Ladies and gentlemen, thank you for standing by, and welcome to the second quarter earnings call for the E.W. Scripps Company. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Tim King. Please go ahead.

Thank you very much, Katie. And good morning, everybody. We thank you for joining us for this recap of The E.W. Scripps Company's second quarter results. We're going to switch things up a little bit this morning by starting with Tim Wesolowski, our CFO and Treasurer, who will provide additional details about the second quarter. Then Rich Boehne, our President and CEO, will talk a bit about our longer-term prospects. We will then open up the lines for your questions. With me today are Tim Stautberg who runs the newspaper division; Brian Lawlor who runs the TV division; and Doug Lyons, our Corporate Controller. The commentary you'll hear from our executives this morning may contain certain forward-looking statements, and actual results for future periods may differ from those predicted. You can read more about some of the factors that may cause results to differ from what you're about to hear by referring to the 10-K and other regulatory filings. Now, as I always remind listeners on these calls, you should visit scripps.com for more information. You can get today's release and the financial tables, you can sign up for an email that alert -- that will alert you anytime we disclose financial information, or you can listen to an audio replay of this call. The length of the replay will be up there later this afternoon and we'll leave it there through August 14. Now here's Tim Wesolowski for a look at the second quarter.

Good morning. After the challenges endured by our industry in 2008 and 2009 and all the difficult decisions Scripp made in the 2009 and 2010 time frame, it's gratifying to see results that validate our strategic repositioning. There are several positive contours to the Scripps story right now: a vibrant core television business, better-than-anticipated political prospects, a strong balance sheet and the ability to generate cash at a healthy rate. All of those aspects are evidenced in today's release. So let's go ahead and start with a close look at the second quarter. Revenue was up 19% versus the prior year. Even if you back out the stations we bought late last year, revenues were up more than 3%. Reported expenses rose 8% due to the effect of the new stations. But on an apples-to-apples basis, we cut our expenses about 4%. As a result, our operating income was $14.4 million versus an operating loss of $2.2 million in last year's second quarter. Our net income of $5.4 million or $0.09 per share was a significant improvement over the loss of $0.04 per share a year ago. Turning to the divisions. We'll start with television where reported revenue growth was better than 50%, thanks to the December addition of new stations in Indianapolis, Denver, San Diego and Bakersfield. On a same-station basis, revenue was still up 16%. I'm pleased to say that our spot business was very healthy. On a same-station basis, both the local and national ad categories grew by more than 3.5% over the year ago period. Auto advertising continues to lead the way with growth of 30% in the quarter on a same-station basis. Why is our core TV business performing so well? I think a big reason is that our stations are doing a better job…

Thanks, Tim. Good morning. Thanks for joining us. Tim gave you lots of detail on the numbers. Bottom line, second half of the year should be strong, thanks to record political ad spending and improved performance of our TV stations. Our goal during the political season is to get more than our share of the available revenue. We're doing that through improved local news ratings, which drives more revenue in all ad categories; an in-house system for managing political revenue; and across-the-board efficiencies that convert those additional revenues to cash flow. We made a lot of moves in the TV division to prepare us for this opportunity in 2012, and so far, those gutsy decisions have paid off. I want to take just a few minutes to step back from the political frenzy and look ahead to what you can expect from Scripps after our nation's voters have selected the next President. As Tim explained, the TV division is well along towards several other goals whose value transcends the political spending cycles. Bridging the third and fourth quarters this year is our transition from some very expensive and underperforming syndicated programming to a couple of new homegrown shows. When Wheel of Fortune and Jeopardy! leave our air in 7 markets on September 17, we will take direct long-term control of these valuable access time slots and set a course that could substantially improve our profit margins. Now for the record, there's nothing wrong with Wheel and Jeopardy!. I have arrived home from work many an evening over the years and enjoyed a bowl of canned soup while Vanna turned the letters and Alex announced the categories. But that hour is a precious asset, one which we believe we can generate much higher long-term return through a more entrepreneurial approach to…

[Operator Instructions] And our first question comes from the line of Alexia Quadrani from JPMorgan.

