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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Luxembourg
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98-0554932
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $1.00 par value
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NASDAQ Global Select Market
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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ITEM 1.
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BUSINESS
|
• Property preservation and inspection services
• Real estate brokerage and auction services
• Title insurance (agent and related services) and settlement services
• Appraisal management services and broker and non-broker valuation services
• Foreclosure trustee services
• Residential and commercial loan servicing technologies
|
|
• Vendor management, marketplace transaction management and payment management technologies
• Document management platform
• Default services (real estate owned (“REO”), foreclosure, bankruptcy, eviction) technologies
• Mortgage charge-off collections
• Residential and commercial loan disbursement processing, risk mitigation and construction inspection services
|
• Title insurance (agent and related services) and settlement services
• Appraisal management services and broker and non-broker valuation services
• Fulfillment services
• Loan origination system
|
|
• Document management platform
• Certified loan insurance and certification
• Vendor management oversight platform
• Mortgage banker cooperative management
• Mortgage trading platform
|
• Real estate brokerage doing business as Owners.com
®
• Title insurance (agent and related services) and settlement services
|
|
• Mortgage brokerage
• Homeowners insurance
|
• Property preservation and inspection services
• Real estate brokerage and auction services
• Data solutions
• Title insurance (agent and related services) and settlement services
|
|
• Buy-renovate-lease-sell
• Renovation services
• Property management services
• Appraisal management services and broker and non-broker valuation services
|
•
|
Generated $66.1 million of cash flows from operating activities and
$110.5 million
of adjusted cash flows from operating activities (this is a non-GAAP measure that is defined and reconciled to the corresponding GAAP measure on pages
29
to
31
)
|
•
|
Ended 2017 with $154.2 million of cash, cash equivalents and marketable securities
|
•
|
Repurchased 1.6 million shares of our common stock at an average price of $23.84 per share
|
•
|
Repurchased $60.1 million par value of our senior secured term loan at a weighted average discount of 10.7%, recognizing a net gain of $5.6 million on the early extinguishment of debt
|
•
|
Recognized a net income tax benefit of $284.1 million in the fourth quarter of 2017 relating to the merger of two of the Company’s Luxembourg subsidiaries, the impact of statutory tax rate changes in the U.S. and Luxembourg and foreign income tax reserves
|
•
|
Amended our senior secured term loan to allow the Company to directly repurchase its debt in the open market and permit the internal restructuring of our Luxembourg subsidiaries
|
•
|
Selected by 9 bank and non-bank loan servicers to provide property preservation and inspection services, real estate brokerage and auction services, or title insurance and settlement services
|
•
|
Selected as a service provider by 4 servicers in the first quarter of 2018
|
•
|
Grew non-Ocwen and non-NRZ (defined below) service revenue by 9% compared to 2016
|
•
|
Maintained Altisource as one of the leading REO asset managers and online auctioneers of residential real estate through its Hubzu.com platform
|
•
|
Entered into agreements with New Residential Investment Corp. (individually, together with one or more of its subsidiaries, or one or more of its subsidiaries individually, “NRZ”) that establish Altisource as the exclusive provider of REO brokerage services for mortgage servicing rights (“MSRs”) that NRZ agreed to acquire from Ocwen (see Item 7 of Part I, “
Ocwen Related Matters
,” for a detailed description)
|
•
|
Entered into a non-binding Letter of Intent (subsequently amended) to enter into a Services Agreement with NRZ to provide fee-based services for MSRs that NRZ agreed to acquire from Ocwen (see Item 7 of Part I, “
Ocwen Related Matters
,” for a detailed description)
|
•
|
Approved as a loan fulfillment provider for residential loan securitizations by Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc., Kroll Bond Rating Agency, Inc., DBRS, Inc. and Fitch Ratings Inc. (acceptance by Fitch as a reviewer of loans for securitizations was received in January 2018)
|
•
|
Selected by 7 lenders in 2017 and early 2018 to provide platform solutions including loan fulfillment services, loan processing services, or CastleLine
®
certification and insurance services
|
•
|
Grew Owners.com residential purchases and sales by 713% in 2017 from 106 transactions in 2016 to 862 transactions in 2017
|
•
|
Launched Owners.com Loans to broker mortgages to Owners.com home buyers to deliver an integrated solution for consumers and grow revenue per sale
|
•
|
Implemented an agile operating model inspired by best-in-class Internet companies
|
•
|
Purchased 257 homes and sold 158 homes in the buy-renovate-lease-sell business in 2017 compared to 119 home purchases and 14 home sales in 2016
|
•
|
Increased the inventory of homes in the buy-renovate-lease-sell business by 94% to 204 homes as of December 31, 2017 compared to December 31, 2016
|
•
|
Received a residential rental property management vendor rating of MOR RV2 from Morningstar Credit Ratings, LLC
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Mortgage Market
|
|
67%
|
|
65%
|
|
66%
|
Real Estate Market
|
|
1%
|
|
—%
|
|
9%
|
Other Businesses, Corporate and Eliminations
|
|
11%
|
|
27%
|
|
37%
|
Consolidated revenue
|
|
58%
|
|
56%
|
|
60%
|
•
|
Expand relationships with existing customers by cross-selling additional services and growing the volume of existing services we provide. We believe our customer relationships represent a meaningful growth opportunity for us;
|
•
|
Develop new customer relationships leveraging a comprehensive suite of services, strong performance and controls. We believe there is a large opportunity to provide our services to potential customers; and
|
•
|
Sell new offerings to existing customers and prospects. Some of our newer offerings include our suite of support services for FHA mortgages, Vendorly™, a SaaS-based vendor management platform, Trelix Connect™, a SaaS-based loan review system, noteXchange
®
, a SaaS platform to facilitate whole loan purchase and sale transactions, and residential and commercial loan disbursement processing, risk mitigation and construction inspection services.
|
•
|
Attract home buyers and sellers to Owners.com and Hubzu.com with a compelling value proposition through online marketing, search engine optimization and public relations; and
|
•
|
Leverage local real estate agents to provide personalized service to existing and prospective customers.
|
|
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United States
|
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India
|
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Philippines
|
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Uruguay
|
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Luxembourg
|
|
Consolidated Altisource
|
||||||
|
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|
||||||
Mortgage Market
|
|
745
|
|
|
2,964
|
|
|
177
|
|
|
8
|
|
|
4
|
|
|
3,898
|
|
Real Estate Market
|
|
167
|
|
|
199
|
|
|
140
|
|
|
1
|
|
|
5
|
|
|
512
|
|
Other Businesses, Corporate and Eliminations
|
|
565
|
|
|
1,951
|
|
|
361
|
|
|
129
|
|
|
12
|
|
|
3,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total employees
|
|
1,477
|
|
|
5,114
|
|
|
678
|
|
|
138
|
|
|
21
|
|
|
7,428
|
|
•
|
the Americans with Disabilities Act (“ADA”);
|
•
|
the California Homeowner Bill of Rights (“CHBR”);
|
•
|
the Controlling the Assault of Non-Solicited Pornography And Marketing Act (“CAN-SPAM”);
|
•
|
the Equal Credit Opportunity Act (“ECOA”);
|
•
|
the Fair and Accurate Credit Transactions Act (“FACTA”);
|
•
|
the Fair Credit Reporting Act (“FCRA”);
|
•
|
the Fair Debt Collection Practices Act (“FDCPA”);
|
•
|
the Fair Housing Act;
|
•
|
the Federal Trade Commission Act (“FTC Act”);
|
•
|
the Gramm-Leach-Bliley Act (“GLBA”);
|
•
|
the Home Affordable Refinance Program (“HARP”);
|
•
|
the Home Mortgage Disclosure Act (“HMDA”);
|
•
|
the Home Ownership and Equity Protection Act (“HOEPA”);
|
•
|
the New York Real Property Actions and Proceedings Law (“RPAPL”);
|
•
|
the Real Estate Settlement Procedures Act (“RESPA”);
|
•
|
the Secure and Fair Enforcement for Mortgage Licensing (“SAFE”) Act;
|
•
|
the Servicemembers Civil Relief Act (“SCRA”);
|
•
|
the Telephone Consumer Protection Act (“TCPA”);
|
•
|
the Truth in Lending Act (“TILA”); and
|
•
|
Unfair, Deceptive or Abusive Acts and Practices statutes (“UDAAP”).
|
ITEM 1A.
|
RISK FACTORS
|
•
|
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
|
•
|
Altisource fails to be retained as a service provider
|
•
|
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
|
•
|
be expensive and time-consuming to defend;
|
•
|
cause us to cease making, licensing or using technology solutions that incorporate the challenged intellectual property;
|
•
|
require us to redesign our technology solutions, if feasible;
|
•
|
divert management’s attention and resources; and/or
|
•
|
require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies.
|
•
|
limiting our ability to borrow money for our working capital, capital expenditures and debt service requirements or other general corporate purposes;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our operations, our business or the industry in which we compete;
|
•
|
requiring us to use a portion of our excess cash flow, as defined in the debt agreement, to repay debt in the event our debt to EBITDA ratios, as defined in the debt agreement, exceed certain thresholds; and
|
•
|
placing us at a competitive disadvantage by limiting our ability to invest in our business.
|
•
|
execute on our strategic businesses;
|
•
|
maintain or improve the quality and compliance of services we provide to our customers;
|
•
|
meet or exceed the expectations of our customers;
|
•
|
successfully leverage our existing customer relationships to sell additional services; and
|
•
|
attract new customers.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
|
|
|
|
|
|
Luxembourg
|
|
X
|
|
X
|
|
X
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
|
Atlanta, GA
|
|
X
|
|
X
|
|
X
|
Boston, MA
|
|
X
|
|
|
|
X
|
Denver, CO
|
|
X
|
|
X
|
|
|
Endicott, NY
|
|
|
|
|
|
X
|
Fort Washington, PA
|
|
X
|
|
|
|
X
|
Irvine, CA
|
|
X
|
|
|
|
|
Los Angeles, CA
|
|
X
|
|
|
|
X
|
Plano, TX
|
|
X
|
|
X
|
|
X
|
Sacramento, CA
|
|
|
|
|
|
X
|
Southfield, MI
|
|
X
|
|
|
|
|
St. Louis, MO
|
|
X
|
|
X
|
|
X
|
Tempe, AZ
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
Montevideo, Uruguay
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
Pasay City, Philippines
|
|
X
|
|
X
|
|
X
|
|
|
|
|
|
|
|
India
|
|
|
|
|
|
|
Bangalore
|
|
X
|
|
X
|
|
X
|
Mumbai
|
|
X
|
|
X
|
|
X
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
2017
|
||||||
Quarter Ended
|
|
Low
|
|
High
|
||||
|
|
|
|
|
||||
March 31
|
|
$
|
21.96
|
|
|
$
|
36.85
|
|
June 30
|
|
17.92
|
|
|
45.02
|
|
||
September 30
|
|
19.79
|
|
|
27.65
|
|
||
December 31
|
|
24.90
|
|
|
29.48
|
|
|
|
12/31/12
|
|
6/30/13
|
|
12/31/13
|
|
6/30/14
|
|
12/31/14
|
|
6/30/15
|
|
12/31/15
|
|
6/30/16
|
|
12/31/16
|
|
6/30/17
|
|
12/31/17
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Altisource
|
|
$
|
100.00
|
|
|
$
|
108.83
|
|
|
$
|
183.07
|
|
|
$
|
132.23
|
|
|
$
|
39.00
|
|
|
$
|
35.53
|
|
|
$
|
32.09
|
|
|
$
|
32.13
|
|
|
$
|
30.69
|
|
|
$
|
25.18
|
|
|
$
|
32.31
|
|
S&P 500 Index
|
|
100.00
|
|
|
112.63
|
|
|
129.60
|
|
|
137.45
|
|
|
144.36
|
|
|
144.66
|
|
|
143.31
|
|
|
147.17
|
|
|
156.98
|
|
|
169.92
|
|
|
187.47
|
|
|||||||||||
NASDAQ Composite Index
|
|
100.00
|
|
|
112.71
|
|
|
138.32
|
|
|
145.99
|
|
|
156.85
|
|
|
165.15
|
|
|
165.84
|
|
|
160.38
|
|
|
178.28
|
|
|
203.36
|
|
|
228.63
|
|
Period
|
|
Total number of shares purchased
(1)
|
|
Weighted average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
(2)
|
|
Maximum number of shares that may yet be purchased under the plans or programs
(2)
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Common stock:
|
|
|
|
|
|
|
|
|
|||||
October 1 – 31, 2017
|
|
53,662
|
|
|
$
|
25.82
|
|
|
53,662
|
|
|
3,892,883
|
|
November 1 – 30, 2017
|
|
213,257
|
|
|
26.42
|
|
|
213,257
|
|
|
3,679,626
|
|
|
December 1 – 31, 2017
|
|
256,675
|
|
|
27.20
|
|
|
256,675
|
|
|
3,422,951
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
523,594
|
|
|
$
|
26.74
|
|
|
523,594
|
|
|
3,422,951
|
|
(1)
|
In addition to the repurchases included in the table above, 2,905 common shares were withheld from employees to satisfy tax withholding obligations that arose from the vesting of restricted shares.
