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 June 30, 2020

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 001-10701

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 June 30, 2020, there were 69,583,840 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 June 30, 2020

Item No.	Page
PART I - Financial Information
1. Financial Statements	4
2. Management's Discussion and Analysis of Financial Condition and Results of Operations	4
3. Quantitative and Qualitative Disclosures About Market Risk	4
4. Controls and Procedures	4
PART II - Other Information
1. Legal Proceedings	4
1A. Risk Factors	4
2. Unregistered Sales of Equity Securities and Use of Proceeds	4
3. Defaults Upon Senior Securities	4
4. Mine Safety Disclosures	4
5. Other Information	5
6. Exhibits	5
Signatures	6

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

Except as updated for the impacts of the COVID-19 pandemic in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, there have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our 2019 Annual Report on Form 10-K.

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

There were no sales of unregistered equity securities during the quarter ended June 30, 2020.

In November 2016, our Board of Directors authorized a repurchase program of up to $100 million of our Class A Common shares. We repurchased a total of $50.3 million of shares under the 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. 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. No shares were repurchased during the second quarter of 2020.

Item 3. Defaults Upon Senior Securities

There were no defaults upon senior securities during the quarter ended June 30, 2020.

Item 4. Mine Safety Disclosures

None.

3

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Exhibit Description
31(a)	Section 302 Certifications
31(b)	Section 302 Certifications
32(a)	Section 906 Certifications
32(b)	Section 906 Certifications
101	The Company's unaudited Condensed Consolidated Financial Statements and related Notes for the quarter and six months ended June 30, 2020 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: August 7, 2020	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
Condensed Consolidated Balance Sheets	F-2
Condensed Consolidated Statements of Operations	F-3
Condensed Consolidated Statements of Comprehensive Income (Loss)	F-4
Condensed Consolidated Statements of Cash Flows	F-5
Condensed Consolidated Statements of Equity	F-6
Notes to Condensed Consolidated Financial Statements	F-7
Management’s Discussion and Analysis of Financial Condition and Results of Operations	F-24
Quantitative and Qualitative Disclosures About Market Risk	F-38
Controls and Procedures	F-39

F-1

The E.W. Scripps Company

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)	As of  June 30,  2020		As of  December 31,  2019
Assets
Current assets:
Cash and cash equivalents	$	98,933	$	32,968
Accounts receivable (less allowances— $3,236 and $3,346)	347,122		387,847
Programming	—		52,699
FCC repack receivable	26,552		29,651
Miscellaneous	47,935		39,486
Assets held for sale	96,035		101,266
Total current assets	616,577		643,917
Investments	13,357		8,375
Property and equipment	369,869		370,378
Operating lease right-of-use assets	122,721		128,192
Goodwill	1,226,222		1,224,679
Other intangible assets	1,033,334		1,060,675
Programming (less current portion)	133,077		96,256
Deferred income taxes	13,334		12,306
Miscellaneous	19,354		17,079
Total Assets	$	3,547,845	$	3,561,857
Liabilities and Equity
Current liabilities:
Accounts payable	$	49,053	$	28,441
Unearned revenue	9,371		10,704
Current portion of long-term debt	10,612		10,612
Accrued liabilities:
Employee compensation and benefits	36,701		43,259
Programming liability	92,940		96,682
Accrued interest	16,248		15,352
Miscellaneous	38,687		41,694
Other current liabilities	18,908		42,561
Liabilities held for sale	19,082		22,727
Total current liabilities	291,602		312,032
Long-term debt (less current portion)	1,952,047		1,904,418
Deferred income taxes	29,395		17,876
Operating lease liabilities	111,582		113,648
Other liabilities (less current portion)	299,605		315,948
Equity:
Preferred stock, $0.01 par — authorized: 25,000,000 shares; none outstanding	—		—
Common stock, $0.01 par:
Class A — authorized: 240,000,000 shares; issued and outstanding: 69,583,840 and 69,027,524 shares	696		691
Voting — authorized: 60,000,000 shares; issued and outstanding: 11,932,722 and 11,932,722 shares	119		119
Total	815		810
Additional paid-in capital	1,123,067		1,117,095
Accumulated deficit	(163,092)		(120,981)
Accumulated other comprehensive loss, net of income taxes	(97,176)		(98,989)
Total equity	863,614		897,935
Total Liabilities and Equity	$	3,547,845	$	3,561,857

See notes to condensed consolidated financial statements.

F-2

The E.W. Scripps Company

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands, except per share data)	2020		2019		2020		2019
Operating Revenues:
Advertising	$	195,457	$	208,651	$	449,998	$	379,448
Retransmission and carriage	144,283		93,325		283,233		180,608
Other	19,143		18,452		39,875		37,431
Total operating revenues	358,883		320,428		773,106		597,487
Costs and Expenses:
Employee compensation and benefits	130,029		110,159		274,824		215,292
Programming	131,743		89,993		263,422		177,341
Other expenses	67,388		68,454		150,525		125,860
Acquisition and related integration costs	221		2,788		5,131		6,268
Restructuring costs	—		957		—		1,895
Total costs and expenses	329,381		272,351		693,902		526,656
Depreciation, Amortization, and (Gains) Losses:
Depreciation	12,396		9,827		25,747		18,625
Amortization of intangible assets	14,249		9,705		28,243		17,913
(Gains) losses, net on disposal of property and equipment	1,307		144		2,740		317
Net depreciation, amortization, and (gains) losses	27,952		19,676		56,730		36,855
Operating income	1,550		28,401		22,474		33,976
Interest expense	(22,999)		(18,023)		(48,797)		(26,939)
Defined benefit pension plan expense	(1,026)		(1,564)		(2,052)		(3,136)
Miscellaneous, net	(1,552)		369		(438)		(431)
Income (loss) from continuing operations before income taxes	(24,027)		9,183		(28,813)		3,470
Provision (benefit) for income taxes	(6,515)		3,385		(4,103)		992
Income (loss) from continuing operations, net of tax	(17,512)		5,798		(24,710)		2,478
Loss from discontinued operations, net of tax	(4,531)		(6,164)		(9,142)		(9,658)
Net loss	$	(22,043)	$	(366)	$	(33,852)	$	(7,180)
Net income (loss) per basic share of common stock:
Income (loss) from continuing operations	$	(0.22)	$	0.07	$	(0.30)	$	0.03
Loss from discontinued operations	(0.06)		(0.07)		(0.11)		(0.12)
Net loss per basic share of common stock:	$	(0.27)	$	(0.01)	$	(0.42)	$	(0.09)
Net income (loss) per diluted share of common stock:
Income (loss) from continuing operations	$	(0.22)	$	0.07	$	(0.30)	$	0.03
Loss from discontinued operations	(0.06)		(0.07)		(0.11)		(0.12)
Net loss per diluted share of common stock:	$	(0.27)	$	(0.01)	$	(0.42)	$	(0.09)

See notes to condensed consolidated financial statements.

Net income 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  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Net loss	$	(22,043)	$	(366)	$	(33,852)	$	(7,180)
Changes in defined benefit pension plans, net of tax of $288, $155, $574, $310	899		461		1,801		921
Other	6		—		12		—
Total comprehensive income (loss)	$	(21,138)	$	95	$	(32,039)	$	(6,259)

See notes to condensed consolidated financial statements.

F-4

The E.W. Scripps Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended  June 30,
(in thousands)	2020		2019
Cash Flows from Operating Activities:
Net loss	$	(33,852)	$	(7,180)
Loss from discontinued operations, net of tax	(9,142)		(9,658)
Income (loss) from continuing operations, net of tax	(24,710)		2,478
Adjustments to reconcile net income (loss) from continuing operations to net cash flows from operating activities:
Depreciation and amortization	53,990		36,538
(Gains) losses, net on disposal of property and equipment	2,740		317
Programming assets and liabilities	(10,662)		1,744
Deferred income taxes	9,933		983
Stock and deferred compensation plans	7,446		9,511
Pension expense, net of contributions	(3,282)		(3,921)
Other changes in certain working capital accounts, net	37,740		(28,287)
Miscellaneous, net	8,287		3,860
Net cash provided by operating activities from continuing operations	81,482		23,223
Net cash used in operating activities from discontinued operations	(7,223)		(14,065)
Net operating activities	74,259		9,158
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired	2,500		(608,273)
Acquisition of intangible assets	(1,041)		(24,073)
Additions to property and equipment	(26,950)		(29,920)
Purchase of investments	(5,361)		(615)
Proceeds from FCC repack	9,427		1,520
Miscellaneous, net	773		308
Net cash used in investing activities from continuing operations	(20,652)		(661,053)
Net cash used in investing activities from discontinued operations	(333)		(74)
Net investing activities	(20,985)		(661,127)
Cash Flows from Financing Activities:
Net borrowings under revolving credit facility	50,000		120,000
Proceeds from issuance of long-term debt	—		761,175
Payments on long-term debt	(5,306)		(3,413)
Deferred financing costs	—		(20,550)
Dividends paid	(8,259)		(8,120)
Repurchase of Class A Common shares	—		(584)
Tax payments related to shares withheld for vested stock and RSUs	(2,292)		(3,700)
Miscellaneous, net	(21,438)		(3,447)
Net cash provided by financing activities from continuing operations	12,705		841,361
Effect of foreign exchange rates on cash and cash equivalents	(14)		8
Increase in cash and cash equivalents	65,965		189,400
Cash and cash equivalents:
Beginning of year	32,968		107,114
End of period	$	98,933	$	296,514
Supplemental Cash Flow Disclosures
Interest paid	$	43,918	$	24,439
Income taxes paid	$	124	$	11,698
Non-cash investing information
Capital expenditures included in accounts payable	$	2,512	$	2,042

See notes to condensed consolidated financial statements.

