Segment Reporting

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

Note 14.     Segment Reporting 

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. Our reportable segments include diagnostic and information technology-based products and services for the veterinary market, which we refer to as the Companion Animal Group (“CAG”), water quality products (“Water”) and diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and food, which we refer to as Livestock, Poultry and Dairy (“LPD”). Our Other operating segment combines and presents products for the human point-of-care medical diagnostics market with our pharmaceutical product line and our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments.

Certain costs are not allocated to our operating segments and are instead reported under the caption “Unallocated Amounts”. These costs include costs that do not align with one of our existing operating segments or are cost prohibitive to allocate, which primarily consist of our R&D function,regional or country expenses, certain foreign currency revaluation gains and losses on monetary balances in currencies other than our subsidiaries’ functional currency and unusual items. Corporate support function costs (such as information technology, facilities, human resources, finance and legal), health benefits and incentive compensation are charged to our business segments at pre-determined budgeted amounts or rates. Differences from these pre-determined budgeted amounts or rates are captured within Unallocated Amounts.

Effective January 1, 2016, we modified our management reporting to the CODM to provide a more comprehensive view of the performance of our operating segments by including the capitalization of variances between standard and actual manufacturing costs, which adjusts the timing of cost recognition from when the variance is created to the period in which the related inventory is sold. Prior to January 1, 2016, the capitalization and subsequent recognition of these variances were not allocated to our operating segments and were instead reported under the caption “Unallocated Amounts”.

The segment gross profit and income (loss) from operations within this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2015 has been retrospectively revised to reflect the changes to our segment performance metrics described above.

The following is a summary of segment performance for the three and six months ended June  30, 2016 and 2015(in thousands):

	For the Three Months Ended June 30,
		CAG	Water		LPD		Other		Unallocated Amounts		Consolidated Total
2016
Revenue	$	400,223	$	27,829	$	32,856	$	5,661	$	-	$	466,569
Income (loss) from operations	$	91,019	$	12,743	$	5,069	$	(920)	$	(3,749)	$	104,162
Interest expense, net												(7,276)
Income before provision for income taxes												96,886
Provision for income taxes												29,680
Net income												67,206
Less: Net income attributable to noncontrolling interest												4
Net income attributable to IDEXX  Laboratories, Inc. stockholders											$	67,202
2015
Revenue	$	351,620	$	25,051	$	32,059	$	4,613	$	-	$	413,343
Income (loss) from operations	$	68,085	$	11,951	$	6,579	$	(933)	$	2,621	$	88,303
Interest expense, net												(6,700)
Income before provision for income taxes												81,603
Provision for income taxes												24,665
Net income												56,938
Less: Net income attributable to noncontrolling interest												26
Net income attributable to IDEXX  Laboratories, Inc. stockholders											$	56,912

	For the Six Months Ended June 30,
		CAG	Water		LPD		Other		Unallocated Amounts		Consolidated Total
2016
Revenue	$	757,862	$	51,381	$	63,712	$	11,164	$	-	$	884,119
Income (loss) from operations	$	152,397	$	22,422	$	9,639	$	(1,757)	$	(4,746)	$	177,955
Interest expense, net												(14,760)
Income before provision for income taxes												163,195
Provision for income taxes												49,964
Net income												113,231
Less: Net income attributable to noncontrolling interest												10
Net income attributable to IDEXX  Laboratories, Inc. stockholders											$	113,221
2015
Revenue	$	676,151	$	46,749	$	63,329	$	9,591	$	-	$	795,820
Income (loss) from operations	$	121,603	$	21,312	$	13,535	$	(1,255)	$	5,911	$	161,106
Interest expense, net												(12,579)
Income before provision for income taxes												148,527
Provision for income taxes												45,011
Net income												103,516
Less: Net income attributable to noncontrolling interest												10
Net income attributable to IDEXX  Laboratories, Inc. stockholders											$	103,506

The following is a summary of revenue by product and service category for the three and six months ended June  30, 2016 and 2015  (in thousands): 

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
		2016		2015		2016		2015
CAG segment revenue:
CAG Diagnostics recurring revenue:	$	338,298	$	300,146	$	643,808	$	578,911
IDEXX VetLab® consumables		114,561		100,743		222,520		199,135
IDEXX VetLab service and accessories		14,826		14,018		28,583		27,548
Rapid assay products		55,777		52,182		98,863		95,819
Reference laboratory diagnostic and consulting services		153,134		133,203		293,842		256,409
CAG Diagnostics capital - instruments		32,520		24,064		55,494		44,178
Veterinary software, services and diagnostic imaging systems (1)		29,405		27,410		58,560		53,062
CAG segment revenue		400,223		351,620		757,862		676,151
Water segment revenue		27,829		25,051		51,381		46,749
LPD segment revenue		32,856		32,059		63,712		63,329
Other segment revenue		5,661		4,613		11,164		9,591
Total revenue	$	466,569	$	413,343	$	884,119	$	795,820
(1) During the second quarter of 2016, we renamed our customer information management and diagnostic imaging systems line of business in the CAG segment to veterinary software, services and diagnostic imaging systems. Financial results were not adjusted as a result of this name change.