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

Assets
Current assets:
Cash and cash equivalents	$	28,465	$	—	$	193	$	28,658
Restricted cash and investments		212		—		—		212
Accounts receivable, net		13,741		—		—		13,741
Prepaid and other assets		417		60		193		670

Total current assets		42,835		60		386		43,281
Furniture, fixtures and equipment, net		798		—		6		804
Intangible assets, net		15,687		—		—		15,687
Deferred tax asset, net		285		—		18,145		18,430
Goodwill		57,203		—		(2,378)		54,825
Other assets		172		—		—		172

Total assets	$	116,980	$	60	$	16,159	$	133,199


Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	—	$	—	$	—	$	—
Accrued expenses and other liabilities		4,502		—		1,397		5,899
Deferred revenue		25,291		—		—		25,291
Liabilities attributable to discontinued operations		—		120		26		146

Total current liabilities		29,793		120		1,423		31,336
Other long-term liabilities		284		—		—		284
Deferred tax liability, net		29,498		—		(29,498)		—

Total liabilities		59,575		120		(28,075)		31,620
Total stockholders’ equity		57,405		(60)		44,234		101,579

Total liabilities and stockholders’ equity	$	116,980	$	60	$	16,159	$	133,199


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		—		156		369

Total current assets		30,615		—		339		30,954
Furniture, fixtures and equipment, net		836		—		15		851
Intangible assets, net		14,681		—		—		14,681
Deferred tax asset, net		285		—		22,152		22,437
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 Year Ended December 31, 2015	Reis Services		Discontinued Operations (A)		Other (B)		Consolidated

Subscription revenue	$	50,890	$	—	$	—	$	50,890
Cost of sales of subscription revenue		9,081		—		—		9,081

Gross profit		41,809		—		—		41,809

Operating expenses:
Sales and marketing		11,701		—		—		11,701
Product development		3,711		—		—		3,711
General and administrative expenses		9,892		—		4,375		14,267

Total operating expenses		25,304		—		4,375		29,679
Other income (expenses):
Interest and other income		38		—		—		38
Interest expense		(92)		—		—		(92)

Total other income (expenses)		(54)		—		—		(54)

Income (loss) before income taxes and discontinued operations	$	16,451	$	—	$	(4,375)	$	12,076


Income (loss) from discontinued operations, before income taxes	$	—	$	(8)	$	3,651	$	3,643


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)

(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, 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.

Reis Services

See Note 1 for a description of Reis Services’s business and products at December 31, 2015.

The Company’s largest individual subscriber accounted for 10.6%, 2.9% and 3.4% of Reis Services’s revenue for the years ended December 31, 2015, 2014 and 2013, respectively.

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


	December 31,
	2015		2014

Accounts receivable	$	13,828,000	$	12,679,000
Allowance for doubtful accounts		(87,000)		(52,000)

Accounts receivable, net	$	13,741,000	$	12,627,000

Twenty-three subscribers accounted for an aggregate of approximately 63.9% of Reis Services’s accounts receivable at December 31, 2015, including four subscribers in excess of 4.0% and the largest representing 17.4%. Through February 18, 2016, the Company received payments of approximately $10,753,000 or 77.8% against the December 31, 2015 accounts receivable balance. 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%.

At December 31, 2015 and 2014, the largest individual subscriber accounted for 6.8% and 5.2% 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,
	2015		2014		2013

Litigation recoveries	$	4,839,000	$	26,000	$	80,000
Other (expenses), net		(1,196,000)		(977,000)		(646,000)

Income (loss) from discontinued operations before income tax		3,643,000		(951,000)		(566,000)
Income tax expense (benefit) from discontinued operations		1,409,000		(382,000)		(230,000)

Income (loss) from discontinued operations, net of income tax expense (benefit)	$	2,234,000	$	(569,000)	$	(336,000)

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.

As of December 31, 2015, the Company entered into the final settlement agreement related to its Gold Peak recovery efforts, bringing closure to this process. In summary, recovery efforts from the fourth quarter of 2012 through December 31, 2015 have resulted in cash collections aggregating approximately $5,658,000. During the years ended December 31, 2015, 2014 and 2013, the Company had litigation recoveries of $4,839,000, $26,000 and $80,000, respectively, from multiple insurance carriers, trial attorneys, an insurance broker and other responsible parties involved in the design, development, construction and supervision of the Gold Peak project. 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 10.