What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-24 compared with 2022-02-25 · 321 added, 403 removed, 1554 unchanged (32% of the section changed)

34 unchanged sentences

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

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

30 unchanged sentences

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

* 001-10701 10.05 12/31/2022

10.06 Second Amended and Restated Scripps Family Agreement

13 unchanged sentences

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

10.13 CEO Performance-Based Restricted Share Unit Agreement

8-K 001-10701 10.2 8/2/2022

10.14 CEO Time-Based Restricted Share Unit Agreement

8-K 001-10701 10.3 8/2/2022

10.15 5.125% Senior Notes due 2025 Purchase Agreement dated April 20, 2017

16 unchanged sentences

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

Scripps Company Code of Business Conduct and Ethics for the Chief Executive Officer and Senior Financial Officers

* 001-10701 14 12/31/2022

21 Subsidiaries of the Company

18 unchanged sentences

Signature Title

President and Chief Executive Officer

Symson President and Chief Executive Officer

Symson (Principal Executive Officer)

/s/ Jason Combs

Executive Vice President and Chief Financial Officer

/s/ Jason Combs Executive Vice President and Chief Financial Officer

Jason Combs (Principal Financial Officer)

5 unchanged sentences

Alexander, Jr.

/s/ Charles Barmonde Director

Charles Barmonde

/s/ Charles L.

Barmonde Director

/s/ Lauren R.

Fine Director

Lucas Director

Michael Scagliotti

Hayden Director

/s/ Burton Jablin Director

Burton Jablin

La Dow Director

/s/ Leigh Radford Director

Leigh Radford

Michael Scagliotti Director

Michael Scagliotti

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

A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors.” 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.

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

Executive Overview

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:

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 .

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.

Scripps Company (“Scripps”) is a diverse media enterprise that serves audiences and businesses through a portfolio of local television stations and national news and entertainment networks.

We serve audiences and businesses in our Local Media division through a portfolio of 61 local television stations in 41 markets.

Our local stations have programming agreements with ABC, NBC, CBS, FOX and the CW.

In our Scripps Networks division, we operate nine national news and entertainment networks - ION, Bounce, Court TV, Defy TV, Grit, ION Mystery, Laff, Scripps News and TrueReal – each reaches well over 90% of U.S.

television households over-the-air.

Effective the beginning of 2023, we merged our nationally focused news resources into a Scripps News division.

Scripps News combines the development and distribution of Newsy programming content, the Local Media national desk and our award-winning investigative reporting newsroom in Washington, D.C.

into one coordinated organization.

The combined operation will more efficiently serve national audiences and our local television stations.

We also serve as the longtime steward of one of the nation's largest, most successful and longest-running educational programs, the Scripps National Spelling Bee.

Additionally, we provide consumers DVR product solutions to watch and record free over-the-air HDTV on connected devices through our Nuvyyo business.

In December of 2022, we launched our Scripps Sports division to further leverage our local market depth and national broadcast reach for partnerships with sports leagues, conferences and teams.

In addition to the market depth of our 61 local television stations, ION boasts the fifth-largest national broadcast viewership and its network of owned and operated and affiliate stations reaches 100% of U.S.

television households through broadcast, cable/satellite and connected TV platforms, providing it the opportunity to run localized, regionalized and national programming.

Our sports division will be comprised of a limited number of personnel that will seek and negotiate sports rights for the benefit of our Local Media and Scripps Networks businesses.

The revenues earned and any sports rights fees or other direct expenses incurred will reside within those respective businesses.

Scripps is a leader in free, ad-supported television.

All of our local stations and national networks reach consumers over-the-air, and all of our television brands can also be found on free streaming platforms.

During 2022, we continued to expand in the fast-growing connected television marketplace, as well as continued to leverage our leadership position in the growing over-the-air marketplace.

Currently, one in three non pay-TV homes is watching television over the air alongside their subscription services, and industry data shows the use of free television over antenna is expected to surpass 50 million households in 2025.

Scripps has launched a major national consumer marketing campaign to broaden antenna use even more, as well as working with key partners in retail, manufacturing and antenna installation, to help television owners understand the quality and quantity of programming available over the air and the ease of antenna use.

In 2022, we incurred $13.2 million of costs related to this advertising campaign.

During 2022, we redeemed $59.0 million of the 2027 Senior Notes at a weighted-average redemption price equal to 97.77% of the aggregate principal amount plus accrued and unpaid interest, $26.6 million of the 2029 Senior Notes at a weighted-average redemption price equal to 93.59% of the aggregate principal amount plus accrued and unpaid interest and

$85.9 million of the 2031 Senior Notes at a weighted-average redemption price equal to 89.51% of the aggregate principal amount plus accrued and unpaid interest.

The redemptions resulted in a gain on extinguishment of debt of $8.6 million, as the notes were redeemed for total consideration below par value of the notes.

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.