|
(2)
|
On May 17, 2017, our shareholders approved the renewal of the share repurchase program originally approved by the shareholders on May 18, 2016, which replaced the previous share repurchase program and authorizes us to purchase up to
4.6 million
shares of our common stock in the open market, subject to certain parameters.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
For the years ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
942,213
|
|
|
$
|
997,303
|
|
|
$
|
1,051,466
|
|
|
$
|
1,078,916
|
|
|
$
|
768,357
|
|
Cost of revenue
|
|
699,865
|
|
|
690,045
|
|
|
687,327
|
|
|
707,180
|
|
|
492,480
|
|
|||||
Gross profit
|
|
242,348
|
|
|
307,258
|
|
|
364,139
|
|
|
371,736
|
|
|
275,877
|
|
|||||
Selling, general and administrative expenses
|
|
192,642
|
|
|
214,155
|
|
|
220,868
|
|
|
201,733
|
|
|
113,810
|
|
|||||
Litigation settlement loss, net of $4,000
insurance recovery |
|
—
|
|
|
28,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment losses
|
|
—
|
|
|
—
|
|
|
71,785
|
|
|
37,473
|
|
|
—
|
|
|||||
Change in the fair value of Equator
®
Earn Out
|
|
—
|
|
|
—
|
|
|
(7,591
|
)
|
|
(37,924
|
)
|
|
—
|
|
|||||
Income from operations
|
|
49,706
|
|
|
65,103
|
|
|
79,077
|
|
|
170,454
|
|
|
162,067
|
|
|||||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
(22,253
|
)
|
|
(24,412
|
)
|
|
(28,208
|
)
|
|
(23,363
|
)
|
|
(20,291
|
)
|
|||||
Other income (expense), net
|
|
7,922
|
|
|
3,630
|
|
|
2,191
|
|
|
174
|
|
|
557
|
|
|||||
Total other income (expense), net
|
|
(14,331
|
)
|
|
(20,782
|
)
|
|
(26,017
|
)
|
|
(23,189
|
)
|
|
(19,734
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes and non-controlling interests
|
|
35,375
|
|
|
44,321
|
|
|
53,060
|
|
|
147,265
|
|
|
142,333
|
|
|||||
Income tax benefit (provision)
|
|
276,256
|
|
|
(12,935
|
)
|
|
(8,260
|
)
|
|
(10,178
|
)
|
|
(8,540
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
311,631
|
|
|
31,386
|
|
|
44,800
|
|
|
137,087
|
|
|
133,793
|
|
|||||
Net income attributable to non-controlling interests
|
|
(2,740
|
)
|
|
(2,693
|
)
|
|
(3,202
|
)
|
|
(2,603
|
)
|
|
(3,820
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Altisource
|
|
$
|
308,891
|
|
|
$
|
28,693
|
|
|
$
|
41,598
|
|
|
$
|
134,484
|
|
|
$
|
129,973
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
16.99
|
|
|
$
|
1.53
|
|
|
$
|
2.13
|
|
|
$
|
6.22
|
|
|
$
|
5.63
|
|
Diluted
|
|
$
|
16.53
|
|
|
$
|
1.46
|
|
|
$
|
2.02
|
|
|
$
|
5.69
|
|
|
$
|
5.19
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
18,183
|
|
|
18,696
|
|
|
19,504
|
|
|
21,625
|
|
|
23,072
|
|
|||||
Diluted
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|
23,634
|
|
|
25,053
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Outstanding shares (at December 31)
|
|
17,418
|
|
|
18,774
|
|
|
19,021
|
|
|
20,279
|
|
|
22,629
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transactions with related parties included above:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
(1)
|
|
|
$
|
666,800
|
|
|
$
|
502,087
|
|
|
Cost of revenue
|
|
—
|
|
|
—
|
|
|
N/A
(1)
|
|
|
38,610
|
|
|
19,983
|
|
|||||
Selling, general and administrative expenses
|
|
—
|
|
|
—
|
|
|
N/A
(1)
|
|
|
(268
|
)
|
|
569
|
|
|||||
Other income
|
|
—
|
|
|
—
|
|
|
N/A
(1)
|
|
|
—
|
|
|
773
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP Financial Measures
(2)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income attributable to Altisource
|
|
$
|
52,306
|
|
|
$
|
90,095
|
|
|
$
|
143,475
|
|
|
$
|
169,141
|
|
|
$
|
156,458
|
|
Adjusted diluted earnings per share
|
|
$
|
2.80
|
|
|
$
|
4.59
|
|
|
$
|
6.96
|
|
|
$
|
7.16
|
|
|
$
|
6.25
|
|
Adjusted EBITDA
|
|
$
|
126,432
|
|
|
$
|
178,313
|
|
|
$
|
219,732
|
|
|
$
|
234,197
|
|
|
$
|
205,137
|
|
|
|
December 31,
|
||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
105,006
|
|
|
$
|
149,294
|
|
|
$
|
179,327
|
|
|
$
|
161,361
|
|
|
$
|
130,324
|
|
Available for sale securities
|
|
49,153
|
|
|
45,754
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accounts receivable, net
|
|
52,740
|
|
|
87,821
|
|
|
105,023
|
|
|
112,183
|
|
|
104,787
|
|
|||||
Premises and equipment, net
|
|
73,273
|
|
|
103,473
|
|
|
119,121
|
|
|
127,759
|
|
|
87,252
|
|
|||||
Goodwill
|
|
86,283
|
|
|
86,283
|
|
|
82,801
|
|
|
90,851
|
|
|
99,414
|
|
|||||
Intangible assets, net
|
|
120,065
|
|
|
155,432
|
|
|
197,003
|
|
|
245,246
|
|
|
276,162
|
|
|||||
Total assets
|
|
865,164
|
|
|
689,212
|
|
|
721,798
|
|
|
780,122
|
|
|
723,365
|
|
|||||
Long-term debt, net (including current portion)
|
|
409,281
|
|
|
473,545
|
|
|
528,178
|
|
|
580,515
|
|
|
388,569
|
|
|||||
Total liabilities
|
|
525,179
|
|
|
627,018
|
|
|
669,528
|
|
|
738,679
|
|
|
565,624
|
|
|
|
For the years ended December 31,
|
||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities
|
|
$
|
66,082
|
|
|
$
|
126,818
|
|
|
$
|
195,352
|
|
|
$
|
197,493
|
|
|
$
|
185,474
|
|
Additions to premises and equipment
|
|
10,514
|
|
|
23,269
|
|
|
36,188
|
|
|
64,846
|
|
|
34,134
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP Financial Measures
(2)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted cash flows from operating activities
|
|
110,462
|
|
|
139,843
|
|
|
195,352
|
|
|
197,493
|
|
|
185,474
|
|
|||||
Adjusted cash flows from operating activities less additions to premises and equipment
|
|
99,948
|
|
|
116,574
|
|
|
159,164
|
|
|
132,647
|
|
|
151,340
|
|
(1)
|
Through January 16, 2015, William C. Erbey served as our Chairman as well as the Executive Chairman of Ocwen and Chairman of each of Home Loan Servicing Solutions, Ltd. (“HLSS”), RESI and AAMC. Effective January 16, 2015, Mr. Erbey stepped down as the Executive Chairman of Ocwen and Chairman of each of Altisource, HLSS, RESI and AAMC and is no longer a member of the Board of Directors of any of these companies. Consequently, as of January 16, 2015, these companies are no longer related parties of Altisource, as defined by Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 850,
Related Party Disclosures
. The disclosures in the table above are limited to the periods that each of Ocwen, HLSS, RESI and AAMC were related parties of Altisource and are not reflective of current activities with these former related parties. See Note 4 to the consolidated financial statements for more details and financial information for the period from January 1, 2015 to January 16, 2015.
|
(2)
|
These are non-GAAP measures that are defined and reconciled to the corresponding GAAP measures on pages
29
to
31
.
|
|
|
For the years ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Altisource
|
|
$
|
308,891
|
|
|
$
|
28,693
|
|
|
$
|
41,598
|
|
|
$
|
134,484
|
|
|
$
|
129,973
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intangible asset amortization expense, net of tax
|
|
27,523
|
|
|
36,819
|
|
|
38,187
|
|
|
35,076
|
|
|
26,485
|
|
|||||
Certain income tax related items, net
|
|
(284,108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net litigation settlement loss, net of tax
|
|
—
|
|
|
24,583
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment loss, net of tax
|
|
—
|
|
|
—
|
|
|
70,630
|
|
|
34,884
|
|
|
—
|
|
|||||
Gain on Equator Earn Out, net of tax
|
|
—
|
|
|
—
|
|
|
(6,940
|
)
|
|
(35,303
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income attributable to Altisource
|
|
$
|
52,306
|
|
|
$
|
90,095
|
|
|
$
|
143,475
|
|
|
$
|
169,141
|
|
|
$
|
156,458
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
|
$
|
16.53
|
|
|
$
|
1.46
|
|
|
$
|
2.02
|
|
|
$
|
5.69
|
|
|
$
|
5.19
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intangible asset amortization expense, net of tax, per diluted share
|
|
1.47
|
|
|
1.88
|
|
|
1.85
|
|
|
1.48
|
|
|
1.06
|
|
|||||
Certain income tax related items, net
|
|
(15.20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net litigation settlement loss, net of tax, per diluted share
|
|
—
|
|
|
1.25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment loss, net of tax, per diluted share
|
|
—
|
|
|
—
|
|
|
3.43
|
|
|
1.48
|
|
|
—
|
|
|||||
Gain on Equator Earn Out, net of tax, per diluted share
|
|
—
|
|
|
—
|
|
|
(0.34
|
)
|
|
(1.49
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted diluted earnings per share
|
|
$
|
2.80
|
|
|
$
|
4.59
|
|
|
$
|
6.96
|
|
|
$
|
7.16
|
|
|
$
|
6.25
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of the impact of intangible asset amortization expense, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intangible asset amortization expense
|
|
$
|
35,367
|
|
|
$
|
47,576
|
|
|
$
|
41,135
|
|
|
$
|
37,680
|
|
|
$
|
28,176
|
|
Tax benefit from intangible asset amortization
|
|
(7,844
|
)
|
|
(10,757
|
)
|
|
(2,948
|
)
|
|
(2,604
|
)
|
|
(1,691
|
)
|
|||||
Intangible asset amortization expense, net of tax
|
|
27,523
|
|
|
36,819
|
|
|
38,187
|
|
|
35,076
|
|
|
26,485
|
|
|||||
Diluted share count
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|
23,634
|
|
|
25,053
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intangible asset amortization expense, net of tax,
per diluted share |
|
$
|
1.47
|
|
|
$
|
1.88
|
|
|
$
|
1.85
|
|
|
$
|
1.48
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certain income tax related items, net resulting from:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Luxembourg subsidiaries merger, net
|
|
$
|
(300,908
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other income tax rate changes
|
|
6,270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign income tax reserves
|
|
10,530
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Certain income tax related items, net
|
|
(284,108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Diluted share count
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|
23,634
|
|
|
25,053
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certain income tax related items, net, per diluted share
|
|
$
|
(15.20
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of the impact of net litigation settlement loss,
net of tax |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net litigation settlement loss
|
|
$
|
—
|
|
|
$
|
28,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Tax benefit from net litigation settlement loss
|
|
—
|
|
|
(3,417
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net litigation settlement loss, net of tax
|
|
—
|
|
|
24,583
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Diluted share count
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|
23,634
|
|
|
25,053
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net litigation settlement loss, net of tax, per diluted share
|
|
$
|
—
|
|
|
$
|
1.25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of the impact of impairment loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment loss
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,785
|
|
|
$
|
37,473
|
|
|
$
|
—
|
|
Tax benefit from impairment loss
|
|
—
|
|
|
—
|
|
|
(1,155
|
)
|
|
(2,589
|
)
|
|
—
|
|
|||||
Impairment loss, net of tax
|
|
—
|
|
|
—
|
|
|
70,630
|
|
|
34,884
|
|
|
—
|
|
|||||
Diluted share count
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|
23,634
|
|
|
25,053
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment loss, net of tax, per diluted share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.43
|
|
|
$
|
1.48
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of gain on Equator Earn Out, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on Equator Earn Out
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,591
|
)
|
|
$
|
(37,924
|
)
|
|
$
|
—
|
|
Tax provision from the gain on Equator Earn Out
|
|
—
|
|
|
—
|
|
|
651
|
|
|
2,621
|
|
|
—
|
|
|||||
Gain on Equator Earn Out, net of tax
|
|
—
|
|
|
—
|
|
|
(6,940
|
)
|
|
(35,303
|
)
|
|
—
|
|
|||||
Diluted share count
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|
23,634
|
|
|
25,053
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on Equator Earn Out, net of tax, per diluted share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.34
|
)
|
|
$
|
(1.49
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Altisource
|
|
$
|
308,891
|
|
|
$
|
28,693
|
|
|
$
|
41,598
|
|
|
$
|
134,484
|
|
|
$
|
129,973
|
|
Income tax (benefit) provision
|
|
(276,256
|
)
|
|
12,935
|
|
|
8,260
|
|
|
10,178
|
|
|
8,540
|
|
|||||
Interest expense (net of interest income)
|
|
21,983
|
|
|
24,321
|
|
|
28,075
|
|
|
23,260
|
|
|
19,392
|
|
|||||
Depreciation and amortization
|
|
36,447
|
|
|
36,788
|
|
|
36,470
|
|
|
29,046
|
|
|
19,056
|
|
|||||
Intangible asset amortization expense
|
|
35,367
|
|
|
47,576
|
|
|
41,135
|
|
|
37,680
|
|
|
28,176
|
|
|||||
Net litigation settlement loss
|
|
—
|
|
|
28,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment loss
|
|
—
|
|
|
—
|
|
|
71,785
|
|
|
37,473
|
|
|
—
|
|
|||||
Gain on Equator Earn Out
|
|
—
|
|
|
—
|
|
|
(7,591
|
)
|
|
(37,924
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
|
$
|
126,432
|
|
|
$
|
178,313
|
|
|
$
|
219,732
|
|
|
$
|
234,197
|
|
|
$
|
205,137
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income tax benefit (provision)
|
|
$
|
276,256
|
|
|
$
|
(12,935
|
)
|
|
$
|
(8,260
|
)
|
|
$
|
(10,178
|
)
|
|
$
|
(8,540
|
)
|
Certain income tax related items, net
|
|
(284,108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Income tax provision before certain income tax related
items, net |
|
$
|
(7,852
|
)
|
|
$
|
(12,935
|
)
|
|
$
|
(8,260
|
)
|
|
$
|
(10,178
|
)
|
|
$
|
(8,540
|
)
|
Income before income taxes and non-controlling interests
|
|
$
|
35,375
|
|
|
$
|
44,321
|
|
|
$
|
53,060
|
|
|
$
|
147,265
|
|
|
$
|
142,333
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted effective income tax rate
|
|
22.2
|
%
|
|
29.2
|
%
|
|
15.6
|
%
|
|
6.9
|
%
|
|
6.0
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities
|
|
$
|
66,082
|
|
|
$
|
126,818
|
|
|
$
|
195,352
|
|
|
$
|
197,493
|
|
|
$
|
185,474
|
|
Net litigation settlement loss payment
|
|
28,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Increase in short-term investments in real estate
|
|
16,380
|
|
|
13,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted cash flows from operating activities
|
|
110,462
|
|
|
139,843
|
|
|
195,352
|
|
|
197,493
|
|
|
185,474
|
|
|||||
Less: Additions to premises and equipment
|
|
(10,514
|
)
|
|
(23,269
|
)
|
|
(36,188
|
)
|
|
(64,846
|
)
|
|
(34,134
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted cash flows from operating activities less additions to premises and equipment
|
|
$
|
99,948
|
|
|
$
|
116,574
|
|
|
$
|
159,164
|
|
|
$
|
132,647
|
|
|
$
|
151,340
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
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
|
•
|
Altisource fails to be retained as a service provider
|
•
|
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
|
•
|
The average number of loans serviced by Ocwen on REALServicing (including those MSRs owned by NRZ and subserviced by Ocwen) was approximately
1.3 million
,
1.5 million
and
2.0 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. The average number of delinquent non-GSE loans serviced by Ocwen on REALServicing was approximately
199 thousand
,
219 thousand
and
279 thousand
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
•
|
The effective income tax rates for the years ended December 31, 2017, 2016 and 2015 were
(780.9)%
,
29.2%
and
15.6%
, respectively. The Company’s effective income tax rate for the year ended
December 31, 2017
was impacted by three significant items. 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 and a deferred tax asset, net of valuation allowance, of $300.9 million as of
December 31, 2017
. The NOL has a 17 year life. 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
. Excluding these three items, the Company’s adjusted effective income tax rate would have been
22.2%
(see non-GAAP measures defined and reconciled on pages
29
to
31
). Other than the three items discussed above, the variability in the effective income tax rate is primarily from changes in the mix of taxable income across the jurisdictions in which we operate.
