What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-26 compared with 2020-02-28 · 733 added, 515 removed, 1478 unchanged (46% of the section changed)

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Other Information

On February 24, 2020, the Compensation Committee of the Company approved amendments to The E.W.

Scripps Company Executive Annual Incentive Plan (the “Annual Incentive Plan”).

The Annual Incentive Plan rewards designated employees of the Company for the achievement of each year’s business plan objectives in a manner consistent with the Company’s strategies for achieving sustainable long-term shareholder value and is effective for performance periods commencing on or after January 1, 2020.

The amendments to this plan removed certain references to change in control provisions that are now addressed in the Scripps Executive Severance and Change in Control Plan.

Additionally, these amendments removed certain Section 162(m) restrictions that were previously identified in the Annual Incentive Plan.

These restrictions were no longer needed following a repeal of the performance-based compensation exception to Section 162(m) in 2017.

The full text of the Annual Incentive Plan agreement is attached hereto as Exhibit 10.04 to this Form 10-K.

On February 25, 2020, the Board of Directors of the Company, upon recommendation of the Compensation Committee, established the Scripps Executive Severance and Change in Control Plan (the “Plan”).

The Plan supersedes and replaces The E.W.

Scripps Company Executive Severance Plan and the Scripps Senior Executive Change in Control Plan, effective February 25, 2020, and provides severance protection for the Company’s corporate officers and certain employees following a termination event.

Provisions in the Plan removed the excise tax gross-up provision that was previously included in the Scripps Senior Executive Change in Control Plan.

As a result, the Company no longer provides tax gross-ups for named executive officers or any other employees in the event they are subject to golden parachute excise taxes on payments received in connection with a change in control.

Additionally, provisions of the Plan modified the severance calculation to equal a multiple of a participant's "target" bonus for the year of termination.

Previously the multiple considered the greater of target bonus and the highest paid bonus over three years.

The full text of the Plan agreement is attached hereto as Exhibit 10.05 to this Form 10‑K.

Directors, Executive Officers and Corporate Governance

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Documents filed as part of this report:

The consolidated financial statements of The E.W.

(a) The consolidated financial statements of The E.W.

Scripps Company are filed as part of this Form 10-K.

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See Index to Consolidated Financial Statement Information at page F-1.

There are no supplemental schedules that are required to be filed as part of this Form 10-K.

An exhibit index required by this item appears below.

(b) There are no supplemental schedules that are required to be filed as part of this Form 10-K.

Form 10-K Summary

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Index to Consolidated Financial Statement Schedules

Exhibit Number

Exhibit Description

Exhibit Number Exhibit Description Form File Number Exhibit Report Date

2.01 Purchase agreement dated as of October 27, 2018, among Cordillera Communications, LLC and Scripps Media, Inc.

with respect to the acquisition of certain subsidiaries of Cordillera Communications, LLC

8-K 001-10701 2.1 10/27/2018

2.02 Asset Purchase Agreement by and among Nexstar Media Group, Inc., Scripps Media, Inc.

and Scripps Broadcasting Holdings, LLC dated as of March 20, 2019

8-K 001-10701 2.1 3/20/2019

2.03 Asset Purchase Agreement by and between 10 Salem Media LLC and The E.W.

Scripps Company, and its wholly-owned subsidiary, Scripps Media, Inc.

and its wholly-owned subsidiaries 90028 Media, LLC, The Midroll LLC, Subscription on Demand Audio, LLC, and Earwolf Media, LLC dated as of July 10, 2020

8-K 001-10701 2.1 10/16/2020

2.04 Agreement and Plan of Merger by and among The E.W.

Scripps Company, Scripps Media, Inc., Scripps Faraday, Inc., ION Media Networks, Inc., and BD ION Equityholder Rep LLC, dated September 23, 2020

8-K/A 001-10701 2.1 9/23/2020

3.01 Amended Articles of Incorporation of The E.W.

Scripps Company

8-K 000-16914 99.03 2/17/2009

3.02 Amended and Restated Code of Regulations of The E.W.

Scripps Company

8-K 000-16914 10.02 5/10/2007

3.03 Amendment to Amended Articles of Incorporation of The E.

Scripps Company

8-K 000-16914 3.1 3/11/2015

3.04 Amendment to Articles of Incorporation

8-K 001-10701 4.2 1/4/2021

4.01 Warrant Agreement dated January 7, 2021, by and between The E.W.

Scripps Company and Berkshire Hathaway, Inc.

8-K 001-10701 4.1 1/4/2021

10.01 The E.W.

Scripps Company 2010 Long-Term Incentive Plan (Amended and Restated as of May 6, 2019)

10-K 001-10701 10.01 12/31/2019

10.02 Amendment No.

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Scripps Company 2010 Long-Term Incentive Plan

10-Q 000-16914 10.02 9/30/2017

10.03 Form of Independent Director Nonqualified Stock Option Agreement

8-K 000-16914 10.03B 2/9/2005

10.04 The E.W.

Scripps Company Executive Annual Incentive Plan

10-K 001-10701 10.04 12/31/2019

10.05 Scripps Executive Severance and Change in Control Plan (Effective as of February 25, 2020)

10-K 001-10701 10.05 12/31/2019

10.06 Amended and Restated Scripps Family Agreement dated May 19, 2015

SC 13D 005-43473 2 6/5/2015

10.07 Amendment No.

1 to Amended and Restated Scripps Family Agreement

10-Q 000-16914 10.1 3/31/2017

10.08 1997 Deferred Compensation and Stock Plan for Directors, as amended

8-K 000-16914 10.61 5/8/2008

10.09 Scripps Supplemental Executive Retirement Plan as Amended and Restated effective February 23, 2015

10-Q 000-16914 10.10 9/30/2017

10.10 Employment Agreement between the Company and Adam P.

8-K 001-10701 10.1 12/19/2019

10.11 Scripps Executive Deferred Compensation Plan, Amended and Restated as of February 23, 2015

10-Q 000-16914 10.14 9/30/2017

10.12 The E.W.

Scripps Company Restricted Share Unit Agreement (Non-Employee Directors)

10-Q 000-16914 10.15 9/30/2017

10.13 Employee Restricted Share Unit Agreement

10-Q 000-16914 10.16 9/30/2017

10.14 5.125% Senior Notes due 2025 Purchase Agreement dated April 20, 2017

8-K 000-16914 10.1 4/20/2017

10.15 Indenture dated as of April 28, 2017

Third Amended and Restated Credit Agreement dated as of April 28, 2017 (as amended by the First Amendment, dated as of October 2, 2017, the Second Amendment, dated as of April 3, 2018, the Third Amendment, dated as of November 20, 2018 and the Fourth Amendment, dated as of May 1, 2019

Fifth Amendment to Third Amended and Restated Credit Agreement (Refinancing Term Loans), dated as of December 18, 2019

8-K 000-16914 10.1 4/28/2017

10.16 Third Amended and Restated Credit Agreement dated as of April 28, 2017 (as amended by the First Amendment, dated as of October 2, 2017, the Second Amendment, dated as of April 3, 2018, the Third Amendment, dated as of November 20, 2018 and the Fourth Amendment, dated as of May 1, 2019, the Fifth Amendment, dated as of December 18, 2019 and the Sixth Amendment, dated as of January 7, 2021)

8-K 001-10701 10.1 1/4/2021

10.17 Indenture dated as of July 26, 2019

8-K 001-10701 10.1 7/26/2019

10.18 Secured Senior Notes Indenture dated as of December 30, 2020

8-K 001-10701 10.1 12/30/2020

10.19 Unsecured Senior Notes Indenture dated as of December 30, 2020

8-K 001-10701 10.2 12/30/2020

10.20 Securities Purchase Agreement, by and between The E.W.

Scripps Company and Berkshire Hathaway, Inc., dated September 23, 2020

8-K 001-10701 10.2 9/23/2020

10.21 Registration Rights Agreement dated January 7, 2021, by and between The E.W.

Scripps Company and Berkshire Hathaway, Inc.

8-K 001-10701 10.3 1/4/2021

14 Code of Ethics for CEO and Senior Financial Officers

10-K 000-16914 14 12/31/2004

21 Subsidiaries of the Company

23 Consent of Independent Registered Public Accounting Firm

Section 302 Certifications

Section 906 Certifications

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Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

31(a) Section 302 Certifications

31(b) Section 302 Certifications

32(a) Section 906 Certifications

32(b) Section 906 Certifications

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101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document *

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document *

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101) *

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SCRIPPS COMPANY

February 28, 2020

February 26, 2021 By:

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities indicated, on February 26, 2021.

Signature Title

President and Chief Executive Officer

(Principal Executive Officer)

Symson (Principal Executive Officer)

/s/ Jason Combs

Executive Vice President and Chief Financial Officer

/s/ Douglas F.

Senior Vice President, Controller and Treasurer

(Principal Accounting Officer)

/s/ Daniel W.

Perschke Vice President, Controller

Perschke (Principal Accounting Officer)

/s/ Marcellus W.

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Alexander, Jr.

/s/ Charles Barmonde

/s/ Charles Barmonde Director

Charles Barmonde

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/s/ Lauren R.

Fine Director

Lucas Director

Michael Scagliotti

/s/ Kim Williams

/s/ Kim Williams Director

Scripps Company

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Market Value of Common Shares at December 31

Per share $ 15.29 $ 15.71 $ 15.73 $ 15.63 $ 19.33

Total 1,250 1,272 1,269 1,276 1,585

Balance Sheet Data

Total assets $ 4,859 $ 3,562 $ 2,130 $ 2,130 $ 1,736

Long-term debt (including current portion) 2,992 1,953 696 702 396

Equity 1,163 898 926 937 946

Notes to Selected Financial Data

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All per-share amounts are presented on a diluted basis.

(1) We have completed the following acquisitions over the last five years.

Operating results for the acquired entities are included for periods after the respective acquisition dates.

2020 — On November 20, 2020, we acquired the television station KCDO in the Denver, Colorado market.

Included in the sale was KSBS-CD, a lower power translator of KCDO.

2019 — On January 1, 2019, we acquired three television stations owned by Raycom Media.

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transaction with Tribune Media Company.

Operating results are included for periods after the acquisition.

2018 — On November 30, 2018, we acquired Triton Digital Canada, Inc.

Operating results are included for periods after the acquisition.

2017 — On October 2, 2017, we acquired the Katz networks.

Operating results are included for periods after the acquisition.

2016 — On April 12, 2016, we acquired Cracked.

On June 6, 2016, we acquired Stitcher.

Operating results for each are included for periods after the acquisitions.

2015 — On April 1, 2015, we acquired the broadcast group owned by Journal Communications, Inc.

On July 22, 2015, we acquired Midroll Media.

Operating results for each are included for periods after the acquisitions.

(2) The five-year summary of operations excludes the operating results of the following entities and the gains (losses) on their divestiture as they are accounted for as discontinued operations:

– On October 16, 2020, we completed the sale of our Stitcher podcasting business.

– During the fourth quarter of 2018, we completed the sale of our radio station group.

- On April 1, 2015, we completed the spin-off of our newspaper business.

The year ended December 31, 2015 has not been retroactively-adjusted to reflect the adoption of the new revenue standard.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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You should read this discussion in conjunction with those financial statements.

This section of the Form 10-K omits discussion of year-to-year comparisons between 2018 and 2017 , which may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our 2018 Form 10-K.

This section of the Form 10-K omits discussion of year-to-year comparisons between 2019 and 2018, which may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our 2019 Form 10-K (as adjusted retrospectively to reflect the impact of accounting for our Stitcher business as discontinued operations in the Current Report on Form 8-K filed on October 16, 2020).

Forward-Looking Statements

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Such forward-looking statements are made as of the date of this document and should be evaluated with the understanding of their inherent uncertainty.

A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors.” The Company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.

A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors.” Such Risk Factors include the potential materially adverse impact of the COVID-19 pandemic on the Company’s financial results or condition as a result of financial market volatility, government and regulatory actions, and disruptions to the Company’s businesses.

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

Executive Overview

Scripps Company (“Scripps”) is a diverse media enterprise, serving audiences and businesses through a portfolio of local and national media brands.

We are the fourth-largest independent owner of local television stations, with 60 stations in 42 markets that reach about 31% of U.S.

We are one of the nation's largest independent owners of local television stations, with 61 stations in 41 markets that reach about 25% of U.S.

television households.

We have affiliations with all of the “Big Four” television networks as well as the CW and MyNetworkTV networks.

In our National Media division, we operate national brands including podcast industry-leader Stitcher and its advertising network Midroll Media;

next-generation national news network Newsy;

five national multicast networks - Bounce, Grit, Laff, Court TV and Court TV Mystery - that make up the Katz Network s;

We operate national brands including next-generation national news network Newsy;

five national multicast networks - Bounce, Grit, Laff, Court TV and Court TV Mystery - that make up the Katz networks;

and Triton, a global leader in digital audio technology and measurement services.

We also operate an award-winning investigative reporting newsroom in Washington, D.C., and serve as the longtime steward of one of the nation's largest, most successful and longest-running educational programs, the Scripps National Spelling Bee.

In our Local Media division, recent acquisitions have strengthened our economic durability, quadrupled the number of No.1 and No.2-ranked stations we operate and more than doubled the number of markets where we operate two stations.

We have further expanded our attractive political advertising footprint and added new large markets.

We now own 26 stations in the top 50 Nielsen Designated Market Areas.

Effective January 1, 2019, we acquired ABC-affiliated stations in Waco, Texas and Tallahassee, Florida.

On May 1, 2019, we acquired from Cordillera Communications, Inc.

15 television stations serving 10 markets.

On September 19, 2019, we acquired eight television stations in seven markets from the Nexstar Media Group, Inc.

transaction with Tribune Media Company.

In order to fund these acquisitions, we issued a $765 million term loan B in May 2019 and $500 million of senior unsecured notes in July 2019.

As a result, our focus is now on integrating the stations we acquired.

We are committed to the continued investment in our national media businesses for long-term growth.

We continue to increase our Newsy audience, Stitcher podcast listeners and Katz U.S.

household reach through our investment in and creation of quality content.

On May 8, 2019, Court TV launched as a fifth over-the-air network operated by Katz, available for cable, satellite and over-the-air and over-the-top carriage.

This network is devoted to live, gavel-to-gavel coverage, in-depth legal reporting and expert analysis of the nation's most important and compelling trials.

On June 10, 2019, we completed the acquisition of Omny Studio, which is a Melbourne, Australia-based podcasting software-as-a-service company now operating as part of Triton.

On September 30, 2019, Katz rebranded its popular and widely available network, Escape, as Court TV Mystery, which targets women 25-54 with programming anchored in true-crime.

These rapidly growing national media brands are attracting large audiences and new advertisers.

Additionally, we deliver value to shareholders through our quarterly 5 cents per share dividend.

Dividends paid totaled $16.4 million during 2019.

We intend to pay regular quarterly cash dividends for the foreseeable future.

All subsequent dividends will be reviewed quarterly and declared by the Board of Directors at its discretion.

The declaration and payment of future dividends will be dependent upon, among other things, the Company's financial position, results of operations, cash flow and other factors.

We completed the acquisition of ION Media Networks, Inc.

(“ION”) on January 7, 2021, for $2.65 billion.

ION is a national broadcast television network that delivers popular crime and justice procedural programming to more than 100 million U.S.

homes through its over-the-air broadcast and pay TV platforms.

To comply with ownership rules of the Federal Communications Commission, we simultaneously divested 23 of ION's television stations, which were purchased by INYO Broadcast Holdings, LLC upon completion of the acquisition.

These divested stations became independent affiliates of ION pursuant to long-term affiliation agreements.

As a result of the acquisition and related divestitures, ION's programming is delivered through 48 owned and operated stations and 63 independent ION affiliated stations.

The acquisition of ION enables us to create a full-scale national television networks business.

By combining ION with the Katz networks and Newsy, the new Scripps Networks will reach nearly every American through free over-the-air broadcast, cable/satellite, over-the-top and digital distribution, with multiple advertising-supported programming streams.

The ION network airs on primary channels in its owned and operated markets and on digital subchannels in its affiliates’ markets.

Our five Katz networks air on digital subchannels on our and other broadcasters stations.

The ION transaction was financed with a combination of cash, debt financing and preferred equity financing, including Berkshire Hathaway's $600 million preferred equity investment in Scripps.

Berkshire Hathaway did not receive any board seats or other governance rights with the preferred equity investment.

Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share.

During 2020, we also reached an agreement to sell our Stitcher podcast business for $325 million, with $265 million of cash upfront;

earnout of up to $30 million based on 2020 financial results and paid in 2021;

and earnout of up to $30 million based on 2021 financial results and paid in 2022.

The transaction closed on October 16, 2020.

During the first quarter of 2021, our Board of Directors approved the sale of our Triton business.

On February 16, 2021, we signed a definitive agreement to sell the business for $230 million.

The transaction is expected to close in the second quarter of 2021 upon satisfaction of normal and customary closing conditions and regulatory approval.

Since the first quarter of 2018, we have paid quarterly dividends of 5 cents per share.

Dividends paid to shareholders of our common stock totaled $16.6 million in 2020, and $16.4 million in 2019 and 2018, respectively.

Under the terms of Berkshire Hathaway's preferred equity investment in Scripps, we are prohibited from paying dividends on and repurchasing our common shares until all preferred shares are redeemed.