F-5

The E.W. Scripps Company

Condensed Consolidated Statements of Equity (Unaudited)

Three Months Ended June 30, 2020 and 2019 (in thousands, except per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss) ("AOCI")		Total Equity
As of March 31, 2020	$	814	$	1,119,485	$	(136,898)	$	(98,081)	$	885,320
Comprehensive income (loss)	—		—		(22,043)		905		(21,138)
Cash dividend: declared and paid - $0.05 per share	—		—		(4,151)		—		(4,151)
Compensation plans:127,043 net shares issued *	1		3,582		—		—		3,583
As of June 30, 2020	$	815	$	1,123,067	$	(163,092)	$	(97,176)	$	863,614

* Net of tax payments related to shares withheld for vested RSUs of $26 for the three months ended June 30, 2020.

As of March 31, 2019	$	808	$	1,108,585	$	(97,083)	$	(94,937)	$	917,373
Comprehensive income (loss)	—		—		(366)		461		95
Cash dividend: declared and paid - $0.05 per share	—		—		(4,080)		—		(4,080)
Compensation plans: 86,805 net shares issued *	1		3,264		—		—		3,265
As of June 30, 2019	$	809	$	1,111,849	$	(101,529)	$	(94,476)	$	916,653

* Net of tax payments related to shares withheld for vested RSUs of $51 for the three months ended June 30, 2019.

Six Months Ended June 30, 2020 and 2019 (in thousands, except per share data)	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)	—		—		(33,852)		1,813		(32,039)
Cash dividend: declared and paid - $0.10 per share	—		—		(8,259)		—		(8,259)
Compensation plans: 556,316 net shares issued *	5		5,972		—		—		5,977
As of June 30, 2020	$	815	$	1,123,067	$	(163,092)	$	(97,176)	$	863,614

* Net of tax payments related to shares withheld for vested RSUs of $2,292 for the six months ended June 30, 2020.

As of December 31, 2018	$	807	$	1,106,984	$	(86,229)	$	(95,397)	$	926,165
Comprehensive income (loss)	—		—		(7,180)		921		(6,259)
Cash dividend: declared and paid - $0.10 per share	—		—		(8,120)		—		(8,120)
Repurchase of 180,541 Class A Common shares	(2)		(582)		—		—		(584)
Compensation plans: 383,936 net shares issued *	4		5,447		—		—		5,451
As of June 30, 2019	$	809	$	1,111,849	$	(101,529)	$	(94,476)	$	916,653

* Net of tax payments related to shares withheld for vested RSUs of $3,700 for the six months ended June 30, 2019.

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 2019 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. Additionally, certain amounts in prior periods have been reclassified to conform to the current period's presentation.

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 television stations and national media brands. All of our businesses provide content and services via digital platforms, including the Internet, smartphones and tablets. Our media businesses are organized into the following reportable business segments: Local Media, 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 Hulu, YouTubeTV and AT&T Now. 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.

Refer to Note 12. 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 June 30, 2020, we had an aggregate transaction price of $54.2 million allocated to unsatisfied performance obligations related to contracts within our Triton business, most of which is expected to be recognized into revenue over the next 24 months.

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 estimate the allowance based on expected credit losses, including our historical experience of actual losses and known troubled accounts. The allowance for doubtful accounts totaled $3.2 million at June 30, 2020 and $3.3 million at December 31, 2019.

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 $9.4 million at June 30, 2020 and is expected to be recognized within revenue over the next 12 months. Unearned revenue totaled $10.7 million at December 31, 2019. We recorded $9.2 million of revenue in the six months ended June 30, 2020 that was included in unearned revenue at December 31, 2019.

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 2019 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 $3.0 million and $2.8 million for the second quarter of 2020 and 2019, respectively. Year-to-date share-based compensation totaled $7.2 million and $8.5 million in 2020 and 2019, 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  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Numerator (for basic and diluted earnings per share)
Income (loss) from continuing operations, net of tax	$	(17,512)	$	5,798	$	(24,710)	$	2,478
Less income allocated to RSUs	—		(98)		—		(37)
Numerator for basic and diluted earnings per share from continuing operations	$	(17,512)	$	5,700	$	(24,710)	$	2,441
Denominator
Basic weighted-average shares outstanding	81,418		80,822		81,248		80,748
Effect of dilutive securities:
Restricted stock units	—		374		—		400
Diluted weighted-average shares outstanding	81,418		81,196		81,248		81,148

For the three and six months ended June 30, 2020, we incurred a net loss and the inclusion of RSUs would have been anti-dilutive. Accordingly, the diluted EPS calculation for the 2020 periods excludes the effect from 2.3 million of outstanding RSUs, respectively.

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2. Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards — In December 2019, the Financial Accounting Standards Board ("FASB") issued new guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The guidance also clarifies and amends existing guidance in order to improve the consistent application of, and simplify GAAP for, other areas of Topic 740. It is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We elected to early adopt this standard effective January 1, 2020, with no material impact on our condensed consolidated financial statements.

In March 2019, the FASB issued new guidance to align the accounting for the costs of producing films and episodic television series in response to changes in production and distribution models in the media and entertainment industry. The new guidance amends the capitalization, amortization, impairment, presentation and disclosure requirements for entities that produce and own content, and also aligns the impairment guidance for licensed content to the owned content fair value model. This guidance applies to broadcasters and entities that produce and distribute films and episodic television series through both traditional mediums and digital mediums. We adopted the standard on January 1, 2020. Upon adoption in 2020, we began recording all licensed programming assets and programming assets produced by us as non-current assets in our condensed consolidated balance sheets. The adoption of the standard had no material impact on our condensed consolidated statements of operations.

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

In June 2016, the FASB issued new guidance that changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model, which generally will result in the earlier recognition of allowances for losses. We adopted the standard on January 1, 2020. Considering current and expected future economic and market conditions related to COVID-19, we increased our allowances for accounts receivable $0.7 million upon adoption in the first quarter of 2020. The adoption of the standard did not result in any other material impacts to our condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Standards — In March 2020, the FASB issued new guidance that provides optional expedients and exceptions to certain accounting requirements to facilitate the transition away from the use of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. The guidance is effective as of March 12, 2020 and will apply through December 31, 2022 to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. We will evaluate transactions or contract modifications occurring as a result of reference rate reform to determine whether to apply the optional guidance on an ongoing basis.

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.

3. Acquisitions

Television Stations Acquisitions

On September 19, 2019, we closed on the acquisition of eight television stations in seven markets from the Nexstar Media Group, Inc. ("Nexstar") transaction with Tribune Media Company ("Tribune"). Cash consideration for the transaction totaled $582 million. Seven of the stations were operated by Tribune, and its subsidiaries, and one was operated by Nexstar. Nexstar was required to divest these stations in order to complete its acquisition of Tribune.

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On May 1, 2019, we acquired 15 television stations in 10 markets from Cordillera Communications, LLC ("Cordillera"), for $521 million in cash, plus a working capital adjustment of $23.9 million. In the second quarter of 2020, we received cash consideration and reduced the purchase price by $2.5 million related to an indemnification claim on certain acquired assets.

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

The following table summarizes the fair values of the Raycom, Cordillera and Nexstar-Tribune assets acquired and liabilities assumed at the closing dates. The allocation of purchase price for the Nexstar-Tribune acquisition reflects preliminary fair values.

(in thousands)	Raycom		Cordillera		Nexstar- Tribune		Total
Accounts receivable	$	—	$	26,770	$	—	$	26,770
Current portion of programming	—		—		11,997		11,997
Other current assets	—		986		3,541		4,527
Property and equipment	11,721		53,734		61,569		127,024
Operating lease right-of-use assets	296		4,667		82,447		87,410
Programming (less current portion)	—		—		9,830		9,830
Goodwill	18,349		251,681		167,888		437,918
Indefinite-lived intangible assets - FCC licenses	6,800		26,700		176,000		209,500
Amortizable intangible assets:
Television network affiliation relationships	17,400		169,400		181,000		367,800
Advertiser relationships	700		5,900		7,100		13,700
Other intangible assets	—		13,000		—		13,000
Accounts payable	—		(15)		—		(15)
Accrued expenses	—		(5,750)		(4,580)		(10,330)
Current portion of programming liabilities	—		—		(16,211)		(16,211)
Other current liabilities	—		(280)		(3,185)		(3,465)
Operating lease liabilities	(296)		(4,387)		(79,766)		(84,449)
Programming liabilities	—		—		(15,305)		(15,305)
Net purchase price	$	54,970	$	542,406	$	582,325	$	1,179,701

Of the value allocated to amortizable intangible assets, television network affiliation relationships have an estimated amortization period of 20 years, advertiser relationships have estimated amortization periods of 5-10 years and the value allocated to a shared services agreement has an estimated amortization period of 20 years.

The goodwill of $438 million arising from the transactions consists largely of synergies, economies of scale and other benefits of a larger broadcast footprint. We allocated the goodwill to our Local Media segment. We treated the transactions as asset acquisitions for income tax purposes resulting in a step-up in the assets acquired. The goodwill is deductible for income tax purposes.

Omny Studio

On June 10, 2019, we completed the acquisition of Omny Studio ("Omny") for a cash purchase price of $8.3 million. Omny is a Melbourne, Australia-based podcasting software-as-a-service company operating as a part of Triton in our National Media segment. Omny is an audio-on-demand platform built specifically for professional audio publishers. The platform enables audio publishers to seamlessly record, edit, distribute, monetize and analyze podcast content; replace static ads with dynamically inserted, highly targeted ads; and automates key aspects of campaign management, such as industry separation, frequency capping and volume normalization.

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

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intangible asset has an estimated amortization period of 10 years. The goodwill arising from the transaction consists largely of the fact that the addition of Omny's podcast and on-demand audio publishing platform to Triton's portfolio of streaming, advertising and measurement technologies provides audio publishers around the world with a full-stack enterprise solution to increase reach and revenue.

