UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-16914

THE E. W. SCRIPPS COMPANY

(Exact name of registrant as specified in its charter)

Ohio (State or other jurisdiction of incorporation or organization)		31-1223339 (IRS Employer Identification Number)
312 Walnut Street Cincinnati, Ohio (Address of principal executive offices)		45202 (Zip Code)

Registrant’s telephone number, including area code: (513) 977-3000

Title of each class Securities registered pursuant to Section 12(b) of the Act:		Name of each exchange on which registered New York Stock Exchange
Class A Common shares, $.01 par value
Securities registered pursuant to Section 12(g) of the Act:
Not applicable

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company “in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o (do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The aggregate market value of Class A Common shares of the registrant held by non-affiliates of the registrant, based on the $9.67 per share closing price for such stock on June 30, 2011, was approximately $308,560,000. All Class A Common shares beneficially held by executives and directors of the registrant and The Edward W. Scripps Trust have been deemed, solely for the purpose of the foregoing calculation, to be held by affiliates of the registrant. There is no active market for our common voting shares.

As of February 15, 2012, there were 42,430,372 of the registrant’s Class A Common shares, $.01 par value per share, outstanding and 11,932,735 of the registrant’s Common Voting Shares, $.01 par value per share, outstanding.

Certain information required for Part III of this report is incorporated herein by reference to the proxy statement for the 2012 annual meeting of shareholders.

 

 

Index to The E. W. Scripps Company Annual Report
on Form 10-K for the Year Ended December 31, 2011

Item No.		Page
Additional Information			3
Forward-Looking Statements			3
PART I
1. Business			4
Television			5
Newspapers			8
Syndication and Other			10
Employees			11
1A. Risk Factors			12
1B. Unresolved Staff Comments			14
2. Properties			14
3. Legal Proceedings			14
4. Mine Safety Disclosures			14
PART II
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			16
6. Selected Financial Data			18
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
7A. Quantitative and Qualitative Disclosures About Market Risk			18
8. Financial Statements and Supplementary Data			18
9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			18
9A. Controls and Procedures			18
9B. Other Information			18
PART III
10. Directors, Executive Officers and Corporate Governance			19
11. Executive Compensation			19
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			19
13. Certain Relationships and Related Transactions, and Director Independence			19
14. Principal Accounting Fees and Services			19
PART IV
15. Exhibits, Financial Statement Schedules			20
Exhibit 21
Exhibit 23
Exhibit 31(a)
Exhibit 31(b)
Exhibit 32(a)
Exhibit 32(b)
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

As used in this Annual Report on Form 10-K, the terms “Scripps,” “we,” “our” or “us” may, depending on the context, refer to The E. W. Scripps Company, to one or more of its consolidated subsidiary companies, or to all of them taken as a whole.

Additional Information

Our Company Web site is www.scripps.com. Copies of all of our SEC filings filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on this Web site as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC. Our Web site also includes copies of the charters for our Compensation, Nominating & Governance and Audit Committees, our Corporate Governance Principles, our Insider Trading Policy, our Ethics Policy and our Code of Ethics for the CEO and Senior Financial Officers. All of these documents are also available to shareholders in print upon request or by request via E-Mail to secretaries@scripps.com.

Forward-Looking Statements

Our Annual Report on Form 10-K contains certain forward-looking statements related to our businesses. We base our forward-looking statements on our current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from the expectations expressed in the forward-looking statements. Such risks, trends and uncertainties, which in most instances are beyond our control, include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint prices; program costs; labor relations; technological developments; competitive pressures; interest rates; regulatory rulings; and reliance on third-party vendors for various products and services. The words “believe,” “expect,” “anticipate,” “estimate,” “intend” and similar expressions identify forward-looking statements. You should evaluate our forward-looking statements, which are as of the date of this filing, with the understanding of their inherent uncertainty. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of the statement.

PART I

Item 1.		Business

We are a diverse, 133-year-old media enterprise with interests in television stations, newspapers, and local news and information Web sites. Our overriding mission is that we do well by doing good – providing value to customers, employees and owners by informing, engaging and empowering the communities we serve. Our portfolio of locally focused media properties includes: 19 TV stations (ten ABC affiliates, three NBC affiliates, one independent and five Azteca affiliates); daily and community newspapers in 13 markets and the Washington, D.C.-based Scripps Media Center, home of the Scripps Howard News Service; and United Media, a syndicator of select news features and comics. For a full listing of our media companies and their associated Web sites, visit http://www.scripps.com.

On December 30, 2011, we acquired the television station group owned by McGraw-Hill Broadcasting Company, Inc., for $212 million in cash, plus a working capital adjustment estimated at $4.4 million. We financed the transaction with a $212 million bank term loan. The acquisition included four ABC affiliated television stations as well as five Azteca Spanish-language affiliates.

In the third quarter of 2011, we combined our digital resources across the company into a single organization focused on delivering market-leading digital products to each of our business segments. This demonstrates that products and services for digital audiences are core to what we do at Scripps. We believe this reorganization will make us more efficient, improve our speed to market for new services, heighten accountability and enable us to better build or buy additional digital brands.

In the first quarter of 2011, we entered into a five-year agreement with Universal Uclick (“Universal”) to provide syndication services for the news features and comics of United Media. Universal will provide editorial and production services, sales and marketing, sales support and customer service, and distribution and fulfillment for all the news features and comics of United Media. We will continue to own certain copyrights and control the licenses for those properties, and will manage the business relationships with the creative talent that produces those comics and features.

In the fourth quarter of 2009 we began a review of our strategic options for United Media Licensing, the character licensing operation of United Media. We completed the sale of United Media Licensing to Iconix Brand Group for $175 million in cash in the second quarter of 2010. The sale also included certain intellectual property including the rights to syndicate the Peanuts and Dilbert comic strips.

After an unsuccessful search for a buyer, we closed the Rocky Mountain News after it published its final edition on February 27, 2009. Our Rocky Mountain News and MediaNews Group, Inc.’s (MNG) Denver Post were partners in The Denver Newspaper Agency (the “Denver JOA”), a limited liability partnership, which operated the sales, production and business operations of the Rocky Mountain News prior to its closure. Under the terms of an agreement with MNG, we transferred our interests in the Denver JOA to MNG in the third quarter of 2009. In connection with the closure of the Rocky Mountain News, we also transferred our 50% interest in Prairie Mountain Publishing (“PMP”) to MNG in the third quarter of 2009.

On July 1, 2008, we completed the spin-off of Scripps Networks Interactive, Inc. (“SNI”) through a tax-free dividend to our shareholders. The shareholders of record received one SNI Class A Common Share for every Scripps Class A Common Share held as of the Record Date and one SNI Common Voting Share for every Scripps Common Voting Share held as of the Record Date.

Financial information for each of our business segments can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to the Consolidated Financial Statements of this Form 10-K.

Television

Scripps has operated broadcast television stations since 1947, when it launched Ohio’s first television station, WEWS in Cleveland. Today our television station group today reaches approximately 13% of the nation’s households, and includes ten ABC affiliates, three NBC affiliates, one independent station and five Azteca affiliates.

We produce news and information content that informs and engages local and national communities. This content is distributed to four platforms; broadcast, online, mobile and tablet. Our ability to cover our communities across multiple digital platforms allows us to expand our audiences beyond our traditional broadcast television boundaries.

We believe that the most critical component of our product mix is compelling news content. Over the past two years we have trained all employees in our news departments to be multi-media journalists, allowing us to pursue a “hyper-local” strategy by having more reporters covering local news for our over-the-air and digital platforms. We expect that the employees in the news departments of the recently acquired stations to go through our multi-media journalists training in 2012.

In addition to local news, we are producing Scripps-owned programming which we own that we will broadcast on our television stations and with which viewers can interact in digital formats. In 2012, we will replace Wheel of Fortune and Jeopardy with Scripps-owned programming in seven of our markets. We currently air Right This Minute, another Scripps-owned program, in six of our markets, and will add the program to our schedule in six additional markets by the fall of 2012.

We continue to invest in platforms for digital technology including smartphone and tablet applications for mobile delivery of our news and information content. Currently our stations in Detroit, West Palm Beach, Kansas City and Tulsa are broadcasting a mobile signal from their towers. We also are working with the Mobile Content Venture, of which we are a charter member, to exploit the potential in our markets of mobile broadcasting.

In our non-news hours, our television stations also broadcast network and syndicated programming.

Information concerning our full-power television stations, their network affiliations and the markets in which they operate is as follows:

																						Percentage
				Network				FCC														of U.S.
				Affiliation/				License		Rank				Stations				Station				Television				Average
				DTV		Affiliation		Expires		of				in				Rank in				Households				Audience
Station		Market		Channel		Expires in		in		Mkt (1)				Mkt (2)				Mkt (3)				in Mkt (4)				Share (5)
WXYZ-TV		Detroit, Ch. 7		ABC/41		2015		2013			11				9				1				1.6	%			11
KNXV-TV		Phoenix, Ch. 15		ABC/15		2015		2014			13				12				3				1.6	%			6
WFTS-TV		Tampa, Ch. 28		ABC/29		2015		2013			14				12				2				1.6	%			6
WEWS-TV		Cleveland, Ch. 5		ABC/15		2015		2013			18				8				1				1.3	%			10
WMAR-TV		Baltimore, Ch. 2		ABC/38		2015		2012			27				6				3				1.0	%			6
KSHB-TV		Kansas City, Ch. 41		NBC/42		2015		2014			31				8				4				0.8	%			6
KMCI		Lawrence, Ch. 38		Ind./41		N/A		2014			31				8				7				0.8	%			1
WCPO-TV		Cincinnati, Ch. 9		ABC/22		2015		2013			35				5				2				0.8	%			10
WPTV		W. Palm Beach, Ch. 5		NBC/12		2015		2013			38				7				1				0.7	%			11
KJRH		Tulsa, Ch. 2		NBC/8		2015		2014			59				10				3				0.5	%			8
KMGH-TV		Denver, Ch. 7		ABC/7		2014		2014			17				11				3				1.4	%			8
WRTV		Indianapolis, Ch. 6		ABC/25		2014		2013			26				10				3T				1.0	%			7
KGTV		San Diego, Ch. 10		ABC/10		2014		2014			28				11				4				0.9	%			6
KERO-TV		Bakersfield, Ch. 23		ABC/10		2014		2014			126				4				3				0.2	%			7

All market and audience data is based on the November Nielsen survey.

