CINCINNATI, Feb. 24,
2023 /PRNewswire/ -- The E.W. Scripps Company
(NASDAQ: SSP) delivered $681 million
in revenue and $204 million in
segment profit for the fourth quarter of 2022, year-over-year
increases of 9.4% and 21% respectively, driven by growth in
political advertising and distribution-related revenues.
On Jan. 5, the company announced
plans to reorganize, creating a more nimble enterprise that further
leverages Scripps' strong position in the U.S. television ecosystem
and propels its growth across emerging media marketplaces. Scripps
Networks President Lisa Knutson was
promoted to chief operating officer and is leading the
reorganization. Scripps expects this work to result in at least
$40 million in annual savings and
will begin taking restructuring charges this year.
Highlights:
- On Dec. 15, the company launched
the Scripps Sports division to seize on this moment of opportunity
in the changing sports rights landscape with its local market depth
and national broadcast reach, in partnership with sports leagues,
conferences and teams. Brian Lawlor,
who has led the company's Local Media division since 2009, was
appointed president of the new division.
- Scripps News launched Jan. 1,
incorporating the former Newsy brand and other Scripps national
news operations into one powerful national news network.
- The Local Media division delivered a full-year midterm
election-year record of nearly $200
million in political advertising revenue, alongside the
record $655 million in distribution
revenue for 2022, driving a 13% increase in division revenue over
fiscal year 2021.
- Scripps will renew about 75% of traditional pay TV subscriber
households in 2023, driving distribution revenue growth and margin
expansion.
- The Scripps Networks division grew connected TV (CTV) revenue
by nearly 40% from 2021 to 2022 as its popular national brands,
including ION, Bounce and Grit, gained further distribution across
the major streaming services. The division expects to generate more
than $100 million in CTV revenue in
2023.
- In January, Scripps partnered with the nonprofit News Literacy
Project on the fourth annual National News Literacy Week – a public
service effort to encourage news consumers to stop the flood of
misinformation and learn how to identify trustworthy news. Dozens
of other media outlets partnered with the initiative to educate
their readers and viewers on this important issue for
democracy.
"Since the beginning of this year, Scripps has been engaged in
examining the best ways to structure our company so that we are
well-positioned to capture the opportunities we see emerging in our
industry," said Adam Symson,
Scripps' president and CEO. "We see those in three key growth
areas: the content categories of news, sports and entertainment; TV
distribution platforms; and the burgeoning marketplace enabled by
ATSC 3.0.
"The reorganization work will include the centralization of some
services and the consolidation of layers of management across the
company. We expect to realize savings of at least $40 million. Our end goal, however, is not just a
more efficient structure but a smarter one, designed to use the
breadth of our assets to accelerate the company's growth.
"As a precursor to our reorganization work, we launched the
Scripps Sports division, led by Brian
Lawlor, to serve sports teams and leagues left isolated from
their fans by the fall-out connected to cord cutting. Through our
local station portfolio and the ION network, we have both local
market depth and unparalleled national reach over the air, on pay
TV and across the important digital platforms — everywhere
audiences watch television. We are working with leagues and teams
that recognize the way a partnership with Scripps will expand their
reach and strengthen their connection with the passionate fans who
are so crucial to them.
"As we all bear witness to this country's ongoing economic
uncertainty and its impact on consumer spending, we see even
greater opportunity for Scripps through free TV. It is a growth
lever that differentiates our story from peers. Given our sizable
share of all OTA viewing, we are creating shareholder value by
promoting the use of digital antennas and other new ways of
accessing our high-quality television programming for free. In
addition, we are working with the industry to develop business
models made possible through ATSC 3.0 technology. The most
promising of these is datacasting – a marketplace quickly moving
from the horizon to the foreground, with tremendous opportunity for
those who hold broadcast spectrum."
Operating results
Total fourth-quarter company revenue was $681 million, an increase of 9.4% or $58.7 million from the prior-year quarter due to
higher political and distribution revenue in our Local Media
division.
Costs and expenses for segments, shared services and corporate
were $477 million, up from
$454 million in the year-ago
quarter.
