E.W. SCRIPPS Co 10-K

Item 9A. Controls and Procedures The Controls and Procedures required by this item are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1 of this Form 10-K. Item 9B. Other Information None. PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G(3). Information required by Item 10 of Form 10-K relating to directors is incorporated by reference to the material captioned “Election of Directors” in our definitive proxy statement for the Annual Meeting of Shareholders (“Proxy Statement”). Information regarding Section 16(a) compliance is incorporated by reference to the material captioned “Delinquent Section 16 Reports” in the Proxy Statement. We have adopted a code of conduct that applies to all employees, officers and directors of Scripps. We also have a code of ethics for the CEO and Senior Financial Officers that meets the requirements of Item 406 of Regulation S-K and the NASDAQ listing standards. Copies of our codes of ethics are posted on our website at http://www.scripps.com. Information regarding our audit committee financial expert is incorporated by reference to the material captioned “Corporate Governance” in the Proxy Statement. The Proxy Statement will be filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Shareholders. Item 11. Executive Compensation The information required by Item 11 of Form 10-K is incorporated by reference to the material captioned “Compensation Discussion and Analysis” and “Compensation Tables” in the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by Item 12 of Form 10-K is incorporated by reference to the material captioned “Report on the Security Ownership of Certain Beneficial Owners,” “Report on the Security Ownership of Management,” and “Equity Compensation Plan Information” in the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by Item 13 of Form 10-K is incorporated by reference to the materials captioned “Corporate Governance” and “Report on Related Party Transactions” in the Proxy Statement. 24 Item 14. Principal Accounting Fees and Services The information required by Item 14 of Form 10-K is incorporated by reference to the material captioned “Report of the Audit Committee of the Board of Directors” in the Proxy Statement. PART IV Item 15. Exhibits and Financial Statement Schedules Documents filed as part of this report: (a) The Consolidated Financial Statements of The E.W. Scripps Company are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1. The reports of Deloitte & Touche LLP, an Independent Registered Public Accounting Firm, dated February 24, 2023, are filed as part of this Form 10-K. See Index to Consolidated Financial Statement Information at page F-1. (b) There are no supplemental schedules that are required to be filed as part of this Form 10-K. (c) An exhibit index required by this item appears below. Item 16. Form 10-K Summary None. 25 The E.W. Scripps Company Index to Consolidated Financial Statement Schedules Exhibit Number Exhibit Description Form File Number Exhibit Report Date 2.01 Agreement and Plan of Merger by and among The E.W. Scripps Company, Scripps Media, Inc., Scripps Faraday, Inc., ION Media Networks, Inc., and BD ION Equityholder Rep LLC, dated September 23, 2020 8-K/A 001-10701 2.1 9/23/2020 3.01 Amended Articles of Incorporation of The E.W. Scripps Company 8-K 000-16914 99.03 2/17/2009 3.02 Amended and Restated Code of Regulations of The E.W. Scripps Company 8-K 000-16914 10.02 5/10/2007 3.03 Amendment to Amended Articles of Incorporation of The E. W. Scripps Company 8-K 000-16914 3.1 3/11/2015 3.04 Amendment to Articles of Incorporation 8-K 001-10701 4.2 1/4/2021 4.01 Warrant Agreement dated January 7, 2021, by and between The E.W. Scripps Company and Berkshire Hathaway, Inc. 8-K 001-10701 4.1 1/4/2021 4.02 First Amendment to Warrant Agreement dated as of May 14, 2021 8-K 001-10701 4.2 5/14/2021 10.01 The E.W. Scripps Company 2010 Long-Term Incentive Plan (Amended and Restated as of May 6, 2019) 10-K 001-10701 10.01 12/31/2019 10.02 Amendment No. 1 to The E.W. Scripps Company 2010 Long-Term Incentive Plan 10-Q 000-16914 10.02 9/30/2017 10.03 Form of Independent Director Nonqualified Stock Option Agreement 8-K 000-16914 10.03B 2/9/2005 10.04 The E.W. Scripps Company Executive Annual Incentive Plan 10-K 001-10701 10.04 12/31/2019 10.05 Scripps Executive Severance and Change in Control Plan (Effective as of February 25, 2020) * 001-10701 10.05 12/31/2022 10.06 Second Amended and Restated Scripps Family Agreement SC 13D/A 005-43473 99.1 4/5/2021 10.07 1997 Deferred Compensation and Stock Plan for Directors, as amended 8-K 000-16914 10.61 5/8/2008 10.08 Scripps Supplemental Executive Retirement Plan as Amended and Restated effective February 23, 2015 10-Q 000-16914 10.10 9/30/2017 10.09 Employment Agreement between the Company and Adam P. Symson 8-K 001-10701 10.1 8/2/2022 10.10 Scripps Executive Deferred Compensation Plan, Amended and Restated as of February 23, 2015 10-Q 000-16914 10.14 9/30/2017 10.11 The E.W. Scripps Company Restricted Share Unit Agreement (Non-Employee Directors) 10-Q 000-16914 10.15 9/30/2017 10.12 Employee Restricted Share Unit Agreement 10-Q 000-16914 10.16 9/30/2017 10.13 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 8-K 000-16914 10.1 4/20/2017 10.16 Indenture dated as of April 28, 2017 8-K 000-16914 10.1 4/28/2017 10.17 Third Amended and Restated Credit Agreement dated as of April 28, 2017 (as amended by the First Amendment, dated as of October 2, 2017, the Second Amendment, dated as of April 3, 2018, the Third Amendment, dated as of November 20, 2018 and the Fourth Amendment, dated as of May 1, 2019, the Fifth Amendment, dated as of December 18, 2019 and the Sixth Amendment, dated as of January 7, 2021) 8-K 001-10701 10.1 1/4/2021 10.18 Indenture dated as of July 26, 2019 8-K 001-10701 10.1 7/26/2019 10.19 Secured Senior Notes Indenture dated as of December 30, 2020 8-K 001-10701 10.1 12/30/2020 10.20 Unsecured Senior Notes Indenture dated as of December 30, 2020 8-K 001-10701 10.2 12/30/2020 10.21 Securities Purchase Agreement, by and between The E.W. Scripps Company and Berkshire Hathaway, Inc., dated September 23, 2020 8-K 001-10701 10.2 9/23/2020 10.22 Registration Rights Agreement dated January 7, 2021, by and between The E.W. Scripps Company and Berkshire Hathaway, Inc. 8-K 001-10701 10.3 1/4/2021 14 The E.W. 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 * 23 Consent of Independent Registered Public Accounting Firm * 31(a) Section 302 Certifications * 31(b) Section 302 Certifications * 32(a) Section 906 Certifications * 32(b) Section 906 Certifications * 101.INS iXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document * 101.SCH Inline XBRL Taxonomy Extension Schema Document * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document * 26 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document * 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101) * * - As filed herewith 27 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE E. W. SCRIPPS COMPANY Dated: February 24, 2023 By: /s/ Adam P. Symson Adam P. Symson President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities indicated, on February 24, 2023. Signature Title /s/ Adam P. Symson President and Chief Executive Officer Adam P. Symson (Principal Executive Officer) /s/ Jason Combs Executive Vice President and Chief Financial Officer Jason Combs (Principal Financial Officer) /s/ Daniel W. Perschke Vice President, Controller Daniel W. Perschke (Principal Accounting Officer) /s/ Marcellus W. Alexander, Jr. Director Marcellus W. Alexander, Jr. /s/ Charles L. Barmonde Director Charles L. Barmonde /s/ Kelly P. Conlin Director Kelly P. Conlin /s/ Lauren R. Fine Director Lauren R. Fine /s/ John W. Hayden Director John W. Hayden /s/ Burton Jablin Director Burton Jablin /s/ Anne M. La Dow Director Anne M. La Dow /s/ Leigh Radford Director Leigh Radford /s/ R. Michael Scagliotti Director R. Michael Scagliotti /s/ Kim Williams Chair of the Board of Directors Kim Williams 28 The E.W. Scripps Company Index to Consolidated Financial Statement Information Item No. Page 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations F- 2 2. Quantitative and Qualitative Disclosures About Market Risk F- 14 3. Controls and Procedures (Including Management’s Report on Internal Control Over Financial Reporting) F- 14 4. Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 16 5. Consolidated Balance Sheets F- 19 6. Consolidated Statements of Operations F- 20 7. Consolidated Statements of Comprehensive Income (Loss) F- 21 8. Consolidated Statements of Cash Flows F- 22 9. Consolidated Statements of Equity F- 23 10. Notes to Consolidated Financial Statements F- 24 F-1 Management’s Discussion and Analysis of Financial Condition and Results of Operations The Consolidated Financial Statements and Notes to Consolidated Financial Statements are the basis for our discussion and analysis of financial condition and results of operations. You should read this discussion in conjunction with those financial statements. This section of the Form 10-K omits discussion of year-to-year comparisons between 2021 and 2020, which may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our 2021 Form 10-K. Forward-Looking Statements Our Annual Report on Form 10-K contains certain forward-looking statements related to the Company's businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. Such forward-looking statements are made as of the date of this document and should be evaluated with the understanding of their inherent uncertainty. A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors.” The Company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made. Executive Overview The E.W. Scripps Company (“Scripps”) is a diverse media enterprise 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 F-2 $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. 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. 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 The trends and underlying economic conditions affecting operating performance and future prospects differ for each of our business segments. Accordingly, you should read the following discussion of our consolidated results of operations in conjunction with the discussion of the operating performance of our individual business segments that follows. Consolidated Results of Operations Consolidated results of operations were as follows: For the years ended December 31, (in thousands) 2022 Change 2021 Change 2020 Operating revenues $ 2,453,215 7.4 % $ 2,283,532 22.9 % $ 1,857,478 Cost of revenues, excluding depreciation and amortization (1,233,769) 11.5 % (1,106,226) 19.0 % (929,748) Selling, general and administrative expenses, excluding depreciation and amortization (623,161) 4.7 % (595,105) 19.6 % (497,748) Acquisition and related integration costs (1,642) (40,373) (18,678) Restructuring costs — (9,436) — Depreciation and amortization of intangible assets (160,433) (161,922) (107,155) Gains (losses), net on disposal of property and equipment (5,866) 30,275 (661) Operating income 428,344 400,745 303,488 Interest expense (161,130) (165,164) (92,994) 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 — Losses on stock warrant — (99,118) — Miscellaneous, net (1,953) (15,469) 2,914 Income from continuing operations before income taxes 276,463 187,088 209,020 Provision for income taxes (80,561) (71,189) (55,456) 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. F-3 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 $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 $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 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 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. In 2021, we recognized an $81.8 million pre-tax gain from the disposition of the Triton business. The transaction closed on March 31, 2021 for total net proceeds of $225 million. In 2021, we incurred a $99.1 million non-cash charge related to our outstanding common stock warrant. The warrant obligation was being marked-to-market each reporting period with the increase in our common stock price being the significant contributor to a higher valuation. Following an amendment to the common stock warrant agreement on May 14, 2021, the fair value of the warrant was reclassified to equity and is 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 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 F-4 recorded in 2021 related to preferred stock issuance costs and unrealized losses on mark-to-market adjustments recorded on the common stock warrant issued in connection with the ION acquisition. Discontinued Operations Discontinued operations reflect the historical results of our Stitcher operations. During the second quarter of 2020, our Board of Directors approved the sale of our Stitcher podcasting business and we signed a definitive agreement for its sale on July 10, 2020. The transaction closed on October 16, 2020. Business Segment Results — As discussed in the Notes to Consolidated Financial Statements, our chief operating decision maker evaluates the operating performance of our business segments using a measure called segment profit. Segment profit excludes interest, defined benefit pension plan amounts, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America. Items excluded from segment profit generally result from decisions made in prior periods or from decisions made by corporate executives rather than the managers of the business segments. Depreciation and amortization charges are the result of decisions made in prior periods regarding the allocation of resources and are therefore excluded from the measure. Generally, our corporate executives make financing, tax structure and divestiture decisions. Excluding these items from measurement of our business segment performance enables us to evaluate business segment operating performance based upon current economic conditions and decisions made by the managers of those business segments in the current period. Our respective business segment results reflect the impact of intercompany carriage agreements between our local broadcast television stations and our national networks. We also allocate a portion of certain corporate costs and expenses, including 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. F-5 Information regarding the operating performance of our business segments and a reconciliation of such information to the Consolidated Financial Statements is as follows: For the years ended December 31, (in thousands) 2022 Change 2021 Change 2020 Segment operating revenues: Local Media $ 1,494,357 13.3 % $ 1,319,468 (11.3) % $ 1,488,237 Scripps Networks 961,242 1.0 % 951,883 309,076 Other 14,628 (45.7) % 26,924 (63.1) % 73,010 Intersegment eliminations (17,012) 15.4 % (14,743) 14.8 % (12,845) Total operating revenues $ 2,453,215 7.4 % $ 2,283,532 22.9 % $ 1,857,478 Segment profit (loss): Local Media $ 386,369 44.1 % $ 268,140 (39.6) % $ 444,243 Scripps Networks 310,336 (20.3) % 389,278 28,324 Other (18,140) 359 (98.0) % 18,173 Shared services and corporate (82,280) 8.9 % (75,576) 24.4 % (60,758) Acquisition and related integration costs (1,642) (40,373) (18,678) Restructuring costs — (9,436) — Depreciation and amortization of intangible assets (160,433) (161,922) (107,155) Gains (losses), net on disposal of property and equipment (5,866) 30,275 (661) Interest expense (161,130) (165,164) (92,994) 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 — Losses on stock warrant — (99,118) — Miscellaneous, net (1,953) (15,469) 2,914 Income from continuing operations before income taxes $ 276,463 $ 187,088 $ 209,020 Local Media — Our Local Media segment includes our 61 local broadcast stations and their related digital operations. It is comprised of 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates. We also have 12 CW affiliates - four on full power stations and eight on multicast; five independent stations and 10 additional low power stations. Our Local Media segment earns revenue primarily from the sale of advertising to local, national and political advertisers and retransmission fees received from cable operators, telecommunication companies, satellite carriers and over-the-top virtual MVPDs. National television networks offer affiliates a variety of programming and sell the majority of advertising within those programs. In addition to network programs, we broadcast internally produced local and national programs, syndicated programs, sporting events and other programs of interest in each station's market. News is the primary focus of our locally-produced programming. The operating performance of our Local Media group is most affected by local and national economic conditions, particularly conditions within the services and automotive categories, and by the volume of advertising purchased by campaigns for elective office and political issues. The demand for political advertising is significantly higher in the third and fourth quarters of even-numbered years. F-6 Operating results for our Local Media segment were as follows: For the years ended December 31, (in thousands) 2022 Change 2021 Change 2020 Segment operating revenues: Core advertising $ 626,095 (5.7) % $ 663,864 8.9 % $ 609,537 Political 198,519 22,693 (91.5) % 266,683 Distribution 655,499 6.2 % 617,305 3.8 % 594,509 Other 14,244 (8.7) % 15,606 (10.9) % 17,508 Total operating revenues 1,494,357 13.3 % 1,319,468 (11.3) % 1,488,237 Segment costs and expenses: Employee compensation and benefits 425,840 (1.9) % 433,989 (3.1) % 447,669 Programming 481,712 9.8 % 438,719 8.2 % 405,604 Other expenses 200,436 12.2 % 178,620 (6.3) % 190,721 Total costs and expenses 1,107,988 5.4 % 1,051,328 0.7 % 1,043,994 Segment profit $ 386,369 44.1 % $ 268,140 (39.6) % $ 444,243 On December 30, 2020, we completed the sale of our WPIX television station. 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 Revenues 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 $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. 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 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. F-7 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. television home through free over-the-air broadcast, cable/satellite, connected TV and digital distribution. Our Scripps Networks group earns revenue primarily through the sale of advertising. The advertising received by our national networks can be subject to seasonal and cyclical variations and is most impacted by national economic conditions. Operating results for our Scripps Networks segment were as follows: For the years ended December 31, (in thousands) 2022 Change 2021 Change 2020 Total operating revenues $ 961,242 1.0 % $ 951,883 $ 309,076 Segment costs and expenses: Employee compensation and benefits 120,202 16.0 % 103,624 87.3 % 55,330 Programming 342,835 18.8 % 288,484 137,305 Other expenses 187,869 10.2 % 170,497 93.5 % 88,117 Total costs and expenses 650,906 15.7 % 562,605 280,752 Segment profit $ 310,336 (20.3) % $ 389,278 $ 28,324 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 Revenues 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. 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 $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 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. F-8 Shared services and corporate We centrally provide certain services to our business segments. Such services include accounting, tax, cash management, procurement, human resources, employee benefits and information technology. The business segments are allocated costs for such services at amounts agreed upon by management. Such allocated costs may differ from amounts that might be negotiated at arms-length. Costs for such services that are not allocated to the business segments are included in shared services and corporate costs. Shared services and corporate also includes unallocated corporate costs, such as costs associated with being a public company. Shared services and corporate expenses were up year-over-year with $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 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. Cash Flows For the years ended December 31, (in thousands) 2022 2021 Net cash provided by operating activities $ 311,423 $ 237,000 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) Decrease in cash, cash equivalents and restricted cash $ (82,453) $ (1,525,541) Cash flows from operating activities 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 $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. Capital expenditures totaled $45.8 million in 2022 and $60.7 million in 2021. Cash flows from financing activities 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. F-9 Debt On January 7, 2021, we entered into the Sixth Amendment to the Third Amended Restated Credit Agreement ("Sixth Amendment"). 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. The annual required principal payments on these term loans total $18.6 million and the earliest maturity date for any of the loans is October of 2024. As of December 31, 2022, we also have $1.3 billion of senior notes outstanding. 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 $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 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 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. Equity With the closing of the ION acquisition, we entered into a Securities Purchase Agreement with Berkshire Hathaway Inc., ("Berkshire Hathaway"), pursuant to which Berkshire Hathaway provided $600 million of financing in exchange for 6,000 Series A Preferred Shares of the Company. The Preferred Shares, having a face value of $100,000 per share, are perpetual and will be redeemable at the option of the Company beginning on the fifth anniversary of issuance, and redeemable at the option of the holders in the event of a Change of Control (as defined in the terms of the Preferred Shares), in each case at a redemption price of 105% of the face value, plus accrued and unpaid dividends (whether or not declared). Preferred stock dividends 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. Under the terms of the Preferred Shares, we are prohibited from paying dividends on and repurchasing our common shares until all Preferred Shares are redeemed. F-10 Contractual Obligations The following table summarizes contractual cash obligations as of December 31, 2022: Less than Years Years Over (in thousands) 1 Year 2 & 3 4 & 5 5 Years Total Long-term debt: (a) Principal amounts $ 18,612 $ 312,474 $ 1,155,268 $ 1,434,427 $ 2,920,781 Interest on debt 174,891 323,808 212,922 85,911 797,532 Programming: (b) Program licenses, network affiliations and other programming commitments 793,599 1,270,457 403,542 33,693 2,501,291 Employee compensation and benefits: Deferred compensation and other post-employment benefits 1,302 2,884 2,833 19,542 26,561 Employment and talent contracts (c) 92,084 84,444 6,216 2 182,746 Pension obligations (d) 1,411 13,911 30,728 5,450 51,500 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 Total contractual cash obligations $ 1,173,418 $ 2,100,685 $ 1,852,669 $ 1,715,465 $ 6,842,237 (a) — Refer to Note 11. 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. Licensed programming includes both programs that have been delivered and are available for telecast and programs that have not yet been produced. It also includes payments for our broadcast television station network affiliation agreements and Scripps Networks carriage agreements with local television broadcasters. If the programs are not produced, our commitments would generally expire without obligation. Fixed fee amounts payable under our network affiliation and carriage agreements are also included. Variable amounts in excess of the contractual amounts payable to the networks and broadcasters are not included in the amounts above. (c) — We secure on-air talent for our television stations through multi-year talent agreements. Certain agreements may be terminated under certain circumstances or at certain dates prior to expiration. We expect our employment and talent contracts will be renewed or replaced with similar agreements upon their expiration. Amounts due under the contracts, assuming the contracts are not terminated prior to their expiration, are included in the contractual obligations table. (d) — Contractual commitments summarized include payments to meet minimum funding requirements of our defined benefit pension plans and estimated benefit payments for our unfunded SERPs. Contractual pension obligations reflect anticipated minimum statutory pension contributions as of December 31, 2022, based upon pension funding regulations in effect at the time and our current pension assumptions regarding discount rates and returns on plan assets. Actual funding requirements may differ from amounts presented due to changes in discount rates, returns on plan assets or pension funding regulations that are in effect at the time. Payments for the SERPs have been estimated over a ten-year period. Accordingly, the amounts in the "over 5 years" column include estimated payments for the periods of 2028-2032. While benefit payments under these plans are expected to continue beyond 2032, we do not believe it is practicable to estimate payments beyond this period. (e) — Refer to Note 9. Leases of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K). (f) — We obtain audience ratings, market research and certain other services under multi-year agreements. These agreements are generally not cancelable prior to expiration of the service agreement. We may also enter into contracts with certain vendors and suppliers. These contracts typically do not require the purchase of fixed or minimum quantities and generally may be terminated at any time without penalty. Included in the table are purchase orders placed as of December 31, 2022. The table does not include any reserves for income taxes recognized because we are unable to reasonably predict the ultimate amount or timing of settlement of our reserves for income taxes. As of December 31, 2022, our reserves for income taxes totaled $14.1 million, which is reflected as a long-term liability in our Consolidated Balance Sheet. F-11 Critical Accounting Policies and Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make a variety of decisions that affect reported amounts and related disclosures, including the selection of appropriate accounting principles and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience, actuarial studies and other assumptions. We are committed to incorporating accounting principles, assumptions and estimates that promote the representational faithfulness, verifiability, neutrality and transparency of the accounting information included in the financial statements. Note 1 to our Consolidated Financial Statements describes the significant accounting policies we have selected for use in the preparation of our financial statements and related disclosures. We believe the following to be the most critical accounting policies, estimates and assumptions affecting our reported amounts and related disclosures. Acquisitions — The accounting for a business combination requires tangible and intangible assets acquired and liabilities assumed to be recorded at estimated fair value. With the assistance of third party appraisals, we generally determine fair values using comparisons to market transactions and a discounted cash flow analysis. The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset and the expected period of time over which those cash flows will occur and to determine an appropriate discount rate. Changes in such estimates could affect the amounts allocated to individual identifiable assets. While we believe our assumptions are reasonable, if different assumptions were made, the amount allocated to intangible assets could differ substantially from the reported amounts. Goodwill and Other Indefinite-Lived Intangible Assets — Goodwill for each reporting unit must be tested for impairment on an annual basis or when events occur or circumstances change that would indicate the fair value of a reporting unit is below its carrying value. If the fair value of the reporting unit is less than its carrying value, we would be required to record an impairment charge. The following is goodwill by reporting unit as of December 31, 2022: (in thousands) Local Media $ 905,494 Scripps Networks 2,007,890 Other 7,190 Total goodwill $ 2,920,574 For our annual goodwill impairment testing, we utilized the quantitative approach for performing our test. Under that approach, we determine the fair value of our reporting unit generally using market data, appraised values and discounted cash flow analyses. The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the business and the period of time over which those cash flows will occur, as well as to determine an appropriate discount rate. The determination of the discount rate is based on a cost of capital model, using a risk-free rate, adjusted by a stock-beta adjusted risk premium and a size premium. While we believe the estimates and judgments used in determining the fair values were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates, could produce a different estimate of fair value. The estimate of fair value assumes certain growth of our businesses, which, if not achieved, could impact the fair value and possibly result in an impairment of the goodwill. Our annual impairment testing for goodwill indicated that the fair value of our Local Media reporting unit exceeded its carrying value by 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. At December 31, 2022, the carrying value of our television FCC licenses was $780 million, which are tested for impairment annually, or more frequently if events or changes in circumstances indicate that they might be impaired. We compare the estimated fair value of each individual FCC license to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. Fair value is estimated for our FCC licenses using a method referred to as the “Greenfield Approach”. This approach uses a discounted cash flow model that incorporates multiple assumptions relating to the future prospects of each individual FCC license, including market revenues, long-term growth projections, and estimated cash flows based on market size and station type. The fair value of the FCC license is sensitive to each of the assumptions used in the Greenfield Approach and a change in any individual assumption could result in the fair value being less than the carrying F-12 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. Pension Plans — We sponsor a noncontributory defined benefit pension plan as well as non-qualified Supplemental Executive Retirement Plans ("SERPs"). Both the defined benefit plan and the SERPs have frozen the accrual of future benefits. The measurement of our pension obligation and related expense is dependent on a variety of estimates, including: discount rates; expected long-term rate of return on plan assets; and employee turnover, mortality and retirement ages. We review these assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when appropriate. In accordance with accounting principles, we record the effects of these modifications currently or amortize them over future periods. We consider the most critical of our pension estimates to be our discount rate and the expected long-term rate of return on plan assets. The assumptions used in accounting for our defined benefit pension plan for 2022 and 2021 are as follows: 2022 2021 Discount rate for expense 2.95 % 2.64 % Discount rate for obligation 5.47 % 2.95 % Long-term rate of return on plan assets for expense 5.50 % 5.50 % The discount rate used to determine our future pension obligation is based upon a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans. The rate is determined each year at the plan measurement date and affects the succeeding year’s pension cost. Discount rates can change from year to year based on economic conditions that impact corporate bond yields. A 50 basis point increase or decrease in the discount rate would decrease or increase our pension obligation as of December 31, 2022 by approximately $22.3 million and decrease or increase 2023 pension expense by approximately $1.0 million. Under our asset allocation strategy, approximately 55% of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 45% of plan assets are invested in equity securities and other return-seeking assets. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed. A decrease in the expected rate of return on plan assets increases pension expense. A 50 basis point change in the 2023 expected long-term rate of return on plan assets would increase or decrease our 2023 pension expense by approximately $2.3 million. We had unrecognized accumulated other comprehensive loss related to net actuarial losses for our pension plan and SERPs of $102.4 million at December 31, 2022. Unrealized actuarial gains and losses result from deferred recognition of differences between our actuarial assumptions and actual results. In 2022, we had an actuarial loss of $9.1 million. Recent Accounting Guidance Refer to Note 2. Recently Adopted and Issued Accounting Standards of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion. F-13 Quantitative and Qualitative Disclosures about Market Risk Earnings and cash flow can be affected by, among other things, economic conditions and interest rate changes. We are also exposed to changes in the market value of our investments. Our objectives in managing interest rate risk are to limit the impact of interest rate changes on our earnings and cash flows, and to reduce overall borrowing costs. We may use derivative financial instruments to modify exposure to risks from fluctuations in interest rates. In accordance with our policy, we do not use derivative instruments unless there is an underlying exposure, and we do not hold or enter into financial instruments for speculative trading purposes. We are subject to interest rate risk associated with our credit agreement, as borrowings bear interest at LIBOR plus respective fixed margin spreads or spreads determined relative to our Company’s leverage ratio. Accordingly, the interest we pay on our borrowings is dependent on interest rate conditions and the timing of our financing needs. 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: As of December 31, 2022 As of December 31, 2021 (in thousands) Cost Basis Fair Value Cost Basis Fair Value Financial instruments subject to interest rate risk: Revolving credit facility $ — $ — $ — $ — Senior secured notes, due in 2029 523,356 426,535 550,000 553,377 Senior unsecured notes, due in 2027 425,667 384,697 484,655 508,282 Senior unsecured notes, due in 2031 392,071 316,107 477,958 488,712 Term loan, due in 2024 284,250 279,631 287,250 286,999 Term loan, due in 2026 736,437 725,850 744,049 744,168 Term loan, due in 2028 559,000 545,025 667,000 667,740 Long-term debt, including current portion $ 2,920,781 $ 2,677,845 $ 3,210,912 $ 3,249,278 Financial instruments subject to market value risk: Investments held at cost $ 20,890 (a) $ 15,431 (a) (a) Includes securities that do not trade in public markets, thus the securities do not have readily determinable fair values. We estimate the fair value of these securities approximates their carrying value. Controls and Procedures Evaluation of Disclosure Controls and Procedures The effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was evaluated as of the date of the financial statements. This evaluation was carried out under the supervision of and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures are effective. There were no changes to the Company's internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. F-14 Management’s Report on Internal Control Over Financial Reporting Scripps’ management is responsible for establishing and maintaining adequate internal controls designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that: 1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; 2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors of the Company; and 3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error, collusion and the improper overriding of controls by management. Accordingly, even effective internal control can only provide reasonable, but not absolute assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time. As required by Section 404 of the Sarbanes Oxley Act of 2002, management assessed the effectiveness of The E.W. Scripps Company and subsidiaries' (the “Company”) internal control over financial reporting as of December 31, 2022. Management’s assessment is based on the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2022. The Company’s independent registered public accounting firm has issued an attestation report on our internal control over financial reporting as of December 31, 2022. This report appears on page F-18. Date: February 24, 2023 BY: /s/ Adam P. Symson Adam P. Symson President and Chief Executive Officer /s/ Jason Combs Jason Combs Executive Vice President and Chief Financial Officer F-15 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of The E.W. Scripps Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The E.W. Scripps Company and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows and equity, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit 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 Scripps Networks’ Goodwill — Refer to Note 10 to the financial statements Critical Audit Matter Description 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. F-16 How the Critical Audit Matter Was Addressed in the Audit 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 Cincinnati, Ohio February 24, 2023 We have served as the Company’s auditor since at least 1959; however, an earlier year could not be reliably determined. F-17 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of The E.W. Scripps Company Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of The E.W. Scripps Company and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 24, 2023, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Cincinnati, Ohio February 24, 2023 F-18 The E.W. Scripps Company Consolidated Balance Sheets As of December 31, (in thousands, except share data) 2022 2021 Assets Current assets: Cash and cash equivalents $ 18,027 $ 66,223 Restricted cash — 34,257 Accounts receivable (less allowances — $ 4,963 and $ 4,256 ) 600,098 572,525 FCC repack receivable — 773 Miscellaneous 25,816 28,503 Total current assets 643,941 702,281 Investments 23,144 21,632 Property and equipment 458,600 456,945 Operating lease right-of-use assets 117,869 124,821 Goodwill 2,920,574 2,913,384 Other intangible assets 1,821,254 1,910,311 Programming 427,962 510,316 Miscellaneous 17,661 18,624 Total Assets $ 6,431,005 $ 6,658,314 Liabilities and Equity Current liabilities: Accounts payable $ 82,710 $ 83,931 Unearned revenue 18,183 20,000 Current portion of long-term debt 18,612 18,612 Accrued liabilities: Employee compensation and benefits 44,590 68,545 Programming liability 167,131 180,269 Accrued interest 31,087 34,973 Miscellaneous 52,891 50,667 Other current liabilities 69,801 54,883 Total current liabilities 485,005 511,880 Long-term debt (less current portion) 2,853,793 3,129,393 Deferred income taxes 370,457 356,777 Operating lease liabilities 106,866 113,892 Other liabilities (less current portion) 484,059 575,938 Commitments and contingencies (Note 17) Equity: Preferred stock, $ 0.01 par — authorized: 25,000,000 shares; none outstanding — — Preferred stock — Series A, $ 100,000 par; 6,000 shares issued and outstanding 412,244 409,939 Common stock, $ 0.01 par: Class A — authorized: 240,000,000 shares; issued and outstanding: 2022 - 71,649,335 shares; 2021 - 70,646,007 shares 717 707 Voting — authorized: 60,000,000 shares; issued and outstanding: 2022 - 11,932,722 shares; 2021 - 11,932,722 shares 119 119 Total preferred and common stock 413,080 410,765 Additional paid-in capital 1,444,501 1,428,460 Retained earnings 350,715 205,118 Accumulated other comprehensive loss, net of income taxes ( 77,471 ) ( 73,909 ) Total equity 2,130,825 1,970,434 Total Liabilities and Equity $ 6,431,005 $ 6,658,314 See Notes to Consolidated Financial Statements. F-19 The E.W. Scripps Company Consolidated Statements of Operations For the years ended December 31, (in thousands, except per share data) 2022 2021 2020 Operating Revenues: Advertising $ 1,757,389 $ 1,614,814 $ 1,187,581 Distribution 660,317 620,454 592,514 Other 35,509 48,264 77,383 Total operating revenues 2,453,215 2,283,532 1,857,478 Operating Expenses: Cost of revenues, excluding depreciation and amortization 1,233,769 1,106,226 929,748 Selling, general and administrative expenses, excluding depreciation and amortization 623,161 595,105 497,748 Acquisition and related integration costs 1,642 40,373 18,678 Restructuring costs — 9,436 — Depreciation 61,943 58,357 50,416 Amortization of intangible assets 98,490 103,565 56,739 Losses (gains), net on disposal of property and equipment 5,866 ( 30,275 ) 661 Total operating expenses 2,024,871 1,882,787 1,553,990 Operating income 428,344 400,745 303,488 Interest expense ( 161,130 ) ( 165,164 ) ( 92,994 ) 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 — Losses on stock warrant — ( 99,118 ) — Miscellaneous, net ( 1,953 ) ( 15,469 ) 2,914 Income from continuing operations before income taxes 276,463 187,088 209,020 Provision for income taxes 80,561 71,189 55,456 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 attributable to the shareholders of The E.W. Scripps Company $ 145,597 $ 73,340 $ 269,333 Net income per basic share of common stock attributable to the shareholders of The E.W. Scripps Company: 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 per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company: 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 Weighted average shares outstanding: Basic 83,220 82,327 81,418 Diluted 87,346 87,979 81,831 See Notes to Consolidated Financial Statements. 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. F-20 The E.W. Scripps Company Consolidated Statements of Comprehensive Income (Loss) For the years ended December 31, (in thousands) 2022 2021 2020 Net income $ 195,902 $ 122,712 $ 269,333 Changes in defined benefit pension plans, net of tax of $( 1,158 ), $ 8,086 , and $( 328 ) ( 3,614 ) 26,076 ( 1,055 ) Other, net of tax of $ 17 , $ 42 and $( 23 ) 52 134 ( 75 ) Total comprehensive income attributable to preferred and common stockholders $ 192,340 $ 148,922 $ 268,203 See Notes to Consolidated Financial Statements. F-21 The E.W. Scripps Company Consolidated Statements of Cash Flows For the years ended December 31, (in thousands) 2022 2021 2020 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 Losses (gains), net on disposal of property and equipment 5,866 ( 30,275 ) 661 Loss (gain) on extinguishment of debt ( 8,589 ) 15,347 — Gain on sale of Triton business — ( 81,784 ) — Losses on stock warrant — 99,118 — Programming assets and liabilities ( 27,144 ) ( 59,233 ) ( 16,966 ) Restructuring impairment charges — 7,050 — Deferred income taxes 12,915 9,725 80,641 Stock and deferred compensation plans 19,461 25,963 17,859 Pension contributions, net of income/expense ( 29,196 ) ( 24,707 ) ( 29,687 ) Other changes in certain working capital accounts, net ( 35,800 ) ( 4,221 ) 34,094 Miscellaneous, net 17,575 ( 3,867 ) 8,009 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 ) Net operating activities 311,423 237,000 277,394 Cash Flows from Investing Activities: Acquisitions, net of cash acquired ( 13,797 ) ( 2,677,755 ) ( 7,103 ) Proceeds from sale of Triton Digital, net of cash disposed — 224,990 — Proceeds from sale of WPIX television station — — 83,738 Additions to property and equipment ( 45,792 ) ( 60,744 ) ( 44,949 ) Acquisition of intangible assets — ( 430 ) ( 1,883 ) Purchase of investments ( 7,373 ) ( 12,030 ) ( 8,309 ) Proceeds from FCC repack 2,670 20,062 28,365 Miscellaneous, net ( 2,101 ) 39,911 5,319 Net cash provided by (used in) investing activities from continuing operations ( 66,393 ) ( 2,465,996 ) 55,178 Net cash provided by investing activities from discontinued operations — 10,000 262,244 Net investing activities ( 66,393 ) ( 2,455,996 ) 317,422 Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 800,000 1,050,000 Proceeds from issuance of preferred stock — 600,000 — Payments on long-term debt ( 278,095 ) ( 580,999 ) ( 10,612 ) Premium paid on debt extinguishment — ( 11,106 ) — Payments for capitalized preferred stock issuance costs — ( 11,526 ) — Payments on financing costs — ( 50,597 ) — Dividends paid on common and preferred stock ( 48,000 ) ( 45,067 ) ( 16,574 ) 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 (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 Increase (decrease) in cash, cash equivalents and restricted cash ( 82,453 ) ( 1,525,541 ) 1,593,053 Cash, cash equivalents and restricted cash: Beginning of year 100,480 1,626,021 32,968 End of year $ 18,027 $ 100,480 $ 1,626,021 Supplemental Cash Flow Disclosures Interest paid $ 150,796 $ 126,257 $ 82,532 Income taxes paid (refunded) $ 61,744 $ 102,473 $ ( 13,222 ) Non-cash investing and financing information Capital expenditures included in accounts payable $ 2,254 $ 4,145 $ 2,511 Accrued debt issuance costs $ — $ — $ 45,243 See Notes to Consolidated Financial Statements. F-22 The