Company Quick10K Filing
EW Scripps
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 81 $1,203
10-Q 2019-11-08 Quarter: 2019-09-30
10-Q 2019-08-09 Quarter: 2019-06-30
10-Q 2019-05-10 Quarter: 2019-03-31
10-K 2019-03-01 Annual: 2018-12-31
10-Q 2018-11-09 Quarter: 2018-09-30
10-Q 2018-08-03 Quarter: 2018-06-30
10-Q 2018-05-07 Quarter: 2018-03-31
10-K 2018-02-28 Annual: 2017-12-31
10-Q 2017-11-03 Quarter: 2017-09-30
10-Q 2017-08-03 Quarter: 2017-06-30
10-Q 2017-05-05 Quarter: 2017-03-31
10-K 2017-02-24 Annual: 2016-12-31
10-Q 2016-11-04 Quarter: 2016-09-30
10-Q 2016-08-05 Quarter: 2016-06-30
10-Q 2016-05-06 Quarter: 2016-03-31
10-K 2016-02-26 Annual: 2015-12-31
10-Q 2015-11-06 Quarter: 2015-09-30
10-Q 2015-08-10 Quarter: 2015-06-30
10-Q 2015-05-08 Quarter: 2015-03-31
10-K 2015-03-13 Annual: 2014-12-31
10-Q 2014-11-07 Quarter: 2014-09-30
10-Q 2014-08-08 Quarter: 2014-06-30
10-Q 2014-05-09 Quarter: 2014-03-31
10-K 2014-03-04 Annual: 2013-12-31
10-Q 2013-11-08 Quarter: 2013-09-30
10-Q 2013-08-09 Quarter: 2013-06-30
10-Q 2013-05-07 Quarter: 2013-03-31
10-K 2013-03-06 Annual: 2012-12-31
10-Q 2012-11-09 Quarter: 2012-09-30
10-Q 2012-08-07 Quarter: 2012-06-30
10-Q 2012-05-08 Quarter: 2012-03-31
10-K 2012-03-07 Annual: 2011-12-31
10-Q 2011-11-09 Quarter: 2011-09-30
10-Q 2011-08-09 Quarter: 2011-06-30
10-Q 2011-05-10 Quarter: 2011-03-31
10-K 2011-03-02 Annual: 2010-12-31
10-Q 2010-11-02 Quarter: 2010-09-30
10-Q 2010-08-09 Quarter: 2010-06-30
10-Q 2010-05-10 Quarter: 2010-03-31
10-K 2010-03-05 Annual: 2009-12-31
8-K 2019-12-19 Officers, Exhibits
8-K 2019-11-08 Earnings, Exhibits
8-K 2019-09-19 M&A, Exhibits
8-K 2019-08-09 Earnings, Exhibits
8-K 2019-07-26 Off-BS Arrangement, Exhibits
8-K 2019-07-12 Other Events, Exhibits
8-K 2019-07-08 Regulation FD, Exhibits
8-K 2019-06-18 Other Events
8-K 2019-05-13 Other Events, Exhibits
8-K 2019-05-10 Earnings, Exhibits
8-K 2019-05-01 Enter Agreement, M&A, Off-BS Arrangement, Exhibits
8-K 2019-03-26 Regulation FD, Exhibits
8-K 2019-03-20 Enter Agreement, Exhibits
8-K 2019-03-01 Earnings, Exhibits
8-K 2018-12-03 Other Events, Exhibits
8-K 2018-11-13 Regulation FD, Exhibits
8-K 2018-11-09 Earnings, Exhibits
8-K 2018-11-06 Other Events, Exhibits
8-K 2018-10-29 Other Events
8-K 2018-10-27 Enter Agreement, Exhibits
8-K 2018-09-24
8-K 2018-08-03 Earnings, Exhibits
8-K 2018-05-22 Regulation FD, Exhibits
8-K 2018-05-10 Other Events, Exhibits
8-K 2018-05-10 Shareholder Vote
8-K 2018-05-07 Earnings, Exhibits
8-K 2018-02-28 Earnings, Exhibits
8-K 2018-02-15 Other Events, Exhibits
8-K 2018-01-31 Officers, Exhibits
8-K 2018-01-25 Other Events, Exhibits
SSP 2019-09-30
Part I
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.A ssp-ex31a20190930x10q.htm
EX-31.B ssp-ex31b20190930x10q.htm
EX-32.A ssp-ex32a20190930x10q.htm
EX-32.B ssp-ex32b20190930x10q.htm

