Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 19, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Altisource Portfolio Solutions S.A. | ||
Entity Central Index Key | 1,462,418 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Smaller Reporting Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 16,303,345 | ||
Entity Treasury Stock (in shares) | 9,109,403 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 471,036,868 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 58,294 | $ 105,006 |
Investment in equity securities | 36,181 | 49,153 |
Accounts receivable, net | 36,466 | 52,740 |
Short-term investments in real estate (Note 9) | 39,873 | 29,405 |
Prepaid expenses and other current assets | 30,720 | 35,337 |
Total current assets | 201,534 | 271,641 |
Premises and equipment, net | 45,631 | 73,273 |
Goodwill | 81,387 | 86,283 |
Intangible assets, net | 91,653 | 120,065 |
Deferred tax assets, net (Note 22) | 309,089 | 303,707 |
Other assets | 12,406 | 10,195 |
Total assets | 741,700 | 865,164 |
Current liabilities: | ||
Accounts payable and accrued expenses | 87,240 | 84,400 |
Current portion of long-term debt | 0 | 5,945 |
Deferred revenue | 10,108 | 9,802 |
Other current liabilities | 7,030 | 9,414 |
Total current liabilities | 104,378 | 109,561 |
Long-term debt, less current portion | 331,476 | 403,336 |
Other non-current liabilities | 9,178 | 12,282 |
Commitments, contingencies and regulatory matters (Note 25) | ||
Equity: | ||
Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 16,276 outstanding as of December 31, 2018; 17,418 outstanding as of December 31, 2017) | 25,413 | 25,413 |
Additional paid-in capital | 122,667 | 112,475 |
Retained earnings | 590,655 | 626,600 |
Accumulated other comprehensive income | 0 | 733 |
Treasury stock, at cost (9,137 shares as of December 31, 2018 and 7,995 shares as of December 31, 2017) | (443,304) | (426,609) |
Altisource equity | 295,431 | 338,612 |
Non-controlling interests | 1,237 | 1,373 |
Total equity | 296,668 | 339,985 |
Total liabilities and equity | $ 741,700 | $ 865,164 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 25,413,000 | 25,413,000 |
Common stock, shares outstanding (in shares) | 16,276,000 | 17,418,000 |
Treasury stock, shares (in shares) | 9,137,000 | 7,995,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenue | $ 838,202 | $ 942,213 | $ 997,303 |
Cost of revenue | 622,165 | 699,865 | 690,045 |
Gross profit | 216,037 | 242,348 | 307,258 |
Selling, general and administrative expenses | 175,670 | 192,642 | 214,155 |
Gain on sale of business (Note 4) | (13,688) | 0 | 0 |
Restructuring charges (Note 24) | 11,560 | 0 | 0 |
Litigation settlement loss, net of $4,000 insurance recovery (Note 20) | 0 | 0 | 28,000 |
Income from operations | 42,495 | 49,706 | 65,103 |
Other income (expense), net: | |||
Interest expense | (26,254) | (22,253) | (24,412) |
Unrealized loss on investment in equity securities (Note 6) | (12,972) | 0 | 0 |
Other (expense) income, net | (1,870) | 7,922 | 3,630 |
Total other income (expense), net | (41,096) | (14,331) | (20,782) |
Income before income taxes and non-controlling interests | 1,399 | 35,375 | 44,321 |
Income tax (provision) benefit | (4,098) | 276,256 | (12,935) |
Net (loss) income | (2,699) | 311,631 | 31,386 |
Net income attributable to non-controlling interests | (2,683) | (2,740) | (2,693) |
Net (loss) income attributable to Altisource | $ (5,382) | $ 308,891 | $ 28,693 |
(Loss) Earnings per share: | |||
Basic (in dollars per share) | $ (0.32) | $ 16.99 | $ 1.53 |
Diluted (in dollars per share) | $ (0.32) | $ 16.53 | $ 1.46 |
Weighted average shares outstanding: | |||
Basic (in shares) | 17,073 | 18,183 | 18,696 |
Diluted (in shares) | 17,073 | 18,692 | 19,612 |
Other comprehensive (loss) income, net of tax: | |||
Reclassification of unrealized gain on investment in equity securities, net of income tax provision of $200, to retained earnings from the cumulative effect of an accounting change (Note 2) | $ (733) | $ 0 | $ 0 |
Unrealized gain (loss) on investment in equity securities, net of income tax (provision) benefit of $0, $(921), $720 | 0 | 2,478 | (1,745) |
Comprehensive (loss) income, net of tax | (3,432) | 314,109 | 29,641 |
Comprehensive income attributable to non-controlling interests | (2,683) | (2,740) | (2,693) |
Comprehensive (loss) income attributable to Altisource | $ (6,115) | $ 311,369 | $ 26,948 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Insurance recovery proceeds | $ 0 | $ 0 | $ 4,000 |
Reclassification of unrealized gain on investment in equity securities, income tax provision, to retained earnings from the cumulative effect of an accounting change (Note 2) | 200 | 0 | 0 |
Unrealized gain (loss) on investment in equity securities, income tax (provision) benefit | $ 0 | $ (921) | $ 720 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock, at cost | Non-controlling interests |
Balance at Dec. 31, 2015 | $ 52,270 | $ 25,413 | $ 96,321 | $ 369,270 | $ 0 | $ (440,026) | $ 1,292 |
Balance (in shares) at Dec. 31, 2015 | 25,413 | ||||||
Increase (Decrease) in Equity | |||||||
Net (loss) income | 31,386 | 28,693 | 2,693 | ||||
Other comprehensive income (loss), net of tax | (1,745) | (1,745) | |||||
Distributions to non-controlling interest holders | (2,580) | (2,580) | |||||
Share-based compensation expense | 6,188 | 6,188 | |||||
Excess tax benefit on stock-based compensation | 4,779 | 4,779 | |||||
Exercise of stock options and issuance of restricted shares | 9,558 | (64,177) | 73,735 | ||||
Repurchase of shares | (37,662) | (37,662) | |||||
Balance at Dec. 31, 2016 | 62,194 | $ 25,413 | 107,288 | 333,786 | (1,745) | (403,953) | 1,405 |
Balance (in shares) at Dec. 31, 2016 | 25,413 | ||||||
Increase (Decrease) in Equity | |||||||
Net (loss) income | 311,631 | 308,891 | 2,740 | ||||
Other comprehensive income (loss), net of tax | 2,478 | 2,478 | |||||
Distributions to non-controlling interest holders | (2,772) | (2,772) | |||||
Share-based compensation expense | 4,255 | 4,255 | |||||
Exercise of stock options and issuance of restricted shares | 2,374 | (13,491) | 15,865 | ||||
Treasury shares withheld for the payment of tax on restricted share issuances and stock option exercises | (1,164) | (1,654) | 490 | ||||
Repurchase of shares | (39,011) | (39,011) | |||||
Balance at Dec. 31, 2017 | 339,985 | $ 25,413 | 112,475 | 626,600 | 733 | (426,609) | 1,373 |
Balance (in shares) at Dec. 31, 2017 | 25,413 | ||||||
Increase (Decrease) in Equity | |||||||
Net (loss) income | (2,699) | (5,382) | 2,683 | ||||
Distributions to non-controlling interest holders | (2,819) | (2,819) | |||||
Share-based compensation expense | 10,192 | 10,192 | |||||
Exercise of stock options and issuance of restricted shares | 3,644 | (19,245) | 22,889 | ||||
Treasury shares withheld for the payment of tax on restricted share issuances and stock option exercises | (825) | (1,603) | 778 | ||||
Repurchase of shares | (40,362) | (40,362) | |||||
Balance at Dec. 31, 2018 | $ 296,668 | $ 25,413 | $ 122,667 | $ 590,655 | $ 0 | $ (443,304) | $ 1,237 |
Balance (in shares) at Dec. 31, 2018 | 25,413 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (2,699) | $ 311,631 | $ 31,386 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 30,799 | 36,447 | 36,788 |
Amortization of intangible assets | 28,412 | 35,367 | 47,576 |
Unrealized loss on investment in equity securities | 12,972 | 0 | 0 |
Change in the fair value of acquisition related contingent consideration | 0 | 24 | (3,555) |
Goodwill write-off from business exit (Note 11) | 2,640 | 0 | 0 |
Share-based compensation expense | 10,192 | 4,255 | 6,188 |
Bad debt expense | 2,830 | 5,116 | 1,829 |
Gain on early extinguishment of debt | 0 | (5,637) | (5,464) |
Amortization of debt discount | 717 | 301 | 413 |
Amortization of debt issuance costs | 965 | 833 | 1,141 |
Deferred income taxes | (5,791) | (297,336) | (2,597) |
Loss on disposal of fixed assets | 727 | 2,768 | 1,765 |
Gain on sale of business (Note 4) | (13,688) | 0 | 0 |
Loss on debt refinancing (Note 14) | 4,434 | 0 | 0 |
Changes in operating assets and liabilities, net of effect of acquisition: | |||
Accounts receivable | 14,556 | 29,965 | 15,980 |
Short-term investments in real estate | (10,468) | (16,380) | (13,025) |
Prepaid expenses and other current assets | 4,617 | (5,754) | (7,856) |
Other assets | 2,278 | 770 | 1,053 |
Accounts payable and accrued expenses | 1,651 | 2,576 | (9,113) |
Other current and non-current liabilities | (16,742) | (38,864) | 24,309 |
Net cash provided by operating activities | 68,402 | 66,082 | 126,818 |
Cash flows from investing activities: | |||
Additions to premises and equipment | (3,916) | (10,514) | (23,269) |
Acquisition of business, net of cash acquired | 0 | 0 | (9,409) |
Proceeds from the sale of business (Note 4) | 15,000 | 0 | 0 |
Purchase of investment in equity securities | 0 | 0 | (48,219) |
Other investing activities | 0 | 188 | 0 |
Net cash provided by (used in) investing activities | 11,084 | (10,326) | (80,897) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 407,880 | 0 | 0 |
Repayments and repurchases of long-term debt | (486,759) | (59,761) | (50,723) |
Debt issuance costs | (5,042) | 0 | 0 |
Proceeds from stock option exercises | 3,644 | 2,374 | 9,558 |
Excess tax benefit on stock-based compensation | 0 | 0 | 4,779 |
Purchase of treasury shares | (40,362) | (39,011) | (37,662) |
Distributions to non-controlling interests | (2,819) | (2,772) | (2,580) |
Payment of tax withholding on issuance of restricted shares and stock option exercises | (825) | (1,164) | 0 |
Net cash used in financing activities | (124,283) | (100,334) | (76,628) |
Net decrease in cash, cash equivalents and restricted cash | (44,797) | (44,578) | (30,707) |
Cash, cash equivalents and restricted cash at the beginning of the period | 108,843 | 153,421 | 184,128 |
Cash, cash equivalents and restricted cash at the end of the period | 64,046 | 108,843 | 153,421 |
Supplemental cash flow information: | |||
Interest paid | 24,123 | 21,210 | 22,717 |
Income taxes paid, net | 7,136 | 18,332 | 18,327 |
Non-cash investing and financing activities: | |||
(Decrease) increase in payables for purchases of premises and equipment | $ (32) | $ (1,311) | $ 404 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Description of Business Altisource Portfolio Solutions S.A., together with its subsidiaries (which may be referred to as “Altisource,” the “Company,” “we,” “us” or “our”), is an integrated service provider and marketplace for the real estate and mortgage industries. Combining operational excellence with a suite of innovative services and technologies, Altisource helps solve the demands of the ever-changing markets we serve. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Presentation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany transactions and accounts have been eliminated in consolidation. Principles of Consolidation The financial statements include the accounts of the Company, its wholly-owned subsidiaries and those entities in which we have a variable interest and are the primary beneficiary. Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One ® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option). The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests. As of December 31, 2018 , Lenders One had total assets of $2.7 million and total liabilities of $1.3 million . As of December 31, 2017 , Lenders One had total assets of $4.6 million and total liabilities of $3.1 million . Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining share-based compensation, income taxes, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives and valuation of fixed assets and contingencies. Actual results could differ materially from those estimates. Cash and Cash Equivalents We classify all highly liquid instruments with an original maturity of three months or less at the time of purchase as cash equivalents. Accounts Receivable, Net Accounts receivable are presented net of an allowance for doubtful accounts that represents an amount that we estimate to be uncollectible. We have estimated the allowance for doubtful accounts based on our historical write-offs, our analysis of past due accounts based on the contractual terms of the receivables and our assessment of the economic status of our customers, if known. The carrying value of accounts receivable, net, approximates fair value. Premises and Equipment, Net We report premises and equipment, net at cost or estimated fair value at acquisition for premises and equipment recorded in connection with a business combination and depreciate these assets over their estimated useful lives using the straight-line method as follows: Furniture and fixtures 5 years Office equipment 5 years Computer hardware 5 years Computer software 3-7 years Leasehold improvements Shorter of useful life, 10 years or the term of the lease Maintenance and repair costs are expensed as incurred. We capitalize expenditures for significant improvements and new equipment and depreciate the assets over the shorter of the capitalized asset’s life or the life of the lease. We review premises and equipment for impairment following events or changes in circumstances that indicate the carrying amount of an asset or asset group may not be recoverable. We measure recoverability of assets to be held and used by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, we recognize an impairment charge for the amount that the carrying value of the asset or asset group exceeds the fair value of the asset or asset group. Computer software includes the fair value of software acquired in business combinations, capitalized software development costs and purchased software. Capitalized software development and purchased software are recorded at cost and amortized using the straight-line method over their estimated useful lives. Software acquired in business combinations is recorded at fair value and amortized using the straight-line method over its estimated useful life. Business Combinations We account for acquisitions using the purchase method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using their fair value as of the acquisition date. Goodwill Goodwill represents the excess cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative two-step goodwill impairment test. Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will we calculate the fair value of the reporting unit. We would then test goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows and market comparisons. The discounted cash flow method is based on the present value of projected cash flows. Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions. Certain estimates of discounted cash flows involve businesses with limited financial history and developing revenue models. The estimated cash flows are discounted using a rate that represents our weighted average cost of capital. The market comparisons include an analysis of revenue and earnings multiples of guideline public companies compared to the Company. Intangible Assets, Net Identified intangible assets consist primarily of customer related intangible assets, operating agreements, trademarks and trade names and other intangible assets. Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors. We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 4 to 20 years. We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable. When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets generally consistent with models utilized for internal planning purposes. If the sum of the undiscounted expected future cash flows is less than the carrying value, we recognize an impairment to the extent the carrying amount exceeds fair value. Long-Term Debt Long-term debt is reported net of applicable discount or premium and net of debt issuance costs. The debt discount or premium and debt issuance costs are amortized to interest expense through maturity of the related debt using the effective interest method. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: Level 1 — Quoted prices in active markets for identical assets and liabilities Level 2 — Observable inputs other than quoted prices included in Level 1 Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. Functional Currency The currency of the primary economic environment in which our operations are conducted is the United States dollar. Therefore, the United States dollar has been determined to be our functional and reporting currency. Non-United States dollar transactions and balances have been measured in United States dollars in accordance with ASC Topic 830, Foreign Currency Matters . All transaction gains and losses from the measurement of monetary balance sheet items denominated in non-United States dollar currencies are reflected in the consolidated statements of operations and comprehensive income (loss) as income or expenses, as appropriate. Defined Contribution 401(k) Plan Some of our employees currently participate in a defined contribution 401(k) plan under which we may make matching contributions equal to a discretionary percentage determined by us. We recorded expenses of $1.2 million in each of the three years in the period ended December 31, 2018 , related to our discretionary contributions. Revenue Recognition We recognize revenue when we satisfy a performance obligation by transferring control of a product or service to a customer in an amount that reflects the consideration that we expect to receive. This revenue can be recognized at a point in time or over time. We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenues are recognized. When there is a timing difference between when we invoice customers and when revenues are recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred revenue or other current liabilities), as appropriate. A description of our principal revenue generating activities by reportable segment are as follows: Mortgage Market • For the majority of the services we provide through the Mortgage Market segment, we recognize transactional revenue when the service is provided. • For loan servicing technologies, we recognize revenue based on the number of loans on the system, on a per-transaction basis or over the estimated average number of months the loans and real estate owned (“REO”) are on the platform, as applicable. We generally recognize revenue for professional services relating to loan servicing technologies over the contract period. For our loan origination system, we generally recognize revenue over the contract term, beginning on the commencement date of each contract. For foreclosure trustee services, we recognize revenue over the period during which we perform the related services, with full recognition upon completion and/or recording the related foreclosure deed. For loan disbursement processing services, we recognize revenue over the period during which we perform the processing services with full recognition upon completion of the disbursements. We use judgment to determine the period over which we recognize revenue for certain of these services. For mortgage charge-off collections performed on behalf of our clients, we recognize revenue as a percentage of amounts collected following collection from the borrowers. • For real estate brokerage and auction services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount. • Reimbursable expenses revenue, primarily related to our property preservation and inspection services, real estate sales and our foreclosure trustee services businesses, is included in revenue with an equal amount recognized in cost of revenue. These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers. Real Estate Market • For the majority of the services we provide through the Real Estate Market segment, we recognize transactional revenue when the service is provided. • For renovation services, revenue is recognized over the period of the construction activity, based on the estimated percentage of completion of each project. We use judgment to determine the period over which we recognize revenue for certain of these services. For real estate brokerage and auction services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount. For the buy-renovate-lease-sell business, we recognize revenue associated with our sales of short-term investments in real estate on a gross basis (i.e., the selling price of the property) as we assume the risks and rewards of ownership of the asset. • Reimbursable expenses revenue, primarily related to our real estate sales business, is included in revenue with an equal offsetting expense recognized in cost of revenue. These amounts are recognized on a gross basis, principally because we generally have control over selection of vendors and the vendor relationships are with us, rather than with our customers. Other Businesses, Corporate and Eliminations • For the majority of the services we provide through Other Businesses, Corporate and Eliminations, we recognize transactional revenue when the service is provided. We generally earn fees for our post-charge-off consumer debt collection services as a percentage of the amount we collect on delinquent consumer receivables and recognize revenue following collection from the borrowers. We provide customer relationship management services for which we typically earn and recognize revenue on a per-person, per-call or per-minute basis as the related services are performed. • For the information technology (“IT”) infrastructure services we provide to Ocwen Financial Corporation (“Ocwen”), Front Yard Residential Corporation (“RESI”) and Altisource Asset Management Corporation (“AAMC”), we recognize revenue primarily based on the number of users of the applicable systems, fixed fees and the number and type of licensed platforms. We recognize revenue associated with implementation services upon completion and maintenance services ratably over the related service period. Share-Based Compensation Share-based compensation is accounted for under the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC Topic 718”). Under ASC Topic 718, the cost of services received in exchange for an award of equity instruments is generally measured based on the grant date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based awards that require future service are recognized over the relevant service period. In 2017, the Company adopted FASB Accounting Standards Update (“ASU”) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). In connection with adopting ASU 2016-09, the Company made an accounting policy election to account for forfeitures in compensation expense as they occur. Prior to adopting ASU No. 2016-09, the Company estimated forfeitures for share-based awards in compensation expense that were not expected to vest. Income Taxes We record income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). We account for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our results of operations. Earnings Per Share We compute earnings per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share . Basic net income per share is computed by dividing net income attributable to Altisource by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities using the treasury stock method. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and during 2016, the FASB issued additional guidance providing clarifications and corrections, including: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (collectively “Topic 606”) . Topic 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most prior revenue recognition guidance. This new standard requires that an entity recognize revenue for the transfer of promised goods or services to a customer in an amount that reflects the consideration that the entity expects to receive and consistent with the delivery of the performance obligation described in the underlying contract with the customer. The Company adopted Topic 606 effective January 1, 2018 retrospectively with the cumulative effect recognized on the date of initial application (the modified retrospective approach) for all contracts. As a result of this adoption, the Company recognized an $11.2 million increase in deferred revenue, a $1.1 million increase in unbilled accounts receivable, a $0.3 million increase in other current liabilities and a $10.4 million decrease in retained earnings as of January 1, 2018. Because the Company adopted Topic 606 retrospectively with a cumulative effect as of January 1, 2018, the comparative results as of and for the year ended December 31, 2017 have not been restated and continue to be reported under ASC Topic 605, Revenue Recognition and SEC Staff Accounting Bulletin Topic 13, Revenue Recognition . The details of the significant changes and quantitative impact of the adoption of Topic 606 are described below. Also see Revenue Recognition above and Note 18 for additional information on revenue, including disaggregation of revenue and contract balances. The following table summarizes the impact of adopting Topic 606 on the Company’s consolidated balance sheet as of December 31, 2018 : Impact of the adoption of Topic 606 (in thousands) As reported Adjustments Balances without adoption of Topic 606 Accounts receivable, net $ 36,466 $ (455 ) $ 36,011 Total current assets 201,534 (455 ) 201,079 Total assets 741,700 (455 ) 741,245 Deferred revenue 10,108 (1,511 ) 8,597 Other current liabilities 7,030 (3,490 ) 3,540 Total current liabilities 104,378 (5,001 ) 99,377 Other non-current liabilities 9,178 269 9,446 Retained earnings 590,655 4,277 594,932 Altisource equity 295,431 4,277 299,708 Total equity 296,668 4,277 300,945 Total liabilities and equity 741,700 (455 ) 741,245 The following table summarizes the impact of adopting Topic 606 on the Company’s consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2018 : Impact of the adoption of Topic 606 (in thousands) As reported Adjustments Balances without adoption of Topic 606 Revenue $ 838,202 $ (6,692 ) $ 831,510 Cost of revenue 622,165 2,116 624,281 Gross profit 216,037 (8,808 ) 207,229 Income from operations 42,495 (8,808 ) 33,687 Income (loss) before income taxes and non-controlling interests 1,399 (8,808 ) (7,409 ) Income tax (provision) benefit (4,098 ) 2,637 (1,461 ) Net loss (2,699 ) (6,171 ) (8,870 ) Net loss attributable to Altisource (5,382 ) (6,171 ) (11,553 ) The adoption of Topic 606 did not have any impact on net cash flows used in operating, financing or investing activities on the Company’s consolidated statement of cash flows for the year ended December 31, 2018 . In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This standard requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The standard also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. It also amends certain financial statement presentation and disclosure requirements associated with the fair value of financial instruments. This standard was effective for the Company on January 1, 2018. The adoption of this standard resulted in a cumulative effect adjustment to increase retained earnings and decrease accumulated other comprehensive income by $0.7 million on January 1, 2018. Changes in the fair value of the Company’s investment in RESI subsequent to January 1, 2018, as well as any equity investments acquired in the future, are reflected as a component of net income in the Company’s consolidated statements of operations and comprehensive income (loss). In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s consolidated statement of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This standard requires that companies recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs. Previous guidance prohibited companies from recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This standard requires that companies include restricted cash and restricted cash equivalents in their cash and cash equivalent balances in the statement of cash flows. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard was effective for the Company on January 1, 2018, and was adopted using the retrospective transition method, as required by the standard. The adoption of this standard resulted in the classification of the Company’s restricted cash with cash and cash equivalents reflected in the Company’s consolidated statements of cash flows. As a result, the Company included $ 5.8 million , $3.8 million and $4.1 million of restricted cash with cash and cash equivalents in its consolidated statements of cash flows as of December 31, 2018 , 2017 and 2016 , respectively. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This standard clarifies the definition of a business and provides a screen to determine if a set of inputs, processes and outputs is a business. The standard specifies that when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the assets acquired would not be a business. Under the new guidance, in order to be considered a business, an acquisition must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. In addition, the standard narrows the definition of the term “output” so that it is consistent with how it is described in Topic 606 . This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets . This standard was issued to clarify the scope of Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets , and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20 provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. In May 2017, the FASB issued ASU No. 2017-09, C ompensation—Stock Compensation (Topic 718): Scope of Modification Accounting . This standard provides guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting. This standard requires companies to continue to apply modification accounting, unless the fair value, vesting conditions and classification of an award all do not change as a result of the modification. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. Future Adoption of New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and in July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (collectively “Topic 842”). Topic 842 introduces a new lessee model that brings substantially all leases on the balance sheet. This standard will require lessees to recognize lease assets and lease liabilities on their balance sheets and disclose key information about leasing arrangements in their financial statements. This standard will be effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period. Based on the Company’s analysis of arrangements where the Company is a lessee, we estimate that the new standard will result in the addition of approximately $42.4 million right-of-use assets and lease liabilities onto the Company’s consolidated balance sheet. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step 2 by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. This standard will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period, and will be applied prospectively. Early adoption of this standard is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements; however, adoption of this standard as of December 31, 2018 would not have had any impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts . This standard requires at a minimum the annual review of th |
