SEGMENT INFORMATION:

The Company has four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. These segments operate in the United States and are consistently aligned with the Company’s management of its businesses and its financial reporting structure. Effective January 1, 2017, the Company changed its reportable segment disclosures. Along with the results of Interactive One, all digital components from our reportable segments are a part of a newly formed reportable segment called “Digital”. This new reportable segment better reflects the manner in which we manage our business and better reflects our operational structure. Segment data for the three and nine months ended September 30, 2016, has been reclassified to conform to the current period presentation. These reclassifications occurred among all segments.

The radio broadcasting segment consists of all broadcast results of operations. The Reach Media segment consists of the results of operations for the Tom Joyner Morning Show and related activities and operations of other syndicated shows. The digital segment includes the results of our online business, including the operations of Interactive One, as well as the digital components of our other reportable segments. The cable television segment consists of TV One’s results of operations. Corporate/Eliminations/Other represents financial activity associated with our corporate staff and offices and intercompany activity among the four segments.

Operating loss or income represents total revenues less operating expenses, depreciation and amortization, and impairment of long-lived assets. Intercompany revenue earned and expenses charged between segments are recorded at estimated fair value and eliminated in consolidation.

The accounting policies described in the summary of significant accounting policies in Note 1 – Organization and Summary of Significant Accounting Policies are applied consistently across the segments.

Detailed segment data for the three and nine months ended September 30, 2017 and 2016, is presented in the following tables:

	Three Months Ended September 30,
	2017		2016
	(Unaudited)
	(In thousands)
			(As reclassified)
Net Revenue:
Radio Broadcasting	$	45,184	$	45,524
Reach Media		10,491		12,153
Digital		8,107		6,417
Cable Television		48,374		46,811
Corporate/Eliminations*		(78)		(49)
Consolidated	$	112,078	$	110,856

Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	27,887	$	25,541
Reach Media		10,018		10,061
Digital		8,178		6,593
Cable Television		29,029		28,510
Corporate/Eliminations		8,239		7,149
Consolidated	$	83,351	$	77,854

Depreciation and Amortization:
Radio Broadcasting	$	923	$	1,035
Reach Media		52		59
Digital		812		417
Cable Television		6,567		6,559
Corporate/Eliminations		450		399
Consolidated	$	8,804	$	8,469

Impairment of long-lived assets:
Radio Broadcasting	$	16,392	$	—
Reach Media		—		—
Digital		—		—
Cable Television		—		—
Corporate/Eliminations		—		—
Consolidated	$	16,392	$	—

Operating income (loss):
Radio Broadcasting	$	(18)	$	18,948
Reach Media		421		2,033
Digital		(883)		(593)
Cable Television		12,778		11,742
Corporate/Eliminations		(8,767)		(7,597)
Consolidated	$	3,531	$	24,533

* Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting

(78)

(49)

Capital expenditures by segment are as follows:

Radio Broadcasting	$	425	$	740
Reach Media		34		110
Digital		302		253
Cable Television		31		172
Corporate/Eliminations/Other		172		369
Consolidated	$	964	$	1,644

	Nine Months Ended September 30,
	2017		2016
	(Unaudited)
	(In thousands)
			(As reclassified)
Net Revenue:
Radio Broadcasting	$	133,082	$	138,971
Reach Media		35,682		41,055
Digital		20,353		18,963
Cable Television		142,298		143,837
Corporate/Eliminations		(410)		(163)
Consolidated	$	331,005	$	342,663

Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	83,381	$	82,123
Reach Media		33,792		34,769
Digital		23,040		19,077
Cable Television		82,334		85,616
Corporate/Eliminations		21,670		24,295
Consolidated	$	244,217	$	245,880

Depreciation and Amortization:
Radio Broadcasting	$	2,819	$	3,256
Reach Media		158		148
Digital		1,616		1,299
Cable Television		19,696		19,664
Corporate/Eliminations		1,259		1,356
Consolidated	$	25,548	$	25,723

Impairment of long-lived assets:
Radio Broadcasting	$	29,148	$	—
Reach Media		—		—
Digital		—		—
Cable Television		—		—
Corporate/Eliminations		—		—
Consolidated	$	29,148	$	—

Operating income (loss):
Radio Broadcasting	$	17,734	$	53,592
Reach Media		1,732		6,138
Digital		(4,303)		(1,413)
Cable Television		40,268		38,557
Corporate/Eliminations		(23,339)		(25,814)
Consolidated	$	32,092	$	71,060

* Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting

(410)

(163)

Capital expenditures by segment are as follows:

Radio Broadcasting	$	2,095	$	2,574
Reach Media		102		332
Digital		847		969
Cable Television		234		313
Corporate/Eliminations/Other		1,434		790
Consolidated	$	4,712	$	4,978

	September 30, 2017		December 31, 2016
	(Unaudited)
	(In thousands)
Total Assets:
Radio Broadcasting	$	751,722	$	781,450
Reach Media		42,796		37,192
Digital		24,353		17,749
Cable Television		429,162		446,880
Corporate/Eliminations/Other		77,583		75,515
Consolidated	$	1,325,616	$	1,358,786