E.W. Scripps Company Consolidated Statements of Equity (in thousands, except share data) Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) ("AOCI") Total Equity As of December 31, 2019 $ — $ 810 $ 1,117,095 $ ( 120,981 ) $ ( 98,989 ) $ 897,935 Comprehensive income (loss) — — — 269,333 ( 1,130 ) 268,203 Cash dividend: declared and paid - $ 0.20 per share — — — ( 16,574 ) — ( 16,574 ) Compensation plans: 767,393 net shares issued * — 7 13,694 — — 13,701 As of December 31, 2020 — 817 1,130,789 131,778 ( 100,119 ) 1,163,265 Comprehensive income (loss) — — — 122,712 26,210 148,922 Issuance of preferred stock, net of discount and issuance costs 407,634 — — — — 407,634 Preferred stock dividends, $ 7,511 per share 2,305 — — ( 49,372 ) — ( 47,067 ) Stock warrant — — 279,958 — — 279,958 Compensation plans: 851,090 net shares issued * — 9 17,713 — — 17,722 As of December 31, 2021 409,939 826 1,428,460 205,118 ( 73,909 ) 1,970,434 Comprehensive income (loss) — — — 195,902 ( 3,562 ) 192,340 Preferred stock dividends, $ 8,000 per share 2,305 — — ( 50,305 ) — ( 48,000 ) Compensation plans: 1,003,328 net shares issued * — 10 16,041 — — 16,051 As of December 31, 2022 $ 412,244 $ 836 $ 1,444,501 $ 350,715 $ ( 77,471 ) $ 2,130,825 * Net of tax payments related to shares withheld for vested stock and RSUs of $ 8,872 in 2022, $ 7,174 in 2021 and $ 2,881 in 2020. See Notes to Consolidated Financial Statements. F-23 THE E.W. SCRIPPS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies As used in the Notes to Consolidated Financial Statements, the terms “Scripps,” “Company,” “we,” “our,” or “us” may, depending on the context, refer to The E.W. Scripps Company, to one or more of its consolidated subsidiary companies or to all of them taken as a whole. Nature of Operations — We are a diverse media enterprise, serving audiences and businesses through a portfolio of local television stations and national news and entertainment networks. All of our businesses provide content and services via digital platforms, including the Internet, smartphones and tablets. Our media businesses are organized into the following reportable business segments: Local Media, Scripps Networks and Other. Additional information for our business segments is presented in the Notes to Consolidated Financial Statements. Basis of Presentation — Certain amounts in the prior periods have been reclassified to conform to the current period's presentation. 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. We believe bad debt losses resulting from default by a single customer, or defaults by customers in any depressed region or business sector, would not have a material effect on our financial position, results of operations or cash flows. We derive approximately 72 % of our operating revenues from advertising. Changes in the demand for such services, both nationally and in individual markets, can affect operating results. Use of Estimates — Preparing financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make a variety of decisions that affect the reported amounts and the related disclosures. Such decisions include the selection of accounting principles that reflect the economic substance of the underlying transactions and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience, actuarial studies and other assumptions. Our financial statements include estimates and assumptions used in accounting for our defined benefit pension plans; the periods over which long-lived assets are depreciated or amortized; the fair value of long-lived assets, goodwill and indefinite lived assets; the liability for uncertain tax positions and valuation allowances against deferred income tax assets; the fair value of assets acquired and liabilities assumed in business combinations; and self-insured risks. While we re-evaluate our estimates and assumptions on an ongoing basis, actual results could differ from those estimated at the time of preparation of the financial statements. Consolidation — The Consolidated Financial Statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and variable interest entities ("VIEs") for which we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. Noncontrolling interest represents an owner’s share of the equity in certain of our consolidated entities. All intercompany transactions and account balances have been eliminated in consolidation. Investments in entities over which we have significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by equity method investees. F-24 Nature of Products and Services — The following is a description of principal activities from which we generate revenue. Core Advertising — Core advertising is comprised of sales to local and national customers. The advertising includes a combination of broadcast air time, as well as digital advertising. Pricing of advertising time is based on audience size and share, the demographic of our audiences and the demand for our limited inventory of commercial time. Advertising time is sold through a combination of local and national sales staff and national sales representative firms. Digital revenues are primarily generated from the sale of advertising to local and national customers on our local television websites, smartphone apps, tablet apps and other platforms. Political Advertising — Political advertising is generally sold through our Washington D.C. sales office. Advertising is sold to presidential, gubernatorial, Senate and House of Representative candidates, as well as for state and local issues. It is also sold to political action groups (PACs) or other advocacy groups. 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. Segment Information for further information, including revenue by significant product and service offering. Revenue Recognition — Revenue is measured based on the consideration we expect to be entitled to in exchange for promised goods or services provided to customers, and excludes any amounts collected on behalf of third parties. Revenue is recognized upon transfer of control of promised products or services to customers. Advertising — Advertising revenue is recognized, net of agency commissions, over time primarily as ads are aired or impressions are delivered and any contracted audience guarantees are met. We apply the practical expedient to recognize revenue at the amount we have the right to invoice, which corresponds directly to the value a customer has received relative to our performance. For advertising sold based on audience guarantees, audience deficiency may result in an obligation to deliver additional advertisements to the customer. To the extent that we do not satisfy contracted audience ratings, we record deferred revenue until such time that the audience guarantee has been satisfied. 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 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. Collateral is generally not required from customers. Payment terms may vary by contract type, although our terms generally include a requirement of payment within 30 to 90 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services. F-25 The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience and other currently available evidence. A rollforward of the allowance for doubtful accounts is as follows: (in thousands) January 1, 2020 $ 3,346 Charged to costs and expenses 3,305 Amounts charged off, net ( 3,208 ) Balance as of December 31, 2020 3,443 Charged to costs and expenses 1,987 Amounts charged off, net ( 1,174 ) Balance as of December 31, 2021 4,256 Charged to costs and expenses 1,674 Amounts charged off, net ( 967 ) Balance as of December 31, 2022 $ 4,963 We record unearned revenue when cash payments are received in advance of our performance. We generally require advance payment for advertising contracts with political advertising customers. Unearned revenue totaled $ 18.2 million at December 31, 2022 and is expected to be recognized within revenue over the next 12 months. Unearned revenue totaled $ 20.0 million at December 31, 2021. We recorded $ 16.4 million of revenue in 2022 that was included in unearned revenue at December 31, 2021. Assets Recognized from the Costs to Obtain a Contract with a Customer — We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We apply and use the practical expedient in the revenue guidance to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. This expedient applies to advertising sales commissions since advertising contracts are short-term in nature. Investments — From time to time, we make investments in private companies. Investment securities can be impacted by various market risks, including interest rate risk, credit risk and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term. Such changes could materially affect the amounts reported in our financial statements. We record investments in private companies not accounted for under the equity method at cost, net of impairment write-downs, because no readily determinable market price is available. We regularly review our investments to determine if there has been any other-than-temporary decline in value. These reviews require management judgments that often include estimating the outcome of future events and determining whether factors exist that indicate impairment has occurred. We evaluate, among other factors, the extent to which cost exceeds fair value; the duration of the decline in fair value below cost; and the current cash position, earnings and cash forecasts and near-term prospects of the investee. We reduce the cost basis when a decline in fair value below cost is determined to be other than temporary, with the resulting adjustment charged against earnings. Property and Equipment — Property and equipment is carried at cost less depreciation. We compute depreciation using the straight-line method over estimated useful lives as follows: Buildings and improvements 15 to 45 years Leasehold improvements Shorter of term of lease or useful life Broadcast transmission towers and related equipment 15 to 35 years Other broadcast and program production equipment 3 to 15 years Computer hardware 3 to 5 years Office and other equipment 3 to 10 years F-26 Programming — Programming includes the cost of national television network programming, programming produced by us or for us by independent production companies and programs licensed under agreements with independent producers. Our network affiliation agreements require the payment of affiliation fees to the network. Network affiliation fees consist of pre-determined fixed fees in all cases and variable payments based on a share of retransmission revenues above the fixed fees for some of our agreements. Program licenses principally consist of television series and films. Program licenses generally have fixed terms, limit the number of times we can air the programs and require payments over the terms of the licenses. We record licensed program assets and liabilities when the license period has commenced and the programs are available for broadcast. We do not discount program licenses for imputed interest. We amortize program licenses based upon expected cash flows over the term of the license agreement. The costs of programming produced by us or for us by independent production companies is charged to expense over estimated useful lives based upon expected future cash flows. The realizable value of internal costs incurred for trial footage at Court TV, including employee compensation and benefits, are capitalized and amortized based upon expected future cash flows. All other internal costs to produce daily or live broadcast shows, such as news, sports or daily magazine shows, are expensed as incurred. Progress payments on programs not yet available for broadcast are recorded as deposits within programming assets. Program assets are predominantly monetized as a group on each of our respective national networks, broadcast television stations and digital content offerings. For program assets predominantly monetized within a network or television station group, when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized costs, fair value of the content is aggregated at the group level by considering expected future revenue generation. Estimates of future revenues consider historical airing patterns and future plans for airing content, including any changes in strategy. An impairment charge is recorded if the fair value of a film group is less than the film group’s carrying value. Programming and development costs for programs we have determined will not be produced, are fully expensed in the period the determination is made. For our program assets available for broadcast, estimated amortization for each of the next five years is $ 149.9 million in 2023, $ 106.1 million in 2024, $ 64.8 million in 2025, $ 45.3 million in 2026, $ 23.6 million in 2027 and $ 11.3 million thereafter. Actual amortization in each of the next five years will exceed the amounts currently recorded as program assets available for broadcast, as we will continue to produce and license additional programs. The unamortized balance of program assets are classified as non-current assets in our Consolidated Balance Sheets. Program rights liabilities payable within the next twelve months are included as current liabilities and noncurrent program rights liabilities are included in other noncurrent liabilities. FCC Repack — In April 2017, the Federal Communications Commission (“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. The U.S. Congress passed legislation which provides the FCC with a fund to reimburse all reasonable costs incurred by stations operating under a full power license and a portion of the costs incurred by stations operating under a low power license that are reassigned to new channels. 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. Deferred FCC repack income totaled $ 46.2 million at December 31, 2022 and $ 48.0 million at December 31, 2021. Leases — We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in our Consolidated Balance Sheets. 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. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the implicit rate is not readily determinable for most of our leases, we use our incremental borrowing rate when determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to F-27 the lease payments on a collateralized basis over the term of the lease. The operating lease ROU asset also includes any payments made at or before commencement and is reduced by any lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Goodwill and Other Indefinite-Lived Intangible Assets — Goodwill represents the cost of acquisitions in excess of the acquired businesses’ tangible assets and identifiable intangible assets. FCC licenses represent the value assigned to the broadcast licenses of acquired broadcast television stations. Broadcast television stations are subject to the jurisdiction of the FCC, which prohibits the operation of stations except in accordance with an FCC license. FCC licenses stipulate each station’s operating parameters as defined by channels, effective radiated power and antenna height. FCC licenses are granted for a term of up to eight years , and are renewable upon request. We have never had a renewal request denied and all previous renewals have been for the maximum term. We do not amortize goodwill or our FCC licenses, but we review them for impairment at least annually or any time events occur or conditions change that would indicate it is more likely than not the fair value of a reporting unit is below its carrying value. We perform our annual impairment review during the fourth quarter of each year in conjunction with our annual planning cycle. We also assess, at least annually, whether our FCC licenses, classified as indefinite-lived intangible assets, continue to have indefinite lives. We review goodwill for impairment based upon our reporting units, which are defined as operating segments or groupings of businesses one level below the operating segment level. Reporting units with similar economic characteristics are aggregated into a single unit when testing goodwill for impairment. Our reporting units are 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. Television stations affiliated with national television networks typically have greater profit margins than independent television stations, primarily due to audience recognition of the television station as a network affiliate. We amortize these network affiliation relationships on a straight-line basis over estimated useful lives of 20 years. We amortize customer lists and other intangible assets in relation to their expected future cash flows over estimated useful lives of up to 20 years. Impairment of Long-Lived Assets — We review long-lived assets (primarily property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate the carrying amounts of the assets may not be recoverable. Recoverability is determined by comparing the aggregate forecasted undiscounted cash flows derived from the operation of the assets to the carrying amount of the assets. If the aggregate undiscounted cash flow is less than the carrying amount of the assets, then amortizable intangible assets are written down first, followed by other long-lived assets, to fair value. We determine fair value based on discounted cash flows or appraisals. We report long-lived assets to be disposed of at the lower of carrying amount or fair value less costs to sell. Self-Insured Risks — We are self-insured, up to certain limits, for general and automobile liability, employee health, disability and workers’ compensation claims and certain other risks. Estimated liabilities for unpaid claims totaled $ 10.4 million at December 31, 2022 and $ 10.2 million at December 31, 2021. We estimate liabilities for unpaid claims using actuarial methodologies and our historical claims experience. While we re-evaluate our assumptions and review our claims experience on an ongoing basis, actual claims paid could vary significantly from estimated claims, which would require adjustments to expense. Income Taxes — We recognize deferred income taxes for temporary differences between the tax basis and reported amounts of assets and liabilities that will result in taxable or deductible amounts in future years. We establish a valuation allowance if we believe that it is more likely than not that we will not realize some or all of the deferred tax assets. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or that we expect to take in a tax return. Interest and penalties associated with such tax positions are included in the tax provision. The liability for additional taxes and interest is included in other liabilities in the Consolidated Balance Sheets. Risk Management Contracts — We do not hold derivative financial instruments for trading or speculative purposes and we do not hold leveraged contracts. From time to time, we may use derivative financial instruments to limit the impact of interest rate fluctuations on our earnings and cash flows. F-28 Stock-Based Compensation — We have a Long-Term Incentive Plan (the “Plan”) which is described more fully in Note 18. The Plan provides for the award of incentive and nonqualified stock options, stock appreciation rights, restricted stock units ("RSUs") and unrestricted Class A Common shares and performance units to key employees and non-employee directors. We recognize compensation cost based on the grant-date fair value of the award. We determine the fair value of awards that grant the employee the underlying shares by the fair value of a Class A Common share on the date of the award. Certain awards of RSUs have performance conditions under which the number of shares granted is determined by the extent to which such performance conditions are met (“Performance Shares”). Compensation costs for such awards are measured by the grant-date fair value of a Class A Common share and the number of shares earned. In periods prior to completion of the performance period, compensation costs are based upon estimates of the number of shares that will be earned. Compensation costs are recognized on a straight-line basis over the requisite service period of the award. The impact of forfeitures is recognized as they occur. The requisite service period is generally the vesting period stated in the award. Grants to retirement-eligible employees are expensed immediately and grants to employees who will become retirement eligible prior to the end of the stated vesting period are expensed over such shorter period because stock compensation grants vest upon the retirement eligibility of the employee. Earnings Per Share (“EPS”) — Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our RSUs, are considered participating securities for purposes of calculating EPS. Under the two-class method, we allocate a portion of net income to these participating securities and therefore exclude that income from the calculation of EPS for common stock. We do not allocate losses to the participating securities. The following table presents information about basic and diluted weighted-average shares outstanding: For the years ended December 31, (in thousands) 2022 2021 2020 Numerator (for basic and diluted earnings per share) Income from continuing operations, net of tax $ 195,902 $ 115,899 $ 153,564 Less income allocated to RSUs ( 3,662 ) ( 1,855 ) ( 3,711 ) Less preferred stock dividends ( 50,305 ) ( 49,372 ) — Numerator for basic and diluted earnings per share $ 141,935 $ 64,672 $ 149,853 Denominator Basic weighted-average shares outstanding 83,220 82,327 81,418 Effect of dilutive securities 4,126 5,652 413 Diluted weighted-average shares outstanding 87,346 87,979 81,831 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. 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 . 2. Recently Adopted and Issued Accounting Standards In November 2021, the Financial Accounting Standards Board ("FASB") issued new guidance for entities to provide certain disclosures for material government assistance transactions that are accounted for by applying a grant or contribution accounting model by analogy. The guidance 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. The guidance will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The guidance is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We adopted the new guidance effective January 1, 2022. The adoption of the guidance did not have an impact on our Consolidated Financial Statements. In May 2021, the FASB issued new guidance that clarifies an issuer's accounting for certain modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. Specifically, the guidance provides a "principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense." The guidance 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. The adoption of the guidance did not have an impact on our Consolidated Financial Statements. In March 2020, the FASB issued new guidance that provides optional expedients and exceptions to certain accounting requirements to facilitate the transition away from the use of the London Interbank Offered Rate ("LIBOR") and other interbank offered rates. The guidance 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. 3. Acquisitions 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 On January 7, 2021, we completed the acquisition of national broadcast network ION Media Networks, Inc. ("ION") for $ 2.65 billion. ION is a national network of broadcast stations and is the largest holder of U.S. broadcast television spectrum. The business distributes its programming through owned Federal Communications Commission-licensed television stations as well as affiliated TV stations, reaching 100 million of U.S. homes through its over-the-air broadcast and pay TV platforms. The acquisition of ION enabled us to create a full-scale national television networks business by combining the ION network with our other news and entertainment networks. The transaction was financed with a combination of cash, debt financing and preferred equity financing, including Berkshire Hathaway's $ 600 million preferred equity investment in Scripps. Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $ 13 per share. To comply with ownership rules of the Federal Communications Commission, we simultaneously divested 23 of ION's television stations for a total consideration of $ 30 million, which were purchased by INYO Broadcast Holdings, LLC upon completion of the acquisition. These divested stations became independent affiliates of ION pursuant to long-term affiliation agreements. The following table summarizes the net cash consideration for the ION transaction. (in thousands) Total purchase price $ 2,650,000 Plus: Cash acquired 14,493 Plus: Working capital 57,755 Total transaction gross cash consideration 2,722,248 Less: Proceeds from ION stations divested ( 30,000 ) Total transaction net cash consideration 2,692,248 Less: Cash acquired ( 14,493 ) Total consideration, net of cash acquired $ 2,677,755 The following table summarizes the final fair values of the ION assets acquired and liabilities assumed at the closing date. (in thousands) Accounts receivable $ 135,006 Other current assets 25,353 Programming rights 169,027 Property and equipment 122,520 Operating lease right-of-use assets 72,717 Other assets 2,295 Goodwill 1,796,148 Indefinite-lived intangible assets - FCC licenses 424,200 Amortizable intangible assets: INYO affiliation agreement 422,000 Other affiliation relationships 22,000 Advertiser relationships 143,000 Trade names 72,000 Accounts payable ( 9,674 ) Unearned revenue ( 13,043 ) Accrued expenses ( 15,814 ) Current portion of programming liabilities ( 92,721 ) Other current liabilities ( 24,810 ) Programming liabilities ( 191,837 ) Deferred tax liabilities ( 265,291 ) Operating lease liabilities ( 78,438 ) Other long-term liabilities ( 36,883 ) Total consideration, net of cash acquired $ 2,677,755 Of the value allocated to amortizable intangible assets, the INYO affiliation agreement has an estimated amortization period of 20 years, advertiser relationships have an estimated amortization period of 7 years, other affiliation relationships have an estimated amortization period of 10 years and the value allocated to trade names has an estimated amortization period of 10 years. The goodwill of $ 1.8 billion arising from the transactions consists largely of synergies, economies of scale and other benefits of a larger national broadcast footprint and becoming the largest holder of broadcast spectrum. We allocated the goodwill to our Scripps Networks segment. The transaction is accounted for as a stock acquisition which applies carryover tax basis to the assets and liabilities acquired. The goodwill is not deductible for income tax purposes. KCDO Television Station On November 20, 2020, we closed on the acquisition of the KCDO television station in the Denver, Colorado market. Included in the sale was KSBS-CD, a lower power translator of KCDO. Consideration for the transaction totaled $ 9.6 million. The purchase price allocation attributed value of $ 6.9 million to the acquired FCC license, $ 1.7 million to goodwill, $ 0.9 million to property and equipment and the remainder to various working capital accounts. 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 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. The pro forma results do not include efficiencies, cost reductions or synergies expected to result from the acquisition, or retrospective fair value adjustments to the warrant. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisition been completed at the beginning of the period. For the years ended December 31, (in thousands, except per share data) (unaudited) 2021 2020 Operating revenues $ 2,290,254 $ 2,395,650 Net income attributable to Scripps shareholders 101,146 275,658 Net income per share: Basic $ 1.19 $ 3.30 Diluted 1.12 3.29 Pro forma results in 2020 include $ 47.5 million of non-recurring transaction costs. The pro forma results in 2021 reflect a $ 38.1 million reversal of ION transaction costs incurred that were already captured in the 2020 pro forma results. 4. 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. ("ION") acquisition, which closed on January 7, 2021. Restructuring costs totaled $ 9.4 million in 2021 due to the Newsy restructuring plan. In the first quarter, we incurred costs of $ 7.1 million for the write-downs of both capitalized carriage agreement payments and certain Newsy intangible assets. The additional Newsy restructuring charges were primarily attributed to employee severance, relocation costs and Nielsen contract costs. We completed the building sale for our Denver KMGH television station in the third quarter of 2021. The sale resulted in recognition of a pre-tax gain totaling $ 32.6 million. We redeemed the outstanding principal amount of our 2025 Senior Notes during the second quarter of 2021. Additionally, F-29 during the fourth quarter of 2021, we redeemed $ 15.4 million of the 2027 Senior Notes and $ 22.0 million of the 2031 Senior Notes. These redemptions resulted in a loss on extinguishment of debt of $ 15.3 million, representing the premiums paid on the notes and write-offs of unamortized debt financing costs. During the first quarter of 2021, we completed the sale of our Triton business. The sale generated total net proceeds of $ 225 million and we recognized a pre-tax gain from disposition totaling $ 81.8 million. Related to our outstanding common stock warrant, we recognized non-cash charges totaling $ 99.1 million in 2021. The warrant obligation was being marked-to-market each reporting period with the increase in our common stock price being the significant contributor to higher valuation. Following an amendment to the common stock warrant agreement on May 14, 2021, the fair value of the warrant was reclassified to equity and is no longer marked-to-market each reporting period. 2020 — Acquisition and related integration costs of $ 18.7 million reflect contract termination costs and professional service costs incurred to integrate the Cordillera and Nexstar-Tribune television stations, as well as costs incurred leading up to the ION acquisition, which closed on January 7, 2021. 