During 2022, we also made additional principal payments on the 2028 term loan totaling $100 million.

Preferred stock dividends paid in 2022 and 2021 totaled $48.0 million and $45.1 million, respectively.

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.

In January of 2023, we announced a strategic restructuring and reorganization of the Company that will further leverage our strong position in the U.S.

television ecosystem and propel our growth across new distribution platforms and emerging media marketplaces.

Lisa Knutson was named chief operating officer, assuming responsibility for the Local Media and Scripps Networks operating divisions, and was tasked with leading the Company’s restructuring efforts.

The restructuring aims to create a leaner and more agile operating structure through the centralization of certain services and the consolidation of layers of management across our operating businesses and corporate office.

We currently anticipate this effort will result in at least $40 million in annual savings, which will include reductions in a variety of areas.

Results of Operations

14 unchanged sentences

Interest expense (161,130) (165,164) (92,994)

Loss on extinguishment of debt (15,347) — —

Defined benefit pension plan expense (343) (4,388) (6,953)

Gain (loss) on extinguishment of debt 8,589 (15,347) —

Defined benefit pension plan income (expense) 2,613 (343) (4,388)

Gain on sale of Triton business — 81,784 —

3 unchanged sentences

Provision for income taxes (80,561) (71,189) (55,456)

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.

Income from continuing operations, net of tax 195,902 115,899 153,564

Income from discontinued operations, net of tax — 6,813 115,769

Net income $ 195,902 $ 122,712 $ 269,333

On January 7, 2021, we acquired the national broadcast network, ION Media Networks, Inc., on March 31, 2021, we completed the sale of our Triton business and on December 30, 2020, we completed the sale of our WPIX television station.

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

2022 compared with 2021

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

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.

Operating revenues increased $170 million or 7.4% in 2022 compared to 2021.

Revenue benefited from higher political and distribution revenues in our Local Media group.

Cost of revenues, which is comprised of programming costs and costs associated with distributing our content, increased $128 million or 12% in 2022 compared to 2021.

Programming costs, the primary driver of fluctuations in cost of revenues, increased $95.1 million year-over-year, attributed to higher network affiliation fees at our Local Media stations and Scripps Networks, reflecting contractual rate increases.

Additionally, syndicated programming expense increased at Scripps Networks attributable to the new networks launched in 2021, continued investment in new series programming for the networks and an increase in production of our original programming.

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.

Selling, general and administrative expenses increased $28.1 million or 4.7% in 2022 compared to 2021, primarily attributed to higher business costs across various categories as employees have returned to our station and office locations and resumed more normal operating procedures.

Acquisition and related integration costs were $1.6 million in 2022.

The 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 acquisition.

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.

In connection with the Newsy restructuring plan, we incurred charges in the first quarter of 2021 totaling $7.1 million for the write-downs of both capitalized carriage agreement payments and certain Newsy intangible assets.

The additional restructuring charges in 2021 were primarily attributed to employee severance, relocation costs and Nielsen contract costs.

Depreciation and amortization expense decreased slightly at $160 million in 2022 compared to $162 million in 2021.

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.

Interest expense decreased $4.0 million in 2022 when compared to the prior year due to the additional term loan B payments and bond repurchases made during the second half of 2021 and throughout 2022.

The impact of rising interest rates during 2022 partially offset the reduction in interest expense attributed to lower outstanding debt balances.

During 2022, we redeemed $59.0 million of the 2027 Senior Notes, $26.6 million of the 2029 Senior Notes and $85.9 million of the 2031 Senior Notes.

The redemptions resulted in a gain on extinguishment of debt of $8.6 million, as the notes were redeemed for total consideration below par value of the notes.

In 2021, we redeemed the outstanding principal amount of our 2025 Senior Notes, $15.4 million of our 2027 Senior Notes and $22.0 million of our 2031 Senior Notes.

These 2021 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.

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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.

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.

The effective income tax rate was 29% and 38% for 2022 and 2021, 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.

federal statutory rate are due to 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 ($1.0 million benefit in 2022 and $1.7 million benefit in 2021), state deferred rate changes ($3.4 million expense in 2022) 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

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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.

We also allocate a portion of certain corporate costs and expenses, including accounting, procurement, human resources, employee benefit and information technology to our business segments.

These intercompany agreements and allocations are generally amounts agreed upon by management, which may differ from an arms-length amount.

The other segment caption aggregates our operating segments that are too small to report separately.

Costs for centrally provided services and certain corporate costs that are not allocated to the business segments are included in shared services and corporate costs.

These unallocated corporate costs would also include the costs associated with being a public company.

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.