Income attributable to the shareholders of Scripps was
$73 million or 84 cents per share. The pre-tax costs for the
quarter included a $7.4 million gain
on extinguishment of debt from the redemption of senior notes. This
item increased income attributable to the shareholders by
$5.5 million, net of taxes, or
7 cents per share. In the prior-year
quarter, income from continuing operations attributable to the
shareholders of Scripps was $40.2
million or 43 cents per share.
Pre-tax costs for the prior-year quarter included acquisition and
related integration costs of $4.8
million and an $1.6 million
loss on extinguishment of debt from the redemption of senior notes.
These items decreased income from continuing operations by
$4.8 million, net of taxes, or
5 cents per share.
Fourth-quarter 2022 results by segment compared to
prior-period amounts:
Local Media
Revenue from Local Media was $433 million, up 24% from the prior-year
quarter.
- Core advertising revenue decreased 11% to $164 million.
- Political revenue was $106
million, compared to $11
million in the prior-year quarter.
- Distribution revenue increased 5.4% to $160 million.
Segment expenses increased 4.9% to $282
million, driven by network affiliation fees and the impact
of Scripps employees returning to working in its station
buildings.
Segment profit was $152 million,
compared to $82.2 million in the
year-ago quarter.
Scripps Networks
Revenue from Scripps Networks was $248
million, down 9.2% from the prior-year quarter, reflecting
softness within the national advertising marketplace as a result of
macroeconomic challenges.
Segment expenses for Scripps Networks were $168 million, in-line with expenses in the
prior-year quarter.
Segment profit was $80 million,
compared to $106 million in the
year-ago quarter.
Financial condition
On Dec. 31, cash and cash equivalents
totaled $18 million and total debt
was $2.9 billion.
During 2022, we redeemed a total of $172
million of the outstanding principal on our senior notes,
including $48 million in Q4, and we
made additional principal payments on our term loan totaling
$100 million, including $75 million in Q4. In addition, we made mandatory
principal payments of $18.6 million
on our term loans in 2022, for a total reduction in gross debt of
$290 million.
Preferred stock dividends paid in 2022 were $48 million. Under the terms of Berkshire
Hathaway's preferred equity investment in Scripps, we are
prohibited from paying dividends on or repurchasing our common
shares until all preferred shares are redeemed.
Year-to-date operating results
The following
comparisons are for the period ending Dec.
31, 2022:
Total 2022 company revenue was $2.5
billion, an increase of 7.4% or $170
million from the prior year, due to higher political and
distribution revenues. Political revenue was $208 million, compared to $22.7 million in the prior year.
Costs and expenses for segments, shared services and corporate
were $1.9 billion, up from
$1.7 billion in the year-ago period,
reflecting costs attributed to our 2021 over-the-air network
launches, continued investment in programming, higher affiliation
fees and the impact of Scripps employees returning to working in
its stations and offices.
Income attributable to the shareholders of Scripps was
$145.6 million or $1.62 per share. Pre-tax costs for the 2022
period included $1.6 million of
acquisition and related integration costs as well as an
$8.6 million gain on extinguishment
of debt from the redemption of senior notes. These items increased
income attributable to the shareholders by $5.2 million, net of taxes, or 6 cents per share. In the prior-year period,
income from continuing operations attributable to the shareholders
of Scripps was $66.5 million or
74 cents per share. Pre-tax costs for
the prior year included: an $81.8
million gain from the sale of Triton; a $15.3 million loss on extinguishment of debt; a
$99.1 million non-cash adjustment due
to the increase in the fair value of the outstanding common stock
warrant liability; acquisition and related integration costs of
$40.4 million; $9.4 million of restructuring costs; and a
$32.6 million gain on the sale of our
Denver (KMGH) television station
building. These items decreased income from continuing operations
by $58.8 million, net of taxes, or
67 cents per share.