Results of Operations

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For the years ended December 31,

(in thousands)

(in thousands) 2020 Change 2019 Change 2018

Operating revenues $ 1,857,478 37.4 % $ 1,351,399 16.8 % $ 1,157,362

Employee compensation and benefits (572,282) 20.0 % (476,968) 26.7 % (376,436)

Programming (530,785) 33.3 % (398,314) 26.6 % (314,586)

Impairment of programming assets — — (8,920)

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Depreciation and amortization of intangible assets (107,155) (84,344) (60,711)

Impairment of goodwill and intangible assets

Gains (losses), net on disposal of property and equipment (661) 1,692 (1,255)

Operating income (loss)

Operating income 303,488 87,359 148,483

Interest expense (92,994) (80,596) (36,184)

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Miscellaneous, net 2,914 1,194 123

Income (loss) from continuing operations before income taxes

(Provision) benefit for income taxes

Income from continuing operations before income taxes 209,020 1,004 92,670

Provision for income taxes (55,456) (2,917) (22,781)

Income (loss) from continuing operations, net of tax 153,564 (1,913) 69,889

Loss from discontinued operations, net of tax

Income (loss) from discontinued operations, net of tax 115,769 (16,465) (50,140)

Net income (loss) 269,333 (18,378) 19,749

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Scripps Company $ 269,333 $ (18,378) $ 20,381

On September 19, 2019, we acquired eight television stations from the Nexstar-Tribune transaction;

on May 1, 2019, we acquired 15 television stations from Cordillera;

On September 19, 2019, we acquired eight television stations from the Nexstar-Tribune transaction, and on May 1, 2019, we acquired 15 television stations from Cordillera.

These are referred to as the "acquired stations" in the discussion that follows.

Effective January 1, 2019, we acquired ABC-affiliated stations in Waco, Texas and Tallahassee, Florida.

and on November 30, 2018, we acquired Triton.

These are referred to as the "acquired operations" in the discussion that follows.

Katz was acquired on October 2, 2017.

The inclusion of operating results from these businesses for the periods subsequent to their acquisition impacts the comparability of our consolidated and segment operating results.

The inclusion of operating results from these stations for the periods subsequent to their acquisition impacts the comparability of our consolidated and segment operating results.

2020 compared with 2019

Operating revenues increased 18% in 2019 .

Excluding the acquired operations, operating revenues decreased 2.6% year-over-year.

The decrease was due to lower political revenues in a non-election year, partially offset by higher retransmission revenues in our Local Media group and overall growth within our National Media businesses.

Employee compensation and benefits increased 27% in 2019 .

Excluding the acquired operations, employee compensation and benefits increased 6.5% year-over-year, primarily driven by the expansion of our National Media group.

Programming expense increased 29% in 2019 .

Excluding the acquired operations, programming expense increased 15% year-over-year due to higher network affiliation fees at our stations, reflecting contractual rate increases, as well as an increase in programming costs associated with our national media brands, Katz and Stitcher.

Other expenses increased 19% in 2019 compared to the prior year.

Excluding the acquired operations, other expenses increased 2.8% year-over-year, primarily driven by increases in marketing and promotion costs for our national brands, mainly Katz and Newsy.

Acquisition and related integration costs of $26.3 million in 2019 reflect investment banking and legal fees incurred to complete the current year acquisitions, as well as professional service costs incurred to integrate Triton and the Raycom, Cordillera and Nexstar-Tribune television stations.

Restructuring costs of $3.4 million in 2019 and $8.9 million in 2018 reflect severance, outside consulting fees and other costs associated with our previously announced changes in management and operating structure.

Depreciation and amortization expense increased from $64 million in 2018 to $87 million in 2019 due to the acquired operations.

Interest expense increased in 2019 due to the issuance of a $765 million term loan in May 2019 and issuance of $500 million of senior unsecured notes in July 2019 in order to fund the Cordillera and Nexstar-Tribune acquisitions.

Defined benefit pension plan expense in 2018 included a $1.8 million non-cash settlement charge related to lump-sum distributions from our Supplemental Executive Retirement Plans and an $11.7 million non-cash settlement charge in connection with the merger of our Scripps Pension Plan into the Journal Communications, Inc.

Plan and related transactions.

Operating revenues increased $506 million or 37% in 2020.

Excluding the acquired stations, operating revenues increased 21% year-over-year.

The increase was driven by an increase in political advertising revenue during this presidential election year, as well as an increase in retransmission revenue and growth in our National Media businesses.

These increases more than offset the weakness in core advertising caused by political advertising displacement as well as weakened economic conditions that began toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, which negatively affected spending from our advertisers.

We began to see cancellations late in the first quarter, which we believe reduced our first quarter consolidated advertising revenues by about $10 million.

Second quarter results were significantly impacted by the economic downturn, with the greatest impact in April.

We have seen continued improvement since April in the advertising markets as economies began to reopen.

We expect the advertising markets to continue to recover, but spending in our local markets for 2020 were below 2019 levels and we expect them to remain that way into 2021.

Employee compensation and benefits increased $95.3 million or 20% in 2020.

Excluding the acquired stations, employee compensation and benefits increased 5.6% year-over-year.

The year-over-year increase is primarily due to strong revenue performance driving higher bonus payments, the impact of bonus payments in lieu of annual merit increases, as well as expansion of our National Media group throughout 2019.

Programming expense increased $132 million or 33% in 2020.

Excluding the acquired stations, programming expense increased 18% year-over-year due to higher network affiliation fees at our stations, reflecting contractual rate increases, as well as an increase in programming costs associated with our National Media business, Katz.

Other expenses increased $48.0 million or 17% in 2020 compared to the prior year.

Excluding the acquired stations, other expenses decreased 3% year-over-year.

In response to the weakened economic conditions created by COVID-19, we implemented various cost saving initiatives through general expense reductions in the areas of travel, entertainment and marketing.

Acquisition and related integration costs of $18.7 million in 2020 reflect contract termination costs and professional service costs incurred to integrate the Cordillera and Nexstar-Tribune television stations, as well as costs incurred for the ION transaction, which closed in January 2021.

Depreciation and amortization expense increased from $84.3 million in 2019 to $107 million in 2020 due to the acquired stations.

Interest expense increased in 2020 due to the issuance of a $765 million term loan in May 2019 and issuance of $500 million of senior unsecured notes in July 2019 that contributed to the financing of the Cordillera and Nexstar-Tribune acquisitions.

Interest expenses also decreased approximately $17.5 million in 2020, partially offsetting the increases in expense from higher year-over-year debt levels, reflecting lower LIBOR rates in 2020 compared to 2019.

On December 30, 2020, we issued $550 million of senior secured notes and $500 million of senior unsecured notes, in order to fund the ION acquisition, that closed in January 2021.

The effective income tax rate was 26.5% and 291% for 2020 and 2019, respectively.

State taxes, non-deductible expenses, excess tax benefits or expense on share-based compensation, tax settlements and changes in our reserves for uncertain tax positions impacted our effective rate.

Both our 2019 and 2018 tax provisions included $0.6 million of excess tax benefits from the exercise and vesting of share-based compensation awards.

Our 2020 tax provision includes $1.0 million of excess tax expense and the 2019 tax provision included $0.6 million of excess tax benefits, in each case, related to the exercise and vesting of share-based compensation awards.

Discontinued Operations

Discontinued operations reflect the historical results of our radio operations.

Discontinued operations reflect the historical results of our held for sale Stitcher business as well as our radio operations.

Our Stitcher business was sold on October 16, 2020 and was previously included in our National Media segment results.

We closed on the sale of our Tulsa radio stations on October 1, 2018, closed on the sales of our Milwaukee, Knoxville, Omaha, Springfield and Wichita radio stations on November 1, 2018 and closed on the sales of our Boise and Tucson radio stations on December 12, 2018.

In 2018 and 2017, results of discontinued operations included $25.9 million and $8 million, respectively, of non-cash impairment charges to write-down the goodwill of our radio business to fair value.

Discontinued operations in 2020 reflect a $139 million gain on divestiture for Stitcher, as well as, a contract termination charge the Stitcher business incurred that totaled $12 million.

The gain on divestiture for Stitcher reflects a $10 million fair value estimate for contingent earnout consideration.

In 2018, results of discontinued operations included $25.9 million of non-cash impairment charges to write-down the goodwill of our radio business to fair value.

Business Segment Results — As discussed in the Notes to Consolidated Financial Statements, our chief operating decision maker evaluates the operating performance of our business segments using a measure called segment profit.

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For the years ended December 31,

(in thousands)

(in thousands) 2020 Change 2019 Change 2018

Segment operating revenues:

Local Media $ 1,475,392 44.2 % $ 1,022,805 11.5 % $ 917,480

National Media 378,218 16.9 % 323,674 37.7 % 235,107

Other 3,868 (21.4) % 4,920 3.0 % 4,775

Total operating revenues $ 1,857,478 37.4 % $ 1,351,399 16.8 % $ 1,157,362

Segment profit (loss):

Local Media $ 431,398 98.0 % $ 217,885 (13.2) % $ 251,119

National Media 62,538 44.9 % 43,166 48.0 % 29,168

Other (3,196) (19.2) % (3,957) 7.5 % (3,680)

Shared services and corporate (60,758) 5.8 % (57,409) 8.1 % (53,123)

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Depreciation and amortization of intangible assets (107,155) (84,344) (60,711)

Impairment of goodwill and intangible assets

Gains (losses), net on disposal of property and equipment (661) 1,692 (1,255)

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Miscellaneous, net 2,914 1,194 123

Income (loss) from continuing operations before income taxes

Income from continuing operations before income taxes $ 209,020 $ 1,004 $ 92,670

Local Media — Our Local Media segment includes our 61 local broadcast stations and their related digital properties.

It is comprised of 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates.

We also have 13 CW affiliates - five on full power stations and eight on multicast;

two MyNetwork TV affiliates;

two independent stations and nine additional low power stations.

We also have 12 CW affiliates - four on full power stations and eight on multicast;

two MyNetworkTV affiliates;

three independent stations and 10 additional low power stations.

Our Local Media segment earns revenue primarily from the sale of advertising to local, national and political advertisers and retransmission fees received from cable operators, telecommunication companies and satellite carriers.

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News is the primary focus of our locally-produced programming.

The operating performance of our Local Media group is most affected by local and national economic conditions, particularly conditions within the automotive and services categories, and by the volume of advertising purchased by campaigns for elective office and political issues.

The operating performance of our Local Media group is most affected by local and national economic conditions, particularly conditions within the services and automotive categories, and by the volume of advertising purchased by campaigns for elective office and political issues.

The demand for political advertising is significantly higher in the third and fourth quarters of even-numbered years.

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For the years ended December 31,

(in thousands)

(in thousands) 2020 Change 2019 Change 2018

Segment operating revenues:

Core advertising $ 609,537 1.6 % $ 599,870 28.9 % $ 465,275

Political 266,683 23,263 139,600

Retransmission 581,514 51.9 % 382,710 27.0 % 301,411

Other 17,658 4.1 % 16,962 51.5 % 11,194

Total operating revenues 1,475,392 44.2 % 1,022,805 11.5 % 917,480

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Employee compensation and benefits 447,669 23.1 % 363,801 24.6 % 292,079

Programming 405,604 46.5 % 276,784 26.0 % 219,690

Impairment of programming assets — — 8,920

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Segment profit $ 431,398 98.0 % $ 217,885 (13.2) % $ 251,119

On September 19, 2019, we acquired eight television stations from the Nexstar-Tribune transaction;

on May 1, 2019, we acquired 15 television stations from Cordillera;

and effective January 1, 2019, we acquired ABC-affiliated stations in Waco, Texas and Tallahassee, Florida.

On September 19, 2019, we acquired eight television stations from the Nexstar-Tribune transaction, and on May 1, 2019, we acquired 15 television stations from Cordillera.

These stations are referred to as the "acquired stations" in the discussion that follows.

Effective January 1, 2019, we acquired ABC-affiliated stations in Waco, Texas and Tallahassee, Florida.

The inclusion of operating results from these stations for the periods subsequent to their acquisition impacts the comparability of our Local Media segment operating results.

2020 compared with 2019

Total Local Media revenues increased 11% in 2019 .

Excluding the acquired stations, Local Media revenues decreased 11% year-over-year, driven by lower political revenues in a non-election year.

The decrease in political revenues was partially offset by increases in core, retransmission and other revenues.

Core advertising increased 1.4% in 2019 due to the political displacement in the prior year.

Retransmission revenue increased 5.4% year-over-year as a result of contractual rate increases, which were partially offset by declining subscriber counts for our traditional MVPDs.

These declines were in-line with industry trends and were partially offset by the growth of our virtual MVPD subscribers.

Total Local Media revenues increased $453 million or 44% in 2020.

Excluding the acquired stations, Local Media revenues increased 22% year-over-year, driven by higher political revenues during this election year and an increase in retransmission revenue.

While retransmission revenues have been affected by an acceleration of subscriber losses at the MVPDs, particularly among satellite providers, rate increases have more than offset those subscriber declines.

After a six-week blackout period, we concluded our negotiation with DISH Network on September 6, 2020, with service restored that day to DISH subscribers in the 42 markets where we operate television stations.

In 2020, we renegotiated three key retransmission consent contracts.

In addition, on December 31, 2019, our agreement with Comcast reset, and for those stations we owned prior to 2019, we began to receive retransmission fees for which we had historically received little to no compensation.

Increases in political revenue and retransmission revenue more than offset the weakness in core advertising revenue.

When excluding the acquired stations, core advertising decreased 14% in 2020, driven by political advertising displacement as

well as weakened economic conditions reflecting the impact of the COVID-19 pandemic that began toward the end of the first quarter and negatively affected spending from our advertisers.

We began to see cancellations late in the first quarter, which we believe reduced our first quarter advertising revenues at Local Media by at least $8 million.

Second quarter results were significantly impacted by the economic downturn, with the greatest impact in April.

We have seen continued improvement since April in the advertising markets as economies began to reopen.

We expect the advertising markets to continue to recover.

Costs and expenses

Employee compensation and benefits increased 25% in 2019 compared to 2018 , mainly due to the acquired stations.

Programming expense increased 26% in 2019 .

Employee compensation and benefits increased $83.9 million or 23% in 2020 compared to 2019.

Excluding the acquired stations, the expense increased 3.9% reflecting the impact of bonus payments in lieu of annual merit increases.

Programming expense increased $129 million or 47% in 2020.

Excluding the acquired stations, programming expense increased 26% year-over-year, primarily due to higher network affiliation fees.

Network affiliation fees have been increasing industry-wide due to higher rates on renewals, as well as contractual rate increases during the terms of the affiliation agreements, and we expect that they may continue to increase over the next several years.

In the fourth quarter of 2018, we incurred a non-cash impairment charge of $8.9 million related to our original programming show, Pickler & Ben, which was not renewed for a third season.

Other expenses increased 13% in 2019 .

Excluding the acquired stations, other expenses decreased 8.3% year-over-year, driven by lower costs in advertising and promotion, supplies and rental as well as professional services.

Other expenses increased $26.4 million or 16% in 2020.

Excluding the acquired stations, other expenses decreased 10% year-over-year.

In response to the weakened economic conditions created by COVID-19, we implemented various cost saving initiatives through general expense reductions in areas of travel, entertainment and marketing.

National Media — Our National Media segment is comprised of the operations of our national media businesses including five national broadcast networks, the Katz networks;

podcast industry-leader, Stitcher, and its advertising network Midroll Media;

next-generation national news network, Newsy;

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For the years ended December 31,

(in thousands)

(in thousands) 2020 Change 2019 Change 2018

Segment operating revenues:

Katz $ 257,487 13.4 % $ 227,035 22.2 % $ 185,852

Newsy 51,461 19.6 % 43,025 75.0 % 24,588

Triton 45,617 11.1 % 41,065 3,292

Other 23,653 88.5 % 12,549 (41.3) % 21,375

Total operating revenues 378,218 16.9 % 323,674 37.7 % 235,107

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Employee compensation and benefits 72,149 12.3 % 64,261 58.9 % 40,440

Programming 125,122 2.8 % 121,669 28.2 % 94,896

Other expenses 118,409 25.2 % 94,578 34.0 % 70,603

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Segment profit (loss) $ 62,538 44.9 % $ 43,166 48.0 % $ 29,168

Our National Media businesses Triton and Katz were acquired on November 30, 2018 and October 2, 2017, respectively.

The inclusion of operating results from these businesses for the periods subsequent to the acquisitions impacts the comparability of our National Media segment operating results.

Our National Media business Triton was acquired on November 30, 2018.

The inclusion of operating results from this business for the periods subsequent to the acquisitions impacts the comparability of our National Media segment operating results.

2020 compared with 2019

National Media revenues increased $110 million or 38% in 2019 .

Triton accounted for $37.8 million of the year-over-year increase.

The remainder of the increase came from growth in our other national brands.

Katz's revenues increased $41.2 million or 22% as a result of growth on all of its networks, as well as the launch of the new network, Court TV, in May 2019.

Stitcher's revenues increased $21.5 million or 42% due to advertising growth from existing podcasts, as well as the addition of new titles to its portfolio.

Newsy's revenues increased $18.4 million or 75% primarily from the growth of advertising on over-the-top platforms.

National Media revenues increased $55 million or 17% in 2020 as a result of growth in each of the National Media businesses.

Katz's increase in revenue was driven by growth at its networks, specifically Grit and Laff, as well as Court TV, which launched in May 2019.

Newsy's revenue increase was driven by growth of advertising on over-the-top platforms and political revenue recognized during this presidential election year.

Political revenue at Newsy for 2020 was $5.3 million.

