the national media segment. This impairment charge was recorded in the
impairment of goodwill and other long-lived assets line on the Consolidated Statements of Earnings (Loss).
Maturities of operating lease liabilities as of June 30, 2021, were as follows:
Years ending June 30,
(In millions)
2022 ...................................................................... $
59.9
2023 ......................................................................
60.1
2024 ......................................................................
61.6
2025 ......................................................................
61.0
2026 ......................................................................
60.8
Thereafter .............................................................
311.5
Total lease payments ............................................
614.9
Less: Interest .........................................................
(146.6)
Present value of lease liabilities ........................... $
468.3
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7. Intangible Assets and Goodwill
Intangible assets consist of the following:
June 30,
2021
2020
(In millions)
Gross
Amount
Accumulated
Amortization
Net
Amount
Gross
Amount
Accumulated
Amortization
Net
Amount
Intangible assets
subject to amortization
National media
Advertiser relationships ............... $
211.0
$
(211.0)
$
—
$
211.0
$
(170.0)
$
41.0
Publisher relationships ................
132.8
(62.6)
70.2
132.8
(43.9)
88.9
Partner relationships ....................
98.2
(54.9)
43.3
98.2
(38.7)
59.5
Customer lists ..............................
8.0
(3.9)
4.1
71.3
(65.6)
5.7
Other ............................................
35.9
(18.2)
17.7
26.3
(16.9)
9.4
Local media
Network affiliation agreements ...
229.3
(167.5)
61.8
229.3
(161.5)
67.8
Advertiser relationships ...............
12.5
(12.5)
—
12.5
(10.1)
2.4
Retransmission agreements .........
10.6
(6.8)
3.8
27.9
(23.1)
4.8
Other ............................................
0.7
(0.7)
—
1.7
(1.6)
0.1
Total ................................................ $
739.0
$
(538.1)
200.9
$
811.0
$
(531.4)
279.6
Intangible assets not
subject to amortization
National media
Trademarks ..................................
694.7
706.7
Internet domain names ................
8.3
8.3
Local media
FCC licenses ................................
652.9
652.9
Total ................................................
1,355.9
1,367.9
Intangible assets, net .......................
$ 1,556.8
$ 1,647.5
Amortization expense was $90.7 million in fiscal 2021, $142.9 million in fiscal 2020, and $155.1 million in fiscal
2019. Future amortization expense for intangible assets is expected to be as follows: $45.1 million in fiscal 2022,
$42.6 million in fiscal 2023, $34.5 million in fiscal 2024, $17.1 million in fiscal 2025, and $6.6 million in fiscal
2026. Actual future amortization expense could differ from these estimates as a result of future acquisitions,
dispositions, and other factors.
As discussed in Note 5, in January 2021, Meredith sold the Travel + Leisure trademark. The trademark had a
recorded value of $12.0 million and was not subject to amortization. As part of the agreement, Meredith retained
certain rights to utilize the Travel + Leisure brand and therefore established an intangible asset subject to
amortization related to these rights at an initial value equal to the sold trademark.
During the first quarter of fiscal 2020, the Company recorded an impairment charge of $5.2 million on a national
media trademark. Management determined this trademark was fully impaired as part of management's commitment
to performance improvement plans, including the closure of the Family Circle brand. The impairment charge was
recorded in the impairment of goodwill and other long-lived assets line on the Consolidated Statements of Earnings
(Loss).
During the third quarter of fiscal 2020, the Company experienced revenue declines, primarily related to advertising
cancellations and delays, as advertisers faced economic challenges caused by the COVID-19 pandemic. These
declines caused the Company to revise forecasts and to determine that it had a triggering event to test the value of
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intangible assets not subject to amortization for impairment as of March 31, 2020. As a result, the national media
segment recorded non-cash impairment charges of $21.2 million to partially impair the trademarks for the
magazines.com, Entertainment Weekly, Shape, EatingWell, and Cooking Light brands. In addition, the local media
segment recorded a non-cash impairment charge of $22.3 million to partially impair the FCC license for its station
WALA-TV in Mobile, Alabama and Pensacola, Florida. The fair values of the trademarks were determined based
on significant inputs not observable in the market constituting a Level 3 measurement as defined in Note 12.
No impairments of indefinite-lived intangible assets were recorded as a result of the Company’s fiscal 2021 or 2020
annual impairment tests performed as of May 31, 2021 and 2020.
During the Company’s annual impairment tests performed as of May 31, 2019, it identified several impaired
trademarks. As a result, the national media segment recorded non-cash impairment charges of $41.8 million to fully
impair the Money and Coastal Living brand trademarks and to partially impair the Shape and Family Circle brand
trademarks. The Company’s decision to discontinue the print publication of Money and transition Coastal Living
from a subscription magazine to a newsstand only title resulted in the impairment of these trademarks. The lack of
sales growth resulted in the carrying value of the trademarks for the Shape and Family Circle brands to exceed their
fair values. The fair values of the trademarks were determined based on significant inputs not observable in the
market constituting a Level 3 measurement as defined in Note 12. These charges were recorded in the impairment
of goodwill and other long-lived assets line on the Consolidated Statements of Earnings (Loss). No other
impairments of indefinite-lived intangible assets were recorded as a result of the Company’s fiscal 2019 annual
impairment tests performed as of May 31, 2019.
The following table summarizes changes in the carrying amount of goodwill for the years ended June 30, 2021 and
2020.
Years ended June 30,
2021
2020
(In millions)
Goodwill
Accumulated
Impairment
Loss
Net
Carrying
Amount
Goodwill
Accumulated
Impairment
Loss
Net
Carrying
Amount
National media
Balance at beginning of year .......... $ 1,855.4 $
(252.7) $ 1,602.7
$ 1,862.8 $
— $ 1,862.8
Acquisitions ...................................
—
—
—
6.7
—
6.7
Acquisition adjustments .................
(0.1)
—
(0.1)
2.4
—
2.4
Disposals ........................................
—
—
—
(16.7)
—
(16.7)
Foreign currency translation ..........
0.1
—
0.1
0.2
—
0.2
Impairment .....................................
—
—
—
—
(252.7)
(252.7)
Balance at end of year ....................
1,855.4
(252.7)
1,602.7
1,855.4
(252.7)
1,602.7
Local media
Balance at beginning of year ..........
116.6
—
116.6
116.6
—
116.6
Activity ...........................................
—
—
—
—
—
—
Balance at end of year ....................
116.6
—
116.6
116.6
—
116.6
Total ............................................... $ 1,972.0 $
(252.7) $ 1,719.3
$ 1,972.0 $
(252.7) $ 1,719.3
The Company is required to evaluate goodwill for impairment on an annual basis or when events occur or
circumstances change that would indicate the carrying value exceeds the fair value. The Company performed its
fiscal 2021 annual impairment review for the national media and local media reporting units using qualitative
assessments as of its measurement date of May 31, 2021. Based on the results of the assessments, there was no
indication of impairment.
During the third quarter of fiscal 2020, the Company determined that interim triggering events, including declines in
the price of its stock and the economic downturn caused by COVID-19, required an interim evaluation of goodwill
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at March 31, 2020. The impairment test determined the carrying value of goodwill in the national media reporting
unit exceeded its estimated fair value. As a result, the Company recorded a non-cash impairment charge of $252.7
million to reduce the carrying value of goodwill in the national media segment in the third quarter of fiscal 2020 to
its fair value. The Company recorded an income tax benefit of $26.9 million related to this goodwill impairment
charge. The Company performed its fiscal 2020 annual impairment review for the national media and local media
reporting units using qualitative assessments as of its measurement date of May 31, 2020. Based on the results of
the assessments, there was no further indication of impairment.
For fiscal 2019, the Company performed its annual impairment review for the national media reporting unit as of
May 31 using a quantitative goodwill impairment test. Based on the results of the analyses, the fair value exceeded
the carrying value and thus resulted in no indication of impairment for fiscal 2019. For fiscal 2019, the local media
reporting unit performed a qualitative assessment as of its measurement date of May 31, 2019, which indicated no
impairment. With no indications of impairment, a quantitative goodwill impairment analysis for fiscal 2019 was not
deemed necessary.
8. Restructuring Accruals
During fiscal 2021, management committed to a performance improvement plan to control costs. Actions included
consolidating certain local media functions and reallocating positions across the Company by shifting resources to
digital operations in the national media segment. In connection with these plans, the Company recorded pre-tax
restructuring charges of $14.6 million for severance and related benefit costs associated with the involuntary
termination of employees. These costs were recorded in the acquisition, disposition, and restructuring related
activities line on the Consolidated Statements of Earnings (Loss). Combined, these actions affected approximately
140 employees in the local media segment, 80 in the national media segment, and 10 in unallocated corporate. The
majority of the severance costs for these restructuring actions were paid during fiscal 2021, with the remainder to be
paid in fiscal 2022.
Details of the severance and related benefit costs by segment for the performance improvement plans are as follows:
Amount Accrued
in the Period
Total Amount
Expected to be
Incurred
Years ended June 30,
2021
2020
(In millions)
National media ............................................... $
6.7 $
12.4
$
6.7
Local media ....................................................
7.3
2.4
7.3
Unallocated corporate ....................................
0.6
3.3
0.6
$
14.6 $
18.1
$
14.6
During fiscal 2020, management made the strategic decisions to transition Rachael Ray Every Day into a consumer-
driven, newsstand-only quarterly magazine and to discontinue the Family Circle brand. In addition, management
committed to several smaller actions in the national media segment, local media segment, and unallocated corporate
resulting in selected workforce reductions. In connection with these plans, the Company recorded pre-tax
restructuring charges totaling $21.1 million, including $18.1 million for severance and related benefit costs
associated with the involuntary termination of employees and $3.0 million in other costs and expenses. Of these
charges, $17.4 million were recorded in the acquisition, disposition, and restructuring related activities line and
$3.7 million were recorded in the loss from discontinued operations, net of income taxes line on the Consolidated
Statements of Earnings (Loss). Combined, these actions affected approximately 165 employees in the national
media segment, 15 in the local media segment, and 10 in unallocated corporate. The majority of the severance costs
were paid during fiscal 2020, with the remainder paid in the first half of fiscal 2021.
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During fiscal 2019, management committed to several performance improvement plans related primarily to business
realignments, including continuing those related to the integration of Time that began in fiscal 2018. Improvement
plans that were made and executed upon during fiscal 2019 related to the strategic decision to merge Cooking Light
magazine with EatingWell, transition Coastal Living from a subscription magazine to a special interest publication,
to change Entertainment Weekly from a weekly to a monthly publication, to consolidate much of the local media's
digital advertising functions with MNI, and to outsource newsstand sales and marketing operations. During fiscal
2019, the Company also incurred restructuring costs related to the consolidation of office space, including closing
the Time Customer Service facility in Tampa, Florida and other office locations in Brooklyn, New York and
Birmingham, Alabama. The fiscal 2019 performance improvement plans affected a total of approximately 300
people, including approximately 225 in the national media segment, approximately 25 in the local media segment,
and the remainder in unallocated corporate. In connection with these plans, the Company recorded a pre-tax
restructuring charge of $56.3 million for severance and related benefit costs related to the involuntary termination of
employees and other write-downs of $31.1 million, mainly related to the closing of office locations in Tampa,
Brooklyn, and Birmingham, which are recorded in the acquisition, disposition, and restructuring related activities
line on the Consolidated Statements of Earnings (Loss). The majority of severance costs have been paid.
During the years ended June 30, 2021, 2020, and 2019, the Company recorded reversals of $2.2 million, $1.8
million, and $6.0 million, respectively, of excess restructuring reserves accrued in prior fiscal years. The reversals
of excess restructuring reserves were recorded as credits in the acquisition, disposition, and restructuring related
activities line on the Consolidated Statements of Earnings (Loss).
Details of changes in the Company’s restructuring accrual related to employee terminations are as follows:
Years ended June 30,
2021
2020
(In millions)
Balance at beginning of year ....................................... $
10.7
$
43.7
Accruals .......................................................................
14.6
18.1
Cash payments .............................................................
(18.8)
(49.3)
Reversal of excess accrual ...........................................
(2.2)
(1.8)
Balance at end of year ................................................. $
4.3
$
10.7
As of June 30, 2021, the $4.3 million liability was classified as current liabilities on the Consolidated Balance
Sheets.
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9. Long-term Debt
Long-term debt consists of the following:
June 30, 2021
June 30, 2020
(In millions)
Principal
Balance
Unamortized
Discount and
Debt Issuance
Costs
Carrying
Value
Principal
Balance
Unamortized
Discount and
Debt Issuance
Costs
Carrying
Value
Variable-rate credit facilities
Senior credit facility term loan,
due January 31, 2025 .................... $ 1,062.5 $
(10.4) $ 1,052.1 $ 1,062.5 $
(13.1) $ 1,049.4
Senior credit facility incremental
term loan, due January 31, 2025 ..
405.9
(18.2)
387.7
410.0
(22.7)
387.3
Revolving credit facility of
$350 million, due January 31,
2023 ..............................................
—
—
—
—
—
—
Senior Unsecured Notes
6.875% senior notes, due
February 1, 2026 ...........................
1,022.9
(12.7) 1,010.2
1,272.9
(18.7) 1,254.2
Senior Secured Notes
6.500% senior notes, due July 1,
2025 ...............................................
300.0
(4.0)
296.0
300.0
(5.0)
295.0
Total long-term debt .........................
2,791.3
(45.3) 2,746.0
3,045.4
(59.5) 2,985.9
Current portion of long-term debt ....
(4.1)
—
(4.1)
(4.1)
—
(4.1)
Long-term debt ................................. $ 2,787.2 $
(45.3) $ 2,741.9 $ 3,041.3 $
(59.5) $ 2,981.8
The following table shows principal payments on the debt due in succeeding fiscal years:
Years ending June 30,
(In millions)
2022 .................................................. $
4.1
2023 ..................................................
4.1
2024 ..................................................
4.1
2025 ..................................................
1,456.1
2026 ..................................................
1,322.9
Total long-term debt
......................... $ 2,791.3
In June 2020, the Company’s redemption of its outstanding Series A preferred stock was achieved by entering into
credit arrangements with a total capacity of $710.0 million comprised of a variable-rate credit facility and senior
secured notes. The variable-rate credit facility included an incremental secured term loan under its credit agreement
(Incremental Term Loan) with $410.0 million of aggregate principal. The Incremental Term Loan matures in 2025
and amortizes at 1.0 percent per annum in equal quarterly installments until the final maturity date, at which time
the remaining principal and interest are due and payable. The interest rate under the Incremental Term Loan is based
on LIBOR plus a spread of 4.25 percent with a floor of 1.0 percent for LIBOR. The Incremental Term Loan bore
interest at a rate of 5.25 percent at June 30, 2021.
The senior secured notes have an aggregate principal balance of $300.0 million maturing in 2025 with an interest
rate of 6.50 percent per annum. Total outstanding principal is due at the final maturity date.
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In connection with the issuance of this indebtedness in fiscal 2020, the Company incurred $3.0 million of deferred
financing costs and an original issue discount of $25.2 million that are being amortized into interest expense over
the lives of the respective facilities.