Information regarding the operating performance of our business segments and a reconciliation of such information to the Consolidated Financial Statements is as follows:

17 unchanged sentences

Interest expense (161,130) (165,164) (92,994)

Loss on extinguishment of debt (15,347) — —

Defined benefit pension plan expense (343) (4,388) (6,953)

Gain (loss) on extinguishment of debt 8,589 (15,347) —

Defined benefit pension plan income (expense) 2,613 (343) (4,388)

Gain on sale of Triton business — 81,784 —

18 unchanged sentences

Political 198,519 22,693 (91.5) % 266,683

Retransmission and carriage fees 617,292 3.9 % 594,359 51.4 % 392,614

Distribution 655,499 6.2 % 617,305 3.8 % 594,509

Other 14,244 (8.7) % 15,606 (10.9) % 17,508

7 unchanged sentences

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.

The exclusion of operating results from WPIX for the periods subsequent to the disposition impacts the comparability of our Local Media segment operating results.

2022 compared with 2021

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.

Total Local Media revenues increased $175 million or 13% in 2022 compared to 2021 driven by year-over-year increases of $38.2 million in distribution revenues and $176 million in political revenues during this election year.

While distribution revenues have been affected by subscriber losses by the MVPDs, particularly among cable and satellite providers, rate increases have more than offset those subscriber declines.

Core advertising revenues decreased $37.8 million or 5.7% in 2022 compared to 2021.

Strong core performance in the first quarter of 2022 was offset by softness during the remainder of 2022, reflecting the impact of macroeconomic conditions and the displacement of spots from political advertisements.

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.

Employee compensation and benefits decreased $8.1 million or 1.9% in 2022 compared to 2021, reflecting lower bonus, stock compensation and employee benefit costs.

Programming expense increased $43.0 million or 9.8% in 2022 compared to 2021.

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.

Other expenses increased $21.8 million or 12% in 2022 compared to 2021.

The increase reflects an increase in business costs across various categories as employees have returned to our station locations and resumed more normal operating procedures.

Scripps Networks — Our Scripps Networks segment is comprised of nine national television networks - ION, Bounce, Court TV, Defy TV, Grit, ION Mystery, Laff, Scripps News and TrueReal.

The networks reach nearly every U.S.

12 unchanged sentences

Segment profit $ 310,336 (20.3) % $ 389,278 $ 28,324

On January 7, 2021, we acquired the national broadcast network ION.

On January 7, 2021, we acquired the national broadcast network, ION Media Networks, Inc.

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.

2022 compared with 2021

Scripps Networks revenues, which are primarily comprised of advertising revenues, increased $643 million in 2021 compared to 2020.

Scripps Networks revenues, which are primarily comprised of advertising revenues, increased $9.4 million or 1.0% in 2022 compared to 2021.

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.

During 2022, our Scripps Networks brands experienced softness within the national advertising marketplace as macroeconomic challenges, such as cost inflation and supply chain disruptions, impacted advertiser budgets.

Scripps Networks revenues reflect the benefits of year-over-year increases in advertising spots available for sale, the expanded distribution of our networks on connected TV ("CTV") platforms and higher overall pricing in general market advertising, offset by the impacts of lower ratings in our key monetized demographics and a decline in direct response advertising rates that reflects the softness in the national advertising marketplace.

Revenues in 2022 also reflect the benefit of incremental revenues earned from the July 2021 launch of the Defy TV and TrueReal networks and the acquisition of ION, which closed on January 7, 2021.

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.

Employee compensation and benefits increased $16.6 million or 16% in 2022 compared to 2021, reflecting additional hiring to support both the continued investment in our national news networks and the 2021 network launches.

Programming expense increased $54.4 million or 19% in 2022 compared to 2021.

The increase is driven by the launch of two new networks in July 2021, continued investment in new series and additional seasons of programming for the networks, increased production of original programming and higher affiliate fees reflecting both contractual rate increases and increased distribution across the Scripps Networks' businesses.

Other expenses increased $17.4 million or 10% in 2022 compared to 2021.

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.

The increase is partly due to higher rating services costs, reflecting increases from the contractual fees that are tied to our revenues as well as additional network ratings added during the year.

The increase is also driven by the addition of new networks in 2021, higher hosting fees tied to CTV revenue growth and the incurrence of higher costs supporting the growth of our Scripps Networks' businesses as well as the return to more normal business operating procedures.

Shared services and corporate

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

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.

Shared services and corporate expenses were up year-over-year with $82.3 million in 2022 and $75.6 million in 2021, reflecting increases in employee compensation and professional and miscellaneous services.

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.

Our primary source of cash is generated from our ongoing operations and can be affected by various risks and uncertainties.

At the end of December 2022, we had $18.0 million of 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.

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Net cash provided by operating activities $ 311,423 $ 237,000

Net cash provided by (used in) investing activities (2,455,996) 317,422

Net cash provided by financing activities 693,475 998,179

Net cash used in investing activities (66,393) (2,455,996)

Net cash provided by (used in) financing activities (327,483) 693,475

Effect of foreign exchange rates on cash, cash equivalents and restricted cash — (20)

Increase (decrease) in cash, cash equivalents and restricted cash $ (1,525,541) $ 1,593,053

Decrease in cash, cash equivalents and restricted cash $ (82,453) $ (1,525,541)

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 provided by operating activities increased $74.4 million in 2022 compared to 2021.

