SEGMENT REPORTING

6 Months Ended

Jun. 30, 2014

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 19 — 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 business into three reporting 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, Equator’s 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. Equator’s software applications provide comprehensive, end-to-end workflow and transaction services to manage real estate and foreclosure related activities and purchase related services from vendors.  In addition, Corporate Items and Eliminations include eliminations of transactions between the reporting segments and costs related to corporate support functions including executive, finance, legal, human resources, vendor management, risk and operational effectiveness as well as interest expense.

Financial information for our segments is as follows:

	Three months ended June 30, 2014
								Corporate
	Mortgage		Financial		Technology			Items and			Consolidated
(in thousands)	Services		Services		Services			Eliminations			Altisource
Revenue	$	221,344	$	25,476	$	57,983		$	(8,731	)	$	296,072
Cost of revenue	128,919		16,058		46,906			(7,884		)	183,999
Gross profit	92,425		9,418		11,077			(847		)	112,073
Selling, general and administrative expenses	23,472		4,773		7,533			13,243			49,021
Income from operations	68,953		4,645		3,544			(14,090		)	63,052
Other income (expense), net	80		12		(106		)	(4,813		)	(4,827		)
Income before income taxes and non-controlling interests	$	69,033	$	4,657	$	3,438		$	(18,903	)	$	58,225

	Three months ended June 30, 2013
									Corporate
	Mortgage		Financial			Technology			Items and			Consolidated
(in thousands)	Services		Services			Services			Eliminations			Altisource
Revenue	$	144,210	$	23,072		$	24,783		$	(5,955	)	$	186,110
Cost of revenue	89,078		13,807			19,407			(5,320		)	116,972
Gross profit	55,132		9,265			5,376			(635		)	69,138
Selling, general and administrative expenses	12,590		3,534			3,028			10,676			29,828
Income from operations	42,542		5,731			2,348			(11,311		)	39,310
Other income (expense), net	61		(5		)	(1		)	(4,880		)	(4,825		)
Income before income taxes and non-controlling interests	$	42,603	$	5,726		$	2,347		$	(16,191	)	$	34,485

	Six months ended June 30, 2014
								Corporate
	Mortgage		Financial		Technology			Items and			Consolidated
(in thousands)	Services		Services		Services			Eliminations			Altisource
Revenue	$	397,120	$	49,761	$	105,487		$	(17,027	)	$	535,341
Cost of revenue	231,723		30,671		84,671			(15,261		)	331,804
Gross profit	165,397		19,090		20,816			(1,766		)	203,537
Selling, general and administrative expenses	42,666		9,436		14,127			26,326			92,555
Income from operations	122,731		9,654		6,689			(28,092		)	110,982
Other income (expense), net	128		11		(122		)	(9,573		)	(9,556		)
Income before income taxes and non-controlling interests	$	122,859	$	9,665	$	6,567		$	(37,665	)	$	101,426

	Six months ended June 30, 2013
									Corporate
	Mortgage			Financial			Technology		Items and			Consolidated
(in thousands)	Services			Services			Services		Eliminations			Altisource
Revenue	$	261,658		$	39,408		$	45,014	$	(11,143	)	$	334,937
Cost of revenue	161,447			25,833			36,519		(9,865		)	213,934
Gross profit	100,211			13,575			8,495		(1,278		)	121,003
Selling, general and administrative expenses	18,048			6,384			4,893		19,183			48,508
Income from operations	82,163			7,191			3,602		(20,461		)	72,495
Other income (expense), net	(112		)	(8		)	3		(7,215		)	(7,332		)
Income before income taxes and non-controlling interests	$	82,051		$	7,183		$	3,605	$	(27,676	)	$	65,163

							Corporate
	Mortgage		Financial		Technology		Items and		Consolidated
(in thousands)	Services		Services		Services		Eliminations		Altisource
Total assets:
June 30, 2014	$	309,043	$	59,290	$	231,440	$	111,227	$	711,000
December 31, 2013	310,253		55,930		277,941		85,928		730,052

Our services are provided to customers primarily located in the United States.  Premises and equipment, net consist of the following, by country:

	June 30,		December 31,
(in thousands)	2014		2013
United States	$	74,065	$	63,615
India	17,855		16,404
Luxembourg	5,264		3,217
Philippines	3,778		4,016
Total	$	100,962	$	87,252