EW Scripps Earnings 2019-09-30

SSP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
GTN 1,603 7,001 4,988 1,634 0 176 404 5,452 0% 13.5 3%
SSP 1,203 3,048 1,300 0 34 179 2,484 0% 13.9 1%
CETV 1,112 1,469 916 682 304 180 294 1,704 45% 5.8 12%
ETM 813 4,125 2,777 1,480 0 -321 -105 2,499 0% -23.8 -8%
EVC 249 700 397 291 61 -5 33 437 21% 13.1 -1%
TSQ 139 1,013 668 430 0 -1 65 637 0% 9.8 -0%
UONE 107 1,269 1,077 444 229 141 257 1,002 52% 3.9 11%
BBGI 84 724 445 264 0 10 40 317 0% 7.9 1%
EMMS 59 260 158 114 0 4 19 135 0% 7.3 2%
SALM 49 611 395 258 0 -5 36 303 0% 8.5 -1%

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from                      to                     
Commission File Number 0-16914
THE E.W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
Ohio
 
31-1223339
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification Number)
312 Walnut Street
Cincinnati, Ohio    45202
(Address of principal executive offices)    (Zip Code)

Registrant's telephone number, including area code: (513) 977-3000

Not applicable
(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share
SSP
NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Emerging growth company
Non-accelerated filer
Smaller reporting company
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of September 30, 2019, there were 68,981,874 of the registrant’s Class A Common shares, $0.01 par value per share, outstanding and 11,932,722 of the registrant’s Common Voting shares, $0.01 par value per share, outstanding.
 



Index to The E.W. Scripps Company Quarterly Report
on Form 10-Q for the Quarter Ended September 30, 2019
Item No.
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Signatures
 
 
 
 

2



PART I

As used in this Quarterly Report on Form 10-Q, 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.

Item 1. Financial Statements

The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.

Item 4. Controls and Procedures

The information required by this item is filed as part of this Form 10-Q. See Index to Financial Information at page F-1 of this Form 10-Q.

PART II

Item 1. Legal Proceedings

We are involved in litigation and regulatory proceedings 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.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our 2018 Annual Report on Form 10-K, except as updated in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no sales of unregistered equity securities during the quarter ended September 30, 2019.
In November 2016, our Board of Directors authorized a repurchase program of up to $100 million of our Class A Common shares. The authorization currently expires on March 1, 2020. 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. At September 30, 2019, $49.7 million remained under the authorization. No shares were repurchased under this program during the third quarter of 2019.

Item 3. Defaults Upon Senior Securities
There were no defaults upon senior securities during the quarter ended September 30, 2019.

Item 4. Mine Safety Disclosures
None.

3




Item 5. Other Information
None.

Item 6. Exhibits
Exhibit Number
 
Exhibit Description
31(a)
 
31(b)
 
32(a)
 
32(b)
 
101
 
The Company's unaudited Condensed Consolidated Financial Statements and related Notes for the quarter and nine months ended September 30, 2019 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).*
104
 
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* - Filed herewith

4



Signatures
Pursuant to the requirements 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: November 8, 2019
By:
/s/ Douglas F. Lyons 
 
 
Douglas F. Lyons
 
 
Senior Vice President, Controller and Treasurer
 
 
(Principal Accounting Officer)



5



The E.W. Scripps Company
Index to Financial Information (Unaudited)

Item
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 


F-1



The E.W. Scripps Company
Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)
 
As of 
 September 30, 
 2019
 
As of 
 December 31, 
 2018
 
 
 
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
86,507

 
$
107,114

Accounts receivable (less allowances— $2,924 and $4,371)
 
333,725

 
281,330

Programming
 
48,260

 
34,432

FCC repack receivable
 
28,531

 
19,242

Miscellaneous
 
37,219

 
28,899

Total current assets
 
534,242

 
471,017

Investments
 
8,395

 
7,162

Property and equipment
 
375,942

 
237,927

Operating lease right-of-use assets
 
128,117

 