|
•
|
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. During
2015
, we repurchased portions of our senior secured term loan with an aggregate par value of
$49.0 million
at a weighted average discount of
10.3%
, recognizing a net gain of
$3.8 million
on the early extinguishment of debt.
|
•
|
In the fourth quarter of 2016, we recorded a litigation settlement loss of
$28.0 million
, net of a
$4.0 million
insurance recovery, related to an agreed settlement of a class action lawsuit (no comparative amounts in
2017
and
2015
).
|
•
|
During the year ended
December 31, 2016
, we purchased
4.1 million
shares of RESI common stock for
$48.2 million
. During the years ended
December 31, 2017
and
2016
, we earned dividends of
$2.5 million
and
$2.3 million
related to this investment (no comparative amount in 2015). In addition, during the year ended
December 31, 2016
, we incurred expenses of
$3.4 million
related to this investment (no comparative amounts in
2017
and 2015).
|
•
|
In the fourth quarter of 2015, we recorded non-cash impairment losses of
$71.8 million
in our Mortgage Market and Other Businesses, Corporate and Eliminations segments primarily driven by our projected technology services revenue from Ocwen and investment in technologies provided to Ocwen (no comparative amounts in
2017
and
2016
).
|
•
|
On July 29, 2016, we acquired certain assets and assumed certain liabilities of Granite for
$9.5 million
.
|
•
|
On October 9, 2015, we acquired RentRange and Investability for
$24.8 million
composed of
$17.5 million
in cash at closing and
247 thousand
shares of restricted common stock of the Company with a value of
$7.3 million
as of the closing date.
|
•
|
On July 17, 2015, we acquired CastleLine for
$33.4 million
. The purchase consideration was composed of
$12.3 million
of cash at closing,
$10.5 million
of cash payable to the seller over
four years
from the acquisition date and
495 thousand
shares of restricted common stock of the Company with a value of
$14.4 million
as of the closing date. Of the cash payable following acquisition,
$3.8 million
is contingent on certain future employment conditions of certain of the sellers, and therefore excluded from the purchase price.
|
•
|
In 2015, we paid the former owners of Equator
$0.5 million
to extinguish any liability for the Equator Earn Out. In connection with this settlement, we reduced the liability for the Equator Earn Out to
$0
and recognized a
$7.6 million
increase in earnings (no comparative amounts in
2017
and
2016
).
|
•
|
During 2015, we recognized a loss on the sale of equity securities of HLSS, net of dividends received, of
$1.9 million
.
|
•
|
Effective March 31, 2015, we terminated the Data Access and Services Agreement with Ocwen (“Data Access Agreement”) (no comparative amounts in 2017 and 2016).
|
(in thousands, except per share data)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service revenue
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage Market
|
|
$
|
754,058
|
|
|
(3
|
)
|
|
$
|
774,514
|
|
|
(1
|
)
|
|
$
|
781,984
|
|
Real Estate Market
|
|
86,821
|
|
|
2
|
|
|
84,805
|
|
|
81
|
|
|
46,963
|
|
|||
Other Businesses, Corporate and Eliminations
|
|
58,682
|
|
|
(30
|
)
|
|
83,280
|
|
|
(26
|
)
|
|
111,973
|
|
|||
Total service revenue
|
|
899,561
|
|
|
(5
|
)
|
|
942,599
|
|
|
—
|
|
|
940,920
|
|
|||
Reimbursable expenses
|
|
39,912
|
|
|
(23
|
)
|
|
52,011
|
|
|
(52
|
)
|
|
107,344
|
|
|||
Non-controlling interests
|
|
2,740
|
|
|
2
|
|
|
2,693
|
|
|
(16
|
)
|
|
3,202
|
|
|||
Total revenue
|
|
942,213
|
|
|
(6
|
)
|
|
997,303
|
|
|
(5
|
)
|
|
1,051,466
|
|
|||
Cost of revenue
|
|
699,865
|
|
|
1
|
|
|
690,045
|
|
|
—
|
|
|
687,327
|
|
|||
Gross profit
|
|
242,348
|
|
|
(21
|
)
|
|
307,258
|
|
|
(16
|
)
|
|
364,139
|
|
|||
Selling, general and administrative expenses
|
|
192,642
|
|
|
(10
|
)
|
|
214,155
|
|
|
(3
|
)
|
|
220,868
|
|
|||
Litigation settlement loss, net of $4,000
insurance recovery |
|
—
|
|
|
(100
|
)
|
|
28,000
|
|
|
N/M
|
|
|
—
|
|
|||
Impairment losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
71,785
|
|
|||
Change in the fair value of Equator Earn Out
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(7,591
|
)
|
|||
Income from operations
|
|
49,706
|
|
|
(24
|
)
|
|
65,103
|
|
|
(18
|
)
|
|
79,077
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(22,253
|
)
|
|
(9
|
)
|
|
(24,412
|
)
|
|
(13
|
)
|
|
(28,208
|
)
|
|||
Other income (expense), net
|
|
7,922
|
|
|
118
|
|
|
3,630
|
|
|
66
|
|
|
2,191
|
|
|||
Total other income (expense), net
|
|
(14,331
|
)
|
|
(31
|
)
|
|
(20,782
|
)
|
|
(20
|
)
|
|
(26,017
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes and non-controlling interests
|
|
35,375
|
|
|
(20
|
)
|
|
44,321
|
|
|
(16
|
)
|
|
53,060
|
|
|||
Income tax benefit (provision)
|
|
276,256
|
|
|
N/M
|
|
|
(12,935
|
)
|
|
57
|
|
|
(8,260
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
311,631
|
|
|
N/M
|
|
|
31,386
|
|
|
(30
|
)
|
|
44,800
|
|
|||
Net income attributable to non-controlling interests
|
|
(2,740
|
)
|
|
2
|
|
|
(2,693
|
)
|
|
(16
|
)
|
|
(3,202
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Altisource
|
|
$
|
308,891
|
|
|
N/M
|
|
|
$
|
28,693
|
|
|
(31
|
)
|
|
$
|
41,598
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit/service revenue
|
|
27
|
%
|
|
|
|
|
33
|
%
|
|
|
|
39
|
%
|
||||
Income from operations/service revenue
|
|
6
|
%
|
|
|
|
|
7
|
%
|
|
|
|
8
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
16.99
|
|
|
N/M
|
|
|
$
|
1.53
|
|
|
(28
|
)
|
|
$
|
2.13
|
|
Diluted
|
|
$
|
16.53
|
|
|
N/M
|
|
|
$
|
1.46
|
|
|
(28
|
)
|
|
$
|
2.02
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
18,183
|
|
|
(3
|
)
|
|
18,696
|
|
|
(4
|
)
|
|
19,504
|
|
|||
Diluted
|
|
18,692
|
|
|
(5
|
)
|
|
19,612
|
|
|
(5
|
)
|
|
20,619
|
|
(in thousands, except per share data)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Financial Measures
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income attributable to Altisource
|
|
$
|
52,306
|
|
|
(42
|
)
|
|
$
|
90,095
|
|
|
(37
|
)
|
|
$
|
143,475
|
|
Adjusted diluted earnings per share
|
|
$
|
2.80
|
|
|
(39
|
)
|
|
$
|
4.59
|
|
|
(34
|
)
|
|
$
|
6.96
|
|
Adjusted EBITDA
|
|
$
|
126,432
|
|
|
(29
|
)
|
|
$
|
178,313
|
|
|
(19
|
)
|
|
$
|
219,732
|
|
(1)
|
These are non-GAAP measures that are defined and reconciled to the corresponding GAAP measures on pages
29
to
31
.
