Scripps Networks Interactive reports second quarter financial results

For immediate release

Aug. 9, 2011

KNOXVILLE, Tenn. – Scripps Networks Interactive Inc. (NYSE: SNI) today reported operating results for the second quarter 2011.

Consolidated revenues for the quarter increased 12 percent to $534 million from the prior-year period. Results for the three-month period ended June 30 reflect strong advertising revenue of $374 million, up 13 percent, and affiliate fee revenue of $148 million, up 6.3 percent year-over-year.

Expenses for the quarter increased 1.2 percent from the prior-year period to $260 million. Expenses in the second quarter 2010 included $8.6 million in one-time expenses related to the Travel Channel transition. Excluding the prior-year transition costs, consolidated expenses increased 4.7 percent in the second quarter of 2011. The increase was driven primarily by increased marketing expenses to promote programming initiatives and higher personnel costs.

Total segment profit increased 24 percent to $274 million. Excluding the 2010 one-time item noted above, segment profit increased 19 percent from the second quarter of 2010. (See note 3 for a definition of segment profit).

Second quarter income from continuing operations attributable to Scripps Networks Interactive was $133 million, or $0.78 per share, compared with $98.0 million, or $0.58 per share, in the second quarter 2010. Excluding the one-time item noted, second quarter 2010 income from continuing operations attributable to Scripps Networks Interactive was $0.60 per share.

On May 31, the company completed the sale of its Shopzilla online comparison shopping business. The results from this business segment have been classified as discontinued operations. The loss from discontinued operations in the second quarter 2011 was $55.5 million which included a loss on divestiture of $53.3 million. Including losses from discontinued operations, net income attributable to Scripps Networks Interactive was $77.4 million or $0.46 per share compared with $106 million or $0.63 per share. Results for the second quarter 2010 include income from discontinued operations of $8.2 million.

“The outstanding marketing power of Scripps Networks Interactive’s television and Internet brands is evident in the company’s solid second quarter financial results,” said Kenneth W. Lowe, chairman, president and chief executive officer. “HGTV, Food Network and Travel Channel – our fully distributed networks – consistently lead their respective content categories and genres on both TV and the Web, aggregating large and targeted audiences that are highly valued by media consumers, our advertising customers and distribution partners.”

“Likewise our premium-tier channels in the home and food categories, DIY Network and Cooking Channel, generated strong revenue growth as an increasing number of viewers discovered the exceptional vitality and utility of the creative original programming that’s defining these unique and exciting brands. Put it all together, and the company succeeded in delivering solid double-digit growth in revenue and segment profit during the second quarter and is on track for another outstanding year.”

Lifestyle Media

Revenue at Food Network was $187 million, up 8.2 percent. Food Network reaches more than 100 million U.S. households, up 0.7 percent from the end of the second quarter 2010.

Revenue at HGTV was $189 million, up 8.9 percent. HGTV now reaches about 100 million U.S. households, up 0.9 percent from the end of the second quarter 2010.

Revenue at Travel Channel increased 15 percent to $70.3 million. Travel Channel reaches 96 million U.S. households, about even with the end of the second quarter 2010.

Revenue at DIY Network was up 27 percent to $29.0 million. DIY can be seen in 54 million U.S. households, up 1.5 percent from a year ago.

Revenue at Cooking Channel was $15.9 million, up 17 percent. These results include $3.1 million in the second quarter 2011 and $1.0 million in the second quarter 2010 of amortization expense for distribution incentives related to the rebranding of the Fine Living Network to the Cooking Channel. Excluding this item, revenue at the Cooking Channel was $19.0 million, up 30 percent from the prior-year quarter. The company completed its rebranding of Fine Living Network to the Cooking Channel on May 31, 2010. Cooking Channel reaches approximately 58 million U.S. households, up 1.0 percent from a year ago.

Revenue at Great American Country (GAC) decreased 31 percent to $5.9 million. GAC can be seen in 60 million U.S. households, up 2.9 percent from a year ago.

Revenue from the company’s digital businesses, which include its network-branded websites, was $27.4 million, up 28 percent.

