Segments And Nature Of The Business |
5.Segments and Nature of the Business
Our segments include the VITAS segment and the Roto-Rooter segment. Relative contributions of each segment to service revenues and sales were 75% and 25%, respectively, in 2012 and 73% and 27%, respectively, in 2011. The vast majority of our service revenues and sales from continuing operations are generated from business within the United States.
The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the RRSC and RRC operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics. The characteristics of these operating segments and the basis for aggregation are reviewed annually. Accordingly, the reportable segments are defined as follows:
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The VITAS segment provides hospice services for patients with terminal illnesses. This type of care is aimed at making the terminally ill patient’s end of life as comfortable and pain-free as possible. Hospice care is typically available to patients who have been initially certified or re-certified as terminally ill (i.e., a prognosis of six months or less) by their attending physician, if any, and the hospice physician. VITAS offers all levels of hospice care in a given market, including routine home care, inpatient care and continuous care. Over 90% of VITAS’ revenues are derived through the Medicare and Medicaid reimbursement programs. |
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The Roto-Rooter segment provides repair and maintenance services to residential and commercial accounts using the Roto-Rooter registered service marks. Such services include plumbing and sewer, drain and pipe cleaning. They are delivered through company-owned and operated territories, independent contractor-operated territories and franchised locations. This segment also manufactures and sells products and equipment used to provide such services. |
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We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”. Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation. Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements. |
Segment data for our continuing operations are set forth below (in thousands):
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For the Years Ended December 31,
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2012
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2011
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2010
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Revenues by Type of Service
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VITAS
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Routine homecare
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$
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778,776
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$
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718,658
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$
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666,562
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Continuous care
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172,063
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158,466
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153,050
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General inpatient
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114,494
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110,742
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105,588
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Medicare cap
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1,704
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(1,594)
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610
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Total segment
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1,067,037
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986,272
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925,810
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Roto-Rooter
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Sewer and drain cleaning
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138,500
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138,932
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135,704
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Plumbing repair and maintenance
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172,310
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177,363
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168,625
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Independent contractors
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28,522
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26,711
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22,943
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HVAC repair and maintenance
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1,109
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3,410
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4,183
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Other products and services
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22,565
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23,282
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23,280
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Total segment
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363,006
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369,698
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354,735
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Total service revenues and sales
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$
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1,430,043
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$
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1,355,970
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$
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1,280,545
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Aftertax Segment Earnings/(Loss)
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VITAS
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$
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86,577
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$
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80,358
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$
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79,796
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Roto-Rooter
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30,905
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34,879
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31,678
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Total
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117,482
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115,237
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111,474
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Corporate
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(28,178)
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(29,258)
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(29,643)
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Net income
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$
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89,304
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$
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85,979
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$
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81,831
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Interest Income
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VITAS
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$
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3,883
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$
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4,293
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$
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4,852
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Roto-Rooter
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1,647
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2,176
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2,661
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Total
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5,530
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6,469
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7,513
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Corporate
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76
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91
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175
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Intercompany eliminations
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(4,797)
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(6,134)
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(7,244)
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Total interest income
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$
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809
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$
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426
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$
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444
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Interest Expense
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VITAS
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$
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233
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$
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229
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$
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131
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Roto-Rooter
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433
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358
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233
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Total
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666
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587
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364
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Corporate
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14,057
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13,301
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11,595
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Total interest expense
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$
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14,723
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$
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13,888
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$
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11,959
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Income Tax Provision
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VITAS
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$
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53,092
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$
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48,835
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$
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48,601
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Roto-Rooter
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18,770
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21,353
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19,547
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Total
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71,862
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70,188
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68,148
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Corporate
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(15,347)
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(15,611)
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(16,148)
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Total income tax provision
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$
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56,515
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$
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54,577
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$
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52,000
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Identifiable Assets
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VITAS
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$
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519,555
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$
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504,677
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$
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531,247
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Roto-Rooter
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224,735
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212,234
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205,601
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Total
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744,290
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716,911
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736,848
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Corporate
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115,336
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78,994
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93,313
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Total identifiable assets
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$
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859,626
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$
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795,905
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$
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830,161
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Additions to Long-Lived Assets
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VITAS
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$
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24,735
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$
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24,298
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$
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17,492
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Roto-Rooter
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16,132
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9,426
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18,035
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Total
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40,867
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33,724
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35,527
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Corporate
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285
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72
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18
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Total additions to long-lived assets
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$
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41,152
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$
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33,796
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$
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35,545
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For the Years Ended December 31,
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2012
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2011
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2010
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Depreciation and Amortization
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VITAS
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$
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19,043
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$
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18,480
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$
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18,900
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Roto-Rooter
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9,029
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8,729
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8,289
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Total
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28,072
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27,209
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27,189
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Corporate
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2,449
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2,290
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1,854
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Total depreciation and amortization
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$
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30,521
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$
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29,499
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$
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29,043
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