SEGMENT REPORTING

9 Months Ended

Sep. 30, 2013

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 18 — 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. The Mortgage Services segment provides services that span the mortgage and real estate lifecycle and are typically outsourced by loan servicers, loan originators and investors in single family homes. The Financial Services segment provides collection and customer relationship management services primarily to debt originators and servicers (e.g., credit card, auto lending, retail credit and mortgage) and the utility and insurance industries. The Technology Services segment principally consists of our REALSuite software applications as well as our information technology infrastructure services. The REALSuite platform provides a fully integrated set of software applications and technologies that manage the end-to-end lifecycle for residential and commercial mortgage loan servicing including the automated management and payment of a distributed network of vendors. In addition, our Corporate Items and Eliminations segment includes eliminations of transactions between the reporting segments, interest expense and costs related to corporate support functions including executive, finance, legal, human resources, vendor management, risk and operational effectiveness.

Financial information for our segments is as follows:

	Three months ended September 30, 2013
								Corporate
	Mortgage			Financial		Technology		Items and			Consolidated
(in thousands)	Services			Services		Services		Eliminations			Altisource
Revenue	$	164,661		$	27,267	$	25,175	$	(6,268	)	$	210,835
Cost of revenue	106,412			14,998		18,569		(5,718		)	134,261
Gross profit	58,249			12,269		6,606		(550		)	76,574
Selling, general and administrative expenses	14,224			4,616		2,621		10,058			31,519
Income from operations	44,025			7,653		3,985		(10,608		)	45,055
Other income (expense), net	(41		)	—		—		(6,400		)	(6,441		)
Income before income taxes and non-controlling interests	$	43,984		$	7,653	$	3,985	$	(17,008	)	$	38,614

	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 income (expense), 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, 2013
									Corporate
	Mortgage			Financial			Technology		Items and			Consolidated
(in thousands)	Services			Services			Services		Eliminations			Altisource
Revenue	$	426,319		$	66,675		$	70,189	$	(17,411	)	$	545,772
Cost of revenue	267,859			40,831			55,088		(15,583		)	348,195
Gross profit	158,460			25,844			15,101		(1,828		)	197,577
Selling, general and administrative expenses	32,272			11,000			7,514		29,241			80,027
Income from operations	126,188			14,844			7,587		(31,069		)	117,550
Other income (expense), net	(153		)	(8		)	3		(13,615		)	(13,773		)
Income before income taxes and non-controlling interests	$	126,035		$	14,836		$	7,590	$	(44,684	)	$	103,777

	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 income (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

							Corporate
	Mortgage		Financial		Technology		Items and		Consolidated
(in thousands)	Services		Services		Services		Eliminations		Altisource
Total assets:
September 30, 2013	$	313,441	$	52,578	$	120,059	$	161,676	$	647,754
December 31, 2012	132,924		37,782		64,570		193,950		429,226