We also operate five low-power stations affiliated with the Azteca America network. The stations are clustered around our California and Denver stations. Azteca America is a Hispanic network producing Spanish language programming.

Revenue cycles and sources

Broadcast Advertising

We sell advertising to local, national and political customers. The sale of local, national and political commercial spots accounted for more than 90% of the television segment’s revenues in 2011. Pricing of advertising is based on audience size and share, the demographics of our audiences and the demand for our limited inventory of commercial time. Our television stations compete for advertising revenues with other sources of local media, including competitors’ television stations in the same markets, radio stations, cable television systems, newspapers, digital platforms and direct mail.

Cyclical factors influence revenues from our core advertising categories. Some of the cycles are periodic and known well in advance, such as election campaign seasons and special programming events like the Olympics or the Super Bowl. For example, our three NBC affiliates in 2010 benefited from incremental advertising demand concurrent with coverage of the Winter Olympics in February. Our three NBC affiliate stations will air the 2012 Summer Olympics. Economic cycles are less predictable and beyond our control.

Advertising revenues dramatically increase during even-numbered years, when local, state and federal elections occur. Political revenue totaled $48 million in 2010, $5 million in 2009 and $41 million in 2008.

Due to increased demand in the spring and holiday seasons, the second and fourth quarters normally have higher advertising revenues than the first and third quarters.

Digital Advertising

We sell advertising across all of our digital platforms. Digital advertising provided approximately 3% of our television segment operating revenues in 2011. Digital advertising includes fixed duration campaigns whereby a banner, text or other advertisement appears for a specified period of time for a fee; impression-based campaigns where the fee is based upon the number of times the advertisement appears in Web pages viewed by a user; and click-through based campaigns where the fee is based upon the number of users who click on an advertisement and are directed to the advertisers’ Web site. We also utilize a variety of audience-extension programs to enhance the reach of our Web sites and garner a larger share of local ad dollars that are spent online.

Other

In addition to selling commercials during our programming, we also offer additional marketing opportunities for our business customers, including sponsorships and community events.

Retransmission revenues

We also earn revenues from retransmission consent agreements with cable operators and satellite carriers who pay us to offer our programming to their customers. The revenue we receive from these retransmission consent agreements is currently lower than those realized by our peers because multiple long-term agreements were executed before we spun-off our cable networks in 2008. Prior to the spin-off of SNI, the rights to retransmit our broadcast signal were included as consideration in negotiations between cable system operators and the Company’s cable networks. We expect to independently negotiate retransmission agreements at then-current market rates between our television stations and the cable and satellite television systems when the existing agreements expire. Agreements with two of our largest cable television system operators, Time Warner and Comcast, expire in December 2015 and December 2019, respectively.

Expenses

Employee costs accounted for 51% of segment costs and expenses in 2011.

We have been centralizing certain functions that do not require a presence in the local markets at company-owned hubs, enabling each of our stations to focus local resources on the creation of content and revenue-producing activities.

Programming costs, which include syndicated programming, were 23% of total segment costs and expenses in 2011. Significantly reducing our syndicated programming costs is a priority over the next several years. Consistent with the industry trend, our ABC and NBC network-affiliated stations pay the networks for the programming that is supplied to us in various dayparts. Those costs are reported as programming expenses.

Federal Regulation of Broadcasting — Broadcast television is subject to the jurisdiction of the FCC pursuant to the Communications Act of 1934, as amended (“Communications Act”). The Communications Act prohibits the operation of broadcast television stations except in accordance with a license issued by the FCC and empowers the FCC to revoke, modify and renew broadcast television licenses, approve the transfer of control of any entity holding such licenses, determine the location of stations, regulate the equipment used by stations and adopt and enforce necessary regulations. The FCC also exercises limited authority over broadcast programming by, among other things, requiring certain children’s programming and limiting commercial content therein, regulating the sale of political advertising, and restricting indecent programming. The FCC also requires television broadcasters to close caption their programming for the benefit of the hearing impaired, and, in accord with a Congressional directive, the agency will begin this year to require the visual description of certain television programming for the benefit of the visually impaired.

Broadcast television licenses are granted for a term of up to eight years and are renewable upon request, subject to FCC review of the licensee’s performance. While complaints about network programming aired by some Company-owned stations during the last license term remain outstanding, all the stations’ licenses have been renewed for the current license term. While there can be no assurance regarding the renewal of our broadcast television licenses, we have never had a license revoked, have never been denied a renewal, and all previous renewals have been for the maximum term.

FCC regulations govern the multiple ownership of television stations and other media. Under the FCC’s current rules , a license for a television station will generally not be granted or renewed if the grant of the license would result in (i) the applicant owning or controlling more than one television station, or in some markets under certain conditions, more than two television stations in the same market (the “television duopoly rule”), or (ii) the grant of the license would result in the applicant’s owning or controlling television stations whose total national audience reach exceeds 39% of all television households. The FCC also has generally prohibited “cross ownership” of a television station and a daily newspaper in the same community, but the scope of this restriction has varied in recent years. A 2007 FCC order slightly relaxing the restriction was first stayed by a reviewing court, then permitted to take effect, and then overturned by that court. The FCC has initiated a broad new ownership rulemaking looking toward, among other things, again relaxing the newspaper-broadcast cross ownership limits. However, a change in the manner of measuring the rule’s geographic scope could bring the Company’s Treasure Coast newspapers and nearby Station WPTV-TV within the rule’s terms. The proposed rule would allow the continuation of such preexisting relationships. In addition, this ownership rulemaking is examining whether to impose the television duopoly rule’s ownership restrictions on independent stations within a market that agree to share news or other program production. Station WPTV-TV has entered into such a shared services agreement with another local station. We cannot predict the effect of this ownership rulemaking on our stations’ operations or our business.

The FCC has suggested that the transition to more efficient digital television broadcasting may permit further reductions in the amount of spectrum allocated to over-the-air broadcasting. In particular, in order to provide additional spectrum for mobile broadband services, the FCC has urged Congress to authorize the conduct of spectrum auctions in which broadcasters would give up spectrum in return for a share of the auction proceeds. Auction proposals are under active consideration in Congress, and some broadcasters are concerned that the auctions might not be truly voluntary and could adversely affect those stations that elect not to participate, for example, by requiring a “repacking” of the remaining broadcast spectrum. Separately, the FCC has now issued rules to implement its order permitting the non-broadcast use of broadcast spectrum in the “white spaces” between broadcast stations’ service areas, and petitions for reconsideration of that order are now being considered. We cannot predict the effect of these proceedings on our offering of digital television service or our business.

Broadcast television stations generally enjoy “must-carry” rights on any cable television system defined as “local” with respect to the station. Stations may waive their must-carry rights and instead negotiate retransmission consent agreements with local cable companies. Similarly, satellite carriers, upon request, are required to carry the signal of those television stations that request carriage and that are located in markets in which the satellite carrier chooses to retransmit at least one local station, and satellite carriers cannot carry a broadcast station without its consent. The Company has elected to negotiate retransmission consent agreements with cable operators and satellite carriers for our network-affiliated stations. Some members of Congress have expressed concern about cable subscribers occasionally losing television service during retransmission consent negotiations, and the FCC is conducting a rulemaking proceeding to reexamine the process. As part of this rulemaking, the FCC has asked whether it should eliminate the “network nonduplication” and “syndicated exclusivity” rules that permit broadcasters to enforce certain contractual programming exclusivity rights through the FCC’s processes rather than by judicial proceedings. In addition, Congress or the FCC may reexamine other regulatory policies that support a television station’s ability to enjoy an exclusive right to present particular programming in its local service area. We cannot predict the outcome of any such proceedings or their possible impact on the Company.

During recent years, the FCC has substantially increased its scrutiny of broadcasters’ programming practices. In particular, it has heightened enforcement of the restrictions on indecent programming. Congress’ decision to greatly increase the financial penalty for airing such programming has at the same time increased the threat to broadcasters from such enforcement. Litigation has continued over the scope of the FCC’s authority to regulate indecency, culminating in a recent U.S. Supreme Court oral argument, and substantial uncertainty remains concerning FCC indecency enforcement. In addition, in 2011 the FCC vacated regulations it adopted in 2008, but never implemented, that would have required broadcasters to maintain more detailed records of their public service programming and to make such information more accessible to the public via their web sites. At the same time, however, the FCC initiated two new notices looking toward requiring such detailed reporting of television stations’ public service-related programming as well as the posting of stations’ entire public inspection files, including their political sales files, on an FCC-controlled web site. The FCC also continues to explore how the evolution of digital media is affecting children, including whether commercial television broadcasters are adequately addressing children’s educational needs and whether steps should be taken to better protect children from exposure to potentially harmful media content, including harmful advertising messages. We cannot predict the outcome of these proceedings or their possible impact on the Company.

Newspapers

We have operated newspapers since 1878, when our founder, Edward W. Scripps, began publishing the Penny Press in Cleveland, Ohio. Today, the Scripps newspaper division operates in 13 markets across the United States. We produce content that informs and engages local and national communities. This content is distributed to four platforms; print, online, mobile and tablet. Our ability to cover our communities across multiple digital platforms allows us to expand our audiences beyond our traditional print boundaries.

We believe all of our newspapers have an excellent reputation for journalistic quality and content, which we believe is key in retaining readership. Our newspapers were recognized during 2011 by numerous regional and national journalism organizations for high-quality reporting across multiple platforms, including print, Web and mobile.

