Segment and Related Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment and Related Information

SEGMENT AND RELATED INFORMATION

We are a major provider of integrated information management solutions and services for the public sector, with a focus on local and state governments.

We provide our software systems and services and appraisal services through four business units, which focus on the following products:

• financial management, education and planning, regulatory and maintenance software solutions;

• financial management, municipal courts, and land and vital records management software solutions;

• courts and justice and public safety software solutions; and

• appraisal and tax software solutions and property appraisal services.

In accordance with ASC 280-10, Segment Reporting, the financial management, education and planning, regulatory and maintenance software solutions unit; financial management, municipal courts and land and vital records management software solutions unit; and the courts and justice and public safety software solutions unit meet the criteria for aggregation and are presented in one reportable segment, Enterprise Software (“ES”).  The ES segment provides municipal and county governments and schools with software systems and services to meet their information technology and automation needs for mission-critical “back-office” functions such as financial management and courts and justice and public safety processes.  The Appraisal and Tax (“A&T”) segment provides systems and software that automate the appraisal and assessment of real and personal property as well as property appraisal outsourcing services for local governments and taxing authorities.  Property appraisal outsourcing services include: the physical inspection of commercial and residential properties; data collection and processing; computer analysis for property valuation; preparation of tax rolls; community education; and arbitration between taxpayers and the assessing jurisdiction.

We evaluate performance based on several factors, of which the primary financial measure is business segment operating income.  We define segment operating income for our business units as income before noncash amortization of intangible assets associated with their acquisition, interest expense and income taxes.  Segment operating income includes intercompany transactions.  The majority of intercompany transactions relate to contracts involving more than one unit and are valued based on the contractual arrangement.  Segment operating income for corporate primarily consists of compensation costs for the executive management team and certain accounting and administrative staff and share-based compensation expense for the entire company.  Corporate segment operating income also includes revenues and expenses related to a company-wide user conference.  The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.”

Segment assets include net accounts receivable, prepaid expenses and other current assets and net property and equipment.  Corporate assets consist of cash and investments, prepaid insurance, intangibles associated with acquisitions, deferred income taxes and net property and equipment mainly related to unallocated information and technology assets.

ES segment capital expenditures in 2016 included $17.7 million for the expansion of an existing building and purchase of a building and land.  

As of the year ended December 31, 2016

	Enterprise Software		Appraisal  and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	68,844	$	5,462	$	—		$	74,306
Subscriptions	135,516		7,188		—			142,704
Software services	158,478		16,326		—			174,804
Maintenance	304,380		18,589		—			322,969
Appraisal services	—		26,287		—			26,287
Hardware and other	11,942		16		3,015			14,973
Intercompany	6,742		—		(6,742		)	—
Total revenues	$	685,902	$	73,868	$	(3,727	)	$	756,043
Depreciation and amortization expense	43,962		984		5,355			50,301
Segment operating income	190,817		18,286		(41,832		)	167,271
Capital expenditures	23,843		1,432		11,448			36,723
Segment assets	$	295,260	$	31,769	$	1,030,916		$	1,357,945

As of the year ended December 31, 2015

	Enterprise Software		Appraisal  and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	54,376	$	4,632	$	—		$	59,008
Subscriptions	107,090		4,843		—			111,933
Software services	129,068		10,784		—			139,852
Maintenance	227,586		17,951		—			245,537
Appraisal services	—		25,065		—			25,065
Hardware and other	6,935		12		2,680			9,627
Intercompany	4,025		—		(4,025		)	—
Total revenues	$	529,080	$	63,287	$	(1,345	)	$	591,022
Depreciation and amortization expense	15,413		867		3,294			19,574
Segment operating income	141,401		15,477		(38,490		)	118,388
Capital expenditures	6,112		646		6,746			13,504
Segment assets	$	265,877	$	22,283	$	1,068,410		$	1,356,570

As of the year ended December 31, 2014

	Enterprise Software		Appraisal  and Tax		Corporate			Totals
Revenues
Software licenses and royalties	$	46,047	$	3,018	$	—		$	49,065
Subscriptions	84,322		3,526		—			87,848
Software services	104,146		9,675		—			113,821
Maintenance	195,881		16,815		—			212,696
Appraisal services	—		21,802		—			21,802
Hardware and other	5,398		11		2,460			7,869
Intercompany	2,812		—		(2,812		)	—
Total revenues	$	438,606	$	54,847	$	(352	)	$	493,101
Depreciation and amortization expense	11,140		866		2,599			14,605
Segment operating income	114,993		11,603		(25,370		)	101,226
Capital expenditures	3,644		359		5,446			9,449
Segment assets	$	170,369	$	16,463	$	382,980		$	569,812

Reconciliation of reportable segment operating	Years Ended December 31,
income to the Company's consolidated totals:	2016			2015			2014
Total segment operating income	$	167,271		$	118,388		$	101,226
Amortization of acquired software	(22,235		)	(4,440		)	(1,858		)
Amortization of customer and trade name intangibles	(13,731		)	(5,905		)	(4,546		)
Other (expense) income, net	(1,998		)	381			(355		)
Income before income taxes	$	129,307		$	108,424		$	94,467