CUSTOMER CONCENTRATION
CUSTOMER CONCENTRATION | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER CONCENTRATION | CUSTOMER CONCENTRATION Ocwen Ocwen is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of MSRs owned by others. During the year ended December 31, 2018 , Ocwen was our largest customer, accounting for 52% of our total revenue. Ocwen purchases certain mortgage services and technology services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2025. Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things. Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements. For the years ended December 31, 2018 , 2017 and 2016 , we recognized revenue from Ocwen of $437.4 million , $542.0 million and $561.9 million , respectively. Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows for the years ended December 31 : 2018 2017 2016 Mortgage Market 63 % 67 % 65 % Real Estate Market 1 % 1 % — % Other Businesses, Corporate and Eliminations 9 % 11 % 27 % Consolidated revenue 52 % 58 % 56 % We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSR owner selects Altisource as the service provider. For the years ended December 31, 2018 , 2017 and 2016 , we recognized revenue of $47.1 million , $148.5 million and $188.0 million , respectively, related to the portfolios serviced by Ocwen when a party other than Ocwen or the MSR owner selected Altisource as the service provider. These amounts are not included in deriving revenue from Ocwen as a percentage of revenue in the table above. As of December 31, 2018, accounts receivable from Ocwen totaled $15.2 million , $11.6 million of which was billed and $3.6 million of which was unbilled. As of December 31, 2017 , accounts receivable from Ocwen totaled $18.9 million , $13.6 million of which was billed and $5.3 million of which was unbilled. As of February 22, 2019, Altisource and Ocwen entered into agreements that, among other things, facilitate Ocwen’s transition from REALServicing and related technologies to another mortgage servicing software platform, establish a process for Ocwen to review and approve the assignment of one or more of our agreements to potential buyers of Altisource’s business lines, permit Ocwen to use service providers other than Altisource for up to 10% of referrals from certain portfolios (determined on a service-by-service basis), subject to certain restrictions, and affirms Altisource’s role as a strategic service provider to Ocwen through August 2025. We do not anticipate that a servicing technology transition would materially impact the other services we provide to Ocwen. For the years ended December 31, 2018 , 2017 and 2016 , service revenue from REALServicing and related technologies was $35.1 million , $37.2 million and $40.2 million , respectively. NRZ New Residential Investment Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “NRZ”) is a residential investment trust that invests in and manages residential mortgage related assets in the United States including MSRs and excess MSRs. Ocwen has disclosed that NRZ is its largest client. As of September 30, 2018, NRZ owned MSRs or rights to MSRs relating to approximately 57% of loans serviced and subserviced by Ocwen (measured in unpaid principal balances (“UPB”)) (the “Subject MSRs”). In July 2017 and January 2018, Ocwen and NRZ entered into a series of agreements pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to the Subject MSRs and under which Ocwen will subservice mortgage loans underlying the Subject MSRs for an initial term of five years. On August 28, 2017, Altisource, through its licensed subsidiaries, entered into a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with NRZ which extends through August 2025. Under this agreement and related amendments, Altisource remains the exclusive provider of brokerage services for REO associated with the Subject MSRs, irrespective of the subservicer, subject to certain limitations. NRZ’s brokerage subsidiary receives a cooperative brokerage commission on the sale of certain REO properties from these portfolios subject to certain exceptions. The Brokerage Agreement can, at Altisource’s discretion, be terminated by Altisource if a services agreement is not signed by Altisource and NRZ. The Brokerage Agreement may otherwise only be terminated upon the occurrence of certain specified events. Termination events include, but are not limited to, a breach of the terms of the Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), the failure to maintain licenses which failure materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against NRZ, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control. For the years ended December 31, 2018 and 2017 , we recognized revenue from NRZ of $28.7 million and $2.4 million , respectively, under the Brokerage Agreement (no comparative amount in 2016). For the years ended December 31, 2018 and 2017 , we recognized additional revenue of $83.6 million and $3.9 million , respectively, relating to the Subject MSRs when a party other than NRZ selects Altisource as the service provider (no comparative amount in 2016). On August 28, 2017, Altisource and NRZ also entered into a non-binding Letter of Intent, as amended, to enter into a services agreement (the “Services LOI”), setting forth the terms pursuant to which Altisource would remain the exclusive service provider of fee-based services for the Subject MSRs, irrespective of the subservicer, through August 2025. The Services LOI expired on December 15, 2018. Altisource is providing services on the Subject MSRs pursuant to its agreements with Ocwen. |
SALE OF BUSINESS
SALE OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF BUSINESS | SALE OF BUSINESS In August 2018, Altisource entered into an amendment to its agreements with RESI to sell Altisource’s rental property management business to RESI and permit RESI to internalize certain services that had been provided by Altisource. These services were historically provided under an agreement between RESI and Altisource, in which Altisource was the sole provider of rental property management services to RESI through December 2027, subject to certain exceptions. The proceeds from the transaction totaled $18.0 million , payable in two installments. The first installment of $15.0 million was received on the closing date of August 8, 2018. The second installment of $3.0 million will be received on the earlier of a RESI change of control or on August 8, 2023. The second installment was recorded as a long-term receivable with a discounted value of $2.2 million as of December 31, 2018 in Other Assets in the consolidated balance sheets. In connection with the sale of the rental property management business, the Company recognized a pretax gain of $13.7 million for the year ended December 31, 2018 in the accompanying consolidated statements of operations and comprehensive income (loss). DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS On November 26, 2018, the Company announced its plans to sell its short-term investments in real estate (“BRS Inventory”) and discontinue the Company’s Buy-Renovate-Lease-Sell (“BRS”) business. Altisource’s BRS business is a component of the Real Estate Investor Solutions business and focuses on buying, renovating, leasing and selling single-family homes to real estate investors. The BRS business is not material in relation to the Company’s results of operations or financial position. In anticipation of receiving the majority of the proceeds from the sale of the BRS Inventory over the fourth quarter of 2018 and the first half of 2019, the Company repaid $49.9 million of its debt in the fourth quarter of 2018. |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITION | ACQUISITION Granite Acquisition On July 29, 2016, we acquired certain assets and assumed certain liabilities of Granite Loan Management of Delaware, LLC (“Granite”) for $9.5 million in cash. Granite provides residential and commercial loan disbursement processing, risk mitigation and construction inspection services to lenders. The Granite acquisition is not material in relation to the Company’s results of operations or financial position. The final allocation of the purchase price is as follows: (in thousands) Accounts receivable, net $ 1,024 Prepaid expenses 22 Other assets 25 Premises and equipment, net 299 Non-compete agreements 100 Trademarks and trade names 100 Customer relationships 3,400 Goodwill 4,827 9,797 Accounts payable and accrued expenses (57 ) Other current liabilities (192 ) Purchase price $ 9,548 |
INVESTMENT IN EQUITY SECURITIES
INVESTMENT IN EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT IN EQUITY SECURITIES | INVESTMENT IN EQUITY SECURITIES During the year ended December 31, 2016 , we purchased 4.1 million shares of RESI common stock for $48.2 million . This investment is reflected in the consolidated balance sheets at fair value of $36.2 million and $49.2 million as of December 31, 2018 and 2017 , respectively. During the year ended December 31, 2018 , we recognized an unrealized loss of $13.0 million (no comparative amounts in 2017 and 2016) on our investment in RESI in other income (expense), net in the consolidated statements of operations and comprehensive income (loss) as a result of a change in the market value of RESI common shares. During the years ended December 31, 2017 and 2016, an unrealized gain (loss) on our investment in RESI of $2.5 million and $(1.7) million , respectively, net of income tax (provision) benefit, was reflected in other comprehensive income in the consolidated statements of operations and comprehensive income (loss) (see Note 2 for additional information on the adoption of the new accounting standard on investments in equity securities). During the years ended December 31, 2018 , 2017 and 2016 , we earned dividends of $2.5 million , $2.5 million and $2.3 million , respectively, related to this investment. In addition, during the year ended December 31, 2016 , we incurred expenses of $3.4 million related to this investment ( no comparative amounts in 2018 and 2017 ). Pursuant to the agreement between Altisource and RESI to sell the rental property management business to RESI (see Note 4 for additional information), Altisource is subject to a lock-up period with respect to the sale or transfer of the shares of common stock of RESI owned by Altisource (the “Shares”). During the period between the closing date of the sale and December 31, 2018 , Altisource was restricted from selling any of the Shares. During each quarter of 2019, Altisource is permitted to transfer no more than 25% of the Shares (approximately 1.0 million shares as of December 31, 2018 ), provided that any Shares not sold in the applicable quarter will increase the amount that may be sold in the subsequent quarters by 50% of the unsold permitted amount. Thereafter, all transfer restrictions will expire and any remaining Shares will be freely transferable. Notwithstanding these restrictions, Altisource retains the right to sell or transfer the Shares at any time: (i) where Altisource has a good faith belief that its or its affiliates’ liquidity should be increased and the sale is necessary to achieve such an increase; (ii) where the proceeds of sales will be used to finance a strategic acquisition transaction; (iii) in privately negotiated block transactions with unrelated third parties or a similar transaction; or (iv) where RESI is the subject of a tender offer that is reasonably likely to result in a change of control or where RESI undergoes a change of control. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | ACCOUNTS RECEIVABLE, NET Accounts receivable, net consists of the following as of December 31: (in thousands) 2018 2017 Billed $ 35,590 $ 40,787 Unbilled 11,759 22,532 47,349 63,319 Less: Allowance for doubtful accounts (10,883 ) (10,579 ) Total $ 36,466 $ 52,740 Unbilled accounts receivable consist primarily of certain real estate asset management, REO sales, title and closing services for which we generally recognize revenue when the service is provided but collect upon closing of the sale, and foreclosure trustee services, for which we generally recognize revenues over the service delivery period but bill following completion of the service. We also include amounts in unbilled accounts receivable that are earned during a month and billed in the following month. Bad debt expense amounted to $2.8 million , $5.1 million and $1.8 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, and is included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following as of December 31 : (in thousands) 2018 2017 Maintenance agreements, current portion $ 5,600 $ 8,014 Income taxes receivable 7,940 9,227 Prepaid expenses 7,484 7,898 Other current assets 9,696 10,198 Total $ 30,720 $ 35,337 |
DISCONTINUATION OF THE BUY-RENO
DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS | SALE OF BUSINESS In August 2018, Altisource entered into an amendment to its agreements with RESI to sell Altisource’s rental property management business to RESI and permit RESI to internalize certain services that had been provided by Altisource. These services were historically provided under an agreement between RESI and Altisource, in which Altisource was the sole provider of rental property management services to RESI through December 2027, subject to certain exceptions. The proceeds from the transaction totaled $18.0 million , payable in two installments. The first installment of $15.0 million was received on the closing date of August 8, 2018. The second installment of $3.0 million will be received on the earlier of a RESI change of control or on August 8, 2023. The second installment was recorded as a long-term receivable with a discounted value of $2.2 million as of December 31, 2018 in Other Assets in the consolidated balance sheets. In connection with the sale of the rental property management business, the Company recognized a pretax gain of $13.7 million for the year ended December 31, 2018 in the accompanying consolidated statements of operations and comprehensive income (loss). DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS On November 26, 2018, the Company announced its plans to sell its short-term investments in real estate (“BRS Inventory”) and discontinue the Company’s Buy-Renovate-Lease-Sell (“BRS”) business. Altisource’s BRS business is a component of the Real Estate Investor Solutions business and focuses on buying, renovating, leasing and selling single-family homes to real estate investors. The BRS business is not material in relation to the Company’s results of operations or financial position. In anticipation of receiving the majority of the proceeds from the sale of the BRS Inventory over the fourth quarter of 2018 and the first half of 2019, the Company repaid $49.9 million of its debt in the fourth quarter of 2018. |
PREMISES AND EQUIPMENT, NET
PREMISES AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT, NET | PREMISES AND EQUIPMENT, NET Premises and equipment, net consists of the following as of December 31 : (in thousands) 2018 2017 Computer hardware and software $ 182,215 $ 179,567 Office equipment and other 7,384 9,388 Furniture and fixtures 13,313 14,092 Leasehold improvements 29,781 33,417 232,693 236,464 Less: Accumulated depreciation and amortization (187,062 ) (163,191 ) Total $ 45,631 $ 73,273 Depreciation and amortization expense amounted to $30.8 million , $36.4 million and $36.8 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the consolidated statements of operations and comprehensive income (loss). |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Goodwill was recorded in connection with the 2016 acquisition of Granite, the 2015 acquisitions of CastleLine Holdings, LLC and its subsidiaries, GoldenGator, LLC, REIsmart, LLC and Onit Solutions, LLC, the 2014 acquisition of certain assets and assumption of certain liabilities of Owners Advantage, LLC (“Owners”), the 2013 acquisition of the Homeward Residential, Inc. fee-based business, the 2011 acquisitions of Springhouse, LLC and Tracmail and the 2010 acquisition of MPA. See Note 5 for additional information on the 2016 acquisition (there were no acquisitions in 2018 or 2017). Changes in goodwill during the years ended December 31, 2018 and 2017 are summarized below: (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Total Balance as of January 1 and December 31, 2017 $ 73,259 $ 10,056 $ 2,968 $ 86,283 Disposition — (2,256 ) — (2,256 ) Write-off — (2,640 ) — (2,640 ) Balance as of December 31, 2018 $ 73,259 $ 5,160 $ 2,968 $ 81,387 During 2018, goodwill was reduced by $2.3 million in connection with the sale of the rental property management business to RESI (see Note 4 ). Also during 2018, we recorded a $2.6 million write-off of goodwill attributable to the BRS business, as a result of our decision to discontinue the BRS business in the fourth quarter of 2018 (see Note 9 ). Intangible Assets, Net Intangible assets, net consist of the following as of December 31 : Weighted average estimated useful life (in years) Gross carrying amount Accumulated amortization Net book value (in thousands) 2018 2017 2018 2017 2018 2017 Definite lived intangible assets: Trademarks and trade names 15 $ 11,349 $ 15,354 $ (6,244 ) $ (8,881 ) $ 5,105 $ 6,473 Customer related intangible assets 10 273,172 277,828 (207,639 ) (188,258 ) 65,533 89,570 Operating agreement 20 35,000 35,000 (15,632 ) (13,865 ) 19,368 21,135 Non-compete agreements 4 1,230 1,560 (1,026 ) (897 ) 204 663 Intellectual property 10 300 300 (145 ) (115 ) 155 185 Other intangible assets 5 3,745 3,745 (2,457 ) (1,706 ) 1,288 2,039 Total $ 324,796 $ 333,787 $ (233,143 ) $ (213,722 ) $ 91,653 $ 120,065 Amortization expense for definite lived intangible assets was $28.4 million , $35.4 million and $47.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively . Expected annual definite lived intangible asset amortization expense for 2019 through 2023 is $20.4 million , $17.7 million , $11.6 million , $7.3 million and $6.3 million , respectively. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other assets consist of the following as of December 31 : (in thousands) 2018 2017 Security deposits $ 3,972 $ 5,304 Restricted cash 5,752 3,837 Other 2,682 1,054 Total $ 12,406 $ 10,195 |
ACCOUNTS PAYABLE, ACCRUED EXPEN
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and accrued expenses consist of the following as of December 31 : (in thousands) 2018 2017 Accounts payable $ 27,853 $ 15,682 Accrued salaries and benefits 31,356 41,363 Accrued expenses - general 27,866 27,268 Income taxes payable 165 87 Total $ 87,240 $ 84,400 Other current liabilities consist of the following as of December 31 : (in thousands) 2018 2017 Unfunded cash account balances $ 4,932 $ 5,900 Other 2,098 3,514 Total $ 7,030 $ 9,414 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consists of the following as of December 31 : (in thousands) 2018 2017 Senior secured term loans $ 338,822 $ 413,581 Less: Debt issuance costs, net (3,855 ) (3,158 ) Less: Unamortized discount, net (3,491 ) (1,142 ) Net long-term debt 331,476 409,281 Less: Current portion — (5,945 ) Long-term debt, less current portion $ 331,476 $ 403,336 On April 3, 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l. entered into a credit agreement (the “Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders. Under the Credit Agreement, Altisource borrowed $412.0 million in the form of Term B Loans and obtained a $15.0 million revolving credit facility. The Term B Loans mature in April 2024 and the revolving credit facility matures in April 2023. Altisource Portfolio Solutions S.A. and certain subsidiaries are guarantors of the term loan and the revolving credit facility (collectively, the “Guarantors”). Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan, which had an outstanding balance of $412.1 million as of April 3, 2018. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of unamortized debt issuance costs and debt discount in the second quarter of 2018. This loss was included in other income (expense), net in the consolidated statements of operations and comprehensive income (loss). The Term B Loans must be repaid in consecutive quarterly principal installments with remaining amounts due of $18.5 million in 2020 and $12.4 million annually thereafter, with the balance due at maturity. During 2018, the Company used the proceeds received from the sale of the rental property management business to RESI (see Note 4 ) to repay $15.0 million of the Term B Loans. In addition, the Company repaid $49.9 million of the Term B Loans in the fourth quarter of 2018 from proceeds from the sale certain of the BRS Inventory received during December 2018 and in anticipation of receiving additional proceeds during the first half of 2019 (see Note 9 ). These repayments were applied to contractual amortization payments in the direct order of maturity. All amounts outstanding under the Term B Loans will become due on the earlier of (i) April 3, 2024, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Credit Agreement; other capitalized terms, unless defined herein, are defined in the Credit Agreement) or as otherwise provided in the Credit Agreement upon the occurrence of any event of default. In addition to the scheduled principal payments, subject to certain exceptions, the Term B Loans are subject to mandatory prepayment upon issuances of debt, casualty and condemnation events and sales of assets, as well as from a percentage of Consolidated Excess Cash Flow if the leverage ratio is greater than 3.00 to 1.00 , as calculated in accordance with the provisions of the Credit Agreement (the percentage increases if the leverage ratio exceeds 3.50 to 1.00 ). Certain mandatory prepayments reduce future contractual amortization payments by an amount equal to the mandatory prepayment. Except as discussed above with respect to the BRS Inventory proceeds repayment, no mandatory prepayments were owed for the year ended December 31, 2018 . Altisource may incur incremental indebtedness under the Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $125.0 million , subject to certain conditions set forth in the Credit Agreement, including a sublimit of $80.0 million with respect to incremental revolving credit commitments. The lenders have no obligation to provide any incremental indebtedness. The Term B Loans bear interest at rates based upon, at our option, the Adjusted Eurodollar Rate or the Base Rate . Adjusted Eurodollar Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Adjusted Eurodollar Rate for a three month interest period and (y) 1.00% plus (ii) 4.00% . Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 3.00% . The interest rate at December 31, 2018 was 6.80% . Loans under the revolving credit facility bear interest at rates based upon, at our option, the Adjusted Eurodollar Rate or the Base Rate . Adjusted Eurodollar Rate revolving loans bear interest at a rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate for a three month interest period plus (ii) 4.00% . Base Rate revolving loans bear interest at a rate per annum equal to the sum of (i) the Base Rate plus (ii) 3.00% . The unused commitment fee is 0.50% . There were no borrowings outstanding under the revolving credit facility as of December 31, 2018 . The payment of all amounts owing by Altisource under the Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l. and the Guarantors, subject to certain exceptions. The Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur indebtedness; incur liens on our assets; sell, transfer or dispose of assets; make Restricted Junior Payments including share repurchases, dividends and repayment of junior indebtedness; make investments; dispose of equity interests of any Material Subsidiaries; engage in a line of business substantially different than existing businesses and businesses reasonably related, complimentary or ancillary thereto; amend material debt agreements or other material contracts; engage in certain transactions with affiliates; enter into sale/leaseback transactions; grant negative pledges or agree to such other restrictions relating to subsidiary dividends and distributions; make changes to our fiscal year; and engage in mergers and consolidations; and to the extent any Revolving Credit Loans are outstanding on the last day of a fiscal quarter, permit the Total Leverage Ratio to be greater than 3.50 : 1.00 as of the last day of such fiscal quarter, subject to a customary cure provision (the “Revolving Financial Covenant”). The Credit Agreement contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Credit Agreement within five days of becoming due, (ii) material incorrectness of representations and warranties when made, (iii) breach of certain other covenants, subject to cure periods described in the Credit Agreement, (iv) a breach of the Revolving Financial Covenant, subject to a customary cure provision and not an Event of Default with respect to the Term Loans unless and until the Required Revolving Lenders accelerate the Revolving Credit Loans, (v) failure to pay principal or interest on any other debt that equals or exceeds $40.0 million when due, (vi) default on any other debt that equals or exceeds $40.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (vii) occurrence of a Change of Control, (viii) bankruptcy and insolvency events, (ix) entry by a court of one or more judgments against us in an amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (x) the occurrence of certain ERISA events and (xi) the failure of certain Loan Documents to be in full force and effect. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. During 2017 , we repurchased portions of our senior secured term loan with an aggregate par value of $60.1 million at a weighted average discount of 10.7% , recognizing a net gain of $5.6 million on the early extinguishment of debt. During 2016 , we repurchased portions of our senior secured term loan with an aggregate par value of $51.0 million at a weighted average discount of 13.2% , recognizing a net gain of $5.5 million on the early extinguishment of debt. There were no similar repurchases in 2018 . These net gains are included in other income (expense), net in the consolidated statements of operations and comprehensive income (loss) (see Note 21 ). At December 31, 2018 , debt issuance costs were $3.9 million , net of $0.7 million of accumulated amortization. At December 31, 2017 , debt issuance costs were $3.2 million , net of $7.1 million of accumulated amortization. Interest expense on the senior secured term loans, including amortization of debt issuance costs and the net debt discount, totaled $26.3 million , $22.3 million and $24.4 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Maturities of our long-term debt are as follows: (in thousands) Maturities 2019 $ — 2020 18,492 2021 12,360 2022 12,360 2023 12,360 2024 283,250 $ 338,822 |
OTHER NON-CURRENT LIABILITIES
OTHER NON-CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER NON-CURRENT LIABILITIES | OTHER NON-CURRENT LIABILITIES Other non-current liabilities consist of the following as of December 31 : (in thousands) 2018 2017 Income tax liabilities $ 7,069 $ 5,955 Deferred revenue 19 2,101 Other non-current liabilities 2,090 4,226 Total $ 9,178 $ 12,282 |
FAIR VALUE MEASUREMENTS AND FIN
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS The following table presents the carrying amount and estimated fair value of financial instruments and certain liabilities measured at fair value as of December 31, 2018 and 2017 . The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP: December 31, 2018 December 31, 2017 (in thousands) Carrying amount Fair value Carrying amount Fair value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 58,294 $ 58,294 $ — $ — $ 105,006 $ 105,006 $ — $ — Restricted cash 5,752 5,752 — — 3,837 3,837 — — Investment in equity securities 36,181 36,181 — — 49,153 49,153 — — Long-term receivable ( Note 4 ) 2,221 — — 2,221 — — — — Liabilities: Senior secured term loan 338,822 — 330,351 — 413,581 — 407,377 — Fair Value Measurements on a Recurring Basis Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair values due to the highly liquid nature of these instruments and were measured using Level 1 inputs. Investment in equity securities is carried at fair value and consist of 4.1 million shares of RESI common stock. The investment in equity securities is measured using Level 1 inputs as these securities have quoted prices in active markets. The fair value of our senior secured term loan is based on quoted market prices. Based on the frequency of trading, we do not believe that there is an active market for our debt. Therefore, the quoted prices are considered Level 2 inputs. In connection with the sale of the rental property management business in August 2018, Altisource will receive $3.0 million on the earlier of a RESI change of control or on August 8, 2023 (see Note 4 for additional information). We measure long-term receivables without a stated interest rate based on the present value of the future payments. There were no transfers between different levels during the periods presented. Concentrations of Credit Risk Financial instruments that subject us to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. Our policy is to deposit our cash and cash equivalents with larger, highly rated financial institutions. The Company derives over 50% of its revenues from Ocwen (see Note 3 for additional information on Ocwen revenues and accounts receivable balance). The Company mitigates its concentrations of credit risk with respect to accounts receivable by actively monitoring past due accounts and the economic status of larger customers, if known. |