In January 2018, the Company entered into credit arrangements with a total capacity of $3.6 billion comprised of a
revolving credit facility and senior unsecured notes (2026 Senior Notes). The revolving credit facility included a
secured term loan (Term Loan B) with $1.8 billion of original aggregate principal and a 5-year senior secured
revolving credit facility of $350.0 million, of which $175.0 million is available for the issuance of letters of credit
and $35.0 million of swingline loans. On June 30, 2021, no borrowings were outstanding under the revolving credit
facility. There were $2.7 million of standby letters of credit issued under the revolving credit facility resulting in
availability of $347.3 million at June 30, 2021. The Term Loan B matures in 2025 and originally amortized at 1.0
percent per annum in equal quarterly installments until the final maturity date, at which time the remaining principal
and interest are due and payable. However, as $200.0 million was paid on the Term Loan B in the first quarter of
fiscal 2019, there are no future amortization requirements under the credit agreement.
In June 2020, the revolving credit facility was amended. The amendment provided relief to certain covenants during
the Covenant Relief Period, which is effective until March 31, 2022. During the Covenant Relief Period, the
revolving credit facility bears interest at LIBOR plus a spread ranging from 2.5 percent to 3.5 percent. After the
Covenant Relief Period, the revolving credit facility bears interest at LIBOR plus a spread ranging from 2.5 percent
to 3.0 percent. The revolving credit facility has a commitment fee ranging from 0.375 percent to 0.500 percent of
the unused commitment. All interest rates and commitment fees associated with this variable-rate revolving credit
facility are derived from a leverage-based pricing grid.
The original interest rate under the Term Loan B was based on LIBOR plus a spread of 3.0 percent. The Company
repriced the Term Loan B effective October 26, 2018, to an interest rate of LIBOR plus a spread of 2.75 percent.
Effective February 19, 2020, the Company again repriced the Term Loan B to an interest rate of LIBOR plus a
spread of 2.5 percent. If the Company's leverage ratio drops below 2.25 to 1, the spread will decrease to 2.25
percent. The Term Loan B bore interest at a rate of 2.60 percent at June 30, 2021.
The repricings of the Term Loan B were evaluated on a creditor-by-creditor basis to determine whether the
transactions should be accounted for as modifications or extinguishments. Certain creditors chose not to participate
in the repricing and ceased being creditors of the Company. As a result, the Company recorded a debt
extinguishment loss of $2.1 million in the second quarter of fiscal 2019 to write off the pro-rata amount of
unamortized debt discount and deferred issuance costs related to these creditors. For the remainder of the creditors,
this transaction was accounted for as a modification because, on a creditor-by-creditor basis, the difference between
the present value of the cash flows to those creditors before and after the repricing was less than 10 percent. No debt
extinguishment loss was recorded in fiscal 2020 as a result of that repricing.
In January 2018, the Company issued senior unsecured notes with an aggregate original principal balance of $1.4
billion maturing in 2026 (2026 Unsecured Senior Notes) with an interest rate of 6.875 percent per annum. Total
outstanding principal is due at the final maturity date.
In the third quarter of fiscal 2021, the Company redeemed $250.0 million of its 2026 Unsecured Senior Notes. This
payment was made in advance of the scheduled maturity and thus was considered an extinguishment of the debt. As
a result of the prepayment, an extinguishment loss of $11.9 million was recognized in the third quarter of fiscal
2021 and was recorded in the interest expense, net line on the Consolidated Statements of Earnings (Loss). This
extinguishment loss included a premium paid on the repurchase of the 2026 Senior Notes of $8.6 million.
Payments totaling $733.0 million were made on the Term Loan B during fiscal 2019. In addition to the Term
Loan B repayments, the Company repurchased $127.1 million of its 2026 Unsecured Senior Notes. These payments
were all made in advance of scheduled maturities and thus were considered extinguishments of the debt. Therefore,
as a result of these prepayments, extinguishment losses of $18.4 million were recognized during fiscal 2019. The
95
extinguishment loss included a premium paid on the repurchase of the 2026 Unsecured Senior Notes of $1.8
million.
Of the total debt extinguishment loss of $18.4 million incurred during fiscal 2019, $10.9 million was recorded in the
interest expense, net line and the remaining $7.5 million was recorded in the loss from discontinued operations, net
of income taxes line on the Consolidated Statements of Earnings (Loss). The portion of the extinguishment loss that
was recorded in the loss from discontinued operations, net of income taxes line was related to debt repaid with the
proceeds from the sale of assets held-for-sale. Refer to Note 5 for further discussion.
Interest expense related to long-term debt and the amortization of the associated debt issuance costs, inclusive of the
extinguishment losses discussed above, totaled $180.1 million in fiscal 2021, $147.3 million in fiscal 2020, and
$196.1 million in fiscal 2019. As further discussed in Note 5, a portion of interest expense and amortization of debt
issuance costs related to long-term debt was recorded in the loss from discontinued operations, net of income taxes
line on the Consolidated Statements of Earnings (Loss).
10. Income Taxes
Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax
assets and liabilities, which represent future tax consequences of events that have been recognized differently in the
financial statements than for tax purposes. Deferred tax assets and liabilities are established using the enacted
statutory tax rates and are adjusted for any changes in such rates in the period of change.
The following table shows income tax expense (benefit) attributable to earnings (loss) from continuing operations
before income taxes:
Years ended June 30,
2021
2020
2019
(In millions)
Current
Federal .................................. $
77.3
$
18.7
$
(29.8)
State ......................................
16.9
7.9
(2.8)
Foreign .................................
1.2
1.1
0.6
95.4
27.7
(32.0)
Deferred
Federal ..................................
(6.5)
(42.6)
42.0
State ......................................
(2.0)
(17.5)
1.6
Foreign .................................
0.1
0.2
(0.1)
(8.4)
(59.9)
43.5
Income tax expense (benefit) ...... $
87.0
$
(32.2)
$
11.5
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The
CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19
pandemic, including tax relief and government loans, grants, and investments. The CARES Act did not have a
material impact on our consolidated financial statements for the years ended June 30, 2021 and 2020.
96
The differences between the statutory U.S. federal income tax rate and the effective tax rate were as follows:
Years ended June 30,
2021
2020
2019
U.S. statutory tax rate ....................................................
21.0 %
21.0 %
21.0 %
State income taxes, less federal income tax benefits ....
2.9
2.8
(0.7)
Foreign operations .........................................................
0.2
(0.5)
(13.3)
Rate change ...................................................................
—
0.1
(0.1)
Settlements - audits / tax litigation ................................
(4.9)
(0.4)
(2.5)
Transaction costs ...........................................................
1.2
—
—
Nondeductible compensation ........................................
1.2
(1.1)
3.7
Tax credits .....................................................................
(0.3)
3.7
—
Goodwill impairment ....................................................
—
(12.8)
—
Other ..............................................................................
0.8
0.5
0.1
Effective income tax rate ..............................................
22.1 %
13.3 %
8.2 %
The Company’s effective tax rate was 22.1 percent in fiscal 2021, 13.3 percent in fiscal 2020, and 8.2 percent in
fiscal 2019. The primary impact to the fiscal 2021 effective tax rate was the favorable Code Section 199 court
determination being finalized and the release of $15.2 million of the associated reserve for uncertain tax positions.
The fiscal 2020 effective tax rate was impacted primarily by the national media goodwill impairment charge. In the
third quarter of fiscal 2020, the Company recorded a non-cash impairment charge of $252.7 million to reduce the
carrying value of goodwill. The Company recorded an income tax benefit of $26.9 million related to this goodwill
impairment charge. The fiscal 2019 effective tax rate was primarily impacted by a credit to income taxes of $23.5
million related to the write-off of worthless stock and related bad debt.
97
The tax effects of temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as
follows:
June 30,
2021
2020
(In millions)
Deferred tax assets
Accounts receivable allowances and return reserves ......................... $
25.0
$
29.7
Compensation and benefits ................................................................
—
0.7
Indirect benefit of uncertain state and foreign tax positions ..............
5.8
6.3
Investment in partnerships .................................................................
1.0
6.8
Tax loss carryforwards .......................................................................
47.4
43.3
Lease liabilities ...................................................................................
117.3
126.5
All other assets ...................................................................................
14.2
17.7
Total deferred tax assets ...........................................................................
210.7
231.0
Valuation allowance .................................................................................
(17.5)
(17.2)
Net deferred tax assets ..............................................................................
193.2
213.8
Deferred tax liabilities
Subscription acquisition costs ............................................................
55.1
62.0
Compensation and benefits ................................................................
7.4
—
Accumulated depreciation and amortization ......................................
482.8
494.3
Deferred gains from dispositions .......................................................
15.0
15.8
Lease right-of-use assets ....................................................................
92.6
101.6
All other liabilities ..............................................................................
2.7
3.7
Total deferred tax liabilities ......................................................................
655.6
677.4
Net deferred tax liability ........................................................................... $
462.4
$
463.6
The Company has $6.9 million of net operating loss carryforwards for federal purposes and $209.9 million for state
purposes, which, if unused, have expiration dates through fiscal 2039. It is expected that all federal net operating
loss carryforwards will be utilized prior to expiration.
There was a small net increase in the valuation allowance of $0.3 million during fiscal 2021, which was related
primarily to foreign and state net operating losses.
A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as
follows:
Years ended June 30,
2021
2020
(In millions)
Balance at beginning of year ..................................................... $
49.4
$
53.7
Increases in tax positions for prior years ...................................
0.7
3.3
Decreases in tax positions for prior years ..................................
(0.4)
(0.1)
Increases in tax positions for current year .................................
2.3
1.9
Settlements .................................................................................
(0.2)
0.1
Lapse in statute of limitations ....................................................
(18.6)
(9.5)
Balance at end of year ................................................................ $
33.2
$
49.4
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $31.4
million as of June 30, 2021, and $40.6 million as of June 30, 2020. The Company recognizes interest and penalties
98
related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest and
penalties related to unrecognized tax benefits was $11.9 million and $13.4 million as of June 30, 2021 and 2020,
respectively.
The total amount of unrecognized tax benefits at June 30, 2021, may change significantly within the next 12
months, decreasing by an estimated range of $18.6 million to $2.5 million. The change, if any, may result primarily
from foreseeable federal and state examinations, ongoing federal and state examinations, anticipated state
settlements, expiration of various statutes of limitation, the results of tax cases, or other regulatory developments.
The Company filed amended federal tax returns for fiscal years 2013-2016 in fiscal 2020 prior to the statute of
limitations expiring. In addition, the Company filed an amended federal tax return for fiscal 2017 in fiscal 2021
prior to the statute of limitations expiring. As a result, those periods are subject to audit. On March 19, 2020, the
Federal District Court ruled in the Company’s favor on a disputed Internal Revenue Code Section 199 issue for
fiscal years 2006 through fiscal 2012. In the first quarter of fiscal 2021, the Department of Justice waived its right to
appeal, resulting in the finalization of the Federal District Court decision and the release of the associated reserve
for uncertain tax positions. Therefore, a tax benefit of $15.2 million was recorded in the first quarter of fiscal 2021.
The Company has various state income tax examinations ongoing at various stages of completion, but generally the
state income tax returns have been audited or closed to audit through fiscal 2012.
The complete legal and structural separation of Time Warner Inc.’s (Time Warner) magazine publishing and related
business from Time Warner (the Time Spin-Off) was completed by way of a pro rata dividend of Time Inc. shares
held by Time Warner to its stockholders as of May 23, 2014, based on a distribution ratio of one share of Time Inc.
common stock for every eight shares of Time Warner common stock held (the Distribution). In connection with the
acquisition of Time, the Company assumed the Tax Matters Agreement (TMA) entered into with Time Warner that
requires Time to indemnify Time Warner for certain tax liabilities for periods prior to the Time Spin-Off from Time
Warner, which was completed on June 6, 2014. With respect to taxes other than those incurred in connection with
the Time Spin-Off, the TMA provides that the Company will indemnify Time Warner for (1) any taxes of Time and
its subsidiaries for all periods after the Distribution and (2) any taxes of the Time Warner group for periods prior to
the Distribution to the extent attributable to Time or its subsidiaries. For purposes of the indemnification described
in clause (2), however, Time will generally be required to indemnify Time Warner only for any such taxes that are
paid in connection with a tax return filed after the Distribution or that result from an adjustment made to such taxes
after the Distribution. In these cases, Time’s indemnification obligations generally would be computed based on the
amount by which the tax liability of the Time Warner group is greater than it would have been absent Time’s
inclusion in its tax returns (or absent the applicable adjustment). Time and Time Warner will generally have joint
control over tax authority audits or other tax proceedings related to Time specific tax matters. As of June 30, 2021
and 2020, the Company has recorded a liability in connection with the TMA of $29.8 million and $28.9 million,
respectively.
11. Commitments and Contingent Liabilities
The Company has commitments under certain firm contractual arrangements (firm commitments) to make future
payments. These firm commitments secure the future rights to various assets and services to be used in the normal
course of operations. Commitments not recorded on the Consolidated Balance Sheets consist primarily of purchase
obligations for goods and services. Commitments recorded on the Consolidated Balance Sheets consist primarily of
99
debt, operating lease liabilities, and pension obligations. Commitments expected to be paid over the next five years
are as follows:
Payments Due In
Years ending June 30,
2022
2023
2024
2025
2026 Thereafter
Total
(In millions)
Broadcast rights payable
Recorded commitments ................. $
5.5 $
2.6 $
1.2 $
0.7 $
0.7 $
0.1 $
10.8
Unavailable rights ..........................
8.0
7.2
1.1
—
—
—
16.3
Total commitments ............................ $
13.5 $
9.8 $
2.3 $
0.7 $
0.7 $
0.1 $
27.1
The Company has recorded commitments for broadcast rights payable in future fiscal years. The Company also is
obligated to make payments under contracts for broadcast rights not currently available for use and, therefore, not
included in the consolidated financial statements. Such unavailable rights amounted to $16.3 million at June 30,
2021. The fair value of these commitments for unavailable broadcast rights, determined by the present value of
future cash flows discounted at the Company’s current borrowing rate, was $15.2 million at June 30, 2021.
Lease Guarantees
In March 2018, the Company sold Time Inc. (UK) Ltd (TIUK), a United Kingdom (U.K.) multi-platform publisher.
In connection with the sale of TIUK, the Company recognized a liability in connection with a lease of office space
in the U.K. through December 31, 2025, which was guaranteed by the Company. In the first quarter of fiscal 2020,
the Company was released of its guarantee by the landlord. As a result, a gain of $8.0 million was recorded in the
non-operating income (expense), net line on the Consolidated Statements of Earnings (Loss).
The Company guarantees two other leases of entities previously sold, one through January 2023 and another
through November 2030. The carrying value of those guarantees, which were recorded in other noncurrent liabilities
on the Consolidated Balance Sheets, was $2.0 million and $2.2 million at June 30, 2021 and 2020, respectively, and
the maximum obligation for which the Company would be liable if the primary obligors fail to perform under the
lease agreements was $12.0 million as of June 30, 2021.
Legal Proceedings
In the ordinary course of business, the Company is a defendant in or party to various legal claims, actions, and
proceedings. These claims, actions, and proceedings are at varying stages of investigation, arbitration, or
adjudication, and involve a variety of areas of law.
On October 26, 2010, the Canadian Minister of National Revenue denied the claims by Time Inc. Retail (formerly
Time/Warner Retail Sales & Marketing, Inc.) (TIR) for input tax credits in respect of goods and services tax that
TIR had paid on magazines it imported into and had displayed at retail locations in Canada during the years 2006 to
2008, on the basis that TIR did not own those magazines and issued Notices of Reassessment in the amount of
approximately C$52 million. On January 21, 2011, TIR filed an objection to the Notices of Reassessment with the
Chief of Appeals of the Canada Revenue Agency (CRA), arguing that TIR claimed input tax credits only in respect
of goods and services tax it actually paid and it is entitled to a rebate for such payments. On September 13, 2013,
TIR received Notices of Reassessment in the amount of C$26.9 million relating to the same type of situation during
the years 2009 to 2010, and TIR filed similar objections as for prior years. By letter dated June 19, 2015, the CRA
requested payment of C$89.8 million, which includes interest accrued and stated that failure to pay may result in
legal action. TIR responded by stating that collection should remain stayed pending resolution of the issues raised
by TIR’s objection. Including interest accrued, the total of the reassessments claimed by the CRA for the years 2006
to 2010 was C$91.0 million as of November 30, 2015. The parties are engaged in mediation.
