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 June 30, 2015	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Assets
Current assets:
Cash and cash equivalents	$	27,079	$	—	$	151	$	27,230
Restricted cash and investments		212		—		—		212
Accounts receivable, net		5,273		—		—		5,273
Prepaid and other assets		341		—		5,076		5,417
Assets attributable to discontinued operations		—		—		—		—

Total current assets		32,905		—		5,227		38,132
Furniture, fixtures and equipment, net		777		—		11		788
Intangible assets, net		14,505		—		—		14,505
Deferred tax asset, non-current portion, net		285		—		15,598		15,883
Goodwill		57,203		—		(2,378)		54,825
Other assets		193		—		—		193

Total assets	$	105,868	$	—	$	18,458	$	124,326

Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	—	$	—	$	—	$	—
Accrued expenses and other liabilities		2,701		—		825		3,526
Deferred revenue		21,512		—		—		21,512
Liabilities attributable to discontinued operations		—		271		208		479

Total current liabilities		24,213		271		1,033		25,517
Other long-term liabilities		330		—		—		330
Deferred tax liability, net		26,119		—		(26,119)		—

Total liabilities		50,662		271		(25,086)		25,847
Total stockholders’ equity		55,206		(271)		43,544		98,479

Total liabilities and stockholders’ equity	$	105,868	$	—	$	18,458	$	124,326


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

(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 Three Months Ended June 30, 2015	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	13,416	$	—	$	—	$	13,416
Cost of sales of subscription revenue		2,134		—		—		2,134

Gross profit		11,282		—		—		11,282

Operating expenses:
Sales and marketing		3,461		—		—		3,461
Product development		889		—		—		889
General and administrative expenses		2,224		—		1,159		3,383

Total operating expenses		6,574		—		1,159		7,733
Other income (expenses):
Interest and other income		8		—		—		8
Interest expense		(28)		—		—		(28)

Total other income (expenses)		(20)		—		—		(20)

Income (loss) before income taxes and discontinued operations	$	4,688	$	—	$	(1,159)	$	3,529


Income (loss) from discontinued operations, before income taxes	$	—	$	(4)	$	1,897	$	1,893


Condensed Operating Data for the Three Months Ended June 30, 2014	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	10,194	$	—	$	—	$	10,194
Cost of sales of subscription revenue		1,974		—		—		1,974

Gross profit		8,220		—		—		8,220

Operating expenses:
Sales and marketing		2,541		—		—		2,541
Product development		814		—		—		814
General and administrative expenses		2,079		—		1,123		3,202

Total operating expenses		5,434		—		1,123		6,557
Other income (expenses):
Interest and other income		6		—		—		6
Interest expense		(28)		—		—		(28)

Total other income (expenses)		(22)		—		—		(22)

Income (loss) before income taxes and discontinued operations	$	2,764	$	—	$	(1,123)	$	1,641


Income (loss) from discontinued operations, before income taxes	$	—	$	—	$	(175)	$	(175)

(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 Six Months Ended June 30, 2015	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	24,547	$	—	$	—	$	24,547
Cost of sales of subscription revenue		4,320		—		—		4,320

Gross profit		20,227		—		—		20,227

Operating expenses:
Sales and marketing		6,114		—		—		6,114
Product development		1,752		—		—		1,752
General and administrative expenses		4,384		—		2,320		6,704

Total operating expenses		12,250		—		2,320		14,570
Other income (expenses):
Interest and other income		15		—		—		15
Interest expense		(56)		—		—		(56)

Total other income (expenses)		(41)		—		—		(41)

Income (loss) before income taxes and discontinued operations	$	7,936	$	—	$	(2,320)	$	5,616


Income (loss) from discontinued operations, before income taxes	$	—	$	(4)	$	1,779	$	1,775


Condensed Operating Data for the Six Months Ended June 30, 2014	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	20,140	$	—	$	—	$	20,140
Cost of sales of subscription revenue		3,890		—		—		3,890

Gross profit		16,250		—		—		16,250

Operating expenses:
Sales and marketing		5,093		—		—		5,093
Product development		1,577		—		—		1,577
General and administrative expenses		3,971		—		2,269		6,240

Total operating expenses		10,641		—		2,269		12,910
Other income (expenses):
Interest and other income		9		—		—		9
Interest expense		(56)		—		—		(56)

Total other income (expenses)		(47)		—		—		(47)

Income (loss) before income taxes and discontinued operations	$	5,562	$	—	$	(2,269)	$	3,293


Income (loss) from discontinued operations, before income taxes	$	—	$	(28)	$	(760)	$	(788)

(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 June 30, 2015.

The Company’s largest individual customer accounted for 18.4% and 3.0% of Reis Services’s revenue for the three months ended June 30, 2015 and 2014, respectively, and 10.8% and 3.0% for the six months ended June 30, 2015 and 2014, respectively.

The following table presents the accounts receivable balances of Reis Services at June 30, 2015 and December 31, 2014:


	June 30, 2015		December 31, 2014

Accounts receivable	$	5,341,000	$	12,679,000
Allowance for doubtful accounts		(68,000)		(52,000)

Accounts receivable, net	$	5,273,000	$	12,627,000

Eight subscribers accounted for an aggregate of approximately 39.4% of Reis Services’s accounts receivable at June 30, 2015, with the largest representing 18.5%. Through July 27, 2015, the Company received payments of approximately $1,960,000 or 36.7%, against the June 30, 2015 accounts receivable balance.

At June 30, 2015, the largest individual subscriber accounted for 6.7% of deferred revenue.

Discontinued Operations – Residential Development Activities

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


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2015		2014		2015		2014

Litigation recoveries	$	2,350,000	$	16,000	$	2,350,000	$	16,000
Other (expense), net		(457,000)		(191,000)		(575,000)		(804,000)

Income (loss) from discontinued operations before income tax		1,893,000		(175,000)		1,775,000		(788,000)
Income tax expense (benefit) from discontinued operations		755,000		(82,000)		708,000		(317,000)

Income (loss) from discontinued operations, net of income tax expense (benefit)	$	1,138,000	$	(93,000)	$	1,067,000	$	(471,000)

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. 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, (“GP HOA”) 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.

Recovery efforts from the fourth quarter of 2012 through June 30, 2015 have resulted in cash collections aggregating $3,169,000, including recoveries of $2,350,000 and $16,000 which occurred in the three months ended June 30, 2015 and 2014, respectively. No recoveries occurred in the first quarter of 2015 or 2014. Other expenses primarily reflect legal and other professional costs incurred related to the Gold Peak litigation recovery efforts. For additional information pertaining to the Gold Peak litigation and recovery efforts, see Note 11.