SEGMENT REPORTING

12 Months Ended

Dec. 31, 2011

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 14: SEGMENT REPORTING

        We have three reporting segments: eDiscovery, bankruptcy, and settlement administration. Our eDiscovery business provides collections and forensics, processing, search and review, and document review services to companies and the litigation departments of law firms. Produced documents are made available primarily through a hosted environment, and our DocuMatrix™ software allows for efficient attorney review and data requests. Our bankruptcy business provides solutions and software that address the needs of trustees to administer bankruptcy proceedings, of debtor corporations that file a plan of reorganization, and assists creditors including banks, mortgage processors, and their administrative services professionals to streamline the processing of their portfolios of loans in bankruptcy cases. Our settlement administration segment provides managed services including legal notification, claims administration, project administration and controlled disbursement.

        The segment performance measure is based on earnings before interest, taxes, depreciation and amortization, intangible asset impairment expense, other operating expense, and share-based compensation expense. In management's evaluation of performance, certain costs, such as compensation for administrative staff and executive management, are not allocated by segment and, accordingly, the following reporting segment results do not include such unallocated costs.

        Assets reported within a segment are those assets that can be identified to a segment and primarily consist of trade receivables, property, equipment and leasehold improvements, software, identifiable intangible assets and goodwill. Cash, tax-related assets, and certain prepaid assets and other assets are not allocated to our segments. Although we can and do identify long-lived assets such as property, equipment and leasehold improvements, software, and identifiable intangible assets to reporting segments, we do not allocate the related depreciation and amortization or intangible asset impairment expense to the segment as management evaluates segment performance exclusive of these non-cash charges.

        Following is a summary of segment information for the year ended December 31, 2011. The intersegment revenues during 2011 related primarily to call center and printing services performed by the settlement administration segment for the bankruptcy segment.

	Year Ended December 31, 2011
	eDiscovery		Bankruptcy		Settlement Administration		Eliminations			Total
	(in thousands)
Revenue:
Operating revenue before reimbursed direct costs	$	132,918	$	91,971	$	36,376	$	—		$	261,265
Intersegment revenue		75		—		2,386		(2,461	)		—
Operating revenue before reimbursed direct costs		132,993		91,971		38,762		(2,461	)		261,265
Operating revenue from reimbursed direct costs		601		5,882		15,578		—			22,061
Total revenue		133,594		97,853		54,340		(2,461	)		283,326
Direct costs, general and administrative costs		77,606		50,421		48,395		(2,461	)		173,961
Segment performance measure	$	55,988	$	47,432	$	5,945	$	—		$	109,365

        Following is a summary of segment information for the year ended December 31, 2010. The intersegment revenues during 2010 related primarily to call center and printing services performed by the settlement administration segment for the bankruptcy segment.

	Year Ended December 31, 2010
	eDiscovery		Bankruptcy		Settlement Administration		Eliminations			Total
	(in thousands)
Revenue:
Operating revenue before reimbursed direct costs	$	81,130	$	97,219	$	39,246	$	—		$	217,595
Intersegment revenue		49		1		3,092		(3,142	)		—
Operating revenue before reimbursed direct costs		81,179		97,220		42,338		(3,142	)		217,595
Operating revenue from reimbursed direct costs		363		8,450		20,758		—			29,571
Total revenue		81,542		105,670		63,096		(3,142	)		247,166
Direct costs, general and administrative costs		45,973		53,147		55,105		(3,142	)		151,083
Segment performance measure	$	35,569	$	52,523	$	7,991	$	—		$	96,083

        Following is a summary of segment information for the year ended December 31, 2009. The intersegment revenues during 2009 related primarily to call center services performed by the settlement administration segment for the bankruptcy segment.

	Year Ended December 31, 2009
	eDiscovery		Bankruptcy		Settlement Administration		Eliminations			Total
	(in thousands)
Revenue:
Operating revenue before reimbursed direct costs	$	55,806	$	91,002	$	61,721	$	—		$	208,529
Intersegment revenue		1		1		1,889		(1,891	)		—
Operating revenue before reimbursed direct costs		55,807		91,003		63,610		(1,891	)		208,529
Operating revenue from reimbursed direct costs		382		10,635		19,525		—			30,542
Total revenue		56,189		101,638		83,135		(1,891	)		239,071
Direct costs, general and administrative costs		37,674		54,191		65,248		(1,891	)		155,222
Segment performance measure	$	18,515	$	47,447	$	17,887	$	—		$	83,849

        Following is a reconciliation of our segment performance measure to income before income taxes:

	Year Ended December 31,
	2011			2010			2009
	(in thousands)
Segment performance measure	$	109,365		$	96,083		$	83,849
Corporate and unallocated expenses		(29,176	)		(28,525	)		(20,277	)
Share-based compensation expense		(7,369	)		(6,727	)		(8,543	)
Depreciation and software and leasehold amortization		(23,081	)		(20,391	)		(18,775	)
Amortization of identifiable intangible assets		(21,323	)		(9,190	)		(7,409	)
Intangible asset impairment expense		(1,278	)		—			—
Fair value adjustment to contingent consideration		7,166			—			—
Acquisition related expense		(7,681	)		(2,125	)		—
Other operating expense		—			(656	)		(634	)
Interest expense, net		(5,716	)		(1,899	)		(1,350	)
Income before income taxes	$	20,907		$	26,570		$	26,861

        Following are total assets by segment:

	December 31, 2011		December 31, 2010
	(in thousands)
Assets
eDiscovery	$	343,868	$	145,246
Bankruptcy		246,203		260,458
Settlement Administration		52,911		53,830
Corporate and unallocated		35,682		18,684
Total consolidated assets	$	678,664	$	478,218

        Following are capital expenditures (including software development costs and non-cash expenditures) by segment:

	Year Ended December 31,
	2011		2010		2009
	(in thousands)
Capital Expenditures
eDiscovery	$	18,731	$	7,418	$	8,688
Bankruptcy		3,707		8,047		7,009
Settlement Administration		680		1,023		5,759
Corporate and unallocated		7,117		6,600		1,753
Total consolidated capital expenditures	$	30,235	$	23,088	$	23,209

        Following is revenue, determined by the location providing the services, by geographical area:

	Year Ended December 31,
	2011		2010		2009
	(in thousands)
Revenue
United States	$	261,864	$	229,072	$	228,961
Other countries		21,462		18,094		10,110
Total	$	283,326	$	247,166	$	239,071

        Following are long-lived assets, excluding intangible assets, by geographical area:

	December 31, 2011		December 31, 2010
	(in thousands)
Long-lived assets
United States	$	65,740	$	57,331
Other countries		2,228		3,586
Total	$	67,968	$	60,917