Our Internet sites offer comprehensive local news and information, user-generated content, advertising, e-commerce and other services. We continue to enhance our online services, using features such as streaming video and audio, to deliver our news and information content. Many of our journalists routinely produce videos for consumption through our Web sites and use an array of social media sites such as Facebook, YouTube and Twitter to communicate with and build our audiences. We have embraced mobile technology by offering our products on e-readers as well as apps available on both the Apple and Android platforms.

We also offer our advertising customers additional digital advertising opportunities through our audience-extension partnerships. We are members of a newspaper consortium that partners with Yahoo! in an advertising and content sharing arrangement that increases our access to local Web-focused advertising dollars. We have similar arrangements with others. We also offer our local advertising customers additional marketing services, such as managing their search engine marketing campaigns.

Over the years we have supplemented our daily newspapers with an array of niche products, including direct-mail advertising, total market coverage publications, zoned editions, specialty publications, and event-based publications. These product offerings allow existing advertisers to reach their target audiences in multiple ways, while giving us a portfolio of products with which to acquire new clients, particularly small- and mid-sized advertisers.

The markets and audiences that we serve are as follows:

Daily circulation (includes print and E-edition)

(in thousands)(1)
Newspaper		2011				2010				2009				2008				2007
Abilene (TX) Reporter-News			24				24				27				28				30
Anderson (SC) Independent-Mail			23				23				26				29				34
Corpus Christi (TX) Caller-Times			43				45				47				52				52
Evansville (IN) Courier & Press			52				52				57				64				66
Henderson (KY) Gleaner			10				10				10				10				10
Kitsap (WA) Sun			21				23				23				28				29
Knoxville (TN) News Sentinel			92				93				101				113				117
Memphis (TN) Commercial Appeal			109				118				136				144				152
Naples (FL) Daily News			54				63				53				54				56
Redding (CA) Record-Searchlight			21				22				25				31				32
San Angelo (TX) Standard-Times			18				18				21				24				25
Treasure Coast (FL) News/Press/Tribune (2)			76				75				87				99				102
Ventura County (CA) Star			62				65				67				83				85
Wichita Falls (TX) Times Record News			22				23				25				27				29
Total Daily Circulation			627				654				705				786				819

Circulation information for the Sunday edition of our newspapers is as follows:

(in thousands)(1)
Newspaper		2011				2010				2009				2008				2007
Abilene (TX) Reporter-News			31				31				35				37				39
Anderson (SC) Independent-Mail			30				29				30				32				38
Corpus Christi (TX) Caller-Times			58				58				65				72				71
Evansville (IN) Courier & Press			73				74				77				83				87
Henderson (KY) Gleaner			11				11				11				11				12
Kitsap (WA) Sun			23				24				26				31				32
Knoxville (TN) News Sentinel			121				116				126				138				145
Memphis (TN) Commercial Appeal			147				151				172				177				193
Naples (FL) Daily News			65				73				61				62				63
Redding (CA) Record-Searchlight			24				25				28				33				35
San Angelo (TX) Standard-Times			22				21				24				28				29
Treasure Coast (FL) News/Press/Tribune (2)			94				95				105				112				112
Ventura County (CA) Star			81				82				82				94				95
Wichita Falls (TX) Times Record News			25				26				28				30				33
Total Sunday Circulation			805				816				870				940				984

Revenue sources

We generate varying levels of revenue from subscribers and advertisers on each of our four platforms.

Advertising

We believe that compelling news content and a diverse portfolio of product offerings are critical components to garnering the most profitable share of local advertising dollars in our markets.

Our range of products and audience reach gives us the ability to deliver the specific audiences desired by our advertisers. While many advertisers want the broad reach delivered by our daily newspaper, others want to target their message by demographic, geography, buying habits or consumer behavior. We develop advertising campaigns that combine products within our portfolio that best reach the advertiser’s targeted audience with the appropriate frequency.

We sell advertising based upon audience size, demographics, price and effectiveness. Advertising rates and revenues vary among our newspapers depending on circulation, type of advertising, local market conditions and competition. Each of our newspapers operates in highly competitive local media marketplaces, where advertisers and media consumers can choose from a wide range of alternatives, including other news publications, radio, broadcast and cable television, magazines, Internet sites, outdoor advertising, directories and direct-mail products.

Print advertising

Print advertising provided approximately 60% of newspaper segment operating revenues in 2011. Print advertising includes Run-of-Press (“ROP”) advertising, preprinted inserts, advertising in niche publications, and direct mail. Advertisements, located throughout the newspaper, include local, classified and national advertising. Local advertising refers to any advertising purchased by in-market advertisers that is not included in the paper’s classified section. Classified advertising includes all auto, real estate and help-wanted advertising and other ads listed together in sequence by the nature of the ads. National advertising includes advertising purchased by businesses outside our local market. National advertisers typically procure advertising from numerous newspapers using advertising agency buying services. Preprinted inserts are stand-alone, multi-page circulars inserted into and distributed with the daily newspaper, niche publications and shared mail products.

Digital advertising

We sell advertising across all of our digital platforms. Digital advertising provided approximately 6% of our newspaper segment operating revenues in 2011. Digital advertising includes fixed duration campaigns whereby a banner, text or other advertisement appears for a specified period of time for a fee; impression-based campaigns where the fee is based upon the number of times the advertisement appears in Web pages viewed by a user; and click-through based campaigns where the fee is based upon the number of users who click on an advertisement and are directed to the advertisers’ Web site. We also utilize a variety of audience-extension programs to enhance the reach of our Web sites and garner a larger share of local ad dollars that are spent online.

Circulation (subscription fees)

Approximately 29% of our total revenue comes from subscribers who pay us to deliver a print product on a regular basis. Our print product may be delivered directly to subscribers (home delivery) or purchased from a retail store or vending machine (single copy). Home delivery copies account for more than 80% of our total daily circulation.

Daily and Sunday circulation has declined during the past five years, due in part to readers who consume more news and information online or on mobile devices. Some of the declines are due to a deliberate decision to eliminate distribution to outlying areas. More recently we have implemented marketing and pricing strategies intended to stabilize home delivery circulation.

Our product offerings may also be delivered on various digital platforms, including on-line, mobile and tablets. We are in the initial stage of implementing strategies to charge for content that is delivered on our digital platforms.

Expenses

Our newspaper business is characterized as having high fixed costs with much of our expense base dedicated to employees and production/distribution capabilities.

Employees — Employee costs accounted for approximately 49% of segment costs and expenses in 2011. Our workforce is comprised of non-union and union employees. See “Employees.” During the past three years, we have reduced our workforce from 4,100 employees to approximately 2,800.

Distribution — We primarily outsource the physical distribution of our products to independent contractors. Distribution costs are affected by the cost of fuel. We also coordinate the distribution of other publications such as the Wall Street Journal and Barron’s, in several of our local markets.

Newsprint — We consumed approximately 56,000 metric tons of newsprint in 2011. Newsprint is a basic commodity and its price is sensitive to changes in the balance of worldwide supply and demand. Mill closures and industry consolidation have decreased overall newsprint production capacity and increased the likelihood of future price increases. We purchase newsprint from various suppliers, many of which are Canadian. Based on our expected newsprint consumption, we believe that our supply sources are sufficient.

Capital expenditures — During the past several years, our newspaper businesses have consumed a historically low level of capital for ongoing operations. We will continue to make necessary investments to maintain the physical operations and to ensure employee safety. We will focus additional capital on projects that expand our ability to deliver news and improve sales, which will likely include software development and technological capabilities that improve audience or revenue growth directly.

Restructuring to take advantage of scale

Our newspaper operations are organized functionally with divisional executives leading content, sales, finance, operations, information technology and human resources across the enterprise. We believe this reorganization enables us to take advantage of scale and consolidate functions that do not require a presence in our local markets. The primary areas of focus in each local market is on content, sales and distribution of our products.

We are also installing common advertising, circulation, sales and editorial systems in each of our newspapers, and are adopting standardized business processes in each market.

Syndication and Other

Syndication and other primarily include syndication of news features and comics. Under the trade name United Media, we distribute news columns, comics and other features for the newspaper industry. Newspapers typically pay a weekly fee for their use of the features.

In the first quarter of 2011, we entered into a five-year agreement with Universal Uclick (“Universal”) to provide syndication services for the news features and comics of United Media. Universal will provide editorial and production services, sales and marketing, sales support and customer service, and distribution and fulfillment for all the news features and comics of United Media. Under the terms of the agreement Scripps will receive a fixed fee from Universal and will continue to own certain copyrights and control the licenses for those properties, and will manage the business relationships with the creative talent that produces those comics and features. We completed the transition of the services in June 2011.

Employees

As of December 31, 2011, we had approximately 4,800 full-time equivalent employees, of whom approximately 1,800 were with television and 2,800 with newspapers. Various labor unions represent approximately 600 employees, 200 of which are in television and 400 are in newspapers. We have not experienced any work stoppages at our current operations since 1985. We consider our relationships with our employees to be generally satisfactory.

Item 1A.		Risk Factors

For an enterprise as large and complex as ours, a wide range of factors could materially affect future developments and performance. The most significant factors affecting our operations include the following:

We derive the majority of our revenues from marketing and advertising spending by businesses, which is affected by numerous factors. Declines in advertising revenues will adversely affect the profitability of our business.

The demand for advertising in our newspapers or on our television stations is sensitive to a number of factors, both nationally and locally, including the following:

	•		The advertising and marketing spending by our customers can be subject to seasonal and cyclical variations and are likely to be adversely affected during economic downturns.
	•		Television advertising revenues in even-numbered years benefit from political advertising.
	•		The impact of advertiser consolidation and contraction in our local markets. The majority of the print and broadcast advertising is sold to local businesses in our markets. Continued consolidation and contraction of local advertisers could adversely impact our operating results.
	•		The size and demographics of the audience reached by advertisers through our media businesses. Continued declines in our newspaper circulation could have an effect on the rate and volume of advertising, which are dependent on the size and demographics of the audience we provide to our advertisers. Television audiences have also fragmented in recent years as the broad distribution of cable and satellite television has greatly increased the options available to the viewing public. Continued fragmentation of television audiences could adversely impact the rates we obtain for advertising.
	•		Our television stations have significant exposure to automotive advertising. In 2011, 21% and in 2010, 17% of our total advertising in our television segment was from the automotive category.

