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Steve LacyThank you very much, Mike, and good morning everyone. I hope by now you’ve had a chance to review our FQ1 2012 earnings release and the press release announcing our new financial strategy and significant dividend increase. We’ve also posted a brief presentation to the Investor Relations section of our website that gives more detail on our new financial strategy as well as our thinking and the philosophy behind it. This new policy is a clear reflection of our confidence in the enduring strength of our brands, our robust business model and the sustainability of our future cash flow. It also reaffirms our strong commitment to providing tangible shareholder value by returning significantly more cash to our shareholders while also maintaining the ability to make strategic investments in our business. To recap the highlights of this policy, last night we announced a 50% increase in our dividend to $1.53 per share on an annualized basis. At its new rate, the dividend delivers a 6.1% yield and a payout ratio of approximately 55%. This places Meredith’s yield at the top of our SEC peer group and in the top 2% of all companies in the S&P 500. We also authorized a new $100 million share repurchase program representing approximately 10% of our market cap. Both of these actions reflect the confidence we have in Meredith’s financial strength and in our continuing ability to generate substantial cash flow. It also demonstrates our commitment to prudent capital stewardship and to total shareholder return. The business model we’ve built at Meredith generates very strong cash flow. Even in difficult economic times our record is quite impressive. We generated $157 million in free cash flow during our F2009, $167 million in F2010, and $185 million in our most recently completed year, F2011. In fact, over the last ten years we’ve generated about $2 billion in cash. In recent years we felt that the most responsible use of our cash was maintaining our historical track record of growing our dividend annually while also paying down debt. This was driven by a very difficult and uncertain economy and the desire for flexibility to add to our portfolio strategically as opportunities became available.
Today we’re in a much stronger position. We’ve strengthened our balance sheet by paying down $250 million of our debt since F2008 and executed a series of strategic acquisitions along the way. Our new financial strategy is the result of a thoughtful and structured assessment. We have pressure tested these changes under multiple theoretical scenarios and have reached the following conclusions: first, that a meaningful increase in our dividend is possible and can be sustained and grown over time through our very strong free cash flow; second, a significant new buyback authorization representing approximately 10% of our current float would give us the opportunity to make opportunistic share repurchases; and third, that we could fund the dividend increase, the share buyback and maintain our ability to reinvest in our businesses and pursue strategic acquisitions.Over the last six months we’ve demonstrated our ability and willingness to execute strategic acquisitions and invest in the longer-term growth of our business. As examples, we recently agreed to acquire the popular Everyday with Rachel Ray magazine and its related digital assets. We launched the multi-channel Food brand Recipe.com and acquired the Eating Well Media Group. These moves are all part of a strategic initiative to increase our reach and share of the food category across media platforms. In addition, we invested in the global marketing company Iris Worldwide that will allow our marketing services arm to better compete for contracts that have international components. We also rebranded this business Meredith Accelerated Marketing to reflect the many capabilities that we’ve developed over the last five years in digital, database, social and mobile media. Read the rest of this transcript for free on seekingalpha.com