Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 18, 2013 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | COSTAR GROUP INC | |
Entity Central Index Key | 1057352 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 28,756,248 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ||||
Revenues | $112,301 | $96,001 | $325,333 | $249,853 |
Cost of revenues | 31,724 | 30,882 | 97,431 | 83,388 |
Gross margin | 80,577 | 65,119 | 227,902 | 166,465 |
Operating expenses: | ||||
Selling and marketing | 23,625 | 22,010 | 74,139 | 57,576 |
Software development | 11,562 | 9,722 | 35,152 | 22,714 |
General and administrative | 21,940 | 19,617 | 74,457 | 59,602 |
Purchase amortization | 3,680 | 4,824 | 11,699 | 9,038 |
Total operating expenses | 60,807 | 56,173 | 195,447 | 148,930 |
Income from operations | 19,770 | 8,946 | 32,455 | 17,535 |
Interest and other income | 52 | 59 | 239 | 440 |
Interest and other expense | -1,736 | -1,822 | -5,249 | -3,022 |
Income before income taxes | 18,086 | 7,183 | 27,445 | 14,953 |
Income tax expense, net | 7,034 | 404 | 10,510 | 9,752 |
Net income | $11,052 | $6,779 | $16,935 | $5,201 |
Net income per share-basic (in dollars per share) | $0.40 | $0.25 | $0.61 | $0.20 |
Net income per share-diluted (in dollars per share) | $0.39 | $0.24 | $0.60 | $0.19 |
Weighted average outstanding shares-basic (in shares) | 27,758 | 27,243 | 27,607 | 26,279 |
Weighted average outstanding shares-diluted (in shares) | 28,349 | 27,673 | 28,137 | 26,691 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income | $11,052 | $6,779 | $16,935 | $5,201 |
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustment | 1,652 | 1,014 | 20 | 1,286 |
Net change in unrealized gain on investments, net of tax | 0 | 727 | 63 | 672 |
Total other comprehensive income | 1,652 | 1,741 | 83 | 1,958 |
Total comprehensive income | $12,704 | $8,520 | $17,018 | $7,159 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $222,938 | $156,027 |
Short-term investments | 0 | 37 |
Accounts receivable, less allowance for doubtful accounts of approximately $3,646 and $2,935 as of September 30, 2013 and December 31, 2012, respectively | 22,960 | 16,392 |
Deferred income taxes, net | 17,115 | 9,256 |
Income tax receivable | 1,796 | 5,357 |
Prepaid expenses and other current assets | 10,021 | 9,560 |
Debt issuance costs, net | 2,740 | 2,934 |
Total current assets | 277,570 | 199,563 |
Long-term investments | 21,675 | 21,662 |
Property and equipment, net | 55,703 | 46,308 |
Goodwill | 718,039 | 718,078 |
Intangibles and other assets, net | 150,800 | 170,632 |
Deposits and other assets | 2,044 | 2,274 |
Debt issuance costs, net | 4,543 | 6,622 |
Total assets | 1,230,374 | 1,165,139 |
Current liabilities: | ||
Current portion of long-term debt | 21,875 | 17,500 |
Accounts payable | 6,347 | 6,234 |
Accrued wages and commissions | 18,256 | 23,831 |
Accrued expenses | 23,498 | 19,002 |
Deferred gain on the sale of building | 2,523 | 2,523 |
Deferred revenue | 34,904 | 32,548 |
Total current liabilities | 107,403 | 101,638 |
Long-term debt, less current portion | 135,625 | 153,125 |
Deferred gain on the sale of building | 26,917 | 28,809 |
Deferred rent | 22,713 | 17,305 |
Deferred income taxes, net | 35,482 | 34,071 |
Income taxes payable | 2,915 | 2,818 |
Other long-term liabilities | 0 | 1,030 |
Total liabilities | 331,055 | 338,796 |
Stockholders' equity: | ||
Total stockholders’ equity | 899,319 | 826,343 |
Total liabilities and stockholders’ equity | $1,230,374 | $1,165,139 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Allowance for doubtful accounts | $3,646 | $2,935 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating activities: | ||
Net income | $16,935 | $5,201 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 9,174 | 7,203 |
Amortization | 21,063 | 14,996 |
Amortization of debt issuance costs | 2,273 | 1,235 |
Excess tax expense (benefit) from stock-based compensation | -15,405 | 57 |
Stock-based compensation expense | 32,270 | 8,667 |
Deferred income tax expense (benefit), net | -6,448 | 11,828 |
Provision for losses on accounts receivable | 1,819 | 1,418 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | -8,305 | -3,612 |
Prepaid expenses and other current assets | -533 | -1,848 |
Deposits and other assets | 220 | 1,286 |
Accounts payable and other liabilities | 17,413 | 4,222 |
Deferred revenue | 2,352 | 5,905 |
Net cash provided by operating activities | 72,828 | 56,558 |
Investing activities: | ||
Proceeds from sale and settlement of investments | 87 | 14,620 |
Purchases of property and equipment and other assets | -15,331 | -9,002 |
Acquisitions, net of cash acquired | 0 | -640,929 |
Net cash used in investing activities | -15,244 | -635,311 |
Financing activities: | ||
Proceeds from long-term debt | 0 | 175,000 |
Payments of long-term debt | -13,125 | -4,375 |
Payments of debt issuance costs | 0 | -11,546 |
Payments of deferred consideration | -1,344 | 0 |
Excess tax benefit (expense) from stock-based compensation | 15,405 | -57 |
Repurchase of restricted stock to satisfy tax withholding obligations | -7,563 | -3,817 |
Proceeds from exercise of stock options and ESPP | 15,846 | 7,667 |
Net cash provided by financing activities | 9,219 | 162,872 |
Effect of foreign currency exchange rates on cash and cash equivalents | 108 | 63 |
Net increase (decrease) in cash and cash equivalents | 66,911 | -415,818 |
Cash and cash equivalents at the beginning of period | 156,027 | 545,280 |
Cash and cash equivalents at the end of period | $222,938 | $129,462 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION |
CoStar Group, Inc. (the “Company” or “CoStar”) provides information, analytics and marketing services to the commercial real estate and related business community through its comprehensive, proprietary database of commercial real estate information covering the United States (“U.S.”) and parts of the United Kingdom ("U.K.") and France, as well as its complementary online marketplace of commercial real estate listings. The Company operates within two operating segments, U.S. and International, and its services are typically distributed to its clients under subscription-based license agreements that renew automatically, a majority of which have a term of one year. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
Basis of Presentation | ||||||||||||||||
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Accounting policies are consistent for each operating segment. | ||||||||||||||||
Interim Financial Statements | ||||||||||||||||
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. In the opinion of the Company’s management, the financial statements reflect all adjustments necessary to present fairly the Company’s financial position at September 30, 2013, the results of its operations for the three and nine months ended September 30, 2013 and 2012, its comprehensive income for the three and nine months ended September 30, 2013 and 2012, and its cash flows for the nine months ended September 30, 2013 and 2012. These adjustments are of a normal recurring nature. | ||||||||||||||||
Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||||||||||||||||
The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of future financial results. | ||||||||||||||||
Use of Estimates | ||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||||||||||
Reclassifications | ||||||||||||||||
Certain previously reported amounts in the condensed consolidated statements of operations and condensed consolidated statements of cash flows have been reclassified to conform to the Company’s current presentation. | ||||||||||||||||
Foreign Currency Translation | ||||||||||||||||
The Company’s functional currency in its foreign locations is the local currency. Assets and liabilities are translated into U.S. dollars as of the balance sheet dates. Revenues, expenses, gains and losses are translated at the average exchange rates in effect during each period. Gains and losses resulting from translation are included in accumulated other comprehensive income (loss). Net gains or losses resulting from foreign currency exchange transactions are included in the condensed consolidated statements of operations. There were no material gains or losses from foreign currency exchange transactions for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (CONTINUED) | |||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||||
The components of accumulated other comprehensive loss were as follows (in thousands): | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Foreign currency translation adjustment | $ | (4,593 | ) | $ | (4,613 | ) | ||||||||||
Accumulated net unrealized loss on investments, net of tax | (1,842 | ) | (1,905 | ) | ||||||||||||
Total accumulated other comprehensive loss | $ | (6,435 | ) | $ | (6,518 | ) | ||||||||||
Net Income Per Share | ||||||||||||||||
Net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis. The Company’s potentially dilutive securities include stock options and restricted stock. Diluted net income per share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of the potentially dilutive common shares would have an anti-dilutive effect. | ||||||||||||||||
The following table sets forth the calculation of basic and diluted net income per share (in thousands, except per share data): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 11,052 | $ | 6,779 | $ | 16,935 | $ | 5,201 | ||||||||
Denominator: | ||||||||||||||||
Denominator for basic net income per share — weighted-average outstanding shares | 27,758 | 27,243 | 27,607 | 26,279 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options and restricted stock | 591 | 430 | 530 | 412 | ||||||||||||
Denominator for diluted net income per share — weighted-average outstanding shares | 28,349 | 27,673 | 28,137 | 26,691 | ||||||||||||
Net income per share — basic | $ | 0.4 | $ | 0.25 | $ | 0.61 | $ | 0.2 | ||||||||
Net income per share — diluted | $ | 0.39 | $ | 0.24 | $ | 0.6 | $ | 0.19 | ||||||||
Employee stock options with exercise prices greater than the average market price of the Company’s common stock for the period are excluded from the calculation of diluted net income per share as their inclusion would be anti-dilutive. Additionally, shares of restricted common stock that vest based on Company performance conditions were not included in the computation of basic or diluted earnings per share. Other than the shares of restricted common stock that vest based on Company performance conditions, no other potential common shares were excluded from the calculation of diluted net income for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||
Stock-Based Compensation | ||||||||||||||||
Equity instruments issued in exchange for employee services are accounted for using a fair-value based method, and the fair value of such equity instruments is recognized as expense in the condensed consolidated statements of operations. | ||||||||||||||||
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (CONTINUED) | |||||||||||||||
Stock-Based Compensation — (Continued) | ||||||||||||||||
Stock-based compensation expense is measured at the grant date of the stock-based awards that vest over set time periods based on their fair values, and is recognized on a straight line basis as expense over the vesting periods of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on performance, the Company assesses the probability of the achievement of the performance conditions at the end of each reporting period, or more frequently based upon the occurrence of events that may change the probability of whether the performance conditions would be met. If the Company's initial estimates of the achievement of the performance conditions change, the related stock-based compensation expense and timing of recognition may fluctuate from period to period based on those estimates. If the performance conditions are not met, no stock-based compensation expense will be recognized, and any previously recognized stock-based compensation expense will be reversed. | ||||||||||||||||
In 2012, the Company granted performance-based restricted common stock awards that vest upon the Company's achievement of $90.0 million of cumulative net income before interest, income taxes, depreciation and amortization ("EBITDA") over a period of four consecutive calendar quarters if such performance is achieved by March 31, 2017. As of September 30, 2013, the Company reassessed the probability of achieving this performance condition and determined that it was still probable that the performance condition for these awards would be met by the March 31, 2017 forfeiture date. As a result, the Company recorded a total of approximately $3.1 million and $0 of stock-based compensation expense related to the performance-based restricted common stock for the three months ended September 30, 2013 and 2012, respectively. The Company recorded approximately $17.5 million and $0 of stock-based compensation expense related to the performance-based restricted common stock for the nine months ended September 30, 2013 and 2012, respectively. The Company expects to record an additional estimated unrecognized stock-based compensation expense related to the performance-based restricted common stock of approximately $6.2 million during the remainder of 2013 and in 2014. | ||||||||||||||||
