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 and 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 x☒ No o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 x☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See ~~definition~~the definitions of “large accelerated ~~filer”,~~filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Non-accelerated filer (Do not check if a smaller reporting company) ☐Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of July ~~29, 2016~~31, 2017 there were ~~95,196,870~~95,962,256 of the Registrant’s Class A Common Shares outstanding and 33,850,481 of the Registrant’s Common Voting Shares outstanding.

SCRIPPS NETWORKS INTERACTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS ( UNAUDITED )
(in thousands, except share and par value amounts)

	June 30,				December 31,
	2017				2016
ASSETS
Current assets:
Cash and cash equivalents		$	131,557			$	122,937
Accounts receivable, net of allowances: 2017 - $14,203; 2016 - $26,118			912,018				808,133
Programs and program licenses, net			641,611				591,378
Prepaid expenses and other current assets			68,225				135,651
Total current assets			1,753,411				1,658,099
Programs and program licenses, net (less current portion)			500,256				500,022
Investments			723,740				699,481
Property and equipment, net of accumulated depreciation: 2017 - $356,939; 2016 - $354,435			315,543				286,399
Goodwill, net			1,756,514				1,642,169
Intangible assets, net			1,122,323				1,092,682
Deferred income taxes			192,753				175,291
Other non-current assets			152,029				146,151
Total Assets		$	6,516,569			$	6,200,294
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	25,728			$	42,223
Accrued liabilities			134,371				152,480
Employee compensation and benefits			72,296				123,506
Program rights payable			69,959				70,403
Deferred revenue			119,977				77,987
Current portion of debt			-				249,932
Total current liabilities			422,331				716,531
Debt (less current portion)			2,979,729				2,952,454
Other non-current liabilities			319,736				302,881
Total liabilities			3,721,796				3,971,866
Shareholders' equity:
Scripps Networks Interactive ("SNI") shareholders’ equity:
Preferred stock, $0.01 par - authorized: 25,000,000 shares; none outstanding			—				—
Common stock, $0.01 par:
Class A Common Shares - authorized: 240,000,000 shares; issued and outstanding: 2017 - 95,936,980 shares; 2016 - 95,491,477 shares			959				954
Common Voting Shares - authorized: 60,000,000 shares; issued and outstanding: 2017 - 33,850,481 shares; 2016 - 33,850,481 shares			339				339
Total common stock			1,298				1,293
Additional paid-in capital			1,425,611				1,390,411
Retained earnings			1,230,668				871,766
Accumulated other comprehensive loss			(143,353	)			(363,701	)
SNI shareholders’ equity			2,514,224				1,899,769
Non-controlling interest (Note 13)			280,549				328,659
Total equity			2,794,773				2,228,428
Total Liabilities and Equity		$	6,516,569			$	6,200,294
See notes to condensed consolidated financial statements.

As of

June 30,

December 31,

2016

2015

ASSETS

Current assets:

Cash and cash equivalents

$
185,923

$
223,444

Accounts receivable, net of allowances: 2016 - $16,253; 2015 - $12,569

835,644

816,679

Programs and program licenses

604,545

588,999

Other current assets

66,830

98,759

Total current assets

1,692,942

1,727,881

Investments

743,974

807,630

Property and equipment, net of accumulated depreciation: 2016 - $324,982; 2015 - $299,153

279,620

293,230

Goodwill

1,785,349

1,804,748

Intangible assets, net

1,191,215

1,262,664

Programs and program licenses (less current portion)

525,090

522,899

Deferred income taxes

142,563

91,954

Other non-current assets

151,962

161,308

Total Assets

$
6,512,715

$
6,672,314

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$
61,464

$
35,308

Current portion of debt

749,487

499,174

Program rights payable

57,446

68,892

Deferred revenue

101,408

96,040

Employee compensation and benefits

75,982

115,266

Other accrued liabilities

154,574

159,969

Total current liabilities

1,200,361

974,649

Debt (less current portion)

2,877,451

3,511,098

Other non-current liabilities

266,875

250,391

Total liabilities

4,344,687

4,736,138

Redeemable non-controlling interests (Note 14)

—

99,000

Equity:

SNI shareholders’ equity:

Preferred stock, $0.01 par - authorized: 25,000,000 shares; none outstanding

—

—

Common stock, $0.01 par:

Class A Common Shares - authorized: 240,000,000 shares; issued and outstanding: 2016 - 95,170,859 shares; 2015 - 94,838,600 shares

951

948

Common Voting Shares - authorized: 60,000,000 shares; issued and outstanding: 2016 - 33,850,481 shares; 2015 - 33,850,481 shares

339

339

Total common stock

1,290

1,287

Additional paid-in capital

1,375,306

1,347,491

Retained earnings

718,292

305,386

Accumulated other comprehensive loss

(210,334
)

(130,233
)
Total SNI shareholders’ equity

1,884,554

1,523,931

Non-controlling interest (Note 14)

283,474

313,245

Total equity

2,168,028

1,837,176

Total Liabilities and Equity

$
6,512,715

$
6,672,314

SCRIPPS NETWORKS INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ( UNAUDITED )
(in thousands, except per share amounts)
	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating revenues:
Advertising	$	663,034		$	646,648		$	1,259,749		$	1,218,503
Distribution		239,685			223,446			478,065			451,514
Other		22,327			22,677			42,352			39,632
Total operating revenues		925,046			892,771			1,780,166			1,709,649
Operating expenses:
Cost of services, excluding depreciation and amortization		299,851			286,999			578,890			566,666
Selling, general and administrative		212,397			191,133			419,767			389,954
Depreciation		13,660			16,089			28,620			33,386
Amortization		25,058			25,654			49,255			56,716
Total operating expenses		550,966			519,875			1,076,532			1,046,722
Operating income		374,080			372,896			703,634			662,927
Interest expense, net		(24,203	)		(33,175	)		(48,455	)		(66,920	)
Equity in earnings of affiliates		20,974			21,712			41,423			47,390
(Loss) gain on derivatives		(3,672	)		8,267			(6,008	)		11,033
Gain (loss) on sale of investments		1,416			(16,373	)		1,416			191,824
Miscellaneous, net		32,181			(21,672	)		59,721			(15,606	)
Income from operations before income taxes		400,776			331,655			751,731			830,648
Provision for income taxes		115,099			98,303			216,239			257,350
Net income		285,677			233,352			535,492			573,298
Less: net income attributable to non-controlling interests		(51,602	)		(48,744	)		(101,517	)		(97,793	)
Net income attributable to SNI	$	234,075		$	184,608		$	433,975		$	475,505

Net income attributable to SNI Class A Common and Common Voting shareholders per share of common stock:
Basic	$	1.80		$	1.42		$	3.34		$	3.67
Diluted	$	1.79		$	1.42		$	3.32		$	3.66
Weighted average shares outstanding:
Basic		130,233			129,562			130,079			129,434
Diluted		130,884			130,141			130,790			129,971
See notes to condensed consolidated financial statements.

Three months ended June 30,

Six months ended June 30,

2016

2015

2016

2015

Operating revenues:

Advertising
$

646,648

$

502,891

$

1,218,503

$

938,159

Distribution

223,446

215,217

451,514

424,225

Other

22,677

13,994

39,632

27,968

Total operating revenues

892,771

732,102

1,709,649

1,390,352

Operating expenses:

Cost of services, excluding depreciation and amortization

286,999

195,087

566,666

394,234

Selling, general and administrative

191,133

178,498

389,954

380,685

Depreciation

16,089

14,798

33,628

31,693

Amortization

25,654

11,640

56,716

23,335

Loss (gain) on disposal of property and equipment

-

44

(242
)

2,560

Total operating expenses

519,875

400,067

1,046,722

832,507

Operating income

372,896

332,035

662,927

557,845

Interest expense, net

(33,175
)

(16,835
)

(66,920
)

(29,802
)
Equity in earnings of affiliates

21,712

27,290

47,390

46,235

Gain on derivatives

8,267

37,198

11,033

43,131

(Loss) gain on sale of investments

(16,373
)

-

191,824

-

Miscellaneous, net

(21,672
)

(13,194
)

(15,606
)

(13,596
)
Income from operations before income taxes

331,655

366,494

830,648

603,813

Provision for income taxes

98,303

120,326

257,350

191,575

Net income

233,352

246,168

573,298

412,238

Less: net income attributable to non-controlling interests

(48,744
)

(52,450
)

(97,793
)

(94,677
)
Net income attributable to SNI
$

184,608

$

193,718

$

475,505

$

317,561

Net income attributable to SNI common shareholders per share of common stock:

Basic
$

1.42

$

1.50

$

3.67

$

2.44

Diluted
$

1.42

$

1.49

$

3.66

$

2.43

Weighted average shares outstanding:

Basic

129,562

129,225

129,434

130,237

Diluted

130,141

129,868

129,971

130,898

SCRIPPS NETWORKS INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ( UNAUDITED )
(in thousands)
	Six months ended June 30,
	2017			2016
Operating Activities:
Net income	$	535,492		$	573,298
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		28,620			33,386
Amortization		49,255			56,716
Program amortization		453,910			441,608
Program payments		(501,221	)		(477,132	)
Equity in earnings of affiliates		(41,423	)		(47,390	)
Share-based compensation		27,598			24,679
Loss (gain) on derivatives		6,008			(11,033	)
Gain on sale of investments		(1,416	)		(191,824	)
Dividends received from equity investments		40,305			38,247
Deferred income taxes		(20,922	)		(31,190	)
Changes in working capital accounts:
Accounts receivable, net		(91,377	)		(23,533	)
Other assets		8,518			(9,356	)
Accounts payable		(18,823	)		26,985
Deferred revenue		42,061			5,629
Accrued / refundable income taxes		78,462			87,453
Other liabilities		(68,039	)		(53,241	)
Other, net		(24,758	)		6,505
Cash provided by operating activities		502,250			449,807
Investing Activities:
Additions to property and equipment		(44,155	)		(24,297	)
Collections of note receivable		2,533			2,135
Purchase of investments		(18,722	)		(4,711	)
Sale of investments		48,248			226,484
Purchase of subsidiary companies, net of cash acquired		(10,320	)		—
Investment in intangible		—			(11,634	)
Settlements of derivatives		(6,008	)		11,016
Other, net		(10,286	)		(8,443	)
Cash (used in) provided by investing activities		(38,710	)		190,550
Financing Activities:
Proceeds from debt		410,000			—
Repayments of debt		(635,000	)		(390,000	)
Purchases of non-controlling interests		—			(99,000	)
Dividends paid to non-controlling interests		(149,650	)		(125,604	)
Dividends paid		(78,267	)		(64,695	)
Proceeds from stock options		12,592			6,246
Other, net		(25,832	)		1,754
Cash used in financing activities		(466,157	)		(671,299	)
Effect of exchange rate changes on cash and cash equivalents		11,237			(6,579	)
Increase (decrease) in cash and cash equivalents		8,620			(37,521	)
Cash and cash equivalents - beginning of period		122,937			223,444
Cash and cash equivalents - end of period	$	131,557		$	185,923
Supplemental Cash Flow Disclosures:
Interest paid, excluding amounts capitalized	$	48,672		$	52,147
Income taxes paid	$	161,228		$	202,570
See notes to condensed consolidated financial statements.

Six months ended June 30,

2016

2015

Cash Flows from Operating Activities:

Net income

$
573,298

$
412,238

Depreciation

33,628

31,693

Amortization

56,716

23,335

Program amortization

441,608

322,268

Program payments

(477,132
)

(396,638
)
Equity in earnings of affiliates

(47,390
)

(46,235
)
Gain on derivatives

(11,033
)

(43,131
)
Gain on sale of investments

(191,824
)

—

Dividends received from equity investments

38,247

44,019

Share-based compensation

24,679

24,255

Deferred income taxes

(31,190
)

2,686

Changes in working capital accounts (excluding the effects of acquisition):

Accounts receivable, net

(23,533
)

(93,465
)
Other assets

(9,356
)

(9,530
)
Accounts payable

26,985

13,246

Deferred revenue

5,629

29,466

Accrued / refundable income taxes

87,453

66,712

Other liabilities

(53,241
)

(13,698
)
Other, net

6,263

18,221

Cash provided by operating activities

449,807

385,442

Cash Flows from Investing Activities:

Additions to property and equipment

(24,297
)

(18,478
)
Collections of note receivable

2,135

2,322

Purchases of investments

(4,711
)

(30,000
)
Sale of investments

226,484

—

Investment in intangible

(11,634
)

—

Foreign currency call option premium

—

(16,000
)
Settlement of derivatives

11,016

63,019

Restricted cash

—

(652,353
)
Other, net

(8,443
)

(32,444
)
Cash provided by (used in) investing activities

190,550

(683,934
)
Cash Flows from Financing Activities:

Proceeds from debt

—

2,760,764

Repayments of debt

(390,000
)

(1,700,000
)
Deferred loan costs

—

(13,963
)
Purchase of non-controlling interests

(99,000
)

—

Dividends paid

(64,695
)

(59,427
)
Dividends paid to non-controlling interests

(125,604
)

(135,817
)
Repurchases of Class A Common Shares

—

(288,502
)
Proceeds from stock options

6,246

7,894

Other, net

1,754

(7,016
)
Cash (used in) provided by financing activities

(671,299
)

563,933

Effect of exchange rate changes on cash and cash equivalents

(6,579
)

(2,791
)
(Decrease) increase in cash and cash equivalents

(37,521
)

262,650

Cash and cash equivalents:

Beginning of period

223,444

878,164

End of period

$
185,923

$
1,140,814

Supplemental Cash Flow Disclosures:

Interest paid, excluding amounts capitalized

$
52,147

$
41,132

Income taxes paid

$
202,570

$
113,921

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ~~(UNAUDITED)~~( UNAUDITED )


	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Non-controlling Interest				Total Equity			Redeemable Non-controlling Interests (Temporary Equity)			Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Non-controlling Interest			Total Equity			Redeemable Non-controlling Interests
Balance as of December 31, 2014	$	1,321		$	1,359,023		$	79,994		$	(57,891	)	$	302,140			$	1,684,587		$	96,251
Comprehensive income								317,561			4,267			90,471				412,299			3,747
Redeemable non-controlling interest fair value adjustments								(1,081	)									(1,081	)		1,081
Addition to non-controlling interests																		-			700
Dividends paid to non-controlling interests														(129,149	)			(129,149	)		(6,668	)
Dividends declared and paid: $0.46 per share								(59,427	)									(59,427	)
Repurchases of Class A Common Shares: 3,986,275 shares		(40	)		(43,677	)		(244,785	)									(288,502	)
Share-based compensation					24,255													24,255
Exercise of employee share options: 172,959 shares issued		2			7,892													7,894
Other share-based compensation, net: 331,530 shares issued; 108,626 shares repurchased		2			(6,299	)												(6,297	)
Tax benefits of compensation plans					1,131													1,131
Balance as of June 30, 2015	$	1,285		$	1,342,325		$	92,262		$	(53,624	)	$	263,462		��	$	1,645,710		$	95,111
Balance as of December 31, 2015	$	1,287		$	1,347,491		$	305,386		$	(130,233	)	$	313,245			$	1,837,176		$	99,000
December 31, 2015																							$	1,287	$	1,347,491		$	305,386		$	(130,233	)	$	313,245		$	1,837,176		$	99,000
Comprehensive income								475,505			(80,101	)		95,833				491,237			2,162								475,505			(80,101	)		95,833			491,237			2,162
Redeemable non-controlling interest fair value adjustments								2,162										2,162			(2,162	)							2,162									2,162			(2,162	)
Purchase of non-controlling interest																		-			(99,000	)																-			(99,000	)
Dividends paid to non-controlling interests														(125,604	)			(125,604	)																(125,604	)		(125,604	)
Dividends declared and paid: $0.50 per share								(64,695	)									(64,695	)										(64,695	)								(64,695	)
Share-based compensation					24,679													24,679								24,679												24,679
Exercise of employee share options: 169,775 shares issued		1			6,245													6,246						1		6,245												6,246
Other share-based compensation, net: 230,094 shares issued; 67,610 shares repurchased		2			(2,768	)												(2,766	)					2		(2,768	)											(2,766	)
Impact of implementation of ASC 718					66			(66	)									-
Tax expense of compensation plans					(407	)												(407	)
Balance as of June 30, 2016	$	1,290		$	1,375,306		$	718,292		$	(210,334	)	$	283,474			$	2,168,028		$	-
Impact of ASC 718 implementation																										66			(66	)								-
Tax impact of compensation plans																										(407	)											(407	)
June 30, 2016																							$	1,290	$	1,375,306		$	718,292		$	(210,334	)	$	283,474		$	2,168,028		$	-

December 31, 2016																							$	1,293	$	1,390,411		$	871,766		$	(363,701	)	$	328,659		$	2,228,428		$	-
Comprehensive income																													433,975			220,348			101,540			755,863
Tax impact of purchase of non-controlling interest																													3,194									3,194
Dividends paid to non-controlling interests																																			(149,650	)		(149,650	)
Dividends declared and paid: $0.60 per share																													(78,267	)								(78,267	)
Share-based compensation																										27,598												27,598
Exercise of employee share options: 266,337 shares issued																								3		12,589												12,592
Other share-based compensation, net: 260,202 shares issued; 81,036 shares repurchased																								2		(4,987	)											(4,985	)
June 30, 2017																							$	1,298	$	1,425,611		$	1,230,668		$	(143,353	)	$	280,549		$	2,794,773		$	-

As used in the notes to the condensed consolidated financial statements, the terms “SNI,” “Scripps,” “the Company,” “we,” “our,” “us” or similar terms may, depending on the context, refer to Scripps Networks Interactive, Inc., to one or more of its consolidated subsidiary companies or to all of them taken as a whole.

~~We operate~~SNI operates in the media industry and ~~have~~has interests in domestic and international television networks and internet-based media properties.

The Company has two reportable segments: U.S. Networks and International Networks.

International Networks includes TVN S.A. (“TVN”), which operates a portfolio of free-to-air and pay-TV lifestyle and entertainment networks in Poland, including TVN, TVN24, TVN Style, TTV, TVN Turbo, TVN24 Biznes i ~~Świat.~~Świat and HGTV. Also included in TVN is TVN Media, an advertising sales house. Additionally, International Networks includes the lifestyle-oriented networks available in the United Kingdom (“UK”), other European markets, the Middle East and Africa (“EMEA”), Asia Pacific (“APAC”), and Latin ~~America and the Caribbean.~~

~~As a result~~America. International Networks also includes our 50.0 percent share of the ~~changes to our reportable segments~~results of UKTV, a general entertainment and lifestyle channel platform in ~~2015, certain prior period segment results have been recast to reflect~~ the ~~current presentation (see Note 17 –~~ ~~Segment Information~~).UK.

The condensed consolidated financial statements include the accounts of SNI and its majority-owned or controlled subsidiaries after elimination of intercompany accounts and transactions. Investments in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method of accounting. Investments in entities in which SNI has no control or significant influence over and is not the primary beneficiary are accounted for using the cost method of accounting.

The results of companies acquired or disposed of are included in the condensed consolidated financial statements from the effective date of acquisition or up to the date of disposal, respectively.

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. These unaudited condensed consolidated financial statements and the related ~~notes~~footnotes hereto should be read in conjunction with the audited consolidated financial statements and ~~notes~~footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

In the opinion of management, the accompanying condensed consolidated balance sheets and related interim condensed consolidated statements of operations, comprehensive income, cash flows and shareholders’ equity include all ~~adjustments, consisting only of~~ normal recurring adjustments necessary for their fair presentation in conformity with ~~accounting principles generally accepted in the United States of America (“GAAP”).~~GAAP. The year end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. ~~Preparing~~

The preparation of financial statements in accordance with GAAP requires management to make estimates, judgments and assumptions that affect the amounts and related disclosures reported ~~amounts~~in the condensed consolidated financial statements and accompanying footnotes, including the selection of ~~assets~~appropriate accounting principles that reflect the economic substance of the underlying transactions and ~~liabilities and disclosure~~the assumptions on which to base accounting estimates. In reaching such decisions, judgment is applied

based on analysis of ~~contingent assets and liabilities, and revenues and expenses. We base our estimates on~~the relevant circumstances, including historical experience, actuarial studies and ~~on various~~ other ~~assumptions that we believe to be reasonable under the circumstances.~~assumptions. Actual results ~~and outcomes may~~could differ ~~materially~~ from ~~management’s estimates and assumptions.~~estimates.

Interim results are not necessarily indicative of the results that may be expected for any future interim periods or for a full year.

During the quarter, the Company adopted new guidance related to the accounting for employee share-based payments. This change resulted in a reclassification in 2016 of $0.1 million of the cumulative effect from 2015 and 2014 of forfeited share-based payments from retained earnings to additional paid-in capital on our condensed consolidated balance sheets and our condensed consolidated statements of shareholders’ equity.

Basic earnings per share (“EPS”) is calculated by dividing earnings available to common shareholders by the weighted average number of common shares outstanding, including participating securities outstanding. Diluted EPS is similar to basic EPS, but adjusts for the effect of the potential issuance of common shares. We include all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in our basic and diluted EPS number of shares outstanding.

~~The following table presents information about basic and diluted weighted average shares outstanding:~~

For the three and six months ended June 30, 2016 and June 30, 2015, we had stock options that were anti-dilutive and, accordingly, were not included in the computation of diluted weighted average shares outstanding.

In ~~March 2016,~~May 2017, the Financial Accounting Standards Board ~~(“FASB”~~(the “FASB”) issued new accounting guidance related to ~~share-based compensation,~~ ~~Improvements to Employee Share-Based Payment Accounting. The new guidance simplifies several aspects~~the scope of ~~the~~modification accounting for equity awards, Compensation – Stock Compensation, which provides guidance about which changes to the terms or conditions of a share-based payments, including forfeitures, accounting for income taxes and statutory withholding requirements. Additionally, this guidance provides clarity around presentation of items within the statements of cash flows.payment award require an entity to apply modification accounting. The guidance is effective ~~for us on January 1,~~December 15, 2017, and early adoption is permitted. We early adopted this guidance in the second quarter of ~~2016.~~2017. This implementation did not have a material effect on our condensed consolidated financial statements ~~and~~or related disclosures.

