SEGMENT REPORTING

9 Months Ended

Sep. 30, 2012

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 16 — SEGMENT REPORTING

Our business segments are based upon our organizational structure which focuses primarily on the services offered and are consistent with the internal reporting used by our Chief Executive Officer to evaluate operating performance and to assess the allocation of our resources.

We classify our businesses into three reportable segments. Mortgage Services principally consists of mortgage portfolio management services that span the mortgage lifecycle. Financial Services principally consists of unsecured asset recovery and customer relationship management. Technology Services principally consists of modular, comprehensive integrated technological solutions for loan servicing, vendor management and invoice presentment and payment as well as providing infrastructure support. In addition, our Corporate Items and Eliminations segment includes eliminations of transactions between the reporting segments and also includes costs recognized by us related to corporate support functions such as executive, finance, legal, human resources, vendor management, risk and six sigma.

Financial information for our segments is as follows:

	Three months ended September 30, 2012
										Corporate
	Mortgage			Financial			Technology			Items and			Consolidated
(in thousands)	Services			Services			Services			Eliminations			Altisource
Revenue	$	115,882		$	15,394		$	19,076		$	(6,364	)	$	143,988
Cost of revenue	72,774			11,784			15,418			(5,689		)	94,287
Gross profit	43,108			3,610			3,658			(675		)	49,701
Selling, general and administrative expenses	6,155			3,116			1,851			7,330			18,452
Income from operations	36,953			494			1,807			(8,005		)	31,249
Other (expense) income, net	(290		)	(6		)	(5		)	34			(267		)
Income before income taxes and non-controlling interests	$	36,663		$	488		$	1,802		$	(7,971	)	$	30,982

	Nine months ended September 30, 2012
										Corporate
	Mortgage			Financial			Technology			Items and			Consolidated
(in thousands)	Services			Services			Services			Eliminations			Altisource
Revenue	$	341,446		$	49,649		$	53,984		$	(17,820	)	$	427,259
Cost of revenue	218,969			35,780			40,098			(16,062		)	278,785
Gross profit	122,477			13,869			13,886			(1,758		)	148,474
Selling, general and administrative expenses	17,458			10,550			5,519			20,958			54,485
Income from operations	105,019			3,319			8,367			(22,716		)	93,989
Other expense, net	(857		)	(22		)	(22		)	(38		)	(939		)
Income before income taxes and non-controlling interests	$	104,162		$	3,297		$	8,345		$	(22,754	)	$	93,050

	Three months ended September 30, 2011
										Corporate
	Mortgage			Financial			Technology			Items and			Consolidated
(in thousands)	Services			Services			Services			Eliminations			Altisource
Revenue	$	82,170		$	17,303		$	14,827		$	(4,507	)	$	109,793
Cost of revenue	55,106			12,676			9,700			(4,143		)	73,339
Gross profit	27,064			4,627			5,127			(364		)	36,454
Selling, general and administrative expenses	4,227			4,268			756			6,078			15,329
Income from operations	22,837			359			4,371			(6,442		)	21,125
Other expense, net	(283		)	(9		)	(12		)	(16		)	(320		)
Income before income taxes and non-controlling interests	$	22,554		$	350		$	4,359		$	(6,458	)	$	20,805

	Nine months ended September 30, 2011
									Corporate
	Mortgage		Financial			Technology			Items and			Consolidated
(in thousands)	Services		Services			Services			Eliminations			Altisource
Revenue	$	207,384	$	54,779		$	41,115		$	(11,547	)	$	291,731
Cost of revenue	135,670		39,738			26,479			(10,502		)	191,385
Gross profit	71,714		15,041			14,636			(1,045		)	100,346
Selling, general and administrative expenses	11,663		12,230			3,489			18,105			45,487
Income from operations	60,051		2,811			11,147			(19,150		)	54,859
Other (expense) income, net	340		(27		)	(39		)	20			294
Income before income taxes and non-controlling interests	$	60,391	$	2,784		$	11,108		$	(19,130	)	$	55,153