Pro forma results of operations

Pro forma results of operations, assuming the Cordillera and Nexstar-Tribune acquisitions had taken place at the beginning of 2019, are presented in the following table. The pro forma results do not include Raycom or Omny Studio, as the impact of these acquisitions, individually or in the aggregate, is not material to prior year results of operations. The pro forma information includes the historical results of operations of Scripps, Cordillera and Nexstar-Tribune, as well as adjustments for additional depreciation and amortization of the assets acquired, additional interest expense related to the financing of the transactions and other transactional adjustments. The pro forma results exclude the $3.2 million of transaction related costs that were expensed in conjunction with the acquisitions and do not include efficiencies, cost reductions or synergies expected to result from the acquisitions. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisitions been completed at the beginning of the period.

(in thousands, except per share data) (unaudited)	Three Months Ended  June 30, 2019		Six Months Ended June 30, 2019
Operating revenues	$	396,410	$	765,610
Loss from continuing operations, net of tax	(3,113)		(19,549)
Net loss per share from continuing operations:
Basic	$	(0.04)	$	(0.24)
Diluted	(0.04)		(0.24)

4. Asset Write-Downs and Other Charges and Credits

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

2020 - Acquisition and related integration costs of $5.1 million in the first six months of 2020 reflect contract termination costs and professional service costs incurred to integrate the Cordillera and Nexstar-Tribune television stations.

2019 - Acquisition and related integration costs of $2.8 million in the second quarter of 2019 and $6.3 million in the first six months of 2019 reflect professional service costs incurred to integrate Triton and the Raycom and Cordillera television stations, as well as costs related to the Nexstar-Tribune acquisition.

5. Income Taxes

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

The income tax provision for interim periods is generally determined based upon the expected effective income tax rate for the full year and the tax rate applicable to certain discrete transactions in the interim period. To determine the annual effective income tax rate, we must estimate both the total income (loss) before income tax for the full year and the jurisdictions in which that income (loss) is subject to tax. The actual effective income tax rate for the full year may differ from these estimates if income (loss) before income tax is greater than or less than what was estimated or if the allocation of income (loss) to jurisdictions in which it is taxed is different from the estimated allocations. We review and adjust our estimated effective income tax rate for the full year each quarter based upon our most recent estimates of income (loss) before income tax for the full year and the jurisdictions in which we expect that income will be taxed.

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 second quarter or year-to-date income tax provision. We do expect to receive an additional tax refund of $14.0 million from the carryback of NOLs to prior periods. We are currently

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assessing the future implications of these provisions within the CARES Act on our condensed consolidated financial statements, but do not expect the impact to be material.

The effective income tax rate for the six months ended June 30, 2020 and 2019 was 14% and 29%, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the impact of state taxes, foreign taxes, non-deductible expenses, changes in reserves for uncertain tax positions and excess tax benefits or expense from the exercise and vesting of share-based compensation awards ($1.1 million expense in 2020 and $0.8 million benefit in 2019). Additionally, in 2020, we had a net discrete tax provision charge of $3.5 million related to state deferred rate changes and state NOL valuation allowance reductions.

Deferred tax assets totaled $13.3 million at June 30, 2020, which includes the tax effect of state NOL carryforwards. We recognize state NOL 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.

6. Leases

We have operating leases for office space, data centers and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. Operating lease costs recognized in our condensed consolidated statements of operations for the three months ended June 30, 2020 and 2019 totaled $4.7 million and $3.0 million, including short-term lease costs of $0.1 million. Year-to-date June 30, 2020 and 2019 costs totaled $9.6 million and $5.8 million, including short-term lease costs of $0.3 million and $0.1 million, respectively.

Other information related to our operating leases was as follows:

(in thousands, except lease term and discount rate)	As of  June 30,  2020			As of  December 31,  2019
Balance Sheet Information
Right-of-use assets	$	122,721		$	128,192
Other current liabilities	14,673			15,051
Operating lease liabilities	111,582			113,648
Weighted Average Remaining Lease Term
Operating leases	12.36 years			12.59 years
Weighted Average Discount Rate
Operating leases	5.17		%	5.19		%

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities	$	4,160	$	2,925	$	8,338	$	5,748
Right-of-use assets obtained in exchange for lease obligations	1,331		1,142		1,741		1,142

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Future minimum lease payments under non-cancellable operating leases as of June 30, 2020 were as follows:

(in thousands)	Operating Leases
Remainder of 2020	$	11,920
2021	11,629
2022	14,995
2023	15,065
2024	13,792
Thereafter	102,717
Total future minimum lease payments	170,118
Less: Imputed interest	(43,863)
Total	$	126,255

7. Goodwill and Other Intangible Assets

Goodwill consisted of the following:

(in thousands)	Local Media		National Media		Total
Gross balance as of December 31, 2019	$	1,143,859	$	318,734	$	1,462,593
Accumulated impairment losses	(216,914)		(21,000)		(237,914)
Net balance as of December 31, 2019	$	926,945	$	297,734	$	1,224,679
Gross balance as of June 30, 2020	$	1,145,418	$	318,718	$	1,464,136
Accumulated impairment losses	(216,914)		(21,000)		(237,914)
Net balance as of June 30, 2020	$	928,504	$	297,718	$	1,226,222

Other intangible assets consisted of the following:

(in thousands)	As of  June 30,  2020		As of  December 31,  2019
Amortizable intangible assets:
Carrying amount:
Television network affiliation relationships	$	616,244	$	616,244
Customer lists and advertiser relationships	104,300		104,300
Other	103,597		102,956
Total carrying amount	824,141		823,500
Accumulated amortization:
Television network affiliation relationships	(98,565)		(82,917)
Customer lists and advertiser relationships	(47,703)		(42,012)
Other	(30,454)		(23,811)
Total accumulated amortization	(176,722)		(148,740)
Net amortizable intangible assets	647,419		674,760
Indefinite-lived intangible assets — FCC licenses	385,915		385,915
Total other intangible assets	$	1,033,334	$	1,060,675

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On April 4, 2019, we acquired assets from an independent station in Stuart, Florida, for $23.6 million in cash. The value attributed to the acquired FCC license totaled $19.2 million and $4.1 million of value was attributed to an other intangible asset.

Estimated amortization expense of intangible assets for each of the next five years is $28.6 million for the remainder of 2020, $55.4 million in 2021, $49.9 million in 2022, $44.6 million in 2023, $42.9 million in 2024, $40.0 million in 2025 and $386.0 million in later years.

Goodwill and other indefinite-lived intangible assets are tested for impairment annually and any time events occur or changes in circumstances indicate it is more likely than not the fair value of a reporting unit, or respective indefinite-lived intangible asset, is below its carrying value. Our reporting units are Local Media, Katz, Triton, Stitcher and Newsy. Such events or changes in circumstances include, but are not limited to, changes in business climate, declines in the price of our stock, or other factors resulting in lower cash flow related to such assets. If the carrying amount exceeds its fair value, then an impairment loss is recognized.

Weakness in economic conditions toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, and declines in our stock price, created indications of fair value declines for our reporting units as of March 31, 2020. Accordingly, during the first quarter, we considered impacts to the estimated fair values for each of our reporting units to determine if it was more likely than not that fair value had declined below carrying value. Our analysis primarily relied upon market data and discounted cash flow analyses. The use of a discounted cash flow approach requires significant judgment to estimate future cash flows of the business and the period of time over which those cash flows will occur, as well as to determine an appropriate discount rate. While we believe the estimates and judgments used in the discounted cash flow analyses for our reporting units were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates, could produce different estimates of value. During the second quarter of 2020, we continued to evaluate changes in facts and circumstances and market impacts resulting from the COVID-19 pandemic, including their impact on operating results and whether it was more likely than not that fair values of our reporting units had declined below carrying value.

We concluded that it was not more likely than not that the carrying value for any of our reporting units exceeded its fair value. However, the discounted cash flow values for each of our reporting units are lower than the values determined during our 2019 annual impairment test. In 2019, the fair value for our Local Media reporting unit exceeded its carrying value by approximately 25% and our other reporting units exceeded their carrying values by over 30%. The Local Media reporting unit has $0.9 billion of goodwill or 76% of the consolidated total for the Company.

We have also concluded that it was not more likely than not that the carrying value of any of our FCC licenses exceeded their fair values. Our FCC licenses are indefinite-lived assets that are not subject to amortization. The value of a FCC license is estimated using an income approach, which requires multiple assumptions relating to the future prospects of each individual FCC license. While we believe the estimates and judgments used in determining that it was not more likely than not that the carrying values of the FCC licenses exceeded fair values were appropriate, different assumptions with respect to the income approach could produce different estimates of value. For example, as it relates to our 2019 annual impairment test, a 50-basis point increase in discount rates would reduce the aggregate fair value of the FCC licenses by approximately $65 million.

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8. Long-Term Debt

Long-term debt consisted of the following:

(in thousands)	As of  June 30,  2020		As of  December 31,  2019
Revolving credit facility	$	50,000	$	—
Senior unsecured notes, due in 2025	400,000		400,000
Senior unsecured notes, due in 2027	500,000		500,000
Term loan, due in 2024	291,750		293,250
Term loan, due in 2026	755,466		759,272
Total outstanding principal	1,997,216		1,952,522
Less: Debt issuance costs and issuance discounts	(34,557)		(37,492)
Less: Current portion	(10,612)		(10,612)
Net carrying value of long-term debt	$	1,952,047	$	1,904,418
Fair value of long-term debt *	$	1,899,320	$	1,991,164

* Fair values of the 2025 and 2027 Senior Notes are estimated based on quoted private market transactions and are classified as Level 1 in the fair value hierarchy. The fair values of the term loans are based on observable estimates provided by third party financial professionals, and as such, are classified within Level 2 of the fair value hierarchy.

