3.	*Segment Information*

The Company is organized into separately managed segments as follows: the Reis Services segment, the discontinued operations segment and other. The following tables present condensed balance sheet and operating data for these segments:


(amounts in thousands)

Condensed Balance Sheet Data December 31, 2014	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	17,562	$	—	$	183	$	17,745
Restricted cash and investments		213		—		—		213
Accounts receivable, net		12,627		—		—		12,627
Prepaid and other assets		213		—		3,950		4,163
Assets attributable to discontinued operations		—		—		4		4

Total current assets		30,615		—		4,137		34,752
Furniture, fixtures and equipment, net		836		—		15		851
Intangible assets, net		14,681		—		—		14,681
Deferred tax asset, non-current portion, net		285		—		18,354		18,639
Goodwill		57,203		—		(2,378)		54,825
Other assets		140		—		—		140

Total assets	$	103,760	$	—	$	20,128	$	123,888


Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	—	$	—	$	—	$	—
Accrued expenses and other liabilities		3,157		—		1,014		4,171
Deferred revenue		22,885		—		—		22,885
Liabilities attributable to discontinued operations		—		271		28		299

Total current liabilities		26,042		271		1,042		27,355
Other long-term liabilities		420		—		—		420
Deferred tax liability, net		23,108		—		(23,108)		—

Total liabilities		49,570		271		(22,066)		27,775
Total stockholders’ equity		54,190		(271)		42,194		96,113

Total liabilities and stockholders’ equity	$	103,760	$	—	$	20,128	$	123,888


Condensed Balance Sheet Data December 31, 2013	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	10,347	$	—	$	213	$	10,560
Restricted cash and investments		217		—		—		217
Accounts receivable, net		11,386		—		—		11,386
Prepaid and other assets		187		—		2,601		2,788
Assets attributable to discontinued operations		—		—		9		9

Total current assets		22,137		—		2,823		24,960
Furniture, fixtures and equipment, net		829		—		24		853
Intangible assets, net		15,687		—		—		15,687
Deferred tax asset, non-current portion, net		285		—		21,032		21,317
Goodwill		57,203		—		(2,378)		54,825
Other assets		225		—		—		225

Total assets	$	96,366	$	—	$	21,501	$	117,867


Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	—	$	—	$	—	$	—
Accrued expenses and other liabilities		2,623		—		956		3,579
Liability for option cancellations		—		—		268		268
Deferred revenue		20,284		—		—		20,284
Liabilities attributable to discontinued operations		—		271		71		342

Total current liabilities		22,907		271		1,295		24,473
Other long-term liabilities		523		—		—		523
Deferred tax liability, net		18,957		—		(18,957)		—

Total liabilities		42,387		271		(17,662)		24,996
Total stockholders’ equity		53,979		(271)		39,163		92,871

Total liabilities and stockholders’ equity	$	96,366	$	—	$	21,501	$	117,867

(A)	Includes the assets and liabilities of the Company’s discontinued operations, to the extent that such assets and liabilities existed at the date presented.

(B)	Includes cash, other assets and liabilities not specifically attributable to or allocable to a specific operating segment.


(amounts in thousands)

Condensed Operating Data for the Year Ended December 31, 2014	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	41,335	$	—	$	—	$	41,335
Cost of sales of subscription revenue		8,037		—		—		8,037

Gross profit		33,298		—		—		33,298

Operating expenses:
Sales and marketing		10,235		—		—		10,235
Product development		3,473		—		—		3,473
General and administrative expenses		7,940		—		4,101		12,041

Total operating expenses		21,648		—		4,101		25,749
Other income (expenses):
Interest and other income		22		—		—		22
Interest expense		(113)		—		—		(113)

Total other income (expenses)		(91)		—		—		(91)

Income (loss) before income taxes and discontinued operations	$	11,559	$	—	$	(4,101)	$	7,458


(Loss) from discontinued operations, before income taxes	$	—	$	(31)	$	(920)	$	(951)


Condensed Operating Data for the Year Ended December 31, 2013	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	34,721	$	—	$	—	$	34,721
Cost of sales of subscription revenue		6,974		—		—		6,974

Gross profit		27,747		—		—		27,747

Operating expenses:
Sales and marketing		8,350		—		—		8,350
Product development		3,122		—		—		3,122
General and administrative expenses		6,989		—		4,920		11,909

Total operating expenses		18,461		—		4,920		23,381
Other income (expenses):
Interest and other income		10		—		—		10
Interest expense		(113)		—		—		(113)

Total other income (expenses)		(103)		—		—		(103)

Income (loss) before income taxes and discontinued operations	$	9,183	$	—	$	(4,920)	$	4,263


(Loss) from discontinued operations, before income taxes	$	—	$	(9)	$	(557)	$	(566)

(A)

Includes the results of the Company’s discontinued operations to the extent that such operations existed during the periods presented.

