3.	*Segment Information*

The Company is organized into separately managed segments as follows: the Reis Services 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, 2016	Reis Services		Other (A)		Consolidated

Assets
Current assets:
Cash and cash equivalents	$	26,348	$	206	$	26,554
Restricted cash and investments		212		—		212
Accounts receivable, net		6,682		—		6,682
Prepaid and other assets		795		23		818

Total current assets		34,037		229		34,266
Furniture, fixtures and equipment, net		2,486		2		2,488
Intangible assets, net		16,986		—		16,986
Deferred tax asset, net		285		17,055		17,340
Goodwill		57,203		(2,378)		54,825
Other assets		327		—		327

Total assets	$	111,324	$	14,908	$	126,232

Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	—	$	—	$	—
Accrued expenses and other liabilities		3,128		743		3,871
Deferred revenue		20,845		—		20,845

Total current liabilities		23,973		743		24,716
Other long-term liabilities		584		—		584
Deferred tax liability, net		31,932		(31,932)		—

Total liabilities		56,489		(31,189)		25,300
Total stockholders’ equity		54,835		46,097		100,932

Total liabilities and stockholders’ equity	$	111,324	$	14,908	$	126,232

Condensed Balance Sheet Data December 31, 2015	Reis Services		Other (A)		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		253		670

Total current assets		42,835		446		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	$	16,219	$	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		—		146		146

Total current liabilities		29,793		1,543		31,336
Other long-term liabilities		284		—		284
Deferred tax liability, net		29,498		(29,498)		—

Total liabilities		59,575		(27,955)		31,620
Total stockholders’ equity		57,405		44,174		101,579

Total liabilities and stockholders’ equity	$	116,980	$	16,219	$	133,199

(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, and includes cash, other assets and liabilities not specifically attributable to or allocable to the Reis Services segment.

(amounts in thousands)


Condensed Operating Data for the Three Months Ended June 30, 2016	Reis Services		Other (A)		Consolidated

Subscription revenue	$	11,614	$	—	$	11,614
Cost of sales of subscription revenue		2,494		—		2,494

Gross profit		9,120		—		9,120

Operating expenses:
Sales and marketing		3,025		—		3,025
Product development		1,016		—		1,016
General and administrative expenses		2,535		1,001		3,536

Total operating expenses		6,576		1,001		7,577
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	$	2,522	$	(1,001)	$	1,521


Income from discontinued operations, before income taxes	$	—	$	—	$	—


Condensed Operating Data for the Three Months Ended June 30, 2015	Reis Services		Other (A)		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 from discontinued operations, before income taxes	$	—	$	1,893	$	1,893


(A)		Includes the results of the Company’s discontinued operations, to the extent that such operations existed during the periods presented, and includes interest and other income, depreciation expense and general and administrative expenses that have not been allocated to the Reis Services segment.

(amounts in thousands)


Condensed Operating Data for the Six Months Ended June 30, 2016	Reis Services		Other (A)		Consolidated

Subscription revenue	$	24,438	$	—	$	24,438
Cost of sales of subscription revenue		4,956		—		4,956

Gross profit		19,482		—		19,482

Operating expenses:
Sales and marketing		5,693		—		5,693
Product development		2,021		—		2,021
General and administrative expenses		5,331		2,290		7,621

Total operating expenses		13,045		2,290		15,335
Other income (expenses):
Interest and other income		14		—		14
Interest expense		(49)		—		(49)

Total other income (expenses)		(35)		—		(35)

Income (loss) before income taxes and discontinued operations	$	6,402	$	(2,290)	$	4,112


Income from discontinued operations, before income taxes	$	—	$	—	$	—


Condensed Operating Data for the Six Months Ended June 30, 2015	Reis Services		Other (A)		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 from discontinued operations, before income taxes	$	—	$	1,775	$	1,775


(A)		Includes the results of the Company’s discontinued operations, to the extent that such operations existed during the periods presented, and includes interest and other income, depreciation expense and general and administrative expenses that have not been allocated to the Reis Services segment.

In the first quarter of 2016, the Company changed the segment presentation to combine the discontinued operations segment with other. The reason for this change in presentation is the result of the completion of the discontinued operating activities in 2015 and to simplify the presentation on a comparable basis.

Reis Services

See Note 1 for a description of Reis Services’s business and products at June 30, 2016.

The Company’s largest individual subscriber accounted for 8.1% and 10.8% of Reis Services’s revenue for the six months ended June 30, 2016 and 2015, respectively.

The following table presents the accounts receivable balances of Reis Services at June 30, 2016 and December 31, 2015:


	June 30, 2016		December 31, 2015

Accounts receivable	$	6,827,000	$	13,828,000
Allowance for doubtful accounts		(145,000)		(87,000)

Accounts receivable, net	$	6,682,000	$	13,741,000

Ten subscribers accounted for an aggregate of approximately 51.2% of Reis Services’s accounts receivable at June 30, 2016, with the largest representing 30.1%. Through July 28, 2016, the Company received payments of approximately $4,443,000 or 65.1%, against the June 30, 2016 accounts receivable balance.

At June 30, 2016, the largest individual subscriber accounted for 8.6% of deferred revenue.

Discontinued Operations – Residential Development Activities

Income from discontinued operations was comprised of the following for the three and six months ended June 30, 2015 (there were no discontinued operations activities for the three or six months ended June 30, 2016):


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

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

Income from discontinued operations before income tax		1,893,000		1,775,000
Income tax expense from discontinued operations		755,000		708,000

Income from discontinued operations, net of income tax expense	$	1,138,000	$	1,067,000

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. Subsequent to that date, the Company began recovery efforts against other responsible parties involved in the design, development, construction and supervision of the Gold Peak project.

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 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. The Company recovered $2,350,000 in the three and six months ended June 30, 2015. Other expenses in these periods primarily reflect legal and other professional costs incurred related to the Gold Peak litigation recovery efforts.