Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 20, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | Altisource Portfolio Solutions S.A. | ||
Entity Central Index Key | 1462418 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 20,132,326 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $1,824,344,937 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Current assets: | |||
Cash and cash equivalents | $161,361 | $130,324 | |
Accounts receivable, net | 112,183 | 104,787 | |
Prepaid expenses and other current assets | 23,567 | 10,996 | |
Deferred tax assets, net | 4,987 | 2,837 | |
Total current assets | 302,098 | 248,944 | |
Premises and equipment, net | 127,759 | 87,252 | |
Non-current deferred tax assets, net | 0 | 622 | |
Goodwill | 90,851 | 99,414 | |
Intangible assets, net | 245,246 | 276,162 | |
Other assets | 22,267 | 17,658 | |
Total assets | 788,221 | 730,052 | |
Current liabilities: | |||
Accounts payable and accrued expenses | 111,766 | 84,706 | [1] |
Current portion of long-term debt | 5,945 | 3,975 | |
Deferred revenue | 9,829 | 36,742 | |
Other current liabilities | 13,227 | 10,131 | |
Total current liabilities | 140,767 | 135,554 | |
Long-term debt, less current portion | 582,669 | 391,281 | |
Deferred tax liabilities, net | 2,694 | 0 | |
Other non-current liabilities | 20,648 | 45,476 | |
Commitments, contingencies and regulatory matters (Note 22) | |||
Equity: | |||
Common stock ($1.00 par value; 25,413 shares authorized and issued, and 20,279 outstanding, as of December 31, 2014; 100,000 shares authorized, 25,413 issued and 22,629 outstanding as of December 31, 2013) | 25,413 | 25,413 | |
Additional paid-in capital | 91,509 | 89,273 | |
Retained earnings | 367,967 | 239,561 | |
Treasury stock, at cost (5,134 shares as of December 31, 2014 and 2,784 shares as of December 31, 2013) | -444,495 | -197,548 | |
Altisource equity | 40,394 | 156,699 | |
Non-controlling interests | 1,049 | 1,042 | |
Total equity | 41,443 | 157,741 | |
Total liabilities and equity | $788,221 | $730,052 | |
[1] | December 31, 2013 payables have been revised to reflect purchase accounting measurement period adjustments related to the Homeward and Equator acquisitions. See Note 5. |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized | 25,413 | 100,000 |
Common stock, shares issued | 25,413 | 25,413 |
Common stock, shares outstanding | 20,279 | 22,629 |
Treasury stock, shares | 5,134 | 2,784 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Revenue | $1,078,916 | $768,357 | $568,360 |
Cost of revenue | 707,180 | 492,480 | 366,201 |
Gross profit | 371,736 | 275,877 | 202,159 |
Selling, general and administrative expenses | 201,282 | 113,810 | 74,712 |
Income from operations | 170,454 | 162,067 | 127,447 |
Other income (expense), net: | |||
Interest expense | -23,363 | -20,291 | -1,210 |
Other income (expense), net | 174 | 557 | -1,588 |
Total other income (expense), net | -23,189 | -19,734 | -2,798 |
Income before income taxes and non-controlling interests | 147,265 | 142,333 | 124,649 |
Income tax provision | -10,178 | -8,540 | -8,738 |
Net income | 137,087 | 133,793 | 115,911 |
Net income attributable to non-controlling interests | -2,603 | -3,820 | -5,284 |
Net income attributable to Altisource | 134,484 | 129,973 | 110,627 |
Earnings per share: | |||
Basic (in dollars per share) | $6.22 | $5.63 | $4.74 |
Diluted (in dollars per share) | $5.69 | $5.19 | $4.43 |
Weighted average shares outstanding: | |||
Basic (in shares) | 21,625 | 23,072 | 23,358 |
Diluted (in shares) | 23,634 | 25,053 | 24,962 |
Transactions with related parties included above: | |||
Revenue | 666,800 | 502,087 | 338,227 |
Cost of revenue | 38,610 | 19,983 | 13,469 |
Selling, general and administrative expenses | -268 | 569 | -542 |
Other income | $0 | $773 | $86 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Total | Common stock | Additional paid-in capital | Retained earnings | Treasury stock, at cost | Non-controlling interests |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2011 | $165,943 | $25,413 | $83,229 | $126,161 | ($72,048) | $3,188 |
Balance (in shares) at Dec. 31, 2011 | 25,413 | |||||
Increase (Decrease) in Equity | ||||||
Net income | 115,911 | 110,627 | 5,284 | |||
Contributions from non-controlling interest holders | 43 | 43 | ||||
Distributions to non-controlling interest holders | -7,145 | -7,145 | ||||
Stockholders' Equity Note, Spinoff Transaction | -105,000 | -105,000 | ||||
Share-based compensation expense | 3,644 | 3,644 | ||||
Exercise of stock options | 3,214 | 7,661 | 10,875 | |||
Repurchase of shares | -16,781 | -16,781 | ||||
Balance at Dec. 31, 2012 | 159,829 | 25,413 | 86,873 | 124,127 | -77,954 | 1,370 |
Balance (in shares) at Dec. 31, 2012 | 25,413 | |||||
Increase (Decrease) in Equity | ||||||
Net income | 133,793 | 129,973 | 3,820 | |||
Contributions from non-controlling interest holders | 28 | 28 | ||||