5. Income Taxes We file a consolidated federal income tax return, consolidated unitary returns in certain states, other separate state income tax returns for certain of our subsidiary companies, and applicable foreign returns. The provision for income taxes from continuing operations consisted of the following: For the years ended December 31, (in thousands) 2022 2021 2020 Current: Federal $ 56,236 $ 52,145 $ ( 13,235 ) State and local 11,411 9,096 2,478 Foreign — ( 48 ) 107 Total current income tax provision (benefit) 67,647 61,193 ( 10,650 ) Deferred: Federal 2,882 6,616 57,755 State and local 10,770 3,087 8,902 Foreign ( 738 ) 293 ( 551 ) Total deferred income tax provision 12,914 9,996 66,106 Provision for income taxes $ 80,561 $ 71,189 $ 55,456 The difference between the statutory rate for federal income tax and the effective income tax rate was as follows: For the years ended December 31, 2022 2021 2020 Statutory rate 21.0 % 21.0 % 21.0 % Effect of: State and local income taxes, net of federal tax benefit 7.0 5.6 4.5 Non-deductible mark-to-market losses — 11.5 — Excess tax benefits from stock-based compensation ( 0.3 ) ( 0.9 ) 0.5 Nondeductible expenses 0.2 0.2 0.4 Reserve for uncertain tax positions 0.7 ( 0.8 ) 0.7 Other 0.5 1.5 ( 0.6 ) Effective income tax rate 29.1 % 38.1 % 26.5 % A non-deductible expense of $ 102.6 million was recorded in 2021 related to preferred stock issuance costs and unrealized losses on mark-to-market adjustments recorded on the common stock warrant issued in connection with the ION acquisition. F-30 The approximate effect of the temporary differences giving rise to deferred income tax assets (liabilities) were as follows: As of December 31, (in thousands) 2022 2021 Temporary differences: Property and equipment $ ( 46,710 ) $ ( 54,292 ) Goodwill and other intangible assets ( 390,105 ) ( 378,978 ) Investments, primarily gains and losses not yet recognized for tax purposes 5,165 2,886 Accrued expenses not deductible until paid 7,897 10,867 Deferred compensation and retiree benefits not deductible until paid 32,174 37,317 Operating lease right-of-use assets ( 36,843 ) ( 31,507 ) Operating lease liabilities 39,099 33,174 Interest limitation carryforward 6,375 7 Other temporary differences, net 7,305 12,354 Total temporary differences ( 375,643 ) ( 368,172 ) Federal and state net operating loss carryforwards 20,283 23,863 Valuation allowance for state deferred tax assets ( 15,097 ) ( 12,468 ) Net deferred tax liability $ ( 370,457 ) $ ( 356,777 ) Total state operating loss carryforwards were $ 436 million at December 31, 2022. Our state tax loss carryforwards expire through 2041. Because we file separate state income tax returns for certain of our subsidiary companies, we are not able to use state tax losses of a subsidiary company to offset state taxable income of another subsidiary company. The Company recognizes state net operating loss carryforwards as deferred tax assets, subject to valuation allowances. At each balance sheet date, we estimate the amount of carryforwards that are not expected to be used prior to expiration of the carryforward period. The tax effect of the carryforwards that are not expected to be used prior to their expiration is included in the valuation allowance. The Company has not provided for income taxes, including withholding tax, U.S. state taxes, or tax on foreign exchange rate changes, associated with the undistributed earnings of our non-U.S. subsidiaries because we plan to indefinitely reinvest the unremitted earnings in these entities. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted and signed into law. The CARES Act includes several provisions for corporations including increasing the amount of deductible interest, allowing companies to carryback certain net operating losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not materially affect our year-to-date income tax provision. We received an additional tax refund of $ 14.0 million from the carryback of NOLs to prior periods in October 2020. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed and enacted into law, which provided an additional stimulus package providing financial relief for individuals and small businesses. The Appropriations Act contains a variety of tax provisions, including full expensing of business meals in 2021 and 2022, an expansion of the Paycheck Protection Program, and expansion of the employee retention tax credit. We continue to evaluate the Appropriations Act, but do not currently expect it to have a material impact on our income tax provision. 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. F-31 A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: For the years ended December 31, (in thousands) 2022 2021 2020 Gross unrecognized tax benefits at beginning of year $ 10,572 $ 2,376 $ 576 Increases in tax positions for prior years 2,965 22,348 166 Decreases in tax positions for prior years ( 390 ) — ( 141 ) Increases in tax positions for current years 796 3,164 1,661 Increases (decreases) from lapse in statute of limitations ( 173 ) ( 4,234 ) 114 Decreases due to settlements with taxing authorities ( 1,646 ) ( 13,082 ) — Gross unrecognized tax benefits at end of year $ 12,124 $ 10,572 $ 2,376 The total amount of net unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 12.1 million at December 31, 2022. We accrue interest and penalties related to unrecognized tax benefits in our provision for income taxes. 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. At December 31, 2022, we are no longer subject to federal income tax examinations for years prior to 2018. For state and local jurisdictions, we are generally no longer subject to income tax examinations for years prior to 2018. Due to the potential for resolution of federal and state examinations, and the expiration of various statutes of limitation, it is reasonably possible that our gross unrecognized tax benefits balance may change within the next twelve months by as much as $ 0.6 million. 6. Restricted Cash 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. F-32 7. Investments Investments consisted of the following: As of December 31, (in thousands) 2022 2021 Investments held at cost $ 20,890 $ 15,431 Equity method investments 2,254 6,201 Total investments $ 23,144 $ 21,632 Our investments do not trade in public markets, thus they do not have readily determinable fair values. We estimate the fair values of the investments to approximate their carrying values at December 31, 2022 and 2021. 8. Property and Equipment Property and equipment consisted of the following: As of December 31, (in thousands) 2022 2021 Land and improvements $ 65,559 $ 65,559 Buildings and improvements 245,531 204,819 Equipment 580,001 575,920 Computer software 29,702 29,029 Total 920,793 875,327 Accumulated depreciation 462,193 418,382 Net property and equipment $ 458,600 $ 456,945 F-33 9. Leases 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. 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, (in thousands, except lease term and discount rate) 2022 2021 Balance Sheet Information Operating Leases Right-of-use assets $ 117,869 $ 124,821 Other current liabilities 19,599 20,066 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 December 31, (in thousands) 2022 2021 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities 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 — F-34 Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows: (in thousands) Operating Leases Finance Leases 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 Total future minimum lease payments 150,425 99,253 Less: Imputed interest ( 23,960 ) ( 70,764 ) Total $ 126,465 $ 28,489 10. Goodwill and Other Intangible Assets Goodwill by business segment was as follows: (in thousands) Local Media Scripps Networks Other Total Gross balance as of December 31, 2019 $ 1,143,859 $ 232,742 $ 85,992 $ 1,462,593 Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 ) Net balance as of December 31, 2019 926,945 211,742 85,992 1,224,679 Television stations acquisitions adjustments 2,500 — — 2,500 KCDO acquisition 1,679 — — 1,679 Sale of WPIX ( 24,997 ) — — ( 24,997 ) Sale of Weathersphere ( 633 ) — — ( 633 ) Omny acquisition adjustment — — ( 16 ) ( 16 ) Balance as of December 31, 2020 $ 905,494 $ 211,742 $ 85,976 $ 1,203,212 Gross balance as of December 31, 2020 $ 1,122,408 $ 232,742 $ 85,976 $ 1,441,126 Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 ) Net balance as of December 31, 2020 905,494 211,742 85,976 1,203,212 ION acquisition — 1,796,148 — 1,796,148 Sale of Triton — — ( 85,976 ) ( 85,976 ) Balance as of December 31, 2021 $ 905,494 $ 2,007,890 $ — $ 2,913,384 Gross balance as of December 31, 2021 $ 1,122,408 $ 2,028,890 $ — $ 3,151,298 Accumulated impairment losses ( 216,914 ) ( 21,000 ) — ( 237,914 ) Net balance as of December 31, 2021 905,494 2,007,890 — 2,913,384 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 F-35 Other intangible assets consisted of the following: As of December 31, (in thousands) 2022 2021 Amortizable intangible assets: Carrying amount: Television network affiliation relationships $ 1,060,244 $ 1,060,244 Customer lists and advertiser relationships 220,997 217,400 Other 136,100 130,265 Total carrying amount 1,417,341 1,407,909 Accumulated amortization: Television network affiliation relationships ( 222,092 ) ( 168,021 ) Customer lists and advertiser relationships ( 106,654 ) ( 77,711 ) Other ( 47,156 ) ( 32,881 ) Total accumulated amortization ( 375,902 ) ( 278,613 ) Net amortizable intangible assets 1,041,439 1,129,296 Indefinite-lived intangible assets — FCC licenses 779,815 781,015 Total other intangible assets $ 1,821,254 $ 1,910,311 Estimated amortization expense of intangible assets for each of the next five years is $ 94.1 million in 2023, $ 92.7 million in 2024, $ 89.6 million in 2025, $ 86.1 million in 2026, $ 83.2 million in 2027 and $ 595.7 million in later years. Goodwill and indefinite-lived intangible assets are tested for impairment annually and any time events occur or conditions change that would indicate it is more likely than not the fair value of a reporting unit, or respective indefinite-lived intangible assets, is below its carrying value. Such indicators of impairment include, but are not limited to, changes in business climate or other factors resulting in low cash flow related to such assets. We determine fair values using market data, appraised values and discounted cash flow analyses. The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the business and the period of time over which those cash flows will occur, as well as to determine an appropriate discount rate. The determination of the discount rate is based on a cost of capital model, using a risk-free rate, adjusted by a stock-beta adjusted risk premium and a size premium. While we believe the estimates and judgments used in determining the fair values were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates, could produce different estimates of fair value. If the fair value of a reporting unit, or respective FCC license, is less than its carrying value, then an impairment exists and an impairment charge is recorded. F-36 11. Long-Term Debt Long-term debt consisted of the following: As of December 31, (in thousands) 2022 2021 Revolving credit facility $ — $ — Senior secured notes, due in 2029 523,356 550,000 Senior unsecured notes, due in 2027 425,667 484,655 Senior unsecured notes, due in 2031 392,071 477,958 Term loan, due in 2024 284,250 287,250 Term loan, due in 2026 736,437 744,049 Term loan, due in 2028 559,000 667,000 Total outstanding principal 2,920,781 3,210,912 Less: Debt issuance costs and issuance discounts ( 48,376 ) ( 62,907 ) Less: Current portion ( 18,612 ) ( 18,612 ) Net carrying value of long-term debt 2,853,793 3,129,393 Fair value of long-term debt * $ 2,677,845 $ 3,249,278 * The fair values of debt are estimated based on either quoted private market transactions or observable estimates provided by third party financial professionals, and as such, are classified within Level 2 of the fair value hierarchy. Scripps Senior Secured Credit Agreement On January 7, 2021, we entered into the Sixth Amendment to the Third Amended Restated Credit Agreement ("Sixth Amendment"). Under the Sixth Amendment, 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 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. As of December 31, 2022 and 2021, we had outstanding letters of credit totaling $ 7.1 million and $ 6.9 million, respectively, under the Revolving Credit Facility. On October 2, 2017, we issued a $ 300 million term loan B which matures in October 2024 ("2024 term loan"). Interest is currently payable on the 2024 term loan at a rate based on LIBOR, plus a fixed margin of 2.00 %. Interest will reduce to a rate of LIBOR plus a fixed margin of 1.75 % if the Company's total net leverage, as defined by the amended agreement, is below 2.75 . The 2024 term loan requires annual principal payments of $ 3 million. As of December 31, 2022 and 2021, the interest rate on the 2024 term loan was 6.38 % and 2.10 %, respectively. The weighted-average interest rate on the 2024 term loan was 5.67 % and 2.09 % in 2022 and 2021, respectively. On May 1, 2019, we issued a $ 765 million term loan B ("2026 term loan") that matures in May 2026. Interest is currently payable on the 2026 term loan at a rate based on LIBOR, plus a fixed margin of 2.56 %. The 2026 term loan requires annual principal payments of $ 7.6 million. Deferred financing costs and an original issuance discount totaled approximately $ 23.0 million with this term loan, which are being amortized over the life of the loan. As of December 31, 2022 and 2021, the interest rate on the 2026 term loan was 6.95 % and 3.31 %, respectively. The weighted-average interest rate on the 2026 term loan was 6.23 % and 3.31 % in 2022 and 2021, respectively. Under the Sixth Amendment, we also issued an $ 800 million term loan B ("2028 term loan") that contributed to the financing of the ION acquisition. The term loan matures in 2028 with interest payable at rates based on LIBOR, plus a fixed margin of 3.00 %. Additionally, the Sixth Amendment provided that the LIBOR rate could not be less than 0.75 % for our term loans that mature in 2026 and 2028. The 2028 term loan requires annual principal payments of $ 8.0 million. We incurred deferred financing costs totaling $ 23.4 million related to this term loan and the amendment to the Revolving Credit Facility, which are being amortized over the life of the term loan. 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). Additionally, we must be in compliance with certain leverage ratios in order to proceed with acquisitions. Our credit agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt. We granted the lenders pledges of our equity interests in our subsidiaries and security interests in substantially all other personal property including cash, accounts receivables and equipment. In addition, the Revolving Credit Facility contains a covenant to comply with a maximum first lien net leverage ratio of 4.50 to 1.0 when we have outstanding borrowings on the facility. As of December 31, 2022, we were in compliance with our financial covenants. 