Goodwill
 
1,323,312

 
834,013

Other intangible assets
 
1,021,025

 
478,953

Programming (less current portion)
 
89,799

 
75,333

Deferred income taxes
 
8,457

 
9,141

Miscellaneous
 
17,202

 
16,515

Total Assets
 
$
3,506,491

 
$
2,130,061

 
 
 
 
 
Liabilities and Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
43,295

 
$
26,919

Unearned revenue
 
8,948

 
11,459

Current portion of long-term debt
 
10,650

 
3,000

Accrued liabilities:
 
 
 
 
Employee compensation and benefits
 
39,636

 
44,929

Programming liability
 
65,819

 
40,301

Miscellaneous
 
55,564

 
46,112

Other current liabilities
 
20,336

 
25,339

Total current liabilities
 
244,248

 
198,059

Long-term debt (less current portion)
 
1,925,566

 
685,764

Deferred income taxes
 
21,041

 
25,531

Operating lease liabilities
 
120,327

 

Other liabilities (less current portion)
 
301,535

 
294,542

Equity:
 
 
 
 
Preferred stock, $.01 par — authorized: 25,000,000 shares; none outstanding
 

 

Common stock, $.01 par:
 
 
 
 
Class A — authorized: 240,000,000 shares; issued and outstanding: 68,981,874 and 68,736,867 shares
 
690

 
688

Voting — authorized: 60,000,000 shares; issued and outstanding: 11,932,722 and 11,932,722 shares
 
119

 
119

Total
 
809

 
807

Additional paid-in capital
 
1,114,239

 
1,106,984

Accumulated deficit
 
(127,612
)
 
(86,229
)
Accumulated other comprehensive loss, net of income taxes
 
(93,828
)
 
(95,397
)
Total The E.W. Scripps Company shareholders' equity
 
893,608

 
926,165

Noncontrolling interest
 
166

 

Total equity
 
893,774

 
926,165

Total Liabilities and Equity
 
$
3,506,491

 
$
2,130,061

See notes to condensed consolidated financial statements.

F-2



The E.W. Scripps Company
Condensed Consolidated Statements of Operations (Unaudited)
 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(in thousands, except per share data)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Operating Revenues:
 
 
 
 
 
 
 
 
Advertising
 
$
220,018

 
$
205,605

 
$
606,861

 
$
568,918

Retransmission and carriage
 
97,128

 
79,673

 
277,736

 
225,391

Other
 
32,631

 
17,448

 
94,838

 
46,003

Total operating revenues
 
349,777

 
302,726

 
979,435

 
840,312

Costs and Expenses:
 
 
 
 
 
 
 
 
Employee compensation and benefits
 
124,667

 
96,129

 
350,472

 
289,689

Programming
 
113,998

 
90,832

 
314,863

 
258,622

Other expenses
 
71,621

 
59,148

 
205,788

 
175,953

Acquisition and related integration costs
 
16,736

 
332

 
23,004

 
332

Restructuring costs
 
27

 
863

 
1,922

 
7,000

Total costs and expenses
 
327,049

 
247,304

 
896,049


731,596

Depreciation, Amortization, and (Gains) Losses:
 
 
 
 
 
 
 
 
Depreciation
 
10,020

 
8,627

 
28,990

 
24,616

Amortization of intangible assets
 
12,221

 
6,971

 
31,280

 
21,784

(Gains) losses, net on disposal of property and equipment
 
(11
)
 
(501
)
 
306

 
150

Net depreciation, amortization, and (gains) losses
 
22,230

 
15,097

 
60,576


46,550

Operating income
 
498

 
40,325

 
22,810

 
62,166

Interest expense
 
(26,537
)
 
(9,003
)
 
(53,476
)
 
(27,041
)
Defined benefit pension plan expense
 
(2,071
)
 
(3,529
)
 
(5,207
)
 
(6,306
)
Miscellaneous, net
 
2,042

 
(546
)
 
1,611

 
(535
)
Income (loss) from continuing operations before income taxes
 
(26,068
)
 
27,247

 
(34,262
)
 
28,284

Provision (benefit) for income taxes
 
(4,305
)
 
7,208

 
(5,319
)
 
8,160

Income (loss) from continuing operations, net of tax
 
(21,763
)
 
20,039

 
(28,943
)
 