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
240,487
|
|
|
(9
|
)
|
|
$
|
264,796
|
|
|
1
|
|
|
$
|
261,839
|
|
Outside fees and services
|
|
325,459
|
|
|
8
|
|
|
301,116
|
|
|
21
|
|
|
248,278
|
|
|||
Cost of real estate sold
|
|
24,398
|
|
|
N/M
|
|
|
1,040
|
|
|
N/M
|
|
|
—
|
|
|||
Reimbursable expenses
|
|
39,912
|
|
|
(23
|
)
|
|
52,011
|
|
|
(52
|
)
|
|
107,344
|
|
|||
Technology and telecommunications
|
|
42,340
|
|
|
(4
|
)
|
|
44,295
|
|
|
3
|
|
|
43,177
|
|
|||
Depreciation and amortization
|
|
27,269
|
|
|
2
|
|
|
26,787
|
|
|
—
|
|
|
26,689
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
699,865
|
|
|
1
|
|
|
$
|
690,045
|
|
|
—
|
|
|
$
|
687,327
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
58,157
|
|
|
5
|
|
|
$
|
55,577
|
|
|
1
|
|
|
$
|
54,897
|
|
Professional services
|
|
13,421
|
|
|
(42
|
)
|
|
23,284
|
|
|
—
|
|
|
23,183
|
|
|||
Occupancy related costs
|
|
36,371
|
|
|
(3
|
)
|
|
37,370
|
|
|
(6
|
)
|
|
39,917
|
|
|||
Amortization of intangible assets
|
|
35,367
|
|
|
(26
|
)
|
|
47,576
|
|
|
16
|
|
|
41,135
|
|
|||
Depreciation and amortization
|
|
9,178
|
|
|
(8
|
)
|
|
10,001
|
|
|
2
|
|
|
9,781
|
|
|||
Marketing costs
|
|
16,171
|
|
|
(42
|
)
|
|
27,847
|
|
|
1
|
|
|
27,499
|
|
|||
Other
|
|
23,977
|
|
|
92
|
|
|
12,500
|
|
|
(49
|
)
|
|
24,456
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
$
|
192,642
|
|
|
(10
|
)
|
|
$
|
214,155
|
|
|
(3
|
)
|
|
$
|
220,868
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Litigation settlement loss, net of $4,000
insurance recovery |
|
$
|
—
|
|
|
(100
|
)
|
|
$
|
28,000
|
|
|
N/M
|
|
|
$
|
—
|
|
Impairment losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
71,785
|
|
|||
Change in the fair value of Equator Earn Out
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(7,591
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other operating expenses
|
|
$
|
—
|
|
|
(100
|
)
|
|
$
|
28,000
|
|
|
(56
|
)
|
|
$
|
64,194
|
|
|
|
For the year ended December 31, 2017
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service revenue
|
|
$
|
754,058
|
|
|
$
|
86,821
|
|
|
$
|
58,682
|
|
|
$
|
899,561
|
|
Reimbursable expenses
|
|
36,886
|
|
|
2,966
|
|
|
60
|
|
|
39,912
|
|
||||
Non-controlling interests
|
|
2,740
|
|
|
—
|
|
|
—
|
|
|
2,740
|
|
||||
|
|
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
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit (loss)/service revenue
|
|
33
|
%
|
|
(8
|
)%
|
|
2
|
%
|
|
27
|
%
|
||||
Income (loss) from operations/service revenue
|
|
18
|
%
|
|
(30
|
)%
|
|
(99
|
)%
|
|
6
|
%
|
|
|
For the year ended December 31, 2016
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service revenue
|
|
$
|
774,514
|
|
|
$
|
84,805
|
|
|
$
|
83,280
|
|
|
$
|
942,599
|
|
Reimbursable expenses
|
|
50,117
|
|
|
1,785
|
|
|
109
|
|
|
52,011
|
|
||||
Non-controlling interests
|
|
2,693
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
||||
|
|
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
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
||||||||
Gross profit/service revenue
|
|
36
|
%
|
|
26
|
%
|
|
5
|
%
|
|
33
|
%
|
||||
Income (loss) from operations/service revenue
|
|
21
|
%
|
|
(1
|
)%
|
|
(112
|
)%
|
|
7
|
%
|
|
|
For the year ended December 31, 2015
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service revenue
|
|
$
|
781,984
|
|
|
$
|
46,963
|
|
|
$
|
111,973
|
|
|
$
|
940,920
|
|
Reimbursable expenses
|
|
99,988
|
|
|
7,236
|
|
|
120
|
|
|
107,344
|
|
||||
Non-controlling interests
|
|
3,202
|
|
|
—
|
|
|
—
|
|
|
3,202
|
|
||||
|
|
885,174
|
|
|
54,199
|
|
|
112,093
|
|
|
1,051,466
|
|
||||
Cost of revenue
|
|
552,676
|
|
|
38,541
|
|
|
96,110
|
|
|
687,327
|
|
||||
Gross profit
|
|
332,498
|
|
|
15,658
|
|
|
15,983
|
|
|
364,139
|
|
||||
Selling, general and administrative expenses
|
|
132,334
|
|
|
7,514
|
|
|
81,020
|
|
|
220,868
|
|
||||
Impairment losses
|
|
64,146
|
|
|
—
|
|
|
7,639
|
|
|
71,785
|
|
||||
Change in the fair value of Equator Earn Out
|
|
(7,591
|
)
|
|
—
|
|
|
—
|
|
|
(7,591
|
)
|
||||
Income (loss) from operations
|
|
143,609
|
|
|
8,144
|
|
|
(72,676
|
)
|
|
79,077
|
|
||||
Total other income (expense), net
|
|
621
|
|
|
2
|
|
|
(26,640
|
)
|
|
(26,017
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and non-controlling interests
|
|
$
|
144,230
|
|
|
$
|
8,146
|
|
|
$
|
(99,316
|
)
|
|
$
|
53,060
|
|
|
|
|
|
|
|
|
|
|
||||||||
Margins:
|
|
|
|
|
|
|
|
|
||||||||
Gross profit/service revenue
|
|
43
|
%
|
|
33
|
%
|
|
14
|
%
|
|
39
|
%
|
||||
Income (loss) from operations/service revenue
|
|
18
|
%
|
|
17
|
%
|
|
(65
|
)%
|
|
8
|
%
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Servicer Solutions
|
|
$
|
704,848
|
|
|
(2
|
)
|
|
$
|
722,734
|
|
|
(2
|
)
|
|
$
|
739,991
|
|
Origination Solutions
|
|
49,210
|
|
|
(5
|
)
|
|
51,780
|
|
|
23
|
|
|
41,993
|
|
|||
Total service revenue
|
|
754,058
|
|
|
(3
|
)
|
|
774,514
|
|
|
(1
|
)
|
|
781,984
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Servicer Solutions
|
|
36,636
|
|
|
(26
|
)
|
|
49,838
|
|
|
(50
|
)
|
|
99,832
|
|
|||
Origination Solutions
|
|
250
|
|
|
(10
|
)
|
|
279
|
|
|
79
|
|
|
156
|
|
|||
Total reimbursable expenses
|
|
36,886
|
|
|
(26
|
)
|
|
50,117
|
|
|
(50
|
)
|
|
99,988
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-controlling interests
|
|
2,740
|
|
|
2
|
|
|
2,693
|
|
|
(16
|
)
|
|
3,202
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
|
$
|
793,684
|
|
|
(4
|
)
|
|
$
|
827,324
|
|
|
(7
|
)
|
|
$
|
885,174
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
163,370
|
|
|
(8
|
)
|
|
$
|
177,473
|
|
|
—
|
|
|
$
|
177,091
|
|
Outside fees and services
|
|
295,533
|
|
|
9
|
|
|
272,124
|
|
|
20
|
|
|
227,281
|
|
|||
Reimbursable expenses
|
|
36,886
|
|
|
(26
|
)
|
|
50,117
|
|
|
(50
|
)
|
|
99,988
|
|
|||
Technology and telecommunications
|
|
30,467
|
|
|
1
|
|
|
30,017
|
|
|
(7
|
)
|
|
32,271
|
|
|||
Depreciation and amortization
|
|
19,251
|
|
|
15
|
|
|
16,809
|
|
|
5
|
|
|
16,045
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
$
|
545,507
|
|
|
—
|
|
|
$
|
546,540
|
|
|
(1
|
)
|
|
$
|
552,676
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
23,089
|
|
|
5
|
|
|
$
|
22,087
|
|
|
52
|
|
|
$
|
14,511
|
|
Professional services
|
|
8,101
|
|
|
(31
|
)
|
|
11,771
|
|
|
(14
|
)
|
|
13,761
|
|
|||
Occupancy related costs
|
|
23,275
|
|
|
12
|
|
|
20,737
|
|
|
(3
|
)
|
|
21,316
|
|
|||
Amortization of intangible assets
|
|
32,715
|
|
|
(27
|
)
|
|
44,597
|
|
|
15
|
|
|
38,624
|
|
|||
Depreciation and amortization
|
|
3,814
|
|
|
(5
|
)
|
|
4,030
|
|
|
21
|
|
|
3,328
|
|
|||
Marketing costs
|
|
8,925
|
|
|
(19
|
)
|
|
10,980
|
|
|
(49
|
)
|
|
21,545
|
|
|||
Other
|
|
14,296
|
|
|
96
|
|
|
7,306
|
|
|
(62
|
)
|
|
19,249
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
$
|
114,215
|
|
|
(6
|
)
|
|
$
|
121,508
|
|
|
(8
|
)
|
|
$
|
132,334
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Impairment losses
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
(100
|
)
|
|
$
|
64,146
|
|
Change in the fair value of Equator Earn Out
|
|
—
|
|
|
—
|
|
—
|
|
|
(100
|
)
|
|
(7,591
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other operating expenses
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
(100
|
)
|
|
$
|
56,555
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer Real Estate Solutions
|
|
$
|
4,713
|
|
|
326
|
|
|
$
|
1,106
|
|
|
(55
|
)
|
|
$
|
2,462
|
|
Real Estate Investor Solutions
|
|
82,108
|
|
|
(2
|
)
|
|
83,699
|
|
|
88
|
|
|
44,501
|
|
|||
Total service revenue
|
|
86,821
|
|
|
2
|
|
|
84,805
|
|
|
81
|
|
|
46,963
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Real Estate Investor Solutions
|
|
2,966
|
|
|
66
|
|
|
1,785
|
|
|
(75
|
)
|
|
7,236
|
|
|||
Total reimbursable expenses
|
|
2,966
|
|
|
66
|
|
|
1,785
|
|
|
(75
|
)
|
|
7,236
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
|
$
|
89,787
|
|
|
4
|
|
|
$
|
86,590
|
|
|
60
|
|
|
$
|
54,199
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Compensation and benefits
|
|
$
|
35,642
|
|
|
20
|
|
$
|
29,625
|
|
|
161
|
|
|
$
|
11,334
|
|
Outside fees and services
|
|
26,642
|
|
|
2
|
|
26,167
|
|
|
42
|
|
|
18,460
|
|
|||
Cost of real estate sold
|
|
24,398
|
|
|
N/M
|
|
1,040
|
|
|
N/M
|
|
|
—
|
|
|||
Reimbursable expenses
|
|
2,966
|
|
|
66
|
|
1,785
|
|
|
(75
|
)
|
|
7,236
|
|
|||
Technology and telecommunications
|
|
5,812
|
|
|
12
|
|
5,208
|
|
|
330
|
|
|
1,212
|
|
|||
Depreciation and amortization
|
|
1,507
|
|
|
103
|
|
741
|
|
|
148
|
|
|
299
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
|
$
|
96,967
|
|
|
50
|
|
$
|
64,566
|
|
|
68
|
|
|
$
|
38,541
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
3,387
|
|
|
79
|
|
|
$
|
1,890
|
|
|
112
|
|
|
$
|
891
|
|
Professional services
|
|
1,073
|
|
|
(37
|
)
|
|
1,694
|
|
|
161
|
|
|
648
|
|
|||
Occupancy related costs
|
|
3,043
|
|
|
34
|
|
|
2,278
|
|
|
83
|
|
|
1,246
|
|
|||
Amortization of intangible assets
|
|
843
|
|
|
(14
|
)
|
|
976
|
|
|
N/M
|
|
|
147
|
|
|||
Depreciation and amortization
|
|
727
|
|
|
59
|
|
|
456
|
|
|
168
|
|
|
170
|
|
|||
Marketing costs
|
|
7,020
|
|
|
(57
|
)
|
|
16,424
|
|
|
N/M
|
|
|
3,423
|
|
|||
Other
|
|
2,625
|
|
|
N/M
|
|
|
(427
|
)
|
|
(143
|
)
|
|
989
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
$
|
18,718
|
|
|
(20
|
)
|
|
$
|
23,291
|
|
|
210
|
|
|
$
|
7,514
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationship management
|
|
$
|
28,469
|
|
|
(23
|
)
|
|
$
|
36,977
|
|
|
(26
|
)
|
|
$
|
50,294
|
|
Asset recovery management
|
|
23,782
|
|
|
(1
|
)
|
|
24,114
|
|
|
23
|
|
|
19,585
|
|
|||
IT infrastructure services
|
|
6,431
|
|
|
(71
|
)
|
|
22,189
|
|
|
(47
|
)
|
|
42,094
|
|
|||
Total service revenue
|
|
58,682
|
|
|
(30
|
)
|
|
83,280
|
|
|
(26
|
)
|
|
111,973
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reimbursable expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Asset recovery management
|
|
60
|
|
|
(45
|
)
|
|
109
|
|
|
(9
|
)
|
|
120
|
|
|||
Total reimbursable expenses
|
|
60
|
|
|
(45
|
)
|
|
109
|
|
|
(9
|
)
|
|
120
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
|
$
|
58,742
|
|
|
(30
|
)
|
|
$
|
83,389
|
|
|
(26
|
)
|
|
$
|
112,093
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
41,475
|
|
|
(28
|
)
|
|
$
|
57,698
|
|
|
(21
|
)
|
|
$
|
73,414
|
|
Outside fees and services
|
|
3,284
|
|
|
16
|
|
|
2,825
|
|
|
11
|
|
|
2,537
|
|
|||
Reimbursable expenses
|
|
60
|
|
|
(45
|
)
|
|
109
|
|
|
(9
|
)
|
|
120
|
|
|||
Technology and telecommunications
|
|
6,061
|
|
|
(33
|
)
|
|
9,070
|
|
|
(6
|
)
|
|
9,694
|
|
|||
Depreciation and amortization
|
|
6,511
|
|
|
(30
|
)
|
|
9,237
|
|
|
(11
|
)
|
|
10,345
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
$
|
57,391
|
|
|
(27
|
)
|
|
$
|
78,939
|
|
|
(18
|
)
|
|
$
|
96,110
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
$
|
31,681
|
|
|
—
|
|
|
$
|
31,600
|
|
|
(20
|
)
|
|
$
|
39,495
|
|
Professional services
|
|
4,247
|
|
|
(57
|
)
|
|
9,819
|
|
|
12
|
|
|
8,774
|
|
|||
Occupancy related costs
|
|
10,053
|
|
|
(30
|
)
|
|
14,355
|
|
|
(17
|
)
|
|
17,355
|
|
|||
Amortization of intangible assets
|
|
1,809
|
|
|
(10
|
)
|
|
2,003
|
|
|
(15
|
)
|
|
2,364
|
|
|||
Depreciation and amortization
|
|
4,637
|
|
|
(16
|
)
|
|
5,515
|
|
|
(12
|
)
|
|
6,283
|
|
|||
Marketing costs
|
|
226
|
|
|
(49
|
)
|
|
443
|
|
|
(82
|
)
|
|
2,531
|
|
|||
Other
|
|
7,056
|
|
|
26
|
|
|
5,621
|
|
|
33
|
|
|
4,218
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
$
|
59,709
|
|
|
(14
|
)
|
|
$
|
69,356
|
|
|
(14
|
)
|
|
$
|
81,020
|
|
(in thousands)
|
|
2017
|
|
% Increase (decrease)
|
|
2016
|
|
% Increase (decrease)
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income adjusted for non-cash items
|
|
$
|
93,769
|
|
|
(19
|
)
|
|
$
|
115,470
|
|
|
(41
|
)
|
|
$
|
195,922
|
|
Changes in operating assets and liabilities
|
|
(27,687
|
)
|
|
(344
|
)
|
|
11,348
|
|
|
N/M
|
|
|
(570
|
)
|
|||
Cash flows from operating activities
|
|
66,082
|
|
|
(48
|
)
|
|
126,818
|
|
|
(35
|
)
|
|
195,352
|
|
|||
Cash flows from investing activities
|
|
(10,036
|
)
|
|
87
|
|
|
(80,223
|
)
|
|
(22
|
)
|
|
(65,995
|
)
|
|||
Cash flows from financing activities
|
|
(100,334
|
)
|
|
(31
|
)
|
|
(76,628
|
)
|
|
31
|
|
|
(111,391
|
)
|
|||
Net (decrease) increase in cash and cash
equivalents
|
|
(44,288
|
)
|
|
(47
|
)
|
|
(30,033
|
)
|
|
(267
|
)
|
|
17,966
|
|
|||
Cash and cash equivalents at the beginning of the period
|
|
149,294
|
|
|
(17
|
)
|
|
179,327
|
|
|
11
|
|
|
161,361
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents at the end of the period
|
|
$
|
105,006
|
|
|
(30
|
)
|
|
$
|
149,294
|
|
|
(17
|
)
|
|
$
|
179,327
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Financial Measures
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted cash flows from operating activities
|
|
$
|
110,462
|
|
|
(21
|
)
|
|
$
|
139,843
|
|
|
(28
|
)
|
|
$
|
195,352
|
|
Adjusted cash flows from operating activities less additions to premises and equipment
|
|
99,948
|
|
|
(14
|
)
|
|
116,574
|
|
|
(27
|
)
|
|
159,164
|
|
(1)
|
These are non-GAAP measures that are defined and reconciled to the corresponding GAAP measures on pages
29
to
31
.
|
|
|
Payments due by period
|
||||||||||||||||||
(in thousands)
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cancelable operating lease obligations
|
|
$
|
53,790
|
|
|
$
|
19,833
|
|
|
$
|
24,234
|
|
|
$
|
9,493
|
|
|
$
|
230
|
|
Long-term debt
|
|
413,581
|
|
|
5,945
|
|
|
407,636
|
|
|
—
|
|
|
—
|
|
|||||
Contractual interest payments
(1)
|
|
57,824
|
|
|
19,937
|
|
|
37,887
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
525,195
|
|
|
$
|
45,715
|
|
|
$
|
469,757
|
|
|
$
|
9,493
|
|
|
$
|
230
|
|
(1)
|
Represents estimated future interest payments on our senior secured term loan based on applicable interest rates as of
December 31, 2017
.
