Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

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.

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, telecommunications companies, satellite carriers and over-the-top virtual MVPDs.

Our Scripps Networks segment includes national news outlets Court TV and Scripps News (formerly Newsy), as well as popular entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery and Laff. The Scripps Networks 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, 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  March 31,
(in thousands)	2023		2022
Segment operating revenues:
Local Media	$	311,923	$	326,661
Scripps Networks	216,473		239,068
Other	3,756		4,151
Intersegment eliminations	(4,374)		(4,174)
Total operating revenues	$	527,778	$	565,706
Segment profit (loss):
Local Media	$	45,843	$	54,393
Scripps Networks	51,526		85,076
Other	(1,532)		(1,113)
Shared services and corporate	(23,405)		(23,211)
Acquisition and related integration costs	—		(1,642)
Restructuring costs	(16,511)		—
Depreciation and amortization of intangible assets	(38,543)		(39,745)
Gains (losses), net on disposal of property and equipment	(896)		(2,481)
Interest expense	(48,838)		(36,499)
Gain on extinguishment of debt	—		1,234
Defined benefit pension plan income	134		663
Miscellaneous, net	(503)		(407)
Income (loss) from operations before income taxes	$	(32,725)	$	36,268
Depreciation:
Local Media	$	9,853	$	10,142
Scripps Networks	4,736		4,785
Other	45		44
Shared services and corporate	419		399
Total depreciation	$	15,053	$	15,370
Amortization of intangible assets:
Local Media	$	8,980	$	8,980
Scripps Networks	13,009		14,209
Other	449		481
Shared services and corporate	1,052		705
Total amortization of intangible assets	$	23,490	$	24,375
Additions to property and equipment:
Local Media	$	7,267	$	9,313
Scripps Networks	194		3,209
Other	—		9
Shared services and corporate	835		56
Total additions to property and equipment	$	8,296	$	12,587

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

	Three Months Ended  March 31,
(in thousands)	2023		2022
Operating revenues:
Core advertising	$	348,574	$	392,535
Political	3,525		5,946
Distribution	166,559		157,600
Other	9,120		9,625
Total operating revenues	$	527,778	$	565,706