This is Caroline Anastasi for Alexia. Just a few questions. First on your local ad trends on TV, they seem to have slowed a bit in Q2, so could you just talk about what you're seeing in the third quarter? And could you give some more color on how much political and retrans make up the 30% like-for-like revenue growth you're looking for this quarter?

Caroline, it's Brian. Let's see, in third quarter, our local is -- pacing in the, I'd say, mid-single digits, low to mid-single digits. All 3 months of the quarter are positive. There's still quite a bit of revenue that'd probably be booked especially for September. So I think the trends that we've seen through second quarter will probably continue through third quarter. They won't be as robust as they were in first quarter, but a lot of that will have to do with political displacement. And so as you saw, the significant political revenue that we booked, $8 million of political in our same station, a lot of that obviously is displacing local advertising. That'll continue to happen through the third quarter. But I think as we get through the election, we expect the spike to break back out in November and December. What was the second half of the question?

Just how much political and retrans make up the 30% like-for-like revenue growth you guided to for the -- for Q3?

How about you give me a few minutes to crunch that for you?

Okay. Could you talk a little bit more about your higher political expectations from your previous guidance and just how much visibility you have at this point and if you see further upside potential there?

Getting back to your last question, most of our growth will be in the political and the retrans. We'll have, as I said, minor growth, but I expect growth in the spot business. But most of the additional increase will come from the political and from retrans. As...

Higher political expectations.

Yes. Political's really being driven in 3 states. We have 2 stations in Florida, 2 stations in Ohio and Colorado. And those are 3 of the key swing states where there's heavy investment and so we own big television stations in each of those markets. And really, it's those 5 markets that are driving our political revenue.

Okay. And just one more. With the buyback authorization nearly completed, could we expect a reauthorization before year end? And just any update on the board's thinking toward a dividend given the strong cash flows you're seeing?

Yes, this is Rich. As you said, we probably will be done ahead of the next board meeting, probably. So those will both be items for the agenda for discussion then. One thing Tim Wesolowski always likes to say is, "let's make sure we actually have the cash first". And while we're expecting a strong back half of the year, we've sort of set our discussion around what to do with our cash for November and then again in February. So no decision yet, but we'll look at all the options.

And our next question comes from the line of Craig Huber with Huber Research Partners.

On your TV side, you gave us -- quantified how auto did in the quarter. Can you quantify maybe your other 4 or 5 top auto -- TV station categories for advertising, how well they did in the quarter. And I have some follow-ups.

Sure. Craig, it's Brian. The other 4 top categories besides auto -- and auto moved to the #1 category in the quarter for us, which typically it's lagged behind services but we did have a heck of a second quarter with automotive. Services; retail; travel and leisure; and food services make up our other top 5 categories. Services; travel and leisure; and food stores were all up. The one category that was down out of the top 5 was retail. But the others remain pretty robust.

Okay. And if you could also talk about this hour when you're replacing Wheel and Jeopardy!, can you quantify at all, what positive EBITDA impact that you guys will get first 12 months out-of-the-box?

I think, for competitive reasons, we've tried not to really disclose that. Obviously, we had a significant expense line for Wheel and Jeopardy!. Our revenue over that expense showed modest increase. I think we're producing these shows for a good bit less than what we're paying. But more importantly, we control 100% of the inventory. And I got to be honest, we're just really excited about these shows. I mean, we've been working on it for 2.5 years. We researched them and focused-group them like crazy and we are very excited about the quality shows. They're testing very well. We're going into production on them now and we think we're going to have very good program. So we control 100% of the inventory and we control 100% of the costs of them as well.

And also, can you just quantify, if you would, in your TV markets how well your ratings have done here in this latest go-around versus a year ago?