In March 2017, the FASB issued new accounting guidance related to the presentation of net periodic pension costs and net periodic postretirement benefit costs, Compensation – Retirement Benefits, which requires that employers sponsoring postretirement benefit plans disaggregate the service cost component from the other components of net benefit cost. The standard also provides explicit guidance on how to present the service cost and other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. The guidance is effective December 15, 2017, and early adoption is permitted. We early adopted this guidance in the first quarter of 2017. This implementation did not have a material effect on our condensed consolidated financial statements or related disclosures.

In January 2017, the FASB issued new accounting guidance related to intangibles, Simplifying the Test for Goodwill Impairment, which eliminates step two from the goodwill impairment test and requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount. The guidance also eliminates the requirement to perform a qualitative assessment for any reporting unit with a zero or negative carrying amount. The guidance is effective January 1, 2020, and early adoption is permitted. We early adopted this guidance in the first quarter of 2017. This implementation did not have an effect on our condensed consolidated financial statements or related disclosures.

In January 2017, the FASB issued new accounting guidance related to business combinations, Clarifying the Definition of a Business, which clarifies the definition of a business. The guidance, which impacts acquisitions, disposals, goodwill and consolidation, provides a framework to determine when an integrated set of assets and activities is considered a business. The guidance is effective December 15, 2017, and early adoption is permitted. We adopted this guidance in the first quarter of 2017. This implementation did not have an effect on our condensed consolidated financial statements or related disclosures.

In March 2016, the FASB issued new accounting guidance related to revenue recognition, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations within the new revenue recognition guidance by clarifying the indicators. This guidance updates the revenue recognition guidance issued in May ~~2015,~~2014, Revenue from Contracts with Customers. In May ~~2015,~~2014, the FASB issued new accounting guidance related to revenue recognition, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance in GAAP. The guidance is effective ~~for us on~~ January 1, 2018, and early adoption is permitted. We ~~are currently evaluating~~have partially completed our assessment of the new guidance to determine the impact it will have on our condensed consolidated financial statements and related ~~disclosures.~~

~~In March 2016,~~disclosures, including identifying new processes and controls to support our revenue recognition under the ~~FASB issued~~ new ~~accounting guidance~~guidance. As a result of our assessment, we are tentatively planning on applying the modified retrospective method of adoption for this guidance. We have completed our assessment of the distribution revenue stream related to ~~investments,~~ ~~Investments – Equity Method~~our top customers and ~~Joint Ventures: Simplifying~~concluded that it will be treated primarily as a license of intellectual property. As a result, we do not expect a material impact on the ~~Transition to the Equity Method~~amount or timing of ~~Accounting,~~ ~~which simplifies the accounting for a transition to equity method investment of accounting~~revenue recognized as a result of ~~an increase in level~~the adoption of ownership or degree of influence and eliminates the requirement to retroactively adjust the investment for all periods the investment was held. The amendments in the update require that an entity that has an available-for-sale equity security becomes qualified for the equity method of accounting if they recognize earnings through the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment qualifies for equity method treatment. The guidance is effective for us on January 1, 2017, and early adoption is permitted.this guidance. We ~~do not~~ expect the ~~new guidance~~remainder of our assessment and the resulting changes to ~~have a material effect on~~ our ~~condensed consolidated financial statements~~processes and ~~related disclosures.~~controls to be completed by late 2017.

In February 2016, the FASB issued new accounting guidance related to leases, Leases, which requires the recognition of an asset and liability arising from leasing arrangements for leases extending beyond an initial period of twelve months. The guidance will increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective ~~for us on~~ January 1, 2019, and early adoption is permitted. We

~~permitted. We are currently evaluating~~have partially completed our evaluation of the new guidance to determine the impact it will have on our condensed consolidated financial statements and related ~~disclosures.~~disclosures, including identifying new processes and controls to support our lease accounting under the new guidance. We expect the remainder of our assessment and the resulting changes to our processes and controls to be completed by late 2017.

Basic earnings per share (“EPS”) is calculated by dividing net income attributable to SNI by the weighted average number of common shares outstanding, including participating securities outstanding. Diluted EPS is similar to basic EPS, but adjusts for the effect of the potential issuance of common shares. We include all unvested share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the calculation of both basic and diluted EPS.

The following table presents information about basic and diluted weighted average shares outstanding:

For both the three and six months ended June 30, 2017 and June 30, 2016, the ~~FASB issued new accounting guidance related to financial assets and liabilities,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities,~~ ~~which requires equity investments~~anti-dilutive share-based awards were not accounted for under the equity method to be measured at fair value with changes recognized in net income. Additionally, the guidance simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairments, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires an entity to present separately in other comprehensive income the portion of the total changeincluded in the ~~fair value~~computation of a liability resulting from a change in the instrument-specific credit risk when an entity has elected to measure the liability at fair value, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset either on the balance sheet or in the accompanying notes and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The guidance will reduce diversity in current practice. The guidance is effective for us on January 1, 2018, and early adoption is not permitted. We are currently evaluating the new guidance to determine the impact it will have on our condensed consolidated financial statements and related disclosures.diluted weighted average shares outstanding.

On July 1, 2015 (the “Acquisition Date”), the Company, through an indirect wholly-owned subsidiary, acquired 100.0 percent of the outstanding shares of N-Vision B.V., a Dutch limited liability company (“N-Vision”) that held a majority interest in TVN, for approximately €1,440.0 million, or $1,608.6 million, comprised of cash consideration of €584.0 million, or $652.4 million, and principal amounts of debt assumed of €856.0 million, or $956.2 million, including €556.0 million, or $621.1 million, of debt directly attributed to TVN (the “Acquisition”). The Acquisition was funded with a portion of the net proceeds from the Company’s $1,500.0 million debt offering executed in June 2015 (the “Financing”) (see Note 10 – ~~Debt~~). The majority of the remaining debt proceeds were used to purchase the residual outstanding shares of TVN through a tender offer for approximately $831.5 million (the “Tender Offer”) and a subsequent squeeze-out for approximately $22.4 million (the “Squeeze-out”), which were both completed during the third quarter of 2015. Together, the Acquisition, Tender Offer and Squeeze-out are referred to herein as the “Transactions”. Total consideration for the Transactions was approximately $2,462.5 million.

The primary purpose of the Acquisition was to obtain N-Vision’s 52.7 percent controlling interest in the voting shares of TVN, a public media company listed on the Warsaw Stock Exchange (the “WSE”).

To minimize the volatility in the purchase price that may have resulted from Euro to U.S. Dollar (“USD”) currency exchange rate changes, we entered into a foreign currency option contract during the first quarter of 2015 that effectively set the USD cash consideration for the Acquisition. We paid a $16.0 million premium for a call option on €584.0 million at a cost of $625.0 million. The premium is reflected as both an expense in gain on derivatives within operating activities and as a cash outflow from foreign currency call option premium within investing activities in our condensed consolidated statements of cash flows for the six months ended June 30, 2015. The foreign currency option contract was settled during the second quarter of 2015, and the $31.9 million resulting gain is included as both a gain in gain on derivatives within operating activities and as a cash inflow from settlement of derivatives within investing activities in our condensed consolidated statements of cash flows for the six months ended June 30, 2015.

Additionally, we entered into and, in certain cases, settled a series of other derivative contracts related to the Transactions. The derivative contracts that were settled as of June 30, 2015, resulted in a net gain of $33.0 million, which is also included both as a gain in gain on derivatives within operating activities and as a cash inflow from settlement of derivatives within investing activities in our condensed consolidated statements of operations for the six months ended June 30, 2015.

The net impact of the various hedges entered into and settled related to the Transactions resulted in a $48.9 million gain, which is included within gain on derivatives in the condensed consolidated statements of operations for the three months ended June 30, 2015.

We also recognized $18.9 million of net losses in the three and six months ended June 30, 2015 related to the effects of foreign currency on cash balances held for the Acquisition and Tender Offer. These losses are included within miscellaneous, net in our condensed consolidated statements of operations.

Within three months of completing the Acquisition, the Company was required under Polish law to launch a mandatory public tender offer for a minimum ownership of 66.0 percent of TVN’s total voting shares outstanding. On July 6, 2015, the Company tendered for the remaining outstanding voting shares of TVN at a purchase price equal to 20.0 Zloty per share. Final cash consideration paid was approximately $853.9 million. The Tender Offer resulted in the acquisition of an additional 156.7 million shares, or a cumulative 98.8

percent ownership of TVN’s outstanding share capital. This enabled the Company to effectuate the Squeeze-out for the remaining unredeemed shares, which was completed on September 28, 2015, resulting in 100.0 percent ownership of TVN. The Company, through TVN, filed the documentation required under Polish law to effect the delisting of TVN shares from the WSE, which became effective December 3, 2015.

The incremental shares purchased through the Tender Offer and Squeeze-out were financed through a combination of cash on hand, including funds remaining from the Financing, borrowings under our $900.0 million amended revolving credit facility (the “Amended Revolving Credit Facility”) and net proceeds from our $250.0 million term loan (the “Term Loan”) (see Note 10 – ~~Debt~~).

We incurred transaction and integration related expenses of $4.2 million and $14.4 million for the three and six months ended June 30, 2015, respectively, associated with the Acquisition. These transaction and integration expenses are included within selling, general and administrative expenses in our condensed consolidated statements of operations and reduced our net income attributable to SNI by $2.6 million and $8.9 million in the three and six months ended June 30, 2015, respectively.

On July 31, 2015, the Company paid €364.9 million to retire the €300.0 million Senior PIK Toggle Notes due 2021 (“the 2021 PIK Notes”), which was debt at the parent of TVN and included as a component of the debt assumed in the Acquisition purchase price.

On September 15, 2015, TVN executed a partial pre-payment of its 7.38% Senior Notes due 2020 (the “2020 TVN Notes”) totaling €45.1 million, comprised of principal of €43.0 million, accrued but unpaid interest of €0.8 million and premium of €1.3 million. Under the terms of the 2020 TVN Notes, TVN has the right to make a payment of 10.0 percent of the original principal amount in each rolling twelve month period prior to December 31, 2016 without an early pre-payment penalty.

On November 16, 2015, TVN Finance Corporation III AB (“TVN Finance Corp.”), an indirect wholly-owned subsidiary of the Company, executed a second partial pre-payment of the 2020 TVN Notes totaling €45.6 million, comprised of principal of €43.0 million, accrued but unpaid interest of €1.3 million and premium of €1.3 million.

On November 16, 2015, TVN Finance Corp. executed a full early redemption of its 7.88% Senior Notes due 2018 (the “2018 TVN Notes”) totaling €118.9 million, comprised of principal of €116.6 million, accrued but unpaid interest of a nominal amount and premium of €2.3 million.

The Acquisition was accounted for using the acquisition method of accounting, which requires, among other things, that we allocate the purchase price to the assets acquired and liabilities assumed based on their fair values as of the Acquisition Date. We have reported the results of operations for TVN in our condensed consolidated financial statements for the period beginning on the Acquisition Date.

The following table summarizes the final fair values of the assets acquired and liabilities assumed as of the Acquisition Date, which were allocated based on information available at the Acquisition Date.

~~The following table represents the fair value of identifiable intangible assets and their assumed estimated useful lives.~~

As a result of the Acquisition, we recognized goodwill of $1,239.6 million. The purchase price was assigned to assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date, and the excess was allocated to goodwill, as shown in the Balance Sheet Classification table above. Goodwill represents the value we expect to achieve through the Acquisition and is recorded in the International Networks segment. The fair value of this goodwill is not deductible for U.S. income tax purposes.

We utilized various valuation techniques to determine fair value, primarily discounted cash flow analyses and excess earnings valuation approaches, each of which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy (see Note 6 – ~~Fair Value Measurement~~). Under these valuation approaches, we are required to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data.

The following unaudited pro forma information presents the combined results of operations as if the Transactions had occurred at the beginning of fiscal year 2015, combining TVN’s pre-acquisition results with our historical results. The 2016 condensed consolidated financial statements include the results of TVN for the entire period. The pro forma results contained in the following table include adjustments for amortization of acquired intangibles, depreciation expense, transaction costs, interest expense as a result of the Financing and related income taxes. Any potential cost savings or other operational efficiencies that could result from the Transactions are not included in these pro forma results. These pro forma results do not necessarily reflect what would have occurred if the Acquisition had taken place January 1, 2015, nor do they represent the results that may occur in the future.

~~We did not recognize any contingent consideration arising from the Transactions.~~

On June 16, 2016 we acquired a new network distribution right in Italy in the amount of €10.4 million, or approximately $11.6 million. We recorded the new distribution right as an intangible asset with a 4 year amortizable life. The acquisition of this asset is reflected as an investing activity within our condensed consolidated statement of cash flows.

During the fourth quarter of 2014, we provided qualified employees with voluntary early retirement packages and notified employees of the elimination of certain positions within the Company (the “Restructuring Plan”). We also announced that we would be closing our Cincinnati office location in late 2015 and relocating certain positions to our Knoxville headquarters. Our operating results do not reflect any impact for the three months ended June 30, 2016 and include an expense of $5.8 million for severance, retention, benefits, relocation costs and accelerated depreciation incurred as a result of the Restructuring Plan during the three months ended June 30, 2015. As a result, net income attributable to SNI was not impacted for the three months ended June 30, 2016 and was reduced by $3.6 million for the three months ended June 30, 2015. Our operating results include a gain of $0.3 million and an expense of $11.2 million for severance, retention benefits, relocation costs and accelerated depreciation incurred as a result of the Restructuring Plan for the six months ended June 30, 2016 and June 30, 2015, respectively. As a result, net income attributable to SNI was increased by $0.2 million and reduced by $6.9 million for the six months ended June 30, 2016 and June 30, 2015, respectively. The Restructuring Plan was substantially completed as of December 31, 2015.

~~A rollforward of the liability related to the Restructuring charges by segment is as follows:~~

During the fourth quarter of 2015, we executed the reorganization (the “Reorganization”) and committed to undertaking activities intended to streamline and integrate the management of our domestic networks, creating a cohesive and holistic ~~organization (the “Reorganization”). As part of the Reorganization, we announced we would be relocating certain employees during 2016.~~organization. Our operating results reflect a very small impact for the three and six months ended June 30, 2017 and include an expense of $3.9 million and $11.2 million for ~~severance, retention, benefits and relocation costs incurred as a result of the Reorganization during~~ the three and six months ended June 30, 2016, respectively. The $3.9 million of expense for the three months ended June 31, 2016 was classified as $2.6 million of selling, general and administrative and $1.3 million of cost of services, while the $11.2 million of expense for the six months ended June 31, 2016 was classified as $8.2 million of selling, general and administrative and $3.0 million of cost of services. As a result of the Reorganization, net income attributable to SNI was reduced by $2.4 million and $6.9 million for the three and six months ended June 30, 2016, respectively. ~~We anticipate that~~The Reorganization was completed in the ~~Reorganization will be completed by the end~~first quarter of ~~2016.~~2017.

A rollforward of the liability related to the Reorganization charges by segment is as follows:

														June 30, 2017
(in thousands)														U.S. Networks				International Networks			Corporate and Other				Total
Liability as of December 31, 2016														$	1,955			$	-		$	1,585			$	3,540
Net accruals															(142	)			-			39				(103	)
Payments															(1,813	)			-			(1,624	)			(3,437	)
Liability as of June 30, 2017														$	-			$	-		$	-			$	-

	Six months ended June 30, 2016												June 30, 2016
(in thousands)	U.S. Networks			International Networks		Corporate and Other			Total				U.S. Networks				International Networks			Corporate and Other				Total
Liability as of December 31, 2015	$	3,258		$	-	$	8		$	3,266				$	3,258			$	-		$	8			$	3,266
Net accruals		7,467			-		3,740			11,207					7,467				-			3,740				11,207
Payments		(8,537	)		-		(2,617	)		(11,154	)				(8,537	)			-			(2,617	)			(11,154	)
Non-cash ^(b)		(422	)		-		(1,131	)		(1,553	)
Non-cash ^{(a )}															(422	)			-			(1,131	)			(1,553	)
Liability as of June 30, 2016	$	1,766		$	-	$	-		$	1,766				$	1,766			$	-		$	-			$	1,766

^(b) Primarily represents the reclassification of current period charges for share-based compensation.
^(a) Primarily represents the reclassification of current period charges for share-based compensation.												^(a) Primarily represents the reclassification of current period charges for share-based compensation.

The liability for ~~both~~ the ~~Restructuring Plan and~~ Reorganization is included within ~~other~~ accrued liabilities on our 2016 condensed consolidated balance sheets.

Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified in one of three categories described below.

There have been no transfers of assets or liabilities between the fair value measurement classifications during the ~~six months ended June 30, 2016 and June 30, 2015.~~periods presented.

	As of June 30, 2016								June 30, 2017
(in thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	5,412	$	5,412	$	-	$	-	$	19,637	$	19,637	$	-	$	-
Derivative asset		632		-	$	632		-
Total assets measured at fair value on a recurring basis	$	6,044	$	5,412	$	632	$	-
Total									$	19,637	$	19,637	$	-	$	-

Temporary equity - Redeemable non-controlling interests	$	-	$	-	$	-	$	-
									December 31, 2016
(in thousands)									Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents									$	658	$	658	$	-	$	-
Total									$	658	$	658	$	-	$	-

Derivatives include free-standing foreign currency forward contracts which are marked to market at each reporting period. We classify our foreign currency forward contracts as Level 2, as the valuation inputs are based on quoted prices and market observable data of similar instruments.

At December 31, 2015, we determined the fair value of our redeemable non-controlling interest in Travel Channel using a combination of a discounted cash flow valuation model and a market approach that applies revenues and EBITDA estimates against the calculated multiples of comparable companies. Operating revenues and EBITDA are key assumptions utilized in both the discounted cash flow valuation model and the market approach. The selected discount rate of approximately 10.5 percent is also a key assumption in our discounted cash flow valuation model. On February 25, 2016, we agreed to pay the non-controlling interest owner $99.0 million to acquire the remaining 35.0 percent interest in Travel Channel, resulting in our 100.0 percent ownership (see Note 14 – ~~Redeemable Non-controlling Interest and Non-controlling Interest).~~

~~The following table summarizes the activity for account balances whose fair value measurements are estimated utilizing Level 3 inputs:~~

~~The net income amounts reflected in the table above are reported within net income attributable to non-controlling interests in our condensed consolidated statements of operations.~~

The carrying values of our financial instruments do not materially differ from their estimated fair values as of June 30, ~~2016~~2017 and December 31, ~~2015~~2016, except for debt, which is disclosed in Note ~~10 -~~9 – Debt., and certain mutual funds held as part of our executive deferred compensation plan, which are disclosed in Note 10 – Employee Benefit Plans.

The majority of the Company’s non-financial instruments, which include goodwill, other intangible assets and property and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur, or at least annually for goodwill, such that a non-financial instrument is required to be evaluated for impairment, a resulting asset impairment would require that the non-financial instrument be recorded at the lower of ~~cost~~carrying value or fair value.

UKTV receives financing through a loan (the “UKTV Loan”) provided by us. The ~~loan, totaling $101.5 million and $112.1 million at June 30, 2016 and December 31, 2015, respectively,~~UKTV Loan is reported within other non-current assets on our condensed consolidated balance sheets and ~~effectively acts~~totaled $98.6 million and $93.9 million as ~~a revolving credit facility for UKTV.~~of June 30, 2017 and December 31, 2016, respectively. As a result of this financing arrangement and the level of equity investment at risk, we have determined that UKTV is a variable interest entity (“VIE”). SNI and its partner, BBC Worldwide Limited (the “BBC”), in the venture share equally in the profits of the entity, have equal representation on UKTV’s board of directors and share voting control in such matters as approving annual budgets, initiating financing arrangements and changing the scope of the business. However, ~~our partner~~BBC maintains control over certain operational aspects of the business related to programming content, scheduling and the editorial and creative development of UKTV. Additionally, certain key management personnel of UKTV are employees of ~~our partner.~~BBC. Since we do not control these activities that are critical to UKTV’s operating performance, we have determined that we are not the primary beneficiary of the entity and, therefore, account for the investment under the equity method of accounting. ~~As of June 30, 2016 and December 31, 2015, the~~The Company’s investment in UKTV ~~was $319.1~~totaled $311.3 million and ~~$353.4~~$305.1 million as of June 30, 2017 and December 31, 2016, respectively.

A portion of the purchase price from our 50.0 percent investment in UKTV was attributed to amortizable intangible assets, which are included in the carrying value of our UKTV investment. Amortization expense attributed to intangible assets recognized upon acquiring our interest in UKTV reduces the equity in earnings we recognize from our UKTV investment. Accordingly, equity in earnings of affiliates includes our ~~$13.1~~$9.3 million and ~~$12.9~~$13.1 million proportionate share of UKTV’s results for the three months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016, respectively, which were reduced by amortization of ~~$3.4~~$3.0 million and ~~$4.2~~$3.4 million for the three months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016, respectively. Equity in earnings of affiliates includes our ~~$24.0~~$21.5 million and $24.0 million proportionate share of UKTV’s results for the six months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016, respectively, which were reduced by amortization of ~~$6.8~~$6.0 million and ~~$8.4~~$6.8 million for the six months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016, respectively. ~~The table below summarizes estimated amortization~~

Amortization that ~~we expect to reduce~~reduces the Company’s equity in UKTV’s earnings for future ~~periods:~~periods is expected to be as follows:

( in thousands )		Estimated Amortization**			Estimated Amortization*
Remainder of 2016		$	5,756
2017		$	12,700
Remainder of 2017				Remainder of 2017	$	6,302
2018	2018	$	12,795	2018	$	12,700
2019	2019	$	12,891	2019	$	12,891
2020	2020	$	12,986	2020	$	12,986
2021				2021	$	11,865
Thereafter	Thereafter	$	94,740	Thereafter	$	82,875
** The functional currency of UKTV is the Great British Pound ("GBP"), so these amounts are subject to change as the GBP to USD exchange rates fluctuate.
* The functional currency of UKTV is the British Pound ("GBP"), so these amounts are subject to change as the GBP to U.S. Dollar ("USD") exchange rate fluctuates.				* The functional currency of UKTV is the British Pound ("GBP"), so these amounts are subject to change as the GBP to U.S. Dollar ("USD") exchange rate fluctuates.

