SEGMENT REPORTING

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 12 – SEGMENT REPORTING

Our plans to make certain changes to our organizational structure to integrate the domestic and international Shred-it operations into our Domestic Regulated Waste and Compliance Services and International Regulated Waste and Compliance Services operating segments, respectively, were finalized in the second quarter of 2016. We also changed the composition of our operating segments to further align our compliance and communication services. Due to this change, part of our Domestic Regulated Waste and Compliance Services operating segment was combined with the legacy Domestic Regulated Recall and Returns Management Services operating segment to form a new operating segment, Domestic Communication and Related Services. As a result, our three operating segments are:

· Domestic Regulated Waste and Compliance Services;

· Domestic Communication and Related Services; and

· International Regulated Waste and Compliance Services.

Our Domestic and International Regulated Waste and ComplianceServices segments include medical waste disposal, pharmaceutical waste disposal, hazardous waste management, sustainability solutions for expired or unused inventory, secure information destruction of documents and e-media, training and consulting through our Steri-Safe® and Clinical Services programs, and other regulatory compliance services.

Our Domestic Communication and Related Services segment consists of inbound/outbound communication, automated patient reminders, online scheduling, notifications, product retrievals, product returns, and quality audits.

Our two reportable segments are:

· Domestic Regulated Waste and Compliance Services (“Domestic RCS”),

· International Regulated Waste and Compliance Services (“International RCS”).

Our Domestic Communication and Related Services operating segment does not meet the quantitative criteria to be a separate reportable segment and is categorized as “Other.”

In connection with changes made to our management reporting to align with the new operating segments, we have also changed our measure of segment profit a measure of earnings before interest, tax and amortization (“EBITA”). As a result of these changes in segment reporting, all historical segment information has been revised to conform to the new presentation.

The following tables show financial information for the Company's reportable segments: 

In thousands
	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Revenues
Domestic RCS	$	591,037	$	451,512	$	1,170,664	$	866,348
International RCS		234,479		197,507		458,993		388,578
Other		66,105		66,670		136,145		124,082
Total	$	891,621	$	715,689	$	1,765,802	$	1,379,008
Gross Profit
Domestic RCS	$	271,816	$	208,690	$	532,975	$	401,878
International RCS		76,396		63,217		149,517		124,585
Other		32,883		32,917		67,787		59,692
Total	$	381,095	$	304,824	$	750,279	$	586,155
Amortization
Domestic RCS	$	32,670	$	3,482	$	43,086	$	6,685
International RCS		16,259		3,639		22,138		7,422
Other		1,980		1,800		3,959		3,611
Total	$	50,909	$	8,921	$	69,183	$	17,718
EBITA
Domestic RCS	$	164,181	$	140,106	$	315,880	$	269,018
International RCS		13,801		24,632		26,901		48,229
Other		14,121		13,777		29,674		23,050
Total	$	192,103	$	178,515	$	372,455	$	340,297

The following table reconciles the Company's primary measure of segment profitability (EBITA) to income from operations:

In thousands
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Domestic RCS EBITA	$	164,181		$	140,106		$	315,880		$	269,018
International RCS EBITA		13,801			24,632			26,901			48,229
Subtotal reportable segments		177,982			164,738			342,781			317,247
Other EBITA		14,121			13,777			29,674			23,050
Acquisition expenses		(2,607	)		(2,986	)		(5,597	)		(6,282	)
Integration expenses		(22,578	)		(8,924	)		(41,846	)		(17,810	)
Litigation expenses		(2,664	)		173			(3,964	)		(75,450	)
Changes in fair value of contingent consideration		—			(35	)		2,644			640
Restructuring and plant conversion expenses		(929	)		(3,058	)		(1,170	)		(15,360	)
Contract exit costs		(12,708	)		—			(12,708	)		—
Amortization expense		(50,909	)		(8,921	)		(69,183	)		(17,718	)
Income from operations	$	99,708		$	154,764		$	240,631		$	208,317

The following table shows consolidated revenue by service:

In thousands
	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Regulated Waste and Compliance Solutions	$	517,186	$	515,978	$	1,021,220	$	1,013,388
Secure Information Destruction Services		190,534		—		375,164		—
Communication and Related Solutions		82,549		82,068		170,498		154,421
Manufacturing and Industrial Services		101,352		117,643		198,920		211,199
Revenues	$	891,621	$	715,689	$	1,765,802	$	1,379,008