XML 35 R24.htm IDEA: XBRL DOCUMENT
v3.5.0.2

SEGMENTS | 3 Months Ended
--- | ---
Sep. 30, 2016
Segment Reporting [Abstract] |
SEGMENTS | (17) SEGMENTS The Company delivers its solutions and manages its business through two reportable business segments, the supply chain services segment and the performance services segment. The supply chain services segment includes the Company's GPO, integrated pharmacy offerings and direct sourcing activities. The performance services segment includes the Company's informatics, collaborative, advisory services and insurance services businesses. The Company uses Segment Adjusted EBITDA (a Non-GAAP measure) as its primary measure of profit or loss to assess segment performance and to determine the allocation of resources. The Company also uses Segment Adjusted EBITDA to facilitate the comparison of the segment operating performance on a consistent basis from period to period. The Company defines Segment Adjusted EBITDA as the segment's net revenue and equity in net income of unconsolidated affiliates less operating expenses directly attributable to the segment excluding depreciation and amortization, amortization of purchased intangible assets, merger and acquisition related expenses and non-recurring or non-cash items. Non-recurring items are expenses that have not been incurred within the prior two years and are not expected to recur within the next two years. Operating expenses directly attributable to the segment include expenses associated with sales and marketing, general and administrative and product development activities specific to the operation of each segment. General and administrative corporate expenses that are not specific to a particular segment are not included in the calculation of Segment Adjusted EBITDA. For more information on Segment Adjusted EBITDA and the use of Non-GAAP measures, see "Other Key Business Metrics" under Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations. All reportable segment revenues are presented net of inter-segment eliminations and represent revenues from external customers. The following tables present selected net revenue and Segment Adjusted EBITDA (in thousands):
| Three months ended September 30,
Net Revenue | 2016 | 2015
Supply Chain Services |  |
Net administrative fees | $ | 125,976 |  | $ | 117,949 |
Other services and support | 1,645 |  | 819 |
Services | 127,621 |  | 118,768 |
Products | 106,129 |  | 77,781 |
Total Supply Chain Services | $ | 233,750 |  | $ | 196,549 |
Performance Services | 79,522 |  | 74,286 |
Total | $ | 313,272 |  | $ | 270,835 |
| Three months ended September 30,
Segment Adjusted EBITDA | 2016 | 2015
Supply Chain Services | $ | 117,304 |  | $ | 102,949 |
Performance Services | 22,311 |  | 24,925 |
Corporate | (28,842 | ) | (22,877 | )
Total | $ | 110,773 |  | $ | 104,997 |
A reconciliation of Segment Adjusted EBITDA to income before income taxes is as follows (in thousands):
| Three months ended September 30,
| 2016 | 2015
Segment Adjusted EBITDA | $ | 110,773 |  | $ | 104,997 |
Depreciation and amortization | (14,018 | ) | (11,865 | )
Amortization of purchased intangible assets | (9,209 | ) | (6,047 | )
Stock-based compensation expense (a) | (5,896 | ) | (13,700 | )
Acquisition related expenses (b) | (2,937 | ) | (3,472 | )
Strategic and financial restructuring expenses (c) | — |  | (27 | )
Adjustment to tax receivable agreement liability (d) | 5,722 |  | 4,818 |
ERP implementation expenses (e) | (1,094 | ) | (560 | )
Acquisition related adjustment - deferred revenue (f) | (151 | ) | (3,092 | )
Equity in net income of unconsolidated affiliates (g) | (9,579 | ) | (4,590 | )
Deferred compensation plan expense | (1,095 | ) | 1,809 |
Operating income | $ | 72,516 |  | $ | 68,271 |
Equity in net income of unconsolidated affiliates (g) | 9,579 |  | 4,590 |
Interest and investment income, net | (152 | ) | 241 |
Loss on disposal of long-lived assets | (1,518 | ) | — |
Other expense, net (h) | 1,006 |  | (1,809 | )
Income before income taxes | $ | 81,431 |  | $ | 71,293 |
(a) | Represents non-cash employee stock-based compensation expense and $0.1 million and $0.2 million stock purchase plan expense in the three months ended September 30, 2016 and 2015, respectively.
(b) | Represents legal, accounting and other expenses related to acquisition activities.
(c) | Represents legal, accounting and other expenses directly related to strategic and financial restructuring expenses.
(d) | Represents adjustment to tax receivable agreement liability for a 1% decrease in the North Carolina state income tax rate during the three months ended September 30, 2016 and 2015.
(e) | Represents implementation and other costs associated with the implementation of a new enterprise resource planning ("ERP") system.
(f) | Represents non-cash adjustment to deferred revenue of acquired entities. Business combination accounting rules require the Company to record a deferred revenue liability at its fair value only if the acquired deferred revenue represents a legal performance obligation assumed by the acquirer. The fair value is based on direct and indirect incremental costs of providing the services plus a normal profit margin. Generally, this results in a reduction to the purchased deferred revenue balance, which was based on upfront fees associated with software license updates and product support contracts assumed in connection with acquisitions. Because these support contracts are typically one year in duration, our GAAP revenues for the one year period subsequent to the acquisition of a business do not reflect the full amount of support revenues on these assumed support contracts that would have otherwise been recorded by the acquired entity. The Non-GAAP adjustment to software license updates and product support revenues is intended to include, and thus reflect, the full amount of such revenues.
(g) | Represents equity in net income of unconsolidated affiliates primarily generated by the Company's 50% ownership interest in Innovatix and 49% ownership interest in FFF, all of which is included in the supply chain services segment.
(h) | Represents unrealized gain on deferred compensation plan assets and losses on investments and other assets.
The following tables present capital expenditures, total assets and depreciation and amortization expense (in thousands):
| Three months ended September 30,
Capital Expenditures | 2016 | 2015
Supply Chain Services | $ | — |  | $ | 764 |
Performance Services | 16,851 |  | 15,263 |
Corporate | 115 |  | 1,114 |
Total | $ | 16,966 |  | $ | 17,141 |
Total Assets | September 30, 2016 | June 30, 2016
Supply Chain Services | $ | 411,810 |  | $ | 345,219 |
Performance Services | 971,834 |  | 934,588 |
Corporate | 506,020 |  | 575,576 |
Total | $ | 1,889,664 |  | $ | 1,855,383 |
| Three months ended September 30,
Depreciation and Amortization Expense (a) | 2016 | 2015
Supply Chain Services | $ | 466 |  | $ | 517 |
Performance Services | 20,875 |  | 15,924 |
Corporate | 1,886 |  | 1,471 |
Total | $ | 23,227 |  | $ | 17,912 |
(a) | Includes amortization of purchased intangible assets.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration