3. Segment Information
The Company categorizes its businesses into
five reportable segments: Children’s Book Publishing
and Distribution; Educational Technology and Services;
Classroom and Supplemental Materials Publishing; Media,
Licensing and Advertising; and International. This
classification reflects the nature of products and services
consistent with the method by which the Company’s chief
operating decision-maker assesses operating performance and
allocates resources.
• Children’s Book Publishing and
Distribution operates as an integrated business which
includes the publication and distribution of children’s
books, media and interactive products in the United States
through school-based book clubs and book fairs and the trade
channel. This segment is comprised of three operating
segments.
• Educational Technology and
Services includes the production and distribution to
schools of curriculum-based learning technology and materials
for grades pre-kindergarten to 12 in the United States,
together with related implementation and assessment services
and school consulting services. This segment is comprised of
one operating segment.
• Classroom and Supplemental Materials
Publishing includes the publication and distribution to
schools and libraries of children’s books, classroom
magazines, supplemental classroom materials and print and
on-line reference and non-fiction products for grades
pre-kindergarten to 12 in the United States. This segment is
comprised of two operating segments.
• Media, Licensing and Advertising
includes the production and/or distribution of media,
consumer promotions and merchandising and advertising
revenue, including sponsorship programs. This segment is
comprised of two operating segments.
• International includes the
publication and distribution of products and services outside
the United States by the Company’s international
operations, and its export and foreign rights businesses.
This segment is comprised of two operating
segments.
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Children’s
Book
Publishing
and
Distribution(1)
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Educational
Technology
and
Services(1)(2)
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Classroom
and
Supplemental
Materials
Publishing(1)(2)
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Media,
Licensing
and
Advertising(1)
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Overhead(1)(3)
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Total
Domestic
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International(1)
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Total
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Three months ended
August 31, 2011
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Revenues
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$
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77.3
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$
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96.6
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$
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45.7
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$
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10.7
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$
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—
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$
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230.3
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$
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87.7
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$
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318.0
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Bad debts
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—
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0.3
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0.4
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—
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—
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0.7
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0.7
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1.4
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Depreciation and
amortization(4)
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3.7
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0.3
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0.3
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0.1
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9.2
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13.6
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1.5
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15.1
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Amortization(5)
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3.1
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5.2
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1.4
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1.5
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—
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11.2
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0.7
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11.9
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Royalty advances expensed
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5.0
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0.2
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0.1
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0.1
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—
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5.4
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0.8
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6.2
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Segment operating (loss) income
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(49.8
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)
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38.8
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2.1
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(5.0
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(19.2
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(33.1
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(0.1
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(33.2
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Segment assets at 8/31/11
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506.5
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185.8
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149.8
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40.6
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396.6
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1,279.3
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270.2
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1,549.5
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Goodwill at 8/31/11
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54.3
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21.9
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64.0
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5.4
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—
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145.6
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8.6
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154.2
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Expenditures for long-lived assets,
including royalty advances
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8.2
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5.3
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1.3
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1.9
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5.0
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21.7
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2.3
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24.0
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Long-lived assets at 8/31/11
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172.5
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97.1
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79.7
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20.2
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244.6
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614.1
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71.0
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685.1
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Three months ended
August 31, 2010
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Revenues
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$
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72.8
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$
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82.1
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$
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36.5
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$
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17.1
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$
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—
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$
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208.5
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$
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81.9
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$
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290.4
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Bad debts
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2.0
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0.3
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(0.3
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—
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—
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2.0
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0.9
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2.9
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Depreciation and
amortization(4)
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3.6
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0.3
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0.3
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0.5
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8.4
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13.1
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1.3
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14.4
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Amortization(5)
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3.3
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5.8
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0.7
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1.7
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—
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11.5
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0.6
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12.1
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Royalty advances expensed
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5.1
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0.2
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—
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0.1
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—
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5.4
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0.6
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6.0
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Segment operating (loss) income
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(51.6
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30.2
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(1.7
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(2.2
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(18.8
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(44.1
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(2.2
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(46.3
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Segment assets at 8/31/10
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553.1
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204.6
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143.5
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51.5
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384.0
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1,336.7
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288.2
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1,624.9
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Goodwill at 8/31/10
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54.3
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21.0
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67.4
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5.4
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—
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148.1
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8.5
|
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156.6
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Expenditures for long-lived assets,
including royalty advances
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13.0
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6.1
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0.8
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2.0
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5.5
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27.4
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3.1
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30.5
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Long-lived assets at 8/31/10
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183.8
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|
91.5
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|
76.7
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20.1
|
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227.1
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|
599.2
|
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|
69.7
|
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|
668.9
|
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(1)
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As discussed under “Discontinued
Operations” in Note 1, “Basis of
Presentation,” the Company closed or sold several
operations during fiscal 2009, fiscal 2010 and the
first quarter of fiscal 2012 and presently holds for
sale one facility. All of these businesses are
classified as discontinued operations in the
Company’s financial statements and, as such, are
not reflected in this table.
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(2)
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Includes assets and results of
operations acquired in a business acquisition as of
September 9, 2010.
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(3)
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Overhead includes all domestic
corporate amounts not allocated to segments, including
expenses and costs related to the management of
corporate assets. Unallocated assets are principally
comprised of deferred income taxes and property, plant
and equipment related to the Company’s
headquarters in the metropolitan New York area, its
fulfillment and distribution facilities located in
Missouri and its facility located in Connecticut.
Overhead also includes amounts previously allocated to
the Media, Licensing and Advertising segment for
the Company’s direct-to-home toy catalog business
that was discontinued in the first quarter of
fiscal 2012.
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(4)
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Includes depreciation of property,
plant and equipment and amortization of intangible
assets.
|
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(5)
|
Includes amortization of
prepublication and production costs.
|
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