Year-over-year change in cash provided by operating activities was favorably impacted from a $14.1 million year-over-year increase in segment profit, a cash outlay decrease of $32.1 million for programming investments in excess of programming amortization and a $38.7 million decrease in acquisition and related integration costs.

These favorable operating cash impacts were partially offset by a $24.5 million increase in interest paid.

In January 2022, all three of our senior notes had interest payments due versus only one having a payment due in January 2021.

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.

Cash used in investing activities was $66.4 million in 2022 compared to $2.5 billion in 2021.

Investing activities in 2022 reflect the $13.8 million acquisition of Nuvyyo.

Investing activities in 2021 reflect the $2.7 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 $45.8 million in 2022 and $60.7 million in 2021.

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.

Cash used in financing activities was $327 million in 2022 compared to cash provided by financing activities of $693 million in 2021.

During the full year of 2022, we redeemed $59.0 million of our 2027 Senior Notes, $26.6 million of our 2029 Senior Notes, $85.9 million of our 2031 Senior Notes and made additional principal payments on the 2028 term loan totaling $100 million.

On January 7, 2021, we issued an $800 million term loan B and $600 million of preferred equity shares to Berkshire Hathaway in connection with the closing of the ION acquisition.

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 were $48.0 million and $45.1 million in 2022 and 2021, respectively.

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.

Under the Sixth Amendment, we have a $400 million Revolving Credit Facility that matures on 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 $1.6 billion of outstanding balance on our term loans.

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Senior secured notes totaling $523 million bear interest at a rate of 3.875% per annum and mature on January 15, 2029.

Senior unsecured notes have a total

outstanding principal balance of $963 million.

Senior unsecured notes have a total outstanding principal balance of $818 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.

Our term loans and notes do not have maintenance covenants.

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

Our revolving credit facility permits maximum leverage of 4.5 times the two-year average earnings before interest, taxes, depreciation and amortization (EBITDA) as defined by our credit agreement.

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.

In February 2023, our Board of Directors provided a new debt repurchase 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 permits an aggregate principal amount reduction of up to $500 million and expires on March 1, 2026.

Our previous debt repurchase authorization was due to expire on March 1, 2023.

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.

Preferred stock dividends paid in 2022 and 2021 totaled $48.0 million and $45.1 million, respectively.

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.

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Pension obligations (d) 1,411 13,911 30,728 5,450 51,500

Operating leases (e) 27,477 45,196 32,024 54,495 159,192

Leases (e) 28,566 47,545 37,189 136,378 249,678

Other purchase and service commitments (f) 62,953 45,162 3,971 62 112,148

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Long-Term Debt of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K).

Interest amounts included in the table may differ from amounts actually paid due to changes in LIBOR.

(b) — Program licenses generally require payments over the terms of the licenses.

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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.

If the fair value of the reporting unit is less than its carrying value, we would be required to record an impairment charge.

The following is goodwill by reporting unit as of December 31, 2022:

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

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

Our annual impairment testing for goodwill indicated that the fair value of our Local Media reporting unit exceeded its carrying value by 30% and the fair value of our Scripps Networks reporting unit exceeded its carrying value by 2.5%.

A 50 basis point increase in the discount rate or a decrease of $25 million in the annual cash flows used in the discounted cash flow analysis could result in the fair value of the Scripps Networks reporting unit being less than carrying value.

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

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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.

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 $125 million.

Our annual impairment testing for our FCC licenses indicated that their fair value exceeded their recorded value.

Pension Plans — We sponsor a noncontributory defined benefit pension plan as well as non-qualified Supplemental Executive Retirement Plans ("SERPs").

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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.

In 2022, we had an actuarial loss of $9.1 million.

Recent Accounting Guidance

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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.

A 100 basis point increase in LIBOR would increase annual interest expense on our variable rate borrowings by approximately $15.8 million.

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

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Senior unsecured notes, due in 2031 392,071 316,107 477,958 488,712

Senior unsecured notes, due in 2031 477,958 488,712 500,000 525,800

Term loan, due in 2024 284,250 279,631 287,250 286,999

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

Critical Audit Matters

Critical Audit Matter

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

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

Valuation of ION Divestiture Agreement Intangible Asset — Refer to Note 3 to the financial statements

Valuation of Scripps Networks’ Goodwill — Refer to Note 10 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.

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.

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

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

As of December 31, 2022, Scripps Networks’ goodwill balance was approximately $2 billion.

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

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

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

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

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

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

• Historical cash flows.

• Underlying analysis detailing business strategies and growth plans, including consideration of the current economic environment.

• Internal communications to management and the Board of Directors.