Distributions to non-controlling interest holders | -4,176 | -4,176 | ||||
Share-based compensation expense | 2,400 | 2,400 | ||||
Exercise of stock options | 6,885 | 14,539 | 21,424 | |||
Repurchase of shares | -141,018 | -141,018 | ||||
Balance at Dec. 31, 2013 | 157,741 | 25,413 | 89,273 | 239,561 | -197,548 | 1,042 |
Balance (in shares) at Dec. 31, 2013 | 25,413 | |||||
Increase (Decrease) in Equity | ||||||
Net income | 137,087 | 134,484 | 2,603 | |||
Distributions to non-controlling interest holders | -2,596 | -2,596 | ||||
Share-based compensation expense | 2,236 | 2,236 | ||||
Exercise of stock options | 2,688 | 6,078 | 8,766 | |||
Repurchase of shares | -255,713 | -255,713 | ||||
Balance at Dec. 31, 2014 | $41,443 | $25,413 | $91,509 | $367,967 | ($444,495) | $1,049 |
Balance (in shares) at Dec. 31, 2014 | 25,413 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | ||||
Net income | $137,087 | $133,793 | $115,911 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 29,046 | 19,056 | 12,776 | |
Amortization of intangible assets | 37,680 | 28,176 | 5,030 | |
Change in the fair value of Equator Earn Out | -37,924 | 0 | 0 | |
Goodwill impairment | 37,473 | [1] | 0 | 0 |
Share-based compensation expense | 2,236 | 2,400 | 3,644 | |
Equity in losses of investment in affiliate | 176 | 1,741 | ||
Bad debt expense | 16,257 | 2,549 | 3,049 | |
Amortization of debt discount | 317 | 223 | 27 | |
Amortization of debt issuance costs | 1,151 | 958 | 57 | |
Deferred income taxes | 1,166 | 2,015 | 2,992 | |
Loss on disposal of fixed assets | 184 | 1,309 | 445 | |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||
Accounts receivable | -22,492 | -5,602 | -39,999 | |
Prepaid expenses and other current assets | -12,501 | -2,817 | -2,616 | |
Other assets | -1,750 | -1,586 | 2,172 | |
Accounts payable and accrued expenses | 24,285 | 7,381 | 11,652 | |
Other current and non-current liabilities | -14,722 | -2,557 | -352 | |
Net cash provided by operating activities | 197,493 | 185,474 | 116,529 | |
Cash flows from investing activities: | ||||
Additions to premises and equipment | -64,846 | -34,134 | -35,563 | |
Acquisition of businesses, net of cash acquired | -34,720 | -267,946 | 0 | |
Loan to Ocwen | 0 | 0 | -75,000 | |
Proceeds from loan to Ocwen | 0 | 75,000 | 0 | |
Proceeds from sale of equity affiliate | 0 | 12,648 | 0 | |
Other investing activities | -300 | -50 | 0 | |
Change in restricted cash | -1,402 | -1,462 | 0 | |
Net cash used in investing activities | -101,268 | -215,944 | -110,563 | |
Cash flows from financing activities: | ||||
Repayment of long-term debt and payments on capital lease obligations | -4,959 | -3,729 | -603 | |
Proceeds from issuance of long-term debt | 198,000 | 200,502 | 198,000 | |
Distribution of cash in connection with the Separation of the Residential Asset Businesses | 0 | 0 | -105,000 | |
Debt issuance costs | -2,608 | -3,200 | -4,317 | |
Proceeds from stock option exercises | 2,688 | 6,885 | 3,214 | |
Purchase of treasury stock | -255,713 | -141,018 | -16,781 | |
Contributions from non-controlling interests | 0 | 28 | 43 | |
Distributions to non-controlling interests | -2,596 | -4,176 | -7,145 | |
Net cash (used in) provided by financing activities | -65,188 | 55,292 | 67,411 | |
Net increase in cash and cash equivalents | 31,037 | 24,822 | 73,377 | |
Cash and cash equivalents at the beginning of the period | 130,324 | 105,502 | 32,125 | |
Cash and cash equivalents at the end of the period | 161,361 | 130,324 | 105,502 | |
Supplemental cash flow information: | ||||
Interest paid | 21,829 | 19,325 | 1,134 | |
Income taxes paid, net | 13,340 | 3,671 | 4,912 | |
Non-cash investing and financing activities: | ||||
(Decrease) increase in payables for purchases of premises and equipment | -2,328 | 4,552 | 2,457 | |
Decrease in acquisition of businesses from subsequent working capital true-ups | -3,711 | -2,039 | 0 | |
Amortization of tax-deductible goodwill | $0 | $0 | $3,334 | |
[1] | See Note 5 for a discussion of the Equator goodwill impairment. |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Accounting and Presentation - The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany and inter-segment transactions and accounts have been eliminated in consolidation. | ||
Principles of Consolidation - The financial statements include the accounts of the Company, its wholly-owned subsidiaries and those entities in which we have a variable interest and are the primary beneficiary. | ||