100
On September 6, 2019, a shareholder filed a putative class action lawsuit in the U.S. District Court for the Southern
District of New York against the Company, its Chief Executive Officer, and its Chief Financial Officer, seeking to
represent a class of shareholders who acquired securities of the Company between May 10, 2018 and September 4,
2019 (the New York Action). On September 12, 2019, a shareholder filed a putative class action lawsuit in the U.S.
District Court for the Southern District of Iowa against the Company, its Chief Executive Officer, its Chief
Financial Officer, and its Chairman of the Board seeking to represent a class of shareholders who acquired securities
of the Company between January 31, 2018 and September 5, 2019 (the Iowa Action). Both complaints allege that
the defendants made materially false and/or misleading statements, and failed to disclose material adverse facts,
about the Company’s business, operations, and prospects. Both complaints assert claims under the federal securities
laws and seek unspecified monetary damages and other relief. On November 12, 2019, the plaintiff shareholder
withdrew the New York Action, and the action has been dismissed. On November 25, 2019, the City of Plantation
Police Officers Pension Fund was appointed to serve as lead plaintiff in the Iowa Action. On March 9, 2020, the
lead plaintiff filed an amended complaint in the Iowa Action, seeking to represent a class of shareholders who
acquired securities of the Company between January 31, 2018 and September 30, 2019. On June 22, 2020, the
defendants filed a motion to dismiss the Iowa Action. On October 28, 2020, a U.S. District Judge granted
defendants’ motion to dismiss, dismissing the Iowa Action with prejudice at plaintiffs’ cost due to plaintiffs’ failure
to satisfy applicable pleading requirements. Specifically, the court held that plaintiffs had failed to plead any
actionable misstatement or omission, scienter, or loss causation. On November 23, 2020, the lead plaintiff filed a
notice of appeal of the District Court’s dismissal. The parties have completed briefing in the Eighth Circuit Court of
Appeals, and it appears likely we will receive a decision on the appeal sometime in late 2021 or 2022.
On April 3, 2019, a purported class of plaintiff purchasers of broadcast television spot advertising amended its
pending consolidated complaint in the U.S. District Court for the Northern District of Illinois against a number of
broadcast television station groups to add Meredith and other broadcast television station groups as defendants (the
Defendants). The amended complaint alleges that the Defendants have violated federal antitrust law by entering
agreements with their competitors to fix prices and exchange competitively sensitive information. The Defendants
filed a joint motion to dismiss on June 5, 2019, after which the plaintiffs filed a consolidated second amended
complaint on September 9, 2019. The Defendants filed a joint motion to dismiss the second amended complaint on
October 8, 2019. On November 6, 2020, the court denied the motion to dismiss. The Court has set a pretrial
schedule requiring that all fact discovery be completed by July 1, 2022, and briefing on class certification be
completed by November 14, 2022.
The results of any such litigation, including the aforementioned class action lawsuits, investigations, and other legal
proceedings are inherently unpredictable and expensive. Any claims against the Company, whether meritorious or
not, could be time consuming, result in costly litigation, damage our reputation, require significant amounts of
management time, and divert significant resources. If any of these legal proceedings were to be determined
adversely to the Company, or the Company were to enter into a settlement arrangement, it could be exposed to
monetary damages or limits on our ability to operate the business, which could have an adverse effect on the
business, financial condition, and operating results.
The Company establishes an accrued liability for specific matters, such as a legal claim, when the Company
determines that a loss is probable and the amount of the loss can be reasonably estimated. Once established, accruals
are adjusted, as appropriate, in light of additional information. The amount of any loss ultimately incurred in
relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for
such matters. In view of the inherent difficulty of predicting the outcome of litigation, claims, and other matters, the
Company often cannot predict what the eventual outcome of a pending matter will be, or what the timing or results
of the ultimate resolution of a matter will be. Accordingly, for the matters described above, the Company is unable
to predict the outcome or reasonably estimate a range of possible loss.
101
12. Fair Value Measurements
The Company estimates the fair value of financial instruments using available market information and valuation
methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high
degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily
indicative of amounts the Company would realize upon disposition.
The fair value hierarchy consists of three broad levels of inputs that may be used to measure fair value, which are
described below:
• Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2
Inputs other than quoted prices included within Level 1 that are either directly or indirectly
observable; and
• Level 3
Assets or liabilities for which fair value is based on valuation models with significant unobservable
pricing inputs and which result in the use of management estimates.
The following table sets forth the carrying value and the estimated fair value of the Company’s financial
instruments not measured at fair value in the Consolidated Balance Sheets:
June 30, 2021
June 30, 2020
(In millions)
Carrying
Value
Fair Value
Carrying
Value
Fair Value
Broadcast rights payable ....................................... $
10.8
$
9.8
$
12.7
$
11.7
Long-term debt .....................................................
2,746.0
2,859.3
2,985.9
2,753.6
The fair value of broadcast rights payable was determined utilizing Level 3 inputs. The fair value of total long-term
debt was based on pricing from observable market information obtained from a non-active market, therefore was
included as a Level 2 measurement.
The following tables summarize recurring and nonrecurring fair value measurements at June 30, 2021 and 2020:
As of June 30, 2021
(In millions)
Total
Level 1
Level 2
Level 3
Recurring fair value measurements
Cash and cash equivalents - cash equivalents ........... $
112.6 $
112.6 $
— $
—
Accrued expenses
Contingent consideration ...................................... $
2.2 $
— $
— $
2.2
Deferred compensation plans ................................
2.1
—
2.1
—
Other noncurrent liabilities
Contingent consideration ......................................
1.6
—
—
1.6
Deferred compensation plans ................................
13.6
—
13.6
—
Total recurring liability fair value measurements ..... $
19.5 $
— $
15.7 $
3.8
102
As of and for the year ended June 30, 2020
(In millions)
Total
Level 1
Level 2
Level 3
Total
Losses
Recurring fair value measurements
Cash and cash equivalents – cash equivalents ....... $
115.2 $
115.2 $
— $
—
Accrued expenses
Contingent consideration
$
1.3 $
— $
— $
1.3
Deferred compensation plans .............................
3.4
—
3.4
—
Other noncurrent liabilities
Contingent consideration ...................................
3.6
—
—
3.6
Deferred compensation plans .............................
13.5
—
13.5
—
Total recurring liability fair value measurements .. $
21.8 $
— $
16.9 $
4.9
Nonrecurring fair value measurements
Net property, plant, and equipment 1
..................... $
16.7 $
— $
— $
16.7 $
(23.4)
Operating lease assets 2
..........................................
46.3
—
—
46.3
(64.5)
Intangible assets, net 3
............................................
77.9
—
—
77.9
(48.7)
Goodwill 4
..............................................................
1,602.5
—
—
1,602.5
(252.7)
Total nonrecurring fair value measurements .......... $ 1,743.4 $
— $
— $ 1,743.4 $
(389.3)
1
Represents leasehold improvements and furniture and fixtures with a carrying value of $40.1 million partially impaired with its
associated operating lease asset at March 31, 2020. The impairment charge was recorded in the impairment of goodwill and other
long-lived assets line on the Consolidated Statements of Earnings (Loss). For further discussion, refer to Note 6.
2
Represents an operating lease asset with a carrying value of $110.8 million partially impaired at March 31, 2020. The impairment
charge was recorded in the impairment of goodwill and other long-lived assets line on the Consolidated Statements of Earnings (Loss).
For further discussion, refer to Note 6.
3
Represents a local media FCC license partially impaired at March 31, 2020, and five national media trademarks. One trademark was
fully impaired at September 30, 2019, and four additional were partially impaired at March 31, 2020. The assets had a carrying value
of $126.6 million prior to the impairment. The impairment charge was recorded in the impairment of goodwill and other long-lived
assets line on the Consolidated Statements of Earnings (Loss). For further details, refer to Note 7.
4
Represents national media goodwill with a carrying value of $1,855.2 million partially impaired at March 31, 2020. The impairment
charge was recorded in the impairment of goodwill and other long-lived assets line on the Consolidated Statements of Earnings (Loss).
For further details, refer to Note 7.
The fair value of deferred compensation plans is derived from quotes of similar investments observable in the
market, and thus represents a Level 2 measurement. The fair value of contingent consideration is based on estimates
on future performance benchmarks established in the associated acquisition agreements and the amortization of the
present value discount. These estimates are based on inputs not observable in the market and thus represent Level 3
measurements. Estimates utilize a weighted average discount rate of 3.50 percent, weighted by relative fair value.
The operating lease assets and net property, plant, and equipment are assets associated with the same leased space.
These assets were measured on a non-recurring basis, and the fair value was determined based on significant inputs
not observable in the market and thus represented a Level 3 measurement. For further discussion of the impairment
of these assets, refer to Note 6. The impairment charges were recorded in the impairment of goodwill and other
long-lived assets line on the Consolidated Statements of Earnings (Loss).
The fair values of the trademarks, FCC licenses, and goodwill were measured on a non-recurring basis and were
determined based on significant inputs not observable in the market and thus represented Level 3 measurements.
Key assumptions used to determine the fair value included discount rates, estimated cash flows, royalty rates, and
revenue growth rates. The discount rate used was based on several factors, including market interest rates, and a
weighted average cost of capital analysis based on the target capital structure, and included adjustments for market
risk and Company-specific risk. Estimated cash flows were based on internally developed estimates and the revenue
growth rates were based on industry knowledge and historical performance. For the intangible assets, the
unobservable significant inputs included a discount rate of 11.00 percent, a royalty rate of 1.61 percent, and a
terminal revenue growth rate of 1.48 percent, all weighted by relative fair values. For further discussion of the
103
impairment of these assets, refer to Note 7. The impairment charges were recorded in the impairment of goodwill
and other long-lived assets line on the Consolidated Statements of Earnings (Loss).
The following table represents the changes in the fair value of liabilities subject to Level 3 remeasurement during
the years ended June 30, 2021 and 2020.
Years ended June 30,
2021
2020
(In millions)
Contingent consideration
Balance at beginning of year ......................................................... $
4.9
$
0.8
Additions due to acquisitions ........................................................
—
4.1
Payments ........................................................................................
(1.0)
—
Fair value adjustment of contingent consideration ........................
(0.1)
—
Balance at end of year ................................................................... $
3.8
$
4.9
The fair value adjustment of contingent consideration was the change in the estimated earn out payments based on
projections of performance and the amortization of the present value discount. The fair value adjustment of
contingent consideration was included in the selling, general, and administrative line on the Consolidated
Statements of Earnings (Loss).
13. Revenue Recognition
Meredith disaggregates revenue from contracts with customers by types of goods and services. A reconciliation of
disaggregated revenue to segment revenue (as provided in Note 19) is as follows.
June 30, 2021
National
Media
Local
Media
Intersegment
Elimination
Total
(In millions)
Advertising related
Digital ................................................................ $
491.8 $
19.0 $
— $
510.8
Magazine ............................................................
426.5
—
—
426.5
Non-political spot ..............................................
—
279.2
—
279.2
Political spot ......................................................
—
175.4
—
175.4
Third party sales ................................................
46.1
92.5
(4.9)
133.7
Total advertising related ................................
964.4
566.1
(4.9)
1,525.6
Consumer related
Subscription .......................................................
564.7
—
—
564.7
Retransmission ...................................................
—
377.0
—
377.0
Newsstand ..........................................................
150.0
—
—
150.0
Licensing ............................................................
124.9
—
—
124.9
Affinity marketing .............................................
62.3
—
—
62.3
Digital and other consumer driven ....................
90.9
0.8
—
91.7
Total consumer related ..................................
992.8
377.8
—
1,370.6
Other
Projects based ....................................................
50.4
—
—
50.4
Other ..................................................................
15.9
14.9
—
30.8
Total other ......................................................
66.3
14.9
—
81.2
Total revenues ......................................................... $
2,023.5 $
958.8 $
(4.9) $
2,977.4
104
June 30, 2020
National
Media
Local
Media
Intersegment
Elimination
Total
(In millions)
Advertising related
Digital ................................................................ $
376.8 $
17.7 $
— $
394.5
Magazine ...........................................................
553.5
—
—
553.5
Non-political spot ..............................................
—
285.6
—
285.6
Political spot ......................................................
—
23.9
—
23.9
Third party sales ................................................
63.1
80.7
(2.3)
141.5
Total advertising related ................................
993.4
407.9
(2.3)
1,399.0
Consumer related
Subscription .......................................................
611.8
—
—
611.8
Retransmission ..................................................
—
347.9
—
347.9
Newsstand .........................................................
150.8
—
—
150.8
Licensing ...........................................................
98.0
—
—
98.0
Affinity marketing .............................................
67.4
—
—
67.4
Digital and other consumer driven ....................
72.8
—
—
72.8
Total consumer related ..................................
1,000.8
347.9
—
1,348.7
Other
Projects based ....................................................
56.7
—
—
56.7
Other ..................................................................
30.7
13.5
—
44.2
Total other .....................................................
87.4
13.5
—
100.9
Total revenues ........................................................ $
2,081.6 $
769.3 $
(2.3) $
2,848.6
June 30, 2019
National
Media
Local
Media
Intersegment
Elimination
Total
(In millions)
Advertising related
Digital ................................................................ $
394.9 $
15.8 $
— $
410.7
Magazine ...........................................................
690.1
—
—
690.1
Non-political spot ..............................................
—
323.3
—
323.3
Political spot ......................................................
—
102.9
—
102.9
Third party sales ................................................
65.3
96.2
(1.9)
159.6
Total advertising related ................................
1,150.3
538.2
(1.9)
1,686.6
Consumer related
Subscription .......................................................
716.1
—
—
716.1
Retransmission ..................................................
—
316.5
—
316.5
Newsstand .........................................................
165.5
—
—
165.5
Licensing ...........................................................
95.2
—
—
95.2
Affinity marketing .............................................
66.7
—
—
66.7
Digital and other consumer driven ....................
56.8
—
—
56.8
Total consumer related ..................................
1,100.3
316.5
—
1,416.8
Other
Projects based ....................................................
50.5
—
—
50.5
Other ..................................................................
25.5
9.1
—
34.6
Total other .....................................................
76.0
9.1
—
85.1
Total revenues ........................................................ $
2,326.6 $
863.8 $
(1.9) $
3,188.5
105
CONTRACT BALANCES
The timing of Meredith’s performance under its various contracts often differs from the timing of the customer’s
payment, which results in the recognition of a contract asset or a contract liability. A contract asset is recognized
when a good or service is transferred to a customer, and the Company does not have the contractual right to bill for
the related performance obligations. Due to the nature of its contracts, the Company does not have significant
contract assets. A contract liability is recognized when consideration is received from the customer prior to the
transfer of goods or services. Current portion of contract liabilities were $396.4 million at June 30, 2021, and $403.2
million at June 30, 2020, and are presented as current portion of unearned revenues on the Consolidated Balance
Sheets. Noncurrent contract liabilities were $218.8 million at June 30, 2021, and $267.5 million at June 30, 2020,
and are reflected as unearned revenues on the Consolidated Balance Sheets. Revenue of $400.5 million and $478.4
million recognized in the years ended June 30, 2021 and 2020, respectively, were in contract liabilities at the
beginning of the periods.
