References to "Meredith" or "the Company" refer to Meredith Corporation and subsidiaries. The information included in the foregoing interim financial statements is unaudited. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring basis. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. Readers are referred to the Company's Form 10-K for the year ended June 30, 2004 for complete financial statements and related notes. Certain prior-year amounts have been reclassified to conform with current-year presentation.

Meredith accounts for awards of stock-based employee compensation under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Compensation costs are reflected in net earnings for restricted stock plans; however, generally no stock-based compensation cost is reflected in net earnings for the employee stock purchase plan or for options granted as all options had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation:

The following table presents the calculations of earnings per share:

For the three months ended September 30, there were no antidilutive options excluded from the above calculations in 2004, and there were 2,000 options excluded in 2003 (with a weighted average exercise price of $47.28).

In the three months ended September 30, 2004 and 2003, options were exercised to purchase 109,000 shares and 114,000 shares, respectively.

Meredith does not have any off-balance sheet arrangements. The Company's use of special-purpose entities is limited to Meredith Funding Corporation, whose activities are fully consolidated in Meredith's Condensed Consolidated Financial Statements.

At the beginning of fiscal 2003, Meredith adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that goodwill and intangible assets with indefinite lives no longer be amortized to earnings but be reviewed at least annually for impairment. Upon the adoption of SFAS No. 142, Meredith, like most broadcasters, determined that its broadcasting network affiliation agreements had indefinite lives and ceased recording amortization expense on these assets. Subsequent to this determination, we had discussions with the staff of the Securities and Exchange Commission as to whether network affiliation agreements are definite lived assets and should be amortized over the period of time the agreements are expected to remain in place, assuming renewals without material modifications to the original terms and conditions. Based on these discussions, Meredith reevaluated its accounting treatment and has modified its accounting policy. It will amortize these assets effective with the adoption of SFAS No. 142 generally using lives of 25 to 40 years from their original acquisition dates. If future renewals result in material modifications to the original terms and conditions of these agreements, the lives will be reassessed.

This change in accounting policy has resulted in the restatement of the unaudited financial statements for the three months ended September 30, 2003 presented in this Quarterly Report on Form 10-Q. The restatement adjustments had no impact on cash flows from operating, investing or financing activities although it did impact certain non-cash components of cash flows from operating activities. The following is a summary of the adjustments to the financial statements as a result of the restatement:

Major components of inventories are summarized below. Of total inventory values shown, approximately 31 percent are under the LIFO method at September 30, 2004 and 36 percent at June 30, 2004.

Intangible assets and goodwill consisted of the following:

In August 2004, Meredith acquired WFLI-TV, the WB television affiliate serving Chattanooga, TN. The purchase price allocation, which included intangible assets and goodwill, is preliminary.

Amortization expense for intangible assets was $1.4 million in the three months ended September 30, 2004. Annual amortization expense for intangible assets is expected to be as follows: $5.5 million in fiscal 2005, $5.4 million in fiscal 2006, $5.2 million in fiscal 2007, $5.0 million in fiscal 2008, and $4.9 million in fiscal 2009.

The changes in the carrying amounts of goodwill during the first quarter of fiscal 2005 and 2004 are as follows:

In response to a weakening economy and a widespread advertising downturn in fiscal 2001, management took steps to reduce the number of Meredith employees, including a one-time, voluntary early retirement program. Other selective workforce reductions were achieved through attrition, realignments and job eliminations. Approximately 200 positions were eliminated in fiscal 2001 and early fiscal 2002. The company also wrote-off certain Internet investments. These actions were the primary factors in a fiscal 2001 fourth-quarter nonrecurring charge of $25.3 million for personnel costs ($18.4 million), asset write-downs and other ($8.2 million), offset by the reversal of excess accruals ($1.3 million). An accrual balance of $0.9 million remained at June 30, 2004 for enhanced retirement benefits. Payments of $0.1 million were made during the quarter resulting in an accrual balance of $0.8 million at September 30, 2004. These payments will continue for approximately four years.