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

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

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

• Developing a range of independent estimates for the discount rate and comparing those to the rate selected by management.

• Utilizing industry and market-specific growth trends to assess the reasonableness of the long-term growth rate selected by management.

/s/ Deloitte & Touche LLP

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Preferred stock — Series A, $ 100,000 par;

6,000 shares at December 31, 2021

6,000 shares issued and outstanding

412,244 409,939

Common stock, $ 0.01 par:

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Advertising $ 1,757,389 $ 1,614,814 $ 1,187,581

Retransmission and carriage 614,892 588,888 390,043

Distribution 660,317 620,454 592,514

Other 35,509 48,264 77,383

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Interest expense ( 161,130 ) ( 165,164 ) ( 92,994 )

Loss on extinguishment of debt ( 15,347 ) — —

Defined benefit pension plan expense ( 343 ) ( 4,388 ) ( 6,953 )

Gain (loss) on extinguishment of debt 8,589 ( 15,347 ) —

Defined benefit pension plan income (expense) 2,613 ( 343 ) ( 4,388 )

Gain on sale of Triton business — 81,784 —

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Provision for income taxes 80,561 71,189 55,456

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 )

Income from continuing operations, net of tax 195,902 115,899 153,564

Income from discontinued operations, net of tax — 6,813 115,769

Net income 195,902 122,712 269,333

Preferred stock dividends ( 50,305 ) ( 49,372 ) —

Net income (loss) attributable to the shareholders of The E.W.

Net income attributable to the shareholders of The E.W.

Scripps Company $ 145,597 $ 73,340 $ 269,333

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

Net income 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.

Income from continuing operations $ 1.71 $ 0.79 $ 1.84

Income from discontinued operations — 0.08 1.39

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

Scripps Company $ 1.71 $ 0.87 $ 3.23

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

Net income 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.

Income from continuing operations $ 1.62 $ 0.74 $ 1.83

Income from discontinued operations — 0.08 1.39

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

Scripps Company $ 1.62 $ 0.81 $ 3.21

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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.

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

Scripps Company

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(in thousands) 2022 2021 2020

Net income (loss) $ 122,712 $ 269,333 $ ( 18,378 )

Net income $ 195,902 $ 122,712 $ 269,333

Changes in defined benefit pension plans, net of tax of $( 1,158 ), $ 8,086 , and $( 328 )

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52 134 ( 75 )

Total comprehensive income (loss) attributable to preferred and common stockholders $ 148,922 $ 268,203 $ ( 21,970 )

Total comprehensive income attributable to preferred and common stockholders $ 192,340 $ 148,922 $ 268,203

See Notes to Consolidated Financial Statements.

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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:

Net income $ 195,902 $ 122,712 $ 269,333

Income from discontinued operations, net of tax — 6,813 115,769

Income from continuing operations, net of tax 195,902 115,899 153,564

Adjustments to reconcile net income from continuing operations to net cash flows from operating activities:

Depreciation and amortization 160,433 161,922 107,155

Gain on disposition of investments — — ( 930 )

Losses (gains), net on disposal of property and equipment 5,866 ( 30,275 ) 661

Loss on extinguishment of debt 15,347 — —

Loss (gain) on extinguishment of debt ( 8,589 ) 15,347 —

Gain on sale of Triton business — ( 81,784 ) —

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Miscellaneous, net 17,575 ( 3,867 ) 8,009

Net cash provided by (used in) operating activities from continuing operations 230,937 355,330 ( 4,484 )

Net cash provided by operating activities from continuing operations 311,423 230,937 355,330

Net cash provided by (used in) operating activities from discontinued operations — 6,063 ( 77,936 )

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Net cash provided by (used in) investing activities from continuing operations ( 66,393 ) ( 2,465,996 ) 55,178

Net cash provided by (used in) investing activities from discontinued operations 10,000 262,244 ( 343 )

Net cash provided by investing activities from discontinued operations — 10,000 262,244

Net investing activities ( 66,393 ) ( 2,455,996 ) 317,422

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Dividends paid on common and preferred stock ( 48,000 ) ( 45,067 ) ( 16,574 )

Repurchase of Class A Common shares — — ( 584 )

Tax payments related to shares withheld for vested stock and RSUs ( 8,872 ) ( 7,174 ) ( 2,881 )

Miscellaneous, net 7,484 ( 56 ) ( 21,754 )

Net cash provided by financing activities from continuing operations 693,475 998,179 1,217,826

Net cash provided by (used in) financing activities from continuing operations ( 327,483 ) 693,475 998,179

Effect of foreign exchange rates on cash, cash equivalents and restricted cash — ( 20 ) 58

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— — — ( 16,574 ) — ( 16,574 )

Repurchase 180,541 Class A Common Shares

— ( 2 ) ( 582 ) — — ( 584 )

Compensation plans:

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Comprehensive income (loss) — — — 122,712 26,210 148,922

Cash dividend:

declared and paid - $ 0.20 per share

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:

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Comprehensive income (loss) — — — 195,902 ( 3,562 ) 192,340

Issuance of preferred stock, net of discount and issuance costs 407,634 — — — — 407,634

Preferred stock dividends, $ 8,000 per share

2,305 — — ( 50,305 ) — ( 48,000 )

Stock warrant — — 279,958 — — 279,958

Compensation plans:

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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.