SHAREHOLDERS' EQUITY AND SHARE-
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION Common Stock At December 31, 2018 , we had 100 million shares authorized, 25.4 million shares issued and 16.3 million shares of common stock outstanding. At December 31, 2017 , we had 100.0 million shares authorized, 25.4 million shares issued and 17.4 million shares of common stock outstanding. The holders of shares of Altisource common stock generally are entitled to one vote for each share on all matters voted on by shareholders, and the holders of such shares generally will possess all voting power. Equity Incentive Plan Our 2009 Equity Incentive Plan (the “Plan”) provides for various types of equity awards, including stock options, stock appreciation rights, stock purchase rights, restricted shares, restricted share units and other awards, or a combination of any of the above. Under the Plan, we may grant up to 6.7 million Altisource share-based awards to officers, directors, employees and to employees of our affiliates. As of December 31, 2018 , 1.2 million share-based awards were available for future grant under the Plan. Expired and forfeited awards are available for reissuance. Share Repurchase Program On May 15, 2018, our shareholders approved the renewal and replacement of the share repurchase program previously approved by the shareholders on May 17, 2017. Under the program, we are authorized to purchase up to 4.3 million shares of our common stock, based on a limit of 25% of the outstanding shares of common stock on the date of approval, at a minimum price of $1.00 per share and a maximum price of $500.00 per share, for a period of five years from the date of approval. As of December 31, 2018 , approximately 3.4 million shares of common stock remain available for repurchase under the program. We purchased 1.6 million shares of common stock at an average price of $25.53 per share during the year ended December 31, 2018 , 1.6 million shares at an average price of $23.84 per share during the year ended December 31, 2017 and 1.4 million shares at an average price of $26.81 per share during the year ended December 31, 2016 . Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of December 31, 2018, we can repurchase up to approximately $139 million of our common stock under Luxembourg law. Our Credit Agreement also limits the amount we can spend on share repurchases, which was approximately $489 million as of December 31, 2018 , and may prevent repurchases in certain circumstances. Share-Based Compensation We issue share-based awards in the form of stock options, restricted shares and restricted share units for certain employees, officers and directors. We recognized share-based compensation expense of $10.2 million , $4.3 million and $6.2 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. As of December 31, 2018 , estimated unrecognized compensation costs related to share-based awards amounted to $11.8 million , which we expect to recognize over a weighted average remaining requisite service period of approximately 1.90 years . In connection with the January 1, 2017 adoption of ASU No. 2016-09 (see Note 2 ), the Company made an accounting policy election to account for forfeitures in compensation expense as they occur, rather than continuing to apply the Company’s previous policy of estimating forfeitures. Prior to this accounting change, share-based compensation expense for stock options and restricted shares was recorded net of estimated forfeiture rates ranging from 0% to 40% . This policy election resulted in a cumulative effect adjustment of $0.9 million to retained earnings and additional paid-in capital as of January 1, 2017 using the modified retrospective transition method. Stock Options Stock option grants are composed of a combination of service-based, market-based and performance-based options. Service-Based Options. These options generally vest over three or four years with equal annual vesting and expire on the earlier of ten years after the date of grant or following termination of service. A total of 500 thousand service-based awards were outstanding as of December 31, 2018 . Market-Based Options . These option grants generally have two components, each of which vests only upon the achievement of certain criteria. The first component, which we refer to as “ordinary performance” grants, generally consists of two-thirds of the market-based grant and begins to vest if the stock price is at least double the exercise price, as long as the stock price realizes a compounded annual gain of at least 20% over the exercise price. The remaining third of the market-based options, which we refer to as “extraordinary performance” grants, generally begins to vest if the stock price is at least triple the exercise price, as long as the stock price realizes a compounded annual gain of at least 25% over the exercise price. Market-based awards vest in three or four year installments with the first installment vesting upon the achievement of the criteria and the remaining installments vesting thereafter in equal annual installments. Market-based options generally expire on the earlier of ten years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service or in the final three years of the option term, in which case vesting will generally continue in accordance with the provisions of the award agreement. A total of 662 thousand market-based awards were outstanding as of December 31, 2018 . Performance-Based Options. These option grants generally begin to vest upon the achievement of certain specific financial measures. Generally, the awards begin vesting if the performance criteria are achieved; one-fourth vest on each anniversary of the grant date. For certain other financial measures, awards cliff-vest upon the achievement of the specific performance during the period from 2018 through 2021 . The award of performance-based options is adjusted based on the level of achievement specified in the award agreements. If the performance criteria achieved is above threshold performance levels, participants have the opportunity to vest in 50% to 200% of the option grants, depending upon performance achieved. If the performance criteria achieved is below a certain threshold, the award is canceled. The options expire on the earlier of ten years after the date of grant or following termination of service. There were 279 thousand performance-based awards outstanding as of December 31, 2018 . The Company granted 277 thousand stock options (at a weighted average exercise price of $25.15 per share), 244 thousand stock options (at a weighted average exercise price of $33.28 per share) and 145 thousand stock options (at a weighted average exercise price of $29.17 per share) during the years ended December 31, 2018 , 2017 and 2016 , respectively. The fair values of the service-based options and performance-based options were determined using the Black-Scholes option pricing model and the fair values of the market-based options were determined using a lattice (binomial) model. The following assumptions were used to determine the fair values as of the grant date: 2018 2017 2016 Black-Scholes Binomial Black-Scholes Binomial Black-Scholes Binomial Risk-free interest rate (%) 2.66 – 3.10 1.64 – 3.22 1.89 – 2.29 0.77 – 2.38 1.25 – 1.89 0.23 – 2.23 Expected stock price volatility (%) 70.31 – 71.86 71.36 – 71.86 61.49 – 71.52 66.68 – 71.52 59.75 – 62.14 59.76 – 62.14 Expected dividend yield — — — — — — Expected option life (in years) 6.00 – 6.25 2.56 – 4.33 6.00 – 7.50 2.55 – 4.82 6.00 – 6.25 4.06 – 4.88 Fair value $16.17 – $19.68 $14.67 – $20.26 $13.57 – $24.80 $11.94 – $24.30 $11.15 – $18.60 $11.06 – $19.27 We determined the expected option life of all service-based stock option grants using the simplified method. We use the simplified method because we believe that our historical data does not provide a reasonable basis upon which to estimate expected option life. The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31 : (in thousands, except per share amounts) 2018 2017 2016 Weighted average grant date fair value of stock options granted per share $ 16.31 $ 20.44 $ 16.82 Intrinsic value of stock options exercised 4,609 3,028 18,209 Grant date fair value of stock options that vested 1,760 2,279 2,698 The following table summarizes the activity related to our stock options: Number of options Weighted average exercise price Weighted average contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2017 1,745,906 $ 28.20 4.96 $ 10,202 Granted 276,876 25.15 Exercised (330,537 ) 11.33 Forfeited (251,679 ) 32.21 Outstanding at December 31, 2018 1,440,566 30.78 5.04 945 Exercisable at December 31, 2018 874,304 27.42 3.20 902 In 2018, the Company modified the performance thresholds that are required to be met in order for vesting to occur for 263 thousand stock options granted to 16 employees during the year ended December 31, 2018. The award modification did not change the inputs into the valuation model or the Company’s assessment of the probability of vesting as of the effective date of the modifications. Consequently, no incremental compensation expense was required as a result of this modification. The following table summarizes information about stock options outstanding and exercisable at December 31, 2018 : Options outstanding Options exercisable Exercise price range (1) Number Weighted average remaining contractual life (in years) Weighted average exercise price Number Weighted average remaining contractual life (in years) Weighted average exercise price $10.01 — $20.00 212,667 6.06 $ 18.79 203,344 6.05 $ 18.79 $20.01 — $30.00 925,563 4.79 24.60 537,607 2.07 23.81 $30.01 — $40.00 132,586 6.20 34.63 54,478 3.54 32.82 $60.01 — $70.00 71,000 3.19 60.73 51,375 3.19 60.74 $70.01 — $80.00 25,000 4.51 72.78 6,250 0.45 72.78 $80.01 — $90.00 25,000 5.60 86.69 6,250 5.60 86.69 $90.01 — $100.00 46,875 5.00 95.64 13,125 4.51 95.59 $100.01 — $110.00 1,875 0.45 105.11 1,875 0.45 105.11 1,440,566 874,304 ______________________________________ (1) These options contain market-based and performance-based components as described above. The following table summarizes the market prices necessary in order for the market-based options to begin to vest: Market-based options Vesting price Ordinary performance Extraordinary performance $40.01 — $50.00 6,400 — $50.01 — $60.00 60,164 9,323 $60.01 — $70.00 16,648 6,325 $70.01 — $80.00 — 11,500 $80.01 — $90.00 — 19,080 $90.01 — $100.00 — 8,325 $140.01 — $150.00 12,500 — $170.01 — $180.00 12,500 — $180.01 — $190.00 7,500 19,625 Over $190.00 15,000 23,750 Total 130,712 97,928 Weighted average share price $ 49.46 $ 47.79 Other Share-Based Awards The Company’s other share-based and similar types of awards are composed of restricted shares and, beginning in 2018, restricted share units. The restricted shares and restricted share units are composed of a combination of service-based awards and performance-based awards. Service-Based Awards. These awards generally vest over one to four years with (a) vesting in equal annual installments, (b) vesting of all of the restricted shares and restricted share units at the end of the vesting period or (c) vesting beginning after two years of service. A total of 482 thousand service-based awards were outstanding as of December 31, 2018 . Performance-Based Awards. These awards generally begin to vest upon the achievement of certain specific financial measures. Generally, the awards begin vesting if the performance criteria are achieved; one-third vest on each anniversary of the grant date. The number of performance-based restricted shares that may vest will be based on the level of achievement, as specified in the award agreements. If the performance criteria achieved is above threshold performance levels, participants have the opportunity to vest in 80% to 150% of the restricted share award, depending on performance achieved. If the performance criteria achieved is below a certain threshold, the award is canceled. A total of four thousand performance-based awards were outstanding as of December 31, 2018 . The Company granted 376 thousand restricted shares and restricted share units (at a weighted average grant date fair value of $21.57 per share) during the year ended December 31, 2018 . The following table summarizes the activity related to our restricted shares and restricted share units: Number of restricted shares and restricted Outstanding at December 31, 2017 356,509 Granted 375,524 Issued (111,565 ) Forfeited/canceled (134,662 ) Outstanding at December 31, 2018 485,806 In 2018 , the Company modified the vesting condition to remove the requirement that a certain employee be employed by the Company in order for the restricted shares to vest for 31 thousand restricted shares granted in the fourth quarter of 2017 and the first quarter of 2018. The award modification did not change the inputs into the valuation model or the Company’s assessment of the probability of vesting as of the effective date of the modifications. Consequently, no incremental compensation expense was required as a result of this modification. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Revenues [Abstract] | |
REVENUE | REVENUE We classify revenue in three categories: service revenue, revenue from reimbursable expenses and non-controlling interests. Service revenue consists of amounts attributable to our fee-based services and sales of short-term investments in real estate. Reimbursable expenses and non-controlling interests are pass-through items for which we earn no margin. Reimbursable expenses consist of amounts we incur on behalf of our customers in performing our fee-based services that we pass directly on to our customers without a markup. Non-controlling interests represent the earnings of Lenders One, a consolidated entity that is a mortgage cooperative managed, but not owned, by Altisource. Lenders One is included in revenue and reduced from net income to arrive at net income attributable to Altisource (see Note 2 ). The components of revenue were as follows for the years ended December 31 : (in thousands) 2018 2017 2016 Service revenue $ 805,480 $ 899,561 $ 942,599 Reimbursable expenses 30,039 39,912 52,011 Non-controlling interests 2,683 2,740 2,693 Total $ 838,202 $ 942,213 $ 997,303 As discussed in Note 2 , the Company adopted Topic 606 effective January 1, 2018 using the cumulative effect method. Disaggregation of Revenue Disaggregation of total revenues by segments and major source is as follows: Twelve months ended December 31, 2018 (in thousands) Revenue recognized when services are performed or assets are sold Revenue related to technology platforms and professional services Reimbursable expenses revenue Total revenue Mortgage Market: Servicer Solutions $ 537,161 $ 73,782 $ 28,207 $ 639,150 Origination Solutions 38,597 8,909 249 47,755 Total Mortgage Market 575,758 82,691 28,456 686,905 Real Estate Market: Consumer Real Estate Solutions 8,593 — 2 8,595 Real Estate Investor Solutions 80,162 — 1,533 81,695 Total Real Estate Market 88,755 — 1,535 90,290 Other Businesses, Corporate and Eliminations 55,226 5,733 48 61,007 Total revenue $ 719,739 $ 88,424 $ 30,039 $ 838,202 Contract Balances Our contract assets consist of unbilled accounts receivable (see Note 7 ). Our contract liabilities consist of current deferred revenue as reported on the consolidated balance sheets and non-current deferred revenue (see Note 15 ). Revenue recognized that was included in the contract liability at the beginning of the period, including amounts added to the contract liability as part of the cumulative effect of adopting Topic 606, was $20.6 million for the year ended December 31, 2018 . |
COST OF REVENUE
COST OF REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Cost of Revenue [Abstract] | |
COST OF REVENUE | COST OF REVENUE Cost of revenue principally includes payroll and employee benefits associated with personnel employed in customer service and operations roles, fees paid to external providers related to the provision of services, cost of real estate sold, reimbursable expenses, technology and telecommunications costs as well as depreciation and amortization of operating assets. The components of cost of revenue were as follows for the years ended December 31 : (in thousands) 2018 2017 2016 Compensation and benefits $ 200,486 $ 240,487 $ 264,796 Outside fees and services 278,380 325,459 301,116 Cost of real estate sold 47,659 24,398 1,040 Reimbursable expenses 30,039 39,912 52,011 Technology and telecommunications 41,588 42,340 44,295 Depreciation and amortization 24,013 27,269 26,787 Total $ 622,165 $ 699,865 $ 690,045 |
SELLING, GENERAL AND ADMINISTRA
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER OPERATING EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Selling, General and Administrative Expense [Abstract] | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER OPERATING EXPENSES | SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER OPERATING EXPENSES Selling, general and administrative expenses include payroll and employee benefits associated with personnel employed in executive, finance, law, compliance, human resources, vendor management, facilities, risk management, sales and marketing roles. This category also includes professional fees, occupancy costs, marketing costs, depreciation and amortization of non-operating assets and other expenses. The components of selling, general and administrative expenses were as follows for the years ended December 31 : (in thousands) 2018 2017 2016 Compensation and benefits $ 51,043 $ 58,157 $ 55,577 Professional services 16,950 13,421 23,284 Occupancy related costs 30,851 36,371 37,370 Amortization of intangible assets 28,412 35,367 47,576 Depreciation and amortization 6,786 9,178 10,001 Marketing costs 14,707 16,171 27,847 Other 26,921 23,977 12,500 Total $ 175,670 $ 192,642 $ 214,155 In addition, on September 8, 2014, the West Palm Beach Firefighters’ Pension Fund filed a putative securities class action suit against Altisource Portfolio Solutions S.A. and certain of its current or former officers and directors in the United States District Court for the Southern District of Florida. On January 19, 2017, the parties notified the Court of their agreement to settle the action to resolve all claims related to this matter for a payment by the Company of $32.0 million , $4.0 million of which was funded by insurance proceeds. The net expense of $28.0 million was recorded as a litigation settlement loss, net in other operating expenses for the year ended December 31, 2016. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET Other income (expense), net consists of the following for the years ended December 31 : (in thousands) 2018 2017 2016 Loss on debt refinancing $ (4,434 ) $ — $ — Gain on early extinguishment of debt — 5,637 5,464 Expenses related to the purchase of investment in equity securities — — (3,356 ) Interest income 740 270 91 Other, net 1,824 2,015 1,431 Total $ (1,870 ) $ 7,922 $ 3,630 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income before income taxes and non-controlling interests consist of the following for the years ended December 31 : (in thousands) 2018 2017 2016 Domestic - Luxembourg $ (22,513 ) $ 9,123 $ 8,498 Foreign - U.S. 8,398 7,967 16,655 Foreign - non-U.S. 15,514 18,285 19,168 Total $ 1,399 $ 35,375 $ 44,321 The income tax provision (benefit) consists of the following for the years ended December 31 : (in thousands) 2018 2017 2016 Current: Domestic - Luxembourg $ 275 $ 737 $ 160 Foreign - U.S. federal 1,838 2,405 9,556 Foreign - U.S. state 336 364 258 Foreign - non-U.S. 7,440 17,574 5,558 $ 9,889 $ 21,080 $ 15,532 Deferred: Domestic - Luxembourg $ (4,927 ) $ (295,318 ) $ 432 Foreign - U.S. federal (291 ) (111 ) (3,065 ) Foreign - U.S. state 134 (210 ) (100 ) Foreign - non-U.S. (707 ) (1,697 ) 136 $ (5,791 ) $ (297,336 ) $ (2,597 ) Income tax provision (benefit) $ 4,098 $ (276,256 ) $ 12,935 In June 2010, the Company received a tax ruling regarding the treatment of certain intangibles that existed for determining the Company’s taxable income, which was scheduled to expire in 2019 unless extended, renewed or terminated by the Company. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. Altisource Holdings S.à r.l. was subsequently renamed Altisource S.à r.l. The merger is part of a larger subsidiary restructuring plan designed to simplify the Company’s corporate structure, allow it to operate more efficiently and reduce administrative costs. For Luxembourg tax purposes, the merger was recognized at fair value and generated a net operating loss (“NOL”) of $1.3 billion , with a 17 year life, and generated a deferred tax asset of $342.6 million as of December 31, 2017, before a valuation allowance of $41.6 million. This deferred tax asset was partially offset by the impact of other changes in U.S. and Luxembourg income tax rates of $6.3 million and an increase in certain foreign income tax reserves (and related interest) of $10.5 million for the year ended December 31, 2017. The Company’s June 2010 tax ruling was terminated in connection with the merger of the Company’s Luxembourg subsidiaries. We operate under tax holidays in certain geographies in India, the Philippines and Uruguay. The India tax holidays are effective through 2020. The Philippines tax holiday has been extended through June 2019. We operate in a Uruguay free trade zone that provides an indefinite future tax benefit. The tax holidays are conditioned upon our meeting certain employment and investment thresholds. The impact of these tax holidays decreased foreign taxes by $0.7 million ( $0.04 per diluted share), $0.9 million ( $0.05 per diluted share) and $0.9 million ( $0.04 per diluted share) for the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company accounts for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences. A summary of the tax effects of the temporary differences is as follows for the years ended December 31 : (in thousands) 2018 2017 Non-current deferred tax assets: Net operating loss carryforwards $ 353,209 $ 349,154 U.S. federal and state tax credits 314 407 Other non-U.S. deferred tax assets 6,161 5,724 Share-based compensation 1,586 1,496 Accrued expenses 5,242 6,494 Unrealized losses 3,131 — Non-current deferred tax liabilities: Intangible assets (9,855 ) (8,015 ) Depreciation (1,225 ) (3,318 ) Other non-U.S. deferred tax liability (1,769 ) (1,692 ) Other (954 ) (260 ) 355,840 349,990 Valuation allowance (46,751 ) (46,283 ) Non-current deferred tax assets, net $ 309,089 $ 303,707 A valuation allowance is provided when it is deemed more likely than not that some portion or all of a deferred tax asset will not be realized. In determining whether a valuation allowance is needed, the Company considered estimates of future taxable income, future reversals of temporary differences, the tax character of gains and losses and the impact of tax planning strategies that can be implemented, if warranted. The net increase in valuation allowance of $0.5 million during 2018 is primarily related to the portion of the Luxembourg NOL that we project will not be used prior to expiration. We have not recognized Luxembourg deferred taxes on cumulative earnings of non-Luxembourg affiliates as we have chosen to indefinitely reinvest these earnings. The earnings reinvested as of December 31, 2018 were approximately $82.9 million , which if distributed would result in additional tax due totaling approximately $15.0 million . The Company had a deferred tax asset of $353.2 million as of December 31, 2018 relating to Luxembourg, U.S. federal, state and foreign net operating losses compared to $349.2 million as of December 31, 2017 . As of December 31, 2018 and 2017, a valuation allowance of $45.0 million and $44.4 million , respectively, has been established related to Luxembourg NOLs, and a valuation allowance of $1.5 million and $1.7 million , respectively, has been established related to state NOLs. The gross amount of net operating losses available for carryover to future years is approximately $1,355.5 million as of December 31, 2018 and approximately $1,339.6 million as of December 31, 2017 . These losses are scheduled to expire between the years 2023 and 2038. As of December 31, 2018 and 2017, $7.4 million and $8.9 million , respectively, of our NOLs are subject to Section 382 of the Internal Revenue Code which limits the application of these NOLs against federal taxable income to approximately $1.3 million per year. On December 22, 2017, the Jobs Act was enacted, which reforms corporate tax legislation in the United States and related laws. One of the provisions of the new tax law reduces the U.S. federal corporate tax rate from 35% to 21% . The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% . As of December 31, 2018 and 2017, the amount recorded related to the remeasurement of our deferred tax balance was $(0.2) million and $2.9 million, respectively. In addition, the Company had a deferred tax asset of $0.3 million and $0.4 million as of December 31, 2018 and 2017 , respectively, relating to the U.S. federal and state tax credits. The U.S. federal credit carryforward was fully utilized in 2018. The state tax credit carryforwards are scheduled to expire with the filing of state income tax returns for the tax years 2018 through 2028. Income tax computed by applying the Luxembourg statutory rate differs from income tax computed at the effective tax rate primarily from differences between the Luxembourg statutory and foreign statutory tax rates applied to entities in different jurisdictions, shown in the tax rate reconciliation table below as tax rate differences on foreign earnings, increases in uncertain tax positions, state taxes, remeasurement of deferred taxes related to tax rate changes, recognition of net operating losses created by the December 27, 2017 legal entity merger (see above), an increase in unrecognized tax benefits and a valuation allowance against deferred tax assets the Company believes it is more likely than not will not be realized. The following table reconciles the Luxembourg statutory tax rate to our effective tax rate for the years ended December 31 : 2018 2017 2016 Statutory tax rate 26.01 % 27.08 % 29.22 % Change in valuation allowance 43.08 119.20 (0.08 ) State tax expense 28.58 0.50 2.30 Tax credits — (2.13 ) (1.81 ) Uncertain tax positions 114.18 30.16 (3.65 ) Unrecognized tax loss — (1,008.20 ) — Income tax rate change — 57.36 — Tax rate differences on foreign earnings 73.11 — — Other 7.96 (4.91 ) 3.20 Effective tax rate 292.92 % (780.94 )% 29.18 % The Company follows ASC Topic 740 which clarifies the accounting and disclosure for uncertainty in tax positions. We analyzed our tax filing positions in all of the domestic and foreign tax jurisdictions where we are required to file income tax returns as well as for all open tax years subject to audit in these jurisdictions. The Company has open tax years in the United States (2015 through 2017), India (2011 through 2018) and Luxembourg (2012 through 2016). The following table summarizes changes in unrecognized tax benefits during the years ended December 31 : (in thousands) 2018 2017 Amount of unrecognized tax benefits as of the beginning of the year $ 8,892 $ 758 Decreases as a result of tax positions taken in a prior period (956 ) (78 ) Increases as a result of tax positions taken in a prior period 1 53 Increases as a result of tax positions taken in the current period 1,750 8,159 Amount of unrecognized tax benefits as of the end of the year $ 9,687 $ 8,892 The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate is $13.0 million and $11.5 million as of December 31, 2018 and 2017 , respectively. The Company recognizes interest, if any, related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2018 and 2017 , the Company had recorded accrued interest and penalties related to unrecognized tax benefits of $3.3 million and $2.6 million , respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the assumed conversion of all dilutive securities using the treasury stock method. Basic and diluted EPS are calculated as follows for the years ended December 31 : (in thousands, except per share data) 2018 2017 2016 Net (loss) income attributable to Altisource $ (5,382 ) $ 308,891 $ 28,693 Weighted average common shares outstanding, basic 17,073 18,183 18,696 Dilutive effect of stock options, restricted shares and — 509 916 Weighted average common shares outstanding, diluted 17,073 18,692 19,612 (Loss) earnings per share: Basic $ (0.32 ) $ 16.99 $ 1.53 Diluted $ (0.32 ) $ 16.53 $ 1.46 For the years ended December 31, 2018 , 2017 and 2016 , 0.3 million options, 0.5 million options and 0.4 million options, respectively, that were anti-dilutive have been excluded from the computation of diluted EPS. These options were anti-dilutive and excluded from the computation of diluted EPS because their exercise price was greater than the average market price of our common stock. Also excluded from the computation of diluted EPS are 0.5 million options and restricted shares, 0.4 million options and 0.4 million options for the years ended December 31, 2018 , 2017 and 2016 , respectively, which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and an annualized rate of return to shareholders that have not yet been met. Furthermore, as a result of the net loss attributable to Altisource for the year ended December 31, 2018 , 0.5 million options, restricted shares and restricted share units were excluded from the computation of diluted EPS, as their impact was anti-dilutive. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring Charges [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In August 2018, Altisource initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to better align our cost structure with our anticipated revenues and improve our operating margins. During the year ended December 31, 2018 , we incurred $11.6 million of severance costs, professional services fees and facility shut-down costs related to the restructuring plan. We expect to incur additional severance costs and professional services fees through 2019 in connection with this restructuring and will expense those costs as incurred. Based on our preliminary analysis, we currently anticipate the future costs relating to the restructuring plan to be in the range of approximately $25 million to $35 million . |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS | COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS We record a liability for contingencies if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range. Litigation We are currently involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows. Regulatory Matters Periodically, we are subject to audits, examinations and investigations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries. Sales Taxes On June 21, 2018, the United States Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning existing court precedent. The Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. As a result, the Company recognized a $6.2 million loss for the year ended December 31, 2018 in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). The Company is in the process of developing and implementing a solution that will enable it to invoice, collect and remit sales tax in the applicable jurisdictions. The Company is also analyzing what rights, if any, it has to seek reimbursement for sales tax payments from clients. As the Company completes its evaluation of potential sales tax exposure, the Company may increase its accrual for sales tax exposure and recognize additional losses, which are not currently estimable. These additional losses could result in a material adjustment to our consolidated financial statements which would impact our financial condition and results of operations. Ocwen Related Matters As discussed in Note 3 , during the year ended December 31, 2018 , Ocwen was our largest customer, accounting for 52% of our total revenue. Additionally, 6% of our revenue for the year ended December 31, 2018 was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the MSR owner selected Altisource as the service provider. Ocwen has disclosed that it is subject to a number of ongoing federal and state regulatory examinations, cease and desist orders, consent orders, inquiries, subpoenas, civil investigative demand, requests for information and other actions and is subject to pending legal proceedings, some of which include claims against Ocwen for substantial monetary damages. For example, on May 15, 2017, Ocwen disclosed that on April 20, 2017, the Consumer Financial Protection Bureau and the State of Florida filed separate complaints in the United States District Court for the Southern District of Florida against Ocwen alleging violations of Federal consumer financial law and, in the case of Florida, Florida statutes. As another example, on May 15, 2017, Ocwen also disclosed that on April 28, 2017, the Commonwealth of Massachusetts filed a lawsuit against Ocwen in the Superior Court for the Commonwealth of Massachusetts alleging violations of state consumer financial laws relating to Ocwen’s servicing business, including lender-placed insurance and property preservation fees. Ocwen disclosed that the complaints seek to obtain permanent injunctive relief, consumer redress, refunds, restitution, disgorgement, damages, civil penalties, costs and fees and other relief. The foregoing or other matters could result in, and in some cases, have resulted in, adverse regulatory or other actions against Ocwen. Previous regulatory actions against Ocwen resulted in subjecting Ocwen to independent oversight of its operations and placing certain restrictions on its ability to acquire servicing rights. In addition to the above, Ocwen may become subject to future federal and state regulatory investigations, cease and desist orders, consent orders, inquiries, subpoenas, civil investigative demands, requests for information, other matters or legal proceedings, any of which could also result in adverse regulatory or other actions against Ocwen. Ocwen has disclosed that NRZ is its largest client. As of September 30, 2018, NRZ owned MSRs or rights to MSRs relating to approximately 57% of loans serviced and subserviced by Ocwen (measured in UPB). In July 2017 and January 2018, Ocwen and NRZ entered into a series of agreements pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to the Subject MSRs and under which Ocwen will subservice mortgage loans underlying the Subject MSRs for an initial term of five years. NRZ can terminate its sub-servicing agreement with Ocwen in exchange for the payment of a termination fee. The foregoing may have significant adverse effects on Ocwen’s business and/or our continuing relationship with Ocwen. For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services (including IT and software services), it may be required to seek changes to its existing pricing structure with us, it may lose its non-government-sponsored enterprise (“GSE”) servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Ocwen’s business that could require it to sell assets or change its business operations. Any or all of these effects could result in our eventual loss of Ocwen as a customer or a reduction in the number and/or volume of services they purchase from us or the loss of other customers. If any of the following events occurred, Altisource’s revenue could be significantly lower and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable: • Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services they purchase from us • Ocwen loses, sells or transfers a significant portion or all of its remaining non-GSE servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider • Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio • The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue • Altisource otherwise fails to be retained as a service provider Management cannot predict whether any of these events will occur or the amount of any impact they may have on Altisource. However, in the event one or more of these events materially negatively impact Altisource, we believe the variable nature of our cost structure would allow us to realign our cost structure in line with remaining revenue. Furthermore, in the event of a significant reduction in the volume of services purchased or loan portfolios serviced by Ocwen (such as a transfer of Ocwen’s remaining servicing rights to a successor servicer), we believe the impact to Altisource could occur over an extended period of time. During this period, we believe that we will continue to generate revenue from all or a portion of Ocwen’s loan portfolios. Our Servicer Solutions, Origination Solutions and Consumer Real Estate Solutions businesses are focused on diversifying and growing our revenue and customer base and we have a sales and marketing strategy to support these businesses. Management believes our plans, together with current liquidity and cash flows from operations, would be sufficient to meet our working capital, capital expenditures, debt service and other cash needs. However, there can be no assurance that our plans will be successful or our operations will be profitable. Leases We lease certain premises and equipment under various operating lease agreements. Future minimum lease payments at December 31, 2018 under non-cancelable operating leases with an original term exceeding one year are as follows: (in thousands) Operating lease obligations 2019 $ 17,600 2020 14,137 2021 9,849 2022 5,558 2023 3,441 Thereafter 1,323 $ 51,908 Total operating lease expense, net of sublease income, was $19.9 million , $19.0 million and $17.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Sublease income was $1.6 million , $1.3 million and less than $0.5 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. The minimum lease payments in the table above have not been reduced by minimum sublease rentals totaling $2.8 million expected to be received under non-cancelable subleases. The operating leases generally relate to office locations and reflect customary lease terms which range from less than 1 year to 10 years in duration. We have executed five standby letters of credit totaling $3.1 million , related to four office leases and a litigation matter that are secured by restricted cash balances. Escrow and Trust Balances We hold customers’ assets in escrow and trust accounts at various financial institutions pending completion of certain real estate activities. We also hold cash in trust accounts at various financial institutions where contractual obligations mandate maintaining dedicated bank accounts for our asset recovery management business’s collections. These amounts are held in escrow and trust accounts for limited periods of time and are not included in the consolidated balance sheets. Amounts held in escrow and trust accounts were $23.6 million and $35.1 million at December 31, 2018 and 2017 , respectively. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Our business segments are based upon our organizational structure, which focuses primarily on the services offered, and are consistent with the internal reporting used by our Chief Executive Officer (our chief operating decision maker) to evaluate operating performance and to assess the allocation of our resources. We report our operations through two reportable segments: Mortgage Market and Real Estate Market . In addition, we report Other Businesses, Corporate and Eliminations separately. The Mortgage Market segment provides loan servicers and originators with marketplaces, services and technologies that span the mortgage lifecycle. The Real Estate Market segment provides real estate consumers and rental property investors with marketplaces and services that span the real estate lifecycle. In addition, the Other Businesses, Corporate and Eliminations segment includes businesses that provide post-charge-off consumer debt collection services primarily to debt originators (e.g., credit card, auto lending and retail credit), customer relationship management services primarily to the utility, insurance and hotel industries and IT infrastructure management services. Other Businesses, Corporate and Eliminations also includes interest expense and costs related to corporate support functions including executive, finance, law, compliance, human resources, vendor management, facilities, risk management, and sales and marketing costs not allocated to the business units as well as eliminations between the reportable segments. Financial information for our segments is as follows: For the year ended December 31, 2018 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Revenue $ 686,905 $ 90,290 $ 61,007 $ 838,202 Cost of revenue 447,108 102,893 72,164 622,165 Gross profit (loss) 239,797 (12,603 ) (11,157 ) 216,037 Operating expenses (income): Selling, general and administrative expenses 85,013 21,561 69,096 175,670 Gain on sale of business — (13,688 ) — (13,688 ) Restructuring charges 2,495 113 8,952 11,560 Income (loss) from operations 152,289 (20,589 ) (89,205 ) 42,495 Total other income (expense), net 81 77 (41,254 ) (41,096 ) Income (loss) before income taxes and non-controlling interests $ 152,370 $ (20,512 ) $ (130,459 ) $ 1,399 For the year ended December 31, 2017 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Revenue $ 793,684 $ 89,787 $ 58,742 $ 942,213 Cost of revenue 545,507 96,967 57,391 699,865 Gross profit (loss) 248,177 (7,180 ) 1,351 242,348 Selling, general and administrative expenses 114,215 18,718 59,709 192,642 Income (loss) from operations 133,962 (25,898 ) (58,358 ) 49,706 Total other income (expense), net 72 (4 ) (14,399 ) (14,331 ) Income (loss) before income taxes and non-controlling interests $ 134,034 $ (25,902 ) $ (72,757 ) $ 35,375 For the year ended December 31, 2016 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Revenue $ 827,324 $ 86,590 $ 83,389 $ 997,303 Cost of revenue 546,540 64,566 78,939 690,045 Gross profit 280,784 22,024 4,450 307,258 Selling, general and administrative expenses 121,508 23,291 69,356 214,155 Litigation settlement loss, net of $4,000 insurance recovery — — 28,000 28,000 Income (loss) from operations 159,276 (1,267 ) (92,906 ) 65,103 Total other income (expense), net 154 (5 ) (20,931 ) (20,782 ) Income (loss) before income taxes and non-controlling interests $ 159,430 $ (1,272 ) $ (113,837 ) $ 44,321 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Total assets: December 31, 2018 $ 236,138 $ 66,772 $ 438,790 $ 741,700 December 31, 2017 304,346 64,624 496,194 865,164 Our services are primarily provided to customers located in the United States. Premises and equipment, net consist of the following, by country, as of December 31 : (in thousands) 2018 2017 United States $ 25,693 $ 46,268 India 3,154 8,136 Luxembourg 14,975 16,688 Philippines 1,754 2,038 Uruguay 55 143 Total $ 45,631 $ 73,273 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following tables contain selected unaudited statement of operations information for each quarter of 2018 and 2017 . The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Our business is affected by seasonality. 2018 quarter ended (1)(2)(3)(4)(5)(6)(7) (in thousands, except per share data) March 31, June 30, September 30, December 31, Revenue $ 197,438 $ 218,556 $ 204,575 $ 217,633 Gross profit 50,244 55,350 56,995 53,448 (Loss) income before income taxes and non-controlling interests (4,972 ) 3,071 16,129 (12,829 ) Net (loss) income (3,607 ) 2,255 9,521 (10,868 ) Net (loss) income attributable to Altisource (4,132 ) 1,568 8,667 (11,485 ) (Loss) earnings per share: Basic $ (0.24 ) $ 0.09 $ 0.51 $ (0.69 ) Diluted $ (0.24 ) $ 0.09 $ 0.49 $ (0.69 ) Weighted average shares outstanding: Basic 17,378 17,142 17,033 16,745 Diluted 17,378 17,553 17,575 16,745 2017 quarter ended (1)(8) (in thousands, except per share data) March 31, June 30, September 30, December 31, Revenue $ 240,483 $ 250,685 $ 234,979 $ 216,066 Gross profit 62,530 65,292 60,081 54,445 Income before income taxes and non-controlling interests 9,746 12,160 10,357 3,112 Net income 7,160 9,722 7,766 286,983 Net income attributable to Altisource 6,545 9,035 6,961 286,350 Earnings per share: Basic $ 0.35 $ 0.49 $ 0.39 $ 16.16 Diluted $ 0.34 $ 0.48 $ 0.38 $ 15.72 Weighted average shares outstanding: Basic 18,662 18,335 18,023 17,724 Diluted 19,304 18,836 18,429 18,211 ______________________________________ (1) The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. (2) Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. (3) In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14 . (4) In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4 . (5) In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24 . (6) In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25 . (7) In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. (8) During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million . This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22 . |
SCHEDULE II. VALUATION AND QUAL
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2018 , 2017 and 2016 : Additions (in thousands) Balance at Beginning of Period Charged to Expenses Charged to Other Accounts Note (1) Deductions Note (2) Balance at End of Period Deductions from asset accounts: Allowance for doubtful accounts: Year 2018 $ 10,579 $ 2,830 $ (7 ) $ 2,519 $ 10,883 Year 2017 10,424 5,116 (3,107 ) 1,854 10,579 Year 2016 18,456 1,829 250 10,111 10,424 Valuation allowance for deferred tax assets: Year 2018 $ 46,283 $ 468 $ — $ — $ 46,751 Year 2017 3,467 42,816 — — 46,283 Year 2016 3,558 228 — 319 3,467 ______________________________________ (1) For allowance for doubtful accounts, primarily includes amounts previously written off which were credited directly to this account when recovered. (2) For allowance for doubtful accounts, amounts written off as uncollectible or transferred to other accounts or utilized. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting and Presentation | Basis of Accounting and Presentation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany transactions and accounts have been eliminated in consolidation. |
Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of the Company, its wholly-owned subsidiaries and those entities in which we have a variable interest and are the primary beneficiary. Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One ® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option). The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining share-based compensation, income taxes, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives and valuation of fixed assets and contingencies. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents We classify all highly liquid instruments with an original maturity of three months or less at the time of purchase as cash equivalents. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable are presented net of an allowance for doubtful accounts that represents an amount that we estimate to be uncollectible. We have estimated the allowance for doubtful accounts based on our historical write-offs, our analysis of past due accounts based on the contractual terms of the receivables and our assessment of the economic status of our customers, if known. The carrying value of accounts receivable, net, approximates fair value. |
Premises and Equipment, Net | Premises and Equipment, Net We report premises and equipment, net at cost or estimated fair value at acquisition for premises and equipment recorded in connection with a business combination and depreciate these assets over their estimated useful lives using the straight-line method as follows: Furniture and fixtures 5 years Office equipment 5 years Computer hardware 5 years Computer software 3-7 years Leasehold improvements Shorter of useful life, 10 years or the term of the lease Maintenance and repair costs are expensed as incurred. We capitalize expenditures for significant improvements and new equipment and depreciate the assets over the shorter of the capitalized asset’s life or the life of the lease. We review premises and equipment for impairment following events or changes in circumstances that indicate the carrying amount of an asset or asset group may not be recoverable. We measure recoverability of assets to be held and used by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, we recognize an impairment charge for the amount that the carrying value of the asset or asset group exceeds the fair value of the asset or asset group. Computer software includes the fair value of software acquired in business combinations, capitalized software development costs and purchased software. Capitalized software development and purchased software are recorded at cost and amortized using the straight-line method over their estimated useful lives. Software acquired in business combinations is recorded at fair value and amortized using the straight-line method over its estimated useful life. |
Business Combinations | Business Combinations We account for acquisitions using the purchase method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using their fair value as of the acquisition date. |
Goodwill | Goodwill Goodwill represents the excess cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative two-step goodwill impairment test. Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will we calculate the fair value of the reporting unit. We would then test goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows and market comparisons. The discounted cash flow method is based on the present value of projected cash flows. Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions. Certain estimates of discounted cash flows involve businesses with limited financial history and developing revenue models. The estimated cash flows are discounted using a rate that represents our weighted average cost of capital. The market comparisons include an analysis of revenue and earnings multiples of guideline public companies compared to the Company. |
Intangible Assets, Net | Intangible Assets, Net Identified intangible assets consist primarily of customer related intangible assets, operating agreements, trademarks and trade names and other intangible assets. Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors. We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 4 to 20 years. We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable. When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets generally consistent with models utilized for internal planning purposes. If the sum of the undiscounted expected future cash flows is less than the carrying value, we recognize an impairment to the extent the carrying amount exceeds fair value. |
Long-Term Debt | Long-Term Debt Long-term debt is reported net of applicable discount or premium and net of debt issuance costs. The debt discount or premium and debt issuance costs are amortized to interest expense through maturity of the related debt using the effective interest method. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: Level 1 — Quoted prices in active markets for identical assets and liabilities Level 2 — Observable inputs other than quoted prices included in Level 1 Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. |
Functional Currency | Functional Currency The currency of the primary economic environment in which our operations are conducted is the United States dollar. Therefore, the United States dollar has been determined to be our functional and reporting currency. Non-United States dollar transactions and balances have been measured in United States dollars in accordance with ASC Topic 830, Foreign Currency Matters . All transaction gains and losses from the measurement of monetary balance sheet items denominated in non-United States dollar currencies are reflected in the consolidated statements of operations and comprehensive income (loss) as income or expenses, as appropriate. |
Defined Contribution 401(k) Plan | Defined Contribution 401(k) Plan Some of our employees currently participate in a defined contribution 401(k) plan under which we may make matching contributions equal to a discretionary percentage determined by us. |
Revenue Recognition | Revenue Recognition We recognize revenue when we satisfy a performance obligation by transferring control of a product or service to a customer in an amount that reflects the consideration that we expect to receive. This revenue can be recognized at a point in time or over time. We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenues are recognized. When there is a timing difference between when we invoice customers and when revenues are recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred revenue or other current liabilities), as appropriate. A description of our principal revenue generating activities by reportable segment are as follows: Mortgage Market • For the majority of the services we provide through the Mortgage Market segment, we recognize transactional revenue when the service is provided. • For loan servicing technologies, we recognize revenue based on the number of loans on the system, on a per-transaction basis or over the estimated average number of months the loans and real estate owned (“REO”) are on the platform, as applicable. We generally recognize revenue for professional services relating to loan servicing technologies over the contract period. For our loan origination system, we generally recognize revenue over the contract term, beginning on the commencement date of each contract. For foreclosure trustee services, we recognize revenue over the period during which we perform the related services, with full recognition upon completion and/or recording the related foreclosure deed. For loan disbursement processing services, we recognize revenue over the period during which we perform the processing services with full recognition upon completion of the disbursements. We use judgment to determine the period over which we recognize revenue for certain of these services. For mortgage charge-off collections performed on behalf of our clients, we recognize revenue as a percentage of amounts collected following collection from the borrowers. • For real estate brokerage and auction services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount. • Reimbursable expenses revenue, primarily related to our property preservation and inspection services, real estate sales and our foreclosure trustee services businesses, is included in revenue with an equal amount recognized in cost of revenue. These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers. Real Estate Market • For the majority of the services we provide through the Real Estate Market segment, we recognize transactional revenue when the service is provided. • For renovation services, revenue is recognized over the period of the construction activity, based on the estimated percentage of completion of each project. We use judgment to determine the period over which we recognize revenue for certain of these services. For real estate brokerage and auction services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount. For the buy-renovate-lease-sell business, we recognize revenue associated with our sales of short-term investments in real estate on a gross basis (i.e., the selling price of the property) as we assume the risks and rewards of ownership of the asset. • Reimbursable expenses revenue, primarily related to our real estate sales business, is included in revenue with an equal offsetting expense recognized in cost of revenue. These amounts are recognized on a gross basis, principally because we generally have control over selection of vendors and the vendor relationships are with us, rather than with our customers. Other Businesses, Corporate and Eliminations • For the majority of the services we provide through Other Businesses, Corporate and Eliminations, we recognize transactional revenue when the service is provided. We generally earn fees for our post-charge-off consumer debt collection services as a percentage of the amount we collect on delinquent consumer receivables and recognize revenue following collection from the borrowers. We provide customer relationship management services for which we typically earn and recognize revenue on a per-person, per-call or per-minute basis as the related services are performed. • For the information technology (“IT”) infrastructure services we provide to Ocwen Financial Corporation (“Ocwen”), Front Yard Residential Corporation (“RESI”) and Altisource Asset Management Corporation (“AAMC”), we recognize revenue primarily based on the number of users of the applicable systems, fixed fees and the number and type of licensed platforms. We recognize revenue associated with implementation services upon completion and maintenance services ratably over the related service period. |
Share-Based Compensation | Share-Based Compensation Share-based compensation is accounted for under the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC Topic 718”). Under ASC Topic 718, the cost of services received in exchange for an award of equity instruments is generally measured based on the grant date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based awards that require future service are recognized over the relevant service period. In 2017, the Company adopted FASB Accounting Standards Update (“ASU”) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). In connection with adopting ASU 2016-09, the Company made an accounting policy election to account for forfeitures in compensation expense as they occur. Prior to adopting ASU No. 2016-09, the Company estimated forfeitures for share-based awards in compensation expense that were not expected to vest. |
Income Taxes | Income Taxes We record income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). We account for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our results of operations. |
Earnings Per Share | Earnings Per Share We compute earnings per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share . Basic net income per share is computed by dividing net income attributable to Altisource by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities using the treasury stock method. |