The Company, through its ownership of TVN, has an investment in nC+, which is managed under the terms of a shareholders’ agreement. The nC+ shareholders’ agreement contains various standard provisions with regards to the management of the business and related matters, as well as terms regarding disposition of ownership by either party.. A portion of the purchase price from our 32.0 percent investment in nC+ was attributed to amortizable intangible assets, which are included in the carrying value of our nC+ investment. Amortization expense attributed to intangible assets recognized upon acquiring our interest in nC+ reduces the equity in earnings we recognize from our nC+ investment. ~~The table below summarizes estimated amortization~~Accordingly, equity in earnings of affiliates includes our $5.7 million and $2.3 million proportionate share of nC+’s results for the three months ended June 30, 2017 and June 30, 2016, respectively.

Amortization that ~~we expect to reduce~~reduces the Company’s equity in nC+’s earnings for future ~~periods:~~periods is expected to be as follows:

( in thousands )		Estimated Amortization**			Estimated Amortization*
Remainder of 2016		$	1,848
2017		$	3,817
Remainder of 2017				Remainder of 2017	$	2,186
2018	2018	$	3,817	2018	$	4,122
2019	2019	$	3,807	2019	$	4,122
2020	2020	$	3,788	2020	$	4,122
2021				2021	$	4,122
Thereafter	Thereafter	$	25,518	Thereafter	$	23,644
** The functional currency of nC+ is the Polish Zloty ("PLN"), so these amounts are subject to change as the PLN to USD exchange rates fluctuate.
* The functional currency of nC+ is the Polish Zloty ("PLN"), so these amounts are subject to change as the PLN to USD exchange rate fluctuates.				* The functional currency of nC+ is the Polish Zloty ("PLN"), so these amounts are subject to change as the PLN to USD exchange rate fluctuates.

~~The~~In May 2017, the Company ~~exercised significant control over Fox-BRV Southern Sports Holdings (“Fox Sports South”) through board positions held~~invested $7.0 million in Philo, a cutting-edge campus television solution providing access to students on devices that expand beyond traditional cable systems. In June 2017, the Company invested $10.0 million in fuboTV, Inc., a sports-centric internet television streaming service with popular live sports and ~~therefore,~~entertainment content providing access via multiple devices. These investments were both accounted for ~~this investment using~~under the ~~equity~~cost method of accounting. On

In February ~~24,~~ 2016, the Company sold its 7.3 percent equity interest in Fox-BRV Southern Sports Holdings (“Fox Sports ~~South~~ South”) to the controlling interest holder for ~~a sale price of~~ $225.0 million upon the exercise of

the Company’s put right. The sale of this ownership interest resulted in a gain of $208.2 million for the six months ended June 30, 2016, which is recorded in gain (loss) ~~gain~~ on sale of investments in our condensed consolidated statements of operations and as ~~both~~ a gain on sale of investments within operating activities ~~and as a~~in our condensed consolidated statements of cash ~~inflow~~flows. The $225.0 million of cash received from the sale of Fox Sports is included in sale of investments within investing activities in our condensed consolidated statements of cash flows. Further, the gain on sale resulted in tax expense of approximately ~~$73.6~~$73.7 million for the six months ended June 30, 2016.

In April 2017, we completed the exercise of our put right and sold our 25.0 percent interest in Onet to the controlling interest holder for PLN 185.0 million. The sale of this ownership interest resulted in a gain of $1.4 million for the three and six months ended June 30, ~~2016.~~

On June 12, 2016, an investment which the Company accounted for using the cost method was sold. The proceeds from the sale totaled $1.5 million and resulted in a $16.4 million loss recognized for the three and six months ended June 30, 2016,2017, which is recorded in gain (loss) ~~gain~~ on sale of investments in our condensed consolidated statements of operations and as a gain on sale of investments within operating activities ~~and~~in our condensed consolidated statements of cash flows. The $48.2 million of cash received from the sale of Onet is included in sale of investments within investing activities in our condensed consolidated statements of cash flows.

In May 2017, we acquired Spoon Media, Inc (“Spoon”)., a campus-oriented food resource for millennials, for $11.5 million in cash, which is included in purchase of subsidiary companies, net of cash acquired within investing activities in our condensed consolidated statements of cash flows. As a result of the acquisition we recorded $10.3 million of goodwill.

~~Amortization expense associated with intangible assets for each of the next five years is expected to be as follows:~~

Amortization expense associated with intangible assets for future periods is expected to be as follows:

~~The following table outlines~~Accrued liabilities consisted of the ~~details within other accrued liabilities:~~following:

			As of								June 30, 2017
(in thousands)	Maturity		June 30, 2016				December 31, 2015			Maturity	Gross			Unamortized Debt Issuance Costs			Net Carrying Amount
Amended Revolving Credit Facility	2019 - 2020	$		-		$		389,170		2019 - 2020		500,000		$	-			500,000
Term Loan	2017			249,863				249,129
2.70% Senior Notes	2016			499,624				499,174
2.75% Senior Notes	2019			496,302				495,750		2019		499,157			(1,750	)		497,407
TVN 7.38% Senior Notes	2020			402,273				399,986
2.80% Senior Notes	2020			594,524				593,796		2020		598,807			(2,884	)		595,923
3.50% Senior Notes	2022			395,703				395,309		2022		399,129			(2,700	)		396,429
3.90% Senior Notes	2024			493,593				493,210		2024		497,292			(2,933	)		494,359
3.95% Senior Notes	2025			495,056				494,748		2025		499,248			(3,637	)		495,611
Total debt		$		3,626,938		$		4,010,272				2,993,633			(13,904	)		2,979,729
Current portion of debt				(749,487	)			(499,174	)			-			-			-
Debt (less current portion)		$		2,877,451		$		3,511,098			$	2,993,633		$	(13,904	)	$	2,979,729
Fair value of debt *		$		3,747,594		$		3,977,985									$	3,057,709

											December 31, 2016
(in thousands)										Maturity	Gross			Unamortized Debt Issuance Costs			Net Carrying Amount
Amended Revolving Credit Facility										2019 - 2020		475,000		$	-			475,000
Term Loan										2017		250,000			(68	)		249,932
2.75% Senior Notes										2019		498,979			(2,124	)		496,855
2.80% Senior Notes										2020		598,602			(3,378	)		595,224
3.50% Senior Notes										2022		399,040			(2,975	)		396,065
3.90% Senior Notes										2024		497,110			(3,133	)		493,977
3.95% Senior Notes										2025		499,200			(3,867	)		495,333
Total debt												3,217,931			(15,545	)		3,202,386
Current portion of debt												(250,000	)		68			(249,932	)
Debt (less current portion)											$	2,967,931		$	(15,477	)	$	2,952,454
Fair value of debt *																	$	3,254,862
*The fair value of the Senior Notes was estimated using Level 2 inputs comprised of quoted prices in active markets, market indices and interest rate measurements for debt with similar remaining maturity.	*The fair value of the Senior Notes was estimated using Level 2 inputs comprised of quoted prices in active markets, market indices and interest rate measurements for debt with similar remaining maturity.									*The fair value of the Senior Notes was estimated using Level 2 inputs comprised of quoted prices in active markets, market indices and interest rate measurements for debt with similar remaining maturity.

~~In March 2014, we entered into a five-year revolving credit facility (the “Facility”) that permitted $650.0 million in aggregate borrowings with an expiration date of March 2019.~~ In May 2015, we entered into the Amended Revolving Credit Facility ~~to amend the Facility.~~(the “Amended Revolving Credit Facility”). The Amended Revolving Credit Facility ~~provides $250.0 million additional revolving loan capacity, which increased permitted~~permits borrowings up to an aggregate principal amount of $900.0 million, ~~and~~which may be increased to $1,150.0 million at our option. ~~Additionally, the~~The Amended Revolving Credit Facility ~~extended the maturity date of the Facility to~~matures in March 2020, with the exception of $32.5 million, which ~~remains scheduled to mature~~matures in March 2019.

Borrowings under the Amended Revolving Credit Facility incur interest charges based on the Company’s credit rating, with drawn amounts incurring interest at LIBOR plus a range of 69 to 130 basis points and a facility fee ranging from 6 to 20 basis points, also subject to the Company’s credit ratings.

The Company had no outstanding borrowings under the Amended Credit Facility of $500.0 million and $475.0 million as of June 30, 2017 and December 31, 2016, ~~and average borrowings outstanding of $29.4 million incurring interest~~respectively. Interest was calculated at a rate of approximately 2.15% and 1.54% for the three months ended June 30, ~~2016.~~2017 and June 30, 2016, respectively. Interest was calculated at a rate of approximately 2.01% and 1.53% for the six months ended June 30, 2017 and June 30, 2016, respectively. Outstanding letters of credit ~~totaled $0.9 million~~ under the Amended Revolving Credit Facility attotaled $0.8 million and $0.8 million as of June 30, ~~2016. There were outstanding borrowings of $389.2 million~~2017 and ~~outstanding letters of credit of $1.1 million under the Amended Revolving Credit Facility at~~ December 31, ~~2015.~~2016, respectively.

In June 2015, we entered into a $250.0 million senior unsecured Term Loan (the “Term Loan”) agreement. The Term Loan ~~has~~had a maturity date inof June 2017, with outstanding borrowings incurring interest at LIBOR plus a range of 62.5 to 137.5 basis points, subject to the Company’s credit ratings. The weighted average interest rate on the Term Loan was 2.09% and 1.53% for the three months ended June 30, 2017 and June 30, 2016, respectively. The weighted average interest rate on the Term Loan was 1.98% and 1.52% for the six months ended June 30, 2017 and June 30, 2016, respectively. The Term Loan was repaid in accordance with its terms in the second quarter of ~~2016. The Term Loan~~2017 and is classified within current portion of debt on our 2016 condensed consolidated balance ~~sheets.~~sheet.

Our $500.0 million aggregate principal amount of 2.70% Senior Notes mature in December 2016 (the “2016 Notes”). Interest is paid on the 2016 Notes on June 15th and December 15th of each year. The balance outstanding on the 2016 Notes is classified within current portion of debt on our condensed consolidated balance sheets.Debt Issuance Costs

Amounts capitalized and included as a reduction against debt on our condensed consolidated balance sheets included ~~$17.5~~$13.9 million and $15.5 million of debt issuance costs ~~related to the Term Loan~~as of June 30, 2017 and ~~the remaining Senior Notes issued in 2015, all~~December 31, 2016, respectively. Debt issuance costs of ~~which were undertaken to finance the Transactions. The debt issuance costs~~$0.9 million and $1.1 million related to the Amended ~~Revolving~~ Credit Facility are included within other non-current assets on our condensed consolidated balance ~~sheets.~~sheets as of June 30, 2017 and December 31, 2016, respectively. We amortized ~~$1.9~~$1.3 million and ~~$1.0~~$2.5 million of debt issuance ~~costs for the three months ended June 30, 2016~~ and ~~June 30, 2015, respectively,~~debt discount costs within interest expense ~~net~~ in our condensed consolidated statements of ~~operations.~~operations for the three and six months ended June 30, 2017, respectively. We amortized ~~$3.6~~$ 1.9 million and ~~$1.8~~$3.6 million of debt issuance and debt discount costs within interest expense in our condensed consolidated statements of operations for the three and six months ended June 30, 2016, ~~and June 30, 2015, respectively, within interest expense, net in our condensed consolidated statements of operations.~~respectively.

The Amended Revolving Credit Facility ~~the Term Loan,~~and all of our Senior Notes ~~and the 2020 TVN Notes all~~ include certain affirmative and negative covenants, including limitations on the incurrence of additional indebtedness and maintenance of a maximum leverage ratio.

We sponsor the Pension Plan, which covers certain of our U.S.-based employees. Expense recognized in relation to the Pension Plan is based upon actuarial valuations. Inherent in those valuations are key assumptions including discount rates and, where applicable, expected returns on assets and projected future salary rates. The ~~Company offers various post-retirement benefits to its employees, including a defined benefit pension plan (the “Pension Plan”)~~discount rates used in the valuation of the Pension Plan are evaluated annually based on current market conditions. Benefits are generally based on the employee’s compensation and years of service.

We also have a non-qualified ~~supplemental employee retirement plan (the “SERP”~~Supplemental Executive Retirement Plan (“SERP”). The SERP, which is unfunded, provides defined pension benefits, in addition to what is provided under the Pension Plan, to eligible executives based on average earnings, years of service and estimated age at retirement.

In 2009, ~~we amended~~ the Pension Plan was amended whereby no additional service benefits ~~will~~can be earned by participants after December 31, 2009. The amount of eligible compensation that is used to calculate a plan participant’s pension benefit will continue to include any compensation earned by the employee through December 31, 2019, after which time all plan participants will have a frozen pension benefit.

The ~~components of~~measurement date used for the Pension Plan and SERP is December 31. The expense components consisted of the following:

	Pension Plan						SERP				Pension Plan						SERP
	Six months ended June 30,						Six months ended June 30,				Three months ended June 30,						Three months ended June 30,
(in thousands)	2016			2015			2016		2015		2017			2016			2017		2016
Interest cost	$	1,552		$	1,464		$	866	$	670	$	827		$	776		$	409	$	433
Expected return on plan assets, net of expenses		(1,644	)		(1,898	)		-		-		(1,002	)		(822	)		-		-
Special termination benefits		-			831			-		293
Amortization of net loss		1,060			1,136			1,032		1,208		765			530			607		516
Settlement charges					1,958					-
Total	$	968		$	3,491		$	1,898	$	2,171	$	590		$	484		$	1,016	$	949

	Pension Plan						SERP				Pension Plan						SERP
	Three months ended June 30,						Three months ended June 30,				Six months ended June 30,						Six months ended June 30,
(in thousands)	2016			2015			2016		2015		2017			2016			2017		2016
Interest cost	$	776		$	732		$	433	$	335	$	1,654		$	1,552		$	818	$	866
Expected return on plan assets, net of expenses		(822	)		(949	)		-		-		(2,004	)		(1,644	)		-		-
Special termination benefits		-			248			-		127
Amortization of net loss		530			568			516		604		1,530			1,060			1,215		1,032
Settlement charges		-			1,958			-		-
Total	$	484		$	2,557		$	949	$	1,066	$	1,180		$	968		$	2,033	$	1,898

In the fourth quarter of 2014, we announced the Restructuring Plan, providing each affected employee the benefit of an additional three years of credited service related to the applicable Pension Plan and SERP for which they qualify (see Note 5 – ~~Employee Termination Programs). The special termination charge represents the cost of providing these additional benefits to the employees retiring under the terms of the Restructuring Plan.~~

We ~~did not make any~~made contributions of $0.5 million to fund the Pension Plan during the three months ended June 30, ~~2016 or~~2017 and did not make any contributions during the three months ended June 30, ~~2015.~~2016. We made ~~a contribution~~contributions of $0.5 million and $10.0 million to fund the Pension Plan during the six months ended June 30, 2017 and June 30, 2016, ~~and did not make any contributions~~respectively We anticipate contributing $1.0 million to fund the Pension Plan during the ~~six months ended June 30, 2015.~~remainder of 2017.

We made $0.1 million and ~~$0.7~~$0.1 million in SERP benefit payments for the three months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016 respectively. We made $0.4 million and $1.8 million ~~and $0.8 million~~in SERP benefit payments for the six months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016 respectively. We anticipate making an additional ~~$6.9~~$6.1 million in SERP benefit payments during the remainder of ~~2016.~~2017.

We have an unqualified executive deferred compensation plan (“Deferred Compensation Plan”) that is available to certain management level employees and directors of the Company. Under the Deferred Compensation Plan, participants may elect to defer receipt of a portion of their annual ~~compensation.~~base compensation and/or bonus. The Deferred Compensation Plan is ~~intended to be~~ an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits. We use corporate-owned life insurance contracts held in a rabbi trust to support the plan. We had investments within this rabbi trust valued at ~~$43.6~~$48.7 million as of June 30, 2017, including ~~$27.4~~$36.8 million of cash surrender value of Company-owned life insurance contracts and ~~$16.2~~$11.9 million held in mutual ~~funds, at June 30, 2016.~~funds. We had investments within this rabbi trust valued at ~~$42.8~~$45.0 million as of December 31, 2016, including ~~$27.0~~$34.4 million of cash surrender value of Company-owned life insurance contracts and ~~$15.8~~$10.6 million held in mutual ~~funds, at December 31, 2015.~~funds. These mutual funds are valued using Level 1 and Level 2 inputs. These instruments are included within other non-current assets on our condensed consolidated balance sheets. Gains or losses related to these insurance contracts and mutual fund investments are included within miscellaneous, net in our condensed consolidated statements of operations. The unsecured obligation to pay the deferred compensation ~~including deferred director’s fees, adjusted to reflect the positive or negative performance of investment measurement options selected by each participant,~~ totaled ~~$44.6~~$62.1 million and ~~$42.0~~$48.7 million atas of June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively. The long-term portion of the unsecured obligation totaled $59.8 million and $47.0 million as of June 30, 2017 and December 31, 2016, respectively, and is included within other non-current liabilities on our condensed consolidated balance sheets. The short-term portion of the unsecured obligation to pay totaled $2.3 million and $1.7 million as of June 30, 2017 and December 31, 2016, respectively, and is included within accrued liabilities on our condensed consolidated balance sheets.

~~The following table outlines~~Other non-current liabilities consisted of the ~~details within other liabilities:~~following:

In order to minimize earnings and cash flow volatility resulting from currency exchange rate changes, ~~on occasion~~ we may enter into derivative instruments, principally forward and option foreign currency contracts. These contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets, liabilities and probable commitments. We do not enter into ~~currency exchange rate~~ derivative instruments for speculative trading purposes.

The free-standing derivative forward contracts are used to offset our exposure to the change in value of specific foreign currency denominated assets and liabilities. These derivatives are not designated as hedges. Changes in the value of these contracts are recognized in earnings, thereby offsetting the current earnings effect of the related change in functional currency value of foreign currency denominated assets and liabilities. The gross notional amount of these contracts outstanding was ~~$107.4 million and $118.6 million at~~zero as of June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively. The cash flow settlements from these derivative contracts are primarily reported within investing activities in the condensed consolidated statements of cash flows.

We recognized ~~$8.2~~$3.7 million and ~~$37.2~~$6.0 million of ~~gains~~net losses from ~~these forward contracts~~derivatives for the three and six months ended June 30, ~~2016~~2017, respectively, and ~~June 30, 2015, respectively,~~$8.2 million and $11.0 million ~~and $43.1 million~~ of net gains from ~~these forward contracts~~derivatives for the three and six months ended June 30, 2016, ~~and June 30, 2015,~~ respectively, which are included within (loss) gain on derivatives in the condensed consolidated statements of operations. Additionally, we ~~have~~recorded foreign ~~exchange~~currency transaction net gains of $31.3 million and $61.0 million for the three and six months ended June 30, 2017, respectively, and foreign currency transaction net losses of $23.3 million and ~~$12.9~~$14.4 million for the three ~~months ended June 30, 2016~~ and ~~June 30, 2015, respectively, and foreign exchange transaction losses of $14.4 million and $18.3 million for the~~ six months ended June 30, 2016, ~~and June 30, 2015,~~ respectively, which are included within miscellaneous, net in our condensed consolidated statements of operations.

A non-controlling owner previously held a 35.0 percent residual interest in the Travel Channel. The owner of the non-controlling interest had a put option requiring us to purchase their interest, and we had a call option to acquire their interest. WeIn February 2016, we exercised our call option ~~and executed a contract on February 25, 2016,~~ for an agreed upon price of $99.0 million. We now own 100.0 percent of Travel Channel.

A non-controlling owner previously held a 30.0 percent interest in Food Network Latin America (“FNLA”). In December 2016, we purchased the remaining interest in FNLA from the non-controlling interest holders for $4.5 million.

The following table summarizes the activity for account balances whose fair value measurements are estimated utilizing Level 3 inputs:

The net income amounts reflected in the table above are reported within net income attributable to non-controlling interests in our condensed consolidated statements of operations.

The Food Network and Cooking Channel are operated and organized under the terms of a general partnership (the “Partnership”). The Company and a non-controlling owner hold interests in the Partnership. During the fourth quarter of ~~2014,~~2016, the Partnership agreement was extended and specifies a dissolution date of December 31, ~~2016.~~2020. If the term of the Partnership is not extended prior to that date, the Partnership agreement permits the Company, as holder of 80.0 percent of the applicable votes, to reconstitute the Partnership and continue its business. If for some reason the Partnership is not continued, it will be required to limit its activities to winding up, settling debts, liquidating assets and distributing proceeds to the partners in proportion to their partnership interests.

SNI’s capital structure includes Common Voting Shares and Class A Common Shares. Our Amended and Restated Articles of Incorporation provide that the holders of Class A Common Shares, who are not entitled to vote on any other matters except as required

by Ohio law, are entitled to elect the greater of three or one-third of the directors. The Common Voting Shares and Class A Common Shares have equal dividend distribution rights.

The ~~Scripps Networks Interactive, Inc.~~SNI 2015 Amended Long-Term Incentive Plan (the “2015 Amended LTI Plan”) provides for long-term equity incentive compensation for key employees and members of the Company’s Board of Directors (the “Board”). The 2015 Amended LTI Plan authorizes the grant of ~~equity-based compensation to~~discretionary awards for employees and non-employee directors ~~officers and other key employees~~ in the form of incentive or non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units (“RSUs”), performance shares, ~~performance~~performance-based restricted stock units (“PBRSUs”) and other share-based awards and dividend equivalents. The Company has reserved 8.0 million Class A Common Shares for issuance under the 2015 Amended LTI Plan.

The 2015 Amended LTI Plan will remain in effect until February 2025, unless terminated sooner by the Board. Termination will not affect outstanding grants and awards. The 2015 Amended LTI Plan replaced the ~~Scripps Networks Interactive, Inc.~~SNI 2008 Long-Term Incentive Plan (the “Prior LTI Plan”), and no further awards will be made under the Prior LTI Plan. However, awards granted under the Prior LTI Plan remain outstanding in accordance with their terms.

We satisfy stock option exercises and vested stock awards with newly-issued shares. Shares available for future share compensation grants totaled ~~6.9~~6.3 million at June 30, ~~2016.~~2017.