Cash flows resulting from excess tax benefits are classified as part of cash flows from operating and financing activities. Excess tax benefits represent tax benefits related to stock-based compensation in excess of the associated deferred tax asset for such equity compensation. Net cash proceeds from the exercise of stock options and the purchase of shares under the Employee Stock Purchase Plan (“ESPP”) were approximately $6.9 million and $2.6 million for the three months ended September 30, 2013 and 2012, respectively. Net cash proceeds from the exercise of stock options and the purchase of shares under the ESPP were approximately $15.8 million and $7.7 million for the nine months ended September 30, 2013 and 2012, respectively. The Company recorded an increase of approximately $5.7 million of excess tax benefits realized from stock options exercised and restricted stock awards vested for the three months ended September 30, 2013 compared to a reduction of approximately $57,000 to its realized excess tax benefit from stock options exercised and restricted stock awards vested for the three months ended September 30, 2012. The Company recorded an increase of approximately $15.4 million of excess tax benefits realized from stock options exercised and restricted stock awards vested for the nine months ended September 30, 2013 compared to a reduction of approximately $57,000 to its realized excess tax benefit from stock options exercised and restricted stock awards vested for the nine months ended September 30, 2012. | ||||||||||||||||
Stock-based compensation expense for stock options and restricted stock issued under equity incentive plans and stock purchases under the ESPP included in the Company’s results of operations were as follows (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cost of revenues | $ | 1,061 | $ | 849 | $ | 3,353 | $ | 1,784 | ||||||||
Selling and marketing | 944 | 493 | 3,763 | 1,331 | ||||||||||||
Software development | 1,608 | 809 | 5,439 | 1,565 | ||||||||||||
General and administrative | 4,175 | 1,588 | 19,715 | 3,987 | ||||||||||||
Total stock-based compensation | $ | 7,788 | $ | 3,739 | $ | 32,270 | $ | 8,667 | ||||||||
Options to purchase 150,560 and 76,542 shares were exercised during the three months ended September 30, 2013 and 2012, respectively. Options to purchase 340,599 and 224,382 shares were exercised during the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||||||
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (CONTINUED) | |||||||||||||||
Capitalized Product Development Costs | ||||||||||||||||
Product development costs are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized. Costs are capitalized, to the extent that the capitalizable costs do not exceed the realizable value of such costs, until the product is available for general release to customers. The Company defines the establishment of technological feasibility as the completion of all planning, designing, coding and testing activities that are necessary to establish products that meet design specifications including functions, features and technical performance requirements. The Company's capitalized product development costs had a total net book value of approximately $159,000 and $302,000 as of September 30, 2013 and December 31, 2012, respectively. These capitalized product development costs are included in intangible and other assets in the Company’s condensed consolidated balance sheets. Amortization is computed using a straight-line method over the remaining estimated economic life of the product, typically three to five years after the software is ready for its intended use. The Company amortized capitalized product development costs of approximately $48,000 for each of the three months ended September 30, 2013 and 2012. The Company amortized capitalized product development costs of approximately $143,000 for each of the nine months ended September 30, 2013 and 2012. | ||||||||||||||||
Debt Issuance Costs | ||||||||||||||||
Costs incurred in connection with the issuance of long-term debt are capitalized and amortized as interest expense over the term of the related debt using the effective interest method. The Company had capitalized debt issuance costs of approximately $7.3 million and $9.6 million as of September 30, 2013 and December 31, 2012, respectively. The debt issuance costs are associated with the financing commitment received from JPMorgan Chase Bank, N.A. (“J.P. Morgan Bank”) on April 27, 2011 and the subsequent term loan facility and revolving credit facility established under a credit agreement dated February 16, 2012 (the “Credit Agreement”). See Note 8 for additional information regarding the financing commitment with J.P. Morgan Bank and the Credit Agreement. The Company amortized debt issuance costs of approximately $760,000 and $763,000 for the three months ended September 30, 2013 and 2012, respectively. The Company amortized debt issuance costs of approximately $2.3 million and $1.2 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||
There have been no developments to the Recent Accounting Pronouncements discussion included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, including the expected dates of adoption and estimated effects on the Company’s condensed consolidated financial statements, except for the following: | ||||||||||||||||
In July 2012, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to simplify how companies test indefinite-lived intangible assets for impairment. The guidance permits a company to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. This guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. This guidance did not have a material impact on the Company's results of operations or financial position. | ||||||||||||||||
In February 2013, the FASB issued authoritative guidance to improve the reporting of reclassifications out of accumulated other comprehensive income. This guidance requires a company to present, either on the consolidated statements of operations or in the notes to the consolidated financial statements, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. This guidance is effective prospectively for financial statements issued for interim and annual periods beginning after December 15, 2012. This guidance did not have a material impact on the Company's results of operations or financial position. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Business Combinations [Abstract] | ||||
ACQUISITIONS | ACQUISITIONS | |||
On April 30, 2012, the Company acquired 100% of the outstanding stock of LoopNet, Inc. (“LoopNet”) pursuant to an Agreement and Plan of Merger dated April 27, 2011, as amended May 20, 2011 (the “Merger Agreement”). LoopNet owns and operates an online marketplace for commercial real estate in the U.S. The online marketplace enables commercial real estate agents, working on behalf of property owners and landlords, to list properties for sale or for lease and submit detailed information on property listings to find a buyer or tenant. The acquisition combines the research capabilities of the Company with the marketing solutions offered by LoopNet to create expected efficiencies in operations and provide more opportunities for the combined company's customers. | ||||
The following table summarizes the consideration paid for LoopNet (in thousands except share and per share data): | ||||
Cash | $ | 746,393 | ||
Equity interest (1,880,300 shares at $72.89) | 137,055 | |||
Fair value of total consideration transferred | $ | 883,448 | ||
The Company has applied the acquisition method to account for the LoopNet transaction, which requires that, among other things, assets acquired and liabilities assumed be recorded at their fair values as of the acquisition date. The following table summarizes the amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands): | ||||
Cash and cash equivalents | $ | 105,464 | ||
Accounts receivable | 3,021 | |||
Goodwill | 625,174 | |||
Acquired trade names and other | 48,700 | |||
Acquired customer base | 71,500 | |||
Acquired database technology | 52,100 | |||
Deferred income taxes, net | (32,623 | ) | ||
Other assets and liabilities | 10,112 | |||
Fair value of identifiable net assets acquired | $ | 883,448 | ||
The net assets of LoopNet were recorded at their estimated fair value. In valuing acquired assets and liabilities, fair value estimates are based on, but are not limited to, future expected cash flows, expected holding period of investments, market rate assumptions for contractual obligations, and appropriate discount rates. | ||||
The acquired customer base for the acquisition consists of one distinct intangible asset, is composed of acquired customer contracts and the related customer relationships, and has an estimated useful life of 10 years. The acquired database technology has an estimated useful life of 5 years and the acquired trade names have an indefinite estimated useful life. Amortization of the acquired customer base is recognized on an accelerated basis related to the expected economic benefit of the intangible asset, while amortization of the acquired database technology is recognized on a straight-line basis over the estimated useful life. The acquired trade names recorded in connection with this acquisition are not amortized, but are subject to annual impairment tests. | ||||
Goodwill recorded in connection with this acquisition is not amortized, but is subject to annual impairment tests. The $625.2 million of goodwill recorded as part of the acquisition is associated with the Company's U.S. operating segment. None of the goodwill recognized is deductible for income tax purposes. | ||||
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the LoopNet acquisition includes: (i) the expected synergies and other benefits that the Company believes will result from combining its operations with LoopNet's operations; and (ii) any intangible assets that do not qualify for separate recognition, such as the assembled workforce. | ||||
There were no acquisition-related costs recorded during the three and nine months ended September 30, 2013. There were no acquisition-related costs recorded during the three months ended September 30, 2012 associated with the LoopNet acquisition. The Company recorded $5.2 million in acquisition-related costs for the nine months ended September 30, 2012. These costs were directly related to acquiring LoopNet and were expensed as incurred and recorded in general and administrative expense. | ||||
3 | ACQUISITIONS — (CONTINUED) | |||
Prior to completion of the LoopNet acquisition, on April 26, 2012, the Federal Trade Commission (the “FTC”) accepted a consent order in connection with the LoopNet merger that was previously agreed to by the Company and LoopNet. The consent order was subject to a 30-day public comment period, and on August 29, 2012, the FTC issued its final acceptance of the consent order. The consent order, which is publicly available on the FTC's website at www.ftc.gov, required, among other things, that the Company and LoopNet divest LoopNet's minority interest in Xceligent, Inc. (“Xceligent”). On March 28, 2012, the Company and LoopNet entered into an agreement to sell LoopNet's interest in Xceligent to DMG Information, Inc. (“DMGI”). The parties closed the sale of LoopNet's interest in Xceligent to DMGI on May 3, 2012. The Company received $4.2 million in proceeds from the sale, which reflected the fair value of the investment at the time of sale and resulted in no gain on the sale of the investment. |
INVESTMENTS
INVESTMENTS | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||
INVESTMENTS | INVESTMENTS | |||||||||||||||
The Company determines the appropriate classification of debt and equity investments at the time of purchase and re-evaluates such designation as of each balance sheet date. The Company considers all of its investments to be available-for-sale. Short-term investments consist of government/federal notes and bonds with maturities greater than 90 days at the time of purchase. Available-for-sale short-term investments with contractual maturities beyond one year are classified as current in the Company’s condensed consolidated balance sheets because they represent the investment of cash that is available for current operations. Long-term investments consist of variable rate debt instruments with an auction reset feature, referred to as auction rate securities (“ARS”). Investments are carried at fair market value. | ||||||||||||||||
Scheduled maturities of investments classified as available-for-sale as of September 30, 2013 were as follows (in thousands): | ||||||||||||||||
Maturity | Fair Value | |||||||||||||||
Due: | ||||||||||||||||
October 1, 2013 — September 30, 2014 | $ | — | ||||||||||||||
October 1, 2014 — September 30, 2018 | 606 | |||||||||||||||
October 1, 2018 — September 30, 2023 | — | |||||||||||||||
After September 30, 2023 | 21,069 | |||||||||||||||
Available-for-sale investments | $ | 21,675 | ||||||||||||||
The Company had no realized gains on its investments for each of the three and nine months ended September 30, 2013 and 2012. The Company had no realized losses on its investments for each of the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||
Changes in unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis. A decline in market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Dividend and interest income are recognized when earned. | ||||||||||||||||
As of September 30, 2013, the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
Auction rate securities | $ | 23,517 | $ | 164 | $ | (2,006 | ) | $ | 21,675 | |||||||
Available-for-sale investments | $ | 23,517 | $ | 164 | $ | (2,006 | ) | $ | 21,675 | |||||||
4 | INVESTMENTS — (CONTINUED) | |||||||||||||||
As of December 31, 2012, the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
Government-sponsored enterprise obligations | $ | 37 | $ | — | $ | — | $ | 37 | ||||||||
Auction rate securities | 23,567 | 101 | (2,006 | ) | 21,662 | |||||||||||
Available-for-sale investments | $ | 23,604 | $ | 101 | $ | (2,006 | ) | $ | 21,699 | |||||||
