Segment Information

12 Months Ended

Dec. 31, 2019

Note 15—Segment Information

Reportable Operating Segments

The Company manages and evaluates its operations in two reportable segments: Housekeeping (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve the same client base and share many operational similarities, they are managed separately due to distinct differences in the type of services provided, as well as the specialized expertise required of the professional management personnel responsible for delivering each segment’s services. Such services are rendered pursuant to discrete service agreements, specific to each reportable segment.

The Company’s accounting policies for the segments are generally the same as described in the Company’s significant accounting policies. Differences between the reportable segments’ operating results and other disclosed data and the information in the Consolidated Financial Statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level using 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 in the Consolidated Financial Statements. In addition, most corporate expenses such as corporate salary and benefit costs, certain legal costs, information technology costs, depreciation, amortization of finite-lived intangible assets, share based compensation costs and other corporate-specific costs, are not allocated to the operating segments. There are also allocations for workers’ compensation and general liability expense within the operating segments that differ from the actual expense recorded by the Company under U.S. GAAP. Segment amounts disclosed are prior to elimination entries made in consolidation.

All revenues and net income are earned in the United States.


	Year Ended December 31,
	2019		2018		2017
	(in thousands)
Revenues¹
Housekeeping services	$	909,499	$	967,606	$	974,685
Dietary services	931,279		1,034,995		886,521
Consolidated	$	1,840,778	$	2,002,601	$	1,861,206

Income before income taxes
Housekeeping services	$	94,173	$	105,904	$	92,500
Dietary services	43,269		60,562		46,008
Corporate²	(52,346)		(66,556)		(5,543)
Consolidated	$	85,096	$	99,910	$	132,965

Depreciation and amortization
Housekeeping services	$	5,945	$	6,315	$	6,547
Dietary services	2,422		2,433		1,813
Corporate	5,573		524		526
Consolidated	$	13,940	$	9,272	$	8,886

Total assets
Housekeeping services	$	265,096	$	291,117	$	304,303
Dietary services	236,075		235,183		242,874
Corporate³	221,421		166,303		128,826
Consolidated	$	722,592	$	692,603	$	676,003

Capital expenditures
Housekeeping services	$	3,188	$	3,996	$	4,287
Dietary services	68		690		663
Corporate	1,112		254		447
Consolidated	$	4,368	$	4,940	$	5,397

^1.For the years ended December 31, 2019 and 2018, both the Housekeeping and Dietary segments earned revenue from several significant customers, including Genesis. For the years ended December 31, 2019 and 2018, Genesis accounted for $287.8 million or 15.6% and $386.7 million or 19.3% of the Company's consolidated revenues, respectively. Additionally, 2018 and 2017 Housekeeping revenues were revised for the presentation of the revenues earned by the Company's wholly-owned captive insurance subsidiary. Refer to Note 1—Description of Business and Significant Accounting Policies herein for additional disclosure regarding the revision.

^2.Represents primarily corporate office cost and related overhead, recording of certain inventories and supplies and workers compensation costs at the reportable segment level which use accounting methods that differ from those used at the corporate level, as well as consolidated subsidiaries’ operating expenses that are not allocated to the reportable segments, net of investment and interest income.

^3.Primarily consists of cash and cash equivalents, marketable securities, deferred income taxes and other current and noncurrent assets.