Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

14. Segment Information

The Company provides services through two reportable segments, Clinical and Commercial. Each reportable business segment is comprised of multiple service offerings that, when combined, create a fully integrated biopharmaceutical outsourced services provider. Clinical provides a continuum of services spanning phases I-IV of clinical development. Commercial, provides commercialization, medication adherence and consulting services to biopharmaceutical companies.  The Clinical and Commercial segments provide services to the other segments primarily in connection with the delivery of services to the end client. The Company accounts for intersegment sales on prices that management considers to be consistent with market pricing.  Total intersegments sales from Clinical to Commercial was $0.1 million and $0.6 million for the three months ended March 31, 2016 and 2015, respectively.  Total intersegment sales from Commercial to Clinical or Corporate and other was $4.4 million and $2.6 million for the three months ended March 31, 2016 and 2015, respectively.

Management measures and evaluates the Company’s operating segments based on segment net revenues and adjusted operating income.  The results of these reportable business segments are regularly reviewed by the Company’s chief operating decision maker, the Chief Executive Officer.  Certain costs are excluded from segment operating income because management evaluates the operating results of the segments excluding such charges.  These items include depreciation and amortization; certain foreign currency impacts; net charges associated with acquisitions; certain legal charges, net of insurance recoveries; certain asset impairment charges; stock-based compensation; as well as corporate and other unallocated expenses.  The Corporate and other unallocated expenses primarily consist of expenses for corporate overhead functions such as finance, human resources, information technology, facilities and legal; restructuring and related charges; and certain expenses incurred in connection with the management agreements with affiliates of certain shareholders of the Parent.  Although these amounts are excluded from segment operating income, as applicable, they are included in reported consolidated operating loss and in the reconciliations presented below.  The Company has not presented segment assets since management does not evaluate the Company’s operating segments using this information.

The Company has an agreement to provide commercialization services to a biopharmaceutical client for launch of certain products in return for a royalty on the client’s net revenues. The results of this arrangement are included in Corporate and other as the contract is managed and evaluated on a corporate level. As these activities were included in the Commercial segment prior to the three months ended September 30, 2015, segment information for the three months ended March 31, 2015 has been restated to include these results in Corporate and other and Commercial recognized intersegment revenues related to performing services under this arrangement.

Selected information for each reportable segment is as follows (in thousands):

	For the Three Months Ended March 31,
	2016			2015
Net Revenues
Clinical	$	254,859		$	219,664
Commercial		290,926			234,546
Intersegment revenues		(4,489	)		(3,233	)
Consolidated net revenues	$	541,296		$	450,977
Adjusted Segment Operating Income (Loss)
Clinical	$	42,736		$	25,649
Commercial		48,920			31,879
Corporate and other		(12,324	)		(8,898	)
Reportable segments adjusted operating income (loss)		79,332			48,630
Depreciation and amortization		(23,763	)		(25,003	)
Stock-based compensation		(1,417	)		(470	)
Other unallocated charges		(8,988	)		(5,599	)
Operating income (loss)		45,164			17,558
Interest income (expense), net		(55,853	)		(56,463	)
Gain on extinguishment of debt		221			—
Income (loss) before income tax (provision) benefit    and income (loss) from equity investments	$	(10,468	)	$	(38,905	)