Conference call

The senior management team of Scripps Networks Interactive will discuss the company’s second quarter results during a telephone conference call at 10 a.m. ET today. Scripps Networks Interactive will offer a live

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webcast of the conference call. To access the webcast, visit www.scrippsnetworksinteractive.com and follow the Investor Relations link at the top of the page. The webcast link can be found next to the microphone icon.

To access the conference call by telephone, dial 800-230-1059 (U.S.) or 612-288-0337 (international) approximately ten minutes before the start of the call. Callers will need the name of the call, “SNI Second Quarter Earnings Call,” to be granted access. Callers also will be asked to provide their name and company affiliation. The media and general public are granted access to the conference call on a listen-only basis.

A replay line will be open from 12:30 p.m. ET Aug. 9 until 11:59 p.m. ET Aug. 23. The domestic number to access the replay is 800-475-6701 and the international number is 320-365-3844. The access code for both numbers is 208998. A replay of the conference call also will be available online. To access the audio replay, visit www.scrippsnetworksinteractive.com approximately four hours after the call, choose Investor Relations then follow the Audio Archives link on the left side of the page.

Forward-looking statements

This press release contains certain forward-looking statements related to the company’s businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The company’s written policy on forward-looking statements can be found on page F-3 of its 2010 Form 10-K filed with the Securities and Exchange Commission.

The company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.

About Scripps Networks Interactive

Scripps Networks Interactive is one of the leading developers of lifestyle-oriented content for television and the Internet, where on-air programming is complemented with online video, social media areas and e-commerce components on companion Web sites and broadband vertical channels. The company’s media portfolio includes popular lifestyle television and Internet brands HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and country music network Great American Country.

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Contact:

Mark Kroeger, Scripps Networks Interactive Inc., 865-560-5007

E-mail: mark.kroeger@scrippsnetworks.com

Mike Gallentine, Scripps Networks Interactive Inc., 865-560-4473

E-mail: m.gallentine@scrippsnetworks.com

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SCRIPPS NETWORKS INTERACTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Net income per share amounts may not foot since each is calculated independently.

See notes to results of operations.

SCRIPPS NETWORKS INTERACTIVE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

SCRIPPS NETWORKS INTERACTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Notes to Results of Operations

1. OTHER CHARGES AND CREDITS

Food Network Partnership noncontrolling interest – During 2010, we completed the rebranding of the Fine Living Network (“FLN”) to the Cooking Channel and subsequently contributed the membership interest of the Cooking Channel to the Food Network Partnership (the “Partnership”) in August of 2010. In accordance with the terms of the Partnership agreement, the noncontrolling interest owner was required to make a pro-rata capital contribution to maintain its proportionate interest in the Partnership. At the close of our 2010 fiscal year, the noncontrolling owner had not made the required $52.8 million contribution and as a result its ownership interest in the Partnership was diluted from 31 percent to 25 percent. Accordingly, for the four months following the Cooking Channel contribution, profits were allocated to the noncontrolling owner at its reduced ownership percentage, reducing net income attributed to noncontrolling interest by $8.0 million in 2010.

In February 2011, the noncontrolling owner made the $52.8 million pro-rata contribution to the Partnership and its ownership interest was returned to the pre-dilution percentage as if this pro-rata contribution had been made as of the date of the Cooking Channel contribution. The retroactive impact from restoring the noncontrolling owner’s interest in the Partnership increased net income attributed to noncontrolling interest $8.0 million in the first quarter of 2011. Year-to-date net income attributable to SNI was decreased $4.7 million, $.03 per share.

Travel Channel and other costs – Operating results in the second quarter of 2010 include $8.6 million of transition costs following our acquisition of a controlling interest in the Travel Channel in December of 2009. Net income attributable to SNI for the second quarter of 2010 was reduced $3.4 million, $.02 per share.

For the year-to-date period of 2010, these Travel Channel transition costs were $24.1 million. Year-to-date operating results in 2010 also include $11.0 million of marketing and legal expenses incurred to support the company’s affiliate agreement renewal negotiations for Food Network and HGTV. These items reduced year-to-date net income attributable to SNI $15.5 million, $.09 per share.