Looking ahead
Comparisons for our segments are to the same period in
2022.
|
|
First-quarter
2023
|
Local Media
revenue
|
|
Down mid-single-digit
percent range
|
Local Media
expense
|
|
Flat
|
Scripps Networks
revenue
|
|
Down high-single-digit
percent range
|
Scripps Networks
expense
|
|
Up high-single-digit
percent range
|
Shared services and
corporate
|
|
About $24
million
|
|
|
Full-year
2023
|
Interest
paid
|
|
Between $180-$190
million
|
Capital
expenditures
|
|
Between $75-$85
million
|
Taxes
paid
|
|
Between $40-$50
million
|
Depreciation and
amortization
|
|
Between $155-$165
million
|
Conference call
The senior management of The E.W. Scripps Company will discuss the
company's quarterly results during a telephone conference call at
9:30 a.m. Eastern today. To
access the live webcast, visit http://ir.scripps.com and find the
link under "upcoming events."
To access the conference call by telephone, dial (844) 867-6169
(U.S.) or (409) 207-6975 (international) and give the access code
4229660 approximately five minutes before the start of the call.
Investors and analysts will need the name of the call ("Scripps
earnings call") to be granted access. The public is granted access
to the conference call on a listen-only basis.
A replay line will be open from 1:30 p.m.
Eastern time Feb. 24 until
midnight March 24. The domestic
number to access the replay is (866) 207-1041 and the international
number is (402) 970-0847. The access code for both numbers is
3388176.
A replay of the conference call will be archived and available
online for an extended period of time following the call. To access
the audio replay, visit http://ir.scripps.com/ approximately four
hours after the call, and the link can be found on that page under
"audio/video links."
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 company's Form 10-K, on file with the SEC, in the section
titled "Risk Factors." The company undertakes no obligation to
publicly update any forward-looking statements to reflect events or
circumstances after the date such statements are made.
Media contact: Michael
Perry, The E.W. Scripps Company, (513) 259-4718,
michael.perry@scripps.com
Investor contact: Carolyn
Micheli, The E.W. Scripps Company, (513) 977-3732,
carolyn.micheli@scripps.com
About Scripps
The E.W. Scripps Company (NASDAQ: SSP) is a diversified media
company focused on creating a better-informed world. As one of the
nation's largest local TV broadcasters, Scripps serves communities
with quality, objective local journalism and operates a portfolio
of 61 stations in 41 markets. The Scripps Networks reach nearly
every American through the national news outlets Court TV and
Scripps News and popular entertainment brands ION, Bounce, Defy TV,
Grit, ION Mystery, Laff and TrueReal. Scripps is the nation's
largest holder of broadcast spectrum. Scripps runs an award-winning
investigative reporting newsroom in Washington, D.C., and is the longtime steward
of the Scripps National Spelling Bee. Founded in 1878, Scripps has
held for decades to the motto, "Give light and the people will find
their own way."
THE E.W. SCRIPPS
COMPANY RESULTS OF OPERATIONS
|
|
|
|
Three Months
Ended
December 31,
|
|
Years Ended December
31,
|
(in thousands, except
per share data)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$ 680,941
|
|
$ 622,291
|
|
$
2,453,215
|
|
$
2,283,532
|
Segment, shared
services and corporate expenses
|
|
(476,565)
|
|
(453,594)
|
|
(1,856,930)
|
|
(1,701,331)
|
Acquisition and related
integration costs
|
|
—
|
|
(4,791)
|
|
(1,642)
|
|
(40,373)
|
Restructuring
costs
|
|
—
|
|
—
|
|
—
|
|
(9,436)
|
Depreciation and
amortization of intangible assets
|
|
(40,104)
|
|
(39,578)
|
|
(160,433)
|
|
(161,922)
|
Gains (losses), net on
disposal of property and equipment
|
|
(215)
|
|
(679)
|
|
(5,866)
|
|
30,275
|
Operating
expenses
|
|
(516,884)
|
|
(498,642)
|
|
(2,024,871)
|
|
(1,882,787)
|
Operating
income
|
|
164,057
|
|
123,649
|
|
428,344
|
|
400,745
|
Interest
expense
|
|
(46,703)
|
|
(38,259)
|
|
(161,130)
|
|
(165,164)
|
Gain (loss) on
extinguishment of debt
|
|
7,355
|
|
(1,572)
|
|
8,589
|
|
(15,347)
|
Defined benefit pension
plan income (expense)
|
|
605
|
|
(93)
|
|
2,613
|
|
(343)
|
Gain on sale of Triton
business
|
|
—
|
|
—
|
|
—
