Reportable Segments And Related Information

12 Months Ended

Dec. 31, 2012

Reportable Segments And Related Information

11. REPORTABLE SEGMENTS AND RELATED INFORMATION

The Outsourced Portals segment is the Company’s only reportable segment and generally includes the Company's subsidiaries operating enterprise-wide outsourced state and local government portals and the corporate divisions that directly support portal operations. The Other Software & Services category primarily includes the Company’s subsidiaries that provide software development and services, other than enterprise-wide outsourced portal services, to state and local governments as well as federal agencies. Each of the Company’s businesses within the Other Software & Services category is an operating segment and has been grouped together to form the Other Software & Services category, as none of the operating segments meets the quantitative threshold of a separately reportable segment. Unallocated corporate-level expenses are reported in the reconciliation of the segment totals to the related consolidated totals as "Other Reconciling Items."  There have been no significant intersegment transactions for the periods reported. The summary of significant accounting policies applies to all reportable and operating segments.

The measure of profitability by which management, including the Company’s chief operating decision maker, evaluates the performance of its segments and allocates resources to them is operating income (loss). Segment assets or other segment balance sheet information is not presented to the Company’s chief operating decision maker. Accordingly, the Company has not presented information relating to segment assets.

The table below reflects summarized financial information for the Company's reportable and operating segments for the years ended December 31:

	Outsourced Portals		Other Software & Services		Other Reconciling Items			Consolidated Total
2012
Revenues	$	199,385,012	$	11,757,514	$	-		$	211,142,526
Costs & expenses		132,529,640		4,397,608		24,504,976			161,432,224
Amortization of acquisition-related
intangible assets		213,592		-		-			213,592
Depreciation & amortization		6,011,522		60,557		232,861			6,304,940
Operating income (loss)	$	60,630,258	$	7,299,349	$	(24,737,837	)	$	43,191,770
2011
Revenues	$	170,276,434	$	10,622,737	$	-		$	180,899,171
Costs & expenses		110,994,019		4,362,317		22,136,275			137,492,611
Amortization of acquisition-related
intangible assets		323,076		-		-			323,076
Depreciation & amortization		4,248,874		58,108		268,430			4,575,412
Operating income (loss)	$	54,710,465	$	6,202,312	$	(22,404,705	)	$	38,508,072
2010
Revenues	$	155,175,664	$	6,358,195	$	-		$	161,533,859
Costs & expenses		101,557,474		4,225,426		21,676,021			127,458,921
Amortization of acquisition-related
intangible assets		323,076		-		-			323,076
Depreciation & amortization		3,951,458		80,743		321,547			4,353,748
Operating income (loss)	$	49,343,656	$	2,052,026	$	(21,997,568	)	$	29,398,114

The following is a reconciliation of total segment operating income to total consolidated income before income taxes for the years ended December 31:

	2012			2011			2010
Total segment operating income	$	67,929,607		$	60,912,777		$	51,395,682
Other reconciling items		(24,737,837	)		(22,404,705	)		(21,997,568	)
Other expense, net		(16,211	)		(34,820	)		(9,557	)
Consolidated income before income taxes	$	43,175,559		$	38,473,252		$	29,388,557

The highest volume, most commercially valuable service the Company offers is access to motor vehicle driver history records through the Company’s outsourced government portals, referred to as DMV records. This service accounted for approximately 34%, 36%, and 39% of the Company’s total consolidated revenues in 2012, 2011, and 2010, respectively. In addition, the Company offers a service in several states for online motor vehicle registration and licensing. This service accounted for approximately 10% of the Company’s total consolidated revenues in 2012. No other services accounted for 10% or more of the Company’s total consolidated revenues for the years ended December 31, 2012, 2011, or 2010.

A primary source of revenue is derived from data resellers, who use the Company's government portals to access DMV records for sale to the auto insurance industry. For the years ended December 31, 2012, 2011, and 2010, one of these data resellers accounted for approximately 26%, 28%, and 27% of the Company’s total consolidated revenues, respectively. At December 31, 2012 and 2011, this one data reseller accounted for approximately 21% and 22%, respectively, of the Company’s accounts receivable.

For the years ended December 31, 2012, 2011, and 2010, the Company’s Texas portal accounted for approximately 21%, 21%, and 22% of the Company’s total consolidated revenues, respectively. No other state portal contract accounted for more than 10% of the Company’s total consolidated revenues for the years ended December 31, 2012, 2011, or 2010.