We've had -- what we can control is the news ratings and we've been very focused on investing in that over the last year and beyond. I didn't bring the numbers in front of me, but our morning news was up like in 11 in 14 of our markets. Six in our news -- in our late news were up in like 70% of our markets. We've been showing some very good market growth there. In addition to that, prime time has held up -- held consistently for NBC and ABC. We're getting a bump now out of the Summer on NBC, with America's Got Talent, and obviously, the Olympics. And we've been able to transition fairly well the -- over a time period with the programming we have there. So I think, overall, we'd been able to grow our share of our -- certainly our news audience in the markets and our overall sign-on/sign-off shares in most of our markets.

And also if I could just switch over to the newspaper side for a second. What was the daily and Sunday combined circulation percent changes across your papers in the quarter?

Yes, Craig. Our daily and Sunday both were down about 5%. Uniquely, I guess, the fact that both of those numbers were similar. And as was mentioned in the remarks, the Sunday single copy is an area of weakness that we're experiencing. I think it's something that the industry is also seeing now.

Okay. Then I will switch to housekeeping question. How much was your newsprint consumption down in the quarter?

Our newsprint consumption was down slightly. I mean 1% or 2%. And again, we're doing a fair amount of commercial printing as well, Craig. So whatever weakness there might be on the advertising volume side, we would be making that up in commercial printing jobs we are running.

Then lastly, if I could. Your print advertising for newspapers is down 7.2%. How much of that was volume versus pricing on average you think?

As I mentioned before, very little -- I mean slight volume declines in the ad categories, most of it was rate. We've made a big push to drive volume where we can in our local markets, especially the accounts that we have more control over in terms of at least a relationship. And so, advertising is content in our print products. So we try to make sure that we're doing a good job giving our advertisers enough impressions and enough impact in the local markets. So again most of it rate in terms of the decline in revenue.

Lastly, Tim, if I could just ask you. Some of your peers have called out in recent quarters that print advertising has been more huddled around the timing of holidays, around the holiday weekends and stuff, as opposed to more spread out over the course of the quarter as it typically is. Are you seeing that or is it more similarly [ph] you guys have had.

That's a fair comment, especially around the preprints we see. And we experienced huge volume in preprints around the Thanksgiving holiday and again around Easter and then a lot of the larger major accounts, key accounts, are really being much stingier in terms of their preprint distribution and making sure that there is exposure when shoppers are interested in coming into the stores. And so it only makes sense that around those holidays, you'd see those advertising show up.

But net-net over the course of the quarter, is it net negative for your newspapers?

I think that, that's the case, yes. I mean, we're still dealing with headwinds from those large major accounts, major retailers that are looking to trim their marketing spend with newspapers, especially on the preprint side.

And our next question comes from the line of Michael Kupinski with Noble Financial.

Can you talk a little bit about the benchmarks that you might like to see for the new programs on your TV stations that you're developing and at what point might you make further changes, whether that be on a ratings basis or a financial basis?

Yes, Michael, it's Brian. I think the benchmarks are really audience. And so, we've laid out various models, obviously having 100% of the inventory versus having roughly 70% gives us some level of flexibility where our ratings could actually go down, but our profitability would go significantly up still and our revenue would go up. So I think we'll continue to monitor that. We're going to be launching our game show in 7 of our markets on a Monday through Friday basis, and I think now we're clearing in about 3 or 4 markets on weekends. Our newsmagazine will be clearing in 6 markets. We are prepared to, through the entire process, continue to research it and test it, focus group it and make adjustments as needed. We have some fixed expense associated with it, nowhere near the expenses that were associated with what we're paying for syndicated and we have some flexible expenses as well. But I think we'll continue to watch closely the ratings and the average unit rates we're able to get and make adjustments as needed.

And then, given the political and obviously there's a lot of displacement on the political upfront, what generally would you like to see in terms of your core advertising growth rate? Does it typically, with that type of influx of political that you're going to see in the third quarter, usually your core advertising goes down, I would imagine, and it seems like you're holding a little bit better than that. What would your -- could you just remind us what your core advertising in the past may have done in terms of the strong political year that you're likely to have this year?