The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource, serves as the manager of Best Partners Mortgage Cooperative, Inc. doing business as Lenders One Mortgage Cooperative (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025. MPA acts on behalf of Lenders One and its members principally to provide its members with education and training along with revenue enhancing, cost reducing and market share expanding opportunities. For providing these services, MPA receives payments from Lenders One, and in some instances the vendors, based primarily upon the benefits achieved for the members. The management agreement provides MPA with broad powers such as recruiting members for Lenders One, collection of fees and other obligations from members of Lenders One, processing of all rebates owed to Lenders One and negotiating and executing contracts with vendors including executing contracts on behalf of Lenders One. | ||
The management agreement between MPA and Lenders One, pursuant to which MPA is the management company of Lenders One, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact Lenders One’s economic performance and the obligation to absorb losses or the right to receive benefits from Lenders One. As a result, Lenders One is presented in the accompanying consolidated financial statements on a consolidated basis with the interests of the members reflected as non-controlling interests. As of December 31, 2014, Lenders One had total assets of $7.7 million and total liabilities of $6.7 million. As of December 31, 2013, Lenders One had total assets of $4.6 million and total liabilities of $3.5 million. | ||
Correction of Immaterial Errors - As previously disclosed, during 2014 we determined that while we properly identified our related parties in previously issued financial statements, disclosures of certain immaterial related party expenses were omitted. We have corrected the previously presented disclosures of related party expenses in Note 4 - Transactions with Related Parties and on the face of the consolidated statements of operations for the years ended December 31, 2013 and 2012. The impact of correcting these items in the notes to the consolidated financial statements had the effect of: | ||
• | increasing the amounts disclosed as related party cost of revenue from Ocwen Financial Corporation and its subsidiaries (“Ocwen”) by $20.0 million and $13.5 million for the years ended December 31, 2013 and 2012, respectively; | |
• | increasing the amounts disclosed as selling, general and administrative expenses from Ocwen billings to Altisource by $1.7 million and $0.7 million for the years ended December 31, 2013 and 2012, respectively; | |
• | decreasing the amounts disclosed as selling, general and administrative expenses from Altisource billings to Ocwen by $0.1 million and less than $0.1 million for the years ended December 31, 2013 and 2012, respectively; and | |
• | decreasing the amounts disclosed as selling, general and administrative expenses from Altisource billings to Altisource Asset Management Corporation (“AAMC”) by $0.5 million for the year ended December 31, 2013 (no adjustment for the year ended December 31, 2012). | |
Correcting these items on the face of the consolidated statements of operations resulted in the disclosure of related party cost of revenue of $20.0 million and $13.5 million for the years ended December 31, 2013 and 2012, respectively, and a decrease in previously disclosed related party selling, general and administrative expenses by $2.4 million and $3.0 million for the years ended December 31, 2013 and 2012, respectively. | ||
In accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, the Company evaluated the effect of the disclosure and presentation errors on its previously issued annual and quarterly financial statements, both qualitatively and quantitatively, and concluded that the related party disclosures in the Company’s previously issued annual and quarterly financial statements are not materially misstated. | ||
Use of Estimates - The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining share-based compensation, income taxes, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives of fixed assets and contingencies. Actual results could differ materially from those estimates. | ||
Cash and Cash Equivalents - We classify all highly liquid instruments with an original maturity of three months or less at the time of purchase as cash equivalents. | ||
Accounts Receivable, Net - Accounts receivable are net of an allowance for doubtful accounts that represents an amount that we estimate to be uncollectible. We have estimated the allowance for doubtful accounts based on our historical write-offs, our analysis of past due accounts based on the contractual terms of the receivables and our assessment of the economic status of our customers, if known. The carrying value of accounts receivable, net, approximates fair value. | ||
Premises and Equipment, Net - We report premises and equipment, net at cost or estimated fair value at acquisition and depreciate these assets over their estimated useful lives using the straight-line method as follows: | ||
Furniture and fixtures | 5 years | |
Office equipment | 5 years | |
Computer hardware | 5 years | |
Computer software | 3-7 years | |