Recently Adopted Accounting Pronouncements and Future Adoption of New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and during 2016, the FASB issued additional guidance providing clarifications and corrections, including: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (collectively “Topic 606”) . Topic 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most prior revenue recognition guidance. This new standard requires that an entity recognize revenue for the transfer of promised goods or services to a customer in an amount that reflects the consideration that the entity expects to receive and consistent with the delivery of the performance obligation described in the underlying contract with the customer. The Company adopted Topic 606 effective January 1, 2018 retrospectively with the cumulative effect recognized on the date of initial application (the modified retrospective approach) for all contracts. As a result of this adoption, the Company recognized an $11.2 million increase in deferred revenue, a $1.1 million increase in unbilled accounts receivable, a $0.3 million increase in other current liabilities and a $10.4 million decrease in retained earnings as of January 1, 2018. Because the Company adopted Topic 606 retrospectively with a cumulative effect as of January 1, 2018, the comparative results as of and for the year ended December 31, 2017 have not been restated and continue to be reported under ASC Topic 605, Revenue Recognition and SEC Staff Accounting Bulletin Topic 13, Revenue Recognition . The details of the significant changes and quantitative impact of the adoption of Topic 606 are described below. Also see Revenue Recognition above and Note 18 for additional information on revenue, including disaggregation of revenue and contract balances. The following table summarizes the impact of adopting Topic 606 on the Company’s consolidated balance sheet as of December 31, 2018 : Impact of the adoption of Topic 606 (in thousands) As reported Adjustments Balances without adoption of Topic 606 Accounts receivable, net $ 36,466 $ (455 ) $ 36,011 Total current assets 201,534 (455 ) 201,079 Total assets 741,700 (455 ) 741,245 Deferred revenue 10,108 (1,511 ) 8,597 Other current liabilities 7,030 (3,490 ) 3,540 Total current liabilities 104,378 (5,001 ) 99,377 Other non-current liabilities 9,178 269 9,446 Retained earnings 590,655 4,277 594,932 Altisource equity 295,431 4,277 299,708 Total equity 296,668 4,277 300,945 Total liabilities and equity 741,700 (455 ) 741,245 The following table summarizes the impact of adopting Topic 606 on the Company’s consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2018 : Impact of the adoption of Topic 606 (in thousands) As reported Adjustments Balances without adoption of Topic 606 Revenue $ 838,202 $ (6,692 ) $ 831,510 Cost of revenue 622,165 2,116 624,281 Gross profit 216,037 (8,808 ) 207,229 Income from operations 42,495 (8,808 ) 33,687 Income (loss) before income taxes and non-controlling interests 1,399 (8,808 ) (7,409 ) Income tax (provision) benefit (4,098 ) 2,637 (1,461 ) Net loss (2,699 ) (6,171 ) (8,870 ) Net loss attributable to Altisource (5,382 ) (6,171 ) (11,553 ) The adoption of Topic 606 did not have any impact on net cash flows used in operating, financing or investing activities on the Company’s consolidated statement of cash flows for the year ended December 31, 2018 . In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This standard requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The standard also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. It also amends certain financial statement presentation and disclosure requirements associated with the fair value of financial instruments. This standard was effective for the Company on January 1, 2018. The adoption of this standard resulted in a cumulative effect adjustment to increase retained earnings and decrease accumulated other comprehensive income by $0.7 million on January 1, 2018. Changes in the fair value of the Company’s investment in RESI subsequent to January 1, 2018, as well as any equity investments acquired in the future, are reflected as a component of net income in the Company’s consolidated statements of operations and comprehensive income (loss). In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s consolidated statement of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This standard requires that companies recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs. Previous guidance prohibited companies from recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This standard requires that companies include restricted cash and restricted cash equivalents in their cash and cash equivalent balances in the statement of cash flows. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard was effective for the Company on January 1, 2018, and was adopted using the retrospective transition method, as required by the standard. The adoption of this standard resulted in the classification of the Company’s restricted cash with cash and cash equivalents reflected in the Company’s consolidated statements of cash flows. As a result, the Company included $ 5.8 million , $3.8 million and $4.1 million of restricted cash with cash and cash equivalents in its consolidated statements of cash flows as of December 31, 2018 , 2017 and 2016 , respectively. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This standard clarifies the definition of a business and provides a screen to determine if a set of inputs, processes and outputs is a business. The standard specifies that when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the assets acquired would not be a business. Under the new guidance, in order to be considered a business, an acquisition must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. In addition, the standard narrows the definition of the term “output” so that it is consistent with how it is described in Topic 606 . This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. In February 2017, the FASB issued ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets . This standard was issued to clarify the scope of Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets , and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20 provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. In May 2017, the FASB issued ASU No. 2017-09, C ompensation—Stock Compensation (Topic 718): Scope of Modification Accounting . This standard provides guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting. This standard requires companies to continue to apply modification accounting, unless the fair value, vesting conditions and classification of an award all do not change as a result of the modification. This standard was effective for the Company on January 1, 2018, and the adoption of this guidance did not have any effect on the Company’s results of operations and financial position. Future Adoption of New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and in July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (collectively “Topic 842”). Topic 842 introduces a new lessee model that brings substantially all leases on the balance sheet. This standard will require lessees to recognize lease assets and lease liabilities on their balance sheets and disclose key information about leasing arrangements in their financial statements. This standard will be effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period. Based on the Company’s analysis of arrangements where the Company is a lessee, we estimate that the new standard will result in the addition of approximately $42.4 million right-of-use assets and lease liabilities onto the Company’s consolidated balance sheet. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step 2 by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. This standard will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period, and will be applied prospectively. Early adoption of this standard is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements; however, adoption of this standard as of December 31, 2018 would not have had any impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts . This standard requires at a minimum the annual review of the assumptions used for liability measurement with the impact of any change recorded in net income, standardizes the liability discount rate with the effect of rate changes recorded in other comprehensive income, requires the measurement of market risk benefits at fair value, simplifies the amortization of deferred acquisition costs and requires enhanced disclosures. This standard will be effective for annual periods beginning after December 15, 2020, including interim periods within that reporting period. Early adoption of this standard is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . This standard modifies certain disclosure requirements such as the valuation processes for Level 3 fair value measurements. This standard also requires new disclosures such as the disclosure of certain assumptions used to develop significant unobservable inputs for Level 3 fair value measurements. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period. Early adoption of either the entire standard or only the provisions that eliminate or modify requirements is permitted. The Company currently does not expect the adoption of this guidance to have an impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) . This standard aligns the requirements for capitalizing implementation costs in a hosting arrangement service contract with the existing guidance for capitalizing implementation costs incurred for an internal-use software license. This standard also requires capitalizing or expensing implementation costs based on the nature of the costs and the project stage during which they are incurred and establishes additional disclosure requirements. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period. Early adoption of this standard is permitted. The Company currently plans to adopt the standard prospectively and is currently evaluating the impact this guidance may have on its consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives using the straight-line method | We report premises and equipment, net at cost or estimated fair value at acquisition for premises and equipment recorded in connection with a business combination and depreciate these assets over their estimated useful lives using the straight-line method as follows: Furniture and fixtures 5 years Office equipment 5 years Computer hardware 5 years Computer software 3-7 years Leasehold improvements Shorter of useful life, 10 years or the term of the lease |
Schedule of impact of adopting Topic 606 on financial statements | The following table summarizes the impact of adopting Topic 606 on the Company’s consolidated balance sheet as of December 31, 2018 : Impact of the adoption of Topic 606 (in thousands) As reported Adjustments Balances without adoption of Topic 606 Accounts receivable, net $ 36,466 $ (455 ) $ 36,011 Total current assets 201,534 (455 ) 201,079 Total assets 741,700 (455 ) 741,245 Deferred revenue 10,108 (1,511 ) 8,597 Other current liabilities 7,030 (3,490 ) 3,540 Total current liabilities 104,378 (5,001 ) 99,377 Other non-current liabilities 9,178 269 9,446 Retained earnings 590,655 4,277 594,932 Altisource equity 295,431 4,277 299,708 Total equity 296,668 4,277 300,945 Total liabilities and equity 741,700 (455 ) 741,245 The following table summarizes the impact of adopting Topic 606 on the Company’s consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2018 : Impact of the adoption of Topic 606 (in thousands) As reported Adjustments Balances without adoption of Topic 606 Revenue $ 838,202 $ (6,692 ) $ 831,510 Cost of revenue 622,165 2,116 624,281 Gross profit 216,037 (8,808 ) 207,229 Income from operations 42,495 (8,808 ) 33,687 Income (loss) before income taxes and non-controlling interests 1,399 (8,808 ) (7,409 ) Income tax (provision) benefit (4,098 ) 2,637 (1,461 ) Net loss (2,699 ) (6,171 ) (8,870 ) Net loss attributable to Altisource (5,382 ) (6,171 ) (11,553 ) |
CUSTOMER CONCENTRATION (Tables)
CUSTOMER CONCENTRATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of customer concentration revenue as a percentage of segment and consolidated revenue | Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows for the years ended December 31 : 2018 2017 2016 Mortgage Market 63 % 67 % 65 % Real Estate Market 1 % 1 % — % Other Businesses, Corporate and Eliminations 9 % 11 % 27 % Consolidated revenue 52 % 58 % 56 % |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation | The final allocation of the purchase price is as follows: (in thousands) Accounts receivable, net $ 1,024 Prepaid expenses 22 Other assets 25 Premises and equipment, net 299 Non-compete agreements 100 Trademarks and trade names 100 Customer relationships 3,400 Goodwill 4,827 9,797 Accounts payable and accrued expenses (57 ) Other current liabilities (192 ) Purchase price $ 9,548 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net | Accounts receivable, net consists of the following as of December 31: (in thousands) 2018 2017 Billed $ 35,590 $ 40,787 Unbilled 11,759 22,532 47,349 63,319 Less: Allowance for doubtful accounts (10,883 ) (10,579 ) Total $ 36,466 $ 52,740 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following as of December 31 : (in thousands) 2018 2017 Maintenance agreements, current portion $ 5,600 $ 8,014 Income taxes receivable 7,940 9,227 Prepaid expenses 7,484 7,898 Other current assets 9,696 10,198 Total $ 30,720 $ 35,337 |
PREMISES AND EQUIPMENT, NET (Ta
PREMISES AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment, net | Premises and equipment, net consists of the following as of December 31 : (in thousands) 2018 2017 Computer hardware and software $ 182,215 $ 179,567 Office equipment and other 7,384 9,388 Furniture and fixtures 13,313 14,092 Leasehold improvements 29,781 33,417 232,693 236,464 Less: Accumulated depreciation and amortization (187,062 ) (163,191 ) Total $ 45,631 $ 73,273 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in goodwill | Changes in goodwill during the years ended December 31, 2018 and 2017 are summarized below: (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Total Balance as of January 1 and December 31, 2017 $ 73,259 $ 10,056 $ 2,968 $ 86,283 Disposition — (2,256 ) — (2,256 ) Write-off — (2,640 ) — (2,640 ) Balance as of December 31, 2018 $ 73,259 $ 5,160 $ 2,968 $ 81,387 |
Schedule of intangible assets, net | Intangible assets, net consist of the following as of December 31 : Weighted average estimated useful life (in years) Gross carrying amount Accumulated amortization Net book value (in thousands) 2018 2017 2018 2017 2018 2017 Definite lived intangible assets: Trademarks and trade names 15 $ 11,349 $ 15,354 $ (6,244 ) $ (8,881 ) $ 5,105 $ 6,473 Customer related intangible assets 10 273,172 277,828 (207,639 ) (188,258 ) 65,533 89,570 Operating agreement 20 35,000 35,000 (15,632 ) (13,865 ) 19,368 21,135 Non-compete agreements 4 1,230 1,560 (1,026 ) (897 ) 204 663 Intellectual property 10 300 300 (145 ) (115 ) 155 185 Other intangible assets 5 3,745 3,745 (2,457 ) (1,706 ) 1,288 2,039 Total $ 324,796 $ 333,787 $ (233,143 ) $ (213,722 ) $ 91,653 $ 120,065 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other assets | Other assets consist of the following as of December 31 : (in thousands) 2018 2017 Security deposits $ 3,972 $ 5,304 Restricted cash 5,752 3,837 Other 2,682 1,054 Total $ 12,406 $ 10,195 |
ACCOUNTS PAYABLE, ACCRUED EXP_2
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following as of December 31 : (in thousands) 2018 2017 Accounts payable $ 27,853 $ 15,682 Accrued salaries and benefits 31,356 41,363 Accrued expenses - general 27,866 27,268 Income taxes payable 165 87 Total $ 87,240 $ 84,400 |
Schedule of other current liabilities | Other current liabilities consist of the following as of December 31 : (in thousands) 2018 2017 Unfunded cash account balances $ 4,932 $ 5,900 Other 2,098 3,514 Total $ 7,030 $ 9,414 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following as of December 31 : (in thousands) 2018 2017 Senior secured term loans $ 338,822 $ 413,581 Less: Debt issuance costs, net (3,855 ) (3,158 ) Less: Unamortized discount, net (3,491 ) (1,142 ) Net long-term debt 331,476 409,281 Less: Current portion — (5,945 ) Long-term debt, less current portion $ 331,476 $ 403,336 |
Schedule of maturities of long-term debt | Maturities of our long-term debt are as follows: (in thousands) Maturities 2019 $ — 2020 18,492 2021 12,360 2022 12,360 2023 12,360 2024 283,250 $ 338,822 |
OTHER NON-CURRENT LIABILITIES (
OTHER NON-CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other non-current liabilities | Other non-current liabilities consist of the following as of December 31 : (in thousands) 2018 2017 Income tax liabilities $ 7,069 $ 5,955 Deferred revenue 19 2,101 Other non-current liabilities 2,090 4,226 Total $ 9,178 $ 12,282 |
FAIR VALUE MEASUREMENTS AND F_2
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements, recurring and nonrecurring | The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP: December 31, 2018 December 31, 2017 (in thousands) Carrying amount Fair value Carrying amount Fair value Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 58,294 $ 58,294 $ — $ — $ 105,006 $ 105,006 $ — $ — Restricted cash 5,752 5,752 — — 3,837 3,837 — — Investment in equity securities 36,181 36,181 — — 49,153 49,153 — — Long-term receivable ( Note 4 ) 2,221 — — 2,221 — — — — Liabilities: Senior secured term loan 338,822 — 330,351 — 413,581 — 407,377 — |
SHAREHOLDERS' EQUITY AND SHAR_2
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used to determine the fair value of options as of the grant date | The following assumptions were used to determine the fair values as of the grant date: 2018 2017 2016 Black-Scholes Binomial Black-Scholes Binomial Black-Scholes Binomial Risk-free interest rate (%) 2.66 – 3.10 1.64 – 3.22 1.89 – 2.29 0.77 – 2.38 1.25 – 1.89 0.23 – 2.23 Expected stock price volatility (%) 70.31 – 71.86 71.36 – 71.86 61.49 – 71.52 66.68 – 71.52 59.75 – 62.14 59.76 – 62.14 Expected dividend yield — — — — — — Expected option life (in years) 6.00 – 6.25 2.56 – 4.33 6.00 – 7.50 2.55 – 4.82 6.00 – 6.25 4.06 – 4.88 Fair value $16.17 – $19.68 $14.67 – $20.26 $13.57 – $24.80 $11.94 – $24.30 $11.15 – $18.60 $11.06 – $19.27 |
Summary of the weighted average fair value of stock options granted, the total intrinsic value of stock options exercised and the fair value of options vested | The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31 : (in thousands, except per share amounts) 2018 2017 2016 Weighted average grant date fair value of stock options granted per share $ 16.31 $ 20.44 $ 16.82 Intrinsic value of stock options exercised 4,609 3,028 18,209 Grant date fair value of stock options that vested 1,760 2,279 2,698 |
Summary of the activity of the entity's stock options | The following table summarizes the activity related to our stock options: Number of options Weighted average exercise price Weighted average contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2017 1,745,906 $ 28.20 4.96 $ 10,202 Granted 276,876 25.15 Exercised (330,537 ) 11.33 Forfeited (251,679 ) 32.21 Outstanding at December 31, 2018 1,440,566 30.78 5.04 945 Exercisable at December 31, 2018 874,304 27.42 3.20 902 |
Shares authorized under stock option plans, by exercise price range | The following table summarizes information about stock options outstanding and exercisable at December 31, 2018 : Options outstanding Options exercisable Exercise price range (1) Number Weighted average remaining contractual life (in years) Weighted average exercise price Number Weighted average remaining contractual life (in years) Weighted average exercise price $10.01 — $20.00 212,667 6.06 $ 18.79 203,344 6.05 $ 18.79 $20.01 — $30.00 925,563 4.79 24.60 537,607 2.07 23.81 $30.01 — $40.00 132,586 6.20 34.63 54,478 3.54 32.82 $60.01 — $70.00 71,000 3.19 60.73 51,375 3.19 60.74 $70.01 — $80.00 25,000 4.51 72.78 6,250 0.45 72.78 $80.01 — $90.00 25,000 5.60 86.69 6,250 5.60 86.69 $90.01 — $100.00 46,875 5.00 95.64 13,125 4.51 95.59 $100.01 — $110.00 1,875 0.45 105.11 1,875 0.45 105.11 1,440,566 874,304 ______________________________________ (1) These options contain market-based and performance-based components as described above. |
Shares authorized under stock option plans by vesting price range | The following table summarizes the market prices necessary in order for the market-based options to begin to vest: Market-based options Vesting price Ordinary performance Extraordinary performance $40.01 — $50.00 6,400 — $50.01 — $60.00 60,164 9,323 $60.01 — $70.00 16,648 6,325 $70.01 — $80.00 — 11,500 $80.01 — $90.00 — 19,080 $90.01 — $100.00 — 8,325 $140.01 — $150.00 12,500 — $170.01 — $180.00 12,500 — $180.01 — $190.00 7,500 19,625 Over $190.00 15,000 23,750 Total 130,712 97,928 Weighted average share price $ 49.46 $ 47.79 |
Restricted shares and restricted share units activity | The following table summarizes the activity related to our restricted shares and restricted share units: Number of restricted shares and restricted Outstanding at December 31, 2017 356,509 Granted 375,524 Issued (111,565 ) Forfeited/canceled (134,662 ) Outstanding at December 31, 2018 485,806 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenues [Abstract] | |
Schedule of revenue | The components of revenue were as follows for the years ended December 31 : (in thousands) 2018 2017 2016 Service revenue $ 805,480 $ 899,561 $ 942,599 Reimbursable expenses 30,039 39,912 52,011 Non-controlling interests 2,683 2,740 2,693 Total $ 838,202 $ 942,213 $ 997,303 |
Disaggregation of revenue | Disaggregation of total revenues by segments and major source is as follows: Twelve months ended December 31, 2018 (in thousands) Revenue recognized when services are performed or assets are sold Revenue related to technology platforms and professional services Reimbursable expenses revenue Total revenue Mortgage Market: Servicer Solutions $ 537,161 $ 73,782 $ 28,207 $ 639,150 Origination Solutions 38,597 8,909 249 47,755 Total Mortgage Market 575,758 82,691 28,456 686,905 Real Estate Market: Consumer Real Estate Solutions 8,593 — 2 8,595 Real Estate Investor Solutions 80,162 — 1,533 81,695 Total Real Estate Market 88,755 — 1,535 90,290 Other Businesses, Corporate and Eliminations 55,226 5,733 48 61,007 Total revenue $ 719,739 $ 88,424 $ 30,039 $ 838,202 |
COST OF REVENUE (Tables)
COST OF REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cost of Revenue [Abstract] | |
Schedule of components of cost of revenue | The components of cost of revenue were as follows for the years ended December 31 : (in thousands) 2018 2017 2016 Compensation and benefits $ 200,486 $ 240,487 $ 264,796 Outside fees and services 278,380 325,459 301,116 Cost of real estate sold 47,659 24,398 1,040 Reimbursable expenses 30,039 39,912 52,011 Technology and telecommunications 41,588 42,340 44,295 Depreciation and amortization 24,013 27,269 26,787 Total $ 622,165 $ 699,865 $ 690,045 |
SELLING, GENERAL AND ADMINIST_2
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER OPERATING EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selling, General and Administrative Expense [Abstract] | |
Schedule of the components of selling, general and administrative expenses | The components of selling, general and administrative expenses were as follows for the years ended December 31 : (in thousands) 2018 2017 2016 Compensation and benefits $ 51,043 $ 58,157 $ 55,577 Professional services 16,950 13,421 23,284 Occupancy related costs 30,851 36,371 37,370 Amortization of intangible assets 28,412 35,367 47,576 Depreciation and amortization 6,786 9,178 10,001 Marketing costs 14,707 16,171 27,847 Other 26,921 23,977 12,500 Total $ 175,670 $ 192,642 $ 214,155 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of other income (expense), net | Other income (expense), net consists of the following for the years ended December 31 : (in thousands) 2018 2017 2016 Loss on debt refinancing $ (4,434 ) $ — $ — Gain on early extinguishment of debt — 5,637 5,464 Expenses related to the purchase of investment in equity securities — — (3,356 ) Interest income 740 270 91 Other, net 1,824 2,015 1,431 Total $ (1,870 ) $ 7,922 $ 3,630 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income tax, domestic and foreign | The components of income before income taxes and non-controlling interests consist of the following for the years ended December 31 : (in thousands) 2018 2017 2016 Domestic - Luxembourg $ (22,513 ) $ 9,123 $ 8,498 Foreign - U.S. 8,398 7,967 16,655 Foreign - non-U.S. 15,514 18,285 19,168 Total $ 1,399 $ 35,375 $ 44,321 |
Schedule of income tax provision (benefit) | The income tax provision (benefit) consists of the following for the years ended December 31 : (in thousands) 2018 2017 2016 Current: Domestic - Luxembourg $ 275 $ 737 $ 160 Foreign - U.S. federal 1,838 2,405 9,556 Foreign - U.S. state 336 364 258 Foreign - non-U.S. 7,440 17,574 5,558 $ 9,889 $ 21,080 $ 15,532 Deferred: Domestic - Luxembourg $ (4,927 ) $ (295,318 ) $ 432 Foreign - U.S. federal (291 ) (111 ) (3,065 ) Foreign - U.S. state 134 (210 ) (100 ) Foreign - non-U.S. (707 ) (1,697 ) 136 $ (5,791 ) $ (297,336 ) $ (2,597 ) Income tax provision (benefit) $ 4,098 $ (276,256 ) $ 12,935 |
Summary of tax effects of the temporary differences | A summary of the tax effects of the temporary differences is as follows for the years ended December 31 : (in thousands) 2018 2017 Non-current deferred tax assets: Net operating loss carryforwards $ 353,209 $ 349,154 U.S. federal and state tax credits 314 407 Other non-U.S. deferred tax assets 6,161 5,724 Share-based compensation 1,586 1,496 Accrued expenses 5,242 6,494 Unrealized losses 3,131 — Non-current deferred tax liabilities: Intangible assets (9,855 ) (8,015 ) Depreciation (1,225 ) (3,318 ) Other non-U.S. deferred tax liability (1,769 ) (1,692 ) Other (954 ) (260 ) 355,840 349,990 Valuation allowance (46,751 ) (46,283 ) Non-current deferred tax assets, net $ 309,089 $ 303,707 |
Schedule of the reconciliation of income tax provision to the Luxembourg statutory income tax rate | The following table reconciles the Luxembourg statutory tax rate to our effective tax rate for the years ended December 31 : 2018 2017 2016 Statutory tax rate 26.01 % 27.08 % 29.22 % Change in valuation allowance 43.08 119.20 (0.08 ) State tax expense 28.58 0.50 2.30 Tax credits — (2.13 ) (1.81 ) Uncertain tax positions 114.18 30.16 (3.65 ) Unrecognized tax loss — (1,008.20 ) — Income tax rate change — 57.36 — Tax rate differences on foreign earnings 73.11 — — Other 7.96 (4.91 ) 3.20 Effective tax rate 292.92 % (780.94 )% 29.18 % |
Summary of income tax contingencies | The following table summarizes changes in unrecognized tax benefits during the years ended December 31 : (in thousands) 2018 2017 Amount of unrecognized tax benefits as of the beginning of the year $ 8,892 $ 758 Decreases as a result of tax positions taken in a prior period (956 ) (78 ) Increases as a result of tax positions taken in a prior period 1 53 Increases as a result of tax positions taken in the current period 1,750 8,159 Amount of unrecognized tax benefits as of the end of the year $ 9,687 $ 8,892 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted EPS calculation | Basic and diluted EPS are calculated as follows for the years ended December 31 : (in thousands, except per share data) 2018 2017 2016 Net (loss) income attributable to Altisource $ (5,382 ) $ 308,891 $ 28,693 Weighted average common shares outstanding, basic 17,073 18,183 18,696 Dilutive effect of stock options, restricted shares and — 509 916 Weighted average common shares outstanding, diluted 17,073 18,692 19,612 (Loss) earnings per share: Basic $ (0.32 ) $ 16.99 $ 1.53 Diluted $ (0.32 ) $ 16.53 $ 1.46 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under non-cancelable capital and operating leases with an original term exceeding one year | Future minimum lease payments at December 31, 2018 under non-cancelable operating leases with an original term exceeding one year are as follows: (in thousands) Operating lease obligations 2019 $ 17,600 2020 14,137 2021 9,849 2022 5,558 2023 3,441 Thereafter 1,323 $ 51,908 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of financial information of segments | Financial information for our segments is as follows: For the year ended December 31, 2018 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Revenue $ 686,905 $ 90,290 $ 61,007 $ 838,202 Cost of revenue 447,108 102,893 72,164 622,165 Gross profit (loss) 239,797 (12,603 ) (11,157 ) 216,037 Operating expenses (income): Selling, general and administrative expenses 85,013 21,561 69,096 175,670 Gain on sale of business — (13,688 ) — (13,688 ) Restructuring charges 2,495 113 8,952 11,560 Income (loss) from operations 152,289 (20,589 ) (89,205 ) 42,495 Total other income (expense), net 81 77 (41,254 ) (41,096 ) Income (loss) before income taxes and non-controlling interests $ 152,370 $ (20,512 ) $ (130,459 ) $ 1,399 For the year ended December 31, 2017 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Revenue $ 793,684 $ 89,787 $ 58,742 $ 942,213 Cost of revenue 545,507 96,967 57,391 699,865 Gross profit (loss) 248,177 (7,180 ) 1,351 242,348 Selling, general and administrative expenses 114,215 18,718 59,709 192,642 Income (loss) from operations 133,962 (25,898 ) (58,358 ) 49,706 Total other income (expense), net 72 (4 ) (14,399 ) (14,331 ) Income (loss) before income taxes and non-controlling interests $ 134,034 $ (25,902 ) $ (72,757 ) $ 35,375 For the year ended December 31, 2016 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Revenue $ 827,324 $ 86,590 $ 83,389 $ 997,303 Cost of revenue 546,540 64,566 78,939 690,045 Gross profit 280,784 22,024 4,450 307,258 Selling, general and administrative expenses 121,508 23,291 69,356 214,155 Litigation settlement loss, net of $4,000 insurance recovery — — 28,000 28,000 Income (loss) from operations 159,276 (1,267 ) (92,906 ) 65,103 Total other income (expense), net 154 (5 ) (20,931 ) (20,782 ) Income (loss) before income taxes and non-controlling interests $ 159,430 $ (1,272 ) $ (113,837 ) $ 44,321 (in thousands) Mortgage Market Real Estate Market Other Businesses, Corporate and Eliminations Consolidated Altisource Total assets: December 31, 2018 $ 236,138 $ 66,772 $ 438,790 $ 741,700 December 31, 2017 304,346 64,624 496,194 865,164 |
