DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

3 Months Ended

Mar. 31, 2013

DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

(2) DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

The reportable segments are strategic business units that offer different products and services.  They are managed separately because each business requires different technology, management expertise and marketing strategies.

Due to the sale, in the first quarter of 2013, of the Company’s remaining non-RV publications operated in the Membership Services — Media segment, the Company made a change in its reportable segments by consolidating the Membership Services — Media segment with the Membership Services segment.  The remaining publication and show operating units share common management with and cater to the same RV customer base as the Membership Services segment.  Accordingly, the new reportable segments will be (i) Membership Services and (ii) Retail.

The change in disclosure of reportable segment information reflects the manner in which the Company is currently managing its operations as the Company no longer evaluates them as separate businesses.  The Company recast the disclosure of historical results into the new business segments for all prior periods included in this report.  While this financial data reflects the change in the Company’s reportable segments described above, the Company has not in any way revised or restated its historical financial statements for any period.

The Membership Services segment operates the Good Sam Club and the Coast to Coast Club and assorted products and services, publications and shows for RV owners, campers and outdoor vacationers.  The President’s Club was merged into the Good Sam Club on January 1, 2012, the Golf Card Club was sold on March 1, 2012, and the seven remaining outdoor powersports magazine titles, two powersports shows and two conferences were sold in March 2013, as described in more detail in Note 3 — Statements of Cash Flows.  The Retail segment sells specialty retail merchandise and services for RV owners primarily through retail supercenters and mail order catalogs. The Company evaluates performance based on profit or loss from operations before income taxes and unusual items because it believes that such measure is useful in evaluating the income and expenses of each segment that are controllable by management of that segment.  In addition, segment profit as presented herein excludes intercompany fees by which interest expense attributable to the Senior Secured Notes is allocated to such segments as management evaluates its lines of business performance before such allocation and this interest expense is evaluated on a consolidated level.

The Company does not allocate income taxes or unusual items to segments.  Financial information by reportable business segment is summarized as follows (in thousands):

	Membership
	Services		Retail			Consolidated
THREE MONTHS ENDED MARCH 31, 2013
Revenues from external customers	$	48,475	$	65,493		$	113,968
Depreciation and amortization	630		1,810			2,440
Gain (loss) on sale of assets	1,834		—			1,834
Interest income	602		—			602
Interest expense	33		553			586
Segment profit (loss)	20,863		(3,142		)	17,721
THREE MONTHS ENDED MARCH 31, 2012
Revenues from external customers	$	49,016	$	61,042		$	110,058
Depreciation and amortization	986		1,843			2,829
Gain (loss) on sale of assets	531		(16		)	515
Interest income	677		—			677
Interest expense	—		605			605
Segment profit (loss)	17,793		(2,910		)	14,883

The following is a reconciliation of operating profit for reportable segments to the Company’s consolidated income before taxes for the three months ended March 31, 2013 and 2012 (in thousands):

	THREE MONTHS ENDED
	3/31/2013			3/31/2012
Income Before Income Taxes
Total operating profit for reportable segments	$	17,721		$	14,883
Unallocated G & A expense	(3,015		)	(3,606		)
Unallocated depreciation and amortization expense	(692		)	(647		)
Unallocated gain on derivative instrument	—			990
Unallocated loss on debt repayment	—			(440		)
Elimination of intercompany interest income	(399		)	(459		)
Unallocated interest expense, net of intercompany elimination	(9,191		)	(10,613		)
Income before income taxes	$	4,424		$	108

The following is a reconciliation of assets of reportable segments to the Company’s consolidated total assets as of March 31, 2013 and December 31, 2012 (in thousands):

	3/31/2013			12/31/2012
Membership Services segment	$	317,463		$	309,140
Retail segment	89,334			88,919
Total assets for reportable segments	406,797			398,059
Intangible assets not allocated to segments	8,438			8,851
Corporate unallocated assets	6,074			8,625
Elimination of intersegment receivable	(182,046		)	(185,174		)
Total assets	$	239,263		$	230,361