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Business Segment Information (Tables)
 12 Months Ended
Dec. 31, 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

 

Year Ended December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

2,959,252

 

$

238,456

 

$

(63)

 

$

3,197,645

 

PBM and dispensing revenue

 

 

 —

 

 

1,510,180

 

 

(110,425)

 

 

1,399,755

 

Cost of care

 

 

(2,274,755)

 

 

 —

 

 

 —

 

 

(2,274,755)

 

Cost of goods sold

 

 

 —

 

 

(1,427,680)

 

 

105,803

 

 

(1,321,877)

 

Direct service costs and other

 

 

(510,811)

 

 

(284,968)

 

 

(26,613)

 

 

(822,392)

 

Stock compensation expense (1)

 

 

8,502

 

 

36,351

 

 

5,531

 

 

50,384

 

Changes in fair value of contingent consideration (1)

 

 

(1,404)

 

 

45,661

 

 

 —

 

 

44,257

 

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

 

 

(2,439)

 

 

 —

 

 

(195)

 

 

(2,634)

 

Segment profit (loss)

 

$

183,223

 

$

118,000

 

$

(25,572)

 

$

275,651

 

Identifiable assets by business segment (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

$

133,597

 

$

 —

 

$

 —

 

$

133,597

 

Net accounts receivable

 

 

153,036

 

 

270,975

 

 

4,633

 

 

428,644

 

Investments

 

 

313,045

 

 

 —

 

 

13,120

 

 

326,165

 

Pharmaceutical inventory

 

 

 —

 

 

50,749

 

 

 —

 

 

50,749

 

Goodwill

 

 

260,618

 

 

360,772

 

 

 —

 

 

621,390

 

Other intangible assets, net

 

 

12,227

 

 

121,147

 

 

 —

 

 

133,374

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Corporate

    

 

 

 

 

 

 

 

 

Pharmacy

 

and

 

 

 

 

 

    

Healthcare

    

Management

    

Elimination

    

Consolidated

 

Year Ended December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

2,659,685

 

$

243,561

 

$

(304)

 

$

2,902,942

 

PBM and dispensing revenue

 

 

 —

 

 

2,053,188

 

 

(119,246)

 

 

1,933,942

 

Cost of care

 

 

(1,882,614)

 

 

 —

 

 

 —

 

 

(1,882,614)

 

Cost of goods sold

 

 

 —

 

 

(1,933,086)

 

 

114,366

 

 

(1,818,720)

 

Direct service costs and other

 

 

(573,706)

 

 

(261,570)

 

 

(41,336)

 

 

(876,612)

 

Stock compensation expense (1)

 

 

4,440

 

 

20,509

 

 

12,473

 

 

37,422

 

Changes in fair value of contingent consideration (1)

 

 

(231)

 

 

127

 

 

 —

 

 

(104)

 

Impairment of intangible assets (1)

 

 

4,800

 

 

 —

 

 

 —

 

 

4,800

 

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

 

 

(567)

 

 

 —

 

 

(170)

 

 

(737)

 

Segment profit (loss)

 

$

212,941

 

$

122,729

 

$

(33,877)

 

$

301,793

 

Identifiable assets by business segment (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

$

81,608

 

$

 1

 

$

167

 

$

81,776

 

Net accounts receivable

 

 

191,058

 

 

405,611

 

 

10,095

 

 

606,764

 

Investments

 

 

293,034

 

 

10,703

 

 

1,516

 

 

305,253

 

Pharmaceutical inventory

 

 

 —

 

 

58,995

 

 

 —

 

 

58,995

 

Goodwill

 

 

350,576

 

 

391,478

 

 

 —

 

 

742,054

 

Other intangible assets, net

 

 

55,756

 

 

130,476

 

 

 —

 

 

186,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Corporate

    

 

 

 

 

 

 

 

 

Pharmacy

 

and

 

 

 

 

 

    

Healthcare

    

Management

    

Elimination

    

Consolidated

 

Year Ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed care and other revenue

 

$

3,206,277

 

$

273,489

 

$

(584)

 

$

3,479,182

 

PBM and dispensing revenue

 

 

 —

 

 

2,491,044

 

 

(131,643)

 

 

2,359,401

 

Cost of care

 

 

(2,413,770)

 

 

 —

 

 

 —

 

 

(2,413,770)

 

Cost of goods sold

 

 

 —

 

 

(2,341,979)

 

 

130,069

 

 

(2,211,910)

 

Direct service costs and other

 

 

(601,201)

 

 

(302,525)

 

 

(38,157)

 

 

(941,883)

 

Stock compensation expense (1)

 

 

10,689

 

 

19,881

 

 

8,546

 

 

39,116

 

Changes in fair value of contingent consideration (1)

 

 

696

 

 

 —

 

 

 —

 

 

696

 

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

 

 

(56)

 

 

 —

 

 

(3)

 

 

(59)

 

Segment profit (loss)

 

$

202,747

 

$

139,910

 

$

(31,766)

 

$

310,891

 

Identifiable assets by business segment (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

$

220,786

 

$

8,059

 

$

168

 

$

229,013

 

Net accounts receivable

 

 

244,486

 

 

403,880

 

 

12,409

 

 

660,775

 

Investments

 

 

327,865

 

 

 —

 

 

 —

 

 

327,865

 

Pharmaceutical inventory

 

 

 —

 

 

40,945

 

 

 —

 

 

40,945

 

Goodwill

 

 

610,867

 

 

395,421

 

 

 —

 

 

1,006,288

 

Other intangible assets, net

 

 

165,159

 

 

103,129

 

 

 —

 

 

268,288

 

(1)

Stock compensation expense, changes in the fair value of contingent consideration recorded in relation to the 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 interest portion of AlphaCare’s segment profit (loss) is excluded from the computation of Segment Profit.

(3)

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.
Schedule of reconciliation of Segment Profit to income before income taxes

(1)

 

The following table reconciles consolidated income before income taxes to Segment Profit for the years ended December 31, 2015, 2016 and 2017 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

2015

    

2016

    

2017

 

Income before income taxes

 

$

71,116

 

$

145,517

 

$

135,224

 

Stock compensation expense

 

 

50,384

 

 

37,422

 

 

39,116

 

Changes in fair value of contingent consideration

 

 

44,257

 

 

(104)

 

 

696

 

Impairment of intangible assets

 

 

 —

 

 

4,800

 

 

 —

 

Non-controlling interest segment (profit) loss

 

 

2,634

 

 

737

 

 

59

 

Depreciation and amortization

 

 

102,844

 

 

106,046

 

 

115,706

 

Interest expense

 

 

6,581

 

 

10,193

 

 

25,977

 

Interest and other income

 

 

(2,165)

 

 

(2,818)

 

 

(5,887)

 

Segment Profit

 

$

275,651

 

$

301,793

 

$

310,891