| Segment Information |
Segment Information
The Company reports its operations through three reportable segments: Media & Content, Aviation Connectivity and Maritime & Land Connectivity. Prior to the EMC Acquisition in the third quarter of 2016, the Company operated through two operating segments: Media & Content and Connectivity. During the fourth quarter of 2016, as a result of the EMC Acquisition, the Company formed a Maritime & Land Connectivity segment. The Company added a significant number of customers in different markets and geographic areas of operations under a different management structure and made corresponding organizational changes. As a result, the Company re-evaluated its reportable segments and concluded that the changes to its reportable segments was appropriate and consistent with how its chief operating decision maker (“CODM”) would continue to manage the Company’s operations for purposes of evaluating financial performance and allocating resources.
The CODM evaluates financial performance and allocates resources by reviewing revenue, costs of sales and contribution profit separately for the Media & Content, Aviation Connectivity and Maritime & Land Connectivity segments. Total segment contribution profit provides the CODM a measure to analyze operating performance of each of the Company’s operating segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results, as operating performance is highly contingent on many factors, including customer tastes and preferences. All other financial information is reviewed by the CODM on a consolidated basis. During the second quarter of 2017, due to the changes in management and organizational structures, the Company reorganized its operations into two operating segments: Media & Content and Connectivity.
Revenue and contribution profit by segment were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
Revenue: |
|
|
|
|
|
Media & Content |
|
|
|
|
|
Licensing |
$ |
261,912 |
|
|
$ |
252,775 |
|
|
$ |
231,521 |
|
Services |
56,152 |
|
|
55,292 |
|
|
45,868 |
|
Total |
318,064 |
|
|
308,067 |
|
|
277,389 |
|
Aviation Connectivity |
|
|
|
|
|
Services |
109,507 |
|
|
96,912 |
|
|
74,839 |
|
Equipment |
28,977 |
|
|
21,051 |
|
|
35,507 |
|
Total |
138,484 |
|
|
117,963 |
|
|
110,346 |
|
Maritime & Land Connectivity |
|
|
|
|
|
Services |
68,964 |
|
|
— |
|
|
— |
|
Equipment |
4,243 |
|
|
— |
|
|
— |
|
Total |
73,207 |
|
|
— |
|
|
— |
|
Total revenue |
$ |
529,755 |
|
|
$ |
426,030 |
|
|
$ |
387,735 |
|
Contribution profit (1):
|
|
|
|
|
|
Media & Content |
$ |
104,036 |
|
|
$ |
104,374 |
|
|
$ |
82,393 |
|
Aviation Connectivity |
46,739 |
|
|
42,500 |
|
|
23,469 |
|
Maritime & Land Connectivity |
13,510 |
|
|
— |
|
|
— |
|
Total contribution profit |
164,285 |
|
|
146,874 |
|
|
105,862 |
|
Other operating expenses |
326,948 |
|
|
155,685 |
|
|
142,845 |
|
Loss from operations |
$ |
(162,663 |
) |
|
$ |
(8,811 |
) |
|
$ |
(36,983 |
) |
|
|
(1) |
Includes depreciation expense of $0.7 million (Media & Content), $4.5 million (Aviation Connectivity) and $5.6 million (Maritime & Land Connectivity), $0.7 million (Media & Content) and $2.2 million (Aviation Connectivity), and $1.2 million (Media & Content) and $1.7 million (Aviation Connectivity) for the years ended December 31, 2016, 2015, and 2014, respectively. Also includes amortization expense of $0.2 million (Media & Content) and $2.7 million (Media & Content) for the years ended December 31, 2015 and 2014, respectively.
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The Company’s total assets by segment were as follows (in thousands):
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|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Segment assets: |
|
|
|
Media & Content |
$ |
391,668 |
|
|
$ |
432,250 |
|
Aviation Connectivity |
151,136 |
|
|
95,379 |
|
Maritime & Land Connectivity |
539,327 |
|
|
— |
|
Total segment assets |
1,082,131 |
|
|
527,629 |
|
Corporate assets |
17,304 |
|
|
110,232 |
|
Total assets |
$ |
1,099,435 |
|
|
$ |
637,861 |
|
Geographical revenue by segment as presented below is based on the billing location of the customer. Revenue from external customers was as follows (in thousands):
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|
|
|
|
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Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
Media & Content: |
|
|
|
|
|
United States and Canada |
$ |
80,765 |
|
|
$ |
78,662 |
|
|
$ |
59,317 |
|
Europe |
48,527 |
|
|
39,738 |
|
|
47,917 |
|
Asia and Middle East |
152,758 |
|
|
155,818 |
|
|
114,886 |
|
Other |
36,014 |
|
|
33,849 |
|
|
55,269 |
|
Total |
$ |
318,064 |
|
|
$ |
308,067 |
|
|
$ |
277,389 |
|
Aviation Connectivity: |
|
|
|
|
|
United States |
$ |
119,198 |
|
|
$ |
102,598 |
|
|
$ |
92,914 |
|
Europe |
15,231 |
|
|
14,833 |
|
|
13,807 |
|
Other |
4,055 |
|
|
532 |
|
|
3,625 |
|
Total |
$ |
138,484 |
|
|
$ |
117,963 |
|
|
$ |
110,346 |
|
Maritime & Land Connectivity: |
|
|
|
|
|
United States |
$ |
31,334 |
|
|
$ |
— |
|
|
$ |
— |
|
Europe |
22,088 |
|
|
— |
|
|
— |
|
Africa, Middle East and Asia |
13,759 |
|
|
— |
|
|
— |
|
Other |
6,026 |
|
|
— |
|
|
— |
|
Total |
$ |
73,207 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
529,755 |
|
|
$ |
426,030 |
|
|
$ |
387,735 |
|
The following table summarizes net property, plant and equipment by country (in thousands):
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|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Media & Content: |
|
|
|
United States and Canada |
$ |
2,803 |
|
|
$ |
5,081 |
|
United Kingdom |
3,023 |
|
|
3,192 |
|
India |
2,013 |
|
|
1,828 |
|
Other |
1,338 |
|
|
552 |
|
Total |
$ |
9,177 |
|
|
$ |
10,653 |
|
Aviation Connectivity: |
|
|
|
United States |
$ |
64,800 |
|
|
$ |
23,638 |
|
Total |
$ |
64,800 |
|
|
$ |
23,638 |
|
Maritime & Land Connectivity: |
|
|
|
United States |
$ |
66,124 |
|
|
$ |
— |
|
Germany |
16,321 |
|
|
— |
|
Other |
4,139 |
|
|
— |
|
Total |
$ |
86,584 |
|
|
$ |
— |
|
Corporate |
|
|
|
United States |
$ |
5,488 |
|
|
$ |
4,775 |
|
Total |
$ |
5,488 |
|
|
$ |
4,775 |
|
|
$ |
166,049 |
|
|
$ |
39,066 |
|
As described above, subsequent to December 31, 2016, the Company reorganized its operations into two reportable segments: Connectivity and Media & Content. The following provides the segment information based on the two reportable segments as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014.
