Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

8. SEGMENT INFORMATION

Lionbridge has determined that its operating segments are those that are based on its method of internal reporting, which separately presents its business based on the service performed. The Company is reporting its results among the following three business segments:

GLC—this segment includes solutions that enable the translation, localization and worldwide multilingual release of clients’ online content, sales and marketing information, products and related technical support and training materials to meet the language, cultural, technical and industry-specific requirements of customers in local markets throughout the world. As part of its GLC solutions, Lionbridge also provides global marketing services, and provides engineering, technical documentation and drafting services for clients who market to and support customers in global markets. Lionbridge GLC solutions utilize the Company’s cloud-based technology platforms and applications, its global crowd of qualified professional linguists, translators and in-country specialists and its global service delivery model, which make the translation, localization and content management processes more efficient for Lionbridge and its clients.

GES—formerly referred to as GDT, this segment includes Lionbridge’s services related to testing clients’ software, websites, mobile applications and hardware utilizing a cost-efficient, blended on-site and offshore model. The GES segment also includes Lionbridge’s specialized business process crowdsourcing services including search relevance testing, in-country testing for mobile devices, and data management solutions. Lionbridge’s business process crowdsourcing solutions combine a dedicated crowd of pre-qualified, in-country professionals, Lionbridge’s secure, task management platform and Lionbridge’s proven program management expertise. This combination enables Lionbridge to align the appropriate combination of skill, capability and geography to meet each client’s requirements.

Interpretation—this segment includes interpretation services for government and business organizations that require experienced linguists. Lionbridge provides interpretation communication services in more than 360 languages and dialects, including on-site interpretation, over-the-phone interpretation and interpreter testing, training, and assessment services.

The Company’s internal reporting does not include the allocation of certain expenses to the operating segments but instead includes those other expenses in unallocated corporate and other expense. Unallocated expenses primarily include corporate expenses, such as interest expense, restructuring, impairment and other charges, foreign exchange gains and losses and governance expenses, as well as finance, information technology, human resources, legal, treasury and marketing expenses. The Company determines whether a cost is charged to a particular business segment or is retained as an unallocated cost based on whether the cost relates to a corporate function or to a direct expense associated with the particular business segment. For example, corporate finance, corporate information technology and corporate human resource expenses are unallocated, whereas operating segment finance, information technology and human resource expenses are charged to the applicable operating segment.

The table below presents information about the Company’s segment data for the three and six month periods ended June 30, 2014 and 2013 (in thousands). Asset information by reportable segment is not reported, since the Company does not produce such information internally.

	GLC		GES		Interpretation		Corporate and Other			Total
Three Months Ended June 30, 2014
External revenue	$	87,651	$	36,689	$	6,198	$	—		$	130,538
Cost of revenue (exclusive of depreciation and amortization)		58,665		26,004		5,202		—			89,871
Depreciation and amortization including acquisition-related intangible assets		1,290		801		10		601			2,702
Other operating expenses		19,261		5,380		424		—			25,065
Segment contribution		8,435		4,504		562		(601	)		12,900
Interest expense and other unallocated items		—		—		—		(8,044	)		(8,044	)
Income (loss) before income taxes		8,435		4,504		562		(8,645	)		4,856
Provision for income taxes		—		—		—		1,066			1,066
Net income (loss)	$	8,435	$	4,504	$	562	$	(9,711	)	$	3,790
Three Months Ended June 30, 2013
External revenue	$	80,275	$	37,081	$	6,051	$	—		$	123,407
Cost of revenue (exclusive of depreciation and amortization)		54,164		25,247		4,842		—			84,253
Depreciation and amortization including acquisition-related intangible assets		1,296		770		8		601			2,675
Other operating expenses		18,655		4,702		445		—			23,802
Segment contribution		6,160		6,362		756		(601	)		12,677
Interest expense and other unallocated items		—		—		—		(8,439	)		(8,439	)
Income (loss) before income taxes		6,160		6,362		756		(9,040	)		4,238
Provision for income taxes		—		—		—		771			771
Net income (loss)	$	6,160	$	6,362	$	756	$	(9,811	)	$	3,467
Six Months Ended June 30, 2014
External revenue	$	169,067	$	69,961	$	11,715	$	—		$	250,743
Cost of revenue (exclusive of depreciation and amortization)		113,387		49,663		9,901		—			172,951
Depreciation and amortization including acquisition-related intangible assets		2,552		1,599		18		1,180			5,349
Other operating expenses		38,240		10,494		849					49,583
Segment contribution		14,888		8,205		947		(1,180	)		22,860
Interest expense and other unallocated items		—		—		—		(15,674	)		(15,674	)
Income (loss) before income taxes		14,888		8,205		947		(16,854	)		7,186
Provision for income taxes		—		—		—		1,514			1,514
Net income (loss)	$	14,888	$	8,205	$	947	$	(18,368	)	$	5,672
Six Months Ended June 30, 2013
External revenue	$	152,828	$	72,359	$	11,890	$	—		$	237,077
Cost of revenue (exclusive of depreciation and amortization)		106,485		49,924		9,726		—			166,135
Depreciation and amortization including acquisition-related intangible assets		2,599		1,526		16		1,162			5,303
Other operating expenses		37,669		9,098		990		—			47,757
Segment contribution		6,075		11,811		1,158		(1,162	)		17,882
Interest expense and other unallocated items		—		—		—		(16,022	)		(16,022	)
Income (loss) before income taxes		6,075		11,811		1,158		(17,184	)		1,860
Provision for income taxes		—		—		—		1,363			1,363
Net income (loss)	$	6,075	$	11,811	$	1,158	$	(18,547	)	$	497