Segment Information

9 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have three reporting segments: Clinical Research Services (“CRS”), PAREXEL Consulting Services (“PC”), and PAREXEL Informatics (“PI”).

• CRS constitutes our core business and includes all phases of clinical research from Early Phase (encompassing the early stages of clinical testing that range from first-in-man through proof-of-concept studies) to Phase II-III and Phase IV, which we call Peri/Post-Approval Services, formerly known as Peri Approval Clinical Excellence. Our services include clinical trials management and biostatistics, data management and clinical pharmacology, as well as related medical advisory, patient recruitment, clinical supply and drug logistics, pharmacovigilance, and investigator site services. We aggregate Early Phase with Phase II-III and Peri/Post-Approval Services due to economic similarities in these operating segments.

• PC provides technical expertise and advice in such areas as drug development, regulatory affairs, product pricing and reimbursement, commercialization and strategic compliance. It also provides a full spectrum of market development, product development, and targeted communications services in support of product launch. Our PC consultants identify alternatives and propose solutions to address client issues associated with product development, registration, and commercialization.

• PI provides information technology solutions designed to help improve clients’ product development and regulatory submission processes. PI offers a portfolio of products and services that includes medical imaging services, ClinPhone^® RTSM, IMPACT^® clinical trials management systems (“CTMS”), DataLabs^® electronic data capture, web-based portals, systems integration, electronic patient reported outcomes, and LIQUENT InSight® Regulatory Information Management ("RIM") solutions. These services are often bundled together and integrated with other applications to provide eClinical solutions for our clients.

In February 2014, we announced the launch of PAREXEL Regulatory Outsourcing Services (“PROS”), a service line designed to provide a focused, market-driven approach to regulatory outsourcing services in the life science industry, with a primary emphasis on post-approval regulatory activities. Effective July 1, 2014, the operating results of PROS are included in the PC segment. This service line offering was previously included within LIQUENT RIM solutions and reported within the PI segment. For the three and nine months ended March 31, 2015, we included the operating results of PROS within the PC segment and retroactively restated the three and nine months ended March 31, 2014 to reflect this presentation change.

We evaluate our segment performance and allocate resources based on service revenue and gross profit (service revenue less direct costs), while other operating costs are allocated and evaluated on a geographic basis. Accordingly, we do not include the impact of selling, general, and administrative expenses, depreciation and amortization expense, other income (expense), and income tax expense in segment profitability. We attribute revenue to individual countries based upon the revenue earned in the respective countries; however, inter-segment transactions are not included in service revenue. Furthermore, we have a global infrastructure supporting our business segments, and therefore do not identify assets by reportable segment.

Our segment results were as follows:

(in thousands)	Three Months Ended				Nine Months Ended
	March 31, 2015		March 31, 2014		March 31, 2015		March 31, 2014
Service revenue
CRS	$	384,779	$	373,216	$	1,131,994	$	1,069,675
PC	50,070		55,302		162,495		171,523
PI	67,184		63,857		198,509		187,567
Total service revenue	$	502,033	$	492,375	$	1,492,998	$	1,428,765
Direct costs
CRS	$	274,053	$	255,244	$	791,418	$	748,663
PC	28,645		32,833		90,760		101,463
PI	35,256		35,072		101,916		100,724
Total direct costs	$	337,954	$	323,149	$	984,094	$	950,850
Gross profit
CRS	$	110,726	$	117,972	$	340,576	$	321,012
PC	21,425		22,469		71,735		70,060
PI	31,928		28,785		96,593		86,843
Total gross profit	$	164,079	$	169,226	$	508,904	$	477,915