Lines of Business | Lines of Business Our Animal Hospital and Laboratory business segments are each considered reportable segments in accordance with the FASB's guidance related to Segment Reporting. 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 the “All Other” category 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, our Vetstreet business, which provides online and printed communications, professional education, marketing solutions to the veterinary community and an ecommerce platform for independent animal hospitals, and our Camp Bow Wow business, which primarily franchises a premier provider of pet services including dog day care, overnight boarding, grooming and other ancillary services at specially designed pet care facilities. 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 our 2014 Annual Report on Form 10-K. 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. 8. 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 Eliminations Total Three Months Ended External revenue $ 435,376 $ 89,707 $ 22,818 $ — $ 884 $ 548,785 Intercompany revenue — 16,515 5,851 — (22,366 ) — Total revenue 435,376 106,222 28,669 — (21,482 ) 548,785 Direct costs 361,991 49,519 17,280 — (20,852 ) 407,938 Gross profit 73,385 56,703 11,389 — (630 ) 140,847 Selling, general and administrative expense 10,453 9,487 7,741 16,804 — 44,485 Operating income (loss) before sale or disposal of assets 62,932 47,216 3,648 (16,804 ) (630 ) 96,362 Net (gain) loss on sale or disposal of assets (914 ) 35 11 49 — (819 ) Operating income (loss) $ 63,846 $ 47,181 $ 3,637 $ (16,853 ) $ (630 ) $ 97,181 Depreciation and amortization $ 16,440 $ 2,705 $ 1,176 $ 575 $ (530 ) $ 20,366 Property and equipment additions $ 13,995 $ 2,862 $ 500 $ 1,512 $ (874 ) $ 17,995 Three Months Ended External revenue $ 386,776 $ 81,320 $ 20,457 $ — $ 919 $ 489,472 Intercompany revenue — 14,635 3,255 — (17,890 ) — Total revenue 386,776 95,955 23,712 — (16,971 ) 489,472 Direct costs 323,440 46,863 16,064 — (17,310 ) 369,057 Gross profit 63,336 49,092 7,648 — 339 120,415 Selling, general and administrative expense 9,864 8,281 7,411 14,375 — 39,931 Operating income (loss) before sale or disposal of assets 53,472 40,811 237 (14,375 ) 339 80,484 Net loss (gain) on sale or disposal of assets 414 (7 ) 97 74 — 578 Operating income (loss) $ 53,058 $ 40,818 $ 140 $ (14,449 ) $ 339 $ 79,906 Depreciation and amortization $ 15,110 $ 2,563 $ 2,004 $ 826 $ (473 ) $ 20,030 Property and equipment additions $ 8,119 $ 1,304 $ 920 $ 1,333 $ (316 ) $ 11,360 8. Lines of Business, continued Animal Hospital Laboratory All Other Corporate Eliminations Total Six Months Ended External revenue $ 828,402 $ 168,516 $ 49,351 $ — $ 1,969 $ 1,048,238 Intercompany revenue — 31,678 13,545 — (45,223 ) — Total revenue 828,402 200,194 62,896 — (43,254 ) 1,048,238 Direct costs 699,533 95,509 40,083 — (41,596 ) 793,529 Gross profit 128,869 104,685 22,813 — (1,658 ) 254,709 Selling, general and administrative expense 21,674 18,352 16,428 32,429 — 88,883 Operating income (loss) before charges 107,195 86,333 6,385 (32,429 ) (1,658 ) 165,826 Net (gain) loss on sale or disposal of assets (620 ) 41 20 75 — (484 ) Operating income (loss) $ 107,815 $ 86,292 $ 6,365 $ (32,504 ) $ (1,658 ) $ 166,310 Depreciation and amortization $ 32,512 $ 5,209 $ 2,328 $ 1,167 $ (1,053 ) $ 40,163 Property and equipment additions $ 26,077 $ 6,078 $ 1,300 $ 2,576 $ (1,510 ) $ 34,521 Six Months Ended External revenue $ 738,364 $ 156,103 $ 42,658 $ — $ 1,854 $ 938,979 Intercompany revenue — 28,386 9,175 — (37,561 ) — Total revenue 738,364 184,489 51,833 — (35,707 ) 938,979 Direct costs 626,228 92,366 34,216 — (35,697 ) 717,113 Gross profit 112,136 92,123 17,617 — (10 ) 221,866 Selling, general and administrative expense 18,992 16,299 15,759 30,321 — 81,371 Operating income (loss) before charges 93,144 75,824 1,858 (30,321 ) (10 ) 140,495 Net loss (gain) on sale or disposal of assets 582 (78 ) (1,087 ) (60 ) — (643 ) Operating income (loss) $ 92,562 $ 75,902 $ 2,945 $ (30,261 ) $ (10 ) $ 141,138 Depreciation and amortization $ 29,852 $ 5,098 $ 4,140 $ 1,645 $ (938 ) $ 39,797 Property and equipment additions $ 21,187 $ 3,285 $ 1,678 $ 2,744 $ (915 ) $ 27,979 At June 30, 2015 Total assets $ 2,092,935 $ 304,685 $ 80,994 $ 340,002 $ (421,506 ) $ 2,397,110 At December 31, 2014 Total assets $ 2,021,725 $ 258,550 $ 89,596 $ 270,414 $ (308,265 ) $ 2,332,020 |