Segment Information

Reportable Operating Segments

The Company manages and evaluates its operations in two reportable segments: Housekeeping (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve the same client base and share many operational similarities, they are managed separately due to distinct differences in the type of services provided, as well as the specialized expertise required of the professional management personnel responsible for delivering each segment’s services. Such services are rendered pursuant to discrete service agreements, specific to each reportable segment.

The Company’s accounting policies for the segments are generally the same as described in the Company’s significant accounting policies. Differences between the reportable segments’ operating results and other disclosed data and the information in the Consolidated Financial Statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level using other than generally accepted accounting principles. There are certain inventories and supplies that are primarily expensed when incurred within the operating segments, while they are capitalized in the Consolidated Financial Statements. In addition, most corporate expenses such as corporate salary and benefit costs, certain legal costs, information technology costs, depreciation, amortization of finite-lived intangible assets, share based compensation costs and other corporate-specific costs, are not allocated to the operating segments. There are also allocations for workers’ compensation and general liability expense within the operating segments that differ from the actual expense recorded by the Company under U.S. GAAP. Segment amounts disclosed are prior to elimination entries made in consolidation.

All revenues and net income are earned in the United States.



	Year Ended December 31,
	2017			2016			2015
	(in thousands)
Revenues⁽¹⁾
Housekeeping services	$	979,610		$	957,148		$	909,709
Dietary services	886,521			605,514			527,140
Corporate and eliminations	—			—			—
Consolidated	$	1,866,131		$	1,562,662		$	1,436,849

Income before income taxes
Housekeeping services	$	95,505		$	90,756		$	84,471
Dietary services	46,008			34,641			31,612
Corporate and eliminations⁽²⁾	(8,548		)	(5,010		)	(26,319		)
Consolidated	$	132,965		$	120,387		$	89,764

Depreciation and amortization
Housekeeping services	$	6,547		$	6,535		$	6,488
Dietary services	1,813			439			685
Corporate and eliminations	526			522			487
Consolidated	$	8,886		$	7,496		$	7,660

Total assets
Housekeeping services	$	304,303		$	266,464		$	228,116
Dietary services	242,874			127,187			104,797
Corporate and eliminations⁽³⁾	128,826			134,795			148,036
Consolidated	$	676,003		$	528,446		$	480,949

Capital expenditures
Housekeeping services	$	4,287		$	4,612		$	3,586
Dietary services	663			410			336
Corporate and eliminations	447			420			1,076
Consolidated	$	5,397		$	5,442		$	4,998


⁽¹⁾	For the year ended December 31, 2017, the Company earned revenue from one customer that amounted to more than 10% of total consolidated revenues. Housekeeping services and Dietary services both earned revenue from the customer, the total of which amounted to $327.5 million.

⁽²⁾

Represents primarily corporate office cost and related overhead, recording of certain inventories and supplies and workers compensation costs at the reportable segment level which use accounting methods that differ from those used at the corporate level, as well as consolidated subsidiaries’ operating expenses that are not allocated to the reportable segments, net of investment and interest income.


⁽³⁾	Primarily consists of cash and cash equivalents, marketable securities, deferred income taxes and other current and noncurrent assets.