Segment Reporting

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Reporting

NOTE 15.     SEGMENT REPORTING

We operate primarily through three business segments: diagnostic and information technology-based products and services for the veterinary market, which we refer to as CAG, water quality testing products ("Water") and products for livestock and poultry health, which we refer to as Livestock and Poultry Diagnostics ("LPD"). We also operate two smaller operating segments that comprise products for testing milk quality ("Dairy") and products for the human point-of-care medical diagnostics market ("OPTI Medical"). Financial information about our Dairy and OPTI Medical operating segments is combined and presented with one of our remaining pharmaceutical product lines and our out-licensing arrangements in an "Other" category because they do not meet the quantitative or qualitative thresholds for reportable segments.

The accounting policies of the segments are consistent with those discussed in Notes 1 and 15 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2010, except for the change in our measure of segment profitability during the three months ended March 31, 2011 as discussed below. Intersegment revenues, which are not included in the table below, were not significant for the three and nine months ended September 30, 2011 and 2010.

On January 1, 2011, we changed the measure of profitability for our reportable segments. As a result of this change, a portion of corporate support function expenses and personnel-related expenses, certain manufacturing costs and certain foreign currency exchange gains and losses are no longer allocated to our reportable segments and, instead, are reported under the caption "Unallocated Amounts." Similar to our treatment of share-based compensation expense, we estimate corporate support function expenses and certain personnel-related costs and allocate the estimated expense to the operating segments. This allocation differs from the actual expense and consequently yields a difference that is now reported under the caption "Unallocated Amounts."  With respect to manufacturing costs, the costs reported in our operating segments include our standard cost for products sold and any variances from standard cost for products purchased or manufactured within the period. We capitalize these variances for inventory on hand at the end of the period to record inventory in accordance with U.S. GAAP. We then record these costs as cost of product revenue as that inventory is sold. The impact to cost of product revenue resulting from this variance capitalization and subsequent expense recognition is now reported within the caption "Unallocated Amounts." Prior to January 1, 2011, "Unallocated Amounts" included primarily corporate research and development expenses that did not align with one of our existing business or service categories and the difference between estimated and actual share-based compensation expense. The segment income (loss) from operations discussed within this report for the three and nine months ended September 30, 2010 have been restated to conform to our new measure of segment profitability. This change in measure of segment profitability did not have a material impact on the results of operations for any of our individual segments. There was no change to the business composition of our reportable segments. 

The following is a summary of segment performance for the three and nine months ended September 30, 2011 and 2010 (in thousands):

	For the Three Months Ended September 30,
	CAG		Water		LPD		Other		Unallocated Amounts			Consolidated Total
2011
Revenue	$	248,074	$	21,648	$	20,675	$	10,557	$	-		$	300,954
Income (loss) from operations	$	44,296	$	9,979	$	3,648	$	34	$	(1,861	)	$	56,096
Interest expense, net													(478	)
Income before provision for income taxes													55,618
Provision for income taxes													17,122
Net income													38,496
Net loss attributable to noncontrolling interest													(11	)
Net income attributable to IDEXX  Laboratories, Inc. stockholders												$	38,507
2010
Revenue	$	222,909	$	20,044	$	17,476	$	9,199	$	-		$	269,628
Income (loss) from operations	$	40,535	$	8,566	$	3,320	$	869	$	(3,476	)	$	49,814
Interest expense, net													(551	)
Income before provision for income taxes													49,263
Provision for income taxes													14,548
Net income													34,715
Net income attributable to noncontrolling interest													21
Net income attributable to IDEXX  Laboratories, Inc. stockholders												$	34,694

	For the Nine Months Ended September 30,
	CAG		Water		LPD		Other			Unallocated Amounts			Consolidated Total
2011
Revenue	$	748,397	$	62,123	$	69,981	$	30,987		$	-		$	911,488
Income (loss) from operations	$	145,137	$	25,327	$	17,974	$	(207	)	$	(7,305	)	$	180,926
Interest expense, net														(1,200	)
Income before provision for income taxes														179,726
Provision for income taxes														55,970
Net income														123,756
Net loss attributable to noncontrolling interest														(20	)
Net income attributable to IDEXX  Laboratories, Inc. stockholders													$	123,776
2010
Revenue	$	676,646	$	57,356	$	56,577	$	29,056		$	-		$	819,635
Income (loss) from operations	$	128,497	$	24,228	$	12,447	$	2,057		$	(14,152	)	$	153,077
Interest expense, net														(1,414	)
Income before provision for income taxes														151,663
Provision for income taxes														46,723
Net income														104,940
Net income attributable to noncontrolling interest														27
Net income attributable to IDEXX  Laboratories, Inc. stockholders													$	104,913

The following is a summary of revenue by product and service category for the three and nine months ended September 30, 2011 and 2010 (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2011		2010		2011		2010
CAG segment revenue:
Instruments and consumables	$	99,719	$	88,481	$	292,209	$	258,318
Rapid assay products		36,073		35,576		118,883		115,500
Reference laboratory diagnostic and consulting services		94,027		82,534		282,242		248,422
Practice management systems and digital radiography		18,255		16,318		55,063		54,406
CAG segment revenue		248,074		222,909		748,397		676,646
Water segment revenue		21,648		20,044		62,123		57,356
LPD segment revenue		20,675		17,476		69,981		56,577
Other segment revenue		10,557		9,199		30,987		29,056
Total revenue	$	300,954	$	269,628	$	911,488	$	819,635