E.W. SCRIPPS Co 10-K

Item 9A. Controls and Procedures The Controls and Procedures required by this item are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1 of this Form 10-K. Item 9B. Other Information None. 26 PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3). Information required by Item 10 of Form 10-K relating to directors is incorporated by reference to the material captioned “Election of Directors” in our definitive proxy statement for the Annual Meeting of Shareholders (“Proxy Statement”). Information regarding Section 16(a) compliance is incorporated by reference to the material captioned “Delinquent Section 16 Reports” in the Proxy Statement. We have adopted a code of conduct that applies to all employees, officers and directors of Scripps. We also have a code of ethics for the CEO and Senior Financial Officers that meets the requirements of Item 406 of Regulation S-K and the NASDAQ listing standards. Copies of our codes of ethics are posted on our website at http://www.scripps.com. Information regarding our audit committee financial expert is incorporated by reference to the material captioned “Corporate Governance” in the Proxy Statement. The Proxy Statement will be filed with the Securities and Exchange Commission in connection with our 2022 Annual Meeting of Shareholders. Item 11. Executive Compensation The information required by Item 11 of Form 10-K is incorporated by reference to the material captioned “Compensation Discussion and Analysis” and “Compensation Tables” in the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by Item 12 of Form 10-K is incorporated by reference to the material captioned “Report on the Security Ownership of Certain Beneficial Owners,” “Report on the Security Ownership of Management,” and “Equity Compensation Plan Information” in the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by Item 13 of Form 10-K is incorporated by reference to the materials captioned “Corporate Governance” and “Report on Related Party Transactions” in the Proxy Statement. Item 14. Principal Accounting Fees and Services The information required by Item 14 of Form 10-K is incorporated by reference to the material captioned “Report of the Audit Committee of the Board of Directors” in the Proxy Statement. 27 PART IV Item 15. Exhibits and Financial Statement Schedules Documents filed as part of this report: (a) The Consolidated Financial Statements of The E.W. Scripps Company are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1. The reports of Deloitte & Touche LLP, an Independent Registered Public Accounting Firm, dated February 25, 2022, are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1. (b) There are no supplemental schedules that are required to be filed as part of this Form 10-K. (c) An exhibit index required by this item appears below. Item 16. Form 10-K Summary None. 28 The E.W. Scripps Company Index to Consolidated Financial Statement Schedules 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. W. 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 4.02 First Amendment to Warrant Agreement dated as of May 14, 2021 8-K 001-10701 4.2 5/14/2021 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. 1 to The E.W. 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 Second Amended and Restated Scripps Family Agreement SC 13D/A 005-43473 99.1 4/5/2021 10.07 1997 Deferred Compensation and Stock Plan for Directors, as amended 8-K 000-16914 10.61 5/8/2008 10.08 Scripps Supplemental Executive Retirement Plan as Amended and Restated effective February 23, 2015 10-Q 000-16914 10.10 9/30/2017 10.09 Employment Agreement between the Company and Adam P. Symson 8-K 001-10701 10.1 12/19/2019 10.10 Scripps Executive Deferred Compensation Plan, Amended and Restated as of February 23, 2015 10-Q 000-16914 10.14 9/30/2017 10.11 The E.W. Scripps Company Restricted Share Unit Agreement (Non-Employee Directors) 10-Q 000-16914 10.15 9/30/2017 10.12 Employee Restricted Share Unit Agreement 10-Q 000-16914 10.16 9/30/2017 10.13 5.125% Senior Notes due 2025 Purchase Agreement dated April 20, 2017 8-K 000-16914 10.1 4/20/2017 10.14 Indenture dated as of April 28, 2017 8-K 000-16914 10.1 4/28/2017 10.15 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 10.16 Indenture dated as of July 26, 2019 8-K 001-10701 10.1 7/26/2019 10.17 Secured Senior Notes Indenture dated as of December 30, 2020 8-K 001-10701 10.1 12/30/2020 10.18 Unsecured Senior Notes Indenture dated as of December 30, 2020 8-K 001-10701 10.2 12/30/2020 10.19 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 10.20 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 * 31(a) Section 302 Certifications * 31(b) Section 302 Certifications * 32(a) Section 906 Certifications * 32(b) Section 906 Certifications * 29 101.INS iXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document * 101.SCH Inline XBRL Taxonomy Extension Schema Document * 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) * * - As filed herewith 30 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE E. W. SCRIPPS COMPANY Dated: February 25, 2022 By: /s/ Adam P. Symson Adam P. Symson 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 25, 2022. Signature Title /s/ Adam P. Symson President and Chief Executive Officer Adam P. Symson (Principal Executive Officer) /s/ Jason Combs Executive Vice President and Chief Financial Officer Jason Combs (Principal Financial Officer) /s/ Daniel W. Perschke Vice President, Controller Daniel W. Perschke (Principal Accounting Officer) /s/ Marcellus W. Alexander, Jr. Director Marcellus W. Alexander, Jr. /s/ Charles Barmonde Director Charles Barmonde /s/ Kelly P. Conlin Director Kelly P. Conlin /s/ Lauren R. Fine Director Lauren R. Fine /s/ John W. Hayden Director John W. Hayden /s/ Anne M. La Dow Director Anne M. La Dow /s/ Wonya Y. Lucas Director Wonya Y. Lucas /s/ R. Michael Scagliotti Director R. Michael Scagliotti /s/ Kim Williams Chair of the Board of Directors Kim Williams 31 The E.W. Scripps Company Index to Consolidated Financial Statement Information Item No. Page 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations F- 2 2. Quantitative and Qualitative Disclosures About Market Risk F- 16 3. Controls and Procedures (Including Management’s Report on Internal Control Over Financial Reporting) F- 17 4. Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 19 5. Consolidated Balance Sheets F- 22 6. Consolidated Statements of Operations F- 23 7. Consolidated Statements of Comprehensive Income (Loss) F- 24 8. Consolidated Statements of Cash Flows F- 25 9. Consolidated Statements of Equity F- 26 10. Notes to Consolidated Financial Statements F- 27 F-1 Management’s Discussion and Analysis of Financial Condition and Results of Operations The Consolidated Financial Statements and Notes to Consolidated Financial Statements are the basis for our discussion and analysis of financial condition and results of operations. 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 2020 and 2019, which may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our 2020 Form 10-K. Forward-Looking Statements Our Annual Report on Form 10-K contains certain forward-looking statements related to the Company's businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. 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.” 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 The E.W. Scripps Company (“Scripps”) is a diverse media enterprise, serving audiences and businesses through a portfolio of local television stations and national media brands. 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 network. In our Scripps Networks division, we operate nine news and entertainment networks - ION, Bounce, Court TV, Defy TV, Grit, ION Mystery, Laff, Newsy and TrueReal. 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. 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. At the time of the acquisition and related divestitures, ION's programming was being delivered through 48 owned and operated stations and 63 independent ION affiliated stations. The acquisition of ION enabled us to create a full-scale national television networks business. By combining ION with our other news and entertainment networks, Scripps Networks reaches nearly every American through free over-the-air broadcast, cable/satellite, connected TV 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 other multicast networks air on digital subchannels on our and other broadcast 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. On July 1, 2021, we launched two national television networks. The two networks, which are distributed for free to viewers over-the-air and reached 92% of U.S. television homes at launch, are demo-specific and reality-based. TrueReal targets women in the 25-54 demographic and features off-network shows such as Storage Wars , Married at First Sight , Hoarders and Little Women: LA . Defy TV targets men ages 25-54 with programming that includes off-network series such as Pawn Stars , Forged in Fire , American Pickers and The Curse of Oak Island . F-2 During the first quarter of 2021, the Company began notifying MVPDs carrying Newsy of our intent to exit cable and satellite distribution of the network. In October 2021, the network launched as an over-the-air television station. Newsy became the nation's only free 24/7 broadcast news network, available to more than 90% of U.S. television homes. The network is headquartered in Atlanta and is carried primarily on the Scripps-owned ION stations and select Scripps local television stations and those of other station groups. In connection with this Newsy restructuring plan, we incurred costs related to relocating certain employees, exiting certain contractual agreements and writing down assets associated with existing cable and satellite provider relationships. For the year ended December 31, 2021, we have incurred restructuring charges totaling $9.4 million, including $7.1 million of charges for the write-downs of both capitalized carriage agreement payments and certain Newsy intangible assets. On May 15, 2021, we redeemed the $400 million outstanding principal amount of our 2025 Senior Notes for a redemption price equal to 102.563% of the aggregate principal amount plus accrued and unpaid interest. During the fourth quarter of 2021, we redeemed $15.4 million of the 2027 Senior Notes at a weighted-average redemption price equal to 103.94% of the aggregate principal amount plus accrued and unpaid interest and we redeemed $22.0 million of the 2031 Senior Notes at a weighted-average redemption price equal to 101.13% of the aggregate principal amount plus accrued and unpaid interest. The notes were redeemed with cash on hand. Our Board of Directors approved the sale of our Triton business in the first quarter of 2021 and we signed a definitive agreement to sell the business on February 16, 2021. The transaction closed on March 31, 2021 for total net proceeds of $225 million. Preferred stock dividends paid in 2021 totaled $45.1 million and dividends paid to shareholders of our common stock totaled $16.6 million in 2020. 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. Therefore, no common stock dividends were paid to our shareholders for the year ended December 31, 2021. F-3 Results of Operations The trends and underlying economic conditions affecting operating performance and future prospects differ for each of our business segments. Accordingly, you should read the following discussion of our consolidated results of operations in conjunction with the discussion of the operating performance of our individual business segments that follows. Consolidated Results of Operations Consolidated results of operations were as follows: For the years ended December 31, (in thousands) 2021 Change 2020 Change 2019 Operating revenues $ 2,283,532 22.9 % $ 1,857,478 37.4 % $ 1,351,399 Cost of revenues, excluding depreciation and amortization (1,106,226) 19.0 % (929,748) 32.5 % (701,835) Selling, general and administrative expenses, excluding depreciation and amortization (595,105) 19.6 % (497,748) 10.6 % (449,879) Acquisition and related integration costs (40,373) (18,678) (26,304) Restructuring costs (9,436) — (3,370) Depreciation and amortization of intangible assets (161,922) (107,155) (84,344) Gains (losses), net on disposal of property and equipment 30,275 (661) 1,692 Operating income 400,745 303,488 87,359 Interest expense (165,164) (92,994) (80,596) Loss on extinguishment of debt (15,347) — — Defined benefit pension plan expense (343) (4,388) (6,953) Gain on sale of Triton business 81,784 — — Losses on stock warrant (99,118) — — Miscellaneous, net (15,469) 2,914 1,194 Income from continuing operations before income taxes 187,088 209,020 1,004 Provision for income taxes (71,189) (55,456) (2,917) Income (loss) from continuing operations, net of tax 115,899 153,564 (1,913) Income (loss) from discontinued operations, net of tax 6,813 115,769 (16,465) Net income (loss) $ 122,712 $ 269,333 $ (18,378) On January 7, 2021, we acquired the national broadcast network ION. On December 30, 2020, we completed the sale of our WPIX television station. 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. The inclusion or exclusion of operating results from ION and these stations for the periods subsequent to their acquisition or disposition impacts the comparability of our consolidated and segment operating results. 2021 compared with 2020 Operating revenues increased $426 million or 23% in 2021. Excluding the impact of ION, as well as the impact of the WPIX television station that was sold in the fourth quarter of 2020, operating revenues decreased $52.8 million or 2.9% year-over-year. In this non-election year, the decrease reflects a year-over-year decline in same-station political revenue of $242 million. The decline in political revenue was partially offset by higher retransmission revenues in our Local Media operations and overall growth in our legacy Scripps Networks operations. Additionally, Local Media same-station core advertising revenue increased $95.2 million year-to-date. The COVID-19 pandemic particularly had an impact on our 2020 results. Beginning with stay at home and similar orders in 2020, we began to see cancellations late in the first quarter, which we believe reduced our first quarter 2020 consolidated advertising revenue by about $10 million. Second quarter 2020 results were significantly impacted by the economic downturn caused by the outbreak, with the greatest impact in April. We saw improvements in the advertising markets starting in May 2020 as economies began to reopen. Cost of revenues, which is comprised of programming costs and costs associated with distributing our content, increased $176 million or 19% in 2021. Programming costs, the primary driver of fluctuations in cost of revenues, increased $182 million year-over-year. Excluding the impacts of the ION acquisition and the WPIX disposition, programming costs increased $76.6 F-4 million or 15% compared to the prior period, attributed to higher network affiliation fees at our Local Media and Scripps Networks stations, reflecting contractual rate increases, as well as an increase in programming costs associated with our legacy Scripps Networks operations. Selling, general and administrative expenses are primarily comprised of sales, marketing and advertising expenses, research costs and costs related to corporate administrative functions. Selling, general and administrative expenses increased $97.4 million or 20% in 2021, primarily attributed to incremental costs incurred related to the ION acquisition, as well as increases in employee compensation and the return of marketing and advertising costs across our businesses. Acquisition and related integration costs of $40.4 million in 2021 primarily reflect investment banking, legal and professional service costs incurred to complete and integrate the ION Media Networks, Inc. acquisition, which closed on January 7, 2021. Restructuring costs totaled $9.4 million in 2021. In connection with the Newsy restructuring plan, we incurred charges in the first quarter totaling $7.1 million for the write-downs of both capitalized carriage agreement payments and certain Newsy intangible assets. The additional Newsy restructuring charges for the year were primarily attributed to employee severance, relocation costs and Nielsen contract costs. Depreciation and amortization expense increased from $107 million in 2020 to $162 million in 2021 primarily due to the acquisition of ION. Gains from the disposal of property and equipment in 2021 primarily reflect a $32.6 million gain from the sale of our KMGH Denver station's building. Interest expense increased in 2021 due to the issuance of new debt to finance the ION acquisition, which included $550 million of senior secured notes, $500 million of senior unsecured notes and an $800 million term loan issued upon the close of the acquisition. We redeemed the outstanding principal amount of our 2025 Senior Notes during the second quarter of 2021. Additionally, during the fourth quarter of 2021, we redeemed $15.4 million of our 2027 Senior Notes and $22.0 million of our 2031 Senior Notes. These redemptions resulted in a loss on extinguishment of debt of $15.3 million, representing the premiums paid on the notes and write-offs