Segment Information

3 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have three reportable 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 PAREXEL Access). Our services include clinical trials management and biostatistics, commercialization, 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 and PAREXEL Access with Phase II-III 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 communication 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.

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 its business segments, and therefore, assets are not identified by reportable segment.

Our segment results were as follows:

(dollars in millions)	Three Months Ended
	September 30, 2016		September 30, 2015
Service revenue
CRS	$	376.3	$	410.2
PC	55.0		39.3
PI	65.4		62.6
Total service revenue	$	496.7	$	512.1
Direct costs
CRS	$	262.1	$	287.5
PC	30.4		20.2
PI	35.2		35.5
Total direct costs	$	327.7	$	343.2
Gross profit
CRS	$	114.2	$	122.7
PC	24.6		19.1
PI	30.2		27.1
Total gross profit	$	169.0	$	168.9