The Company manages its business in two segments: PBM and HCIT, and evaluates segment performance based on revenue and gross profit. Information about the Company’s reportable segments for the years ended December 31, 2011, 2010 and 2009 is presented below:
EBITDA and Adjusted EBITDA increased $23.8 million and $26.0 million, respectively, for the year ended December 31, 2010, compared to the same period of 2009. The growth in EBITDA and Adjusted EBITDA was related primarily to new contract starts during 2010 and improved purchasing efficiencies on prescription drugs.
Rebates receivable of $33.8 million relate to billed and unbilled PBM receivables from pharmaceutical manufacturers and third party administrators in connection with the administration of the rebate program where the Company is the principal contracting party. The receivable and related payables are based on estimates, which are subject to final settlement. Rebates receivable decreased $0.4 million to $33.8 million from $34.2 million at December 31, 2010, due primarily to the timing of payments from pharmaceutical manufacturers and third party administrators. The Company does not process rebates for all PBM customers and accordingly the rebates receivable balance does not always fluctuate proportionately with changes in revenues and prescription claim volumes.
Pharmacy benefit claims payable of $199.7 million predominantly relates to amounts owed to our participating pharmacy network for prescription drug costs and dispensing fees in connection with prescriptions dispensed by the participating pharmacies for the Company’s PBM segment customers when the Company is the principal contracting party with the pharmacy. Pharmacy benefit claims payable increased $115.1 million from $84.6 million at December 31, 2010, due to increased transaction volumes during 2011 driven by new customer contracts, as well as the timing of payments to the participating pharmacies.
As of December 31, 2011, certain contracts with the Company’s utilities providers require minimum annual purchases.
Long-lived assets or asset groups held and used, including P&E and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; the accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its previously estimated useful life. Recoverability is assessed based on the carrying amount of the asset and the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset or asset group. An impairment loss is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss is measured as the amount by which the carrying amount exceeds fair value. During each of the years ended December 31, 2011, 2010, and 2009, no events or circumstances occurred that indicated that the carrying amounts of the long-lived assets may not be recoverable.
in connection with the acquisition of HealthTran and certain transaction fees and expenses related to the acquisition. After this borrowing, the Company had $250 million of remaining available borrowing capacity under its Revolving Credit Facility.
The following table summarizes activity related to stock options denominated in Canadian dollars for the year ended December 31, 2011:
The total rental expense under operating leases for the years ended December 31, 2011, 2010, and 2009 was $6.4 million, $5.7 million, and $6.5 million, respectively. The lease renewal terms have not been factored into the commitments noted above as not renewing these leases would not have a detrimental impact on the Company. The Company terminated its Port Washington, New York lease effective May 2009, and paid an early termination fee of approximately $1.9 million. This cost was included in the purchase price of the NMHC acquisition in accordance with purchase accounting guidance in place at the time of the acquisition.
The estimated fair value of the Company’s financial instruments has been determined based on the Company’s assessment of available market information and appropriate valuation methodologies. However, these estimates may not necessarily be indicative of the amounts that the Company could realize in a current market exchange. See Note 17 for the Company’s disclosure on the fair value of derivative instruments. The Company has determined that it is not meaningful to calculate the fair value of the non-current accrued liabilities as a portion of this amount is an accrual for tax uncertainties.