If we are unable to respond to any or all these factors our advertising revenues could decline which would affect our profitability.

Our local media businesses operate in a changing and increasingly competitive environment. We must continually invest in new business initiatives and to modify strategies to maintain our competitive position. Investment in new business strategies and initiatives could disrupt our ongoing business and present risks not originally contemplated.

The profile of our newspaper and television audience has shifted dramatically in recent years as readers and viewers access news and other content online or through mobile devices and as they spend more discretionary time with social media. While slow and steady declines in audiences have been offset by a growing online viewership, online advertising rates are much lower than print and broadcast advertising rates on a cost-per-thousand basis. This audience shift results in lower profit margins. To remain competitive we must adjust business strategies and invest in new business initiatives, particularly within digital media. Development of new products and services may require significant costs. The success of these initiatives depends on a number of factors, including timely development and market acceptance. Investments we make in new strategies and initiatives may not perform as expected.

We are undergoing a strategic restructuring in our newspaper business that, if unsuccessful, could have a material adverse financial impact.

We are undergoing a significant restructuring in our Newspaper business. This transformation includes, among other things, alignment of our operating costs with secular declines in newspaper revenues, the standardization and centralization of systems and processes, the outsourcing of certain financial processes and the implementation of new software for our circulation, advertising and editorial systems. As a result, we are in a transformational period in which we have made, and will continue to make, changes that, if unsuccessful, could have a material adverse financial impact on our operations.

A significant portion of our operating cost for the newspaper segment is newsprint, so an increase in price or reduction in supplies may adversely affect our operating results.

Newsprint is a significant component of the operating cost of our newspaper operations, comprising 10% of newspaper costs in 2011. The price of newsprint has historically been volatile, and increases in the price of newsprint could materially reduce our operating results. In addition, the continued reduction in the capacity of newsprint producers increases the risk that supplies of newsprint could be limited in the future.

The loss of affiliation agreements could adversely affect our television stations’ operating results.

Ten of our stations have affiliations with the ABC television network and three have affiliations with the NBC television network. 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.

The non-renewal or termination of our network affiliation agreements, which expire in 2014 and 2015, would prevent us from being able to carry programming of the relevant network. This loss of programming would require us to obtain replacement programming, which may involve higher costs and which may not be as attractive to our target audiences, resulting in lower revenues.

Our television stations are subject to government regulations which, if revised, could adversely affect our operating results.

•

Pursuant to FCC rules, local television stations must elect every three years to either (1) require cable and/or direct broadcast satellite operators to carry the stations’ over the air signals or (2) enter into retransmission consent negotiations for carriage. At present all of our stations have retransmission consent agreements with of cable operators and satellite providers. If our retransmission consent agreements are terminated or not renewed, or if our broadcast signals are distributed on less-favorable terms than our competitors, our ability to compete effectively may be adversely affected.

•

If we cannot renew our FCC broadcast licenses, our broadcast operations will be impaired. Our television business depends upon maintaining our broadcast licenses from the FCC, which has the authority to revoke licenses, not renew them, or renew them only with significant qualifications, including renewals for less than a full term. We cannot assure that future renewal applications will be approved, or that the renewals will not include conditions or qualifications that could adversely affect our operations. If the FCC fails to renew any of our licenses, it could prevent us from operating the affected stations. If the FCC renews a license with substantial conditions or modifications (including renewing the license for a term of fewer than eight years), it could have a material adverse effect on the affected station’s revenue-generation potential.

•

The FCC and other government agencies are considering various proposals intended to promote consumer interests, including proposals to encourage locally-focused television programming, to restrict certain types of advertising to children, and to repurpose some of the broadcast spectrum. New government regulations affecting the television industry could raise programming costs, restrict broadcasters’ operating flexibility, reduce advertising revenues, raise the costs of delivering broadcast signals, or otherwise affect our operating results. We cannot predict the nature or scope of future government regulation or its impact on our operations.

Sustained increases in costs of employee health and welfare plans and funding requirements of our pension obligations may reduce the cash available for our business.

Employee compensation and benefits account for approximately 50% of our total operating expenses. In recent years, we have experienced significant increases in employee benefit costs. Various factors may continue to put upward pressure on the cost of providing medical benefits. Although we have actively sought to control increases in these costs, there can be no assurance that we will succeed in limiting cost increases, and continued upward pressure could reduce the profitability of our businesses.

The projected benefit obligations of our pension plans exceed plan assets by $79 million at December 31, 2011. Our pension plans invest in a variety of equity and debt securities, many of which were affected by the disruption in the credit and capital markets in 2008 and 2009. Future volatility and disruption in the stock and bond markets could cause further declines in the asset values of our pension plans. In addition, a decrease in the discount rate used to determine minimum funding requirements could result in increased future contributions. If either occurs, we may need to make additional pension contributions above what is currently estimated, which could reduce the cash available for our businesses.

We may be unable to effectively integrate any new business we acquired.

In December 2011, we acquired the television stations owned by McGraw-Hill Companies, Inc. Failure to successfully integrate operations with our television station operations or to meet our performance expectations could have an adverse impact on our operations.

We may make future acquisitions and could face integration challenges and acquired businesses could significantly under-perform relative to our expectations. If acquisitions are not successfully integrated, our revenues and profitability could be adversely affected and impairment charges may result if acquired businesses significantly under-perform relative to our expectations.

The Edward W. Scripps Trust principally holds our Common Voting shares; such ownership could inhibit potential changes of control.

We have two classes of stock: Common Voting shares and Class A Common shares. Holders of Class A Common shares are entitled to elect one-third of the Board of Directors, but are not permitted to vote on any other matters except as required by Ohio law. Holders of Common Voting shares are entitled to elect the remainder of the Board and to vote on all other matters. Our Common Voting shares are principally held by The Edward W. Scripps Trust, which holds 90% of the Common Voting shares. As a result, the trust has the ability to elect two-thirds of the Board of Directors and to direct the outcome of any matter that does not require a vote of the Class A Common shares. Because this concentrated control could discourage others from initiating any potential merger, takeover or other change of control transaction, the market price of our Class A Common shares could be adversely affected.

Item 1B.		Unresolved Staff Comments

None.

Item 2.		Properties

We own substantially all of the facilities and equipment used in our newspaper operations.

We own substantially all of the facilities and equipment used by our television stations. We own, or co-own with other broadcast television stations, the towers used to transmit our television signals.

Item 3.		Legal Proceedings

We are involved in litigation arising in the ordinary course of business, such as defamation actions, and governmental proceedings primarily relating to renewal of broadcast licenses, none of which is expected to result in material loss.

Item 4.		Mine Safety Disclosures

None.

Executive Officers of the Company — Executive officers serve at the pleasure of the Board of Directors.

Name		Age				Position
Richard A. Boehne			55			President, Chief Executive Officer and Director (since July 2008); Executive Vice President (1999 to 2008) and Chief Operating Officer (2006 to 2008)
Timothy M. Wesolowski			54			Senior Vice President and Chief Financial Officer (since August 2011)
William Appleton			63			Senior Vice President and General Counsel (since July 2008); Managing Partner Cincinnati office, Baker & Hostetler, LLP (2003 to 2008)
Timothy E. Stautberg			49			Senior Vice President/Newspapers (since August 2011); Senior Vice President and Chief Financial Officer (July 2008 to August 2011)
Lisa A. Knutson			46			Senior Vice President/Chief Administrative Officer (since September 2011); Senior Vice President/Human Resources (2008 to 2011)
Brian G. Lawlor			45			Senior Vice President/Television (since January 2009); Vice President/General Manager of WPTV (2004 to 2008)
Douglas F. Lyons			55			Vice President/Controller (since July 2008); Vice President Finance/Administration (2006 to 2008), Director Financial Reporting (1997 to 2006)

PART II

Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Class A Common shares are traded on the New York Stock Exchange (“NYSE”) under the symbol “SSP.” As of December 31, 2011, there were approximately 4,000 owners of our Class A Common shares, based on security position listings, and 19 owners of our Common Voting shares (which do not have a public market). We did not pay any cash dividends in 2011 or 2010.

The range of market prices of our Class A Common shares, which represents the high and low sales prices for each full quarterly period, are as follows:

		Quarter
		1st				2nd				3rd				4th
2011
Market price of common stock:
High		$	10.46			$	9.99			$	9.78			$	8.94
Low			8.94				8.08				6.79				6.46
2010
Market price of common stock:
High		$	9.70			$	11.45			$	8.43			$	10.27
Low			6.22				7.43				6.81				7.72

There were no sales of unregistered equity securities during the quarter for which this report is filed.

The following table provides information about Company purchases of Class A Common Shares during the quarter ended December 31, 2011, and the remaining amount that may still be repurchased under the program:

														Maximum value
		Total				Weighted				Total market				that may yet be
		number of				average				value of				purchased under
		shares				price paid				shares				the plans or
Period		purchased				per share				purchased				programs
10/1/11 – 10/31/11			1,155,221			$	7.02			$	8,110,165			$	27,556,508
11/1/11 – 11/30/11			305,457			$	8.36			$	2,553,775			$	25,002,733
12/1/11 – 12/31/11			170,339			$	8.14			$	1,385,905			$	23,616,828
Total			1,631,017			$	7.39			$	12,049,845

Our board of directors authorized the repurchase of up to $75 million of our Class A Common shares in 2010. We have repurchased a total of $51 million of shares under this authorization through December 31, 2011. An additional $24 million of shares may be repurchased pursuant to the authorization, which expires December 31, 2012.