Revenue and contribution profit by segment were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
Revenue: |
|
|
|
|
|
Media & Content |
|
|
|
|
|
Licensing |
$ |
261,912 |
|
|
$ |
252,775 |
|
|
$ |
231,521 |
|
Services |
56,152 |
|
|
55,292 |
|
|
45,868 |
|
Total |
318,064 |
|
|
308,067 |
|
|
277,389 |
|
Connectivity |
|
|
|
|
|
Services |
178,471 |
|
|
96,912 |
|
|
74,839 |
|
Equipment |
33,220 |
|
|
21,051 |
|
|
35,507 |
|
Total |
211,691 |
|
|
117,963 |
|
|
110,346 |
|
Total revenue |
$ |
529,755 |
|
|
$ |
426,030 |
|
|
$ |
387,735 |
|
Contribution profit (1):
|
|
|
|
|
|
Media & Content |
$ |
104,036 |
|
|
$ |
104,374 |
|
|
$ |
82,393 |
|
Connectivity |
60,249 |
|
|
42,500 |
|
|
23,469 |
|
Total contribution profit |
164,285 |
|
|
146,874 |
|
|
105,862 |
|
Other operating expenses |
326,948 |
|
|
155,685 |
|
|
142,845 |
|
Loss from operations |
$ |
(162,663 |
) |
|
$ |
(8,811 |
) |
|
$ |
(36,983 |
) |
|
|
(1) |
Includes depreciation expense of $0.7 million (Media & Content) and $10.2 million (Connectivity), $0.7 million (Media & Content) and $2.2 million (Connectivity), and $1.2 million (Media & Content) and $1.7 million (Connectivity) for the years ended December 31, 2016, 2015, and 2014, respectively. Also includes amortization expense of $0.2 million (Media & Content) and $2.7 million (Media & Content) for the years ended December 31, 2015 and 2014, respectively.
|
The Company’s total assets by segment were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Segment assets: |
|
|
|
Media & Content |
$ |
391,668 |
|
|
$ |
432,250 |
|
Connectivity |
690,463 |
|
|
95,379 |
|
Total segment assets |
1,082,131 |
|
|
527,629 |
|
Corporate assets |
17,304 |
|
|
110,232 |
|
Total assets |
$ |
1,099,435 |
|
|
$ |
637,861 |
|
Geographical revenue by segment as presented below is based on the billing location of the customer. The revenue from external customers was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
Media & Content: |
|
|
|
|
|
United States and Canada |
$ |
80,765 |
|
|
$ |
78,662 |
|
|
$ |
59,317 |
|
Europe |
48,527 |
|
|
39,738 |
|
|
47,917 |
|
Asia and the Middle East |
152,758 |
|
|
155,818 |
|
|
114,886 |
|
Other |
36,014 |
|
|
33,849 |
|
|
55,269 |
|
Total |
$ |
318,064 |
|
|
$ |
308,067 |
|
|
$ |
277,389 |
|
Connectivity: |
|
|
|
|
|
United States |
$ |
150,532 |
|
|
$ |
102,598 |
|
|
$ |
92,914 |
|
Europe |
37,319 |
|
|
14,833 |
|
|
13,807 |
|
Other |
23,840 |
|
|
532 |
|
|
3,625 |
|
Total |
$ |
211,691 |
|
|
$ |
117,963 |
|
|
$ |
110,346 |
|
|
$ |
529,755 |
|
|
$ |
426,030 |
|
|
$ |
387,735 |
|
The following table summarizes net property, plant and equipment by country (in thousands):
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Media & Content: |
|
|
|
United States and Canada |
$ |
2,803 |
|
|
$ |
5,081 |
|
United Kingdom |
3,023 |
|
|
3,192 |
|
India |
2,013 |
|
|
1,828 |
|
Other |
1,338 |
|
|
552 |
|
Total |
$ |
9,177 |
|
|
$ |
10,653 |
|
Connectivity: |
|
|
|
United States |
$ |
130,924 |
|
|
$ |
23,638 |
|
Germany |
16,321 |
|
|
— |
|
Other |
4,139 |
|
|
— |
|
Total |
$ |
151,384 |
|
|
$ |
23,638 |
|
Corporate |
|
|
|
United States |
$ |
5,488 |
|
|
$ |
4,775 |
|
Total |
$ |
5,488 |
|
|
$ |
4,775 |
|
|
$ |
166,049 |
|
|
$ |
39,066 |
|
|