Segment Information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and to assess performance. Our chief operating decision maker is our President and Chief Executive Officer.

The subscription and software segment is engaged in the licensing of process optimization and asset performance management software solutions and associated support services. The services segment includes professional services and training. We do not track assets or capital expenditures by operating segments. Consequently, it is not practical to present assets, capital expenditures, depreciation or amortization by operating segments.

The following table presents a summary of our reportable segments’ profits:



	Subscription and Software			Services			Total
	(Dollars in Thousands)
Three Months Ended March 31, 2018
Segment revenue	$	118,126		$	7,745		$	125,871
Segment expenses (1)	(53,325		)	(6,959		)	(60,284		)
Segment profit	$	64,801		$	786		$	65,587
Three Months Ended March 31, 2017
Segment revenue	$	111,717		$	7,560		$	119,277
Segment expenses (1)	(48,138		)	(6,746		)	(54,884		)
Segment profit	$	63,579		$	814		$	64,393



	Subscription and Software			Services			Total
	(Dollars in Thousands)
Nine Months Ended March 31, 2018
Segment revenue	$	351,540		$	22,014		$	373,554
Segment expenses (1)	(151,824		)	(20,511		)	(172,335		)
Segment profit	$	199,716		$	1,503		$	201,219
Nine Months Ended March 31, 2017
Segment revenue	$	338,077		$	21,184		$	359,261
Segment expenses (1)	(139,466		)	(19,586		)	(159,052		)
Segment profit	$	198,611		$	1,598		$	200,209

(1) Our reportable segments’ operating expenses include expenses directly attributable to the segments. Segment expenses include selling and marketing, research and development, stock-based compensation and certain corporate expenses incurred in support of the segments. Segment expenses do not include allocations of general and administrative; interest income, net; and other income, net.

Reconciliation to Income before Income Taxes

The following table presents a reconciliation of total segment profit to income before income taxes for the three and nine months ended March 31, 2018 and 2017:



	Three Months Ended March 31,						Nine Months Ended March 31,
	2018			2017			2018			2017
	(Dollars in Thousands)

Total segment profit for reportable segments	$	65,587		$	64,393		$	201,219		$	200,209
General and administrative expense	(14,430		)	(12,120		)	(42,284		)	(37,140		)
Other (expense) income, net	(104		)	(56		)	(958		)	1,287
Interest (expense), net	(1,462		)	(783		)	(3,748		)	(2,056		)
Income before income taxes	$	49,591		$	51,434		$	154,229		$	162,300