During the six months ended June 30, 2017, the Company granted 0.4 million RSUs, including PBRSUs, under the 2015 Amended LTI Plan. During the six months ended June 30, 2016, the Company granted 0.6 million stock options and ~~less than~~ 0.4 million RSUs, including performance-based restricted stock units (“PBRSUs”) under the 2015 LTI Plan. During the six months ended June 30, 2015, the Company granted 0.4 million stock options and 0.3 million RSUs, including PBRSUs. The number of shares ultimately issued for PBRSUs will depend upon performance compared to specified metrics. The fair values for stock options are estimated on the grant date using a lattice-based binomial model. Assumptions utilized in the model are evaluated and revised, as necessary, to reflect market conditions and experience.

Share-based compensation costs totaled $7.0 million and $7.1 million for the three months ended June 30, 2016 and June 30, 2015, respectively, and $24.7 million and $24.3 million for the six months ended June 30, 2016 and June 30, 2015, respectively.was as follows:

~~As of June 30, 2016, unrecognized~~Unrecognized share-based compensation expense was as ~~follows:~~follows as of June 30, 2017:


(in thousands)	Amount		Weighted-Average Period	Amount		Weighted-Average Period
Stock options	$	2,921	2.4 years	$	1,002	1.1 years
RSUs and PBRSUs		21,780	1.8 years		30,676	2.0 years
Total unrecognized share-based compensation	$	24,701		$	31,678

We have share repurchase programs (“Repurchase Programs”) authorized by the Board that permit us to acquire the Company’s Class A Common Shares. We did not repurchase any shares during the ~~three months ended June 30, 2016 and June 30, 2015, respectively. We did not repurchase any shares for the~~ six months ended June 30, ~~2016. During the six months ended~~2017 and June 30, ~~2015, we repurchased 4.0 million shares for approximately $289.5 million, including 3.0 million shares repurchased for approximately $216.8 million from Scripps family members.~~2016, respectively.

As of June 30, ~~2016,~~2017, $1,512.5 million in authorization remains available for repurchase under the Repurchase Programs. All shares repurchased under the Repurchase Programs are retired and returned to authorized and unissued shares. There is no expiration date for the Repurchase Programs, and we are under no commitment or obligation to repurchase any particular amount of Class A Common Shares under the Repurchase Programs.

Changes in the accumulated other comprehensive income or loss (“AOCI”) balance by component consisted of the following:

Three months ended June 30,

2016

2015

(in thousands)

Currency Translation

Pension Plan and SERP Liability

Currency Translation

Pension Plan and SERP Liability

AOCI beginning period balance

$
(57,421
)

$
(31,328
)

$
(51,857
)

$
(32,105
)

Other comprehensive income (loss) before reclassifications

(122,251
)

—

29,610

—

Amounts reclassified from AOCI

—

666

—

728

Net current-period other comprehensive income (loss)

(122,251
)

666

29,610

728

AOCI end of period balance

$
(179,672
)

$
(30,662
)

$
(22,247
)

$
(31,377
)

Six months ended June 30,

2016

2015

(in thousands)

Currency Translation

Pension Plan and SERP Liability

Currency Translation

Pension Plan and SERP Liability

AOCI beginning period balance

$
(98,239
)

$
(31,994
)

$
(25,122
)

$
(32,769
)

Other comprehensive income (loss) before reclassifications

(81,433
)

—

2,875

—

Amounts reclassified from AOCI

—

1,332

—

1,392

Net current-period other comprehensive income (loss)

(81,433
)

1,332

2,875

1,392

AOCI end of period balance

$
(179,672
)

$
(30,662
)

$
(22,247
)

$
(31,377
)

	Three months ended June 30, 2017									Three months ended June 30, 2016
(in thousands)	Foreign Currency Translation			Pension Plan and SERP Liability			Total Accumulated Other Comprehensive (Loss) Income			Foreign Currency Translation			Pension Plan and SERP Liability			Total Accumulated Other Comprehensive (Loss) Income
Beginning period balance	$	(258,251	)	$	(38,120	)	$	(296,371	)	$	(57,421	)	$	(31,328	)	$	(88,749	)
Other comprehensive (loss) before reclassifications		151,623			—			151,623			(122,251	)		—			(122,251	)
Amounts reclassified from AOCI		—			1,395			1,395			—			666			666
Net current-period other comprehensive (loss)		151,623			1,395			153,018			(122,251	)		666			(121,585	)
Ending period balance	$	(106,628	)	$	(36,725	)	$	(143,353	)	$	(179,672	)	$	(30,662	)	$	(210,334	)

	Six months ended June 30, 2017									Six months ended June 30, 2016
(in thousands)	Foreign Currency Translation			Pension Plan and SERP Liability			Total Accumulated Other Comprehensive (Loss) Income			Foreign Currency Translation			Pension Plan and SERP Liability			Total Accumulated Other Comprehensive (Loss) Income
Beginning period balance	$	(324,708	)	$	(38,993	)	$	(363,701	)	$	(98,239	)	$	(31,994	)	$	(130,233	)
Other comprehensive (loss) income before reclassifications		218,080			—			218,080			(81,433	)		—			(81,433	)
Amounts reclassified from AOCI		—			2,268			2,268			—			1,332			1,332
Net current-period other comprehensive (loss) income		218,080			2,268			220,348			(81,433	)		1,332			(80,101	)
Ending period balance	$	(106,628	)	$	(36,725	)	$	(143,353	)	$	(179,672	)	$	(30,662	)	$	(210,334	)

Amounts reclassified to net earnings for Pension Plan and SERP liability adjustments relate to the amortization of actuarial losses. These amounts are included within selling, general and administrative in our condensed consolidated statements of operations and totaled ~~$1.0~~$1.4 million and ~~$1.2~~$2.8 million for the three and six months ended June 30, ~~2016~~2017, respectively and ~~June 30, 2015, respectively,~~$1.0 million and $2.0 million ~~and $2.4 million~~ for the three and six months ended June 30, 2016, ~~and June 30, 2015,~~ respectively (see Note 1110 - Employee Benefit Plans).

The ~~Company’s operating segments~~Company has two reportable segments: U.S. Networks and International Networks which are determined based ~~upon~~on our management and internal reporting structure.

~~As a result of the Transactions (see Note 4 –~~ ~~Acquisitions~~), the international operating segment that was previously not significant, has become significant. Therefore, the Company now has two reportable segments: U.S. Networks, previously referred to as Lifestyle Media, and International Networks. As a result, certain prior period segment results have been recast to reflect the current presentation.

U.S. Networks includes our six domestic television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. Additionally, U.S. Networks ~~also~~ includes websites associated with the aforementioned television brands and other internet and ~~mobile~~digital businesses serving home, food, travel and other lifestyle-related categories. U.S. Networks also includes our digital content studio, Scripps ~~Networks~~ Lifestyle ~~Studio. The~~Studios. We own 100.0 percent of each of our networks, with the exception of Food Network and Cooking Channel, ~~are included in the Partnership,~~ of which we own 68.7 percent. Each of our networks is distributed by cable and satellite ~~distributors,~~operators, telecommunication ~~service providers~~suppliers and ~~certain non-linear~~other digital providers, such as those providing streaming or on-demand services. U.S. Networks ~~earns revenue~~generates revenues primarily from ~~the sale of~~ advertising ~~time~~sales and ~~from~~ distribution fees ~~paid by distributors of~~earned from the right to distribute our programming content. U.S. Networks also earns ~~revenue~~revenues from licensing of content to third parties and of brands for consumer ~~products, such as videos, books, kitchenware and tools.~~products.

International Networks includes the TVN portfolio of networks and other lifestyle-oriented networks ~~as well as those~~ available in the UK, EMEA, APAC and Latin America. International Networks also includes our 50.0 percent share of the results of UKTV, a general entertainment and lifestyle channel platform in the UK.

Corporate and Other includes the results of businesses not separately identified as reportable segments for external financial reporting purposes and will continue to be disclosed separately from the results of U.S. Networks and International Networks. The Company generally does not allocate employee-related corporate overhead costs to its reportable segments, but rather classifies these expenses within Corporate and Other. However, certain corporate costs, including information technology, pension and other employee benefits and other shared service functions, are allocated to our reportable segments. These allocations are generally amounts agreed upon by management, which may differ from amounts that would be incurred if such services were purchased separately by the reportable segments.

Intersegment revenue eliminations are included in Corporate and Other and totaled ~~$6.5~~$7.3 million and ~~$5.1~~$14.5 million for the three ~~months ended June 30, 2016~~ and ~~June 30, 2015, respectively, and $13.1 million and $9.8 million for the~~ six months ended June 30, ~~2016~~2017, respectively, and $6.5 million and $13.1 million for the three and six months ended June 30, ~~2015,~~2016, respectively.

Our Chief Operating Decision Maker (“CODM”), whom we have identified as our Chief Executive Officer (“CEO”), evaluates the operating performance of our businesses and makes decisions about the allocation of resources to the businesses using a measure we refer to as segment ~~profit.~~profit (loss). Segment profit ~~excludes interest,~~(loss) is defined as income (loss) from operations before income taxes excluding depreciation, amortization, goodwill write-downs, interest expense, equity in earnings of affiliates, gain (loss) on derivatives, gain (loss) on sale of investments and ~~amortization, divested operating units, investment results and certain~~ other ~~items~~miscellaneous non-operating expenses which are included in net income (loss) determined in accordance with GAAP.

Three months ended June 30,

Six months ended June 30,

(in thousands)

2016

2015

2016

2015

Segment operating revenues:

U.S. Networks

$
752,321

$
715,100

$
1,454,516

$
1,354,004

International Networks

147,044

22,088

268,382

46,153

Corporate and Other

(6,594
)

(5,086
)

(13,249
)

(9,805
)
Total operating revenues

$
892,771

$
732,102

$
1,709,649

$
1,390,352

Cost of services, excluding depreciation and amortization

286,999

195,087

566,666

394,234

Selling, general and administrative

191,133

178,498

389,954

380,685

Total segment profit

$
414,639

$
358,517

$
753,029

$
615,433

Depreciation

16,089

14,798

33,628

31,693

Amortization

25,654

11,640

56,716

23,335

Loss (gain) on disposal of property and equipment

-

44

(242
)

2,560

Total operating income

372,896

332,035

662,927

557,845

Interest expense, net

(33,175
)

(16,835
)

(66,920
)

(29,802
)
Equity in earnings of affiliates

21,712

27,290

47,390

46,235

Gain on derivatives

8,267

37,198

11,033

43,131

(Loss) gain on sale of investments

(16,373
)

-

191,824

-

Miscellaneous, net

(21,672
)

(13,194
)

(15,606
)

(13,596
)
Income from operations before income taxes

$
331,655

$
366,494

$
830,648

$
603,813

Segment profit (loss):

U.S. Networks

$
401,139

$
397,332

$
760,636

$
697,836

International Networks

37,369

(10,495
)

47,158

(16,374
)
Corporate and Other

(23,869
)

(28,320
)

(54,765
)

(66,029
)
Total segment profit

$
414,639

$
358,517

$
753,029

$
615,433

Depreciation:

U.S. Networks

$
12,716

$
12,848

$
26,869

$
27,560

International Networks

3,114

949

6,239

2,078

Corporate and Other

259

1,001

520

2,055

Total depreciation

$
16,089

$
14,798

$
33,628

$
31,693

Amortization:

U.S. Networks

$
10,022

$
10,021

$
20,043

$
19,961

International Networks

15,632

1,619

36,673

3,374

Corporate and Other

-

-

-

-

Total amortization

$
25,654

$
11,640

$
56,716

$
23,335

Loss (gain) on disposal of property and equipment

U.S. Networks

$
-

$
34

$
42

$
3,581

International Networks

-

9

(284
)

9

Corporate and Other

-

1

-

(1,030
)
Total loss (gain) on disposal of property and equipment

$
-

$
44

$
(242
)

$
2,560

Equity in earnings of affiliates:

U.S. Networks

$
9,014

$
14,486

$
16,746

$
24,507

International Networks

12,698

12,804

30,644

21,728

Corporate and Other

-

-

-

-

Total equity in earnings of affiliates

$
21,712

$
27,290

$
47,390

$
46,235

	Three months ended June 30, 2017
(in thousands)	U.S. Networks			International Networks		Corporate and Other			Consolidated
Operating revenues:
Advertising	$	552,652		$	110,382	$	—		$	663,034
Distribution		211,902			27,783		—			239,685
Other		14,489			15,097		(7,259	)		22,327
Total operating revenues		779,043			153,262		(7,259	)		925,046
Cost of services, excluding depreciation and amortization		222,790			83,335		(6,274	)		299,851
Selling, general and administrative		157,531			31,147		23,719			212,397
Segment profit (loss)		398,722			38,780		(24,704	)		412,798
Depreciation		9,961			3,045		654			13,660
Amortization		9,994			15,064		—			25,058
Operating income (loss)		378,767			20,671		(25,358	)		374,080
Interest (expense) income, net		(144	)		206		(24,265	)		(24,203	)
Equity in earnings of affiliates		7,846			13,128		—			20,974
Loss on derivatives		—			—		(3,672	)		(3,672	)
Gain on sale of investments		—			1,416		—			1,416
Miscellaneous, net		3,481			7,896		20,804			32,181
Income (loss) from operations before income taxes	$	389,950		$	43,317	$	(32,491	)	$	400,776

Additions to property and equipment:	$	13,212		$	7,100	$	—		$	20,312

Three months ended June 30,

Six months ended June 30,

(in thousands)
2016

2015

2016

2015

Additions to property and equipment:

U.S. Networks
$
8,567

$
8,582

$
17,238

$
16,251

International Networks

4,385

496

7,059

776

Corporate and Other

-

1

-

1,451

Total additions to property and equipment
$
12,952

$
9,079

$
24,297

$
18,478

Operating revenues by geographic location:

United States
$
755,427

$
717,081

$
1,457,315

$
1,359,886

Poland

120,095

$
-

217,853

-

Other International

17,249

$
15,021

34,481

30,466

Total operating revenues
$
892,771

$
732,102

$
1,709,649

$
1,390,352

As of

June 30, 2016

December 31, 2015

Assets:

U.S. Networks

$
2,903,981

$
2,937,428

International Networks

3,165,665

3,276,989

Corporate and Other

443,069

457,897

Total assets

$
6,512,715

$
6,672,314

Long-lived assets by geographic location:

United States

$
1,862,190

$
1,903,918

Poland

2,333,333

2,406,842

Other International

481,687

541,719

Total long-lived assets

$
4,677,210

$
4,852,479

	Three months ended June 30, 2016
(in thousands)	U.S. Networks			International Networks			Corporate and Other			Consolidated
Operating revenues:
Advertising	$	540,979		$	105,669		$	—		$	646,648
Distribution		196,073			27,378			(5	)		223,446
Other		15,269			13,997			(6,589	)		22,677
Total operating revenues		752,321			147,044			(6,594	)		892,771
Cost of services, excluding depreciation and amortization		211,040			80,666			(4,707	)		286,999
Selling, general and administrative		140,142			29,009			21,982			191,133
Segment profit (loss)		401,139			37,369			(23,869	)		414,639
Depreciation		12,716			3,114			259			16,089
Amortization		10,022			15,632			—			25,654
Operating income (loss)		378,401			18,623			(24,128	)		372,896
Interest expense, net		(69	)		(7,076	)		(26,030	)		(33,175	)
Equity in earnings of affiliates		9,014			12,698			—			21,712
Gain on derivatives		—			—			8,267			8,267
Loss on sale of investments		(16,373	)		—			—			(16,373	)
Miscellaneous, net		18,952			23,823			(64,447	)		(21,672	)
Income (loss) from operations before income taxes	$	389,925		$	48,068		$	(106,338	)	$	331,655

Additions to property and equipment:	$	8,567		$	4,385		$	—		$	12,952

	Six months ended June 30, 2017
(in thousands)	U.S. Networks			International Networks		Corporate and Other			Consolidated
Operating revenues:
Advertising	$	1,064,707		$	195,042	$	—		$	1,259,749
Distribution		423,042			55,023		—			478,065
Other		28,183			28,722		(14,553	)		42,352
Total operating revenues		1,515,932			278,787		(14,553	)		1,780,166
Cost of services, excluding depreciation and amortization		428,112			162,669		(11,891	)		578,890
Selling, general and administrative		305,524			61,828		52,415			419,767
Segment profit (loss)		782,296			54,290		(55,077	)		781,509
Depreciation		21,460			5,917		1,243			28,620
Amortization		19,912			29,343		—			49,255
Operating income (loss)		740,924			19,030		(56,320	)		703,634
Interest (expense) income, net		(264	)		353		(48,544	)		(48,455	)
Equity in earnings of affiliates		13,089			28,334		—			41,423
Loss on derivatives		—			—		(6,008	)		(6,008	)
Gain on sale of investments		—			1,416		—			1,416
Miscellaneous, net		5,964			27,799		25,958			59,721
Income (loss) from operations before income taxes	$	759,713		$	76,932	$	(84,914	)	$	751,731

Additions to property and equipment:	$	25,468		$	14,447	$	5,844		$	45,759

	Six months ended June 30, 2016
(in thousands)	U.S. Networks			International Networks			Corporate and Other			Consolidated
Operating revenues:
Advertising	$	1,028,264		$	190,239		$	—		$	1,218,503
Distribution		398,169			53,350			(5	)		451,514
Other		28,083			24,793			(13,244	)		39,632
Total operating revenues		1,454,516			268,382			(13,249	)		1,709,649
Cost of services, excluding depreciation and amortization		414,399			161,724			(9,457	)		566,666
Selling, general and administrative		279,481			59,500			50,973			389,954
Segment profit (loss)		760,636			47,158			(54,765	)		753,029
Depreciation		26,911			5,955			520			33,386
Amortization		20,043			36,673			—			56,716
Operating income (loss)		713,682			4,530			(55,285	)		662,927
Interest expense, net		(86	)		(13,943	)		(52,891	)		(66,920	)
Equity in earnings of affiliates		16,746			30,644			—			47,390
Gain on derivatives		—			—			11,033			11,033
Gain on sale of investments		191,824			—			—			191,824
Miscellaneous, net		22,440			54,880			(92,926	)		(15,606	)
Income (loss) from operations before income taxes	$	944,606		$	76,111		$	(190,069	)	$	830,648

Additions to property and equipment:	$	17,238		$	7,059		$	—		$	24,297

Assets held by our businesses and physically located outside of the United States totaled ~~$3,104.0~~$3,224.1 million and ~~$3,238.2~~$2,955.8 million at June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively.

On July 30, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Discovery Communications, Inc., (“Discovery”) and Skylight Merger Sub, Inc., a wholly-owned subsidiary of Discovery (“Merger Sub”) pursuant to which Merger Sub will merge with and into the Company with the Company surviving as a wholly-owned subsidiary of Discovery (the “Merger”). The transaction reflects a total enterprise value for the Company of approximately $14.6 billion.

Subject to the terms and conditions set forth in the Merger Agreement, including the collar mechanism described below, holders of the Company’s Class A Common Shares and Common Voting Shares, collectively the “SNI Shares” will receive $63.00 in cash and $27.00 (based on Discovery’s July 21, 2017 closing price) in Discovery’s Series C Common Shares (“Series C Shares”) for each SNI Share, (the “Merger Consideration”).

The stock portion of the Merger Consideration will be subject to a collar based on the volume weighted average price of Discovery’s Series C Shares measured cumulatively over the 15 trading days ending on the third trading day prior to closing (the “Average Discovery Price”). Holders of SNI Shares will receive 1.2096 Series C Shares if the Average Discovery Price is less than $22.32, and 0.9408 Series C Shares if the Average Discovery Price is greater than $28.70. If the Average Discovery Price is greater than or equal to $22.32 but less than or equal to $28.70, holders of SNI Shares will receive a number of Series C Shares between 1.2096 and 0.9408 equal to $27.00 in value. If the Average Discovery Price is between $22.32 and $25.51, Discovery has the option to pay additional cash instead of issuing more shares.

The Merger was approved unanimously by the Board of Directors of SNI and unanimously among those voting by the Board of Directors of Discovery and is subject to review by regulatory authorities in the U.S. and other jurisdictions. The transaction is expected to close in the first quarter of 2018. The full terms of the agreement are included in the Merger Agreement dated July 30, 2017, which was included as Exhibit 2.1 to the Form 8-K filed with the SEC on July 31, 2017.

In connection with the Merger Agreement, we have made certain representations, warranties and covenants, including, among other things, customary covenants to conduct business in the ordinary course consistent with past practice and to refrain from taking specified actions without Discovery’s consent during the period prior to closing.

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 on the condensed consolidated financial statements and the notes ~~to the condensed consolidated financial statements.~~thereto. This discussion and analysis should be read in conjunction with those condensed consolidated financial statements.

This discussion and the information contained in the ~~notes to the~~ condensed consolidated financial statements and notes thereto contain certain forward-looking statements that are based on our current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially ~~and include, without limitation, statements relating to future cash flow~~ from operating activities, the payment of future dividends and the anticipated timing of the completion of the Reorganization as well as statements expressing general views about our future operating results from the expectations expressed in ~~the~~ forward-looking statements. Such risks, trends and uncertainties, which in most instances are beyond our control, include without limitation, changes in advertising demand and other economic conditions; changing consumers’ ~~tastes;~~tastes and viewing habits; program costs; labor relations; technological developments; risks related to ~~the integration of TVN and~~ international operations; competitive pressures; industry consolidation; interest rates; regulatory rulings; reliance on third-party vendors for various products and services; and other ~~risk factors described~~risks, trends and uncertainties disclosed in our annual report on Form 10-K for the year ended December 31, ~~2015~~2016 (the ~~“2015~~“2016 Form 10-K”) and other filings with the Securities and Exchange Commission. The words “believe,” “expect,” “anticipate,” “estimate,” “intend” and similar expressions identify forward-looking statements. All forward-looking statements, which are as of the date of this filing, should be evaluated with the understanding of their inherent uncertainty. We undertake no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date as of which the statement is made.

