Description of Business and Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

The consolidated financial statements include the accounts of SNI and its majority-owned subsidiary companies after elimination of intercompany accounts and transactions. Consolidated subsidiary companies include general partnerships and limited liability companies in which more than a 50 percent residual interest is owned. Investments in 20 percent to 50 percent owned companies and partnerships or companies and partnerships in which we exercise significant influence over the operating and financial policies are accounted for using the equity method. The results of companies acquired or disposed of are included in the consolidated financial statements from the effective date of acquisition or up to the date of disposal.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make a variety of decisions that affect reported amounts and the related disclosures, including the selection of appropriate accounting principles that reflect the economic substance of the underlying transactions and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgment based on our understanding and analysis of the relevant circumstances, including our historical experience, actuarial studies and other assumptions.

Our consolidated financial statements include estimates, judgments, and assumptions used in accounting for business acquisitions and dispositions, asset impairments, equity method investments, revenue recognition, program assets, depreciation and amortization, pension plans, share-based compensation, income taxes, redeemable non-controlling interests in subsidiaries, fair value measurements and contingencies.

While we re-evaluate our estimates and assumptions on an on-going basis, actual results could differ from those estimated at the time consolidated financial statements were prepared.

Concentration Risks

Approximately 68.3 percent of our operating revenues are derived from advertising. Operating results can be affected by changes in the demand for such services both nationally and in individual markets.

The six largest cable television systems and the two largest direct broadcast satellite television systems in the United States (“U.S.”) provide service to more than 91.8 percent of homes receiving HGTV, Food Network and Travel Channel. The loss of distribution of our networks by any of these cable or satellite television systems could adversely affect our business.

Foreign Currency Translation

Substantially all of our international subsidiaries use the local currency of their respective country as their functional currency. Assets and liabilities of such international subsidiaries are translated using end-of-period exchange rates while results of operations are translated using the average exchange rates throughout the year.

Equity is translated at historical exchange rates, with the resulting cumulative translation adjustment included as a component of accumulated other comprehensive loss within shareholders’ equity, net of applicable taxes.

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency using end-of-period exchange rates. Gains or losses resulting from such remeasurement are recorded in income. Foreign exchange gains and losses are included within miscellaneous, net in the consolidated statements of operations.

Reclassifications

Certain amounts within operating activities in our consolidated statements of cash flows for 2014 and 2013 have been reclassified to conform with current year presentation. During 2015, amounts totaling $3.9 million and $10.0 million, previously reported within stock and deferred compensation plans for 2014 and 2013, respectively, have been reclassified to other, net. Amounts totaling $2.8 million and $7.1 million, previously reported within other, net, for 2014 and 2013, respectively, have been reclassified to (gain) loss on derivatives. Amounts totaling $6.8 million and $9.7 million, previously reported within accrued employee compensation and benefits, for 2014 and 2013, respectively, have been reclassified to other liabilities. Amounts totaling $7.0 million for 2014 and 2013, previously reported within amortization of network distribution costs have been reclassified to other, net from operating activities in our consolidated statements of cash flows. Additionally, amounts totaling ($19.3) million and $23.9 million, previously reported within other liabilities, for 2014 and 2013, respectively, have been reclassified to deferred revenue. These reclassifications did not have an impact on the reported cash provided by operating activities in our consolidated statements of cash flows for 2014 or 2013.

We also made a reclassification to conform to the current year presentation in our consolidated statements of operations for 2014 and 2013 between miscellaneous, net and gain (loss) on derivatives totaling $2.8 million and ($7.1) million, respectively. This adjustment did not impact reported net income for 2014 or 2013.

As part of our normal operations, we develop and, in some instances, purchase content in the United States and license it to certain of our international operations. In conjunction with our change in reporting of two reportable segments, we changed where we present intercompany program license revenues. Accordingly, we reclassified $9.8 million of revenues previously recorded in Corporate and Other to U.S. Networks for the first six months of 2015 related to these activities. Additionally, $13.0 million and $10.4 million of revenues from these activities for 2014 and 2013, respectively are now reflected in U.S. Networks.

In addition to the segment changes noted above, 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, formally referred to as Lifestyle Media, rather than within Corporate and Other. This reclassification only affected our segment reporting and did not change our consolidated operating revenues, operating income or net income.

In connection with the adoption of the Financial Accounting Standards Board (“FASB”) guidance on Balance Sheet Classification of Deferred Taxes (see Note 3 – Accounting Standards Updates), we reclassified $41.8 million from current to non-current deferred income tax assets for 2014.

In connection with the adoption of the FASB guidance on Imputation of Interest (see Note 3 – Accounting Standards Updates), we reclassified $10.2 million from other non-current assets to debt (less current portion) and an immaterial amount from other non-current assets to current portion of debt for 2014.

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 21 – Segment Information). A reconciliation of segment results between those previously reported and those as revised is included below:

	As of December 31, 2014									As of December 31, 2013
(in thousands)	As Reported			Amounts Reclassified			Revised			As Reported			Amounts Reclassified			Revised
Segment Operating Revenues
U.S. Networks	$	2,575,376		$	12,981		$	2,588,357		$	2,455,650		$	10,411		$	2,466,061
International Networks					90,180			90,180						75,677			75,677
Corporate and Other		90,080			(103,161	)		(13,081	)		75,159			(86,088	)		(10,929	)
Total segment operating revenues	$	2,665,456		$	-		$	2,665,456		$	2,530,809		$	-		$	2,530,809

Segment Profit (Loss)
U.S. Networks	$	1,255,437		$	12,980		$	1,268,417		$	1,202,356		$	10,411		$	1,212,767
International Networks					(41,854	)		(41,854	)					(17,535	)		(17,535	)
Corporate and Other		(133,676	)		28,874			(104,802	)		(99,896	)		7,124			(92,772	)
Total segment profit	$	1,121,761		$	-		$	1,121,761		$	1,102,460		$	-		$	1,102,460

	As of December 31, 2014
			Amounts
(in thousands)	As Reported		Reclassified			Revised
Assets
U.S. Networks	$	2,864,089	$	(15	)	$	2,864,074
International Networks		-		660,215			660,215
Corporate and Other		1,803,543		(670,351	)		1,133,192
Total assets	$	4,667,632	$	(10,151	)	$	4,657,481

	As of December 31, 2014
			Amounts
(in thousands)	As Reported		Reclassified			Revised
Liabilities and Equity
U.S. Networks	$	2,864,089	$	(15	)	$	2,864,074
International Networks		-		660,215			660,215
Corporate and Other		1,803,543		(670,351	)		1,133,192
Total liabilities and equity	$	4,667,632	$	(10,151	)	$	4,657,481