Leasehold improvements | Shorter of useful life, 10 years or the term of the lease | |
Maintenance and repair costs are expensed as incurred. We capitalize expenditures for significant improvements and new equipment and depreciate the assets over the shorter of the capitalized asset’s life or the life of the lease. | ||
We review premises and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. We measure recoverability of assets to be held and used by comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, we recognize an impairment charge for the amount that the carrying value of the asset or asset group exceeds the fair value of the asset or asset group. | ||
Computer software includes the fair value of software acquired in business combinations and purchased software. Purchased software is recorded at cost and amortized using the straight-line method over its estimated useful life. Software acquired in business combinations is recorded at its fair value and amortized using the straight-line method over its estimated useful life. | ||
Business Combinations - We account for acquisitions using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using the fair values as of the acquisition date. | ||
Investment in Equity Affiliates - We utilize the equity method to account for investments in equity securities where we have the ability to exercise significant influence over operating and financial policies of the investee. We include a proportionate share of losses of equity method investees in equity losses of affiliates, net which is included in other income (expense), net in the consolidated statements of operations. We review investments in equity affiliates for an other than temporary impairment whenever events or circumstances indicate that the carrying value is greater than the fair value of the investment and the loss is other than a temporary decline. | ||
Goodwill - Goodwill represents the excess cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative two-step goodwill impairment test. Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will we calculate the fair value of the reporting unit. We would then test goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. The discounted cash flow method is based on present value of projected cash flows. Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions. Certain estimates of discounted cash flows involve businesses with limited financial history and developing revenue models. The estimated cash flows are discounted using a rate that represents our weighted average cost of capital. | ||
Because we recorded an impairment of goodwill during an interim period in 2014 (see Note 5), we elected to bypass the initial analysis of qualitative factors and perform a quantitative two-step goodwill impairment test of all of our reporting units during our annual assessment in the fourth quarter of 2014. For purposes of the annual goodwill impairment assessment, our reporting units are our reportable segments. We calculated the fair value of each of our reporting units by using a discounted cash flow analysis. As of December 31, 2014, the fair value of the Mortgage Services, Financial Services and Technology Services reporting units exceeded their carrying values by a significant margin. Consequently, we determined that no further goodwill impairment exists as of December 31, 2014. There were no goodwill impairments in 2013 or 2012. | ||
Intangible Assets, Net - Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors. We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 5 to 20 years. | ||
We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable. When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets consistent with models utilized for internal planning purposes. If the sum of the undiscounted expected future cash flows is less than the carrying value, we would recognize an impairment to the extent the carrying amount exceeds fair value. Based on the 2014, 2013 and 2012 cash flow analyses prepared by management for certain of the intangible assets, no impairment of intangible assets was recorded for the years ended December 31, 2014, 2013 and 2012. | ||
Debt Issuance Costs - Debt issuance costs are capitalized and amortized to interest expense through maturity of the related debt using the effective interest method. | ||
Long-Term Debt - Long-term debt is reported net of applicable discount or premium. The debt discount or premium is amortized to interest expense through maturity of the related debt using the effective interest method. | ||
Fair Value Measurements - Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: | ||
Level 1 — Quoted prices in active markets for identical assets and liabilities | ||
Level 2 — Observable inputs other than quoted prices included in Level 1 | ||
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. | ||
Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. | ||