2029 Senior Secured Notes On December 30, 2020, we issued $ 550 million of senior secured notes (the "2029 Senior Notes"), which bear interest at a rate of 3.875 % per annum and mature on January 15, 2029. The proceeds of the 2029 Senior Notes were deposited into a segregated escrow account. The escrow account was subsequently released on January 7, 2021 and used toward the financing of the ION acquisition (See Note 3). The 2029 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on January 15 and July 15, commencing on July 15, 2021. Prior to January 15, 2024 we may redeem up to 40 % of the aggregate principal amount of the 2029 Senior Notes at a redemption price of 103.875 % of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. We may also redeem some or all of the 2029 Senior Notes before January 15, 2024 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date plus a "make whole" premium. On or after January 15, 2024 and before January 15, 2026, we may redeem the notes, in whole or in part, at applicable redemption prices noted in the indenture agreement. If we sell certain of our assets or have a change of control, the holders of the 2029 Senior Notes may require us to repurchase some or all of the notes. Our credit agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt. The 2029 Senior Notes are guaranteed by us and the majority of our subsidiaries and are secured on equal footing with the obligations under the Senior Secured Credit Agreement. Following the release of the proceeds from escrow on January 7, 2021, the notes became secured, on a first lien basis, from pledges of equity interests in our subsidiaries and by substantially all of the existing and future assets of Scripps. The 2029 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature. We incurred approximately $ 13.8 million of deferred financing costs in connection with the issuance of the 2029 Senior Notes, which are being amortized over the life of the notes. 2027 Senior Unsecured Notes On July 26, 2019, we issued $ 500 million of senior unsecured notes, which bear interest at a rate of 5.875 % per annum and mature on July 15, 2027 ("the 2027 Senior Notes"). The 2027 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on July 15 and January 15. We may 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. The 2027 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our existing and future domestic restricted subsidiaries. The 2027 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature. There are no registration rights associated with the 2027 Senior Notes. We incurred approximately $ 10.7 million of deferred financing costs in connection with the issuance of the 2027 Senior Notes, which are being amortized over the life of the notes. 2031 Senior Unsecured Notes On December 30, 2020, we issued $ 500 million of senior unsecured notes (the "2031 Senior Notes"), which bear interest at a rate of 5.375 % per annum and mature on January 15, 2031. The proceeds of the 2031 Senior Notes were deposited into a segregated escrow account. The escrow account was subsequently released on January 7, 2021 and used toward the financing of the ION acquisition (See Note 3). The 2031 Senior Notes were priced at 100 % of par value and interest is payable semi-annually on January 15 and July 15, commencing on July 15, 2021. Prior to January 15, 2024 we may redeem up to 40 % of the aggregate principal amount of the 2031 Senior Notes at a redemption price of 105.375 % of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. We may also redeem some or all of the 2031 Senior Notes before January 15, 2026 at a redemption price of 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date plus a "make whole" premium. On or after January 15, 2026 and before January 15, 2029, we may redeem the notes, in whole or in part, at applicable redemption prices noted in the indenture agreement. If we sell certain of our assets or have a change of control, the holders of the 2031 Senior Notes may require us to repurchase some or all of the notes. The 2031 Senior Notes are also guaranteed by us and the majority of our subsidiaries. The 2031 Senior Notes contain covenants with which we must comply that are typical for borrowing transactions of this nature. We incurred approximately $ 12.5 million of deferred financing costs in connection with the issuance of the 2031 Senior Notes, which are being amortized over the life of the notes. Debt Repurchase Authorization 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. 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. F-37 12. Fair Value Measurement We measure certain financial assets and liabilities at fair value on a recurring basis, such as cash equivalents. The fair values of these financial assets were determined based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of input are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than quoted market prices in active markets, that are observable either directly or indirectly. • Level 3 — Unobservable inputs based on our own assumptions. The following tables set forth our assets that are measured at fair value on a recurring basis at December 31, 2022 and 2021: December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Cash equivalents $ 27 $ 27 $ — $ — December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Cash equivalents $ 32,536 $ 32,536 $ — $ — 13. Other Liabilities Other liabilities consisted of the following: As of December 31, (in thousands) 2022 2021 Employee compensation and benefits $ 25,916 $ 29,175 Deferred FCC repack income 46,205 47,977 Programming liability 263,093 352,686 Liability for pension benefits 78,279 102,831 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 14. Supplemental Cash Flow Information The following table presents additional information about the change in certain working capital accounts: For the years ended December 31, (in thousands) 2022 2021 2020 Accounts receivable $ ( 26,875 ) $ ( 31,624 ) $ ( 40,524 ) Other current assets 5,653 12,488 22,644 Accounts payable 7,313 18,534 19,520 Accrued employee compensation and benefits ( 24,080 ) 4,073 11,915 Accrued interest ( 3,886 ) 18,459 1,162 Other accrued liabilities 4,991 2,336 ( 5,918 ) Unearned revenue ( 3,115 ) ( 7,080 ) 3,397 Other, net 4,199 ( 21,407 ) 21,898 Total $ ( 35,800 ) $ ( 4,221 ) $ 34,094 F-38 The following table reconciles cash and cash equivalents and restricted cash in the Consolidated Balance Sheets to cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows. As of December 31, (in thousands) 2022 2021 2020 Cash and cash equivalents $ 18,027 $ 66,223 $ 576,021 Restricted cash — 34,257 1,050,000 Total cash, cash equivalents and restricted cash, end of year $ 18,027 $ 100,480 $ 1,626,021 As disclosed in Note 6. Restricted Cash, the December 31, 2021 restricted cash balance reflects cash held in escrow from the KMGH Denver television station building sale, which was received in January 2022. The December 31, 2020 restricted cash balance represents the senior secured notes and senior unsecured notes proceeds that were segregated as financing for the January 7, 2021 closing of the ION Media Networks, Inc. acquisition. 15. Employee Benefit Plans We sponsor a noncontributory defined benefit pension plan and non-qualified Supplemental Executive Retirement Plans ("SERPs"). Both the defined benefit plan and the SERPs have frozen the accrual of future benefits. We sponsor a defined contribution plan covering substantially all non-union and certain union employees. We match a portion of employees' voluntary contributions to this plan. Other union-represented employees are covered by defined benefit pension plans jointly sponsored by us and the union, or by union-sponsored multi-employer plans. We use a December 31 measurement date for our retirement plans. Retirement plans expense is based on valuations as of the beginning of each year. The components of the expense consisted of the following: For the years ended December 31, (in thousands) 2022 2021 2020 Interest cost $ 17,332 $ 16,465 $ 19,799 Expected return on plan assets, net of expenses ( 24,900 ) ( 23,235 ) ( 21,016 ) Amortization of actuarial loss and prior service cost 4,034 6,210 4,672 Total for defined benefit plans ( 3,534 ) ( 560 ) 3,455 Multi-employer plans — — 5 SERPs 921 903 933 Defined contribution plan 15,257 14,394 14,074 Net periodic benefit cost 12,644 14,737 18,467 Allocated to discontinued operations — — ( 522 ) Net periodic benefit cost - continuing operations $ 12,644 $ 14,737 $ 17,945 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows: For the years ended December 31, (in thousands) 2022 2021 2020 Actuarial gain/(loss) $ ( 12,703 ) $ 27,318 $ ( 5,296 ) Amortization of actuarial loss and prior service cost 4,034 6,210 4,672 Total $ ( 8,669 ) $ 33,528 $ ( 624 ) F-39 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: 2022 2021 2020 Discount rate 2.95 % 2.64 % 3.40 % Long-term rate of return on plan assets 5.50 % 5.50 % 5.50 % The discount rate used to determine our future pension obligations is based on a dedicated bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans. The expected long-term rate of return on plan assets is based upon the weighted-average expected rate of return and capital market forecasts for each asset class employed. Changes in other key actuarial assumptions affect the determination of the benefit obligations as of the measurement date and the calculation of net periodic benefit costs in subsequent periods. Obligations and Funded Status — The defined benefit pension plan obligations and funded status are actuarially valued as of the end of each year. The following table presents information about our employee benefit plan assets and obligations: Defined Benefit Plan SERPs For the years ended December 31, (in thousands) 2022 2021 2022 2021 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 603,309 $ 637,165 $ 18,023 $ 18,890 Interest cost 17,332 16,465 509 473 Benefits paid ( 33,521 ) ( 31,616 ) ( 1,541 ) ( 1,028 ) Actuarial (gains)/losses ( 137,098 ) ( 18,705 ) ( 3,598 ) ( 312 ) Projected benefit obligation at end of year 450,022 603,309 13,393 18,023 Plan assets: Fair value at beginning of year 517,148 492,827 — — Actual return on plan assets ( 124,901 ) 31,848 — — Company contributions 24,999 24,089 1,541 1,028 Benefits paid ( 33,521 ) ( 31,616 ) ( 1,541 ) ( 1,028 ) Fair value at end of year 383,725 517,148 — — Funded status $ ( 66,297 ) $ ( 86,161 ) $ ( 13,393 ) $ ( 18,023 ) Amounts recognized in Consolidated Balance Sheets: Current liabilities $ — $ — $ ( 1,411 ) $ ( 1,353 ) Noncurrent liabilities ( 66,297 ) ( 86,161 ) ( 11,982 ) ( 16,670 ) Total $ ( 66,297 ) $ ( 86,161 ) $ ( 13,393 ) $ ( 18,023 ) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ 98,884 $ 90,197 $ 3,467 $ 7,364 Prior service cost 352 370 — — 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. F-40 Information for plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets was as follows: Defined Benefit Plan SERPs As of December 31, (in thousands) 2022 2021 2022 2021 Accumulated benefit obligation $ 450,022 $ 603,309 $ 13,393 $ 18,023 Projected benefit obligation 450,022 603,309 13,393 18,023 Fair value of plan assets 383,725 517,148 — — Assumptions used to determine the defined benefit pension plan benefit obligation were as follows: 2022 2021 2020 Weighted average discount rate 5.47 % 2.95 % 2.64 % 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. Plan Assets and Investment Strategy Our long-term investment strategy for pension assets is to earn a rate of return over time that minimizes future contributions to the plan while reducing the volatility of pension assets relative to pension liabilities. The strategy reflects the fact that we have frozen the accrual of service credits under our plans which cover the majority of employees. We evaluate our asset allocation target ranges for equity, fixed income and other investments annually. We monitor actual asset allocations quarterly and adjust as necessary. We control risk through diversification among multiple asset classes, managers and styles. Risk is further monitored at the manager and asset class level by evaluating performance against appropriate benchmarks. Information related to our pension plan asset allocations by asset category were as follows: Target allocation Percentage of plan assets as of December 31, 2023 2022 2021 US equity securities 13 % 13 % 15 % Non-US equity securities 27 % 31 % 35 % Fixed-income securities 55 % 55 % 49 % Other 5 % 1 % 1 % Total 100 % 100 % 100 % U.S. equity securities include common stocks of large, medium and small capitalization companies, which are predominantly U.S. based. Non-U.S. equity securities include companies domiciled outside of the U.S. and American depository receipts. Fixed-income securities include securities issued or guaranteed by the U.S. government, mortgage backed securities and corporate debt obligations. Other investments include real estate funds and cash equivalents. Under our asset allocation strategy, approximately 55 % of plan assets are invested in a portfolio of fixed income securities with a duration approximately that of the projected payment of benefit obligations. The remaining 45 % of plan assets are invested in equity securities and other return-seeking assets. The expected long-term rate of return on plan assets is based primarily upon the target asset allocation for plan assets and capital markets forecasts for each asset class employed. F-41 The following table presents our plan assets as of December 31, 2022 and 2021: As of December 31, (in thousands) 2022 2021 Equity securities Common/collective trust funds $ 170,867 $ 261,810 Fixed income Common/collective trust funds 210,226 252,731 Cash equivalents 2,632 2,607 Fair value of plan assets $ 383,725 $ 517,148 Our investments are valued using net asset value as a practical expedient as allowed under U.S. GAAP and therefore are not valued using the fair value hierarchy. Equity securities-common/collective trust funds and fixed income-common/collective trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds (equity securities and fixed income securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. Common/collective trust funds are typically valued at their net asset values that are calculated by the investment manager or sponsor of the fund and have daily or monthly liquidity. 16. Segment Information We determine our business segments based upon our management and internal reporting structure, as well as the basis that our chief operating decision maker makes resource allocation decisions. Our Local Media segment includes our 61 local broadcast stations and their related digital operations. It is comprised of 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates. We also have 12 CW affiliates - four on full power stations and eight on multicast; five independent stations and 10 additional low power stations. Our Local Media segment earns revenue primarily from the sale of advertising to local, national and political advertisers and retransmission fees received from cable operators, telecommunication companies, satellite carriers and over-the-top virtual MVPDs. Our Scripps Networks segment 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. 