| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Note 5: Business Segments
The Company, located primarily in the southeastern United States, is a diversified communications company which has three business segments: Publishing, Broadcast Television and Newsprint. The Publishing Segment, the Company’s largest based on revenue and segment profit, includes 21 daily newspapers and nearly 100 weekly newspapers and other publications, its online financial data service, the Company’s 20% interest in Denver, as well as the Company’s 7% interest in AdOne. The Broadcast Television Segment consists of 13 network-affiliated broadcast television stations and a provider of equipment and studio design services. A wholly owned mill, as well as the Company’s 33% interest in SP Newsprint Company, comprise the Newsprint Segment which produces recycled newsprint for sale primarily to publishers. In October 1999 the Company sold its Cable Television Segment (see Note 2).
Management measures segment performance based on operating cash flow (operating income plus depreciation and amortization) as well as profit or loss from operations before interest, income taxes, and acquisition related amortization. Amortization of the excess of cost over fair value of net identifiable assets, as well as FCC licenses and other intangibles, is not allocated to individual segments although the intangible assets themselves are included in identifiable assets for each segment. Investments in the Denver Post Corporation, AdOne and SP Newsprint Company are included in corporate assets although the equity income is included in the applicable Publishing or Newsprint Segment. Intercompany sales are accounted for at current market prices and are eliminated in the consolidated financial statements. The Company’s reportable segments, which are managed separately, are strategic business enterprises that provide distinct products and services using diverse technology and production processes.
Information by segment is as follows:
|
Broadcast |
|||||||||||||||||||
|
(In thousands) |
Publishing |
Television |
Newsprint |
Total |
|||||||||||||||
|
|
|||||||||||||||||||
|
1999 |
|||||||||||||||||||
|
|
Consolidated revenues* |
$ |
524,017 |
$ |
168,885 |
$ |
102,506 |
$ |
795,408 |
|
|||||||||
|
|
|||||||||||||||||||
|
Segment operating cash flow |
$ |
174,929 |
$ |
47,854 |
$ |
(6,223 |
) |
$ |
216,560 |
|
|||||||||
|
|
Allocated amounts: |
||||||||||||||||||
|
|
Equity in net income of unconsolidated affiliates |
(673 |
) |
6,567 |
5,894 |
|
|||||||||||||
|
|
License fees from unconsolidated affiliate |
529 |
529 |
|
|||||||||||||||
|
|
Depreciation and amortization |
(24,617 |
) |
(10,542 |
) |
(7,079 |
) |
(42,238 |
) |
||||||||||
|
|
|||||||||||||||||||
|
|
Segment profit |
$ |
149,639 |
$ |
37,312 |
$ |
(6,206 |
) |
180,745 |
|
|||||||||
|
|
|||||||||||||||||||
|
|
Unallocated amounts: |
||||||||||||||||||
|
|
Interest expense |
(46,554 |
) |
||||||||||||||||
|
|
Acquisition intangible amortization |
(33,934 |
) |
||||||||||||||||
|
|
Corporate expenses |
(29,932 |
) |
||||||||||||||||
|
Gain on sale of Denver Newspapers, Inc. common stock |
30,983 |
||||||||||||||||||
|
|
Other |
14,102 |
|
||||||||||||||||
|
|
|||||||||||||||||||
|
Consolidated income from continuing operations before taxes and extraordinary item |
$ |
115,410 |
|||||||||||||||||
|
|
|||||||||||||||||||
|
|
Segment assets |
$ |
788,625 |
$ |
670,612 |
$ |
91,272 |
$ |
1,550,509 |
|
|||||||||
|
|
Corporate assets |
789,865 |
|
||||||||||||||||
|
|
|||||||||||||||||||
|
|
Consolidated assets |
$ |
2,340,374 |
|
|||||||||||||||
|
|
|||||||||||||||||||
|
|
Segment capital expenditures |
$ |
12,570 |
$ |
14,389 |
$ |
10,779 |
$ |
37,738 |
|
|||||||||
|
Discontinued Cable capital expenditures |
20,123 |
||||||||||||||||||
|
|
Corporate capital expenditures |
2,968 |
|
||||||||||||||||
|
|
|||||||||||||||||||
|
|
Consolidated capital expenditures |
$ |
60,829 |
|
|||||||||||||||
|
|
|||||||||||||||||||
|
|
|||||||||||||||||||
|
1998 |
|||||||||||||||||||
|
Consolidated revenues* |
$ |
517,880 |
$ |
170,797 |
$ |
128,259 |
$ |
816,936 |
|||||||||||
|
|
|||||||||||||||||||
|
Segment operating cash flow |
$ |
155,452 |
$ |
51,318 |
$ |
18,825 |
$ |
225,595 |
|||||||||||
|
Allocated amounts: |
|||||||||||||||||||
|
Equity in net income of unconsolidated affiliates |
3,226 |
12,831 |
16,057 |
||||||||||||||||
|
License fees from unconsolidated affiliate |
944 |
944 |
|||||||||||||||||
|
Depreciation and amortization |
(23,627 |
) |
(9,311 |
) |
(6,734 |
) |
(39,672 |
) |
|||||||||||
|
|
|||||||||||||||||||
|
Segment profit |
$ |
135,051 |
$ |
42,007 |
$ |
25,866 |
202,924 |
||||||||||||
|
|
|||||||||||||||||||
|
Unallocated amounts: |
|||||||||||||||||||
|
Interest expense |
(62,584 |
) |
|||||||||||||||||
|
Acquisition intangible amortization |
(34,111 |
) |
|||||||||||||||||
|
Corporate expenses |
(24,462 |
) |
|||||||||||||||||
|
Other |
2,152 |
||||||||||||||||||
|
|
|||||||||||||||||||
|
Consolidated income from continuing operations before taxes |
$ |
83,919 |
|||||||||||||||||
|
|
|||||||||||||||||||
|
Segment assets |
$ |
809,803 |
$ |
691,787 |
$ | ||||||||||||||