|
|
81,784
|
Losses on stock
warrant
|
|
—
|
|
—
|
|
—
|
|
(99,118)
|
Miscellaneous,
net
|
|
(3,222)
|
|
(8,585)
|
|
(1,953)
|
|
(15,469)
|
Income from continuing
operations before income taxes
|
|
122,092
|
|
75,140
|
|
276,463
|
|
187,088
|
Provision for income
taxes
|
|
(36,543)
|
|
(22,323)
|
|
(80,561)
|
|
(71,189)
|
Income from continuing
operations, net of tax
|
|
85,549
|
|
52,817
|
|
195,902
|
|
115,899
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
(14)
|
|
—
|
|
6,813
|
Net income
|
|
85,549
|
|
52,803
|
|
195,902
|
|
122,712
|
Preferred stock
dividends
|
|
(12,576)
|
|
(12,576)
|
|
(50,305)
|
|
(49,372)
|
Net income attributable
to the shareholders of The E.W. Scripps
Company
|
|
$
72,973
|
|
$
40,227
|
|
$ 145,597
|
|
$
73,340
|
Net income per diluted
share of common stock attributable to the
shareholders of The E.W. Scripps Company:
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
0.84
|
|
$
0.43
|
|
$
1.62
|
|
$
0.74
|
Income from
discontinued operations
|
|
—
|
|
—
|
|
—
|
|
0.08
|
Net income per diluted
share of common stock attributable to the
shareholders of The E.W. Scripps Company
|
|
$
0.84
|
|
$
0.43
|
|
$
1.62
|
|
$
0.81
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average shares outstanding
|
|
84,792
|
|
91,206
|
|
87,346
|
|
87,979
|
|
See notes to results
of operations.
|
The sum of net
income per share from continuing and discontinued operations may
not equal the reported total net income per share as each is
calculated independently.
|
Notes to Results of Operations
1. SEGMENT INFORMATION
We determine our business segments based upon our management and
internal reporting structure, as well as the basis that our chief
operating decision maker makes resource allocation decisions.
Our Local Media segment includes our 61 local broadcast stations
and their related digital operations. It is comprised of 18 ABC
affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX
affiliates. We also have 12 CW affiliates - four on full power
stations and eight on multicast; five independent stations and 10
additional low power stations. Our Local Media segment earns
revenue primarily from the sale of advertising to local, national
and political advertisers and retransmission fees received from
cable operators, telecommunication companies, satellite carriers
and over-the-top virtual MVPDs.
Our Scripps Networks segment is comprised of nine national
television networks that reach nearly every U.S. television home
through free over-the-air broadcast, cable/satellite, connected TV
and digital distribution. These operations earn revenue primarily
through the sale of advertising.
Our respective business segment results reflect the impact of
intercompany carriage agreements between our local broadcast
television stations and our national networks. We also allocate a
portion of certain corporate costs and expenses, including
accounting, procurement, human resources, employee benefit and
information technology to our business segments. These intercompany
agreements and allocations are generally amounts agreed upon by
management, which may differ from an arms-length amount.
The other segment caption aggregates our operating segments that
are too small to report separately. Costs for centrally provided
services and certain corporate costs that are not allocated to the
business segments are included in shared services and corporate
costs. These unallocated corporate costs would also include the
costs associated with being a public company. Corporate assets are
primarily cash and cash equivalents, restricted cash, property and
equipment primarily used for corporate purposes and deferred income
taxes.
Our chief operating decision maker evaluates the operating
performance of our business segments and makes decisions about the
allocation of resources to our business segments using a measure
called segment profit. Segment profit excludes interest, defined
benefit pension plan amounts, income taxes, depreciation and
amortization, impairment charges, divested operating units,
restructuring activities, investment results and certain other
items that are included in net income (loss) determined in
accordance with accounting principles generally accepted in
the United States of America.