In connection with the asset-backed commercial paper facility, Meredith entered into a revolving agreement to sell all of its rights, title and interest in the majority of its accounts receivable related to advertising, book and miscellaneous revenues to Meredith Funding Corporation, a special purpose entity established to purchase accounts receivable from Meredith. At September 30, 2004, $155 million of accounts receivable, net of reserves, were outstanding under the agreement. Meredith Funding Corporation in turn sells receivable interests to an asset-backed commercial paper conduit administered by a major national bank. In consideration of the sale, Meredith receives cash and a subordinated note, bearing interest at the prime rate (4.75 percent at September 30, 2004), from Meredith Funding Corporation. The agreement is structured as a true sale under which the creditors of Meredith Funding Corporation will be entitled to be satisfied out of the assets of Meredith Funding Corporation prior to any valu e being returned to Meredith or its creditors. The accounts of Meredith Funding Corporation are fully consolidated in Meredith's Condensed Consolidated Financial Statements. The asset-backed commercial paper facility renews annually in April. Meredith has the ability and the intent to renew the facility each year until April 9, 2007, the facility termination date.

The following tables present the components of net periodic benefit cost:

Comprehensive income is defined as the change in equity during a period from transactions and other events and circumstances from nonowner sources. Comprehensive income includes net earnings as well as foreign currency translation adjustments. Total comprehensive income (in thousands) for the three-month periods ended September 30, 2004 and 2003, was $25,661 and $19,370, respectively.

Meredith Corporation is a diversified media company primarily focused on the home and family marketplace. Based on products and services, the Company has established two reportable segments: publishing and broadcasting. The publishing segment includes magazine and book publishing, integrated marketing, interactive media, database-related activities, brand licensing, and other related operations. The broadcasting segment includes the operations of 13 network-affiliated television stations and one AM radio station. There are no material intersegment transactions. There have been no changes in the basis of segmentation since June 30, 2004.

There are two principal financial measures reported to the chief executive officer for use in assessing segment performance and allocating resources. Those measures are operating profit and earnings before interest, taxes, depreciation and amortization (EBITDA). Operating profit for segment reporting, disclosed below, is revenues less operating costs excluding interest income and expense and unallocated corporate expenses. Segment operating costs include allocations of certain centrally incurred costs such as employee benefits, occupancy, information systems, accounting services, internal legal staff and human resources administration expenses. These costs are allocated based on actual usage or other appropriate methods, primarily number of employees. Unallocated corporate expenses are corporate overhead expenses not attributable to the operating groups. Segment EBITDA also excludes unallocated corporate expenses. In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, EBITDA is not presented below.

Meredith Corporation (Meredith or the Company) is one of America's leading home and family publishers and a broadcaster with television stations in top markets such as Atlanta and Phoenix. Each month we reach more than 75 million American consumers through our magazines, books, custom publications, web sites, and television stations.

Meredith operates in two business segments. Publishing consists of magazine and book publishing, integrated marketing, interactive media, database-related activities, brand licensing and other related operations. Broadcasting consists of 13 network-affiliated television stations and one radio station. Both segments operate primarily in the United States and compete against similar media and other types of media on both a local and national basis. Publishing accounted for 75 percent of the Company's revenues in the first quarter of fiscal 2005 while broadcasting revenues totaled 25 percent.

PUBLISHING
Advertising revenues made up 50 percent of publishing's fiscal 2005 first quarter revenues. These revenues are generated from the sale of advertising space in the Company's magazines and on web sites to clients interested in promoting their brands, products and services to consumers. Circulation revenues accounted for 27 percent of publishing's fiscal 2005 first quarter revenues. Circulation revenues result from the sale of magazines to consumers through subscriptions and by single copy sales on newsstands, primarily at major retailers and grocery/drug stores. The remaining 23 percent of publishing revenues came from a variety of activities that included the sale of books and custom publishing services as well as brand licensing, product sales and other related activities. Publishing's major expense categories include production and delivery of publications and promotional mailings and employee compensation costs.

BROADCASTING
Broadcasting derives almost all of its revenues-98 percent in the first quarter of fiscal 2005-from the sale of advertising. The remainder comes from television rebroadcast rights fees, network compensation, television production services, and other services. Political advertising associated with biennial election campaigns can result in cyclical increases (in odd-numbered fiscal years) and decreases (in even-numbered fiscal years) in advertising revenues. Broadcasting's major expense categories are employee compensation and programming costs.

• Revenues increased 6 percent from the prior first quarter reflecting increased advertising revenues, including cyclical political advertising at the television stations, and strong growth in our custom publishing revenues.

