Lines of Business

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Lines of Business

15. Lines of Business

Our reportable segments are Animal Hospital and Laboratory. Our Animal Hospital segment provides veterinary services for companion animals and sells related retail and pharmaceutical products. Our Laboratory segment provides diagnostic laboratory testing services for veterinarians, both associated with our animal hospitals and those independent of us. Our other operating segments included in “All Other” in the following tables are our medical technology business, which sells digital radiography and ultrasound imaging equipment, related computer hardware, software and ancillary services to the veterinary market and our Vetstreet business, which provides online communications, professional education, marketing solutions to the veterinary community and an ecommerce platform for independent animal hospitals. These operating segments do not meet the quantitative requirements for reportable segments. Our operating segments are strategic business units that have different services, products and/or functions. The segments are managed separately because each is a distinct and different business venture with unique challenges, risks and rewards. We also operate a corporate office that provides general and administrative support services for our other segments.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies included in Note 2, Summary of Significant Accounting Policies. We evaluate the performance of our segments based on gross profit and operating income. For purposes of reviewing the operating performance of our segments, all intercompany sales and purchases are generally accounted for as if they were transactions with independent third parties at current market prices.

VCA Antech, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

15. Lines of Business, continued

The following is a summary of certain financial data for each of our segments (in thousands):

	Animal Hospital		Laboratory			All Other			Corporate			Intercompany Eliminations			Total
2012
External revenue	$	1,331,314	$	275,406		$	92,922		$	—		$	—		$	1,699,642
Intercompany revenue	—		52,395			20,038			—			(72,433		)	—
Total revenue	1,331,314		327,801			112,960			—			(72,433		)	1,699,642
Direct costs	1,142,203		176,040			74,253			—			(67,828		)	1,324,668
Gross profit	189,111		151,761			38,707			—			(4,605		)	374,974
Selling, general and administrative expense	30,826		29,660			37,879			58,790			—			157,155
Operating income (loss) before charges	158,285		122,101			828			(58,790		)	(4,605		)	217,819
Impairment of goodwill and other long-lived assets	1,216		—			122,357			—			—			123,573
Net loss (gain) on sale of assets	713		(14		)	717			(106		)	—			1,310
Operating income (loss)	$	156,356	$	122,115		$	(122,246	)	$	(58,684	)	$	(4,605	)	$	92,936
Depreciation and amortization	$	54,835	$	10,141		$	9,582		$	3,198		$	(1,529	)	$	76,227
Capital expenditures	$	55,651	$	8,334		$	5,921		$	9,695		$	(2,794	)	$	76,807
Total assets at December 31, 2012	$	1,648,578	$	244,551		$	98,159		$	127,963		$	(27,671	)	$	2,091,580
2011
External revenue	$	1,150,120	$	272,468		$	62,773		$	—		$	—		$	1,485,361
Intercompany revenue	—		44,329			17,657			—			(61,986		)	—
Total revenue	1,150,120		316,797			80,430			—			(61,986		)	1,485,361
Direct costs	970,310		173,007			59,459			—			(55,872		)	1,146,904
Gross profit	179,810		143,790			20,971			—			(6,114		)	338,457
Selling, general and administrative expense	24,342		27,864			19,136			49,770			—			121,112
Operating income (loss) before charges	155,468		115,926			1,835			(49,770		)	(6,114		)	217,345
Goodwill impairment	—		—			21,310			—			—			21,310
Net loss on sale of assets	327		21			27			7			—			382
Operating income (loss)	$	155,141	$	115,905		$	(19,502	)	$	(49,777	)	$	(6,114	)	$	195,653
Depreciation and amortization	$	40,319	$	10,111		$	5,022		$	2,853		$	(1,317	)	$	56,988
Capital expenditures	$	45,753	$	6,082		$	6,448		$	7,299		$	(2,097	)	$	63,485
Total assets at December 31, 2011	$	1,439,103	$	232,423		$	202,187		$	142,793		$	(21,138	)	$	1,995,368
2010
External revenue	$	1,052,462	$	273,616		$	55,390		$	—		$	—		$	1,381,468
Intercompany revenue	—		37,038			8,623			—			(45,661		)	—
Total revenue	1,052,462		310,654			64,013			—			(45,661		)	1,381,468
Direct costs	880,072		168,458			44,736			—			(42,962		)	1,050,304
Gross profit	172,390		142,196			19,277			—			(2,699		)	331,164
Selling, general and administrative expense	23,539		26,243			14,507			59,252			—			123,541
Net loss on sale of assets	273		22			71			8			—			374
Operating income (loss)	$	148,578	$	115,931		$	4,699		$	(59,260	)	$	(2,699	)	$	207,249
Depreciation and amortization	$	32,456	$	9,738		$	2,437		$	2,474		$	(1,036	)	$	46,069
Capital expenditures	$	52,243	$	5,176		$	857		$	5,516		$	(1,841	)	$	61,951
Total assets at December 31, 2010	$	1,320,619	$	215,483		$	69,082		$	175,297		$	(14,059	)	$	1,766,422

VCA Antech, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

15. Lines of Business, continued

The table below lists our revenue by geographic area for fiscal 2012, 2011 and 2010 (in thousands):

	2012		2011		2010
Revenue*
United States	$	1,589,588	$	1,474,294	$	1,374,835
Canada	110,054		11,067		6,633
Total	$	1,699,642	$	1,485,361	$	1,381,468

*Revenues are determined based on the location of the customer. Long-lived assets were not disclosed, as the amounts attributable to the Canadian operations are immaterial, as compared to total consolidated long-lived assets.