Annual report pursuant to Section 13 and 15(d)

SEGMENT DATA

v3.7.0.1
SEGMENT DATA
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
SEGMENT DATA
NOTE 20. SEGMENT DATA
 
FASB ASC Topic 280, “Segment Reporting,” requires companies to provide certain information about their operating segments. We have three operating segments: (1) Broadcast, (2) Digital Media and (3) Publishing.
 
During the third quarter of 2016, we reclassed Salem Consumer Products, our e-commerce business that sells books, DVD’s and editorial content developed by our on-air personalities, from our Digital Media segment to our Broadcast segment. With this reclassification, all revenue and expenses generated by on-air hosts, including broadcast programs and e-commerce product sales are consolidated to assess the financial performance of each network program.
 
Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assess the performance of each operating segment and determine the appropriate allocations of resources to each segment. 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 defined by Salem, 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, 2016, 2015 and 2014 based on the new composition of our operating segments:
 
 
 
 
 
Digital
 
 
 
Unallocated
 
 
 
 
 
Broadcast
 
Media
 
Publishing
 
Corporate
 
Consolidated
 
 
 
(Dollars in thousands)
 
Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
202,016
 
$
46,777
 
$
25,528
 
$
—
 
$
274,321
 
Operating expenses
 
 
146,283
 
 
36,290
 
 
26,209
 
 
14,994
 
 
223,776
 
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
 
$
55,733
 
$
10,487
 
$
(681)
 
$
(14,994)
 
$
50,545
 
Depreciation
 
 
7,592
 
 
3,092
 
 
675
 
 
846
 
 
12,205
 
Amortization
 
 
86
 
 
4,304
 
 
680
 
 
1
 
 
5,071
 
Impairment of long-lived assets
 
 
700
 
 
—
 
 
—
 
 
—
 
 
700
 
Impairment of indefinite-lived long-term assets other than goodwill
 
 
6,540
 
 
—
 
 
501
 
 
—
 
 
7,041
 
Impairment of goodwill
 
 
—
 
 
32
 
 
—
 
 
—
 
 
32
 
Impairment of amortizable intangible assets
 
 
—
 
 
8
 
 
—
 
 
—
 
 
8
 
Change in estimated fair value of contingent earn-out consideration
 
 
—
 
 
(146)
 
 
(543)
 
 
—
 
 
(689)
 
(Gain) loss on the sale or disposal of assets
 
 
(2,122)
 
 
236
 
 
(21)
 
 
6
 
 
(1,901)
 
Operating income (loss)
 
$
42,937
 
$
2,961
 
$
(1,973)
 
$
(15,847)
 
$
28,078
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
197,184
 
$
44,761
 
$
23,842
 
$
—
 
$
265,787
 
Operating expenses
 
 
140,819
 
 
35,380
 
 
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
 
$
56,365
 
$
9,381
 
$
(932)
 
$
(15,146)
 
$
49,668
 
Depreciation
 
 
7,726
 
 
3,091
 
 
637
 
 
963
 
 
12,417
 
Amortization
 
 
96
 
 
4,685
 
 
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
 
Operating income (loss)
 
$
47,885
 
$
2,072
 
$
(816)
 
$
(16,119)
 
$
33,022
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
194,094
 
$
45,691
 
$
26,751
 
$
—
 
$
266,536
 
Operating expenses
 
 
139,206
 
 
35,590
 
 
26,143
 
 
17,092
 
 
218,031
 
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
 
$
54,888
 
$
10,101
 
$
608
 
$
(17,092)
 
$
48,505
 
Depreciation
 
 
7,988
 
 
2,987
 
 
529
 
 
1,125
 
 
12,629
 
Amortization
 
 
109
 
 
4,874
 
 
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
 
Operating income (loss)
 
$
46,560
 
$
1,890
 
$
(1,616)
 
$
(18,218)
 
$
28,616
 
  
 
 
 
 
Digital
 
 
 
Unallocated
 
 
 
 
 
Broadcast
 
Media
 
Publishing
 
Corporate
 
Consolidated
 
 
 
(Dollars in thousands)
 
As of December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories, net
 
$
—
 
$
300
 
$
370
 
$
—
 
$
670
 
Property and equipment, net
 
 
86,976
 
 
6,634
 
 
1,779
 
 
7,401
 
 
102,790
 
Broadcast licenses
 
 
388,517
 
 
—
 
 
—
 
 
—
 
 
388,517
 
Goodwill
 
 
3,581
 
 
20,136
 
 
1,888
 
 
8
 
 
25,613
 
Other indefinite-lived intangible assets
 
 
—
 
 
—
 
 
332
 
 
—
 
 
332
 
Amortizable intangible assets, net
 
 
407
 
 
9,927
 
 
4,069
 
 
5
 
 
14,408
 
As of December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories, net
 
$
—
 
$
505
 
$
388
 
$
—
 
$
893
 
Property and equipment, net
 
 
88,894
 
 
6,927
 
 
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
 
 
The table below presents financial information for each operating segment as of December 31, 2015 and 2014 with a comparison of the results under the prior composition of our operating segments as compared to the new composition:
 
 
 
Year ended December 31,
 
 
 
2014
 
 
2015
 
 
 
Original
 
 
Updated
 
 
Original
 
 
Updated
 
 
 
(Dollars in thousands)
 
Revenues by Segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Broadcast Revenue
 
$
192,923
 
 
$
194,094
 
 
$
196,090
 
 
$
197,184
 
Net Digital Media Revenue
 
 
46,862
 
 
 
45,691
 
 
 
45,855
 
 
 
44,761
 
Net Publishing Revenue
 
 
26,751
 
 
 
26,751
 
 
 
23,842
 
 
 
23,842
 
Total Net Revenue
 
$
266,536
 
 
$
266,536
 
 
$
265,787
 
 
$
265,787
 
Operating expenses by segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Broadcast Operating Expenses
 
$
138,564
 
 
$
139,206
 
 
$
140,230
 
 
$
140,819
 
Digital Media Operating Expenses
 
 
36,232
 
 
 
35,590
 
 
 
35,969
 
 
 
35,380
 
Publishing Operating Expenses
 
 
26,143
 
 
 
26,143
 
 
 
24,774
 
 
 
24,774
 
Unallocated Corporate Expenses
 
 
17,092
 
 
 
17,092
 
 
 
15,146
 
 
 
15,146
 
 
 
$
218,031
 
 
$
218,031
 
 
$
216,119
 
 
$
216,119
 
Net operating income (loss) before depreciation, amortization, impairments and (gain) loss on the sale or disposal of assets
 
$
48,505
 
 
$
48,505
 
 
$
49,668
 
 
$
49,668