| SEGMENT DATA |
NOTE 17. SEGMENT DATA
FASB ASC Topic 280, “Segment Reporting,” requires companies to provide certain information about their operating segments. We have two reportable segments, radio broadcasting and digital media. Digital media (formerly “Internet and e-commerce”) became a reportable segment as of the first quarter of 2011 upon the realization of organic and acquisition-related revenue growth. Our acquisition of Eagle Publishing on January 10, 2014, which included Regnery Publishing, Eagle Financial Publications, Eagle Wellness, Human Events and Red State, resulted in operational changes in our business and a realignment of our operating segments. We now have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing.
We changed the composition of our operating segments to reflect management’s view of the operating results for each segment during the fourth quarter of 2014. Under our new composition, digital revenue generated by our broadcast stations is now reported under broadcast operating revenue, as the station sales team and general manager are responsible for this digital revenue under their bonus and commission structure. Digital revenue from our broadcast stations was previously reported as Internet and e-Commerce revenue. E-book revenue is now reported under Publishing revenue as sales goals and bonuses for Eagle Regnery Publishing are inclusive of sales of e-books. The sale of e-books was previously reported as Internet & e-commerce revenue. Additionally, we have allocated specific corporate departments, such as engineering, broadcast operations, digital and publishing within their respective operating segments. Corporate expenses as revised include unallocated expenses, such as accounting and finance, human resources, and other shared functions. Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assesses the performance of each operating segment and determines the appropriate allocations of resources to each segment. Our operating segments do not all meet the quantitative thresholds to qualify as reportable segments; however, we have elected to disclose the results of these non-reportable operating segments as we believe this information is useful to readers of our financial statements. We continue to review our operating segment classifications to align with operational changes in our business and may make future changes as necessary. We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury; nor do they include costs such as amortization, depreciation, taxes or interest expense. Changes to our operating segments did not impact the reporting units used to test non-amortizable assets for impairment. All prior periods presented are updated to reflect the new composition of our operating segments. Segment performance, as we define it in accordance with the FASB’s guidance relating to segment reporting, is not necessarily comparable to other similarly titled captions of other companies. The table below presents financial information for each operating segment as of December 31, 2015, 2014 and 2013 based on the new composition of our operating segments: | | | Broadcast | | Digital Media | | Publishing | | Unallocated
Corporate | | Consolidated | | | | | (Dollars in thousands) | | | Year Ended December 31, 2015 | | | | | | | | | | | | | | | | | | Net revenue | | $ | 196,090 | | $ | 45,855 | | $ | 23,842 | | $ | | | $ | 265,787 | | | Operating expenses | | | 140,230 | | | 35,969 | | | 24,774 | | | 15,146 | | | 216,119 | | | Net operating income (loss) before depreciation, amortization, impairments, change in estimated fair value of contingent earn-out consideration (gain) loss on the sale or disposal of assets | | $ | 55,860 | | $ | 9,886 | | $ | (932) | | $ | (15,146) | | $ | 49,668 | | | Depreciation | | | 7,659 | | | 3,158 | | | 637 | | | 963 | | | 12,417 | | | Amortization | | | 91 | | | 4,690 | | | 542 | | | 1 | | | 5,324 | | | Impairment of goodwill | | | 439 | | | | | | | | | | | | 439 | | | Change in estimated fair value of contingent earn-out consideration | | | | | | (478) | | | (1,237) | | | | | | (1,715) | | | (Gain) loss on the sale or disposal of assets | | | 219 | | | 11 | | | (58) | | | 9 | | | 181 | | | Net operating income (loss) from continuing operations | | $ | 47,452 | | $ | 2,505 | | $ | (816) | | $ | (16,119) | | $ | 33,022 | | | Year Ended December 31, 2014 | | | | | | | | | | | | | | | | | | Net revenue | | $ | 192,923 | | $ | 46,862 | | $ | 26,751 | | $ | | | $ | 266,536 | | | Operating expenses | | | 138,564 | | | 36,232 | | | 26,143 | | | 17,092 | | | 218,031 | | | Net operating income (loss) before depreciation, amortization, impairments