During the second quarter of fiscal 2020, the Company wrote off $42.7 million of contract liabilities due to the
discontinuation of Rachael Ray Every Day and Family Circle as subscription magazines. This amount was
composed of balances at June 30, 2019, as well as newly acquired contracts during the first six months of fiscal
2020. In addition, the Company wrote off an offsetting $42.7 million of contract costs associated with the
discontinued contracts. The contract liabilities were presented in the current portion of unearned revenues and
unearned revenues lines and the contract costs were presented in the current portion of subscription acquisition costs
and subscription acquisition costs lines on the Consolidated Balance Sheets.
CONTRACT COSTS
The Company recognizes an asset for the incremental costs of obtaining a contract with a customer paid to external
parties, if it expects to recover those costs. The Company has determined that sales commissions paid on all third-
party agent sales of subscriptions are direct and incremental and therefore meet the capitalization criteria. These
capitalized costs are amortized as revenue is recognized or over the term of the agreement. As of June 30, 2021, the
balances recognized from the costs incurred to obtain contracts with customers were $406.0 million, $225.6 million
of which was recorded in current portion of subscription acquisition costs and $180.4 million was recorded in
subscription acquisition costs on the Consolidated Balance Sheets. As of June 30, 2020, the total balances
recognized were $434.8 million, $213.2 million of which was recorded in current portion of subscription acquisition
costs and $221.6 million was recorded in subscription acquisition costs. The Company recognized amortization
related to these costs of $213.2 million in fiscal 2021, $238.1 million in fiscal 2020, and $319.5 million in fiscal
2019. As discussed in the contract balances section above, during fiscal 2020, the Company wrote off $42.7 million
of contract costs associated with discontinued contracts. There were no impairments of contract costs recognized
during the years ended June 30, 2021 and 2019.
14. Pension and Postretirement Benefit Plans
Defined Contribution Plans
The Company sponsors a defined contribution saving plan for most of its U.S. based employees. Eligible Company
employees may participate in the Meredith Savings and Investment Plan, a defined contribution plan that allows
eligible employees to contribute a percentage of their salary, commissions, and bonuses in accordance with plan
limitations and provisions of Section 401(k) of the Internal Revenue Code and the Company makes matching
contributions to the plan subject to the limits of the plan. Until January 1, 2021, the Company matched 100 percent
of the first 4 percent and 50 percent of the next 1 percent of employee contributions. Effective January 1, 2021, the
Company increased the 401(k) match to 100 percent of the first 5 percent for employees ineligible for Meredith
pension plans.
106
In connection with the Time acquisition, certain employees continued to participate, through December 31, 2018, in
the defined contribution savings plan that Time had in place for its employees in the U.S., the Time Inc. Savings
Plan. For the Time Inc. Savings Plan, the Company matched 100 percent of the first 4 percent and 50 percent of the
next 2 percent of eligible compensation. In addition to the annual employer contribution made to the Time Inc.
Savings Plan, following the plan year, the Company made an employer match contribution of up to 5 percent of
each participant’s compensation less any employer matching contribution made within the plan year to those
participants who contributed up to 6 percent of their compensation for the plan year. The Time Inc. Savings Plan
merged into the Meredith Savings and Investment Plan effective for the 2019 calendar plan year.
Employees are allowed to choose among various investment options. The Meredith Savings and Investment Plan
included an investment option in the Company’s common stock until December 31, 2018. Matching contributions
are invested in the same manner as the participants’ pre-tax contributions. Company contribution expense under
these plans totaled $17.6 million in fiscal 2021, $17.9 million in fiscal 2020, and $22.6 million in fiscal 2019.
The Company sponsors the Meredith Corporation Deferred Compensation Plan and also administers The Time Inc.
Deferred Compensation Plan, which is a frozen plan (collectively the Deferred Compensation Plans). The Deferred
Compensation Plans allow participants to defer certain bonuses and salaries. No actual monies are set aside in
respect of the Deferred Compensation Plans, and participants have no rights to Company assets in respect of plan
liabilities in excess of general unsecured creditors.
The liabilities associated with the plans fluctuate with hypothetical yields of the underlying investments. Liabilities
for the uncollateralized plans were $15.7 million and $16.9 million at June 30, 2021 and 2020, respectively, of
which $2.1 million was reflected in the accrued expenses-accrued compensation and benefits line and $13.6 million
was reflected in the other noncurrent liabilities line on the Consolidated Balance Sheets at June 30, 2021, and $3.4
million was reflected in the accrued expenses-accrued compensation and benefits line and $13.5 million was
reflected in the other noncurrent liabilities line on the Consolidated Balance Sheets at June 30, 2020.
Pension and Postretirement Plans
Meredith has U.S. noncontributory pension plans covering substantially all employees who were employed by
Meredith prior to January 1, 2018. The Company also assumed the obligations under Time’s various international
pension plans, including plans in the U.K., Netherlands, and Germany. These domestic and international plans
include qualified (funded) plans as well as nonqualified (unfunded) plans. These plans provide participating
employees with retirement benefits in accordance with benefit provision formulas. The nonqualified plans provide
retirement benefits only to certain highly compensated employees. The Company also sponsors defined healthcare
and life insurance plans that provide benefits to eligible retirees.
107
Obligations and Funded Status
The following tables present changes in, and components of, the Company’s net assets/liabilities for pension and
other postretirement benefits:
Change in benefit obligation
Benefit obligation, beginning of year ....................... $ 169.8 $ 187.5
$ 815.1 $ 725.3
$
8.5 $
8.3
Service cost ..............................................................
9.3
9.7
—
—
—
—
Interest cost ..............................................................
3.3
5.1
10.0
14.4
0.2
0.3
Participant contributions ..........................................
—
—
—
—
0.8
0.8
Plan amendments ......................................................
0.1
—
1.5
—
—
—
Net actuarial loss (gain) ............................................
—
13.5
(22.2)
124.3
(0.6)
0.1
Benefits paid (including lump sums) .......................
(1.1)
(0.2)
(19.8)
(22.0)
(0.9)
(1.0)
Settlements ...............................................................
(14.6)
(45.8)
—
(4.0)
—
—
Foreign currency exchange rate impact ...................
—
—
101.9
(22.9)
—
—
Benefit obligation, end of year ................................. $ 166.8 $ 169.8
$ 886.5 $ 815.1
$
8.0 $
8.5
Change in plan assets
Fair value of plan assets, beginning of year ............. $ 125.8 $ 135.4
$ 948.9 $ 872.1
$
— $
—
Actual return on plan assets .....................................
34.5
6.9
(40.4)
112.7
—
—
Employer contributions ............................................
5.8
29.5
14.9
18.2
0.1
0.2
Participant contributions ..........................................
—
—
—
—
0.8
0.8
Benefits paid (including lump sums) .......................
(1.1)
(0.2)
(19.8)
(22.0)
(0.9)
(1.0)
Settlements ...............................................................
(14.6)
(45.8)
—
(4.0)
—
—
Foreign currency exchange rate impact ...................
—
—
119.3
(28.1)
—
—
Fair value of plan assets, end of year ....................... $ 150.4 $ 125.8
$ 1,022.9 $ 948.9
$
— $
—
Over (under) funded status, end of year ................... $ (16.4) $ (44.0) $ 136.4 $ 133.8
$
(8.0) $
(8.5)
Pension
Postretirement
Domestic
International
Domestic
June 30,
2021
2020
2021
2020
2021
2020
(In millions)
The net actuarial loss included in the change in benefit obligation for the domestic pension plan for the year ended
June 30, 2020, is primarily the result of a decrease in the discount rate used at June 30, 2020, as compared to
June 30, 2019, offset by a very slight gain impacted by a mortality assumption update.
The net actuarial gain included in the change in benefit obligation for the international pension plans for the year
ended June 30, 2021, is primarily the result of an increase in the discount rate used at June 30, 2021, as compared to
June 30, 2020, partially offset by an increase in inflation. The net actuarial loss included in the change in benefit
obligation for the international pension plans for the year ended June 30, 2020, was primarily the result of a
significant decrease in the discount rate used at June 30, 2020, as compared to June 30, 2019, partially offset by a
decrease in inflation and plan experience.
Benefits paid directly from Meredith assets are included both in employer contributions and benefits paid.
108
The following amounts are recognized in the Consolidated Balance Sheets:
Pension
Postretirement
Domestic
International
Domestic
June 30,
2021
2020
2021
2020
2021
2020
(In millions)
Other assets
Prepaid benefit cost ............................................ $
26.5 $
2.3
$ 144.2 $ 140.9
$
— $
—
Accrued expenses-compensation and benefits
—
Accrued benefit liability ....................................
(3.9)
(6.3)
(0.2)
(0.1)
(0.5)
(0.6)
Other noncurrent liabilities
Accrued benefit liability ....................................
(39.0)
(40.0)
(7.6)
(7.0)
(7.5)
(7.9)
Net amount recognized, end of year ......................... $ (16.4) $ (44.0) $ 136.4 $ 133.8
$
(8.0) $
(8.5)
The accumulated benefit obligation for the domestic defined benefit pension plans was $147.0 million and $150.4
million at June 30, 2021 and 2020, respectively. The accumulated benefit obligation for the international defined
benefit pension plans was $886.5 million and $815.1 million at June 30, 2021 and 2020, respectively.
The following table provides information about pension plans with projected benefit obligations and accumulated
benefit obligations in excess of plan assets:
Domestic
International
June 30,
2021
2020
2021
2020
(In millions)
Projected benefit obligation ................... $
43.0
$
45.9
$
7.8
$
7.1
Accumulated benefit obligation ............
34.1
37.9
7.8
7.1
Costs
The components of net periodic benefit costs recognized in the Consolidated Statements of Earnings (Loss) were as
follows:
Pension
Postretirement
Domestic
International
Domestic
Years ended June 30,
2021
2020
2019
2021
2020
2019
2021
2020
2019
(In millions)
Components of net periodic benefit costs
Service cost .............................................. $ 9.3 $ 9.7 $ 11.5
$ — $
— $ 0.1
$ — $ — $ —
Interest cost ..............................................
3.3
5.1
6.5
10.0
14.4 16.9
0.2
0.3
0.3
Expected return on plan assets ................. (7.8) (9.2) (9.7) (16.9) (18.4) (31.5)
—
—
—
Prior service cost amortization ................
0.4
0.5
0.5
0.2
0.2
—
—
—
—
Actuarial loss (gain) amortization ...........
2.6
2.8
1.9
—
—
—
(0.3) (0.5) (0.6)
Settlement charges (credit) ......................
1.1 13.0
2.7
—
1.2
(4.1)
—
—
—
Contractual termination benefits .............
—
—
1.3
—
—
—
—
—
—
Net periodic benefit costs (credit)............ $ 8.9 $ 21.9 $ 14.7
$ (6.7) $ (2.6) $ (18.6) $ (0.1) $ (0.2) $ (0.3)
The pension settlement charges recorded in fiscal 2021 and 2020 related to lump-sum payments as a result of
executive retirements and a resignation in the prior fiscal year and cash distributions paid by the pension plan during
fiscal 2020 exceeding a prescribed threshold. This required that a portion of pension losses within accumulated
109
other comprehensive loss be realized in the period that the related pension liabilities were settled. The international
settlement charge recorded in fiscal 2020 was related to the final settlement of the Company's German pension plan.
The components of net periodic benefit costs (credit), other than the service cost component, are included in non-
operating income (expense), net in the Consolidated Statements of Earnings (Loss). The amortization of amounts
related to unrecognized prior service costs/credit and net actuarial gain/loss were reclassified out of other
comprehensive income (loss) as components of net periodic benefit costs.
Amounts recognized in the accumulated other comprehensive loss component of shareholders’ equity for Company-
sponsored plans were as follows:
Pension
Postretirement
Domestic
International
Domestic
June 30,
2021
2020
2021
2020
2021
2020
(In millions)
Unrecognized net actuarial losses (gains), net of taxes .... $
2.7 $ 25.4
$ 66.2 $ 27.5
$ (1.6) $ (1.3)
Unrecognized prior service cost, net of taxes ...................
0.5
0.7
8.7
6.7
—
—
Total .................................................................................. $
3.2 $ 26.1
$ 74.9 $ 34.2
$ (1.6) $ (1.3)
Assumptions
Benefit obligations were determined using the following weighted average assumptions:
Pension
Postretirement
Domestic
International
Domestic
June 30,
2021
2020
2021
2020
2021
2020
Weighted average assumptions
Discount rate ............................................................
2.55 %
2.43 %
1.57 %
1.17 %
2.75 %
2.65 %
Rate of compensation increase .................................
3.01 %
3.07 %
n/a
n/a
3.50 %
3.50 %
Cash balance interest credit rate ...............................
2.14 %
2.08 %
n/a
n/a
n/a
n/a
n/a - Not applicable
Net periodic benefit costs were determined using the following weighted average assumptions:
Pension
Postretirement
Domestic
International
Domestic
Years ended June 30,
2021
2020
2019
2021
2020
2019
2021
2020
2019
Weighted average assumptions
Discount rate ................................... 2.43 % 3.39 % 4.03 %
1.17 % 2.24 % 2.57 %
2.65 % 3.45 % 4.10 %
Expected return on plan assets ........ 7.00 % 8.00 % 8.00 %
1.70 % 2.20 % 3.89 %
n/a
n/a
n/a
Rate of compensation increase ........ 3.07 % 3.09 % 3.50 %
n/a
n/a
n/a
3.50 % 3.50 % 3.50 %
n/a - Not applicable
110
The assumed health care cost trend rates used to measure the expected cost of benefits were as follows:
Postretirement
Assumed healthcare cost trend rates as of June 30,
2021
2020
2019
Rate of increase in health care cost levels
Initial level .....................................................................
6.50 %
5.50 %
6.00 %
Ultimate level .................................................................
5.00 %
5.00 %
5.00 %
Years to ultimate level ...................................................
6 years
2 years
3 years
Pension expense is calculated using a number of actuarial assumptions, including an expected long-term rate of
return on plan assets and a discount rate. In developing the expected long-term rate of return on plan assets, the
Company considered long-term historical rates of return, plan asset allocations as well as the opinions and outlooks
of investment professionals and consulting firms. Returns projected by such consultants and economists are based
on broad equity and bond indices. The objective is to select an average rate of earnings expected on existing plan
assets and expected contributions to the plan during the year. The Company reviews this long-term assumption on a
periodic basis.
The value (market-related value) of plan assets is multiplied by the expected long-term rate of return on plan assets
to compute the expected return on plan assets, a component of net periodic pension cost. The market-related value
of plan assets is a calculated value that recognizes changes in fair value over three years.
Plan Assets
The targeted and weighted average asset allocations by asset category for investments held by the Company’s
pension plans are as follows:
Domestic
International
2021 Allocation
2020 Allocation
2021 Allocation
2020 Allocation
June 30,
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Equity securities ..........................
63 %
66 %
70 %
69 %
2 %
2 %
7 %
6 %
Fixed-income securities ...............
37 %
32 %
30 %
30 %
61 %
62 %
55 %
56 %
Other securities 1 .........................
— %
2 %
— %
1 %
37 %
36 %
38 %
38 %
Total .............................................