We ~~operate in the~~are a global media ~~industry~~company with respected high-profile brands and are ~~one of the~~a leading ~~developers~~developer of lifestyle-oriented content, ~~for linear~~providing primarily home, food, travel and other lifestyle-related programming. Our content is distributed via multiple methods, including television, the internet, digital platforms ~~including television~~ and licensing arrangements. The SNI portfolio of networks includes HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country within and outside the ~~internet,~~United States, with ~~respected, high-profile brands.~~the exception of Great American Country, which is only distributed in the United States, and Fine Living, Asian Food Channel (“AFC”) and TVN’s portfolio of networks outside the United States. Additionally, outside the United States, we participate in UKTV, a joint venture with the BBC. Our businesses engage audiences and efficiently serve advertisers by producing and delivering entertaining and highly-useful content that focuses on specifically-defined topics of interest.

We seek to engage audiences that are highly desirable to advertisers with entertaining and informative lifestyle content that is produced for television, the worldwide internet and alternative media platforms. We intend to expand and enhance our lifestyle brands by: ~~creating~~growing our brands through the creation of popular new programming and content; reaching additional demographics; extending distribution on various platforms, such as over-the-top ~~services, utilizing mobile phones~~ and ~~tablets; licensing of content to third parties and of brands for consumer products;~~digital entrants providing streaming and/or on-demand services; and increasing our international footprint. We have a large library of content which we produced and own the rights to indefinitely, enabling us to exploit original programming quickly and/or repackage content in a cost-effective manner.

We are focused on strengthening our networks and expanding reach, including in both the digital arena and international market. As part of our effort to expand in the digital arena, we launched Scripps Lifestyle Studios in the fourth quarter of 2015.

The Company has two reportable segments: U.S. Networks and International ~~Networks.~~

~~The Company’s focus is on strengthening our linear networks and expanding reach, including both in digital and within international.~~

~~As part of our effort to expand in the digital market, we launched Scripps Networks Lifestyle Studio, which is included in U.S.~~ Networks.

The growth of our international business, through acquisition and joint ventures, as well as organically, has been and continues to be, a strategic priority for the Company. In the second quarter of 2017, we launched Food Network as a free-to-air channel in Italy. In the first quarter of 2017, we launched HGTV in Poland, expanding the reach of our brand internationally. During the fourth quarter of 2016, Cooking Channel launched in Canada in partnership with Corus Entertainment, marking the first time this network was made available outside the United States and Caribbean. Also in the fourth quarter of 2016, we launched HGTV in the Middle East and North Africa. In the second quarter of 2016, HGTV launched as a free-to-air channel in New Zealand ~~as a first of its kind offering~~ in ~~the region.~~partnership with Top TV and Blue Ant Media. During 2015, we ~~completed the acquisition of~~acquired TVN, ~~S.A.,~~ a Polish media company, which operates a portfolio of 13 free-to-air and pay-TV lifestyle and entertainment ~~networks; launched~~networks. Also in 2015, we expanded distribution of Travel Channel as a 24/7 free-to-air channel in the UK; expanded distribution of Food Network across Latin America and HGTV in ~~Asia-Pacific;~~APAC; launched Food Network in Australia in partnership with ~~Special Broadcasting Service (“SBS”);~~SBS; and secured a large volume output deal with Nine in Australia to launch Food Network and HGTV-branded programming blocks on newly-launched 9LIFE, Australia’s first free-to-air lifestyle network.

Consolidated operating revenues increased ~~$160.7~~$32.3 million, or ~~21.9~~3.6 percent, while consolidated ~~operating~~ income from operations before income taxes increased ~~$40.9~~$69.1 million, or ~~12.3~~20.8 percent, for the three months ended June 30, ~~2016~~2017 compared with the same period in ~~2015, both driven by the inclusion of TVN. Consolidated income from operations before income taxes decreased $34.8 million, or 9.5 percent, for the three months ended June 30,~~ 2016, ~~compared with the same period in 2015,~~primarily driven by a ~~reduction~~$54.6 million increase in ~~gain on derivatives this year primarily~~foreign currency transaction net gains, which are included in miscellaneous, net, a $9.0

million decrease in interest expense, net, as a result of ~~exercising our call option~~debt repayment in 2016 and a $1.4 million gain on ~~€584 million to fund the Acquisition last year, incremental debt service costs this year associated with the Financing~~sale of investments in the second quarter of ~~2015 for the Transactions as well as the assumed debt of TVN,~~2017 compared with a $16.4 million loss on sale of investments ~~this year and additional foreign currency losses reflected~~ in ~~miscellaneous, net, this year.~~the second quarter of 2016.

Consolidated operating revenues increased ~~$319.3~~$70.5 million, or ~~23.0~~4.1 percent, while consolidated ~~operating~~ income ~~increased $105.1~~from operations before income taxes decreased $78.9 million, or ~~18.8~~9.5 percent, for the six months ended June 30, ~~2016~~2017 compared with the same period in ~~2015, both driven by the inclusion of TVN. Consolidated income from operations before income taxes increased $226.8 million, or 37.6 percent, for the six months ended June 30,~~ 2016, ~~compared with the same period in 2015,~~ primarily driven by the ~~$208.2~~$191.8 million gain ~~recognized~~ on ~~the~~ sale of ~~our 7.3 percent equity interest~~investments in ~~Fox Sports South in the first quarter of~~ 2016, partially offset by the aforementioned increase in consolidated operating revenues, a ~~loss of $16.4~~$75.4 million ~~on the sale of a cost investment~~increase in ~~the second quarter of 2016. This~~foreign currency transaction net ~~increase was partially offset by a reduction~~gains, which are included within other miscellaneous, net and an $18.5 million decrease in ~~gain on derivatives this year primarily~~interest expense, net, as a result of ~~exercising our call option on €584 million to fund the Acquisition last year and incremental~~ debt ~~service costs this year associated with the Financing obtained~~repayments in ~~the second quarter of 2015 for the Transaction, as well as the assumed debt of TVN.~~2016.

~~Although the international business experienced growth primarily through the acquisition of TVN as noted above,~~ U.S. Networks continues to account for the majority of the Company’s performance. U.S. Networks generated operating revenues of $779.0 million, representing 84.2 percent of consolidated operating revenues, for the three months ended June 30, 2017 compared with $752.3 million, representing 84.3 percent of consolidated operating revenues, for the three months ended June 30, ~~2016 compared with $715.1~~2016. U.S. Networks generated operating revenues of $1,515.9 million, representing ~~97.7~~85.2 percent of consolidated operating revenues, for the ~~three~~six months ended June 30, ~~2015. U.S. Networks generated operating revenues of~~2017 compared with $1,454.5 million, representing 85.1 percent of consolidated operating revenues, for the six months ended June 30, ~~2016 compared with $1,354.0~~2016.

International Networks generated operating revenues of $153.3 million, representing ~~97.4~~16.6 percent of consolidated operating revenues, for the ~~six~~three months ended June 30, ~~2015. The reduced contribution of U.S. Networks’ revenues as a percentage of consolidated revenues for both the three and six months ended June 30, 2016~~2017 compared ~~to the same period in 2015 was primarily as a result of the inclusion of TVN in the current year.~~

~~International Networks generated operating revenues of~~with $147.0 million, representing 16.5 percent of consolidated operating revenues, for the three months ended June 30, ~~2016 compared with $22.1~~2016. International Networks generated operating revenues of $278.8 million, representing ~~3.0~~15.7 percent of consolidated operating revenues, for the ~~three~~six months ended June 30, ~~2015. International Networks generated operating revenues of~~2017 compared with $268.4 million, representing 15.7 percent of consolidated operating revenues, for the six months ended June 30, 2016 compared with $46.2 million, representing 3.3 percent of consolidated operating revenues, for the six months ended June 30, 2015. The year-over-year increase for both the three and six months ended June 30, 2016 compared with the same period in 2015 was primarily driven by the inclusion of TVN in the current year.2016.

The preparation of financial statements in accordance with GAAP requires usmanagement to make ~~a variety of decisions which~~estimates, judgments and assumptions that affect ~~reported~~ amounts and related disclosures reported in the condensed consolidated financial statements and accompanying footnotes, including the selection of appropriate 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 is applied 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~~our condensed consolidated financial statements.

Note 22- Summary of Significant Accounting Policies to the ~~Consolidated Financial Statements~~consolidated financial statements included in the ~~2015~~2016 Form 10-K describes the significant accounting policies we have selected for use in the preparation of our condensed consolidated 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 could materially change the financial statements. We believe the accounting for programs and program licenses, acquisitions, goodwill, finite-lived intangible assets, income taxes and revenue recognition to be our most critical accounting policies and estimates. A detailed description of these accounting policies is included in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our ~~2015~~2016 Form 10-K. We adopted ~~one~~four accounting standard updates during the six months ended June 30, ~~2016 related to the accounting for share-based compensation~~2017 (see Note 32 – Accounting Standards ~~Updates~~Updates)).

The competitive landscape in our business is affected by multiple media platforms competing for consumers and advertising dollars. We strive to create popular programming that resonates with viewers across a variety of demographic groups by developing relatable content through strong brands that engage audiences.

Three months ended June 30,

Six months ended June 30,

( in thousands)
2016

2015

% Change

2016

2015

% Change

Operating revenues:

Advertising
$
646,648

$
502,891

28.6
%
$
1,218,503

$
938,159

29.9
%
Distribution

223,446

215,217

3.8
%

451,514

424,225

6.4
%
Other

22,677

13,994

62.0
%

39,632

27,968

41.7
%
Total operating revenues

892,771

732,102

21.9
%

1,709,649

1,390,352

23.0
%
Operating expenses:

Cost of services, excluding depreciation and amortization

286,999

195,087

47.1
%

566,666

394,234

43.7
%
Selling, general and administrative

191,133

178,498

7.1
%

389,954

380,685

2.4
%
Depreciation

16,089

14,798

8.7
%

33,628

31,693

6.1
%
Amortization

25,654

11,640

120.4
%

56,716

23,335

143.1
%
Loss (gain) on disposal of property and equipment

-

44

(100.0
)%

(242
)

2,560

(109.5
)%
Total operating expenses

519,875

400,067

29.9
%

1,046,722

832,507

25.7
%
Operating income

372,896

332,035

12.3
%

662,927

557,845

18.8
%
Interest expense, net

(33,175
)

(16,835
)

97.1
%

(66,920
)

(29,802
)

124.5
%
Equity in earnings of affiliates

21,712

27,290

(20.4
)%

47,390

46,235

2.5
%
Gain on derivatives

8,267

37,198

(77.8
)%

11,033

43,131

(74.4
)%
(Loss) gain on sale of investment

(16,373
)

-

NM

191,824

-

NM

Miscellaneous, net

(21,672
)

(13,194
)

64.3
%

(15,606
)

(13,596
)

14.8
%
Income from operations before income taxes

331,655

366,494

(9.5
)%

830,648

603,813

37.6
%
Provision for income taxes

98,303

120,326

(18.3
)%

257,350

191,575

34.3
%
Net income

233,352

246,168

(5.2
)%

573,298

412,238

39.1
%
Less: net income attributable to non-controlling interests

(48,744
)

(52,450
)

(7.1
)%

(97,793
)

(94,677
)

3.3
%
Net income attributable to SNI
$
184,608

$
193,718

(4.7
)%
$
475,505

$
317,561

49.7
%

Three Months Ended June 30, ~~2016~~2017 Compared to the Three Months Ended June 30, ~~2015~~2016

	Three months ended June 30,
( in thousands)	2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Operating revenues:
Advertising	$	663,034		$	646,648		$	16,386			2.5	%
Distribution		239,685			223,446			16,239			7.3	%
Other		22,327			22,677			(350	)		(1.5	)%
Total operating revenues		925,046			892,771			32,275			3.6	%
Operating expenses:
Cost of services, excluding depreciation and amortization		299,851			286,999			(12,852	)		(4.5	)%
Selling, general and administrative		212,397			191,133			(21,264	)		(11.1	)%
Depreciation		13,660			16,089			2,429			15.1	%
Amortization		25,058			25,654			596			2.3	%
Total operating expenses		550,966			519,875			(31,091	)		(6.0	)%
Operating income		374,080			372,896			1,184			0.3	%
Interest expense, net		(24,203	)		(33,175	)		8,972			27.0	%
Equity in earnings of affiliates		20,974			21,712			(738	)		(3.4	)%
(Loss) gain on derivatives		(3,672	)		8,267			(11,939	)		(144.4	)%
Gain (loss) on sale of investments		1,416			(16,373	)		17,789			108.6	%
Miscellaneous, net		32,181			(21,672	)		53,853			248.5	%
Income from operations before income taxes		400,776			331,655			69,121			20.8	%
Provision for income taxes		115,099			98,303			(16,796	)		(17.1	)%
Net income		285,677			233,352			52,325			22.4	%
Less: net income attributable to non-controlling interests		(51,602	)		(48,744	)		(2,858	)		(5.9	)%
Net income attributable to SNI	$	234,075		$	184,608		$	49,467			26.8	%

Consolidated total operating revenues increased ~~$160.7~~$32.3 million, or ~~21.9~~3.6 percent, for the three months ended June 30, ~~2016~~2017 compared with the same period in ~~2015,~~2016, with growth in both advertising sales and distribution ~~revenues. Advertising revenues grew $143.8~~fees.

Consolidated advertising sales increased $16.4 million, or ~~28.6 percent, while distribution revenues increased $8.2 million, or 3.8~~2.5 percent, for the three months ended June 30, ~~2016~~2017 compared with the ~~same~~respective period in ~~2015.~~

~~Advertising revenues for the three months ended June 30,~~ 2016, ~~increased over the same period~~primarily driven by strong pricing in the ~~prior year driven~~U.S. market, partially offset by ~~the inclusion of TVN, strong pricing and improved ratings at U.S. Networks during the quarter.~~impressions delivered. Advertising ~~revenues~~sales are affected by the strength of advertising markets and general economic conditions and fluctuate based on the success of our programming, as measured by viewership, and seasonality. The amount of advertising ~~revenue~~sales we earn is a function of pricing negotiated with advertisers, number of advertising spots sold and ~~audience~~ impressions delivered. Consolidated advertising sales represented 71.7 percent and 72.4 percent of consolidated total operating revenues during the three months ended June 30, 2017 and June 30, 2016, respectively.

~~Distribution revenues~~Consolidated advertising sales growth was supplemented by a $16.2 million, or 7.3 percent, increase in consolidated distribution fees for the three months ended June 30, ~~2016 improved over~~2017 compared with the ~~same~~respective period in ~~the prior year~~2016, primarily driven by ~~the inclusion of TVN,~~ negotiated contractual rate increases, and, to a lesser extent, revenues generated ~~from new~~by over-the-top and non-linear ~~entrants, such as those providing streaming or on-demand services,~~distribution platforms, partially offset by a ~~one-time rate equalization due to~~decrease in the ~~consolidation~~number of ~~certain distributor agreements.~~subscribers receiving our networks. Distribution agreements with cable and satellite distributors and telecommunication service providers require distributors to pay us fees over the terms of the agreements in exchange for certain rights to distribute our content. The ~~amount of revenue~~revenues earned from our distribution agreements ~~is dependent~~depend on the rates negotiated in the agreements and the number of subscribers that receive our networks. Consolidated distribution fees represented 25.9 percent and 25.0 percent of consolidated total operating revenues during the three months ended June 30, 2017 and June 30, 2016, respectively.

Cost of services, which consists of program amortization and the costs associated with distributing our content, increased ~~$91.9~~$12.9 million, or ~~47.1~~4.5 percent, for the three months ended June 30, ~~2016~~2017 compared with the respective period in ~~2015, primarily driven by the inclusion of TVN.~~2016. Program amortization, which represents the largest expense and is the primary driver of fluctuations in cost of services, increased ~~$63.1~~$14.6 million, or ~~39.5~~6.6 percent, for the three months ended June 30, ~~2016~~2017 compared with the same period in ~~2015, reflecting our continued investment in the improved quality~~2016 and ~~variety~~represented 43.1 percent and 42.8 percent of ~~programming on our networks as well as the inclusion of TVN. Cost of services also included $1.3 million of Reorganization costs~~consolidated total operating expenses during the three months ended June 30, 2017 and June 30, 2016, ~~and $0.9~~respectively. Cost of services included $1.3 million of Reorganization costs ~~related to the Restructuring Plan~~incurred during the ~~same period in 2015.~~three months ended June 30, 2016.

Selling, general and administrative, which primarily consists of employee costs, marketing and advertising expenses, administrative costs and costs of facilities, increased ~~$12.6~~$21.3 million, or ~~7.1~~11.1 percent, for the three months ended June 30, ~~2016~~2017 compared with the ~~same~~respective period in ~~2015. The year-over-year increase was~~2016, primarily driven by ~~the inclusion of TVN,~~marketing and technology expenses. Selling, general and administrative included $2.6 million of Reorganization costs and $0.8 million of TVN transaction and integration related expenses, partially offset by the timing of certain marketing programs as well as $4.4 million of costs related to the Restructuring Plan and $4.2 million of TVN transaction and integration related expenses incurred during the three months ended June 30, ~~2015.~~

Amortization of intangible assets reflects the expense associated with intangible assets primarily identified through business acquisitions. Amortization of intangible assets increased $14.0 million, or 120.4 percent, for the three months ended June 30, 2016 compared with the same period of 2015, primarily driven by the Acquisition.2016.

Interest expense, net primarily reflects the interest incurred on our outstanding borrowings. Interest expense, net ~~increased $16.3~~decreased $9.0 million, or ~~97.1~~27.0 percent, for the three months ended June 30, ~~2016~~2017 compared with the same period in ~~the prior year, reflecting additional~~2016 driven by less debt outstanding ~~borrowings associated with the Financing obtained in the second quarter of 2015 for the Transactions as well as the assumed debt of TVN.~~

At June 30, 2015, we had the 2016 Notes, the 2019 Notes and the 2024 Notes outstanding. Additionally, we increased our borrowing activity in the second quarter of 2015 to generate funds necessary to complete the Transactions. The additional activity resulted in incremental debt as of June 30, ~~2016, including~~2017. Our debt outstanding as of June 30, 2017, included $1,500.0 million of Senior Notes issued in June 2015, comprised of ~~the~~$600.0 million aggregate principal amount of 2.80% Senior Notes due 2020 (the “2020 Notes”), $400.0 million aggregate principal amount of 3.50% Senior Notes ~~the~~due 2022 (the “2022 Notes”) and $500.0 million aggregate principal amount of 3.95% Senior Notes due 2025 (the “2025 Notes”). Also outstanding as of June 30, 2017, were $500.0 million aggregate principal amount of 2.75% Senior Notes due 2019 (the “2019 Notes”) and ~~the 2025~~$500.0 million aggregate principal amount of 3.90% Senior Notes due 2024 (the “2024 Notes”), as well as $500.0 million drawn on the ~~$250.0~~Amended Revolving Credit Facility. In addition to what was outstanding as of June 30, 2017, we had $500.0 million aggregate principal amount of Senior Notes due 2016 (the “2016 Notes”), the 7.85% TVN Senior Notes due 2020 (the “2020 TVN Notes”) and the Term ~~Loan. We also assumed debt~~Loan outstanding as ~~part~~ of ~~the Acquisition, including the 2020 TVN Notes that remain outstanding (See Note 10 –~~ ~~Debt~~)June 30, 2016. Interest expense, net also includes interest income of ~~$1.3~~$1.2 million and ~~$1.4~~$1.3 million ~~primarily~~ related to the UKTV ~~note~~Loan for the three months ended June 30, ~~2016~~2017 and ~~2015,~~2016, respectively.

~~Equity~~Gain (loss) on sale of investments increased $17.8 million for the three months ended June 30, 2017 compared with the same period in ~~earnings~~2016, primarily driven by a $16.4 million loss recognized on the sale of ~~affiliates,~~our interest in a cost method investment in the second quarter of 2016.

Miscellaneous, net includes foreign currency transaction gains and losses, which ~~represents the proportionate share~~totaled $31.3 million of net gains and $23.3 million of net losses for the three months ended June 30, 2017 and June 30, 2016, respectively.

Our effective income ~~or loss from each of our equity method investments, decreased $5.6 million, or 20.4~~tax rate was 28.7 percent for the three months ended June 30, 2017 compared with 29.6 percent for the three months ended June 30, 2016, primarily driven by an increase in tax benefits resulting from differences in the U.S. statutory rate and that of foreign jurisdictions as well as recognition of tax benefits related to certain investments in foreign jurisdictions, partially offset by changes in uncertain tax positions.

	Six months ended June 30,
( in thousands)	2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Operating revenues:
Advertising	$	1,259,749		$	1,218,503		$	41,246			3.4	%
Distribution		478,065			451,514			26,551			5.9	%
Other		42,352			39,632			2,720			6.9	%
Total operating revenues		1,780,166			1,709,649			70,517			4.1	%
Operating expenses:
Cost of services, excluding depreciation and amortization		578,890			566,666			(12,224	)		(2.2	)%
Selling, general and administrative		419,767			389,954			(29,813	)		(7.6	)%
Depreciation		28,620			33,386			4,766			14.3	%
Amortization		49,255			56,716			7,461			13.2	%
Total operating expenses		1,076,532			1,046,722			(29,810	)		(2.8	)%
Operating income		703,634			662,927			40,707			6.1	%
Interest expense, net		(48,455	)		(66,920	)		18,465			27.6	%
Equity in earnings of affiliates		41,423			47,390			(5,967	)		(12.6	)%
(Loss) gain on derivatives		(6,008	)		11,033			(17,041	)		(154.5	)%
Gain on sale of investments		1,416			191,824			(190,408	)		(99.3	)%
Miscellaneous, net		59,721			(15,606	)		75,327			482.7	%
Income from operations before income taxes		751,731			830,648			(78,917	)		(9.5	)%
Provision for income taxes		216,239			257,350			41,111			16.0	%
Net income		535,492			573,298			(37,806	)		(6.6	)%
Less: net income attributable to non-controlling interests	��	(101,517	)		(97,793	)		(3,724	)		(3.8	)%
Net income attributable to SNI	$	433,975		$	475,505		$	(41,530	)		(8.7	)%

Consolidated total operating revenues increased $70.5 million, or 4.1 percent, for the six months ended June 30, 2017 compared with the same period in ~~2015,~~2016, with growth in both advertising sales and distribution fees.

Consolidated advertising sales increased $41.2 million, or 3.4 percent, for the six months ended June 30, 2017 compared with the respective period in 2016, primarily driven by strong pricing in the U.S. market, partially offset by impressions delivered. Consolidated advertising sales represented 70.8 percent and 71.3 percent of consolidated total operating revenues during the six months ended June 30, 2017 and June 30, 2016, respectively.