The unrealized losses on the Company’s investments as of September 30, 2013 and December 31, 2012 were generated primarily from changes in interest rates. The losses are considered temporary, as the contractual terms of these investments do not permit the issuer to settle the security at a price less than the amortized cost of the investment. Because the Company does not intend to sell these instruments and it is more likely than not that the Company will not be required to sell these instruments prior to anticipated recovery, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2013 and December 31, 2012. See Note 5 for further discussion of the fair value of the Company’s financial assets. | ||||||||||||||||
The components of the Company’s investments in an unrealized loss position for twelve months or longer were as follows (in thousands): | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Aggregate | Gross | Aggregate | Gross | |||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||
Value | Losses | Value | Losses | |||||||||||||
Government-sponsored enterprise obligations | $ | — | $ | — | $ | 37 | $ | — | ||||||||
Auction rate securities | 21,069 | (2,006 | ) | 21,119 | (2,006 | ) | ||||||||||
Investments in an unrealized loss position | $ | 21,069 | $ | (2,006 | ) | $ | 21,156 | $ | (2,006 | ) | ||||||
The Company did not have any investments in an unrealized loss position for less than twelve months as of September 30, 2013 and December 31, 2012, respectively. |
FAIR_VALUE
FAIR VALUE | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
FAIR VALUE | FAIR VALUE | |||||||||||||||
Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. There is a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||
5 | FAIR VALUE — (CONTINUED) | |||||||||||||||
The following table represents the Company's fair value hierarchy for its financial assets (cash, cash equivalents and investments) and liabilities measured at fair value on a recurring basis as of September 30, 2013 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 136,909 | $ | — | $ | — | $ | 136,909 | ||||||||
Money market funds | 32,338 | — | — | 32,338 | ||||||||||||
Commercial paper | 53,691 | — | — | 53,691 | ||||||||||||
Auction rate securities | — | — | 21,675 | 21,675 | ||||||||||||
Total assets measured at fair value | $ | 222,938 | $ | — | $ | 21,675 | $ | 244,613 | ||||||||
Liabilities: | ||||||||||||||||
Deferred consideration | $ | — | $ | — | $ | 1,208 | $ | 1,208 | ||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 1,208 | $ | 1,208 | ||||||||
The following table represents the Company's fair value hierarchy for its financial assets (cash, cash equivalents and investments) and liabilities measured at fair value on a recurring basis as of December 31, 2012 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 135,232 | $ | — | $ | — | $ | 135,232 | ||||||||
Money market funds | 20,775 | — | — | 20,775 | ||||||||||||
Commercial paper | 20 | — | — | 20 | ||||||||||||
Government-sponsored enterprise obligations | — | 37 | — | 37 | ||||||||||||
Auction rate securities | — | — | 21,662 | 21,662 | ||||||||||||
Total assets measured at fair value | $ | 156,027 | $ | 37 | $ | 21,662 | $ | 177,726 | ||||||||
Liabilities: | ||||||||||||||||
Deferred consideration | $ | — | $ | — | $ | 2,304 | $ | 2,304 | ||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 2,304 | $ | 2,304 | ||||||||
The Company’s Level 2 assets consisted of government-sponsored enterprise obligations, which did not have directly observable quoted prices in active markets. The Company’s Level 2 assets were valued using matrix pricing. | ||||||||||||||||
The Company’s Level 3 assets consist of ARS, whose underlying assets are primarily student loan securities supported by guarantees from the Federal Family Education Loan Program (“FFELP”) of the U.S. Department of Education. | ||||||||||||||||
The following tables summarize changes in fair value of the Company’s Level 3 assets for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Balance at beginning of period | $ | 21,675 | $ | 24,976 | $ | 21,662 | $ | 24,584 | ||||||||
Auction rate securities upon acquisition | — | — | — | 442 | ||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | — | 735 | 63 | 735 | ||||||||||||
Settlements | — | (4,150 | ) | (50 | ) | (4,200 | ) | |||||||||
Balance at end of period | $ | 21,675 | $ | 21,561 | $ | 21,675 | $ | 21,561 | ||||||||
5 | FAIR VALUE — (CONTINUED) | |||||||||||||||
The following table summarizes changes in fair value of the Company’s Level 3 assets from December 31, 2007 to September 30, 2013 (in thousands): | ||||||||||||||||
Auction | ||||||||||||||||
Rate | ||||||||||||||||
Securities | ||||||||||||||||
Balance at December 31, 2007 | $ | 53,975 | ||||||||||||||
Change in unrealized loss included in accumulated other comprehensive loss | (3,710 | ) | ||||||||||||||
Settlements | (20,925 | ) | ||||||||||||||
Balance at December 31, 2008 | 29,340 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 684 | |||||||||||||||
Settlements | (300 | ) | ||||||||||||||
Balance at December 31, 2009 | 29,724 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 40 | |||||||||||||||
Settlements | (575 | ) | ||||||||||||||
Balance at December 31, 2010 | 29,189 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 245 | |||||||||||||||
Settlements | (4,850 | ) | ||||||||||||||
Balance at December 31, 2011 | 24,584 | |||||||||||||||
Auction rate securities upon acquisition | 442 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 836 | |||||||||||||||
Settlements | (4,200 | ) | ||||||||||||||
Balance at December 31, 2012 | 21,662 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 63 | |||||||||||||||
Settlements | (50 | ) | ||||||||||||||
Balance at September 30, 2013 | $ | 21,675 | ||||||||||||||
ARS are variable rate debt instruments whose interest rates are reset approximately every 28 days. The majority of the underlying securities have contractual maturities greater than twenty years. The ARS are recorded at fair value. | ||||||||||||||||
As of September 30, 2013, the Company held ARS with $24.3 million par value, all of which failed to settle at auction. The majority of these investments are of high credit quality with AAA credit ratings and are primarily student loan securities supported by guarantees from the FFELP of the U.S. Department of Education. The Company may not be able to liquidate and fully recover the carrying value of the ARS in the near term. As a result, these securities are classified as long-term investments in the Company’s condensed consolidated balance sheet as of September 30, 2013. | ||||||||||||||||
While the Company continues to earn interest on its ARS investments at the contractual rate, these investments are not currently actively trading and therefore do not currently have a readily determinable market value. The estimated fair value of the ARS no longer approximates par value. The Company used a discounted cash flow model to determine the estimated fair value of its investment in ARS as of September 30, 2013. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, credit spreads, timing and amount of contractual cash flows, liquidity risk premiums, expected holding periods and default risk. The Company updates the discounted cash flow model on a quarterly basis to reflect any changes in the assumptions used in the model and settlements of ARS investments that occurred during the period. | ||||||||||||||||
The only significant unobservable input in the discounted cash flow model is the discount rate. The discount rate used represents the Company's estimate of the yield expected by a market participant from the ARS investments. The weighted average discount rate used in the discounted cash flow model as of September 30, 2013 and December 31, 2012 was approximately 5.2% and 5.1%, respectively. Selecting another discount rate within the range used in the discounted cash flow model would not result in a significant change to the fair value of the ARS. | ||||||||||||||||
5 | FAIR VALUE — (CONTINUED) | |||||||||||||||
Based on this assessment of fair value, as of September 30, 2013, the Company determined there was a decline in the fair value of its ARS investments of approximately $1.8 million. The decline was deemed to be a temporary impairment and recorded as an unrealized loss in accumulated other comprehensive loss in stockholders’ equity. In addition, while a majority of the ARS are currently rated AAA, if the issuers are unable to successfully close future auctions and/or their credit ratings deteriorate, the Company may be required to record additional unrealized losses in accumulated other comprehensive loss or an other-than-temporary impairment charge to earnings on these investments. | ||||||||||||||||
As of September 30, 2013, the Company held Level 3 liabilities for deferred consideration that it acquired as a result of the April 30, 2012 acquisition of LoopNet. The deferred consideration totaled $1.2 million as of September 30, 2013 and included potential deferred cash payments in connection with acquisitions LoopNet completed in 2010 including: (i) potential deferred cash payments due to the sellers of LandsofAmerica.com, LLC ("LandsofAmerica") on March 31, 2014 based on LandsofAmerica's achievement of financial and operational milestones, resulting in undiscounted deferred consideration as of September 30, 2013 of approximately $1.0 million; and (ii) potential deferred cash payments due to the sellers of Reaction Corp. ("Reaction Web") on March 31, 2014 based on Reaction Web's achievement of revenue milestones, resulting in undiscounted deferred consideration as of September 30, 2013 of approximately $344,000. On March 28, 2013, the Company made a payment of $1.0 million to the sellers of LandsofAmerica for the achievement of financial and operational milestones in 2012 and a payment of approximately $344,000 to the sellers of Reaction Web for the achievement of revenue milestones in 2012. | ||||||||||||||||
The following tables summarize changes in fair value of the Company’s Level 3 liabilities for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Balance at beginning of period | $ | 1,146 | $ | 2,072 | $ | 2,304 | $ | — | ||||||||
Deferred consideration upon acquisition | — | — | — | 2,011 | ||||||||||||
Accretion for period | 62 | 113 | 248 | 174 | ||||||||||||
Payments made during period | — | — | (1,344 | ) | — | |||||||||||
Balance at end of period | $ | 1,208 | $ | 2,185 | $ | 1,208 | $ | 2,185 | ||||||||
The following table summarizes changes in fair value of the Company’s Level 3 liabilities from December 31, 2011 to September 30, 2013 (in thousands): | ||||||||||||||||
Deferred | ||||||||||||||||
Consideration | ||||||||||||||||
Balance at December 31, 2011 | $ | — | ||||||||||||||
Deferred consideration upon acquisition | 2,011 | |||||||||||||||
Accretion for 2012 | 293 | |||||||||||||||
Balance at December 31, 2012 | 2,304 | |||||||||||||||
Accretion from January 1, 2013 – September 30, 2013 | 248 | |||||||||||||||
Payments made from January 1, 2013 – September 30, 2013 | (1,344 | ) | ||||||||||||||
Balance at September 30, 2013 | $ | 1,208 | ||||||||||||||
The Company used a discounted cash flow model to determine the estimated fair value of its Level 3 liabilities. The assumptions used in preparing the discounted cash flow model include the discount rate and probabilities for completion of financial and operational milestones. | ||||||||||||||||
5 | FAIR VALUE — (CONTINUED) | |||||||||||||||
The only significant unobservable input in the discounted cash flow model used to determine the estimated fair value of the Company's Level 3 liabilities is the discount rate. The discount rate used represents LoopNet's cost of equity at the time of each acquisition plus a margin for counterparty risk. The weighted average discount rate used as of September 30, 2013 and December 31, 2012 was approximately 23.5%. Selecting another discount rate within the range used in the discounted cash flow model would not result in a significant change to the fair value of the deferred consideration. | ||||||||||||||||
Concentration of Credit Risk and Financial Instruments | ||||||||||||||||
The Company performs ongoing credit evaluations of its customers’ financial condition and generally does not require that its customers’ obligations to the Company be secured. The Company maintains reserves for estimated inherent credit losses, and such losses have been within management’s expectations. The large size and widespread nature of the Company’s customer base and the Company’s lack of dependence on any individual customer mitigates the risk of nonpayment of the Company’s accounts receivable. The carrying amount of the accounts receivable approximates the net realizable value. The carrying value of accounts receivable, accounts payable, accrued expenses, and long-term debt approximates fair value. |
GOODWILL
GOODWILL | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Goodwill [Abstract] | ||||||||||||
GOODWILL | GOODWILL | |||||||||||
The changes in the carrying amount of goodwill by operating segment consist of the following (in thousands): | ||||||||||||
United States | International | Total | ||||||||||
Goodwill, December 31, 2011 | $ | 67,465 | $ | 24,319 | $ | 91,784 | ||||||
Acquisitions | 625,174 | — | 625,174 | |||||||||
Effect of foreign currency translation | — | 1,120 | 1,120 | |||||||||
Goodwill, December 31, 2012 | 692,639 | 25,439 | 718,078 | |||||||||
Effect of foreign currency translation | — | (39 | ) | (39 | ) | |||||||
Goodwill, September 30, 2013 | $ | 692,639 | $ | 25,400 | $ | 718,039 | ||||||
The Company recorded goodwill of approximately $625.2 million in connection with the April 30, 2012 acquisition of LoopNet. |
INTANGIBLES_AND_OTHER_ASSETS
INTANGIBLES AND OTHER ASSETS | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Intangibles and Other Assets [Abstract] | ||||||||||
INTANGIBLES AND OTHER ASSETS | INTANGIBLES AND OTHER ASSETS | |||||||||
Intangibles and other assets consist of the following (in thousands, except amortization period data): | ||||||||||
September 30, | December 31, | Weighted- | ||||||||
2013 | 2012 | Average | ||||||||