20,124

Loss from discontinued operations, net of tax
 

 
(908
)
 


(22,354
)
Net income (loss)
 
(21,763
)
 
19,131

 
(28,943
)
 
(2,230
)
Income (loss) attributable to noncontrolling interest
 
166

 

 
166

 
(632
)
Net income (loss) attributable to the shareholders of The E.W. Scripps Company
 
$
(21,929
)
 
$
19,131

 
$
(29,109
)
 
$
(1,598
)
 
 
 
 
 
 
 
 
 
Net income (loss) per basic share of common stock attributable to the shareholders of The E.W. Scripps Company:
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
(0.27
)
 
$
0.24

 
$
(0.36
)

$
0.25

Loss from discontinued operations
 

 
(0.01
)
 


(0.27
)
Net income (loss) per basic share of common stock attributable to the shareholders of The E.W. Scripps Company:
 
$
(0.27
)
 
$
0.23

 
$
(0.36
)

$
(0.02
)
 
 
 
 
 
 
 
 
 
Net income (loss) per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company:
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
(0.27
)
 
$
0.24

 
$
(0.36
)
 
$
0.25

Loss from discontinued operations
 

 
(0.01
)
 

 
(0.27
)
Income (loss) per diluted share of common stock attributable to the shareholders of The E.W. Scripps Company
 
$
(0.27
)
 
$
0.23

 
$
(0.36
)
 
$
(0.02
)
See notes to condensed consolidated financial statements.
Net income (loss) per share amounts may not foot since each is calculated independently.

F-3



The E.W. Scripps Company
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(in thousands)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(21,763
)
 
$
19,131

 
$
(28,943
)
 
$
(2,230
)
Changes in defined benefit pension plans, net of tax of $218, $777, $528, and $1,274
 
648

 
2,316

 
1,569

 
3,796

Total comprehensive income (loss)
 
(21,115
)
 
21,447


(27,374
)
 
1,566

Less comprehensive net income (loss) attributable to noncontrolling interest
 
166

 

 
166

 
(632
)
Total comprehensive income (loss) attributable to the shareholders of The E.W. Scripps Company
 
$
(21,281
)
 
$
21,447

 
$
(27,540
)
 
$
2,198

See notes to condensed consolidated financial statements.

F-4



The E.W. Scripps Company
Condensed Consolidated Statements of Cash Flows (Unaudited)

 
Nine Months Ended 
 September 30,
(in thousands)
 
2019

2018
 
 
 
 
 
Cash Flows from Operating Activities:
 



Net loss
 
$
(28,943
)
 
$
(2,230
)
Loss from discontinued operations, net of tax
 

 
(22,354
)
Income (loss) from continuing operations, net of tax
 
(28,943
)
 
20,124

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



Depreciation and amortization
 
60,270

 
46,400

(Gain)/loss on sale of property and equipment
 
306

 
150

Programming assets and liabilities
 
7,649

 
(10,775
)
Deferred income taxes
 
(5,284
)

3,072

Stock and deferred compensation plans
 
11,524


10,128

Pension expense, net of contributions
 
(9,630
)

(13,261
)
Other changes in certain working capital accounts, net
 
(33,977
)

10,240

Miscellaneous, net
 
9,092


(1,168
)
Net cash provided by operating activities from continuing operations
 
11,007

 
64,910

Net cash provided by operating activities from discontinued operations
 

 
8,878

Net operating activities
 
11,007

 
73,788

Cash Flows from Investing Activities:
 



Acquisitions, net of cash acquired

(1,190,631
)


Acquisition of intangible assets
 
(24,475
)
 
(7,229
)
Additions to property and equipment
 
(41,775
)

(39,279
)
Purchase of investments
 
(1,453
)

(79
)
Proceeds from FCC repack
 
3,965

 
946

Miscellaneous, net
 
(41
)
 
2,307

Net cash used in investing activities from continuing operations
 
(1,254,410
)
 
(43,334
)
Net cash used in investing activities from discontinued operations
 

 
(1,044
)
Net investing activities
 
(1,254,410
)
 
(44,378
)
Cash Flows from Financing Activities:
 



Proceeds from long-term debt
 
1,281,175

 

Payments on long-term debt
 
(6,075
)