Information regarding our business segments is as follows:
|
|
Three Months Ended
December 31,
|
|
|
|
Years Ended December
31,
|
|
|
(in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Media
|
|
$
433,439
|
|
$
350,734
|
|
23.6 %
|
|
$
1,494,357
|
|
$
1,319,468
|
|
13.3 %
|
Scripps
Networks
|
|
247,844
|
|
272,938
|
|
(9.2) %
|
|
961,242
|
|
951,883
|
|
1.0 %
|
Other
|
|
3,990
|
|
2,546
|
|
56.7 %
|
|
14,628
|
|
26,924
|
|
(45.7) %
|
Intersegment
eliminations
|
|
(4,332)
|
|
(3,927)
|
|
10.3 %
|
|
(17,012)
|
|
(14,743)
|
|
15.4 %
|
Total operating
revenues
|
|
$
680,941
|
|
$
622,291
|
|
9.4 %
|
|
$
2,453,215
|
|
$
2,283,532
|
|
7.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Media
|
|
$
151,627
|
|
$ 82,169
|
|
84.5 %
|
|
$ 386,369
|
|
$ 268,140
|
|
44.1 %
|
Scripps
Networks
|
|
79,979
|
|
106,431
|
|
(24.9) %
|
|
310,336
|
|
389,278
|
|
(20.3) %
|
Other
|
|
(5,887)
|
|
(154)
|
|
|
|
(18,140)
|
|
359
|
|
|
Shared services and
corporate
|
|
(21,343)
|
|
(19,749)
|
|
8.1 %
|
|
(82,280)
|
|
(75,576)
|
|
8.9 %
|
Acquisition and related
integration costs
|
|
—
|
|
(4,791)
|
|
|
|
(1,642)
|
|
(40,373)
|
|
|
Restructuring
costs
|
|
—
|
|
—
|
|
|
|
—
|
|
(9,436)
|
|
|
Depreciation and
amortization of intangible
assets
|
|
(40,104)
|
|
(39,578)
|
|
|
|
(160,433)
|
|
(161,922)
|
|
|
Gains (losses), net on
disposal of property
and equipment
|
|
(215)
|
|
(679)
|
|
|
|
(5,866)
|
|
30,275
|
|
|
Interest
expense
|
|
(46,703)
|
|
(38,259)
|
|
|
|
(161,130)
|
|
(165,164)
|
|
|
Gain (loss) on
extinguishment of debt
|
|
7,355
|
|
(1,572)
|
|
|
|
8,589
|
|
(15,347)
|
|
|
Defined benefit pension
plan income
(expense)
|
|
605
|
|
(93)
|
|
|
|
2,613
|
|
(343)
|
|
|
Gain on sale of Triton
business
|
|
—
|
|
—
|
|
|
|
—
|
|
81,784
|
|
|
Losses on stock
warrant
|
|
—
|
|
—
|
|
|
|
—
|
|
(99,118)
|
|
|
Miscellaneous,
net
|
|
(3,222)
|
|
(8,585)
|
|
|
|
(1,953)
|
|
(15,469)
|
|
|
Income from continuing
operations before
income taxes
|
|
$
122,092
|
|
$ 75,140
|
|
|
|
$ 276,463
|
|
$ 187,088
|
|
|
Operating results for our Local Media segment were as
follows:
|
|
Three Months
Ended
December 31,
|
|
|
|
Years Ended December
31,
|
|
|
(in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
advertising
|
|
$ 164,188
|
|
$ 183,476
|
|
(10.5) %
|
|
$ 626,095
|
|
$ 663,864
|
|
(5.7) %
|
Political
|
|
105,559
|
|
11,102
|
|
|
|
198,519
|
|
22,693
|
|
|
Distribution
|
|
160,049
|
|
151,806
|
|
5.4 %
|
|
655,499
|
|
617,305
|
|
6.2 %
|
Other
|
|
3,643
|
|
4,350
|
|
(16.3) %
|
|
14,244
|
|
15,606
|
|
(8.7) %
|
Total operating
revenues
|
|
433,439
|
|
350,734
|
|
23.6 %
|
|
1,494,357
|
|
1,319,468
|
|
13.3 %
|
Segment costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
109,529
|
|
110,143
|
|
(0.6) %
|
|
425,840
|
|
433,989
|
|
(1.9) %
|
Programming
|
|
120,279
|
|
108,415
|
|
10.9 %
|
|
481,712
|
|
438,719
|
|
9.8 %
|
Other
expenses
|
|
52,004
|
|
50,007
|
|
4.0 %
|
|
200,436
|
|
178,620
|
|
12.2 %
|
Total costs and
expenses
|
|
281,812
|
|
268,565
|
|
4.9 %
|
|
1,107,988
|
|
1,051,328
|
|
5.4 %
|
Segment
profit
|
|
$ 151,627
|
|
$
82,169
|
|
84.5 %
|
|
$ 386,369
|
|
$ 268,140
|
|
44.1 %
|
Operating results for Scripps Networks segment were as
follows:
|
|
Three Months
Ended
December 31,
|
|
|
|