Functional Currency - The currency of the primary economic environment in which our operations are conducted is the United States dollar. Therefore, the United States dollar has been determined to be our functional and reporting currency. Non-United States dollar transactions and balances have been measured in United States dollars in accordance with ASC Topic 830, Foreign Currency Matters. All transaction gains and losses from the measurement of monetary balance sheet items denominated in non-United States dollar currencies are reflected in the statement of operations as income or expenses, as appropriate. | ||
Defined Contribution 401(k) Plan - Some of our employees currently participate in a defined contribution 401(k) plan under which we may make matching contributions equal to a discretionary percentage determined by us. We recorded expense of $0.9 million, $0.4 million and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively, related to our discretionary amounts contributed. | ||
Share-Based Compensation - Share-based compensation is accounted for under the provisions of ASC Topic 718, Compensation - Stock Compensation. Under ASC Topic 718, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based employee awards that require future service are recognized over the relevant service period. Further, as required under ASC Topic 718, we estimate forfeitures for share-based awards that are not expected to vest. | ||
Earnings Per Share - We compute earnings per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share. Basic net income per share is computed by dividing net income attributable to Altisource by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities. | ||
Revenue Recognition - We recognize revenue from the services we provide in accordance with ASC Topic 605, Revenue Recognition. ASC Topic 605 sets forth guidance as to when revenue is realized or realizable and earned, which is generally when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Generally, the contract terms for these services are relatively short in duration, and we recognize revenue as the services are performed either on a per unit or a fixed price basis. Specific policies for each of our reportable segments are as follows: | ||
Mortgage Services segment: We recognize revenue for the majority of the services we provide when the services have been performed. For default processing services and certain property preservation services, we recognize revenue over the period during which we perform the related services, with full recognition upon recording the related foreclosure deed or on closing of the related real estate transaction. We record revenue associated with real estate sales on a net basis as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage. Reimbursable expenses of $137.4 million, $102.0 million and $95.6 million incurred for the years ended December 31, 2014, 2013 and 2012, respectively, are included in revenue with an equal offsetting expense included in cost of revenue primarily related to our property preservation and default processing services. These amounts are recognized on a gross basis, principally because we have complete control over selection of vendors and the vendor relationship is with us, rather than with our customers. | ||
Financial Services segment: We generally earn our fees for asset recovery management services as a percentage of the amount we collect on delinquent consumer receivables and charged-off mortgages on behalf of our clients and recognize revenue upon collection from the debtors. We also earn fees for packaging and selling charged-off mortgages and recognize revenue after the sale of the notes and once the risks and rewards of the mortgage notes are transferred to the purchasers. In addition, we provide customer relationship management services for which we earn and recognize revenue on a per-call, per-person or per-minute basis as the related services are performed. | ||
Technology Services segment: For our REALSuite platform, we charge based on the number of loans on the system or on a per-transaction basis. We record transactional revenue when the service is provided and other revenue monthly based on the number of loans processed or services provided. | ||