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
1 Other primarily includes pooled investment funds and an insurance buy-in contract.
Meredith’s investment policy for domestic plans seeks to maximize investment returns while balancing the
Company’s tolerance for risk. The plan fiduciaries oversee the investment allocation process. This includes
selecting investment managers, setting long-term strategic targets, and monitoring asset allocations. Target
allocation ranges are guidelines, not limitations, and plan fiduciaries may occasionally approve allocations above or
below a target range, or elect to rebalance the portfolio within the targeted range. The investment portfolio contains
a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across
domestic and international stocks and between growth and value stocks and small and large capitalizations. The
primary investment strategy currently employed is a dynamic target allocation method that periodically rebalances
among various investment categories depending on the current funded position. This program is designed to actively
move from return-seeking investments (such as equities) toward liability-hedging investments (such as fixed-
income) as funding levels improve. The reverse effect occurs when funding levels decrease.
The trustees of the IPC Media Pension Scheme (IPC Plan) defined benefit pension plan in the U.K. have delegated
the day-to-day investment decisions of the IPC Plan to a large international fiduciary manager and utilize an
investment manager to monitor investment performance and the reporting of the fiduciary manager. The investment
objective of the IPC Plan is to invest the assets prudently with the intention that the benefits promised to the
111
members are provided. Funding level based de-risking triggers have been established such that the investment
strategy evolves as the funding level moves along an agreed glide path. As the funding level improves, the
investment strategy will de-risk. Each trigger level specifies a minimum interest rate and hedge rate ratio and a
maximum allocation to growth assets, which target a diversified portfolio using specialist managers and asset
classes.
Equity securities did not include any Meredith Corporation common or class B stock at June 30, 2021 or 2020.
Fair value measurements for domestic pension plan assets were as follows:
(In millions)
Total
Fair Value
Quoted
Prices
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
June 30, 2021
Investments in registered investment companies
Equity ................................................................... $
99.5
$
75.8
$
23.7
$
—
Fixed Income .......................................................
48.5
8.3
40.2
—
Pooled separate accounts .........................................
2.4
—
2.4
—
Total assets at fair value .......................................... $
150.4
$
84.1
$
66.3
$
—
June 30, 2020
Investments in registered investment companies
Equity ................................................................... $
86.2
$
63.9
$
22.3
$
—
Fixed Income .......................................................
38.0
—
38.0
—
Pooled separate accounts .........................................
1.6
—
1.6
—
Total assets at fair value .......................................... $
125.8
$
63.9
$
61.9
$
—
Fair value measurements for international pension plan assets were as follows:
(In millions)
Total
Fair Value
Quoted
Prices
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
June 30, 2021
Cash and cash equivalents ....................................... $
4.8
$
4.8
$
—
$
—
Pooled investments
Equity ...................................................................
12.9
1.1
11.8
—
Fixed Income .......................................................
55.3
6.8
48.5
—
Other ....................................................................
584.9
—
584.9
—
Insurance buy-in contract ........................................
365.0
—
—
365.0
Total assets at fair value .......................................... $ 1,022.9
$
12.7
$
645.2
$
365.0
June 30, 2020
Cash and cash equivalents ....................................... $
10.3
$
8.9
$
1.4
$
—
Pooled investments
Equity ...................................................................
58.8
1.5
57.3
—
Fixed Income .......................................................
277.2
9.3
267.9
—
Other ....................................................................
253.6
—
253.6
—
Insurance buy-in contract ........................................
349.0
—
—
349.0
Total assets at fair value .......................................... $
948.9
$
19.7
$
580.2
$
349.0
112
The international pension plans hold investments in liability matching funds whose objective is to provide leveraged
returns equal to that of the liabilities. In order to do so, these funds invest in U.K. Treasury Gilt bonds, Gilt Total
Return Swaps, Repurchase Transactions, and cash or money markets to provide liquidity to meet payment
obligations or post as collateral in the derivative transactions they enter into. These liability matching funds are
included in Other pooled investments in the table above.
The trustees of the IPC Plan implemented a new investment strategy in fiscal 2020 to further reduce risk without
adversely affecting return. The trustees entered into an insurance buy-in contract with a private limited life
insurance company to insure a portion of the IPC Plan, covering approximately 30 percent of IPC Plan participants,
which is intended to provide payments designed to equal all future designated contractual benefit payments to
covered participants. The benefit obligation was not transferred to the insurer, and the Company remains
responsible for paying pension benefits. The assets and liabilities with respect to insured participants are assumed to
match (i.e., the full benefits have been insured). The initial value of the asset associated with this contract was equal
to the premium paid to secure the contract and is adjusted each reporting period to reflect the estimated fair value of
the premium that would be paid for such a contract at that time. As the valuation of this asset is judgmental, and
there are no observable inputs associated with the valuation, the insurance buy-in contract is presented as a Level 3
investment. Refer to Note 12 for a discussion of the three levels in the hierarchy of fair values.
The following table provides a reconciliation of the beginning and ending balances of assets measured at fair value
on a recurring basis using significant unobservable inputs (Level 3):
Year ended June 30,
2021
2020
(In millions)
Balance at beginning of year ......................................................... $
349.0
$
—
Purchases .......................................................................................
—
353.6
Settlements ....................................................................................
(11.7)
—
Change in fair value .......................................................................
(16.1)
(3.2)
Foreign currency translation ..........................................................
43.8
(1.4)
Balance at end of year ................................................................... $
365.0
$
349.0
There were no transfers in or out of Level 3 investments for the years ended June 30, 2021 and 2020.
Cash Flows
Although the Company does not have a minimum funding requirement for the domestic pension plans in fiscal
2022, the Company is currently determining what voluntary pension plan contributions, if any, will be made in
fiscal 2022 to the domestic plan. Actual contributions will be dependent upon investment returns, changes in
pension obligations, and other economic and regulatory factors. Meredith expects to contribute $0.6 million to its
postretirement plan in fiscal 2022.
Monthly contributions of £0.9 million are required to be made to the IPC Plan. In the event that on November 25,
2021, the IPC Plan has a funding deficit valuing its liabilities with a gilts plus 50 basis point discount rate, the
Company, as the sponsor of the IPC Plan, will make a contribution equal to that funding deficit. In the event that on
November 25, 2025, the IPC Plan has a funding deficit valuing its liabilities with a gilts flat discount rate, the
Company will make a contribution equal to 50 percent of that funding deficit. In the event that on November 25,
2026, the IPC Plan has a funding deficit valuing its liabilities with a gilts flat discount rate, the Company will make
a contribution equal to 50 percent of that funding deficit. In the event that on November 25, 2027, the IPC Plan has
a funding deficit valuing its liabilities with a gilts flat discount rate, the Company will make a contribution equal to
that funding deficit. Contributions shall cease to be payable from the date that the IPC Plan is confirmed to be fully
funded.
113
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:
Years ending June 30,
Pension
Benefits
Postretirement
Benefits
(In millions)
Domestic
International
Domestic
2022 .......................................
$
17.3
$
18.8
$
0.6
2023 .......................................
16.9
19.4
0.6
2024 .......................................
16.2
20.4
0.5
2025 .......................................
19.3
22.7
0.5
2026 .......................................
18.1
23.0
0.5
2027-2031 ..............................
74.5
131.4
2.3
Other
The Company maintains collateral assignment split-dollar life insurance arrangements on certain key officers and
retirees. The net periodic pension cost for fiscal 2021, 2020, and 2019 was $0.2 million, $0.2 million, and $0.2
million, respectively, and the accrued liability at June 30, 2021 and 2020, was $3.0 million and $3.1 million,
respectively.
15. Share-based Compensation
Meredith has an employee stock purchase plan and a stock incentive plan, both of which are shareholder-approved.
More detailed descriptions of these plans follow. Compensation expense recognized for these plans was $17.5
million in fiscal 2021, $13.9 million in fiscal 2020, and $22.9 million in fiscal 2019. The total income tax benefit
recognized in earnings (loss) was $3.8 million in fiscal 2021, $3.2 million in fiscal 2020, and $4.9 million in fiscal
2019.
Stock Incentive Plan
Meredith has a stock incentive plan that permits the Company to issue stock options, restricted stock, stock
equivalent units, restricted stock units, and performance shares to key employees and directors of the Company.
Approximately 5.0 million shares remained available for future awards under the plan as of June 30, 2021. Forfeited
awards, shares deemed to be delivered to us on tender of stock in payment for the exercise price of options, and
shares reacquired pursuant to tax withholding on option exercises and the vesting of restricted shares and restricted
stock units increase shares available for future awards. The plan is designed to provide an incentive to contribute to
the achievement of long-range corporate goals; provide flexibility in motivating, attracting, and retaining
employees; and to align more closely the employees’ interests with those of shareholders.
The Company has awarded restricted stock and restricted stock units to eligible key employees and non-employee
directors under the plan. In addition, certain awards are granted based on specified levels of Company stock
ownership. All awards have restriction periods tied primarily to employment and/or service. The awards granted to
employees generally vest three or five years from the date of the grant, and the awards granted to directors vest one-
third each year during the three-year period from date of grant. The grant date of awards is the date the
Compensation Committee of the Board of Directors approves the granting of the awards or a date thereafter as
specified by the Committee. The awards are recorded at the market value of traded shares on the date of the grant as
unearned compensation. The initial values of the grants are amortized over the vesting periods.
114
The Company’s restricted stock activity during the year ended June 30, 2021, was as follows:
Restricted Stock
Shares
Weighted Average
Grant Date
Fair Value
Aggregate
Intrinsic
Value
(Shares in thousands and Aggregate Intrinsic Value in millions)
Nonvested at June 30, 2020 .......................................
23.2
$ 42.90
Granted .......................................................................
38.0
15.98
Vested ........................................................................
(11.2)
44.46
Nonvested at June 30, 2021 .......................................
50.0
22.09
$
2.2
As of June 30, 2021, there was no unearned compensation cost related to restricted stock granted under the plan.
The weighted average grant date fair value of restricted stock granted during the years ended June 30, 2021, 2020,
and 2019, was $15.98, $35.39, and $58.76, respectively. The total fair value of shares vested during the years ended
June 30, 2021, 2020, and 2019, was $0.2 million, $0.4 million, and $0.8 million, respectively.
The Company’s restricted stock unit activity during the year ended June 30, 2021, was as follows:
Restricted Stock Units
Units
Weighted Average
Grant Date
Fair Value
Aggregate
Intrinsic
Value
(Units in thousands and Aggregate Intrinsic Value in millions)
Nonvested at June 30, 2020 .....................................
531.5
$ 44.31
Granted .................................................................... 1,059.7
14.33
Vested ......................................................................
(127.8)
49.51
Forfeited ...................................................................
(98.4)
23.94
Nonvested at June 30, 2021 ..................................... 1,365.0
22.01
$
59.3
As of June 30, 2021, there was $8.9 million of unearned compensation cost related to restricted stock units granted
under the plan. That cost is expected to be recognized over a weighted average period of 1.9 years. The weighted
average grant date fair value of restricted stock units granted during the years ended June 30, 2021, 2020, and 2019,
was $14.33, $35.50, and $52.55, respectively. The total fair value of shares vested during the years ended June 30,
2021, 2020, and 2019, was $2.0 million, $7.9 million, and $13.0 million, respectively.
Meredith also has outstanding stock equivalent units resulting from the deferral of compensation of employees and
directors under various deferred compensation plans. The period of deferral is specified when the deferral election is
made. These stock equivalent units are issued at the market price of the underlying stock on the date of deferral. In
addition, shares of restricted stock and restricted stock units may be converted to stock equivalent units upon
vesting.
The following table summarizes the activity for stock equivalent units during the year ended June 30, 2021:
Stock Equivalent Units
Units
Weighted Average
Issue Date
Fair Value
(Units in thousands)
Balance at June 30, 2020 ...........................................
207.6
$ 38.42
Additions ...................................................................
20.0
15.90
Converted to common stock ......................................
(64.8)
35.03
Balance at June 30, 2021 ............................................
162.8
37.00
115
The stock equivalent units outstanding at June 30, 2021, had $1.0 million aggregate intrinsic value. The total
intrinsic value of stock equivalent units converted to common stock was zero for the year ended June 30, 2021,
compared to zero in fiscal 2020, and $1.7 million for fiscal 2019.
Meredith has granted nonqualified stock options to certain employees and directors under the plan. The grant date of
options issued is the date the Compensation Committee of the Board of Directors approves the granting of the
options or a date thereafter as specified by the Committee. The exercise price of options granted is set at the fair
value of the Company’s common stock on the grant date. All options granted under the plan expire at the end of 10
years. Options granted to employees vest three years from the date of grant. Options granted to directors vest one-
third each year during the three-year period from date of grant.
A summary of stock option activity and weighted average exercise prices follows:
Stock Options
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(Options in thousands and Aggregate Intrinsic Value in millions)
Outstanding July 1, 2020 ............................................. 2,896.0
$ 48.57
Granted ........................................................................ 1,200.5
14.46
Exercised .....................................................................
(63.5)
27.87
Forfeited ......................................................................
(152.4)
32.64
Outstanding June 30, 2021 .......................................... 3,880.6
39.16
7.0
$
37.3
Exercisable June 30, 2021 ........................................... 1,933.3
$ 51.49
5.4
$
1.6
The fair value of each option is estimated as of the date of grant using the Black-Scholes option-pricing model. The
expected volatility was based on a blend of historical volatility of the Company’s common stock taking into
consideration Meredith’s capital structure and implied volatility in market traded options on the Company’s
common stock with a term greater than six months. The expected life of options granted used the simplified method
under U.S. GAAP to determine the expected life. The risk-free rate for periods that coincide with the expected life
of the options is based on the U.S. Treasury yield curve in effect at the time of grant.
The following summarizes the assumptions used in determining the fair value of options granted:
Years ended June 30,
2021
2020
2019
Risk-free interest rate ....................................
0.4-0.7%
1.4-1.8%
2.3%-3.0%
Expected dividend yield ................................
— %
5 %
4 %
Expected option life ......................................
6-6.5 yrs
6-6.5 yrs
6-6.5 yrs
Expected stock price volatility ......................
52-56%
40 %
33-35%
The weighted average grant date fair value of options granted during the years ended June 30, 2021, 2020, and
2019, was $5.56, $8.64, and $12.26, respectively. The total intrinsic value of options exercised during the years
ended June 30, 2021, 2020, and 2019, was $0.6 million, $0.4 million, and $1.7 million, respectively. As of June 30,
2021, there was $3.2 million in unrecognized compensation cost for stock options granted under the plan. This cost
is expected to be recognized over a weighted average period of 1.9 years.
Cash received from option exercises under all share-based payment plans for the years ended June 30, 2021, 2020,
and 2019 was $1.8 million, $1.0 million, and $4.4 million, respectively. The actual tax benefit realized for the tax
deductions from option exercises totaled $0.2 million, $0.1 million, and $0.4 million, respectively, for the years
ended June 30, 2021, 2020, and 2019.
116
Employee Stock Purchase Plan
On January 1, 2020, Meredith reintroduced a previously suspended Employee Stock Purchase Plan (ESPP). The
ESPP allows employees to purchase shares of Meredith common stock at a 5 percent discount on the market value
at the end of each quarter through bi-weekly payroll deductions. Shares purchased through the ESPP that are held
for two years qualify for a 15 percent Company match on the original purchase price in the form of additional shares
of Meredith stock. The ESPP has quarterly offering periods. There were 2 million common shares authorized and
approximately 0.6 million shares remained available for issuance under the ESPP as of June 30, 2021.