Triton experienced revenue growth in its infrastructure business, specifically in content delivery, ad serving and the programmatic marketplace.

Weakness in economic conditions that began toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, negatively affected spending from our advertisers.

We began to see cancellations late in the first quarter, which we believe reduced our first quarter National Media revenues by approximately $1.3 million.

The impact was greatest in April and we have seen continued improvement in the advertising markets since that time as economies began to reopen.

We expect the advertising markets to continue to recover, however, we expect growth in National Media revenue to remain below the 30% year over year levels we experienced prior to COVID-19.

Cost and Expenses

Employee compensation and benefits increased 49% or $28.3 million in 2019 .

Excluding the impact of Triton, employee compensation and benefits increased 25% year-over-year, mainly attributable to the hiring of personnel to support the growth of Katz, Stitcher and Newsy.

Employee compensation and benefits increased $7.9 million or 12% in 2020 as a result of higher payroll and benefits costs due to the impact of increased hiring at Katz, Newsy and Triton throughout 2019 and early 2020, as well as the impact of bonus payments in lieu of annual merit increases.

Programming expense increased $3.5 million or 2.8% in 2020.

Programming expense includes the amortization of programming for Katz, podcast production costs and other programming costs.

The overall increase is attributable to the continual investment in Katz programming, higher affiliate fees related to the increased distribution of all of the Katz networks and the additional programming costs for our podcast business as a result of higher revenue.

Programming expense includes the amortization and distribution of programming for Katz and other programming costs.

The overall increase is attributable to contractual rate increases at Katz, higher affiliate fees related to the increased distribution of all the Katz networks and the annualization of affiliate fees tied to increased distribution at Court TV.

Other expenses increased $23.8 million or 25% in 2020.

Excluding the impact of Triton, other expenses increased 23% year-over-year.

Newsy had higher expenses related to its audience extension product and network distribution incentives.

Katz had higher advertising and promotion expenses related to the launch of the new network, Court TV, and for promotion of Bounce network's original programming.

Stitcher had higher podcast hosting and bandwidth costs.

Additionally, occupancy, travel and entertainment expenses at the segment level increased as a direct result of an increase in hiring in order to support the growth of our national brands.

Other expenses increased at Katz, Newsy and Triton due to certain expenses that are directly tied to their revenue growth.

Shared services and corporate

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Shared services and corporate also includes unallocated corporate costs, such as costs associated with being a public company.

2019 compared with 2018

Shared services and corporate expenses were up year-over-year with $60.8 million in 2020 and $57.4 million in 2019.

Employee compensation and benefits increased nearly $5 million as a result of increased hiring at corporate to support to the growth of our local and national businesses.

Employee compensation and benefits increased nearly $4 million reflecting the impact of bonus payments in lieu of annual merit increases.

Liquidity and Capital Resources

Our primary source of liquidity is our available cash and borrowing capacity under our revolving credit facility.

Our primary source of cash is generated from our ongoing operations.

Cash from operations can be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic.

At the end of December 2020, we had approximately $576 million of unrestricted cash on hand and $204 million of additional borrowing capacity under our revolving credit facility.

Based on our current business plan, we believe our cash flow from operations will provide sufficient liquidity during this economic downturn to meet the Company’s operating needs for the next 12 months.

In addition, the Company’s liquidity is enhanced through the federal government’s stimulus measures, including the deferral of social security taxes;

tax relief on the use of net operating losses and interest expense limitations;

and a few other provisions that either brought in cash this year or pushed out cash payments to 2021 and beyond.

While we currently do not anticipate liquidity constraints, in the event of a prolonged period of economic weakness, there are additional measures we could take to further control cost, slow our working capital needs and generate cash.

Debt Covenants

Our term loans and our senior notes do not have maintenance covenants.

The earliest maturity of our term loans and unsecured notes is the fourth quarter of 2024.

Our revolving credit facility permits maximum leverage of 4.75 times the two-year average earnings before interest, taxes, depreciation and amortization (EBITDA) as defined by our credit agreement, through second quarter of 2022, at which point it steps down to 4.5 times.

Based upon our current outlook, we expect to be in compliance with that covenant.

Operating activities

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Net income (loss) $ 269,333 $ (18,378) $ 19,749

Loss from discontinued operations, net of tax

Income (loss) from discontinued operations, net of tax 115,769 (16,465) (50,140)

Income (loss) from continuing operations, net of tax 153,564 (1,913) 69,889

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Depreciation and amortization 107,155 84,344 60,711

Impairment of goodwill and intangible assets

Impairment of programming assets — — 8,920

Loss (gain) on disposition of investments — (930) 251

(Gains) losses on sale of property and equipment

Losses (gains) on sale of property and equipment 661 (1,692) 1,255

Programming assets and liabilities (16,966) 21,194 (12,788)

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Net cash provided by (used in) operating activities from continuing operations 355,330 (4,484) 145,724

Net cash provided by operating activities from discontinued operations

Net cash used in operating activities from discontinued operations (77,936) (22,968) (4,813)

Net operating activities $ 277,394 $ (27,452) $ 140,911

The $158 million increase in cash used by continuing operating activities was primarily attributable to a $28 million year-over-year decrease in segment profit, changes in working capital accounts that decreased year-over-year cash by $101 million and $28 million higher cash interest payments made in 2019 compared to 2018.

In 2020, cash provided by operating activities from continuing operations was $355 million and in 2019, cash used in operating activities from continuing operations was $4.5 million.

The $360 million increase in cash provided by continuing operating activities was primarily attributable to a $230 million year-over-year increase in segment profit combined with changes in working capital accounts that increased year-over-year cash by $144 million.

These increases in cash flow were partially offset by $21 million higher cash interest payments made in 2020 compared to 2019.

Interest payments increased due to the issuance of a $765 million term loan in May 2019 and issuance of $500 million of senior unsecured notes in July 2019 to fund the Cordillera and Nexstar-Tribune acquisitions.

One of the main factors contributing to the $101 million increase in cash used for working capital accounts was the timing of payments received on accounts receivable, which decreased cash by $83 million year-over-year.

The main drivers in the accounts receivable change year-over-year were the Nexstar-Tribune acquisition and the impact of political advertising.

We did not acquire working capital in the Nexstar-Tribune acquisition, and as advertisers tend to pay on a 60- to 90-day lag and retransmission partners on a 90- to 120-day lag, fourth quarter revenue resulted in growth of the accounts receivable balance and reduced cash flow.

During the fourth quarter of 2019, we recognized $41 million of core advertising and $22 million of retransmission revenue attributed to the stations acquired in the Nexstar-Tribune acquisition.

Additionally, we recognized $19 million in political revenue over the last two months of 2018, which increased prior year cash flow, as political advertising is paid in advance.

Another factor contributing to the increase in cash used for working capital accounts was the $11 million tax payment made in the second quarter of 2019 related to the sale of our radio stations.

The primary factors affecting changes in certain working capital accounts are described below:

• Year-over-year cash provided from changes in accounts receivable increased $58 million in 2020 compared to 2019.

We did not acquire working capital in the Nexstar-Tribune acquisition that closed in September 2019, and as advertisers tend to pay on a 60- to 90-day lag, fourth quarter 2019 revenue resulted in growth of the accounts receivable balance.

In 2020, we received over $50 million from Nexstar related to cash collected on December 31, 2019 receivables.

Political advertising revenue does not generally impact year-over-year accounts receivable balances as the advertising is typically paid in advance.

• Timing of payments made on accounts payable increased the year-over-year cash provided from working capital by $18 million, mainly attributable to the slower timing of payments made to our vendors in order to control liquidity during the current economic conditions.

• Timing of payments made on other current liabilities increased the year-over-year cash provided from working capital by $41 million, partly attributable to the timing of tax payments.

In the second quarter of 2019, we paid $11 million in taxes, primarily related to income taxes accrued in 2018 from the sale of our radio stations.

In 2020, an increase of $19.4 million in accrued income taxes also contributed to an increase in cash from working capital accounts.

Investing activities

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Acquisitions, net of cash acquired $ (7,103) $ (1,190,422) $ (149,469)

Proceeds from sale of WPIX television station 83,738 — —

Additions to property and equipment (44,949) (60,935) (47,093)

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Miscellaneous, net 5,319 6,734 2,307

Net cash used in investing activities from continuing operations

Net cash provided by (used in) investing activities from continuing operations 55,178 (1,264,164) (200,512)

Net cash provided by (used in) investing activities from discontinued operations 262,244 (343) 73,028

Net investing activities $ 317,422 $ (1,264,507) $ (127,484)

In 2019 , 2018 and 2017 we used $1.3 billion , $207 million and $297 million , respectively, in cash for investing activities from continuing operations.

In 2020, cash provided by investing activities from continuing operations was $55 million.

In 2019 and 2018 we used $1.3 billion and $201 million, respectively, in cash for investing activities from continuing operations.

The primary factors affecting our cash flows from investing activities for the years presented are described below.

• In the fourth quarter of 2020, we acquired the Denver, Colorado station KCDO for $9.6 million in cash.

Additionally, in the second quarter of 2020, we received cash consideration and reduced the Cordillera purchase price by $2.5 million related to an indemnification claim on certain acquired assets.

During 2019, we acquired three television stations owned by Raycom Media for $55 million in cash, we acquired 15 television stations owned by Cordillera Communications, LLC for $521 million in cash, plus an estimated working capital adjustment of $23.9 million, we completed the acquisition of Omny Studio for a cash purchase price of $8.3 million and we acquired eight television stations from the Nexstar-Tribune transactions for $582 million.

In 2018, we acquired Triton for $150 million, net of cash acquired.

In 2017, we acquired Katz for $281 million, net of cash acquired.

During 2019, capital expenditures increased $8 million year-over-year due to an increase in spending at Local Media as a result of our station growth during the year.

Included in Local Media's 2019 capital expenditures was $16.7 million related to the FCC repacking process.

In 2018, capital expenditures increased $35 million.

A significant portion of the increase was attributed to $17.9 million of capital expenditures incurred in 2018 related to the FCC repacking process.

Additionally in 2018, National Media's capital expenditures increased $14.4 million year-over-year mainly as a result of one-time expenses incurred related to the expansion and renovation of office and studio space in our leased facilities that was needed to accommodate current and future growth of our national brands.

• In December 2020, we completed the sale of our WPIX television station to Mission Broadcasting, Inc.

for total cash consideration of $83.7 million, including interest income of $7.6 million.

• During 2020, capital expenditures decreased $14.7 million year-over-year.

In order to preserve liquidity in response to the changing economic environment, we undertook a number of cost saving initiatives, including a reduction in capital expenses.

Included in Local Media's capital expenditures were costs incurred related to the FCC repacking process.

In 2020, 2019 and 2018, repacking costs incurred were $10.1 million, $16.7 million and $17.9 million, respectively.

• In April of 2019, we acquired assets from an independent station in Stuart, Florida, for $23.6 million in cash, the majority of which were intangible assets.

In 2018 and 2017, we recognized other intangible assets of $5.8 million and $9.7 million, respectively, related to the acquisition of cable and satellite carriage rights for Newsy.

In 2019 and 2018, we received $7.0 million and $1.5 million, respectively, in proceeds from the FCC repacking process.

Miscellaneous investing activities for the current year include cash received from the sale of land and the sale of assets at Triton.

In 2018, we recognized other intangible assets related to the acquisition of cable and satellite carriage rights for Newsy.

• In 2020, we contributed $8.3 million in cash to our investments.

• In 2020, 2019 and 2018, we received $28.4 million, $7.0 million and $1.5 million, respectively, in proceeds from the FCC repacking process.

• Miscellaneous investing activities for the current year include $3.2 million in proceeds from the disposal of property and equipment, mainly related to an indemnification settlement on one of our television broadcast towers acquired by Cordillera.

In 2019, miscellaneous investing activities included cash received from the sale of land and the sale of assets at Triton.

In the repacking process associated with the incentive spectrum auction conducted by the FCC in 2017, the FCC has reassigned some stations to new post-auction channels.

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Reimbursements provided by the FCC are recognized as the cash is received.

We have spent $37.5 million to date on FCC repack and expect to incur approximately $20 million of additional expenditures through the end of 2020.

We have received total reimbursement proceeds from the FCC of $8.5 million as of December 31, 2019.

We have spent $48.6 million to date on FCC repack.

As of early July 2020, all full power stations were operating on their reassigned channels.

We incurred incremental costs through the remainder of 2020 to complete work delayed by the COVID-19 pandemic.

We have received total reimbursement proceeds from the FCC of $36.9 million of which $28.4 million was received during the year ended December 31, 2020.

Financing activities

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Net cash provided by (used in) financing activities from continuing operations $ 998,179 $ 1,217,826 $ (54,997)

For continuing financing activities, cash provided by financing activities was $1.2 billion and $273 million in 2019 and 2017 , respectively, while cash used in financing activities was $55 million in 2018 .

The primary factors affecting our cash flows from financing activities are described below.

We have $400 million of senior unsecured notes that mature on May 15, 2025 and bear interest at a rate of 5.125% per annum.

We also have $500 million aggregate principal amount senior unsecured notes that mature on July 15, 2027, which bear interest at a rate of 5.875% per annum.

Additionally, we have a $300 million term loan B that matures in October 2024 ("2024 term loan").

Following an amendment to the 2024 term loan on April 4, 2018, interest is payable at a rate based on LIBOR, plus a fixed margin of 2.00%.

Interest will reduce to a rate of LIBOR plus a fixed margin of 1.75% if the Company’s total net leverage, as defined by the amended agreement, is below 2.75.

The 2024 term loan requires annual principal payments of $3 million .

On May 1, 2019, we issued a $765 million term loan B that matures in May 2026 ("2026 term loan") with interest payable at rates based on LIBOR, plus a fixed margin of 2.75%.

Following an amendment to the 2026 term loan on December 18, 2019, interest is payable at a rate based on LIBOR, plus a fixed margin of 2.50%.

The 2026 term loan requires annual principal payments of $7.6 million .

Deferred financing costs and original issuance discount on the new debt issued in 2019 totaled approximately $34 million.

We have a revolving credit facility ("Revolving Credit Facility") with a capacity of $210 million that matures in April 2022.

Interest is payable on the Revolving Credit Facility at rates based on LIBOR, plus a margin, based on our leverage ratio, ranging from 1.75% to 2.50%.

The weighted-average interest rate over the period we had a drawn revolver balance in 2019 was 4.18% .

As of December 31, 2019 and December 31, 2018 , there were no borrowings under the revolving credit agreement.

The revolving credit agreement includes financial covenants, which we were in compliance with for all periods presented.

The Revolving Credit Facility includes the maintenance of a net leverage ratio when we have outstanding borrowings on the facility.

Additionally, we can make acquisitions as long as the pro forma net leverage ratio is less than 5.5 to 1.0 .

We were in compliance with all financial covenants at December 31, 2019 and December 31, 2018 .

Our credit agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow, as defined, to repay debt.

As of December 31, 2019 , we were not required to make additional principal payments pursuant to this provision.

We paid quarterly dividends of 5 cents per share, totaling $16.4 million in both 2019 and 2018 .

We intend to pay regular quarterly cash dividends for the foreseeable future.

All subsequent dividends will be reviewed quarterly and declared by the Board of Directors at its discretion.

The declaration and payment of future dividends will be dependent upon, among other things, the Company's financial position, results of operations, cash flow and other factors.

In 2020 and 2019, cash provided by financing activities from continuing operations was $998.2 million and $1.2 billion, respectively.

In 2018, cash used in financing activities from continuing operations was $55.0 million.

The primary factors affecting our cash flows from continuing financing activities are described below.

On December 30, 2020, we issued $550 million of senior secured notes that mature on January 15, 2029 and bear interest at a rate of 3.875% per annum and $500 million senior unsecured notes that mature on January 15, 2031 and bear interest at a rate of 5.375% per annum.

The proceeds from these senior notes contributed to the financing of the January 7, 2021 ION acquisition.

On May 1, 2019, we issued a $765 million term loan B that matures in May 2026 and issued $500 million of senior unsecured notes that mature on July 15, 2027 and bear interest at a rate of 5.875%.

The proceeds from these debt issuances contributed to the financing on the Cordillera and Nexstar/Tribune television station acquisitions.

We have $1.95 billion of senior notes and $1.04 billion outstanding balance on our term loans.

Our debt has required annual principal payments of $10.6 million.

On January 7, 2021, we entered into a Sixth Amendment to the Third Amended Restated Credit Agreement ("Sixth Amendment") and issued an $800 million term loan B that contributed to the financing of the ION acquisition.

The Sixth Amendment also increased the capacity of the Revolving Credit Facility to $400 million and extended the facility's maturity date to the earlier of January 2026 or 91 days prior to the stated maturity date for any of our existing loans and our existing unsecured notes that mature within the facility’s term.

We are subject to interest rate risk associated with our credit agreement, as borrowings bear interest at LIBOR plus respective fixed margin spreads or spreads determined relative to our Company’s leverage ratio.

Accordingly, a 100 basis point increase in LIBOR would increase annual interest expense on our variable rate borrowings by approximately $10.4 million.

In November 2020, our Board of Directors authorized a debt repurchase program pursuant to which we may reduce, through redemptions or open market purchases and retirement, a combination of the outstanding principal balance of our senior secured and senior unsecured notes, and the additional indebtedness incurred from the financing of the ION acquisition.

The authorization permits an aggregate principal amount reduction of up to $500 million upon closing of the ION acquisition.

The authorization expires on March 1, 2023.

We paid quarterly dividends of 5 cents per share, totaling $16.6 million and $16.4 million in 2020 and 2019, respectively.

