Operating Segments

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Operating Segments

Operating Segments

As of September 30, 2014, the Company held interests in 24 non-consolidated partner companies which are included in the Healthcare and Technology segments. Included in the Penn Mezzanine segment are the Company’s interests in the Penn Mezzanine management company and general partner and the Company’s participations in mezzanine loans and equity interests initiated by Penn Mezzanine.

The Company’s active partner companies by segment were as follows as of September 30, 2014:

Healthcare
Partner Company	Safeguard Primary Ownership as of September 30, 2014	Accounting Method
AdvantEdge Healthcare Solutions, Inc.	40.1%	Equity
Dabo Health, Inc.	12.9%	Cost
Good Start Genetics, Inc.	29.9%	Equity
InfoBionic Inc.	18.0%	Equity (1)
Medivo, Inc.	34.5%	Equity
NovaSom, Inc.	30.3%	Equity
Propeller Health, Inc.	24.4%	Equity
Putney, Inc.	28.3%	Equity
Quantia, Inc.	42.3%	Equity
Syapse, Inc.	27.0%	Equity
Trice Medical, Inc.	31.9%	Equity

Technology
Partner Company	Safeguard Primary Ownership as of September 30, 2014	Accounting Method
AppFirst, Inc.	34.3%	Equity
Apprenda, Inc.	21.6%	Equity
Beyond.com, Inc.	38.2%	Equity
Bridgevine, Inc.	17.2%	Cost (2)
Clutch Holdings, Inc.	29.6%	Equity
DriveFactor, Inc.	40.6%	Equity
Hoopla Software, Inc.	25.6%	Equity
Lumesis, Inc.	48.5%	Equity
MediaMath, Inc.	20.5%	Equity
Pneuron Corporation	27.6%	Equity
Spongecell, Inc.	23.0%	Equity
Transactis, Inc.	24.8%	Equity
WebLinc, Inc.	29.2%	Equity

(1) The decrease in the Company's primary ownership below 20.0% in the third quarter of 2014 is considered temporary because the Company expects to deploy additional capital in InfoBionic in the fourth quarter of 2014. Accordingly, the Company continues to exercise significant influence over InfoBionic and account for it under the equity method.

(2) In the second quarter of 2014, the Company’s ownership interest in Bridgevine decreased from 22.7% to 17.3%, below the threshold at which the Company believes it exercises significant influence. Accordingly, the Company changed its method of accounting for Bridgevine from the equity method to the cost method at such time.

As of September 30, 2014, the Company has a 36% ownership interest in the management company and general partner of Penn Mezzanine L.P., which is included in the Penn Mezzanine segment. The Company accounts for its interest under the equity method.

Results of the Healthcare and Technology segments reflect the equity income (loss) of their respective equity method partner companies, other income (loss) associated with fair value method and cost method partner companies and the gains or losses on the sale of their respective partner companies. Results of the Penn Mezzanine segment include interest, dividends and participation fees earned on the mezzanine interests in which the Company participates as well as equity income (loss) associated with the Company’s management company and general partner interest in the Penn Mezzanine platform.

Management evaluates the Healthcare and Technology segments’ performance based on net income (loss) which is impacted by the number of partner companies accounted for under the equity method, the Company’s voting ownership percentage in these partner companies and the net results of operations of these partner companies, any impairment charges and gain (loss) on the sale of equity and cost method partner companies.

Management evaluates the Penn Mezzanine segment performance based on the performance of the mezzanine interests in which the Company participates. This includes an evaluation of the current and future cash flows associated with interest and dividend payments as well as estimated losses based on evaluating known and inherent risks in the investments in which the Company participates.

Other Items include certain expenses which are not identifiable to the operations of the Company’s operating business segments. Other Items primarily consist of general and administrative expenses related to corporate operations, including employee compensation, insurance and professional fees, including legal and finance, interest income, interest expense and other income (loss) and equity income (loss) related to certain private equity fund ownership interests. Other Items also include income taxes, which are reviewed by management independent of segment results.

As of September 30, 2014 and December 31, 2013, all of the Company’s assets were located in the United States.

Segment assets in Other Items included primarily cash, cash equivalents, and marketable securities of $165.7 million and $183.7 million, at September 30, 2014 and December 31, 2013, respectively.

	Three months ended September 30, 2014
	Healthcare			Technology			Penn Mezzanine			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	(3	)	$	(3	)	$	(4,174	)	$	(4,177	)
Other income (loss), net	(8		)	—			(238		)	(246		)	—			(246		)
Interest income	—			—			307			307			175			482
Equity income (loss)	(4,734		)	(4,109		)	(158		)	(9,001		)	39			(8,962		)
Net loss	(4,742		)	(4,109		)	(92		)	(8,943		)	(5,063		)	(14,006		)
Segment Assets:
September 30, 2014	62,066			93,025			6,490			161,581			170,727			332,308
December 31, 2013	74,939			69,471			12,783			157,193			188,803			345,996

	Three months ended September 30, 2013
	Healthcare			Technology			Penn Mezzanine			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	(4	)	$	(4	)	$	(4,831	)	$	(4,835	)
Other income (loss), net	(4,772		)	—			547			(4,225		)	1			(4,224		)
Interest income	—			—			394			394			178			572
Equity income (loss)	(6,553		)	(3,490		)	(92		)	(10,135		)	269			(9,866		)
Net income (loss)	(11,325		)	(3,490		)	845			(13,970		)	(5,460		)	(19,430		)

	Nine months ended September 30, 2014
	Healthcare		Technology			Penn Mezzanine			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—	$	—		$	(8	)	$	(8	)	$	(14,477	)	$	(14,485	)
Other income (loss), net	31,823		—			(243		)	31,580			—			31,580
Interest income	—		—			1,087			1,087			407			1,494
Equity income (loss)	1,341		(6,108		)	(596		)	(5,363		)	34			(5,329		)
Net income (loss)	33,164		(6,108		)	240			27,296			(17,331		)	9,965

	Nine months ended September 30, 2013
	Healthcare			Technology			Penn Mezzanine			Total Segments			Other Items			Total
	(Unaudited - In thousands)
Operating loss	$	—		$	—		$	(13	)	$	(13	)	$	(16,911	)	$	(16,924	)
Other income (loss), net	(6,362		)	—			324			(6,038		)	(153		)	(6,191		)
Interest income	—			—			1,118			1,118			978			2,096
Equity income (loss)	(27,303		)	(7,990		)	(256		)	(35,549		)	296			(35,253		)
Net income (loss)	(33,665		)	(7,990		)	1,173			(40,482		)	(19,010		)	(59,492		)