Segment Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company has two reportable segments: U.S. Networks and International Networks which are determined based on our management and internal reporting structure. 

U.S. Networks includes our six domestic 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 digital businesses serving home, food, travel and other lifestyle-related categories. U.S. Networks also includes our digital content studio, Scripps Lifestyle Studios. We own 100.0 percent of each of our networks, with the exception of Food Network and Cooking Channel, of which we own 68.7 percent. Each of our networks is distributed by cable and satellite operators, telecommunication suppliers and other digital providers, such as those providing streaming or on-demand services. U.S. Networks generates revenues primarily from advertising sales and distribution fees earned from the right to distribute our programming content. U.S. Networks also earns revenues from licensing content to third parties and brands for consumer products.

International Networks includes the TVN portfolio of networks and other lifestyle-oriented networks available in the UK, EMEA, APAC and Latin America. International Networks also includes our 50.0 percent share of the results of UKTV, a general entertainment and lifestyle channel platform in the UK.

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 U.S. Networks and International Networks. The Company generally does not allocate employee-related corporate overhead costs to its reportable segments, but rather classifies these expenses within Corporate and Other.

Intersegment revenue eliminations are included in Corporate and Other and totaled $7.2 million and $6.6 million for the three months ended March 31, 2017 and March 31, 2016, respectively.

Our CODM, whom we have identified as our Chief Executive Officer (“CEO”), evaluates the operating performance of our businesses and makes decisions about the allocation of resources to the businesses using a measure we refer to as segment profit (loss). Segment profit (loss) is defined as income (loss) from operations before income taxes excluding depreciation, amortization, goodwill write-downs, interest expense, equity in earnings of affiliates, gain (loss) on derivatives, gain (loss) on sale of investments and other miscellaneous non-operating expenses which are included in net income (loss) determined in accordance with GAAP.

Information regarding our segments is as follows:

	Three months ended March 31, 2017
(in thousands)	U.S. Networks			International Networks			Corporate and Other			Consolidated
Operating revenues:
Advertising	$	512,055		$	84,660		$	—		$	596,715
Distribution		211,140			27,240			—			238,380
Other		13,694			13,625			(7,294	)		20,025
Total operating revenues		736,889			125,525			(7,294	)		855,120
Cost of services, excluding depreciation and amortization		205,322			79,334			(5,617	)		279,039
Selling, general and administrative		147,993			30,681			28,696			207,370
Segment profit (loss)		383,574			15,510			(30,373	)		368,711
Depreciation		11,499			2,872			589			14,960
Amortization		9,918			14,279			—			24,197
Operating income (loss)		362,157			(1,641	)		(30,962	)		329,554
Interest (expense) income, net		(120	)		147			(24,279	)		(24,252	)
Equity in earnings of affiliates		5,243			15,206			—			20,449
Loss on derivatives		—			—			(2,336	)		(2,336	)
Miscellaneous, net		2,483			19,903			5,154			27,540
Income (loss) from operations before income taxes	$	369,763		$	33,615		$	(52,423	)	$	350,955
Additions to property and equipment:	$	12,256		$	7,347		$	5,844		$	25,447

	Three months ended March 31, 2016
(in thousands)	U.S. Networks			International Networks			Corporate and Other			Consolidated
Operating revenues:
Advertising	$	487,285		$	84,570		$	—		$	571,855
Distribution		202,096			25,972			—			228,068
Other		12,814			10,796			(6,655	)		16,955
Total operating revenues		702,195			121,338			(6,655	)		816,878
Cost of services, excluding depreciation and amortization		203,359			81,058			(4,750	)		279,667
Selling, general and administrative		139,339			30,491			28,991			198,821
Segment profit (loss)		359,497			9,789			(30,896	)		338,390
Depreciation		14,195			2,841			261			17,297
Amortization		10,021			21,041			—			31,062
Operating income (loss)		335,281			(14,093	)		(31,157	)		290,031
Interest expense, net		(17	)		(6,867	)		(26,861	)		(33,745	)
Equity in earnings of affiliates		7,732			17,946			—			25,678
Gain on derivatives		—			—			2,766			2,766
Gain on sale of investments		208,197			—			—			208,197
Miscellaneous, net		3,487			31,058			(28,479	)		6,066
Income (loss) from operations before income taxes	$	554,680		$	28,044		$	(83,731	)	$	498,993
Additions to property and equipment:	$	8,671		$	2,674		$	—		$	11,345

	Three months ended March 31,
(in thousands)	2017		2016
Operating revenues by geographic location:
United States	$	738,094	$	701,888
Poland		99,284	$	97,758
Other International		17,742		17,232
Total operating revenues	$	855,120	$	816,878
(in thousands)	March 31, 2017		December 31, 2016
Assets:
U.S. Networks	$	2,782,139	$	2,800,137
International Networks		3,077,875		2,991,607
Corporate and Other		342,578		408,550
Total assets	$	6,202,592	$	6,200,294
Long-lived assets by geographic location:
United States	$	1,803,591	$	1,809,919
Poland		2,251,449		2,172,743
Other International		395,261		384,242
Total long-lived assets	$	4,450,301	$	4,366,904

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

Assets held by our businesses and physically located outside of the United States totaled $3,041.0 million and $2,955.8 million at March 31, 2017 and December 31, 2016, respectively.