In November 2016, our Board of Directors authorized a share repurchase program of up to $100 million of our Class A Common shares.

This authorization expires on March 1, 2020.

This authorization expired on March 1, 2020.

In February 2020, our Board of Directors authorized a new share repurchase program of up to $100 million of our Class A Common shares through March 1, 2022.

Shares can be repurchased under the authorization via open market purchases or privately negotiated transactions, including accelerated stock repurchase transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 of the Securities Exchange Act of 1934.

During 2017 , we repurchased $17.9 million of shares at prices ranging from $14.05 to $23.01 per share.

From March 15, 2018 through August 20, 2018, we

were in a black out period for repurchasing shares while we negotiated the sales of our radio stations.

No shares were repurchased under either authorization during 2020.

During 2019, we repurchased $0.6 million of shares ranging from $15.54 to $18.72 per share.

From March 15, 2018 through August 20, 2018, we were in a black out period for repurchasing shares while we negotiated the sales of our radio stations.

On August 21, 2018, we entered into an Accelerated Share Repurchase ("ASR") agreement with JP Morgan to repurchase the Company’s common stock.

We repurchased $32.3 million of shares in 2018 , of which, $25 million was under the ASR agreement.

During 2019, we repurchased $0.6 million of shares at prices ranging from $15.54 to $18.72 per share.

As of December 31, 2019 , $49.7 million was outstanding under this authorization.

In February 2020, our Board of Directors authorized a new share repurchase program of up to $100 million of our Class A Common shares through March 1, 2022.

In 2018 and 2017 , we received $2 million and $1 million , respectively, of proceeds from the exercise of employee stock options.

We have not issued any stock options since 2008.

During 2018, we repurchased $32.3 million of shares, of which, $25 million was under the ASR agreement.

We completed the acquisition of ION on January 7, 2021 for $2.65 billion.

The transaction was financed with a combination of cash on hand, $1.85 billion of secured and unsecured debt, and a $600 million preferred equity investment in Scripps by Berkshire Hathaway.

Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share.

Under the terms of the preferred equity investment, we will be prohibited from paying dividends on and repurchasing our common shares until all preferred shares are redeemed.

We have met our funding requirements for our defined benefit pension plans under the provisions of the Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006.

In 2021, we expect to contribute approximately $25.8 million in total to our defined benefit pension plans and our SERPs.

We expect that our cash and cash flows from operating activities will be sufficient to meet our operating and capital needs over the next 12 months.

Off-Balance Sheet Arrangements and Contractual Obligations

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A summary of our contractual cash commitments as of December 31, 2020 is as follows:

(in thousands)

Less than Years Years Over

(in thousands) 1 Year 2 & 3 4 & 5 5 Years Total

Long-term debt:

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Total contractual cash obligations $ 721,790 $ 839,502 $ 1,027,360 $ 2,672,483 $ 5,261,135

Long-term debt — Long-term debt includes $900 million of unsecured senior notes and $1.1 billion outstanding balance on our term loans.

(1) This table does not include contractual obligations for discontinued operations.

Refer to Note 21.

Assets Held for Sale and Discontinued Operations for additional information.

Long-term debt — Long-term debt includes $550 million secured senior notes, $1.4 billion of unsecured senior notes and $1.0 billion outstanding balance on our term loans.

We have $550 million of senior secured notes that matures on January 15, 2029 and bear interest at a rate of 3.875% per annum.

We have $400 million of senior unsecured notes that mature on May 15, 2025 and bear interest at a rate of 5.125% per annum.

We also have $500 million of senior unsecured notes that mature on July 15, 2027, which bear interest at a rate of 5.875% per annum.

We have $500 million of senior unsecured notes that mature on July 15, 2027, which bear interest at a rate of 5.875% per annum.

We also have $500 million of senior unsecured notes that mature on January 15, 2031 and bear interest at a rate of 5.375% per annum.

Additionally, we have $290.3 million outstanding on a term loan B that matures in October 2024.

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We also have $751.7 million outstanding on a term loan B that matures in May 2026.

Following an amendment to this loan on December 18, 2019, interest is payable at a rate based on LIBOR, plus a fixed margin

Following an amendment to this loan on December 18, 2019, interest is payable at a rate based on LIBOR, plus a fixed margin of 2.50%.

The rate on this term loan was 2.65% at December 31, 2020.

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Licensed programming includes both programs that have been delivered and are available for telecast and programs that have not yet been produced.

It also includes payments for our network affiliation agreements.

It also includes payments for our broadcast television station network affiliation agreements and Katz carriage agreements with local television broadcasters.

If the programs are not produced, our commitments would generally expire without obligation.

Fixed fee amounts payable under our network affiliation agreements are also included.

Variable amounts in excess of the contractual amounts payable to the networks are not included in the amounts above.

Other programming rights also include commitments for the purchase of podcast content rights.

Fixed fee amounts payable under our network affiliation and carriage agreements are also included.

Variable amounts in excess of the contractual amounts payable to the networks and broadcasters are not included in the amounts above.

Talent Contracts — We secure on-air talent for our television stations through multi-year talent agreements.

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We expect such agreements will be renewed or replaced with similar agreements upon their expiration.

Katz has carriage agreements with local television broadcasters to carry one or more of the Katz networks.

These carriage agreements are generally for a five-year term.

Under these agreements, Katz pays a fixed fee for the carriage rights.

We may also enter into contracts with certain vendors and suppliers.

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(in thousands)

Local Media $ 905,494

Triton 85,976

Total goodwill $ 1,203,212

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The estimate of fair value assumes certain growth of our businesses, which, if not achieved, could impact the fair value and possibly result in an impairment of the goodwill.

Our annual impairment testing for goodwill indicated that the fair value of our Local Media reporting unit exceeded its carrying value by approximately 25% and our other reporting units exceeded their carrying value by over 30%.

Our annual impairment testing for goodwill indicated that the fair value of our Local Media reporting unit exceeded its carrying value by over 15% and our other reporting units exceeded their carrying value by over 40%.

We have determined that our FCC licenses are indefinite lived assets and not subject to amortization.

At December 31, 2020, the carrying value of our television FCC licenses was $357 million, which are tested for impairment annually, or more frequently if events or changes in circumstances indicate that they might be impaired.

We compare the estimated fair value of

each individual FCC license to its carrying amount.

We compare the estimated fair value of each individual FCC license to its carrying amount.

If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized.

Fair value is estimated using an income approach referred to as the “Greenfield Approach,” which requires multiple assumptions relating to the future prospects of each individual FCC license.

Fair value is estimated for our FCC licenses using a method referred to as the “Greenfield Approach”.

This approach uses a discounted cash flow model that incorporates multiple assumptions relating to the future prospects of each individual FCC license, including market revenues, long-term growth projections, and estimated cash flows based on market size and station type.

The fair value of the FCC license is sensitive to each of the assumptions used in the Greenfield Approach and a change in any individual assumption could result in the fair value being less than the carrying value of the asset and an impairment charge being recorded.

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Discount rate for expense 3.40 % 4.38 %

3.71% - 4.58%

Discount rate for obligations 2.64 % 3.40 %

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In 2020, we had an actuarial loss of $6.3 million.

Based on our current assumptions, we anticipate that 2020 pension expense will include $4.7 million in amortization of actuarial losses.

Recently Adopted Standards and Issued Accounting Standards

Refer to Note 2.

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Our objectives in managing interest rate risk are to limit the impact of interest rate changes on our earnings and cash flows, and to reduce overall borrowing costs.

We may use derivative financial instruments to modify exposure to risks from fluctuations in interest rates.

In accordance with our policy, we do not use derivative instruments unless there is an underlying exposure, and we do not hold or enter into financial instruments for speculative trading purposes.

Accordingly, the interest we pay on our borrowings is dependent on interest rate conditions and the timing of our financing needs.

A 100 basis point increase in LIBOR would increase annual interest expense on our variable rate borrowings by approximately $10.4 million.

The following table presents additional information about market-risk-sensitive financial instruments:

As of December 31, 2019

As of December 31, 2018

(in thousands)

As of December 31, 2020 As of December 31, 2019

(in thousands) Cost

Financial instruments subject to interest rate risk:

Revolving credit facility $ — $ — $ — $ —

Senior secured notes, due in 2029 550,000 573,375 — —

Senior unsecured notes, due in 2025 400,000 409,000 400,000 409,000

Senior unsecured notes, due in 2027 500,000 522,500 500,000 525,000

Senior unsecured notes, due in 2031 500,000 525,800 — —

Term loan, due in 2024 290,250 288,436 293,250 293,617

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Financial instruments subject to market value risk:

Investments held at cost

Includes securities that do not trade in public markets, thus the securities do not have readily determinable fair values.

Investments held at cost $ 4,564 (a) $ 4,405 (a)

(a) Includes securities that do not trade in public markets, thus the securities do not have readily determinable fair values.

We estimate the fair value of these securities approximates their carrying value.

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Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures are effective.

We implemented internal controls to ensure we properly assessed the impact of the new lease accounting standard on our financial statements to facilitate its adoption on January 1, 2019.

There were no significant changes to our internal controls over financial reporting due to the adoption of the new standard.

Additionally, in the ordinary course of business, we review our system of internal control over financial reporting and make changes to our systems and processes to improve such controls and increase efficiency, while ensuring that we maintain an effective internal control environment.

Changes may include such activities as implementing new, more efficient systems, automating manual processes and updating existing systems.

For example, during the third quarter of 2019, we completed the implementation of various financial system applications across the Company.

As these financial system applications are implemented, they become a significant component of our internal control over financial reporting.

Except for the ongoing implementation of these financial system applications, there were no changes to the Company's internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

There were no changes to the Company's internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

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Based upon our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2020.

We acquired 15 television stations from Cordillera Communications, LLC on May 1, 2019 and eight television stations from the Nexstar Media Group, Inc.

transaction with Tribune Media Company on September 19, 2019, and have excluded these businesses from management's reporting on internal control over financial reporting, as permitted by SEC guidance, for the year ended December 31, 2019 .

The acquired operations have total assets of approximately $1.3 billion , or 37% of our total assets as of December 31, 2019 and revenues of approximately $185 million , or 13% of our total revenues for the year ended December 31, 2019 .

The Company’s independent registered public accounting firm has issued an attestation report on our internal control over financial reporting as of December 31, 2020.

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President and Chief Executive Officer

/s/ Jason Combs

Executive Vice President and Chief Financial Officer

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition of television stations from Cordillera Communications, LLC and Nexstar Media Group, Inc.

- Refer to Note 3 to the financial statements

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Local Media Reporting Unit – Refer to Notes 1 and 10 to the financial statements

Critical Audit Matter Description

The Company completed its acquisition of 15 television stations in 10 markets from Cordillera Communications, LLC for $521 million in cash, plus a working capital adjustment of $23.9 million, on May 1, 2019.

Additionally, the Company completed its acquisition of eight television stations in seven markets that were required to be divested by Nexstar Media Group, Inc.

as part of its acquisition of Tribune Media Company for $582 million on September 19, 2019.

The Company accounted for these transactions under the acquisition method of accounting for business combinations.

Accordingly, the purchase prices were allocated, on a preliminary basis, to the assets acquired and liabilities assumed based on their respective fair values, including aggregate identified intangible assets of $579 million and aggregate goodwill of $417 million.

The identified intangible assets primarily included indefinite-lived Federal Communications Commission (“FCC”) licenses of $203 million and amortizable television network affiliation relationships of $350 million.

The Company estimated the fair value of the FCC licenses and television network affiliation relationships using the Greenfield (market-based) approach, which is a discounted cash flow method that required management to make significant estimates and assumptions related to future market revenues and cash flows for a hypothetical new market participant, as well as discount rates.

We identified the valuation of the acquired intangible assets through the television station acquisitions as a critical audit matter because of the significant estimates and assumptions management utilized to record these assets at fair value for purposes of allocating the acquisition purchase prices.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s forecasts of future revenues and cash flows as well as the selection of discount rates, including the need to involve our fair value specialists.

The Company tests goodwill for impairment, including within the Local Media reporting unit (“Local Media”), on an annual basis with an impairment testing date during the fourth quarter of each year.

Within the Company’s quantitative annual impairment testing, the fair value of Local Media is compared to its carrying value.

The Company uses both income and market approaches to determine the fair value of Local Media.

The determination of fair value utilizes assumptions including future cash flows, discount rates, and long-term growth rates.

As of December 31, 2020, Local Media’s goodwill balance was $905 million.

We identified the valuation of Local Media as a critical audit matter because of the significant estimates and assumptions management utilized in determining the fair value.

These estimates and assumptions required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s forecasts of future cash flows as well as the selection of the discount rates and long-term growth rates, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenues and cash flows as well as the selection of discount rates for purposes of estimating a fair value of the acquired intangible assets included the following, among others:

We inquired of management to understand the process being used by the Company to determine the fair value of assets acquired and liabilities assumed in the television station acquisitions.

We tested the design and operating effectiveness of the Company’s internal controls over the valuation of the acquired intangible assets, including controls over forecasts of future revenues and cash flows and selection of the discount rates.

We evaluated the reasonableness of management’s forecasts of future revenues and cash flows for a hypothetical new market participant by comparing the projections to historical results and available industry data and performing lookback procedures to assess management’s ability to forecast future revenues and cash flows.

Our audit procedures related to the projected future cash flows as well as the selection of the discount rates and long-term growth rates for purposes of estimating the fair value of Local Media included the following, among others:

• We inquired of management to understand the process being used by the Company to determine the valuation of Local Media.

• We tested the design and operating effectiveness of the Company’s internal controls over the valuation of Local Media, including controls over forecasts of projected future cash flows as well as the selection of the discount rates and long-term growth rates.

• We evaluated the reasonableness of management’s projected future cash flows by comparing the forecasts to:

• Historical cash flows.

• Underlying analysis detailing business strategies and growth plans including consideration of the effects related to the COVID-19 pandemic.

• Internal communications to management and the Board of Directors.

• Forecasted information included in analyst and industry reports for the Company and certain of its peer companies.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodologies utilized along with valuation assumptions including the discount rates and long-term growth rates selected by:

• Testing the source information underlying the determination of the discount rates and long-term growth rates and testing the mathematical accuracy of the calculations.

• Developing a range of independent estimates for the discount rates and long-term growth rates and comparing those to those rates selected by management.

Valuation of 2019 Acquired FCC Licenses - Refer to Notes 1 and 10 to the financial statements

Critical Audit Matter Description

The Company tests FCC licenses for impairment on at least an annual basis.

Within the Company’s quantitative annual impairment testing, the fair value of each FCC license is compared to its carrying value.

The Company uses an income approach referred to as the “Greenfield Approach” to determine the fair value of each FCC license.

The determination of fair value utilizes assumptions including future market revenues and cash flows for each individual FCC license, as well as discount rates.

The assumptions can require significant auditor judgment, in addition to complexity, due to uncertainty of the economic impact of the COVID-19 pandemic.

As of December 31, 2020, recorded FCC licenses attributed to 2019 acquired FCC licenses were $193 million.

We identified the valuation of the 2019 acquired FCC licenses as a critical audit matter because of the significant estimates and assumptions management utilized in determining their fair values along with the limited period of time in which they were able to increase in fair value since the date of acquisition.

These estimates and assumptions required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s forecasts of future market revenues and cash flows as well as the selection of discount rates, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to forecast of future market revenues and cash flows as well as the selection of discount rates for purposes of estimating the fair value of the 2019 acquired FCC licenses included the following, among others:

• We inquired of management to understand the process being used by the Company to determine the valuation of the 2019 acquired FCC licenses.

• We tested the design and operating effectiveness of the Company’s internal controls over the valuation of the 2019 acquired FCC licenses, including controls over forecasts of future market revenues and cash flows as well as the selection of the discount rates.

• We evaluated the reasonableness of management’s forecasts of future market revenues and cash flows by comparing the projections to historical results and available industry data and performing lookback procedures to assess management’s ability to forecast future market revenues and cash flows.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019, of the Company and our report dated February 28, 2020, expressed an unqualified opinion on those financial statements and included an explanatory paragraph related to the Company’s change in method of accounting for leases due to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842) , during 2019.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at television stations acquired from Cordillera Communications, LLC, and the Nexstar Media Group, Inc.

transaction with Tribune Media Company, which were acquired on May 1, 2019 and September 19, 2019, respectively, and whose financial statements combined constitute 37% of total assets and 13% of total revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2019.

Accordingly, our audit did not include the internal control over financial reporting at television stations acquired from Cordillera Communications, LLC, or the Nexstar Media Group, Inc.

transaction with Tribune Media Company.