(4,906
)
Deferred financing costs
 
(31,295
)
 

Dividends paid
 
(12,274
)
 
(12,362
)
Repurchase of Class A Common shares
 
(584
)

(30,270
)
Proceeds from exercise of stock options
 


1,857

Tax payments related to shares withheld for RSU vesting
 
(3,716
)

(2,520
)
Miscellaneous, net
 
(4,437
)

(165
)
Net cash provided by (used in) financing activities from continuing operations
 
1,222,794


(48,366
)
Effect of foreign exchange rates on cash, cash equivalents and restricted cash
 
2

 

Decrease in cash, cash equivalents and restricted cash
 
(20,607
)

(18,956
)
Cash, cash equivalents and restricted cash:
 



Beginning of year
 
107,114


148,699

End of period
 
$
86,507


$
129,743

 
 
 
 
 
Supplemental Cash Flow Disclosures
 
 
 
 
Interest paid
 
$
41,965


$
19,683

Income taxes paid
 
$
11,878

 
$
934

Non-cash investing information
 
 
 
 
Capital expenditures included in accounts payable
 
$
1,587

 
$
698

See notes to condensed consolidated financial statements.

F-5



The E.W. Scripps Company
Condensed Consolidated Statements of Equity (Unaudited)
Three Months Ended
September 30, 2019 and 2018
(in thousands, except per share data)
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained Earnings (Accumulated Deficit)
 
Accumulated
Other
Comprehensive
Income (Loss) ("AOCI")
 
Noncontrolling
Interest
 
Total
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2019
 
$
809

 
$
1,111,849

 
$
(101,529
)
 
$
(94,476
)
 
$

 
$
916,653

Comprehensive income (loss)
 

 

 
(21,929
)
 
648

 
166

 
(21,115
)
Cash dividend: declared and paid - $0.05 per share
 

 

 
(4,154
)
 

 

 
(4,154
)
Compensation plans: 41,612 net shares issued *
 

 
2,390

 

 

 

 
2,390

As of September 30, 2019
 
$
809

 
$
1,114,239

 
$
(127,612
)
 
$
(93,828
)
 
$
166

 
$
893,774

* Net of tax payments related to shares withheld for vested RSUs of $16 for the three months ended September 30, 2019.
As of June 30, 2018
 
$
819

 
$
1,131,499

 
$
(119,012
)
 
$
(101,442
)
 
$

 
$
911,864

Comprehensive income
 

 

 
19,131

 
2,316

 

 
21,447

Cash dividend: declared and paid - $0.05 per share
 

 

 
(4,140
)
 

 

 
(4,140
)
Repurchase of 1,405,535 Class A Common shares
 
(14
)
 
(25,847
)
 

 

 

 
(25,861
)
Compensation plans: 116,392 net shares issued *
 
1

 
2,341

 

 

 

 
2,342

As of September 30, 2018
 
$
806

 
$
1,107,993

 
$
(104,021
)
 
$
(99,126
)
 
$

 
$
905,652

* Net of tax payments related to shares withheld for vested RSUs of $620 for the three months ended September 30, 2018.
Nine Months Ended
September 30, 2019 and 2018
(in thousands, except per share data)
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained Earnings (Accumulated Deficit)
 
Accumulated
Other
Comprehensive
Income (Loss) ("AOCI")
 
Noncontrolling
Interest
 
Total
Equity
As of December 31, 2018
 
$
807

 
$
1,106,984

 
$
(86,229
)
 
$
(95,397
)
 
$

 
$
926,165

Comprehensive income (loss)
 

 

 
(29,109
)
 
1,569

 
166

 
(27,374
)
Cash dividend: declared and paid - $0.15 per share
 

 

 
(12,274
)
 

 

 
(12,274
)
Repurchase of 180,541 Class A Common shares
 
(2
)
 
(582
)
 

 

 

 
(584
)
Compensation plans: 425,548 net shares issued *
 
4

 
7,837

 

 

 

 
7,841

As of September 30, 2019
 
$
809

 
$
1,114,239

 
$
(127,612
)
 
$
(93,828
)
 
$
166

 
$
893,774


* Net of tax payments related to shares withheld for vested RSUs of $3,716 for the nine months ended September 30, 2019.
As of December 31, 2017
 