Consolidated advertising sales growth was supplemented by a $26.6 million, or 5.9 percent, increase in consolidated distribution fees for the six months ended June 30, 2017 compared with the respective period in 2016, primarily driven by negotiated contractual rate increases, and, to a lesser extent, revenues generated by over-the-top and non-linear distribution platforms, partially offset by a decrease in the number of subscribers receiving our networks. Consolidated distribution fees represented 26.9 percent and 26.4 percent of consolidated total operating revenues during the six months ended June 30, 2017 and June 30, 2016, respectively.

Cost of services, increased $12.2 million, or 2.2 percent, for the six months ended June 30, 2017 compared with the respective period in 2016. Program amortization increased $12.3 million, or 2.8 percent, for the six months ended June 30, 2017 compared with the same period in 2016 and represented 42.2 percent and 42.2 percent of consolidated total operating expenses during the six months ended June 30, 2017 and June 30, 2016, respectively. Cost of services included $3.0 million of Reorganization costs incurred during the six months ended June 30, 2016.

Selling, general and administrative increased $29.8 million, or 7.6 percent, for the six months ended June 30, 2017 compared with the respective period in 2016, primarily driven by marketing and technology expenses. Selling, general and administrative included $8.3 million of Reorganization costs and $2.1 million of TVN transaction and integration expenses incurred during the six months ended June 30, 2016.

Interest expense, net primarily reflects the interest incurred on our outstanding borrowings. Interest expense, net decreased $18.5 million, or 27.6 percent, for the six months ended June 30, 2017 compared with the same period in 2016 driven by less debt outstanding as of June 30, 2017. Our debt outstanding as of June 30, 2017, included the 2020 Notes, the 2022 Notes and the 2025 Notes. Also outstanding as of June 30, 2017, were the 2019 Notes and the 2024 Notes, as well as $500.0 million drawn on the Amended Revolving Credit Facility. In addition to what was outstanding as of June 30, 2017, we had the 2016 Notes, the 2020 TVN Notes and the Term Loan outstanding as of June 30, 2016. Interest expense, net also includes interest income of $2.3 million and $2.6 million related to the UKTV Loan for the six months ended June 30, 2017 and 2016, respectively.

Gain on sale of investments decreased $190.4 million for the six months ended June 30, 2017 compared with the same period in 2016 primarily due to the sale of our 7.3 percent equity interest in Fox Sports South in the first quarter of 2016. ~~Included in equity in earnings~~

Miscellaneous, net includes foreign currency transaction gains and losses, which totaled $61.0 million of ~~affiliates, representing a significant component~~net gains and $14.4 million of the balance, is our 50.0 percent proportionate share of results from UKTV. Amortization expense attributed to intangible assets recognized upon acquiring our interest in UKTV reduces the equity in earnings we recognize from our UKTV investment. Accordingly, equity in earnings of affiliates includes our $13.1 million and $12.9 million proportionate share of UKTV’s resultsnet losses for the ~~three~~six months ended June 30, ~~2016~~2017 and June 30, ~~2015, respectively, which were reduced by amortization of $3.4 million and $4.2 million for the three months ended June 30,~~ 2016, ~~and June 30, 2015,~~ respectively.

~~Loss (gain) on sale of investments totaled $16.4 million for the three months ended June 30, 2016 due to the sale of a cost method investment.~~

Miscellaneous, net increased by $8.5 million, or 64.3 percent, primarily driven by an increase of $10.4 million in foreign currency losses during the three months ended June 30, 2016 compared with the same period in 2015.

Our effective income tax rate was 29.6 percent for the second quarter of 2016 compared with 32.8 percent for the second quarter of 2015. The favorable variance in the year-over-year tax rate was primarily driven by an overall decrease in the foreign losses for which tax benefits were not recognized for the three months ended June 30, 2016, as well as the impact of certain non-deductible expenses related to the Transactions in 2015.

~~Six months Ended June 30, 2016 Compared to the Six months Ended June 30, 2015~~

~~Consolidated operating revenues increased $319.3 million, or 23.0~~28.8 percent for the six months ended June 30, ~~2016~~2017 compared with the same period in 2015, with growth in both advertising and distribution revenues. Advertising revenues grew $280.3 million, or 29.9 percent, while distribution revenues increased $27.3 million, or 6.4 percent, for the six months ended June 30, 2016 compared with the same period in 2015.

Advertising revenues for the six months ended June 30, 2016 increased over the same period in the prior year driven by the inclusion of TVN, strong pricing and improved ratings at U.S. Networks during the quarter.

Distribution revenues for the six months ended June 30, 2016 improved over the same period in the prior year driven by the inclusion of TVN, negotiated contractual rate increases and revenues generated from new over-the-top and non-linear entrants, such as those providing streaming or on-demand services, partially offset by a one-time rate equalization due to the consolidation of certain distributor agreements.

Cost of services increased $172.4 million, or 43.7 percent, for the six months ended June 30, 2016 compared with the respective period in 2015, primarily driven by the inclusion of TVN. Program amortization, which represents the largest expense and is the primary driver of fluctuations in cost of services, increased $119.3 million, or 37.0 percent, for the six months ended June 30, 2016 compared with the same period in 2015, reflecting our continued investment in the improved quality and variety of programming on our networks as well as the inclusion of TVN. Cost of services also included $3.0 million of Reorganization costs during the six months ended June 30, 2016 and $2.4 million of costs related to the Restructuring Plan during the same period in 2015.

Selling, general and administrative increased $9.3 million, or 2.4 percent, for the six months ended June 30, 2016 compared with the same period in 2015. The year-over-year increase was driven by the inclusion of TVN, $8.3 million of Reorganization costs and $2.1 million of TVN transaction and integration related expenses, partially offset by the timing of certain marketing programs as well as $14.4 million of TVN transaction and integration related expenses and $7.9 million of costs related to the Restructuring Plan incurred during the six months ended June 30, 2015.

~~Amortization of intangible assets increased $33.4 million, or 143.1 percent, for the six months ended June 30, 2016 compared with the same period of 2015, primarily driven by the Acquisition.~~

Interest expense, net increased $37.1 million, or 124.5 percent, for the six months ended June 30, 2016 compared with the same period in the prior year, reflecting additional outstanding borrowings associated with the Financing obtained in the second quarter of 2015 for the Transactions as well as the assumed debt of TVN.

Equity in earnings of affiliates increased $1.2 million, or 2.5 percent, for the six months ended June 30, 2016 compared with the same period in 2015, primarily due to the inclusion of TVN’s equity investment results, partially offset by the exclusion of our share of Fox Sports South’s financial results for a portion of the six months ended June 30, 2016. Equity in earnings of affiliates includes our $24.0 million and $24.0 million proportionate share of UKTV’s results for the six months ended June 30, 2016 and June 30, 2015, respectively, which were reduced by amortization of $6.8 million and $8.4 million for the six months ended June 30, 2016 and June 30, 2015, respectively.

(Loss) gain on sale of investments totaled $191.8 million for the six months ended June 30, 2016, with $208.2 million driven by the sale of our 7.3 percent equity interest in Fox Sports South in the first quarter of 2016, partially offset by a $16.4 million loss incurred on the sale of a cost method investment in the second quarter of 2016.

Miscellaneous, net increased by $2.0 million, or 14.8 percent, primarily driven by a decrease of $3.9 million in foreign currency losses during the six months ended June 30, 2016 compared with the same period in 2015, partially offset by the release of a contingent liability during the six months ended June 30, 2015.

~~Our effective income tax rate was~~ 31.0 percent for the six months ended June 30, 2016, ~~compared with 31.7 percent for the same period of 2015. The year-over-year variance was~~ primarily driven by an increase in ~~the~~ tax benefits resulting from differences in the U.S. statutory rate and that of foreign jurisdictions ~~in 2016~~ as well as ~~a decrease in~~ the ~~foreign losses for which~~recognition of tax benefits ~~were not recognized for the six months ended June 30, 2016. These items were primarily~~related to certain investments in foreign jurisdictions, partially offset by ~~a reduction~~changes in ~~the~~uncertain tax ~~benefit attributable to income allocated to our non-controlling interests.~~positions.

As discussed in Note 1716 - Segment Information to the condensed consolidated financial statements, our CODM evaluates the operating performance of our businesses and makes decisions about the allocation of resources to the businesses using a ~~non-GAAP~~ measure we ~~call~~refer to as segment ~~profit.~~profit (loss). Segment profit ~~excludes interest,~~(loss) is defined as income (loss) from operations before income taxes, excluding depreciation, amortization, goodwill write-downs, interest expense, equity in earnings of affiliates, gain (loss) on derivatives, gain (loss) on sale of investments, other miscellaneous non-operating expenses and ~~amortization, divested operating units, investment results and certain other items~~income taxes, which are included in net income (loss) determined in accordance with GAAP.

Depreciation and amortization charges are a result of decisions made in prior periods regarding the allocation of resources and are, therefore, excluded from segment profit (loss). Also excluded from segment profit (loss) are financing, tax structuring and acquisition and divestiture decisions, which are generally made by corporate executives. Excluding these items from the performance measure of our businesses enables management to evaluate operating performance based on current economic conditions and decisions made by the managers of the businesses in the current period.

~~Total~~Consolidated segment profit (loss) is the aggregate of the segment profit for each of our two reportable segments. ~~Total~~Consolidated segment profit (loss) is a ~~non-GAAP~~ financial measure ~~and~~that is not intended to replace ~~operating~~ income (loss) from operations before income taxes, the most directly comparable GAAP financial measure. Our management believes that ~~total~~ segment profit (loss) is a useful measure of the operating profitability of our business since the measure allows for an evaluation of the performance of our segments without regard to the effect of interest, depreciation and

amortization and certain other items. For this reason, operating performance measures, such as ~~total~~consolidated segment profit (loss), are used by analysts and investors in our industry. ~~Total~~Consolidated segment profit (loss) is not a measure of consolidated operating results under ~~U.S.~~ GAAP and should not be considered superior to, as a substitute for or as an alternative to, ~~operating~~ income (loss) from operations before income taxes or any other measure of consolidated operating results under ~~U.S.~~ GAAP.

Items excluded from segment profit generally result from decisions made in prior periods or by corporate executives rather than the managers of the segments. Depreciation and amortization charges are a result of decisions made in prior periods regarding the allocation of resources and are, therefore, excluded from segment profit. Also excluded from segment profit are financing, tax structuring and divestiture decisions, which are generally made by corporate executives. Excluding these items from the performance measures of our segments enables management to evaluate operating performance based on current economic conditions and decisions made by segment managers in the current period.

Information regarding the operating performance of our business segments, ~~and~~including a reconciliation of ~~such information~~consolidated segment profit to ~~the condensed consolidated financial statements~~income from operations before income taxes in accordance with GAAP, is as follows:

Three months Ended June 30, 2017 Compared to the Three Months Ended June 30, 2016

	Three months ended June 30,									Six months ended June 30,									Three months ended June 30,
(in thousands)	2016			2015			% Change			2016			2015			% Change			2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Segment operating revenues:
Operating revenues:
U.S. Networks	$	752,321		$	715,100			5.2	%	$	1,454,516		$	1,354,004			7.4	%	$	779,043		$	752,321		$	26,722			3.6	%
International Networks		147,044			22,088			565.7	%		268,382			46,153			481.5	%		153,262			147,044			6,218			4.2	%
Corporate and Other		(6,594	)		(5,086	)		29.7	%		(13,249	)		(9,805	)		35.1	%		(7,259	)		(6,594	)		(665	)		(10.1	)%
Total operating revenues	$	892,771		$	732,102			21.9	%	$	1,709,649		$	1,390,352			23.0	%
Operating revenues																				925,046			892,771			32,275			3.6	%
Cost of services, excluding depreciation and amortization		286,999			195,087			47.1	%		566,666			394,234			43.7	%		299,851			286,999			(12,852	)		(4.5	)%
Selling, general and administrative		191,133			178,498			7.1	%		389,954			380,685			2.4	%		212,397			191,133			(21,264	)		(11.1	)%
Total segment profit		414,639			358,517			15.7	%		753,029			615,433			22.4	%		412,798			414,639			(1,841	)		(0.4	)%
Depreciation		16,089			14,798			8.7	%		33,628			31,693			6.1	%		13,660			16,089			2,429			15.1	%
Amortization		25,654			11,640			120.4	%		56,716			23,335			143.1	%		25,058			25,654			596			2.3	%
Loss (gain) on disposal of property and equipment		-			44			(100.0	)%		(242	)		2,560			(109.5	)%
Operating income		372,896			332,035			12.3	%		662,927			557,845			18.8	%
Total operating income																				374,080			372,896			1,184			0.3	%
Interest expense, net		(33,175	)		(16,835	)		97.1	%		(66,920	)		(29,802	)		124.5	%		(24,203	)		(33,175	)		8,972			27.0	%
Equity in earnings of affiliates		21,712			27,290			(20.4	)%		47,390			46,235			2.5	%		20,974			21,712			(738	)		(3.4	)%
Gain on derivatives		8,267			37,198			(77.8	)%		11,033			43,131			(74.4	)%
Gain on sale of investment		(16,373	)		-		NM				191,824			-		NM
(Loss) gain on derivatives																				(3,672	)		8,267			(11,939	)		(144.4	)%
Gain (loss) on sale of investments																				1,416			(16,373	)		17,789			108.6	%
Miscellaneous, net		(21,672	)		(13,194	)		64.3	%		(15,606	)		(13,596	)		14.8	%		32,181			(21,672	)		53,853			248.5	%
Income from operations before income taxes	$	331,655		$	366,494			(9.5	)%	$	830,648		$	603,813			37.6	%	$	400,776		$	331,655		$	69,121			20.8	%
Segment profit (loss):
U.S. Networks	$	401,139		$	397,332			1.0	%	$	760,636		$	697,836			9.0	%	$	398,722		$	401,139		$	(2,417	)		(0.6	)%
International Networks		37,369			(10,495	)		(456.1	)%		47,158			(16,374	)		(388.0	)%		38,780			37,369			1,411			3.8	%
Corporate and Other		(23,869	)		(28,320	)		(15.7	)%		(54,765	)		(66,029	)		(17.1	)%		(24,704	)		(23,869	)		(835	)		(3.5	)%
Total segment profit		414,639			358,517			15.7	%		753,029			615,433			22.4	%	$	412,798		$	414,639		$	(1,841	)		(0.4	)%

Six months Ended June 30, 2017 Compared to the ~~change is not meaningful~~Six Months Ended June 30, 2016

	Six months ended June 30,
(in thousands)	2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Operating revenues:
U.S. Networks	$	1,515,932		$	1,454,516		$	61,416			4.2	%
International Networks		278,787			268,382			10,405			3.9	%
Corporate and Other		(14,553	)		(13,249	)		(1,304	)		(9.8	)%
Total operating revenues		1,780,166			1,709,649			70,517			4.1	%
Cost of services, excluding depreciation and amortization		578,890			566,666			(12,224	)		(2.2	)%
Selling, general and administrative		419,767			389,954			(29,813	)		(7.6	)%
Total segment profit		781,509			753,029			28,480			3.8	%
Depreciation		28,620			33,386			4,766			14.3	%
Amortization		49,255			56,716			7,461			13.2	%
Operating income		703,634			662,927			40,707			6.1	%
Interest expense, net		(48,455	)		(66,920	)		18,465			27.6	%
Equity in earnings of affiliates		41,423			47,390			(5,967	)		(12.6	)%
(Loss) gain on derivatives		(6,008	)		11,033			(17,041	)		(154.5	)%
Gain on sale of investments		1,416			191,824			(190,408	)		(99.3	)%
Miscellaneous, net		59,721			(15,606	)		75,327			482.7	%
Income from operations before income taxes	$	751,731		$	830,648		$	(78,917	)		(9.5	)%
Segment profit (loss):
U.S. Networks	$	782,296		$	760,636		$	21,660			2.8	%
International Networks		54,290			47,158			7,132			15.1	%
Corporate and Other		(55,077	)		(54,765	)		(312	)		(0.6	)%
Total segment profit	$	781,509		$	753,029		$	28,480			3.8	%

U.S. Networks includes our six national television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. Additionally, U.S. Networks includes websites associated with the aforementioned television brands and other internet and ~~mobile~~digital businesses serving home, food, travel and other lifestyle-related categories. U.S. Networks also includes our digital content studio, Scripps ~~Networks~~ Lifestyle Studios. We own 100.0 percent of each ~~network,~~of our networks, with the exception of Food Network and Cooking Channel, of which we own 68.7 percent. Each of our networks is distributed by cable and satellite distributors, telecommunication service providers and certain non-linear providers, such as those providing streaming or on-demand services. U.S. Networks earns revenue primarily from the sale of advertising time and from distribution fees paid by distributors of our content. U.S. Networks also earns revenue from licensing of content to third parties and of brands for consumer products.

~~Programming expenses, employee costs and marketing and advertising expenses are the primary operating costs of U.S. Networks.~~

Three months ended June 30,

Six months ended June 30,

(in thousands)
2016

2015

% Change

2016

2015

% Change

Segment operating revenues:

Advertising
$
540,979

$
496,879

8.9
%

$
1,028,264

$
925,430

11.1
%
Distribution

196,073

203,444

(3.6
)%

398,169

401,271

(0.8
)%
Other

15,269

14,777

3.3
%

28,083

27,303

2.9
%
Segment operating revenues

752,321

715,100

5.2
%

1,454,516

1,354,004

7.4
%
Segment operating expenses:

Cost of services, excluding depreciation and amortization

211,040

179,050

17.9
%

414,399

363,289

14.1
%
Selling, general and administrative

140,142

138,718

1.0
%

279,481

292,879

(4.6
)%
Segment profit
$
401,139

$
397,332

1.0
%

$
760,636

$
697,836

9.0
%
Depreciation

12,716

12,848

(1.0
)%

26,869

27,560

(2.5
)%
Amortization

10,022

10,021

0.0
%

20,043

19,961

0.4
%
Loss (gain) on disposal of property and equipment

-

34

(100.0
)%

42

3,581

(98.8
)%
Segment operating income
$
378,401

$
374,429

1.1
%

$
713,682

$
646,734

10.4
%

Supplemental segment information:

Equity in earnings of affiliates
$
9,014

$
14,486

(37.8
)%

$
16,746

$
24,507

(31.7
)%
Program amortization
$
185,780

$
155,139

19.8
%

$
364,856

$
314,190

16.1
%
Program payments
$
193,503

$
157,430

22.9
%

$
390,258

$
353,116

10.5
%
Capital expenditures
$
8,567

$
8,582

(0.2
)%

$
17,238

$
16,251

6.1
%

Three Months Ended June 30, ~~2016~~2017 Compared to the Three Months Ended June 30, ~~2015~~2016

	Three months ended June 30,
(in thousands)	2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Operating revenues:
Advertising	$	552,652		$	540,979		$	11,673			2.2	%
Distribution		211,902			196,073			15,829			8.1	%
Other		14,489			15,269			(780	)		(5.1	)%
Operating revenues		779,043			752,321			26,722			3.6	%
Cost of services, excluding depreciation and amortization		222,790			211,040			(11,750	)		(5.6	)%
Selling, general and administrative		157,531			140,142			(17,389	)		(12.4	)%
Segment profit		398,722			401,139			(2,417	)		(0.6	)%
Depreciation		9,961			12,716			2,755			21.7	%
Amortization		9,994			10,022			28			0.3	%
Operating income		378,767			378,401			366			0.1	%
Interest expense, net		(144	)		(69	)		(75	)		(108.7	)%
Equity in earnings of affiliates		7,846			9,014			(1,168	)		(13.0	)%
Loss on sale of investments		—			(16,373	)		16,373			100.0	%
Miscellaneous, net		3,481			18,952			(15,471	)		(81.6	)%
Income from operations before income taxes	$	389,950		$	389,925		$	25			0.0	%

Supplemental information:
Program amortization	$	198,135		$	185,780		$	(12,355	)		(6.7	)%
Program payments	$	202,443		$	193,503		$	(8,940	)		(4.6	)%
Capital expenditures	$	13,212		$	8,567		$	(4,645	)		(54.2	)%

U.S. Networks generated operating revenues of ~~approximately $752.3~~$779.0 million, ~~and $715.1~~an increase of $26.7 million, or 3.6 percent, for the three months ended June 30, 2017 compared with the same period in 2016, with growth in both advertising sales and distribution fees.

U.S. Networks operating revenues included a $11.7 million, or 2.2 percent, increase in advertising sales for the three months ended June 30, ~~2015, respectively, representing 84.3~~2017 compared with the respective period in 2016, primarily driven by strong pricing, partially offset by impressions delivered. U.S. Networks’ advertising sales represented 70.9 percent and ~~97.7~~71.9 percent of ~~consolidated operating revenues in the respective periods and a $37.2 million, or 5.2 percent, increase year-over-year. Despite the 5.2 percent growth in~~ U.S. Networks’ total operating revenues during the three months ended June 30, 2017 and June 30, 2016, ~~compared with the same period in 2015, the U.S. Networks’ contribution of operating revenues to consolidated operating revenues decreased on~~respectively.

Advertising sales growth was supplemented by a ~~percentage basis, primarily driven by the inclusion of TVN, thereby increasing International Networks’ contribution of operating revenues to consolidated operating revenues.~~

~~The year-over-year~~$15.8 million, or 8.1 percent, increase in U.S. Networks’ operating revenues included a $44.1 million, or 8.9 percent, growth in advertising revenues, primarily driven by positive pricing, reflecting strength in the advertising market for our lifestyle brands, coupled with ratings growth at the majority of our networks. Advertising revenues represented 71.9 percent and 69.5 percent of total operating revenues for U.S. Networksdistribution fees for the three months ended June 30, ~~2016 and 2015, respectively.~~

~~Advertising revenue growth was partially offset by a $7.4 million, or 3.6 percent, decrease~~2017 compared with the respective period in ~~distribution revenues,~~2016, primarily driven ~~by a one-time rate equalization due to the consolidation of certain distribution agreements, partially offset~~ by negotiated contractual rate increases, and, to a lesser extent, revenues generated from ~~new~~ over-the-top and non-linear ~~entrants, such as those providing streaming or on-demand services.~~distribution platforms, partially offset by a decrease in the number of subscribers receiving our networks. U.S. Networks’ distribution fees represented 27.2 percent and 26.1 percent of U.S. Networks’ total operating revenues during the three months ended June 30, 2017 and June 30, 2016, respectively.

