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Segment and Geographic Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment and Geographic Information

13. Segment and Geographic Information

The Company has a geographic reporting structure consisting of North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions. The Company's reportable segments are comprised of the following:

•
North America Loss Adjusting, which services the North American property and casualty market. This is comprised of Loss Adjusting operations in the U.S. and Canada, including Global Technical Services, field operations and edjuster. The Canadian operations include all operations within that country including third party administration and Contractor Connection.
•
International Operations, which services the global property and casualty market in the U.K., Europe Australia, Asia and Latin America. The International Operations includes all operations within the respective countries, including Loss Adjusting, Global Technical Services, Legal Services, third party administration, and where applicable, Contractor Connection services.
•
Broadspire, which provides third party administration, medical management and technology solutions for workers' compensation, auto and liability, disability and accident claims to corporations, brokers and insurers in the U.S.
•
Platform Solutions, which consists of the Contractor Connection, Networks, and Subrogation service lines in the U.S. The Networks service line includes Catastrophe operations and WeGoLook.

The North America Loss Adjusting and International Operations reportable segments represent the aggregation of certain geographic operating segments within those service lines.

The Company's four reportable segments represent components of the business for which separate financial information is available, and which is evaluated regularly by the chief operating decision maker ("CODM"). The segments, organized based upon geography and the nature of services, are: North America Loss Adjusting, which primarily serves the property and casualty insurance company markets in the U.S. and Canada; International Operations, which services the property and casualty insurance markets in the U.K., Europe, Australia, Asia and Latin America; Broadspire, which serves the casualty, disability and self-insurance marketplace in the U.S.; and Platform Solutions which serves the property and casualty insurance company markets in the U.S. Intersegment sales are recorded at cost and are not material.

Operating earnings is the primary financial performance measure used by the Company's senior management and the CODM to evaluate the financial performance of the Company's four reportable segments and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate segment operating performance using the same criteria used by the Company's senior management and CODM. Operating earnings will differ from net income computed in accordance with GAAP since operating earnings represent segment earnings before certain unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, contingent earnout adjustments, goodwill impairment, non-service pension costs and credits, income taxes, reserves on certain income tax assets, and net income or loss attributable to noncontrolling interests.

Segment operating earnings includes allocations of certain corporate and shared costs. If the Company changes its allocation methods or changes the types of costs that are allocated to its four reportable segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process.

In the normal course of its business, the Company sometimes pays for certain out-of-pocket expenses that are thereafter reimbursed by its clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in the Company's consolidated results of operations. However, in evaluating segment results, Company management excludes these reimbursements and related expenses from segment results, as they offset each other.

Financial information as of and for the years ended December 31, 2023, 2022, and 2021 related to the Company's reportable segments is presented below.

 

 

 

North America Loss Adjusting

 

 

International Operations

 

 

Broadspire

 

 

Platform
Solutions

 

 

Total

 

 

 

(In thousands)

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursements

 

$

303,629

 

 

$

382,393

 

 

$

355,650

 

 

$

225,459

 

 

$

1,267,131

 

Segment operating earnings

 

 

23,185

 

 

 

11,181

 

 

 

41,873

 

 

 

28,541

 

 

 

104,780

 

Depreciation and amortization (1)

 

 

1,998

 

 

 

1,437

 

 

 

5,664

 

 

 

5,568

 

 

 

14,667

 

Assets (2)

 

 

108,471

 

 

 

144,785

 

 

 

70,283

 

 

 

82,944

 

 

 

406,483

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursements

 

$

274,755

 

 

$

357,452

 

 

$

313,564

 

 

$

243,711

 

 

$

1,189,482

 

Segment operating earnings (loss)

 

 

19,108

 

 

 

(12,946

)

 

 

27,021

 

 

 

35,746

 

 

 

68,929

 

Depreciation and amortization (1)

 

 

2,228

 

 

 

2,388

 

 

 

5,800

 

 

 

4,269

 

 

 

14,685

 

Assets (2)

 

 

109,480

 

 

 

149,744

 

 

 

72,159

 

 

 

100,658

 

 

 

432,041

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursements

 

$

243,789

 

 

$

357,909

 

 

$

301,035

 

 

$

199,299

 

 

$

1,102,032

 

Segment operating earnings

 

 

15,015

 

 

 

4,918

 

 

 

24,783

 

 

 

32,048

 

 

 

76,764

 

Depreciation and amortization (1)

 

 

1,971

 

 

 

2,371

 

 

 

6,986

 

 

 

3,667

 

 

 

14,995

 

Assets (2)

 

 

103,839

 

 

 

182,817

 

 

 

70,319

 

 

 

110,302

 

 

 

467,277

 

(1) Excludes amortization expense of finite-lived customer relationships and trade name intangible assets.

(2) Consists of accounts receivable, less allowance for expected credit losses, unbilled revenues at estimated billable amounts, goodwill and intangible assets arising from business acquisitions, net.