I think we work hard to prep our advertisers for what to expect especially in key markets and key states where we know it's going to be competitive. But we work really hard to kind of move them around, so that we're not just completely ignoring -- those are our loyal customers and we want them to be there for the long term with us. And so they understand that in the 5 weeks, say, leading into the election in key markets. Local news isn't prime time. Those get pretty tight, but we try and accommodate them there where we can and move them to other dayparts. We've had some success in moving people into some of our digital platforms. So in several of our key markets, we may have negative pacing. But as I said earlier, it's really most of our political is being driven by 5 of our 13 markets. And in the other markets, the political is relatively quiet and so we're able to drive our regular advertisers in those. So I think on a consolidated basis, I think low single digits year-to-year is probably what we'll be looking at.

And then if you look at next year, and obviously you haven't done the budget, but this is more of a general question. If you look at next year, given that so much of the advertising is by PAC money, which aren't bound by lowest unit rates and so forth, how much of the pricing that you're obtaining this year do you hope to retain as you go into next year? In other words, do you have any goals or set pricing mechanisms for 2013 at this point?

I think, look, clearly the pressure and the PAC money does allow us to drive unit rate and we maximize that in the even years. We're working awful hard on our ratings performance on our newscasts and now in the local programming and I think that, hopefully, those continue to increases in those key dayparts will allow us to drive unit rate increases. But inevitably, we will have to give back some just because the unit rates and the pressure. But I think, again, we're all used to living in this 2-year cycle and adapting in the odd and even years. But I think our focus is on growing our news in some of our now homegrown programming that will allow us to be able to drive unit rate on an odd-to-odd year basis. Really, you got to kind of throw out the back half of this year on a comparative basis.

On the TV Azteca stations, the fact that Fox is trying to get into the Spanish language, developing their own network, does this make the TV Azteca stations more valuable? Are there opportunities maybe to switch affiliations? Or what -- can you give us your thoughts on what's going on in that area?

Yes, we've been watching that closely and it looks like Fox is going to launch their Spanish station in one or 2 of the markets that will compete in Azteca. Look, I think having a vibrant Hispanic marketplace is a good thing for the local markets. It will draw additional attention. I think it's an opportunity for us. We've spent the last 6 months kind of getting our strategic plan together and being ready to launch that and I don't see it changing much as a result of Fox's launch. They'll have a long way to go to build that brand and start from scratch and we're already a good established national and local brand in those markets.

And in terms of acquisitions, I know that there's been some TV stations on the market obviously you passed on. What are your thoughts about acquisitions at this point in maybe making more TV acquisitions.

Are we talking about acquisitions in general, Mike?

Well, yes, specifically that we've seen some multiples like in the 11x range. And we're just wondering your thoughts on the multiple, the valuations whether or not you looked at those stations that were on the market, whether or not you have an appetite for additional stations, that sort of thing.

Yes, we'll just -- we look at everything that comes along. And I guess just an editorial comment, we don't pay much attention to what multiples are. We focus on cash-on-cash return on investments when we spend the shareholders' money. And so obviously we haven't seen any additional deals on top of McGraw-Hill that would satisfy what we think is the return on investment that we need to really make it work. But we do continue to look at everything. Our priorities for investment are continue our digital build-out, which we think is absolutely essential to having leading digital products in all of our markets. Also, investing in markets where we already do business, so we continue to look for opportunities for second stations or partnerships or other places to put money to work to make more money where we already do business and know the marketplace well. And then we do look at additional markets as they come along, but we're not in the roll-up game. We're not one of those that believes that the best way for us to create value for our shareholders is trying to roll up dozens and dozens and dozens of more TV stations across the country. We're very focused on the markets they would be in and the individual opportunities that those markets would yield. But we do continue to look and we'll see if anything comes along. And then obviously, beyond that, we tend to be an opportunistic investor. And then continue to focus on should we restart a dividend and consider more stock buybacks.

And our next question comes from the line of Edward Atorino from Benchmark.

My question has been asked several times. Did you give the separate performance of the McGraw-Hill stations for the quarter? I might have missed that.

No, we did not.

Well, would you?

No.

Okay.

So we talked about same-station revenue growth. We talked about growth with and without McGraw-Hill on a revenue side. We talked about expense changes with and without McGraw-Hill. So somebody with a sharp pencil and a calculator could get pretty close, I think.