Cost of services increased ~~$32.0~~$11.8 million, or ~~17.9~~5.6 percent, for the three months ended June 30, ~~2016~~2017 compared with the ~~same~~respective period in ~~2015, reflecting our continued investment~~2016, primarily driven by investments in ~~the improved quality and variety of programming on our networks.~~programming. Program amortization represented 52.9 percent and 48.8 percent of U.S. Networks’ operating expenses for the three months ended June 30, 2016 and June 30, 2015, respectively. Cost of services also included $1.3 million of Reorganization costs during the three months ended June 30, 2016 and $0.9 million of costs related to the Restructuring Plan during the same period in 2015.

~~Selling, general and administrative~~ increased ~~$1.4~~$12.4 million, or ~~1.0~~6.7 percent for the three months ended June 30, 2017 compared with the same period in 2016 and represented 49.5 percent and 49.7 percent of U.S. Networks’ total operating expenses during the three months ended June 30, 2017 and June 30, 2016, respectively. Cost of services included $1.3 million of Reorganization costs incurred during the three months ended June 30, 2016.

Selling, general and administrative increased $17.4 million, or 12.4 percent, for the three months ended June 30, 2017 compared with the respective period in ~~2015. Included in selling,~~2016, primarily driven by marketing and technology expenses. Selling, general and administrative included $2.4 million of Reorganization costs incurred during the three months ended June 30, 2016.

Loss on sale of investments increased $16.4 million for the three months ended June 30, 2017 compared with the same period in 2016 due to the sale of our interest in a cost method investment in the second quarter of 2016 were $2.4 million of Reorganization costs, partially offset by the timing of certain marketing programs, while $2.2 million of costs related to the Restructuring Plan were incurred in the second quarter of 2015.2016.

Six ~~months~~Months Ended June 30, ~~2016~~2017 Compared to the Six ~~months~~Months Ended June 30, ~~2015~~2016

	Six months ended June 30,
(in thousands)	2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Segment operating revenues:
Advertising	$	1,064,707		$	1,028,264		$	36,443			3.5	%
Distribution		423,042			398,169			24,873			6.2	%
Other		28,183			28,083			100			0.4	%
Segment operating revenues		1,515,932			1,454,516			61,416			4.2	%
Cost of services, excluding depreciation and amortization		428,112			414,399			(13,713	)		(3.3	)%
Selling, general and administrative		305,524			279,481			(26,043	)		(9.3	)%
Segment profit		782,296			760,636			21,660			2.8	%
Depreciation		21,460			26,911			5,451			20.3	%
Amortization		19,912			20,043			131			0.7	%
Segment operating income		740,924			713,682			27,242			3.8	%
Interest expense, net		(264	)		(86	)		(178	)		(207.0	)%
Equity in earnings of affiliates		13,089			16,746			(3,657	)		(21.8	)%
Gain on sale of investments		—			191,824			(191,824	)		(100.0	)%
Miscellaneous, net		5,964			22,440			(16,476	)		(73.4	)%
Income from operations before income taxes	$	759,713		$	944,606		$	(184,893	)		(19.6	)%

Supplemental segment information:
Program amortization	$	377,502		$	364,856		$	(12,646	)		(3.5	)%
Program payments	$	397,363		$	390,258		$	(7,105	)		(1.8	)%
Capital expenditures	$	25,468		$	17,238		$	(8,230	)		(47.7	)%

U.S. Networks generated operating revenues of ~~approximately $1,454.5~~$1,515.9 million, ~~and $1,354.0~~an increase of $61.4 million, or 4.2 percent, for the six months ended June 30, 2017 compared with the same period in 2016, with growth in both advertising sales and distribution fees.

U.S. Networks operating revenues included a $36.4 million, or 3.5 percent, increase in advertising sales for the six months ended June 30, ~~2015, respectively, representing 85.1~~2017 compared with the respective period in 2016, primarily driven by strong pricing, partially offset by impressions delivered. U.S. Networks’ advertising sales represented 70.2 percent and ~~97.4~~70.7 percent of ~~consolidated operating revenues in the respective periods and a $100.5 million, or 7.4 percent, increase year-over-year. Despite the 7.4 percent growth in~~ U.S. Networks’ total operating revenues during the six months ended June 30, 2017 and June 30, 2016, ~~compared with the same period in 2015, the U.S. Networks’ contribution of operating revenues to consolidated operating revenues decreased on~~respectively.

~~The year-over-year~~$24.9 million, or 6.2 percent, increase in U.S. Networks’ operating revenues included a $102.8 million, or 11.1 percent, growth in advertising revenues, primarily driven by positive pricing, reflecting strength in the advertising market for our lifestyle brands, coupled with ratings growth at the majority of our networks. Advertising revenues represented 70.7 percent and 68.3 percent of total operating revenues for U.S. Networksdistribution fees for the six months ended June 30, ~~2016 and 2015, respectively.~~

~~Advertising revenue growth was partially offset by a $3.1 million, or 0.8 percent, decrease~~2017 compared with the respective period in ~~distribution revenues,~~2016, primarily driven ~~by a one-time rate equalization due to the consolidation of certain distribution agreements, partially offset~~ by negotiated contractual rate increases, and, to a lesser extent, revenues generated from ~~new~~ over-the-top and non-linear ~~entrants, such as those providing streaming or on-demand services.~~distribution platforms, partially offset by a decrease in the number of subscribers receiving our networks. U.S. Networks’ distribution fees represented 27.9 percent and 27.4 percent of U.S. Networks’ total operating revenues during the six months ended June 30, 2017 and June 30, 2016, respectively.

Cost of services increased ~~$51.1~~$13.7 million, or ~~14.1~~3.3 percent, for the six months ended June 30, ~~2016~~2017 compared with the ~~same~~respective period in ~~2015, reflecting our continued investment~~2016, primarily driven by investments in ~~the improved quality and variety of programming on our networks.~~programming. Program amortization represented 52.6 percent and 47.9 percent of U.S. Networks’ operating expenses for the six months ended June 30, 2016 and June 30, 2015, respectively. Cost of services also included $3.0 million of Reorganization costs during the six months ended June 30, 2016 and $2.4 million of costs related to the Restructuring Plan during the same period in 2015.

~~Selling, general and administrative decreased $13.4~~increased $12.6 million, or ~~4.6~~3.5 percent for the six months ended June 30, ~~2016~~2017 compared with the ~~respective~~same period in ~~2015, primarily driven by~~2016 and represented 48.7 percent and 49.2 percent of U.S. Networks’ total operating expenses during the ~~timing~~six months ended June 30, 2017 and June 30, 2016, respectively. Cost of ~~certain marketing programs and $4.0~~services included $3.0 million of Reorganization costs ~~related to the Restructuring Plan~~ incurred during the six months ended June 30, ~~2015, partially offset~~2016.

Selling, general and administrative increased $26.0 million, or 9.3 percent, for the six months ended June 30, 2017 compared with the respective period in 2016, primarily driven by marketing and technology expenses. Selling, general and administrative included $4.5 million of Reorganization costs incurred during the six months ended June 30, 2016.

Gain on sale of investments decreased $191.8 million for the six months ended June 30, 2017 compared with the same period in 2016 primarily due to the sale of our 7.3 percent equity interest in Fox Sports South in the first quarter of 2016 and the sale of a cost method investment in the second quarter of 2016.

Three Months Ended June 30, 2017 Compared to the Three Months Ended June 30, 2016

	Three months ended June 30,									Six months ended June 30,									Three months ended June 30,
(in thousands)	2016			2015			% Change			2016			2015			% Change			2017			2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Operating revenues by network:
HGTV	$	282,753		$	271,784			4.0	%	$	554,468		$	509,085			8.9	%	$	302,064		$	282,753		$	19,311			6.8	%
Food Network		240,902			228,069			5.6	%		470,200			445,367			5.6	%		245,510			240,902			4,608			1.9	%
Travel Channel		85,884			81,729			5.1	%		166,651			157,646			5.7	%		85,447			85,884			(437	)		(0.5	)%
DIY Network		46,996			47,984			(2.1	)%		88,509			86,374			2.5	%		43,883			46,996			(3,113	)		(6.6	)%
Cooking Channel		36,823			35,102			4.9	%		69,792			65,725			6.2	%		37,926			36,823			1,103			3.0	%
Great American Country		8,234			8,111			1.5	%		15,520			15,465			0.4	%		7,248			8,234			(986	)		(12.0	)%
Digital Businesses		40,916			34,336			19.2	%		69,888			58,710			19.0	%		46,680			40,916			5,764			14.1	%
Other		9,943			9,220			7.8	%		20,103			17,372			15.7	%		10,414			9,943			471			4.7	%
Intrasegment eliminations		(130	)		(1,235	)		(89.5	)%		(615	)		(1,740	)		(64.7	)%		(129	)		(130	)		1			0.8	%
Total segment operating revenues	$	752,321		$	715,100			5.2	%	$	1,454,516		$	1,354,004			7.4	%	$	779,043		$	752,321		$	26,722			3.6	%

International Networks includes the TVN ~~which operates a~~ portfolio of ~~free-to-air~~networks and pay-TV lifestyle and entertainment networks, including TVN, TVN24, TVN Style, TTV, TVN Turbo, TVN24 Biznes i Świat. Also included in TVN is TVN Media, an advertising sales house. Additionally, International Networks includes theother lifestyle-oriented networks available in the UK, EMEA, APAC and Latin ~~America and the Caribbean.~~

We currently distribute HGTV, DIY, Food Network, AFC, Cooking Channel, Fine Living and Travel Channel brands, as well as the TVN network portfolio, in more than 175 countries and territories around the world. Our networks are broadcast in 29 languages via 36 unique channel feeds reaching approximately 300 million cumulative subscribers. In addition to the broadcast networks, we also license a portion of our programming to other broadcasters around the world.

~~International Networks earns revenue primarily from the sale of advertising time and from distribution fees paid by distributors of our content.~~America. International Networks also ~~earns revenue from licensing~~includes our 50.0 percent share of ~~content to third parties, commissions on ad sales~~the results of UKTV, a general entertainment and ~~sales of merchandise inventory.~~lifestyle platform in the UK.

~~Satellite transmission fees, programming expenses, employee costs and marketing and advertising expenses are the primary operating costs of International Networks.~~

Three months ended June 30,

Six months ended June 30,

(in thousands)

2016

2015

$ Change

2016

2015

$ Change

Segment operating revenues:

Advertising

$
105,669

$
6,012

$
99,657

$
190,239

$
12,729

$
177,510

Distribution

27,378

11,773

15,605

53,350

22,954

30,396

Other

13,997

4,303

9,694

24,793

10,470

14,323

Segment operating revenues

147,044

22,088

124,956

268,382

46,153

222,229

Segment operating expenses:

Cost of services, excluding depreciation and amortization

80,666

18,734

61,932

161,724

36,089

125,635

Selling, general and administrative

29,009

13,849

15,160

59,500

26,438

33,062

Segment profit (loss)

$
37,369

$
(10,495
)

$
47,864

$
47,158

$
(16,374
)

$
63,532

Depreciation

3,114

949

2,165

6,239

2,078

4,161

Amortization

15,632

1,619

14,013

36,673

3,374

33,299

Loss (gain) on disposal of property and equipment

-

9

(9
)

(284
)

9

(293
)
Segment operating income (loss)

$
18,623

$
(13,072
)

$
31,695

$
4,530

$
(21,835
)

$
26,365

Supplemental segment information:

Equity in earnings of affiliates

$
12,698

$
12,804

$
(106
)

$
30,644

$
21,728

$
8,916

Program amortization

$
41,335

$
7,111

$
34,224

$
85,721

$
13,082

$
72,639

Program payments

$
37,875

$
38,656

$
(781
)

$
86,874

$
43,522

$
43,352

Capital expenditures

$
4,385

$
496

$
3,889

$
7,059

$
776

$
6,283

Three Months Ended June 30, ~~2016~~2017 Compared to the Three Months Ended June 30, ~~2015~~2016

	Three months ended June 30,
(in thousands)	2017		2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Operating revenues:
Advertising	$	110,382	$	105,669		$	4,713			4.5	%
Distribution		27,783		27,378			405			1.5	%
Other		15,097		13,997			1,100			7.9	%
Operating revenues		153,262		147,044			6,218			4.2	%
Cost of services, excluding depreciation and amortization		83,335		80,666			(2,669	)		(3.3	)%
Selling, general and administrative		31,147		29,009			(2,138	)		(7.4	)%
Segment profit		38,780		37,369			1,411			3.8	%
Depreciation		3,045		3,114			69			2.2	%
Amortization		15,064		15,632			568			3.6	%
Operating income		20,671		18,623			2,048			11.0	%
Interest income (expense), net		206		(7,076	)		7,282			102.9	%
Equity in earnings of affiliates		13,128		12,698			430			3.4	%
Gain on sale of investments		1,416		—			1,416		NM
Miscellaneous, net		7,896		23,823			(15,927	)		(66.9	)%
Income from operations before income taxes	$	43,317	$	48,068		$	(4,751	)		(9.9	)%

Supplemental information:
Program amortization	$	44,993	$	41,335		$	(3,658	)		(8.8	)%
Program payments	$	55,484	$	37,875		$	(17,609	)		(46.5	)%
Capital expenditures	$	7,100	$	4,385		$	(2,715	)		(61.9	)%

International Networks generated operating revenues of ~~approximately $147.0~~$153.3 million, ~~and $22.1~~an increase of $6.2 million, or 4.2 percent, for the three months ended June 30, 2017 compared with the same period in 2016, with growth in both advertising sales and ~~June 30, 2015, respectively, representing 16.5 percent and 3.0 percent of consolidated~~other revenues.

International Networks’ operating revenues ~~in the respective periods and~~included a ~~$125.0~~$4.7 million, ~~increase year-over-year, primarily driven by the inclusion of TVN. The~~or 4.5 percent, increase in ~~International Networks’ contribution of operating revenues to consolidated operating revenues on a percentage basis~~advertising sales for the three months ended June 30, ~~2016~~2017 compared with the ~~same~~respective period in ~~2015 is primarily driven by the inclusion of TVN, thereby increasing~~2016. International Networks’ ~~contribution of operating revenues to consolidated operating revenues.~~

~~The year-over-year increase in International Networks’ operating revenues included a $99.7 million increase in~~ advertising ~~revenues, primarily driven by the inclusion of TVN~~sales represented 72.0 percent and ~~positive pricing. Advertising revenues represented~~ 71.9 percent ~~and 27.2 percent~~ of International Networks’ total operating revenues ~~for~~ during the three months ended June 30, 2017 and June 30, 2016, respectively.

International ~~Networks~~Networks’ distribution fees represented 18.1 percent and 18.6 percent of International Networks’ total operating revenues during the three months ended June 30, 2017 and June 30, 2016, respectively.

Advertising sales growth was supplemented by a $1.1 million, or 7.9 percent, increase in other revenues for the three months ended June 30, ~~2016 and 2015, respectively.~~

~~Advertising revenue growth was supplemented by a $15.6 million increase~~2017 compared with the respective period in ~~distribution revenues, also~~2016, primarily driven by ~~the inclusion of TVN.~~program licensing and production revenues.

Cost of services increased ~~$61.9~~$2.7 million, or 3.3 percent, for the three months ended June 30, ~~2016~~2017 compared with the respective period in ~~2015, primarily due to the inclusion of TVN.~~2016. Program amortization ~~represented 37.7~~increased $3.7 million, or 8.8 percent, ~~and 21.8 percent of International Networks’ operating expenses~~ for the three months ended June 30, 2017 compared with the respective period in 2016 and represented 33.9 percent and 32.2 percent of International Networks’ total operating expenses during the three months ended June 30, 2017 and June 30, ~~2015,~~2016, respectively.

Selling, general and administrative increased ~~$15.2~~$2.1 million, or 7.4 percent, for the three months ended June 30, ~~2016~~2017 compared with the respective period in ~~2015, primarily driven by the inclusion~~2016.

~~Amortization of intangible assets increased $14.0 million for the three months ended June 30, 2016 compared with the same period of 2015, primarily driven by the Acquisition.~~

Equity in earnings of affiliates decreased $0.1 million for the three months ended June 30, 2016 compared with the respective period in 2015, primarily driven by the inclusion of TVN’s equity investment results.Operations

Six ~~months~~Months Ended June 30, ~~2016~~2017 Compared to the Six ~~months~~Months Ended June 30, ~~2015~~2016

	Six months ended June 30,
(in thousands)	2017		2016			$ Change Fav / (Unfav)			% Change Fav / (Unfav)
Segment operating revenues:
Advertising	$	195,042	$	190,239		$	4,803			2.5	%
Distribution		55,023		53,350			1,673			3.1	%
Other		28,722		24,793			3,929			15.8	%
Segment operating revenues		278,787		268,382			10,405			3.9	%
Cost of services, excluding depreciation and amortization		162,669		161,724			(945	)		(0.6	)%
Selling, general and administrative		61,828		59,500			(2,328	)		(3.9	)%
Segment profit		54,290		47,158			7,132			15.1	%
Depreciation		5,917		5,955			38			0.6	%
Amortization		29,343		36,673			7,330			20.0	%
Operating income		19,030		4,530			14,500			320.1	%
Interest income (expense), net		353		(13,943	)		14,296			102.5	%
Equity in earnings of affiliates		28,334		30,644			(2,310	)		(7.5	)%
Gain on sale of investments		1,416		—			1,416		NM
Miscellaneous, net		27,799		54,880			(27,081	)		(49.3	)%
Income from operations before income taxes	$	76,932	$	76,111		$	821			1.1	%

Supplemental segment information:
Program amortization	$	87,468	$	85,721		$	(1,747	)		(2.0	)%
Program payments	$	103,858	$	86,874		$	(16,984	)		(19.6	)%
Capital expenditures	$	14,447	$	7,059		$	(7,388	)		(104.7	)%

International Networks generated operating revenues of ~~approximately $268.4~~$278.8 million, ~~and $46.2~~an increase of $10.4 million, or 3.9 percent, for the six months ended June 30, 2017 compared with the same period in 2016, with growth in advertising sales, distribution fees and ~~June 30, 2015, respectively, representing 15.7 percent and 3.3 percent of consolidated~~other revenues.

International Networks’ operating revenues ~~in the respective periods and~~included a ~~$222.2~~$4.8 million, ~~increase year-over-year, primarily driven by the inclusion of TVN. The~~or 2.5 percent, increase in ~~International Networks’ contribution of operating revenues to consolidated operating revenues on a percentage basis~~advertising sales for the six months ended June 30, ~~2016~~2017 compared with the ~~same~~respective period in ~~2015 is primarily driven by the inclusion of TVN, thereby increasing~~2016. International Networks’ ~~contribution of operating revenues to consolidated operating revenues.~~

~~The year-over-year increase in International Networks’ operating revenues included a $177.5 million increase in~~ advertising ~~revenues, primarily driven by the inclusion of TVN~~sales represented 70.0 percent and ~~positive pricing. Advertising revenues represented~~ 70.9 percent ~~and 27.6 percent~~ of International Networks’ total operating revenues ~~for International Networks~~during the six months ended June 30, 2017 and June 30, 2016, respectively.

Advertising sales growth was supplemented by a $1.7 million, or 3.1 percent, increase in distribution fees for the six months ended June 30, ~~2016~~2017 compared with the respective period in 2016. International Networks’ distribution fees represented 19.7 percent and ~~2015,~~19.9 percent of International Networks’ total operating revenues during the six months ended June 30, 2017 and June 30, 2016, respectively.

Advertising ~~revenue~~sales and distribution fees growth was further supplemented by a ~~$30.4~~$3.9 million, or 15.8 percent, increase in ~~distribution fees, also primarily driven by the inclusion of TVN.~~

~~Cost of services increased $125.6 million~~other revenues for the six months ended June 30, ~~2016~~2017 compared with the respective period in ~~2015,~~2016, primarily ~~due to the inclusion~~driven by program licensing and production revenues.

Cost of ~~TVN. Program amortization represented 38.7~~services increased $0.9 million, or 0.6 percent, ~~and 20.9 percent of International Networks’ operating expenses~~ for the six months ended June 30, 2017 compared with the respective period in 2016. Program amortization increased $1.7 million, or 2.0 percent, for the six months ended June 30, 2017 compared with the respective period in 2016 and represented 33.7 percent and 32.5 percent of International Networks’ total operating expenses during the six months ended June 30, 2017 and June 30, ~~2015,~~2016, respectively.

Selling, general and administrative increased ~~$33.1~~$2.3 million, or 3.9 percent, for the six months ended June 30, ~~2016~~2017 compared with the respective period in ~~2015, primarily driven by the inclusion of TVN.~~

~~Amortization of intangible assets increased $33.3 million for the six months ended June 30, 2016 compared with the same period in 2015, primarily driven by the inclusion of TVN in~~ 2016.

Equity in earnings of affiliates increased $8.9 million for the six months ended June 30, 2016 compared with the respective period in 2015, primarily driven by the inclusion of TVN’s equity investment results.

Corporate and Other includes the results of businesses not separately identified as reportable segments for external financial reporting purposes and will continue to be disclosed separately from the results of U.S. Networks and International Networks. The Company generally does not allocate ~~employee payroll~~employee-related corporate overhead costs to its reportable segments, but rather classifies these expenses within Corporate and Other. However, certain corporate costs, including information technology, pension and other employee benefits and other shared service functions, are allocated to our businesses. These allocations are generally amounts agreed upon by management, which may differ from amounts that would be incurred if such services were purchased separately by the businesses.

The Corporate and Other loss ~~includes~~included $0.7 million of TVN transaction and integration expenses and $0.2 million of Reorganization costs incurred during the three months ended June 30, ~~2016 and $3.7 million of TVN transaction and integration related expenses and $2.2 million of expenses related to the Restructuring Plan during the three months ended June 30, 2015.~~ 2016.