of unamortized debt financing costs. In 2021, we recognized an $81.8 million pre-tax gain from the disposition of the Triton business. The transaction closed on March 31, 2021 for total net proceeds of $225 million. In 2021, we incurred a $99.1 million non-cash charge related to our outstanding common stock warrant. The warrant obligation was being marked-to-market each reporting period with the increase in our common stock price being the significant contributor to a higher valuation. Following an amendment to the common stock warrant agreement on May 14, 2021, the fair value of the warrant was reclassified to equity and is longer marked-to-market each reporting period. The effective income tax rate was 38% and 27% for 2021 and 2020, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the impact of state taxes, foreign taxes, non-deductible expenses, changes in reserves for uncertain tax positions, excess tax benefits or expense from the exercise and vesting of share-based compensation awards ($1.7 million benefit in 2021 and $1.0 million expense in 2020), state deferred rate changes and state NOL valuation allowance changes. Additionally, a non-deductible expense of $102.6 million was recorded in 2021 related to preferred stock issuance costs and unrealized losses on mark-to-market adjustments recorded on the common stock warrant issued in connection with the ION acquisition. Discontinued Operations Discontinued operations reflect the historical results of our Stitcher operations. During the second quarter of 2020, our Board of Directors approved the sale of our Stitcher podcasting business and we signed a definitive agreement for its sale on July 10, 2020. The transaction closed on October 16, 2020. F-5 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. Segment profit excludes interest, defined benefit pension plan amounts, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America. Items excluded from segment profit generally result from decisions made in prior periods or from decisions made by corporate executives rather than the managers of the business segments. Depreciation and amortization charges are the result of decisions made in prior periods regarding the allocation of resources and are therefore excluded from the measure. Generally, our corporate executives make financing, tax structure and divestiture decisions. Excluding these items from measurement of our business segment performance enables us to evaluate business segment operating performance based upon current economic conditions and decisions made by the managers of those business segments in the current period. Our respective business segment results reflect the impact of intercompany carriage agreements between our local broadcast television stations and our national networks. We also allocate a portion of certain corporate costs and expenses, including information technology, certain employee benefits and shared services to our business segments. These intercompany agreements and allocations are generally amounts agreed upon by management, which may differ from an arms-length amount. Corporate assets are primarily cash and cash equivalents, restricted cash, property and equipment primarily used for corporate purposes and deferred income taxes. Effective with the January 7, 2021 close of the ION acquisition, we realigned our internal reporting structure and changed the reporting of our businesses’ operating results to reflect this new structure. Under the new structure, our operating results are reported under Local Media, Scripps Networks and Other segment captions. The Scripps Networks segment is comprised of nine national television networks that reach nearly every U.S. television home through free over-the-air broadcast, cable/satellite, connected TV and digital distribution. The operating results of the sold Triton business, and our other national businesses that were previously reported in our National Media segment, are aggregated with our remaining business activities in the Other segment caption. F-6 Information regarding the operating performance of our business segments and a reconciliation of such information to the Consolidated Financial Statements is as follows: For the years ended December 31, (in thousands) 2021 Change 2020 Change 2019 Segment operating revenues: Local Media $ 1,319,468 (11.3) % $ 1,488,237 44.1 % $ 1,032,709 Scripps Networks 951,883 309,076 14.4 % 270,060 Other 26,924 (63.1) % 73,010 24.7 % 58,534 Intersegment eliminations (14,743) 14.8 % (12,845) 29.7 % (9,904) Total operating revenues $ 2,283,532 22.9 % $ 1,857,478 37.4 % $ 1,351,399 Segment profit (loss): Local Media $ 268,140 (39.6) % $ 444,243 95.0 % $ 227,789 Scripps Networks 389,278 28,324 81.7 % 15,585 Other 359 (98.0) % 18,173 32.5 % 13,720 Shared services and corporate (75,576) 24.4 % (60,758) 5.8 % (57,409) Acquisition and related integration costs (40,373) (18,678) (26,304) Restructuring costs (9,436) — (3,370) Depreciation and amortization of intangible assets (161,922) (107,155) (84,344) Gains (losses), net on disposal of property and equipment 30,275 (661) 1,692 Interest expense (165,164) (92,994) (80,596) Loss on extinguishment of debt (15,347) — — Defined benefit pension plan expense (343) (4,388) (6,953) Gain on sale of Triton business 81,784 — — Losses on stock warrant (99,118) — — Miscellaneous, net (15,469) 2,914 1,194 Income from continuing operations before income taxes $ 187,088 $ 209,020 $ 1,004 F-7 Local Media — Our Local Media segment includes our 61 local broadcast stations and their related digital operations. It is comprised of 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates. We also have 12 CW affiliates - four on full power stations and eight on multicast; five 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, satellite carriers and over-the-top virtual MVPDs. National television networks offer affiliates a variety of programming and sell the majority of advertising within those programs. In addition to network programs, we broadcast internally produced local and national programs, syndicated programs, sporting events and other programs of interest in each station's market. 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 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. Operating results for our Local Media segment were as follows: For the years ended December 31, (in thousands) 2021 Change 2020 Change 2019 Segment operating revenues: Core advertising $ 663,864 8.9 % $ 609,537 1.6 % $ 599,870 Political 22,693 (91.5) % 266,683 23,263 Retransmission and carriage fees 617,292 3.9 % 594,359 51.4 % 392,614 Other 15,619 (11.5) % 17,658 4.1 % 16,962 Total operating revenues 1,319,468 (11.3) % 1,488,237 44.1 % 1,032,709 Segment costs and expenses: Employee compensation and benefits 433,989 (3.1) % 447,669 23.1 % 363,801 Programming 438,719 8.2 % 405,604 46.5 % 276,784 Other expenses 178,620 (6.3) % 190,721 16.1 % 164,335 Total costs and expenses 1,051,328 0.7 % 1,043,994 29.7 % 804,920 Segment profit $ 268,140 (39.6) % $ 444,243 95.0 % $ 227,789 On December 30, 2020, we completed the sale of our WPIX television station. 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. The exclusion or inclusion of operating results from these stations for the periods subsequent to their disposition or acquisition impacts the comparability of our Local Media segment operating results. 2021 compared with 2020 Revenues Total Local Media revenues decreased $169 million or 11% in 2021 compared to 2020. Excluding the impact of the WPIX disposition, Local Media revenues decreased $105 million or 7.4% year-over-year. On a same-station basis, there was a year-over-year decrease in political revenues of $242 million during this non-election year, which was partially offset by increases in same-station core advertising and retransmission revenues. Retransmission revenues on a same-station basis increased $38.5 million year-over-year. While retransmission revenues have been affected by subscriber losses by the MVPDs, particularly among satellite providers, rate increases have more than offset those subscriber declines. Core advertising revenues on a same-station basis increased $95.2 million or 17% year-over-year. Political advertising displacement, as well as weakness in economic conditions attributed to the COVID-19 pandemic, had an impact on our 2020 core advertising results. We began to see cancellations late in the first quarter and estimate that the impact of the pandemic reduced our core advertising revenues by at least $8 million in the first quarter of 2020. Second quarter 2020 results were significantly impacted by the economic downturn caused by the outbreak, with the greatest impact in April. We saw improvements in the advertising markets starting in May 2020 as economies began to reopen. F-8 Costs and expenses Employee compensation and benefits decreased $13.7 million or 3.1% in 2021 compared to 2020. Excluding the impact of the WPIX disposition, employee compensation and benefits increased $19.4 million or 4.7% year-over-year. The increase in employee compensation and benefits is primarily attributed to annual merit increases, higher bonus compensation year-over-year and increases in commissions as a result of higher advertising revenue. Programming expense increased $33.1 million or 8.2% in 2021 compared to 2020. Excluding the impact of the WPIX disposition, the expense increased $44.3 million or 11% year-over-year, reflecting the impact of 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. Other expenses decreased $12.1 million or 6.3% in 2021 compared to 2020. Excluding the impact of the WPIX disposition, other expenses increased $7.6 million or 4.4% year-over-year. In response to the weakened economic conditions created by COVID-19 toward the end of the first quarter of 2020, we implemented various cost saving initiatives through general expense reductions in areas of travel, entertainment and marketing. The increase in 2021 reflects an increase in both national representation commissions and marketing and advertising costs. Scripps Networks — Our Scripps Networks segment is comprised of nine national television networks - ION, Bounce, Court TV, Grit, ION Mystery, Laff, Newsy and recently launched, Defy TV and TrueReal. The networks reach nearly every U.S. television home through free over-the-air broadcast, cable/satellite, connected TV and digital distribution. Our Scripps Networks group earns revenue primarily through the sale of advertising. The advertising received by our national networks can be subject to seasonal and cyclical variations and is most impacted by national economic conditions. Operating results for our Scripps Networks segment were as follows: For the years ended December 31, (in thousands) 2021 Change 2020 Change 2019 Total operating revenues $ 951,883 $ 309,076 14.4 % $ 270,060 Segment costs and expenses: Employee compensation and benefits 103,624 87.3 % 55,330 15.4 % 47,951 Programming 288,484 137,305 5.4 % 130,242 Other expenses 170,497 93.5 % 88,117 15.5 % 76,282 Total costs and expenses 562,605 280,752 10.3 % 254,475 Segment profit $ 389,278 $ 28,324 81.7 % $ 15,585 On January 7, 2021, we acquired the national broadcast network ION. The inclusion of operating results from this business for the periods subsequent to the acquisition impacts the comparability of our consolidated and segment operating results. 2021 compared with 2020 Revenues Scripps Networks revenues, which are primarily comprised of advertising revenues, increased $643 million in 2021 compared to 2020. The amount of advertising revenue we earn is a function of the pricing negotiated with advertisers, the number of advertising spots sold and the audience impressions delivered. Weakness in economic conditions that began toward the end of the first quarter of 2020, reflecting the impact of the COVID-19 pandemic, negatively affected 2020 year-to-date, particularly second quarter 2020, advertising spending and rates for our Scripps Networks businesses. The impact of the ION acquisition and significant year-over-year increases in advertising rates for our legacy Scripps Networks businesses, in both general market and direct response, were the primary drivers of revenue increases during the year. F-9 Cost and Expenses Employee compensation and benefits increased $48.3 million or 87% in 2021 compared to 2020. When compared to the prior year, our average full-time equivalent employees has increased by about 90%, reflecting the impact of the ION acquisition and continued investment to support the growth of our legacy Scripps Networks businesses. Higher year-over-year bonus compensation also contributed to the increase in employee compensation and benefits. Programming expense increased $151 million in 2021 compared to 2020. Costs attributed to acquired ION programming and ION affiliation fees totaled $117 million in 2021. The remaining increase is driven by the launch of two new networks and higher affiliate fees reflecting both contractual rate increases and increased distribution across the legacy Scripps Networks businesses. Other expenses increased $82.4 million or 93% in 2021 compared to 2020. The increase primarily reflects incremental occupancy, marketing and other administrative costs related to the ION acquisition. Additionally, marketing, advertising and rating services costs attributed to our legacy Scripps Networks businesses increased $22.7 million in 2021. Shared services and corporate We centrally provide certain services to our business segments. Such services include accounting, tax, cash management, procurement, human resources, employee benefits and information technology. The business segments are allocated costs for such services at amounts agreed upon by management. Such allocated costs may differ from amounts that might be negotiated at arms-length. Costs for such services that are not allocated to the business segments are included in shared services and corporate costs. Shared services and corporate also includes unallocated corporate costs, such as costs associated with being a public company. Shared services and corporate expenses were up year-over-year with $75.6 million in 2021 and $60.8 million in 2020. Employee compensation and benefits increased $15.5 million primarily reflecting increases in corporate staffing to support the ION acquisition. F-10 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 2021, we had approximately $66.2 million of unrestricted cash on hand and $393 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 to meet the Company’s operating needs for the next 12 months. Cash Flows For the years ended December 31, (in thousands) 2021 2020 Net cash provided by operating activities $ 237,000 $ 277,394 Net cash provided by (used in) investing activities (2,455,996) 317,422 Net cash provided by financing activities 693,475 998,179 Effect of foreign exchange rates on cash, cash equivalents and restricted cash (20) 58 Increase (decrease) in cash, cash equivalents and restricted cash $ (1,525,541) $ 1,593,053 Cash flows from operating activities Cash provided by operating activities decreased $40.4 million in 2021 compared to 2020. The decrease reflects a $152 million year-over-year increase in segment profit offset by a $43.7 million increase in interest paid, $116 million increase in income taxes paid, $21.7 million increase in acquisition and integration costs and year-over-year cash outlay increase of $42.3 million for programming investments in excess of programming amortization. The increase in interest payments reflects the impact of the issuance of new debt related to the financing of the ION acquisition. Cash flows from investing activities Cash used in investing activities was $2.46 billion in 2021 compared to $317 million of cash provided by investing activities in 2020. Investing activities in 2021 reflect the $2.68 billion acquisition of ION, $225 million of net proceeds from the sale of our Triton business and $34.3 million of proceeds from the building sale at our Denver KMGH television station. Investing activities in 2020 reflect $349 million of proceeds from the completed sales of the Stitcher business and WPIX television station. Capital expenditures totaled $60.7 million in 2021 and $44.9 million in 2020. Cash flows from financing activities Cash provided by financing activities was $693 million in 2021 compared to $998 million in 2020. Cash generated for both years reflects financing activities that were used for the ION acquisition. On December 30, 2020, we issued $1.05 billion of senior notes and completed the financing on January 7, 2021 with the issuance of an $800 million term loan B and issuance of $600 million of preferred equity shares to Berkshire Hathaway. Our debt has required annual principal payments of $18.6 million. Additionally, during 2021, we redeemed the $400 million outstanding principal amount of our 2025 Senior Notes, $15.4 million of the 2027 Senior Notes, $22.0 million of the 2031 Senior Notes and made additional principal payments on term loans totaling $125 million. Preferred stock dividends paid in 2021 totaled $45.1 million. Debt On January 7, 2021, we entered into the Sixth Amendment to the Third Amended Restated Credit Agreement ("Sixth Amendment"). The Sixth Amendment 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. In connection with our credit agreement, we also have $1.7 billion of outstanding balance on our term loans. The annual required principal payments on these term loans total $18.6 million and the earliest maturity date for any of the loans is October of 2024. As of December 31, 2021, we also have $1.5 billion of senior notes outstanding. Senior secured notes totaling $550 million bear interest at a rate of 3.875% per annum and mature on January 15, 2029. Senior unsecured notes have a total F-11 outstanding principal balance of $963 million. The senior notes that mature on July 15, 2027 bear interest at 5.875% per annum and the senior notes that mature on January 15, 2031 bear interest at a rate of 5.375% per annum. 