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Actionable news in SNI: SCRIPPS NETWORKS INTERACTIVE Inc,

, Tenn. — Scripps Networks Interactive, Inc. (Nyse: Sni) Today Reported Third-Quarter 2015 Operating Results

The following excerpt is from the company's SEC filing.

"This has been a transformative quarter for Scripps Networks Interactive. Our international business has been bolstered by the successful acquisition of Poland's leading multi-platform media company, TVN. Our networks continue to thrive in the United States, and their success is reflected in strong growth in both advertising and affiliate revenues. With a strategy that enables us to create deeper connections with consumers across the world, we are focused on delivering long-term growth and enhanced shareholder value," said Kenneth W. Lowe, Chairman, President and Chief Executive Officer

During the quarter, the company successfully completed its acquisition of 100 percent of TVN. TVN is a world-class operation with stellar management that has a proven record of connecting consumers with compelling content in multiple ways. Scripps Networks Interactive is actively integrating TVN’s operations and realizing the benefits of its financial results, which drove a nearly 400 percent increase in International Networks’ segment revenue and resulted in the first profitable quarter for Scripps’ international operations.

Consolidated revenues for the quarter were $776.1 million, an increase of 20.4 percent, or

$131.7 million, from the prior-year period. Results for the three-month period ended Sept. 30, 2015, included advertising revenue of $527.9 million, an increase of 22.2 percent, or $95.8 million; and affiliate fee revenue of $224.9 million, an increase of 13.5 percent, or $26.7 million, compared with the prior-year period.

Total segment profit was $312.3 million, an increase of 15.7 percent, or $42.3 million, compared with the prior-year period. This improvement reflects revenues from TVN and growth in both advertising and affiliate fees from the core business, partially offset by increased international operating costs as a result of TVN, and additional programming costs. Also included in operating expenses in the third quarter of 2015 were $8.4 million of transaction and integration expenses related to the TVN acquisition, and $2.8 million of costs related to the previously announced restructuring program. Excluding the impact of the integration and acquisition expenses as well as restructuring charges, segment profit would have been $323.5 million, an increase of 19.8 percent.

Third-quarter net income attributable to Scripps Networks Interactive was $124.6 million, or

$0.96 per diluted share, compared with $131.3 million, or $0.93 per diluted share, in the prior year. Earnings in the third quarter of 2015 were negatively impacted by:

$5.3 million after tax, or $0.04 per share, of foreign currency effects on TVN funds;

$5.2 million after tax, or $0.04 per share, of TVN transaction and integration expenses; and

$2.0 million after tax, or $0.02 per share, of restructuring charges.

Excluding the impact of these items, net income attributable to Scripps Networks Interactive would have been $137.6 million, or $1.06 per share.

Segment results

Three months ended

Nine months ended

September 30,

(in thousands)

Change

Segment operating revenues:

U.S. Networks

660,862

622,512

2,014,866

1,938,838

118,719

23,768

164,872

62,896

Corporate and other

(3,459

(1,857

(13,264

(5,430

(144.3

Total segment operating revenues

776,122

644,423

2,166,474

1,996,304

Segment profit (loss):

330,282

294,309

1,028,118

962,795

10,896

(5,933

(5,478

(33,827

(28,851

(18,413

(94,880

(68,986

312,327

269,963

927,760

859,982

U.S. Networks revenues for the third quarter of 2015 were $660.9 million, an increase of

6.2 percent, or $38.4 million, driven by both advertising revenue and affiliate fee growth. Total advertising revenue was $447.8 million, an increase of 5.2 percent, or $22.0 million, reflecting a strengthening in the advertising market. Affiliate fee revenue was $199.2 million, an increase of 6.3 percent, or $11.8 million, primarily driven by annual contractual rate increases, expanded distribution for DIY Network and Cooking Channel with our traditional partners and additional distribution from new OTT entrants.

U.S. Networks segment profit was $330.3 million, an increase of 12.2 percent, or $36.0 million. This reflects revenue growth, partially offset by a slight increase in operating expenses, including

$0.9 million of restructuring charges. Excluding these restructuring related costs, segment profit was $331.2 million, an increase of 12.5 percent.

International Networks revenues for the third quarter of 2015 were $118.7 million compared with $23.8 million in the prior-year third quarter, primarily due to the consolidation of TVN operations.

Driven by the consolidation of TVN, International Networks segment profit was $10.9 million, compared with a loss of $5.9 million in the third quarter of 2014.

Corporate and Other included a segment loss of $28.9 million in the third quarter of 2015 compared with a segment loss of $18.4 million in the prior year third quarter. The results include

$7.8 million of TVN transaction and integration expenses and $1.9 million of restructuring charges. Excluding these amounts, the segment loss would have been $19.2 million, a slight increase from prior year, reflecting the benefits of the restructuring initiated in the fourth quarter of 2014.

2015 Updated Full-year Guidance

The company now expects full-year revenue to increase approximately 13 percent. Due to the impact of purchase accounting, depreciation and amortization is now expected to be approximately $145 million.

Finally, as a result of our 100 percent ownership of TVN, we now expect interest expense to be approximately $110 million.

Conference call

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

www.scrippsnetworksinteractive.com

and follow the Investors link at the top of the page. The webcast link can be found next to the microphone icon on the investor relations landing page.

To access the conference call by telephone, dial (800) 230-1059 (U.S.) or (612) 234-9959 (international) approximately ten minutes before the start of the call. Callers will need the name of the call, "SNI Third Quarter Earnings Report," to be granted access. Callers also will be asked to provide their name and company affiliation. The media...


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