OPERATING AND REPORTABLE SEGMENTS

12 Months Ended

Dec. 31, 2013

OPERATING AND REPORTABLE SEGMENTS [Abstract]

Operating and Reportable Segments

OPERATING AND REPORTABLE SEGMENTS

On February 1, 2012, the Company divested its traditional and specialty pharmacy mail operations and community retail pharmacy stores, as a result the Company reevaluated its operating and reportable segments in accordance with the provisions of ASC 280 Segment Reporting (“ASC 280”). Based on this review, the Company changed its operating and reportable segments from “Infusion/Home Health Services” and “Pharmacy Services” to its new operating and reportable segments: “Infusion Services", "Home Health Services” and “PBM Services”. These three operating and reportable segments reflect how the Company's chief operating decision maker reviews the Company's results in terms of allocating resources and assessing performance. Disclosures for the year ended December 31, 2011 reflect the change in reportable segments.

The Infusion Services operating and reportable segment provides services consisting of home infusion therapy, respiratory therapy and the provision of durable medical equipment, products and services. Infusion services include the dispensing and administering of infusion-based drugs, which typically require nursing support and clinical management services, equipment to administer the correct dosage and patient training designed to improve patient outcomes.

The Home Health Services operating and reportable segment provides services including the provision of skilled nursing services and therapy visits, private duty nursing services, hospice services, rehabilitation services and medical social services to patients primarily in their home.

The PBM Services operating and reportable segment consists of PBM services, which primarily consists of discount card programs. The discount card programs provide a cost effective alternative for individuals who may be uninsured, underinsured or may have restrictive coverage that disallows reimbursement for certain medications. Under these discount programs, individuals who present a discount card at one of the Company's participating network pharmacies receive prescription medications at a discounted price compared to the retail price. In addition, in the Company's capacity as a pharmacy benefit manager, it has fully funded prescription benefit programs where the Company reimburses its network pharmacies and third party payors in turn reimburse the Company based on Medi-Span reported pricing for those claims fulfilled for their plan participants.

The Company's chief operating decision maker evaluates segment performance and allocates resources based on Segment Adjusted EBITDA. Segment Adjusted EBITDA is defined as income (loss) from continuing operations, net of income taxes adjusted for net interest expense, income tax expense (benefit), depreciation, amortization of intangibles and stock-based compensation expense and prior to the allocation of certain corporate expenses. Segment Adjusted EBITDA excludes acquisition and integration expenses; restructuring and other expense; and other expenses related to the Company's strategic assessment. Segment Adjusted EBITDA is a measure of earnings that management monitors as an important indicator of operating and financial performance. The accounting policies of the operating and reportable segments are consistent with those described in the Company's summary of significant accounting policies.

Segment Reporting Information

(in thousands)

	Year Ended December 31,
	2013			2012			2011
Results of Operations:
Revenue:
Infusion Services - product revenue	$	675,684		$	471,506		$	365,526
Infusion Services - service revenue	21,643			10,080			8,756
Total Infusion Services revenue	697,327			481,586			374,282
Home Health Services - service revenue	72,276			69,190			69,635
PBM Services - service revenue	72,592			111,861			110,589
Total revenue	$	842,195		$	662,637		$	554,506
Adjusted EBITDA by Segment before corporate overhead:
Infusion Services	$	60,677		$	36,764		$	35,128
Home Health Services	2,884			5,401			5,954
PBM Services	17,110			25,659			30,122
Total Segment Adjusted EBITDA	80,671			67,824			71,204
Corporate overhead	(32,042		)	(26,755		)	(23,308		)
Interest expense, net	(28,197		)	(26,067		)	(25,542		)
Loss on extinguishment of debt	(15,898		)	—			—
Income tax benefit (expense)	(2,538		)	4,439			(435		)
Depreciation	(13,555		)	(8,513		)	(6,591		)
Amortization of intangibles	(6,671		)	(3,957		)	(3,376		)
Stock-based compensation expense	(9,450		)	(6,122		)	(4,467		)
Acquisition and integration expenses	(16,130		)	(4,046		)	—
Restructuring and other expenses and investments	(9,796		)	(5,143		)	(7,909		)
Loss from continuing operations, net of income taxes	$	(53,606	)	$	(8,340	)	$	(424	)

	Year Ended December 31,
	2013		2012		2011
Supplemental Operating Data:
Capital Expenditures:
Infusion Services	$	15,972	$	6,685	$	4,826
Home Health Services	69		171		170
PBM Services	—		—		—
Corporate unallocated	9,576		4,130		2,857
Total Capital Expenditures	$	25,617	$	10,986	$	7,853
Depreciation Expense:
Infusion Services	$	8,640	$	4,347	$	5,242
Home Health Services	75		111		48
PBM Services	—		—		—
Corporate unallocated	4,840		4,055		1,301
Total Depreciation Expense	$	13,555	$	8,513	$	6,591
Total Assets:
Infusion Services	$	794,006	$	438,623	$	353,999
Home Health Services	64,428		62,403		64,672
PBM Services	25,239		36,354		40,418
Corporate unallocated	53,169		95,813		24,348
Assets from discontinued operations	—		—		59,005
Assets associated with discontinued operations, not sold	16		9,183		134,660
Total Assets	$	936,858	$	642,376	$	677,102
Goodwill:
Infusion Services	$	558,593	$	304,282	$	265,859
Home Health Services	33,784		33,784		33,784
PBM Services	12,744		12,744		12,744
Total Goodwill	$	605,121	$	350,810	$	312,387

Subsequent to December 31, 2013, the Company entered into a Stock Purchase Agreement to sell substantially all of the assets and entities that make up its Home Health Services segment (see Note 17 - Subsequent Events).