Segment Disclosures

3 Months Ended

Mar. 31, 2019

Note 16. Segment Disclosures

Our business units have been aggregated into three practice groups: Financial Services, Benefits and Insurance Services and National Practices. The business units have been aggregated based on the following factors: similarity of the products and services provided to clients; similarity of the regulatory environment in which they operate; and similarity of economic conditions affecting long-term performance. The business units are managed along these segment lines. A general description of services provided by each practice group is provided in the table below.

Financial Services

Benefits and Insurance Services

National Practices

• Accounting and Tax

• Government Healthcare Consulting

• Financial Advisory

• Valuation

• Risk & Advisory Services

• Group Health Benefits Consulting

• Payroll

• Property & Casualty

• Retirement Plan Services

• Managed Networking and Hardware Services

• Healthcare Consulting

Corporate and Other – Included in Corporate and Other are operating expenses that are not directly allocated to the individual business units. These expenses are primarily comprised of certain health care costs, gains or losses attributable to assets held in the Company’s non-qualified deferred compensation plan, share-based compensation, consolidation and integration charges, certain professional fees, certain advertising costs and other various expenses.

Accounting policies of the practice groups are the same as those described in Note 1, Organization and Summary of Significant Accounting Policies, to the Annual Report on Form 10-K for the year ended December 31, 2018, except for our lease policies. Refer to Note 1, Summary of Significant Accounting Policies – Changes in Accounting Policies, in this Quarterly Report on Form 10-Q. Upon consolidation, intercompany accounts and transactions are eliminated, thus inter-segment revenue is not included in the measure of profit or loss for the practice groups. Performance of the practice groups is evaluated on operating income excluding those costs listed above, which are reported in the Corporate and Other segment.

Segment information for the three months ended March 31, 2019 and 2018 was as follows (in thousands):

	Three Months Ended March 31, 2019
	Financial Services			Benefits and Insurance Services			National Practices		Corporate and Other			Total
Revenue	$	185,144		$	76,255		$	8,599	$	—		$	269,998
Operating expenses		134,458			61,371			8,000		11,667			215,496
Gross margin		50,686			14,884			599		(11,667	)		54,502
Corporate general & administrative expenses		—			—			—		11,680			11,680
Operating income (loss)		50,686			14,884			599		(23,347	)		42,822
Other income (expense):
Interest expense		—			(10	)		—		(1,391	)		(1,401	)
Gain on sale of operations, net		497			—			—		—			497
Other (expense) income, net		(136	)		21			—		9,375			9,260
Total other (expense) income		361			11			—		7,984			8,356
Income (loss) from continuing operations before income tax expense	$	51,047		$	14,895		$	599	$	(15,363	)	$	51,178

	Three Months Ended March 31, 2018
	Financial Services		Benefits and Insurance Services			National Practices		Corporate and Other			Total
Revenue	$	180,603	$	77,330		$	8,157	$	—		$	266,090
Operating expenses		133,033		61,133			7,275		3,309			204,750
Gross margin		47,570		16,197			882		(3,309	)		61,340
Corporate general & administrative expenses		—		—			—		10,028			10,028
Operating income (loss)		47,570		16,197			882		(13,337	)		51,312
Other income (expense):
Interest expense		—		(75	)		—		(1,705	)		(1,780	)
Gain on sale of operations, net		—		663			—		—			663
Other income (expense), net		265		193			—		(1,687	)		(1,229	)
Total other income (expense)		265		781			—		(3,392	)		(2,346	)
Income (loss) from continuing operations before income tax expense	$	47,835	$	16,978		$	882	$	(16,729	)	$	48,966