• Both segments increased revenues and operating profits and improved their operating profit margins in the quarter.

• Diluted earnings per share increased 35 percent to $0.50 from prior first quarter earnings of $0.37. The increase primarily reflected the improved performance of both operating groups.

• We generated $41.1 million in operating cash flow and spent $31.1 million to repurchase shares of our common stock in the quarter.

• We acquired WFLI-TV, the WB television affiliate serving Chattanooga, TN. Chattanooga is the 86^th largest television market in the country, and the station serves viewers in southeast Tennessee and northwest Georgia. The acquisition adds a WB station to our affiliate mix and increases our presence in the Southeast, where we already own stations in Atlanta, Nashville and Greenville, SC. Our initial investment in the station was not material.

USE OF NON-GAAP FINANCIAL MEASURES
Our analysis of broadcasting segment results includes references to earnings before interest, taxes, depreciation, and amortization (EBITDA). EBITDA and EBITDA margin are non-GAAP measures. We use EBITDA along with operating profit and other GAAP measures to evaluate the financial performance of our broadcasting segment. EBITDA is a common alternative measure of performance in the broadcasting industry and is used by investors and financial analysts, but its calculation may vary among companies. Broadcasting segment EBITDA is not used as a measure of liquidity, nor is it necessarily indicative of funds available for our discretionary use.

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

The following sections provide an analysis of the results of operations for the publishing and broadcasting segments followed by an analysis of the consolidated results of operations for the quarter ended September 30, 2004 compared with the quarter ended September 30, 2003. This commentary should be read in conjunction with the consolidated financial statements presented elsewhere in this report and with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004.

PUBLISHING
Publishing operating results were as follows:

Revenues
Publishing advertising revenues increased 8 percent in the first quarter of fiscal 2005. The increase resulted from higher average net revenues per page as total advertising pages sold were down slightly from the prior-year quarter for the group as a whole. There was considerable variability in advertising page performance among the titles. Combined advertising pages for our two largest circulation titles, Better Homes and Gardens and Ladies' Home Journal, were flat with Better Homes and Gardens reporting a small increase and Ladies' Home Journal down slightly. Advertising pages for American Baby magazine increased in the mid-teens on a percentage basis while advertising pages for our mid-size titles, Country Home, Traditional Home, Midwest Living, and MORE, increased 3 percent as a group. MORE magazine reported strong growth in advertising pages but ad pages were down at Midwest Living and flat at the remaining two titles. Advertising pages were also down for the Special Interest Publications. Among our core advertising categories, food and beverage, home and building, and direct response showed strength while demand was weaker for the pharmaceutical and cosmetics categories. Also, online advertising revenues increased more than 30 percent in the quarter due to increased market demand.

Magazine circulation revenues declined 4 percent in the quarter. The decline in circulation revenues reflected lower average subscription revenues per copy for several titles, due to an increase in the term of direct mail offers. Our strategy is to increase circulation profits by increasing the term of direct mail offers which lowers costs. Also contributing to the decline in circulation revenues were lower newsstand revenues due to continued weakness in newsstand sales and our previously announced reduction in the number of Special Interest Publications on sale.

Other publishing revenues increased 7 percent in the quarter ended September 30, 2004, primarily reflecting strong new business growth in integrated marketing, our custom publishing operation. One of our larger new programs is with Nestlé. The growth in integrated marketing revenues was partially offset by lower revenues from the sale of books. The decline was due to the timing of the book release schedule compared with the prior year.

Operating Costs
First quarter publishing operating costs increased 2 percent from the comparable fiscal 2004 quarter. The increase reflected volume-related growth in integrated marketing production costs and higher employee compensation costs. Employee compensation costs were up as a result of higher staff levels primarily to support the growth in integrated marketing business, higher salary levels due to annual merit increases and higher performance-based incentive expense. Partially offsetting these cost increases were lower magazine subscription acquisition costs resulting from a shift to more profitable direct-to-publisher sources and a volume-related decline in book product costs.

Operating Profit
Publishing operating profit increased 17 percent in the quarter. The primary factors were higher advertising revenues, a volume related increase in integrated marketing operating profits and higher magazine circulation contribution. These improvements were partially offset by lower operating profits from book sales.

