Annual report pursuant to Section 13 and 15(d)

SEGMENT DATA

v3.3.1.900
SEGMENT DATA
12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
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