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. Debt Repurchase Program In May 2021, our Board of Directors provided additional debt repurchase program authorization 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. The authorization currently permits an aggregate principal amount reduction of up to $562.6 million and expires on March 1, 2023. Equity With the 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). Preferred stock dividends, effective through December 15, 2021, were paid in 2021 totaling $45.1 million. Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share. In February 2020, our Board of Directors authorized a 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 intended to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. No shares were repurchased under any authorizations during 2021 or 2020. Under the terms of the Preferred Shares, we are prohibited from paying dividends on and repurchasing our common shares until all Preferred Shares are redeemed. F-12 Contractual Obligations The following table summarizes contractual cash obligations as of December 31, 2021: Less than Years Years Over (in thousands) 1 Year 2 & 3 4 & 5 5 Years Total Long-term debt: (a) Principal amounts $ 18,612 $ 315,474 $ 737,213 $ 2,139,613 $ 3,210,912 Interest on debt 130,842 258,375 230,186 186,548 805,951 Programming: (b) Program licenses, network affiliations and other programming commitments 584,173 639,156 264,491 52,977 1,540,797 Employee compensation and benefits: Deferred compensation and other post-employment benefits 1,247 2,701 2,617 23,188 29,753 Employment and talent contracts (c) 74,920 66,071 2,464 — 143,455 Pension obligations (d) 26,353 2,654 2,474 72,703 104,184 Operating leases (e) 27,477 45,196 32,024 54,495 159,192 Other purchase and service commitments (f) 106,539 38,924 11,645 60 157,168 Total contractual cash obligations $ 970,163 $ 1,368,551 $ 1,283,114 $ 2,529,584 $ 6,151,412 (a) — Refer to Note 11. Long-Term Debt of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K). (b) — Program licenses generally require payments over the terms of the licenses. 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 broadcast television station network affiliation agreements and Scripps Networks 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 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. (c) — We secure on-air talent for our television stations through multi-year talent agreements. Certain agreements may be terminated under certain circumstances or at certain dates prior to expiration. We expect our employment and talent contracts will be renewed or replaced with similar agreements upon their expiration. Amounts due under the contracts, assuming the contracts are not terminated prior to their expiration, are included in the contractual obligations table. (d) — Contractual commitments summarized include payments to meet minimum funding requirements of our defined benefit pension plans and estimated benefit payments for our unfunded SERPs. Contractual pension obligations reflect anticipated minimum statutory pension contributions as of December 31, 2021, based upon pension funding regulations in effect at the time and our current pension assumptions regarding discount rates and returns on plan assets. Actual funding requirements may differ from amounts presented due to changes in discount rates, returns on plan assets or pension funding regulations that are in effect at the time. Payments for the SERPs have been estimated over a ten-year period. Accordingly, the amounts in the “over 5 years” column include estimated payments for the periods of 2027-2031. While benefit payments under these plans are expected to continue beyond 2031, we do not believe it is practicable to estimate payments beyond this period. (e) — Refer to Note 9. Leases of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K). (f) — We obtain audience ratings, market research and certain other services under multi-year agreements. These agreements are generally not cancelable prior to expiration of the service agreement. We may also enter into contracts with certain vendors and suppliers. These contracts typically do not require the purchase of fixed or minimum quantities and generally may be terminated at any time without penalty. Included in the table are purchase orders placed as of December 31, 2021. The table does not include any reserves for income taxes recognized because we are unable to reasonably predict the ultimate amount or timing of settlement of our reserves for income taxes. As of December 31, 2021, our reserves for income taxes totaled $12.3 million, which is reflected as a long-term liability in our Consolidated Balance Sheet. F-13 Critical Accounting Policies and Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make a variety of decisions that affect reported amounts and related disclosures, including the selection of appropriate accounting principles and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience, actuarial studies and other assumptions. We are committed to incorporating accounting principles, assumptions and estimates that promote the representational faithfulness, verifiability, neutrality and transparency of the accounting information included in the financial statements. Note 1 to our Consolidated Financial Statements describes the significant accounting policies we have selected for use in the preparation of our financial statements and related disclosures. We believe the following to be the most critical accounting policies, estimates and assumptions affecting our reported amounts and related disclosures. Acquisitions — The accounting for a business combination requires tangible and intangible assets acquired and liabilities assumed to be recorded at estimated fair value. With the assistance of third party appraisals, we generally determine fair values using comparisons to market transactions and a discounted cash flow analysis. The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset and the expected period of time over which those cash flows will occur and to determine an appropriate discount rate. Changes in such estimates could affect the amounts allocated to individual identifiable assets. While we believe our assumptions are reasonable, if different assumptions were made, the amount allocated to intangible assets could differ substantially from the reported amounts. Goodwill and Other Indefinite-Lived Intangible Assets — Goodwill for each reporting unit must be tested for impairment on an annual basis or when events occur or circumstances change that would indicate the fair value of a reporting unit is below its carrying value. If the fair value of the reporting unit is less than its carrying value, we may be required to record an impairment charge. The following is goodwill by reporting unit as of December 31, 2021: (in thousands) Local Media $ 905,494 Scripps Networks 2,007,890 Total goodwill $ 2,913,384 For our annual goodwill impairment testing, we utilized the quantitative approach for performing our test. Under that approach, we determine the fair value of our reporting unit generally 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 a different estimate of fair value. 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 over 40% and the fair value of our Scripps Networks reporting unit exceeded its carrying value by over 15%. We have determined that our FCC licenses are indefinite lived assets and not subject to amortization. At December 31, 2021, the carrying value of our television FCC licenses was $781 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. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. 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. For example, a 50 basis point increase in the discount rate would reduce the aggregate fair value of the FCC licenses by approximately $135 million. Our annual impairment testing for our FCC licenses indicated that their fair value exceeded their recorded value. F-14 Pension Plans — We sponsor a noncontributory defined benefit pension plan as well as non-qualified Supplemental Executive Retirement Plans ("SERPs"). Both the defined benefit plan and the SERPs have frozen the accrual of future benefits. The measurement of our pension obligation and related expense is dependent on a variety of estimates, including: discount rates; expected long-term rate of return on plan assets; and employee turnover, mortality and retirement ages. We review these assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when appropriate. In accordance with accounting principles, we record the effects of these modifications currently or amortize them over future periods. We consider the most critical of our pension estimates to be our discount rate and the expected long-term rate of return on plan assets. The assumptions used in accounting for our defined benefit pension plan for 2021 and 2020 are as follows: 2021 2020 Discount rate for expense 2.64 % 3.40 % Discount rate for obligation 2.95 % 2.64 % Long-term rate of return on plan assets for expense 5.50 % 5.50 % The discount rate used to determine our future pension obligation is based upon a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans. The rate is determined each year at the plan measurement date and affects the succeeding year’s pension cost. Discount rates can change from year to year based on economic conditions that impact corporate bond yields. A 50 basis point increase or decrease in the discount rate would decrease or increase our pension obligation as of December 31, 2021 by approximately $36.8 million and decrease or increase 2022 pension expense by approximately $0.4 million. Under our asset allocation strategy, approximately 50% of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 50% of plan assets are invested in equity securities and other return-seeking assets. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed. A decrease in the expected rate of return on plan assets increases pension expense. A 50 basis point change in the 2022 expected long-term rate of return on plan assets would increase or decrease our 2022 pension expense by approximately $2.3 million. We had unrecognized accumulated other comprehensive loss related to net actuarial losses for our pension plan and SERPs of $97.6 million at December 31, 2021. Unrealized actuarial gains and losses result from deferred recognition of differences between our actuarial assumptions and actual results. In 2021, we had an actuarial gain of $27.6 million. Recent Accounting Guidance Refer to Note 2. Recently Adopted and Issued Accounting Standards of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion. F-15 Quantitative and Qualitative Disclosures about Market Risk Earnings and cash flow can be affected by, among other things, economic conditions and interest rate changes. We are also exposed to changes in the market value of our investments. 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. 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, the interest we pay on our borrowings is dependent on interest rate conditions and the timing of our financing needs. With consideration for the LIBOR floor that is present in our term loans due in 2026 and 2028, a 100 basis point increase in LIBOR would increase annual interest expense on our variable rate borrowings by approximately $7.9 million. The following table presents additional information about market-risk-sensitive financial instruments: As of December 31, 2021 As of December 31, 2020 (in thousands) Cost Basis Fair Value Cost Basis Fair Value Financial instruments subject to interest rate risk: Revolving credit facility $ — $ — $ — $ — Senior secured notes, due in 2029 550,000 553,377 550,000 573,375 Senior unsecured notes, due in 2025 — — 400,000 409,000 Senior unsecured notes, due in 2027 484,655 508,282 500,000 522,500 Senior unsecured notes, due in 2031 477,958 488,712 500,000 525,800 Term loan, due in 2024 287,250 286,999 290,250 288,436 Term loan, due in 2026 744,049 744,168 751,660 745,083 Term loan, due in 2028 667,000 667,740 — — Long-term debt, including current portion $ 3,210,912 $ 3,249,278 $ 2,991,910 $ 3,064,194 Financial instruments subject to market value risk: Investments held at cost $ 15,431 (a) $ 4,564 (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. F-16 Controls and Procedures Evaluation of Disclosure Controls and Procedures The effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was evaluated as of the date of the financial statements. This evaluation was carried out under the supervision of and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer. 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. 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. F-17 Management’s Report on Internal Control Over Financial Reporting Scripps’ management is responsible for establishing and maintaining adequate internal controls designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that: 1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; 2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors of the Company; and 3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error, collusion and the improper overriding of controls by management. Accordingly, even effective internal control can only provide reasonable, but not absolute assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time. As required by Section 404 of the Sarbanes Oxley Act of 2002, management assessed the effectiveness of The E.W. Scripps Company and subsidiaries' (the “Company”) internal control over financial reporting as of December 31, 2021. Management’s assessment is based on the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2021. The Company’s independent registered public accounting firm has issued an attestation report on our internal control over financial reporting as of December 31, 2021. This report appears on page F-21. Date: February 25, 2022 BY: /s/ Adam P. Symson Adam P. Symson President and Chief Executive Officer /s/ Jason Combs Jason Combs Executive Vice President and Chief Financial Officer F-18 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of The E.W. Scripps Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The E.W. Scripps Company and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), cash flows and equity, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters 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. Valuation of ION Divestiture Agreement Intangible Asset — Refer to Note 3 to the financial statements Critical Audit Matter Description The Company completed its acquisition of ION Media Networks, Inc. (“ION”) on January 7, 2021 for $2.65 billion. Upon the acquisition of ION, the purchase price was allocated, on a preliminary basis, to the assets acquired and liabilities assumed based on their respective fair values. As part of the transaction, the Company divested 23 stations to INYO Broadcast Holdings, LLC (“INYO”) for $30 million. The divested stations became independent affiliates of ION pursuant to a long-term affiliation agreement (“Divestiture Agreement”). This Divestiture Agreement was identified as an intangible asset and was assigned a fair value of $422 million. The Company estimated the fair value of the Divestiture agreement using significant estimates and assumptions related to future revenues and operating expenses, discount rates, and assumed probability of renewal rates. F-19 We identified the valuation of the Divestiture Agreement intangible asset acquired through the ION acquisition as a critical audit matter because of the significant estimates and assumptions management utilized to record the asset at fair value for purposes of allocating the acquisition purchase price. 