Compensation cost for the ESPP was based on the fair value of the employee match amortized over the match
period of two years. In fiscal 2021, the Company issued approximately 0.1 million ESPP shares that had a weighted
average market price per share at purchase of $22.57 and an average purchase price per share of $21.44. In fiscal
2020, the Company issued approximately 0.1 million ESPP shares that had a weighted average market price per
share at purchase of $13.43 and an average purchase price per share of $12.76.
16. Common Stock
The Company has two classes of common stock outstanding: common and class B. Class B stock, which has 10
votes per share, is not transferable as class B stock except to family members of the holder or certain other related
entities. At any time, class B stock is convertible, share for share, into common stock with one vote per share.
Class B stock transferred to persons or entities not entitled to receive it as class B stock will automatically be
converted and issued as common stock to the transferee. The principal market for trading the Company’s common
stock is the New York Stock Exchange (trading symbol MDP). No separate public trading market exists for the
Company’s class B stock.
Each class of common stock receives equal dividends per share. The Company paused dividends on common and
class B stock after the March 13, 2020, payment. Future decisions to pay or to increase or decrease dividends are at
the discretion of the Board of Directors and will be dependent on the Company’s operating performance, financial
condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of
the Company’s debt facilities, and such other factors that the Board considers relevant.
From time to time, the Company’s Board of Directors has authorized the repurchase of shares of the Company’s
common stock and class B stock. In May 2014, the Board approved the repurchase of $100.0 million of shares. As
of June 30, 2021, $45.4 million remained available under the current authorizations for future repurchases.
Repurchases of the Company’s common and class B stock were as follows:
Years ended June 30,
2021
2020
2019
(In millions)
Number of shares ........................
0.1
0.1
0.2
Cost at market value ................... $
2.9
$
4.7
$
10.0
Shares deemed to be delivered to the Company on tender of stock in payment for the exercise price of options do
not reduce the repurchase authority granted by the Board. Shares tendered for the exercise price of stock options
were minimal at a cost of $1.8 million in fiscal 2021, minimal at a cost of $1.0 million in fiscal 2020, and 0.1
million shares at a cost of $4.1 million in fiscal 2019.
117
17. Earnings (Loss) per Common Share
The calculation of basic earnings (loss) per common share for each year is based on the weighted average number of
common and class B shares outstanding during the year. The calculation of diluted earnings (loss) per common
share for each year is based on the weighted average number of common and class B shares outstanding during the
year plus the effect, if any, of dilutive common stock equivalent shares.
The following table presents the calculations of basic earnings (loss) per common share:
Years ended June 30,
2021
2020
2019
(In millions except per share data)
Net earnings (loss) ................................................................................................... $
306.6 $ (234.3) $
46.3
Participating warrants dividend ...............................................................................
—
(2.8)
(3.6)
Series A preferred stock dividend ............................................................................
—
(56.5)
(55.9)
Accretion of Series A preferred stock .....................................................................
—
(18.2)
(17.6)
Loss on redemption of Series A preferred stock .....................................................
—
(163.6)
—
Other securities dividends ........................................................................................
—
(0.6)
(1.2)
Undistributed earnings allocated to participating securities ....................................
(15.2)
—
—
Basic earnings (loss) attributable to common shareholders .................................... $
291.4 $ (476.0) $
(32.0)
Basic weighted average common shares outstanding ..............................................
46.2
45.7
45.3
Basic earnings (loss) per common share ................................................................. $
6.31 $ (10.41) $
(0.71)
Diluted earnings (loss) per common share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock. The dilutive effects of these
share-based awards were computed using the two-class method.
Years ended June 30,
2021
2020
2019
(In millions except per share data)
Basic weighted average common shares outstanding ..............................................
46.2
45.7
45.3
Dilutive effect of stock options and equivalents ......................................................
0.3
—
0.2
Diluted weighted average common shares outstanding ...........................................
46.5
45.7
45.5
Diluted earnings (loss) attributable to common shareholders ................................. $
291.4 $ (476.0) $
(32.0)
Diluted earnings (loss) per common share ..............................................................
6.27
(10.41)
(0.70)
For the year ended June 30, 2021, 1.5 million warrants and 0.3 million shares of restricted stock were excluded from
the computation of diluted earnings per common share. These securities have an antidilutive effect on the earnings
per common share calculation (the diluted earnings per common share becoming more than the basic earnings per
common share). Therefore, these securities are not taken into account in determining the weighted average number
of common shares for the calculation of diluted earnings per common share for the year ended June 30, 2021.
For the year ended June 30, 2020, 0.7 million convertible preferred shares, 1.6 million warrants, and 0.1 million
shares of restricted stock were not included in the computation of diluted loss per common share. These securities
have an antidilutive effect on the loss per common share calculation (the diluted loss per common share becoming
less negative than the basic loss per common share). Therefore, these securities are not taken into account in
determining the weighted average number of common shares for the calculation of diluted loss per common share
for the year ended June 30, 2020.
118
For the year ended June 30, 2019, 0.2 million options were included in the computation of diluted loss per common
share while being antidilutive (the diluted loss per share becoming less negative than basic loss per share). These
shares are dilutive (the diluted earnings per common share becoming less than basic earnings per common share)
when calculating the diluted earnings per common share for income from continuing operations, which is the
control number when determining the dilutive impact of securities in all earnings (loss) per common share
calculations. Therefore, these securities are included in all diluted earnings (loss) per common share calculations for
the year ended June 30, 2019. In addition, 0.7 million convertible preferred shares, 1.6 million warrants, 0.3 million
common stock equivalents, and 0.1 million shares of restricted stock were not included in the computation of
diluted loss per common share. These securities have an antidilutive effect on the loss per common share calculation
(the diluted loss per common share becoming less negative than basic loss per common share). Therefore, these
securities are not taken into account in determining the weighted average number of common shares for the
calculation of diluted loss per share for the year ended June 30, 2019.
In addition, antidilutive options excluded from the above calculations totaled 3.7 million for the year ended June 30,
2021 ($53.88 weighted average exercise price), 3.8 million for the year ended June 30, 2020 ($54.66 weighted
average exercise price), and 2.5 million for the year ended June 30, 2019 ($63.86 weighted average exercise price).
In the years ended June 30, 2021, 2020, and 2019, 0.1 million, a minimal amount, and 0.1 million options were
exercised to purchase common shares, respectively.
18. Other comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events
and circumstances from nonowner sources. Comprehensive income (loss) includes net earnings (loss) as well as
items of other comprehensive income (loss).
The following table summarizes the items of other comprehensive income (loss) and the accumulated other
comprehensive loss balances:
Minimum
Pension/Post
Retirement
Liability
Adjustments
Foreign
Currency
Translation
Accumulated
Other
Comprehensive
Loss
(In millions)
Balance at June 30, 2018 ........................................................
$ (23.8)
$ (12.9)
$
(36.7)
Current-year adjustments, pre-tax ......................................
(9.1)
(2.8)
(11.9)
Tax expense .......................................................................
2.3
—
2.3
Other comprehensive loss ...........................................
(6.8)
(2.8)
(9.6)
Balance at June 30, 2019 ........................................................
(30.6)
(15.7)
(46.3)
Current-year adjustments, pre-tax ......................................
(28.7)
(6.8)
(35.5)
Tax benefit .........................................................................
(0.6)
—
(0.6)
Other comprehensive loss ...........................................
(29.3)
(6.8)
(36.1)
Balance at June 30, 2020 ........................................................
(59.9)
(22.5)
(82.4)
Current-year adjustments, pre-tax ......................................
(9.5)
21.7
12.2
Tax benefit .........................................................................
(8.2)
—
(8.2)
Other comprehensive income (loss) ............................
(17.7)
21.7
4.0
Balance at June 30, 2021 ........................................................
$ (77.6)
$
(0.8)
$
(78.4)
119
19. Financial Information about Industry Segments
Meredith is a diversified media company focused primarily on service journalism. On the basis of products and
services, the Company has established two reportable segments: national media and local media. The national media
segment focuses on the distribution of our nationally recognized brands through magazine publishing, digital media,
brand licensing, database-related activities, and other related operations. The local media segment consists primarily
of the operations of network-affiliated television stations. Virtually all of the Company’s revenues are generated in
the U.S. and substantially all of the assets reside within the U.S. Intersegment transactions are eliminated.
There are two principal financial measures reported to the chief executive officer (the chief operating decision
maker) for use in assessing segment performance and allocating resources. Those measures are operating profit and
earnings before interest, taxes, depreciation, and amortization (EBITDA). Operating profit for segment reporting,
disclosed below, is revenues less operating costs and unallocated corporate expenses. Segment operating expenses
include allocations of certain centrally incurred costs such as employee benefits, occupancy, information systems,
accounting services, internal legal staff, and human resources administration. These costs are allocated based on
actual usage or other appropriate methods, primarily number of employees. Unallocated corporate expenses are
corporate overhead expenses not attributable to the operating groups. Interest income and expense are not allocated
to the segments. In accordance with authoritative guidance on disclosures about segments of an enterprise and
related information, EBITDA is not presented below.
Significant non-cash items included in segment operating expenses other than depreciation and amortization of
fixed and intangible assets include impairments of national media goodwill, operating lease assets and associated
leasehold improvements and furniture and fixtures, and trademarks; impairment of a local media FCC license; and
the amortization of broadcast rights in the local media segment. Impairment of national media goodwill was $252.7
million in fiscal 2020. The impairments of an operating lease asset and associated leasehold improvements and
furniture and fixtures totaled $87.9 million in fiscal 2020. National media trademarks were impaired by $26.4
million in fiscal 2020 and $41.8 million in fiscal 2019. Fiscal 2020 impairment of the local media FCC license was
$22.3 million. Broadcast rights amortization totaled $15.8 million in fiscal 2021, $19.0 million in fiscal 2020, and
$20.0 million in fiscal 2019.
Segment assets include intangible, fixed, and all other non-cash assets identified with each segment. Jointly used
assets such as office buildings and information technology equipment are allocated to the segments by appropriate
methods, primarily number of employees. Unallocated corporate assets consist primarily of cash and cash items,
assets allocated to or identified with corporate staff departments, and other miscellaneous assets not assigned to a
segment.
On July 1, 2021, the operating structure of the Company was changed, resulting in a reportable segment
realignment. The operating structure change resulted in a split in the existing national media group into two
reportable segments. Effective for the first quarter of fiscal 2022, the Company will have three established
reportable segments: digital, magazine, and local media.
120
The following table presents financial information by segment:
Years ended June 30,
2021
2020
2019
(In millions)
Revenues
National media ....................................................................................... $
2,023.5
$
2,081.6
$
2,326.6
Local media ............................................................................................
958.8
769.3
863.8
Total revenues, gross ..............................................................................
2,982.3
2,850.9
3,190.4
Intersegment revenue elimination ..........................................................
(4.9)
(2.3)
(1.9)
Total revenue .......................................................................................... $
2,977.4
$
2,848.6
$
3,188.5
Segment profit (loss)
National media ....................................................................................... $
351.2
$
(167.7)
$
126.0
Local media ............................................................................................
314.0
146.0
278.3
Unallocated corporate ............................................................................
(103.8)
(72.4)
(117.3)
Income (loss) from operations ................................................................
561.4
(94.1)
287.0
Non-operating income (expense), net ....................................................
10.8
(1.3)
24.2
Interest expense, net ...............................................................................
(178.6)
(145.8)
(170.6)
Earnings (loss) from continuing operations before income taxes .......... $
393.6
$
(241.2)
$
140.6
Depreciation and amortization
National media ....................................................................................... $
129.9
$
176.5
$
206.5
Local media ............................................................................................
31.5
38.9
36.6
Unallocated corporate ............................................................................
1.6
4.5
4.5
Total depreciation and amortization ....................................................... $
163.0
$
219.9
$
247.6
Assets
National media ....................................................................................... $
3,963.5
$
4,110.2
$
4,606.8
Local media ............................................................................................
1,137.1
1,137.1
1,192.3
Unallocated corporate ............................................................................
465.2
262.8
337.8
Total assets ............................................................................................. $
5,565.8
$
5,510.1
$
6,136.9
Capital expenditures
National media ....................................................................................... $
19.4
$
19.9
$
13.0
Local media ............................................................................................
9.9
19.5
25.1
Unallocated corporate ............................................................................
5.9
16.0
8.3
Total capital expenditures ...................................................................... $
35.2
$
55.4
$
46.4
121
Meredith Corporation and Subsidiaries
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
Additions
Reserves Deducted from Receivables in
the Consolidated Financial Statements:
Balance at
beginning of
period
Charged to
costs and
expenses
Charged to
other
accounts
Deductions
Balance at
end of
period
(In millions)
Year ended June 30, 2021
Reserve for doubtful accounts ........... $
25.6
$
1.2 $
(2.8) 1 $
(8.6) $
15.4
Reserve for returns ............................
3.6
—
—
(3.6)
—
Income tax valuation allowance ........
17.2
0.3
—
—
17.5
Total ............................................. $
46.4
$
1.5 $
(2.8)
$
(12.2) $
32.9
Year ended June 30, 2020
Reserve for doubtful accounts ........... $
15.4
$
15.8 $
—
$
(5.6) $
25.6
Reserve for returns ............................
5.1
5.1
2.4
2
(9.0)
3.6
Income tax valuation allowance ........
21.7
—
—
(4.5)
17.2
Total ............................................. $
42.2
$
20.9 $
2.4
$
(19.1) $
46.4
Year ended June 30, 2019
Reserve for doubtful accounts ........... $
12.2
$
4.8 $
—
$
(1.6) $
15.4
Reserve for returns ............................
2.2
8.8
3.4 3
(9.3)
5.1
Income tax valuation allowance ........
21.1
0.6
—
—
21.7
Total ............................................. $
35.5
$
14.2 $
3.4
$
(10.9) $
42.2
1
Amount is the result of the Company’s adoption of ASU 2016-13 on July 1, 2020. Refer to Note 1 for further discussion.
2
Amounts primarily charged against revenue accounts.
3
As a result of the Company's adoption of ASC 606 effective July 1, 2018, the Company recorded a reserve for underperformance of spot
advertising of $3.4 million using the modified retrospective method.
122
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Meredith maintains disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (Exchange Act), that are designed to provide reasonable assurance
that (1) information that is required to be disclosed in Exchange Act reports is recorded, processed, summarized,
and reported within the time periods specified in the SEC rules and forms and (2) such information is accumulated
and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosures.
An evaluation was conducted under the supervision and with the participation of the Chief Executive Officer and
the Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures as of June 30,
2021. Based on this evaluation, Meredith’s Chief Executive Officer and Chief Financial Officer have concluded that
the Company’s disclosure controls and procedures were effective as of June 30, 2021.
Our management, including the Chief Executive Officer and the Chief Financial Officer, has concluded that our
consolidated financial statements present fairly, in all material respects, our financial position, results of operations,
and cash flows for the years presented in this Form 10-K, in conformity with U.S. GAAP.
Management’s Report on Internal Control over Financial Reporting
Meredith’s management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with U.S. GAAP. All internal
control systems, no matter how well designed, have inherent limitations. Therefore, even those systems that were
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation and they may not prevent or detect misstatements.
The Company, under the supervision of the Chief Executive Officer and the Chief Financial Officer and the
oversight of the Board of Directors, conducted an evaluation of the effectiveness of the design and operation of
internal control over financial reporting as of June 30, 2021, based on the criteria established in Internal Control-
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO Framework). Based on the results of its evaluation, management concluded that our internal control over
financial reporting was effective as of June 30, 2021.