2025 Senior Unsecured Notes

On April 28, 2017, we issued $400 million senior unsecured notes ("the 2025 Senior Notes"), which bear interest at a rate of 5.125% per annum and mature on May 15, 2025. The 2025 Senior Notes were priced at 100% of par value and interest is payable semi-annually on May 15 and November 15. If we sell certain of our assets or have a change of control, the holders of the 2025 Senior Notes may require us to repurchase some or all of the notes. The 2025 Senior Notes are also guaranteed by us and the majority of our subsidiaries. The 2025 Senior Notes contain covenants that, among other things, limit the ability to incur additional debt, make certain restricted payments, and/or create liens, that are typical for borrowing transactions of this nature. 

We incurred approximately $7.0 million of deferred financing costs in connection with the issuance of the 2025 Senior Notes, which are being amortized over the life of the notes.

2027 Senior Unsecured Notes

On July 26, 2019, our wholly-owned subsidiary, Scripps Escrow, Inc. ("Scripps Escrow"), issued $500 million of senior unsecured notes, which bear interest at a rate of 5.875% per annum and mature on July 15, 2027 ("the 2027 Senior Notes"). The 2027 Senior Notes were priced at 100% of par value and interest is payable semi-annually on July 15 and January 15, commencing on January 15, 2020. Prior to July 15, 2022, we may redeem up to 40% of the aggregate principal amount of the 2027 Senior Notes at a redemption price of 105.875% of the principal amount plus accrued and unpaid interest, if any, to the date of redemption. We may also redeem some or all of the notes before 2022 at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date. If we sell certain of our assets or have a change of control, the holders of the 2027 Senior Notes may require us to repurchase some or all of the notes. The 2027 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our existing and future domestic restricted subsidiaries. The 2027 Senior Notes contain covenants that, among other things, limit the ability to incur additional debt, make certain restricted payments, and/or create liens, that are typical for borrowing transactions of this nature. There are no registration rights associated with the 2027 Senior Notes.

We incurred approximately $10.7 million of deferred financing costs in connection with the issuance of the 2027 Senior Notes, which are being amortized over the life of the notes.

Scripps Senior Secured Credit Agreement

On October 2, 2017, we issued a $300 million term loan B which matures in October 2024 ("2024 term loan"). We amended the term loan on April 4, 2018, reducing the interest rate by 25 basis points. Following the amendment, interest is 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 June 30, 2020 and December 31, 2019, the interest rate on the 2024 term loan was 2.18% and 3.80%, respectively. The weighted-average interest rate was 2.51% and 4.47% for the six months ended June 30, 2020 and 2019, respectively.

On May 1, 2019, we entered into a Fourth Amendment to the Third Amended and Restated Credit Agreement ("Fourth Amendment"). Under the Fourth Amendment, we issued a $765 million term loan B ("2026 term loan") that matures in May 2026 with interest payable at rates based on LIBOR, plus a fixed margin of 2.75%. We amended this term loan on December 18, 2019, reducing the interest rate by 25 basis points. Following the amendment, interest is payable on the 2026 term loan at a rate based on LIBOR, plus a fixed margin of 2.50%. The 2026 term loan requires annual principal payments of $7.6 million. Deferred financing costs and original issuance discount totaled approximately $23.0 million with this term loan, which are being amortized over the life of the loan.

As of June 30, 2020 and December 31, 2019, the interest rate on the 2026 term loan was 2.68% and 4.30%, respectively. The weighted-average interest rate on the term loan was 3.01% for the six months ended June 30, 2020. The weighted-average interest rate on the term loan was 5.21% for the two months it was outstanding during 2019.

We have a $210 million revolving credit facility ("Revolving Credit Facility") that expires in April 2022. Commitment fees of 0.30% to 0.50% per annum, based on our leverage ratio, of the total unused commitment are payable under the Revolving Credit Facility. Interest is payable on the Revolving Credit Facility at rates based on LIBOR, plus a margin based on our leverage ratio, ranging from 1.75% to 2.50%. As of June 30, 2020, we had $50 million outstanding under the Revolving Credit Facility with an interest rate of 2.43%. The weighted-average interest rate over the period during which we had a drawn revolver balance in 2020 was 2.67%. As of June 30, 2020 and December 31, 2019, we had outstanding letters of credit totaling $6.0 million under the Revolving Credit Facility.

The Senior Secured Credit Agreement contains covenants that limit our ability to incur additional debt and provides for restrictions on certain payments (dividends and share repurchases). Additionally, we must be in compliance with certain leverage ratios in order to proceed with acquisitions. Our credit agreement also includes a provision that in certain circumstances we must use a portion of excess cash flow to repay debt. 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 4.5 to 1.0 when we have outstanding borrowings on the facility. As of June 30, 2020, we were in compliance with our financial covenants.

9. Other Liabilities

Other liabilities consisted of the following:

(in thousands)	As of  June 30,  2020		As of  December 31,  2019
Employee compensation and benefits	$	21,981	$	21,403
Deferred FCC repack income	42,197		36,770
Programming liability	34,493		57,291
Liability for pension benefits	184,390		190,219
Other	16,544		10,265
Other liabilities (less current portion)	$	299,605	$	315,948

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10. Supplemental Cash Flow Information

The following table presents additional information about the change in certain working capital accounts:

	Six Months Ended  June 30,
(in thousands)	2020		2019
Accounts receivable	$	41,231	$	(13,756)
Other current assets	(8,435)		3,799
Accounts payable	19,083		15,054
Accrued employee compensation and benefits	(6,575)		(9,191)
Accrued interest	896		329
Other accrued liabilities	(7,533)		(4,231)
Unearned revenue	(1,333)		(4,835)
Other, net	406		(15,456)
Total	$	37,740	$	(28,287)

11. Employee Benefit Plans

We sponsor a noncontributory defined benefit pension plan and non-qualified Supplemental Executive Retirement Plans ("SERPs"). The accrual for future benefits has been frozen in our defined benefit pension plan and SERPs.

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.

The components of the employee benefit plans expense consisted of the following:

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Interest cost	$	4,918	$	5,800	$	9,835	$	11,600
Expected return on plan assets, net of expenses	(5,256)		(5,058)		(10,512)		(10,116)
Amortization of actuarial loss and prior service cost	1,124		572		2,249		1,144
Total for defined benefit pension plan	786		1,314		1,572		2,628
Multi-employer plans	52		58		61		99
SERPs	240		250		480		508
Defined contribution plan	3,702		1,695		7,481		4,690
Net periodic benefit cost	4,780		3,317		9,594		7,925
Allocated to discontinued operations	(121)		(84)		(326)		(190)
Net periodic benefit cost — continuing operations	$	4,659	$	3,233	$	9,268	$	7,735

We contributed $0.5 million to fund current benefit payments for our SERPs and $4.8 million for our defined benefit pension plan during the six months ended June 30, 2020. During the remainder of 2020, we anticipate contributing an additional $0.7 million to fund the SERPs' benefit payments. We are required to contribute an additional $27.0 million to fund our qualified defined benefit pension plan in order to meet our 2020 funding requirements under the provisions of the Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006. In response to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act provides a provision to defer 2020 pension contributions until January 1, 2021. Currently, we do not anticipate delaying the payment of 2020 pension contributions with respect to this permitted CARES Act provision.

F-17

12. Segment Information

We determine our business segments based upon our management and internal reporting structures, as well as the basis on which our chief operating decision maker makes resource-allocation decisions. We report our financial performance based on the following segments: Local Media, National Media, Other.

Our Local Media segment includes our 60 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 13 CW affiliates - five on full power stations and eight on multicast; two MyNetworkTV affiliates; two independent stations and nine 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, telecommunications companies and satellite carriers. We also receive retransmission fees from over-the-top virtual MVPDs such as Hulu, YouTubeTV and AT&T Now.

Our National Media segment includes our collection of national brands. Our national brands include Katz, Newsy, Triton and other national brands. These operations earn revenue primarily through the sale of advertising.

We allocate a portion of certain corporate costs and expenses, including information technology, certain employee benefits and shared services, to our business segments. The allocations are generally amounts agreed upon by management, which may differ from an arms-length amount.

Our chief operating decision maker evaluates the operating performance of our business segments and makes decisions about the allocation of resources to our business segments using a measure called segment profit. Segment profit excludes interest, defined benefit pension plan expense, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America.

F-18

Information regarding our business segments is as follows:

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Segment operating revenues:
Local Media	$	276,747	$	236,715	$	598,551	$	440,102
National Media	80,503		81,439		171,422		153,652
Other	1,633		2,274		3,133		3,733
Total operating revenues	$	358,883	$	320,428	$	773,106	$	597,487
Segment profit (loss):
Local Media	$	32,260	$	54,329	$	88,237	$	88,502
National Media	10,282		12,097		27,741		21,687
Other	104		(1,485)		(66)		(1,918)
Shared services and corporate	(12,923)		(13,119)		(31,577)		(29,277)
Acquisition and related integration costs	(221)		(2,788)		(5,131)		(6,268)
Restructuring costs	—		(957)		—		(1,895)
Depreciation and amortization of intangible assets	(26,645)		(19,532)		(53,990)		(36,538)
Gains (losses), net on disposal of property and equipment	(1,307)		(144)		(2,740)		(317)
Interest expense	(22,999)		(18,023)		(48,797)		(26,939)
Defined benefit pension plan expense	(1,026)		(1,564)		(2,052)		(3,136)
Miscellaneous, net	(1,552)		369		(438)		(431)
Income (loss) from continuing operations before income taxes	$	(24,027)	$	9,183	$	(28,813)	$	3,470
Depreciation:
Local Media	$	10,774	$	8,391	$	22,264	$	15,982
National Media	1,194		1,030		2,637		1,857
Other	41		39		78		77
Shared services and corporate	387		367		768		709
Total depreciation	$	12,396	$	9,827	$	25,747	$	18,625
Amortization of intangible assets:
Local Media	$	9,399	$	5,468	$	19,320	$	9,426
National Media	4,512		3,898		8,247		7,810
Shared services and corporate	338		339		676		677
Total amortization of intangible assets	$	14,249	$	9,705	$	28,243	$	17,913
Additions to property and equipment:
Local Media	$	11,776	$	12,411	$	26,217	$	21,891
National Media	232		4,279		2,041		8,562
Other	—		179		5		210
Shared services and corporate	102		195		216		606
Total additions to property and equipment	$	12,110	$	17,064	$	28,479	$	31,269

A disaggregation of the principal activities from which we generate revenue is as follows:

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Operating revenues:
Core advertising	$	182,089	$	206,535	$	417,910	$	376,452
Political	13,368		2,116		32,088		2,996
Retransmission and carriage	144,283		93,325		283,233		180,608
Other	19,143		18,452		39,875		37,431
Total operating revenues	$	358,883	$	320,428	$	773,106	$	597,487

F-19

13. Capital Stock

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.