$
816

 
$
1,129,020

 
$
(90,061
)
 
$
(102,922
)
 
$
632

 
$
937,485

Comprehensive income (loss)
 

 

 
(1,598
)
 
3,796

 
(632
)
 
1,566

Cash dividend: declared and paid - $0.15 per share
 

 

 
(12,362
)
 

 

 
(12,362
)
Repurchase of 1,690,736 Class A Common shares
 
(17
)
 
(30,253
)
 

 

 

 
(30,270
)
Compensation plans: 731,414 net shares issued *
 
7

 
9,226

 

 

 

 
9,233

As of September 30, 2018
 
$
806

 
$
1,107,993

 
$
(104,021
)
 
$
(99,126
)
 
$

 
$
905,652


* Net of tax payments related to shares withheld for vested RSUs of $2,520 for the nine months ended September 30, 2018.
See notes to condensed consolidated financial statements.

F-6



The E.W. Scripps Company
Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Summary of Significant Accounting Policies
As used in the Notes to Condensed 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.
Basis of Presentation — The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The interim financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto included in our 2018 Annual Report on Form 10-K. In management's opinion, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the interim periods have been made.
Results of operations are not necessarily indicative of the results that may be expected for future interim periods or for the full year.
Principles of 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.
Nature of Operations — We are a diverse media enterprise, serving audiences and businesses through a portfolio of local and national media brands. All of our media businesses provide content and advertising services via digital platforms, including the Internet, smartphones and tablets. Our media businesses are organized into the following reportable business segments: Local Media, National Media and Other. Additional information for our business segments is presented in the Notes to Condensed Consolidated Financial Statements.

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.
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 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.

F-7



Political Advertising Political advertising is generally sold through our Washington D.C. sales office. Advertising is sold to presidential, gubernatorial, Senate and House of Representative candidates, as well as for state and local issues. It is also sold to political action groups (PACs) or other advocacy groups.
Retransmission Revenues We earn revenue from retransmission consent agreements with multi-channel video programming distributors (“MVPDs”) in our markets. The MVPDs are cable operators and satellite carriers who pay us to offer our programming to their customers. We also receive fees from over-the-top virtual MVPDs such as YouTubeTV, DirectTV Now and Sony Vue. The fees we receive are typically based on the number of subscribers in our local market and the contracted rate per subscriber.
Other Products and Services We derive revenue from sponsorships and community events through our Local Media segment. Our National Media segment offers subscription services for access to premium content to its customers. Our Triton business earns revenue from monthly fees charged to audio publishers for converting their content into digital audio streams and inserting digital advertising into those audio streams and providing statistical measurement information about their listening audience. Our podcast business acts as a sales and marketing representative and earns commission for its work.
Refer to Note 13. Segment Information for further information, including revenue by significant product and service offering.
Revenue Recognition — Revenue is measured based on the consideration we expect to be entitled to in exchange for promised goods or services provided to customers, and excludes any amounts collected on behalf of third parties. Revenue is recognized upon transfer of control of promised products or services to customers.
Advertising Advertising revenue is recognized, net of agency commissions, over time primarily as ads are aired or impressions are delivered and any contracted audience guarantees are met. We apply the practical expedient to recognize revenue at the amount we have the right to invoice, which corresponds directly to the value a customer has received relative to our performance. For advertising sold based on audience guarantees, audience deficiency may result in an obligation to deliver additional advertisements to the customer. To the extent that we do not satisfy contracted audience ratings, we record deferred revenue until such time that the audience guarantee has been satisfied.
Retransmission Retransmission revenues are considered licenses of functional intellectual property and are recognized at the point in time the content is transferred to the customer. MVPDs report their subscriber numbers to us generally on a 30- to 90-day lag. Prior to receiving the MVPD reporting, we record revenue based on estimates of the number of subscribers, utilizing historical levels and trends of subscribers for each MVPD.
Other Revenues generated by our Triton business are recognized on a ratable basis over the contract term as the monthly service is provided to the customer.

Transaction Price Allocated to Remaining Performance Obligations — As of September 30, 2019, we had an aggregate transaction price of $85.9 million allocated to unsatisfied performance obligations related to contracts within our Triton business. We expect to recognize revenue on 86% of these remaining performance obligations over the next 24 months and the remainder thereafter.

We did not disclose the value of unsatisfied performance obligations on any other contracts with customers because they are either (i) contracts with an original expected term of one year or less, (ii) contracts for which the sales- or usage-based royalty exception was applied, or (iii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.
Contract Balances — Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing.
Payment terms may vary by contract type, although our terms generally include a requirement of payment within 30 to 90 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers.
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. The allowance for doubtful accounts totaled $2.9 million at September 30, 2019 and $4.4 million at December 31, 2018.

F-8



We record unearned revenue when cash payments are received in advance of our performance. We generally require amounts payable under advertising contracts with political advertising customers to be paid in advance. Unearned revenue totaled $8.9 million at September 30, 2019 and is expected to be recognized within revenue over the next 12 months. Unearned revenue totaled $11.5 million at December 31, 2018. We recorded $10.0 million of revenue in the nine months ended September 30, 2019 that was included in unearned revenue at December 31, 2018.
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 condensed consolidated balance sheets.
  
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the implicit rate is not readily determinable for most of our leases, we use our incremental borrowing rate when determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. The operating lease ROU asset also includes any payments made at or before commencement and is reduced by any lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Share-Based Compensation — We have a Long-Term Incentive Plan (the “Plan”) which is described more fully in our 2018 Annual Report on Form 10-K. 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.
Share-based compensation costs totaled $2.0 million and $2.6 million for the third quarter of 2019 and 2018, respectively. Year-to-date share-based compensation costs totaled $10.6 million and $8.9 million in 2019 and 2018, respectively.
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:
 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(in thousands)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Numerator (for basic and diluted earnings per share)
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
 
$
(21,763
)
 
$
20,039

 
$
(28,943
)
 
$
20,124

(Income) loss attributable to noncontrolling interest
 
(166
)
 


(166
)
 
632

Less income allocated to RSUs
 


(316
)
 


(338
)
Numerator for basic and diluted earnings per share from continuing operations attributable to the shareholders of The E.W. Scripps Company
 
$
(21,929
)
 
$
19,723

 
$
(29,109
)
 
$
20,418

Denominator
 
 
 
 
 
 
 
 
Basic weighted-average shares outstanding
 
80,877


81,452


80,791


81,606

Effect of dilutive securities:
 



 



Stock options and restricted stock units
 


632

 


491

Diluted weighted-average shares outstanding
 
80,877

 
82,084

 
80,791

 
82,097


For the three and nine months ended September 30, 2019, we incurred a net loss and the inclusion of RSUs would have been anti-dilutive. Accordingly, the diluted EPS calculation for the 2019 periods excludes the effect from 1.4 million of outstanding RSUs as of September 30, 2019.


F-9




2. Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards — In August 2018, the SEC issued a final rule that amended certain of its disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of shareholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of shareholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The first interim period this rule was effective for our condensed consolidated financial statements was June 30, 2019. As such, we have provided condensed consolidated statements of equity for the three and nine months ended September 30, 2019 and 2018.

In February 2016, the Financial Accounting Standards Board ("FASB") issued new guidance on the accounting for leases. Under this guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases at the commencement date. In July 2018, the FASB approved amendments to create an optional transition method. The amendments provided an option to implement the new leasing standard through a cumulative-effect adjustment to opening retained earnings in the period of adoption without having to restate the comparative periods presented. We adopted the standard on January 1, 2019 using this optional transition method that does not restate the comparative prior periods.

The new guidance provides a number of optional practical expedients in transition. We elected the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of right-of-use assets. We have utilized the practical expedient to not separate lease and non-lease components. Further, we elected a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

Implementation of the standard resulted in the recognition of $46.6 million of right-of-use assets and $50.3 million of lease liabilities, which included the impact of prepaid and deferred rent and lease incentives, on our condensed consolidated balance sheet. No cumulative-effect adjustment was recognized as the amount was not material, and adoption of the standard had no impact on our condensed consolidated statements of operations.

Recently Issued Accounting Standards — In March 2019, the FASB issued new guidance to align the accounting for the costs of producing films and episodic television series in response to changes in production and distribution models in the media and entertainment industry. The new guidance amends the capitalization, amortization, impairment, presentation and disclosure requirements for entities that produce and own content, and also aligns the impairment guidance for licensed content to the owned content fair value model. This guidance applies to broadcasters and entities that produce and distribute films and episodic television series through both traditional mediums and digital mediums. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of this guidance on our condensed consolidated financial statements, as well as the timing of adoption.

