Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

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, 2018
Managed care and other revenue	$	1,154,888	$	60,603	$	(151)	$	1,215,340
PBM revenue		—		642,794		(47,211)		595,583
Cost of care		(935,814)		—		—		(935,814)
Cost of goods sold		—		(603,951)		45,532		(558,419)
Direct service costs and other		(177,990)		(70,941)		(10,221)		(259,152)
Stock compensation expense (1)		2,742		1,408		6,289		10,439
Changes in fair value of contingent consideration (1)		70		—		—		70
Segment Profit (Loss)	$	43,896	$	29,913	$	(5,762)	$	68,047

					Corporate
			Pharmacy		and
	Healthcare		Management		Elimination		Consolidated
Three Months Ended June 30, 2019
Managed care and other revenue	$	1,220,642	$	62,648	$	(147)	$	1,283,143
PBM revenue		—		550,010		(44,817)		505,193
Cost of care		(1,001,886)		—		—		(1,001,886)
Cost of goods sold		—		(505,203)		44,016		(461,187)
Direct service costs and other		(177,948)		(78,776)		(9,710)		(266,434)
Stock compensation expense (1)		2,444		2,124		846		5,414
Changes in fair value of contingent consideration (1)		(2,149)		—		—		(2,149)
Segment Profit (Loss)	$	41,103	$	30,803	$	(9,812)	$	62,094

					Corporate
			Pharmacy		and
	Healthcare		Management		Elimination		Consolidated
Six Months Ended June 30, 2018
Managed care and other revenue	$	2,312,489	$	122,910	$	(296)	$	2,435,103
PBM revenue		—		1,274,992		(94,095)		1,180,897
Cost of care		(1,864,475)		—		—		(1,864,475)
Cost of goods sold		—		(1,208,864)		90,780		(1,118,084)
Direct service costs and other		(364,236)		(146,527)		(17,466)		(528,229)
Stock compensation expense (1)		5,692		2,893		9,500		18,085
Changes in fair value of contingent consideration (1)		303		—		—		303
Segment Profit (Loss)	$	89,773	$	45,404	$	(11,577)	$	123,600

					Corporate
			Pharmacy		and
	Healthcare		Management		Elimination		Consolidated
Six Months Ended June 30, 2019
Managed care and other revenue	$	2,384,895	$	122,543	$	(316)	$	2,507,122
PBM revenue		—		1,106,575		(85,872)		1,020,703
Cost of care		(1,943,847)		—		—		(1,943,847)
Cost of goods sold		—		(1,035,410)		84,430		(950,980)
Direct service costs and other		(357,138)		(158,411)		(22,809)		(538,358)
Stock compensation expense (1)		4,194		3,796		7,031		15,021
Changes in fair value of contingent consideration (1)		(2,005)		—		—		(2,005)
Segment Profit (Loss)	$	86,099	$	39,093	$	(17,536)	$	107,656

(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.

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,
	2018		2019		2018		2019
Income before income taxes	$	18,375	$	21,219	$	29,752	$	22,189
Stock compensation expense		10,439		5,414		18,085		15,021
Changes in fair value of contingent consideration		70		(2,149)		303		(2,005)
Depreciation and amortization		33,848		33,490		64,255		64,198
Interest expense		8,678		9,141		17,044		18,248
Interest and other income		(3,363)		(5,021)		(5,839)		(9,995)
Segment Profit	$	68,047	$	62,094	$	123,600	$	107,656