Business Segment Information |
Note 8—Business Segment Information
The Company has two reportable business segments, Telecom Platform Services and Consumer Phone Services, which comprise the IDT Telecom division. All other operating segments that are not reportable individually are included in All Other. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker.
The Telecom Platform Services segment provides telecommunications services, including prepaid and rechargeable calling products and international long distance traffic termination, as well as various payment services. The Consumer Phone Services segment provides consumer local and long distance services in the United States. All Other includes (1) Zedge, which operates a service accessible online and through both an Android and iOS app that provides mobile game discovery and personalization content such as ringtones and wallpapers, (2) Fabrix, a software development company specializing in highly efficient cloud-based video processing, storage and delivery, (3) Straight Path Spectrum, which holds, leases and markets fixed wireless spectrum licenses, (4) Straight Path IP Group, which holds intellectual property primarily related to communications over the Internet and the licensing and other businesses related to this intellectual property, (5) the Company’s real estate holdings, and (6) other smaller businesses. Corporate costs include certain services, such as compensation, consulting fees, treasury and accounts payable, tax and accounting services, human resources and payroll, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, business development, and other corporate-related general and administrative expenses including, among others, facilities costs, charitable contributions and travel, as well as depreciation expense on corporate assets. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.
The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations. IDT Telecom depreciation and amortization are allocated to Telecom Platform Services and Consumer Phone Services because the related assets are not tracked separately by segment. There are no other significant asymmetrical allocations to segments.
Operating results for the business segments of the Company are as follows:
(in thousands)
|
|
Telecom
Platform
Services
|
|
|
|
|
|
All Other
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
388,939 |
|
|
$ |
3,427 |
|
|
$ |
4,855 |
|
|
$ |
— |
|
|
$ |
397,221 |
|
Income (loss) from operations
|
|
|
19,314 |
|
|
|
341 |
|
|
|
(1,555 |
) |
|
|
(3,374 |
) |
|
|
14,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
372,102 |
|
|
$ |
4,585 |
|
|
$ |
3,032 |
|
|
$ |
— |
|
|
$ |
379,719 |
|
(Loss) income from operations
|
|
|
(125 |
) |
|
|
977 |
|
|
|
4,330 |
|
|
|
(3,020 |
) |
|
|
2,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
1,183,731 |
|
|
$ |
11,156 |
|
|
$ |
14,604 |
|
|
$ |
— |
|
|
$ |
1,209,491 |
|
Income (loss) from operations
|
|
|
38,404 |
|
|
|
1,377 |
|
|
|
(3,993 |
) |
|
|
(10,581 |
) |
|
|
25,207 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
1,098,755 |
|
|
$ |
14,949 |
|
|
$ |
8,241 |
|
|
$ |
— |
|
|
$ |
1,121,945 |
|
(Loss) income from operations
|
|
|
(961 |
) |
|
|
3,186 |
|
|
|
3,185 |
|
|
|
(10,278 |
) |
|
|
(4,868 |
) |
Telecom Platform Services’ income from operations in the three and nine months ended April 30, 2013 included net gains of $9.6 million and $9.3 million, respectively, related to legal matters. Telecom Platform Services’ loss from operations in the three and nine months ended April 30, 2012 included an aggregate of $6.5 million and $6.7 million, respectively, for estimated losses from pending litigation. In addition, Telecom Platform Services’ loss from operations in the nine months ended April 30, 2012 included a loss of $11.0 million from the settlement of litigation with T-Mobile (see Note 3), offset by a $1.8 million gain from the Broadstripe, LLC
settlement (see Note 3).
All Other’s loss from operations in the nine months ended April 30, 2013 included a gain of $0.2 million from the settlement of a claim. All Other’s income from operations in the three and nine months ended April 30, 2012 included a gain of $5.3 million from the sale of rights in wireless spectrum partitioned and/or disaggregated from eight spectrum licenses (see Note 3). |