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 operating expenses as well as the selection of discount rates and assumed probability of renewal, 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 projected future revenues and operating expenses as well as the selection of discount rates and assumed probability of renewal used in the valuation of the ION Divestiture Agreement included the following, among others: • We inquired of management to understand the process being used by the Company to determine the valuation of the Divestiture Agreement. • We tested the design and operating effectiveness of the Company’s internal controls over the valuation of the Divestiture Agreement included within the ION purchase price allocation, including controls over forecasts of future revenues and operating expenses, assumed probability of renewal as well as the selection of discount rates. • With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodologies utilized along with valuation assumptions included the discount rates selected by: • Testing the source information underlying the determination of the discount rates and testing the mathematical accuracy of the calculations. • Developing a range of independent estimates for the discount rates and comparing those to the discount rates selected by management. • We evaluated the reasonableness of management’s forecast of future revenues and operating expenses related to the Divestiture Agreement by comparing the projections to historical results and relevant industry data. • We evaluated the reasonableness of management’s assumed probability of renewal of the Divestiture Agreement by assessing the agreement and comparable renewal rates for similar agreements. /s/ Deloitte & Touche LLP Cincinnati, Ohio February 25, 2022 We have served as the Company’s auditor since at least 1959; however, an earlier year could not be reliably determined. F-20 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of The E.W. Scripps Company Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of The E.W. Scripps Company and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, 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, 2021, of the Company and our report dated February 25, 2022, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Cincinnati, Ohio February 25, 2022 F-21 The E.W. Scripps Company Consolidated Balance Sheets As of December 31, (in thousands, except share data) 2021 2020 Assets Current assets: Cash and cash equivalents $ 66,223 $ 576,021 Restricted cash 34,257 1,050,000 Accounts receivable (less allowances — $ 4,256 and $ 3,443 ) 572,525 429,017 FCC repack receivable 773 12,363 Miscellaneous 28,503 26,784 Total current assets 702,281 2,094,185 Investments 21,632 14,404 Property and equipment 456,945 343,920 Operating lease right-of-use assets 124,821 51,471 Goodwill 2,913,384 1,203,212 Other intangible assets 1,910,311 975,444 Programming 510,316 138,701 Miscellaneous 18,624 38,049 Total Assets $ 6,658,314 $ 4,859,386 Liabilities and Equity Current liabilities: Accounts payable $ 83,931 $ 68,139 Unearned revenue 20,000 14,101 Current portion of long-term debt 18,612 10,612 Accrued liabilities: Employee compensation and benefits 68,545 55,133 Programming liability 180,269 72,743 Accrued interest 34,973 16,514 Miscellaneous 50,667 85,588 Other current liabilities 54,883 35,626 Total current liabilities 511,880 358,456 Long-term debt (less current portion) 3,129,393 2,923,359 Deferred income taxes 356,777 85,844 Operating lease liabilities 113,892 42,097 Other liabilities (less current portion) 575,938 286,365 Commitments and contingencies (Note 17) Equity: Preferred stock, $ 0.01 par — authorized: 25,000,000 shares; none outstanding — — Preferred stock — Series A, $ 100,000 par; 6,000 shares at December 31, 2021 409,939 — Common stock, $ 0.01 par: Class A — authorized: 240,000,000 shares; issued and outstanding: 2021 - 70,646,007 shares; 2020 - 69,794,917 shares 707 698 Voting — authorized: 60,000,000 shares; issued and outstanding: 2021 - 11,932,722 shares; 2020 - 11,932,722 shares 119 119 Total preferred and common stock 410,765 817 Additional paid-in capital 1,428,460 1,130,789 Retained earnings 205,118 131,778 Accumulated other comprehensive loss, net of income taxes ( 73,909 ) ( 100,119 ) Total equity 1,970,434 1,163,265 Total Liabilities and Equity $ 6,658,314 $ 4,859,386 See Notes to Consolidated Financial Statements. F-22 The E.W. Scripps Company Consolidated Statements of Operations For the years ended December 31, (in thousands, except per share data) 2021 2020 2019 Operating Revenues: Advertising $ 1,614,814 $ 1,187,581 $ 884,649 Retransmission and carriage 614,892 588,888 390,043 Other 53,826 81,009 76,707 Total operating revenues 2,283,532 1,857,478 1,351,399 Operating Expenses: Cost of revenues, excluding depreciation and amortization 1,106,226 929,748 701,835 Selling, general and administrative expenses, excluding depreciation and amortization 595,105 497,748 449,879 Acquisition and related integration costs 40,373 18,678 26,304 Restructuring costs 9,436 — 3,370 Depreciation 58,357 50,416 39,998 Amortization of intangible assets 103,565 56,739 44,346 Losses (gains), net on disposal of property and equipment ( 30,275 ) 661 ( 1,692 ) Total operating expenses 1,882,787 1,553,990 1,264,040 Operating income 400,745 303,488 87,359 Interest expense ( 165,164 ) ( 92,994 ) ( 80,596 ) Loss on extinguishment of debt ( 15,347 ) — — Defined benefit pension plan expense ( 343 ) ( 4,388 ) ( 6,953 ) Gain on sale of Triton business 81,784 — — Losses on stock warrant ( 99,118 ) — — Miscellaneous, net ( 15,469 ) 2,914 1,194 Income from continuing operations before income taxes 187,088 209,020 1,004 Provision for income taxes 71,189 55,456 2,917 Income (loss) from continuing operations, net of tax 115,899 153,564 ( 1,913 ) Income (loss) from discontinued operations, net of tax 6,813 115,769 ( 16,465 ) Net income (loss) 122,712 269,333 ( 18,378 ) Preferred stock dividends ( 49,372 ) — — Net income (loss) attributable to the shareholders of The E.W. Scripps Company $ 73,340 $ 269,333 $ ( 18,378 ) Net income (loss) per basic share of common stock attributable to the shareholders of The E.W. Scripps Company: Income (loss) from continuing operations $ 0.79 $ 1.84 $ ( 0.02 ) Income (loss) from discontinued operations 0.08 1.39 ( 0.20 ) Net income (loss) per basic share of common stock attributable to the shareholders of The E.W. Scripps Company $ 0.87 $ 3.23 $ ( 0.23 ) Net income (loss) per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company: Income (loss) from continuing operations $ 0.74 $ 1.83 $ ( 0.02 ) Income (loss) from discontinued operations 0.08 1.39 ( 0.20 ) Net income (loss) per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company $ 0.81 $ 3.21 $ ( 0.23 ) Weighted average shares outstanding: Basic 82,327 81,418 80,826 Diluted 87,979 81,831 80,826 See Notes to Consolidated Financial Statements. 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. F-23 The E.W. Scripps Company Consolidated Statements of Comprehensive Income (Loss) For the years ended December 31, (in thousands) 2021 2020 2019 Net income (loss) $ 122,712 $ 269,333 $ ( 18,378 ) Changes in defined benefit pension plans, net of tax of $ 8,086 , $( 328 ), and $( 1,156 ) 26,076 ( 1,055 ) ( 3,369 ) Other, net of tax of $ 42 , $( 23 ) and $( 77 ) 134 ( 75 ) ( 223 ) Total comprehensive income (loss) attributable to preferred and common stockholders $ 148,922 $ 268,203 $ ( 21,970 ) See Notes to Consolidated Financial Statements. F-24 The E.W. Scripps Company Consolidated Statements of Cash Flows For the years ended December 31, (in thousands) 2021 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 122,712 $ 269,333 $ ( 18,378 ) Income (loss) from discontinued operations, net of tax 6,813 115,769 ( 16,465 ) Income (loss) from continuing operations, net of tax 115,899 153,564 ( 1,913 ) Adjustments to reconcile net income (loss) from continuing operations to net cash flows from operating activities: Depreciation and amortization 161,922 107,155 84,344 Gain on disposition of investments — — ( 930 ) Losses (gains), net on disposal of property and equipment ( 30,275 ) 661 ( 1,692 ) Loss on extinguishment of debt 15,347 — — Gain on sale of Triton business ( 81,784 ) — — Losses on stock warrant 99,118 — — Programming assets and liabilities ( 59,233 ) ( 16,966 ) 21,194 Restructuring impairment charges 7,050 — — Deferred income taxes 9,725 80,641 ( 5,782 ) Stock and deferred compensation plans 25,963 17,859 14,697 Pension contributions, net of income/expense ( 24,707 ) ( 29,687 ) ( 13,066 ) Other changes in certain working capital accounts, net ( 4,221 ) 34,094 ( 109,530 ) Miscellaneous, net ( 3,867 ) 8,009 8,194 Net cash provided by (used in) operating activities from continuing operations 230,937 355,330 ( 4,484 ) Net cash provided by (used in) operating activities from discontinued operations 6,063 ( 77,936 ) ( 22,968 ) Net operating activities 237,000 277,394 ( 27,452 ) Cash Flows from Investing Activities: Acquisitions, net of cash acquired ( 2,677,755 ) ( 7,103 ) ( 1,190,422 ) Proceeds from sale of Triton Digital, net of cash disposed 224,990 — — Proceeds from sale of WPIX television station — 83,738 — Additions to property and equipment ( 60,744 ) ( 44,949 ) ( 60,935 ) Acquisition of intangible assets ( 430 ) ( 1,883 ) ( 24,864 ) Purchase of investments ( 12,030 ) ( 8,309 ) ( 1,636 ) Proceeds from FCC repack 20,062 28,365 6,959 Miscellaneous, net 39,911 5,319 6,734 Net cash provided by (used in) investing activities from continuing operations ( 2,465,996 ) 55,178 ( 1,264,164 ) Net cash provided by (used in) investing activities from discontinued operations 10,000 262,244 ( 343 ) Net investing activities ( 2,455,996 ) 317,422 ( 1,264,507 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt 800,000 1,050,000 1,261,175 Proceeds from issuance of preferred stock 600,000 — — Payments on long-term debt ( 580,999 ) ( 10,612 ) ( 8,728 ) Premium paid on debt extinguishment ( 11,106 ) — — Payments for capitalized preferred stock issuance costs ( 11,526 ) — — Payments on financing costs ( 50,597 ) — ( 31,295 ) Dividends paid on common and preferred stock ( 45,067 ) ( 16,574 ) ( 16,374 ) Repurchase of Class A Common shares — — ( 584 ) Tax payments related to shares withheld for vested stock and RSUs ( 7,174 ) ( 2,881 ) ( 3,831 ) Miscellaneous, net ( 56 ) ( 21,754 ) 17,463 Net cash provided by financing activities from continuing operations 693,475 998,179 1,217,826 Effect of foreign exchange rates on cash, cash equivalents and restricted cash ( 20 ) 58 ( 13 ) Increase (decrease) in cash, cash equivalents and restricted cash ( 1,525,541 ) 1,593,053 ( 74,146 ) Cash, cash equivalents and restricted cash: Beginning of year 1,626,021 32,968 107,114 End of year $ 100,480 $ 1,626,021 $ 32,968 Supplemental Cash Flow Disclosures Interest paid $ 126,257 $ 82,532 $ 61,299 Income taxes paid (refunded) $ 102,473 $ ( 13,222 ) $ 13,183 Non-cash investing and financing information Capital expenditures included in accounts payable $ 4,145 $ 2,511 $ 983 Accrued debt issuance costs $ — $ 45,243 $ — See Notes to Consolidated Financial Statements. F-25 The E.W. Scripps Company Consolidated Statements of Equity (in thousands, except share data) Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) ("AOCI") Total Equity As of December 31, 2018 $ — $ 807 $ 1,106,984 $ ( 86,229 ) $ ( 95,397 ) $ 926,165 Comprehensive income (loss) — — — ( 18,378 ) ( 3,592 ) ( 21,970 ) Cash dividend: 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 Comprehensive income (loss) — — — 269,333 ( 1,130 ) 268,203 Cash dividend: declared and paid - $ 0.20 per share — — — ( 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 Comprehensive income (loss) — — — 122,712 26,210 148,922 Issuance of preferred stock, net of discount and issuance costs 407,634 — — — — 407,634 Preferred stock dividends, $ 7,511 per share 2,305 — — ( 49,372 ) — ( 47,067 ) Stock warrant — — 279,958 — — 279,958 Compensation plans: 851,090 net shares issued * — 9 17,713 — — 17,722 As of December 31, 2021 $ 409,939 $ 826 $ 1,428,460 $ 205,118 $ ( 73,909 ) $ 1,970,434 * Net of tax payments related to shares withheld for vested stock and RSUs of $ 7,174 in 2021, $ 2,881 in 2020 and $ 3,831 in 2019. See Notes to Consolidated Financial Statements. F-26 THE E.W. SCRIPPS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies As used in the Notes to Consolidated Financial Statements, the terms “Scripps,” “Company,” “we,” “our,” or “us” may, depending on the context, refer to The E.W. Scripps Company, to one or more of its consolidated subsidiary companies or to all of them taken as a whole. Nature of Operations — We are a diverse media enterprise, serving audiences and businesses through a portfolio of local television stations and national media brands. All of our businesses provide content and services via digital platforms, including the Internet, smartphones and tablets. Our media businesses are organized into the following reportable business segments: Local Media, Scripps Networks and Other. Additional information for our business segments is presented in the Notes to Consolidated Financial Statements. Basis of Presentation — Certain amounts in the prior periods have been reclassified to conform to the current period's presentation. Expense amounts that were previously reported under the captions “Employee compensation and benefits,” “Programming,” and “Other expenses” in our 2020 and 2019 Consolidated Statements of Operations have been reclassified into line items captioned as either “Cost of revenues” or “Selling, general and administrative expenses.” Cost of revenues reflects the cost of providing our broadcast signals, programming and other content to respective distribution platforms. The costs captured within the cost of revenues caption include programming, content distribution, satellite transmission fees, production and operations and other direct costs. Selling, general and administrative expenses are primarily comprised of sales, marketing and advertising expenses, research costs, certain occupancy costs and other administrative costs. Concentration Risks — Our operations are geographically dispersed and we have a diverse customer base. We believe bad debt losses resulting from default by a single customer, or defaults by customers in any depressed region or business sector, would not have a material effect on our financial position, results of operations or cash flows. We derive approximately 71 % of our operating revenues from advertising. Changes in the demand for such services, both nationally and in individual markets, can affect operating results. Use of Estimates — Preparing financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make a variety of decisions that affect the reported amounts and the related disclosures. Such decisions include the selection of accounting principles that reflect the economic substance of the underlying transactions and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience, actuarial studies and other assumptions. Our financial statements include estimates and assumptions used in accounting for our defined benefit pension plans; the periods over which long-lived assets are depreciated or amortized; the fair value of long-lived assets, goodwill and indefinite lived assets; the liability for uncertain tax positions and valuation allowances against deferred income tax assets; the fair value of assets acquired and liabilities assumed in business combinations; and self-insured risks. While we re-evaluate our estimates and assumptions on an ongoing basis, actual results could differ from those estimated at the time of preparation of the financial statements. Consolidation — The Consolidated Financial Statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and variable interest entities (VIEs) for which we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. Noncontrolling interest represents an owner’s share of the equity in certain of our consolidated entities. All intercompany transactions and account balances have been eliminated in consolidation. Investments in entities over which we have significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by equity method investees. F-27 Nature of Products and Services — The following is a description of principal activities from which we generate revenue. Core Advertising — Core advertising is comprised of sales to local and national customers. The advertising includes a combination of broadcast air time, as well as digital advertising. Pricing of advertising time is based on audience size and share, the demographic of our audiences and the demand for our limited inventory of commercial time. Advertising time is sold through a combination of local and national sales staff and national sales representative firms. Digital revenues are primarily generated from the sale of advertising to local and national customers on our local television websites, smartphone apps, tablet apps and other platforms. Political Advertising — Political advertising is generally sold through our Washington D.C. sales office. Advertising is sold to presidential, gubernatorial, Senate and House of Representative candidates, as well as for state and local issues. It is also sold to political action groups (PACs) or other advocacy groups. Retransmission Revenues — We earn revenue from retransmission consent agreements with multi-channel video programming distributors (“MVPDs”) in our markets. The MVPDs are cable operators and satellite carriers who pay us to offer our programming to their customers. We also receive fees from over-the-top virtual MVPDs. The fees we receive are typically based on the number of subscribers in our local market and the contracted rate per subscriber. Other Products and Services — We derive revenue from sponsorships and community events through our Local Media segment. Our Scripps Networks segment offers subscription services for access to premium content to its customers. Refer to Note 16. Segment Information for further information, including