Segment Information

9 Months Ended

Sep. 30, 2014

Segment Information

3. SEGMENT INFORMATION

The Company currently operates in three reportable segments, television broadcasting, radio broadcasting and digital media. The Company had previously operated in two reportable segments, television broadcasting and radio broadcasting.  On June 18, 2014, the Company acquired Pulpo Media Inc. (“Pulpo”), a leading provider of digital advertising services and solutions focused on Hispanics in the U.S. and Latin America.  Beginning with the third quarter of 2014, the Company separated the results of Pulpo into a new operating segment, digital media.  The Company’s segments results reflect information presented on the same basis that is used for internal management reporting and it is also how the chief operating decision maker evaluates the business. The Company believes that this information regarding the digital media segment is useful to readers of our financial statements.  The results of this new segment for the interim period between the acquisition date and the beginning of the third quarter were not considered significant for reclassification.

Television Broadcasting

The Company owns and/or operates 58 primary television stations located primarily in California, Colorado, Connecticut, Florida, Massachusetts, Nevada, New Mexico, Texas and the Washington, D.C. area.

Radio Broadcasting

The Company owns and operates 49 radio stations (38 FM and 11 AM) located primarily in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas.

Digital Media

The Company owns and operates an online advertising platform reaching online Hispanics with display, video, mobile and social media advertising.   

Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses. There were no significant sources of revenue generated outside the United States during the three- and nine-month periods ended September 30, 2014 and 2013. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Nine-Month Period
	Ended September 30,						%			Ended September 30,						%
		2014			2013		Change				2014			2013		Change
Net revenue
Television	$	41,301		$	39,747			4	%	$	122,193		$	114,289			7	%
Radio		18,081			18,039			0	%		51,691			49,534			4	%
Digital		2,892			-			100	%		2,892			-			100	%
Consolidated		62,274			57,786			8	%		176,776			163,823			8	%
Cost of revenue - digital media		1,489			-			100	%		1,489			-			100	%
Direct operating expenses
Television		15,777			15,905			(1	)%		46,885			46,884			0	%
Radio		10,131			9,955			2	%		30,652			29,189			5	%
Digital		1,005			-			100	%		1,005			-			100	%
Consolidated		26,913			25,860			4	%		78,542			76,073			3	%
Selling, general and administrative expenses
Television		4,346			4,127			5	%		12,875			11,635			11	%
Radio		4,150			4,004			4	%		12,500			11,603			8	%
Digital		535			-			100	%		535			-			100	%
Consolidated		9,031			8,131			11	%		25,910			23,238			11	%
Depreciation and amortization
Television		2,621			2,918			(10	)%		8,007			9,249			(13	)%
Radio		868			695			25	%		2,500			2,139			17	%
Digital		296			-			100	%		296			-			100	%
Consolidated		3,785			3,613			5	%		10,803			11,388			(5	)%
Segment operating profit (loss)
Television		18,557			16,797			10	%		54,426			46,521			17	%
Radio		2,932			3,385			(13	)%		6,039			6,603			(9	)%
Digital		(433	)		-			100	%		(433	)		-			100	%
Consolidated		21,056			20,182			4	%		60,032			53,124			13	%
Corporate expenses		4,899			5,011			(2	)%		14,996			14,244			5	%
Operating income (loss)		16,157			15,171			6	%		45,036			38,880			16	%
Interest expense		(3,501	)		(5,352	)		(35	)%		(10,408	)		(21,017	)		(50	)%
Interest income		12			12			0	%		37			28			32	%
Gain (loss) on debt extinguishment		-			(29,404	)		(100	)%		-			(29,534	)		(100	)%
Income (loss) before income taxes	$	12,668		$	(19,573	)	*			$	34,665		$	(11,643	)	*
Capital expenditures
Television	$	1,351		$	2,298					$	3,925		$	5,853
Radio		1,029			1,098						2,779			1,785
Digital		15			-						20			-
Consolidated	$	2,395		$	3,396					$	6,724		$	7,638

	September 30,		December 31,
Total assets		2014		2013
Television	$	400,481	$	412,487
Radio		126,981		125,750
Digital		22,949		-
Consolidated	$	550,411	$	538,237