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Mortgage Market
|
|
67%
|
|
65%
|
|
66%
|
Real Estate Market
|
|
1%
|
|
—%
|
|
9%
|
Other Businesses, Corporate and Eliminations
|
|
11%
|
|
27%
|
|
37%
|
Consolidated revenue
|
|
58%
|
|
56%
|
|
60%
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
||||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
105,006
|
|
|
$
|
149,294
|
|
Available for sale securities
|
|
49,153
|
|
|
45,754
|
|
||
Accounts receivable, net
|
|
52,740
|
|
|
87,821
|
|
||
Prepaid expenses and other current assets
|
|
64,742
|
|
|
42,608
|
|
||
Total current assets
|
|
271,641
|
|
|
325,477
|
|
||
|
|
|
|
|
||||
Premises and equipment, net
|
|
73,273
|
|
|
103,473
|
|
||
Goodwill
|
|
86,283
|
|
|
86,283
|
|
||
Intangible assets, net
|
|
120,065
|
|
|
155,432
|
|
||
Deferred tax assets, net (Note 21)
|
|
303,707
|
|
|
7,292
|
|
||
Other assets
|
|
10,195
|
|
|
11,255
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
865,164
|
|
|
$
|
689,212
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
84,400
|
|
|
$
|
83,135
|
|
Accrued litigation settlement (Note 19)
|
|
—
|
|
|
32,000
|
|
||
Current portion of long-term debt
|
|
5,945
|
|
|
5,945
|
|
||
Deferred revenue
|
|
9,802
|
|
|
8,797
|
|
||
Other current liabilities
|
|
9,414
|
|
|
19,061
|
|
||
Total current liabilities
|
|
109,561
|
|
|
148,938
|
|
||
|
|
|
|
|
||||
Long-term debt, less current portion
|
|
403,336
|
|
|
467,600
|
|
||
Other non-current liabilities
|
|
12,282
|
|
|
10,480
|
|
||
|
|
|
|
|
||||
Commitments, contingencies and regulatory matters (Note 23)
|
|
|
|
|
|
|||
|
|
|
|
|
||||
Equity:
|
|
|
|
|
||||
Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 17,418 outstanding as of December 31, 2017; 25,413 shares authorized and issued and 18,774 outstanding as of December 31, 2016)
|
|
25,413
|
|
|
25,413
|
|
||
Additional paid-in capital
|
|
112,475
|
|
|
107,288
|
|
||
Retained earnings
|
|
626,600
|
|
|
333,786
|
|
||
Accumulated other comprehensive income (loss)
|
|
733
|
|
|
(1,745
|
)
|
||
Treasury stock, at cost (7,995 shares as of December 31, 2017 and 6,639 shares as of December 31, 2016)
|
|
(426,609
|
)
|
|
(403,953
|
)
|
||
Altisource equity
|
|
338,612
|
|
|
60,789
|
|
||
|
|
|
|
|
||||
Non-controlling interests
|
|
1,373
|
|
|
1,405
|
|
||
Total equity
|
|
339,985
|
|
|
62,194
|
|
||
|
|
|
|
|
||||
Total liabilities and equity
|
|
$
|
865,164
|
|
|
$
|
689,212
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
942,213
|
|
|
$
|
997,303
|
|
|
$
|
1,051,466
|
|
Cost of revenue
|
|
699,865
|
|
|
690,045
|
|
|
687,327
|
|
|||
|
|
|
|
|
|
|
||||||
Gross profit
|
|
242,348
|
|
|
307,258
|
|
|
364,139
|
|
|||
Selling, general and administrative expenses
|
|
192,642
|
|
|
214,155
|
|
|
220,868
|
|
|||
Litigation settlement loss, net of $4,000 insurance recovery (
Note 19
)
|
|
—
|
|
|
28,000
|
|
|
—
|
|
|||
Impairment losses
(Notes 9 and 10)
|
|
—
|
|
|
—
|
|
|
71,785
|
|
|||
Change in the fair value of Equator Earn Out
(Note 19)
|
|
—
|
|
|
—
|
|
|
(7,591
|
)
|
|||
Income from operations
|
|
49,706
|
|
|
65,103
|
|
|
79,077
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(22,253
|
)
|
|
(24,412
|
)
|
|
(28,208
|
)
|
|||
Other income (expense), net
|
|
7,922
|
|
|
3,630
|
|
|
2,191
|
|
|||
Total other income (expense), net
|
|
(14,331
|
)
|
|
(20,782
|
)
|
|
(26,017
|
)
|
|||
|
|
|
|
|
|
|
||||||
Income before income taxes and non-controlling interests
|
|
35,375
|
|
|
44,321
|
|
|
53,060
|
|
|||
Income tax benefit (provision)
(Note 21)
|
|
276,256
|
|
|
(12,935
|
)
|
|
(8,260
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net income
|
|
311,631
|
|
|
31,386
|
|
|
44,800
|
|
|||
Net income attributable to non-controlling interests
|
|
(2,740
|
)
|
|
(2,693
|
)
|
|
(3,202
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net income attributable to Altisource
|
|
$
|
308,891
|
|
|
$
|
28,693
|
|
|
$
|
41,598
|
|
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
16.99
|
|
|
$
|
1.53
|
|
|
$
|
2.13
|
|
Diluted
|
|
$
|
16.53
|
|
|
$
|
1.46
|
|
|
$
|
2.02
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
18,183
|
|
|
18,696
|
|
|
19,504
|
|
|||
Diluted
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
311,631
|
|
|
$
|
31,386
|
|
|
$
|
44,800
|
|
Other comprehensive
income (loss)
, net of tax:
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on securities, net of income tax benefit
(provision) of $(921), $720, $0 |
|
2,478
|
|
|
(1,745
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income, net of tax
|
|
314,109
|
|
|
29,641
|
|
|
44,800
|
|
|||
Comprehensive income attributable to non-controlling interests
|
|
(2,740
|
)
|
|
(2,693
|
)
|
|
(3,202
|
)
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income attributable to Altisource
|
|
$
|
311,369
|
|
|
$
|
26,948
|
|
|
$
|
41,598
|
|
|
Altisource Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Treasury stock, at cost
|
|
Non-controlling interests
|
|
Total
|
|||||||||||||||||
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, January 1, 2015
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
91,509
|
|
|
$
|
367,967
|
|
|
$
|
—
|
|
|
$
|
(444,495
|
)
|
|
$
|
1,049
|
|
|
$
|
41,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
41,598
|
|
|
—
|
|
|
—
|
|
|
3,202
|
|
|
44,800
|
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,959
|
)
|
|
(2,959
|
)
|
|||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
4,812
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,812
|
|
|||||||
Exercise of stock option
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,292
|
)
|
|
—
|
|
|
9,682
|
|
|
—
|
|
|
1,390
|
|
|||||||
Issuance of restricted shares for acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,003
|
)
|
|
—
|
|
|
53,736
|
|
|
—
|
|
|
21,733
|
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,949
|
)
|
|
—
|
|
|
(58,949
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2015
|
25,413
|
|
|
25,413
|
|
|
96,321
|
|
|
369,270
|
|
|
—
|
|
|
(440,026
|
)
|
|
1,292
|
|
|
52,270
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
28,693
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
|
31,386
|
|
|||||||
Other comprehensive 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
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,177
|
)
|
|
—
|
|
|
73,735
|
|
|
—
|
|
|
9,558
|
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,662
|
)
|
|
—
|
|
|
(37,662
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2016
|
25,413
|
|
|
25,413
|
|
|
107,288
|
|
|
333,786
|
|
|
(1,745
|
)
|
|
(403,953
|
)
|
|
1,405
|
|
|
62,194
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
308,891
|
|
|
—
|
|
|
—
|
|
|
2,740
|
|
|
311,631
|
|
|||||||
Other comprehensive income, 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
|
|
|||||||
Cumulative effect of an accounting change (
Note 2
)
|
—
|
|
|
—
|
|
|
932
|
|
|
(932
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options and issuance of restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,491
|
)
|
|
—
|
|
|
15,865
|
|
|
—
|
|
|
2,374
|
|
|||||||
Treasury shares withheld for the payment of tax on restricted share issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,654
|
)
|
|
—
|
|
|
490
|
|
|
—
|
|
|
(1,164
|
)
|
|||||||
Repurchase of shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,011
|
)
|
|
—
|
|
|
(39,011
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2017
|
25,413
|
|
|
$
|
25,413
|
|
|
$
|
112,475
|
|
|
$
|
626,600
|
|
|
$
|
733
|
|
|
$
|
(426,609
|
)
|
|
$
|
1,373
|
|
|
$
|
339,985
|
|
|
For the years ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
311,631
|
|
|
$
|
31,386
|
|
|
$
|
44,800
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
36,447
|
|
|
36,788
|
|
|
36,470
|
|
|||
Amortization of intangible assets
|
35,367
|
|
|
47,576
|
|
|
41,135
|
|
|||
Loss on HLSS equity securities and dividends received, net
|
—
|
|
|
—
|
|
|
1,854
|
|
|||
Change in the fair value of acquisition related contingent consideration
|
24
|
|
|
(3,555
|
)
|
|
(7,184
|
)
|
|||
Impairment losses
|
—
|
|
|
—
|
|
|
71,785
|
|
|||
Share-based compensation expense
|
4,255
|
|
|
6,188
|
|
|
4,812
|
|
|||
Bad debt expense
|
5,116
|
|
|
1,829
|
|
|
5,514
|
|
|||
Gain on early extinguishment of debt
|
(5,637
|
)
|
|
(5,464
|
)
|
|
(3,836
|
)
|
|||
Amortization of debt discount
|
301
|
|
|
413
|
|
|
498
|
|
|||
Amortization of debt issuance costs
|
833
|
|
|
1,141
|
|
|
1,374
|
|
|||
Deferred income taxes
|
(297,336
|
)
|
|
(2,597
|
)
|
|
(1,326
|
)
|
|||
Loss on disposal of fixed assets
|
2,768
|
|
|
1,765
|
|
|
26
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
29,965
|
|
|
15,980
|
|
|
2,401
|
|
|||
Prepaid expenses and other current assets
|
(22,134
|
)
|
|
(20,881
|
)
|
|
1,883
|
|
|||
Other assets
|
770
|
|
|
1,053
|
|
|
2,993
|
|
|||
Accounts payable and accrued expenses
|
2,576
|
|
|
(9,113
|
)
|
|
(14,483
|
)
|
|||
Other current and non-current liabilities
|
(38,864
|
)
|
|
24,309
|
|
|
6,636
|
|
|||
Net cash provided by operating activities
|
66,082
|
|
|
126,818
|
|
|
195,352
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Additions to premises and equipment
|
(10,514
|
)
|
|
(23,269
|
)
|
|
(36,188
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(9,409
|
)
|
|
(28,675
|
)
|
|||
Purchase of available for sale securities
|
—
|
|
|
(48,219
|
)
|
|
(29,966
|
)
|
|||
Proceeds received from sale of and dividends from HLSS equity securities
|
—
|
|
|
—
|
|
|
28,112
|
|
|||
Change in restricted cash
|
290
|
|
|
674
|
|
|
722
|
|
|||
Other investing activities
|
188
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(10,036
|
)
|
|
(80,223
|
)
|
|
(65,995
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Repayments and repurchases of long-term debt
|
(59,761
|
)
|
|
(50,723
|
)
|
|
(50,373
|
)
|
|||
Proceeds from stock option exercises
|
2,374
|
|
|
9,558
|
|
|
1,390
|
|
|||
Excess tax benefit on stock-based compensation
|
—
|
|
|
4,779
|
|
|
—
|
|
|||
Purchase of treasury shares
|
(39,011
|
)
|
|
(37,662
|
)
|
|
(58,949
|
)
|
|||
Distributions to non-controlling interests
|
(2,772
|
)
|
|
(2,580
|
)
|
|
(2,959
|
)
|
|||
Payment of tax withholding on issuance of restricted shares
|
(1,164
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||
Net cash used in financing activities
|
(100,334
|
)
|
|
(76,628
|
)
|
|
(111,391
|
)
|
|||
|
|
|
|
|
|
||||||
Net
(decrease) increase
in cash and cash equivalents
|
(44,288
|
)
|
|
(30,033
|
)
|
|
17,966
|
|
|||
Cash and cash equivalents at the beginning of the period
|
149,294
|
|
|
179,327
|
|
|
161,361
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents at the end of the period
|
$
|
105,006
|
|
|
$
|
149,294
|
|
|
$
|
179,327
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
||||
Interest paid
|
$
|
21,210
|
|
|
$
|
22,717
|
|
|
$
|
26,274
|
|
Income taxes paid, net
|
18,332
|
|
|
18,327
|
|
|
9,725
|
|
|||
|
|
|
|
|
|
||||||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
||||
