SEGMENT REPORTING

9 Months Ended

Sep. 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  September 30,				Nine Months Ended  September 30,
	2016		2015		2016		2015
Revenues
Domestic RCS	$	593,336	$	447,609	$	1,764,000	$	1,313,957
International RCS		226,067		195,088		685,060		583,666
Other		70,741		75,899		206,886		199,981
Total	$	890,144	$	718,596	$	2,655,946	$	2,097,604
Gross Profit
Domestic RCS	$	274,054	$	203,136	$	807,029	$	605,014
International RCS		70,707		59,018		220,224		183,603
Other		34,499		37,521		102,286		97,213
Total	$	379,260	$	299,675	$	1,129,539	$	885,830
Amortization
Domestic RCS	$	24,412	$	3,634	$	67,498	$	10,319
International RCS		6,754		3,551		28,892		10,973
Other		1,962		2,054		5,921		5,665
Total	$	33,128	$	9,239	$	102,311	$	26,957
EBITA
Domestic RCS	$	163,447	$	132,806	$	479,327	$	401,824
International RCS		14,028		21,749		40,929		69,978
Other		14,238		16,838		43,912		39,888
Total	$	191,713	$	171,393	$	564,168	$	511,690

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

In thousands
	Three Months Ended  September 30,						Nine Months Ended  September 30,
	2016			2015			2016			2015
Domestic RCS EBITA	$	163,447		$	132,806		$	479,327		$	401,824
International RCS EBITA		14,028			21,749			40,929			69,978
Subtotal reportable segments		177,475			154,555			520,256			471,802
Other EBITA		14,238			16,838			43,912			39,888
Acquisition expenses		(2,265	)		(33,674	)		(7,862	)		(39,956	)
Integration expenses		(19,162	)		(13,447	)		(61,008	)		(31,257	)
Litigation expenses		(1,481	)		16,444			(5,445	)		(59,006	)
Changes in fair value of contingent consideration		(559	)		—			2,085			640
Restructuring and plant conversion expenses		(491	)		(2,721	)		(1,661	)		(18,081	)
Contract exit costs		(10,110	)		—			(22,818	)		—
Amortization expense		(33,128	)		(9,239	)		(102,311	)		(26,957	)
Income from operations	$	124,517		$	128,756		$	365,148		$	337,073

The following table shows consolidated revenue by service:

In thousands
	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2016		2015		2016		2015
Regulated Waste and Compliance Solutions	$	520,390	$	520,986	$	1,550,273	$	1,544,603
Secure Information Destruction Services		187,090		—		562,254		—
Communication and Related Solutions		87,486		93,158		257,984		247,579
Manufacturing and Industrial Services		95,178		104,452		285,435		305,422
Revenues	$	890,144	$	718,596	$	2,655,946	$	2,097,604