Business Segment Information

12 Months Ended

Dec. 31, 2011

Business Segment Information

Business Segment Information

11. Business Segment Information

        The accounting policies of the Company's segments are the same as those described in Note 1—"General." The Company evaluates performance of its segments based on profit or loss from operations before stock compensation expense, depreciation and amortization, interest expense, interest income, gain on sale of assets, special charges or benefits, and income taxes ("Segment Profit"). Management uses Segment Profit information for internal reporting and control purposes and considers it important in making decisions regarding the allocation of capital and other resources, risk assessment and employee compensation, among other matters. Effective September 1, 2010, Public Sector has subcontracted with Medicaid Administration to provide pharmacy benefits management services on a risk basis for one of Public Sector's customers. As such, revenue and cost of care related to this intersegment arrangement are eliminated. The Company's segments are defined above. The following tables summarize, for the periods indicated, operating results by business segment (in thousands):

	Commercial			Public Sector			Radiology Benefits Management			Specialty Pharmaceutical Management			Medicaid Administration			Corporate and Elimination			Consolidated
Year Ended December 31, 2009
Net revenue	$	650,139		$	1,362,420		$	305,251		$	259,745		$	64,259		$	—		$	2,641,814
Cost of care		(351,270	)		(1,208,451	)		(205,592	)		—			—			—			(1,765,313	)
Cost of goods sold		—			—			—			(203,336	)		—			—			(203,336	)
Direct service costs		(152,280	)		(67,835	)		(51,732	)		(24,901	)		(54,874	)		—			(351,622	)
Other operating expenses		—			—			—			—			—			(114,088	)		(114,088	)
Stock compensation expense(1)		953			690			1,260			5,383			27			11,469			19,782
Segment profit (loss)	$	147,542		$	86,824		$	49,187		$	36,891		$	9,412		$	(102,619	)	$	227,237
Identifiable assets by business segment(2)
Restricted cash	$	20,398		$	133,123		$	2,272		$	—		$	—		$	3,866		$	159,659
Net accounts receivable		23,025			16,450			6,085			30,371			31,021			7,482			114,434
Investments		14,337			133,392			12,676			—			—			70,040			230,445
Goodwill		120,485			—			104,549			142,291			59,146			—			426,471

	Commercial			Public Sector			Radiology Benefits Management			Specialty Pharmaceutical Management			Medicaid Administration			Corporate and Elimination			Consolidated
Year Ended December 31, 2010
Net revenue	$	652,221		$	1,442,093		$	454,105		$	270,646		$	176,283		$	(26,108	)	$	2,969,240
Cost of care		(365,115	)		(1,246,779	)		(298,516	)		—			(23,683	)		26,108			(1,907,985	)
Cost of goods sold		—			—			—			(218,630	)		—			—			(218,630	)
Direct service costs		(156,278	)		(67,577	)		(67,672	)		(26,368	)		(124,312	)		—			(442,207	)
Other operating expenses		—			—			—			—			—			(124,375	)		(124,375	)
Stock compensation expense(1)		714			714			1,485			424			74			11,691			15,102
Segment profit (loss)	$	131,542		$	128,451		$	89,402		$	26,072		$	28,362		$	(112,684	)	$	291,145
Identifiable assets by business segment(2)
Restricted cash	$	22,501		$	82,813		$	7,890		$	—		$	—		$	3,530		$	116,734
Net accounts receivable		26,564			15,086			2,496			28,309			29,632			4,847			106,934
Investments		8,507			183,632			5,005			—			—			87,360			284,504
Goodwill		120,485			—			104,549			142,291			59,614			—			426,939

	Commercial			Public Sector			Radiology Benefits Management			Specialty Pharmaceutical Management			Medicaid Administration			Corporate and Elimination			Consolidated
Year Ended December 31, 2011
Net revenue	$	561,780		$	1,459,659		$	344,335		$	295,943		$	220,453		$	(82,770	)	$	2,799,400
Cost of care		(314,178	)		(1,271,532	)		(205,240	)		—			(76,544	)		82,770			(1,784,724	)
Cost of goods sold		—			—			—			(232,038	)		—			—			(232,038	)
Direct service costs		(152,760	)		(67,227	)		(61,681	)		(24,344	)		(103,254	)		—			(409,266	)
Other operating expenses		—			—			—			—			—			(120,368	)		(120,368	)
Stock compensation expense(1)		839			872			1,563			693			124			13,327			17,418
Segment profit (loss)	$	95,681		$	121,772		$	78,977		$	40,254		$	40,779		$	(107,041	)	$	270,422
Identifiable assets by business segment(2)
Restricted cash	$	18,319		$	164,479		$	—		$	—		$	—		$	2,996		$	185,794
Net accounts receivable		26,822			28,331			1,398			21,370			30,654			13,031			121,606
Investments		5,320			131,261			—			—			—			64,322			200,903
Goodwill		120,485			—			104,549			142,291			59,614			—			426,939

(1)

Stock compensation expense is included in direct service costs and other operating expenses, however this amount is excluded from the computation of segment profit since it is managed on a consolidated basis.

(2)

Identifiable assets by business segment are those assets that are used in the operations of each segment. The remainder of the Company's assets cannot be specifically identified by segment.

        The following table reconciles Segment Profit to consolidated income before income taxes for the years ended December 31, 2009, 2010 and 2011 (in thousands):

	2009			2010			2011
Segment Profit	$	227,237		$	291,145		$	270,422
Stock compensation expense		(19,782	)		(15,102	)		(17,418	)
Depreciation and amortization		(47,268	)		(54,682	)		(58,623	)
Interest expense		(2,424	)		(2,233	)		(2,502	)
Interest income		6,245			3,275			2,781
Income before income taxes	$	164,008		$	222,403		$	194,660