Years Ended December
31,
|
|
|
(in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
|
$ 247,844
|
|
$ 272,938
|
|
(9.2) %
|
|
$ 961,242
|
|
$ 951,883
|
|
1.0 %
|
Segment costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
30,533
|
|
30,464
|
|
0.2 %
|
|
120,202
|
|
103,624
|
|
16.0 %
|
Programming
|
|
88,495
|
|
85,808
|
|
3.1 %
|
|
342,835
|
|
288,484
|
|
18.8 %
|
Other
expenses
|
|
48,837
|
|
50,235
|
|
(2.8) %
|
|
187,869
|
|
170,497
|
|
10.2 %
|
Total costs and
expenses
|
|
167,865
|
|
166,507
|
|
0.8 %
|
|
650,906
|
|
562,605
|
|
15.7 %
|
Segment
profit
|
|
$
79,979
|
|
$ 106,431
|
|
(24.9) %
|
|
$ 310,336
|
|
$ 389,278
|
|
(20.3) %
|
2. CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
As of
December 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
18,027
|
|
$
66,223
|
Restricted
cash
|
|
—
|
|
34,257
|
Other current
assets
|
|
625,914
|
|
601,801
|
Total current
assets
|
|
643,941
|
|
702,281
|
Investments
|
|
23,144
|
|
21,632
|
Property and
equipment
|
|
458,600
|
|
456,945
|
Operating lease
right-of-use assets
|
|
117,869
|
|
124,821
|
Goodwill
|
|
2,920,574
|
|
2,913,384
|
Other intangible
assets
|
|
1,821,254
|
|
1,910,311
|
Programming
|
|
427,962
|
|
510,316
|
Miscellaneous
|
|
17,661
|
|
18,624
|
TOTAL ASSETS
|
|
$
6,431,005
|
|
$
6,658,314
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
82,710
|
|
$
83,931
|
Unearned
revenue
|
|
18,183
|
|
20,000
|
Current portion of
long-term debt
|
|
18,612
|
|
18,612
|
Accrued expenses and
other current liabilities
|
|
365,500
|
|
389,337
|
Total current
liabilities
|
|
485,005
|
|
511,880
|
Long-term debt (less
current portion)
|
|
2,853,793
|
|
3,129,393
|
Other liabilities (less
current portion)
|
|
961,382
|
|
1,046,607
|
Total
equity
|
|
2,130,825
|
|
1,970,434
|
TOTAL LIABILITIES AND EQUITY
|
|
$
6,431,005
|
|
$
6,658,314
|
3. 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
December 31,
|
|
Years Ended December
31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Numerator (for basic and diluted earnings
per share)
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
|
$ 85,549
|
|
$ 52,817
|
|
$ 195,902
|
|
$ 115,899
|
Less income allocated
to RSUs
|
|
(1,924)
|
|
(1,145)
|
|
(3,662)
|
|
(1,855)
|
Less preferred stock
dividends
|
|
(12,576)
|
|
(12,576)
|
|
(50,305)
|
|
(49,372)
|
Numerator for basic and
diluted earnings per share
|
|
$ 71,049
|
|
$ 39,096
|
|
$ 141,935
|
|
$
64,672
|
Denominator
|
|
|
|
|
|
|
|
|
Basic weighted-average
shares outstanding
|
|
83,455
|
|
82,533
|
|
83,220
|
|
82,327
|
Effect of dilutive
securities
|
|
1,337
|
|
8,673
|
|
4,126
|
|
5,652
|
Diluted
weighted-average shares outstanding
|
|
84,792
|
|
91,206
|
|
87,346
|
|
87,979
|
4. NON-GAAP INFORMATION
In addition to results prepared in accordance with GAAP, this
earnings release discusses free cash flow, a non-GAAP performance
measure that management and the company's Board of Directors uses
to evaluate the performance of the business. We also believe that
the non-GAAP measure provides useful information to investors by
allowing them to view our business through the eyes of management
and is a measure that is frequently used by industry analysts,
investors and lenders as a measure of valuation for broadcast
companies.