For Equator, LLC’s (“Equator”) software applications, we recognize revenue from arrangements with multiple deliverables in accordance with ASC Subtopic 605-25, Revenue Recognition: Multiple-Element Arrangements (“ASC 605-25”), and Securities and Exchange Commission Staff Accounting Bulletin Topic 13, Revenue Recognition (“SAB Topic 13”). ASC 605-25 and SAB Topic 13 require each deliverable within a multiple-deliverable revenue arrangement to be accounted for as a separate unit if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the seller’s control. Deliverables not meeting the criteria for accounting treatment as a separate unit are combined with a deliverable that meets that criterion. Equator derives its revenue from platform services fees, professional services fees and other services. Equator does not begin to recognize revenue for platform services fees until these fees become billable, as the services fees are not fixed and determinable until such time. Platform services fees are recognized ratably over the shorter of the term of the contract with the customer or the minimum cancellation period. Professional services fees consist primarily of configuration services related to customizing the platform for individual customers and are generally billed as the hours are worked. Due to the essential and specialized nature of the configuration services, these services do not qualify as separate units of accounting separate from the platform services as the delivered services do not have value to the customer on a standalone basis. Therefore, the related fees are recorded as deferred revenue until the project configuration is complete and then recognized ratably over the longer of the term of the agreement or the estimated expected customer life. Other services consist primarily of training, including agent certification, and consulting services. These services are generally sold separately and are recognized as revenue as the services are performed and earned. | ||
For Mortgage Builder Software, Inc. (“Mortgage Builder”) software applications, we recognize subscription revenues ratably over the contract term, beginning on the commencement date of each contract. Revenues for usage-based transactions are generally recognized as the usage occurs, as that is the point when the fee becomes fixed or determinable. Mortgage Builder generally invoices customers on a monthly basis. | ||
We provide information technology (“IT”) infrastructure services to Ocwen, Home Loan Servicing Solutions, Ltd. (“HLSS”), Altisource Residential Corporation (“Residential”) and AAMC and charge for these services primarily based on the number of employees that are using the applicable systems and the number and type of licensed platforms used by Ocwen, HLSS, Residential and AAMC. We record revenue associated with implementation services upon completion and maintenance ratably over the related service period. | ||
Income Taxes - We account for certain income and expense items differently for financial purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization and loss and credit carryforwards. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. | ||
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740, Income Taxes (“ASC Topic 740”). | ||
Future Adoption of New Accounting Pronouncement | ||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This new standard will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently evaluating the impact this new guidance may have on its results of operations and financial position. |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION |
Description of Business - Altisource Portfolio Solutions S.A., together with its subsidiaries (which may be referred to as “Altisource,” the “Company,” “we,” “us” or “our”), is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. We leverage proprietary business process, vendor and electronic payment management software and behavioral science based analytics to improve outcomes for marketplace participants. | |
We conduct our operations through three reportable segments: Mortgage Services, Financial Services and Technology Services. In addition, we report our corporate related expenditures and eliminations separately (see Note 23 for a description of our business segments). |
SEPARATION_OF_RESIDENTIAL_ASSE
SEPARATION OF RESIDENTIAL ASSET BUSINESSES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SEPARATION OF RESIDENTIAL ASSET BUSINESSES | |||||||||||||
SEPARATION OF RESIDENTIAL ASSET BUSINESSES | SEPARATION OF RESIDENTIAL ASSET BUSINESSES | ||||||||||||
On December 21, 2012, we completed the spin-offs of two wholly-owned subsidiaries, AAMC and Residential, into separate publicly traded companies (the “Separation of the Residential Asset Businesses”). | |||||||||||||
On December 24, 2012, Altisource shareholders of record as of December 17, 2012 received a pro rata distribution of: | |||||||||||||
• | one share of Residential common stock for every three shares of Altisource common stock held; | ||||||||||||
• | one share of AAMC common stock for every ten shares of Altisource common stock held; and | ||||||||||||
• | cash in lieu of fractional Residential and AAMC shares. | ||||||||||||
We eliminated the assets and liabilities of Residential and AAMC from our consolidated balance sheet effective at the close of business on December 21, 2012. As Residential and AAMC were development stage companies and had not commenced operations | |||||||||||||
at the date of separation, these entities had no historical results of operations. | |||||||||||||
