3.	*Segment Information*

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


(amounts in thousands)

Condensed Balance Sheet Data December 31, 2016	Reis Services		Other (A)			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	19,903	$	1,588		$	21,491
Accounts receivable, net		10,744		—			10,744
Prepaid and other assets		622		170			792

Total current assets		31,269		1,758			33,027
Furniture, fixtures and equipment, net		5,260		—			5,260
Intangible assets, net		17,922		—			17,922
Deferred tax asset, net		285		16,530			16,815
Goodwill		57,203		(2,378	)		54,825
Other assets		295		—			295

Total assets	$	112,234	$	15,910		$	128,144

Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	—	$	—		$	—
Accrued expenses and other liabilities		3,724		307			4,031
Deferred revenue		25,031		—			25,031

Total current liabilities		28,755		307			29,062
Other long-term liabilities		1,902		—			1,902
Deferred tax liability, net		32,909		(32,909	)		—

Total liabilities		63,566		(32,602	)		30,964
Total stockholders’ equity		48,668		48,512			97,180

Total liabilities and stockholders’ equity	$	112,234	$	15,910		$	128,144


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 at December 31, 2015, and includes cash, other assets and liabilities not specifically attributable to or allocable to the Reis Services segment for both periods presented.


(amounts in thousands)

Condensed Operating Data for the Year Ended December 31, 2016	Reis Services			Other (A)			Consolidated
Revenue:
Subscription revenue	$	45,399		$	—		$	45,399
Other revenue		2,131			—			2,131

Total revenue		47,530			—			47,530
Cost of sales		10,999			—			10,999

Gross profit		36,531			—			36,531

Operating expenses:
Sales and marketing		11,879			—			11,879
Product development		4,167			—			4,167
General and administrative expenses		11,572			4,093			15,665

Total operating expenses		27,618			4,093			31,711
Other income (expenses):
Interest and other income		22			—			22
Interest expense		(108	)		—			(108	)

Total other income (expenses)		(86	)		—			(86	)

Income (loss) before income taxes and discontinued operations	$	8,827		$	(4,093	)	$	4,734

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


Condensed Operating Data for the Year Ended December 31, 2015	Reis Services			Other (A)			Consolidated
Revenue:
Subscription revenue	$	43,722		$	—		$	43,722
Other revenue		7,168			—			7,168

Total revenue		50,890			—			50,890
Cost of sales		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 from discontinued operations, before income taxes	$	—		$	3,643		$	3,643

(A)	Includes the results of the Company’s discontinued operations for the year ended December 31, 2015 and includes interest and other income, depreciation expense and general and administrative expenses that have not been allocated to the Reis Services segment for all periods presented.


(amounts in thousands)

Condensed Operating Data for the Year Ended December 31, 2014	Reis Services			Other (A)			Consolidated
Revenue:
Subscription revenue	$	39,727		$	—		$	39,727
Other revenue		1,608			—			1,608

Total revenue		41,335			—			41,335
Cost of sales		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	$	—		$	(951	)	$	(951	)

(A)	Includes the results of the Company’s discontinued operations for the year ended December 31, 2014 and includes interest and other income, depreciation expense and general and administrative expenses that have not been allocated to the Reis Services segment for all periods presented.

In the first quarter of 2016, the Company changed the segment presentation to combine the previously separately disclosed discontinued operations segment with the Other segment. 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. Therefore, 2015 and 2014 information for the discontinued operations segment is being presented in the Other segment.

Reis Services

See Note 1 for a description of Reis Services’s business and products at December 31, 2016.

The Company’s largest individual customer accounted for 6.3%, 10.6% and 2.9% of Reis Services’s total revenue for the years ended December 31, 2016, 2015 and 2014, respectively. Included in other revenue was $1,200,000 and $4,519,000 for the years ended December 31, 2016 and 2015, respectively, associated with custom data deliverables and portfolio advisory services related to one customer.

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


	December 31,
	2016			2015
Accounts receivable	$	10,862,000		$	13,828,000
Allowance for doubtful accounts		(118,000	)		(87,000	)

Accounts receivable, net	$	10,744,000		$	13,741,000

Twenty-three subscribers accounted for an aggregate of approximately 52.4% of Reis Services’s accounts receivable at December 31, 2016, including two subscribers in excess of 4.0% and the largest representing 8.3%. Through February 24, 2017, the Company received payments of approximately $5,000,000, or 50.0%, against the December 31, 2016 accounts receivable

balance. 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 $2,400,000, or 17.4%, which was associated with a custom data deliverable, half of which was recorded as other revenue in December 2015 and the remainder in February 2016.

At December 31, 2016 and 2015, the largest individual subscriber accounted for 3.7% and 6.8% respectively, of deferred revenue.

Discontinued Operations – Residential Development Activities

Income from discontinued operations was comprised of the following for the years ended December 31, 2015 and 2014 (there were no discontinued operations activities for the year ended December 31, 2016):


	For the Years Ended December 31,
	2015			2014
Litigation recoveries	$	4,839,000		$	26,000
Other (expenses), net		(1,196,000	)		(977,000	)

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

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

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 approximately $4,839,000 and $26,000 in the years ended December 31, 2015 and 2014, respectively. Other expenses in these periods primarily reflect legal and other professional costs incurred related to the Gold Peak litigation recovery efforts.