Share Repurchase Plan — Shares may be repurchased from time to time at management's discretion. Shares can be repurchased under an 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 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 the six months ended June 30, 2020. During the six months ended June 30, 2019, we repurchased $0.6 million of shares at prices ranging from $15.54 to $18.72 per share.

14. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) ("AOCI") by component, including items reclassified out of AOCI, were as follows:

	Three Months Ended June 30, 2020
(in thousands)	Defined Benefit Pension Items		Other		Total
Beginning balance, March 31, 2020	$	(97,832)	$	(249)	$	(98,081)
Other comprehensive income (loss) before reclassifications	—		—		—
Amounts reclassified from AOCI, net of tax of $288(a)	899		6		905
Net current-period other comprehensive income (loss)	899		6		905
Ending balance, June 30, 2020	$	(96,933)	$	(243)	$	(97,176)

	Three Months Ended June 30, 2019
(in thousands)	Defined Benefit Pension Items		Other		Total
Beginning balance, March 31, 2019	$	(94,905)	$	(32)	$	(94,937)
Other comprehensive income (loss) before reclassifications	—		—		—
Amounts reclassified from AOCI, net of tax of $155(a)	461		—		461
Net current-period other comprehensive income (loss)	461		—		461
Ending balance, June 30, 2019	$	(94,444)	$	(32)	$	(94,476)

	Six Months Ended June 30, 2020
(in thousands)	Defined Benefit Pension Items		Other		Total
Beginning balance, December 31, 2019	$	(98,734)	$	(255)	$	(98,989)
Other comprehensive income (loss) before reclassifications	—		—		—
Amounts reclassified from AOCI, net of tax of $574(a)	1,801		12		1,813
Net current-period other comprehensive income (loss)	1,801		12		1,813
Ending balance, June 30, 2020	$	(96,933)	$	(243)	$	(97,176)

F-20

	Six Months Ended June 30, 2019
(in thousands)	Defined Benefit Pension Items		Other		Total
Beginning balance, December 31, 2018	$	(95,365)	$	(32)	$	(95,397)
Other comprehensive income (loss) before reclassifications	—		—		—
Amounts reclassified from AOCI, net of tax of $310(a)	921		—		921
Net current-period other comprehensive income (loss)	921		—		921
Ending balance, June 30, 2019	$	(94,444)	$	(32)	$	(94,476)

^(a) Actuarial gain (loss) is included in defined benefit pension plan expense in the condensed consolidated statements of operations

15. Assets Held for Sale and Discontinued Operations

Stitcher

During the second quarter of 2020, our Board of Directors approved the sale of our Stitcher podcasting business. On July 10, 2020, we signed a definitive agreement to sell the business for $325 million, with $265 million of cash upfront; earnout of up to $30 million based on 2020 financial results and paid in 2021; and earnout of up to $30 million based on 2021 financial results and paid in 2022. The transaction is expected to close in the third quarter of 2020 upon satisfaction of normal and customary closing conditions and regulatory approval.

Beginning in the second quarter of 2020, we have classified Stitcher as held for sale in our condensed consolidated balance sheets and reported its results as discontinued operations in our condensed consolidated statements of operations for all periods presented.

Operating results of our discontinued Stitcher operations were as follows:

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Operating revenues	$	16,568	$	17,067	$	33,696	$	32,171
Total costs and expenses	(22,261)		(22,591)		(45,063)		(42,344)
Depreciation and amortization of intangible assets	(587)		(705)		(1,157)		(1,491)
Other, net	(106)		—		(106)		—
Loss from discontinued operations before income taxes	(6,386)		(6,229)		(12,630)		(11,664)
Provision (benefit) for income taxes	(1,855)		(65)		(3,488)		(2,006)
Net loss from discontinued operations	$	(4,531)	$	(6,164)	$	(9,142)	$	(9,658)

F-21

The following table presents a summary of the Stitcher assets held for sale included in our condensed consolidated balance sheets.

(in thousands)	As of  June 30,  2020		As of  December 31,  2019
Assets:
Total current assets	$	28,865	$	34,793
Investments	159		178
Property and equipment	5,488		5,526
Goodwill and intangible assets	47,507		48,292
Operating lease right-of-use assets	10,041		10,448
Other assets	3,975		2,029
Total assets included in the disposal group	96,035		101,266
Liabilities:
Total current liabilities	9,917		10,175
Other liabilities	9,165		12,552
Total liabilities included in the disposal group	19,082		22,727
Net assets included in the disposal group	$	76,953	$	78,539

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, and Mission immediately exercised the option. The option price is $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. Pending FCC approval, the transaction is expected to close later in 2020. WPIX assets and liabilities will be classified as held for sale beginning in the third quarter of 2020.

F-22

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

This discussion and analysis of financial condition and results of operations is based upon the Condensed Consolidated Financial Statements and the Notes to Condensed Consolidated Financial Statements. You should read this discussion in conjunction with those financial statements.

Forward-Looking Statements

This document contains certain forward-looking statements related to the Company's businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. Such forward-looking statements are made as of the date of this document and should be evaluated with the understanding of their inherent uncertainty. A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors.” Such Risk Factors include the potential materially adverse impact of the COVID-19 pandemic on the Company’s financial results or condition as a result of financial market volatility, government and regulatory actions, and disruptions to the Company’s businesses. The Company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.

Executive Overview

The E.W. Scripps Company (“Scripps”) is a diverse media enterprise, serving audiences and businesses through a portfolio of local and national media brands. We are the fourth-largest independent owner of local television stations, with 60 stations in 42 markets that reach about 31% of U.S. television households. We have affiliations with all of the “Big Four” television networks as well as the CW and MyNetworkTV networks. In our National Media division, we operate national brands including next-generation national news network Newsy; five national multicast networks - Bounce, Grit, Laff, Court TV and Court TV Mystery - that make up the Katz Networks; and Triton, a global leader in digital audio technology and measurement services. We also operate an award-winning investigative reporting newsroom in Washington, D.C., and serve as the longtime steward of one of the nation's largest, most successful and longest-running educational programs, the Scripps National Spelling Bee.

During the first quarter of 2020, an outbreak of the coronavirus that causes the disease COVID-19 was declared a pandemic by the World Health Organization. As the United States began to combat the crisis, the Company identified three priorities to guide its actions: maintaining the health and well-being of its employees; serving its audiences and communities; and maintaining business continuity. By mid-March, we had transitioned nearly all of our employees out of our workplaces without the interruption of news programming or other media delivery.

The full impact of COVID-19 is unknown and continues to evolve rapidly. The outbreak and any preventative or protective actions that the Company, its vendors or its customers may take in respect of this virus may result in a period of disruption that could potentially impact our operations, financial results and financial condition. Beginning with stay at home and similar orders, we began to see cancellations late in the first quarter, which we believe reduced our first quarter consolidated advertising revenue by about $10 million. Second quarter results were significantly impacted by the economic downturn caused by the outbreak, with the greatest impact in April. We saw improvements in advertising revenues from April to May and from May to June. The extent to which COVID-19 impacts our results and financial condition in future periods depends on future developments that we cannot predict, including new information that may emerge concerning the severity of COVID-19 and the actions to contain the virus or treat its impact, among others. As media had been designated an essential business, we implemented work from home procedures, including for newscast production, and continued our operations without disruption. In order to preserve liquidity in response to this changing environment, we also have undertaken a number of cost saving initiatives through reductions in capital expenses, hiring freezes, freezes on 2020 merit pay raises, reduced executive pay and Board of Directors’ fees, and other general expense reductions in areas of travel, entertainment and marketing. These initiatives are expected to provide cash savings from our continuing operations of $75 million for the full year, approximately $40 million of which will be in the second half of the year. We will continue to evaluate and quantify the impact of COVID-19 on our consolidated financial statements.

In response to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) on March 27, 2020. The CARES Act provides a number of provisions intended to support the economy and business operations, including the deferral of 2020 pension contributions to 2021, the temporary suspension of certain payment requirements for the employer portion of Social Security taxes, temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, technical

F-23

corrections from prior tax legislation for tax depreciation of certain qualified improvement property and the creation of certain refundable employee retention credits. We anticipate benefiting from deferring $17 million of Social Security tax payments beyond 2020 and receiving an additional tax refund of $14.0 million from the carryback of net operating losses to prior periods. Currently, we do not anticipate delaying the payment of 2020 pension contributions with respect to the permitted CARES Act provision.

Based upon expected financial results, our costs saving initiatives, the stimulus provisions under the CARES Act, as well as $154 million of availability under our $210 million revolving credit facility, we currently anticipate having sufficient liquidity for navigating the next 12 months. Our term loans and unsecured notes do not have maintenance covenants, and our revolving credit facility has a leverage ratio covenant, that only applies when there are outstanding borrowings under the facility. While we believe we currently have sufficient liquidity and will remain in compliance with our revolving credit covenant, in the event of any prolonged periods of economic weakness there are additional cost saving initiatives we could undertake that would further enhance our liquidity.