The carrying value of the net assets transferred by Altisource was as follows: | |||||||||||||
(in thousands) | Residential | AAMC | Total | ||||||||||
Cash | $ | 100,000 | $ | 5,000 | $ | 105,000 | |||||||
Reduction in Altisource retained earnings | $ | 100,000 | $ | 5,000 | $ | 105,000 | |||||||
We incurred $2.7 million of expenses for the year ended December 31, 2012 representing salaries of certain employees who became employees of AAMC after the separation (included in cost of revenue) and advisory expenses (included in selling, general and administrative expenses) incurred in connection with the Separation of the Residential Asset Businesses. These expenses are included in our Mortgage Services segment (no comparative amounts for 2014 and 2013). | |||||||||||||
Impact on Share-Based Compensation | |||||||||||||
The exercise price of each outstanding stock option of Altisource was adjusted to reflect the value of Residential and AAMC common stock distributed to Altisource shareholders. On the separation date, all holders of Altisource stock options received the following: | |||||||||||||
• | stock options (issued by Residential and AAMC) to acquire the number of shares of Residential or AAMC common stock equal to the product of (a) the number of Altisource stock options held on the separation date and (b) the distribution ratio of one share of Residential common stock for every three shares of Altisource common stock and one share of AAMC stock for every ten shares of Altisource common stock; and | ||||||||||||
• | an adjusted Altisource stock option, with a reduced exercise price per stock option. |
TRANSACTIONS_WITH_RELATED_PART
TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Related Party Transactions [Abstract] | |||||||
TRANSACTIONS WITH RELATED PARTIES | TRANSACTIONS WITH RELATED PARTIES | ||||||
Through January 16, 2015, William C. Erbey served as our Chairman as well as the Executive Chairman of Ocwen and Chairman of each of HLSS, Residential and AAMC. Effective January 16, 2015, Mr. Erbey stepped down as the Executive Chairman of Ocwen and Chairman of each of Altisource, HLSS, Residential and AAMC and is no longer a member of the Board of Directors for any of these companies. As of December 31, 2014, Mr. Erbey owned or controlled approximately 29% of the common stock of Altisource, approximately 14% of the common stock of Ocwen, approximately 1% of the common stock of HLSS, approximately 4% of the common stock of Residential and approximately 28% of the common stock of AAMC. As of December 31, 2014, Mr. Erbey also held 873,501 options to purchase Altisource common stock (all of which were exercisable), 3,620,498 options to purchase Ocwen common stock (3,370,498 of which were exercisable) and 87,350 options to purchase AAMC common stock (all of which were exercisable). Accordingly, as a result of Mr. Erbey’s positions and the continuing common ownership, these companies have been and are related parties of Altisource. | |||||||
Ocwen | |||||||
Revenue | |||||||
Ocwen is our largest customer. Ocwen purchases certain mortgage services and technology services from us under the terms of the master services agreements and amendments to the master services agreements (collectively, the “Service Agreements”) with terms extending through August 2025. The Service Agreements, among other things, contain a “most favored nation” provision and the parties to the Service Agreements have the right to renegotiate pricing. In connection with our March 29, 2013 acquisition from Ocwen of the fee-based businesses of Homeward Residential, Inc. (“Homeward”) and the April 12, 2013 transaction with Ocwen related to the fee-based businesses of Residential Capital, LLC (“ResCap”) (see Note 5), our Service Agreements with Ocwen were amended to extend the term from 2020 to 2025. Further, as part of the amendments, Ocwen agreed not to establish similar fee-based businesses that would directly or indirectly compete with Altisource’s services with respect to the Homeward and ResCap businesses. During 2014, we agreed with Ocwen to apply a negligence standard with respect to indemnification obligations arising out of property preservation and inspection services. Previously, Altisource and Ocwen applied a gross negligence standard with respect to these indemnification obligations. The impact of changing the negligence standard did not have a material effect on our results of operations. In addition, Ocwen purchases certain origination services from Altisource under an agreement that extends through January 2017, subject to termination under certain conditions. We settle amounts with Ocwen on a daily, weekly or monthly basis depending upon the nature of the service and when the service is provided. | |||||||