Acquisition of businesses with restricted shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,733
|
|
(Decrease) increase in payables for purchases of premises and equipment
|
(1,311
|
)
|
|
404
|
|
|
(6,679
|
)
|
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
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Mortgage Market
|
|
67%
|
|
65%
|
|
66%
|
Real Estate Market
|
|
1%
|
|
—%
|
|
9%
|
Other Businesses, Corporate and Eliminations
|
|
11%
|
|
27%
|
|
37%
|
Consolidated revenue
|
|
58%
|
|
56%
|
|
60%
|
(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
|
|
(in thousands)
|
|
Initial purchase price allocation
|
|
Adjustments
|
|
Final purchase price allocation
|
||||||
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Accounts receivable, net
|
|
245
|
|
|
(76
|
)
|
|
169
|
|
|||
Premises and equipment, net
|
|
2,471
|
|
|
(1,067
|
)
|
|
1,404
|
|
|||
Other assets
|
|
199
|
|
|
(196
|
)
|
|
3
|
|
|||
Trademarks and trade names
|
|
1,205
|
|
|
—
|
|
|
1,205
|
|
|||
Databases/other
|
|
910
|
|
|
1,035
|
|
|
1,945
|
|
|||
Non-compete agreements
|
|
330
|
|
|
—
|
|
|
330
|
|
|||
Customer relationships
|
|
255
|
|
|
—
|
|
|
255
|
|
|||
Goodwill
|
|
19,565
|
|
|
50
|
|
|
19,615
|
|
|||
|
|
25,183
|
|
|
(254
|
)
|
|
24,929
|
|
|||
Accounts payable and accrued expenses
|
|
(391
|
)
|
|
46
|
|
|
(345
|
)
|
|||
|
|
|
|
|
|
|
||||||
Purchase price
|
|
$
|
24,792
|
|
|
$
|
(208
|
)
|
|
$
|
24,584
|
|
(in thousands)
|
|
Initial purchase price allocation
|
|
Adjustments
|
|
Final purchase price allocation
|
||||||
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
1,088
|
|
|
$
|
—
|
|
|
$
|
1,088
|
|
Accounts receivable, net
|
|
510
|
|
|
(410
|
)
|
|
100
|
|
|||
Prepaid expenses
|
|
66
|
|
|
(46
|
)
|
|
20
|
|
|||
Restricted cash
|
|
2,501
|
|
|
—
|
|
|
2,501
|
|
|||
Non-compete agreements
|
|
1,105
|
|
|
25
|
|
|
1,130
|
|
|||
Databases/other
|
|
465
|
|
|
1,335
|
|
|
1,800
|
|
|||
Customer relationships
|
|
395
|
|
|
—
|
|
|
395
|
|
|||
Trademarks and trade names
|
|
150
|
|
|
10
|
|
|
160
|
|
|||
Deferred taxes
|
|
—
|
|
|
356
|
|
|
356
|
|
|||
Goodwill
|
|
28,125
|
|
|
(1,395
|
)
|
|
26,730
|
|
|||
|
|
34,405
|
|
|
(125
|
)
|
|
34,280
|
|
|||
Accounts payable and accrued expenses
|
|
(875
|
)
|
|
38
|
|
|
(837
|
)
|
|||
Deferred revenue
|
|
(87
|
)
|
|
87
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Purchase price
|
|
$
|
33,443
|
|
|
$
|
—
|
|
|
$
|
33,443
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Billed
|
|
$
|
40,787
|
|
|
$
|
58,392
|
|
Unbilled
|
|
22,532
|
|
|
39,853
|
|
||
|
|
63,319
|
|
|
98,245
|
|
||
Less: Allowance for doubtful accounts
|
|
(10,579
|
)
|
|
(10,424
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
52,740
|
|
|
$
|
87,821
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Short-term investments in real estate
|
|
$
|
29,405
|
|
|
$
|
13,025
|
|
Maintenance agreements, current portion
|
|
8,014
|
|
|
6,590
|
|
||
Income taxes receivable
|
|
9,227
|
|
|
5,186
|
|
||
Prepaid expenses
|
|
7,898
|
|
|
6,919
|
|
||
Litigation settlement insurance recovery (Note 19)
|
|
—
|
|
|
4,000
|
|
||
Other current assets
|
|
10,198
|
|
|
6,888
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
64,742
|
|
|
$
|
42,608
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Computer hardware and software
|
|
$
|
179,567
|
|
|
$
|
164,877
|
|
Office equipment and other
|
|
9,388
|
|
|
20,188
|
|
||
Furniture and fixtures
|
|
14,092
|
|
|
13,997
|
|
||
Leasehold improvements
|
|
33,417
|
|
|
33,808
|
|
||
|
|
236,464
|
|
|
232,870
|
|
||
Less: Accumulated depreciation and amortization
|
|
(163,191
|
)
|
|
(129,397
|
)
|
||
|
|
|
|
|
||||
Total
|
|
$
|
73,273
|
|
|
$
|
103,473
|
|
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of January 1, 2016
|
|
$
|
69,827
|
|
|
$
|
10,006
|
|
|
$
|
2,968
|
|
|
$
|
82,801
|
|
CastleLine purchase price allocation adjustment
(1)
|
|
(1,395
|
)
|
|
—
|
|
|
—
|
|
|
(1,395
|
)
|
||||
RentRange and Investability purchase price allocation adjustment
(2)
|
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||
Acquisition of Granite
|
|
4,827
|
|
|
—
|
|
|
—
|
|
|
4,827
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016 and 2017
|
|
$
|
73,259
|
|
|
$
|
10,056
|
|
|
$
|
2,968
|
|
|
$
|
86,283
|
|
(1)
|
During the second quarter of 2016, goodwill was revised to reflect a purchase accounting measurement period adjustment related to the CastleLine acquisition. See
Note 5
.
|
(2)
|
During the third quarter of 2016, goodwill was revised to reflect a purchase accounting measurement period adjustment related to the RentRange and Investability acquisition. See
Note 5
.
|
|
|
Weighted average estimated useful life
(in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net book value
|
||||||||||||||||||
(in thousands)
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Definite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and trade names
|
|
13
|
|
$
|
15,354
|
|
|
$
|
15,354
|
|
|
$
|
(8,881
|
)
|
|
$
|
(7,724
|
)
|
|
$
|
6,473
|
|
|
$
|
7,630
|
|
Customer related intangible assets
|
|
10
|
|
277,828
|
|
|
277,828
|
|
|
(188,258
|
)
|
|
(156,980
|
)
|
|
89,570
|
|
|
120,848
|
|
||||||
Operating agreement
|
|
20
|
|
35,000
|
|
|
35,000
|
|
|
(13,865
|
)
|
|
(12,104
|
)
|
|
21,135
|
|
|
22,896
|
|
||||||
Non-compete agreements
|
|
4
|
|
1,560
|
|
|
1,560
|
|
|
(897
|
)
|
|
(507
|
)
|
|
663
|
|
|
1,053
|
|
||||||
Intellectual property
|
|
10
|
|
300
|
|
|
300
|
|
|
(115
|
)
|
|
(85
|
)
|
|
185
|
|
|
215
|
|
||||||
Other intangible assets
|
|
5
|
|
3,745
|
|
|
3,745
|
|
|
(1,706
|
)
|
|
(955
|
)
|
|
2,039
|
|
|
2,790
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
|
|
$
|
333,787
|
|
|
$
|
333,787
|
|
|
$
|
(213,722
|
)
|
|
$
|
(178,355
|
)
|
|
$
|
120,065
|
|
|
$
|
155,432
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Security deposits
|
|
$
|
5,304
|
|
|
$
|
5,508
|
|
Maintenance agreements, non-current portion
|
|
362
|
|
|
853
|
|
||
Restricted cash
|
|
3,837
|
|
|
4,127
|
|
||
Other
|
|
692
|
|
|
767
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
10,195
|
|
|
$
|
11,255
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Accounts payable
|
|
$
|
15,682
|
|
|
$
|
8,787
|
|
Accrued salaries and benefits
|
|
41,363
|
|
|
47,614
|
|
||
Accrued expenses - general
|
|
27,268
|
|
|
26,426
|
|
||
Income taxes payable
|
|
87
|
|
|
308
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
84,400
|
|
|
$
|
83,135
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Unfunded cash account balances
|
|
$
|
5,900
|
|
|
$
|
7,137
|
|
Other
|
|
3,514
|
|
|
11,924
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
9,414
|
|
|
$
|
19,061
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Senior secured term loan
|
|
$
|
413,581
|
|
|
$
|
479,653
|
|
Less: Debt issuance costs, net
|
|
(3,158
|
)
|
|
(4,486
|
)
|
||
Less: Unamortized discount, net
|
|
(1,142
|
)
|
|
(1,622
|
)
|
||
Net long-term debt
|
|
409,281
|
|
|
473,545
|
|
||
Less: Current portion
|
|
(5,945
|
)
|
|
(5,945
|
)
|
||
|
|
|
|
|
||||
Long-term debt, less current portion
|
|
$
|
403,336
|
|
|
$
|
467,600
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Income tax liabilities (Note 21)
|
|
$
|
5,955
|
|
|
$
|
—
|
|
Deferred revenue
|
|
2,101
|
|
|
5,680
|
|
||
Other non-current liabilities
|
|
4,226
|
|
|
4,800
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
12,282
|
|
|
$
|
10,480
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
(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
|
|
$
|
105,006
|
|
|
$
|
105,006
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
149,294
|
|
|
$
|
149,294
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
|
3,837
|
|
|
3,837
|
|
|
—
|
|
|
—
|
|
|
4,127
|
|
|
4,127
|
|
|
—
|
|
|
—
|
|
||||||||
Available for sale securities
|
|
49,153
|
|
|
49,153
|
|
|
—
|
|
|
—
|
|
|
45,754
|
|
|
45,754
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Acquisition contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
376
|
|
||||||||
Long-term debt
|
|
413,581
|
|
|
—
|
|
|
407,377
|
|
|
—
|
|
|
479,653
|
|
|
—
|
|
|
474,856
|
|
|
—
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
|
Black-Scholes
|
|
Binomial
|
|
Black-Scholes
|
|
Binomial
|
|
Black-Scholes
|
|
Binomial
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Risk-free interest rate (%)
|
|
1.89 – 2.29
|
|
|
0.77 – 2.38
|
|
|
1.25 – 1.89
|
|
|
0.23 – 2.23
|
|
|
1.50 – 1.91
|
|
|
0.02 – 2.34
|
|
Expected stock price volatility (%)
|
|
61.49 – 71.52
|
|
|
66.68 – 71.52
|
|
|
59.75 – 62.14
|
|
|
59.76 – 62.14
|
|
|
55.06 – 59.73
|
|
|
55.06 – 59.73
|
|
Expected dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected option life (in years)
|
|
6.00 – 7.50
|
|
|
2.55 – 4.82
|
|
|
6.00 – 6.25
|
|
|
4.06 – 4.88
|
|
|
6.00 – 6.25
|
|
|
4.08 – 4.92
|
|
Fair value
|
|
$13.57 – $24.80
|
|
|
$11.94 – $24.30
|
|
|
$11.15 – $18.60
|
|
|
$11.06 – $19.27
|
|
|
$10.01 – $17.66
|
|
|
$9.91 – $18.05
|
|
(in thousands, except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Weighted average grant date fair value of stock options granted per share
|
|
$
|
20.44
|
|
|
$
|
16.82
|
|
|
$
|
13.20
|
|
Intrinsic value of stock options exercised
|
|
3,028
|
|
|
18,209
|
|
|
1,998
|
|
|||
Grant date fair value of stock options that vested
|
|
2,279
|
|
|
2,698
|
|
|
1,616
|
|
|
Number of options
|
|
Weighted average exercise price
|
|
Weighted average contractual term (in years)
|
|
Aggregate intrinsic value (in thousands)
|
|||||
|
|
|
|
|
|
|
|
|||||
Outstanding at December 31, 2016
|
1,996,509
|
|
|
$
|
25.98
|
|
|
5.32
|
|
$
|
15,942
|
|
Granted
|
243,930
|
|
|
33.28
|
|
|
|
|
|
|||
Exercised
|
(223,060
|
)
|
|
10.64
|
|
|
|
|
|
|
||
Forfeited
|
(271,473
|
)
|
|
30.12
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Outstanding at December 31, 2017
|
1,745,906
|
|
|
28.20
|
|
|
4.96
|
|
10,202
|
|
||
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2017
|
1,140,333
|
|
|
23.10
|
|
|
3.30
|
|
9,160
|
|
|
|
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
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Up to $10.00
|
|
286,252
|
|
|
0.53
|
|
$
|
9.14
|
|
|
286,252
|
|
|
0.53
|
|
$
|
9.14
|
|
$10.01 — $20.00
|
|
246,479
|
|
|
7.27
|
|
18.79
|
|
|
163,424
|
|
|
7.25
|
|
18.79
|
|
||
$20.01 — $30.00
|
|
813,730
|
|
|
4.86
|
|
25.11
|
|
|
559,576
|
|
|
3.21
|
|
24.11
|
|
||
$30.01 — $40.00
|
|
224,695
|
|
|
8.03
|
|
36.27
|
|
|
53,924
|
|
|
4.78
|
|
32.67
|
|
||
$60.01 — $70.00
|
|
71,000
|
|
|
4.19
|
|
60.73
|
|
|
51,375
|
|
|
4.19
|
|
60.74
|
|
||
$70.01 — $80.00
|
|
25,000
|
|
|
6.86
|
|
72.78
|
|
|
4,688
|
|
|
6.86
|
|
72.78
|
|
||
$80.01 — $90.00
|
|
30,000
|
|
|
6.35
|
|
86.22
|
|
|
8,438
|
|
|
5.94
|
|
85.43
|
|
||
$90.01 — $100.00
|
|
46,875
|
|
|
6.15
|
|
95.64
|
|
|
11,250
|
|
|
5.95
|
|
95.38
|
|
||
$100.01 — $110.00
|
|
1,875
|
|
|
6.37
|
|
105.11
|
|
|
1,406
|
|
|
6.37
|
|
105.11
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
1,745,906
|
|
|
|
|
|
|
1,140,333
|
|
|
|
|
|
(1)
|
These options contain market-based components as described above.
