Segment Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

Reportable Operating Segments

U.S. GAAP establishes standards for reporting information regarding operating segments in annual financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group in making decisions on how to allocate resources and assess performance.

We manage and evaluate our operations in two reportable segments: Housekeeping (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve a similar client base and share many operational similarities, they are managed separately due to distinct differences in the type of service provided, as well as the specialized expertise required of the professional management personnel responsible for delivering the respective segment’s services. We consider the various services provided within each reportable segment to comprise an identifiable reportable operating segment since such services are rendered pursuant to a single service agreement, specific to that reportable segment, as well as the fact that the delivery of the respective reportable segment’s services are managed by the same management personnel of the particular reportable segment.

The Company’s accounting policies for the segments are generally the same as the Company’s significant accounting policies. Differences between the reportable segments’ operating results and other disclosed data and our consolidated financial statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level which use methods other than generally accepted accounting principles. There are certain inventories and supplies that are primarily expensed when incurred within the operating segments, while they are capitalized for the consolidated financial statements. As discussed, most corporate expense is not allocated to the operating segments, and such expenses include corporate salary and benefit costs, bad debt expense, certain legal costs, information technology costs, depreciation, amortization of finite lived intangibles, share based compensation costs and other corporate specific costs. Additionally, there are allocations for workers' compensation and general liability expense within the operating segments that differ from our actual expense recorded for U.S. GAAP. Additionally, included in the differences between the reportable segments’ operating results and other disclosed data are amounts attributable to Huntingdon Holdings Inc. ("Huntingdon"), our investment holding company subsidiary. Huntingdon does not transact any business with the reportable segments. Segment amounts disclosed are prior to any elimination entries made in consolidation.

Housekeeping provides services in Canada, although essentially all of its revenues and net income, 99% in both categories, are earned in one geographic area, the United States. Dietary provides services solely in the United States.

	Housekeeping Services		Dietary Services		Corporate and Eliminations				Total
Three Months Ended September 30, 2015
Revenues	$	227,760,000	$	132,405,000	$	—			$	360,165,000
Income before income taxes	21,770,000		8,239,000		(3,268,000		)	(1)	26,741,000
Three Months Ended September 30, 2014
Revenues	$	211,552,000	$	108,547,000	$	—			$	320,099,000
Income (loss) before income taxes	15,589,000		5,648,000		(56,320,000		)	(1)	(35,083,000		)

	Housekeeping Services		Dietary Services		Corporate and Eliminations				Total
Nine Months Ended September 30, 2015
Revenues	$	681,306,000	$	389,461,000	$	—			$	1,070,767,000
Income before income taxes	64,139,000		25,008,000		(11,095,000		)	(1)	78,052,000
Nine Months Ended September 30, 2014
Revenues	$	627,650,000	$	323,909,000	$	—			$	951,559,000
Income before income taxes	52,224,000		18,946,000		(61,081,000		)	(1)	10,089,000

(1) Represents primarily corporate office cost and related overhead, recording of transactions at the reportable segment level which use methods other than U.S. GAAP, as well as consolidated subsidiaries’ operating expenses that are not allocated to the reportable segments, net of investment and interest income. Additionally, during the third quarter 2014, the Company recorded a one-time, non-cash change in estimate related to our self-insurance claims reserve which was not allocated to the reportable segments.

Total Revenues from Clients

We earned total revenues from clients in the following service categories:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2015		2014		2015		2014
Housekeeping services	$	158,019,000	$	147,812,000	$	471,692,000	$	437,358,000
Laundry and linen services	69,060,000		63,241,000		207,887,000		188,766,000
Dietary services	132,405,000		108,547,000		389,461,000		323,909,000
Maintenance services and other	681,000		499,000		1,727,000		1,526,000
	$	360,165,000	$	320,099,000	$	1,070,767,000	$	951,559,000