National CineMedia, Inc. Segments Disclosure
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16. |
SEGMENT REPORTING |
Advertising revenue accounted for 100.0%, 100.0% and 92.1%, of consolidated revenue for the years ended December 31, 2015, January 1, 2015, and December 26, 2013, respectively. The following tables present revenue, less directly identifiable expenses to arrive at income before income taxes for the advertising reportable segment, the combined Fathom Events operating segments (disposed on December 26, 2013), and network, administrative and unallocated costs. Refer to Note 1—Basis of Presentation and Summary of Significant Accounting Policies.
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Year Ended December 31, 2015 (in millions) |
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Advertising |
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Fathom Events (1) |
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Network, Administrative and Unallocated Costs |
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Consolidated |
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||||
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Revenue |
|
$ |
446.5 |
|
|
$ |
— |
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|
$ |
— |
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|
$ |
446.5 |
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|
Operating costs |
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|
103.3 |
|
|
|
— |
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|
|
17.8 |
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|
121.1 |
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Selling and marketing costs |
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66.8 |
|
|
|
— |
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|
5.5 |
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|
72.3 |
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Administrative and other costs |
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3.5 |
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|
|
— |
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|
35.1 |
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|
38.6 |
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Merger termination fee and related merger costs |
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|
— |
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|
|
— |
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34.3 |
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|
34.3 |
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Depreciation and amortization |
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|
— |
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|
|
— |
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|
32.2 |
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32.2 |
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Interest and other non-operating costs |
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— |
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|
— |
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66.5 |
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|
66.5 |
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Income (loss) before income taxes |
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$ |
272.9 |
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|
$ |
— |
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|
$ |
(191.4 |
) |
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$ |
81.5 |
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Year Ended January 1, 2015 (in millions) |
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Advertising |
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Fathom Events (1) |
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Network, Administrative and Unallocated Costs |
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Consolidated |
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Revenue |
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$ |
394.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
394.0 |
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Operating costs |
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|
97.0 |
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|
|
— |
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|
18.3 |
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|
115.3 |
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Selling and marketing costs |
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54.8 |
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|
— |
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|
2.8 |
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|
57.6 |
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Administrative and other costs |
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2.8 |
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|
— |
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26.7 |
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29.5 |
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Merger termination fee and related merger costs |
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— |
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|
— |
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|
7.5 |
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|
7.5 |
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Depreciation and amortization |
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|
— |
|
|
|
— |
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|
|
32.4 |
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|
|
32.4 |
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Interest and other non-operating costs |
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|
— |
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|
— |
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|
76.2 |
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|
76.2 |
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Income (loss) before income taxes |
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$ |
239.4 |
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|
$ |
— |
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|
$ |
(163.9 |
) |
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$ |
75.5 |
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Year Ended December 26, 2013 (in millions) |
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Advertising |
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Fathom Events (1) |
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Network, Administrative and Unallocated Costs |
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Consolidated |
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Revenue |
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$ |
426.3 |
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|
$ |
36.5 |
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|
$ |
— |
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|
$ |
462.8 |
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Operating costs |
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|
98.4 |
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|
|
25.5 |
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|
|
19.4 |
|
|
|
143.3 |
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Selling and marketing costs |
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|
56.1 |
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|
|
3.6 |
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|
|
1.8 |
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|
|
61.5 |
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Administrative and other costs |
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2.9 |
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|
0.9 |
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|
|
25.6 |
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|
|
29.4 |
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Depreciation and amortization |
|
|
— |
|
|
|
— |
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|
26.6 |
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|
26.6 |
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Interest and other non-operating costs |
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|
— |
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|
— |
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|
52.0 |
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|
52.0 |
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Income (loss) before income taxes |
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$ |
268.9 |
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|
$ |
6.5 |
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|
$ |
(125.4 |
) |
|
$ |
150.0 |
|
The following is a summary of revenue by category (in millions):
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Years Ended |
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December 31, 2015 |
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January 1, 2015 |
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December 26, 2013 |
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National advertising revenue |
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$ |
309.5 |
|
|
$ |
258.8 |
|
$ |
|
295.0 |
|
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Local and regional advertising revenue |
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|
107.0 |
|
|
|
96.8 |
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|
89.9 |
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Founding member advertising revenue from beverage concessionaire agreements |
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|
30.0 |
|
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|
38.4 |
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|
41.4 |
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Fathom Consumer revenue (1) |
|
|
— |
|
|
|
— |
|
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|
34.4 |
|
|
Fathom Business revenue (1) |
|
|
— |
|
|
|
— |
|
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|
2.1 |
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Total revenue |
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$ |
446.5 |
|
|
$ |
394.0 |
|
$ |
|
462.8 |
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(1) |
Fathom Events was sold on December 26, 2013 as discussed in Note 2— Divesture. |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.