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 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. Our chief operating decision maker evaluates the operating performance of our business segments and makes decisions about the allocation of resources to our business segments using a measure called segment profit. Segment profit excludes interest, defined benefit pension plan amounts, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America. F-42 Information regarding our business segments is as follows: For the years ended December 31, (in thousands) 2022 2021 2020 Segment operating revenues: Local Media $ 1,494,357 $ 1,319,468 $ 1,488,237 Scripps Networks 961,242 951,883 309,076 Other 14,628 26,924 73,010 Intersegment eliminations ( 17,012 ) ( 14,743 ) ( 12,845 ) Total operating revenues $ 2,453,215 $ 2,283,532 $ 1,857,478 Segment profit (loss): Local Media $ 386,369 $ 268,140 $ 444,243 Scripps Networks 310,336 389,278 28,324 Other ( 18,140 ) 359 18,173 Shared services and corporate ( 82,280 ) ( 75,576 ) ( 60,758 ) Acquisition and related integration costs ( 1,642 ) ( 40,373 ) ( 18,678 ) Restructuring costs — ( 9,436 ) — Depreciation and amortization of intangible assets ( 160,433 ) ( 161,922 ) ( 107,155 ) Gains (losses), net on disposal of property and equipment ( 5,866 ) 30,275 ( 661 ) Interest expense ( 161,130 ) ( 165,164 ) ( 92,994 ) 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 — Losses on stock warrant — ( 99,118 ) — Miscellaneous, net ( 1,953 ) ( 15,469 ) 2,914 Income from continuing operations before income taxes $ 276,463 $ 187,088 $ 209,020 Depreciation: Local Media $ 40,479 $ 39,368 $ 42,934 Scripps Networks 19,360 17,109 5,133 Other 189 382 854 Shared services and corporate 1,915 1,498 1,495 Total depreciation $ 61,943 $ 58,357 $ 50,416 Amortization of intangible assets: Local Media $ 35,461 $ 40,315 $ 37,848 Scripps Networks 56,836 58,599 9,460 Other 1,870 2,147 8,077 Shared services and corporate 4,323 2,504 1,354 Total amortization of intangible assets $ 98,490 $ 103,565 $ 56,739 F-43 A disaggregation of the principal activities from which we generate revenue is as follows: For the years ended December 31, (in thousands) 2022 2021 2020 Operating revenues: Core advertising $ 1,549,277 $ 1,592,121 $ 915,515 Political 208,112 22,693 272,066 Distribution 660,317 620,454 592,514 Other 35,509 48,264 77,383 Total operating revenues $ 2,453,215 $ 2,283,532 $ 1,857,478 The following table presents additions to property and equipment by segment: For the years ended December 31, (in thousands) 2022 2021 2020 Additions to property and equipment: Local Media $ 58,350 $ 35,963 $ 42,611 Scripps Networks 13,444 23,871 2,020 Other 54 430 1,200 Shared services and corporate 374 2,114 646 Total additions to property and equipment $ 72,222 $ 62,378 $ 46,477 Total assets by segment for the years ended December 31 were as follows: As of December 31, (in thousands) 2022 2021 2020 Assets: Local Media $ 2,391,703 $ 2,431,730 $ 2,463,064 Scripps Networks 3,915,374 3,865,046 526,887 Other 52,571 27,582 198,215 Shared services and corporate 71,357 333,956 1,671,220 Total assets $ 6,431,005 $ 6,658,314 $ 4,859,386 17. Commitments and Contingencies In the ordinary course of business, we enter into contractual commitments for network affiliation agreements, the acquisition of programming and for other purchase and service agreements. Minimum payments on such contractual commitments at December 31, 2022 were: $ 856.5 million in 2023, $ 752.3 million in 2024, $ 563.3 million in 2025, $ 321.5 million in 2026, $ 86.0 million in 2027 and $ 33.8 million in later years. We expect these contracts will be replaced with similar contracts upon their expiration. We are involved in litigation arising in the ordinary course of business, such as defamation actions and governmental proceedings primarily relating to renewal of broadcast licenses, none of which is expected to result in material loss. F-44 18. Capital Stock and Share-Based Compensation Plans Capital Stock — We have two classes of common shares, Common Voting shares and Class A Common shares. The Class A Common shares are only entitled to vote on the election of the greater of three or one-third of the directors and other matters as required by Ohio law. In connection with the January 7, 2021 closing of the ION acquisition, we entered into a Securities Purchase Agreement with Berkshire Hathaway Inc., (“Berkshire Hathaway”), pursuant to which Berkshire Hathaway provided $ 600 million of financing in exchange for 6,000 Series A Preferred Shares of the Company. The Preferred Shares, having a face value of $ 100,000 per share, are perpetual and will be redeemable at the option of the Company beginning on the fifth anniversary of issuance, and redeemable at the option of the holders in the event of a Change of Control (as defined in the terms of the Preferred Shares), in each case at a redemption price of 105 % of the face value, plus accrued and unpaid dividends (whether or not declared). As long as the Company pays quarterly dividends in cash on the Preferred Shares, the dividend rate will be 8 % per annum. If dividends on the Preferred Shares, which compound quarterly, are not paid in full in cash, the rate will increase to 9 % per annum for the remaining period of time that the Preferred Shares are outstanding. Preferred stock dividends were $ 48.0 million and $ 45.1 million in 2022 and 2021, respectively. Class A Common Shares Stock Warrant — In connection with the Preferred Shares issuance, Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $ 13 per share. The warrant is exercisable at the holder’s option at any time or from time to time, in whole or in part, until the first anniversary of the date on which no Preferred Shares remain outstanding. Since the holder had the option to settle the warrant through cash payment of the exercise price and/or through surrendering portions of their Preferred Shares for the stated par value, a liability was recognized for the fair value of the warrant. The valuation model, classified within Level 3 of the fair value hierarchy, included inputs for the estimated term of the warrant, the historical volatility rate of Scripps common stock and the exercise price for the warrant. At time of issuance, the fair value of the warrant totaled $ 181 million and was being remeasured each reporting period with the changes in fair value of the warrant captured in the gains/losses on stock warrant caption in the Consolidated Statements of Operations. On May 14, 2021, the warrant agreement was amended to only permit settlement of the warrant through cash payment of the exercise price. Following the warrant amendment, the warrant is no longer accounted for as a liability award where mark-to-market changes in the fair value of the warrant are captured as gains or losses in our operating results. The fair value of the warrant was remeasured on May 14, 2021 at $ 280 million. The increase in our stock price during 2021 was the primary contributor to the increase in the fair value of the warrant. The value of the liability on the amendment date was reclassified to equity within the caption Additional Paid-in Capital. Share Repurchase Plan — Shares may be repurchased from time to time at management's discretion. Shares can be repurchased under the authorization via open market purchases or privately negotiated transactions, including accelerated stock repurchase transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. In November 2016, our Board of Directors authorized a share repurchase program of up to $ 100 million of our Class A Common shares. We repurchased a total of $ 50.3 million of shares under this authorization prior to its expiration on March 1, 2020. In February 2020, our Board of Directors authorized a new share repurchase program of up to $ 100 million of our Class A Common shares through March 1, 2022. No shares were repurchased under either authorization during 2022, 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. Incentive Plans — The Company has a long-term incentive plan (the “Plan”) that permits the granting of incentive and nonqualified stock options, stock appreciation rights, restricted stock units ("RSUs"), restricted and unrestricted Class A Common shares and performance units to key employees and non-employee directors. We satisfy stock option exercises and vested stock awards with newly issued shares. We have not issued any new stock options since 2008. As of December 31, 2022, approximately 4.6 million shares were available for future stock compensation awards. Restricted Stock Units — Awards of RSUs generally require no payment by the employee. RSUs are converted into an equal number of Class A Common shares when vested. These awards generally vest over a three or four year period, conditioned upon the individual’s continued employment through that period. Awards vest immediately upon the retirement, death or disability of the employee or upon a change in control of Scripps or in the business in which the individual is employed. Unvested awards may be forfeited if employment is terminated for other reasons. Awards are nontransferable during the vesting period, but the awards are entitled to all the rights of an outstanding share, including receiving stock dividend equivalents. There are no post-vesting restrictions on awards granted to employees and non-employee directors. F-45 Long-term incentive compensation includes performance share awards. Performance share awards represent the right to receive an award of RSUs if certain performance measures are met. Each award specifies a target number of shares to be issued and the specific performance criteria that must be met. The number of shares that an employee receives may be less or more than the target number of shares depending on the extent to which the specified performance measures are met or exceeded. The following table summarizes our RSU activity: Fair Value Number of Shares Weighted Average Range of Prices Unvested at December 31, 2019 1,358,438 $ 18.68 $ 11 - 24 Awarded 1,588,134 8.86 7 - 12 Vested ( 739,633 ) 11.52 7 - 17 Forfeited ( 15,280 ) 13.37 8 - 23 Unvested at December 31, 2020 2,191,659 12.22 7 - 23 Awarded 1,375,565 22.63 14 - 23 Vested ( 1,060,685 ) 20.32 15 - 24 Forfeited ( 121,043 ) 16.19 9 - 23 Unvested at December 31, 2021 2,385,496 17.25 9 - 23 Awarded 1,867,083 19.19 14 - 22 Vested ( 1,147,220 ) 21.20 11 - 22 Forfeited ( 57,074 ) 20.07 9 - 23 Unvested at December 31, 2022 3,048,285 18.57 9 - 23 The following table summarizes additional information about RSU vesting: For the years ended December 31, (in thousands) 2022 2021 2020 Fair value of RSUs vested $ 24,321 $ 21,548 $ 8,518 Tax benefits realized on vesting 5,902 5,101 2,019 Share-based Compensation Costs Share-based compensation costs were as follows: For the years ended December 31, (in thousands) 2022 2021 2020 Total share-based compensation $ 21,596 $ 22,334 $ 14,507 Included in discontinued operations — — ( 492 ) Included in continuing operations $ 21,596 $ 22,334 $ 14,015 Share-based compensation, net of tax $ 16,355 $ 17,047 $ 10,694 As of December 31, 2022, $ 33.1 million of total unrecognized compensation costs related to RSUs and performance shares is expected to be recognized over a weighted-average period of 2.3 years. F-46 19. Accumulated Other Comprehensive Income (Loss) Changes in the accumulated other comprehensive income (loss) ("AOCI") balance by component consisted of the following for the respective years: (in thousands) Defined Benefit Pension Items Other Total As of December 31, 2020 $ ( 99,789 ) $ ( 330 ) $ ( 100,119 ) Other comprehensive income (loss) before reclassifications, net of tax of $ 6,540 and $ 42 21,090 134 21,224 Amounts reclassified from AOCI, net of tax of $ 1,546 4,986 — 4,986 Net current-period other comprehensive income (loss) 26,076 134 26,210 As of December 31, 2021 ( 73,713 ) ( 196 ) ( 73,909 ) Other comprehensive income (loss) before reclassifications, net of tax of $( 2,209 ) and $ 17 ( 6,895 ) 52 ( 6,843 ) Amounts reclassified from AOCI, net of tax of $ 1,051 3,281 — 3,281 Net current-period other comprehensive income (loss) ( 3,614 ) 52 ( 3,562 ) As of December 31, 2022 $ ( 77,327 ) $ ( 144 ) $ ( 77,471 ) Amounts reclassified to net earnings for defined benefit pension items relate to the amortization of actuarial gains (losses) and settlement charges. These amounts are included within the defined benefit pension plan expense caption on our Consolidated Statements of Operations. See Note 15. Employee Benefit Plans for additional information. 20. Assets Held for Sale and Discontinued Operations Stitcher On October 16, 2020, we closed on the sale of our Stitcher podcasting business. Stitcher is classified as discontinued operations in our Consolidated Financial Statements. Operating results of our discontinued Stitcher business were as follows: For the years ended December 31, (in thousands) 2021 2020 Operating revenues $ — $ 57,573 Total costs and expenses ( 600 ) ( 88,599 ) Depreciation and amortization of intangible assets — ( 1,157 ) Other, net — ( 174 ) Loss from operations ( 600 ) ( 32,357 ) Pretax gain on disposal 9,572 182,589 Gain from discontinued operations before income taxes 8,972 150,232 Provision for income taxes ( 2,159 ) ( 34,463 ) Income from discontinued operations, net of tax $ 6,813 $ 115,769 During 2021, the estimate for the contingent earnout consideration was increased by $ 9.1 million. In the third quarter of 2021, we received payment of $ 19.1 million for the 2020 earnout period. No value was assigned to the 2021 contingent earnout consideration. Stitcher’s discontinued operating results in 2020 included a contract termination charge that totaled $ 12 million. The 2020 gain on disposal for Stitcher reflected a $ 10 million fair value estimate for the contingent earnout consideration. F-47 Triton Digital During the first quarter of 2021, our Board of Directors approved the sale of our Triton Digital business. On February 16, 2021, we signed a definitive agreement to sell the business and the transaction closed on March 31, 2021. The sale generated total net proceeds of $ 225 million and we recognized a pre-tax gain from disposition totaling $ 81.8 million. WPIX When we acquired the Nexstar-Tribune television stations in 2019, we granted Nexstar the option to repurchase WPIX, the CW-affiliated station in New York City. The option was exercisable from March 31, 2020, through the end of 2021, and was assignable by Nexstar to a third party. In July 2020, Nexstar assigned their option to repurchase WPIX to Mission Broadcasting, Inc., and Mission immediately exercised the option. The option price was $ 75 million plus accrued interest, to be calculated on the period between September 19, 2019, the purchase date of WPIX, and the option sale closing date. The transaction closed on December 30, 2020 for cash consideration of $ 83.7 million. Including interest income of $ 7.6 million, we recognized gains from the WPIX disposition totaling $ 6.5 million in the fourth quarter of 2020. These gains are included within the miscellaneous, net caption on our Consolidated Statements of Operations. F-48