(B)

Includes interest and other income, depreciation expense and general and administrative expenses that have not been allocated to the operating segments.


(amounts in thousands)
Condensed Operating Data for the Year Ended December 31, 2012	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	31,229	$	—	$	—	$	31,229
Cost of sales of subscription revenue		6,617		—		—		6,617

Gross profit		24,612		—		—		24,612

Operating expenses:
Sales and marketing		7,643		—		—		7,643
Product development		2,485		—		—		2,485
General and administrative expenses		6,696		—		5,098		11,794

Total operating expenses		16,824		—		5,098		21,922
Other income (expenses):
Interest and other income		50		—		1		51
Interest expense		(155)		—		—		(155)

Total other income (expenses)		(105)		—		1		(104)

Income (loss) before income taxes and discontinued operations	$	7,683	$	—	$	(5,097)	$	2,586


(Loss) from discontinued operations, before income taxes	$	—	$	(393)	$	(11,904)	$	(12,297)

(A)

Includes the results of the Company’s discontinued operations to the extent that such operations existed during the periods presented.

(B)

Includes interest and other income, depreciation expense and general and administrative expenses that have not been allocated to the operating segments.

Reis Services

See Note 1 for a description of Reis Services’s business and products at December 31, 2014.

The Company’s largest individual subscriber accounted for 2.9%, 3.4% and 4.2% of Reis Services’s revenue for the years ended December 31, 2014, 2013 and 2012, respectively.

The following table presents the accounts receivable balances of Reis Services at December 31, 2014 and 2013:


	December 31,
	2014		2013

Accounts receivable	$	12,679,000	$	11,465,000
Allowance for doubtful accounts		(52,000)		(79,000)

Accounts receivable, net	$	12,627,000	$	11,386,000

Thirty-one subscribers accounted for an aggregate of approximately 65.0% of Reis Services’s accounts receivable at December 31, 2014, including four subscribers in excess of 4.0% and the largest representing 9.4%. Through February 27, 2015, the Company received payments of approximately $9,773,000 or 77.1% against the December 31, 2014 accounts receivable balance. Twenty-five subscribers accounted for an aggregate of approximately 59.1% of Reis Services’s accounts receivable at December 31, 2013, including four subscribers in excess of 4.0% and the largest representing 10.4%.

At December 31, 2014 and 2013, the largest individual subscriber accounted for 5.2% and 5.9%, respectively, of deferred revenue.

Discontinued Operations – Residential Development Activities

Income (loss) from discontinued operations is comprised of the following:


	For the Years Ended December 31,
	2014		2013		2012

Litigation recoveries	$	26,000	$	80,000	$	713,000
Litigation charge, net		—		—		(12,260,000)
Other (expenses), net		(977,000)		(646,000)		(750,000)

(Loss) from discontinued operations before income tax		(951,000)		(566,000)		(12,297,000)
Income tax (benefit) from discontinued operations		(382,000)		(230,000)		—

(Loss) from discontinued operations, net of income tax (benefit)	$	(569,000)	$	(336,000)	$	(12,297,000)

In September 2009, the Company sold the final unit at Gold Peak, the final phase of Palomino Park, a five phase multifamily residential development in Highlands Ranch, Colorado. Gold Peak was a 259 unit condominium project on the remaining 29 acre land parcel at Palomino Park. On March 13, 2012, in connection with litigation regarding construction defects at the Gold Peak project, a jury rendered its verdict whereby Reis, one of its subsidiaries (Gold Peak at Palomino Park LLC, the developer of the project (“GP LLC”)), and the construction manager/general contractor for the project (Tri-Star Construction West, LLC (“Tri-Star”)) were found jointly and severally liable for an aggregate of $18,200,000, plus other costs of approximately $756,000. The Company recorded a charge of $14,216,000 during the first quarter of 2012. On June 20, 2012, following denial of all of the defendants’ post-trial motions, Reis and its subsidiaries reached a settlement with the plaintiff, the Gold Peak homeowners association, providing for a total payment of $17,000,000. Of this amount, $5,000,000 was paid on August 3, 2012 and the remaining $12,000,000 was paid on October 15, 2012, in accordance with the settlement terms. As a result of the settlement, in the second quarter of 2012 the Company reversed $1,956,000 of the previously recorded charge, resulting in the net litigation charge for the year ended December 31, 2012 of approximately $12,260,000.

During the years ended December 31, 2014, 2013 and 2012, the Company had litigation recoveries of $26,000, $80,000 and $713,000, respectively, from insurance carriers and other responsible parties. Other expenses primarily reflect legal and other professional costs incurred related to the Gold Peak litigation. For additional information pertaining to the Gold Peak litigation, see Note 10.