Performance Graph — Set forth below is a line graph comparing the cumulative return on the Company’s Class A Common shares, assuming an initial investment of $100 as of January 1, 2007, and based on the market prices at the end of each year and assuming dividend reinvestment, with the cumulative return of the Standard & Poor’s Composite-500 Stock Index and an Index based on a peer group of media companies. The spin-off of SNI at July 1, 2008 is treated as a reinvestment of a special dividend pursuant to SEC rules.

The following graph compares the return on the Company’s Class A Common shares with that of the indices noted above for the period of July 1, 2008 (date of spin-off) through December 31, 2011. The graph assumes an investment of $100 in our Class A Common shares, the S&P 500 Index, and our peer group index on July 1, 2008 and that all dividends were reinvested.

We continually evaluate and revise our peer group index as necessary so that it is reflective of our Company’s portfolio of businesses. The companies that comprise our current peer group are A.H. Belo, Belo Corporation, Gannett Company, Gray Television, Inc., Journal Communications, Inc., LIN TV Corporation, McClatchy Company, Media General, New York Times Company, and Sinclair Broadcast Group. The peer group index is weighted based on market capitalization. In 2011, we no longer included Lee Enterprise and Meredith Corporation in our peer group.

Item 6.		Selected Financial Data

The Selected Financial Data required by this item is filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-2 of this Form 10-K.

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 required by this item is filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1 of this Form 10-K.

Item 7A.		Quantitative and Qualitative Disclosures About Market Risk

The market risk information required by this item is filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1 of this Form 10-K.

Item 8.		Financial Statements and Supplementary Data

The Financial Statements and Supplementary Data required by this item are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1 of this Form 10-K.

Item 9.		Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.		Controls and Procedures

The Controls and Procedures required by this item are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1 of this Form 10-K.

Item 9B.		Other Information

None.

PART III

Item 10.		Directors, Executive Officers and Corporate Governance

Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3).

Information required by Item 10 of Form 10-K relating to directors is incorporated by reference to the material captioned “Election of Directors” in our definitive proxy statement for the Annual Meeting of Shareholders (“Proxy Statement”). Information regarding Section 16(a) compliance is incorporated by reference to the material captioned “Report on Section 16(a) Beneficial Ownership Compliance” in the Proxy Statement.

We have adopted a code of conduct that applies to all employees, officers and directors of Scripps. We also have a code of ethics for the CEO and Senior Financial Officers that meets the requirements of Item 406 of Regulation S-K and the NYSE listing standards. Copies of our codes of ethics are posted on our Web site at www.scripps.com.

Information regarding our audit committee financial expert is incorporated by reference to the material captioned “Corporate Governance” in the Proxy Statement.

The Proxy Statement will be filed with the Securities and Exchange Commission in connection with our 2012 Annual Meeting of Stockholders.

Item 11.		Executive Compensation

The information required by Item 11 of Form 10-K is incorporated by reference to the material captioned “Compensation Discussion and Analysis” and “Compensation Tables” in the Proxy Statement.

Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 of Form 10-K is incorporated by reference to the material captioned “Report on the Security Ownership of Certain Beneficial Owners”, “Report on the Security Ownership of Management” and “Equity Compensation Plan Information” in the Proxy Statement.

Item 13.		Certain Relationships and Related Transactions, and Director Independence

The information required by Item 13 of Form 10-K is incorporated by reference to the materials captioned “Corporate Governance” and “Report on Related Party Transactions” in the Proxy Statement.

Item 14.		Principal Accounting Fees and Services

The information required by Item 14 of Form 10-K is incorporated by reference to the material captioned “Report of the Audit Committee of the Board of Directors” in the Proxy Statement.

PART IV

Item 15.		Exhibits and Financial Statement

Schedules

Financial Statements and Supplemental Schedule

(a)

The consolidated financial statements of Scripps are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1.

The reports of Deloitte & Touche LLP, an Independent Registered Public Accounting Firm, dated March 7, 2012, are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1.

(b)

The Company’s consolidated supplemental schedules are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Schedules at page S-1.

Exhibits

The information required by this item appears at page E-1 of this Form 10-K.

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.

		THE E. W. SCRIPPS COMPANY
Dated: March 7, 2012		By:		/s/ Richard A. Boehne   Richard A. Boehne
				President and Chief Executive Officer

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 in the capacities indicated, on March 7, 2012.

Signature		Title
/s/ Richard A. Boehne   Richard A. Boehne		President, Chief Executive Officer and Director  (Principal Executive Officer)
/s/ Timothy M. Wesolowski   Timothy M. Wesolowski		Senior Vice President and Chief Financial Officer
/s/ Douglas F. Lyons   Douglas F. Lyons		Vice President and Controller  (Principal Accounting Officer)
/s/ Nackey E. Scagliotti   Nackey E. Scagliotti		Chairwoman of the Board of Directors
/s/ John H. Burlingame   John H. Burlingame		Director
/s/ John W. Hayden   John W. Hayden		Director
/s/ Roger L. Ogden   Roger L. Ogden		Director
/s/ Mary McCabe Peirce   Mary McCabe Peirce		Director
/s/ J. Marvin Quin   J. Marvin Quin		Director
/s/ Paul Scripps   Paul Scripps		Director
/s/ Kim Williams   Kim Williams		Director

The E. W. Scripps Company
Index to Consolidated Financial Statement Information

Item No.		Page
1. Selected Financial Data			F-2
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			F-4
3. Quantitative and Qualitative Disclosures About Market Risk			F-17
4. Controls and Procedures (Including Management’s Report on Internal Control Over Financial Reporting)			F-19
5. Reports of Independent Registered Public Accounting Firm			F-21
6. Consolidated Balance Sheets			F-23
7. Consolidated Statements of Operations			F-24
8. Consolidated Statements of Comprehensive Income (Loss)			F-25
9. Consolidated Statements of Cash Flows			F-26
10. Consolidated Statements of Equity			F-27
11. Notes to Consolidated Financial Statements			F-28

Selected Financial Data

Five-Year Financial Highlights
(in millions, except per share data)

		2011 (1)				2010 (1)				2009 (1)				2008 (1)				2007 (1)
Summary of Operations (5)
Operating revenues:
Television		$	301			$	321			$	255			$	327			$	326
Newspapers			414				435				455				569				658
Syndication and other			14				21				22				26				21
Corporate and shared services			—				—				—				4				2
Total operating revenues		$	729			$	777			$	732			$	925			$	1,007
Segment profit (loss):
Television			50				75				20				81				84
Newspapers			21				52				49				71				136
JOA and newspaper partnerships			—				—				—				(1	)			3
Syndication and other			(1	)			(3	)			(1	)			(2	)			(4	)
Corporate and shared services			(31	)			(34	)			(27	)			(42	)			(59	)
Depreciation and amortization of intangibles			(40	)			(45	)			(44	)			(47	)			(44	)
Impairment of goodwill, indefinite and long-lived assets (2)			(9	)			—				(216	)			(810	)			—
Write-down of investment in newspaper partnership (3)			—				—				—				(21	)			—
Gains (losses), net on disposals of property, plant and equipment			—				(1	)			—				6				—
Interest expense			(2	)			(4	)			(3	)			(11	)			(36	)
Acquisition costs			(3	)			—				—				—				—
Separation and restructuring costs			(10	)			(13	)			(10	)			(34	)			—
Losses on repurchases of debt			—				—				—				(26	)			—
Miscellaneous, net (4)			(1	)			2				1				10				15
Benefit (provision) for income taxes			10				(1	)			32				266				(33	)
Income (loss) from continuing operations		$	(16	)		$	29			$	(199	)		$	(559	)		$	61
Per Share Data
Income (loss) from continuing operations		$	(.27	)		$	.45			$	(3.69	)		$	(10.33	)		$	1.11
Cash dividends			0.00				0.00				0.00				0.99				1.62
Market Value of Common Shares at December 31 (6)
Per share		$	8.01			$	10.15			$	6.96			$	2.21			$	135.03
Total			435				592				381				119				7,336
Balance Sheet Data
Total assets		$	971			$	828			$	786			$	1,089			$	4,005
Long-term debt (including current portion)			212				—				36				61				505
Equity			517				592				433				595				2,592

Certain amounts may not foot since each is rounded independently.

Notes to Selected Financial Data

As used herein and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “Scripps,” “we,” “our,” or “us” may, depending on the context, refer to The E. W. Scripps Company, to one or more of its consolidated subsidiary companies, or to all of them taken as a whole.

The statement of operations and cash flow data for the five years ended December 31, 2011, and the balance sheet data as of the same dates have been derived from our audited consolidated financial statements. All per-share amounts are presented on a diluted basis. The five-year financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included elsewhere herein.

Operating revenues and segment profit (loss) represent the revenues and the profitability measures used to evaluate the operating performance of our business segments in accordance with GAAP.

(1)		In 2011, we acquired McGraw-Hill Broadcasting, Inc.
(2)		2011 — A non-cash charge of $9 million was recorded to reduce the carrying value of long-lived assets at four of our newspapers.
		2009 — A non-cash charge of $216 million was recorded to reduce the carrying value of our Television segment’s goodwill and indefinite-lived assets.
		2008 — A non-cash charge of $810 million was recorded to reduce the carrying value of our Newspaper segment’s goodwill and, indefinite-lived intangible and long-lived assets in our Television segment.
(3)		2008 — A non-cash charge of $21 million was recorded to reduce the carrying value of our investment in our Colorado newspaper partnership.
(4)		2008 — Miscellaneous, net includes realized gains of $7.6 million from the sale of investments.
		2007— Miscellaneous, net includes realized gains of $9.2 million from the sale of investments.
(5)		The five-year summary of operations excludes the operating results of the following entities and the gains (losses) on their divestiture as they are accounted for as discontinued operations:

2010 — Closed the sale of United Feature Syndicate, Inc. character licensing business for $175 million in cash. We recorded a $162 million pre-tax gain which is included in discontinued operations.

2009 — Closed the Rocky Mountain News in 2009. Under the terms of an agreement with MNG, we transferred our interests in the Denver JOA to MNG in the third quarter of 2009. We recorded no gain or loss on the transfer of our interest in the Denver JOA to MNG.

