2.Segment Data

The Company has two divisions, Home Health Care and Healthcare Innovations. The Home Health Care division is comprised of two reportable segments, Visiting Nurse Services (VN or Visiting Nurse) and Personal Care Services (PC or Personal Care). Healthcare Innovations is also a reportable segment. Reportable segments have been identified based upon how management has organized the business by services provided to customers and how the chief operating decision maker manages the business and allocates resources, consistent with the criteria in ASC 280, Segment Reporting.

Consistent with information given to the chief operating decision maker, the Company does not allocate certain expenses to the reportable segments. The Company evaluates the performance of its business segments based on operating income. Intercompany and intersegment transactions have been eliminated.

The VN segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. Approximately 96% of the VN segment revenues are generated from the Medicare program while the balance is generated from Medicaid and private insurance programs. VN Medicare revenues include revenues from all Medicare sources including traditional Medicare and Medicare Advantage, whether paid on a per episode basis or a per visit basis.

The PC segment services are also provided in patients’ homes. These services (generally provided by paraprofessional staff such as home health aides) are generally of a custodial rather than skilled nature. PC revenues are generated on an hourly basis. Approximately 85% of the PC segment revenues are generated from Medicaid and other government programs while the balance is generated from insurance programs and private pay patients.

The Company’s Healthcare Innovations business segment was created to house and separately report on our developmental activities outside the traditional home health business platform. These activities are intended ultimately, whether directly or indirectly, to benefit the Company’s patients and payors through the enhanced provision of home health services. The activities all share a common goal of improving patient experiences and quality outcomes, while lowering costs. They include, but are not limited to, items such as: technology, information, population health management, risk-sharing, care-coordination and transitions, clinical advancements, enhanced patient engagement and informed clinical decision and technology enabled in-home clinical assessments.

	Three month period ended						Six month period ended
Consolidated	July 3, 2015			June 30, 2014			July 3, 2015			June 30, 2014
Home Health Operations
Net service revenues:
Visiting Nurse	$	97,748		$	96,776		$	197,283		$	189,949
Personal Care	29,488			28,160			58,249			55,020

	127,236			124,936			255,532			244,969

Operating income before corporate expenses:
Visiting Nurse	12,362			12,445			24,786			21,193
Personal Care	3,724			3,501			6,599			6,140

	16,086			15,946			31,385			27,333
Healthcare Innovations
Revenue	130			256			233			563
Operating loss before noncontrolling interest	(402		)	(427		)	(919		)	(683		)

Corporate expenses	6,898			7,268			13,900			12,966
Deal, transition and other	206			1,243			614			4,357

Operating income	8,580			7,008			15,952			9,327
Interest expense, net	(392		)	(329		)	(753		)	(677		)
Income tax expense	(3,393		)	(2,618		)	(6,380		)	(3,435		)

Net income from continuing operations	$	4,795		$	4,061		$	8,819		$	5,215