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Segment and Related Information
 12 Months Ended
Jun. 30, 2014
Segment and Related Information
(10) Segment and Related Information

The Company’s business units have been aggregated into three reportable segments: (i) research, (ii) molecular diagnostics and (iii) pharmaceutical and clinical services, formerly called companion diagnostics. The research segment is focused on the discovery of genes, biomarkers and proteins related to major common diseases and includes corporate services such as finance, human resources, legal, and information technology. The molecular diagnostics segment provides testing that is designed to assess an individual’s risk for developing disease later in life, identify a patient’s likelihood of responding to drug therapy and guide a patient’s dosing to ensure optimal treatment, or assess a patient’s risk of disease progression and disease recurrence. The business of Crescendo acquired in February 2014 is included as part of the molecular diagnostic segment. The pharmaceutical and clinical services segment provides testing products and services to the pharmaceutical, biotechnology and medical research industries.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (Note 1). The Company evaluates segment performance based on income (loss) before interest income and other income and expense.

 

(In thousands)    Research     Molecular
diagnostics		      Pharmaceutical &
clinical services		     Total  

Year ended June 30, 2014:

          

Revenues

    $ —        $ 748,198       $ 30,018      $ 778,216   

Depreciation and amortization

      2,001        9,887         1,931        13,819   

Segment operating income (loss)

      (64,981 )      338,020         1,403        274,442   

Year ended June 30, 2013:

          

Revenues

    $ —        $ 582,392       $ 30,773      $ 613,165   

Depreciation and amortization

      2,182        4,974         1,733        8,889   

Segment operating income (loss)

      (56,428 )      291,509         (7,079 )      228,002   

Year ended June 30, 2012:

          

Revenues

    $ —        $ 472,390       $ 23,615      $ 496,005   

Depreciation and amortization

      2,021        5,395         1,653        9,069   

Segment operating income (loss)

      (49,231 )      237,737         (8,188 )      180,318   

 

     Years Ended June 30,  
(In thousands)    2014     2013     2012  

Total operating income for reportable segments

    $ 274,442      $ 228,002      $ 180,318   

Unallocated amounts:

       

Interest income

      5,397        5,497        4,629   

Other

      (1,974 )      (223 )     (407 )
  

 

 

    

 

 

    

 

 

  

Income from operations before income taxes

      277,865        233,276       184,540  
  

 

 

    

 

 

    

 

 

  

Income tax provision

      101,640        86,137       72,389  
  

 

 

    

 

 

    

 

 

  

Net income

    $ 176,225      $ 147,139      $ 112,151   
  

 

 

    

 

 

    

 

 

  

 

The following table sets forth a comparison of balance sheet assets by operating segment:

 

(In thousands)    June 30,  
     2014      2013  

Net equipment and leasehold improvements:

      

Research

    $ 8,199       $ 8,590   

Molecular diagnostics

      24,316         15,769   

Pharmaceutical and clinical services

      2,079         3,243   
  

 

 

     

 

 

  

Total

    $ 34,594       $ 27,602   
  

 

 

     

 

 

  

Total Assets:

      

Research

    $ 67,999       $ 82,517   

Molecular diagnostics

      409,795         110,329   

Pharmaceutical and clinical services

      75,434         79,911   
  

 

 

     

 

 

  

Total

    $ 553,228       $ 272,757   
  

 

 

     

 

 

  

The following table reconciles assets by operating segment to total assets:

 

     June 30,  
(In thousands)    2014      2013  

Total assets by segment

    $ 553,228       $ 272,757   

Cash, cash equivalents, and marketable investment securities (1)

      270,586         531,064   
  

 

 

     

 

 

  

Total

    $ 823,814       $ 803,821   
  

 

 

     

 

 

  

 

  (1) The Company manages cash, cash equivalents, and marketable investment securities at the consolidated level for all segments

The majority of the Company’s revenues were derived from the sale of molecular diagnostic tests in the United States. There were no customers that accounted for greater than 10% of revenue in the years ended June 30, 2014, 2013 and 2012.

Of the Company’s $169.2 million goodwill balance at June 30, 2014, $112.3 million related to Crescendo which is included in the molecular diagnostics segment and $56.9 million related to Myriad RBM which is included in the pharmaceutical and clinical services segment. Additionally, the majority of the Company’s long-lived assets are located in the United States.