On July 10, 2020, we signed a definitive agreement to sell our Stitcher podcast business for $325 million, with $265 million of cash upfront; earnout of up to $30 million based on 2020 financial results and paid in 2021; and earnout of up to $30 million based on 2021 financial results and paid in 2022. The transaction is expected to close in the third quarter of 2020 upon satisfaction of normal and customary closing conditions and regulatory approval.

In July 2020, the purchase option was exercised for the CW-affiliated station in New York City we acquired in our 2019 transaction with Nexstar. The option price for the station is $75 million plus accrued interest, to be calculated on the period between September 19, 2019, purchase date of WPIX, and the option sale closing date. Pending FCC approval, the transaction is expected to close later in 2020.

On July 25, 2020, the contract extension on our retransmission consent agreement with DISH Network expired. Pending the negotiation of contract renewal terms, the local television stations we operate in 42 markets are currently no longer accessible to this customer.

F-24

Results of Operations

The trends and underlying economic conditions affecting the 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 business segments that follows.

Consolidated Results of Operations

Consolidated results of operations were as follows:

	Three Months Ended  June 30,						Six Months Ended  June 30,
(in thousands)	2020		Change		2019		2020		Change		2019
Operating revenues	$	358,883	12.0	%	$	320,428	$	773,106	29.4	%	$	597,487
Employee compensation and benefits	(130,029)		18.0	%	(110,159)		(274,824)		27.7	%	(215,292)
Programming	(131,743)		46.4	%	(89,993)		(263,422)		48.5	%	(177,341)
Other expenses	(67,388)		(1.6)	%	(68,454)		(150,525)		19.6	%	(125,860)
Acquisition and related integration costs	(221)				(2,788)		(5,131)				(6,268)
Restructuring costs	—				(957)		—				(1,895)
Depreciation and amortization of intangible assets	(26,645)				(19,532)		(53,990)				(36,538)
Gains (losses), net on disposal of property and equipment	(1,307)				(144)		(2,740)				(317)
Operating income	1,550				28,401		22,474				33,976
Interest expense	(22,999)				(18,023)		(48,797)				(26,939)
Defined benefit pension plan expense	(1,026)				(1,564)		(2,052)				(3,136)
Miscellaneous, net	(1,552)				369		(438)				(431)
Income (loss) from continuing operations before income taxes	(24,027)				9,183		(28,813)				3,470
(Provision) benefit for income taxes	6,515				(3,385)		4,103				(992)
Income (loss) from continuing operations, net of tax	(17,512)				5,798		(24,710)				2,478
Loss from discontinued operations, net of tax	(4,531)				(6,164)		(9,142)				(9,658)
Net loss	$	(22,043)			$	(366)	$	(33,852)			$	(7,180)

On September 19, 2019, we acquired eight television stations from the Nexstar-Tribune transaction, and on May 1, 2019, we acquired 15 television stations from Cordillera. These stations are referred to as the "acquired stations" in the discussion that follows. The inclusion of operating results from these stations for the periods subsequent to their acquisition impacts the comparability of our consolidated and segment operating results.

Operating revenues increased $38.5 million or 12% in the second quarter of 2020 and $176 million or 29% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, operating revenues decreased 5.9% and increased 4.2% in the quarter and year-to-date periods, respectively. Weakness in economic conditions that began toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, negatively affected spending from our advertisers. We began to see cancellations late in the first quarter, which we believe reduced our first quarter consolidated advertising revenues by about $10 million. Second quarter results were significantly impacted by the economic downturn, with the greatest impact in April. We saw improvements in advertising revenues from April to May and from May to June. For the quarter-to-date period, increases in political advertising revenue and retransmission revenue were not able to offset the decrease in core advertising revenue within our Local Media group. For the year-to-date period, higher political advertising revenue and retransmission revenue in our Local Media group and overall growth within our National Media businesses contributed to the remainder of the increase in the period.

While we face a period of uncertainty regarding the duration of the pandemic and the extent of the impact on our operations, we do expect that core revenue will continue to be under pressure for the remainder of 2020. Retransmission revenue has also been affected by declines in subscriber levels at the MVPDs, as customers adjust their spending habits. However, we do not expect revenue from political advertising to be impacted by the economic downturn.

F-25

Employee compensation and benefits increased $19.9 million or 18% in the second quarter of 2020 and $59.5 million or 28% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, employee compensation and benefits decreased 1.8% and increased 2.2% in the quarter and year-to-date periods, respectively. The quarter-to-date decrease is due to a decrease in commissions and bonuses as a result of lower advertising revenue. The year-to-date increase in employee compensation and benefits is due to the annual merit increase that occurred in March 2019, as well as expansion of our National Media group throughout 2019.

Programming expense increased $41.8 million or 46% in the second quarter of 2020 and $86.1 million or 49% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, programming expense increased 23% and 21% in the quarter and year-to-date periods, respectively, due to higher network affiliation fees at our stations, reflecting contractual rate increases, as well as an increase in programming costs associated with our National Media business, Katz.

Other expenses decreased $1.1 million or 1.6% in the second quarter of 2020 and increased $24.7 million or 20% for the first six months of 2020 when compared to the prior periods. Excluding the acquired stations, other expenses decreased 19% and 3.6% in the quarter and year-to-date periods, respectively, primarily driven by a decrease in costs during the current quarter. In response to the weakened economic conditions created by COVID-19, we implemented various cost saving initiatives through general expense reductions in the areas of travel, entertainment and marketing.

Acquisition and related integration costs of $5.1 million incurred during the first six months of 2020 reflect contract termination costs and professional service costs incurred to integrate the Cordillera and Nexstar-Tribune television stations.

For the three and six months ended 2019, restructuring costs were $1.0 million and $1.9 million, respectively. These restructuring charges reflect severance, outside consulting fees and other costs associated with our previously announced changes in management and operating structure.

Depreciation and amortization of intangible assets increased from $36.5 million in 2019 to $54.0 million in 2020 due to the acquired stations.

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

The effective income tax rate was 14% and 29% for the six months ended June 30, 2020 and 2019, respectively. Other differences between our effective income tax rate and the U.S. federal statutory rate are the impact of state taxes, foreign taxes, non-deductible expenses, changes in reserves for uncertain tax positions and excess tax benefits or expense from the exercise and vesting of share-based compensation awards ($1.1 million expense in 2020 and $0.8 million benefit in 2019). Additionally, in 2020, we had a net discrete tax provision charge of $3.5 million related to state deferred rate changes and state net operating loss valuation allowance reductions.

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 is expected to close in the third quarter of 2020 upon satisfaction of normal and customary closing conditions and regulatory approval. Stitcher was previously included in our National Media segment results.

F-26

Business Segment Results — As discussed in the Notes to Condensed 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 expense, income taxes, depreciation and amortization, impairment charges, divested operating units, restructuring activities, investment results and certain other items that are included in net income (loss) determined in accordance with accounting principles generally accepted in the United States of America.

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.

We allocate a portion of certain corporate costs and expenses, including information technology, certain employee benefits and shared services to our business segments. The allocations are generally amounts agreed upon by management, which may differ from an arms-length amount. Corporate assets are primarily cash and cash equivalents, restricted cash, property and equipment primarily used for corporate purposes and deferred income taxes.

Information regarding the operating performance of our business segments and a reconciliation of such information to the condensed consolidated financial statements is as follows:

	Three Months Ended  June 30,						Six Months Ended  June 30,
(in thousands)	2020		Change		2019		2020		Change		2019
Segment operating revenues:
Local Media	$	276,747	16.9	%	$	236,715	$	598,551	36.0	%	$	440,102
National Media	80,503		(1.1)	%	81,439		171,422		11.6	%	153,652
Other	1,633		(28.2)	%	2,274		3,133		(16.1)	%	3,733
Total operating revenues	$	358,883	12.0	%	$	320,428	$	773,106	29.4	%	$	597,487
Segment profit (loss):
Local Media	$	32,260	(40.6)	%	$	54,329	$	88,237	(0.3)	%	$	88,502
National Media	10,282		(15.0)	%	12,097		27,741		27.9	%	21,687
Other	104				(1,485)		(66)		(96.6)	%	(1,918)
Shared services and corporate	(12,923)		(1.5)	%	(13,119)		(31,577)		7.9	%	(29,277)
Acquisition and related integration costs	(221)				(2,788)		(5,131)				(6,268)
Restructuring costs	—				(957)		—				(1,895)
Depreciation and amortization of intangible assets	(26,645)				(19,532)		(53,990)				(36,538)
Gains (losses), net on disposal of property and equipment	(1,307)				(144)		(2,740)				(317)
Interest expense	(22,999)				(18,023)		(48,797)				(26,939)
Defined benefit pension plan expense	(1,026)				(1,564)		(2,052)				(3,136)
Miscellaneous, net	(1,552)				369		(438)				(431)
Income (loss) from continuing operations before income taxes	$	(24,027)			$	9,183	$	(28,813)			$	3,470

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Local Media — Our Local Media segment includes our 60 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 13 CW affiliates - five on full power stations and eight on multicast; two MyNetworkTV affiliates; two independent stations and nine 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, telecommunications companies and satellite carriers. We also receive retransmission fees from over-the-top virtual MVPDs such as Hulu, YouTubeTV and AT&T Now.

National television networks offer affiliates a variety of programs 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 automotive and services categories, and by the volume of advertising purchased by campaigns for elective office and political issues. The demand for political advertising is significantly higher in the third and fourth quarters of even-numbered years.