Nature of Operations — We are a diverse media enterprise, serving audiences and businesses through a portfolio of local television stations and national news and entertainment networks.

All of our businesses provide content and services via digital platforms, including the Internet, smartphones and tablets.

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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.

Our presentation for operating revenues in 2022 includes a new caption titled “Distribution” revenues.

This caption includes amounts that were previously reported within our “Retransmission and carriage” revenue caption and also includes subscription revenues that were previously captured within our “Other” revenue caption.

Amounts previously reported in 2021 and 2020 within these prior revenue captions have been reclassified to conform to the 2022 presentation.

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

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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.

Distribution Revenues — We earn revenues from cable operators, satellite carriers, other multi-channel video programming distributors (collectively "MVPDs"), other online video distributors and subscribers for access rights to our broadcast signals.

These arrangements are generally governed by multi-year contracts and the fees we receive are typically based on the number of subscribers the respective distributor has and the contracted rate per subscriber.

Refer to Note 16.

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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.

Distribution — Our primary source of distribution revenue is from retransmission consent contracts with MVPDs.

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.

Cost of Revenues — 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.

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.

Contract Balances — Timing of revenue recognition may differ from the timing of cash collection from customers.

We record a receivable when revenue is recognized prior to cash receipt, or unearned revenue when cash is collected in advance of revenue being recognized.

We extend credit to customers based upon our assessment of the customer’s financial condition.

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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.

The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services.

The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance.

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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.

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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”).

FCC Repack — In April 2017, the Federal Communications Commission (“FCC”) began a process of reallocating the broadcast spectrum (“repack”).

Specifically, the FCC is requiring certain television stations to change channels and/or modify their transmission facilities.

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.

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.

We recorded a FCC repack receivable for the amount of reimbursable costs due from the FCC, which totaled $ 0.8 million at December 31, 2021.

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.

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Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in our Consolidated Balance Sheets.

Finance leases are included in property and equipment, other current liabilities and other long-term 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.

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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 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.

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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.

Broadcast television stations are subject to the jurisdiction of the 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.

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

Our reporting units are our Local Media and Scripps Networks segments.

Our reporting units are Local Media, Scripps Networks and Nuvyyo.

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

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Numerator (for basic and diluted earnings per share)

Income (loss) from continuing operations, net of tax $ 115,899 $ 153,564 $ ( 1,913 )

Income from continuing operations, net of tax $ 195,902 $ 115,899 $ 153,564

Less income allocated to RSUs ( 3,662 ) ( 1,855 ) ( 3,711 )

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Effect of dilutive securities 4,126 5,652 413

Restricted stock units 941 413 —

Common stock warrant 4,711 — —

Diluted weighted-average shares outstanding 87,346 87,979 81,831

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.

For the years ended December 31, 2022 and 2020, there were 0.1 million and 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.

Following the amendment date, the EPS calculations include the dilutive impact of the common stock warrant .

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.

The guidance was effective for our 2022 annual reporting period and did not 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.

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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.

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.

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 was 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.

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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.

The guidance was effective as of March 12, 2020 and the sunset date of the guidance was deferred to December 31, 2024, 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 evaluate transactions and contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis.

Nuvyyo Acquisition

On January 5, 2022, we acquired Nuvyyo for net cash consideration totaling $ 13.8 million.

Nuvyyo provides consumers DVR product solutions to watch and record free over-the-air HDTV on connected devices.

The final purchase price allocation assigned $ 7.2 million to intangible assets with useful lives ranging from three to five years , $ 7.2 million to goodwill and the remainder was allocated to various working capital and deferred tax liability accounts.

The goodwill, which is not tax deductible, reflects the synergies and increased market penetration expected from combining the operations of Nuvyyo with Scripps.

We allocated the goodwill to our Other segment.

ION Acquisition

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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

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.

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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

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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 results do not include Nuvyyo or KCDO, as the impact of these acquisitions, individually or in the aggregate, is not material to prior year results of operations.

The pro forma information includes the historical results of operations of Scripps 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.

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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.

The pro forma results in 2021 reflect a $ 38.1 million reversal of ION transaction costs incurred that were already captured in the 2020 pro forma results.

Asset Write-Downs and Other Charges and Credits

Income from continuing operations before income taxes was affected by the following:

2022 — Acquisition and related integration costs were $ 1.6 million during 2022.