Schedule of premises and equipment, net by country | Our services are primarily provided to customers located in the United States. Premises and equipment, net consist of the following, by country, as of December 31 : (in thousands) 2018 2017 United States $ 25,693 $ 46,268 India 3,154 8,136 Luxembourg 14,975 16,688 Philippines 1,754 2,038 Uruguay 55 143 Total $ 45,631 $ 73,273 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly results | The operating results for any quarter are not necessarily indicative of results for any future period. Our business is affected by seasonality. 2018 quarter ended (1)(2)(3)(4)(5)(6)(7) (in thousands, except per share data) March 31, June 30, September 30, December 31, Revenue $ 197,438 $ 218,556 $ 204,575 $ 217,633 Gross profit 50,244 55,350 56,995 53,448 (Loss) income before income taxes and non-controlling interests (4,972 ) 3,071 16,129 (12,829 ) Net (loss) income (3,607 ) 2,255 9,521 (10,868 ) Net (loss) income attributable to Altisource (4,132 ) 1,568 8,667 (11,485 ) (Loss) earnings per share: Basic $ (0.24 ) $ 0.09 $ 0.51 $ (0.69 ) Diluted $ (0.24 ) $ 0.09 $ 0.49 $ (0.69 ) Weighted average shares outstanding: Basic 17,378 17,142 17,033 16,745 Diluted 17,378 17,553 17,575 16,745 2017 quarter ended (1)(8) (in thousands, except per share data) March 31, June 30, September 30, December 31, Revenue $ 240,483 $ 250,685 $ 234,979 $ 216,066 Gross profit 62,530 65,292 60,081 54,445 Income before income taxes and non-controlling interests 9,746 12,160 10,357 3,112 Net income 7,160 9,722 7,766 286,983 Net income attributable to Altisource 6,545 9,035 6,961 286,350 Earnings per share: Basic $ 0.35 $ 0.49 $ 0.39 $ 16.16 Diluted $ 0.34 $ 0.48 $ 0.38 $ 15.72 Weighted average shares outstanding: Basic 18,662 18,335 18,023 17,724 Diluted 19,304 18,836 18,429 18,211 ______________________________________ (1) The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. (2) Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. (3) In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14 . (4) In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4 . (5) In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24 . (6) In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25 . (7) In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. (8) During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million . This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22 . |
ORGANIZATION (Details)
ORGANIZATION (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Jan. 01, 2017 | |
Defined Contribution 401(k) Plan | |||||
Expense recorded for discretionary amounts contributed | $ 1,200 | $ 1,200 | $ 1,200 | ||
New Accounting Pronouncements | |||||
Deferred revenue | 10,108 | 9,802 | |||
Other current liabilities | 7,030 | 9,414 | |||
Retained earnings decrease | (590,655) | (626,600) | |||
Cumulative effect (decrease) increase of an accounting change | $ (10,448) | $ 0 | |||
Restricted cash | 5,752 | 3,837 | $ 4,127 | ||
Accumulated other comprehensive income (loss) | |||||
New Accounting Pronouncements | |||||
Cumulative effect (decrease) increase of an accounting change | (733) | ||||
Retained earnings | |||||
New Accounting Pronouncements | |||||
Cumulative effect (decrease) increase of an accounting change | (9,715) | (932) | |||
Accounting Standards Update 2016-09 | Retained earnings | |||||
New Accounting Pronouncements | |||||
Cumulative effect (decrease) increase of an accounting change | $ (900) | ||||
Accounting Standards Update 2016-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
New Accounting Pronouncements | |||||
Deferred revenue | 11,200 | ||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
New Accounting Pronouncements | |||||
Deferred revenue | (1,511) | ||||
Unbilled accounts receivable | 1,100 | ||||
Other current liabilities | (3,490) | 300 | |||
Retained earnings decrease | (4,277) | 10,400 | |||
Accounting Standards Update 2016-01 | Accumulated other comprehensive income (loss) | |||||
New Accounting Pronouncements | |||||
Cumulative effect (decrease) increase of an accounting change | (700) | ||||
Accounting Standards Update 2016-01 | Retained earnings | |||||
New Accounting Pronouncements | |||||
Cumulative effect (decrease) increase of an accounting change | $ 700 | ||||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements | |||||
Operating lease, right-of-use, estimated asset and liability (approximately) | $ 42,400 | ||||
Furniture and fixtures | |||||
Premises and Equipment, Net | |||||
Estimated useful lives | 5 years | ||||
Office equipment | |||||
Premises and Equipment, Net | |||||
Estimated useful lives | 5 years | ||||
Computer hardware | |||||
Premises and Equipment, Net | |||||
Estimated useful lives | 5 years | ||||
Computer software | Minimum | |||||
Premises and Equipment, Net | |||||
Estimated useful lives | 3 years | ||||
Computer software | Maximum | |||||
Premises and Equipment, Net | |||||
Estimated useful lives | 7 years | ||||
Leasehold improvements | Maximum | |||||
Premises and Equipment, Net | |||||
Estimated useful lives | 10 years | ||||
Lenders One | |||||
Principles of Consolidation | |||||
Total assets | $ 2,700 | 4,600 | |||
Total liabilities | $ 1,300 | $ 3,100 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impact on Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable, net | $ 36,466 | $ 52,740 | |||
Total current assets | 201,534 | 271,641 | |||
Total assets | 741,700 | 865,164 | |||
Deferred revenue | 10,108 | 9,802 | |||
Other current liabilities | 7,030 | 9,414 | |||
Total current liabilities | 104,378 | 109,561 | |||
Other non-current liabilities | 9,178 | 12,282 | |||
Retained earnings | 590,655 | 626,600 | |||
Altisource equity | 295,431 | 338,612 | |||
Total equity | 296,668 | 339,985 | $ 62,194 | $ 52,270 | |
Total liabilities and equity | 741,700 | $ 865,164 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable, net | 36,011 | ||||
Total current assets | 201,079 | ||||
Total assets | 741,245 | ||||
Deferred revenue | 8,597 | ||||
Other current liabilities | 3,540 | ||||
Total current liabilities | 99,377 | ||||
Other non-current liabilities | 9,446 | ||||
Retained earnings | 594,932 | ||||
Altisource equity | 299,708 | ||||
Total equity | 300,945 | ||||
Total liabilities and equity | 741,245 | ||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable, net | (455) | ||||
Total current assets | (455) | ||||
Total assets | (455) | ||||
Deferred revenue | (1,511) | ||||
Other current liabilities | (3,490) | $ 300 | |||
Total current liabilities | (5,001) | ||||
Other non-current liabilities | 269 | ||||
Retained earnings | 4,277 | $ (10,400) | |||
Altisource equity | 4,277 | ||||
Total equity | 4,277 | ||||
Total liabilities and equity | $ (455) |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impact on Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Sep. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Jun. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017 | [7],[8] | Sep. 30, 2017 | [7],[8] | Jun. 30, 2017 | [7],[8] | Mar. 31, 2017 | [7],[8] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||||||||
Revenue | $ 217,633 | $ 204,575 | $ 218,556 | $ 197,438 | $ 216,066 | $ 234,979 | $ 250,685 | $ 240,483 | $ 838,202 | $ 942,213 | $ 997,303 | ||||||||
Cost of revenue | 622,165 | 699,865 | 690,045 | ||||||||||||||||
Gross profit | 53,448 | 56,995 | 55,350 | 50,244 | 54,445 | 60,081 | 65,292 | 62,530 | 216,037 | 242,348 | 307,258 | ||||||||
Income from operations | 42,495 | 49,706 | 65,103 | ||||||||||||||||
Income (loss) before income taxes and non-controlling interests | (12,829) | 16,129 | 3,071 | (4,972) | 3,112 | 10,357 | 12,160 | 9,746 | 1,399 | 35,375 | 44,321 | ||||||||
Income tax (provision) benefit | (4,098) | 276,256 | (12,935) | ||||||||||||||||
Net (loss) income | (10,868) | 9,521 | 2,255 | (3,607) | 286,983 | 7,766 | 9,722 | 7,160 | (2,699) | 311,631 | 31,386 | ||||||||
Net (loss) income attributable to Altisource | $ (11,485) | $ 8,667 | $ 1,568 | $ (4,132) | $ 286,350 | $ 6,961 | $ 9,035 | $ 6,545 | (5,382) | $ 308,891 | $ 28,693 | ||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||||||||
Revenue | (6,692) | ||||||||||||||||||
Cost of revenue | 2,116 | ||||||||||||||||||
Gross profit | (8,808) | ||||||||||||||||||
Income from operations | (8,808) | ||||||||||||||||||
Income (loss) before income taxes and non-controlling interests | (8,808) | ||||||||||||||||||
Income tax (provision) benefit | 2,637 | ||||||||||||||||||
Net (loss) income | (6,171) | ||||||||||||||||||
Net (loss) income attributable to Altisource | (6,171) | ||||||||||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||||||||||
Revenue | 831,510 | ||||||||||||||||||
Cost of revenue | 624,281 | ||||||||||||||||||
Gross profit | 207,229 | ||||||||||||||||||
Income from operations | 33,687 | ||||||||||||||||||
Income (loss) before income taxes and non-controlling interests | (7,409) | ||||||||||||||||||
Income tax (provision) benefit | (1,461) | ||||||||||||||||||
Net (loss) income | (8,870) | ||||||||||||||||||
Net (loss) income attributable to Altisource | $ (11,553) | ||||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | ||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | ||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | ||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | ||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | ||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | ||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | ||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
CUSTOMER CONCENTRATION (Details
CUSTOMER CONCENTRATION (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 31, 2018 | Jul. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Jun. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017 | Sep. 30, 2017 | [7],[8] | Jun. 30, 2017 | [7],[8] | Mar. 31, 2017 | [7],[8] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | $ 217,633 | [1],[2],[3],[4],[5],[6],[7] | $ 204,575 | $ 218,556 | $ 197,438 | $ 216,066 | [7],[8] | $ 234,979 | $ 250,685 | $ 240,483 | $ 838,202 | $ 942,213 | $ 997,303 | |||||||||
Operating Segment | Mortgage Market | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 686,905 | 793,684 | 827,324 | |||||||||||||||||||
Operating Segment | Real Estate Market | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 90,290 | 89,787 | 86,590 | |||||||||||||||||||
Other Businesses, Corporate and Eliminations | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 61,007 | 58,742 | 83,389 | |||||||||||||||||||
Service revenue | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 805,480 | 899,561 | 942,599 | |||||||||||||||||||
Ocwen | NRZ | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Subservice transferred subject MSRs, initial term | 5 years | 5 years | ||||||||||||||||||||
Ocwen | Service revenue | REALServicing | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 35,100 | 37,200 | $ 40,200 | |||||||||||||||||||
Ocwen | Customer Concentration Risk | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Accounts receivable from largest customer | 15,200 | 18,900 | 15,200 | 18,900 | ||||||||||||||||||
Ocwen | Customer Concentration Risk | Billed | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Accounts receivable from largest customer | 11,600 | 13,600 | 11,600 | 13,600 | ||||||||||||||||||
Ocwen | Customer Concentration Risk | Unbilled | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Accounts receivable from largest customer | $ 3,600 | $ 5,300 | $ 3,600 | $ 5,300 | ||||||||||||||||||
Ocwen | Customer Concentration Risk | Revenue | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 52.00% | 58.00% | 56.00% | |||||||||||||||||||
Revenue | $ 437,400 | $ 542,000 | $ 561,900 | |||||||||||||||||||
Ocwen | Customer Concentration Risk | Revenue | NRZ | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of loans serviced and subserviced by largest customer's largest client | 57.00% | |||||||||||||||||||||
Ocwen | Customer Concentration Risk | Revenue | Operating Segment | Mortgage Market | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 63.00% | 67.00% | 65.00% | |||||||||||||||||||
Ocwen | Customer Concentration Risk | Revenue | Operating Segment | Real Estate Market | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 1.00% | 1.00% | 0.00% | |||||||||||||||||||
Ocwen | Customer Concentration Risk | Revenue | Other Businesses, Corporate and Eliminations | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 9.00% | 11.00% | 27.00% | |||||||||||||||||||
Highly Correlated - Ocwen | Customer Concentration Risk | Revenue | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 6.00% | |||||||||||||||||||||
Revenue | $ 47,100 | $ 148,500 | $ 188,000 | |||||||||||||||||||
NRZ | Customer Concentration Risk | Revenue | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 28,700 | 2,400 | ||||||||||||||||||||
Highly Correlated - NRZ | Customer Concentration Risk | Revenue | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | $ 83,600 | $ 3,900 | ||||||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | |||||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | |||||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | |||||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | |||||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | |||||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | |||||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | |||||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
SALE OF BUSINESS (Details)
SALE OF BUSINESS (Details) $ in Thousands | Aug. 08, 2018USD ($)payment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from the sale of business, first installment | $ 15,000 | $ 0 | $ 0 | ||
Future proceeds from the sale of business, second installment | 3,000 | ||||
Long-term receivable (Note 4) | 2,221 | 0 | |||
Gain on sale of business | 13,688 | $ 0 | $ 0 | ||
Rental Property Management Business | Discontinued Operations, Disposed of by Sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total proceeds from the sale of business | $ 18,000 | ||||
Number of installment payments | payment | 2 | ||||
Proceeds from the sale of business, first installment | $ 15,000 | ||||
Future proceeds from the sale of business, second installment | 3,000 | ||||
Long-term receivable (Note 4) | 2,200 | ||||
Gain on sale of business | $ 13,700 | $ 13,700 |
ACQUISITIONS - Granite (Details
ACQUISITIONS - Granite (Details) - USD ($) $ in Thousands | Jul. 29, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Acquisitions | |||
Goodwill | $ 81,387 | $ 86,283 | |
Granite | |||
Acquisitions | |||
Purchase price, cash | $ 9,500 | ||
Accounts receivable, net | 1,024 | ||
Prepaid expenses | 22 | ||
Other assets | 25 | ||
Premises and equipment, net | 299 | ||
Goodwill | 4,827 | ||
Assets acquired | 9,797 | ||
Accounts payable and accrued expenses | (57) | ||
Other current liabilities | (192) | ||
Purchase price | 9,548 | ||
Granite | Non-compete agreements | |||
Acquisitions | |||
Intangibles | 100 | ||
Granite | Trademarks and trade names | |||
Acquisitions | |||
Intangibles | 100 | ||
Granite | Customer relationships | |||
Acquisitions | |||
Intangibles | $ 3,400 |
INVESTMENT IN EQUITY SECURITI_2
INVESTMENT IN EQUITY SECURITIES (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Marketable Securities [Line Items] | |||||||
Number of available for sale shares acquired (in shares) | 4.1 | ||||||
Payments to acquire equity securities | $ 0 | $ 0 | $ 48,219 | ||||
Investment in equity securities | $ 36,181 | 36,181 | 49,153 | ||||
Unrealized loss on investment in equity securities | $ 8,800 | $ (1,800) | $ (1,500) | $ 7,500 | 12,972 | 0 | 0 |
Unrealized gain (loss) on investment in equity securities, net of income tax (provision) benefit of $0, $(921), $720 | 0 | 2,478 | (1,745) | ||||
Investment income, dividend | 2,500 | $ 2,500 | $ 2,300 | ||||
Available for sale securities, investment related expenses | $ 3,400 | ||||||
Investment shares, transfer restrictions, number of shares (in shares) | 1 | ||||||
Maximum allowable increase, percent | 50.00% | ||||||
Maximum | |||||||
Marketable Securities [Line Items] | |||||||
Investment shares, transfer restrictions, percent (no more than) | 25.00% |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts receivable, net | |||
Accounts receivable, gross | $ 47,349 | $ 63,319 | |
Less: Allowance for doubtful accounts | (10,883) | (10,579) | |
Total | 36,466 | 52,740 | |
Bad debt expense | 2,830 | 5,116 | $ 1,829 |
Billed | |||
Accounts receivable, net | |||
Accounts receivable, gross | 35,590 | 40,787 | |
Unbilled | |||
Accounts receivable, net | |||
Accounts receivable, gross | $ 11,759 | $ 22,532 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Maintenance agreements, current portion | $ 5,600 | $ 8,014 |
Income taxes receivable | 7,940 | 9,227 |
Prepaid expenses | 7,484 | 7,898 |
Other current assets | 9,696 | 10,198 |
Total | $ 30,720 | $ 35,337 |
DISCONTINUATION OF THE BUY-RE_2
DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Repayment of debt | $ 486,759 | $ 59,761 | $ 50,723 | |
Term B Loans | ||||
Debt Instrument [Line Items] | ||||
Repayment of debt | $ 49,900 |
PREMISES AND EQUIPMENT, NET (De
PREMISES AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | $ 232,693 | $ 236,464 | |
Less: Accumulated depreciation and amortization | (187,062) | (163,191) | |
Total | 45,631 | 73,273 | |
Depreciation and amortization expense | 30,799 | 36,447 | $ 36,788 |
Computer hardware and software | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | 182,215 | 179,567 | |
Office equipment and other | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | 7,384 | 9,388 | |
Furniture and fixtures | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | 13,313 | 14,092 | |
Leasehold improvements | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | $ 29,781 | $ 33,417 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)acquisition | Dec. 31, 2017USD ($)acquisition | |
Goodwill | |||
Number of acquisitions | acquisition | 0 | 0 | |
Goodwill [Roll Forward] | |||
Balance at the beginning of the period | $ 86,283 | ||
Balance at the end of the period | $ 81,387 | 81,387 | $ 86,283 |
Rental Property Management Business | |||
Goodwill [Roll Forward] | |||
Disposition | (2,256) | ||
Write-off | (2,256) | ||
Buy-Renovate-Lease-Sell Business | |||
Goodwill [Roll Forward] | |||
Disposition | (2,640) | ||
Write-off | (2,640) | ||
Real Estate Market | Buy-Renovate-Lease-Sell Business | |||
Goodwill [Roll Forward] | |||
Disposition | (2,600) | (2,600) | |
Write-off | (2,600) | (2,600) | |
Operating Segment | Mortgage Market | |||
Goodwill [Roll Forward] | |||
Balance at the beginning of the period | 73,259 | ||
Balance at the end of the period | 73,259 | 73,259 | 73,259 |
Operating Segment | Real Estate Market | |||
Goodwill [Roll Forward] | |||
Balance at the beginning of the period | 10,056 | ||
Balance at the end of the period | 5,160 | 5,160 | 10,056 |
Operating Segment | Real Estate Market | Rental Property Management Business | |||
Goodwill [Roll Forward] | |||
Disposition | (2,256) | ||
Write-off | (2,256) | ||
Operating Segment | Real Estate Market | Buy-Renovate-Lease-Sell Business | |||
Goodwill [Roll Forward] | |||
Disposition | (2,640) | ||
Write-off | (2,640) | ||
Other Businesses, Corporate and Eliminations | |||
Goodwill [Roll Forward] | |||
Balance at the beginning of the period | 2,968 | ||
Balance at the end of the period | $ 2,968 | 2,968 | $ 2,968 |
Discontinued Operations, Disposed of by Sale | Rental Property Management Business | |||
Goodwill [Roll Forward] | |||
Disposition | (2,300) | ||
Write-off | $ (2,300) |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets, Net (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets, Net | |||
Gross carrying amount | $ 324,796 | $ 333,787 | |
Accumulated amortization | (233,143) | (213,722) | |
Net book value | 91,653 | 120,065 | |
Amortization expense for definite lived intangible assets | 28,412 | 35,367 | $ 47,576 |
Amortization expense, 2019 | 20,400 | ||
Amortization expense, 2020 | 17,700 | ||
Amortization expense, 2021 | 11,600 | ||
Amortization expense, 2022 | 7,300 | ||
Amortization expense, 2023 | 6,300 | ||
Trademarks and trade names | |||
Intangible Assets, Net | |||
Gross carrying amount | 11,349 | 15,354 | |
Accumulated amortization | (6,244) | (8,881) | |
Net book value | $ 5,105 | 6,473 | |
Trademarks and trade names | Weighted average | |||
Intangible Assets, Net | |||
Estimated useful life | 15 years | ||
Customer related intangible assets | |||
Intangible Assets, Net | |||
Gross carrying amount | $ 273,172 | 277,828 | |
Accumulated amortization | (207,639) | (188,258) | |
Net book value | $ 65,533 | 89,570 | |
Customer related intangible assets | Weighted average | |||
Intangible Assets, Net | |||
Estimated useful life | 10 years | ||
Operating agreement | |||
Intangible Assets, Net | |||
Gross carrying amount | $ 35,000 | 35,000 | |
Accumulated amortization | (15,632) | (13,865) | |
Net book value | $ 19,368 | 21,135 | |
Operating agreement | Weighted average | |||
Intangible Assets, Net | |||
Estimated useful life | 20 years | ||
Non-compete agreements | |||
Intangible Assets, Net | |||
Gross carrying amount | $ 1,230 | 1,560 | |
Accumulated amortization | (1,026) | (897) | |
Net book value | $ 204 | 663 | |
Non-compete agreements | Weighted average | |||
Intangible Assets, Net | |||
Estimated useful life | 4 years | ||
Intellectual property | |||
Intangible Assets, Net | |||
Gross carrying amount | $ 300 | 300 | |
Accumulated amortization | (145) | (115) | |
Net book value | $ 155 | 185 | |
Intellectual property | Weighted average | |||
Intangible Assets, Net | |||
Estimated useful life | 10 years | ||
Other intangible assets | |||
Intangible Assets, Net | |||
Gross carrying amount | $ 3,745 | 3,745 | |
Accumulated amortization | (2,457) | (1,706) | |
Net book value | $ 1,288 | $ 2,039 | |
Other intangible assets | Weighted average | |||
Intangible Assets, Net | |||
Estimated useful life | 5 years |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Security deposits | $ 3,972 | $ 5,304 | |
Restricted cash | 5,752 | 3,837 | $ 4,127 |
Other | 2,682 | 1,054 | |
Total | $ 12,406 | $ 10,195 |
ACCOUNTS PAYABLE, ACCRUED EXP_3
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 27,853 | $ 15,682 |
Accrued salaries and benefits | 31,356 | 41,363 |
Accrued expenses - general | 27,866 | 27,268 |
Income taxes payable | 165 | 87 |
Total | $ 87,240 | $ 84,400 |
ACCOUNTS PAYABLE, ACCRUED EXP_4
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other current liabilities | ||
Unfunded cash account balances | $ 4,932 | $ 5,900 |
Other | 2,098 | 3,514 |
Total | $ 7,030 | $ 9,414 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Apr. 03, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Gross, long-term debt | $ 338,822 | ||
Less: Debt issuance costs, net | (3,855) | $ (3,158) | |
Less: Unamortized discount, net | (3,491) | (1,142) | |
Net long-term debt | 331,476 | 409,281 | |
Less: Current portion | 0 | (5,945) | |
Long-term debt, less current portion | 331,476 | 403,336 | |
Senior secured term loans | |||
Debt Instrument [Line Items] | |||
Gross, long-term debt | $ 338,822 | $ 412,100 | $ 413,581 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Apr. 03, 2018USD ($)lender | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Apr. 30, 2018USD ($) |
Debt Instrument [Line Items] | |||||||
Gross, long-term debt | $ 338,822,000 | $ 338,822,000 | |||||
Loss on debt refinancing | 4,434,000 | $ 0 | $ 0 | ||||
Long-term debt, maturities, 2020 | 18,492,000 | 18,492,000 | |||||
Repayment of debt | 486,759,000 | 59,761,000 | 50,723,000 | ||||
Gain on early extinguishment of debt | 0 | 5,637,000 | 5,464,000 | ||||
Debt issuance costs, net | 3,855,000 | 3,855,000 | 3,158,000 | ||||
Accumulated amortization | 700,000 | 700,000 | 7,100,000 | ||||
Interest on long-term debt | 26,254,000 | 22,253,000 | 24,412,000 | ||||
Term B Loans | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, maturities, annually thereafter | 12,400,000 | 12,400,000 | |||||
Repayment of debt | $ 49,900,000 | ||||||
Leverage ratio to be maintained under the credit facility covenants | 3 | ||||||
Covenant threshold, leverage ratio | 3.50 | ||||||
Mandatory prepayments owed | $ 0 | ||||||
Interest rate at the end of the period (as a percent) | 6.80% | 6.80% | |||||
Term B Loans | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Amount of principal or interest if failed to pay considered as event of default | $ 40,000,000 | ||||||
Amount of debt which results in acceleration of debt if failed to pay considered as event of default | 40,000,000 | ||||||
Amount of unbonded, undischarged or unstayed debt under entry by court of one or more judgments for certain period to determine as event of default | $ 40,000,000 | ||||||
Term B Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Leverage ratio to be maintained under the credit facility covenants | 1 | ||||||
Covenant threshold, leverage ratio | 1 | ||||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Covenant threshold, leverage ratio | 3.5 | ||||||
Senior secured term loans | |||||||
Debt Instrument [Line Items] | |||||||
Gross, long-term debt | $ 412,100,000 | $ 338,822,000 | $ 338,822,000 | 413,581,000 | |||
Loss on debt refinancing | $ 4,400,000 | ||||||
Extinguishment of debt, amount | $ 60,100,000 | $ 51,000,000 | |||||
Weighted average discount of par received on early extinguishment of debt | 10.70% | 13.20% | |||||
Gain on early extinguishment of debt | $ 5,600,000 | $ 5,500,000 | |||||
Interest on long-term debt | 26,300,000 | $ 22,300,000 | $ 24,400,000 | ||||
April 3, 2018 Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Number of incremental lenders (or more) | lender | 1 | ||||||
Debt instrument accordion feature increase in additional borrowings | $ 125,000,000 | ||||||
April 3, 2018 Credit Agreement | Term B Loans | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 412,000,000 | $ 412,000,000 | |||||
April 3, 2018 Credit Agreement | Term B Loans | Adjusted Eurodollar Rate | |||||||
Debt Instrument [Line Items] | |||||||
Reference rate | Adjusted Eurodollar Rate | ||||||
Fixed interest rate base (as a percent) | 1.00% | ||||||
Interest rate margin (as a percent) | 4.00% | ||||||
April 3, 2018 Credit Agreement | Term B Loans | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Reference rate | Base Rate | ||||||
Fixed interest rate base (as a percent) | 2.00% | ||||||
Interest rate margin (as a percent) | 3.00% | ||||||
April 3, 2018 Credit Agreement | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 15,000,000 | ||||||
Gross, long-term debt | 0 | 0 | |||||
Debt instrument accordion feature increase in additional borrowings | $ 80,000,000 | ||||||
Unused commitment fee | 0.50% | ||||||
April 3, 2018 Credit Agreement | Line of Credit | Revolving Credit Facility | Adjusted Eurodollar Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin (as a percent) | 4.00% | ||||||
April 3, 2018 Credit Agreement | Line of Credit | Revolving Credit Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin (as a percent) | 3.00% | ||||||
Rental Property Management Business | Discontinued Operations, Disposed of by Sale | Term B Loans | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of debt | $ 15,000,000 | ||||||
Real Estate Market | Buy-Renovate-Lease-Sell Business | Term B Loans | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of debt | $ 49,900,000 |
LONG-TERM DEBT (Details 2)
LONG-TERM DEBT (Details 2) $ in Thousands | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Long-term debt, maturities, 2019 | $ 0 |
Long-term debt, maturities, 2020 | 18,492 |
Long-term debt, maturities, 2021 | 12,360 |
Long-term debt, maturities, 2022 | 12,360 |
Long-term debt, maturities, 2023 | 12,360 |
Long-term debt, maturities, 2024 | 283,250 |
Long-term debt, maturities, total | $ 338,822 |
OTHER NON-CURRENT LIABILITIES_2
OTHER NON-CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities, Noncurrent [Abstract] | ||
Income tax liabilities | $ 7,069 | $ 5,955 |
Deferred revenue | 19 | 2,101 |
Other non-current liabilities | 2,090 | 4,226 |
Total | $ 9,178 | $ 12,282 |
FAIR VALUE MEASUREMENTS AND F_3
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Apr. 03, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets, Fair Value Disclosure [Abstract] | ||||
Cash and cash equivalents | $ 58,294 | $ 105,006 | ||
Restricted cash | 5,752 | 3,837 | $ 4,127 | |
Investment in equity securities | 36,181 | 49,153 | ||
Long-term receivable (Note 4) | 2,221 | 0 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||||
Senior secured term loan, carrying value | 338,822 | |||
Senior secured term loan | ||||
Liabilities, Fair Value Disclosure [Abstract] | ||||
Senior secured term loan, carrying value | 338,822 | $ 412,100 | 413,581 | |
Fair Value, Level 1 | Fair Value, Measurements, Recurring | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Cash and cash equivalents | 58,294 | 105,006 | ||
Restricted cash | 5,752 | 3,837 | ||
Investment in equity securities | 36,181 | 49,153 | ||
Long-term receivable (Note 4) | 0 | 0 | ||
Fair Value, Level 1 | Fair Value, Measurements, Recurring | Senior secured term loan | ||||
Liabilities, Fair Value Disclosure [Abstract] | ||||
Senior secured term loan, fair value | 0 | 0 | ||
Fair Value, Level 2 | Fair Value, Measurements, Recurring | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Investment in equity securities | 0 | 0 | ||
