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, 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 2015 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 $ 540,376 $ 93,265 $ 18,656 $ — $ 1,192 $ 653,489 Intercompany revenue — 18,795 4,741 — (23,536 ) — Total revenue 540,376 112,060 23,397 — (22,344 ) 653,489 Direct costs 445,697 51,513 14,480 — (22,149 ) 489,541 Gross profit 94,679 60,547 8,917 — (195 ) 163,948 Selling, general and administrative expense 14,277 9,702 6,022 18,189 — 48,190 Operating income (loss) before sale or disposal of assets 80,402 50,845 2,895 (18,189 ) (195 ) 115,758 Net (gain) loss on sale or disposal of assets (132 ) (35 ) 3 (107 ) — (271 ) Operating income (loss) $ 80,534 $ 50,880 $ 2,892 $ (18,082 ) $ (195 ) $ 116,029 Depreciation and amortization $ 21,875 $ 2,839 $ 904 $ 668 $ (597 ) $ 25,689 Property and equipment additions $ 25,486 $ 4,750 $ 1,485 $ 2,336 $ (1,049 ) $ 33,008 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 8. Lines of Business, continued Animal Hospital Laboratory All Other Corporate Eliminations Total Six Months Ended External revenue $ 998,999 $ 182,505 $ 33,110 $ — $ 2,314 $ 1,216,928 Intercompany revenue — 36,282 9,700 — (45,982 ) — Total revenue 998,999 218,787 42,810 — (43,668 ) 1,216,928 Direct costs 830,903 101,524 26,983 — (43,210 ) 916,200 Gross profit 168,096 117,263 15,827 — (458 ) 300,728 Selling, general and administrative expense 26,362 19,998 11,321 40,637 — 98,318 Operating income (loss) before sale or disposal of assets 141,734 97,265 4,506 (40,637 ) (458 ) 202,410 Net loss (gain) on sale or disposal of assets 443 (35 ) 3 (119 ) — 292 Operating income (loss) $ 141,291 $ 97,300 $ 4,503 $ (40,518 ) $ (458 ) $ 202,118 Depreciation and amortization $ 39,448 $ 5,620 $ 1,787 $ 1,306 $ (1,183 ) $ 46,978 Property and equipment additions $ 44,030 $ 9,402 $ 2,092 $ 5,187 $ (1,897 ) $ 58,814 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 sale or disposal of assets 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 At June 30, 2016 Total assets $ 2,888,883 $ 326,719 $ 68,336 $ 1,338,562 $ (1,443,373 ) $ 3,179,127 At December 31, 2015 Total assets $ 2,186,959 $ 306,296 $ 73,491 $ 471,112 $ (536,726 ) $ 2,501,132 |