Operating results for our Local Media segment were as follows:

	Three Months Ended  June 30,						Six Months Ended  June 30,
(in thousands)	2020		Change		2019		2020		Change		2019
Segment operating revenues:
Core advertising	$	116,749	(16.5)	%	$	139,738	$	277,271	9.5	%	$	253,142
Political	13,368				2,115		32,088				2,995
Retransmission	142,268		55.5	%	91,464		279,466		58.0	%	176,841
Other	4,362		28.4	%	3,398		9,726		36.5	%	7,124
Total operating revenues	276,747		16.9	%	236,715		598,551		36.0	%	440,102
Segment costs and expenses:
Employee compensation and benefits	102,924		24.3	%	82,790		214,520		36.0	%	157,701
Programming	101,250		64.0	%	61,756		203,523		66.2	%	122,473
Other expenses	40,313		6.5	%	37,840		92,271		29.2	%	71,426
Total costs and expenses	244,487		34.0	%	182,386		510,314		45.1	%	351,600
Segment profit	$	32,260	(40.6)	%	$	54,329	$	88,237	(0.3)	%	$	88,502

On September 19, 2019, we acquired eight television stations from the Nexstar-Tribune transaction, and on May 1, 2019, we acquired 15 television stations from Cordillera. These stations are referred to as the "acquired stations" in the discussion that follows. The inclusion of operating results from these stations for the periods subsequent to their acquisition impacts the comparability of our Local Media segment operating results.

Revenues

Total Local Media revenues increased $40.0 million or 17% in the second quarter of 2020 and $158 million or 36% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, Local Media revenues decreased 7.4% and increased 1.7% in the quarter and year-to-date periods, respectively. Core advertising revenue decreased 36% and 22% in the quarter and year-to-date periods, respectively. Weakness in economic conditions that began toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, negatively affected spending from our advertisers. We began to see cancellations late in the first quarter, which we believe reduced our first quarter advertising revenues at Local Media by at least $8 million. Second quarter results were significantly impacted by the economic downturn, with the greatest impact in April. Core advertising revenues decreased 40% in April 2020 from March 2020, but we saw core advertising revenue improve over 18% from April 2020 to May 2020 and 19% from May 2020 to June 2020.

In both the quarter and year-to-date periods, there was an increase in political revenues due to an election year and an increase in retransmission revenue. While retransmission revenues have been affected by an acceleration of subscriber losses at the MVPDs, particularly among satellite providers, rate increases have more than offset those subscriber declines. During the second quarter, we completed the second of three key distributor negotiations for this year, which means during 2020 we have

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renegotiated retransmission consent contracts covering more than 30% of our subscriber households. In addition, on December 31, 2019, our agreement with Comcast reset, and for those stations we owned prior to 2019, we began to receive retransmission fees for which we had historically received little to no compensation. Retransmission consent agreements with DISH Network, covering an additional 10% of our subscribers, expired at the beginning of March 2020. We continued to provide our signal at prior rates under short-term extensions that expired on July 25, 2020. Pending the negotiation of contract renewal terms, the local television stations we operate in 42 markets are currently no longer accessible to this customer.

Our Local Media revenues are being impacted due to weakened economic conditions resulting from the COVID-19 pandemic, primarily our core advertising revenues. A number of factors will ultimately have an impact on our core advertising revenues throughout the rest of the year, including the pace of businesses re-opening and consumer spending rebounding across our markets. Retransmission revenue has also been affected by declines in subscriber levels at the MVPDs, as customers adjust their spending habits. We do not expect our political advertising revenues to be impacted by the economic effects of the pandemic.

Costs and expenses

Employee compensation and benefits increased $20.1 million or 24% in the second quarter of 2020 and $56.8 million or 36% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, the expense decreased 2.0% and increased 1.3% in the quarter and year-to-date periods, respectively. The quarter-to-date decrease is due to a decrease in commissions as a result of lower advertising revenue. The year-to-date increase in employee compensation and benefits is due to the annual merit increase that occurred in March 2019.

Programming expense increased $39.5 million or 64% in the second quarter of 2020 and $81.1 million or 66% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, programming expense increased 31% and 27% in the quarter and year-to-date periods, respectively, primarily due to higher network affiliation fees. Network affiliation fees have been increasing industry-wide due to higher rates on renewals, as well as contractual rate increases during the terms of the affiliation agreements, and we expect that they may continue to increase over the next several years.

Other expenses increased $2.5 million or 6.5% in the second quarter of 2020 and $20.8 million or 29% for the first six months of 2020 when compared to prior periods. Excluding the acquired stations, other expenses decreased 25% and 12% in the quarter and year-to-date periods, respectively. In response to the weakened economic conditions created by COVID-19, we implemented various cost saving initiatives through reductions in capital expenses and other general expense reductions in areas of travel, entertainment and marketing.

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National Media — Our National Media segment is comprised of the operations of our national media businesses, including five national broadcast networks, the Katz networks; next-generation national news network, Newsy; a global leader in digital audio technology and measurement services, Triton; and other national brands. Our National Media group earns revenue primarily through the sale of advertising.

Operating results for our National Media segment were as follows:

	Three Months Ended  June 30,						Six Months Ended  June 30,
(in thousands)	2020		Change		2019		2020		Change		2019
Segment operating revenues:
Katz	$	55,793	(1.3)	%	$	56,505	$	121,684	13.8	%	$	106,900
Newsy	10,859		(4.7)	%	11,395		21,723		9.9	%	19,773
Triton	10,455		5.6	%	9,902		20,802		2.2	%	20,364
Other	3,396		(6.6)	%	3,637		7,213		9.0	%	6,615
Total operating revenues	80,503		(1.1)	%	81,439		171,422		11.6	%	153,652
Segment costs and expenses:
Employee compensation and benefits	16,057		(0.1)	%	16,066		33,753		7.1	%	31,521
Programming	30,493		8.0	%	28,237		59,899		8.9	%	55,008
Other expenses	23,671		(5.5)	%	25,039		50,029		10.1	%	45,436
Total costs and expenses	70,221		1.3	%	69,342		143,681		8.9	%	131,965
Segment profit	$	10,282	(15.0)	%	$	12,097	$	27,741	27.9	%	$	21,687

Revenues

National Media revenues decreased $0.9 million or 1.1% in the second quarter of 2020 and increased $17.8 million or 12% for the first six months of 2020 when compared to prior periods. Katz's revenues decreased $0.7 million or 1.3% in the second quarter of 2020 and increased $14.8 million or 14% for the first six months of 2020 when compared to prior periods. Newsy's revenues decreased $0.5 million or 4.7% in the second quarter of 2020 and increased $2.0 million or 10% for the first six months of 2020 when compared to prior periods. The decrease in revenue at Katz and Newsy for the quarter-to-date period was due to a reduction in advertising demand and rates, as well as cancellations, as a result of the economic conditions created by the COVID-19 pandemic. Katz's increase in revenue in the year-to-date period was driven by growth at its networks, specifically Grit, Laff and CourtTV, which launched in May 2019. Newsy's revenue increase in the year-to-date period was driven by growth of advertising on over-the-top platforms. Triton experienced revenue growth in both the quarter and year-to-date periods as a result of growth in content delivery and ad serving.

Weakness in economic conditions that began toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, negatively affected spending from our advertisers. We began to see cancellations late in the first quarter, which we believe reduced our first quarter National Media revenues by approximately $1.3 million. Second quarter results were significantly impacted by the economic downturn, with the greatest impact in April. We saw improvements in advertising revenues from April to May and from May to June.

Costs and expenses

Employee compensation and benefits remained flat in the second quarter of 2020 and increased $2.2 million or 7.1% in the first six months of 2020 when compared to prior periods. The year-to-date increase in employee compensation and benefits is due to increased hiring at Katz and Newsy throughout 2019.

Programming expense increased $2.3 million or 8.0% in the second quarter of 2020 and $4.9 million or 8.9% for the first six months of 2020 when compared to prior periods. Programming expense includes the amortization and distribution of programming for Katz and other programming costs. The overall increase is attributable to the continual investment in Katz programming, higher affiliate fees related to the increased distribution of all the Katz networks and the annualization of affiliate fees tied to increased distribution at CourtTV.

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Other expenses decreased $1.4 million or 5.5% in the second quarter of 2020 and increased $4.6 million or 10% for the first six months of 2020 when compared to prior periods. In response to the weakened economic conditions created by the COVID-19 pandemic, we implemented various general expense reductions in areas of travel, entertainment and marketing, which drove the quarter-to-date decrease in other expenses. Year-to-date expenses increased at Newsy, Katz and Triton. Newsy had increases in ratings expense, news service and coverage costs, research and consulting, inducement expense and rent. Katz had higher rating expenses due to contractual increases and the addition of Court TV ratings. Triton had an increase in software licensing and information technology related costs.

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.

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Liquidity and Capital Resources

Our primary source of liquidity is our available cash and borrowing capacity under our revolving credit facility. Our primary source of cash is generated from our ongoing operations. Cash from operations can be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic. At the end of June 2020, we had approximately $100 million of cash on hand and about $154 million of additional borrowing capacity under our revolving credit facility. Based on our current business plan, we believe our cash flow from operations will provide sufficient liquidity during this economic downturn to meet the Company’s operating needs for the next 12 months. In addition, the Company’s liquidity is enhanced through the federal government’s stimulus measures, including the deferral of social security taxes; tax relief on the use of net operating losses and interest expense limitations; and a few other provisions that either bring in cash this year or push out cash payments to 2021 and beyond. Additionally, we expect to receive total gross cash proceeds of approximately $345 million during 2020 related to the announced sales of our Stitcher business and WPIX television station. While we currently do not anticipate liquidity constraints, in the event of a prolonged period of economic weakness there are additional measures we could take to further control cost, slow our working capital needs and generate cash.