Amortization | ||||||||||
Period (in years) | ||||||||||
Capitalized product development cost | $ | 2,140 | $ | 2,140 | 4 | |||||
Accumulated amortization | (1,981 | ) | (1,838 | ) | ||||||
Capitalized product development cost, net | 159 | 302 | ||||||||
Building photography | 13,566 | 12,474 | 5 | |||||||
Accumulated amortization | (11,830 | ) | (11,639 | ) | ||||||
Building photography, net | 1,736 | 835 | ||||||||
Acquired database technology | 77,325 | 77,328 | 5 | |||||||
Accumulated amortization | (38,284 | ) | (29,673 | ) | ||||||
Acquired database technology, net | 39,041 | 47,655 | ||||||||
Acquired customer base | 130,662 | 130,683 | 10 | |||||||
Accumulated amortization | (70,968 | ) | (59,218 | ) | ||||||
Acquired customer base, net | 59,694 | 71,465 | ||||||||
Acquired trade names and other (1) | 59,249 | 59,255 | 7 | |||||||
Accumulated amortization | (9,079 | ) | (8,880 | ) | ||||||
Acquired trade names and other, net | 50,170 | 50,375 | ||||||||
Intangibles and other assets, net | $ | 150,800 | $ | 170,632 | ||||||
(1) The weighted-average amortization period for acquired trade names excludes $48.7 million for acquired trade names recorded in connection with the LoopNet acquisition on April 30, 2012, which amount is not amortized, but is subject to annual impairment tests. |
LONGTERM_DEBT
LONG-TERM DEBT | 9 Months Ended | |
Sep. 30, 2013 | ||
Long-term Debt, Current and Noncurrent [Abstract] | ||
LONG-TERM DEBT | LONG-TERM DEBT | |
On February 16, 2012, the Company entered into a term loan facility and revolving credit facility pursuant to the Credit Agreement dated February 16, 2012, by and among the Company, as borrower, CoStar Realty Information, Inc. ("CoStar Realty"), as co-borrower, J.P. Morgan Bank, as administrative agent, and the other lenders thereto. The Credit Agreement provides for a $175.0 million term loan facility and a $50.0 million revolving credit facility, each with a term of five years. On April 30, 2012, the Company borrowed $175.0 million under the term loan facility and used those proceeds, together with net proceeds from the Company's equity offering conducted in June 2011, to pay a portion of the merger consideration and transaction costs related to the LoopNet merger. The carrying value of the term loan facility approximates fair value and can be estimated through unobservable inputs using an expected present value technique based on expected cash flows discounted using the current credit-adjusted risk-free rate, which approximates the rate of interest on the term loan facility at the origination. | ||
8 | LONG-TERM DEBT — (CONTINUED) | |
The revolving credit facility includes a subfacility for swingline loans of up to $5.0 million and up to $10.0 million of the revolving credit facility is available for the issuances of letters of credit. The term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 5% during the first year, 10% during the second year, 15% during the third year, 20% during the fourth year and 50% during the fifth year after the closing date. The loans under the Credit Agreement bear interest, at the Company's option, either (i) during any interest period selected by the Company, at the London interbank offered rate for deposits in U.S. dollars with a maturity comparable to such interest period, adjusted for statutory reserves (“LIBOR”), plus a spread of 2.00% per annum, or (ii) at the greatest of (x) the prime rate from time to time announced by J.P. Morgan Bank, (y) the federal funds effective rate plus ½ of 1% and (z) LIBOR for a one-month interest period plus 1.00%, plus a spread of 1.00% per annum. If an event of default occurs under the Credit Agreement, the interest rate on overdue amounts will increase by 2.00% per annum. The obligations under the Credit Agreement are guaranteed by all material subsidiaries of the Company and secured by a lien on substantially all of the assets of the Company and its material subsidiaries, in each case subject to certain exceptions. | ||
The Credit Agreement requires the Company to maintain a Debt Service Coverage Ratio (as defined in the Credit Agreement) of at least 1.5 to 1.0 and a Total Leverage Ratio (as defined in the Credit Agreement) that does not exceed 2.75 to 1.00 during each of the three months ending September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014; and 2.50 to 1.00 thereafter. The Credit Agreement also includes other covenants that were effective as of April 30, 2012, including covenants that, subject to certain exceptions, restrict the ability of the Company and its subsidiaries (i) to incur additional indebtedness, (ii) to create, incur, assume or permit to exist any liens, (iii) to enter into mergers, consolidations or similar transactions, (iv) to make investments and acquisitions, (v) to make certain dispositions of assets, (vi) to make dividends, distributions and prepayments of certain indebtedness, and (vii) to enter into certain transactions with affiliates. The Company was in compliance with the covenants in the Credit Agreement as of September 30, 2013. | ||
Commencing with the fiscal year ended December 31, 2012, the Credit Agreement requires the Company to make an annual prepayment of the term loan facility equal to a percentage of Excess Cash Flow (as defined in the Credit Agreement) to reduce the principal amount outstanding under the term loan facility. The prepayment percentage is 50% when the Total Leverage Ratio exceeds 3.00 to 1.00; 25% when the Total Leverage Ratio is greater than 2.50 to 1.00 but equal to or less than 3.00 to 1.00; and 0% when the Total Leverage Ratio is equal to or less than 2.50 to 1.00. This prepayment requirement is reduced by the amount of prior voluntary prepayments during the respective fiscal year, subject to certain exceptions set forth in the Credit Agreement. The Excess Cash Flow payment, if required, is due within ten business days of the date on which the annual financial statements are delivered or required to be delivered to the lenders pursuant to the Credit Agreement. For the fiscal year ended December 31, 2012, the Company was not required to make an Excess Cash Flow payment. | ||
In connection with obtaining the facility, the Company incurred approximately $11.5 million in debt issuance costs, which were capitalized and are being amortized as interest expense over the term of the Credit Agreement using the effective interest method. The debt issuance costs are comprised of approximately $9.2 million in underwriting fees and approximately $2.3 million primarily related to legal fees associated with the debt issuance. | ||
As of September 30, 2013 and December 31, 2012, no amounts were outstanding under the revolving credit facility. Total interest expense for the term loan facility was approximately $1.7 million and $1.8 million for the three months ended September 30, 2013 and 2012, respectively, and $5.2 million and $3.0 million for the nine months ended September 30, 2013 and 2012, respectively. Interest expense included amortized debt issuance costs of approximately $760,000 and $763,000 for the three months ended September 30, 2013 and 2012, respectively, and $2.3 million and $1.2 million for the nine months ended September 30, 2013 and 2012, respectively. Total interest paid for the term loan facility was approximately $1.3 million and $1.1 million for the three months ended September 30, 2013 and 2012, respectively, and $3.3 million and $1.8 million for the nine months ended September 30, 2013 and 2012, respectively. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended | |
Sep. 30, 2013 | ||
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | INCOME TAXES | |
The income tax provision for the nine months ended September 30, 2013 and 2012 reflects an effective tax rate of approximately 38% and 65%, respectively. The higher effective tax rate for the nine months ended September 30, 2012 was primarily due to costs related to the LoopNet acquisition that reduced income from operations but were not deductible for tax purposes. | ||
9 | INCOME TAXES — (CONTINUED) | |
The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. The Company is currently under Internal Revenue Service ("IRS") audit in the U.S. for tax year 2010 and its subsidiary LoopNet is under IRS audit for tax years 2009, 2010, 2011 and the four months ended April 30, 2012. While no formal assessments have been received, the Company believes it has provided adequate reserves related to all matters in the tax periods open to examination. Although the timing of income tax audit resolutions and negotiations with taxing authorities is highly uncertain, the Company does not anticipate a significant change to the total amount of unrecognized income tax benefits within the next 12 months. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES | |
The Company leases office facilities and office equipment under various non-cancelable operating leases. The leases contain various renewal options. | ||
On February 16, 2012, the Company entered into the Credit Agreement. The Credit Agreement provides for a $175.0 million term loan facility and a $50.0 million revolving credit facility, each with a term of five years. See Note 8 for additional information regarding the Credit Agreement. | ||
In May 2011, LoopNet, the Board of Directors of LoopNet (“the LoopNet Board”) and/or the Company were named as defendants in three purported class action lawsuits brought by alleged LoopNet stockholders challenging LoopNet's proposed merger with the Company. The stockholder actions alleged, among other things, that (i) each member of the LoopNet Board breached his fiduciary duties to LoopNet and its stockholders in authorizing the sale of LoopNet to the Company, (ii) the merger does not maximize value to LoopNet stockholders, (iii) LoopNet and the Company have made incomplete or materially misleading disclosures about the proposed transaction and (iv) LoopNet and the Company aided and abetted the breaches of fiduciary duty allegedly committed by the members of the LoopNet Board. The stockholder actions sought class action certification and equitable relief, including an injunction against consummation of the merger. The parties have stipulated to the consolidation of the actions, and to permit the filing of a consolidated complaint. In June 2011, counsel for the parties entered into a memorandum of understanding in which they agreed on the terms of a settlement of this litigation, which could result in a loss to the Company of approximately $200,000. On March 20, 2013, the California Superior Court declined to grant preliminary approval to the proposed settlement and issued an order scheduling a hearing on June 11, 2013 to show good cause why the case should not be dismissed. Shortly before the hearing plaintiffs filed a third supplemental submission in support of their motion for preliminary approval of the proposed settlement, and the Court has rescheduled the show cause hearing for February 11, 2014. | ||
On January 3, 2012, LoopNet, the Company’s wholly owned subsidiary, was sued by CIVIX-DDI, LLC (“Civix”) in the U.S. District Court for the Eastern District of Virginia for alleged infringement of U.S. Patent Nos. 6,385,622 and 6,415,291. The complaint seeks unspecified damages, attorneys' fees and costs. On February 16, 2012, LoopNet filed an answer to Civix’s complaint and filed counterclaims against Civix seeking, among other things, declaratory relief that the asserted patents are invalid, not infringed, and that Civix committed inequitable conduct during the prosecution and re-examination of the asserted patents. On or about May 14, 2012, Civix filed a motion for leave to amend its complaint against LoopNet in the U.S. District Court for the Eastern District of Virginia seeking to add the Company as a defendant, alleging that the Company's products also infringe Civix's patents. The Company filed a motion opposing Civix's motion, and on June 21, 2012, the district court denied Civix's motion to amend its complaint. On June 21, 2012, the Company filed an action in the U.S. District Court for the Northern District of Illinois seeking a declaratory judgment of non-infringement and invalidity against Civix. On August 14, 2012, the Company amended its complaint against Civix to assert an affirmative claim for breach of contract against Civix for Civix's violation of its license agreement and covenant not to sue with one of the Company's technology licensors. On August 30, 2012, the Eastern District of Virginia transferred Civix's case against LoopNet to the Northern District of Illinois, where both cases are now pending. On October 29, 2012, Civix filed a separate action against LoopNet in the Northern District of Illinois alleging infringement of U.S. Patent No. 8,296,335. That case was later consolidated with Civix's original lawsuit against LoopNet. Civix amended its complaint against the Company on November 8, 2012 to add claims under Patent No. 8,296,335 as well. On November 15, 2012, LoopNet filed an amended answer and counterclaim against Civix, asserting an affirmative claim for breach of contract against Civix for Civix's violation of its license agreement and covenant not to sue with one of LoopNet's technology licensors. The U.S. District Court for the Northern District of Illinois construed the language of the patent on September 23, 2013, and has issued a schedule providing for expert discovery and dispositive motions in this case through April 2014, but no trial date has been set. At this time, the Company cannot predict the outcome of either case involving Civix, but the Company intends to vigorously defend itself against Civix's claims. | ||
10 | COMMITMENTS AND CONTINGENCIES — (CONTINUED) | |
