Segment and Related Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment and Related Information

(14) 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 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 software solutions unit meet the criteria for aggregation and are presented in one reportable segment, Enterprise Software Solutions (“ESS”).  The ESS 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 processes.  The Appraisal and Tax Software Solutions and Services (“ATSS”) 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.

ESS segment capital expenditures in 2013 and 2012 included $19.6 million, and $3.0 million, respectively for the construction of a new building and purchase of an existing building and land. ATSS segment capital expenditures in 2012 included $2.6 million for the purchase of a building and land to support long-term growth.

As of the year ended December 31, 2014
	Enterprise Software Solutions		Appraisal and Tax Software Solutions and Services		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	$	387,150		$	573,982

As of the year ended December 31, 2013
	Enterprise Software Solutions		Appraisal and Tax Software Solutions and Services		Corporate			Totals
Revenues
Software licenses and royalties	$	38,774	$	2,067	$	—		$	40,841
Subscriptions		59,070		2,794		—			61,864
Software services		85,459		7,808		—			93,267
Maintenance		175,180		16,540		—			191,720
Appraisal services		—		20,825		—			20,825
Hardware and other		6,342		—		1,784			8,126
Intercompany		2,899		—		(2,899	)		—
Total revenues	$	367,724	$	50,034	$	(1,115	)	$	416,643
Depreciation and amortization expense		10,569		1,028		2,189			13,786
Segment operating income		85,045		9,428		(20,750	)		73,723
Capital expenditures		22,457		250		3,438			26,145
Segment assets	$	161,923	$	16,244	$	266,321		$	444,488

As of the year ended December 31, 2012
	Enterprise Software Solutions		Appraisal and Tax Software Solutions and Services		Corporate			Totals
Revenues
Software licenses and royalties	$	32,060	$	1,868	$	—		$	33,928
Subscriptions		43,319		1,299		—			44,618
Software services		76,103		7,305		—			83,408
Maintenance		155,290		16,561		—			171,851
Appraisal services		—		22,543		—			22,543
Hardware and other		5,297		—		1,659			6,956
Intercompany		2,249		—		(2,249	)		—
Total revenues	$	314,318	$	49,576	$	(590	)	$	363,304
Depreciation and amortization expense		9,929		958		1,824			12,711
Segment operating income		71,135		8,498		(16,889	)		62,744
Capital expenditures		5,469		3,382		1,865			10,716
Segment assets	$	134,160	$	18,464	$	186,042		$	338,666

Reconciliation of reportable segment operating	Years Ended December 31,
income to the Company's consolidated totals:	2014			2013			2012
Total segment operating income	$	101,226		$	73,723		$	62,744
Amortization of acquired software		(1,858	)		(2,078	)		(1,888	)
Amortization of customer and trade name intangibles		(4,546	)		(4,517	)		(4,279	)
Other expense, net		(355	)		(1,309	)		(2,709	)
Income before income taxes	$	94,467		$	65,819		$	53,868