In August 2018, the FASB issued new guidance to address a customer's accounting for implementation costs incurred in a cloud computing arrangement ("CCA") that is a service contract. The new guidance aligns the accounting for costs incurred to implement a CCA that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of this guidance on our condensed consolidated financial statements, as well as the timing of adoption.

In August 2018, the FASB issued new guidance to add, remove and clarify annual disclosure requirements related to defined benefit pension and other postretirement plans. The guidance is effective for fiscal years ending after December 15, 2020 with early adoption permitted, and it should be applied on a retrospective basis. We believe the main impact of this guidance will be to no longer disclose the amount in accumulated other comprehensive income that is expected to be recognized as part of net periodic benefit cost over the next year. Additionally, we will have to add a narrative description for any significant gains and losses affecting the benefit obligation for the period. We are currently evaluating the impact of this guidance on our disclosures as well as the timing of adoption.

In June 2016, the FASB issued new guidance that changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model, which generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses,

F-10



entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The guidance is effective in 2020 with early adoption permitted in 2019. We are currently evaluating the impact of this guidance, specifically as it relates to our allowances for accounts receivable, which we don’t anticipate having a material impact on our condensed consolidated financial statements and related disclosure as of the adoption date.
 

3. Acquisitions

Television Stations Acquisitions

On September 19, 2019, we closed on the previously announced acquisition of eight television stations in seven markets from the Nexstar Media Group, Inc. ("Nexstar") transaction with Tribune Media Company ("Tribune"). Cash consideration for the transaction totaled $582 million. Seven of the stations were operated by Tribune, and its subsidiaries, and one was operated by Nexstar. Nexstar was required to divest these stations in order to complete its acquisition of Tribune. The purchase price and other related costs associated with the transaction were financed from a combination of incremental term loan B proceeds and a portion of the $500 million of senior unsecured notes issued on July 26, 2019.

From the acquisition date of September 19, 2019 through September 30, 2019, revenue from the Nexstar-Tribune stations was $9.8 million.

On May 1, 2019, we acquired 15 television stations in 10 markets from Cordillera Communications, LLC ("Cordillera"), for $521 million in cash, plus a working capital adjustment of $23.9 million. We financed the acquisition with a $765 million term loan B, of which $240 million was segregated into a separate account for financing a portion of the Nexstar transaction.

From the acquisition date of May 1, 2019 through September 30, 2019, revenue from the Cordillera stations was $64.8 million.

Effective January 1, 2019, we acquired television stations owned by Raycom Media ("Raycom") — Waco, Texas ABC affiliate KXXV/KRHD and Tallahassee, Florida ABC affiliate WTXL — for $55 million in cash. These stations were being divested as part of Gray Television's acquisition of Raycom.

From the acquisition date of January 1, 2019 through September 30, 2019, revenue from the Raycom stations was $17.6 million.

The following table summarizes the preliminary fair values of the Raycom, Cordillera and Nexstar-Tribune assets acquired and liabilities assumed at the closing dates.
(in thousands)
 
Raycom
 
Cordillera
 
Nexstar- Tribune
 
Total
 
 
 
 
 
 
 
 
 
Accounts receivable
 
$

 
$
26,264

 
$

 
$
26,264

Other current assets
 

 
986

 
3,541

 
4,527

Property and equipment
 
11,721

 
53,671

 
59,373

 
124,765

Operating lease right-of-use assets
 
296

 
4,667

 
82,447

 
87,410

Goodwill
 
18,349

 
253,735

 
212,065

 
484,149

Indefinite-lived intangible assets - FCC licenses
 
6,800

 
26,500

 
144,900

 
178,200

Amortizable intangible assets:
 

 

 
 
 

  Television network affiliation relationships
 
17,400

 
168,700

 
157,000

 
343,100

  Advertiser relationships
 
700

 
5,900

 
7,300

 
13,900

  Other intangible assets
 

 
13,000

 

 
13,000

Accounts payable
 

 
(15
)
 

 
(15
)
Accrued expenses