2. DISCONTINUED OPERATIONS

During the second quarter of 2011, our Board of Directors approved the sale of our Shopzilla business and its related online comparison shopping brands. We received consideration totaling approximately $160 million upon finalizing the sale of the business on May 31, 2011. The Shopzilla business’ assets, liabilities and results of operations have been retrospectively presented as discontinued operations within our condensed consolidated financial statements for all periods.

Discontinued operations in the second quarter of 2011 reflect a loss on divestiture of $53.3 million related to the sale of the Shopzilla business. No income tax benefit related to the capital losses attributed to the sale has been recognized. Net income attributable to SNI was decreased $.31 per share. The loss on divestiture is subject to the settlement of final working capital adjustments and $5 million in contingent cash consideration if Shopzilla achieves certain performance targets in 2012.

The income tax benefit recorded during the second quarter of 2010 includes a reduction in the valuation allowance on the deferred tax asset resulting from the sale of our uSwitch business in December of 2009. The reduction in the valuation allowance is attributed to the partial utilization of the uSwitch capital loss against capital gains that were generated in periods prior to the Company’s separation from The E. W. Scripps Company (“E. W. Scripps”). In accordance with the tax allocation agreement with E. W. Scripps, we were notified in the second quarter of 2010 that these capital gains were available for use by SNI. The income tax benefit increased income from discontinued operations $9.3 million. Net income attributable to SNI was increased $.06 per share.

3. SEGMENT INFORMATION

We determine our business segments based upon our management and internal reporting structure. Our reportable segment, Lifestyle Media, is a strategic business that offers different products and services.

Lifestyle Media includes our national television networks, HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country (“GAC”). Lifestyle Media also includes Web sites that are associated with the aforementioned television brands and other Internet-based businesses serving food, home and travel related categories. The Food Network and Cooking Channel are included in the Food Network Partnership of which we own approximately 69%. We also own 65% of Travel Channel. Each of our networks is distributed by cable and satellite distributors and telecommunication service providers.

Our chief operating decision maker evaluates the operating performance of our business segments and makes decisions about the allocation of resources to our business segments using a measure we call segment profit. Segment profit excludes interest, income taxes, depreciation and amortization, divested operating units, restructuring activities, investment results and certain other items that are included in net income determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Refer to Note 5—Non-GAAP Financial Measures, for reconciliations to GAAP measures.

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. Financing, tax structure and divestiture decisions are generally made by corporate executives. Excluding these items from our business segment performance measure enables us to evaluate business segment operating performance for the current period 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 to our results of operations is as follows:

Corporate includes the results of the lifestyle-oriented channels we operate in Europe, the Middle East, and Africa, operating results from the international licensing of our national networks’ programming, and the costs associated with our international expansion initiatives.

Our continued investment in international expansion initiatives increased the segment loss at corporate by $0.3 million in the second quarter of 2011 and $2.2 million for the year-to-date period of 2011 compared with $3.2 million in the second quarter of 2010 and $5.0 million for the year-to-date period of 2010.

4. SUPPLEMENTAL FINANCIAL INFORMATION

Our Lifestyle Media division earns revenue primarily from the sale of advertising time on our national television networks, affiliate fees paid by cable and satellite television operators that carry our network programming, the licensing of its content to third parties, the licensing of its brands for consumer products such as books and kitchenware, and from the sale of advertising on our Lifestyle Media affiliated Web sites.

Supplemental information for Lifestyle Media is as follows:

5. NON-GAAP FINANCIAL MEASURES

In addition to the results prepared in accordance with GAAP provided in this release, the Company has presented segment profit. A reconciliation of segment profit to operating income determined in accordance with GAAP for each business segment is as follows:

The Company defines free cash flow as cash provided by operating activities less dividends paid to noncontrolling interests and acquisitions of property and equipment. The Company measures free cash flow as it believes it is an important indicator for management and investors as to the Company’s liquidity, including its ability to reduce debt, make strategic investments and return capital to shareholders. A reconciliation of free cash flow is as follows:

Since segment profit and free cash flow are non-GAAP measures, they should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance reported in accordance with GAAP.