Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company determines its operating segments based upon our management and internal reporting structure. We manage our operations through one reportable operating segment, lifestyle media.

Lifestyle media includes our national television networks, HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. Lifestyle media also includes websites that are associated with the aforementioned television brands and other Internet-based businesses serving home, food and travel related categories. The Food Network and Cooking Channel are included in the Food Network partnership of which we own approximately 69%. We also own 65% of Travel Channel. Each of our networks is distributed by cable and satellite distributors and telecommunication service providers. Lifestyle media earns revenue primarily from the sale of advertising time and from affiliate fees paid by distributors of our content.

The results of businesses not separately identified as reportable segments are included within our corporate and other caption. Corporate and other includes the results of the lifestyle-oriented channels we operate in the United Kingdom, other European markets, the Middle East, Africa, Asia-Pacific and Latin America, operating results from the international licensing of our national networks’ programming, and other interactive and digital business initiatives that are not associated with our lifestyle media or international businesses.

In 2014, we made changes to our management reporting structure related to operating results from our businesses located in the Caribbean. In conjunction with this change in our reporting structure, we now report the results of these international businesses within our international operating segment, included within our corporate and other caption for segment reporting purposes, rather than our lifestyle media reportable segment. For comparability purposes, prior year segment results have also been reclassified to reflect the impact of this management reporting change. These reclassifications only affect our segment reporting, and do not change our consolidated operating revenues, operating income, or net income.

Each of our businesses may provide advertising, programming or other services to one another. In addition, certain corporate costs and expenses, including information technology, pensions and other employee benefits, and other shared services, are allocated to our businesses. The 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 business.

Our chief operating decision maker evaluates the operating performance of our businesses and makes decisions about the allocation of resources to the businesses using a measure we call segment profit. Segment profit excludes interest, income taxes, depreciation and amortization, divested operating units, restructuring activities, investment results and certain other items that are included in net income determined in accordance with accounting principles generally accepted in the United States of America.

Information regarding our segments is as follows:

( in thousands )	Three months ended						Nine months ended
	September 30,						September 30,
	2014			2013			2014			2013
Segment operating revenues:
Lifestyle media	$	618,090		$	593,135		$	1,926,102		$	1,817,893
Corporate and other		27,110			24,990			73,131			59,745
Intersegment eliminations		(777	)		(1,224	)		(2,929	)		(1,224	)
Total operating revenues	$	644,423		$	616,901		$	1,996,304		$	1,876,414
Segment profit (loss):
Lifestyle media	$	296,639		$	289,534		$	970,104		$	916,160
Corporate and other		(26,676	)		(27,498	)		(110,122	)		(86,969	)
Total segment profit		269,963			262,036			859,982			829,191
Depreciation and amortization of intangible assets		(31,617	)		(29,514	)		(97,084	)		(85,768	)
Gains (losses) on disposal of property and equipment		448			(95	)		(1,047	)		(1,570	)
Interest expense		(12,235	)		(12,337	)		(36,898	)		(36,679	)
Equity in earnings of affiliates		17,586			15,180			67,110			61,172
Miscellaneous, net		2,066			(626	)		1,871			(344	)
Income from operations before income taxes	$	246,211		$	234,644		$	793,934		$	766,002

( in thousands )	As of
	September 30,		December 31,
	2014		2013
Assets:
Lifestyle media	$	2,826,743	$	2,832,529
Corporate and other		1,094,815		1,605,918
Total assets	$	3,921,558	$	4,438,447

No single customer provides more than 10% of our total operating revenues.

Assets held by our businesses outside of the United States totaled $632 million at September 30, 2014 and $627 million at December 31, 2013.