The Corporate and Other loss ~~includes~~included $3.7 million of Reorganization costs and $2.1 million of TVN transaction and integration ~~related~~ expenses incurred during the six months ended June 30, 2016 ~~and $13.9 million of TVN transaction and integration related expenses and $3.9 million of expenses related to the Restructuring Plan during the six months ended June 30, 2015.~~

Our primary sources of liquidity are cash and cash equivalents on hand, cash flows from operations, available borrowing capacity under our Amended Revolving Credit Facility and access to capital markets. Advertising revenues provided ~~approximately~~between 70.8 percent and 71.3 percent of consolidated total operating revenues for the year-to-date ~~period,~~periods of 2017 and 2016, respectively, so cash flow from operating activities can be adversely affected during recessionary periods. Our cash and cash equivalents totaled ~~$185.9~~$131.6 million at June 30, ~~2016~~2017 and ~~$223.4~~$122.9 million at December 31, ~~2015.~~2016. Our Amended Revolving Credit Facility permits $900.0 million in aggregate borrowings, with the option to increase up to $1,150.0 million, and expires in March 2020, with the exception of $32.5 million, which expires in March 2019. There were no$500.0 million of outstanding borrowings ~~outstanding~~ under the Amended Revolving Credit Facility atas of June 30, ~~2016. In the fourth quarter of 2014, we issued $1,000.0 million~~

aggregate principal amount of Senior Notes whose funds were primarily used to repay the $885.0 million Senior Notes that matured in January 2015. In the second quarter of 2015, we issued $1,500.0 million aggregate principal amount of Senior Notes, whose net proceeds were primarily used to fund the Transactions, and also entered into the $250.0 million Term Loan agreement. 2017.

We were in compliance with all financial covenants as of June 30, ~~2016.~~2017.

Our cash flow year-to-date has primarily been used to fund ~~acquisitions and~~ investments, develop new businesses, pay dividends on our common stock and repay debt. We expect cash flow from operating activities in ~~2016 will~~2017 to provide sufficient liquidity to fund our normal ~~operations, including repayment of the 2016 Notes.~~operations.

Cash and cash equivalents ~~decreased $37.5~~increased $8.6 million ~~for~~during the six months ended June 30, ~~2016~~2017 and ~~increased $262.7~~decreased $37.5 million during the six months ended June 30, ~~2015, respectively.~~2016. Components of these changes are discussed below in more detail.

Cash provided by operating activities totaled ~~$449.8 million and $385.4~~$502.3 million for the six months ended June 30, ~~2016~~2017 and ~~June 30, 2015, respectively.~~

~~Net income totaled $573.3~~$449.8 million for the six months ended June 30, ~~2016~~2016.

Operating income totaled $703.6 million and ~~$412.2~~$662.9 million for the six months ended June 30, ~~2015. Contributing to~~2017 and June 30, 2016, respectively, with the ~~increase in net income were increased revenues and reduced marketing expenses, partially offset by a $119.3~~$40.7 million increase ~~in program amortization.~~primarily driven by operating revenues.

Program payments exceeded program amortization by $47.3 million and $35.5 million for the six months ended June 30, ~~2016~~2017 and ~~$74.4 million for the six months ended~~ June 30, ~~2015,~~2016, respectively, reducing cash provided by operating activities for these periods. Cash provided by operating activities is also impacted by income tax payments and refunds ~~for~~and interest payments. During the six months ended June 30, 2017, we made income ~~taxes~~tax payments of $161.2 million and interest payments ~~for interest. During~~of $48.7 million, and during the six months ended June 30, 2016, we made income tax payments of $202.6 million and ~~paid~~ interest payments of $52.1 million. ~~During~~

Cash used in investing activities totaled $38.7 million for the six months ended June 30, ~~2015, we made income tax payments of $113.9 million~~2017, and ~~paid interest of $41.1 million.~~

~~Cash~~cash provided by investing activities totaled $190.6 million for the six months ended June 30, ~~2016,~~2016. Capital expenditures totaled $44.2 million and ~~cash used by investing activities totaled $683.9~~$24.3 million for the six months ended June 30, ~~2015. Capital~~2017 and June 30, 2016, respectively. The increase in capital expenditures ~~totaled $24.3 million and $18.5 million for~~year-over-year was driven by investments in technology. During the six months ended June 30, ~~2016~~2017, we made cost investments in Fubo and ~~June 30, 2015, respectively.~~Philo, both

of which are over-the-top distribution platforms. During the six months ended June 30, 2016, we ~~received $225.0 million of cash from the sale of~~sold our 7.3 percent equity interest in Fox Sports ~~South. During the six months ended June 30, 2015, we placed $652.4 million~~South and received cash proceeds of cash in escrow to fund the Acquisition. Additionally, during the six months ended June 30, 2015, we received $63.0 million of settlements of derivatives, which were partially offset by a cash outflow of $16.0 million for the premium paid for a call option on Euros to fund the Acquisition.$225.0 million.

Cash used in financing activities totaled $466.2 million for the six months ended June 30, 2017 and $671.3 million for the six months ended June 30, ~~2016, and cash provided by financing activities totaled $563.9 million for~~2016.

~~In June 2015,~~2017, we ~~issued $1,500.0~~borrowed $410.0 million ~~aggregate principal amount~~and made $385.0 million of Senior Notes comprised of $600.0 million aggregate principal amount of the 2020 Notes, $400.0 million aggregate principal amount of the 2022 Notes and $500.0 million aggregate principal amount of the 2025 Notes. During the second quarter of 2015, we also ent~~ered into the $250.0 million Term Loan agreement that matures in 2017.~~

~~The~~repayments on our Amended Revolving Credit Facility ~~permits $900.0~~and paid off the Term Loan with a $250.0 million ~~in aggregate borrowings and expires in March 2020, with the exception of $32.5 million which expires March 2019.~~payment. During the six months ended June 30, 2016, we did not ~~borrow any additional funds, but made repayments totaling $390.0 million~~incur borrowings under the Amended Revolving Credit Facility, ~~resulting in no borrowings outstanding under the Amended Revolving Credit Facility at June 30, 2016. During the six months ended June 30 2015, we borrowed $1,015.0~~but made $390.0 million ~~under the Facility and made repayments~~ of ~~$815.0 million.~~

In November 2014, we issued $1,000.0 million aggregate principal amount of Senior Notes comprised of $500.0 million aggregate principal amount of the 2019 Notes and $500.0 million aggregate principal amount of the 2024 Notes. Net proceeds from these Senior Notes were utilized for general corporate purposes including, but not limited to, the repayment of our $885.0 million 3.55% Senior Notes that matured in January 2015. We also have $500.0 million aggregate principal amount of the 2016 Notes.

We have share Repurchase Programs authorized by the Board that permit us to acquire the Company’s Class A Common Shares. During the six months ended June 30, 2016, we did not repurchase any shares. During the six months ended June 30, 2015, we repurchased 4.0 million shares for $288.5 million, including 3.0 million shares repurchased for $216.8 million from Scripps family members. As of June 30, 2016, $1,512.5 million in authorization remains available for repurchase under the Repurchase Programs. All shares repurchased under the Repurchase Programs are retired and returned to authorized and unissued shares. There is no expiration date for the Repurchase Programs, and we are under no commitment or obligation to repurchase any particular amount of Class A Common Shares under the Repurchase Programs.repayments.

We have paid quarterly dividends since our inception as a public company onin July 1, 2008. During the first quarter of ~~2016,~~2017, the Board approved an increase in the quarterly dividend rate to ~~$0.25~~$0.30 per share from ~~$0.23~~$0.25 per share. Total dividend payments to holders of our Class A Common Shares and Common Voting Shares ~~were $64.7~~totaled $78.3 million and ~~$59.4~~$64.7 million for the six months ended June 30, ~~2016~~2017 and June 30, ~~2015,~~2016, respectively. We currently expect that quarterly cash dividends will continue to be paid in the future. However, future dividends are not guaranteed and are subject to our earnings, financial condition and capital requirements.

A non-controlling owner held a 35.0 percent residual interest in ~~the~~ Travel Channel as of December 31, 2015. OnIn February ~~25,~~ 2016, we acquired the residual interest for ~~cash consideration of~~ $99.0 million.

Pursuant to the terms of the Food Network Partnership agreement, the Partnership is required to distribute available cash to the general partners. Cash distributions to Food Network’s non-controlling interest partner were ~~$125.6~~$149.7 million and ~~$129.1~~$125.6 million for the six months ended June 30, ~~2016~~2017 and June 30, ~~2015, respectively. We did not have any cash distributions to Travel Channel’s non-controlling interest holder during the six months ended June 30,~~ 2016, ~~and had $6.7 million for the six months ended June 30, 2015,~~ respectively. We expect cash distributions to non-controlling interest owners to approximate ~~$165.0~~$185.0 million in ~~2016.~~total for 2017.

We are exposed to market risk related to interest rates and foreign currency exchange rates. We use, or expect to use, derivative financial instruments to ~~modify~~reduce exposure to risks from fluctuations in interest rates and foreign currency exchange ~~rates.~~rates and to limit the impact of our earnings and cash flows. In accordance with our policy, we do not use derivative instruments unless there is an underlying exposure, and we do not hold or enter into financial instruments for speculative trading purposes.

~~Our objectives in managing interest rate risk are to limit the impact of interest rate changes on our commitments, earnings and cash flows, and to reduce overall borrowing costs.~~

We are subject to interest rate risk associated with our Amended Revolving Credit Facility as borrowings bear interest at LIBOR plus a spread that is determined ~~relative to~~by our Company’s debt rating. Accordingly, the interest we pay on these borrowings is dependent on interest rate conditions and the timing of our financing needs. ~~The Company issued $1,500.0~~Aggregate principal amounts of outstanding debt at June 30, 2017 included $1,488.0 million ~~aggregate principal amount~~ of Senior Notes issued in June 2015, ~~$1,000.0~~which includes the 2020 Notes, the 2022 Notes and the 2025 Notes, and $991.8 million ~~aggregate principal amount~~ of Senior Notes issued in November 2014, which includes the 2019 Notes and ~~$500.0 million aggregate principal amount of Senior Notes in December 2011. We also have~~ the ~~TVN 2020 Notes outstanding.~~2024 Notes. A 100 basis point increase or decrease in the blended level of interest ~~rate~~rates, respectively, would decrease or increase the total aggregate fair value of ~~the aggregate principal amount of our total combined~~all outstanding Senior Notes by approximately ~~$153.6~~$113.5 million ~~whereas a 100 basis point decrease in the interest rate would increase the fair value of the aggregate principal amount of our total combined Senior Notes by approximately $134.6 million.~~and $111.8 million, respectively.

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

As of June 30, 2016

As of December 31, 2015

(in thousands)

Cost

Fair Value

Cost

Fair Value

Financial instruments subject to interest rate risk:

Amended Revolving Credit Facility

$
-

$
-

$
389,170

$
389,170

Term Loan

249,863

249,863

249,129

249,129

2.70% Senior Notes due 2016

499,624

503,765

499,174

504,415

2.75% Senior Notes due 2019

496,302

511,150

495,750

494,290

TVN 7.38% Senior Notes due 2020

402,273

404,554

399,986

408,110

2.80% Senior Notes due 2020

594,524

609,858

593,796

585,558

3.50% Senior Notes due 2022

395,703

414,124

395,309

388,348

3.90% Senior Notes due 2024

493,593

526,595

493,210

480,490

3.95% Senior Notes due 2025

495,056

527,685

494,748

478,475

Total debt

$
3,626,938

$
3,747,594

$
4,010,272

$
3,977,985

		June 30, 2017				December 31, 2016
(in thousands)	Maturity	Net Carrying Amount		Fair Value		Net Carrying Amount		Fair Value
Financial instruments subject to interest rate risk:
Amended Revolving Credit Facility	2019-2020	$	500,000	$	500,000	$	475,000	$	475,000
Term Loan	2017		-		-		249,932		249,932
2.75% Senior Notes	2019		497,407		505,830		496,855		506,575
2.80% Senior Notes	2020		595,923		607,008		595,224		602,946
3.50% Senior Notes	2022		396,429		412,216		396,065		404,784
3.90% Senior Notes	2024		494,359		518,515		493,977		507,470
3.95% Senior Notes	2025		495,611		514,140		495,333		508,155
Total debt		$	2,979,729	$	3,057,709	$	3,202,386	$	3,254,862

We are also subject to interest rate risk associated with the notes receivable acquired in the UKTV investment (see Note 76 – Investments). The ~~notes accrue~~UKTV Loan, totaling $98.6 million at June 30, 2017 and $93.9 million at December 31, 2016, accrues interest at variable rates related to either the spread over LIBOR or other identified market indices. Because interest on the note receivable is variable, the carrying amount of such note receivable is believed to approximate fair value.

We conduct business in various countries outside the United States, resulting in exposure to movements in foreign currency exchange rates when translating from the local currency to the functional currency (see Note ~~13-~~12 - ~~Foreign Exchange Risk Management~~Derivative Financial Instruments).

The Company’s 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 GAAP. The company’s internal control over financial reporting includes those policies and procedures that:

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 (the “Exchange Act”)) was evaluated as of June 30, ~~2016.~~2017. 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 as of June 30, ~~2016.~~

There were no changes to the Company’s internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the three months ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. In making our assessment of changes in internal control over financial reporting, we excluded TVN, as we are currently assessing TVN’s control environment. TVN’s operating revenues for the three and six months ended June 30, 2016 were $120.1 million and $217.9 million, respectively, representing approximately 13.5 percent and 12.7 percent, respectively, of our consolidated operating revenues for the three and six months ended June 30, 2016. TVN’s assets totaled $2,562.1 million, representing approximately 39.3 percent of our consolidated assets at June 30, 2016. 2017.

We are involved in litigation arising in the ordinary course of business, none of which is expected to result in material loss.

A wide range of risks may affect our business and financial results, now and in the future; however, we consider the risks described in our ~~2015~~2016 Form 10-K to be the most significant.

There were no sales of unregistered equity securities during the quarter for which this report is filed.

We have share Repurchase Programs authorized by the Board that permit us to acquire the Company’s Class A Common Shares.

As of June 30, ~~2016,~~2017, $1,512.5 million in authorization remains available for repurchase under the Repurchase Programs. There is no expiration date for the Repurchase Programs, and we are under no commitment or obligation to repurchase any particular amount of Class A Common Shares under the Repurchase Programs.

~~The following table provides information about Company purchases of~~ We did not purchase any equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act during the quarter ended June 30, ~~2016:~~2017.

There were no defaults upon senior securities during the quarter for which this report is filed.

The information required by this item is filed as part of this Form 10-Q. See Index of Exhibits to this Form 10-Q.

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.

Ohio	61-1551890
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

9721 Sherrill Boulevard Knoxville, TN	37932
(Address of principal executive offices)	(Zip Code)

PART I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Shareholders’ Equity	7
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2825

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3938

Item 4.	Controls and Procedures	4039

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	4140

Item 1A.	Risk Factors	4140

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4140

Item 3.	Defaults Upon Senior Securities	4140

Item 4.	Mine Safety Disclosures	4140

Item 5.	Other Information	4140

Item 6.	Exhibits	4140

Signatures		4241

Index of Exhibits		4342

SCRIPPS NETWORKS INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ( UNAUDITED )
(in thousands)
	Three months ended June 30,								Six months ended June 30,
	2017				2016				2017			2016
Net income		$	285,677			$	233,352		$	535,492		$	573,298
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax: 2017 - ($8) and ($3); 2016 - $2,306 and ($810)			151,644				(122,814	)		218,103			(81,231	)
Pension Plan and SERP liability adjustments, net of tax: 2017 - $23 and ($476); 2016 - ($380) and ($760)			1,395				666			2,268			1,332
Comprehensive income			438,716				111,204			755,863			493,399
Less: comprehensive income attributable to non-controlling interests			(51,623	)			(48,181	)		(101,540	)		(97,995	)
Comprehensive income attributable to SNI		$	387,093			$	63,023		$	654,323		$	395,404
See notes to condensed consolidated financial statements.

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Net income	$	233,352		$	246,168		$	573,298		$	412,238
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax: 2016 - $2,306 and ($810); 2015 - ($225) and $1,595		(122,814	)		29,636			(81,231	)		2,416
Pension Plan and SERP liability adjustments, net of tax: 2016 - ($380) and ($760); 2015 - ($444) and ($952)		666			728			1,332			1,392
Comprehensive income		111,204			276,532			493,399			416,046
Less: comprehensive income attributable to non-controlling interests		(48,181	)		(52,476	)		(97,995	)		(94,218	)
Comprehensive income attributable to SNI	$	63,023		$	224,056		$	395,404		$	321,828

(in thousands)
Balance Sheet Classification	Fair Value at July 1, 2015
Cash consideration transferred	$	652,365
Recognized amounts of identifiable assets acquired and liabilities assumed:
Assets acquired:
Cash and cash equivalents		105,714
Restricted cash		7,342
Accounts receivable		110,387
Other current assets		21,592
Investments		354,719
Property and equipment		92,133
Programs and program licenses		79,211
Intangible assets		760,636
Liabilities assumed:
Accounts payable		(28,941	)
Program rights payable (current portion)		(19,395	)
Deferred revenue		(2,132	)
Employee compensation and benefits		(27,896	)
Other accrued liabilities		(64,767	)
2018 TVN Notes		(128,577	)
2020 TVN Notes		(528,205	)
2021 PIK Notes		(409,549	)
Term Loan		(18,178	)
Deferred income taxes		(23,651	)
Program rights payable (less current portion)		(3,492	)
Other non-current liabilities		(5,624	)
Non-controlling interest		(858,530	)
Goodwill		1,239,568
Net Assets acquired	$	652,365

	Three months ended				Six months ended
	June 30,				June 30,
( in thousands )	2016		2015		2016		2015
Basic weighted average shares outstanding		129,562		129,225		129,434		130,237
Effect of dilutive securities:
Unvested share units and shares held by employees		230		183		212		168
Stock options held by employees and directors		349		460		325		493
Diluted weighted average shares outstanding		130,141		129,868		129,971		130,898
Anti-dilutive share awards		881		727		1,296		532

(in thousands) Intangible Asset Category	Type	Weighted Average Life in Years	Fair Value at July 1, 2015
Copyrights and other tradenames	Amortizable	23	$	333,912
Broadcast licenses	Amortizable	25		128,017
Advertiser lists	Amortizable	7		106,681
Customer lists	Amortizable	15		26,670
Acquired network distribution rights and other	Amortizable	20		165,356
			$	760,636

	As of December 31, 2015
(in thousands)	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	80,944	$	80,944	$	-	$	-
Derivative asset		615		-		615		-
Total assets measured at fair value on a recurring basis	$	81,559	$	80,944	$	615	$	-

Temporary equity - Redeemable non-controlling interests	$	99,000	$	-	$	-	$	99,000

Investments accounted for using the equity method include the following:	As of
	June 30, 2016		December 31, 2015
UKTV		50.0%		50.0%
HGTV Magazine JV		50.0%		50.0%
Food Network Magazine JV		50.0%		50.0%
* Everytap		40.0%		40.0%
HGTV Canada		33.0%		33.0%
* nC+		32.0%		32.0%
Food Canada		29.0%		29.0%
* Onet		25.0%		25.0%
Fox-BRV Southern Sports Holdings	-			7.3%
* Acquired as a part of the Acquisition

( in thousands )	Estimated Amortization **
Remainder of 2016	$	46,338
2017	$	100,437
2018	$	98,976
2019	$	98,115
2020	$	86,935
Thereafter	$	760,414

** The functional currency of certain foreign subsidiaries differs from the U.S. Dollar, so these amounts are subject to change as exchange rates fluctuate.

(in thousands) Goodwill	U.S. Networks		International Networks		Corporate and Other		Total
December 31, 2016	$	510,484	$	1,131,685	$	-	$	1,642,169
Additions - business acquisitions		10,320		-		-		10,320
Foreign currency translation adjustment		-		104,025		-		104,025
June 30, 2017	$	520,804	$	1,235,710	$	-	$	1,756,514

( in thousands )	Estimated Amortization *
Remainder of 2017	$	52,003
2018	$	95,774
2019	$	92,109
2020	$	88,339
2021	$	85,713
Thereafter	$	708,385

* The functional currency of certain foreign subsidiaries differs from the USD, so these amounts are subject to change as exchange rates fluctuate.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
4/1/16 - 4/30/16		-	$	-		-	$	1,512,536,943
5/1/16 - 5/31/16		-		-		-		1,512,536,943
6/1/16 - 6/30/16		-		-		-		1,512,536,943
Total		-	$	-		-	$	1,512,536,943

	SCRIPPS NETWORKS INTERACTIVE, INC.

Dated: August ~~9, 2016~~4, 2017	BY:	/s/ Lori A. Hickok
	Lori A. Hickok
	Executive Vice President, Chief Financial Officer and Chief ~~Financial~~Development Officer
	(Principal Financial and Accounting Officer)

~~10.1~~10.44		Amendment No. 31 to ~~Employment~~the Amended and Restated Scripps Family Agreement ~~between~~among The E. W. Scripps Company, Scripps Networks Interactive, Inc. and ~~Joseph G. NeCastro (incorporated by reference to Exhibit 10.34 to~~ the ~~Scripps Networks Interactive, Inc. Annual Report on Form 10-K, filed on February 25, 2016).~~Family Shareholders †

~~10.2~~10.45		~~Separation~~Employment Agreement ~~and General Release~~ between Scripps Networks Interactive, Inc. and ~~Joseph G. NeCastro (incorporated by reference to Exhibit 10.35 to the Scripps Networks Interactive, Inc. Annual Report on Form 10-K, filed on February 25, 2016).~~

~~10.3~~		Membership Interest Purchase Agreement by and among Cox TMI, Inc., Cox Communications, Inc., Gulliver Media Holdings, LLC, Scripps Networks Interactive, Inc. and TCM Parent, LLC (incorporated by reference to Exhibit 10.42 to the Scripps Networks Interactive, Inc. Current Report on Form 8-K, filed on February 29, 2016).

~~10.4~~		Purchase Agreement by and among FSN Southern Holdings, Inc., Scripps Networks, LLC and Fox-BRV Southern Sports Holdings, LLC (incorporated by reference to Exhibit 10.43 to the Scripps Networks Interactive, Inc. Current Report on Form 8-K, filed on February 29, 2016).Cynthia L. Gibson*†

31(a)		Section 302 Certifications

31(b)		Section 302 Certifications

32(a)		Section 906 Certifications * **

32(b)		Section 906 Certifications * **

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document