Report of Registered Public Accounting Firm
The Company’s independent registered public accounting firm, KPMG LLP (KPMG), who audited the consolidated
financial statements included in this Form 10-K, has issued an audit report on the effectiveness of the Company’s
internal control over financial reporting. KPMG's report on the effectiveness of the Company's internal control over
financial reporting is included with the Consolidated Financial Statements included in this report under Item 8-
Financial Statements and Supplementary Data and is incorporated in this item by reference.
123
Changes in Internal Control over Financial Reporting
There has been no change in the Company's internal control over financial reporting during the fiscal quarter ended
June 30, 2021, that has materially affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting. We have not experienced any material impact to our internal control over financial
reporting despite the fact that the majority of our accounting, finance, and legal employees are working remotely
due to the COVID-19 pandemic, but we are continually monitoring the COVID-19 pandemic and its effects on the
design and operating effectiveness of our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
The Board of Directors of the Company has determined that the Company’s 2021 annual meeting of shareholders
will be held December 29, 2021 (the 2021 Annual Meeting). The time and location of the 2021 Annual Meeting,
and the matters to be considered, will be as set forth in the Company’s definitive proxy statement for the 2021
Annual Meeting to be filed with the SEC.
Because the expected date of the 2021 Annual Meeting represents a change of more than 30 calendar days from the
date of the anniversary of the Company’s 2020 annual meeting of shareholders, the Company is informing
shareholders of this change and the updated deadline for shareholders to submit proposals intended for inclusion in
our proxy statement for consideration at the 2021 Annual Meeting in accordance with the rules and regulations of
the SEC. Accordingly, to be timely, shareholders wishing to submit proposals intended to be considered for
inclusion in our proxy statement relating to the 2021 Annual Meeting must ensure that proper notice is received by
the Company at its offices no later than the close of business on September 28, 2021, which we consider a
reasonable time before we will begin printing and mailing proxy materials. Any proposal intended to be considered
for inclusion in our proxy statement must comply with Rule 14a-8 of Regulation 14A of the proxy rules of the SEC.
The submission of a shareholder proposal does not guarantee that it will be included in the Company’s proxy
materials.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this Item will be set forth in Registrant’s Proxy Statement for the Annual Meeting of
Shareholders to be held on December 29, 2021, under the captions “Election of Directors,” “Corporate
Governance,” “Meetings and Committees of the Board” and in Part I of this Form 10-K beginning on page 11 under
the caption “Information about our Executive Officers” and is incorporated herein by reference.
124
The Company has adopted a Code of Business Conduct and Ethics and a Code of Ethics for CEO and Senior
Financial Officers. These codes are applicable to the Chief Executive Officer, Chief Financial Officer, Controller,
and any persons performing similar functions. The Company’s Code of Business Conduct and Ethics and the
Company’s Code of Ethics for CEO and Senior Financial Officers are available free of charge on the Company’s
corporate website at meredith.com. Copies of the codes are also available free of charge upon written request to the
Secretary of the Company. The Company will post any amendments to the Code of Business Conduct and Ethics
and the Code of Ethics for CEO and Senior Financial Officers, as well as any waivers that are required to be
disclosed by the rules of either the U.S. Securities and Exchange Commission or the New York Stock Exchange on
the Company’s corporate website.
There have been no material changes to the procedures by which shareholders of the Company may recommend
nominees to the Company’s Board of Directors.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will be set forth in Registrant’s Proxy Statement for the Annual Meeting of
Shareholders to be held on December 29, 2021, under the captions “Compensation Discussion and Analysis,”
“Compensation Committee Report,” “Summary Compensation Table,” “Director Compensation,” and
“Compensation Committee Interlocks and Insider Participation” and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
Certain information required by this Item will be set forth in Registrant’s Proxy Statement for the Annual Meeting
of Shareholders to be held on December 29, 2021, under the captions “Security Ownership of Certain Beneficial
Owners and Management” and “Equity Compensation Plans” and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this Item will be set forth in Registrant’s Proxy Statement for the Annual Meeting of
Shareholders to be held on December 29, 2021, under the captions “Related Person Transaction Policy and
Procedures” and “Corporate Governance - Director Independence” and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item will be set forth in Registrant’s Proxy Statement for the Annual Meeting of
Shareholders to be held on December 29, 2021, under the caption “Audit Committee Disclosure” and is
incorporated herein by reference.
125
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements listed under (a) 1. and the financial statement schedule listed under
(a) 2. of the Company and its subsidiaries are filed as part of this report as set forth in the Index on page 59 (Item 8).
(a) Financial Statements, Financial Statement Schedule, and Exhibits
1.
Financial Statements
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of June 30, 2021 and 2020
Consolidated Statements of Earnings (Loss) for the Years Ended June 30, 2021, 2020, and 2019
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended June 30, 2021, 2020, and
2019
Consolidated Statements of Shareholders' Equity for the Years Ended June 30, 2021, 2020, and 2019
Consolidated Statements of Cash Flows for the Years Ended June 30, 2021, 2020, and 2019
Notes to Consolidated Financial Statements
2.
Financial Statement Schedule for the years ended June 30, 2021, 2020, and 2019
Schedule II-Valuation and Qualifying Accounts
All other Schedules have been omitted because the items required by such schedules are not present in
the consolidated financial statements, are covered in the consolidated financial statements or notes
thereto, or are not significant in amount.
3.
Exhibits
Certain of the exhibits to this Form 10-K are incorporated herein by reference, as specified:
2.1
Agreement and Plan of Merger among Meredith Corporation, Gray Television, Inc., and Gray
Hawkeye Stations, Inc., dated May 3, 2021, is incorporated herein by reference to Exhibit 2.1
to the Company’s Current Report on Form 8-K filed May 3, 2021.
2.2
Separation and Distribution Agreement by and among Meredith Holdings Corporation,
Meredith Corporation, and Gray Television, Inc. dated May 3, 2021, is incorporated herein by
reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed May 3, 2021.
2.3
Amendment No. 1 to the Agreement and Plan of Merger dated June 2, 2021, by and among
Meredith Corporation, Gray Television, Inc., and Gray Hawkeye Stations, Inc., is
incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-
K filed June 3, 2021.
2.4
Amendment No. 2 to the Separation and Distribution Agreement dated June 2, 2021, by and
among Meredith Corporation and Gray Television, Inc. is incorporated herein by reference to
Exhibit 2.2 to the Company’s Current Report on Form 8-K filed June 3, 2021.
126
2.5
Separation and Distribution Agreement, dated June 4, 2014, between Time Warner Inc. and
Time Inc., incorporated herein by reference to Exhibit 2.1 to Time Inc.’s Current Report on
Form 8-K filed June 5, 2014. #
3.1
The Company's Restated Articles of Incorporation, as amended, are incorporated herein by
reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the period
ended December 31, 2003.
3.2
Articles of Amendment to the Restated Articles of Incorporation of Meredith Corporation,
including the Statement of Designation of Series A Preferred Stock of Meredith Corporation
attached as Appendix I is incorporated herein by reference to Exhibit 3.1 to the Company’s
Current Report on Form 8-K filed January 31, 2018.
3.3
Articles of Amendment to the Restated Articles of Incorporation of Meredith Corporation,
including the deletion of the Statement of Designation of Series A Preferred Stock of
Meredith Corporation is incorporated herein by reference to Exhibit 3.1 to the Company’s
Current Report on Form 8-K filed November 16, 2020.
3.4
Articles of Amendment to the Restated Articles of Incorporation of Meredith Corporation,
including amendment of Article III(A)(3) is incorporated herein by reference to Exhibit 3.2 to
the Company’s Current Report on Form 8-K filed November 16, 2020.
3.5
The Restated Bylaws, as amended, are incorporated herein by reference to Exhibit 3.1 to the
Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015.
4.1
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of
1934 is incorporated herein by reference to Exhibit 4.1 to the Company’s Annual Report on
Form 10-K for the year ended June 30, 2020.
4.2
Indenture, dated as of January 31, 2018, by and among Meredith Corporation, the Guarantors,
and U.S. Bank National Association, as Trustee is incorporated herein by reference to
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 31, 2018.
4.3
Form of 6.875 percent Note (included in Exhibit 4.2)
4.4
First Supplemental Indenture, dated as of January 31, 2018, by and among Meredith
Corporation, the Guarantors, and U.S. Bank National Association, as Trustee, is incorporated
herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed
January 31, 2018.
4.5
Indenture, dated as of June 29, 2020, by and among Meredith Corporation, the Guarantors,
and U.S. Bank National Association, as Trustee is incorporated herein by reference to
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 30, 2020.
4.6
Form of 6.500 percent Note (included in Exhibit 4.5)
10.1
Indemnification Agreement in the form entered into between the Company and its officers
and directors is incorporated herein by reference to Exhibit 10 to the Company’s Quarterly
Report on Form 10-Q for the period ended December 31, 1988. *
10.2
Meredith Corporation Deferred Compensation Plan, dated as of November 8, 1993, is
incorporated herein by reference to Exhibit 10 to the Company’s Quarterly Report on
Form 10-Q for the period ended December 31, 1993. *
127
10.3
Meredith Corporation Employee Stock Purchase Plan of 2002, as amended, is incorporated
herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed
November 16, 2020 *
10.4
Amended and Restated Replacement Benefit Plan effective January 1, 2001, is incorporated
herein by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the
year ended June 30, 2003. *
10.5
Amended and Restated Supplemental Benefit Plan effective January 1, 2001, is incorporated
herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the
year ended June 30, 2003. *
10.6
Employment Agreement dated August 10, 2016, between Meredith Corporation and
Thomas H. Harty is incorporated herein by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed August 12, 2016. *
10.7
Amendment to employment agreement between Meredith Corporation and Thomas Harty
effective May 4, 2020, is incorporated herein by reference to Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q for the period ended March 31, 2020. *
10.8
Retention, Assignment, and Acknowledgement Agreement dated August 10, 2021, between
Meredith Corporation and Thomas Harty. *
10.9
Employment Agreement dated August 14, 2008, and re-executed August 24, 2009, between
Meredith Corporation and John S. Zieser is incorporated herein by reference to Exhibit 10.17
to the Company’s Annual Report on Form 10-K for the year ended June 30, 2009. *
10.10
Amendment to employment agreement between Meredith Corporation and John Zieser
effective May 4, 2020, is incorporated herein by reference to Exhibit 10.3 to the Company’s
Quarterly Report on Form 10-Q for the period ended March 31, 2020. *
10.11
Retention, Assignment, and Acknowledgement Agreement dated August 10, 2021, between
Meredith Corporation and John Zieser. *
10.12
Employment Agreement dated February 25, 2020, and effective March 9, 2020, between
Meredith Corporation and Jason Frierott is incorporated herein by reference to Exhibit 10 to
the Company’s Current Report on Form 8-K filed February 27, 2020. *
10.13
Amendment to employment agreement between Meredith Corporation and Jason Frierott
effective May 4, 2020, is incorporated herein by reference to Exhibit 10.5 to the Company’s
Quarterly Report on Form 10-Q for the period ended March 31, 2020. *
10.14
Amended and Restated Severance Agreement between Meredith Corporation and Jason
Frierott is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report
on Form 8-K filed April 2, 2020. *
10.15
Retention, Assignment, and Acknowledgement Agreement dated August 10, 2021, between
Meredith Corporation and Jason Frierott. *
10.16
Employment Agreement dated December 1, 2020, between Meredith Corporation and
Catherine Levene is incorporated herein by reference to Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q for the period ended December 31, 2020. *
128
10.17
Amended and Restated Severance agreement dated December 2, 2020, between Meredith
Corporation and Catherine Levene is incorporated herein by reference to Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2020. *
10.18
Retention, Assignment, and Acknowledgement Agreement dated August 10, 2021, between
Meredith Corporation and Catherine Levene. *
10.19
Employment Agreement dated May 9, 2018, and effective July 1, 2018, between Meredith
Corporation and Patrick McCreery is incorporated herein by reference to Exhibit 10.14 to the
Company’s Annual Report on Form 10-K for the year ended June 30, 2018. *
10.20
Amendment to employment agreement between Meredith Corporation and Patrick McCreery
effective May 4, 2020, is incorporated herein by reference to Exhibit 10.4 to the Company’s
Quarterly Report on Form 10-Q for the period ended March 31, 2020. *
10.21
Amendment to employment agreement dated February 2, 2021, between Meredith
Corporation and Patrick McCreery is incorporated herein by reference to Exhibit 10.4 to the
Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2020. *
10.22
Amended and Restated Severance Agreement in the form entered into between the Company
and its executive officers is incorporated herein by reference to Exhibit 10 to the Company's
Quarterly Report on Form 10-Q for the period ended December 31, 2016. *
10.23
Meredith Corporation 2014 Stock Incentive Plan is incorporated herein by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 18, 2014. *
10.24
Form of the Nonqualified Stock Option Award Agreement for Employees for the 2014 Stock
Incentive Plan is incorporated herein by reference to Exhibit 10.20 to the Company's Annual
Report on Form 10–K for the year ended June 30, 2017. *
10.25
Form of the Nonqualified Stock Option Award Agreement for Non-Employee Directors for
the 2014 Stock Incentive Plan is incorporated herein by reference to Exhibit 10.21 to the
Company's Annual Report on Form 10–K for the year ended June 30, 2017. *
10.26
Form of the Restricted Stock Award Agreement for Employees for the 2014 Stock Incentive
Plan is incorporated herein by reference to Exhibit 10.22 to the Company's Annual Report on
Form 10–K for the year ended June 30, 2017. *
10.27
Form of the Restricted Stock Award Agreement for Non-Employee Directors for the 2014
Stock Incentive Plan is incorporated herein by reference to Exhibit 10.23 to the Company's
Annual Report on Form 10–K for the year ended June 30, 2017. *
10.28
Form of Restricted Stock Unit Award Agreement - Time Vested for the 2014 Stock Incentive
Plan is incorporated herein by reference to Exhibit 10.24 to the Company's Annual Report on
Form 10–K for the year ended June 30, 2017. *
10.29
Form of Restricted Stock Unit Award Agreement - Performance-Based for the 2014 Stock
Incentive Plan is incorporated herein by reference to Exhibit 10.25 to the Company's Annual
Report on Form 10–K for the year ended June 30, 2017. *
10.30
Credit Agreement, dated as of January 31, 2018, by and among Meredith Corporation, the
Guarantors, the lenders party thereto from time to time and Royal Bank of Canada, as
administrative agent and collateral agent, is incorporated herein by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed January 31, 2018.
129
10.31
Amendment No. 1 to Credit Agreement, dated as of October 26, 2018, by and among
Meredith Corporation, the Guarantors, the lenders party thereto from time to time and Royal
Bank of Canada, as administrative agent and collateral agent is incorporated herein by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period
ended September 30, 2018.
10.32
Amendment No. 2 to Credit Agreement, dated as of February 19, 2020, by and among
Meredith Corporation, the Guarantors, the lenders party thereto from time to time, and Royal
Bank of Canada, as administrative agent and collateral agent is incorporated herein by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period
ended March 31, 2020.
10.33
Amendment No. 3 to Credit Agreement, dated as of June 22, 2020, by and among Meredith
Corporation, the Guarantors, the lenders party thereto from time to time, and Royal Bank of
Canada, as administrative agent and collateral agent is incorporated herein by reference to
Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended June 30,
2020.
10.34
Amendment No. 4 to Credit Agreement dated June 29, 2020, by and among Meredith
Corporation, the Guarantors, the lenders party thereto from time to time, and Royal Bank of
Canada, as administrative agent and collateral agent is incorporated herein by reference to
Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended June 30,
2020.
