Salem Media Group, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SEGMENT DATA

SEGMENT DATA

3 Months Ended

Mar. 31, 2018

NOTE 19. 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.

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 March 31, 2018 and 2017 based on the new composition of our operating segments:

	Broadcast		Digital Media		Publishing		Unallocated Corporate Expenses		Consolidated

	(Dollars in thousands)
Three Months Ended March 31, 2018
Net revenue	$	48,050	$	10,394	$	5,351	$		$	63,795
Operating expenses		35,750		8,374		5,587		3,921		53,632
Net operating income (loss) before depreciation, amortization and net loss on the sale or disposal of assets	$	12,300	$	2,020	$	(236)	$	(3,921)	$	10,163
Depreciation		1,858		802		131		218		3,009
Amortization		10		1,225		243				1,478
Net loss on the sale or disposal of assets		5								5
Net operating income (loss)	$	10,427	$	(7)	$	(610)	$	(4,139)	$	5,671

Three Months Ended March 31, 2017
Net revenue	$	47,804	$	10,686	$	6,490	$		$	64,980
Operating expenses		35,836		8,702		6,351		5,125		56,014
Net operating income (loss) before depreciation, amortization, change in the estimated fair value of contingent earn-out consideration, impairment and net (gain) loss on the sale or disposal of assets	$	11,968	$	1,984	$	139	$	(5,125)	$	8,966
Depreciation		1,819		777		194		190		2,980
Amortization		17		818		307				1,142
Change in the estimated fair value of contingent earn-out consideration				1						1
Impairment of indefinite-lived long-term assets other than goodwill						19				19
Net (gain) loss on the sale or disposal of assets		(2)				7				5
Net operating income (loss)	$	10,134	$	388	$	(388)	$	(5,315)	$	4,819

	Broadcast		Digital Media		Publishing		Unallocated Corporate		Consolidated

	(Dollars in thousands)
As of March 31, 2018
Inventories, net	$		$	337	$	471	$		$	808
Property and equipment, net		83,825		6,123		1,116		7,589		98,653
Broadcast licenses		380,693								380,693
Goodwill		3,581		20,947		1,888		8		26,424
Other indefinite-lived intangible assets						313				313
Amortizable intangible assets, net		340		8,577		2,704		5		11,626

As of December 31, 2017
Inventories, net	$		$	313	$	417	$		$	730
Property and equipment, net		83,901		6,173		1,281		8,125		99,480
Broadcast licenses		380,914								380,914
Goodwill		3,581		20,947		1,888		8		26,424
Other indefinite-lived intangible assets						313				313
Amortizable intangible assets, net		351		9,801		2,947		5		13,104