Long-term receivable (Note 4) | 0 | 0 | ||
Fair Value, Level 2 | Fair Value, Measurements, Recurring | Senior secured term loan | ||||
Liabilities, Fair Value Disclosure [Abstract] | ||||
Senior secured term loan, fair value | 330,351 | 407,377 | ||
Fair Value, Level 3 | Fair Value, Measurements, Recurring | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Investment in equity securities | 0 | 0 | ||
Long-term receivable (Note 4) | 2,221 | 0 | ||
Fair Value, Level 3 | Fair Value, Measurements, Recurring | Senior secured term loan | ||||
Liabilities, Fair Value Disclosure [Abstract] | ||||
Senior secured term loan, fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS AND F_4
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Details 2) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Future proceeds from the sale of business, second installment | $ 3 | ||
Customer Concentration Risk | Revenue, Segment | Ocwen | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percentage of revenues (over) | 52.00% | 58.00% | 56.00% |
Customer Concentration Risk | Revenue, Segment | Ocwen | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percentage of revenues (over) | 50.00% | ||
Altisource Residential Corporation | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale securities, number of shares | 4.1 |
SHAREHOLDERS' EQUITY AND SHAR_3
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands | May 17, 2017$ / sharesshares | Dec. 31, 2018USD ($)votecomponent$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Jan. 01, 2018USD ($) | Jan. 01, 2017USD ($) |
Common Stock [Abstract] | ||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||||
Common stock, shares issued (in shares) | 25,413,000 | 25,413,000 | ||||
Common stock, shares outstanding (in shares) | 16,276,000 | 17,418,000 | ||||
Voting rights per share | vote | 1 | |||||
Equity Incentive Plan [Abstract] | ||||||
Maximum number of Altisource share-based awards that can be granted under the Plan (in shares) | 6,700,000 | |||||
Share-based awards available for future grants under the Plan (in shares) | 1,200,000 | |||||
Share Repurchase Program [Abstract] | ||||||
Authorized amount (approximately) | $ | $ 139,000 | |||||
Capacity available to repurchase common stock under senior secured term loan | $ | 489,000 | |||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation expense | $ | 10,200 | $ 4,300 | $ 6,200 | |||
Estimated unrecognized compensation costs (in dollars) | $ | $ 11,800 | |||||
Weighted average remaining requisite service period for stock options over which unrecognized compensation costs would be recognized | 1 year 10 months 24 days | |||||
Cumulative effect (decrease) increase of an accounting change | $ | $ (10,448) | $ 0 | ||||
Options outstanding (in shares) | 1,440,566 | 1,745,906 | ||||
Stock options granted, approximate (in shares) | 276,876 | 244,000 | 145,000 | |||
Weighted average exercise price of stock options granted (in dollars per share) | $ / shares | $ 25.15 | $ 33.28 | $ 29.17 | |||
Plan modification, number of stock options affected (in shares) | 263,000 | |||||
Plan modification, number of employees affected | 16 | |||||
Assumptions used to determine the fair value of options as of the grant date | ||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | ||||||
Weighted average fair value at grant date per share (in dollars per share) | $ / shares | $ 16.31 | $ 20.44 | $ 16.82 | |||
Intrinsic value of stock options exercised | $ | $ 4,609 | $ 3,028 | $ 18,209 | |||
Grant date fair value of stock options that vested | $ | $ 1,760 | $ 2,279 | $ 2,698 | |||
Minimum | ||||||
Share-Based Compensation [Abstract] | ||||||
Share based compensation arrangement by share based payment award estimated forfeiture rate | 0.00% | |||||
Minimum | Black-Scholes | ||||||
Assumptions used to determine the fair value of options as of the grant date | ||||||
Risk-free interest rate (%) | 2.66% | 1.89% | 1.25% | |||
Expected stock price volatility (%) | 70.31% | 61.49% | 59.75% | |||
Expected option life (in years) | 6 years | 6 years | 6 years | |||
Fair value (in usd per share) | $ / shares | $ 16.17 | $ 13.57 | $ 11.15 | |||
Minimum | Binomial | ||||||
Assumptions used to determine the fair value of options as of the grant date | ||||||
Risk-free interest rate (%) | 1.64% | 0.77% | 0.23% | |||
Expected stock price volatility (%) | 71.36% | 66.68% | 59.76% | |||
Expected option life (in years) | 2 years 6 months 22 days | 2 years 6 months 18 days | 4 years 22 days | |||
Fair value (in usd per share) | $ / shares | $ 14.67 | $ 11.94 | $ 11.06 | |||
Maximum | ||||||
Share-Based Compensation [Abstract] | ||||||
Share based compensation arrangement by share based payment award estimated forfeiture rate | 40.00% | |||||
Maximum | Black-Scholes | ||||||
Assumptions used to determine the fair value of options as of the grant date | ||||||
Risk-free interest rate (%) | 3.10% | 2.29% | 1.89% | |||
Expected stock price volatility (%) | 71.86% | 71.52% | 62.14% | |||
Expected option life (in years) | 6 years 3 months | 7 years 6 months | 6 years 3 months | |||
Fair value (in usd per share) | $ / shares | $ 19.68 | $ 24.80 | $ 18.60 | |||
Maximum | Binomial | ||||||
Assumptions used to determine the fair value of options as of the grant date | ||||||
Risk-free interest rate (%) | 3.22% | 2.38% | 2.23% | |||
Expected stock price volatility (%) | 71.86% | 71.52% | 62.14% | |||
Expected option life (in years) | 4 years 3 months 29 days | 4 years 9 months 26 days | 4 years 10 months 17 days | |||
Fair value (in usd per share) | $ / shares | $ 20.26 | $ 24.30 | $ 19.27 | |||
Stock Repurchase Program, Current | ||||||
Share Repurchase Program [Abstract] | ||||||
Number of shares of common stock authorized to be purchased | 4,300,000 | |||||
Percentage of outstanding shares authorized to be repurchased | 25.00% | |||||
Minimum purchase price authorized (in dollars per share) | $ / shares | $ 1 | |||||
Maximum purchase price authorized (in dollars per share) | $ / shares | $ 500 | |||||
Stock repurchase program, period in force | 5 years | |||||
Remaining number of shares available for repurchase under the plan (in shares) | 3,400,000 | |||||
Stock Repurchase Programs | ||||||
Share Repurchase Program [Abstract] | ||||||
Number of shares of common stock purchased (in shares) | 1,600,000 | 1,600,000 | 1,400,000 | |||
Average purchase price per share (in dollars per share) | $ / shares | $ 25.53 | $ 23.84 | $ 26.81 | |||
Employee and non employee stock option | Performance-Based, Vesting Period One | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | |||||
Employee and non employee stock option | Performance-Based, Vesting Period Two | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | |||||
Employee and non employee stock option | Performance-Based, Vesting Period Three | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | |||||
Employee and non employee stock option | Vesting Based on Service | ||||||
Share-Based Compensation [Abstract] | ||||||
Options outstanding (in shares) | 500,000 | |||||
Employee and non employee stock option | Market-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Options outstanding (in shares) | 662,000 | |||||
Number of components of an award | component | 2 | |||||
Allowable performance period before expiration date | 3 years | |||||
Employee and non employee stock option | Performance-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Options outstanding (in shares) | 279,000 | |||||
Employee and non employee stock option | Minimum | Vesting Based on Service | ||||||
Share-Based Compensation [Abstract] | ||||||
Vesting period | 3 years | |||||
Employee and non employee stock option | Minimum | Market-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Vesting period | 3 years | |||||
Expiration term | 10 years | |||||
Employee and non employee stock option | Minimum | Market-Based, ordinary performance | ||||||
Share-Based Compensation [Abstract] | ||||||
Percentage of compounded annual gain of stock price over exercise price required for the award to vest | 20.00% | |||||
Employee and non employee stock option | Minimum | Market-Based, extraordinary performance | ||||||
Share-Based Compensation [Abstract] | ||||||
Percentage of compounded annual gain of stock price over exercise price required for the award to vest | 25.00% | |||||
Employee and non employee stock option | Minimum | Performance-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Attainment above threshold performance levels, vesting percentage | 50.00% | |||||
Allowable performance period before expiration date | 10 years | |||||
Employee and non employee stock option | Maximum | Vesting Based on Service | ||||||
Share-Based Compensation [Abstract] | ||||||
Vesting period | 4 years | |||||
Expiration term | 10 years | |||||
Employee and non employee stock option | Maximum | Market-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Vesting period | 4 years | |||||
Employee and non employee stock option | Maximum | Performance-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Attainment above threshold performance levels, vesting percentage | 200.00% | |||||
Restricted Shares and Restricted Share Units | Performance-Based, Vesting Period One | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | |||||
Restricted Shares and Restricted Share Units | Performance-Based, Vesting Period Two | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | |||||
Restricted Shares and Restricted Share Units | Performance-Based, Vesting Period Three | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | |||||
Restricted Shares and Restricted Share Units | Minimum | Vesting Based on Service | ||||||
Share-Based Compensation [Abstract] | ||||||
Vesting period | 1 year | |||||
Restricted Shares and Restricted Share Units | Minimum | Performance-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Attainment above threshold performance levels, vesting percentage | 80.00% | |||||
Restricted Shares and Restricted Share Units | Maximum | Vesting Based on Service | ||||||
Share-Based Compensation [Abstract] | ||||||
Vesting period | 4 years | |||||
Restricted Shares and Restricted Share Units | Maximum | Performance-Based | ||||||
Share-Based Compensation [Abstract] | ||||||
Attainment above threshold performance levels, vesting percentage | 150.00% | |||||
Retained earnings | ||||||
Share-Based Compensation [Abstract] | ||||||
Cumulative effect (decrease) increase of an accounting change | $ | $ (9,715) | (932) | ||||
Retained earnings | Accounting Standards Update 2016-09 | ||||||
Share-Based Compensation [Abstract] | ||||||
Cumulative effect (decrease) increase of an accounting change | $ | (900) | |||||
Additional paid-in capital | ||||||
Share-Based Compensation [Abstract] | ||||||
Cumulative effect (decrease) increase of an accounting change | $ | 932 | |||||
Additional paid-in capital | Accounting Standards Update 2016-09 | ||||||
Share-Based Compensation [Abstract] | ||||||
Cumulative effect (decrease) increase of an accounting change | $ | $ 900 |
SHAREHOLDERS' EQUITY AND SHAR_4
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of options | |||
Outstanding at the beginning of the period (in shares) | 1,745,906 | ||
Granted (in shares) | 276,876 | 244,000 | 145,000 |
Exercised (in shares) | (330,537) | ||
Forfeited (in shares) | (251,679) | ||
Outstanding at the end of the period (in shares) | 1,440,566 | 1,745,906 | |
Exercisable at the end of the period (in shares) | 874,304 | ||
Weighted average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 28.20 | ||
Granted (in dollars per share) | 25.15 | $ 33.28 | $ 29.17 |
Exercised (in dollars per share) | 11.33 | ||
Forfeited (in dollars per share) | 32.21 | ||
Outstanding at the end of the period (in dollars per share) | 30.78 | $ 28.20 | |
Exercisable at the end of the period (in dollars per share) | $ 27.42 | ||
Weighted average contractual term (in years) | |||
Weighted average contractual term | 5 years 14 days | 4 years 11 months 16 days | |
Exercisable at the end of the period | 3 years 2 months 12 days | ||
Aggregate intrinsic value (in thousands) | |||
Aggregate intrinsic value (in dollars) | $ 945 | $ 10,202 | |
Exercisable at the end of the period (in dollars) | $ 902 |
SHAREHOLDERS' EQUITY AND SHAR_5
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Stock option information (Details) | 12 Months Ended | |
Dec. 31, 2018$ / sharesshares | ||
Options outstanding | ||
Number (in shares) | shares | 1,440,566 | |
Options exercisable | ||
Number (in shares) | shares | 874,304 | |
$10.01 — $20.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | $ 10.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 20 | [1] |
Options outstanding | ||
Number (in shares) | shares | 212,667 | |
Weighted average remaining contractual life (in years) | 6 years 21 days | |
Weighted average exercise price (in dollars per share) | $ 18.79 | |
Options exercisable | ||
Number (in shares) | shares | 203,344 | |
Weighted average remaining contractual life (in years) | 6 years 18 days | |
Weighted average exercise price (in dollars per share) | $ 18.79 | |
$20.01 — $30.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 20.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 30 | [1] |
Options outstanding | ||
Number (in shares) | shares | 925,563 | |
Weighted average remaining contractual life (in years) | 4 years 9 months 14 days | |
Weighted average exercise price (in dollars per share) | $ 24.60 | |
Options exercisable | ||
Number (in shares) | shares | 537,607 | |
Weighted average remaining contractual life (in years) | 2 years 25 days | |
Weighted average exercise price (in dollars per share) | $ 23.81 | |
$30.01 — $40.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 30.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 40 | [1] |
Options outstanding | ||
Number (in shares) | shares | 132,586 | |
Weighted average remaining contractual life (in years) | 6 years 2 months 12 days | |
Weighted average exercise price (in dollars per share) | $ 34.63 | |
Options exercisable | ||
Number (in shares) | shares | 54,478 | |
Weighted average remaining contractual life (in years) | 3 years 6 months 14 days | |
Weighted average exercise price (in dollars per share) | $ 32.82 | |
$60.01 — $70.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 60.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 70 | [1] |
Options outstanding | ||
Number (in shares) | shares | 71,000 | |
Weighted average remaining contractual life (in years) | 3 years 2 months 8 days | |
Weighted average exercise price (in dollars per share) | $ 60.73 | |
Options exercisable | ||
Number (in shares) | shares | 51,375 | |
Weighted average remaining contractual life (in years) | 3 years 2 months 8 days | |
Weighted average exercise price (in dollars per share) | $ 60.74 | |
$70.01 — $80.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 70.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 80 | [1] |
Options outstanding | ||
Number (in shares) | shares | 25,000 | |
Weighted average remaining contractual life (in years) | 4 years 6 months 3 days | |
Weighted average exercise price (in dollars per share) | $ 72.78 | |
Options exercisable | ||
Number (in shares) | shares | 6,250 | |
Weighted average remaining contractual life (in years) | 5 months 12 days | |
Weighted average exercise price (in dollars per share) | $ 72.78 | |
$80.01 — $90.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 80.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 90 | [1] |
Options outstanding | ||
Number (in shares) | shares | 25,000 | |
Weighted average remaining contractual life (in years) | 5 years 7 months 6 days | |
Weighted average exercise price (in dollars per share) | $ 86.69 | |
Options exercisable | ||
Number (in shares) | shares | 6,250 | |
Weighted average remaining contractual life (in years) | 5 years 7 months 6 days | |
Weighted average exercise price (in dollars per share) | $ 86.69 | |
$90.01 — $100.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 90.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 100 | [1] |
Options outstanding | ||
Number (in shares) | shares | 46,875 | |
Weighted average remaining contractual life (in years) | 5 years | |
Weighted average exercise price (in dollars per share) | $ 95.64 | |
Options exercisable | ||
Number (in shares) | shares | 13,125 | |
Weighted average remaining contractual life (in years) | 4 years 6 months 3 days | |
Weighted average exercise price (in dollars per share) | $ 95.59 | |
$100.01 — $110.00 | ||
Stock options outstanding and exercisable | ||
Exercise price, low end of range (in dollars per share) | 100.01 | [1] |
Exercise price, high end of range (in dollars per share) | $ 110 | [1] |
Options outstanding | ||
Number (in shares) | shares | 1,875 | |
Weighted average remaining contractual life (in years) | 5 months 12 days | |
Weighted average exercise price (in dollars per share) | $ 105.11 | |
Options exercisable | ||
Number (in shares) | shares | 1,875 | |
Weighted average remaining contractual life (in years) | 5 months 12 days | |
Weighted average exercise price (in dollars per share) | $ 105.11 | |
[1] | These options contain market-based and performance-based components as described above. |
SHAREHOLDERS' EQUITY AND SHAR_6
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Market-based options vesting prices (Details) | Dec. 31, 2018$ / sharesshares |
Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 130,712 |
Market-based options, weighted average share price (in dollars per share) | $ / shares | $ 49.46 |
Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 97,928 |
Market-based options, weighted average share price (in dollars per share) | $ / shares | $ 47.79 |
$40.01 — $50.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | 40.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 50 |
$40.01 — $50.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 6,400 |
$40.01 — $50.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$50.01 — $60.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 50.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 60 |
$50.01 — $60.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 60,164 |
$50.01 — $60.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 9,323 |
$60.01 — $70.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 60.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 70 |
$60.01 — $70.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 16,648 |
$60.01 — $70.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 6,325 |
$70.01 — $80.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 70.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 80 |
$70.01 — $80.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$70.01 — $80.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 11,500 |
$80.01 — $90.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 80.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 90 |
$80.01 — $90.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$80.01 — $90.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 19,080 |
$90.01 — $100.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 90.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 100 |
$90.01 — $100.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$90.01 — $100.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 8,325 |
$140.01 — $150.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 140.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 150 |
$140.01 — $150.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 12,500 |
$140.01 — $150.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$170.01 — $180.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 170.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 180 |
$170.01 — $180.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 12,500 |
$170.01 — $180.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$180.01 — $190.00 | |
Market prices for market performance options to vest | |
Market-based options, vesting price, low end of range (in dollars per share) | $ / shares | $ 180.01 |
Market-based options, vesting price, high end of range (in dollars per share) | $ / shares | $ 190 |
$180.01 — $190.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 7,500 |
$180.01 — $190.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 19,625 |
Over $190.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 15,000 |
Over $190.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 23,750 |
SHAREHOLDERS' EQUITY AND SHAR_7
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Restricted stock awards (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Restricted Shares and Restricted Share Units | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Other than options, outstanding (in shares) | 356,509 | 356,509 | 356,509 |
Other than options, granted (in shares) | 375,524 | ||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share) | $ 21.57 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding, beginning of period (in shares) | 356,509 | 356,509 | |
Granted (in shares) | 375,524 | ||
Issued (in shares) | (111,565) | ||
Forfeited/canceled (in shares) | (134,662) | ||
Outstanding, end of period (in shares) | 356,509 | 485,806 | |
Restricted Shares and Restricted Share Units | Performance-Based, Vesting Period One | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | ||
Restricted Shares and Restricted Share Units | Performance-Based, Vesting Period Two | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | ||
Restricted Shares and Restricted Share Units | Performance-Based, Vesting Period Three | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage | 33.00% | ||
Restricted Shares and Restricted Share Units | Vesting Based on Service | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Share-based compensation arrangement by share-based payment award, alternate award vesting period | 2 years | ||
Other than options, outstanding (in shares) | 482,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding, end of period (in shares) | 482,000 | ||
Restricted Shares and Restricted Share Units | Performance-Based | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Other than options, outstanding (in shares) | 4,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding, end of period (in shares) | 4,000 | ||
Restricted Shares | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Share-based compensation arrangement by share-based payment award, plan modification, number of instruments other than options, affected (in shares) | 31,000 | 31,000 | |
Minimum | Restricted Shares and Restricted Share Units | Vesting Based on Service | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Vesting period | 1 year | ||
Minimum | Restricted Shares and Restricted Share Units | Performance-Based | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Attainment above threshold performance levels, vesting percentage | 80.00% | ||
Maximum | Restricted Shares and Restricted Share Units | Vesting Based on Service | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Vesting period | 4 years | ||
Maximum | Restricted Shares and Restricted Share Units | Performance-Based | |||
Schedule of Share-based compensation, Restricted Stock and Restricted Stock units activity [Line Items] | |||
Attainment above threshold performance levels, vesting percentage | 150.00% |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Sep. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Jun. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017 | [7],[8] | Sep. 30, 2017 | [7],[8] | Jun. 30, 2017 | [7],[8] | Mar. 31, 2017 | [7],[8] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of revenue [Line Items] | |||||||||||||||||||
Revenue | $ 217,633 | $ 204,575 | $ 218,556 | $ 197,438 | $ 216,066 | $ 234,979 | $ 250,685 | $ 240,483 | $ 838,202 | $ 942,213 | $ 997,303 | ||||||||
Revenue recognized that was included in contract liability at the beginning of the period | 20,600 | ||||||||||||||||||
Service revenue | |||||||||||||||||||
Schedule of revenue [Line Items] | |||||||||||||||||||
Revenue | 805,480 | 899,561 | 942,599 | ||||||||||||||||
Reimbursable expenses | |||||||||||||||||||
Schedule of revenue [Line Items] | |||||||||||||||||||
Revenue | 30,039 | 39,912 | 52,011 | ||||||||||||||||
Non-controlling interests | |||||||||||||||||||
Schedule of revenue [Line Items] | |||||||||||||||||||
Revenue | $ 2,683 | $ 2,740 | $ 2,693 | ||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | ||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | ||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | ||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | ||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | ||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | ||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | ||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Sep. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Jun. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017 | [7],[8] | Sep. 30, 2017 | [7],[8] | Jun. 30, 2017 | [7],[8] | Mar. 31, 2017 | [7],[8] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | $ 217,633 | $ 204,575 | $ 218,556 | $ 197,438 | $ 216,066 | $ 234,979 | $ 250,685 | $ 240,483 | $ 838,202 | $ 942,213 | $ 997,303 | ||||||||
Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 719,739 | ||||||||||||||||||
Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 88,424 | ||||||||||||||||||
Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 30,039 | ||||||||||||||||||
Operating Segment | Mortgage Market | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 686,905 | 793,684 | 827,324 | ||||||||||||||||
Operating Segment | Mortgage Market | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 575,758 | ||||||||||||||||||
Operating Segment | Mortgage Market | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 82,691 | ||||||||||||||||||
Operating Segment | Mortgage Market | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 28,456 | ||||||||||||||||||
Operating Segment | Mortgage Market | Servicer Solutions | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 639,150 | ||||||||||||||||||
Operating Segment | Mortgage Market | Servicer Solutions | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 537,161 | ||||||||||||||||||
Operating Segment | Mortgage Market | Servicer Solutions | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 73,782 | ||||||||||||||||||
Operating Segment | Mortgage Market | Servicer Solutions | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 28,207 | ||||||||||||||||||
Operating Segment | Mortgage Market | Origination Solutions | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 47,755 | ||||||||||||||||||
Operating Segment | Mortgage Market | Origination Solutions | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 38,597 | ||||||||||||||||||
Operating Segment | Mortgage Market | Origination Solutions | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 8,909 | ||||||||||||||||||
Operating Segment | Mortgage Market | Origination Solutions | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 249 | ||||||||||||||||||
Operating Segment | Real Estate Market | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 90,290 | 89,787 | 86,590 | ||||||||||||||||
Operating Segment | Real Estate Market | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 88,755 | ||||||||||||||||||
Operating Segment | Real Estate Market | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 0 | ||||||||||||||||||
Operating Segment | Real Estate Market | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 1,535 | ||||||||||||||||||
Operating Segment | Real Estate Market | Consumer Real Estate Solutions | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 8,595 | ||||||||||||||||||
Operating Segment | Real Estate Market | Consumer Real Estate Solutions | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 8,593 | ||||||||||||||||||
Operating Segment | Real Estate Market | Consumer Real Estate Solutions | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 0 | ||||||||||||||||||
Operating Segment | Real Estate Market | Consumer Real Estate Solutions | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 2 | ||||||||||||||||||
Operating Segment | Real Estate Market | Real Estate Investor Solutions | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 81,695 | ||||||||||||||||||
Operating Segment | Real Estate Market | Real Estate Investor Solutions | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 80,162 | ||||||||||||||||||
Operating Segment | Real Estate Market | Real Estate Investor Solutions | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 0 | ||||||||||||||||||
Operating Segment | Real Estate Market | Real Estate Investor Solutions | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 1,533 | ||||||||||||||||||
Other Businesses, Corporate and Eliminations | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 61,007 | $ 58,742 | $ 83,389 | ||||||||||||||||
Other Businesses, Corporate and Eliminations | Revenue recognized when services are performed or assets are sold | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 55,226 | ||||||||||||||||||
Other Businesses, Corporate and Eliminations | Revenue related to technology platforms and professional services | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | 5,733 | ||||||||||||||||||
Other Businesses, Corporate and Eliminations | Reimbursable expenses revenue | |||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||
Revenue | $ 48 | ||||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | ||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | ||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | ||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | ||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | ||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | ||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | ||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