and (gain) loss on the sale or disposal of assets | | $ | 54,359 | | $ | 10,630 | | $ | 608 | | $ | (17,092) | | $ | 48,505 | | | Depreciation | | | 7,923 | | | 3,052 | | | 529 | | | 1,125 | | | 12,629 | | | Amortization | | | 98 | | | 4,885 | | | 1,212 | | | 1 | | | 6,196 | | | Impairment of indefinite-lived long-term assets other than goodwill | | | | | | | | | 34 | | | | | | 34 | | | Impairment of goodwill | | | | | | | | | 45 | | | | | | 45 | | | Change in estimated fair value of contingent earn-out consideration | | | | | | 325 | | | 409 | | | | | | 734 | | | (Gain) loss on the sale or disposal of assets | | | 231 | | | 25 | | | (5) | | | | | | 251 | | | Net operating income (loss) from continuing operations | | $ | 46,107 | | $ | 2,343 | | $ | (1,616) | | $ | (18,218) | | $ | 28,616 | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2013 | | | | | | | | | | | | | | | | | | Net revenue | | $ | 188,544 | | $ | 35,156 | | $ | 13,234 | | $ | | | $ | 236,934 | | | Operating expenses | | | 129,857 | | | 25,741 | | | 14,280 | | | 16,081 | | | 185,959 | | | Net operating income (loss) before depreciation, amortization, impairment and (gain) loss on the sale or disposal of assets | | $ | 58,687 | | $ | 9,415 | | $ | (1,046) | | $ | (16,081) | | $ | 50,975 | | | Depreciation | | | 7,934 | | | 2,904 | | | 444 | | | 1,166 | | | 12,448 | | | Amortization | | | 154 | | | 2,654 | | | 6 | | | | | | 2,814 | | | Impairment of indefinite-lived long-term assets other than goodwill | | | | | | | | | 1,006 | | | | | | 1,006 | | | Impairment of goodwill | | | | | | | | | 438 | | | | | | 438 | | | (Gain) loss on the sale or disposal of assets | | | (274) | | | | | | | | | 10 | | | (264) | | | Net operating income (loss) from continuing operations | | $ | 50,873 | | $ | 3,857 | | $ | (2,940) | | $ | (17,257) | | $ | 34,533 | | | | | Broadcast | | Digital
Media | | Publishing | | Unallocated
Corporate | | Consolidated | | | | | (Dollars in thousands) | | | As of December 31, 2015 | | | | | | | | | | | | | | | | | | Inventories, net | | $ | | | $ | 505 | | $ | 388 | | $ | | | $ | 893 | | | Property and equipment, net | | | 88,788 | | | 7,033 | | | 1,742 | | | 7,920 | | | 105,483 | | | Broadcast licenses | | | 393,031 | | | | | | | | | | | | 393,031 | | | Goodwill | | | 3,581 | | | 19,930 | | | 1,044 | | | 8 | | | 24,563 | | | Other indefinite-lived intangible assets | | | | | | | | | 833 | | | | | | 833 | | | Amortizable intangible assets, net | | | 492 | | | 9,599 | | | 1,385 | | | 5 | | | 11,481 | | | As of December 31, 2014 | | | | | | | | | | | | | | | | | | Inventories, net | | $ | | | $ | 222 | | $ | 350 | | $ | | | $ | 572 | | | Property and equipment, net | | | 81,948 | | | 7,111 | | | 1,941 | | | 8,227 | | | 99,227 | | | Broadcast licenses | | | 385,726 | | | | | | | | | | | | 385,726 | | | Goodwill | | | 3,955 | | | 19,677 | | | 1,044 | | | 8 | | | 24,684 | | | Other indefinite-lived intangible assets | | | | | | | | | 833 | | | | | | 833 | | | Amortizable intangible assets, net | | | 583 | | | 9,884 | | | 1,926 | | | 2 | | | 12,395 | | The table below presents financial information for each operating segment as of December 31, 2014 and 2013 with a comparison of the results under the prior composition of our operating segments as compared to the new composition: | | | Year Ending December 31, | | | | | 2013 | | 2014 | | | | | As Reported
Original | | As Updated
New | | As updated
Original | | As Reported New | | | | | (Dollars in thousands) | | | Revenues by Segment: | | | | | | | | | | | | | | | Net Broadcast Revenue | | $ | 183,697 | | $ | 188,544 | | $ | 187,815 | | $ | 192,923 | | | Net Digital Media Revenue | | | 40,906 | | | 35,156 | | | 55,519 | | | 46,862 | | | Net Publishing Revenue | | | 12,331 | | | 13,234 | | | 23,202 | | | 26,751 | | | Total Net Revenue | | $ | 236,934 | | $ | 236,934 | | $ | 266,536 | | $ | 266,536 | | | Operating expenses by segment: | | | | | | | | | | | | | | | Broadcast Operating Expenses | | $ | 122,862 | | $ | 129,857 | | $ | 130,875 | | $ | 138,564 | | | Digital Media Operating Expenses | | | 28,378 | | | 25,741 | | | 41,067 | | | 36,232 | | | Publishing Operating Expenses | | | 13,289 | | | 14,280 | | | 23,052 | | | 26,143 | | | Unallocated Corporate Expenses | | | 21,430 | | | 16,081 | | | 23,037 | | | 17,092 | | | | | $ | 185,959 | | $ | 185,959 | | $ | 218,031 | | $ | 218,031 | | | Net operating income (loss) before depreciation, amortization, impairments and (gain) loss on the sale or disposal of assets | | $ | 50,975 | | $ | 50,975 | | $ | 48,505 | | $ | 48,505 | |
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