2008 — On July 1, 2008 we completed the spin-off of Scripps Network Interactive to the shareholders of the Company. In January the Cincinnati joint operating agreement was terminated and we ceased operation of our Cincinnati Post and Kentucky Post newspapers.

(6)

On July 1, 2008 we completed the spin-off of SNI as an independent, publicly traded company to our shareholders. Market prices presented in the tables above are unadjusted and include the value of SNI until the date of the spin-off.

Management’s Discussion and Analysis of
Financial Condition and Results of Operations

The consolidated financial statements and notes to the consolidated financial statements are the basis for our discussion and analysis of financial condition and results of operations. You should read this discussion in conjunction with those financial statements.

Forward-Looking Statements

Certain forward-looking statements related to our businesses are included in this discussion. Those forward-looking statements reflect our current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from the expectations expressed in the forward-looking statements. Such risks, trends and uncertainties, which in most instances are beyond our control, include changes in advertising demand and other economic conditions; consumers’ tastes; newsprint prices; program costs; labor relations; technological developments; competitive pressures; interest rates; regulatory rulings; and reliance on third-party vendors for various products and services. The words “believe,” “expect,” “anticipate,” “estimate,” “intend” and similar expressions identify forward-looking statements. You should evaluate our forward-looking statements, which are as of the date of this filing, with the understanding of their inherent uncertainty. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date the statement is made.

Executive Overview

The E. W. Scripps Company (“Scripps”) is a diverse media company with interests in television stations and newspaper publishing. The company’s portfolio of media properties includes: 19 television stations, including ten ABC-affiliated stations, three NBC affiliates, one independent station and five Azteca affiliates: daily and community newspapers in 13 markets and the Washington-based Scripps Media Center, home to the Scripps Howard News Service.

On December 30, 2011, we acquired the television station group owned by McGraw-Hill Broadcasting Company, Inc. (“McGraw-Hill”), for $212 million in cash, plus a working capital adjustment estimated at $4.4 million. The acquisition was financed with a $212 million term bank loan. The acquisition included four ABC affiliated television stations as well as five Azteca affiliated stations.

In 2011, we repurchased $51 million of shares under the share repurchase program authorized by the board of directors in 2010.

In the first quarter of 2011, we entered into a five-year agreement with Universal Uclick (“Universal”) to provide syndication services for the news features and comics of United Media. Universal will provide editorial and production services, sales and marketing, sales support and customer service, and distribution and fulfillment for all the news features and comics of United Media. Under the terms of the agreement Scripps will receive a fixed fee from Universal and will continue to own certain copyrights and control the licenses for those properties, and will manage the business relationships with the creative talent that produces those comics and features. We completed the transition of the services in June 2011.

Also in the first quarter of 2011, we entered into agreements with Raycom Media, Inc. to produce news and provide services involving technical, promotional and online operations and certain local programming for WFLX, Raycom Media’s Fox affiliate in West Palm Beach, Florida. Raycom will continue to program the station and conduct all advertising sales. Scripps will receive a minimum annual fee for its news content and the services provided and may receive additional incentive payments.

Our efforts to restructure our newspaper operations continue. We have invested in technology to install common advertising, circulation and editorial systems in our newspapers. We are standardizing processes within our operating divisions and are centralizing our outsourcing processes that do not require a significant presence in the local market. Costs related to these efforts totaled $9.9 million for the year ended December 31, 2011. We expect the restructuring program and installation of common newspaper systems to continue through 2013.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make a variety of decisions which affect reported amounts and related disclosures, including the selection of appropriate accounting principles and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience, actuarial studies and other assumptions. We are committed to incorporating accounting principles, assumptions and estimates that promote the representational faithfulness, verifiability, neutrality and transparency of the accounting information included in the financial statements.

Note 1 to the Consolidated Financial Statements describes the significant accounting policies we have selected for use in the preparation of our financial statements and related disclosures. We believe the following to be the most critical accounting policies, estimates and assumptions affecting our reported amounts and related disclosures.

Acquisitions — The accounting for a business combination requires assets acquired and liabilities assumed to be recorded at fair value. With the assistance of third party appraisals, we generally determine fair values using comparisons to market transactions and discounted cash flow analyses. The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset and the expected period of time over which those cash flows will occur and to determine an appropriate discount rate. Changes in such estimates could affect the amounts allocated to individual identifiable assets. While we believe our assumptions are reasonable, if different assumptions were made, the amount allocated to intangible assets could differ substantially from the reported amounts.

Long-Lived Assets — Long-Lived Assets (primarily property, plant and equipment and amortizable intangible assets) must be tested for impairment whenever events occur or circumstances change that indicate that the carrying value of an asset or asset group may not be recoverable. A long-lived asset group is determined not to be recoverable if the estimated future undiscounted cash flows of the asset group are less than the carrying value of the asset group. In the third quarter of 2011, we recorded a $9 million impairment charge for the long-lived assets of four of our newspaper properties.

Estimating undiscounted cash flows requires significant judgments and estimates. We will continue to monitor the estimated cash flows of our newspaper properties and may incur additional impairment charges if future cash flows are less than our current estimates.

Goodwill and Other Indefinite-Lived Intangible Assets — Goodwill for each reporting unit must be tested for impairment on an annual basis or when events occur or circumstances change that would indicate the fair value of a reporting unit is below its carrying value. For purposes of performing the impairment test for goodwill, our reporting units are newspapers and television. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill for the reporting unit is less than its carrying value.

To determine the fair value of our reporting units we generally use market data, appraised values and discounted cash flow analyses. The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset or business and the period of time over which those cash flows will occur and to determine an appropriate discount rate. While we believe the estimates and judgments used in determining the fair values were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates could produce a different estimate of fair value.

We have determined that our FCC licenses are indefinite lived assets and not subject to amortization. They are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. We must compare the fair value of each indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. The carrying value of most of our intangible assets for FCC licenses equals fair value since they were recorded as part of the McGraw-Hill purchase accounting. Fair value is estimated using an income approach referred to as the “Greenfield Approach.” This method requires multiple assumptions relating to the future prospects of each individual FCC license, but not limited to: (i) expected long-term market growth characteristics, (ii) station revenue shares within a market, (iii) future expected operating expenses, (iv) costs of capital and (v) appropriate discount rates. The fair value of the asset is sensitive to each of the assumptions and a change in any individual assumption could result in the fair value being less than the carrying value of the asset and an impairment charge being recorded. For example a 0.5% increase in the discount rate would reduce the aggregate fair value of the FCC licenses by approximately $5 million.

Income Taxes — The accounting for uncertain tax positions and the application of income tax law is inherently complex. As such, we are required to make many assumptions and judgments regarding our income tax positions and the likelihood of whether such tax positions would be sustained if challenged. Interpretations and guidance surrounding income tax laws and regulations change over time. As such, changes in our assumptions and judgments can materially affect amounts recognized in the consolidated financial statements.

We have a significant deferred tax asset balance included in our consolidated balance sheet. We are required to assess the likelihood that our deferred tax assets, which include our net operating loss carryforwards and temporary differences that are expected to be deductible in future years, will be recoverable from the carryback to prior years, carryforward to future years or through other prudent and feasible tax planning strategies. If recovery is not likely, we have to provide a valuation allowance based on our estimates of future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. The provision for current and deferred taxes involves evaluations and judgments of uncertainties in the interpretation of complex tax regulations by various taxing authorities. Actual results could differ from our estimates and if we determine the deferred tax asset we would realize would be greater or less than the net amount recorded, an adjustment would be made to the tax provision in that period.

Pension Plans — We sponsor various noncontributory defined benefit pension plans covering substantially all full-time employees that began employment prior to June 30, 2008 (the majority of our defined benefit pension plans were frozen June 30, 2009), including a SERP, which covers certain executive employees. Pension expense for continuing operations for those plans was $8.0 million in 2011, $7.3 million in 2010 and $26.2 million in 2009.

The measurement of our pension obligation and related expense is dependent on a variety of estimates, including: discount rates; expected long-term rate of return on plan assets; expected increase in compensation levels; and employee turnover, mortality and retirement ages. We review these assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when appropriate. In accordance with accounting principles we record the effects of these modifications currently or amortize them over future periods. We consider the most critical of our pension estimates to be our discount rate and the expected long-term rate of return on plan assets.

The assumptions used in accounting for our defined benefit pension plans for 2011 and 2010 are the following:

		2011				2010
Discount rate for expense			5.85	%			5.97	%
Discount rate for obligations			5.29	%			5.85	%
Long-term rate of return on plan assets			5.70	%			7.60	%
Increase in compensation levels for expense and obligations			3.3	%			0% for 2010 and 3.3% thereafter

The discount rate used to determine our future pension obligations is based upon a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans. The rate is determined each year at the plan measurement date and affects the succeeding year’s pension cost. Discount rates can change from year to year based on economic conditions that impact corporate bond yields. A decrease in the discount rate increases pension obligations and pension expense.

For our defined benefit pension plans, as of December 31, 2011, a half percent increase or decrease in the discount rate would have the following effect:

		0.5%				0.5%
(in thousands)		Increase				Decrease
Effect on total pension expense in 2012		$	(423	)		$	274
Effect on pension benefit obligation as of December 31, 2011		$	(32,824	)		$	35,070

In 2010, we changed our target asset allocations to invest a greater percentage of plan assets in securities that better match the timing of the payment of plan obligations. As a result, approximately 70% of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 30% of plan assets are invested in equity securities and other return-seeking assets. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed. Our expected rate of return on plan assets also considers our historical compound rate of return on plan assets for a 15 year period. A decrease in the expected rate of return on plan assets increases pension expense. A 0.5% change in the expected long-term rate of return on plan assets, to either 4.8% or 5.8%, would increase or decrease our 2012 pension expense by approximately $2.1 million.