|
|
|
Market-based options
|
||||||
Vesting price
|
|
Ordinary performance
|
|
Extraordinary performance
|
||||
|
|
|
|
|
||||
$40.01 — $50.00
|
|
9,525
|
|
|
—
|
|
||
$50.01 — $60.00
|
|
82,600
|
|
|
11,653
|
|
||
$60.01 — $70.00
|
|
14,148
|
|
|
6,325
|
|
||
$70.01 — $80.00
|
|
1,250
|
|
|
10,333
|
|
||
$80.01 — $90.00
|
|
—
|
|
|
30,963
|
|
||
$90.01 — $100.00
|
|
—
|
|
|
7,075
|
|
||
$110.01 — $120.00
|
|
—
|
|
|
625
|
|
||
$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
|
|
|
25,000
|
|
||
|
|
|
|
|
||||
Total
|
|
155,023
|
|
|
111,599
|
|
||
|
|
|
|
|
||||
Weighted average share price
|
|
$
|
45.99
|
|
|
$
|
45.83
|
|
|
Number of restricted shares
|
|
|
|
|
Outstanding at December 31, 2016
|
231,730
|
|
Granted
|
245,655
|
|
Issued
|
(55,385
|
)
|
Forfeited/canceled
|
(65,491
|
)
|
|
|
|
Outstanding at December 31, 2017
|
356,509
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Service revenue
|
|
$
|
899,561
|
|
|
$
|
942,599
|
|
|
$
|
940,920
|
|
Reimbursable expenses
|
|
39,912
|
|
|
52,011
|
|
|
107,344
|
|
|||
Non-controlling interests
|
|
2,740
|
|
|
2,693
|
|
|
3,202
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
942,213
|
|
|
$
|
997,303
|
|
|
$
|
1,051,466
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
|
$
|
240,487
|
|
|
$
|
264,796
|
|
|
$
|
261,839
|
|
Outside fees and services
|
|
325,459
|
|
|
301,116
|
|
|
248,278
|
|
|||
Cost of real estate sold
|
|
24,398
|
|
|
1,040
|
|
|
—
|
|
|||
Reimbursable expenses
|
|
39,912
|
|
|
52,011
|
|
|
107,344
|
|
|||
Technology and telecommunications
|
|
42,340
|
|
|
44,295
|
|
|
43,177
|
|
|||
Depreciation and amortization
|
|
27,269
|
|
|
26,787
|
|
|
26,689
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
699,865
|
|
|
$
|
690,045
|
|
|
$
|
687,327
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
|
$
|
58,157
|
|
|
$
|
55,577
|
|
|
$
|
54,897
|
|
Professional services
|
|
13,421
|
|
|
23,284
|
|
|
23,183
|
|
|||
Occupancy related costs
|
|
36,371
|
|
|
37,370
|
|
|
39,917
|
|
|||
Amortization of intangible assets
|
|
35,367
|
|
|
47,576
|
|
|
41,135
|
|
|||
Depreciation and amortization
|
|
9,178
|
|
|
10,001
|
|
|
9,781
|
|
|||
Marketing costs
|
|
16,171
|
|
|
27,847
|
|
|
27,499
|
|
|||
Other
|
|
23,977
|
|
|
12,500
|
|
|
24,456
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
192,642
|
|
|
$
|
214,155
|
|
|
$
|
220,868
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Gain on early extinguishment of debt
|
|
$
|
5,637
|
|
|
$
|
5,464
|
|
|
$
|
3,836
|
|
Expenses related to the purchase of available for sale securities
|
|
—
|
|
|
(3,356
|
)
|
|
—
|
|
|||
Loss on HLSS equity securities and dividends received, net
|
|
—
|
|
|
—
|
|
|
(1,854
|
)
|
|||
Interest income
|
|
270
|
|
|
91
|
|
|
133
|
|
|||
Other, net
|
|
2,015
|
|
|
1,431
|
|
|
76
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
7,922
|
|
|
$
|
3,630
|
|
|
$
|
2,191
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Domestic - Luxembourg
|
|
$
|
9,123
|
|
|
$
|
8,489
|
|
|
$
|
27,884
|
|
Foreign - U.S.
|
|
7,967
|
|
|
16,655
|
|
|
5,944
|
|
|||
Foreign - Non-U.S.
|
|
18,285
|
|
|
19,168
|
|
|
19,232
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
35,375
|
|
|
$
|
44,321
|
|
|
$
|
53,060
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Domestic - Luxembourg
|
|
$
|
737
|
|
|
$
|
160
|
|
|
$
|
1,787
|
|
Foreign - U.S. Federal
|
|
2,405
|
|
|
9,556
|
|
|
539
|
|
|||
Foreign - U.S. State
|
|
364
|
|
|
258
|
|
|
855
|
|
|||
Foreign - Non-U.S.
|
|
17,574
|
|
|
5,558
|
|
|
6,405
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
$
|
21,080
|
|
|
$
|
15,532
|
|
|
$
|
9,586
|
|
Deferred:
|
|
|
|
|
|
|
||||||
Domestic - Luxembourg
|
|
$
|
(295,318
|
)
|
|
$
|
432
|
|
|
$
|
—
|
|
Foreign - U.S. Federal
|
|
(111
|
)
|
|
(3,065
|
)
|
|
(108
|
)
|
|||
Foreign - U.S. State
|
|
(210
|
)
|
|
(100
|
)
|
|
(526
|
)
|
|||
Foreign - Non-U.S.
|
|
(1,697
|
)
|
|
136
|
|
|
(692
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
|
$
|
(297,336
|
)
|
|
$
|
(2,597
|
)
|
|
$
|
(1,326
|
)
|
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
(276,256
|
)
|
|
$
|
12,935
|
|
|
$
|
8,260
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Non-current deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
349,154
|
|
|
$
|
5,891
|
|
U.S. federal and state tax credits
|
|
407
|
|
|
316
|
|
||
Other non-U.S. deferred tax assets
|
|
5,724
|
|
|
3,674
|
|
||
Share-based compensation
|
|
1,496
|
|
|
2,486
|
|
||
Accrued expenses
|
|
6,494
|
|
|
11,527
|
|
||
Non-current deferred tax liabilities:
|
|
|
|
|
||||
Intangible assets
|
|
(8,015
|
)
|
|
(4,203
|
)
|
||
Depreciation
|
|
(3,318
|
)
|
|
(6,964
|
)
|
||
Other non-U.S. deferred tax liability
|
|
(1,692
|
)
|
|
(1,342
|
)
|
||
Other
|
|
(260
|
)
|
|
(626
|
)
|
||
|
|
349,990
|
|
|
10,759
|
|
||
|
|
|
|
|
||||
Valuation allowance
|
|
(46,283
|
)
|
|
(3,467
|
)
|
||
|
|
|
|
|
||||
Non-current deferred tax assets, net
|
|
$
|
303,707
|
|
|
$
|
7,292
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
|
|
|
|
|
|
|||
Statutory tax rate
|
|
27.08
|
%
|
|
29.22
|
%
|
|
29.22
|
%
|
Permanent difference related to Luxembourg intangible assets
|
|
(0.63
|
)
|
|
—
|
|
|
(13.56
|
)
|
Change in valuation allowance
|
|
119.20
|
|
|
(0.08
|
)
|
|
0.83
|
|
State tax expense
|
|
0.50
|
|
|
2.30
|
|
|
0.29
|
|
Tax credits
|
|
(2.13
|
)
|
|
(1.81
|
)
|
|
(2.34
|
)
|
Uncertain taxes
|
|
30.16
|
|
|
(3.65
|
)
|
|
1.39
|
|
Unrecognized tax loss
|
|
(1,008.20
|
)
|
|
—
|
|
|
—
|
|
Income tax rate change
|
|
57.36
|
|
|
—
|
|
|
—
|
|
Other
|
|
(4.28
|
)
|
|
3.20
|
|
|
(0.26
|
)
|
|
|
|
|
|
|
|
|||
Effective tax rate
|
|
(780.94
|
)%
|
|
29.18
|
%
|
|
15.57
|
%
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Amount of unrecognized tax benefits as of the beginning of the year
|
|
$
|
758
|
|
|
$
|
2,005
|
|
Decreases as a result of tax positions taken in a prior period
|
|
(78
|
)
|
|
(1,527
|
)
|
||
Increases as a result of tax positions taken in a prior period
|
|
53
|
|
|
60
|
|
||
Increases as a result of tax positions taken in the current period
|
|
8,159
|
|
|
220
|
|
||
|
|
|
|
|
||||
Amount of unrecognized tax benefits as of the end of the year
|
|
$
|
8,892
|
|
|
$
|
758
|
|
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Net income attributable to Altisource
|
|
$
|
308,891
|
|
|
$
|
28,693
|
|
|
$
|
41,598
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding, basic
|
|
18,183
|
|
|
18,696
|
|
|
19,504
|
|
|||
Dilutive effect of stock options and restricted shares
|
|
509
|
|
|
916
|
|
|
1,115
|
|
|||
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding, diluted
|
|
18,692
|
|
|
19,612
|
|
|
20,619
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
16.99
|
|
|
$
|
1.53
|
|
|
$
|
2.13
|
|
Diluted
|
|
$
|
16.53
|
|
|
$
|
1.46
|
|
|
$
|
2.02
|
|
•
|
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
|
•
|
Altisource fails to be retained as a service provider
|
•
|
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
|
(in thousands)
|
|
Operating lease obligations
|
||
|
|
|
||
2018
|
|
$
|
19,833
|
|
2019
|
|
14,012
|
|
|
2020
|
|
10,222
|
|
|
2021
|
|
6,817
|
|
|
2022
|
|
2,676
|
|
|
Thereafter
|
|
230
|
|
|
|
|
|
||
|
|
$
|
53,790
|
|
|
|
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
|
|
|
|
For the year ended December 31, 2015
|
||||||||||||||
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
885,174
|
|
|
$
|
54,199
|
|
|
$
|
112,093
|
|
|
$
|
1,051,466
|
|
Cost of revenue
|
|
552,676
|
|
|
38,541
|
|
|
96,110
|
|
|
687,327
|
|
||||
Gross profit
|
|
332,498
|
|
|
15,658
|
|
|
15,983
|
|
|
364,139
|
|
||||
Selling, general and administrative expenses
|
|
132,334
|
|
|
7,514
|
|
|
81,020
|
|
|
220,868
|
|
||||
Impairment losses
|
|
64,146
|
|
|
—
|
|
|
7,639
|
|
|
71,785
|
|
||||
Change in the fair value of Equator Earn Out
|
|
(7,591
|
)
|
|
—
|
|
|
—
|
|
|
(7,591
|
)
|
||||
Income (loss) from operations
|
|
143,609
|
|
|
8,144
|
|
|
(72,676
|
)
|
|
79,077
|
|
||||
Total other income (expense), net
|
|
621
|
|
|
2
|
|
|
(26,640
|
)
|
|
(26,017
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes and non-controlling interests
|
|
$
|
144,230
|
|
|
$
|
8,146
|
|
|
$
|
(99,316
|
)
|
|
$
|
53,060
|
|
(in thousands)
|
|
Mortgage Market
|
|
Real Estate Market
|
|
Other Businesses, Corporate and Eliminations
|
|
Consolidated Altisource
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total assets:
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
$
|
304,346
|
|
|
$
|
64,624
|
|
|
$
|
496,194
|
|
|
$
|
865,164
|
|
December 31, 2016
|
|
347,067
|
|
|
47,863
|
|
|
294,282
|
|
|
689,212
|
|
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
United States
|
|
$
|
46,268
|
|
|
$
|
71,418
|
|
India
|
|
8,136
|
|
|
14,006
|
|
||
Luxembourg
|
|
16,688
|
|
|
14,791
|
|
||
Philippines
|
|
2,038
|
|
|
3,027
|
|
||
Uruguay
|
|
143
|
|
|
231
|
|
||
|
|
|
|
|
||||
Total
|
|
$
|
73,273
|
|
|
$
|
103,473
|
|
|
|
2017 quarter ended
(1)(2)
|
||||||||||||||
(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
|
|
|
|
2016 quarter ended
(1)(3)(4)
|
||||||||||||||
(in thousands, except per share data)
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
250,132
|
|
|
$
|
255,799
|
|
|
$
|
252,745
|
|
|
$
|
238,627
|
|
Gross profit
|
|
81,269
|
|
|
81,428
|
|
|
78,743
|
|
|
65,818
|
|
||||
Income (loss) before income taxes and non-controlling interests
|
|
21,085
|
|
|
23,977
|
|
|
18,796
|
|
|
(19,537
|
)
|
||||
Net income (loss)
|
|
18,892
|
|
|
20,686
|
|
|
11,472
|
|
|
(19,664
|
)
|
||||
Net income (loss) attributable to Altisource
|
|
18,494
|
|
|
19,994
|
|
|
10,589
|
|
|
(20,384
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.98
|
|
|
$
|
1.08
|
|
|
$
|
0.57
|
|
|
$
|
(1.08
|
)
|
Diluted
|
|
$
|
0.92
|
|
|
$
|
1.02
|
|
|
$
|
0.54
|
|
|
$
|
(1.08
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
18,855
|
|
|
18,437
|
|
|
18,715
|
|
|
18,788
|
|
||||
Diluted
|
|
20,040
|
|
|
19,604
|
|
|
19,568
|
|
|
18,788
|
|
(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)
|
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 an NOL of
$1.3 billion
and a deferred tax asset, net of valuation allowance, of
$300.9 million
as of December 31, 2017. The NOL has a
17
year life. 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
. See
Note 21
.