Currently, and from time to time, the Company is involved in litigation incidental to the conduct of its business. In accordance with GAAP, the Company records a provision for a liability when it is both probable that a liability has been incurred and the amount can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome may occur as a result of one or more of the Company’s current litigation matters, management has concluded that it is not probable that a loss has been incurred in connection with the Company’s current litigation other than as described above. In addition, other than as described above, the Company is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in the Company’s current litigation and accordingly, the Company has not recognized any liability in the condensed consolidated financial statements for unfavorable results, if any, other than described above. Legal defense costs are expensed as incurred. |
SEGMENT_REPORTING
SEGMENT REPORTING | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING | |||||||||||||||
The Company manages its business geographically in two operating segments, with the primary areas of measurement and decision-making being the U.S. and International, which includes the U.K. and France. The Company’s subscription-based information services consist primarily of CoStar Suite™ and FOCUS™ services. CoStar Suite is sold as a platform of service offerings consisting of CoStar Property Professional®, CoStar COMPS Professional® and CoStar Tenant® and through the Company's mobile application, CoStarGo®. CoStar Suite is the Company's primary service offering in the U.S. operating segment. FOCUS is the Company's primary service offering in the International operating segment. Additionally, the Company introduced CoStar Suite in the U.K. in the fourth quarter of 2012. CoStar's and its subsidiaries' subscription-based services consist primarily of similar services offered over the Internet to commercial real estate industry and related professionals. Management relies on an internal management reporting process that provides revenue and operating segment EBITDA, which is the Company's net income before interest, income taxes, depreciation and amortization. Management believes that operating segment EBITDA is an appropriate measure for evaluating the operational performance of the Company's operating segments. EBITDA is used by management to internally measure operating and management performance and to evaluate the performance of the business. However, this measure should be considered in addition to, not as a substitute for or superior to, income from operations or other measures of financial performance prepared in accordance with GAAP. | ||||||||||||||||
11 | SEGMENT REPORTING — (CONTINUED) | |||||||||||||||
Summarized information by operating segment consists of the following (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues | ||||||||||||||||
United States | $ | 107,230 | $ | 91,153 | $ | 310,762 | $ | 235,606 | ||||||||
International | ||||||||||||||||
External customers | 5,071 | 4,848 | 14,571 | 14,247 | ||||||||||||
Intersegment revenue | 131 | 388 | 277 | 1,154 | ||||||||||||
Total international revenue | 5,202 | 5,236 | 14,848 | 15,401 | ||||||||||||
Intersegment eliminations | (131 | ) | (388 | ) | (277 | ) | (1,154 | ) | ||||||||
Total revenues | $ | 112,301 | $ | 96,001 | $ | 325,333 | $ | 249,853 | ||||||||
EBITDA | ||||||||||||||||
United States | $ | 30,855 | $ | 22,688 | $ | 66,609 | $ | 46,302 | ||||||||
International | (1,063 | ) | (3,047 | ) | (3,917 | ) | (6,568 | ) | ||||||||
Total EBITDA | $ | 29,792 | $ | 19,641 | $ | 62,692 | $ | 39,734 | ||||||||
Reconciliation of EBITDA to net income | ||||||||||||||||
EBITDA | $ | 29,792 | $ | 19,641 | $ | 62,692 | $ | 39,734 | ||||||||
Purchase amortization in cost of revenues | (2,954 | ) | (3,027 | ) | (9,007 | ) | (5,607 | ) | ||||||||
Purchase amortization in operating expenses | (3,680 | ) | (4,824 | ) | (11,699 | ) | (9,038 | ) | ||||||||
Depreciation and other amortization | (3,388 | ) | (2,844 | ) | (9,531 | ) | (7,554 | ) | ||||||||
Interest income | 52 | 59 | 239 | 440 | ||||||||||||
Interest expense | (1,736 | ) | (1,822 | ) | (5,249 | ) | (3,022 | ) | ||||||||
Income tax expense, net | (7,034 | ) | (404 | ) | (10,510 | ) | (9,752 | ) | ||||||||
Net income | $ | 11,052 | $ | 6,779 | $ | 16,935 | $ | 5,201 | ||||||||
Intersegment revenue is attributable to services performed for the Company’s wholly owned subsidiary, Property and Portfolio Research, Inc. (“PPR”) by Property and Portfolio Research Ltd., a wholly owned subsidiary of PPR. Intersegment revenue is recorded at an amount the Company believes approximates fair value. U.S. EBITDA includes a corresponding cost for the services performed by Property and Portfolio Research Ltd. for PPR. | ||||||||||||||||
U.S. EBITDA includes an allocation of approximately $300,000 and $0 for the three months ended September 30, 2013 and 2012, respectively. U.S. EBITDA includes an allocation of approximately $600,000 and $0 for the nine months ended September 30, 2013 and 2012, respectively. This allocation represents costs incurred for International employees involved in development activities of the Company's U.S. operating segment. | ||||||||||||||||
International EBITDA includes a corporate allocation of approximately $100,000 and $2.3 million for the three months ended September 30, 2013 and 2012, respectively. International EBITDA includes a corporate allocation of approximately $300,000 and $4.5 million for the nine months ended September 30, 2013 and 2012, respectively. The corporate allocation represents costs incurred for U.S. employees involved in management and expansion activities of the Company's International operating segment. | ||||||||||||||||
11 | SEGMENT REPORTING — (CONTINUED) | |||||||||||||||
Summarized information by operating segment consists of the following (in thousands): | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Property and equipment, net | ||||||||||||||||
United States | $ | 51,781 | $ | 42,480 | ||||||||||||
International | 3,922 | 3,828 | ||||||||||||||
Total property and equipment, net | $ | 55,703 | $ | 46,308 | ||||||||||||
Goodwill | ||||||||||||||||
United States | $ | 692,639 | $ | 692,639 | ||||||||||||
International | 25,400 | 25,439 | ||||||||||||||
Total goodwill | $ | 718,039 | $ | 718,078 | ||||||||||||
Assets | ||||||||||||||||
United States | $ | 1,285,779 | $ | 1,215,949 | ||||||||||||
International | 41,963 | 40,933 | ||||||||||||||
Total operating segment assets | $ | 1,327,742 | $ | 1,256,882 | ||||||||||||
Reconciliation of operating segment assets to total assets | ||||||||||||||||
Total operating segment assets | $ | 1,327,742 | $ | 1,256,882 | ||||||||||||
Investment in subsidiaries | (18,344 | ) | (18,344 | ) | ||||||||||||
Intersegment receivables | (79,024 | ) | (73,399 | ) | ||||||||||||
Total assets | $ | 1,230,374 | $ | 1,165,139 | ||||||||||||
Liabilities | ||||||||||||||||
United States | $ | 326,850 | $ | 335,855 | ||||||||||||
International | 77,209 | 70,108 | ||||||||||||||
Total operating segment liabilities | $ | 404,059 | $ | 405,963 | ||||||||||||
Reconciliation of operating segment liabilities to total liabilities | ||||||||||||||||
Total operating segment liabilities | $ | 404,059 | $ | 405,963 | ||||||||||||
Intersegment payables | (73,004 | ) | (67,167 | ) | ||||||||||||
Total liabilities | $ | 331,055 | $ | 338,796 | ||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ||||||||
Basis of Presentation | Basis of Presentation | |||||||
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Accounting policies are consistent for each operating segment. | ||||||||
Use of Estimates | Use of Estimates | |||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||
Reclassifications | Reclassifications | |||||||
Certain previously reported amounts in the condensed consolidated statements of operations and condensed consolidated statements of cash flows have been reclassified to conform to the Company’s current presentation. | ||||||||
Foreign Currency Translation | Foreign Currency Translation | |||||||
The Company’s functional currency in its foreign locations is the local currency. Assets and liabilities are translated into U.S. dollars as of the balance sheet dates. Revenues, expenses, gains and losses are translated at the average exchange rates in effect during each period. Gains and losses resulting from translation are included in accumulated other comprehensive income (loss). Net gains or losses resulting from foreign currency exchange transactions are included in the condensed consolidated statements of operations. There were no material gains or losses from foreign currency exchange transactions for the three and nine months ended September 30, 2013 and 2012. | ||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | |||||||
The components of accumulated other comprehensive loss were as follows (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Foreign currency translation adjustment | $ | (4,593 | ) | $ | (4,613 | ) | ||
Accumulated net unrealized loss on investments, net of tax | (1,842 | ) | (1,905 | ) | ||||
Total accumulated other comprehensive loss | $ | (6,435 | ) | $ | (6,518 | ) | ||
Net Income Per Share | Net Income Per Share | |||||||
Net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis. The Company’s potentially dilutive securities include stock options and restricted stock. Diluted net income per share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of the potentially dilutive common shares would have an anti-dilutive effect. | ||||||||
Stock-Based Compensation | Stock-Based Compensation | |||||||
Equity instruments issued in exchange for employee services are accounted for using a fair-value based method, and the fair value of such equity instruments is recognized as expense in the condensed consolidated statements of operations. | ||||||||
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (CONTINUED) | |||||||
Stock-Based Compensation — (Continued) | ||||||||
Stock-based compensation expense is measured at the grant date of the stock-based awards that vest over set time periods based on their fair values, and is recognized on a straight line basis as expense over the vesting periods of the awards, net of an estimated forfeiture rate. For equity instruments that vest based on performance, the Company assesses the probability of the achievement of the performance conditions at the end of each reporting period, or more frequently based upon the occurrence of events that may change the probability of whether the performance conditions would be met. If the Company's initial estimates of the achievement of the performance conditions change, the related stock-based compensation expense and timing of recognition may fluctuate from period to period based on those estimates. If the performance conditions are not met, no stock-based compensation expense will be recognized, and any previously recognized stock-based compensation expense will be reversed. | ||||||||
In 2012, the Company granted performance-based restricted common stock awards that vest upon the Company's achievement of $90.0 million of cumulative net income before interest, income taxes, depreciation and amortization ("EBITDA") over a period of four consecutive calendar quarters if such performance is achieved by March 31, 2017. As of September 30, 2013, the Company reassessed the probability of achieving this performance condition and determined that it was still probable that the performance condition for these awards would be met by the March 31, 2017 forfeiture date. As a result, the Company recorded a total of approximately $3.1 million and $0 of stock-based compensation expense related to the performance-based restricted common stock for the three months ended September 30, 2013 and 2012, respectively. The Company recorded approximately $17.5 million and $0 of stock-based compensation expense related to the performance-based restricted common stock for the nine months ended September 30, 2013 and 2012, respectively. The Company expects to record an additional estimated unrecognized stock-based compensation expense related to the performance-based restricted common stock of approximately $6.2 million during the remainder of 2013 and in 2014. | ||||||||
Cash flows resulting from excess tax benefits are classified as part of cash flows from operating and financing activities. Excess tax benefits represent tax benefits related to stock-based compensation in excess of the associated deferred tax asset for such equity compensation. | ||||||||
Capitalized Product Development Costs | Capitalized Product Development Costs | |||||||
Product development costs are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized. Costs are capitalized, to the extent that the capitalizable costs do not exceed the realizable value of such costs, until the product is available for general release to customers. The Company defines the establishment of technological feasibility as the completion of all planning, designing, coding and testing activities that are necessary to establish products that meet design specifications including functions, features and technical performance requirements. The Company's capitalized product development costs had a total net book value of approximately $159,000 and $302,000 as of September 30, 2013 and December 31, 2012, respectively. These capitalized product development costs are included in intangible and other assets in the Company’s condensed consolidated balance sheets. Amortization is computed using a straight-line method over the remaining estimated economic life of the product, typically three to five years after the software is ready for its intended use. The Company amortized capitalized product development costs of approximately $48,000 for each of the three months ended September 30, 2013 and 2012. The Company amortized capitalized product development costs of approximately $143,000 for each of the nine months ended September 30, 2013 and 2012. | ||||||||