Revenues by geographic region and major service line for the North America Loss Adjusting, International Operations, Broadspire and Platform Solutions segments are shown in Note 2, "Revenue Recognition."

Capital expenditures for the years ended December 31, 2023, 2022, and 2021 are shown in the following table:

 

Year Ended December 31,

 

2023

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

North America Loss Adjusting

 

$

3,052

 

 

$

2,276

 

 

$

794

 

International Operations

 

 

1,061

 

 

 

1,625

 

 

 

1,155

 

Broadspire

 

 

12,494

 

 

 

10,680

 

 

 

8,654

 

Platform Solutions

 

 

4,815

 

 

 

7,362

 

 

 

8,073

 

Corporate

 

 

15,174

 

 

 

12,656

 

 

 

12,278

 

Total capital expenditures

 

$

36,596

 

 

$

34,599

 

 

$

30,954

 

The total of the Company's reportable segments' revenues before reimbursements reconciled to total consolidated revenues for the years ended December 31, 2023, 2022, and 2021 was as follows:

 

Year Ended December 31,

 

2023

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Segments' revenues before reimbursements

 

$

1,267,131

 

 

$

1,189,482

 

 

$

1,102,032

 

Reimbursements

 

 

49,788

 

 

 

41,744

 

 

 

37,199

 

Total consolidated revenues

 

$

1,316,919

 

 

$

1,231,226

 

 

$

1,139,231

 

 

The Company's reportable segments' total operating earnings reconciled to consolidated income before income taxes for the years ended December 31, 2023, 2022, and 2021 were as follows:

 

Year Ended December 31,

 

2023

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Operating earnings of all reportable segments

 

$

104,780

 

 

$

68,929

 

 

$

76,764

 

Unallocated corporate and shared costs and credits

 

 

(19,419

)

 

 

(5,459

)

 

 

(14,259

)

Net corporate interest expense

 

 

(17,036

)

 

 

(10,311

)

 

 

(6,559

)

Stock option expense

 

 

(552

)

 

 

(548

)

 

 

(1,053

)

Amortization of acquisition-related intangible assets

 

 

(7,790

)

 

 

(7,836

)

 

 

(11,029

)

Goodwill and intangible asset impairment charges

 

 

—

 

 

 

(36,808

)

 

 

—

 

Contingent earnout adjustments

 

 

(4,025

)

 

 

(2,921

)

 

 

—

 

Income before income taxes

 

$

55,958

 

 

$

5,046

 

 

$

43,864

 

The Company's reportable segments' total assets reconciled to consolidated total assets of the Company at 2023 and 2022 are presented in the following table:

 

December 31,

 

2023

 

 

2022

 

 

 

(In thousands)

 

Assets of reportable segments

 

$

406,483

 

 

$

432,041

 

Corporate assets:

 

 

 

 

 

 

Cash and cash equivalents

 

 

58,363

 

 

 

46,007

 

Income taxes receivable

 

 

4,842

 

 

 

9,098

 

Prepaid expenses and other current assets

 

 

58,168

 

 

 

28,782

 

Net property and equipment

 

 

22,742

 

 

 

27,809

 

Operating lease right-of-use asset, net

 

 

88,615

 

 

 

93,334

 

Capitalized software costs, net

 

 

96,770

 

 

 

82,975

 

Deferred income tax assets

 

 

26,247

 

 

 

19,573

 

Other noncurrent assets

 

 

36,969

 

 

 

51,888

 

Total corporate assets

 

 

392,716

 

 

 

359,466

 

Total assets

 

$

799,199

 

 

$

791,507

 

Revenues and long-lived assets for the U.S., U.K. and Canada are set out below as these countries are material for geographical area disclosure. For the purposes of these geographic area disclosures, long-lived assets consist of the net property and equipment, capitalized software costs, net and operating lease right-of-use, net line items on the Company's Consolidated Balance Sheets and excludes intangible assets and goodwill.

 

 

 

U.S.

 

 

U.K.

 

 

Canada

 

 

All Other
International

 

 

Total
Company

 

 

 

(In thousands)

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursements

 

$

788,364

 

 

$

143,353

 

 

$

96,374

 

 

$

239,040

 

 

$

1,267,131

 

Long-lived assets

 

 

136,087

 

 

 

20,847

 

 

 

18,213

 

 

 

32,981

 

 

 

208,128

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursements

 

 

734,264

 

 

 

121,814

 

 

 

97,766

 

 

 

235,638

 

 

 

1,189,482

 

Long-lived assets

 

 

131,680

 

 

 

17,103

 

 

 

19,457

 

 

 

35,876

 

 

 

204,116

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursements

 

 

658,785

 

 

 

134,663

 

 

 

84,945

 

 

 

223,639

 

 

 

1,102,032

 

Long-lived assets

 

 

128,211

 

 

 

15,939

 

 

 

21,803

 

 

 

42,939

 

 

 

208,892