|
(3)
|
We acquired Granite on July 29, 2016. See
Note 5
.
|
(4)
|
During the fourth quarter of 2016, Altisource recorded a litigation settlement loss of
$32.0 million
in connection with a litigation matter. Also during the fourth quarter of 2016, Altisource recorded an insurance recovery related to this litigation settlement of
$4.0 million
. See
Note 19
.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
10.34
**
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
10.63
†
|
|
|
|
|
|
10.64
†
|
|
|
|
|
|
10.65
†
|
|
|
|
|
|
10.66
†
|
|
|
|
|
|
10.67
†
|
|
|
|
|
|
10.68
**
|
|
|
|
|
|
10.69
**
|
|
|
|
|
|
|
||
|
|
|
10.71
*
,
**
|
|
|
|
|
|
10.72
*
,
**
|
|
|
|
|
|
21.1
*
|
|
|
|
|
|
23.1
*
|
|
|
|
|
|
23.2
*
|
|
|
|
|
|
31.1
*
|
|
|
|
|
|
31.2
*
|
|
|
|
|
|
32.1
*
|
|
|
|
|
|
101*
|
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 is formatted in XBRL interactive data files: (i) Consolidated Balance Sheets at December 31, 2017 and December 31, 2016; (ii) Consolidated Statements of Operations and Comprehensive Income for each of the years in the three-year period ended December 31, 2017; (iii) Consolidated Statements of Equity for each of the years in the three-year period ended December 31, 2017 (iv) Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2017; (v) Notes to Consolidated Financial Statements; and (vi) Financial Statement Schedule.
|
*
|
|
Filed herewith
|
|
|
|
**
|
|
Portions of this exhibit have been redacted pursuant to a request for confidential treatment. The non-public information has been filed separately with the Securities and Exchange Commission.
|
|
|
|
†
|
|
Denotes management contract or compensatory arrangement
|
SCHEDULE II.
|
VALUATION AND QUALIFYING ACCOUNTS
|
|
|
|
|
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 2017
|
|
$
|
10,424
|
|
|
$
|
5,116
|
|
|
$
|
(3,107
|
)
|
|
$
|
1,854
|
|
|
$
|
10,579
|
|
Year 2016
|
|
18,456
|
|
|
1,829
|
|
|
250
|
|
|
10,111
|
|
|
10,424
|
|
|||||
Year 2015
|
|
22,675
|
|
|
5,514
|
|
|
(4
|
)
|
|
9,729
|
|
|
18,456
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year 2017
|
|
$
|
3,467
|
|
|
$
|
42,816
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,283
|
|
Year 2016
|
|
3,558
|
|
|
228
|
|
|
—
|
|
|
319
|
|
|
3,467
|
|
|||||
Year 2015
|
|
3,115
|
|
|
674
|
|
|
—
|
|
|
231
|
|
|
3,558
|
|
(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.
|
|
|
Altisource Portfolio Solutions S.A.
|
|
|
|
|
|
|
By:
|
/s/ William B. Shepro
|
|
|
|
Name:
|
William B. Shepro
|
|
|
Title:
|
Director and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
By:
|
/s/ Michelle D. Esterman
|
|
|
|
Name:
|
Michelle D. Esterman
|
|
|
Title:
|
Executive Vice President, Finance
|
|
|
|
(Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Timo Vättö
|
|
Chairman of the Board of Directors
|
|
February 22, 2018
|
Timo Vättö
|
|
|
|
|
|
|
|
|
|
/s/ William B. Shepro
|
|
Director and Chief Executive Officer
|
|
February 22, 2018
|
William B. Shepro
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Orin S. Kramer
|
|
Director
|
|
February 22, 2018
|
Orin S. Kramer
|
|
|
|
|
|
|
|
|
|
/s/ W. Michael Linn
|
|
Director
|
|
February 22, 2018
|
W. Michael Linn
|
|
|
|
|
|
|
|
|
|
/s/ Joseph L. Morettini
|
|
Director
|
|
February 22, 2018
|
Joseph L. Morettini
|
|
|
|
|
|
|
|
|
|
/s/ Roland Müller-Ineichen
|
|
Director
|
|
February 22, 2018
|
Roland Müller-Ineichen
|
|
|
|
|
|
|
|
|
|
/s/ Indroneel Chatterjee
|
|
Chief Financial Officer
|
|
February 22, 2018
|
Indroneel Chatterjee
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Michelle D. Esterman
|
|
Executive Vice President, Finance
|
|
February 22, 2018
|
Michelle D. Esterman
|
|
(Principal Accounting Officer)
|
|
|
|
|
REALHome Services and Solutions, Inc.
|
|
|
|
|
|
|
By:
|
/s/ Min L. Alexander
|
|
|
Name:
|
Min L. Alexander
|
|
|
Title:
|
President
|
|
|
Date:
|
November 16, 2017
|
|
|
|
|
|
|
|
|
|
|
|
REALHome Services and Solutions - CT, Inc.
|
|
|
|
|
|
|
By:
|
/s/ Min L. Alexander
|
|
|
Name:
|
Min L. Alexander
|
|
|
Title:
|
President
|
|
|
Date:
|
November 16, 2017
|
|
|
|
|
|
|
|
|
|
|
|
New Residential Sales Corp.
|
|
|
|
|
|
|
By:
|
/s/ Nicola Santoro, Jr.
|
|
|
Name:
|
Nicola Santoro, Jr.
|
|
|
Title:
|
Chief Financial Officer
|
|
|
Date:
|
November 16, 2017
|
|
|
|
|
|
“If to RHSS:
|
REALHome Services and Solutions, Inc.
|
|
|
1000 Abernathy Road, Suite 245
|
|
|
Atlanta, GA 30328
|
|
|
Attention: Corporate Secretary
|
|
|
Email: contractmanagement@altisource.com
and
|
|
|
nrzinfo@altisource.com”
|
|
1.
|
Monthly Business Review Deck - To the extent it satisfies the reporting obligations set forth in Vendor Management Addendum Sections 2(b) and 2(c) and as also listed as numbers 1-4 (under the heading “SLA Based Operational Reporting”) in Exhibit 5B of this Agreement and 1-12 (under the heading “Non-SLA Based Operational Reporting”) in Exhibit 5B of this Agreement.
|
2.
|
Monthly New Listing report - To the extent it satisfies the reporting obligations set forth in Vendor Management Addendum Section 2(b) and as also listed as number 14 (under the heading “Non-SLA Based Operational Reporting”).
|
3.
|
Quarterly Results of Governmental Authority Examinations or Investigations - To the extent it satisfies the reporting obligation set forth in section 1(h) of the Vendor Management Addendum.
|
4.
|
Quarterly Licensing Update - To the extent is satisfies the reporting obligation set forth in Section 1(g) of the Vendor Management Addendum.
|
5.
|
Quarterly Financial Statements - To the extent it satisfies the reporting obligation set forth in section 1(k) of the Vendor Management Addendum.”
|
|
|
RHSS I
NC
.:
|
|
|
|
|
|
|
|
REALHome Services and Solutions, Inc.
|
|
|
|
|
|
|
By:
|
/s/ Min Alexander
|
|
|
Name:
|
Min Alexander
|
|
|
Title:
|
Vice President, Real Estate Services
|
|
|
|
|
|
|
|
|
|
|
|
RHSS CT.:
|
|
|
|
|
|
|
|
REALHome Services and Solutions - CT, Inc.
|
|
|
|
|
|
|
By:
|
/s/ Min Alexander
|
|
|
Name:
|
Min Alexander
|
|
|
Title:
|
Vice President, Real Estate Services
|
|
|
|
|
|
|
|
|
|
|
|
NRZ B
ROKERAGE
:
|
|
|
|
|
|
|
|
New Residential Sales Corp.
|
|
|
|
|
|
|
By:
|
/s/ Nicola Santoro, Jr.
|
|
|
Name:
|
Nicola Santoro, Jr.
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
Chief Operating Officer
|
|
Name
|
|
Jurisdiction of incorporation or organization
|
|
|
|
|
|
Altisource S.à r.l.
|
|
Luxembourg
|
|
Altisource Access CA, Inc.
|
|
Delaware
|
|
Altisource Access, Inc.
|
|
Delaware
|
|
Altisource Asia Holdings Ltd. I
|
|
Mauritius
|
|
Altisource Asset Acquisition, Inc.
|
|
Delaware
|
|
Altisource Business Solutions Private Limited
|
|
India
|
|
Altisource Business Solutions S.à r.l.
|
|
Luxembourg
|
|
Altisource Business Solutions, Inc.
|
|
Philippines
|
|
Altisource Collaborative S.à r.l.
|
|
Luxembourg
|
|
Altisource Consumer Analytics S.à r.l.
|
|
Luxembourg
|
|
Altisource Document Solutions S.à r.l.
|
|
Luxembourg
|
|
Altisource Fulfillment Operations, Inc.
|
|
Delaware
|
|
Altisource Holdings, LLC
|
|
Delaware
|
|
Altisource Mortgage Solutions S.à r.l.
|
|
Luxembourg
|
|
Altisource Online Auction, Inc.
|
|
Delaware
|
|
Altisource Outsourcing Solutions S.R.L.
|
|
Uruguay
|
|
Altisource Portfolio Solutions, Inc.
|
|
Delaware
|
|
Altisource Real Estate Web Portal S.à r.l.
|
|
Luxembourg
|
|
Altisource Single Family, Inc.
|
|
Delaware
|
|
Altisource Solutions B.V.
|
|
Netherlands
|
|
Altisource Solutions, Inc.
|
|
Delaware
|
|
Altisource Spend Management S.à r.l.
|
|
Luxembourg
|
|
Altisource Technology Solutions S.à r.l.
|
|
Luxembourg
|
|
Altisource US Data, Inc.
|
|
Delaware
|
|
Association of Certified Mortgage Originators Risk Retention Group, Inc.
|
|
Nevada
|
|
Association of Certified Originators
|
|
Nevada
|
|
Beltline Road Insurance Agency, Inc.
|
|
Texas
|
|
BRS Better Neighborhoods, Inc.
|
|
Delaware
|
|
CastleLine Holdings, LLC
|
|
Delaware
|
|
CastleLine Re, Inc.
|
|
Nevada
|
|
CastleLine Risk and Insurance Services, LLC
|
|
Nevada
|
|
Equator, LLC
|
|
California
|
|
GoldenGator, LLC
|
|
Delaware
|
|
Hubzu Notes, LLC
|
|
Delaware
|
|
Hubzu USA, Inc.
|
|
Delaware
|
|
Investability Solutions, Inc.
|
|
Delaware
|
|
Nationwide Credit, Inc.
|
|
Georgia
|
|
noteXchange, LLC
|
|
Delaware
|
|
Onit Solutions, LLC
|
|
Colorado
|
|
Power Default Services, Inc.
|
|
Delaware
|
|
Premium Title Agency, Inc.
|
|
Delaware
|
|
Premium Title Insurance Agency - UT, Inc.
|
|
Utah
|
|
Premium Title of California, Inc.
|
|
California
|
|
Premium Title Services - FL, Inc.
|
|
Delaware
|
|
Premium Title Services - IL, Inc.
|
|
Delaware
|
|
Premium Title Services - Indiana, Inc.
|
|
Delaware
|
|
Premium Title Services - MD, Inc.
|
|
Delaware
|
|
Premium Title Services - MN, Inc.
|
|
Delaware
|
Name
|
|
Jurisdiction of incorporation or organization
|
|
|
|
|
|
Premium Title Services - MO, Inc.
|
|
Delaware
|
|
Premium Title Services - NY, Inc.
|
|
Delaware
|
|
Premium Title Services - VA, Inc.
|
|
Delaware
|
|
Premium Title Services, Inc.
|
|
Florida
|
|
PTS – Escrow, Inc.
|
|
Delaware
|
|
PTS – Texas Title, Inc.
|
|
Delaware
|
|
REALHome Services and Solutions – CT, Inc.
|
|
Connecticut
|
|
REALHome Services and Solutions, Inc.
|
|
Florida
|
|
REIsmart, LLC
|
|
Delaware
|
|
Springhouse, LLC
|
|
Missouri
|
|
The Mortgage Partnership of America, L.L.C.
|
|
Missouri
|
|
Western Progressive – Arizona, Inc.
|
|
Delaware
|
|
Western Progressive – Nevada, Inc.
|
|
Delaware
|
|
Western Progressive – Washington, Inc.
|
|
Washington
|
|
Western Progressive Trustee, LLC
|
|
Delaware
|
/s/
Mayer Hoffman McCann P.C.
|
|
February 22, 2018
|
Clearwater, Florida
|
/s/
Deloitte & Touche LLP
|
|
Atlanta, Georgia
|
February 22, 2018
|
1.
|
I have reviewed this annual report on Form 10-K for the period ending
December 31, 2017
of Altisource Portfolio Solutions S.A.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 22, 2018
|
By:
|
/s/ William B. Shepro
|
|
|
|
William B. Shepro
|
|
|
|
Director and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K for the period ending
December 31, 2017
of Altisource Portfolio Solutions S.A.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 22, 2018
|
By:
|
/s/ Indroneel Chatterjee
|
|
|
|
Indroneel Chatterjee
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ William B. Shepro
|
|
By:
|
/s/ Indroneel Chatterjee
|
|
William B. Shepro
|
|
|
Indroneel Chatterjee
|
|
Director and Chief Executive Officer
|
|
|
Chief Financial Officer
|
|
(Principal Executive Officer)
|
|
|
(Principal Financial Officer)
|
|
February 22, 2018
|
|
|
February 22, 2018
|