COST OF REVENUE (Details)
COST OF REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cost of Revenue [Abstract] | |||
Compensation and benefits | $ 200,486 | $ 240,487 | $ 264,796 |
Outside fees and services | 278,380 | 325,459 | 301,116 |
Cost of real estate sold | 47,659 | 24,398 | 1,040 |
Reimbursable expenses | 30,039 | 39,912 | 52,011 |
Technology and telecommunications | 41,588 | 42,340 | 44,295 |
Depreciation and amortization | 24,013 | 27,269 | 26,787 |
Total | $ 622,165 | $ 699,865 | $ 690,045 |
SELLING, GENERAL AND ADMINIST_3
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND OTHER OPERATING EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 19, 2017 | |
Selling, General and Administrative Expense [Abstract] | ||||
Compensation and benefits | $ 51,043 | $ 58,157 | $ 55,577 | |
Professional services | 16,950 | 13,421 | 23,284 | |
Occupancy related costs | 30,851 | 36,371 | 37,370 | |
Amortization of intangible assets | 28,412 | 35,367 | 47,576 | |
Depreciation and amortization | 6,786 | 9,178 | 10,001 | |
Marketing costs | 14,707 | 16,171 | 27,847 | |
Other | 26,921 | 23,977 | 12,500 | |
Total | 175,670 | 192,642 | 214,155 | |
Accrued litigation settlement | $ 32,000 | |||
Insurance recovery proceeds | 0 | 0 | 4,000 | $ 4,000 |
Litigation settlement loss, net | $ 0 | $ 0 | $ 28,000 |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |||
Loss on debt refinancing | $ (4,434) | $ 0 | $ 0 |
Gain on early extinguishment of debt | 0 | 5,637 | 5,464 |
Expenses related to the purchase of investment in equity securities | 0 | 0 | (3,356) |
Interest income | 740 | 270 | 91 |
Other, net | 1,824 | 2,015 | 1,431 |
Total | $ (1,870) | $ 7,922 | $ 3,630 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income before income taxes and non-controlling interests [Line Items] | |||
Domestic - Luxembourg | $ (22,513) | $ 9,123 | $ 8,498 |
Total | 1,399 | 35,375 | 44,321 |
U.S. | |||
Income before income taxes and non-controlling interests [Line Items] | |||
Foreign - U.S. and Non-U.S. | 8,398 | 7,967 | 16,655 |
Foreign - non-U.S. | |||
Income before income taxes and non-controlling interests [Line Items] | |||
Foreign - U.S. and Non-U.S. | $ 15,514 | $ 18,285 | $ 19,168 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 27, 2017subsidiary | |
Current: | |||||
Current income tax provision | $ 9,889 | $ 21,080 | $ 15,532 | ||
Deferred: | |||||
Deferred income tax provision | (5,791) | (297,336) | (2,597) | ||
Income tax provision (benefit) | 4,098 | (276,256) | 12,935 | ||
Operating loss carryforwards | $ 1,339,600 | 1,355,500 | 1,339,600 | ||
Deferred tax assets, other | 349,154 | 353,209 | 349,154 | ||
Valuation allowance | 46,283 | 46,751 | 46,283 | ||
Income tax expense, adjustment of deferred tax asset | 6,300 | ||||
Income tax expense, foreign income tax reserves | 10,500 | ||||
Decrease in foreign taxes due to tax holidays | $ 700 | $ 900 | $ 900 | ||
Effect on diluted per share due to decrease in foreign tax holiday (in dollars per share) | $ / shares | $ 0.04 | $ 0.05 | $ 0.04 | ||
2017 Subsidiary Merger | |||||
Deferred: | |||||
Income tax provision (benefit) | (284,100) | ||||
Number of wholly-owned subsidiaries merged | subsidiary | 2 | ||||
Operating loss carryforwards | 1,300,000 | $ 1,300,000 | |||
Deferred tax assets, other | $ 342,600 | ||||
Operating loss carryforwards, term | 17 years | ||||
Valuation allowance | $ 41,600 | $ 41,600 | |||
Domestic - Luxembourg | |||||
Current: | |||||
Current income tax provision | 275 | 737 | $ 160 | ||
Deferred: | |||||
Deferred income tax provision | (4,927) | (295,318) | 432 | ||
Foreign - U.S. federal | |||||
Current: | |||||
Foreign | 1,838 | 2,405 | 9,556 | ||
Deferred: | |||||
Foreign | (291) | (111) | (3,065) | ||
Foreign - U.S. state | |||||
Current: | |||||
Foreign | 336 | 364 | 258 | ||
Deferred: | |||||
Foreign | 134 | (210) | (100) | ||
Foreign - non-U.S. | |||||
Current: | |||||
Foreign | 7,440 | 17,574 | 5,558 | ||
Deferred: | |||||
Foreign | $ (707) | $ (1,697) | $ 136 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Non-current deferred tax assets: | ||
Net operating loss carryforwards | $ 353,209 | $ 349,154 |
U.S. federal and state tax credits | 314 | 407 |
Other non-U.S. deferred tax assets | 6,161 | 5,724 |
Share-based compensation | 1,586 | 1,496 |
Accrued expenses | 5,242 | 6,494 |
Unrealized losses | 3,131 | 0 |
Non-current deferred tax liabilities: | ||
Intangible assets | (9,855) | (8,015) |
Depreciation | (1,225) | (3,318) |
Other non-U.S. deferred tax liability | (1,769) | (1,692) |
Other | (954) | (260) |
Deferred tax assets net of deferred tax liabilities | 355,840 | 349,990 |
Valuation allowance | (46,751) | (46,283) |
Deferred tax assets, net | 309,089 | 303,707 |
Income Taxes | ||
Increase in valuation allowance related to state and foreign losses | 500 | |
Undistributed earnings | 82,900 | |
Deferred tax liability that would be recognized if earnings were distributed | 15,000 | |
Operating loss carryforwards | 1,355,500 | 1,339,600 |
Tax Cuts And Jobs Act of 2017, provisional income tax expense | (200) | 2,900 |
Foreign - U.S. state | ||
Income Taxes | ||
Operating loss carryforwards, valuation allowance | 1,500 | 1,700 |
Domestic - Luxembourg | ||
Income Taxes | ||
Operating loss carryforwards, valuation allowance | 45,000 | 44,400 |
U.S. State and U.S. Federal | ||
Non-current deferred tax assets: | ||
Net operating loss carryforwards | 300 | 400 |
NCI | ||
Income Taxes | ||
Operating loss carryforwards | 7,400 | $ 8,900 |
Annual limit on use of operating loss carryforward | $ 1,300 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Income Tax Provision to the Luxembourg income tax rate | |||
Statutory tax rate | 26.01% | 27.08% | 29.22% |
Change in valuation allowance | 43.08% | 119.20% | (0.08%) |
State tax expense | 28.58% | 0.50% | 2.30% |
Tax credits | (0.00%) | (2.13%) | (1.81%) |
Uncertain tax positions | 114.18% | 30.16% | (3.65%) |
Unrecognized tax loss | 0.00% | (1008.20%) | 0.00% |
Income tax rate change | 0.00% | 57.36% | 0.00% |
Tax rate differences on foreign earnings | 73.11% | 0.00% | 0.00% |
Other | 7.96% | (4.91%) | 3.20% |
Effective tax rate | 292.92% | (780.94%) | 29.18% |
INCOME TAXES (Details 5)
INCOME TAXES (Details 5) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Amount of unrecognized tax benefits as of the beginning of the year | $ 8,892 | $ 758 |
Decreases as a result of tax positions taken in a prior period | (956) | (78) |
Increases as a result of tax positions taken in a prior period | 1 | 53 |
Increases as a result of tax positions taken in the current period | 1,750 | 8,159 |
Amount of unrecognized tax benefits as of the end of the year | 9,687 | 8,892 |
Unrecognized tax benefits that would affect the effective tax rate | 13,000 | 11,500 |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 3,300 | $ 2,600 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Sep. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Jun. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017 | [7],[8] | Sep. 30, 2017 | [7],[8] | Jun. 30, 2017 | [7],[8] | Mar. 31, 2017 | [7],[8] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||||||||||
Net (loss) income attributable to Altisource | $ (11,485) | $ 8,667 | $ 1,568 | $ (4,132) | $ 286,350 | $ 6,961 | $ 9,035 | $ 6,545 | $ (5,382) | $ 308,891 | $ 28,693 | ||||||||
Weighted average common shares outstanding, basic (in shares) | 16,745 | 17,033 | 17,142 | 17,378 | 17,724 | 18,023 | 18,335 | 18,662 | 17,073 | 18,183 | 18,696 | ||||||||
Dilutive effect of stock options, restricted shares and restricted share units (in shares) | 0 | 509 | 916 | ||||||||||||||||
Weighted average common shares outstanding, diluted (in shares) | 16,745 | 17,575 | 17,553 | 17,378 | 18,211 | 18,429 | 18,836 | 19,304 | 17,073 | 18,692 | 19,612 | ||||||||
(Loss) earnings per share: | |||||||||||||||||||
Basic (in dollars per share) | $ (0.69) | $ 0.51 | $ 0.09 | $ (0.24) | $ 16.16 | $ 0.39 | $ 0.49 | $ 0.35 | $ (0.32) | $ 16.99 | $ 1.53 | ||||||||
Diluted (in dollars per share) | $ (0.69) | $ 0.49 | $ 0.09 | $ (0.24) | $ 15.72 | $ 0.38 | $ 0.48 | $ 0.34 | $ (0.32) | $ 16.53 | $ 1.46 | ||||||||
Anti-dilutive securities | |||||||||||||||||||
Excluded from the computation of diluted EPS (in shares) | 500 | ||||||||||||||||||
Employee and non employee stock option | |||||||||||||||||||
Anti-dilutive securities | |||||||||||||||||||
Excluded from the computation of diluted EPS (in shares) | 300 | 500 | 400 | ||||||||||||||||
Options and restricted shares issuable upon achievement of market and performance criteria | |||||||||||||||||||
Anti-dilutive securities | |||||||||||||||||||
Excluded from the computation of diluted EPS (in shares) | 500 | ||||||||||||||||||
Options issuable upon achievement of certain market and performance criteria | |||||||||||||||||||
Anti-dilutive securities | |||||||||||||||||||
Excluded from the computation of diluted EPS (in shares) | 400 | 400 | |||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | ||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | ||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | ||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | ||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | ||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | ||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | ||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
RESTRUCTURING CHARGES (Details)
RESTRUCTURING CHARGES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 11,560 | $ 0 | $ 0 |
Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected future cost (approximate) | 25,000 | ||
Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected future cost (approximate) | $ 35,000 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 31, 2018 | Jul. 31, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018 | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017 | Sep. 30, 2017 | [7],[8] | Jun. 30, 2017 | [7],[8] | Mar. 31, 2017 | [7],[8] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Estimate of possible loss | $ 6,200 | $ 6,200 | ||||||||||||||||||||
Loss in the period | 400 | $ 5,900 | 6,200 | |||||||||||||||||||
Revenue | 217,633 | [1],[2],[3],[4],[5],[6],[7] | $ 204,575 | [1],[2],[3],[4],[5],[6],[7] | $ 218,556 | $ 197,438 | $ 216,066 | [7],[8] | $ 234,979 | $ 250,685 | $ 240,483 | 838,202 | $ 942,213 | $ 997,303 | ||||||||
Escrow and Trust Balances | ||||||||||||||||||||||
Amounts held in escrow and trust accounts | $ 23,600 | $ 35,100 | $ 23,600 | $ 35,100 | ||||||||||||||||||
Customer Concentration Risk | Ocwen | Revenue, Segment | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 52.00% | 58.00% | 56.00% | |||||||||||||||||||
Revenue | $ 437,400 | $ 542,000 | $ 561,900 | |||||||||||||||||||
Customer Concentration Risk | Highly Correlated - Ocwen | Revenue, Segment | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of revenue from largest customer | 6.00% | |||||||||||||||||||||
Revenue | $ 47,100 | 148,500 | 188,000 | |||||||||||||||||||
Customer Concentration Risk | NRZ | Revenue, Segment | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 28,700 | 2,400 | ||||||||||||||||||||
Service revenue | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | 805,480 | 899,561 | 942,599 | |||||||||||||||||||
REALServicing | Service revenue | Ocwen | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Revenue | $ 35,100 | $ 37,200 | $ 40,200 | |||||||||||||||||||
NRZ | Ocwen | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Subservice transferred subject MSRs, initial term | 5 years | 5 years | ||||||||||||||||||||
NRZ | Customer Concentration Risk | Ocwen | Revenue, Segment | ||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||
Percentage of loans serviced and subserviced by largest customer's largest client | 57.00% | |||||||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | |||||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | |||||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | |||||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | |||||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | |||||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | |||||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | |||||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
COMMITMENTS, CONTINGENCIES AN_4
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS (Details 2) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)office_leaseletter_of_credit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Operating Lease Obligations | |||
Total operating lease expense, net of sublease income | $ 19,900 | $ 19,000 | $ 17,600 |
Sublease income | 1,600 | $ 1,300 | $ 500 |
Future minimum payments due, sublease rentals | 2,800 | ||
Operating lease obligations | |||
2,019 | 17,600 | ||
2,020 | 14,137 | ||
2,021 | 9,849 | ||
2,022 | 5,558 | ||
2,023 | 3,441 | ||
Thereafter | 1,323 | ||
Operating lease obligations | $ 51,908 | ||
Financial Standby Letter of Credit | |||
Operating Lease Obligations | |||
Standby letters of credit, number | letter_of_credit | 5 | ||
Standby letters of credit, amount | $ 3,100 | ||
Number of office leases | office_lease | 4 | ||
Minimum | |||
Operating Lease Obligations | |||
Customary lease term | 1 year | ||
Maximum | |||
Operating Lease Obligations | |||
Customary lease term | 10 years |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | [1],[2],[3],[4],[5],[6],[7] | Jun. 30, 2018USD ($) | [1],[2],[3],[4],[5],[6],[7] | Mar. 31, 2018USD ($) | [1],[2],[3],[4],[5],[6],[7] | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | [7],[8] | Jun. 30, 2017USD ($) | [7],[8] | Mar. 31, 2017USD ($) | [7],[8] | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 19, 2017USD ($) | |||
SEGMENT REPORTING | ||||||||||||||||||||
Revenue | $ 217,633 | [1],[2],[3],[4],[5],[6],[7] | $ 204,575 | $ 218,556 | $ 197,438 | $ 216,066 | [7],[8] | $ 234,979 | $ 250,685 | $ 240,483 | $ 838,202 | $ 942,213 | $ 997,303 | |||||||
Cost of revenue | 622,165 | 699,865 | 690,045 | |||||||||||||||||
Gross profit | 53,448 | [1],[2],[3],[4],[5],[6],[7] | 56,995 | 55,350 | 50,244 | 54,445 | [7],[8] | 60,081 | 65,292 | 62,530 | 216,037 | 242,348 | 307,258 | |||||||
Selling, general and administrative expenses | 175,670 | 192,642 | 214,155 | |||||||||||||||||
Gain on sale of business | (13,688) | 0 | 0 | |||||||||||||||||
Restructuring charges | 11,560 | 0 | 0 | |||||||||||||||||
Litigation settlement loss, net of $4,000 insurance recovery (Note 20) | 0 | 0 | 28,000 | |||||||||||||||||
Income (loss) from operations | 42,495 | 49,706 | 65,103 | |||||||||||||||||
Total other income (expense), net | (41,096) | (14,331) | (20,782) | |||||||||||||||||
Income before income taxes and non-controlling interests | (12,829) | [1],[2],[3],[4],[5],[6],[7] | $ 16,129 | $ 3,071 | $ (4,972) | 3,112 | [7],[8] | $ 10,357 | $ 12,160 | $ 9,746 | 1,399 | 35,375 | 44,321 | |||||||
Total Assets: | ||||||||||||||||||||
Total assets | 741,700 | 865,164 | $ 741,700 | 865,164 | ||||||||||||||||
Number of reportable segments | segment | 2 | |||||||||||||||||||
Insurance recovery proceeds | 0 | 0 | $ 0 | 0 | 4,000 | $ 4,000 | ||||||||||||||
Operating Segment | Mortgage Market | ||||||||||||||||||||
SEGMENT REPORTING | ||||||||||||||||||||
Revenue | 686,905 | 793,684 | 827,324 | |||||||||||||||||
Cost of revenue | 447,108 | 545,507 | 546,540 | |||||||||||||||||
Gross profit | 239,797 | 248,177 | 280,784 | |||||||||||||||||
Selling, general and administrative expenses | 85,013 | 114,215 | 121,508 | |||||||||||||||||
Gain on sale of business | 0 | |||||||||||||||||||
Restructuring charges | 2,495 | |||||||||||||||||||
Litigation settlement loss, net of $4,000 insurance recovery (Note 20) | 0 | |||||||||||||||||||
Income (loss) from operations | 152,289 | 133,962 | 159,276 | |||||||||||||||||
Total other income (expense), net | 81 | 72 | 154 | |||||||||||||||||
Income before income taxes and non-controlling interests | 152,370 | 134,034 | 159,430 | |||||||||||||||||
Total Assets: | ||||||||||||||||||||
Total assets | 236,138 | 304,346 | 236,138 | 304,346 | ||||||||||||||||
Operating Segment | Real Estate Market | ||||||||||||||||||||
SEGMENT REPORTING | ||||||||||||||||||||
Revenue | 90,290 | 89,787 | 86,590 | |||||||||||||||||
Cost of revenue | 102,893 | 96,967 | 64,566 | |||||||||||||||||
Gross profit | (12,603) | (7,180) | 22,024 | |||||||||||||||||
Selling, general and administrative expenses | 21,561 | 18,718 | 23,291 | |||||||||||||||||
Gain on sale of business | (13,688) | |||||||||||||||||||
Restructuring charges | 113 | |||||||||||||||||||
Litigation settlement loss, net of $4,000 insurance recovery (Note 20) | 0 | |||||||||||||||||||
Income (loss) from operations | (20,589) | (25,898) | (1,267) | |||||||||||||||||
Total other income (expense), net | 77 | (4) | (5) | |||||||||||||||||
Income before income taxes and non-controlling interests | (20,512) | (25,902) | (1,272) | |||||||||||||||||
Total Assets: | ||||||||||||||||||||
Total assets | 66,772 | 64,624 | 66,772 | 64,624 | ||||||||||||||||
Other Businesses, Corporate and Eliminations | ||||||||||||||||||||
SEGMENT REPORTING | ||||||||||||||||||||
Revenue | 61,007 | 58,742 | 83,389 | |||||||||||||||||
Cost of revenue | 72,164 | 57,391 | 78,939 | |||||||||||||||||
Gross profit | (11,157) | 1,351 | 4,450 | |||||||||||||||||
Selling, general and administrative expenses | 69,096 | 59,709 | 69,356 | |||||||||||||||||
Gain on sale of business | 0 | |||||||||||||||||||
Restructuring charges | 8,952 | |||||||||||||||||||
Litigation settlement loss, net of $4,000 insurance recovery (Note 20) | 28,000 | |||||||||||||||||||
Income (loss) from operations | (89,205) | (58,358) | (92,906) | |||||||||||||||||
Total other income (expense), net | (41,254) | (14,399) | (20,931) | |||||||||||||||||
Income before income taxes and non-controlling interests | (130,459) | (72,757) | (113,837) | |||||||||||||||||
Total Assets: | ||||||||||||||||||||
Total assets | $ 438,790 | $ 496,194 | $ 438,790 | $ 496,194 | ||||||||||||||||
Insurance recovery proceeds | $ 4,000 | |||||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | |||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | |||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | |||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | |||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | |||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | |||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | |||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
SEGMENT REPORTING (Details 2)
SEGMENT REPORTING (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Premises & equipment, net | ||
Premises and equipment, net | $ 45,631 | $ 73,273 |
United States | ||
Premises & equipment, net | ||
Premises and equipment, net | 25,693 | 46,268 |
India | ||
Premises & equipment, net | ||
Premises and equipment, net | 3,154 | 8,136 |
Luxembourg | ||
Premises & equipment, net | ||
Premises and equipment, net | 14,975 | 16,688 |
Philippines | ||
Premises & equipment, net | ||
Premises and equipment, net | 1,754 | 2,038 |
Uruguay | ||
Premises & equipment, net | ||
Premises and equipment, net | $ 55 | $ 143 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) $ / shares in Units, shares in Thousands | Aug. 08, 2018USD ($) | Dec. 31, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | [7],[8] | Jun. 30, 2017USD ($)$ / sharesshares | [7],[8] | Mar. 31, 2017USD ($)$ / sharesshares | [7],[8] | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Apr. 30, 2018USD ($) | Apr. 03, 2018USD ($) | Dec. 27, 2017subsidiary | |||||
Unrealized (loss) gain on investment in equity securities | $ (8,800,000) | $ 1,800,000 | $ 1,500,000 | $ (7,500,000) | $ (12,972,000) | $ 0 | $ 0 | ||||||||||||||||
Loss on debt refinancing | 4,434,000 | 0 | 0 | ||||||||||||||||||||
Proceeds from the sale of business, first installment | 15,000,000 | 0 | 0 | ||||||||||||||||||||
Future proceeds from the sale of business, second installment | 3,000,000 | ||||||||||||||||||||||
Gain on sale of business | 13,688,000 | 0 | 0 | ||||||||||||||||||||
Restructuring charges | 11,560,000 | 0 | 0 | ||||||||||||||||||||
Estimate of possible loss | 6,200,000 | 6,200,000 | |||||||||||||||||||||
Loss in the period | 400,000 | 5,900,000 | 6,200,000 | ||||||||||||||||||||
Net tax benefit | (4,098,000) | 276,256,000 | (12,935,000) | ||||||||||||||||||||
Operating loss carryforwards | 1,355,500,000 | $ 1,339,600,000 | 1,355,500,000 | 1,339,600,000 | |||||||||||||||||||
Deferred tax assets, net | 309,089,000 | 303,707,000 | 309,089,000 | 303,707,000 | |||||||||||||||||||
Income tax expense, adjustment of deferred tax asset | 6,300,000 | ||||||||||||||||||||||
Income tax expense, foreign income tax reserves | 10,500,000 | ||||||||||||||||||||||
Revenue | 217,633,000 | [1],[2],[3],[4],[5],[6],[7] | 204,575,000 | [1],[2],[3],[4],[5],[6],[7] | 218,556,000 | [1],[2],[3],[4],[5],[6],[7] | 197,438,000 | [1],[2],[3],[4],[5],[6],[7] | 216,066,000 | [7],[8] | $ 234,979,000 | $ 250,685,000 | $ 240,483,000 | 838,202,000 | 942,213,000 | 997,303,000 | |||||||
Gross profit | 53,448,000 | [1],[2],[3],[4],[5],[6],[7] | 56,995,000 | [1],[2],[3],[4],[5],[6],[7] | 55,350,000 | [1],[2],[3],[4],[5],[6],[7] | 50,244,000 | [1],[2],[3],[4],[5],[6],[7] | 54,445,000 | [7],[8] | 60,081,000 | 65,292,000 | 62,530,000 | 216,037,000 | 242,348,000 | 307,258,000 | |||||||
(Loss) income before income taxes and non-controlling interests | (12,829,000) | [1],[2],[3],[4],[5],[6],[7] | 16,129,000 | [1],[2],[3],[4],[5],[6],[7] | 3,071,000 | [1],[2],[3],[4],[5],[6],[7] | (4,972,000) | [1],[2],[3],[4],[5],[6],[7] | 3,112,000 | [7],[8] | 10,357,000 | 12,160,000 | 9,746,000 | 1,399,000 | 35,375,000 | 44,321,000 | |||||||
Net (loss) income | (10,868,000) | [1],[2],[3],[4],[5],[6],[7] | 9,521,000 | [1],[2],[3],[4],[5],[6],[7] | 2,255,000 | [1],[2],[3],[4],[5],[6],[7] | (3,607,000) | [1],[2],[3],[4],[5],[6],[7] | 286,983,000 | [7],[8] | 7,766,000 | 9,722,000 | 7,160,000 | (2,699,000) | 311,631,000 | 31,386,000 | |||||||
Net (loss) income attributable to Altisource | $ (11,485,000) | [1],[2],[3],[4],[5],[6],[7] | $ 8,667,000 | [1],[2],[3],[4],[5],[6],[7] | $ 1,568,000 | [1],[2],[3],[4],[5],[6],[7] | $ (4,132,000) | [1],[2],[3],[4],[5],[6],[7] | $ 286,350,000 | [7],[8] | $ 6,961,000 | $ 9,035,000 | $ 6,545,000 | $ (5,382,000) | $ 308,891,000 | $ 28,693,000 | |||||||
(Loss) earnings per share: | |||||||||||||||||||||||
Basic (in dollars per share) | $ / shares | $ (0.69) | [1],[2],[3],[4],[5],[6],[7] | $ 0.51 | [1],[2],[3],[4],[5],[6],[7] | $ 0.09 | [1],[2],[3],[4],[5],[6],[7] | $ (0.24) | [1],[2],[3],[4],[5],[6],[7] | $ 16.16 | [7],[8] | $ 0.39 | $ 0.49 | $ 0.35 | $ (0.32) | $ 16.99 | $ 1.53 | |||||||
Diluted (in dollars per share) | $ / shares | $ (0.69) | [1],[2],[3],[4],[5],[6],[7] | $ 0.49 | [1],[2],[3],[4],[5],[6],[7] | $ 0.09 | [1],[2],[3],[4],[5],[6],[7] | $ (0.24) | [1],[2],[3],[4],[5],[6],[7] | $ 15.72 | [7],[8] | $ 0.38 | $ 0.48 | $ 0.34 | $ (0.32) | $ 16.53 | $ 1.46 | |||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic (in shares) | shares | 16,745 | [1],[2],[3],[4],[5],[6],[7] | 17,033 | [1],[2],[3],[4],[5],[6],[7] | 17,142 | [1],[2],[3],[4],[5],[6],[7] | 17,378 | [1],[2],[3],[4],[5],[6],[7] | 17,724 | [7],[8] | 18,023 | 18,335 | 18,662 | 17,073 | 18,183 | 18,696 | |||||||
Diluted (in shares) | shares | 16,745 | [1],[2],[3],[4],[5],[6],[7] | 17,575 | [1],[2],[3],[4],[5],[6],[7] | 17,553 | [1],[2],[3],[4],[5],[6],[7] | 17,378 | [1],[2],[3],[4],[5],[6],[7] | 18,211 | [7],[8] | 18,429 | 18,836 | 19,304 | 17,073 | 18,692 | 19,612 | |||||||
2017 Subsidiary Merger | |||||||||||||||||||||||
Net tax benefit | $ 284,100,000 | ||||||||||||||||||||||
Number of wholly-owned subsidiaries merged | subsidiary | 2 | ||||||||||||||||||||||
Operating loss carryforwards | 1,300,000,000 | $ 1,300,000,000 | |||||||||||||||||||||
Deferred tax assets, net | $ 300,900,000 | $ 300,900,000 | |||||||||||||||||||||
Employee Severance and Professional Service Fees | |||||||||||||||||||||||
Restructuring charges | $ 8,100,000 | $ 3,400,000 | |||||||||||||||||||||
Rental Property Management Business | |||||||||||||||||||||||
Goodwill, written off | $ 2,256,000 | ||||||||||||||||||||||
Buy-Renovate-Lease-Sell Business | |||||||||||||||||||||||
Goodwill, written off | 2,640,000 | ||||||||||||||||||||||
Buy-Renovate-Lease-Sell Business | Real Estate Market | |||||||||||||||||||||||
Goodwill, written off | $ 2,600,000 | 2,600,000 | |||||||||||||||||||||
Discontinued Operations, Disposed of by Sale | Rental Property Management Business | |||||||||||||||||||||||
Total proceeds from the sale of business | $ 18,000,000 | ||||||||||||||||||||||
Proceeds from the sale of business, first installment | $ 15,000,000 | ||||||||||||||||||||||
Future proceeds from the sale of business, second installment | 3,000,000 | ||||||||||||||||||||||
Gain on sale of business | $ 13,700,000 | 13,700,000 | |||||||||||||||||||||
Goodwill, written off | $ 2,300,000 | ||||||||||||||||||||||
Senior secured term loans | |||||||||||||||||||||||
Loss on debt refinancing | $ 4,400,000 | ||||||||||||||||||||||
April 3, 2018 Credit Agreement | Term B Loans | |||||||||||||||||||||||
Debt instrument, face amount | $ 412,000,000 | $ 412,000,000 | |||||||||||||||||||||
[1] | Effective January 1, 2018, the Company adopted Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. Previously, changes in the fair value of the Company’s available for sale securities were included in comprehensive income. During the three months ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, we recognized unrealized (losses) gains from our investment in RESI common shares of $(7.5) million, $1.5 million, $1.8 million and $(8.8) million, respectively. See Note 6. | ||||||||||||||||||||||
[2] | In April 2018, Altisource entered into the Credit Agreement, pursuant to which, among other things, Altisource borrowed $412.0 million in the form of Term B Loans. Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of the unamortized debt issuance costs and debt discount in the second quarter of 2018. See Note 14. | ||||||||||||||||||||||
[3] | In August 2018, we initiated Project Catalyst, a restructuring plan intended to optimize our operations and reduce costs to align our cost structure with our anticipated revenues and improve our operating margins. During the three months ended September 30, 2018 and December 31, 2018, we incurred $3.4 million and $8.1 million, respectively, of severance costs, facility shut-down costs and professional services fees related to the restructuring plan. See Note 24. | ||||||||||||||||||||||
[4] | In August 2018, we sold our rental property management business to RESI for total transaction proceeds of $18.0 million, $15.0 million of which was received on the closing date of August 8, 2018 and $3.0 million of which will be received on the earlier of a RESI change of control or August 8, 2023. We recognized a $13.7 million pretax gain on the sale of this business during the third quarter of 2018. See Note 4. | ||||||||||||||||||||||
[5] | In November 2018, the Company announced its plans to sell its BRS Inventory and discontinue the Company’s BRS business. The Company recorded a write-off of goodwill related to its plan to discontinue the BRS business of $2.6 million during the three months ended December 31, 2018. See Notes 9 and 11. | ||||||||||||||||||||||
[6] | In connection with a United States Supreme Court decision in June 2018, the Company is analyzing its services for potential exposure to sales tax in various jurisdictions in the United States and believes that the Company has a related estimated probable loss of $6.2 million. The Company recognized $5.9 million and $0.4 million during the three months ended September 30, 2018 and December 31, 2018, respectively. See Note 25. | ||||||||||||||||||||||
[7] | The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted average shares outstanding for each period. | ||||||||||||||||||||||
[8] | During the three months ended December, 31, 2017, the Company recognized net tax benefits of $284.1 million. On December 27, 2017, two of the Company’s wholly-owned subsidiaries, Altisource Solutions S.à r.l. and Altisource Holdings S.à r.l., merged, with Altisource Holdings S.à r.l. as the surviving entity. For Luxembourg tax purposes, the merger was recognized at fair value and generated an NOL of $1.3 billion and a deferred tax asset, net of valuation allowance, of $300.9 million. This deferred tax benefit was partially offset by $6.3 million of income tax from changes in U.S. and Luxembourg income tax rates and a $10.5 million increase in certain foreign income tax reserves (and related interest). See Note 22. |
SCHEDULE II. VALUATION AND QU_2
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Allowance for doubtful accounts | ||||
Deductions from asset accounts: | ||||
Balance at Beginning of Period | $ 10,579 | $ 10,424 | $ 18,456 | |
Additions, Charged to Expenses | 2,830 | 5,116 | 1,829 | |
Additions, Charged to Other Accounts | [1] | (7) | (3,107) | 250 |
Deductions | [2] | 2,519 | 1,854 | 10,111 |
Balance at End of Period | 10,883 | 10,579 | 10,424 | |
Valuation allowance for deferred tax assets | ||||
Deductions from asset accounts: | ||||
Balance at Beginning of Period | 46,283 | 3,467 | 3,558 | |
Additions, Charged to Expenses | 468 | 42,816 | 228 | |
Additions, Charged to Other Accounts | 0 | 0 | 0 | |
Deductions | 0 | 0 | 319 | |
Balance at End of Period | $ 46,751 | $ 46,283 | $ 3,467 | |
[1] | For allowance for doubtful accounts, primarily includes amounts previously written off which were credited directly to this account when recovered. | |||
[2] | For allowance for doubtful accounts, amounts written off as uncollectible or transferred to other accounts or utilized. |