During 2022, we redeemed $ 59.0 million of the 2027 Senior Notes, $ 26.6 million of the 2029 Senior Notes and $ 85.9 million of the 2031 Senior Notes.

The redemptions resulted in a gain on extinguishment of debt of $ 8.6 million, as the notes were redeemed for total consideration below par value of the notes.

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.

("ION") acquisition, which closed on January 7, 2021.

Restructuring costs totaled $ 9.4 million in 2021 due to the Newsy restructuring plan.

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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.

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.

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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

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.

We file a consolidated federal income tax return, consolidated unitary returns in certain states, other separate state income tax returns for certain of our subsidiary companies, and applicable foreign returns.

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Foreign ( 738 ) 293 ( 551 )

Total deferred income tax provision (benefit) 9,996 66,106 ( 5,965 )

Total deferred income tax provision 12,914 9,996 66,106

Provision for income taxes $ 80,561 $ 71,189 $ 55,456

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We continue to evaluate the Appropriations Act, but do not currently expect it to have a material impact on our income tax provision.

In July and August 2022, the CHIPS and Science Act, (the “CHIPS Act”), and the Inflation Reduction Act of 2022, (the “IRA”), were signed into law.

The IRA introduced a 15% corporate alternative minimum tax, or CAMT, on adjusted financial statement income for corporations with profits in excess of $1 billion, effective for tax years after December 31, 2022.

While further guidance on the implementation of the CAMT is expected, we do not expect it will have a material impact to our 2023 effective tax rate.

We also do not expect that CHIPS will have a material impact.

The IRA also includes a stock buyback excise tax of 1% on share repurchases, which will apply to net stock buybacks after December 31, 2022.

We do not expect this to have a material impact if and when share repurchases are resumed.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

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Increases in tax positions for current years 796 3,164 1,661

Decreases in tax positions for current years — — ( 167 )

Increases (decreases) from lapse in statute of limitations ( 173 ) ( 4,234 ) 114

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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.

At December 31, 2022 and 2021, we had accrued interest related to unrecognized tax benefits of $ 0.9 million and $ 1.5 million, respectively, and penalties of $ 1.2 million and $ 0.9 million, respectively.

We file income tax returns in the U.S., Canada and in various state and local jurisdictions.

We are routinely examined by tax authorities in these jurisdictions.

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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.

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.

At December 31, 2021, we had restricted cash of $ 34.3 million.

The balance reflected restricted cash held in escrow from the KMGH Denver television station building sale, which was received in January 2022.

Investments consisted of the following:

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We have operating leases for office space, data centers and certain equipment.

We also have finance leases for office space.

Our leases have remaining lease terms of 1 year to 36 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, 2022 and 2021 totaled $ 25.9 million and $ 24.3 million, including short-term lease costs of $ 1.7 million and $ 1.8 million, respectively.

Other information related to our operating leases was as follows:

Amortization of the right-of-use asset for our finance lease totaled $ 0.1 million in 2022 and interest expense on the finance lease liability totaled $ 0.2 million in 2022.

Other information related to our leases was as follows:

As of December 31,

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Balance Sheet Information

Operating Leases

Right-of-use assets $ 117,869 $ 124,821

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Operating lease liabilities 106,866 113,892

Finance Leases

Property and equipment, at cost 28,321 —

Accumulated depreciation 69 —

Property and equipment, net 28,252 —

Other current liabilities 426 —

Other liabilities 28,063 —

Weighted Average Remaining Lease Term

Operating leases 8.22 years 8.35 years

Finance leases 35.50 years —

Weighted Average Discount Rate

Operating leases 4.34 % 4.16 %

Finance leases 7.10 % —

For the years ended

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Cash paid for amounts included in the measurement of lease liabilities

Right-of-use assets obtained in exchange for lease obligations 17,835 5,235

Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 were as follows:

Operating cash flows from operating leases $ 24,073 $ 22,477

Operating cash flows from finance leases — —

Financing cash flows from finance leases — —

Right-of-use assets obtained in exchange for new operating lease obligations 6,217 17,835

Right-of-use assets obtained in exchange for new finance lease obligations 28,321 —

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows:

(in thousands) Operating

Leases Finance

2023 $ 28,140 $ 426

2024 24,395 1,302

2025 20,072 1,776

2026 18,016 1,824

2027 15,474 1,875

Thereafter 44,328 92,050

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Net balance as of December 31, 2019 926,945 211,742 85,992 1,224,679

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

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Net balance as of December 31, 2021 905,494 2,007,890 — 2,913,384

Nuvyyo acquisition — — 7,190 7,190

Balance as of December 31, 2022 $ 905,494 $ 2,007,890 $ 7,190 $ 2,920,574

Gross balance as of December 31, 2022 $ 1,122,408 $ 2,028,890 $ 7,190 $ 3,158,488

Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 )

Net balance as of December 31, 2022 $ 905,494 $ 2,007,890 $ 7,190 $ 2,920,574

Other intangible assets consisted of the following:

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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.