Basis for Opinion

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Cash and cash equivalents $ 576,021 $ 32,968

Cash restricted for pending acquisition 1,050,000 —

Accounts receivable (less allowances — $ 3,443 and $ 3,346 )

429,017 387,847

Programming — 52,699

FCC repack receivable 12,363 29,651

Miscellaneous 26,784 39,486

Assets of discontinued operations — 101,266

Total current assets 2,094,185 643,917

Investments 14,404 8,375

Property and equipment 343,920 370,378

Operating lease right-of-use assets 51,471 128,192

Goodwill 1,203,212 1,224,679

Other intangible assets 975,444 1,060,675

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Miscellaneous 38,049 17,079

Total Assets $ 4,859,386 $ 3,561,857

Liabilities and Equity

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Other current liabilities 35,626 42,561

Liabilities of discontinued operations — 22,727

Total current liabilities 358,456 312,032

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2019 - 11,932,722 shares

Total 817 810

Additional paid-in capital 1,130,789 1,117,095

Accumulated deficit

Retained earnings (accumulated deficit) 131,778 ( 120,981 )

Accumulated other comprehensive loss, net of income taxes ( 100,119 ) ( 98,989 )

Total equity 1,163,265 897,935

Total Liabilities and Equity $ 4,859,386 $ 3,561,857

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Operating Revenues:

Advertising $ 1,187,581 $ 884,649 $ 825,829

Retransmission and carriage 588,888 390,043 304,402

Other 81,009 76,707 27,131

Total operating revenues 1,857,478 1,351,399 1,157,362

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Employee compensation and benefits 572,282 476,968 376,436

Programming 530,785 398,314 314,586

Impairment of programming assets — — 8,920

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Depreciation, Amortization, and (Gains) Losses:

Depreciation 50,416 39,998 34,385

Amortization of intangible assets 56,739 44,346 26,326

Impairment of goodwill and intangible assets

(Gains) losses, net on disposal of property and equipment

Losses (gains), net on disposal of property and equipment 661 ( 1,692 ) 1,255

Net depreciation, amortization, and (gains) losses 107,816 82,652 61,966

Operating income (loss)

Operating income 303,488 87,359 148,483

Interest expense ( 92,994 ) ( 80,596 ) ( 36,184 )

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Miscellaneous, net 2,914 1,194 123

Income (loss) from continuing operations before income taxes

Provision (benefit) for income taxes

Income from continuing operations before income taxes 209,020 1,004 92,670

Provision for income taxes 55,456 2,917 22,781

Income (loss) from continuing operations, net of tax 153,564 ( 1,913 ) 69,889

Loss from discontinued operations, net of tax

Income (loss) from discontinued operations, net of tax 115,769 ( 16,465 ) ( 50,140 )

Net income (loss) 269,333 ( 18,378 ) 19,749

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Income (loss) from continuing operations $ 1.84 $ ( 0.02 ) $ 0.85

Loss from discontinued operations

Income (loss) from discontinued operations 1.39 ( 0.20 ) ( 0.61 )

Net income (loss) per basic share of common stock attributable to the shareholders of The E.W.

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Income (loss) from continuing operations $ 1.83 $ ( 0.02 ) $ 0.85

Loss from discontinued operations

Income (loss) from discontinued operations 1.39 ( 0.20 ) ( 0.60 )

Net income (loss) per diluted share of common stock attributable to the shareholders of The E.W.

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Weighted average shares outstanding:

Basic 81,418 80,826 81,369

Diluted 81,831 80,826 81,927

See notes to consolidated financial statements.

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

The sum of net income (loss) per share from continuing and discontinued operations may not equal the reported total net income (loss) per share as each is calculated independently.

Scripps Company

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Changes in defined benefit pension plans, net of tax of $( 328 ), $( 1,156 ), and $ 2,557

( 1,055 ) ( 3,369 ) 7,590

Other, net of tax of $( 23 ), $( 77 ) and $( 22 )

( 75 ) ( 223 ) ( 65 )

Total comprehensive income (loss) 268,203 ( 21,970 ) 27,274

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Net income (loss) $ 269,333 $ ( 18,378 ) $ 19,749

Loss from discontinued operations, net of tax

Income (loss) from discontinued operations, net of tax 115,769 ( 16,465 ) ( 50,140 )

Income (loss) from continuing operations, net of tax 153,564 ( 1,913 ) 69,889

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Depreciation and amortization 107,155 84,344 60,711

Impairment of goodwill and intangible assets

Impairment of programming assets — — 8,920

Loss (gain) on disposition of investments — ( 930 ) 251

(Gains) losses on sale of property and equipment

Losses (gains) on sale of property and equipment 661 ( 1,692 ) 1,255

Programming assets and liabilities ( 16,966 ) 21,194 ( 12,788 )

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Net cash provided by (used in) operating activities from continuing operations 355,330 ( 4,484 ) 145,724

Net cash provided by operating activities from discontinued operations

Net cash used in operating activities from discontinued operations ( 77,936 ) ( 22,968 ) ( 4,813 )

Net operating activities 277,394 ( 27,452 ) 140,911

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Acquisitions, net of cash acquired ( 7,103 ) ( 1,190,422 ) ( 149,469 )

Proceeds from sale of WPIX television station 83,738 — —

Additions to property and equipment ( 44,949 ) ( 60,935 ) ( 47,093 )

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Miscellaneous, net 5,319 6,734 2,307

Net cash used in investing activities from continuing operations

Net cash provided by (used in) investing activities from continuing operations 55,178 ( 1,264,164 ) ( 200,512 )

Net cash provided by (used in) investing activities from discontinued operations 262,244 ( 343 ) 73,028

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Beginning of year 32,968 107,114 148,699

End of year $ 1,626,021 $ 32,968 $ 107,114

Supplemental Cash Flow Disclosures

Interest paid $ 82,532 $ 61,299 $ 33,673

Income taxes paid

Non-cash investing information

Income taxes refunded (paid) $ 13,222 $ ( 13,183 ) $ ( 3,729 )

Non-cash investing and financing information

Capital expenditures included in accounts payable $ 2,511 $ 983 $ 693

Accrued debt issuance costs $ 45,243 $ — $ —

See notes to consolidated financial statements.

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Consolidated Statements of Equity

(in thousands, except share data)

Earnings (Accumulated Deficit)

(in thousands, except share data) Common

Stock Additional

Capital Retained

Earnings (Accumulated Deficit) Accumulated

Comprehensive

Income (Loss) ("AOCI")

Noncontrolling

Income (Loss) ("AOCI") Noncontrolling

Interest Total

As of December 31, 2017 $ 816 $ 1,129,020 $ ( 90,061 ) $ ( 102,922 ) $ 632 $ 937,485

Minority interest contribution to subsidiary

Comprehensive income (loss) — — 20,381 7,525 ( 632 ) 27,274

Cash dividend:

declared and paid - $ 0.20 per share

— — ( 16,395 ) — — ( 16,395 )

Repurchase 1,813,249 Class A Common Shares

( 18 ) ( 32,151 ) ( 154 ) — — ( 32,323 )

Compensation plans:

851,011 net shares issued *

Reclassification of disproportionate tax effects from AOCI

9 10,115 — — — 10,124

As of December 31, 2018 807 1,106,984 ( 86,229 ) ( 95,397 ) — 926,165

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declared and paid - $ 0.20 per share

— — ( 16,374 ) — — ( 16,374 )

Repurchase 180,541 Class A Common Shares

( 2 ) ( 582 ) — — — ( 584 )

Compensation plans:

471,198 net shares issued *

5 10,693 — — — 10,698

As of December 31, 2019 810 1,117,095 ( 120,981 ) ( 98,989 ) — 897,935

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declared and paid - $ 0.20 per share

Repurchase 180,541 Class A Common Shares

— — ( 16,574 ) — — ( 16,574 )

Compensation plans:

767,393 net shares issued *

7 13,694 — — — 13,701

As of December 31, 2020 $ 817 $ 1,130,789 $ 131,778 $ ( 100,119 ) $ — $ 1,163,265

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Local Media, National Media and Other.

Basis of Presentation — Certain amounts in prior periods have been reclassified to conform to the current period's presentation.

Concentration Risks — Our operations are geographically dispersed and we have a diverse customer base.

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Our Triton business earns revenue from monthly fees charged to audio publishers for converting their content into digital audio streams and inserting digital advertising into those audio streams and providing statistical measurement information about their listening audience.

Our podcast business acts as a sales and marketing representative and earns commission for its work.

Refer to Note 16.

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We compute depreciation using the straight-line method over estimated useful lives as follows:

Buildings and improvements

15 to 45 years

Leasehold improvements

Shorter of term of lease or useful life

Broadcast transmission towers and related equipment

15 to 35 years

Other broadcast and program production equipment

3 to 15 years

Computer hardware

Office and other equipment

3 to 10 years

Buildings and improvements 15 to 45 years

Leasehold improvements Shorter of term of lease or useful life

Broadcast transmission towers and related equipment 15 to 35 years

Other broadcast and program production equipment 3 to 15 years

Computer hardware 3 to 5 years

Office and other equipment 3 to 10 years

Programming — Programming includes the cost of national television network programming, programming produced by us or for us by independent production companies and programs licensed under agreements with independent producers.

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We amortize program licenses based upon expected cash flows over the term of the license agreement.

We classify the portion of the unamortized balance expected to be amortized within one year as a current asset.

The costs of programming produced by us or for us by independent production companies is charged to expense over estimated useful lives based upon expected future cash flows.

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Progress payments on programs not yet available for broadcast are recorded as deposits within programming assets.

We review the net realizable value of program assets for impairment using a day-part methodology if the programming is for our local broadcast stations, whereby programs broadcast during a particular time period, such as prime time, are evaluated on an aggregate basis.

Programming for our over-the-air broadcast network is reviewed for impairment using the individual network methodology.

Program assets are predominantly monetized as a group on each of our respective national networks, broadcast television stations and digital content offerings.

For program assets predominantly monetized within a network or television station group, when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized costs, fair value of the content is aggregated at the group level by considering expected future revenue generation .

Estimates of future revenues consider historical airing patterns and future plans for airing content, including any changes in strategy.

An impairment charge is recorded if the fair value of a film group is less than the film group’s carrying value.

Programming and development costs for programs we have determined will not be produced, are fully expensed in the period the determination is made.

For our program assets available for broadcast, estimated amortization for each of the next five years is $ 53.7 million in 2021, $ 34.5 million in 2022, $ 15.6 million in 2023, $ 7.2 million in 2024, $ 2.6 million in 2025 and $ 6.7 million thereafter.

Actual amortization in each of the next five years will exceed the amounts currently recorded as program assets available for broadcast, as we will continue to produce and license additional programs.

Beginning in 2020, the unamortized balance of program assets are classified as non-current assets in our consolidated balance sheets (See Note 2).

Program rights liabilities payable within the next twelve months are included as current liabilities and noncurrent program rights liabilities are included in other noncurrent liabilities.

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Reporting units with similar economic characteristics are aggregated into a single unit when testing goodwill for impairment.

Our reporting units are our Local Media group, Katz, Stitcher, Triton and Newsy.

Our reporting units are our Local Media group, Katz, Triton and Newsy.

Amortizable Intangible Assets — Television network affiliations represents the value assigned to an acquired broadcast television station’s relationship with a national television network.

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Diluted weighted-average shares outstanding 81,831 80,826 81,927

For the years ended December 31, 2019 and 2017, we incurred a net loss and the inclusion of RSUs and stock options would have been anti-dilutive.

Accordingly, the diluted EPS calculation excludes the effect from 1.4 million and 1.2 million of outstanding RSUs as of December 31, 2019 and 2017, respectively.

For the year ended December 31, 2019, we incurred a net loss and the inclusion of RSUs and stock options would have been anti-dilutive.

Accordingly, the diluted EPS calculation excludes the effect from 1.4 million of outstanding RSUs as of December 31, 2019.

As of December 31, 2020, we had 0.4 million of outstanding RSUs that were anti-dilutive.

As of December 31, 2018, we had less than 0.1 million of outstanding RSUs that were anti-dilutive.

Recently Adopted and Issued Accounting Standards

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The amendments provided an option to implement the new leasing standard through a cumulative-effect adjustment to opening retained earnings in the period of adoption without having to restate the comparative periods presented.

We adopted the standard on January 1, 2019 using this optional transition method that does not restate the comparative prior periods.

The new guidance provides a number of optional practical expedients in transition.

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leases with terms of 12 months or less).

We adopted the standard on January 1, 2019 using this optional transition method that does not restate the comparative prior periods.

Implementation of the standard resulted in the recognition of $ 46.6 million of right-of-use assets and $ 50.3 million of lease liabilities, which included the impact of prepaid and deferred rent and lease incentives, on our consolidated balance sheet.

No cumulative-effect adjustment was recognized as the amount was not material, and adoption of the standard had no impact on our consolidated statements of operations.

Recently Issued Accounting Standards — In March 2019, the FASB issued new guidance to align the accounting for the costs of producing films and episodic television series in response to changes in production and distribution models in the media and entertainment industry.

In December 2019, the Financial Accounting Standards Board ("FASB") issued new guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The guidance also clarifies

and amends existing guidance in order to improve the consistent application of, and simplify GAAP for, other areas of Topic 740.

It is effective for fiscal years beginning after December 15, 2020, with early adoption permitted.

We elected to early adopt this standard effective January 1, 2020, with no material impact on our consolidated financial statements.

In March 2019, the FASB issued new guidance to align the accounting for the costs of producing films and episodic television series in response to changes in production and distribution models in the media and entertainment industry.

The new guidance amends the capitalization, amortization, impairment, presentation and disclosure requirements for entities that produce and own content, and also aligns the impairment guidance for licensed content to the owned content fair value model.

This guidance applies to broadcasters and entities that produce and distribute films and episodic television series through both traditional mediums and digital mediums.

It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted.

Upon adoption, all programming assets (licensed and produced by us) will be recorded as non-current assets in our consolidated balance sheet.

We do not expect a material impact to our consolidated statement of operations.

We adopted the standard on January 1, 2020.

Upon adoption in 2020, we began recording all licensed programming assets and programming assets produced by us as non-current assets in our consolidated balance sheets.

The adoption of the standard had no material impact on our consolidated financial statements.

In August 2018, the FASB issued new guidance to address a customer's accounting for implementation costs incurred in a cloud computing arrangement ("CCA") that is a service contract.

The new guidance aligns the accounting for costs incurred to implement a CCA that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software.

The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted.

The adoption of this guidance is not expected to have a material impact on our consolidated financial statements in 2020.

In August 2018, the FASB issued new guidance to add, remove and clarify annual disclosure requirements related to defined benefit pension and other postretirement plans.

The guidance is effective for fiscal years ending after December 15, 2020 with early adoption permitted, and it should be applied on a retrospective basis.

We believe the main impact of this guidance will be to no longer disclose the amount in accumulated other comprehensive income that is expected to be recognized as part of net periodic benefit cost over the next year.

Additionally, we will have to add a narrative description for any significant gains and losses affecting the benefit obligation for the period.

We are currently evaluating the impact of this guidance on our disclosures.

We adopted the standard on January 1, 2020, with no material impact on our consolidated financial statements.

In June 2016, the FASB issued new guidance that changes the impairment model for most financial assets and certain other instruments.

For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model, which generally will result in the earlier recognition of allowances for losses.

For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance.

The guidance is effective in 2020 with early adoption permitted in 2019.

We are currently evaluating the impact of this guidance, specifically as it relates to our allowances for accounts receivable, but do not expect a material impact to our consolidated financial statements and related disclosure on adoption.

For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace the previous “incurred loss” model, which generally will result in the earlier recognition of allowances for losses.

We adopted the standard on January 1, 2020.

Considering current and expected future economic and market conditions related to COVID-19, we increased our allowances for accounts receivable by $ 0.7 million upon adoption in the first quarter of 2020.

The adoption of the standard did not result in any other material impacts to our consolidated financial statements and related disclosures.

In August 2018, the FASB issued new guidance to add, remove and clarify annual disclosure requirements related to defined benefit pension and other postretirement plans.

The guidance became effective for us and was adopted in 2020.

The main impact of this guidance was to no longer disclose the amount in accumulated other comprehensive income that is expected to be recognized as part of net periodic benefit cost over the next year.

Additionally, it requires a narrative description for any significant gains and losses affecting the benefit obligation for the period.

Recently Issued Accounting Standards — In March 2020, the FASB issued new guidance that provides optional expedients and exceptions to certain accounting requirements to facilitate the transition away from the use of the London Interbank Offered Rate (LIBOR) and other interbank offered rates.

The guidance is effective as of March 12, 2020 and will apply through December 31, 2022 to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

We will evaluate transactions or contract modifications occurring as a result of reference rate reform to determine whether to apply the optional guidance on an ongoing basis.

KCDO Television Station

On November 20, 2020, we closed on the acquisition of the KCDO television station in the Denver, Colorado market.

Included in the sale was KSBS-CD, a lower power translator of KCDO.

Total consideration for the transaction totaled $ 9.6 million.

The preliminary purchase price allocation attributed value of $ 6.9 million to the acquired FCC license, $ 1.7 million to goodwill, $ 0.9 million to property and equipment, and the remainder to various working capital accounts.

2019 Television Stations Acquisitions

On September 19, 2019, we closed on the previously announced acquisition of eight television stations in seven markets from the Nexstar Media Group, Inc.

On September 19, 2019, we closed on the acquisition of eight television stations in seven markets from the Nexstar Media Group, Inc.

("Nexstar") transaction with Tribune Media Company ("Tribune").

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Nexstar was required to divest these stations in order to complete its acquisition of Tribune.

The purchase price and other related costs associated with the transaction were financed from a combination of incremental term loan B proceeds and a portion of the $ 500 million of senior unsecured notes issued on July 26, 2019.

From the acquisition date of September 19, 2019 through December 31, 2019 , revenue from the Nexstar-Tribune stations was $ 79.8 million .

On May 1, 2019, we acquired 15 television stations in 10 markets from Cordillera Communications, LLC ("Cordillera"), for $ 521 million in cash, plus a working capital adjustment of $ 23.9 million.

We financed the acquisition with a $ 765 million term loan B, of which $ 240 million was segregated into a separate account for financing a portion of the Nexstar transaction.

From the acquisition date of May 1, 2019 through December 31, 2019 , revenue from the Cordillera stations was $ 105.2 million .

