SEGMENT REPORTING

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

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 (our Chief Operating Decision Maker) 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 segmentprincipally consists of our REALSuite^™ software applications, Equator^® software applications, Mortgage Builder^® software applications as well as our information technology infrastructure services. The software platforms provide 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. Mortgage Builder provides mortgage origination and servicing software applications. 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 September 30, 2014
(in thousands)	Mortgage Services		Financial Services		Technology Services		Corporate Items and Eliminations			Consolidated Altisource
Revenue	$	209,946	$	26,852	$	61,726	$	(10,836	)	$	287,688
Cost of revenue	128,816		17,123		52,583		(9,798		)	188,724
Gross profit	81,130		9,729		9,143		(1,038		)	98,964
Selling, general and administrative expenses	20,644		4,767		7,240		14,097			46,748
Income from operations	60,486		4,962		1,903		(15,135		)	52,216
Other income (expense), net	18		13		25		(6,405		)	(6,349		)
Income before income taxes and non-controlling interests	$	60,504	$	4,975	$	1,928	$	(21,540	)	$	45,867

	Three months ended September 30, 2013
(in thousands)	Mortgage Services			Financial Services		Technology Services		Corporate Items and Eliminations			Consolidated 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

	Nine months ended September 30, 2014
(in thousands)	Mortgage Services		Financial Services		Technology Services			Corporate Items and Eliminations			Consolidated Altisource
Revenue	$	607,066	$	76,613	$	167,213		$	(27,863	)	$	823,029
Cost of revenue	360,539		47,794		137,254			(25,059		)	520,528
Gross profit	246,527		28,819		29,959			(2,804		)	302,501
Selling, general and administrative expenses	63,310		14,203		21,367			40,423			139,303
Income from operations	183,217		14,616		8,592			(43,227		)	163,198
Other income (expense), net	146		24		(97		)	(15,978		)	(15,905		)
Income before income taxes and non-controlling interests	$	183,363	$	14,640	$	8,495		$	(59,205	)	$	147,293

	Nine months ended September 30, 2013
(in thousands)	Mortgage Services			Financial Services			Technology Services		Corporate Items and Eliminations			Consolidated 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

(in thousands)	Mortgage Services		Financial Services		Technology Services		Corporate Items and Eliminations		Consolidated Altisource
Total assets:
September 30, 2014	$	333,203	$	62,347	$	261,040	$	160,002	$	816,592
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:

(in thousands)	September 30, 2014		December 31, 2013
United States	$	83,316	$	63,615
India	19,948		16,404
Luxembourg	8,952		3,217
Philippines	3,557		4,016
Total	$	115,773	$	87,252