Debt Issuance Costs | Debt Issuance Costs | |||||||
Costs incurred in connection with the issuance of long-term debt are capitalized and amortized as interest expense over the term of the related debt using the effective interest method. The Company had capitalized debt issuance costs of approximately $7.3 million and $9.6 million as of September 30, 2013 and December 31, 2012, respectively. The debt issuance costs are associated with the financing commitment received from JPMorgan Chase Bank, N.A. (“J.P. Morgan Bank”) on April 27, 2011 and the subsequent term loan facility and revolving credit facility established under a credit agreement dated February 16, 2012 (the “Credit Agreement”). See Note 8 for additional information regarding the financing commitment with J.P. Morgan Bank and the Credit Agreement. The Company amortized debt issuance costs of approximately $760,000 and $763,000 for the three months ended September 30, 2013 and 2012, respectively. The Company amortized debt issuance costs of approximately $2.3 million and $1.2 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||
There have been no developments to the Recent Accounting Pronouncements discussion included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, including the expected dates of adoption and estimated effects on the Company’s condensed consolidated financial statements, except for the following: | ||||||||
In July 2012, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to simplify how companies test indefinite-lived intangible assets for impairment. The guidance permits a company to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. This guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. This guidance did not have a material impact on the Company's results of operations or financial position. | ||||||||
In February 2013, the FASB issued authoritative guidance to improve the reporting of reclassifications out of accumulated other comprehensive income. This guidance requires a company to present, either on the consolidated statements of operations or in the notes to the consolidated financial statements, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. This guidance is effective prospectively for financial statements issued for interim and annual periods beginning after December 15, 2012. This guidance did not have a material impact on the Company's results of operations or financial position. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Schedule of accumulated other comprehensive loss | The components of accumulated other comprehensive loss were as follows (in thousands): | |||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Foreign currency translation adjustment | $ | (4,593 | ) | $ | (4,613 | ) | ||||||||||
Accumulated net unrealized loss on investments, net of tax | (1,842 | ) | (1,905 | ) | ||||||||||||
Total accumulated other comprehensive loss | $ | (6,435 | ) | $ | (6,518 | ) | ||||||||||
Calculation of basic and diluted net income per share | The following table sets forth the calculation of basic and diluted net income per share (in thousands, except per share data): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 11,052 | $ | 6,779 | $ | 16,935 | $ | 5,201 | ||||||||
Denominator: | ||||||||||||||||
Denominator for basic net income per share — weighted-average outstanding shares | 27,758 | 27,243 | 27,607 | 26,279 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options and restricted stock | 591 | 430 | 530 | 412 | ||||||||||||
Denominator for diluted net income per share — weighted-average outstanding shares | 28,349 | 27,673 | 28,137 | 26,691 | ||||||||||||
Net income per share — basic | $ | 0.4 | $ | 0.25 | $ | 0.61 | $ | 0.2 | ||||||||
Net income per share — diluted | $ | 0.39 | $ | 0.24 | $ | 0.6 | $ | 0.19 | ||||||||
Stock-based compensation expense for stock options and restricted stock | Stock-based compensation expense for stock options and restricted stock issued under equity incentive plans and stock purchases under the ESPP included in the Company’s results of operations were as follows (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cost of revenues | $ | 1,061 | $ | 849 | $ | 3,353 | $ | 1,784 | ||||||||
Selling and marketing | 944 | 493 | 3,763 | 1,331 | ||||||||||||
Software development | 1,608 | 809 | 5,439 | 1,565 | ||||||||||||
General and administrative | 4,175 | 1,588 | 19,715 | 3,987 | ||||||||||||
Total stock-based compensation | $ | 7,788 | $ | 3,739 | $ | 32,270 | $ | 8,667 | ||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) (LoopNet [Member]) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
LoopNet [Member] | ||||
Business Acquisition [Line Items] | ||||
Schedule of consideration paid to acquire business | The following table summarizes the consideration paid for LoopNet (in thousands except share and per share data): | |||
Cash | $ | 746,393 | ||
Equity interest (1,880,300 shares at $72.89) | 137,055 | |||
Fair value of total consideration transferred | $ | 883,448 | ||
Schedule of assets acquired and liabilities assumed | The following table summarizes the amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands): | |||
Cash and cash equivalents | $ | 105,464 | ||
Accounts receivable | 3,021 | |||
Goodwill | 625,174 | |||
Acquired trade names and other | 48,700 | |||
Acquired customer base | 71,500 | |||
Acquired database technology | 52,100 | |||
Deferred income taxes, net | (32,623 | ) | ||
Other assets and liabilities | 10,112 | |||
Fair value of identifiable net assets acquired | $ | 883,448 | ||
INVESTMENTS_Tables
INVESTMENTS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||
Scheduled maturities of investments classified as available-for-sale | Scheduled maturities of investments classified as available-for-sale as of September 30, 2013 were as follows (in thousands): | |||||||||||||||
Maturity | Fair Value | |||||||||||||||
Due: | ||||||||||||||||
October 1, 2013 — September 30, 2014 | $ | — | ||||||||||||||
October 1, 2014 — September 30, 2018 | 606 | |||||||||||||||
October 1, 2018 — September 30, 2023 | — | |||||||||||||||
After September 30, 2023 | 21,069 | |||||||||||||||
Available-for-sale investments | $ | 21,675 | ||||||||||||||
Schedule of available for sale securities reconciliation | As of September 30, 2013, the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): | |||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
Auction rate securities | $ | 23,517 | $ | 164 | $ | (2,006 | ) | $ | 21,675 | |||||||
Available-for-sale investments | $ | 23,517 | $ | 164 | $ | (2,006 | ) | $ | 21,675 | |||||||
4 | INVESTMENTS — (CONTINUED) | |||||||||||||||
As of December 31, 2012, the amortized cost basis and fair value of investments classified as available-for-sale were as follows (in thousands): | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
Cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
Government-sponsored enterprise obligations | $ | 37 | $ | — | $ | — | $ | 37 | ||||||||
Auction rate securities | 23,567 | 101 | (2,006 | ) | 21,662 | |||||||||||
Available-for-sale investments | $ | 23,604 | $ | 101 | $ | (2,006 | ) | $ | 21,699 | |||||||
Schedule of unrealized loss on investments | The components of the Company’s investments in an unrealized loss position for twelve months or longer were as follows (in thousands): | |||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Aggregate | Gross | Aggregate | Gross | |||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||
Value | Losses | Value | Losses | |||||||||||||
Government-sponsored enterprise obligations | $ | — | $ | — | $ | 37 | $ | — | ||||||||
Auction rate securities | 21,069 | (2,006 | ) | 21,119 | (2,006 | ) | ||||||||||
Investments in an unrealized loss position | $ | 21,069 | $ | (2,006 | ) | $ | 21,156 | $ | (2,006 | ) | ||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Summary of fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis | The following table represents the Company's fair value hierarchy for its financial assets (cash, cash equivalents and investments) and liabilities measured at fair value on a recurring basis as of September 30, 2013 (in thousands): | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 136,909 | $ | — | $ | — | $ | 136,909 | ||||||||
Money market funds | 32,338 | — | — | 32,338 | ||||||||||||
Commercial paper | 53,691 | — | — | 53,691 | ||||||||||||
Auction rate securities | — | — | 21,675 | 21,675 | ||||||||||||
Total assets measured at fair value | $ | 222,938 | $ | — | $ | 21,675 | $ | 244,613 | ||||||||
Liabilities: | ||||||||||||||||
Deferred consideration | $ | — | $ | — | $ | 1,208 | $ | 1,208 | ||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 1,208 | $ | 1,208 | ||||||||
The following table represents the Company's fair value hierarchy for its financial assets (cash, cash equivalents and investments) and liabilities measured at fair value on a recurring basis as of December 31, 2012 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 135,232 | $ | — | $ | — | $ | 135,232 | ||||||||
Money market funds | 20,775 | — | — | 20,775 | ||||||||||||
Commercial paper | 20 | — | — | 20 | ||||||||||||
Government-sponsored enterprise obligations | — | 37 | — | 37 | ||||||||||||
Auction rate securities | — | — | 21,662 | 21,662 | ||||||||||||
Total assets measured at fair value | $ | 156,027 | $ | 37 | $ | 21,662 | $ | 177,726 | ||||||||
Liabilities: | ||||||||||||||||
Deferred consideration | $ | — | $ | — | $ | 2,304 | $ | 2,304 | ||||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 2,304 | $ | 2,304 | ||||||||
Summary of changes in the fair value of the company's level 3 assets | The following tables summarize changes in fair value of the Company’s Level 3 assets for the three and nine months ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Balance at beginning of period | $ | 21,675 | $ | 24,976 | $ | 21,662 | $ | 24,584 | ||||||||
Auction rate securities upon acquisition | — | — | — | 442 | ||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | — | 735 | 63 | 735 | ||||||||||||
Settlements | — | (4,150 | ) | (50 | ) | (4,200 | ) | |||||||||
Balance at end of period | $ | 21,675 | $ | 21,561 | $ | 21,675 | $ | 21,561 | ||||||||
5 | FAIR VALUE — (CONTINUED) | |||||||||||||||
The following table summarizes changes in fair value of the Company’s Level 3 assets from December 31, 2007 to September 30, 2013 (in thousands): | ||||||||||||||||
Auction | ||||||||||||||||
Rate | ||||||||||||||||
Securities | ||||||||||||||||
Balance at December 31, 2007 | $ | 53,975 | ||||||||||||||
Change in unrealized loss included in accumulated other comprehensive loss | (3,710 | ) | ||||||||||||||
Settlements | (20,925 | ) | ||||||||||||||
Balance at December 31, 2008 | 29,340 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 684 | |||||||||||||||
Settlements | (300 | ) | ||||||||||||||
Balance at December 31, 2009 | 29,724 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 40 | |||||||||||||||
Settlements | (575 | ) | ||||||||||||||
Balance at December 31, 2010 | 29,189 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 245 | |||||||||||||||
Settlements | (4,850 | ) | ||||||||||||||
Balance at December 31, 2011 | 24,584 | |||||||||||||||
Auction rate securities upon acquisition | 442 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 836 | |||||||||||||||
Settlements | (4,200 | ) | ||||||||||||||
Balance at December 31, 2012 | 21,662 | |||||||||||||||
Change in unrealized gain included in accumulated other comprehensive loss | 63 | |||||||||||||||
Settlements | (50 | ) | ||||||||||||||
Balance at September 30, 2013 | $ | 21,675 | ||||||||||||||
Summary of changes in the fair value of the company's level 3 liabilities | The following tables summarize changes in fair value of the Company’s Level 3 liabilities for the three and nine months ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Balance at beginning of period | $ | 1,146 | $ | 2,072 | $ | 2,304 | $ | — | ||||||||
Deferred consideration upon acquisition | — | — | — | 2,011 | ||||||||||||
Accretion for period | 62 | 113 | 248 | 174 | ||||||||||||
Payments made during period | — | — | (1,344 | ) | — | |||||||||||
Balance at end of period | $ | 1,208 | $ | 2,185 | $ | 1,208 | $ | 2,185 | ||||||||
The following table summarizes changes in fair value of the Company’s Level 3 liabilities from December 31, 2011 to September 30, 2013 (in thousands): | ||||||||||||||||
Deferred | ||||||||||||||||
Consideration | ||||||||||||||||
Balance at December 31, 2011 | $ | — | ||||||||||||||
Deferred consideration upon acquisition | 2,011 | |||||||||||||||
Accretion for 2012 | 293 | |||||||||||||||
Balance at December 31, 2012 | 2,304 | |||||||||||||||
Accretion from January 1, 2013 – September 30, 2013 | 248 | |||||||||||||||
Payments made from January 1, 2013 – September 30, 2013 | (1,344 | ) | ||||||||||||||
Balance at September 30, 2013 | $ | 1,208 | ||||||||||||||
GOODWILL_Tables
GOODWILL (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Goodwill [Abstract] | ||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill by operating segment consist of the following (in thousands): | |||||||||||
United States | International | Total | ||||||||||
Goodwill, December 31, 2011 | $ | 67,465 | $ | 24,319 | $ | 91,784 | ||||||
Acquisitions | 625,174 | — | 625,174 | |||||||||
Effect of foreign currency translation | — | 1,120 | 1,120 | |||||||||
Goodwill, December 31, 2012 | 692,639 | 25,439 | 718,078 | |||||||||
Effect of foreign currency translation | — | (39 | ) | (39 | ) | |||||||
Goodwill, September 30, 2013 | $ | 692,639 | $ | 25,400 | $ | 718,039 | ||||||
INTANGIBLES_AND_OTHER_ASSETS_T
INTANGIBLES AND OTHER ASSETS (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Intangibles and Other Assets [Abstract] | ||||||||||
Schedule of acquired finite-lived intangible assets by major class | Intangibles and other assets consist of the following (in thousands, except amortization period data): | |||||||||