10.35
Registration Rights Agreement, dated as of June 29, 2020, by and among the Meredith
Corporation, the subsidiary guarantors party thereto and RBC Capital Markets, LLC is
incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-
K filed June 30, 2020.
10.36
Deed of Guarantee in Relation to the IPC Media Pension Scheme, dated as of January 31,
2018, by and among Meredith Corporation, Time Inc. (UK) Ltd, IPC Media Pension Trustee
Limited and Time Inc. is incorporated herein by reference to Exhibit 10.2 to the Company’s
Current report on Form 8-K filed January 31, 2018.
10.37
Amended and Restated Deed of Guarantee in Relation to the IPC Media Pension Scheme,
dated as of March 15, 2018, by and among Meredith Corporation, IPC Media Pension Trustee
Limited, and International Publishing Corporation Limited, is incorporated herein by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 21,
2018.
10.38
Option to Purchase Class A Common Stock, dated as of January 31, 2018, is incorporated
herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed
January 31, 2018.
10.39
Registration Rights Agreement, dated as of January 31, 2018, by and between Meredith
Corporation and KED MDP Investments, LLC, is incorporated herein by reference to
Exhibit 10.5 to the Company’s Current Report on Form 8-K filed January 31, 2018.
10.40
Tax Matters Agreement, dated June 4, 2014, between Time Warner Inc. and Time Inc. is
incorporated herein by reference to Exhibit 10.2 to Time Inc.’s Current Report on Form 8-K
filed June 5, 2014.
10.41
Time Inc. Supplemental Savings Plan, dated and effective January 1, 2011, restated January 1,
2014, is incorporated herein by reference to Exhibit 10.17 to Amendment No. 2 to Time Inc.’s
Registration Statement on Form 10 filed March 7, 2014. *
130
10.42
Time Inc. Deferred Compensation Plan, dated and effective November 18, 1998, restated
January 1, 2014, is incorporated herein by reference to Exhibit 10.18 to Amendment No. 2 to
Time Inc.’s Registration Statement on Form 10 filed March 7, 2014. *
10.43
Time Inc. Deferred Compensation Plan, dated and effective November 18, 1998, restated
January 1, 2014, and applicable to amounts deferred prior to January 1, 2005, is incorporated
herein by reference to Exhibit 10.19 to Amendment No. 2 to Time Inc.’s Registration
Statement on Form 10 filed March 7, 2014. *
10.44
Employee Matters Agreement dated May 3, 2021, by and among Meredith Corporation,
Meredith Holdings Corporation, and Gray Television, Inc. is incorporated hereby by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 3, 2021.
10.45
Tax Matters Agreement dated May 3, 2021, by and among Meredith Corporation, Meredith
Holdings Corporation, and Gray Television, Inc. is incorporated hereby by reference to
Exhibit 10.2 to the Company’s Current Report on Form 8-K filed May 3, 2021.
10.46
Transition Services Agreement dated May 3, 2021, by and among Meredith Corporation,
Meredith Holdings Corporation, and Gray Television, Inc. is incorporated hereby by reference
to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed May 3, 2021.
21
Subsidiaries of the Registrant
22
List of Guarantor Subsidiaries
23
Consent of Independent Registered Public Accounting Firm
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act, as amended.
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act, as amended.
32
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive
Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL (included in Exhibits 101)
The Company agrees to furnish to the Commission, upon request, a copy of each agreement with respect to
long-term debt of the Company for which the amount authorized thereunder does not exceed 10 percent of
the total assets of the Company on a consolidated basis.
131
*
Management contract or compensatory plan or arrangement
#
Confidential treatment has been granted with respect to portions of this exhibit (indicated by asterisks) and those portions have
been separately filed with the SEC.
†
These certifications are being furnished solely to accompany this Annual Report on Form 10-K pursuant to 18 U.S.C.
Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not
to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any
general incorporation language in such filing.
ITEM 16. FORM 10-K SUMMARY
None.
132
MEREDITH CORPORATION
John S. Zieser,
Chief Development Officer/
General Counsel and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Jason Frierott,
Chief Financial Officer
(Principal Financial and Accounting
Officer)
Thomas H. Harty, Chairman of the
Board, Chief Executive Officer, and
Director
(Principal Executive Officer)
D. Mell Meredith Frazier,
Vice Chairman of the Board and
Director
Donald A. Baer, Director
Donald C. Berg, Director
Gregory G. Coleman, Director
Beth J. Kaplan, Director
Paula A. Kerger, Director
Christopher Roberts III, Director
Elizabeth E. Tallett, Director
Each of the above signatures is affixed as of September 10, 2021.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
133
Reconciliation of Non-GAAP Financial Measures
For non-GAAP financial measures used in the annual report to shareholders, the following tables provide
reconciliations between the financial measures that are not in accordance with accounting principles generally
accepted in the United States of America (U. S. GAAP) and the most directly comparable U.S. GAAP financial
measures. This information is not part of the Company's Annual Report on Form 10-K as filed with the United
States Securities and Exchange Commission.
Adjusted EBITDA, a supplemental non-GAAP financial measure, is defined as earnings (loss) from continuing
operations before interest expense, income taxes, depreciation, amortization, and special items. While Adjusted
EBITDA is not a substitute for reported results under U.S. GAAP, management believes this information is useful
as an aid in further understanding Meredith’s current performance, performance trends, and financial condition.
Years ended June 30,
2021
2020
2019
2018
2017
(In millions)
Net earnings (loss) ............................................................. $
306.6 $ (234.3) $
46.3 $
99.4 $
188.9
Loss from discontinued operations, net of income taxes ....
—
25.3
82.8
14.6
—
Earnings (loss) from continuing operations ....................
306.6
(209.0)
129.1
114.0
188.9
Income tax expense (benefit) ..............................................
87.0
(32.2)
11.5
(123.6)
101.4
Interest expense, net ............................................................
178.6
145.8
170.6
97.2
18.8
Depreciation and amortization ............................................
163.0
219.9
247.6
129.0
53.8
Special Items .......................................................................
Write-down of impaired assets .......................................
—
389.3
41.8
22.7
8.9
Transaction, integration, and restructuring costs ............
35.4
23.6
64.6
69.3
—
Severance and related benefit costs ................................
14.6
14.1
51.5
112.4
11.9
Pension settlements .........................................................
1.1
14.0
(2.8)
—
—
Gain on sale of business and assets ................................
(97.6)
(8.7)
(15.1)
(14.7)
—
Release of lease guarantee ..............................................
—
(8.0)
—
—
—
Loss (gain) on investment ...............................................
(3.6)
1.1
—
12.9
—
Write-down of contingent consideration payable ...........
—
—
—
—
(20.0)
Other ..............................................................................
(2.2)
(1.7)
6.8
3.4
(1.5)
Adjusted EBITDA ............................................................. $
682.9 $
548.2 $
705.6 $
422.6 $
362.2
Free cash flow, a supplemental non-GAAP financial measure, is defined as net cash provided by operating activities
as reported under U.S. GAAP less additions to property, plant, and equipment as reported under U.S. GAAP. While
free cash flow is not a substitute for reported results under U.S. GAAP, management believes this information is
useful as an aid in further understanding the Company’s liquidity and ability to fund its operations.
Years ended June 30,
2021
2020
2019
2018
2017
(In millions)
Net cash provided by operating activities ....................... $
398.6 $
306.6 $
245.3 $
149.9 $
218.6
Less: additions to plant, property, and equipment ..............
(35.2)
(55.4)
(46.4)
(53.2)
(34.8)
Free cash flow .................................................................... $
363.4 $
251.2 $
198.9 $
96.7 $
183.8
134
Net debt and net debt leverage, are supplemental non-GAAP measures. Net debt is defined as long-term debt
outstanding as reported under U.S. GAAP less cash and cash equivalents as reported under U.S. GAAP. Net debt
leverage is defined as net debt divided by adjusted EBITDA, both supplemental non-GAAP measures. While net
debt and net debt leverage are not substitutes for reported results under U.S. GAAP, management believes this
information is useful as an aid in further understanding the Company’s financial position.
Years ended June 30,
2021
2020
2019
2018
2017
(In millions)
Adjusted EBITDA ............................................................... $
682.9 $
548.2 $
705.6 $
422.6 $
362.2
Long-term debt outstanding ................................................ $ 2,791.3 $ 3,045.4 $ 2,370.4 $ 3,195.5 $
700.6
Less: cash and cash equivalents ..........................................
(240.2)
(132.4)
(45.0)
(437.6)
(22.3)
Net debt (non-GAAP) ......................................................... $ 2,551.1 $ 2,913.0 $ 2,325.4 $ 2,757.9 $
678.3
Net debt leverage ratio (non-GAAP) ..................................
3.7x
5.3x
3.3x
6.5x
1.9x
135
Corporate Information
MEREDITH CORPORATION
Meredith Corporation (NYSE: MDP) is a multi-platform
media and marketing company that provides information
and inspiration to women’s lives daily through our trusted
brands including PEOPLE, Better Homes & Gardens,
Allrecipes, Southern Living, and REAL SIMPLE. We create
content and experiences focused on entertainment news,
house and home, food, style, health, fitness, travel and
luxury, and parenting – priority topics for our largely
female audience.
With our long history of demonstrated integrity, editorial
excellence, and deep consumer insights we have earned
relationships with 190 million Americans across media
platforms, including digital, magazines, performance
marketing, and brand licensing. Our rich proprietary data
and sophisticated technology platform provide unparalleled
insights and best-in-class advertising and performance
marketing solutions.
Meredith’s Local Media Group portfolio includes 17
television stations concentrated in large, fast-growing
markets, with seven stations in the nation’s Top 25 markets,
including Atlanta, Phoenix, St. Louis, and Portland.
ANNUAL MEETING
Holders of Meredith Corporation stock are invited to
attend the annual meeting of shareholders at 10 am Central
Standard Time on December 29, 2021. The link to the
meeting is included in the Meredith Corporation Proxy
Statement. A copy is filed with the Securities and Exchange
Commission (SEC) and is included at meredith.com.
Shareholders should note that we are seeking shareholder
approval of the Local Media Group sale at a special
meeting of shareholders that is yet to be scheduled, but we
presently expect that meeting will occur before the annual
meeting. If the Local Media Group sale closes on or before
the December 29, 2021 date for the Annual Meeting, we
intend to cancel the Annual Meeting. The IAC transaction
does not require shareholder approval.
STOCK EXCHANGE
Common stock of Meredith Corporation is listed on the New
York Stock Exchange. The exchange symbol for Meredith is
MDP. CUSIP Number: 589433101. Class B stock of Meredith
Corporation (issued as a dividend on common stock in
December 1986) is not listed. The transfer of class B stock
is limited to the spouse of the transferring class B holder,
lineal descendants of a grandparent of the transferring
class B holder or spouse of such descendant, and trusts,
family partnerships, or similar estate planning vehicles for
the benefit of those persons and certain other permitted
transferees identified in our articles of incorporation.
Requests for transfer to any other person or entity will
require a share-for-share conversion to common stock.
Conversion prior to sale is recommended. CUSIP Number:
589433200. The Company’s Chief Executive Officer has
certified to the New York Stock Exchange that he is not
aware of any violation by the Company of the New York
Stock Exchange Corporate Governance Listing Standards.
The most recently required certification was submitted to
the exchange on November 18, 2020.
REGISTRAR AND TRANSFER AGENT
EQ Shareowner Services, PO Box 64854, St. Paul, MN
55164-0854 or 1110 Centre Pointe Curve, Suite 101, Mendota
Heights, MN 55120-4100, 800-468-9716 or 651-450-4064,
email: stocktransfer@equiniti.com
FORM 10-K
A copy of the Meredith Corporation Fiscal 2021 Annual
Report on Form 10-K to the Securities and Exchange
Commission (SEC) is included in this report and available
at meredith.com. Additional copies are available without
charge to shareholders by calling 515-284-3000. The
Company has filed as an exhibit to the Annual Report on
Form 10-K the certification of its Chief Executive Officer
and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
QUARTERLY INFORMATION
To receive copies of Meredith Corporation quarterly SEC
filings, earnings releases, and dividend releases, please visit
ir.meredith.com, or call 515-284-3000.
INVESTOR CONTACT
Meredith Corporation Investor Relations
1716 Locust Street, Des Moines, IA 50309-3023
515-284-3000
Email: investor.relations@meredith.com
A relentless focus on corporate citizenship has been a hallmark of
Meredith Corporation since our company was founded nearly 120
years ago. While times have changed and the scale of our reach has
increased, our commitment to doing what’s right is unwavering.
Through our extensive portfolio of brands, we inform, inspire and
entertain our readers and viewers. We take very seriously the
trust they place in us. We’re applying that same level of care and
commitment to ensuring a sustainable future for Meredith and our
clients, investors, employees and business partners. We’re pleased
to share our journey and growth with you. For more information visit
meredith.com/esg.
OUR COMMITMENT TO SOCIAL RESPONSIBILITY
Greg G. Coleman 1
Mr. Coleman, 67, a director
since 2020, is a board
advisor for BuzzFeed,
previously serving as
president, and an adjunct
professor at New York
University’s Stern School
of Business.
Board of Directors
Thomas H. Harty
Mr. Harty, 58, a director
since 2017, is chairman
and chief executive
officer of Meredith
Corporation, the leading
media and marketing
company serving
American women.
Elizabeth E. Tallett 1, 2, 3
Ms. Tallett, 72, Lead
Independent Director, and
a director since 2008, is a
consultant to early-stage
pharmaceutical and
healthcare companies.
Donald C. Berg 1
Mr. Berg, 66, a director
since 2012, is the president
of DCB Advisory Services,
which provides consulting
services to food and
beverage companies
ranging from start-up
companies to multi-national
conglomerates.
Donald A. Baer 1, 3
Mr. Baer, 67, a director
since 2014, is a senior
partner at Brunswick Group,
the world’s leading critical
issues firm.
Mell Meredith
Frazier 2, 3
Ms. Frazier, 65, a
director since 2000,
is vice chairman of
Meredith Corporation and
chairman of the Meredith
Corporation Foundation.
Committee Assignments
1 Audit
2 Human Resources and Compensation
3 Nominating/Governance
Paula A. Kerger 2, 3
Ms. Kerger, 63, a
director since 2018,
is president and chief
executive officer of
PBS, the nation’s largest
non-commercial media
organization with nearly
350 member stations.
Christopher Roberts III 1
Mr. Roberts, 59, a director
since 2019, is executive
vice president and general
manager of Global Food &
Beverage (F&B) for Ecolab
Inc., the global leader in
water, hygiene and infection
preventions solutions and
services that protect people
and vital resources.
Beth J. Kaplan 1, 2
Ms. Kaplan, 63, a director
since 2017, is the managing
member of Axcel Partners,
LLC, investing in consumer-
facing early-stage and
growth companies founded
and led by women.
Officers
Thomas H. Harty
Chairman and
Chief Executive Officer
Catherine A. Levene
President, National
Media Group
Patrick J. McCreery
President,
Local Media Group
Jason M. Frierott
Chief Financial Officer
John S. Zieser
Chief Development Officer
and General Counsel
Steven M. Cappaert
Corporate Controller
Mission
Meredith empowers and inspires American women to take
action to live their best lives every day.
Vision
We inspire, influence, inform and empower women every
day, every way, where it matters.
Core Values
Every person matters and our differences make us stronger.
The customer is at the center of what we do.
We take risks. We win, or we learn.
We don’t do what’s easy. We do what’s right for all stakeholders.
We collaborate internally while we play to win externally.