Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Business Segment Information

Schedule of operating results by business segment

        The following tables summarize, for the periods indicated, operating results by business segment (in thousands):

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Three Months Ended June 30, 2015
Managed care and other revenue	$	722,471		$	53,782		$	(13	)	$	776,240
PBM and dispensing revenue		—			408,924			(27,557	)		381,367
Cost of care		(568,288	)		—			—			(568,288	)
Cost of goods sold		—			(387,828	)		26,419			(361,409	)
Direct service costs and other(3)		(124,779	)		(61,038	)		(5,638	)		(191,455	)
Stock compensation expense(1)(3)		1,784			10,339			1,672			13,795
Changes in fair value of contingent consideration(1)		71			2,496			—			2,567
Less: non-controlling interest segment profit (loss)(2)		(273	)		—			(77	)		(350	)
Segment profit (loss)	$	31,532		$	26,675		$	(5,040	)	$	53,167

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Three Months Ended June 30, 2016
Managed care and other revenue	$	637,970		$	61,975		$	(84	)	$	699,861
PBM and dispensing revenue		—			495,399			(30,915	)		464,484
Cost of care		(472,529	)		—			—			(472,529	)
Cost of goods sold		—			(466,637	)		29,707			(436,930	)
Direct service costs and other(3)		(139,965	)		(64,086	)		(10,026	)		(214,077	)
Stock compensation expense(1)(3)		2,451			5,548			1,511			9,510
Changes in fair value of contingent consideration(1)		390			73			—			463
Impairment of intangible assets(1)		4,800			—			—			4,800
Less: non-controlling interest segment profit (loss)(2)		(1,305	)		—			(7	)		(1,312	)
Segment profit (loss)	$	34,422		$	32,272		$	(9,800	)	$	56,894

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Six Months Ended June 30, 2015
Managed care and other revenue	$	1,422,064		$	102,850		$	(24	)	$	1,524,890
PBM and dispensing revenue		—			667,717			(54,032	)		613,685
Cost of care		(1,090,621	)		5			—			(1,090,616	)
Cost of goods sold		—			(631,366	)		51,750			(579,616	)
Direct service costs and other(3)		(253,247	)		(129,271	)		(13,387	)		(395,905	)
Stock compensation expense(1)(3)		4,972			19,744			2,980			27,696
Changes in fair value of contingent consideration(1)		171			17,365			—			17,536
Less: non-controlling interest segment profit (loss)(2)		(393	)		—			(51	)		(444	)
Segment profit (loss)	$	83,732		$	47,044		$	(12,662	)	$	118,114

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Six Months Ended June 30, 2016
Managed care and other revenue	$	1,256,898		$	119,552		$	(128	)	$	1,376,322
PBM and dispensing revenue		—			965,633			(60,588	)		905,045
Cost of care		(930,160	)		—			—			(930,160	)
Cost of goods sold		—			(910,586	)		58,197			(852,389	)
Direct service costs and other(3)		(265,582	)		(124,927	)		(16,024	)		(406,533	)
Stock compensation expense(1)(3)		4,470			10,970			2,957			18,397
Changes in fair value of contingent consideration(1)		70			127			—			197
Impairment of intangible assets(1)		4,800			—			—			4,800
Less: non-controlling interest segment profit (loss)(2)		(1,136	)		—			(11	)		(1,147	)
Segment profit (loss)	$	71,632		$	60,769		$	(15,575	)	$	116,826

(1)	Stock compensation expense, changes in the fair value of contingent consideration recorded in relation to the acquisitions, and impairment of intangible assets are included in direct service costs and other operating expenses; however, these amounts are excluded from the computation of Segment Profit.
(2)	The non-controlling portion of AlphaCare's segment profit (loss) is excluded from the computation of Segment Profit.
(3)	Effective January 1, 2016, the Company implemented changes related to the allocation of Corporate operational and support functions. These changes were applied retrospectively. The following tables summarize, for the periods indicated, the changes by business segment (in thousands):

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Three Months Ended June 30, 2015
Segment profit (loss) before Corporate allocations	$	47,522		$	30,960		$	(25,315	)	$	53,167
Allocated Corporate costs		(17,280	)		(4,608	)		21,888			—
Allocated Corporate stock compensation expense		1,290			323			(1,613	)		—
Segment profit (loss)	$	31,532		$	26,675		$	(5,040	)	$	53,167

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Three Months Ended June 30, 2016
Segment profit (loss) before Corporate allocations	$	50,719		$	36,256		$	(30,081	)	$	56,894
Allocated Corporate costs		(17,661	)		(4,325	)		21,986			—
Allocated Corporate stock compensation expense		1,364			341			(1,705	)		—
Segment profit (loss)	$	34,422		$	32,272		$	(9,800	)	$	56,894

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Six Months Ended June 30, 2015
Segment profit (loss) before Corporate allocations	$	115,470		$	55,465		$	(52,821	)	$	118,114
Allocated Corporate costs		(35,227	)		(9,293	)		44,520			—
Allocated Corporate stock compensation expense		3,489			872			(4,361	)		—
Segment profit (loss)	$	83,732		$	47,044		$	(12,662	)	$	118,114

	Healthcare			Pharmacy Management			Corporate and Elimination			Consolidated
Six Months Ended June 30, 2016
Segment profit (loss) before Corporate allocations	$	104,246		$	68,963		$	(56,383	)	$	116,826
Allocated Corporate costs		(35,302	)		(8,866	)		44,168			—
Allocated Corporate stock compensation expense		2,688			672			(3,360	)		—
Segment profit (loss)	$	71,632		$	60,769		$	(15,575	)	$	116,826

Schedule of reconciliation of Segment Profit to consolidated income before income taxes

        The following table reconciles Segment Profit to income before income taxes (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2016			2015			2016
Segment profit	$	53,167		$	56,894		$	118,114		$	116,826
Stock compensation expense		(13,795	)		(9,510	)		(27,696	)		(18,397	)
Changes in fair value of contingent consideration		(2,567	)		(463	)		(17,536	)		(197	)
Impairment of intangible assets		—			(4,800	)		—			(4,800	)
Non-controlling interest segment profit (loss)		(350	)		(1,312	)		(444	)		(1,147	)
Depreciation and amortization		(25,022	)		(25,580	)		(48,518	)		(50,587	)
Interest expense		(1,653	)		(1,994	)		(3,279	)		(3,742	)
Interest income		500			692			966			1,375
Income before income taxes	$	10,280		$	13,927		$	21,607		$	39,331