We had cumulative unrecognized actuarial losses for our pension plans of $157 million at December 31, 2011. Unrealized actuarial gains and losses result from deferred recognition of differences between our actuarial assumptions and actual results. In 2011, we had an actuarial loss of $31 million. The cumulative unrecognized net loss is primarily due to declines in corporate bond yields and their impact on our discount rate, as well as the overall unfavorable performance of the equity markets since 2000. Based on our current assumptions, we anticipate that 2012 pension expense will include $3.7 million in amortization of unrecognized actuarial losses.

Recently Adopted Standards and Issued Accounting Standards

Recently Adopted Accounting Standards — In October 2009, the FASB issued amendments to the accounting and disclosure for revenue recognition. These amendments, which were effective for us on January 1, 2011, modified the criteria for recognizing revenue in multiple element arrangements and the scope of what constitutes a non-software deliverable. The adoption of this standard did not have a material impact on our financial condition or results of operations.

In September 2011, the FASB issued changes to the disclosure requirements with respect to multiemployer pension plans. These changes require additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. The additional disclosures are effective for our year ending December 31, 2011. The implementation of this amended accounting guidance did not have a material impact on our consolidated financial position and results of operations.

In June 2011, the FASB issued amendments to disclosure requirements for presentation of comprehensive income. This guidance, effective retrospectively for the interim and annual periods beginning on or after December 15, 2011 (early adoption is permitted), requires presentation of total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The implementation in 2011 of this amended accounting guidance did not have a material impact on our consolidated financial position and results of operations.

Recently Issued Accounting Standards — In May 2011, the FASB issued amendments to disclosure requirements for common fair value measurement. These amendments, effective for the interim and annual periods beginning on or after December 15, 2011 (early adoption is prohibited), result in common definition of fair value and common requirements for measurement of and disclosure requirements between U.S. GAAP and IFRS. Consequently, the amendments change some fair value measurement principles and disclosure requirements. The implementation of this amended accounting guidance is not expected to have a material impact on our consolidated financial position and results of operations.

In September 2011, the FASB issued changes to the testing of goodwill for impairment. These changes provide an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the fair value of a reporting unit is less than its carrying amount. Such qualitative factors may include the following: macroeconomic conditions; industry and market considerations; cost factors; overall financial performance; and other relevant entity-specific events. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the existing two-step quantitative impairment test, otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, go directly to the two-step quantitative impairment test. These changes become effective for us for any goodwill impairment test performed on January 1, 2012 or later, although early adoption is permitted. The implementation of this amended accounting guidance is not expected to have a material impact on our consolidated financial position and results of operations.

Results of Operations

The trends and underlying economic conditions affecting the operating performance and future prospects differ for each of our business segments. Accordingly, you should read the following discussion of our consolidated results of operations in conjunction with the discussion of the operating performance of our business segments that follows.

Consolidated Results of Operations — Consolidated results of operations were as follows:

(in thousands, except		For the years ended December 31,
per share data)		2011				Change				2010				Change				2009
Operating revenues		$	728,660				(6.2	)%		$	776,890				6.1	%		$	732,398
Employee compensation and benefits			(351,898	)			1.4	%			(347,183	)			(4.6	)%			(363,837	)
Programs and program licenses			(57,713	)			(3.7	)%			(59,949	)			14.1	%			(52,530	)
Newsprint and press supplies			(51,230	)			8.5	%			(47,235	)			(11.8	)%			(53,544	)
Other expenses			(229,525	)			(1.1	)%			(232,155	)			4.7	%			(221,733	)
Acquisition costs			(2,787	)							—								—
Separation and restructuring costs			(9,935	)			(21.6	)%			(12,678	)			27.6	%			(9,935	)
Depreciation and amortization of intangibles			(40,069	)			(10.7	)%			(44,894	)			1.2	%			(44,360	)
Impairment of goodwill, indefinite and long-lived assets			(9,000	)							—								(216,413	)
Gains (losses), net on disposal of property, plant and equipment			124								(1,218	)							444
Operating income (loss)			(23,373	)							31,578								(229,510	)
Interest expense			(1,640	)							(3,666	)							(2,554	)
Miscellaneous, net			(675	)							1,798								749
Income (loss) from continuing operations before income taxes			(25,688	)							29,710								(231,315	)
Benefit (provision) for income taxes			10,001								(840	)							32,363
Income (loss) from continuing operations			(15,687	)							28,870								(198,952	)
Income (loss) from discontinued operations, net of tax			—								101,536								(10,695	)
Net income (loss)			(15,687	)							130,406								(209,647	)
Net income (loss) attributable to noncontrolling interests			(150	)							(103	)							(42	)
Net income (loss) attributable to the shareholders of The E.W. Scripps Company		$	(15,537	)						$	130,509							$	(209,605	)

Continuing Operations

2011 compared with 2010

Operating results include certain items that affect the comparisons of 2011 to 2010. The most significant of these items are as follows:

•

Restructuring costs to standardize and centralize functions in our Newspaper divisions totaled $9.9 million in 2011 and $12.7 million in 2010.

•

Acquisition costs of $2.8 million were incurred in 2011 for the acquisition of McGraw-Hill.

•

Impairment charges to reduce the carrying value of long-lived assets at four of our newspapers were $9 million in 2011.

Operating revenues decreased due to continued weakness in newspaper print advertising and lower political spending at our television stations in a non-election year. Increased revenues from higher television retransmission rights and fees from our news and television service agreement with WFLX helped offset some of the reductions.

Employee compensation and benefits were up slightly in 2011 compared to 2010. The primary factors affecting employee compensation and benefits in 2011 are:

•

The restoration of employer matching contributions to our defined contribution plan in the third quarter of 2010,

•

Supplemental retirement plan contributions to employees nearing retirement age associated with freezing the accrual of benefits under our defined benefit pension plan in 2009 were instituted in the first quarter of 2011,

	•		An increase in non-forfeitable contributions made in the first quarter of 2011 to employee health savings accounts due to greater enrollment in those plans,
	•		A reduction in the number of employees in 2011 compared to 2010.

Expenses for programs and program licenses decreased in 2011 compared with 2010 primarily due to replacing Oprah at the end of the third quarter with lower-priced programming. This decrease was partially offset by increased expense for network affiliation fees we pay under new network affiliation agreements with ABC and NBC.

Newsprint and press supplies increased by $4.0 million compared with 2010, primarily due to higher newsprint costs. Newsprint costs in 2011 increased by $3.1 million as compared with 2010 due to a 9.4% increase in average newsprint prices while newsprint consumption was flat.

Other expenses decreased slightly in 2011 compared with 2010.

Interest expense in 2011 decreased compared with 2010 since we had no outstanding borrowings for the majority of 2011, until we incurred debt in connection with the December 30, 2011, acquisition of McGraw-Hill.

The effective income tax rate for continuing operations was 38.9% and 2.9% for 2011 and 2010, respectively. The primary difference between the effective rate of 38.9% for 2011 and the U.S. Federal statutory rate of 35% is the impact of the settlement of Internal Revenue Service (“IRS”) examinations, state taxes, the reversal of accruals of taxes and interest for uncertain tax positions and non-deductible expenses. The primary difference in the effective rate of 2.9% for 2010 and the U.S. Federal statutory rate is the impact of state taxes, the reversal of accruals of taxes and interest for uncertain tax positions and non-deductible expenses.

2010 compared with 2009

Operating results include a number of items that affect the comparisons of 2010 to 2009. The most significant of these items are as follows:

•

Restructuring costs to standardize and centralize functions in our Television and Newspaper divisions totaled $12.7 million in 2010 and $9.9 million in 2009.

•

Impairment charges to write-down the value of our Television goodwill and certain FCC licenses totaled $216 million in 2009.

The business climate improved through 2010, resulting in a moderation in the rate of decline of our newspaper advertising revenues and higher advertising rates in all of our television markets. Strong political advertising and a strong rebound in automotive advertising at our television stations also bolstered 2010 revenues.

Excluding $3.1 million in costs associated with freezing the accrual of pension benefits recorded in 2009, and the restructuring costs for 2010 and 2009, total costs and expenses declined by $2.0 million for 2010 compared with 2009.

Employee compensation and benefit costs decreased by $13.6 million compared with 2009, excluding costs associated with freezing our defined benefit pension plans. We reduced the number of employees in our newspaper and television divisions by approximately 7% in 2010 compared with 2009. Late in the first quarter of 2009, we took actions to reduce employee pay and benefits, including suspending employer matching contributions to our defined contribution plan, suspending our annual incentive plan and temporary and permanent pay reductions. We reinstated an annual incentive plan in 2010 and reinstated matching contributions to our defined contribution plan in the second half of 2010.

Programs and program licenses increased in 2010 compared with 2009 primarily due to network affiliation fees we are required to pay to ABC.

Newsprint and press supplies decreased by $6.3 million compared with 2009, primarily due to decreased newsprint costs. Newsprint costs in 2010 declined by $4.5 million as compared with 2009 due to a 12% decrease in consumption and a 2% increase in average newsprint prices.

Other costs and expenses increased by $10.4 million in 2010 compared with 2009 mainly due to an increase in newspaper distribution costs and the restoration of marketing and promotional spending in most of our television markets. The increase in newspaper distribution costs was a result of the new circulation model which we discuss further in the newspaper section.

Interest expense in 2010 increased compared with 2009 since we no longer capitalized interest for the construction of our production facility in Naples.

The effective income tax rate for continuing operations was 2.9% and 14.0% for 2010 and 2009, respectively. The primary difference between the effective rate of 2.9% for 2010 and the U.S. Federal statutory rate of 35% is the impact of state taxes, the reversal of accruals of taxes and interest for uncertain tax positions and non-deductible expenses. The primary difference in the effective rate of 14.0% for 2009 and the U.S. Federal statutory rate was the write-down to the carrying value of Television goodwill which included $150 million of goodwill that was not deductible for income taxes.

Business Segment Results — As discussed in the notes to the Consolidated Financial Statements, our chief operating decision maker evaluates the operating performance of our business segments using a measure called segment profit. Segment profit excludes interest, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America.