BROADCASTING
Broadcasting operating results were as follows:

Revenues
Broadcasting revenues increased 11 percent in the first quarter of fiscal 2005 compared with the prior first quarter primarily reflecting higher advertising related to the November presidential and other election campaigns. Political advertising totaled $6.4 million in the quarter compared with just $0.3 million in the prior first quarter. Non-political advertising revenues increased 2 percent in the quarter despite political advertising displacing some core advertising.

Operating Costs
Broadcasting costs increased 6 percent in the first quarter of fiscal 2005. The cost increase was due to higher programming fees and increased news, sales and promotion costs which resulted from our efforts to improve our news programming and to sell our advertising more aggressively. Programming costs increased primarily due to the higher fee paid in Kansas City for the NFL Chiefs' pre-season broadcast rights. Costs for the newly acquired Chattanooga station also contributed to the increase in costs. Lower broadcasting program rights amortization partially offset the cost increases.

Operating Profit
Broadcasting operating profit increased 40 percent in the quarter compared to the prior first quarter as a result of the increase in political advertising revenues.

Supplemental Disclosure of Broadcasting EBITDA
Meredith's broadcasting EBITDA is defined as broadcasting segment operating profit plus depreciation and amortization expense. EBITDA is not a GAAP financial measure and should not be considered in isolation or as a substitute for GAAP financial measures. See the discussion of management's rationale for the use of EBITDA in the preceding Executive Overview section. The following table provides reconciliations between broadcasting segment operating profit and EBITDA. The EBITDA margin is defined as segment EBITDA divided by segment revenues.

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

Unallocated corporate expenses declined slightly in the first quarter of fiscal 2005 as lower legal costs offset an increase in employee compensation costs resulting from higher performance-based incentives and annual salary merit increases.

Consolidated Operating Costs and Expenses
Consolidated operating costs and expenses were as follows:

Fiscal 2005 first quarter production, distribution and editorial costs increased 5 percent from the prior first quarter. The largest factor in the increase was a volume-related increase in production costs for integrated marketing custom publishing projects. Other contributing factors included higher magazine editorial costs and higher broadcasting spending for news and sports programming. These cost increases were partially offset by lower broadcasting program rights amortization expense and a volume-related decline in book product costs.

First quarter selling, general and administrative expenses increased slightly from the prior first quarter. Increased spending for advertising and promotion at the broadcasting stations was nearly offset by lower magazine subscription acquisition costs.

Depreciation and amortization expenses decreased 3 percent in the quarter reflecting lower information technology depreciation due to certain systems becoming fully depreciated.

Income from Operations
Income from operations increased 27 percent in the first quarter of fiscal 2005 reflecting revenue growth and higher operating margins in both of our business segments.

Net Interest Expense
Net interest expense was $5.0 million in the fiscal 2005 first quarter compared with expense of $5.8 million in the comparable prior-year quarter. Average long-term debt outstanding declined to $300 million in the current quarter from $365 million in the first quarter of fiscal 2004.

Interest expense in the prior-year first quarter included the effects of interest rate swap contracts. We had entered into interest rate swap contracts to effectively convert a substantial portion of our variable rate debt to fixed rate debt. The net cash disbursements related to these contracts were included in interest expense. In addition, certain interest rate swap contracts had previously been deemed ineffective and dedesignated as hedge contracts. Subsequent to the discontinuation of hedge accounting, changes in the fair market value of the affected interest rate swap contracts were recorded as interest expense. The net effect of the swap contracts was an increase in interest expense of $0.5 million in the quarter ended September 30, 2003. All of our interest rate swap contracts expired in June 2004.

Income Taxes
Our effective tax rate was 38.7 percent in both the current and prior first quarters.

Earnings and Earnings per Share
Net earnings were $25.6 million (50 cents per diluted share) in the quarter ended September 30, 2004, up 35 percent from $19.1 million (37 cents per diluted share) in the comparable prior-year quarter. The improvement reflected higher segment operating profits and lower interest expense. Average basic and diluted shares outstanding increased slightly in the quarter.

OVERVIEW
Meredith's primary source of liquidity is cash generated by operating activities. Debt financing is typically used for acquisitions. We expect cash on hand, internally generated cash flow, and available credit from third-party financing agreements will provide funds for operating and recurring cash needs (e.g., working capital, capital expenditures, debt repayments, and cash dividends) into the foreseeable future. We have up to $250 million available under current credit agreements. While there are no guarantees that we will be able to replace current credit agreements when they expire, we expect to be able to do so.