Free cash flow is calculated as non-GAAP Adjusted EBITDA (as
defined below), plus reimbursements received from the FCC for
repack expenditures, less capital expenditures, preferred stock
dividends, interest payments, income taxes paid (refunded) and
mandatory contributions to defined retirement plans.
Adjusted EBITDA is calculated as income (loss) from continuing
operations, net of tax, plus income tax expense (benefit), interest
expense, losses (gains) on extinguishment of debt, defined benefit
pension plan expense (income), share-based compensation costs,
depreciation, amortization of intangible assets, loss (gain) on
business and asset disposals, mark-to-market losses (gains),
acquisition and integration costs, restructuring charges and
certain other miscellaneous items.
A reconciliation of these non-GAAP measures to the comparable
financial measure in accordance with GAAP is as follows:
|
|
Three Months
Ended
December 31,
|
|
Years Ended December
31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
|
$
85,549
|
|
$
52,817
|
|
$ 195,902
|
|
$ 115,899
|
Provision for income
taxes
|
|
36,543
|
|
22,323
|
|
80,561
|
|
71,189
|
Interest
expense
|
|
46,703
|
|
38,259
|
|
161,130
|
|
165,164
|
Loss (gain) on
extinguishment of debt
|
|
(7,355)
|
|
1,572
|
|
(8,589)
|
|
15,347
|
Defined benefit pension
plan expense (income)
|
|
(605)
|
|
93
|
|
(2,613)
|
|
343
|
Share-based
compensation costs
|
|
3,811
|
|
4,006
|
|
21,596
|
|
22,334
|
Depreciation
|
|
15,421
|
|
15,048
|
|
61,943
|
|
58,357
|
Amortization of
intangible assets
|
|
24,683
|
|
24,530
|
|
98,490
|
|
103,565
|
Losses (gains), net on
disposal of property and equipment
|
|
215
|
|
679
|
|
5,866
|
|
(30,275)
|
Acquisition and related
integration costs
|
|
—
|
|
4,791
|
|
1,642
|
|
40,373
|
Restructuring
costs
|
|
—
|
|
—
|
|
—
|
|
9,436
|
Gain on sale of Triton
business
|
|
—
|
|
—
|
|
—
|
|
(81,784)
|
Losses on stock
warrant
|
|
—
|
|
—
|
|
—
|
|
99,118
|
Miscellaneous,
net
|
|
3,222
|
|
8,585
|
|
1,953
|
|
15,469
|
Adjusted
EBITDA
|
|
208,187
|
|
172,703
|
|
617,881
|
|
604,535
|
Capital
expenditures
|
|
(9,822)
|
|
(16,181)
|
|
(43,901)
|
|
(62,378)
|
Proceeds from FCC
Repack
|
|
20
|
|
1,864
|
|
2,670
|
|
20,062
|
Preferred stock
dividends
|
|
(12,000)
|
|
(12,000)
|
|
(48,000)
|
|
(45,067)
|
Interest
paid
|
|
(27,008)
|
|
(15,441)
|
|
(150,796)
|
|
(126,257)
|
Income taxes paid, net
of tax indemnification reimbursements
|
|
(5,066)
|
|
(27,660)
|
|
(61,573)
|
|
(85,621)
|
Mandatory contributions
to defined retirement plans
|
|
(788)
|
|
(257)
|
|
(1,541)
|
|
(25,117)
|
Free cash
flow
|
|
$ 153,523
|
|
$ 103,028
|
|
$ 314,740
|
|
$ 280,157
|
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SOURCE The E.W. Scripps Company