revenue by significant product and service offering. Revenue Recognition — Revenue is measured based on the consideration we expect to be entitled to in exchange for promised goods or services provided to customers, and excludes any amounts collected on behalf of third parties. Revenue is recognized upon transfer of control of promised products or services to customers. Advertising — Advertising revenue is recognized, net of agency commissions, over time primarily as ads are aired or impressions are delivered and any contracted audience guarantees are met. We apply the practical expedient to recognize revenue at the amount we have the right to invoice, which corresponds directly to the value a customer has received relative to our performance. For advertising sold based on audience guarantees, audience deficiency may result in an obligation to deliver additional advertisements to the customer. To the extent that we do not satisfy contracted audience ratings, we record deferred revenue until such time that the audience guarantee has been satisfied. Retransmission — Retransmission revenues are considered licenses of functional intellectual property and are recognized at the point in time the content is transferred to the customer. MVPDs report their subscriber numbers to us generally on a 30- to 90-day lag. Prior to receiving the MVPD reporting, we record revenue based on estimates of the number of subscribers, utilizing historical levels and trends of subscribers for each MVPD. Cash Equivalents — Cash equivalents represent highly liquid investments with maturity of less than three months when acquired. Contract Balances — Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. We extend credit to customers based upon our assessment of the customer’s financial condition. Collateral is generally not required from customers. Payment terms may vary by contract type, although our terms generally include a requirement of payment within 30 to 90 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers. F-28 The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience and other currently available evidence. A rollforward of the allowance for doubtful accounts is as follows: (in thousands) January 1, 2019 $ 4,221 Charged to costs and expenses 1,823 Amounts charged off, net ( 2,698 ) Balance as of December 31, 2019 3,346 Charged to costs and expenses 3,305 Amounts charged off, net ( 3,208 ) Balance as of December 31, 2020 3,443 Charged to costs and expenses 1,987 Amounts charged off, net ( 1,174 ) Balance as of December 31, 2021 $ 4,256 We record unearned revenue when cash payments are received in advance of our performance. We generally require advance payment for advertising contracts with political advertising customers. Unearned revenue totaled $ 20.0 million at December 31, 2021 and is expected to be recognized within revenue over the next 12 months. Unearned revenue totaled $ 14.1 million at December 31, 2020. We recorded $ 12.6 million of revenue in 2021 that was included in unearned revenue at December 31, 2020. Assets Recognized from the Costs to Obtain a Contract with a Customer — We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We apply and use the practical expedient in the revenue guidance to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. This expedient applies to advertising sales commissions since advertising contracts are short-term in nature. In addition, we also may provide inducement payments to secure carriage agreements with distributors of our content. These inducement payments would be capitalized and amortized to expense over the term of the distribution contract. Investments — From time to time, we make investments in private companies. Investment securities can be impacted by various market risks, including interest rate risk, credit risk and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term. Such changes could materially affect the amounts reported in our financial statements. We record investments in private companies not accounted for under the equity method at cost, net of impairment write-downs, because no readily determinable market price is available. We regularly review our investments to determine if there has been any other-than-temporary decline in value. These reviews require management judgments that often include estimating the outcome of future events and determining whether factors exist that indicate impairment has occurred. We evaluate, among other factors, the extent to which cost exceeds fair value; the duration of the decline in fair value below cost; and the current cash position, earnings and cash forecasts and near-term prospects of the investee. We reduce the cost basis when a decline in fair value below cost is determined to be other than temporary, with the resulting adjustment charged against earnings. F-29 Property and Equipment — Property and equipment is carried at cost less depreciation. 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 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. Our network affiliation agreements require the payment of affiliation fees to the network. Network affiliation fees consist of pre-determined fixed fees in all cases and variable payments based on a share of retransmission revenues above the fixed fees for some of our agreements. Program licenses principally consist of television series and films. Program licenses generally have fixed terms, limit the number of times we can air the programs and require payments over the terms of the licenses. We record licensed program assets and liabilities when the license period has commenced and the programs are available for broadcast. We do not discount program licenses for imputed interest. We amortize program licenses based upon expected cash flows over the term of the license agreement. 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. The realizable value of internal costs incurred for trial footage at Court TV, including employee compensation and benefits, are capitalized and amortized based upon expected future cash flows. All other internal costs to produce daily or live broadcast shows, such as news, sports or daily magazine shows, are expensed as incurred. Progress payments on programs not yet available for broadcast are recorded as deposits within programming assets. 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 $ 181.1 million in 2022, $ 119.0 million in 2023, $ 83.0 million in 2024, $ 49.8 million in 2025, $ 36.3 million in 2026 and $ 25.0 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. The unamortized balance of program assets are classified as non-current assets in our Consolidated Balance Sheets. 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. FCC Repack — In April 2017, the Federal Communications Commission (the “FCC”) began a process of reallocating the broadcast spectrum (the “repack”). Specifically, the FCC is requiring certain television stations to change channels and/or modify their transmission facilities. The U.S. Congress passed legislation which provides the FCC with a fund to reimburse all reasonable costs incurred by stations operating under a full power license and a portion of the costs incurred by stations operating under a low power license that are reassigned to new channels. F-30 We record an FCC repack receivable for the amount of reimbursable costs due from the FCC, which totaled $ 0.8 million at December 31, 2021 and $ 12.4 million at December 31, 2020. The total amount of consideration currently due or that has been collected from the FCC is recorded as a deferred liability and will be recognized against depreciation expense in the same manner that the underlying FCC repack fixed assets are depreciated. Deferred FCC repack income totaled $ 48.0 million at December 31, 2021 and $ 44.9 million at December 31, 2020. Leases — We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the implicit rate is not readily determinable for most of our leases, we use our incremental borrowing rate when determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. The operating lease ROU asset also includes any payments made at or before commencement and is reduced by any lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Goodwill and Other Indefinite-Lived Intangible Assets — Goodwill represents the cost of acquisitions in excess of the acquired businesses’ tangible assets and identifiable intangible assets. FCC licenses represent the value assigned to the broadcast licenses of acquired broadcast television stations. Broadcast television stations are subject to the jurisdiction of the Federal Communications Commission (“FCC”) which prohibits the operation of stations except in accordance with an FCC license. FCC licenses stipulate each station’s operating parameters as defined by channels, effective radiated power and antenna height. FCC licenses are granted for a term of up to eight years , and are renewable upon request. We have never had a renewal request denied and all previous renewals have been for the maximum term. We do not amortize goodwill or our FCC licenses, but we review them for impairment at least annually or 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. We perform our annual impairment review during the fourth quarter of each year in conjunction with our annual planning cycle. We also assess, at least annually, whether our FCC licenses, classified as indefinite-lived intangible assets, continue to have indefinite lives. We review goodwill for impairment based upon our reporting units, which are defined as operating segments or groupings of businesses one level below the operating segment level. Reporting units with similar economic characteristics are aggregated into a single unit when testing goodwill for impairment. Our reporting units are our Local Media and Scripps Networks segments. Amortizable Intangible Assets — Television network affiliations represents the value assigned to an acquired broadcast television station’s relationship with a national television network. Television stations affiliated with national television networks typically have greater profit margins than independent television stations, primarily due to audience recognition of the television station as a network affiliate. We amortize these network affiliation relationships on a straight-line basis over estimated useful lives of 20 years. We amortize customer lists and other intangible assets in relation to their expected future cash flows over estimated useful lives of up to 20 years. Impairment of Long-Lived Assets — We review long-lived assets (primarily property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate the carrying amounts of the assets may not be recoverable. Recoverability is determined by comparing the aggregate forecasted undiscounted cash flows derived from the operation of the assets to the carrying amount of the assets. If the aggregate undiscounted cash flow is less than the carrying amount of the assets, then amortizable intangible assets are written down first, followed by other long-lived assets, to fair value. We determine fair value based on discounted cash flows or appraisals. We report long-lived assets to be disposed of at the lower of carrying amount or fair value less costs to sell. F-31 Self-Insured Risks — We are self-insured, up to certain limits, for general and automobile liability, employee health, disability and workers’ compensation claims and certain other risks. Estimated liabilities for unpaid claims totaled $ 10.2 million at December 31, 2021 and $ 9.3 million at December 31, 2020. We estimate liabilities for unpaid claims using actuarial methodologies and our historical claims experience. While we re-evaluate our assumptions and review our claims experience on an ongoing basis, actual claims paid could vary significantly from estimated claims, which would require adjustments to expense. Income Taxes — We recognize deferred income taxes for temporary differences between the tax basis and reported amounts of assets and liabilities that will result in taxable or deductible amounts in future years. We establish a valuation allowance if we believe that it is more likely than not that we will not realize some or all of the deferred tax assets. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or that we expect to take in a tax return. Interest and penalties associated with such tax positions are included in the tax provision. The liability for additional taxes and interest is included in other liabilities in the Consolidated Balance Sheets. Risk Management Contracts — We do not hold derivative financial instruments for trading or speculative purposes and we do not hold leveraged contracts. From time to time, we may use derivative financial instruments to limit the impact of interest rate fluctuations on our earnings and cash flows. Stock-Based Compensation — We have a Long-Term Incentive Plan (the “Plan”) which is described more fully in Note 18. The Plan provides for the award of incentive and nonqualified stock options, stock appreciation rights, restricted stock units (RSUs) and unrestricted Class A Common shares and performance units to key employees and non-employee directors. We recognize compensation cost based on the grant-date fair value of the award. We determine the fair value of awards that grant the employee the underlying shares by the fair value of a Class A Common share on the date of the award. Certain awards of RSUs have performance conditions under which the number of shares granted is determined by the extent to which such performance conditions are met (“Performance Shares”). Compensation costs for such awards are measured by the grant-date fair value of a Class A Common share and the number of shares earned. In periods prior to completion of the performance period, compensation costs are based upon estimates of the number of shares that will be earned. Compensation costs are recognized on a straight-line basis over the requisite service period of the award. The impact of forfeitures is recognized as they occur. The requisite service period is generally the vesting period stated in the award. Grants to retirement-eligible employees are expensed immediately and grants to employees who will become retirement eligible prior to the end of the stated vesting period are expensed over such shorter period because stock compensation grants vest upon the retirement eligibility of the employee. Earnings Per Share (“EPS”) — Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our RSUs, are considered participating securities for purposes of calculating EPS. Under the two-class method, we allocate a portion of net income to these participating securities and therefore exclude that income from the calculation of EPS for common stock. We do not allocate losses to the participating securities. The following table presents information about basic and diluted weighted-average shares outstanding: For the years ended December 31, (in thousands) 2021 2020 2019 Numerator (for basic and diluted earnings per share) Income (loss) from continuing operations, net of tax $ 115,899 $ 153,564 $ ( 1,913 ) Less income allocated to RSUs ( 1,855 ) ( 3,711 ) — Less preferred stock dividends ( 49,372 ) — — Numerator for basic and diluted earnings per share $ 64,672 $ 149,853 $ ( 1,913 ) Denominator Basic weighted-average shares outstanding 82,327 81,418 80,826 Effect of dilutive securities: Restricted stock units 941 413 — Common stock warrant 4,711 — — Diluted weighted-average shares outstanding 87,979 81,831 80,826 F-32 For the year ended December 31, 2019, we incurred a net loss and the inclusion of RSUs 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, there were 0.4 million of outstanding RSUs that were anti-dilutive. On May 14, 2021, we amended our common stock warrant agreement with Berkshire Hathaway. Following the amendment date, the EPS calculation for the 2021 year-to-date period includes the dilutive impact of the common stock warrant. Prior to the May 14, 2021 amendment of the common stock warrant agreement, the basic and dilutive EPS calculations excluded the impact of the common stock warrant as the effect would have been anti-dilutive. 2. Recently Adopted and Issued Accounting Standards In November 2021, the Financial Accounting Standards Board ("FASB") issued new guidance for entities to provide certain disclosures for material government assistance transactions that are accounted for by applying a grant or contribution accounting model by analogy. The guidance is effective for our 2022 annual reporting period and we do not expect adoption of the guidance to have a material impact on our Consolidated Financial Statements and related disclosures. In October 2021, the FASB issued new guidance requiring entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with the revenue from contracts with customers accounting standard. The guidance will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The guidance is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We adopted the new guidance effective January 1, 2022. The adoption of the guidance did not have an impact on our Consolidated Financial Statements. In May 2021, the FASB issued new guidance that clarifies an issuer's accounting for certain modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. Specifically, the guidance provides a "principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense." The guidance is effective for all entities with fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We adopted the new guidance effective January 1, 2022. The adoption of the guidance did not have an impact on our Consolidated Financial Statements. 