And our next question comes from the line of Barry Lucas with Gabelli & Company, Inc.

Just a couple of items, primarily for Brian. Brian, you mentioned that Olympics are comping nicely versus '08. Could you give us the '08 number and maybe -- and/or a percentage change. Some of your peers are talking 25%, 30% plus over Beijing.

Yes, Beijing, we had about $4.7 million in Olympic-related revenue. I'm looking at probably over a 40% increase over that number for this year.

Great. Auto has been a terrific category but the comps have been relatively easy as a result of last year's tsunami. So any sense that you have post, I don't know, September when the Japanese nameplates started to get inventory back and what is a more normal rate of growth in your mind for the auto category?

I got to be honest. I didn't think it was that easy pickings last year even though the foreigns kind of dried up. The domestics took advantage of that and went after market share. And so we had pretty significant double-digit growth through the back half of last year in the auto category. And so for us to continue to show a 30% increase through second quarter and what appears to be pretty good return continuing in third quarter, I remain very optimistic on the category. I mean, at some point, we're now on -- post-2009, it seems like every quarter we're reporting 20-plus percent increases in automotive. We've had some that had been 30% and 40%. So at some point, it's got to stabilize. But I expect the growth to continue through the rest of the year, Barry.

Tim, anything you can add on the circulation side in terms of the weakness in single copy and what do you do about that?

Couple of things. One, yes, I think the Sunday pieces is maybe a fatigue on the coupon craze that hit stride. There were some reality shows on some of the cable networks and there were just a heightened interest in that. I think that's starting to wane a bit. One of the other things that we're focused on strategically, Barry, and we're kind of in the midst of it right now, but it's focusing more on store sales -- retail locations as opposed to the old newspaper boxes and doing a better job in store with marketing point-of-sale promotion, that type of thing, is a change for us but something that's underway right now to start -- to restart the growth on the Sunday single copy piece. So I think that's really important for us. The other piece is preparing for the bundling of access to additional platforms later this fall, getting ready for a bundled subscription model, which I think will help us start to see an increase in Sunday net paid on the print side as well.

Okay. Last item for Rich, maybe we can come at the use of cash one other way. Rich, maybe you could just prioritize. If you had your druthers, where would you really prefer to spend the cash?

Well, thanks, Barry. Yes, You have to be opportunistic and so it's hard to draw up a list because you can only invest against opportunities that you have. But absolutely essential to us is continuing a build-out of high-quality market-leading digital products. Now the good news is that is not consuming a lot of cash. Some of that is thanks to the efficiencies that we've created by consolidating into one group and rolling out platforms and products across all of our markets. So where does that come into play is making sure that we have the financial flexibility to invest through our P&L, much like this company has done for many years, to build new revenues and streams and products on the digital side. So that is absolutely top priority and essential. But again, it's not consuming a whole lot of cash. Second after that would be investing in the markets where we already do business. We are -- we have a terrific -- we think we have one of the industries' best portfolios of markets and we see as a significant opportunity taking more money and more audience out of the places where we already do business and that would be investing in second stations and duopolies and other kinds of partnerships or businesses where we have -- already have an advantage, where we know the marketplace well, where we have smart people already on the ground. So that's really second priority. Third is looking at additional markets, opportunities like McGraw-Hill. But they're few and far between. And as I said, and I think as you know, we're very disciplined buyers and focused on getting strong cash-on-cash returns when we lay out valuable cash for a deal. So if we can see opportunities for additional markets, I think we take advantage of them, but we are very cautious, disciplined investors. So then, share buybacks. We continue to believe in. It's a good deal. We don't buy back shares to demonstrate some support of our stock. We buy back shares if we think they are an excellent investment. And so far we've -- that's the reason we've invested the last $75 million in cash and we'll consider whether to do another chunk after that. And then we always discuss with the board is our cash position such that we should consider some sort of return of capital through some sort of dividends, either a regular or a special dividend. Obviously, so far, we haven't pulled the trigger. But we'll talk about it again in November and then obviously toward and after the beginning of the year when we think our cash position is going to be very strong. So good, strong cash flow streams that continue to build value is a top priority, either through digital or additional assets. And then, after that, we'll look at returning capital. Does that answer your question?

