REPORTABLE SEGMENTS AND RELATED INFORMATION

12 Months Ended

Dec. 31, 2015

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 outsourced state and local government portals. The Other Software & Services category primarily includes the Company’s subsidiaries that provide software development and digital government services, other than 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. Beginning in the fourth quarter of 2015, certain corporate divisions that support the Company’s portal businesses, which were previously reported in the Outsourced Portals segment, are now reported with all other corporate divisions as unallocated corporate-level expenses and reported in the reconciliation of the segments totals to the related consolidated totals as “Other Reconciling Items.” The new presentation is consistent with the manner by which information is presently used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions. All prior periods presented have been recast to conform to the current segment reporting. These changes had no impact on total consolidated revenues, total operating expenses or total operating income before income taxes. 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) before income taxes. 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
2015
Revenues	$	273,502,323	$	18,873,973	$	-		$	292,376,296
Costs & expenses		168,166,011		5,431,967		43,098,323			216,696,301
Depreciation & amortization		4,648,870		47,015		3,689,528			8,385,413
Operating income (loss) before income taxes	$	100,687,442	$	13,394,991	$	(46,787,851	)	$	67,294,582
2014
Revenues	$	255,743,418	$	16,353,153	$	-		$	272,096,571
Costs & expenses		156,185,335		4,783,606		38,936,541			199,905,482
Depreciation & amortization		5,305,302		36,999		3,834,717			9,177,018
Operating income (loss) before income taxes	$	94,252,781	$	11,532,548	$	(42,771,258	)	$	63,014,071
2013
Revenues	$	235,183,005	$	14,095,660	$	-		$	249,278,665
Costs & expenses		147,007,246		4,498,233		36,881,346			188,386,825
Depreciation & amortization		4,962,692		53,475		3,316,922			8,333,089
Operating income (loss) before income taxes	$	83,213,067	$	9,543,952	$	(40,198,268	)	$	52,558,751

The highest volume, most commercially valuable service the Company offers is access to motor vehicle driver history records, referred to as DHR, through the Company’s outsourced government portals. This service accounted for approximately 35%, 35% and 34% of the Company’s total consolidated revenues in 2015, 2014 and 2013, respectively. In addition, the Company offers a service in several states for online motor vehicle registration and licensing. This service accounted for approximately 13%, 12% and 13% of the Company’s total consolidated revenues in 2015, 2014 and 2013, respectively. No other services accounted for 10% or more of the Company’s total consolidated revenues for the years ended December 31, 2015, 2014 or 2013.

A primary source of revenue is derived from data resellers, who use the Company’s government portals to access DHR records for the auto insurance industry. For the years ended December 31, 2015, 2014 and 2013, one of these data resellers accounted for approximately 23%, 24% and 22% of the Company’s total consolidated revenues, respectively. At December 31, 2015 and 2014, this one data reseller accounted for approximately 17% and 24%, respectively, of the Company’s accounts receivable.

For the years ended December 31, 2015, 2014 and 2013, the Company’s Texas portal accounted for approximately 21%, 22% and 23% 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, 2015, 2014 or 2013.