SOURCES AND USES OF CASH
Cash and cash equivalents decreased $5.0 million in the first three months of fiscal 2005; they decreased $12.9 million in the comparable period of fiscal 2004. In both periods, net cash provided by operating activities was used for purchases of Company stock, capital investments, and dividends. In the current quarter, cash was also used for the acquisition of the Chattanooga television station. In the prior-year quarter, cash was also used to reduce debt.

Operating activities
The largest single component of operating cash inflows is cash received from advertising customers. Other sources of operating cash inflows include cash received from magazine circulation sales and other revenue transactions such as book, integrated marketing, and product sales. Operating cash outflows include payments to vendors and employees and payments of interest and income taxes.

Cash provided by operating activities totaled $41.1 million in the first quarter of fiscal 2005 compared with $20.0 million in first quarter of fiscal 2004. The largest factor in the increase was a 13 percent increase in cash received from advertising sales. Also contributing to the increase were higher cash receipts from integrated marketing sales, a refund of federal income taxes resulting from the sale of a subsidiary in June 2003, and lower interest payments. These increases in cash from operating activities were partially offset by a reduction in cash received from magazine newsstand sales as well as increased cash spending for employee compensation costs and integrated marketing production costs.

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

Net cash used by investing activities increased from $6.5 million in the prior first quarter to $12.6 million in the current quarter. The increase reflected the use of cash for the acquisition of the Chattanooga television station partially offset by lower spending for the purchase of property, plant and equipment in the current quarter.

Financing activities
Financing cash inflows generally include borrowings under debt agreements and proceeds from common stock issued for stock option exercises and for our Employee Stock Purchase Plan. Financing cash outflows generally include the repayment of long-term debt, repurchases of Company stock, and the payment of dividends.

Net cash used by financing activities totaled $33.5 million in the quarter ended September 30, 2004, compared with $26.4 million in the quarter ended September 30, 2003. Spending for purchases of Company stock increased in the current quarter; however, this was partially offset by a reduction in net debt repayments.

Long-term debt
At September 30, 2004, long-term debt outstanding totaled $300 million in fixed-rate unsecured senior notes. $125 million of this debt is due in the next 12 months. The weighted average effective interest rate for the fixed-rate notes is 6.55 percent. We also have credit available under an asset-backed commercial paper facility with a capacity of up to $100 million and a revolving credit facility of up to $150 million. The asset-backed commercial paper facility renews annually until April 9, 2007, the facility termination date. The interest rate changes monthly and is based on a fixed spread over the average commercial paper cost to the lender. The revolving credit facility expires on April 5, 2007. The interest rate is variable based on LIBOR and Meredith's debt to trailing 12 month EBITDA ratio.

All of our debt agreements include financial covenants, and failure to comply with any such covenants could result in the debt becoming payable on demand. The Company was in compliance with all debt covenants at September 30, 2004 and expects to remain so in the future.

Contractual obligations
Our contractual obligations are summarized in our Annual Report on Form 10-K for the year ended June 30, 2004. As of September 30, 2004, there had been no material changes in our contractual obligations from June 30, 2004.

Share repurchase program
As part of our ongoing share repurchase program, we spent $31.1 million in the first quarter of fiscal 2005 to repurchase an aggregate of 609,000 shares of Meredith Corporation common stock at then current market prices. We spent $4.7 million to repurchase 100,000 shares in the first quarter of fiscal 2004. We expect to continue repurchasing shares from time to time in the foreseeable future, subject to market conditions. As of September 30, 2004, approximately 1.5 million shares were authorized for future repurchase. The status of the repurchase program is reviewed at each quarterly Board of Directors meeting. See Part II, Item 2 (e), Issuer Purchases of Equity Securities, of this Form 10-Q for detailed information on share repurchases during the quarter ended September 30, 2004.

Dividends
Dividends paid in the first quarter of fiscal 2005 totaled $6.0 million, or 12 cents per share, compared with dividend payments of $4.8 million, or 9.5 cents per share, in the first quarter of fiscal 2004.

Capital expenditures
Spending for property, plant, and equipment totaled $4.2 million in the first three months of fiscal 2005 compared with prior-year first quarter spending of $6.3 million. The decline reflected lower spending for broadcasting DTV conversion and publishing information technology equipment in the current period. We expect to spend between $18 and $22 million in fiscal 2005 and 2006 for a new facility for our television station in Hartford. We have no other material commitments for capital expenditures. We expect funds for future capital expenditures to come from operating activities or, if necessary, borrowings under credit agreements.

CRITICAL ACCOUNTING POLICIES
Meredith's critical accounting policies are summarized in our Annual Report on Form 10-K for the year ended June 30, 2004. As of September 30, 2004, the Company's critical accounting policies had not changed from June 30, 2004.

OUTLOOK
Meredith anticipates that fiscal 2005 will be another strong year. The Company believes the current First Call mean estimate of $2.63 per share for fiscal 2005 is achievable. However, the current First Call mean estimates for the remaining quarters of fiscal 2005 require some rebalancing, primarily due to shifts in advertising spending caused partially by general economic uncertainty approaching the Presidential election.

For the second quarter of fiscal 2005, Broadcasting pacings, which are a snapshot in time and change frequently, are currently running up nearly 20 percent. With one week left before the election, Meredith expects to book $11 to $13 million in net political advertising in the second quarter.

The Company expects its Publishing Group to grow operating profit in the low-double digits for the second quarter due to improved net yield per advertising page, increased circulation profit, strong results from its book business, and disciplined expense management. Publishing advertising revenues are expected to be down in the mid-single digits reflecting comparisons with strong results in the prior-year quarter and continuing period-to-period volatility in the advertising marketplace. Total Publishing revenues are expected to decline in the low-single digits in the second quarter due to the expected advertising performance partially offset by gains in books.

Given these factors, Meredith expects second quarter earnings per share will increase 40 to 45 percent from the $0.38 per share it earned in the prior-year quarter.

RISK FACTOR
Except for the historical information contained herein, the matters discussed in this quarterly report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These statements are based on management's current knowledge and estimates of factors affecting our operations. Readers are cautioned not to place undue reliance on such forward-looking information. Factors that could adversely affect future results include but are not limited to downturns in national and/or local economies; a softening of the domestic advertising market; world, national or local events that could disrupt broadcast television; increased consolidation among major advertisers or other events depressing the level of advertising spending; the unexpected loss of one or more major clients; changes in consumer reading, purchase, and/or television viewing patterns; unanticipated increases in paper, postage, printing, or syndicated programming costs; changes in television network affiliation agreements; technological developments affecting products or methods of distribution; changes in legislation or government regulations affecting the Company's industries; unexpected changes in interest rates; and any acquisitions and/or dispositions. Meredith's Annual Report on Form 10-K for the year ended June 30, 2004 includes a more complete description of the risk factors that may affect our results.

Meredith is exposed to certain market risks as a result of its use of financial instruments, in particular the potential market value loss arising from adverse changes in interest rates. Readers are referred to Item 7A, Quantitative and Qualitative Disclosures about Market Risk of the Company's fiscal 2004 Form 10-K for a more complete discussion of these risks.

Long-term debt
At September 30, 2004, Meredith had outstanding $300 million in fixed-rate long-term debt. There are no earnings or liquidity risks associated with the Company's fixed-rate debt. The fair market value of the fixed-rate debt (based on discounted cash flows reflecting borrowing rates currently available for debt with similar terms and maturities) varies with fluctuations in interest rates. A 10 percent decrease in interest rates would have changed the fair market value of the fixed-rate debt to $312.1 million from $309.8 million at September 30, 2004.

Broadcast rights payable
There has been no material change in the market risk associated with broadcast rights payable since June 30, 2004.

Meredith's Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this Form 10-Q, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that Meredith files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. There have been no significant changes in the Company's internal controls that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting in the quarter ended September 30, 2004.

The following table sets forth information with respect to the Company's repurchases of common and class B stock during the quarter ended September 30, 2004.

In February 2004, Meredith announced the Board of Directors had authorized the repurchase of up to 2 million additional shares of the Company's stock through public and private transactions.

*  In addition to the above, at the end of September 2004, 37,000 shares were repurchased as part of our ongoing share repurchase program, at an average price of $51.00, but were settled subsequent to the end of the quarter.