SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 11—SEGMENT INFORMATION

Effective December 31, 2012, we expanded our reportable segments from one to two, consisting of mortgage and non-mortgage. The change was made as the convergence of economic similarities associated with our mortgage and non-mortgage operating segments was no longer expected. This decision was made in connection with the update of our annual budget and forecast, which occurs in the fourth quarter each year. The non-mortgage reportable segment consists of our auto, education, home services and other operating segments, which are not yet mature businesses and have been aggregated. Prior period results have been reclassified to conform with the change in reportable segments.

The expenses presented below for each segment include allocations of certain corporate expenses that are identifiable and directly benefit those segments. The unallocated expenses are those corporate overhead expenses that are not directly attributable to a segment and include: corporate expenses such as finance, legal, executive technology support and human resources, as well as elimination of inter-segment revenue and costs.

Adjusted EBITDA is the primary metric by which the chief operating decision maker evaluates the performance of our businesses, on which our internal budgets are based and by which management is compensated. Adjusted EBITDA is defined as operating income or loss (which excludes interest expense and taxes) adjusted to exclude amortization of intangibles and depreciation, and excluding (1) non-cash compensation expense, (2) non-cash intangible asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements and contingencies, (6) adjustments for significant acquisitions or dispositions, and (7) one-time items.

Assets and other balance sheet information are not used by the chief operating decision maker.

Summarized information by segment and reconciliations to Adjusted EBITDA and income (loss) before income taxes is as follows (in thousands):

	For the Three Months Ended June 30, 2013:
	Mortgage		Non-Mortgage			Corporate			Total
Revenue	$	33,528	$	3,256		$	622		$	37,406
Cost of revenue (exclusive of depreciation shown separately below)	1,395		163			392			1,950
Selling and marketing expense	24,119		2,262			5			26,386
General and administrative expense	874		420			4,357			5,651
Product development	1,226		266			—			1,492
Depreciation	345		426			101			872
Amortization of intangibles	—		43			—			43
Restructuring and severance	23		125			—			148
Litigation settlements and contingencies	—		—			2,909			2,909
Total costs and expenses	27,982		3,705			7,764			39,451
Operating income (loss)	5,546		(449		)	(7,142		)	(2,045		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		43			—			43
Depreciation	345		426			101			872
Restructuring and severance	23		125			—			148
Loss on disposal of assets	—		—			—			—
Non-cash compensation	483		95			854			1,432
Litigation settlements and contingencies	—		—			2,909			2,909
Adjusted EBITDA	$	6,397	$	240		$	(3,278	)	$	3,359
Adjustments to reconcile to income/loss before taxes:
Operating loss									(2,045		)
Interest expense									(7		)
Loss before income taxes									$	(2,052	)

	For the Three Months Ended June 30, 2012:
	Mortgage		Non-Mortgage			Corporate			Total
Revenue	$	11,406	$	4,484		$	1,080		$	16,970
Cost of revenue (exclusive of depreciation shown separately below)	623		165			15			803
Selling and marketing expense	6,957		4,002			10			10,969
General and administrative expense	769		560			4,502			5,831
Product development	422		334			—			756
Depreciation	396		509			141			1,046
Amortization of intangibles	—		106			—			106
Restructuring and severance	2		—			1			3
Litigation settlements and contingencies	—		—			216			216
Total costs and expenses	9,169		5,676			4,885			19,730
Operating income (loss)	2,237		(1,192		)	(3,805		)	(2,760		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		106			—			106
Depreciation	396		509			141			1,046
Restructuring and severance	2		—			1			3
Loss on disposal of assets	—		—			—			—
Non-cash compensation	111		95			866			1,072
Litigation settlements and contingencies	—		—			216			216
Adjusted EBITDA	$	2,746	$	(482	)	$	(2,581	)	$	(317	)
Adjustments to reconcile to income/loss before taxes:
Operating loss									(2,760		)
Interest expense									(136		)
Loss before income taxes									$	(2,896	)

	For the Six Months Ended June 30, 2013:
	Mortgage		Non-Mortgage			Corporate			Total
Revenue	$	59,048	$	5,816		$	622		$	65,486
Cost of revenue (exclusive of depreciation shown separately below)	2,550		337			419			3,306
Selling and marketing expense	39,279		4,357			5			43,641
General and administrative expense	1,852		930			9,425			12,207
Product development	2,176		521			—			2,697
Depreciation	719		843			195			1,757
Amortization of intangibles	—		86			—			86
Restructuring and severance	23		125			(2		)	146
Litigation settlements and contingencies	—		—			3,937			3,937
Total costs and expenses	46,599		7,199			13,979			67,777
Operating income (loss)	12,449		(1,383		)	(13,357		)	(2,291		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		86			—			86
Depreciation	719		843			195			1,757
Restructuring and severance	23		125			(2		)	146
Loss on disposal of assets	—		—			24			24
Non-cash compensation	896		237			1,733			2,866
Discretionary cash bonus	—		—			920			920
Litigation settlements and contingencies	—		—			3,937			3,937
Adjusted EBITDA	$	14,087	$	(92	)	$	(6,550	)	$	7,445
Adjustments to reconcile to income/loss before taxes:
Operating loss									(2,291		)
Interest expense									(14		)
Loss before income taxes									$	(2,305	)

	For the Six Months Ended June 30, 2012:
	Mortgage		Non-Mortgage			Corporate			Total
Revenue	$	20,398	$	8,947		$	860		$	30,205
Cost of revenue (exclusive of depreciation shown separately below)	1,322		247			30			1,599
Selling and marketing expense	13,953		7,668			—			21,621
General and administrative expense	1,413		1,084			8,137			10,634
Product development	941		595			(6		)	1,530
Depreciation	788		1,133			349			2,270
Amortization of intangibles	—		213			—			213
Restructuring and severance	4		1			(66		)	(61		)
Litigation settlements and contingencies	—		—			438			438
Total costs and expenses	18,421		10,941			8,882			38,244
Operating income (loss)	1,977		(1,994		)	(8,022		)	(8,039		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		213			—			213
Depreciation	788		1,133			349			2,270
Restructuring and severance	4		1			(66		)	(61		)
Loss on disposal of assets	25		30			5			60
Non-cash compensation	351		255			1,650			2,256
Litigation settlements and contingencies	—		—			438			438
Adjusted EBITDA	$	3,145	$	(362	)	$	(5,646	)	$	(2,863	)
Adjustments to reconcile to income/loss before taxes:
Operating loss									(8,039		)
Interest expense									(257		)
Loss before income taxes									$	(8,296	)