In the second quarter of 2020, we received cash consideration and reduced the purchase price by $ 2.5 million related to an indemnification claim on certain acquired assets.

Effective January 1, 2019, we acquired three television stations owned by Raycom Media ("Raycom") — Waco, Texas ABC affiliate KXXV/KRHD and Tallahassee, Florida ABC affiliate WTXL — for $ 55 million in cash.

These stations were being divested as part of Gray Television's acquisition of Raycom.

From the acquisition date of January 1, 2019 through December 31, 2019 , revenue from the Raycom stations was $ 23.4 million .

The following table summarizes the fair values of the Raycom, Cordillera and Nexstar-Tribune assets acquired and liabilities assumed at the closing dates.

The allocation of purchase price for the Cordillera and Nexstar-Tribune acquisitions reflect preliminary fair values.

(in thousands)

Nexstar- Tribune

The following table summarizes the final fair values of the Raycom, Cordillera and Nexstar-Tribune assets acquired and liabilities assumed at the closing dates.

(in thousands) Raycom Cordillera Nexstar- Tribune Total

Accounts receivable $ — $ 26,770 $ — $ 26,770

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Programming (less current portion) — — 9,830 9,830

Goodwill 18,349 251,681 168,196 438,226

Indefinite-lived intangible assets - FCC licenses 6,800 26,700 176,000 209,500

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and automates key aspects of campaign management, such as industry separation, frequency capping and volume normalization.

The preliminary purchase price allocation assigned $ 5.3 million to goodwill, $ 3.8 million to a developed technology intangible asset and the remainder was allocated to various working capital and deferred tax liability accounts.

The developed technology intangible asset has an estimated amortization period of 10 years.

The purchase price allocation assigned $ 5.3 million to goodwill, $ 3.8 million to a developed technology intangible asset and the remainder was allocated to various working capital and deferred tax liability accounts.

The developed technology

intangible asset has an estimated amortization period of 10 years.

The goodwill arising from the transaction consists largely of the fact that the addition of Omny's podcast and on-demand audio publishing platform to Triton's portfolio of streaming, advertising and measurement technologies provides audio publishers around the world with a full-stack enterprise solution to increase reach and revenue.

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(in thousands)

Cash $ 10,515

Accounts receivable 8,879

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Property and equipment 705

Goodwill 80,656

Other intangible assets 75,000

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Goodwill was decreased by $ 3.2 million as a result of adjustments to assumed tax liability balances in the opening balance sheet.

Adjustment to decrease the fair value of the deferred tax liability by $ 3.6 million was partially offset by adjustments to various working capital accounts.

The adjustment to decrease the fair value of the deferred tax liability by $ 3.6 million was partially offset by adjustments to various working capital accounts.

Of the $ 75 million allocated to intangible assets, $ 39 million was assigned to various developed technologies for audience measurement, content delivery and advertising with lives ranging from 8 - 12 years, $ 31 million was assigned to customer relationships with a life of 12 years and $ 5 million was assigned to trade names with a life of 10 years.

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The goodwill is not deductible for income tax purposes.

On October 2, 2017 we acquired the Katz networks for $ 292 million , which was net of a 5.33 % non-controlling interest we owned prior to the acquisition date.

At the time of acquisition, Katz owned and operated four national television networks — Bounce, Grit, Escape and Laff.

The acquisition was funded through the issuance of a new term loan B.

Katz is included as part of our National Media segment.

The following table summarizes the final fair values of the Katz assets acquired and liabilities assumed at the closing date.

(in thousands)

Accounts receivable

Current portion of programming

Intangible assets

Programming (less current portion)

Accounts payable and accrued liabilities

Current portion of programming liabilities

Programming liabilities

Net purchase price

The acquisition date fair value of goodwill was revised in 2018.

Goodwill was decreased by $ 5.8 million .

Adjustments to increase the fair value of property and equipment by $ 9.9 million were partially offset by adjustments to decrease the fair value of program assets by $ 4.1 million .

Additionally, these changes to the acquired value of assets in 2018 resulted in an increase to previously reported depreciation expense of $ 0.3 million and a decrease to previously reported programming costs of $ 0.3 million .

Of the $ 32 million allocated to intangible assets, $ 8 million was assigned to trade names with a life of 10 years and $ 24 million was assigned to advertiser relationships with a life of 5 years.

The goodwill of $ 204 million arises from being able to enter into the market for established over-the-air networks.

The goodwill was allocated to our National Media segment.

We treated the transaction as an asset acquisition for income tax purposes with a step-up in the assets acquired.

The goodwill is deductible for income tax purposes.

Prior to the acquisition of Katz, we owned a 5.33 % noncontrolling interest of the company.

Upon obtaining a controlling interest in Katz in 2017, we recorded a $ 5.4 million gain from the fair value remeasurement of our 5.33 % interest.

This gain was included in Miscellaneous, net in our Consolidated Statements of Operations for the year ended December 31, 2017.

Pro forma results of operations

Pro forma results of operations, assuming the Cordillera and Nexstar-Tribune acquisitions had taken place at the beginning of 2018, are presented in the following table.

The pro forma results do not include Raycom or Omny Studio, as the impact of these acquisitions, individually or in the aggregate, is not material to prior year results of operations.

The pro forma results do not include KCDO, Raycom or Omny Studio, as the impact of these acquisitions, individually or in the aggregate, is not material to prior year results of operations.

The pro forma information includes the historical results of operations of Scripps, Cordillera and Nexstar-Tribune, as well as adjustments for additional depreciation and amortization of the assets acquired, additional interest expense related to the financing of the transaction and other transactional adjustments.

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Scripps Company

Basic $ ( 0.23 )

Diluted ( 0.23 )

Pending acquisition

On January 7, 2021, we completed the acquisition of national broadcast network ION Media Networks, Inc.

("ION") for $ 2.65 billion.

ION is a national network of broadcast stations and is the largest holder of U.S.

broadcast television spectrum.

The business distributes its programming through Federal Communications Commission-licensed television stations it owns as well as affiliated TV stations, reaching more than 100 million U.S.

homes through its over-the-air broadcast and pay TV platforms.

With the acquisition of ION, we will create a full-scale national television networks business by combining the ION network with the five Katz networks and national news network, Newsy.

The transaction was financed with a combination of cash, debt financing and preferred equity financing, including Berkshire Hathaway's $ 600 million preferred equity investment in Scripps.

Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $ 13 per share.

To comply with ownership rules of the Federal Communications Commission, we simultaneously divested 23 of ION's television stations for a total consideration of $ 30 million, which were purchased by INYO Broadcast Holdings, LLC upon completion of the acquisition.

These divested stations became independent affiliates of ION pursuant to long-term affiliation agreements.

Due to the limited time since the closing date of the acquisition, we have not yet completed the initial acquisition accounting for the transaction, including the determination of the fair values of the assets acquired and the liabilities assumed.

We will complete the preliminary purchase price allocation in the first quarter of 2021.

The results of operations of the acquired business will be included in our results from the January 7, 2021 closing date of the acquisition.

Asset Write-Downs and Other Charges and Credits

Income (loss) from continuing operations before income taxes was affected by the following:

2019 — Acquisition and related integration costs of $ 26.3 million reflect investment banking and legal fees incurred to complete the current year acquisitions, as well as professional service costs incurred to integrate Triton and the Raycom, Cordillera and Nexstar-Tribune television stations.

2018 — Costs associated with our previously announced restructuring totaled $ 8.9 million .

Income from continuing operations before income taxes was affected by the following:

2020 — Acquisition and related integration costs of $ 18.7 million reflect contract termination costs and professional service costs incurred to integrate the Cordillera and Nexstar-Tribune television stations, as well as costs incurred for the ION transaction, which closed in January 2021.

2019 — Acquisition and related integration costs of $ 26.3 million reflect investment banking and legal fees incurred to complete the 2019 acquisitions, as well as professional service costs incurred to integrate Triton and the Raycom, Cordillera and Nexstar-Tribune television stations.

2018 — Restructuring costs totaled $ 8.9 million.

Acquisition and related integration costs of $ 4.1 million reflect professional service costs incurred to integrate Triton and the former Raycom stations, as well as costs related to the 2019 Cordillera acquisition.

In the fourth quarter of 2018, we incurred a non-cash impairment charge of $ 8.9 million related to our original programming show, Pickler & Ben, which was not renewed for a third season.

2017 — In the second quarter, we sold our newspaper syndication business, resulting in a gain of $ 3.0 million .

Restructuring includes $ 3.5 million of severance associated with a change in senior management and employees, as well as outside consulting fees associated with changes in our management and operating structure.

Reductions to the earn out provision associated with the acquisition of Midroll Media resulted in increases to other income of $ 3.2 million .

In the third quarter of 2017, we recorded a $ 29.4 million non-cash charge to reduce the carrying value of goodwill and $ 6.3 million to reduce the value of intangible assets related to Cracked.

For more information around the impairment of goodwill and intangible assets, see Note 10.

We recognized a $ 5.4 million gain on our investment in Katz when we completed the acquisition in the fourth quarter.

We file a consolidated federal income tax return, consolidated unitary returns in certain states, other separate state income tax returns for certain of our subsidiary companies, and applicable foreign returns.

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(in thousands) 2020 2019 2018

Federal $ ( 13,235 ) $ 6,653 $ 3,865

State and local 2,478 2,235 2,331

Foreign 107 ( 6 ) 1

Total current income tax provision (benefit) ( 10,650 ) 8,882 6,197

Federal 57,755 ( 6,346 ) 15,588

State and local 8,902 206 1,000

Foreign ( 551 ) 175 ( 4 )

Total deferred income tax provision (benefit) 66,106 ( 5,965 ) 16,584

Provision (benefit) for income taxes

Provision for income taxes $ 55,456 $ 2,917 $ 22,781

The difference between the statutory rate for federal income tax and the effective income tax rate was as follows:

For the years ended December 31,

2020 2019 2018

Statutory rate 21.0 % 21.0 % 21.0 %

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Reserve for uncertain tax positions 0.7 ( 13.7 ) ( 0.1 )

federal statutory rate change

Other ( 0.6 ) 12.2 ( 1.9 )

Effective income tax rate 26.5 % 290.5 % 24.6 %

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Valuation allowance for state deferred tax assets ( 2,875 ) ( 4,905 )

Net deferred tax asset (liability)

Net deferred tax liability $ ( 85,844 ) $ ( 5,570 )

Total federal operating loss carryforwards were $ 12 million and state operating loss carryforwards were $ 380 million at December 31, 2020.

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Because we file separate state income tax returns for certain of our subsidiary companies, we are not able to use state tax losses of a subsidiary company to offset state taxable income of another subsidiary company.

Deferred tax assets related to our state jurisdictions totaled $ 12 million at December 31, 2019 .

We recognize state net operating loss carryforwards as deferred tax assets, subject to valuation allowances.

The Company recognizes state net operating loss carryforwards as deferred tax assets, subject to valuation allowances.

At each balance sheet date, we estimate the amount of carryforwards that are not expected to be used prior to expiration of the carryforward period.

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subsidiaries because we plan to indefinitely reinvest the unremitted earnings in these entities.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation referred to as the Tax Cuts and Jobs Act (the “Tax Act”).

The Tax Act significantly revised the future ongoing U.S.

corporate income tax by, among other things, lowering U.S.

corporate income tax rates.

The reduction of the U.S.

corporate tax rate caused the Company to adjust its federal deferred tax assets and liabilities to the lower base rate of 21% .

The change in the rate resulted in a provisional estimated benefit of $ 4.2 million for the year ended December 31, 2017.

This amount includes the benefit related to the rate change on the deferred tax liabilities included in the radio net assets that are classified as held for sale (see Note 21) as such benefit is required by GAAP to be included in income taxes from continuing operations.

The SEC provided guidance in SAB 118 that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related income tax impacts.

In accordance with that guidance, the income tax effects recorded in 2017 were provisional, including those related to our revaluation of federal deferred tax assets and liabilities.

The accounting for the income tax effects could have been adjusted during 2018 as a result of continuing analysis of the Tax Act, or additional implementation guidance from the Internal Revenue Service (IRS), state tax authorities, the SEC, the FASB, or the Joint Committee on Taxation.

We had no material adjustments to our accounting for the Tax Act during 2018.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted and signed into law.

The CARES Act includes several provisions for corporations including increasing the amount of deductible interest, allowing companies to carryback certain net operating losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income.

The CARES Act did not materially affect our year-to-date income tax provision.

We received an additional tax refund of $ 14.0 million from the carryback of NOLs to prior periods in October 2020.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed and enacted into law, which provided an additional stimulus package providing financial relief for individuals and small businesses.

The Appropriations Act contains a variety of tax provisions, including full expensing of business meals in 2021 and 2022, an expansion of the Paycheck Protection Program, and expansion of the employee retention tax credit.

We continue to evaluate the Appropriations Act, but do not currently expect it to have a material impact on our income tax provision.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

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Decreases in tax positions for current years — ( 167 ) —

Decreases from lapse in statute of limitations

Increases (decreases) from lapse in statute of limitations 114 ( 69 ) ( 255 )

Gross unrecognized tax benefits at end of year $ 2,376 $ 576 $ 1,112

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Restricted Cash

At December 31, 2018 , our cash and cash equivalents included $ 5.1 million held in a restricted cash account on deposit with our insurance carrier.

This account served as collateral, in place of an irrevocable stand-by letter of credit, to provide financial assurance that we will fulfill our obligations with respect to cash requirements associated with our workers' compensation self-insurance.

This cash was to remain on deposit with the carrier until all claims have been paid or we provided a letter of credit in lieu of the cash deposit.

At December 31, 2019 , no deposits were held in a restricted cash account as we provided a letter of credit in lieu of the cash deposit.

At December 31, 2020, our cash and cash equivalents included $ 1.1 billion held in a restricted cash account for the pending ION acquisition.

The restricted balance represents the Senior Secured Notes and Senior Unsecured Notes proceeds that were segregated as financing for the January 7, 2021 closing of the ION Media Networks, Inc.

Refer to Note 11.

Long-Term Debt and Note 3.

Acquisitions for further information on the $ 550 million Senior Secured Notes and $ 500 million Senior Unsecured Notes that were issued on December 30, 2020.

Investments consisted of the following:

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Buildings and improvements 183,516 187,830

Equipment 447,139 452,239

Computer software 25,888 20,047

Total 719,198 722,828

Accumulated depreciation 375,278 352,450

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Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year.

Operating lease costs recognized in our consolidated statements of operations for the year ended December 31, 2019 totaled $ 17.2 million , including short-term lease costs of $ 0.3 million .

Operating lease costs recognized in our consolidated statements of operations for the years ended December 31, 2020 and 2019 totaled $ 21.0 million and $ 14.7 million, including short-term lease costs of $ 0.5 million and $ 0.3 million, respectively.

Other information related to our operating leases was as follows:

(in thousands, except lease term and discount rate)

As of December 31,

(in thousands, except lease term and discount rate) 2020 2019

Balance Sheet Information

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Weighted Average Remaining Lease Term

Operating leases

Operating leases 7.64 years 12.59 years

Weighted Average Discount Rate

Operating leases 5.96 % 5.19 %

For the years ended

(in thousands) 2020 2019

As of December 31, 2019

Supplemental Cash Flows Information

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Future minimum lease payments under non-cancellable operating leases as of December 31, 2020 were as follows:

(in thousands)

(in thousands) Operating

2021 $ 12,404

Thereafter 21,421

Total future minimum lease payments 64,963

Imputed interest ( 13,243 )

Future minimum lease payments under non-cancellable operating leases as of December 31, 2018 (1) were as follows:

(in thousands)

Total future minimum lease payments

Amounts included for comparability and accounted for in accordance with ASC 840, "Leases".

Total $ 51,720

Goodwill and Other Intangible Assets

Goodwill by business segment was as follows:

(in thousands)

National Media

Gross balance as of December 31, 2016

Accumulated impairment losses

Net balance as of December 31, 2016

Cracked impairment charge

Katz acquisition

Balance as of December 31, 2017

(in thousands) Local Media National Media Total

Gross balance as of December 31, 2017 $ 708,133 $ 267,957 $ 976,090

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Net balance as of December 31, 2018 491,219 295,618 786,837

Sale of Cracked — ( 29,403 ) ( 29,403 )

Removal of Cracked accumulated impairment loss due to sale — 29,403 29,403

Television stations acquisitions 435,726 — 435,726

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Net balance as of December 31, 2019 926,945 297,734 1,224,679

Television stations acquisitions adjustments 2,500 — 2,500

KCDO Acquisition 1,679 — 1,679

Sale of WPIX ( 24,997 ) — ( 24,997 )

Sale of Weathersphere ( 633 ) — ( 633 )

Omny acquisition adjustment — ( 16 ) ( 16 )

Balance as of December 31, 2020 $ 905,494 $ 297,718 $ 1,203,212

Gross balance as of December 31, 2020 $ 1,122,408 $ 318,718 $ 1,441,126

Accumulated impairment losses ( 216,914 ) ( 21,000 ) ( 237,914 )

Net balance as of December 31, 2020 $ 905,494 $ 297,718 $ 1,203,212

Other intangible assets consisted of the following:

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Customer lists and advertiser relationships 102,900 104,300

Other 104,445 102,956

Total carrying amount 823,589 823,500

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Customer lists and advertiser relationships ( 53,232 ) ( 42,012 )

Other ( 37,778 ) ( 23,811 )

Total accumulated amortization ( 204,960 ) ( 148,740 )

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The value attributed to the acquired FCC license totaled $ 19.2 million and $ 4.1 million of value was attributed to other intangible assets.

