Note 15. 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 improve bovine efficiency, 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.

The following is a summary of segment performance for the three and six months ended June 30, 2017 and 2016 (in thousands):


	For the Three Months Ended June 30,
		CAG	Water		LPD		Other		Unallocated Amounts		Consolidated Total
2017
Revenue	$	439,948	$	29,424	$	33,553	$	6,015	$	-	$	508,940

Income (loss) from operations	$	108,731	$	13,653	$	5,176	$	768	$	(5,764)	$	122,564
Interest expense, net												(7,979)
Income before provision for income taxes												114,585
Provision for income taxes												29,178
Net income												85,407
Less: Net income attributable to noncontrolling interest												50
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	85,357

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



	For the Six Months Ended June 30,
		CAG	Water		LPD		Other		Unallocated Amounts		Consolidated Total
2017
Revenue	$	843,175	$	54,501	$	62,870	$	10,415	$	-	$	970,961

Income (loss) from operations	$	188,586	$	23,916	$	8,978	$	1,161	$	(7,834)	$	214,807
Interest expense, net												(15,485)
Income before provision for income taxes												199,322
Provision for income taxes												44,857
Net income												154,465
Less: Net income attributable to noncontrolling interest												89
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	154,376

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

The following is a summary of revenue by product and service category for the three and six months ended June 30, 2017 and 2016 (in thousands):


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
		2017		2016		2017		2016
CAG segment revenue:
CAG Diagnostics recurring revenue:	$	380,319	$	338,653	$	726,999	$	644,494
IDEXX VetLab consumables		132,094		114,560		255,647		222,529
Rapid assay products		60,266		55,777		108,161		98,863
Reference laboratory diagnostic and consulting services		171,298		153,134		330,367		293,842
CAG Diagnostics service and accessories		16,661		15,182		32,824		29,260
CAG Diagnostics capital - instruments		27,716		32,165		53,899		54,808
Veterinary software, services and diagnostic imaging systems		31,913		29,405		62,277		58,560
CAG segment revenue		439,948		400,223		843,175		757,862

Water segment revenue		29,424		27,829		54,501		51,381
LPD segment revenue		33,553		32,856		62,870		63,712
Other segment revenue		6,015		5,661		10,415		11,164
Total revenue	$	508,940	$	466,569	$	970,961	$	884,119

During the fourth quarter of 2016, we modified our management reporting and reclassified the location of SNAP Pro service plans previously located in CAG Diagnostics capital - instruments to CAG Diagnostics service and accessories. The amount of revenue reclassified was $0.4 million during the three months ended June 30, 2016 and $0.7 million for the six months ended June 30, 2016.