Long-Term Debt

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Senior unsecured notes, due in 2031 392,071 477,958

Senior unsecured notes, due in 2031 477,958 500,000

Term loan, due in 2024 284,250 287,250

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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.

Under the Sixth Amendment, we have a $ 400 million revolving credit facility ("Revolving Credit Facility") that matures on 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 %.

The weighted-average interest rate over the period during which we had a drawn revolver balance in 2022 was 4.65 %.

As of December 31, 2022, we had no borrowings under the Revolving Credit Facility.

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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.

As of December 31, 2022 and 2021, the interest rate on the 2028 term loan was 7.13 % and 3.75 %, respectively.

The weighted-average interest rate on the 2028 term loan was 6.42 % and 3.75 % in 2022 and 2021, respectively.

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).

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2027 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.

We may redeem the notes before July 15, 2025, 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.

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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.

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

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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

The authorization currently permits an aggregate principal amount reduction of up to $ 562.6 million and expires on March 1, 2023.

The authorization permits an aggregate principal amount reduction of up to $ 500 million and expires on March 1, 2026.

Our previous debt repurchase authorization was due to expire on March 1, 2023.

Debt Repurchase Transactions

During the first quarter of 2022, we redeemed $ 42.2 million of our 2027 Senior Notes at a weighted-average redemption price equal to 100.61 % of the aggregate principal amount plus accrued and unpaid interest, $ 26.6 million of our 2029 Senior Notes at a weighted-average redemption price equal to 93.59 % of the aggregate principal amount plus accrued and unpaid interest and $ 54.5 million of our 2031 Senior Notes at a weighted-average redemption price equal to 95.73 % of the aggregate principal amount plus accrued and unpaid interest.

The redemptions resulted in a gain on extinguishment of debt of $ 1.2 million, as the notes were redeemed for total consideration below par value of the notes.

During the fourth quarter of 2022, we redeemed $ 16.8 million of our 2027 Senior Notes at a weighted-average redemption price equal to 90.63 % of the aggregate principal amount plus accrued and unpaid interest and $ 31.4 million of our 2031 Senior Notes at a weighted-average redemption price equal to 78.71 % of the aggregate principal amount plus accrued and unpaid interest.

The redemptions resulted in a gain on extinguishment of debt of $ 7.4 million, for a total gain on extinguishment of debt of $ 8.6 million for the year ended December 31, 2022.

During 2022, we made additional principal payments on the 2028 term loan totaling $ 100 million and wrote-off $ 1.1 million of deferred financing costs related to this term loan to interest expense.

On May 15, 2021, we redeemed the $ 400 million outstanding principal amount of our senior unsecured notes that were due to mature in 2025.

The redemption price was 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.

During the fourth quarter of 2021, we redeemed $ 15.4 million of our 2027 Senior Notes at a weighted-average redemption price equal to 103.94 % of the aggregate principal amount plus accrued and unpaid interest and $ 22.0 million of our 2031 Senior Notes at a weighted-average redemption price equal to 101.13 % of the aggregate principal amount plus accrued and unpaid interest.

The redemptions resulted in a loss on extinguishment of debt of $ 1.5 million, for a total loss on extinguishment of debt of $ 15.3 million for the year ended December 31, 2021.

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.

Fair Value Measurement

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Liabilities for uncertain tax positions 14,144 12,280

Finance leases 28,063 —

Other 28,359 30,989

Other liabilities (less current portion) $ 484,059 $ 575,938

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.

Supplemental Cash Flow Information

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Total $ ( 8,669 ) $ 33,528 $ ( 624 )

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.

In addition to the amounts summarized above, amortization of actuarial losses related to our SERPs recognized through other comprehensive income was $ 0.3 million in 2022, 2021 and 2020.

We recognized actuarial gains for our SERPs of $ 3.6 million and $ 0.3 million in 2022 and 2021, respectively, and an actuarial loss of $ 1.0 million in 2020.

Assumptions used in determining the annual retirement plans expense were as follows:

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Prior service cost 352 370 — —

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.

During 2022 and 2021, net actuarial gains decreased our benefit obligation primarily due to a year-over-year increase 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.

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Weighted average discount rate 5.47 % 2.95 % 2.64 %

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.

In 2023, we expect to contribute $ 1.4 million to fund our SERPs.

We have met regulatory funding requirements for our qualified defined benefit pension plan and do not have a mandatory contribution in 2023.

Estimated future benefit payments expected to be paid from the plans for the next ten years are $ 33.3 million in 2023, $ 33.9 million in 2024, $ 34.4 million in 2025, $ 34.7 million in 2026, $ 35.1 million in 2027 and a total of $ 175.9 million for the five years ending 2032.

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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.

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.

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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.

Our 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.

These operations earn revenue primarily through the sale of advertising.