Debt Covenants

Our term loans and our unsecured notes do not have maintenance covenants. The earliest maturity of our term loans and unsecured notes is the fourth quarter of 2024. Our revolving credit facility permits maximum leverage of 4.5 times the two-year average earnings before interest, taxes, depreciation and amortization (EBITDA) as defined by our credit agreement, through second quarter of 2021, at which point it steps down to 4.25 times. Based upon our current outlook, we expect to be in compliance with that covenant.

Cash Flows - Operating Activities

Cash flows from operating activities for the six months ended June 30 are as follows:

	Six Months Ended  June 30,
(in thousands)	2020		2019
Cash Flows from Operating Activities:
Income (loss) from continuing operations, net of tax	$	(24,710)	$	2,478
Adjustments to reconcile net income (loss) from continuing operations to net cash flows from operating activities:
Depreciation and amortization	53,990		36,538
(Gains) losses, net on disposal of property and equipment	2,740		317
Programming assets and liabilities	(10,662)		1,744
Deferred income taxes	9,933		983
Stock and deferred compensation plans	7,446		9,511
Pension expense, net of contributions	(3,282)		(3,921)
Other changes in certain working capital accounts, net	37,740		(28,287)
Miscellaneous, net	8,287		3,860
Net cash provided by operating activities from continuing operations	81,482		23,223
Net cash used in operating activities from discontinued operations	(7,223)		(14,065)
Net operating activities	$	74,259	$	9,158

In 2020 and 2019, cash provided by operating activities from continuing operations was $81.5 million and $23.2 million, respectively. The $58 million increase in cash provided by operating activities from continuing operations was attributable to a $5 million year-over-year increase in segment profit combined with a $66 million year-over-year increase in cash provided from changes in certain working capital accounts. Additionally, in the second quarter of 2019, we paid nearly $12 million in cash taxes, primarily related to the sale of radio. These increases in cash flow were partially offset by a $19 million increase in interest paid and year-over-year cash outlay increase of $12 million for programming investments in excess of programming amortization. Interest payments increased due to the issuance of a $765 million term loan B in May 2019 and issuance of $500 million of senior unsecured notes in July 2019 in order to fund the Cordillera and Nexstar-Tribune acquisitions.

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

•Year-over-year cash provided from changes in accounts receivable increased $55 million in 2020 compared to 2019. This is partially due to political advertising revenue recognized during an election year, which is paid in advance and displaces traditional local and national advertising. Additionally, we did not acquire working capital in the Nexstar-Tribune acquisition, and as advertisers tend to pay on a 60- to 90-day lag, fourth quarter 2019 revenue resulted in growth of the accounts receivable balance. In 2020, we received $37 million from Nexstar related to cash they collected on our December 31, 2019 receivables. The last factor for receivables was a softness in core advertising revenue in the second quarter of 2020 as a result of COVID-19, which had a direct impact to trade receivables.

•Timing of payments made on other current liabilities increased the year-over-year cash provided from working capital by $16 million, mainly attributable to the slower timing of payments made to our vendors in order to control liquidity during the current economic conditions.

Cash Flows - Investing Activities

Cash flows from investing activities for the six months ended June 30 are as follows:

	Six Months Ended  June 30,
(in thousands)	2020		2019
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired	$	2,500	$	(608,273)
Acquisition of intangible assets	(1,041)		(24,073)
Additions to property and equipment	(26,950)		(29,920)
Purchase of investments	(5,361)		(615)
Proceeds from FCC repack	9,427		1,520
Miscellaneous, net	773		308
Net cash used in investing activities from continuing operations	(20,652)		(661,053)
Net cash used in investing activities from discontinued operations	(333)		(74)
Net investing activities	$	(20,985)	$	(661,127)

In 2020 and 2019, we used $20.7 million and $661 million, respectively, in cash for investing activities from continuing operations. The primary factors affecting these cash flows for the periods presented are described below.

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

•Capital expenditures decreased $3.0 million year-over-year. In order to preserve liquidity in response to this changing environment, we have undertaken a number of cost saving initiatives, including a reduction in capital expenses.

•In 2020, we contributed $5.4 million in cash to our investments.

•In 2020 and 2019, we received $9.4 million and $1.5 million, respectively, in reimbursement proceeds from the FCC.

•In January of 2019, we acquired three television stations owned by Raycom Media for $55 million in cash.

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

•In May of 2019, we acquired 15 television stations owned by Cordillera Communications, LLC for $521 million in cash, plus an estimated working capital adjustment of $23.9 million.

•In June of 2019, we completed the acquisition of Omny Studio for a cash purchase price of $8.5 million.

In the repacking process associated with the incentive spectrum auction conducted by the FCC in 2017, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our stations' broadcast signals as viewed in their markets. Twenty-seven of our current full power stations (including nine from recent acquisitions) have been assigned to new channels. The legislation authorizing the incentive auction and repack provides the FCC with up to a $2.75 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect the FCC fund will be sufficient to cover the costs we would expect to incur for the repack and that our only potential funding risks would be limited to any disagreements with the FCC over reimbursement of expenditures incurred. Reimbursements provided by the FCC are recognized as the cash is received.

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We have spent $43.8 million to date on FCC repack. As of early July 2020, all full power stations were operating on their reassigned channels. We will incur incremental costs through the remainder of 2020 to complete work delayed by the COVID-19 pandemic. We have received total reimbursement proceeds from the FCC of $17.9 million, of which $9.4 million was received during the six months ended June 30, 2020.

Cash Flows - Financing Activities

Cash flows from financing activities for the six months ended June 30 are as follows:

	Six Months Ended  June 30,
(in thousands)	2020		2019
Cash Flows from Financing Activities:
Net borrowings under revolving credit facility	$	50,000	$	120,000
Proceeds from issuance of long-term debt	—		761,175
Payments on long-term debt	(5,306)		(3,413)
Deferred financing costs	—		(20,550)
Dividends paid	(8,259)		(8,120)
Repurchase of Class A Common shares	—		(584)
Tax payments related to shares withheld for vested stock and RSUs	(2,292)		(3,700)
Miscellaneous, net	(21,438)		(3,447)
Net cash provided by financing activities from continuing operations	$	12,705	$	841,361

In 2020 and 2019, cash provided by financing activities from continuing operations was $12.7 million and $841 million, respectively. As of June 30, 2020, we have $50 million drawn under our revolving credit facility. Other factors impacting our cash flows from financing activities from continuing operations are described below.

We have $900 million of unsecured senior notes and $1.0 billion outstanding balance on our term loans. The outstanding balance on our term loans reflect the $765 million term loan B, issued on May 1, 2019, for financing on the Cordillera and Nexstar/Tribune television station acquisitions. Our debt had required principal payments of $5.3 million in the first half of 2020 and will have required payments of $5.3 million for the remainder of 2020.

We paid quarterly dividends of 5 cents per share, totaling $8.3 million and $8.1 million in 2020 and 2019, respectively.

In November 2016, our Board of Directors authorized a share repurchase program of up to $100 million of our Class A Common shares, which expired on March 1, 2020. In February 2020, our Board of Directors authorized a new share repurchase program of up to $100 million of our Class A Common shares through March 1, 2022. Shares can be repurchased under the authorization via open market purchases or privately negotiated transactions, including accelerated stock repurchase transactions, block trades, or pursuant to trades intended to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. No shares were repurchased under either authorization during the first six months of 2020 as the Company has temporarily suspended share buybacks. During the first six months of 2019, we repurchased $0.6 million of shares.

Other

We are required to contribute an additional $27 million to fund our qualified defined benefit pension plan in order to meet our 2020 funding requirements under the provisions of the Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006. In response to the COVID-19 pandemic, President Donald Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act provides a provision to defer 2020 pension contributions until January 1, 2021. Currently, we do not anticipate delaying the payment of 2020 pension contributions with respect to this permitted CARES Act provision.

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Off-Balance Sheet Arrangements and Contractual Obligations

Off-Balance Sheet Arrangements

There have been no material changes to the off-balance sheet arrangements disclosed in our 2019 Annual Report on Form 10-K.

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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 the Consolidated Financial Statements included in our 2019 Annual Report on Form 10-K describes the significant accounting policies we have selected for use in the preparation of our financial statements and related disclosures. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made and if different estimates that reasonably could have been used or changes in estimates that are likely to occur could materially change the financial statements. We believe the accounting for acquisitions, goodwill and indefinite-lived intangible assets and pension plans to be our most critical accounting policies and estimates. A detailed description of these accounting policies is included in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2019 Annual Report on Form 10-K.

Recent Accounting Guidance

        Refer to Note 2 – Recently Adopted and Issued Accounting Standards of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further discussion.

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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.

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

	As of June 30, 2020				As of December 31, 2019
(in thousands)	Cost Basis		Fair Value		Cost Basis		Fair Value
Financial instruments subject to interest rate risk:
Revolving credit facility	$	50,000	$	50,000	$	—	$	—
Senior unsecured notes, due in 2025	400,000		385,000		400,000		409,000
Senior unsecured notes, due in 2027	500,000		475,000		500,000		525,000
Term loan, due in 2024	291,750		273,516		293,250		293,617
Term loan, due in 2026	755,466		715,804		759,272		763,547
Long-term debt, including current portion	$	1,997,216	$	1,899,320	$	1,952,522	$	1,991,164
Financial instruments subject to market value risk:
Investments held at cost	$	4,616	(a)		$	4,405	(a)
(a) Includes securities that do not trade in public markets, thus the securities do not have readily determinable fair values. We estimate the fair value of these securities approximates their carrying value.

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Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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.

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. We acquired eight television stations from the Nexstar Media Group, Inc. transaction with Tribune Media Company on September 19, 2019, and have excluded these stations from management's reporting on internal control over financial reporting, as permitted by SEC guidance, for the quarter ended June 30, 2020. The acquired operations have total assets of approximately $689 million, or 19% of our total assets as of June 30, 2020, and revenues of $109 million, or 14% of our total revenues for the six months ended June 30, 2020.

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