In 2018, we recognized other intangible assets of $ 5.8 million related to the acquisition of cable and satellite carriage rights for the launch of our Newsy cable network.

These rights are amortized over the life of the respective carriage agreement.

Estimated amortization expense of intangible assets for each of the next five years is $ 54.9 million in 2021, $ 49.7 million in 2022, $ 44.0 million in 2023, $ 42.7 million in 2024, $ 41.0 million in 2025 and $ 386.3 million in later years.

Goodwill and indefinite-lived intangible assets are tested for impairment annually and any time events occur or conditions change that would indicate it is more likely than not the fair value of a reporting unit is below its carrying value.

Such indicators of impairment include, but are not limited to, changes in business climate or other factors resulting in low cash flow related to such assets.

If the fair value is less than the carrying value of the reporting unit then an impairment of goodwill exists and an impairment charge is recorded for the difference between the carrying value of the reporting unit and its estimated fair value, not to exceed the carrying value of the goodwill.

The slower development of our original operating model created indications of impairment of goodwill as of September 30, 2017 for Cracked.

Under the process required by GAAP, we estimated the fair value of Cracked.

The fair value was determined using a combination of discounted cash flow approach, which estimated fair value based upon future revenues, expenses and cash flows discounted to their present value, and a market approach, which estimated fair value using market multiples of various financial measures compared to a set of comparable public companies.

The discounted cash flow approach utilized unobservable factors, such as projected revenues and expenses and a discount rate applied to the estimated cash flows.

The determination of the discount rate was based on a cost of capital model, using a risk-free rate, adjusted by a stock-beta adjusted risk premium and a size premium.

The inputs to the nonrecurring fair value determination of our reporting units are classified as Level 3 fair value measurements under GAAP.

The valuation methodology and underlying financial information used to determine fair value requires significant judgments to be made by management.

These judgments include, but are not limited to, long-term projections of future financial performance and the selection of appropriate discount rates used to determine the present value of future cash flows.

Changes in such estimates or the application of alternative assumptions could produce significantly different results.

We concluded that the fair value of Cracked did not exceed its carrying value as of September 30, 2017.

Based upon our valuations, we recorded a $ 29.4 million non-cash impairment charge in 2017 to reduce the carrying value of goodwill and $ 6.3 million to reduce the value of intangible assets.

We determine fair values using market data, appraised values and discounted cash flow analyses.

The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the business and the period of time over which those cash flows will occur, as well as to determine an appropriate discount rate.

The determination of the discount rate is based on a cost of capital model, using a risk-free rate, adjusted by a stock-beta adjusted risk premium and a size premium.

While we believe the estimates and judgments used in determining the fair values were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates, could produce different estimates of fair value.

If the fair value of a reporting unit, or respective FCC license, is less than its carrying value, then an impairment exists and an impairment charge is recorded.

In the fourth quarter of 2020 and 2019, we completed our annual impairment tests on goodwill and FCC licenses.

The results of the tests indicated that the estimated fair value of our reporting units and FCC licenses exceeded their respective carrying values.

Long-Term Debt

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Revolving credit facility $ — $ —

Senior secured notes, due in 2029 550,000 —

Senior unsecured notes, due in 2025 400,000 400,000

Senior unsecured notes, due in 2027 500,000 500,000

Senior unsecured notes, due in 2031 500,000 —

Term loan, due in 2024 290,250 293,250

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The fair values of the term loans are based on observable estimates provided by third party financial professionals, and as such, are classified within Level 2 of the fair value hierarchy.

2025 Senior Unsecured Notes

On April 28, 2017, we issued $ 400 million of senior unsecured notes (the "2025 Senior Notes"), which bear interest at a rate of 5.125 % per annum and mature on May 15, 2025.

The proceeds of the 2025 Senior Notes were used to repay an old term loan, for the payment of the related issuance costs and for general corporate purposes.

The 2025 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on May 15 and November 15.

Prior to May 15, 2020, we may redeem the 2025 Senior Notes, in whole or in part, at any time, or from time to time, at a price equal to 100 % of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium, as set forth in the 2025 Senior Notes indenture.

In addition, on or prior to May 15, 2020 , we may redeem up to 40 % of the Senior Notes, using proceeds of equity offerings.

If we sell certain of our assets or have a change of control, the holders of the 2025 Senior Notes may require us to repurchase some or all of the notes.

The 2025 Senior Notes are also guaranteed by us and the majority our subsidiaries.

The 2025 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature.

We incurred approximately $ 7.0 million of deferred financing costs in connection with the issuance of the 2025 Senior Notes, which are being amortized over the life of the notes.

Additionally, in the second quarter of 2017, we wrote off $ 2.4 million of deferred financing costs associated with an old term loan.

2027 Senior Unsecured Notes

On July 26, 2019, our wholly-owned subsidiary, Scripps Escrow, Inc.

("Scripps Escrow"), issued $ 500 million of senior unsecured notes, which bear interest at a rate of 5.875 % per annum and mature on July 15, 2027 ("the 2027 Senior Notes").

The 2027 Senior Notes were released from Escrow on September 19, 2019 upon closing the acquisition of eight television stations from Nexstar.

A portion of the proceeds from these 2027 Senior Notes and the incremental term loan B proceeds were used to finance these stations acquired from Nexstar.

The 2027 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on July 15 and January 15, commencing on January 15, 2020.

Prior to July 15, 2022, we may redeem up to 40 % of the aggregate principal amount of the 2027 Senior Notes at a redemption price of 105.875 % of the principal amount plus accrued and unpaid interest, if any, to the date of redemption.

We may also redeem some or all of the notes before 2022 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

If we sell certain of our assets or have a change of control, the holders of the 2027 Senior Notes may require us to repurchase some or all of the notes.

The 2027 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our existing and future domestic restricted subsidiaries.

The 2027 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature.

There are no registration rights associated with the 2027 Senior Notes.

We incurred approximately $ 10.7 million of deferred financing costs in connection with the issuance of the 2027 Senior Notes, which are being amortized over the life of the notes.

Scripps Senior Secured Credit Agreement

We have a $ 210 million revolving credit facility ("Revolving Credit Facility") that expires in April 2022.

Commitment fees of 0.30 % to 0.50 % per annum, based on our leverage ratio, of the total unused commitment are payable under the Revolving Credit Facility.

Interest is payable on the Revolving Credit Facility at rates based on LIBOR, plus a margin based on our leverage ratio, ranging from 1.75 % to 2.50 %.

The weighted-average interest rate over the period we had a drawn revolver balance in 2020 was 2.46 %.

As of December 31, 2020, we had no borrowings under the Revolving Credit Facility.

As of December 31, 2020 and 2019, we had outstanding letters of credit totaling $ 6.0 million, under the Revolving Credit Facility.

On October 2, 2017, we issued a $ 300 million term loan B which matures in October 2024 ("2024 term loan").

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The 2026 term loan requires annual principal payments of $ 7.6 million.

Deferred financing costs and original issuance discount totaled approximately $ 23.0 million with this term loan, which are being amortized over the life of the loan.

Of the $ 765 million raised under the 2026 term loan, $ 525 million of the proceeds were used to fund the Cordillera acquisition and pay related fees and expenses, which closed on May 1, 2019.

The remaining proceeds financed a portion of the acquisition of eight broadcast television stations from the Nexstar transaction with Tribune Media Company, which closed on September 19, 2019.

As of December 31, 2019 , the interest rate on the 2026 term loan was 4.30 % .

Deferred financing costs and an original issuance discount totaled approximately $ 23.0 million with this term loan, which are being amortized over the life of the loan.

As of December 31, 2020 and 2019, the interest rate on the 2026 term loan was 2.65 % and 4.30 %, respectively.

The weighted-average interest rate on the 2026 term loan was 2.65 % in 2020.

The weighted-average interest rate on the 2026 term loan was 4.56 % for the months it was outstanding during 2019.

On January 7, 2021, we entered into a Sixth Amendment to the Third Amended Restated Credit Agreement ("Sixth Amendment") and issued an $ 800 million term loan B that contributed to the financing of the ION acquisition.

The Sixth Amendment also increased the capacity of the Revolving Credit Facility to $ 400 million and extended the facility's maturity date to the earlier of January 2026 or 91 days prior to the stated maturity date for any of our existing loans and our existing unsecured notes that mature within the facility’s term.

Deferred financing costs totaling $ 18.9 million were incurred in 2020 related to this term loan and the amendment to the Revolving Credit Facility.

The Senior Secured Credit Agreement contains covenants that limit our ability to incur additional debt and provides for restrictions on certain payments (dividends and share repurchases).

Additionally, we must be in compliance with certain leverage ratios in order to proceed with acquisitions.

Our credit agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt.

As of December 31, 2019 , we were not required to make any additional principal payments pursuant to this provision.

We have a $ 210 million revolving credit facility ("Revolving Credit Facility") that expires in April 2022.

Interest is payable on the Revolving Credit Facility at rates based on LIBOR, plus a margin, based on our leverage ratio, ranging from 1.75 % to 2.50 % .

The weighted-average interest rate over the period we had a drawn revolver balance in 2019 was 4.18 % .

As of December 31, 2019 , there were no borrowings under the revolving credit agreement.

The Revolving Credit Facility includes the maintenance of a net leverage ratio when we have outstanding borrowings on the facility, as well as other restrictions on payments (dividends and share repurchases).

Additionally, we can make acquisitions as long as the pro forma net leverage ratio is less than 5.5 to 1.0 .

Commitment fees of 0.30 % to 0.50 % per annum, based on our leverage ratio, of the total unused commitment are payable under the Revolving Credit Facility.

As of December 31, 2019 and 2018 , we had outstanding letters of credit totaling $ 6.0 million and $ 0.1 million , respectively, under the Revolving Credit Facility.

Our credit agreement grants the lenders pledges of our equity interests in our subsidiaries and security interests in substantially all other personal property including cash, accounts receivables and equipment.

We granted the lenders pledges of our equity interests in our subsidiaries and security interests in substantially all other personal property including cash, accounts receivables and equipment.

In addition, the Revolving Credit Facility contains a covenant to comply with a maximum first lien net leverage ratio of 5.5 to 1.0 when we have outstanding borrowings on the facility.

As of December 31, 2020, we were in compliance with our financial covenants.

2029 Senior Secured Notes

On December 30, 2020, we issued $ 550 million of senior secured notes (the "2029 Senior Notes"), which bear interest at a rate of 3.875 % per annum and mature on January 15, 2029.

The proceeds of the 2029 Senior Notes were deposited into a segregated escrow account.

The escrow account was subsequently released on January 7, 2021 and used toward the financing of the ION acquisition (See Note 3).

The 2029 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on January 15 and July 15, commencing on July 15, 2021.

Prior to January 15, 2024 we may redeem up to 40 % of the aggregate principal amount of the 2029 Senior Notes at a redemption price of 103.875 % of the principal amount plus accrued and unpaid interest, if any, to the date of redemption.

We may also redeem some or all of the 2029 Senior Notes before 2024 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

If we sell certain of our assets or have a change of control, the holders of the 2029 Senior Notes may require us to repurchase some or all of the notes.

Our credit agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt.

The 2029 Senior Notes are guaranteed by us and the majority our subsidiaries and are secured on equal footing with the obligations under the Senior Secured Credit Agreement.

Following the release of the proceeds from escrow on January 7, 2021, the notes became secured, on a first lien basis, from pledges of equity interests in our subsidiaries and by substantially all of the existing and future assets of Scripps.

The 2029 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature.

We incurred approximately $ 13.8 million of deferred financing costs in connection with the issuance of the 2029 Senior Notes, which are being amortized over the life of the notes.

2025 Senior Unsecured Notes

On April 28, 2017, we issued $ 400 million of senior unsecured notes (the "2025 Senior Notes"), which bear interest at a rate of 5.125 % per annum and mature on May 15, 2025.

The 2025 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on May 15 and November 15.

If we sell certain of our assets or have a change of control, the holders of the 2025 Senior Notes may require us to repurchase some or all of the notes.

The 2025 Senior Notes are also guaranteed by us and the majority our subsidiaries.

The 2025 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature.

We incurred approximately $ 7.0 million of deferred financing costs in connection with the issuance of the 2025 Senior Notes, which are being amortized over the life of the notes.

2027 Senior Unsecured Notes

On July 26, 2019, we issued $ 500 million of senior unsecured notes, which bear interest at a rate of 5.875 % per annum and mature on July 15, 2027 ("the 2027 Senior Notes").

The 2027 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on July 15 and January 15.

We may also redeem some or all of the notes before 2022 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

If we sell certain of our assets or have a change of control, the holders of the 2027 Senior Notes may require us to repurchase some or all of the notes.

The 2027 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our existing and future domestic restricted subsidiaries.

The 2027 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature.

There are no registration rights associated with the 2027 Senior Notes.

We incurred approximately $ 10.7 million of deferred financing costs in connection with the issuance of the 2027 Senior Notes, which are being amortized over the life of the notes.

2031 Senior Unsecured Notes

On December 30, 2020, we issued $ 500 million of senior unsecured notes (the "2031 Senior Notes"), which bear interest at a rate of 5.375 % per annum and mature on January 15, 2031.

The proceeds of the 2031 Senior Notes were deposited into a segregated escrow account.The escrow account was subsequently released on January 7, 2021 and used toward the financing of the ION acquisition (See Note 3).

The 2031 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on January 15 and July 15, commencing on July 15, 2021.

Prior to January 15, 2024 we may redeem up to 40 % of the aggregate principal amount of the 2031 Senior Notes at a redemption price of 105.375 % of the principal amount plus accrued and unpaid interest, if any, to the date of redemption.

We may also redeem some or all of the 2031 Senior Notes before 2026 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

If we sell certain of our assets or have a change of control, the holders of the 2031 Senior Notes may require us to repurchase some or all of the notes.

The 2031 Senior Notes are also guaranteed by us and the majority our subsidiaries.

The 2031 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature.

We incurred approximately $ 12.5 million of deferred financing costs in connection with the issuance of the 2031 Senior Notes, which are being amortized over the life of the notes.

Debt Repurchase Authorization

The authorization permits an aggregate principal amount reduction of up to $ 500 million and expires on March 1, 2023.

Fair Value Measurement

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December 31, 2020

(in thousands)

(in thousands) Total Level 1 Level 2 Level 3

Cash equivalents $ 539,891 $ 539,891 $ — $ —

December 31, 2019

(in thousands)

(in thousands) Total Level 1 Level 2 Level 3

Cash equivalents $ 8,948 $ 8,948 $ — $ —

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Liabilities for uncertain tax positions 2,332 637

Other 9,742 9,628

Other liabilities (less current portion) $ 286,365 $ 315,948

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Unearned revenue 3,397 358 2,037

Other, net 21,898 ( 19,532 ) 605

Total $ 34,094 $ ( 109,530 ) $ ( 11,446 )

The following table reconciles cash and cash equivalents and cash restricted for a pending acquisition in the consolidated balance sheets to cash, cash equivalents, and restricted cash per the consolidated statements of cash flows.

As of December 31,

(in thousands) 2020 2019 2018

Cash and cash equivalents $ 576,021 $ 32,968 $ 107,114

Cash restricted for pending acquisition 1,050,000 — —

Total cash, cash equivalents and restricted cash, end of year $ 1,626,021 $ 32,968 $ 107,114

As disclosed in Note 6.

Restricted Cash, the cash restricted for a pending acquisition on the consolidated balance sheet represents amounts segregated in escrow for the close of the ION acquisition.

Employee Benefit Plans

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Multi-employer plans 5 132 190

SERPs 933 1,018 2,908

Defined contribution plan 14,074 10,494 8,619

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Amortization of actuarial loss and prior service cost

4,672 2,622 3,527

Reclassification of actuarial loss related to settlement — — 11,713

In addition to the amounts summarized above, amortization of actuarial losses related to our SERPs recognized through other comprehensive income was $ 0.2 million in 2019 , $ 0.3 million in 2018 and $ 0.2 million in 2017 , and settlement losses in 2018 totaled $ 1.8 million .

Total $ ( 624 ) $ ( 2,856 ) $ 7,051

In addition to the amounts summarized above, amortization of actuarial losses related to our SERPs recognized through other comprehensive income was $ 0.3 million in 2020 and 2018 and $ 0.2 million in 2019, and settlement losses in 2018 totaled $ 1.8 million.

We recognized actuarial losses for our SERPs of $ 1.0 million and $ 1.9 million in 2020 and 2019, respectively, and a gain of $ 1.0 million in 2018.

Assumptions used in determining the annual retirement plans expense were as follows:

2020 2019 2018 (1)

Discount rate 3.40 % 4.38 % 3.71 %- 4.58 %

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(1) Range presented for 2018 discount rate represents the rates used for various remeasurement periods during the year as well as differing rates used for Scripps Pension Plan and Journal Communications, Inc.

(2) Range presented for long-term rate of return on plan assets for 2017 represents the rates used for Scripps Pension Plan and Journal Communications, Inc.

The discount rate used to determine our future pension obligations is based on a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans.

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The following table presents information about our employee benefit plan assets and obligations:

Defined Benefit Plans

Defined Benefit Plan SERPs

For the years ended December 31,

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Actuarial (gains)/losses 55,351 60,909 999 1,857

Plan Amendments

Projected benefit obligation at end of year 637,165 593,591 18,890 18,541

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Noncurrent liabilities ( 144,338 ) ( 172,892 ) ( 17,507 ) ( 17,327 )

Total $ ( 144,338 ) $ ( 172,892 ) $ ( 18,890 ) $ ( 18,541 )

Amounts recognized in accumulated other comprehensive loss consist of:

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Prior service cost 388 406 — —

In 2020 , we expect to recognize amortization of accumulated other comprehensive loss into net periodic benefit costs of $ 4.8 million (including $ 0.3 million for our SERPs).

