SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2015

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 14: SEGMENT INFORMATION

        We report our financial performance based on the following two reportable segments: the Technology segment and the Bankruptcy and Settlement Administration segment.

        Our Technology segment provides eDiscovery services and technology solutions comprised of consulting, collections and forensics, processing, search and review, and document review to companies and law firms. Produced documents are made available primarily through a hosted environment utilizing our proprietary software and third-party software which allows for efficient attorney review and data requests.

        On April 30, 2015, we acquired Iris, a leading provider of managed services for the legal profession including electronic discovery and document review. Iris supports Epiq's strategic plan to offer managed services solutions to its existing global client base, while bringing Epiq's eDiscovery and document review resources to a new client base. The financial information of Iris is included in the Technology segment.

        Our Bankruptcy and Settlement Administration segment provides managed services and technology solutions that address the needs of our customers with respect to litigation, claims and project administration, compliance matters, controlled disbursements, corporate restructuring, bankruptcy and class action proceedings.

        The segment performance measure is based on earnings before interest, taxes, depreciation and amortization, certain nonrecurring operating expenses, and share-based compensation expense. In management's evaluation of performance, certain costs, such as compensation for administrative staff and executive management, as well as other enterprise level expenses 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 and equipment, leasehold improvements, software, identifiable intangible assets and goodwill. Cash, certain 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 and equipment, leasehold improvements, software, and identifiable intangible assets to reporting segments, we do not allocate the related depreciation and amortization to the segment as management evaluates segment performance exclusive of these non-cash charges.

        Following is a summary of segment information (in thousands):

	Year Ended December 31, 2015
	Technology			Bankruptcy and Settlement Administration			Eliminations			Total
Operating revenue	$	345,613		$	160,323		$	—		$	505,936
Intersegment revenue		1,594			—			(1,594	)		—
Operating revenues including intersegment revenue		347,207			160,323			(1,594	)		505,936
Reimbursable expenses		2,044			36,225						38,269
Total revenue		349,251			196,548			(1,594	)		544,205
Direct costs, selling, general and administrative expenses		254,200			142,527			(1,594	)		395,133
Segment performance measure	$	95,051		$	54,021		$	—		$	149,072
As a percentage of segment operating revenue		28	%		34	%					29	%

	Year Ended December 31, 2014
	Technology			Bankruptcy and Settlement Administration			Eliminations			Total
Operating revenue	$	297,679		$	146,439		$	—		$	444,118
Intersegment revenue		2,045			—			(2,045	)		—
Operating revenues including intersegment revenue		299,724			146,439			(2,045	)		444,118
Reimbursable expenses		2,540			27,812			—			30,352
Total revenue		302,264			174,251			(2,045	)		474,470
Direct costs, selling, general and administrative expenses		218,255			121,085			(2,045	)		337,295
Segment performance measure	$	84,009		$	53,166		$	—		$	137,175
As a percentage of segment operating revenue		28	%		36	%					31	%

	Year Ended December 31, 2013
	Technology			Bankruptcy and Settlement Administration			Eliminations			Total
Operating revenue	$	284,929		$	153,761		$	—		$	438,690
Intersegment revenue		384			—			(384	)		—
Operating revenues including intersegment revenue		285,313			153,761			(384	)		438,690
Reimbursable expenses		2,488			40,905			—			43,393
Total revenue		287,801			194,666			(384	)		482,083
Direct costs, selling, general and administrative expenses		198,462			145,596			(384	)		343,674
Segment performance measure	$	89,339		$	49,070		$	—		$	138,409
As a percentage of segment operating revenue		31	%		32	%					32	%

        Following is a reconciliation of a segment performance measure to consolidated income (loss) before income taxes (in thousands):

	Year Ended December 31,
	2015			2014			2013
Segment performance measure	$	149,072		$	137,175		$	138,409
Unallocated expenses		(45,821	)		(62,557	)		(47,587	)
Share-based compensation expense		(13,748	)		(13,098	)		(10,008	)
Depreciation and software and leasehold amortization		(37,810	)		(36,042	)		(30,971	)
Amortization of identifiable intangible assets		(18,347	)		(12,655	)		(18,834	)
Intangible asset impairment expense		(1,162	)		—			—
Fair value adjustment to contingent consideration		1,182			(1,142	)		(2,580	)
Other operating income (expense)		(5,291	)		(880	)		791
Operating income		28,075			10,801			29,220
Interest expense, net		(20,413	)		(16,653	)		(12,115	)
Income (loss) before income taxes	$	7,662		$	(5,852	)	$	17,105

        Following are capital expenditures (including software development costs) by segment (in thousands):

	Year Ended December 31,
	2015		2014		2013
Capital Expenditures
Technology	$	11,372	$	15,477	$	22,234
Bankruptcy and Settlement Administration		1,266		2,596		3,161
Unallocated and corporate		16,467		17,966		15,312
Total capital expenditures(1)	$	29,105	$	36,039	$	40,707

(1) Excludes capital expenditures financed under long-term obligations such as capital leases and notes payable of $6.5 million, $4.9 million and $7.9 million for the years ended December 31, 2015, 2014 and 2013, respectively.

        Following are assets by segment (in thousands):

	As of December 31,
	2015		2014
Total Assets
Technology	$	465,736	$	341,764
Bankruptcy and Settlement Administration		276,097		286,237
Unallocated and corporate		82,064		99,923
Total assets	$	823,897	$	727,924

        Following is total revenue, determined by the location providing the services, by geographical area (in thousands):

	Year Ended December 31,
	2015		2014		2013
Total Revenue
United States	$	465,646	$	410,768	$	431,615
United Kingdom		60,514		49,710		45,962
Other countries		18,045		13,992		4,506
Total revenue	$	544,205	$	474,470	$	482,083

        Following are long-lived assets, excluding intangible assets, by geographical area (in thousands):

	As of December 31,
	2015		2014
Long-lived assets
United States	$	84,137	$	78,921
Other countries		9,549		6,371
Total long-lived assets	$	93,686	$	85,292

Significant Client and Concentration of Credit Risk

        For the years ended December 31, 2015, 2014 and 2013, we had no clients which accounted for more than 10% of our consolidated revenue or consolidated accounts receivable as of December 31, 2015 and 2014.