And our next question comes from the line of Howard Rosencrans with VA.

Can you give us a little more color in terms of digital? You gave us some color, but when will we begin to -- you talked about Storm Shield. I'm sure you mentioned you have a political app coming. I'm sure you mentioned it. I apologize, I missed it. And just can you give us some more discussion of digital? When will we begin to -- I mean, the political I guess we'll probably see the windfall of that associated like right now or later? Or when will we really see the impact of digital or when does it really start to grow? I'm not -- I guess more so your app side than your -- or however much you're inclined to give us perspective on what the sort of mobile ad picture would look like, but I think that sort of mobile ad picture is sort of what everybody talks about. So I'm more interested in your app side, I guess, in terms of where digital can go.

Sure, Howard. It's Rich and I'll let Brian talk about political in just a second. Although political on the digital side is a nice little business at this point, but it's tiny compared to what we see on air. Although, obviously, digital political awareness will probably grow over the years. This is in -- 2012 was the year that we set back and have reorganized all of our digital resources into one group. As I said, we're now building out a revenue structure and then building up a lot of additional resources to take advantage of digital revenues in our local markets. So as you get into 2013, I think you'll start to see the beneficial effects of the investments we've made on the revenue side, and we'll just continue to build through 2013. I'm not sure in 2013 how much you'll see us pull money to the bottom line. But you'll definitely be able to start measuring our process much more easily on the revenue side. So this year is a reorganize and build. Next year, you should be able to start tracking revenues and hopefully seeing value at the same time.

What I'm trying to understand is -- I mean, you have the app, which -- am I mistaken you have some sort of political app as well?

Oh, I'm sorry, Howard. We do not have a specific political app that takes advantage of spending by the candidates. We do have a social games company, 519 Games, and we're launching...

Right. That's what I was referring, yes.

Yes, and that game, it's specifically focused on news and politics is out in some markets now and should be out in broad release well before the election. But again that's a very -- that's a pretty small venture at this point and you're not going to see the material effect at least in 2012 on our financials. Our hope is we're building a social games business there -- we're a 50% owner with capital broadcasting down in the Carolinas. And so by the time we get around to the next political cycle, hopefully we've built enough of a company that it could have a material effect.

Okay. And can you just tell us then what you are doing on the digital front that either the magnitude of the focus of what you're doing or just specific things you -- how does your digital focus or plan really differ in terms of getting the news out there differ from your, again on the newspaper side, differ from what your competitors are doing in publishing or do you just feel like you're going to be able to execute better?

Let me give you sort of a broad picture. At least, in our mind, the arms race has commenced in local markets and we're not the only one that's obviously rolling out digital products. I would say we're probably one of the most aggressive in building, in particular, products for mobile, for tablets and smartphones and believing that local news products on digital platforms will be a primary platform for news delivery in the future and one that we have to read starting now.

And our next question comes from the line of Michael Kass from BlueMountain Capital.

Was hoping you guys might be able to provide a little bit of the puts and takes on programming expenses in TV as you rolled from last year to this year to next year. I'm just trying to reconcile the decline in programming expenses from Oprah last year when that cycles through versus the decline that you're talking about for decrease in the syndicated content and then the ad expenses that you're booking for this quarter, or this quarter going into fourth quarter.

