SEGMENT AND RELATED INFORMATION

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

SEGMENT AND RELATED INFORMATION

SEGMENT AND RELATED INFORMATION

We provide integrated information management solutions and services for the public sector, with a focus on local governments.

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

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

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

•courts and justice and public safety software solutions;

•data and insights solutions;

•platform technologies; and

•appraisal and tax software solutions and property appraisal services.

In accordance with ASC 280-10, Segment Reporting, we report our results in two segments. The financial management, education and planning, regulatory and maintenance software solutions unit; financial management, municipal courts, planning, regulatory and maintenance, and land and vital records management software solutions unit; courts and justice and public safety software solutions unit; the data and insights solutions unit; and platform technologies solutions unit meet the criteria for aggregation and are presented in one reportable segment, Enterprise Software (“ES”). The ES segment provides public sector entities with software systems and services to meet their information technology and automation needs for mission-critical “back-office” functions such as: financial management and education, courts and justice, public safety, planning, regulatory and maintenance, land and vital records management, data and insights and platform technologies processes. The Appraisal and Tax (“A&T”) segment provides systems and software that automate the appraisal and assessment of real and personal property, land and vital records management 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. Due to the shelter-in-place orders caused by the COVID-19 pandemic, we cancelled our company-wide user conference for the current year. The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies”.

As of January 1, 2020, the land and vital records management business unit, which was previously reported in the ES segment, was moved to the A&T segment to reflect changes in the way in which management makes operating decisions, allocates resources, and manages the growth and profitability of the Company. Prior year amounts for the ES and A&T segments have been adjusted to reflect the segment change.

Segment assets primarily consist of net accounts receivable, prepaid expenses and other current assets and net property and equipment, and capitalized software development costs. Corporate assets primarily 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 included $6.6 million in 2020 and $12.6 million in 2019 for the expansion of existing buildings and purchases of buildings and land. A&T segment capital expenditures included $3.3 million in 2020 and $8.2 million in 2019 for the expansion of existing buildings. 

For the year ended December 31, 2020	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	64,200	$	8,964	$	—	$	73,164
Subscriptions	326,284		24,364		—		350,648
Software services	164,520		21,889		—		186,409
Maintenance	429,224		38,289		—		467,513
Appraisal services	—		21,127		—		21,127
Hardware and other	17,670		121		11		17,802
Intercompany	19,061		70		(19,131)		—
Total revenues	$	1,020,959	$	114,824	$	(19,120)	$	1,116,663
Depreciation and amortization expense	67,411		1,055		13,191		81,657
Segment operating income	285,271		27,383		(86,104)		226,550
Capital expenditures	11,099		3,823		6,826		21,748
Segment assets	$	847,672	$	94,149	$	1,665,453	$	2,607,274

For the year ended December 31, 2019	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	90,808	$	9,397	$	—	$	100,205
Subscriptions	279,282		17,070		—		296,352
Software services	179,865		33,196		—		213,061
Maintenance	393,521		36,797		—		430,318
Appraisal services	—		23,479		—		23,479
Hardware and other	16,553		203		6,256		23,012
Intercompany	15,290		206		(15,496)		—
Total revenues	$	975,319	$	120,348	$	(9,240)	$	1,086,427
Depreciation and amortization expense	64,245		970		11,457		76,672
Segment operating income	255,365		26,918		(73,829)		208,454
Capital expenditures	19,283		8,436		10,379		38,098
Segment assets	$	833,203	$	91,343	$	1,267,068	$	2,191,614

For the year ended December 31, 2018	Enterprise Software		Appraisal and Tax		Corporate		Totals
Revenues
Software licenses and royalties	$	81,299	$	12,142	$	—	$	93,441
Subscriptions	205,193		15,354		—		220,547
Software services	161,612		29,657		—		191,269
Maintenance	349,387		35,134		—		384,521
Appraisal services	—		21,846		—		21,846
Hardware and other	18,387		390		4,881		23,658
Intercompany	12,764		391		(13,155)		—
Total revenues	$	828,642	$	114,914	$	(8,274)	$	935,282
Depreciation and amortization expense	49,921		1,123		10,715		61,759
Segment operating income	231,819		28,434		(68,572)		191,681
Capital expenditures	9,918		1,241		13,973		25,132
Segment assets	$	554,960	$	64,810	$	1,171,193	$	1,790,963

Reconciliation of reportable segment operating	Years Ended December 31,
income to the Company's consolidated totals:	2020		2019		2018
Total segment operating income	$	226,550	$	208,454	$	191,681
Amortization of acquired software	(31,962)		(30,642)		(22,972)
Amortization of customer and trade name intangibles	(21,662)		(21,445)		(16,217)
Other income, net	2,116		3,471		3,378
Income before income taxes	$	175,042	$	159,838	$	155,870