Information for pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets was as follows:

Defined Benefit Plans

During 2020 and 2019, net actuarial losses increased our benefit obligation primarily due to year-over-year decreases in discount rate assumptions.

The recognized actuarial losses are recorded in accumulated other comprehensive income (loss) and are reflected in the table above.

Information for plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets was as follows:

Defined Benefit Plan SERPs

As of December 31,

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Assumptions used to determine the defined benefit pension plans benefit obligations were as follows:

2020 2019 2018

Weighted average discount rate 2.64 % 3.40 % 4.38 %

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Information related to our pension plan asset allocations by asset category were as follows:

Percentage of plan assets

allocation Percentage of plan assets

as of December 31,

2021 2020 2019

US equity securities 20 % 16 % 17 %

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Fixed-income securities 45 % 44 % 43 %

Other 5 % 1 % 1 %

Total 100 % 100 % 100 %

equity securities include common stocks of large, medium and small capitalization companies, which are predominantly U.S.

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Common/collective trust funds 215,444 181,176

Real estate fund

Cash equivalents 2,573 2,508

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The underlying assets in these funds (equity securities and fixed income securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available.

Common/collective trust funds are typically valued at their net asset values that are calculated by the investment manager or

sponsor of the fund and have daily or monthly liquidity.

Real estate fund pertained to an investment in a real estate fund which invested in limited partnerships, limited liability corporations, real estate investment trusts, other funds and insurance company group annuity contracts.

The valuations for these holdings were based on property appraisals using cash flow analysis and market transactions.

The fund provided for quarterly redemptions with 110 days written notice.

Common/collective trust funds are typically valued at their net asset values that are calculated by the investment manager or sponsor of the fund and have daily or monthly liquidity.

Segment Information

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It is comprised of 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates.

We also have 13 CW affiliates - five on full power stations and eight on multicast;

two MyNetwork TV affiliates;

two independent stations and nine additional low power stations.

We also have 12 CW affiliates - four on full power stations and eight on multicast;

two MyNetworkTV affiliates;

three independent stations and 10 additional low power stations.

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Our National Media segment includes our collection of national brands.

Our national media brands include Katz, Stitcher and its advertising network Midroll Media (Midroll), Newsy, Triton and other national brands.

Our national media brands include Katz, Newsy, Triton and other national brands.

These operations earn revenue primarily through the sale of advertising.

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Segment operating revenues:

Local Media $ 1,475,392 $ 1,022,805 $ 917,480

National Media 378,218 323,674 235,107

Other 3,868 4,920 4,775

Total operating revenues $ 1,857,478 $ 1,351,399 $ 1,157,362

Segment profit (loss):

Local Media $ 431,398 $ 217,885 $ 251,119

National Media 62,538 43,166 29,168

Other ( 3,196 ) ( 3,957 ) ( 3,680 )

Shared services and corporate ( 60,758 ) ( 57,409 ) ( 53,123 )

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Depreciation and amortization of intangible assets ( 107,155 ) ( 84,344 ) ( 60,711 )

Impairment of goodwill and intangible assets

Gains (losses), net on disposal of property and equipment ( 661 ) 1,692 ( 1,255 )

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Miscellaneous, net 2,914 1,194 123

Income (loss) from continuing operations before income taxes

Income from continuing operations before income taxes $ 209,020 $ 1,004 $ 92,670

Depreciation:

Local Media $ 42,934 $ 34,086 $ 30,467

National Media 5,788 4,302 2,336

Other 199 148 150

Shared services and corporate 1,495 1,462 1,432

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Amortization of intangible assets:

Local Media $ 37,848 $ 26,283 $ 14,821

National Media 17,537 16,710 10,152

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Core advertising $ 915,515 $ 861,386 $ 686,229

Political 272,066 23,263 139,600

Retransmission and carriage 588,888 390,043 304,402

Other 81,009 76,707 27,131

Total operating revenues $ 1,857,478 $ 1,351,399 $ 1,157,362

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Additions to property and equipment:

Local Media $ 42,611 $ 46,855 $ 37,773

National Media 3,079 11,963 9,004

Other 141 529 —

Shared services and corporate 646 1,878 723

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(in thousands) 2020 2019 2018

Local Media $ 2,463,064 $ 2,694,667 $ 1,261,526

National Media 721,805 680,764 655,718

Other 3,297 3,503 865

Shared services and corporate 1,671,220 81,657 129,969

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Discontinued operations — 101,266 82,269

Total assets $ 4,859,386 $ 3,561,857 $ 2,130,347

Commitments and Contingencies

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The Class A Common shares are only entitled to vote on the election of the greater of three or one-third of the directors and other matters as required by Ohio law.

In connection with the January 7, 2021 closing of the ION acquisition, we entered into a Securities Purchase Agreement with Berkshire Hathaway Inc., (“Berkshire Hathaway”), pursuant to which Berkshire Hathaway provided $ 600 million of financing in exchange for 6,000 Series A Preferred Shares of the Company.

The Preferred Shares, having a face value of $ 100,000 per share, are perpetual and will be redeemable at the option of the Company beginning on the fifth anniversary of issuance, and redeemable at the option of the holders in the event of a Change of Control (as defined in the terms of the Preferred Shares), in each case at a redemption price of 105 % of the face value, plus accrued and unpaid dividends (whether or not declared).

As long as the Company pays quarterly dividends in cash on the Preferred Shares, the dividend rate will be 8 % per annum.

If dividends on the Preferred Shares, which compound quarterly, are not paid in full in cash, the rate will increase to 9 % per annum for the remaining period of time that the Preferred Shares are outstanding.

Class A Common Shares Stock Warrant — In connection with the Preferred Shares issuance, Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $ 13 per share.

The warrant is exercisable at the holder’s option at any time or from time to time, in whole or in part, until the first anniversary of the date on which no Preferred Shares remain outstanding.

Share Repurchase Plan — Shares may be repurchased from time to time at management's discretion.

In November 2016, our Board of Directors authorized a share repurchase program of up to $ 100 million of our Class A Common shares.

This authorization expires on March 1, 2020.

In November 2016, our Board of Directors authorized a share repurchase program of up to $ 100 million of our Class A Common shares.

We repurchased a total of $ 50.3 million of shares under this authorization prior to its expiration on March 1, 2020.

In February 2020, our Board of Directors authorized a new share repurchase program of up to $ 100 million of our Class A Common shares through March 1, 2022.

As part of the 2016 share repurchase plan, the Company entered into an Accelerated Share Repurchase ("ASR") agreement with JP Morgan to repurchase $ 25 million of the Company's common stock.

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Upon initial receipt of the shares, there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share.

final settlement of the ASR agreement in February 2019, the Company received additional deliveries totaling 147,164 shares of its common stock based on a weighted average cost per share of $ 16.70 over the term of the ASR agreement.

Upon final settlement of the ASR agreement in February 2019, the Company received additional deliveries totaling 147,164 shares of its common stock based on a weighted average cost per share of $ 16.70 over the term of the ASR agreement.

No shares were repurchased under either authorization during 2020.

As of December 31, 2019, we repurchased $ 0.6 million of shares at prices ranging from $ 15.54 to $ 18.72 per share.

Excluding the shares repurchased under the ASR, during 2018 we repurchased $ 7.3 million of shares at prices ranging from $ 13.29 to $ 17.86 per share.

As of December 31, 2019 , $ 49.7 million was outstanding under this authorization.

In February 2020, our Board of Directors authorized a new share repurchase program of up to $ 100 million of our Class A Common shares through March 1, 2022.

Under the terms of the Preferred Shares, we will be prohibited from paying dividends on and repurchasing our common shares until all Preferred Shares are redeemed.

Incentive Plans — The Company has a long-term incentive plan (the “Plan”) that permits the granting of incentive and nonqualified stock options, stock appreciation rights, restricted stock units (RSUs), restricted and unrestricted Class A Common shares and performance units to key employees and non-employee directors.

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The following table summarizes our stock option activity:

Exercise Price

Outstanding at December 31, 2016

of Shares Weighted-

Exercise Price Range of

Outstanding at December 31, 2017 251,507 $ 7.38 $ 6 - 9

Exercised ( 251,507 ) 7.38 6 - 9

Outstanding at December 31, 2018 —

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The following table summarizes our RSU activity:

of Shares Weighted

Average Range of

Unvested at December 31, 2017 1,187,923 $ 19.99 $ 14 - 24

Awarded 816,771 13.28 11 - 17

Vested ( 771,904 ) 14.16 11 - 18

Forfeited ( 57,348 ) 16.68 13 - 23

Unvested at December 31, 2018 1,175,442 15.86 11 - 24

Awarded 758,557 22.12 13 - 23

Vested ( 536,064 ) 21.67 12 - 23

Forfeited ( 39,497 ) 17.89 13 - 24

Unvested at December 31, 2019 1,358,438 18.68 11 - 24

Awarded 1,588,134 8.86 7 - 12

Vested ( 739,633 ) 11.52 7 - 17

Forfeited ( 15,280 ) 13.37 8 - 23

Unvested at December 31, 2020 2,191,659 12.22 7 - 23

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Changes in the accumulated other comprehensive income (loss) ("AOCI") balance by component consisted of the following for the respective years:

(in thousands)

Defined Benefit Pension Items

(in thousands) Defined Benefit Pension Items Other Total

As of December 31, 2018 $ ( 95,365 ) $ ( 32 ) $ ( 95,397 )

Other comprehensive income (loss) before reclassifications, net of tax of $( 1,874 ) and $( 77 )

( 5,461 ) ( 223 ) ( 5,684 )

Amounts reclassified from AOCI, net of tax of $ 718

2,092 — 2,092

Net current-period other comprehensive income (loss) ( 3,369 ) ( 223 ) ( 3,592 )

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Other comprehensive income (loss) before reclassifications, net of tax of $( 1,492 ) and $( 23 )

( 4,803 ) ( 75 ) ( 4,878 )

Amounts reclassified from AOCI, net of tax of $ 1,164

3,748 — 3,748

Net current-period other comprehensive income (loss) ( 1,055 ) ( 75 ) ( 1,130 )

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Summarized quarterly financial information is as follows:

(in thousands, except per share data)

2020 1st 2nd 3rd 4th

(in thousands, except per share data) Quarter Quarter Quarter Quarter Total

Operating revenues $ 414,223 $ 358,883 $ 493,262 $ 591,110 $ 1,857,478

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Income (loss) from continuing operations, net of tax ( 7,198 ) ( 17,512 ) 63,973 114,301 153,564

Loss from discontinued operations, net of tax

Income (loss) from discontinued operations, net of tax ( 4,611 ) ( 4,531 ) ( 5,455 ) 130,366 115,769

Net income (loss) ( 11,809 ) ( 22,043 ) 58,518 244,667 269,333

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Net income (loss) from continuing operations per basic share of common stock $ ( 0.09 ) $ ( 0.22 ) $ 0.76 $ 1.36 $ 1.84

Loss from discontinued operations per basic share of common stock $ ( 0.06 ) $ ( 0.06 ) $ ( 0.07 ) $ 1.55 $ 1.39

Net income (loss) from continuing operations per diluted share of common stock $ ( 0.09 ) $ ( 0.22 ) $ 0.76 $ 1.35 $ 1.83

Loss from discontinued operations per diluted share of common stock $ ( 0.06 ) $ ( 0.06 ) $ ( 0.07 ) $ 1.55 $ 1.39

Weighted average shares outstanding:

Basic 81,077 81,418 81,522 81,650 81,418

Diluted 81,077 81,418 82,088 82,467 81,831

Cash dividends per share of common stock $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.20

The sum of the quarterly net income (loss) per share amounts may not equal the reported annual amount because each amount is computed independently based upon the weighted-average number of shares outstanding for the period.

(in thousands, except per share data)

2019 1st 2nd 3rd 4th

(in thousands, except per share data) Quarter Quarter Quarter Quarter Total

Operating revenues $ 277,059 $ 320,428 $ 330,857 $ 423,055 $ 1,351,399

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Net income (loss) ( 6,814 ) ( 366 ) ( 21,763 ) 10,565 ( 18,378 )

Loss attributable to noncontrolling interest

Income (loss) attributable to noncontrolling interest — — 166 ( 166 ) —

Net income (loss) attributable to the shareholders of The E.W.

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Weighted average shares outstanding:

Basic 80,673 80,822 80,877 80,927 80,826

Diluted 80,673 81,196 80,877 81,322 80,826

Cash dividends per share of common stock $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.20

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Assets Held for Sale and Discontinued Operations

During the second quarter of 2020, our Board of Directors approved the sale of our Stitcher podcasting business.

On July 10, 2020, we signed a definitive agreement to sell the business for $ 325 million, with $ 265 million of cash upfront;

earnout of up to $ 30 million based on 2020 financial results and paid in 2021;

and earnout of up to $ 30 million based on 2021 financial results and paid in 2022.

The transaction closed on October 16, 2020.

Beginning in the second quarter of 2020, Stitcher was classified as discontinued operations in our consolidated financial statements for all periods presented.

Radio Divestiture

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We have reported its results as discontinued operations for the years ended 2017 and 2018.

Operating results of our radio operations included in discontinued operations were as follows:

For the years ended December 31,

(in thousands)

We have reported its results as discontinued operations for the year ended 2018.

Operating results of our Stitcher and radio operations included in discontinued operations were as follows:

2020 2019 2018

(in thousands) Stitcher Stitcher Stitcher Radio Total

Operating revenues $ 57,573 $ 72,545 $ 51,063 $ 49,243 $ 100,306

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Impairment of goodwill and intangible assets — — — ( 25,900 ) ( 25,900 )

Income (loss) from operations of discontinued operations

Pretax loss on disposal of discontinued operations

Income (loss) from discontinued operations before income taxes

Income tax benefit (provision)

Loss from discontinued operations, net of tax

Results of discontinued operations in 2018 and 2017 included $ 25.9 million and $ 8.0 million , respectively, of non-cash impairment charges to write-down the goodwill of our radio business to fair value.

The income tax provision for discontinued operations was impacted by non-deductible charges of $ 30.9 million in 2018 and $ 8.0 million in 2017.

Other, net ( 174 ) ( 57 ) 29 ( 179 ) ( 150 )

Loss from operations ( 32,357 ) ( 21,879 ) ( 18,495 ) ( 19,530 ) ( 38,025 )

Pretax gain (loss) on disposal 182,589 — — ( 18,558 ) ( 18,558 )

Gain (loss) from discontinued operations before income taxes 150,232 ( 21,879 ) ( 18,495 ) ( 38,088 ) ( 56,583 )

Income tax (provision) benefit ( 34,463 ) 5,414 4,683 1,760 6,443

Income (loss) from discontinued operations, net of tax $ 115,769 $ ( 16,465 ) $ ( 13,812 ) $ ( 36,328 ) $ ( 50,140 )

Stitcher’s discontinued operating results in 2020 include a contract termination charge that totaled $ 12 million.

The gain on disposal for Stitcher reflects an $ 10 million fair value estimate for the contingent earnout consideration.

Results of discontinued operations in 2018 included $ 25.9 million of a non-cash impairment charge to write-down the goodwill of our radio business to fair value.

The income tax provision for discontinued operations was impacted by a non-deductible charge of $ 30.9 million in 2018.

We also entered into separate Local Marketing Agreements (“LMA”) with the acquirer of the Tulsa radio stations and the acquirer of the Wichita, Springfield, Omaha, and Knoxville radio stations.

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Discontinued operating revenues included LMA fees totaling $ 2.5 million for the year ended December 31, 2018.

The following table presents a summary of the Stitcher net assets classified as discontinued operations.

(in thousands) As of December 31, 2019

Total current assets $ 34,793

Investments 178

Property and equipment 5,526

Goodwill and intangible assets 48,292

Operating lease right-of-use assets 10,448

Other assets 2,029

Total assets of discontinued operations 101,266

Total current liabilities 10,175

Other liabilities 12,552

Total liabilities of discontinued operations 22,727

Net assets of discontinued operations $ 78,539

When we acquired the Nexstar-Tribune television stations in 2019, we granted Nexstar the option to repurchase WPIX, the CW-affiliated station in New York City.

The option was exercisable from March 31, 2020, through the end of 2021, and was assignable by Nexstar to a third party.

In July 2020, Nexstar assigned their option to repurchase WPIX to Mission Broadcasting, Inc., and Mission immediately exercised the option.

The option price was $ 75 million plus accrued interest, to be calculated on the period between September 19, 2019, the purchase date of WPIX, and the option sale closing date.

The transaction closed on December 30, 2020 for cash consideration of $ 83.7 million.

Including interest income of $ 7.6 million, we recognized gains from the WPIX disposition totaling $ 6.5 million in the fourth quarter of 2020.

These gains are included within the miscellaneous, net caption on our Consolidated Statements of Operations.

Pending Triton Sale

During the first quarter of 2021, our Board of Directors approved the sale of our Triton business.

On February 16, 2021, we signed a definitive agreement to sell the business for $ 230 million.

The transaction is expected to close in the second quarter of 2021 upon satisfaction of normal and customary closing conditions and regulatory approval.

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What changed 10-K

Item 9A. Controls and Procedures