September 30, | December 31, | Weighted- | ||||||||
2013 | 2012 | Average | ||||||||
Amortization | ||||||||||
Period (in years) | ||||||||||
Capitalized product development cost | $ | 2,140 | $ | 2,140 | 4 | |||||
Accumulated amortization | (1,981 | ) | (1,838 | ) | ||||||
Capitalized product development cost, net | 159 | 302 | ||||||||
Building photography | 13,566 | 12,474 | 5 | |||||||
Accumulated amortization | (11,830 | ) | (11,639 | ) | ||||||
Building photography, net | 1,736 | 835 | ||||||||
Acquired database technology | 77,325 | 77,328 | 5 | |||||||
Accumulated amortization | (38,284 | ) | (29,673 | ) | ||||||
Acquired database technology, net | 39,041 | 47,655 | ||||||||
Acquired customer base | 130,662 | 130,683 | 10 | |||||||
Accumulated amortization | (70,968 | ) | (59,218 | ) | ||||||
Acquired customer base, net | 59,694 | 71,465 | ||||||||
Acquired trade names and other (1) | 59,249 | 59,255 | 7 | |||||||
Accumulated amortization | (9,079 | ) | (8,880 | ) | ||||||
Acquired trade names and other, net | 50,170 | 50,375 | ||||||||
Intangibles and other assets, net | $ | 150,800 | $ | 170,632 | ||||||
(1) The weighted-average amortization period for acquired trade names excludes $48.7 million for acquired trade names recorded in connection with the LoopNet acquisition on April 30, 2012, which amount is not amortized, but is subject to annual impairment tests. |
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Summarized information by operating segment | Summarized information by operating segment consists of the following (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues | ||||||||||||||||
United States | $ | 107,230 | $ | 91,153 | $ | 310,762 | $ | 235,606 | ||||||||
International | ||||||||||||||||
External customers | 5,071 | 4,848 | 14,571 | 14,247 | ||||||||||||
Intersegment revenue | 131 | 388 | 277 | 1,154 | ||||||||||||
Total international revenue | 5,202 | 5,236 | 14,848 | 15,401 | ||||||||||||
Intersegment eliminations | (131 | ) | (388 | ) | (277 | ) | (1,154 | ) | ||||||||
Total revenues | $ | 112,301 | $ | 96,001 | $ | 325,333 | $ | 249,853 | ||||||||
EBITDA | ||||||||||||||||
United States | $ | 30,855 | $ | 22,688 | $ | 66,609 | $ | 46,302 | ||||||||
International | (1,063 | ) | (3,047 | ) | (3,917 | ) | (6,568 | ) | ||||||||
Total EBITDA | $ | 29,792 | $ | 19,641 | $ | 62,692 | $ | 39,734 | ||||||||
Reconciliation of EBITDA to net income (loss) | ||||||||||||||||
Reconciliation of EBITDA to net income | ||||||||||||||||
EBITDA | $ | 29,792 | $ | 19,641 | $ | 62,692 | $ | 39,734 | ||||||||
Purchase amortization in cost of revenues | (2,954 | ) | (3,027 | ) | (9,007 | ) | (5,607 | ) | ||||||||
Purchase amortization in operating expenses | (3,680 | ) | (4,824 | ) | (11,699 | ) | (9,038 | ) | ||||||||
Depreciation and other amortization | (3,388 | ) | (2,844 | ) | (9,531 | ) | (7,554 | ) | ||||||||
Interest income | 52 | 59 | 239 | 440 | ||||||||||||
Interest expense | (1,736 | ) | (1,822 | ) | (5,249 | ) | (3,022 | ) | ||||||||
Income tax expense, net | (7,034 | ) | (404 | ) | (10,510 | ) | (9,752 | ) | ||||||||
Net income | $ | 11,052 | $ | 6,779 | $ | 16,935 | $ | 5,201 | ||||||||
Summarized information by operating segment, assets and liabilities | Summarized information by operating segment consists of the following (in thousands): | |||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Property and equipment, net | ||||||||||||||||
United States | $ | 51,781 | $ | 42,480 | ||||||||||||
International | 3,922 | 3,828 | ||||||||||||||
Total property and equipment, net | $ | 55,703 | $ | 46,308 | ||||||||||||
Goodwill | ||||||||||||||||
United States | $ | 692,639 | $ | 692,639 | ||||||||||||
International | 25,400 | 25,439 | ||||||||||||||
Total goodwill | $ | 718,039 | $ | 718,078 | ||||||||||||
Assets | ||||||||||||||||
United States | $ | 1,285,779 | $ | 1,215,949 | ||||||||||||
International | 41,963 | 40,933 | ||||||||||||||
Total operating segment assets | $ | 1,327,742 | $ | 1,256,882 | ||||||||||||
Reconciliation of operating segment assets to total assets | ||||||||||||||||
Total operating segment assets | $ | 1,327,742 | $ | 1,256,882 | ||||||||||||
Investment in subsidiaries | (18,344 | ) | (18,344 | ) | ||||||||||||
Intersegment receivables | (79,024 | ) | (73,399 | ) | ||||||||||||
Total assets | $ | 1,230,374 | $ | 1,165,139 | ||||||||||||
Liabilities | ||||||||||||||||
United States | $ | 326,850 | $ | 335,855 | ||||||||||||
International | 77,209 | 70,108 | ||||||||||||||
Total operating segment liabilities | $ | 404,059 | $ | 405,963 | ||||||||||||
Reconciliation of operating segment liabilities to total liabilities | ||||||||||||||||
Total operating segment liabilities | $ | 404,059 | $ | 405,963 | ||||||||||||
Intersegment payables | (73,004 | ) | (67,167 | ) | ||||||||||||
Total liabilities | $ | 331,055 | $ | 338,796 | ||||||||||||
ORGANIZATION_Details
ORGANIZATION (Details) | 9 Months Ended |
Sep. 30, 2013 | |
operating_segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments (in segments) | 2 |
Term of subscription-based license agreements (in years) | 1 year |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NET INCOME (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: [Abstract] | ||||
Net income | $11,052 | $6,779 | $16,935 | $5,201 |
Denominator: [Abstract] | ||||
Denominator for basic net income per share - weighted-average outstanding shares (in shares) | 27,758 | 27,243 | 27,607 | 26,279 |
Effect of dilutive securities: [Abstract] | ||||
Stock options and restricted stock | 591 | 430 | 530 | 412 |
Denominator for diluted net income per share - weighted-average outstanding shares (in shares) | 28,349 | 27,673 | 28,137 | 26,691 |
Net income per share - basic (in dollars per share) | $0.40 | $0.25 | $0.61 | $0.20 |
Net income per share - diluted (in dollars per share) | $0.39 | $0.24 | $0.60 | $0.19 |
Antidilutive securities excluded from computation of earnings per share | 0 | 0 | 0 | 0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ACCUMULATED OTHER COMPREHENSIVE LOSS, NET OF TAX (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accumulated Other Comprehensive Loss Net of Tax [Abstract] | ||
Foreign currency translation adjustment | ($4,593) | ($4,613) |
Accumulated net unrealzied loss on investments, net of tax | -1,842 | -1,905 |
Total accumulated other comprehensive loss | ($6,435) | ($6,518) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, STOCK BASED COMPENSATION EXPENSE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-Based Compensation Expense [Abstract] | ||||
Compensation expense | $7,788,000 | $3,739,000 | $32,270,000 | $8,667,000 |
Net cash proceeds from the exercise of stock options and ESPP | 6,935,000 | 2,635,000 | 15,846,000 | 7,667,000 |
Excess tax benefits realized from stock option exercised and restricted stock awards vested | 5,655,000 | -57,000 | 15,405,000 | -57,000 |
Exercise of stock options (in shares) | 150,560 | 76,542 | 340,599 | 224,382 |
Cost of Revenues [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Compensation expense | 1,061,000 | 849,000 | 3,353,000 | 1,784,000 |
Selling and Marketing [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Compensation expense | 944,000 | 493,000 | 3,763,000 | 1,331,000 |
Software Development [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Compensation expense | 1,608,000 | 809,000 | 5,439,000 | 1,565,000 |
General and Administrative [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Compensation expense | 4,175,000 | 1,588,000 | 19,715,000 | 3,987,000 |
Performance-Based Restricted Common Stock [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Cumulative EBITDA required for award shares to vest | 90,000,000 | 90,000,000 | ||
Number of consecutive quarters to mantain cumulative EBITDA required for award shares to vest | 4 | 4 | ||
Compensation expense | 3,100,000 | 0 | 17,500,000 | 0 |
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized | $6,200,000 | $6,200,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CAPITALIZED PRODUCT DEVELOPMENT AND DEBT ISSUANCE COSTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Capitalized Product Development Costs [Abstract] | |||||
Capitalized product development costs, net book value | $159 | $159 | $302 | ||
Amortization expense of capitalized product development costs | 48 | 48 | 143 | 143 | |
Debt Issuance Cost [Abstract] | |||||
Capitalized debt issuance costs | 7,283 | 7,283 | 9,556 | ||
Amortization of debt issuance costs | $760 | $763 | $2,273 | $1,235 | |
Minimum [Member] | |||||
Capitalized Product Development Costs [Abstract] | |||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||
Maximum [Member] | |||||
Capitalized Product Development Costs [Abstract] | |||||
Finite-Lived Intangible Asset, Useful Life | 5 years |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | Apr. 26, 2012 | 3-May-12 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Apr. 30, 2012 | Sep. 30, 2013 | Apr. 30, 2012 | Sep. 30, 2013 | Apr. 30, 2012 |
LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | Acquired Customer Base [Member] | Acquired Customer Base [Member] | Acquired Database Technology [Member] | Acquired Database Technology [Member] | ||
distinct_intangible_asset | LoopNet [Member] | LoopNet [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage of outstanding stock controlled by compnay | 100.00% | ||||||||||
Distinct intangible asset (in intangible asset) | 1 | ||||||||||
Estimated useful life of acquired assets | 10 years | 10 years | 5 years | 5 years | |||||||
Business combination, recognized goodwill acquired | $625,174,000 | ||||||||||
Goodwill tax deductible amount | 0 | ||||||||||
Incurred acquisition-related costs | 0 | 0 | 0 | 5,200,000 | |||||||
Term of consent order public comment period | 30 days | ||||||||||
Proceeds from sale of Xcelignet | 4,200,000 | ||||||||||
Gain on sale of Xceligent | $0 |
ACQUISITIONS_Schedule_of_Consi
ACQUISITIONS (Schedule of Consideration Paid to Aquire LoopNet) (Details) (LoopNet [Member], USD $) | 0 Months Ended |
In Thousands, except Share data, unless otherwise specified | Apr. 30, 2012 |
LoopNet [Member] | |
Business Acquisition [Line Items] | |
Cash | $746,393 |
Equity interest, number of shares (in shares) | 1,880,300 |
Equity interest, price per share (in dollars per share) | $72.89 |
Equity interest | 137,055 |
Fair value of total consideration transferred | $883,448 |
ACQUISITIONS_Schedule_of_Asset
ACQUISITIONS (Schedule of Assets Acquired and Liabilities Assumed of Loopnet Acquisition) (Details) (LoopNet [Member], USD $) | Apr. 30, 2012 |
In Thousands, unless otherwise specified | |
LoopNet [Member] | |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $105,464 |
Accounts receivable | 3,021 |
Goodwill | 625,174 |
Acquired trade names and other | 48,700 |
Acquired customer base | 71,500 |
Acquired database technology | 52,100 |
Deferred income taxes, net | -32,623 |
Other assets and liabilities | 10,112 |
Fair value of identifiable net assets acquired | $883,448 |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale securities, gross realized gains | $0 | $0 | $0 | $0 | |
Available-for-sale securities, gross realized losses | 0 | 0 | 0 | 0 | |
Debt Maturities Fair Value [Abstract] | |||||
October 1, 2013 — September 30, 2014 | 0 | 0 | |||
October 1, 2014 — September 30, 2018 | 606,000 | 606,000 | |||
October 1, 2018 — September 30, 2023 | 0 | 0 | |||
After September 30, 2023 | 21,069,000 | 21,069,000 | |||
Fair Value | $21,675,000 | $21,675,000 | $21,699,000 | ||
Minimum [Member] | |||||
Investments, Debt and Equity Securities [Abstract] | |||||
Short-term investment maturities (in days) | 90 days | ||||
Available for sale short term investment contractual maturities (in years) | 1 year |
INVESTMENTS_AVAILABLEFORSALE_S
INVESTMENTS, AVAILABLE-FOR-SALE SECURITIES (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses | $0 | $0 |
Available-for-sale Securities Reconciliation [Abstract] | ||
Amortized Cost | 23,517 | 23,604 |
Gross Unrealized Gains | 164 | 101 |
Gross Unrealized Losses | -2,006 | -2,006 |
Fair Value | 21,675 | 21,699 |
Available-for-sale securities, unrealized loss positions | ||
Aggregate Fair Value | 21,069 | 21,156 |
Government-Sponsored Enterprise Obligations [Member] | ||
Available-for-sale Securities Reconciliation [Abstract] | ||
Amortized Cost | 37 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 37 | |
Available-for-sale securities, unrealized loss positions | ||
Aggregate Fair Value | 0 | 37 |
Auction Rate Securities [Member] | ||
Available-for-sale Securities Reconciliation [Abstract] | ||
Amortized Cost | 23,517 | 23,567 |
Gross Unrealized Gains | 164 | 101 |
Gross Unrealized Losses | -2,006 | -2,006 |
Fair Value | 21,675 | 21,662 |
Available-for-sale securities, unrealized loss positions | ||
Aggregate Fair Value | $21,069 | $21,119 |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Sep. 30, 2013 | Mar. 28, 2013 | Sep. 30, 2013 | Mar. 28, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | LandsofAmerica [Member] | LandsofAmerica [Member] | Reaction Web [Member] | Reaction Web [Member] | LoopNet [Member] | LoopNet [Member] | ||||||
Cash [Member] | Cash [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Government-Sponsored Enterprise Obligations [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||||||||||||||||
