Exhibit 99.1
ADJUSTED COMBINED SUPPLEMENTAL INFORMATION
Due to the effect that the 2019 television station acquisitions have on our Local Media segment, and to provide meaningful period over period comparisons, we are providing this supplemental non-GAAP (Generally Accepted Accounting Principles) information to present certain financial results on an adjusted combined basis. The adjusted combined financial results have been compiled by adding, as of the earliest period presented, the acquired Waco, Texas; Tallahassee, Florida; and Cordillera television stations’ historical revenue, employee compensation and benefits, programming and other expenses to Scripps’ historical revenue, employee compensation and benefits, programming and other expenses captions historically reported within our Local Media segment. These historical results are adjusted for certain intercompany adjustments and other impacts that would result from the companies operating under the ownership of Scripps.
Management uses the adjusted combined non-GAAP supplemental information for purposes of evaluating the performance of the Local Media segment. The company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the company’s businesses through the eyes of management, facilitating comparison of Local Media results across historical periods and providing a focus on the underlying ongoing operating performance of the segment.
The company uses the adjusted combined non-GAAP supplemental information to supplement the financial information presented on Scripps GAAP historical basis. This non-GAAP supplemental information is not to be considered in isolation from, or as a substitute for, the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.
The adjusted combined financial results contained in the following supplemental information is for informational purposes only. These results do not necessarily reflect what the historical results of Scripps would have been if the acquisitions of the Waco, Tallahassee and Cordillera broadcast operations had occurred on January 1, 2018. Nor is this information necessarily indicative of the future results of operations of the combined entities.
The adjusted combined financial information is not pro forma information prepared in accordance with Article 11 of SEC regulation S-X, and the preparation of information in accordance with Article 11 would result in a significantly different presentation.
Local Media segment Adjusted Combined segment profit
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2019 | | 2018 |
| (in thousands) | | Q1 | | Q1 | | Q2 | | Q3 | | Q4 | | Total |
| | | | | | | | | | | | | |
| Segment operating revenues: | | | | | | | | | | | | |
| Core advertising | | $ | 136,662 |
| | $ | 143,022 |
| | $ | 148,188 |
| | $ | 133,521 |
| | $ | 141,914 |
| | $ | 566,645 |
|
| Political | | 1,112 |
| | 3,137 |
| | 21,678 |
| | 54,733 |
| | 109,704 |
| | 189,252 |
|
| Retransmission | | 96,046 |
| | 83,372 |
| | 86,748 |
| | 91,446 |
| | 90,929 |
| | 352,495 |
|
| Other revenue | | 4,214 |
| | 3,186 |
| | 3,504 |
| | 3,517 |
| | 3,047 |
| | 13,254 |
|
| Total operating revenues | | 238,034 |
| | 232,717 |
| | 260,118 |
| | 283,217 |
| | 345,594 |
| | 1,121,646 |
|
| Segment costs and expenses: | | | | | | | | | | | | |
| Employee compensation and benefits | | 87,863 |
| | 88,498 |
| | 85,660 |
| | 86,309 |
| | 90,548 |
| | 351,015 |
|
| Programming | | 68,728 |
| | 61,824 |
| | 61,815 |
| | 65,564 |
| | 64,584 |
| | 253,787 |
|
| Impairment of programming assets | | — |
| | — |
| | — |
| | — |
| | 8,920 |
| | 8,920 |
|
| Other expenses | | 38,178 |
| | 38,950 |
| | 41,670 |
| | 41,414 |
| | 48,815 |
| | 170,849 |
|
| Total costs and expenses | | 194,769 |
| | 189,272 |
| | 189,145 |
| | 193,287 |
| | 212,867 |
| | 784,571 |
|
| Segment profit | | $ | 43,265 |
| | $ | 43,445 |
| | $ | 70,973 |
| | $ | 89,930 |
| | $ | 132,727 |
| | $ | 337,075 |
|
Non-GAAP reconciliation
Below is a reconciliation of Scripps historical reported revenue and segment profit for its Local Media segment to the adjusted combined revenue and adjusted combined segment profit for the Local Media segment with the 2019 television station acquisitions.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2019 | | 2018 |
| (in thousands) | | Q1 | | Q1 | | Q2 | | Q3 | | Q4 | | Total |
| | | | | | | | | | | | | |
| Local Media operating revenues, as reported | | $ | 203,387 |
| | $ | 192,059 |
| | $ | 213,248 |
| | $ | 230,734 |
| | $ | 281,439 |
| | $ | 917,480 |
|
| Waco/Tallahassee TV stations acquisition | | — |
| | 6,068 |
| | 6,174 |
| | 6,190 |
| | 6,805 |
| | 25,237 |
|
| Cordillera TV stations acquisition | | 35,480 |
| | 35,166 |
| | 41,283 |
| | 46,884 |
| | 57,942 |
| | 181,275 |
|
Other revenue adjustments (1) | | (833 | ) | | (576 | ) | | (587 | ) | | (591 | ) | | (592 | ) | | (2,346 | ) |
| Local Media adjusted combined operating revenues | | $ | 238,034 |
| | $ | 232,717 |
| | $ | 260,118 |
| | $ | 283,217 |
| | $ | 345,594 |
| | $ | 1,121,646 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2019 | | 2018 |
| (in thousands) | | Q1 | | Q1 | | Q2 | | Q3 | | Q4 | | Total |
| | | | | | | | | | | | | |
| Local Media segment profit, as reported | | $ | 34,173 |
| | $ | 31,619 |
| | $ | 53,368 |
| | $ | 67,416 |
| | $ | 98,716 |
| | $ | 251,119 |
|
| Waco/Tallahassee TV stations acquisition | | — |
| | 1,770 |
| | 1,905 |
| | 1,893 |
| | 2,265 |
| | 7,833 |
|
| Cordillera TV stations acquisition | | 7,925 |
| | 8,632 |
| | 14,287 |
| | 19,212 |
| | 30,338 |
| | 72,469 |
|
Other revenue adjustments (1) | | (833 | ) | | (576 | ) | | (587 | ) | | (591 | ) | | (592 | ) | | (2,346 | ) |
| Acquisition synergies | | 2,000 |
| | 2,000 |
| | 2,000 |
| | 2,000 |
| | 2,000 |
| | 8,000 |
|
| Local Media adjusted combined segment profit | | $ | 43,265 |
| | $ | 43,445 |
| | $ | 70,973 |
| | $ | 89,930 |
| | $ | 132,727 |
| | $ | 337,075 |
|
(1) Primarily reflects reduced retransmission revenue from CW affiliates under Scripps retransmission agreements in effect during each period.