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. 3. Acquisitions ION 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 owned Federal Communications Commission-licensed television stations as well as affiliated TV stations, reaching 100 million of U.S. homes through its over-the-air broadcast and pay TV platforms. The acquisition of ION enabled us to create a full-scale national television networks business by combining the ION network with our other news and entertainment networks. 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. The following table summarizes the net cash consideration for the ION transaction. (in thousands) Total purchase price $ 2,650,000 Plus: Cash acquired 14,493 Plus: Working capital 57,755 Total transaction gross cash consideration 2,722,248 Less: Proceeds from ION stations divested ( 30,000 ) Total transaction net cash consideration 2,692,248 Less: Cash acquired ( 14,493 ) Total consideration, net of cash acquired $ 2,677,755 The following table summarizes the final fair values of the ION assets acquired and liabilities assumed at the closing date. (in thousands) Accounts receivable $ 135,006 Other current assets 25,353 Programming rights 169,027 Property and equipment 122,520 Operating lease right-of-use assets 72,717 Other assets 2,295 Goodwill 1,796,148 Indefinite-lived intangible assets - FCC licenses 424,200 Amortizable intangible assets: INYO affiliation agreement 422,000 Other affiliation relationships 22,000 Advertiser relationships 143,000 Trade names 72,000 Accounts payable ( 9,674 ) Unearned revenue ( 13,043 ) Accrued expenses ( 15,814 ) Current portion of programming liabilities ( 92,721 ) Other current liabilities ( 24,810 ) Programming liabilities ( 191,837 ) Deferred tax liabilities ( 265,291 ) Operating lease liabilities ( 78,438 ) Other long-term liabilities ( 36,883 ) Total consideration, net of cash acquired $ 2,677,755 During 2021, we recorded measurement period adjustments to the preliminary ION purchase price allocation as a result of ongoing valuation procedures on assets acquired and liabilities assumed. These adjustments included increases in property and equipment of $ 59.4 million and advertiser relationships of $ 4.0 million, as well as decreases in FCC licenses of $ 9.5 million and INYO and other affiliation relationships of $ 14.0 million. The estimated amortization period for certain intangible assets were adjusted as well. These adjustments in fair value also resulted in an increase to the deferred tax liability of $ 10.2 million. The impact of the measurement period adjustments to our results of operations resulted in increases to previously reported depreciation and amortization expense of $ 2.0 million in 2021. Of the value allocated to amortizable intangible assets, the INYO affiliation agreement has an estimated amortization period of 20 years, advertiser relationships have an estimated amortization period of 7 years, other affiliation relationships have an estimated amortization period of 10 years and the value allocated to trade names has an estimated amortization period of 10 years. Determination of the value allocated to these intangible assets involved the use of certain assumptions, including forecasts of future revenues and operating expenses as well as the selection of discount rates and assumed future probability of renewal of agreements. The goodwill of $ 1.8 billion arising from the transactions consists largely of synergies, economies of scale and other benefits of a larger national broadcast footprint and becoming the largest holder of broadcast spectrum. We allocated the goodwill to our Scripps Networks segment. The transaction is accounted for as a stock acquisition which applies carryover tax basis to the assets and liabilities acquired. The goodwill is not deductible for income tax purposes. From the January 7, 2021 acquisition date through December 31, 2021, revenues from ION's operations of $ 543 million have been included in the accompanying Consolidated Statements of Operations. Acquisition and integration costs related to the transaction, including legal and professional fees and severance costs, totaled $ 38.1 million for the year ended December 31, 2021. 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. Consideration for the transaction totaled $ 9.6 million. The 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 acquisition of eight television stations in seven markets from the Nexstar Media Group, Inc. ("Nexstar") transaction with Tribune Media Company ("Tribune"). Cash consideration for the transaction totaled $ 582 million. Seven of the stations were operated by Tribune, and its subsidiaries, and one was operated by Nexstar. Nexstar was required to divest these stations in order to complete its acquisition of Tribune. 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. 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. 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 Current portion of programming — — 11,997 11,997 Other current assets — 986 3,541 4,527 Property and equipment 11,721 53,734 61,569 127,024 Operating lease right-of-use assets 296 4,667 82,447 87,410 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 Amortizable intangible assets: Television network affiliation relationships 17,400 169,400 181,000 367,800 Advertiser relationships 700 5,900 7,100 13,700 Other intangible assets — 13,000 — 13,000 Accounts payable — ( 15 ) — ( 15 ) Accrued expenses — ( 5,750 ) ( 4,586 ) ( 10,336 ) Current portion of programming liabilities — — ( 16,211 ) ( 16,211 ) Other current liabilities — ( 280 ) ( 3,185 ) ( 3,465 ) Programming liabilities — — ( 15,607 ) ( 15,607 ) Operating lease liabilities ( 296 ) ( 4,387 ) ( 79,766 ) ( 84,449 ) Net purchase price $ 54,970 $ 542,406 $ 582,325 $ 1,179,701 Of the value allocated to amortizable intangible assets, television network affiliation relationships have an estimated amortization period of 20 years, advertiser relationships have estimated amortization periods of 5 - 10 years and the value allocated to a shared services agreement has an estimated amortization period of 20 years. The goodwill of $ 438 million arising from the transactions consists largely of synergies, economies of scale and other benefits of a larger broadcast footprint. We allocated the goodwill to our Local Media segment. We treated the transactions as asset acquisitions for income tax purposes resulting in a step-up in the assets acquired. The goodwill is deductible for income tax purposes. Pro forma results of operations Pro forma results of operations, assuming the ION acquisition had taken place at the beginning of 2020, are presented in the following table. The pro forma results do not include KCDO, as the impact of this acquisition, 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 and ION (excluding the results of the divested stations sold to INYO), as well as adjustments for additional depreciation and amortization of the assets acquired, additional interest expense related to the financing of the transactions and other transactional adjustments. The pro forma results do not include efficiencies, cost reductions or synergies expected to result from the acquisition, or retrospective fair value adjustments to the warrant. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisition been completed at the beginning of the period. For the years ended December 31, (in thousands, except per share data) (unaudited) 2021 2020 Operating revenues $ 2,290,254 $ 2,395,650 Net income attributable to Scripps shareholders 101,146 275,658 Net income per share: Basic $ 1.19 $ 3.30 Diluted 1.12 3.29 Pro forma results in 2020 include $ 47.5 million of non-recurring transaction costs. The pro forma results in 2021 reflect a $ 38.1 million reversal of ION transaction costs incurred that are already being captured in the 2020 pro forma results. Pending acquisition On January 5, 2022, we acquired Nuvyyo for net cash consideration totaling $ 12.1 million. Nuvyyo provides consumers DVR product solutions to watch and record free over-the-air HDTV on connected devices. 4. Asset Write-Downs and Other Charges and Credits Income from continuing operations before income taxes was affected by the following: 2021 — Acquisition and related integration costs of $ 40.4 million primarily reflect investment banking, legal and professional service costs incurred to complete and integrate the ION Media Networks, Inc. acquisition, which closed on January 7, 2021. Restructuring costs totaled $ 9.4 million in 2021 due to the Newsy restructuring plan. In the first quarter, we incurred costs of $ 7.1 million for the write-downs of both capitalized carriage agreement payments and certain Newsy intangible assets. The additional Newsy restructuring charges were primarily attributed to employee severance, relocation costs and Nielsen contract costs. We completed the building sale for our Denver KMGH television station in the third quarter of 2021. The sale resulted in recognition of a pre-tax gain totaling $ 32.6 million. We redeemed the outstanding principal amount of our 2025 Senior Notes during the second quarter of 2021. Additionally, during the fourth quarter of 2021, we redeemed $ 15.4 million of the 2027 Senior Notes and $ 22.0 million of the 2031 Senior Notes. These redemptions resulted in a loss on extinguishment of debt of $ 15.3 million, representing the premiums paid on the notes and write-offs of unamortized debt financing costs. During the first quarter of 2021, we completed the sale of our Triton business. The sale generated total net proceeds of $ 225 million and we recognized a pre-tax gain from disposition totaling $ 81.8 million. Related to our outstanding common stock warrant, we recognized non-cash charges totaling $ 99.1 million in 2021. The warrant obligation was being marked-to-market each reporting period with the increase in our common stock price being the significant contributor to higher valuation. Following an amendment to the common stock warrant agreement on May 14, 2021, the fair value of the warrant was reclassified to equity and is no longer marked-to-market each reporting period. 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 leading up to the ION F-33 Media Networks, Inc. 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. 5. Income Taxes 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. The provision for income taxes from continuing operations consisted of the following: For the years ended December 31, (in thousands) 2021 2020 2019 Current: Federal $ 52,145 $ ( 13,235 ) $ 6,653 State and local 9,096 2,478 2,235 Foreign ( 48 ) 107 ( 6 ) Total current income tax provision (benefit) 61,193 ( 10,650 ) 8,882 Deferred: Federal 6,616 57,755 ( 6,346 ) State and local 3,087 8,902 206 Foreign 293 ( 551 ) 175 Total deferred income tax provision (benefit) 9,996 66,106 ( 5,965 ) Provision for income taxes $ 71,189 $ 55,456 $ 2,917 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, 2021 2020 2019 Statutory rate 21.0 % 21.0 % 21.0 % Effect of: State and local income taxes, net of federal tax benefit 5.6 4.5 212.7 Non-deductible mark-to-market losses 11.5 — — Excess tax benefits from stock-based compensation ( 0.9 ) 0.5 ( 60.4 ) Nondeductible expenses 0.2 0.4 118.7 Reserve for uncertain tax positions ( 0.8 ) 0.7 ( 13.7 ) Other 1.5 ( 0.6 ) 12.2 Effective income tax rate 38.1 % 26.5 % 290.5 % A non-deductible expense of $ 102.6 million was recorded in 2021 related to preferred stock issuance costs and unrealized losses on mark-to-market adjustments recorded on the common stock warrant issued in connection with the ION acquisition. F-34 The approximate effect of the temporary differences giving rise to deferred income tax assets (liabilities) were as follows: As of December 31, (in thousands) 2021 2020 Temporary differences: Property and equipment $ ( 54,292 ) $ ( 31,003 ) Goodwill and other intangible assets ( 378,978 ) ( 119,074 ) Investments, primarily gains and losses not yet recognized for tax purposes 2,886 ( 2,989 ) Accrued expenses not deductible until paid 10,867 7,748 Deferred compensation and retiree benefits not deductible until paid 37,317 46,242 Operating lease right-of-use assets ( 31,507 ) ( 12,480 ) Operating lease liabilities 33,174 12,089 Interest limitation carryforward 7 — Other temporary differences, net 12,354 966 Total temporary differences ( 368,172 ) ( 98,501 ) Federal and state net operating loss carryforwards 23,863 15,532 Valuation allowance for state deferred tax assets ( 12,468 ) ( 2,875 ) Net deferred tax liability $ ( 356,777 ) $ ( 85,844 ) Total state operating loss carryforwards were $ 614 million at December 31, 2021. Our state tax loss carryforwards expire through 2040. 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. 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. The tax effect of the carryforwards that are not expected to be used prior to their expiration is included in the valuation allowance. The Company has not provided for income taxes, including withholding tax, U.S. state taxes, or tax on foreign exchange rate changes, associated with the undistributed earnings of our non-U.S. subsidiaries because we plan to indefinitely reinvest the unremitted earnings in these entities. 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. F-35 A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: For the years ended December 31, (in thousands) 2021 2020 2019 Gross unrecognized tax benefits at beginning of year $ 2,376 $ 576 $ 1,112 Increases in tax positions for prior years 22,348 166 87 Decreases in tax positions for prior years — ( 141 ) ( 387 ) Increases in tax positions for current years 3,164 1,661 — Decreases in tax positions for current years — — ( 167 ) Increases (decreases) from lapse in statute of limitations ( 4,234 ) 114 ( 69 ) Decreases due to settlements with taxing authorities ( 13,082 ) — — Gross unrecognized tax benefits at end of year $ 10,572 $ 2,376 $ 576 The total amount of net unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 9.0 million at December 31, 2021. We accrue interest and penalties related to unrecognized tax benefits in our provision for income taxes. At December 31, 2021 and 2020, we had accrued interest related to unrecognized tax benefits of $ 1.5 million and less than $ 0.1 million, respectively, and penalties of $ 0.9 million at December 31, 2021. We file income tax returns in the U.S. and in various state and local jurisdictions. We are routinely examined by tax authorities in these jurisdictions. At December 31, 2021, we are no longer subject to federal income tax examinations for years prior to 2018. For state and local jurisdictions, we are generally no longer subject to income tax examinations for years prior to 2017. Due to the potential for resolution of federal and state examinations, and the expiration of various statutes of limitation, it is reasonably possible that our gross unrecognized tax benefits balance may change within the next twelve months by as much as $ 0.3 million. 6. Restricted Cash At December 31, 2021 and 2020, we had restricted cash of $ 34.3 million and $ 1.1 billion, respectively. The December 31, 2021 balance reflects restricted cash held in escrow from the KMGH Denver television station building sale, which was received in January 2022. The December 31, 2020 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. acquisition. 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. 