Michael, it's Brian. I think, consistently through the year, we've talked about the fact that we expected our syndicated programming expenses to be down more than 20% in calendar year 2012. And that continues to be accurate. We expect to be down more than 20% as we work our way through the year. As we get into next year, we will have the expense of Wheel and Jeopardy! through the first 3 quarters that we will be able to realize a benefit from being able to produce programming at a reduced level. We've been able to capture a lot of our gain from Oprah through the first 3 quarters of this year and now as that lapse itself, we'll begin the Wheel and Jeopardy! process. It won't be as significant next year. There's other investments we've made. One of the things you may have noticed is that ABC announced a year ago that they were going to be turning back an hour daytime to their affiliates. And with that time period, we've invested in most of our markets Katie Couric, and so that's a couple million dollar investment into a time period that we typically -- prior, we did not have control of. But we think that there's a great ROI on that kind of investment and big upside. We also made some investments in new partnerships with NFL deals in Phoenix and Detroit, we've created long-term deals, which add to our programming costs. So there's other things that will kind of fill in some of the programming as well as our investment in just the production of our shows. With all of that rolled up, we still expense -- expect our programming costs to be down even with all those additional investments. But every one of those investments has a positive ROI with a good strong revenue stream associated with it. And so every one of those decisions we've made as it relates to programming is a margin driver that I think will drop to the bottom line and will continue to get a good return for the company.

So if you try to bridge the guidance that you're giving for overall TV expenses being up low single digits in the back half versus the negative 4% or so that would be implied by a 20% drop in programming expenses, is all of that -- I mean, is roughly 1/2 of that the new programming expenses that you're talking about and roughly 1/2 advertising for those programs? Or are there other factors kind of complicating the mix in terms of nonprogramming expenses?

Yes, I think there's some nonprogramming expenses, employee costs and things like that, that are just factored into us running the division. But I mentioned in the back half of the year, the addition of Katie Couric is several million dollars, the NFL rights. One of the other things that we felt really important, Michael, is, as I said earlier, we're really excited about these new shows. We believe we've got some very strong shows that'll be -- really get noticed in the market. But, of course, they're unknown brands at this point. And come September, they'll be launching against some established shows, Wheel and Jeopardy! will be on other stations in the markets and other things. And so we built a pretty robust program -- promotional and marketing platform to launch these shows and really get their brands established. In fact, we kind of doubled down in the last month based on our strong earnings and our forecast for the back half of the year. We actually invested more money beyond what we had originally budgeted just because that we, A, are committed to really launching and establishing these shows well; and B, we believe that the additional money will create an immediate return on those shows.

Great. And then just real briefly on capital allocation, are you guys comfortable now with the net leverage that you're -- or the gross leverage that you're kind of guiding to for the end of the year? I just wanted a sense of if the postacquisition you anticipate paying debt being a high priority versus shareholder returns or if you've kind of gotten or are comfortable with kind of decipherous leverage word is right now provided that you maintain a healthy cash balance.

Well, certainly, where interest rates are today at record lows combined with the modest level of gross debt that we've got and the cash balances that we have, we're comfortable with where we are. We've had a lot of discussion about where we're going to be prioritizing our investments and our cash going forward. I guess the context of all of this is we've got about, by the end of the year, we anticipate having about $200 million of cash and $200 million of debt. So it's hard for me to call that lots of excess cash. We've got ample capacity to make investments and grow into our businesses and we'll be prioritizing this investment choices that Rich walked through here. And debt repayment is certainly an option, but honestly with where interest rates are as low as they are, it's -- I think we get higher shareholder returns by making some prudent investments.

Are you guys just liquidity-constrained in the shares that you can buy back? I mean, you guys have talked about that in the past a bit. I'm just wondering how you'd factor that in with the board in terms of deciding how to allocate capital.

This is Rich. I'll go back a couple of years that, in the past, has not tended to be our focus. I guess, at least speak for myself, tend to be sort of a fundamentalist. And if we think that shares are undervalued or a good deal, we tend to go ahead and buy them. And we've not focused so much on the float. I'm sure each time we re-up, we'll obviously look at it and see how we think the stock trades.

And there are no further questions at this time. Please continue.

Well, Katie, thank you very much for your help this morning, and thanks to all investors who called in, for spending time with us. That concludes the call. Thanks for your attention.

Thank you. Ladies and gentlemen, this conference will be available for replay after 11:00 a.m. today through August 14 at midnight. You may access the AT&T Executive TeleConference replay system at any time by pressing 1 (800) 475-6701 and entering the access code 252990. International participants dial (320) 365-3844. That does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.