Segment Information

12 Months Ended

Dec. 31, 2010

17. Segment Information

The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making decisions, allocating resources and assessing performance. The Group’s chief operating decision maker has been identified as the executive chairman, who reviews consolidated and segment results when making decisions about allocating resources and assessing performance of the Group.

The Group has seven operating segments: 1) primary real estate agency services; 2) secondary real estate brokerage services; 3) real estate information and consulting services; 4) real estate online services; 5) real estate advertising services; 6) promotional events service; and 7) real estate fund management services. The real estate information and consulting service line grew substantially in 2008 and had their revenues, costs and expenses reviewed separately by the Group’s chief operating decision maker and therefore were separated from the primary real estate agency service segment. The Group began offering real estate online services in 2009 through its newly acquired subsidiary COHT. The real estate advertising service segment commenced in 2008. The promotional events services segment started as a result of the acquisition of a promotional events provider in 2010. In 2010, the real estate advertising services, promotional events services, and real estate fund management services did not meet the significance threshold for separate disclosure and have been combined in other services segment. Prior period information has been recast to be consistent with the current segment organization. The Group’s chief operating decision maker reviews net revenue, cost of sales, operating expenses, income from operations and net income and does not review balance sheet information. Corporation expenses such as selling, general and administrative expenses and interest income are not allocated among segments and are recorded as non-allocated items.

The following tables summarize the selected revenue and expense information for each operating segment:

For the years ended December 31,


							Real estate
				Secondary			information
	Primary real			real estate			and
	estate agency			brokerage			consulting			Other
2008	services			services			services			services			Non-allocated			Total
	$			$			$			$			$			$
Revenues		88,601,982			14,836,943			49,116,061			1,932,469			—			154,487,455
Cost of revenues		(27,232,660	)		(1,725,941	)		(2,855,398	)		(41,849	)		—			(31,855,848	)
Selling, general and administrative expenses		(34,075,314	)		(20,209,062	)		(13,776,504	)		(2,329,020	)		(6,807,731	)		(77,197,631	)


Income (loss) from operations		27,294,008			(7,098,060	)		32,484,159			(438,400	)		(6,807,731	)		45,433,976
Interest expenses		—			—			—			—			(2,420,468	)		(2,420,468	)
Interest income		551,576			30,475			415,512			8,152			2,056,798			3,062,513
Other income (expense), net		1,422,744			22,483			(1,323,858	)		—			1,849,112			1,970,481


Income (loss) before taxes and equity in affiliates		29,268,328			(7,045,102	)		31,575,813			(430,248	)		(5,322,289	)		48,046,502
Income tax benefit (expense)		(4,153,861	)		52,535			(4,917,503	)		306,271			—			(8,712,558	)


Income (loss) before equity in affiliates		25,114,467			(6,992,567	)		26,658,310			(123,977	)		(5,322,289	)		39,333,944
Income from equity in affiliates		—			—			—			—			153,700			153,700


Net income (loss)		25,114,467			(6,992,567	)		26,658,310			(123,977	)		(5,168,589	)		39,487,644


							Real estate
				Secondary			information
	Primary real			real estate			and			Real estate
	estate agency			brokerage			consulting			online			Other
2009	services			services			services			services			services			Non-allocated			Total
	$			$			$			$			$			$			$
Revenues		183,154,000			28,447,714			61,707,295			13,829,937			12,399,710			—			299,538,656
Cost of revenues		(55,655,737	)		(1,877,546	)		(1,865,697	)		(4,930,280	)		(6,014,185	)		—			(70,343,445	)
Selling, general and administrative expenses		(47,241,533	)		(26,123,163	)		(22,723,019	)		(11,359,944	)		(6,338,251	)		(11,935,269	)		(125,721,179	)
Gain from settlement of pre-existing relationship		—			—			2,100,832			—			—			—			2,100,832

Income (loss) from operations		80,256,730			447,005			39,219,411			(2,460,287	)		47,274			(11,935,269	)		105,574,864
Interest expenses		—			—			—			—			—			(215,854	)		(215,854	)
Interest income		591,772			29,130			166,521			23,722			29,557			198,087			1,038,789
Other income (expense), net		1,842,672			279,030			2,481,451			5,814			(1,810	)		4,173,213			8,780,370


Income (loss) before taxes and equity in affiliates		82,691,174			755,165			41,867,383			(2,430,751	)		75,021			(7,779,823	)		115,178,169
Income tax benefit (expense)		(15,981,753	)		2,204,395			(6,710,032	)		957,085			(393,776	)		—			(19,924,081	)


Income (loss) before equity in affiliates		66,709,421			2,959,560			35,157,351			(1,473,666	)		(318,755	)		(7,779,823	)		95,254,088
Income from equity in affiliates		112,628			—			—			22,015,607			—			—			22,128,235


Net income (loss)		66,822,049			2,959,560			35,157,351			20,541,941			(318,755	)		(7,779,823	)		117,382,323


							Real estate
				Secondary			information
	Primary real			real estate			and			Real estate
	estate agency			brokerage			consulting			online			Other
2010	services			services			services			services			services			Non-allocated			Total
	$			$			$			$			$			$			$
Revenues		173,081,747			20,892,641			75,110,282			66,804,671			20,635,786			—			356,525,127
Cost of revenues		(62,946,388	)		(890,545	)		(3,016,516	)		(26,361,391	)		(11,631,655	)		—			(104,846,495	)
Selling, general and administrative expenses		(46,975,421	)		(29,429,044	)		(35,214,081	)		(54,741,152	)		(8,978,057	)		(23,087,167	)		(198,424,922	)


Income (loss) from operations		63,159,938			(9,426,948	)		36,879,685			(14,297,872	)		26,074			(23,087,167	)		53,253,710
Interest income		1,035,826			35,213			1,156,337			286,154			114,293			180,008			2,807,831
Other income (expense), net		1,845,960			195,509			2,360,398			(22,831	)		726,952			483,181			5,589,169


Income (loss) before taxes and equity in affiliates		66,041,724			(9,196,226	)		40,396,420			(14,034,549	)		867,319			(22,423,978	)		61,650,710
Income tax benefit (expense)		(9,987,481	)		334,285			(2,911,786	)		455,815			(587,067	)		—			(12,696,234	)


Income (loss) before equity in affiliates		56,054,243			(8,861,941	)		37,484,634			(13,578,734	)		280,252			(22,423,978	)		48,954,476
Loss from equity in affiliates		(2,277	)		—			(271,300	)		(5,085	)		—			—			(278,662	)


Net income (loss)		56,051,966			(8,861,941	)		37,213,334			(13,583,819	)		280,252			(22,423,978	)		48,675,814

Geographic

Substantially all of the Group’s revenues from external customers and long-lived assets are located in the PRC.

Major customers

Details of the revenues for customers accounting for 10% or more of total net revenues are as follows:


	Years Ended December 31,
	2008		2009		2010
	$		$		$
Customer A		32,498,047		70,541,996		58,986,246

Details of the accounts receivable from customers accounting for 10% or more of total net accounts receivable are as follows:


	As of December 31,
	2009		2010
	$		$
Customer B		19,021,127		*


*		indicates the accounts receivable from the customer was less than 10% as of the stated year end.

Details of the customer deposits from customers accounting for 10% or more of total net customer deposits are as follows:


	As of December 31,
	2009		2010
	$		$
Customer C		13,912,841		14,344,620
Customer D		*		44,000,000
Customer E		7,322,550		*
Customer F		7,322,550		*
Customer G		4,393,530		*


*		indicates the customer deposits from customers was less than 10% as of the stated year end.