7. Investments Investments consisted of the following: As of December 31, (in thousands) 2021 2020 Investments held at cost $ 15,431 $ 4,564 Equity method investments 6,201 9,840 Total investments $ 21,632 $ 14,404 Our investments do not trade in public markets, thus they do not have readily determinable fair values. We estimate the fair values of the investments to approximate their carrying values at December 31, 2021 and 2020. F-36 8. Property and Equipment Property and equipment consisted of the following: As of December 31, (in thousands) 2021 2020 Land and improvements $ 65,559 $ 62,655 Buildings and improvements 204,819 183,516 Equipment 575,920 447,139 Computer software 29,029 25,888 Total 875,327 719,198 Accumulated depreciation 418,382 375,278 Net property and equipment $ 456,945 $ 343,920 9. Leases We have operating leases for office space, data centers and certain equipment. Our leases have remaining lease terms of 1 year to 30 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 years ended December 31, 2021 and 2020 totaled $ 24.3 million and $ 21.0 million, including short-term lease costs of $ 1.8 million and $ 0.5 million, respectively. Other information related to our operating leases was as follows: As of December 31, (in thousands, except lease term and discount rate) 2021 2020 Balance Sheet Information Right-of-use assets $ 124,821 $ 51,471 Other current liabilities 20,066 9,623 Operating lease liabilities 113,892 42,097 Weighted Average Remaining Lease Term Operating leases 8.35 years 7.64 years Weighted Average Discount Rate Operating leases 4.16 % 5.96 % For the years ended December 31, (in thousands) 2021 2020 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities $ 22,477 $ 19,028 Right-of-use assets obtained in exchange for lease obligations 17,835 5,235 F-37 Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 were as follows: (in thousands) Operating Leases 2022 $ 27,477 2023 24,063 2024 21,133 2025 17,005 2026 15,019 Thereafter 54,495 Total future minimum lease payments 159,192 Less: Imputed interest ( 25,234 ) Total $ 133,958 F-38 10. Goodwill and Other Intangible Assets Goodwill by business segment was as follows: (in thousands) Local Media Scripps Networks Other Total Gross balance as of December 31, 2018 $ 708,133 $ 232,742 $ 113,279 $ 1,054,154 Accumulated impairment losses ( 216,914 ) ( 21,000 ) ( 29,403 ) ( 267,317 ) Net balance as of December 31, 2018 491,219 211,742 83,876 786,837 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 Omny acquisition — — 5,336 5,336 Triton acquisition adjustment — — ( 3,220 ) ( 3,220 ) Balance as of December 31, 2019 $ 926,945 $ 211,742 $ 85,992 $ 1,224,679 Gross balance as of December 31, 2019 $ 1,143,859 $ 232,742 $ 85,992 $ 1,462,593 Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 ) Net balance as of December 31, 2019 926,945 211,742 85,992 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 $ 211,742 $ 85,976 $ 1,203,212 Gross balance as of December 31, 2020 $ 1,122,408 $ 232,742 $ 85,976 $ 1,441,126 Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 ) Net balance as of December 31, 2020 905,494 211,742 85,976 1,203,212 ION acquisition — 1,796,148 — 1,796,148 Sale of Triton — — ( 85,976 ) ( 85,976 ) Balance as of December 31, 2021 $ 905,494 $ 2,007,890 $ — $ 2,913,384 Gross balance as of December 31, 2021 $ 1,122,408 $ 2,028,890 $ — $ 3,151,298 Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 ) Net balance as of December 31, 2021 $ 905,494 $ 2,007,890 $ — $ 2,913,384 F-39 Other intangible assets consisted of the following: As of December 31, (in thousands) 2021 2020 Amortizable intangible assets: Carrying amount: Television network affiliation relationships $ 1,060,244 $ 616,244 Customer lists and advertiser relationships 217,400 102,900 Other 130,265 104,445 Total carrying amount 1,407,909 823,589 Accumulated amortization: Television network affiliation relationships ( 168,021 ) ( 113,950 ) Customer lists and advertiser relationships ( 77,711 ) ( 53,232 ) Other ( 32,881 ) ( 37,778 ) Total accumulated amortization ( 278,613 ) ( 204,960 ) Net amortizable intangible assets 1,129,296 618,629 Indefinite-lived intangible assets — FCC licenses 781,015 356,815 Total other intangible assets $ 1,910,311 $ 975,444 Estimated amortization expense of intangible assets for each of the next five years is $ 94.4 million in 2022, $ 90.8 million in 2023, $ 89.5 million in 2024, $ 87.7 million in 2025, $ 84.7 million in 2026 and $ 682.2 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, or respective indefinite-lived intangible assets, 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. 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 2021 and 2020, 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. F-40 11. Long-Term Debt Long-term debt consisted of the following: As of December 31, (in thousands) 2021 2020 Revolving credit facility $ — $ — Senior secured notes, due in 2029 550,000 550,000 Senior unsecured notes, due in 2025 — 400,000 Senior unsecured notes, due in 2027 484,655 500,000 Senior unsecured notes, due in 2031 477,958 500,000 Term loan, due in 2024 287,250 290,250 Term loan, due in 2026 744,049 751,660 Term loan, due in 2028 667,000 — Total outstanding principal 3,210,912 2,991,910 Less: Debt issuance costs and issuance discounts ( 62,907 ) ( 57,939 ) Less: Current portion ( 18,612 ) ( 10,612 ) Net carrying value of long-term debt 3,129,393 2,923,359 Fair value of long-term debt * $ 3,249,278 $ 3,064,194 * The fair values of debt are estimated based on either quoted private market transactions or observable estimates provided by third party financial professionals, and as such, are classified within Level 2 of the fair value hierarchy. Scripps Senior Secured Credit Agreement On January 7, 2021, we entered into the Sixth Amendment to the Third Amended Restated Credit Agreement ("Sixth Amendment"). Under the Sixth Amendment, the capacity of our Revolving Credit Facility was increased from $ 210 million to $ 400 million. Additionally, the Sixth Amendment 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. 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, 2021, we had no borrowings under the Revolving Credit Facility. As of December 31, 2021 and 2020, we had outstanding letters of credit totaling $ 6.9 million and $ 6.0 million, respectively, 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"). Interest is currently payable on the 2024 term loan 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. As of December 31, 2021 and 2020, the interest rate on the 2024 term loan was 2.10 % and 2.15 %, respectively. The weighted-average interest rate on the 2024 term loan was 2.09 % and 2.15 % in 2021 and 2020, respectively. On May 1, 2019, we issued a $ 765 million term loan B ("2026 term loan") that matures in May 2026. Interest is currently payable on the 2026 term loan at a rate based on LIBOR, plus a fixed margin of 2.56 %. The 2026 term loan requires annual principal payments of $ 7.6 million. 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, 2021 and 2020, the interest rate on the 2026 term loan was 3.31 % and 2.65 %, respectively. The weighted-average interest rate on the 2026 term loan was 3.31 % and 2.65 % in 2021 and 2020, respectively. Under the Sixth Amendment, we also issued an $ 800 million term loan B ("2028 term loan") that contributed to the financing of the ION acquisition. The term loan matures in 2028 with interest payable at rates based on LIBOR, plus a fixed margin of 3.00 %. Additionally, the Sixth Amendment provided that the LIBOR rate could not be less than 0.75 % for our term loans that mature in 2026 and 2028. The 2028 term loan requires annual principal payments of $ 8.0 million. We incurred deferred financing costs totaling $ 23.4 million related to this term loan and the amendment to the Revolving Credit Facility, which are being amortized over the life of the term loan. During 2021, we made additional principal payments on the 2028 term loan totaling $ 125 million and wrote off $ 3.1 million of deferred financing costs related to this term loan to interest expense. As of December 31, 2021, the interest rate on the 2028 term loan was 3.75 %. The weighted-average interest rate on the 2028 term loan was 3.75 % in 2021. 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. 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 4.75 to 1.0 when we have outstanding borrowings on the facility. As of December 31, 2021, 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 January 15, 2024 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date plus a "make whole" premium. On or after January 15, 2024 and before January 15, 2026, we may redeem the notes, in whole or in part, at applicable redemption prices noted in the indenture agreement. 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 of 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. On or after May 15, 2020 and before May 15, 2023, we may redeem the notes, in whole or in part, at applicable redemption prices noted in the indenture agreement. 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. On May 15, 2021, we redeemed all the outstanding principal amount of the 2025 Senior Notes for a redemption price equal to 102.563 % of the aggregate principal amount plus accrued and unpaid interest. The redemption resulted in a loss on extinguishment of debt of $ 13.8 million, representing the premium paid to retire the notes and write-off of unamortized debt financing costs. The notes were redeemed with cash on hand. 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. 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 July 15, 2022 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date plus a "make whole" premium. On or after July 15, 2022 and before July 15, 2025, we may redeem the notes, in whole or in part, at applicable redemption prices noted in the indenture agreement. 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. During the fourth quarter of 2021, we redeemed $ 15.4 million of the 2027 Senior Notes at a weighted-average redemption price equal to 103.94 % of the aggregate principal amount plus accrued and unpaid interest. The redemption resulted in a loss on extinguishment of debt of $ 0.9 million, representing the premium paid on the notes and write-off of unamortized debt financing costs. 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 January 15, 2026 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date plus a "make whole" premium. On or after January 15, 2026 and before January 15, 2029, we may redeem the notes, in whole or in part, at applicable redemption prices noted in the indenture agreement. 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 of 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. During the fourth quarter of 2021, we redeemed $ 22.0 million of the 2031 Senior Notes at a weighted-average redemption price equal to 101.13 % of the aggregate principal amount plus accrued and unpaid interest. The redemption resulted in a loss on extinguishment of debt of $ 0.6 million, representing the premium paid on the notes and write-off of unamortized debt financing costs. Debt Repurchase Authorization In May 2021, our Board of Directors provided additional debt repurchase program authorization 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. The authorization currently permits an aggregate principal amount reduction of up to $ 562.6 million and expires on March 1, 2023. F-41 12. Fair Value Measurement We measure certain financial assets and liabilities at fair value on a recurring basis, such as cash equivalents. The fair values of these financial assets were determined based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of input are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than quoted market prices in active markets, that are observable either directly or indirectly. • Level 3 — Unobservable inputs based on our own assumptions. The following tables set forth our assets that are measured at fair value on a recurring basis at December 31, 2021 and 2020: December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Cash equivalents $ 32,536 $ 32,536 $ — $ — December 31, 2020 (in thousands) Total Level 1 Level 2 Level 3 Cash equivalents $ 539,891 $ 539,891 $ — $ — 13. Other Liabilities Other liabilities consisted of the following: As of December 31, (in thousands) 2021 2020 Employee compensation and benefits $ 29,175 $ 34,020 Deferred FCC repack income 47,977 44,945 Programming liability 352,686 33,481 Liability for pension benefits 102,831 161,845 Liabilities for uncertain tax positions 12,280 2,332 Other 30,989 9,742 Other liabilities (less current portion) $ 575,938 $ 286,365 In connection with the acquisition of ION, we assumed $ 26.1 million of uncertain tax position liabilities. Approximately $ 21.9 million of that liability was attributed to disallowed domestic production activities deductions (DPAD). During 2021, we provided payments to the IRS and state taxing authorities totaling $ 17.2 million for settlement of the DPAD liability. An additional $ 4.7 million of the liability was reversed following statute of limitation lapses for respective tax years. F-42 14. Supplemental Cash Flow Information The following table presents additional information about the change in certain working capital accounts: For the years ended December 31, (in thousands) 2021 2020 2019 Accounts receivable $ ( 31,624 ) $ ( 40,524 ) $ ( 98,714 ) Other current assets 12,488 22,644 ( 11,056 ) Accounts payable 18,534 19,520 1,572 Accrued employee compensation and benefits 4,073 11,915 877 Accrued interest 18,459 1,162 12,726 Other accrued liabilities 2,336 ( 5,918 ) 4,239 Unearned revenue ( 7,080 ) 3,397 358 Other, net ( 21,407 ) 21,898 ( 19,532 ) Total $ ( 4,221 ) $ 34,094 $ ( 109,530 ) The following table reconciles cash and cash equivalents and restricted cash 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) 2021 2020 2019 Cash and cash equivalents $ 66,223 $ 576,021 $ 32,968 Restricted cash 34,257 1,050,000 — Total cash, cash equivalents and restricted cash, end of year $ 100,480 $ 1,626,021 $ 32,968 As disclosed in Note 6. Restricted Cash, the December 31, 2021 restricted cash balance reflects cash held in escrow from the KMGH Denver television station building sale, which was received in January 2022. The December 31, 2020 restricted cash 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. acquisition. 15. Employee Benefit Plans We sponsor a noncontributory defined benefit pension plan and non-qualified Supplemental Executive Retirement Plans ("SERPs"). Both the defined benefit plan and the SERPs have frozen the accrual of future benefits. We sponsor a defined contribution plan covering substantially all non-union and certain union employees. We match a portion of employees' voluntary contributions to this plan. Other union-represented employees are covered by defined benefit pension plans jointly sponsored by us and the union, or by union-sponsored multi-employer plans. We use a December 31 measurement date for our retirement plans. Retirement plans expense is based on valuations as of the beginning of each year. F-43 The components of the expense consisted of the following: For the years ended December 31, (in thousands) 2021 2020 2019 Interest cost $ 16,465 $ 19,799 $ 23,287 Expected return on plan assets, net of expenses ( 23,235 ) ( 21,016 ) ( 19,974 ) Amortization of actuarial loss and prior service cost 6,210 4,672 2,622 Total for defined benefit plans ( 560 ) 3,455 5,935 Multi-employer plans — 5 132 SERPs 903 933 1,018 Defined contribution plan 14,394 14,074 10,494 Net periodic benefit cost 14,737 18,467 17,579 Allocated to discontinued operations — ( 522 ) ( 447 ) Net periodic benefit cost - continuing operations $ 14,737 $ 17,945 $ 17,132 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows: For the years ended December 31, (in thousands) 2021 2020 2019 Actuarial gain/(loss) $ 27,318 $ ( 5,296 ) $ ( 5,478 ) Amortization of actuarial loss and prior service cost 6,210 4,672 2,622 Total $ 33,528 $ ( 624 ) $ ( 2,856 ) In addition to the amounts summarized above, amortization of actuarial losses related to our SERPs recognized through other comprehensive income was $ 0.3 million, $ 0.3 million and $ 0.2 million in 2021, 2020 and 2019, respectively. We recognized an actuarial gain for our SERPs of $ 0.3 million in 2021 and actuarial losses of $ 1.0 million and $ 1.9 million in 2020 and 2019, respectively. Assumptions used in determining the annual retirement plans expense were as follows: 2021 2020 2019 Discount rate 2.64 % 3.40 % 4.38 % Long-term rate of return on plan assets 5.50 % 5.50 % 5.50 % 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. The expected long-term rate of return on plan assets is based upon the weighted-average expected rate of return and capital market forecasts for each asset class employed. Changes in other key actuarial assumptions affect the determination of the benefit obligations as of the measurement date and the calculation of net periodic benefit costs in subsequent periods. F-44 Obligations and Funded Status — The defined benefit pension plan obligations and funded status are actuarially valued as of the end of each year. The following table presents information about our employee benefit plan assets and obligations: Defined Benefit Plan SERPs For the years ended December 31, (in thousands) 2021 2020 2021 2020 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 637,165 $ 593,591 $ 18,890 $ 18,541 Interest cost 16,465 19,799 473 586 Benefits paid ( 31,616 ) ( 31,576 ) ( 1,028 ) ( 1,236 ) Actuarial (gains)/losses ( 18,705 ) 55,351 ( 312 ) 999 Projected benefit obligation at end of year 603,309 637,165 18,023 18,890 Plan assets: Fair value at beginning of year 492,827 420,699 — — Actual return on plan assets 31,848 71,071 — — Company contributions 24,089 32,633 1,028 1,236 Benefits paid ( 31,616 ) ( 31,576 ) ( 1,028 ) ( 1,236 ) Fair value at end of year 517,148 492,827 — — Funded status $ ( 86,161 ) $ ( 144,338 ) $ ( 18,023 ) $ ( 18,890 ) Amounts recognized in Consolidated Balance Sheets: Current liabilities $ — $ — $ ( 1,353 ) $ ( 1,383 ) Noncurrent liabilities ( 86,161 ) ( 144,338 ) ( 16,670 ) ( 17,507 ) Total $ ( 86,161 ) $ ( 144,338 ) $ ( 18,023 ) $ ( 18,890 ) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ 90,197 $ 123,707 $ 7,364 $ 7,999 Prior service cost 370 388 — — During 2021, net actuarial gains decreased our benefit obligation primarily due to a year-over-year increase in the discount rate assumption, whereas in 2020, net actuarial losses increased our benefit obligation primarily due to a year-over-year decrease in the discount rate assumption. The recognized actuarial gains/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, (in thousands) 2021 2020 2021 2020 Accumulated benefit obligation $ 603,309 $ 637,165 $ 18,023 $ 18,890 Projected benefit obligation 603,309 637,165 18,023 18,890 Fair value of plan assets 517,148 492,827 — — Assumptions used to determine the defined benefit pension plan benefit obligation were as follows: 2021 2020 2019 Weighted average discount rate 2.95 % 2.64 % 3.40 % In 2022, we expect to contribute $ 1.4 million to fund our SERPs and $ 25.0 million to fund our qualified defined benefit pension plan. F-45 Estimated future benefit payments expected to be paid from the plans for the next ten years are $ 32.9 million in 2022, $ 33.4 million in 2023, $ 34.0 million in 2024, $ 34.6 million in 2025, $ 34.9 million in 2026 and a total of $ 177.1 million for the five years ending 2031. Plan Assets and Investment Strategy Our long-term investment strategy for pension assets is to earn a rate of return over time that minimizes future contributions to the plan while reducing the volatility of pension assets relative to pension liabilities. The strategy reflects the fact that we have frozen the accrual of service credits under our plans which cover the majority of employees. We evaluate our asset allocation target ranges for equity, fixed income and other investments annually. We monitor actual asset allocations quarterly and adjust as necessary. We control risk through diversification among multiple asset classes, managers and styles. Risk is further monitored at the manager and asset class level by evaluating performance against appropriate benchmarks. Information related to our pension plan asset allocations by asset category were as follows: Target allocation Percentage of plan assets as of December 31, 2022 2021 2020 US equity securities 15 % 15 % 16 % Non-US equity securities 30 % 35 % 39 % Fixed-income securities 50 % 49 % 44 % Other 5 % 1 % 1 % Total 100 % 100 % 100 % U.S. equity securities include common stocks of large, medium and small capitalization companies, which are predominantly U.S. based. Non-U.S. equity securities include companies domiciled outside of the U.S. and American depository receipts. Fixed-income securities include securities issued or guaranteed by the U.S. government, mortgage backed securities and corporate debt obligations. Other investments include real estate funds and cash equivalents. Under our asset allocation strategy, approximately 50 % of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 50 % of plan assets are invested in equity securities and other return-seeking assets. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed. The following table presents our plan assets as of December 31, 2021 and 2020: As of December 31, (in thousands) 2021 2020 Equity securities Common/collective trust funds $ 261,810 $ 274,810 Fixed income Common/collective trust funds 252,731 215,444 Cash equivalents 2,607 2,573 Fair value of plan assets $ 517,148 $ 492,827 Our investments are valued using net asset value as a practical expedient as allowed under U.S. GAAP and therefore are not valued using the fair value hierarchy. Equity securities-common/collective trust funds and fixed income-common/collective trust funds are comprised of shares or units in commingled funds that are not publicly traded. 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. F-46 16. Segment Information We determine our business segments based upon our management and internal reporting structure, as well as the basis that our chief operating decision maker makes resource allocation decisions. Effective with the January 7, 2021 close of the ION acquisition, we realigned our internal reporting structure and changed the reporting of our businesses’ operating results to reflect this new structure. Under the new structure, our operating results are reported under Local Media, Scripps Networks and Other segment captions. Our Local Media segment includes our 61 local broadcast stations and their related digital operations. It is comprised of 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates. We also have 12 CW affiliates - four on full power stations and eight on multicast; five 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, satellite carriers and over-the-top virtual MVPDs. Our Scripps Networks segment, which includes the recently acquired ION business, is comprised of nine national television networks that reach nearly every U.S. television home through free over-the-air broadcast, cable/satellite, connected TV and digital distribution. These operations earn revenue primarily through the sale of advertising. The operating results of the sold Triton business, and our other national businesses that were previously reported in our National Media segment, are aggregated with our remaining business activities in the Other segment caption. Our respective business segment results reflect the impact of intercompany carriage agreements between our local broadcast television stations and our national networks. We also allocate a portion of certain corporate costs and expenses, including information technology, certain employee benefits and shared services to our business segments. These intercompany agreements and allocations are generally amounts agreed upon by management, which may differ from an arms-length amount. Corporate assets are primarily cash and cash equivalents, restricted cash, property and equipment primarily used for corporate purposes and deferred income taxes. Our chief operating decision maker evaluates the operating performance of our business segments and makes decisions about the allocation of resources to our business segments using a measure called segment profit. Segment profit excludes interest, defined benefit pension plan expense, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America. F-47 Information regarding our business segments is as follows: For the years ended December 31, (in thousands) 2021 2020 2019 Segment operating revenues: Local Media $ 1,319,468 $ 1,488,237 $ 1,032,709 Scripps Networks 951,883 309,076 270,060 Other 26,924 73,010 58,534 Intersegment eliminations ( 14,743 ) ( 12,845 ) ( 9,904 ) Total operating revenues $ 2,283,532 $ 1,857,478 $ 1,351,399 Segment profit (loss): Local Media $ 268,140 $ 444,243 $ 227,789 Scripps Networks 389,278 28,324 15,585 Other 359 18,173 13,720 Shared services and corporate ( 75,576 ) ( 60,758 ) ( 57,409 ) Acquisition and related integration costs ( 40,373 ) ( 18,678 ) ( 26,304 ) Restructuring costs ( 9,436 ) — ( 3,370 ) Depreciation and amortization of intangible assets ( 161,922 ) ( 107,155 ) ( 84,344 ) Gains (losses), net on disposal of property and equipment 30,275 ( 661 ) 1,692 Interest expense ( 165,164 ) ( 92,994 ) ( 80,596 ) Loss on extinguishment of debt ( 15,347 ) — — Defined benefit pension plan expense ( 343 ) ( 4,388 ) ( 6,953 ) Gain on sale of Triton business 81,784 — — Losses on stock warrant ( 99,118 ) — — Miscellaneous, net ( 15,469 ) 2,914 1,194 Income from continuing operations before income taxes $ 187,088 $ 209,020 $ 1,004 Depreciation: Local Media $ 39,368 $ 42,934 $ 34,086 Scripps Networks 17,109 5,133 3,854 Other 382 854 596 Shared services and corporate 1,498 1,495 1,462 Total depreciation $ 58,357 $ 50,416 $ 39,998 Amortization of intangible assets: Local Media $ 40,315 $ 37,848 $ 26,283 Scripps Networks 58,599 9,460 9,507 Other 2,147 8,077 7,203 Shared services and corporate 2,504 1,354 1,353 Total amortization of intangible assets $ 103,565 $ 56,739 $ 44,346 F-48 A disaggregation of the principal activities from which we generate revenue is as follows: For the years ended December 31, (in thousands) 2021 2020 2019 Operating revenues: Core advertising $ 1,592,121 $ 915,515 $ 861,386 Political 22,693 272,066 23,263 Retransmission and carriage 614,892 588,888 390,043 Other 53,826 81,009 76,707 Total operating revenues $ 2,283,532 $ 1,857,478 $ 1,351,399 The following table presents additions to property and equipment by segment: For the years ended December 31, (in thousands) 2021 2020 2019 Additions to property and equipment: Local Media $ 35,963 $ 42,611 $ 46,855 Scripps Networks 23,871 2,020 11,126 Other 430 1,200 1,366 Shared services and corporate 2,114 646 1,878 Total additions to property and equipment $ 62,378 $ 46,477 $ 61,225 Total assets by segment for the years ended December 31 were as follows: As of December 31, (in thousands) 2021 2020 2019 Assets: Local Media $ 2,431,730 $ 2,463,064 $ 2,694,667 Scripps Networks 3,865,046 526,887 486,593 Other 27,582 198,215 197,674 Shared services and corporate 333,956 1,671,220 81,657 Total assets of continuing operations 6,658,314 4,859,386 3,460,591 Discontinued operations — — 101,266 Total assets $ 6,658,314 $ 4,859,386 $ 3,561,857 17. Commitments and Contingencies In the ordinary course of business, we enter into contractual commitments for network affiliation agreements, the acquisition of programming and for other purchase and service agreements. Minimum payments on such contractual commitments at December 31, 2021 were: $ 690.7 million in 2022, $ 381.4 million in 2023, $ 296.7 million in 2024, $ 153.1 million in 2025, $ 123.1 million in 2026 and $ 53.0 million in later years. We expect these contracts will be replaced with similar contracts upon their expiration. We are involved in litigation arising in the ordinary course of business, such as defamation actions and governmental proceedings primarily relating to renewal of broadcast licenses, none of which is expected to result in material loss. F-49 18. Capital Stock and Share-Based Compensation Plans Capital Stock — We have two classes of common shares, Common Voting shares and Class A Common shares. 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. Preferred stock dividends, effective through December 15, 2021, have been paid in 2021 totaling $ 45.1 million. 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. Since the holder had the option to settle the warrant through cash payment of the exercise price and/or through surrendering portions of their Preferred Shares for the stated par value, a liability was recognized for the fair value of the warrant. The valuation model, classified within Level 3 of the fair value hierarchy, included inputs for the estimated term of the warrant, the historical volatility rate of Scripps common stock and the exercise price for the warrant. At time of issuance, the fair value of the warrant totaled $ 181 million and was being remeasured each reporting period with the changes in fair value of the warrant captured in the gains/losses on stock warrant caption in the Consolidated Statements of Operations. On May 14, 2021, the warrant agreement was amended to only permit settlement of the warrant through cash payment of the exercise price. Following the warrant amendment, the warrant is no longer accounted for as a liability award where mark-to-market changes in the fair value of the warrant are captured as gains or losses in our operating results. The fair value of the warrant was remeasured on May 14, 2021 at $ 280 million resulting in non-cash charges totaling $ 99.1 million for the year-to-date period of 2021. The increase in our stock price during 2021 was the primary contributor to the increase in the fair value of the warrant. The value of the liability on the amendment date was reclassified to equity within the caption Additional Paid-in Capital. Share Repurchase Plan — Shares may be repurchased from time to time at management's discretion. 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. 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. No shares were repurchased under either authorization during 2021 or 2020. As of December 31, 2019, we repurchased $ 0.6 million of shares at prices ranging from $ 15.54 to $ 18.72 per share. Under the terms of the Preferred Shares, we are 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. We satisfy stock option exercises and vested stock awards with newly issued shares. We have not issued any new stock options since 2008. As of December 31, 2021, approximately 6.3 million shares were available for future stock compensation awards. F-50 Restricted Stock Units — Awards of restricted stock units (RSUs) generally require no payment by the employee. RSUs are converted into an equal number of Class A Common shares when vested. These awards generally vest over a three or four year period, conditioned upon the individual’s continued employment through that period. Awards vest immediately upon the retirement, death or disability of the employee or upon a change in control of Scripps or in the business in which the individual is employed. Unvested awards may be forfeited if employment is terminated for other reasons. Awards are nontransferable during the vesting period, but the awards are entitled to all the rights of an outstanding share, including receiving stock dividend equivalents. There are no post-vesting restrictions on awards granted to employees and non-employee directors. Long-term incentive compensation includes performance share awards. Performance share awards represent the right to receive an award of RSUs if certain performance measures are met. Each award specifies a target number of shares to be issued and the specific performance criteria that must be met. The number of shares that an employee receives may be less or more than the target number of shares depending on the extent to which the specified performance measures are met or exceeded. The following table summarizes our RSU activity: Fair Value Number of Shares Weighted Average Range of Prices 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 Awarded 1,375,565 22.63 14 - 23 Vested ( 1,060,685 ) 20.32 15 - 24 Forfeited ( 121,043 ) 16.19 9 - 23 Unvested at December 31, 2021 2,385,496 17.25 9 - 23 The following table summarizes additional information about RSU vesting: For the years ended December 31, (in thousands) 2021 2020 2019 Fair value of RSUs vested $ 21,548 $ 8,518 $ 11,618 Tax benefits realized on vesting 5,101 2,019 2,969 F-51 Share-based Compensation Costs Share-based compensation costs were as follows: For the years ended December 31, (in thousands) 2021 2020 2019 Total share-based compensation $ 22,334 $ 14,507 $ 13,308 Included in discontinued operations — ( 492 ) ( 215 ) Included in continuing operations $ 22,334 $ 14,015 $ 13,093 Share-based compensation, net of tax $ 17,047 $ 10,694 $ 9,747 As of December 31, 2021, $ 24.6 million of total unrecognized compensation costs related to RSUs and performance shares is expected to be recognized over a weighted-average period of 1.6 years. F-52 19. Accumulated Other Comprehensive Income (Loss) 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 Other Total As of December 31, 2019 $ ( 98,734 ) $ ( 255 ) $ ( 98,989 ) 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 ) As of December 31, 2020 ( 99,789 ) ( 330 ) ( 100,119 ) Other comprehensive income (loss) before reclassifications, net of tax of $ 6,540 and $ 42 21,090 134 21,224 Amounts reclassified from AOCI, net of tax of $ 1,546 4,986 — 4,986 Net current-period other comprehensive income (loss) 26,076 134 26,210 As of December 31, 2021 $ ( 73,713 ) $ ( 196 ) $ ( 73,909 ) Amounts reclassified to net earnings for defined benefit pension items relate to the amortization of actuarial gains (losses) and settlement charges. These amounts are included within the defined benefit pension plan expense caption on our Consolidated Statements of Operations. See Note 15. Employee Benefit Plans for additional information. F-53 20. Assets Held for Sale and Discontinued Operations Stitcher 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. Stitcher is classified as discontinued operations in our Consolidated Financial Statements for all periods presented. Operating results of our discontinued Stitcher operations were as follows: For the years ended December 31, (in thousands) 2021 2020 2019 Operating revenues $ — $ 57,573 $ 72,545 Total costs and expenses ( 600 ) ( 88,599 ) ( 91,725 ) Depreciation and amortization of intangible assets — ( 1,157 ) ( 2,642 ) Other, net — ( 174 ) ( 57 ) Loss from operations ( 600 ) ( 32,357 ) ( 21,879 ) Pretax gain on disposal 9,572 182,589 — Gain (loss) from discontinued operations before income taxes 8,972 150,232 ( 21,879 ) Income tax (provision) benefit ( 2,159 ) ( 34,463 ) 5,414 Income (loss) from discontinued operations, net of tax $ 6,813 $ 115,769 $ ( 16,465 ) During 2021, the estimate for the contingent earnout consideration was increased by $ 9.1 million. In the third quarter of 2021, we received payment of $ 19.1 million for the 2020 earnout period. No value is currently assigned to the 2021 contingent earnout consideration. Stitcher’s discontinued operating results in 2020 include a contract termination charge that totaled $ 12 million. The 2020 gain on disposal for Stitcher reflects a $ 10 million fair value estimate for the contingent earnout consideration. Triton Digital During the first quarter of 2021, our Board of Directors approved the sale of our Triton Digital business. On February 16, 2021, we signed a definitive agreement to sell the business and the transaction closed on March 31, 2021. The sale generated total net proceeds of $ 225 million and we recognized a pre-tax gain from disposition totaling $ 81.8 million. WPIX 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. F-54