Items excluded from segment profit generally result from decisions made in prior periods or from decisions made by corporate executives rather than the managers of the business segments. Depreciation and amortization charges are the result of decisions made in prior periods regarding the allocation of resources and are therefore excluded from the measure. Generally our corporate executives make financing, tax structure and divestiture decisions. Excluding these items from measurement of our business segment performance enables us to evaluate business segment operating performance based upon current economic conditions and decisions made by the managers of those business segments in the current period.

Information regarding the operating performance of our business segments and a reconciliation of such information to the consolidated financial statements is as follows:

		For the years ended December 31,
(in thousands)		2011				Change				2010				Change				2009
Segment operating revenues:
Television		$	300,598				(6.4	)%		$	321,148				25.8	%		$	255,220
Newspapers			414,289				(4.8	)%			434,988				(4.4	)%			455,166
Syndication and other			13,773				(33.6	)%			20,754				(5.7	)%			22,012
Total operating revenues		$	728,660				(6.2	)%		$	776,890				6.1	%		$	732,398
Segment profit (loss):
Television		$	49,631				(33.7	)%		$	74,890							$	20,168
Newspapers			21,455				(59.1	)%			52,480				6.6	%			49,249
JOA and newspaper partnerships			—								—								(211	)
Syndication and other			(1,363	)			(50.7	)%			(2,767	)							(1,352	)
Corporate and shared services			(31,429	)			(8.2	)%			(34,235	)			25.3	%			(27,313	)
Depreciation and amortization of intangibles			(40,069	)							(44,894	)							(44,360	)
Impairment of goodwill, indefinite and long-lived assets			(9,000	)							—								(216,413	)
Gains (losses), net on disposal of property, plant and equipment			124								(1,218	)							444
Interest expense			(1,640	)							(3,666	)							(2,554	)
Acquisition costs			(2,787	)							—								—
Separation and restructuring costs			(9,935	)							(12,678	)							(9,935	)
Miscellaneous, net			(675	)							1,798								962
Income (loss) from continuing operations before income taxes		$	(25,688	)						$	29,710							$	(231,315	)

Certain items required to reconcile segment profitability to consolidated results of operations determined in accordance with accounting principles generally accepted in the United States of America are attributed to particular business segments. Significant reconciling items attributable to each business segment are as follows:

		For the years ended December 31,
(in thousands)		2011				2010				2009
Depreciation and amortization:
Television		$	16,897			$	17,573			$	18,172
Newspapers			21,843				26,260				24,860
Syndication and other			138				458				592
Corporate and shared services			1,191				603				736
Total		$	40,069			$	44,894			$	44,360

Television —Television includes ten ABC-affiliated stations, three NBC-affiliated stations, five Azteca-affiliated stations and one independent station. Our television stations reach approximately 13% of the nation’s households. Our television stations earn revenue primarily from the sale of advertising time to local and national advertisers.

National television networks offer affiliates a variety of programs and sell the majority of advertising within those programs. Through 2009 we received compensation from the networks for carrying their programming. In the fourth quarter of 2010 and first quarter of 2011 we completed the renewal of our affiliation agreements with ABC and NBC. Under the renewal with ABC and NBC we will pay for network programming and will no longer receive any network compensation. In addition to network programs, we broadcast locally produced programs, syndicated programs, sporting events, and other programs of interest in each station’s market. News is the primary focus of our locally produced programming.

The operating performance of our television group is most affected by the health of the national and local economies, particularly conditions within the automotive, services and retail categories, and by the volume of advertising time purchased by campaigns for elective office and political issues. The demand for political advertising is significantly higher in the third and fourth quarters of even-numbered years.

Operating results for television were as follows:

		For the years ended December 31,
(in thousands)		2011				Change				2010				Change				2009
Segment operating revenues:
Local		$	177,931				9.2	%		$	162,929				7.4	%		$	151,665
National			84,425				(1.7	)%			85,909				16.8	%			73,575
Political			6,922								48,117								5,063
Digital			9,400				21.4	%			7,744				39.8	%			5,538
Retransmission			15,687				34.5	%			11,660				45.4	%			8,022
Network compensation			—								1,152								7,464
Other			6,233				71.4	%			3,637				(6.6	)%			3,893
Total operating revenues			300,598				(6.4	)%			321,148				25.8	%			255,220
Segment costs and expenses:
Employee compensation and benefits			128,455				4.6	%			122,851				(1.5	)%			124,755
Programs and program licenses			57,713				(3.7	)%			59,949				14.1	%			52,530
Other expenses			64,799				2.1	%			63,458				9.9	%			57,767
Total costs and expenses			250,967				1.9	%			246,258				4.8	%			235,052
Segment profit		$	49,631							$	74,890							$	20,168

2011 compared with 2010

Revenues

Television time sales decreased due to lower political advertising in a non-election year. Excluding the impact of political advertising, revenues increased 7.6% to $294 million. The increase is primarily due to stronger local advertising, particularly in the auto and service categories.

Retransmission revenues increased year over year due to the renewal of certain agreements in 2011 at higher rates. Prior to the spin-off of SNI, the rights to retransmit our broadcast signals were included as consideration in negotiations between cable and satellite system operators and the Company’s cable networks. SNI pays us fixed fees for the use of our retransmission rights. As the retransmission contracts negotiated by SNI expire, we will negotiate standalone retransmission consent agreements with the cable and satellite system operators. Agreements with two of our largest cable television operators, Time Warner and Comcast, expire in December 2015 and December 2019, respectively.

Under the renewal of the long-term network affiliation agreements with ABC and NBC, we no longer receive network compensation revenue.

Other revenues include revenue from our news production and television services arrangement with WFLX. Other revenues increased primarily due to our news production and television services agreement with WFLX starting in 2011.

Cost and expenses

Employee compensation and benefits increased in 2011 compared with 2010 primarily due to increased costs for our defined contribution retirement plans and other employee benefits. We restored the matching contribution to our defined contribution plan in July 2010 and in the first quarter of 2011 began making supplemental retirement plan contributions to employees nearing retirement age. The supplemental contributions are associated with freezing the accrual of benefits under our defined benefit pension plan in 2009.

Expenses for programs and program licenses decreased in 2011 compared with 2010 primarily due to replacing Oprah at the end of the third quarter with lower-priced programming. This decrease was partially offset by increased expense for network affiliation fees we pay under new network affiliation agreements with ABC and NBC.

Other expenses in 2011 increased primarily due to increased promotional advertising spending.

2010 compared with 2009

Revenues

We experienced an improvement in the flow of advertising in all of our markets, and key television revenue categories have shown year-over-year growth. The rate of improvement in advertising revenues increased throughout 2010, with local and national time sales up 11% in the year, led by a 58% increase in automotive advertising. Automotive advertising revenues in 2009 were affected by the weakened financial condition of the large automotive manufacturers. Revenues in our television division also were bolstered by strong political spending in the third and fourth quarters of 2010.

Network compensation revenue decreased in 2010 compared with 2009 due to the expiration of our ABC network affiliation agreement in January 2010. Under the renewal of the long-term network affiliation agreement with ABC we no longer receive compensation revenue from ABC.

Retransmission revenues increased year over year due to the renewal of certain agreements in 2010 at higher rates.

Cost and expenses

Changes in pension costs affect year-over-year comparisons of employee compensation and benefits. Pension costs decreased by $4.9 million in 2010 due to freezing the accrual of service credits in plans covering a majority of our television employees effective July 1, 2009. Pension costs in 2009 also include $1.1 million in curtailment charges related to the benefit accrual freeze. Excluding pension costs, 2010 employee compensation and benefits increased by 3% compared with 2009. The 2009 year includes the effects of temporary pay reductions, which since have been restored, and the elimination of bonus programs, which were partially restored in 2010.

Programs and program licenses increased in 2010 primarily due to network affiliation fees we now pay under a new affiliation agreement with ABC.

Other costs and expenses increased primarily due to the cost associated with transitioning to a new national representation contract, increases in promotional spending during 2010 and additional spending to support our digital platforms. These increases were partially offset by lower bad debt expense.

Newspapers — We operate daily and community newspapers in 13 markets in the U.S. Our newspapers earn revenue primarily from the sale of advertising to local and national advertisers and from the sale of newspapers to readers. Our newspapers operate in mid-size markets, focusing on news coverage within their local markets. Advertising and circulation revenues provide substantially all of each newspaper’s operating revenues, and employee, distribution and newsprint costs are the primary expenses at each newspaper. The operating performance of our newspapers is most affected by local and national economic conditions, particularly within the retail, labor, housing and automotive markets, as well as newsprint prices.

Operating results for our newspaper business were as follows:

		For the years ended December 31,
(in thousands)		2011				Change				2010				Change				2009
Segment operating revenues:
Local		$	83,992				(5.4	)%		$	88,778				(8.8	)%		$	97,394
Classified			78,077				(8.1	)%			84,993				(9.8	)%			94,183
National			13,723				(27.8	)%			19,017				(11.7	)%			21,546
Preprint and other			72,824				(2.6	)%			74,765				(5.7	)%			79,243
Print advertising			248,616				(7.1	)%			267,553				(8.5	)%			292,366
Circulation			120,569				(0.6	)%			121,283				4.7	%			115,872
Digital			26,160				(8.2	)%			28,492				(4.1	)%			29,696
Other			18,944				7.3	%			17,660				2.5	%			17,232
Total operating revenues			414,289				(4.8	)%			434,988				(4.4	)%			455,166
Segment costs and expenses:
Employee compensation and benefits			193,505				2.1	%			189,491				(9.8	)%			210,124
Newsprint and press supplies			51,230				8.5	%			47,235				(11.8	)%			53,544
Distribution services			51,091				6.1	%			48,166				16.6	%			41,295
Other expenses			97,008				(0.6	)%			97,616				(3.3	)%			100,954
Total costs and expenses			392,834				2.7	%			382,508				(5.8	)%			405,917
Segment profit		$	21,455				(59.1	)%		$	52,480				6.6	%		$	49,249