Segment Disclosures

9 Months Ended

Sep. 30, 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 our 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. Basis of Presentation and Significant Accounting Policies, to the Annual Report on Form 10-K for the year ended December 31, 2018. 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 and nine months ended September 30, 2019 and 2018 is presented below. We do not manage our assets on a segment basis, therefore segment assets are not presented below.

	Three Months Ended September 30, 2019
	Financial Services		Benefits and Insurance Services			National Practices		Corporate and Other			Total
Revenue	$	153,794	$	76,960		$	9,036	$	—		$	239,790
Operating expenses		128,231		63,390			8,104		9,421			209,146
Gross margin		25,563		13,570			932		(9,421	)		30,644
Corporate general & admin		—		—			—		11,670			11,670
Operating income (loss)		25,563		13,570			932		(21,091	)		18,974
Other income (expense):
Interest expense		—		(14	)		—		(1,507	)		(1,521	)
Gain (loss) on sale of operations, net		16		—			—		(161	)		(145	)
Other income, net		14		9			—		6,744			6,767
Total other income (expense)		30		(5	)		—		5,076			5,101
Income (loss) from continuing operations before income tax expense	$	25,593	$	13,565		$	932	$	(16,015	)	$	24,075

	Three Months Ended September 30, 2018
	Financial Services			Benefits and Insurance Services			National Practices		Corporate and Other			Total
Revenue	$	146,145		$	70,069		$	8,035	$	—		$	224,249
Operating expenses		124,546			59,399			7,514		7,148			198,607
Gross margin		21,599			10,670			521		(7,148	)		25,642
Corporate general & admin		—			—			—		10,279			10,279
Operating income (loss)		21,599			10,670			521		(17,427	)		15,363
Other (expense) income:
Interest expense		—			(7	)		—		(1,607	)		(1,614	)
Other (expense) income, net		(142	)		129			—		3,156			3,143
Total other (expense) income		(142	)		122			—		1,549			1,529
Income (loss) from continuing operations before income tax expense	$	21,457		$	10,792		$	521	$	(15,878	)	$	16,892

Segment information for the nine months ended September 30, 2019 and 2018 was as follows (in thousands):

	Nine Months Ended September 30, 2019
	Financial Services			Benefits and Insurance Services			National Practices		Corporate and Other			Total
Revenue	$	493,311		$	225,342		$	26,633	$	—		$	745,286
Operating expenses		390,847			185,836			24,308		21,799			622,790
Gross margin		102,464			39,506			2,325		(21,799	)		122,496
Corporate general & admin		—			—			—		33,916			33,916
Operating income (loss)		102,464			39,506			2,325		(55,715	)		88,580
Other income:
Interest expense		—			(38	)		—		(4,471	)		(4,509	)
Gain (loss) on sale of operations, net		563			—			—		(161	)		402
Other (expense) income, net		(188	)		204			1		12,699			12,716
Total other income		375			166			1		8,067			8,609
Income (loss) from continuing operations before income tax expense	$	102,839		$	39,672		$	2,326	$	(47,648	)	$	97,189

	Nine Months Ended September 30, 2018
	Financial Services		Benefits and Insurance Services			National Practices		Corporate and Other			Total
Revenue	$	478,485	$	220,152		$	24,343	$	—		$	722,980
Operating expenses		386,649		181,697			22,356		17,757			608,459
Gross margin		91,836		38,455			1,987		(17,757	)		114,521
Corporate general & admin		—		—			—		30,300			30,300
Operating income (loss)		91,836		38,455			1,987		(48,057	)		84,221
Other income (expense):
Interest expense		—		(96	)		—		(5,115	)		(5,211	)
Gain on sale of operations, net		—		—			—		663			663
Other income (expense), net		106		351			—		2,087			2,544
Total other income (expense)		106		255			—		(2,365	)		(2,004	)
Income (loss) from continuing operations before income tax expense	$	91,942	$	38,710		$	1,987	$	(50,422	)	$	82,217