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Business Segment Information (Tables)
 6 Months Ended
Jun. 30, 2017
Business Segment Information  
Schedule of operating results by business segment

The following tables summarize, for the periods indicated, operating results by business segment (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Corporate

    

 

 

 

 

 

 

 

 

Pharmacy

 

and

 

 

 

 

 

    

Healthcare

    

Management

    

Elimination

    

Consolidated

 

Three Months Ended June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

637,970

 

$

61,975

 

$

(84)

 

$

699,861

 

PBM and dispensing revenue

 

 

 —

 

 

495,399

 

 

(30,915)

 

 

464,484

 

Cost of care

 

 

(472,529)

 

 

 —

 

 

 —

 

 

(472,529)

 

Cost of goods sold

 

 

 —

 

 

(466,637)

 

 

29,707

 

 

(436,930)

 

Direct service costs and other

 

 

(139,965)

 

 

(64,086)

 

 

(10,026)

 

 

(214,077)

 

Stock compensation expense (1)

 

 

2,451

 

 

5,548

 

 

1,511

 

 

9,510

 

Changes in fair value of contingent consideration (1)

 

 

390

 

 

73

 

 

 —

 

 

463

 

Impairment of intangible assets (1)

 

 

4,800

 

 

 —

 

 

 —

 

 

4,800

 

Less: non-controlling interest segment profit (loss) (2)

 

 

(1,305)

 

 

 —

 

 

(7)

 

 

(1,312)

 

Segment profit (loss)

 

$

34,422

 

$

32,272

 

$

(9,800)

 

$

56,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Corporate

    

 

 

 

 

 

 

 

 

Pharmacy

 

and

 

 

 

 

 

    

Healthcare

    

Management

    

Elimination

    

Consolidated

 

Three Months Ended June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

755,270

 

$

66,659

 

$

(230)

 

$

821,699

 

PBM and dispensing revenue

 

 

 —

 

 

631,932

 

 

(34,492)

 

 

597,440

 

Cost of care

 

 

(583,264)

 

 

 —

 

 

 —

 

 

(583,264)

 

Cost of goods sold

 

 

 —

 

 

(595,446)

 

 

33,091

 

 

(562,355)

 

Direct service costs and other

 

 

(145,914)

 

 

(74,953)

 

 

(10,505)

 

 

(231,372)

 

Stock compensation expense (1)

 

 

3,106

 

 

5,684

 

 

2,581

 

 

11,371

 

Changes in fair value of contingent consideration (1)

 

 

252

 

 

 —

 

 

 —

 

 

252

 

Less: non-controlling interest segment profit (loss) (2)

 

 

(568)

 

 

 —

 

 

(1)

 

 

(569)

 

Segment profit (loss)

 

$

30,018

 

$

33,876

 

$

(9,554)

 

$

54,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Corporate

    

 

 

 

 

 

 

 

 

Pharmacy

 

and

 

 

 

 

 

    

Healthcare

    

Management

    

Elimination

    

Consolidated

 

Six Months Ended June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

1,256,898

 

$

119,552

 

$

(128)

 

$

1,376,322

 

PBM and dispensing revenue

 

 

 —

 

 

965,633

 

 

(60,588)

 

 

905,045

 

Cost of care

 

 

(930,160)

 

 

 —

 

 

 —

 

 

(930,160)

 

Cost of goods sold

 

 

 —

 

 

(910,586)

 

 

58,197

 

 

(852,389)

 

Direct service costs and other

 

 

(265,582)

 

 

(124,927)

 

 

(16,024)

 

 

(406,533)

 

Stock compensation expense (1)

 

 

4,470

 

 

10,970

 

 

2,957

 

 

18,397

 

Changes in fair value of contingent consideration (1)

 

 

70

 

 

127

 

 

 —

 

 

197

 

Impairment of intangible assets (1)

 

 

4,800

 

 

 —

 

 

 

 

 

4,800

 

Less: non-controlling interest segment profit (loss) (2)

 

 

(1,136)

 

 

 —

 

 

(11)

 

 

(1,147)

 

Segment profit (loss)

 

$

71,632

 

$

60,769

 

$

(15,575)

 

$

116,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Corporate

    

 

 

 

 

 

 

 

 

Pharmacy

 

and

 

 

 

 

 

    

Healthcare

    

Management

    

Elimination

    

Consolidated

 

Six Months Ended June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

1,420,646

 

$

130,839

 

$

(446)

 

$

1,551,039

 

PBM and dispensing revenue

 

 

 —

 

 

1,238,678

 

 

(64,955)

 

 

1,173,723

 

Cost of care

 

 

(1,065,318)

 

 

 —

 

 

 —

 

 

(1,065,318)

 

Cost of goods sold

 

 

 —

 

 

(1,167,283)

 

 

62,295

 

 

(1,104,988)

 

Direct service costs and other

 

 

(284,882)

 

 

(150,806)

 

 

(17,170)

 

 

(452,858)

 

Stock compensation expense (1)

 

 

5,765

 

 

11,414

 

 

4,332

 

 

21,511

 

Changes in fair value of contingent consideration (1)

 

 

203

 

 

 —

 

 

 —

 

 

203

 

Less: non-controlling interest segment profit (loss) (2)

 

 

(845)

 

 

 —

 

 

(2)

 

 

(847)

 

Segment profit (loss)

 

$

77,259

 

$

62,842

 

$

(15,942)

 

$

124,159

 

 

(1)

Stock compensation expense, changes in the fair value of contingent consideration recorded in relation to acquisitions and impairment of intangible assets are included in direct service costs and other operating expenses; however, these amounts are excluded from the computation of Segment Profit.

(2)

The non‑controlling portion of AlphaCare’s segment profit (loss) is excluded from the computation of Segment Profit.
Schedule of reconciliation of Segment Profit to income before income taxes

The following table reconciles income before income taxes to Segment Profit (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

June 30, 

 

June 30, 

 

 

 

 

2016

    

2017

    

2016

    

2017

    

 

Income before income taxes

 

$

13,927

 

$

10,588

 

$

39,331

 

$

39,863

 

 

Stock compensation expense

 

 

9,510

 

 

11,371

 

 

18,397

 

 

21,511

 

 

Changes in fair value of contingent consideration

 

 

463

 

 

252

 

 

197

 

 

203

 

 

Impairment of intangible assets

 

 

4,800

 

 

 —

 

 

4,800

 

 

 —

 

 

Non-controlling interest segment (profit) loss

 

 

1,312

 

 

569

 

 

1,147

 

 

847

 

 

Depreciation and amortization

 

 

25,580

 

 

27,731

 

 

50,587

 

 

54,707

 

 

Interest expense

 

 

1,994

 

 

4,900

 

 

3,742

 

 

9,048

 

 

Interest and other income

 

 

(692)

 

 

(1,071)

 

 

(1,375)

 

 

(2,020)

 

 

Segment Profit

 

$

56,894

 

$

54,340

 

$

116,826

 

$

124,159