Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

21. SEGMENT INFORMATION

The Company’s operating segments are determined based upon our management and internal reporting structure.

In the fourth quarter of 2014, we modified our management reporting structure related to the operating results from our uLive business. In conjunction with this change in reporting structure, we now report the results of uLive within U.S. Networks rather than within Corporate and Other.

As a result of the Acquisition (see Note 4 – Acquisitions), the international operating segment that was previously insignificant, has become significant.  Therefore, the Company now has two reportable segments: U.S. Networks, previously referred to as Lifestyle Media, and International Networks. 

As a result of these changes to our reportable segments, certain prior period segment results have been recast to reflect the current presentation (see Note 1 – Description of Business and Basis of Presentation).

U.S. Networks includes our six national television networks: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. Additionally, U.S. Networks includes websites associated with the aforementioned television brands and other internet and mobile businesses serving home, food, travel and other lifestyle-related categories. The Food Network and Cooking Channel are included in the Partnership, of which we own 68.7 percent. We also own 65.0 percent of Travel Channel. Each of our networks is distributed by cable and satellite distributors and telecommunication service providers. U.S. Networks earns revenue primarily from the sale of advertising time and from affiliate fees paid by distributors of our content.

International Networks includes the lifestyle-oriented networks available in the UK, EMEA, APAC and Latin America.  Additionally, International Networks includes TVN.

Corporate and Other includes the results of businesses not separately identified as reportable segments for external financial reporting purposes and will continue to be disclosed separately from the results of the U.S. Networks and International Networks segments.  The Company generally does not allocate employee-related corporate overhead costs to its reportable segments, but rather classifies these expenses within Corporate and Other. However, certain corporate costs, including information technology, pension and other employee benefits and other shared service functions, are allocated to our businesses. These 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 businesses.

Our Chief Operating Decision Maker (“CODM”) evaluates the operating performance of our businesses and makes decisions about the allocation of resources to the businesses using a non-GAAP measure we call segment profit. Segment profit excludes interest, income taxes, depreciation and amortization, divested operating units, investment results and certain other items included in net income determined in accordance with GAAP.

Intersegment revenue and program amortization eliminations are included within Corporate and Other, and totaled $26.3 and $13.3, respectively, for the twelve months ended December 31, 2015.

Information regarding our segments is as follows:

	For the years ended December 31,
(in thousands)		2015			2014			2013
Segment operating revenues:
U.S. Networks		$	2,716,663		$	2,588,357		$	2,466,061
International Networks			327,891			90,180			75,677
Corporate and Other			(26,327	)		(13,081	)		(10,929	)
Total operating revenues		$	3,018,227		$	2,665,456		$	2,530,809
Segment profit (loss):
U.S. Networks		$	1,337,189		$	1,268,417		$	1,212,767
International Networks			30,893			(41,854	)		(17,535	)
Corporate and Other			(122,391	)		(104,802	)		(92,772	)
Total segment profit			1,245,691			1,121,761			1,102,460
Depreciation and amortization of intangible assets			137,596			128,582			117,580
Write-down of goodwill			-			-			24,723
Loss on disposal of property and equipment			4,163			870			1,681
Interest expense			(108,047	)		(52,687	)		(48,710	)
Equity in earnings of affiliates			80,916			85,631			79,644
Gain (loss) on derivatives			50,256			2,810			(7,085	)
Miscellaneous, net			(5,193	)		(212	)		8,326
Income from operations before income taxes		$	1,121,864		$	1,027,851		$	990,651
Depreciation:
U.S. Networks		$	54,954		$	63,179		$	55,560
International Networks			10,299			4,257			2,263
Corporate and Other			3,696			5,543			5,187
Total depreciation		$	68,949		$	72,979		$	63,010
Amortization of intangible assets:
U.S. Networks		$	40,166		$	48,318		$	48,655
International Networks			28,481			7,285			5,914
Corporate and Other			-			-			1
Total amortization of intangible assets		$	68,647		$	55,603		$	54,570
Loss (gain) on disposal of property and equipment:
U.S. Networks		$	4,474		$	1,311		$	1,606
International Networks			461			(5	)		6
Corporate and Other			(772	)		(436	)		69
Total loss on disposal of property and equipment		$	4,163		$	870		$	1,681
Equity in earnings of affiliates:
U.S. Networks		$	43,851		$	42,613		$	40,648
International Networks			37,065			43,018			38,996
Corporate and Other			-			-			-
Total equity in earnings of affiliates		$	80,916		$	85,631		$	79,644

No single customer provides more than 10.0 percent of our revenue.

	For the years ended December 31,
(in thousands)		2015		2014		2013
Additions to property and equipment:
U.S. Networks		$	40,120	$	50,042	$	63,026
International Networks			10,424		8,212		7,313
Corporate and Other			1,936		540		2,750
Total additions to property and equipment		$	52,480	$	58,794	$	73,089
Assets:
U.S. Networks		$	2,937,428	$	2,864,074	$	2,849,547
International Networks			3,276,989		660,215		693,846
Corporate and Other			457,897		1,133,192		891,430
Total assets		$	6,672,314	$	4,657,481	$	4,434,823
Operating revenues by geographic country of origin:
United States		$	2,726,124	$	2,602,103	$	2,479,492
Poland			224,720		-		-
Other International			67,383		63,353		51,317
Total operating revenues		$	3,018,227	$	2,665,456	$	2,530,809
Long-lived assets by geographic location:
United States		$	1,903,918	$	1,919,692	$	1,948,434
Poland			2,406,842		-		-
Other International			541,719		562,363		586,004
Total long-lived assets		$	4,852,479	$	2,482,055	$	2,534,438

Other additions to long-lived assets include investments, capitalized intangible assets and capitalized programs.

As of December 31, assets held by our businesses outside of the United States totaled $3,238.2 million for 2015, $590.0 million for 2014 and $627.0 million for 2013.