Cash [Member] | Cash [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Government-Sponsored Enterprise Obligations [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Cash [Member] | Cash [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Government-Sponsored Enterprise Obligations [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | Cash [Member] | Cash [Member] | Money Market Funds [Member] | Money Market Funds [Member] | Commercial Paper [Member] | Commercial Paper [Member] | Government-Sponsored Enterprise Obligations [Member] | Auction Rate Securities [Member] | Auction Rate Securities [Member] | |||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets measured at fair value | $244,613,000 | $177,726,000 | $136,909,000 | $135,232,000 | $32,338,000 | $20,775,000 | $53,691,000 | $20,000 | $37,000 | $21,675,000 | $21,662,000 | $222,938,000 | $156,027,000 | $136,909,000 | $135,232,000 | $32,338,000 | $20,775,000 | $53,691,000 | $20,000 | $0 | $0 | $0 | $0 | $37,000 | $0 | $0 | $0 | $0 | $0 | $0 | $37,000 | $0 | $0 | $21,675,000 | $21,662,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $21,675,000 | $21,662,000 | |||||||||||||||||
Unobservable inputs assets (level 3) [Roll forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | 21,675,000 | 24,976,000 | 21,662,000 | 24,584,000 | 24,584,000 | 21,662,000 | 24,584,000 | 29,189,000 | 29,724,000 | 29,340,000 | 53,975,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Auction rate securities upon acquisition | 0 | 0 | 0 | 442,000 | 442,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) included in accumulated other comprehensive loss | 0 | 735,000 | 63,000 | 735,000 | 63,000 | 836,000 | 245,000 | 40,000 | 684,000 | -3,710,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | 0 | -4,150,000 | -50,000 | -4,200,000 | -50,000 | -4,200,000 | -4,850,000 | -575,000 | -300,000 | -20,925,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | 21,675,000 | 21,561,000 | 21,675,000 | 21,561,000 | 21,662,000 | 21,675,000 | 21,662,000 | 24,584,000 | 29,189,000 | 29,724,000 | 29,340,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Auction rate securities variable rate debt instruments interest rate reset period | 28 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The minimum contractual maturities on underlying securities involved in auction rate securities | 20 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Par value of company held auction rate securities | 24,300,000 | 24,300,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary impairment of the auction rates security investments | -1,842,000 | -1,842,000 | -1,905,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred consideration | 1,208,000 | 2,304,000 | 0 | 0 | 0 | 0 | 1,208,000 | 2,304,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Unobservable inputs liabilities (level 3) [Roll forward] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | 1,146,000 | 2,072,000 | 2,304,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred consideration upon acquisition | 0 | 0 | 0 | 2,011,000 | 2,011,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion | 62,000 | 113,000 | 248,000 | 174,000 | 293,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments | 0 | 0 | -1,344,000 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | 1,208,000 | 2,185,000 | 1,208,000 | 2,185,000 | 2,304,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisition deferred consideration potential cash payment (undiscounted) | 1,000,000 | 344,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisition deferred consideration cash payment | $1,000,000 | $344,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount rate (in percent) | 5.20% | 5.10% | 23.50% | 23.50% |
GOODWILL_Details
GOODWILL (Details) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
LoopNet [Member] | United States [Member] | United States [Member] | International [Member] | International [Member] | |||
Goodwill [Line Items] | |||||||
Goodwill resulting from acquisition | $625,174 | ||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning balance | 718,078 | 91,784 | 692,639 | 67,465 | 25,439 | 24,319 | |
Acquisitions | 625,174 | 625,174 | 0 | ||||
Effect of foreign currency translation | -39 | 1,120 | 0 | 0 | -39 | 1,120 | |
Goodwill, ending balance | $718,039 | $718,078 | $692,639 | $692,639 | $25,400 | $25,439 |
INTANGIBLES_AND_OTHER_ASSETS_D
INTANGIBLES AND OTHER ASSETS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Apr. 30, 2012 | Apr. 30, 2012 |
In Thousands, unless otherwise specified | Capitalized Product Development Costs [Member] | Capitalized Product Development Costs [Member] | Building Photography [Member] | Building Photography [Member] | Acquired Database Technology [Member] | Acquired Database Technology [Member] | Acquired Customer Base [Member] | Acquired Customer Base [Member] | Acquired Trade Names and Other [Member] | Acquired Trade Names and Other [Member] | LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | ||
Acquired Database Technology [Member] | Acquired Customer Base [Member] | ||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||||||
Business acquisition, purchase price allocation, Intangible assets not amortizable | $48,700 | ||||||||||||||
Finite-lived intangible assets, gross | 2,140 | 2,140 | 13,566 | 12,474 | 77,325 | 77,328 | 130,662 | 130,683 | 59,249 | 59,255 | |||||
Finite-lived intangible assets, accumulated amortization | -1,981 | -1,838 | -11,830 | -11,639 | -38,284 | -29,673 | -70,968 | -59,218 | -9,079 | -8,880 | |||||
Finite-lived intangible assets, net | $150,800 | $170,632 | $159 | $302 | $1,736 | $835 | $39,041 | $47,655 | $59,694 | $71,465 | $50,170 | $50,375 | |||
Weighted-average amortization period (in years} | 4 years | 5 years | 5 years | 10 years | 7 years | 5 years | 10 years |
LONGTERM_DEBT_LONGTERM_DEBT_De
LONG-TERM DEBT LONG-TERM DEBT (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||
Feb. 16, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | Apr. 30, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | Feb. 16, 2012 | |
New Term Loan [Member] | New Term Loan [Member] | New Term Loan [Member] | New Term Loan [Member] | CoStar Group [Member] | CoStar Group [Member] | CoStar Group [Member] | CoStar Group [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | LIBOR [Member] | Federal Funds Rate [Member] | ||||||||
LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | LoopNet [Member] | CoStar Group [Member] | CoStar Group [Member] | ||||||||||||||||
Committed Term Loan [Member] | New Revolving Credit Facility [Member] | New Term Loan [Member] | New Term Loan [Member] | Swingline Loan [Member] | Letter of Credit [Member] | ||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Debt instrument borrowing capacity | $50,000,000 | $175,000,000 | |||||||||||||||||||
Term of loan (in years) | 5 years | 5 years | |||||||||||||||||||
Line of credit facility, amount outstanding | 0 | 0 | 0 | 175,000,000 | |||||||||||||||||
Revolving credit sub-facility for swing-line loans and issuances of letters of credit | 5,000,000 | 10,000,000 | |||||||||||||||||||
Annual amortization, first year after closing (in percent) | 5.00% | ||||||||||||||||||||
Annual amortization, second year after closing (in percent) | 10.00% | ||||||||||||||||||||
Annual amortization, third year after closing (in percent) | 15.00% | ||||||||||||||||||||
Annual amortization, fourth year after closing (in percent) | 20.00% | ||||||||||||||||||||
Annual amortization, fifth year after closing (in percent) | 50.00% | ||||||||||||||||||||
Basis spread on federal funds rate (in percent) | 2.00% | 0.50% | |||||||||||||||||||
LIBOR Maturity Period (in months) | 1 month | ||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate, One Month Interest Period (in percent) | 1.00% | ||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate, Per Annum (in percent) | 1.00% | ||||||||||||||||||||
Default interest rate per annum on overdue amounts (in percent) | 2.00% | ||||||||||||||||||||
Maximum debt service coverage ratio for two quarters after closing (in percent) | 150.00% | ||||||||||||||||||||
Maximum total leverage ratio for fifth through eighth quarters after closing date (in percent) | 275.00% | ||||||||||||||||||||
Maximum total leverage ratio after eight fiscal quarters (in percent) | 250.00% | ||||||||||||||||||||
Excess Cash Flow Payment Maturity Period Within Issuance of Financial Statements | 10 days | ||||||||||||||||||||
First Excess Cash Flow Repayment, Percentage (in percent) | 50.00% | ||||||||||||||||||||
First Excess Cash Flow Repayment Requirement (in percent) | 300.00% | ||||||||||||||||||||
Second Excess Cash Flow Repayment, Percentage (in percent) | 25.00% | ||||||||||||||||||||
Second Excess Cash Flow Repayment Requirement (in percent) | 250.00% | 300.00% | |||||||||||||||||||
Third Excess Cash Flow Repayment, Percentage (in percent) | 0.00% | ||||||||||||||||||||
Third Excess Cash Flow Repayment Requirement (in percent | 250.00% | ||||||||||||||||||||
Unamortized Debt Issuance Expense | 11,500,000 | ||||||||||||||||||||
Debt issuance underwriting fees | 9,200,000 | ||||||||||||||||||||
Legal fees associated with the debt issuance | 2,300,000 | ||||||||||||||||||||
Interest expense, debt | 1,736,000 | 1,822,000 | 5,249,000 | 3,000,000 | |||||||||||||||||
Amortization of debt issuance costs | 760,000 | 763,000 | 2,273,000 | 1,235,000 | |||||||||||||||||
Interest paid | $1,307,000 | $1,059,000 | $3,339,000 | $1,787,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (in percent) | 38.00% | 65.00% |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 1 Months Ended | 0 Months Ended | |||
31-May-11 | Sep. 30, 2013 | Jun. 30, 2011 | Feb. 16, 2012 | Feb. 16, 2012 | |
class_action_lawsuits | current_litigation_matters | New Term Loan [Member] | New Revolving Credit Facility [Member] | ||
CoStar Group [Member] | CoStar Group [Member] | ||||
LoopNet [Member] | LoopNet [Member] | ||||
Business Acquisition [Line Items] | |||||
Debt instrument borrowing capacity | $175,000,000 | $50,000,000 | |||
Term of loan (in years) | 5 years | 5 years | |||
Class action lawsuits brought by alleged LoopNet stockholders (in lawsuits) | 3 | ||||
Memorandum of understanding in which they agreed on the terms of a settlement of litigation | $200,000 | ||||
Number of minimum of current litigation matters (in claims) | 1 |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
operating_segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of business segments (in segments) | 2 | |||||
Summarized information by operating segment [Abstract] | ||||||
Revenues | $112,301,000 | $96,001,000 | $325,333,000 | $249,853,000 | ||
Property and equipment, net | 55,703,000 | 55,703,000 | 46,308,000 | |||
Goodwill | 718,039,000 | 718,039,000 | 718,078,000 | 91,784,000 | ||
Reconciliation of EBITDA to net income (loss) [Abstract] | ||||||
EBITDA | 29,792,000 | 19,641,000 | 62,692,000 | 39,734,000 | ||
Purchase amortization in cost of revenues | -2,954,000 | -3,027,000 | -9,007,000 | -5,607,000 | ||
Purchase amortization in operating expenses | -3,680,000 | -4,824,000 | -11,699,000 | -9,038,000 | ||
Depreciation and other amortization | -3,388,000 | -2,844,000 | -9,531,000 | -7,554,000 | ||
Interest income | 52,000 | 59,000 | 239,000 | 440,000 | ||
Interest expense | -1,736,000 | -1,822,000 | -5,249,000 | -3,022,000 | ||
Income tax expense, net | -7,034,000 | -404,000 | -10,510,000 | -9,752,000 | ||
Net income | 11,052,000 | 6,779,000 | 16,935,000 | 5,201,000 | ||
Reconciliation of operating segment assets to total assets [Abstract] | ||||||
Total operating segment assets | 1,327,742,000 | 1,327,742,000 | 1,256,882,000 | |||
Investment in subsidiaries | -18,344,000 | -18,344,000 | -18,344,000 | |||
Intersegment receivables | -79,024,000 | -79,024,000 | -73,399,000 | |||
Total assets | 1,230,374,000 | 1,230,374,000 | 1,165,139,000 | |||
Reconciliation of operating segment liabilities to total liabilities [Abstract] | ||||||
Total operating segment liabilities | 404,059,000 | 404,059,000 | 405,963,000 | |||
Intersegment payables | -73,004,000 | -73,004,000 | -67,167,000 | |||
Total liabilities | 331,055,000 | 331,055,000 | 338,796,000 | |||
United States [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
U.S. corporate allocation | 300,000 | 0 | 600,000 | 0 | ||
Summarized information by operating segment [Abstract] | ||||||
Revenues | 107,230,000 | 91,153,000 | 310,762,000 | 235,606,000 | ||
Property and equipment, net | 51,781,000 | 51,781,000 | 42,480,000 | |||
Goodwill | 692,639,000 | 692,639,000 | 692,639,000 | 67,465,000 | ||
Reconciliation of EBITDA to net income (loss) [Abstract] | ||||||
EBITDA | 30,855,000 | 22,688,000 | 66,609,000 | 46,302,000 | ||
Reconciliation of operating segment assets to total assets [Abstract] | ||||||
Total operating segment assets | 1,285,779,000 | 1,285,779,000 | 1,215,949,000 | |||
Reconciliation of operating segment liabilities to total liabilities [Abstract] | ||||||
Total operating segment liabilities | 326,850,000 | 326,850,000 | 335,855,000 | |||
International [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
International corporate allocation | 100,000 | 2,300,000 | 300,000 | 4,500,000 | ||
Summarized information by operating segment [Abstract] | ||||||
Revenues | 5,202,000 | 5,236,000 | 14,848,000 | 15,401,000 | ||
Property and equipment, net | 3,922,000 | 3,922,000 | 3,828,000 | |||
Goodwill | 25,400,000 | 25,400,000 | 25,439,000 | 24,319,000 | ||
Reconciliation of EBITDA to net income (loss) [Abstract] | ||||||
EBITDA | -1,063,000 | -3,047,000 | -3,917,000 | -6,568,000 | ||
Reconciliation of operating segment assets to total assets [Abstract] | ||||||
Total operating segment assets | 41,963,000 | 41,963,000 | 40,933,000 | |||
Reconciliation of operating segment liabilities to total liabilities [Abstract] | ||||||
Total operating segment liabilities | 77,209,000 | 77,209,000 | 70,108,000 | |||
External Customers [Member] | ||||||
Summarized information by operating segment [Abstract] | ||||||
Revenues | 5,071,000 | 4,848,000 | 14,571,000 | 14,247,000 | ||
Intersegment Revenue [Member] | ||||||
Summarized information by operating segment [Abstract] | ||||||
Revenues | 131,000 | 388,000 | 277,000 | 1,154,000 | ||
Intersegment Elimination [Member] | ||||||
Summarized information by operating segment [Abstract] | ||||||
Revenues | ($131,000) | ($388,000) | ($277,000) | ($1,154,000) |