Related party revenue primarily consists of revenue earned directly from Ocwen and revenue earned from the loans serviced by Ocwen when Ocwen designates us as the service provider. Related party revenue from Ocwen as a percentage of segment and consolidated revenue was as follows for the years ended December 31: | |||||||
2014 | 2013 | 2012 | |||||
Mortgage Services | 67% | 71% | 68% | ||||
Financial Services | 27% | 30% | <1% | ||||
Technology Services | 41% | 49% | 42% | ||||
Consolidated revenue | 60% | 65% | 59% | ||||
We record revenue we earn from Ocwen under the Service Agreements at rates we believe to be market rates as we believe they are consistent with the fees we charge to other customers for comparable services and/or fees charged by our competitors. | |||||||
We earn additional revenue on the portfolios serviced by Ocwen that is not considered related party revenue when a party other than Ocwen selects Altisource as the service provider. For the years ended December 31, 2014, 2013 and 2012, we recognized revenue of $256.0 million, $161.9 million and $125.4 million, respectively, on the portfolios serviced by Ocwen that are not considered related party revenue. | |||||||
Cost of Revenue | |||||||
At times, we use Ocwen’s contractors and/or employees to support Altisource related services. Ocwen generally bills us for these contractors and/or employees based on their fully-allocated cost. Additionally, we purchase certain data relating to Ocwen’s servicing portfolio in connection with a Data Access and Services Agreement. The Data Access and Services Agreement may be renegotiated and may be cancelled by either Altisource or Ocwen with 90 days prior written notice. Ocwen bills us a per asset fee for this data. For the years ended December 31, 2014, 2013 and 2012, Ocwen billed us $38.6 million, $20.0 million and $13.5 million, respectively. These amounts are reflected as a component of cost of revenue in the consolidated statements of operations. On December 31, 2014, we notified Ocwen that we are canceling the Data Access and Services Agreement, effective March 31, 2015. | |||||||
Selling, General and Administrative Expenses | |||||||
We provided certain other services to Ocwen and Ocwen provided certain other services to us in connection with Support Services Agreements. These services include such areas as human resources, vendor management, vendor oversight, corporate services, operational effectiveness, quality assurance, quantitative analytics, tax and treasury. The Support Services Agreement with Ocwen Mortgage Servicing, Inc. extends through September 2018 with automatic one-year renewals thereafter. The Support Services Agreement with Ocwen Financial Corporation extends through October 2017 with automatic one-year renewals thereafter. Billings for these services were generally based on the fully-allocated cost of providing the service based on an estimate of the time and expense of providing the service or estimates thereof. For the years ended December 31, 2014, 2013 and 2012, we billed Ocwen $4.5 million, $2.8 million and $2.7 million, respectively, and Ocwen billed us $6.1 million, $4.6 million and $3.2 million, respectively. These amounts are reflected as a component of selling, general and administrative expenses in the consolidated statements of operations. | |||||||
Unsecured Term Loan | |||||||
On December 27, 2012, we entered into a senior unsecured term loan agreement with Ocwen under which we loaned $75.0 million to Ocwen. Payments of interest were due quarterly at a rate per annum equal to the Eurodollar Rate (as defined in the agreement) plus 6.75%, provided that the Eurodollar Rate was not less than 1.50%. On February 15, 2013, Ocwen repaid the outstanding principal amount of this loan and all accrued and unpaid interest and the term loan was terminated. Interest income related to this loan was $0.8 million and $0.1 million for the years ended December 31, 2013 and 2012, respectively (no comparative amount for 2014). | |||||||
Transactions Related to Fee-Based Businesses | |||||||
On January 31, 2013, we entered into non-binding letters of intent with Ocwen to acquire certain fee-based businesses associated with Ocwen’s acquisitions of the Homeward and ResCap servicing portfolios. Ocwen acquired the Homeward servicing portfolio on December 27, 2012 and the ResCap servicing portfolio on February 15, 2013. Altisource acquired the Homeward fee-based businesses from Ocwen on March 29, 2013 (see Note 5). Altisource entered into an agreement with Ocwen on April 12, 2013 to establish additional terms related to our services in connection with the ResCap fee-based businesses (see Note 5). | |||||||
Correspondent One and HLSS | |||||||
In July 2011, we acquired an equity interest in Correspondent One S.A. (“Correspondent One”). Correspondent One purchased closed conforming and government guaranteed residential mortgages from approved mortgage bankers. On March 31, 2013, we sold our 49% interest in Correspondent One to Ocwen for $12.6 million. Prior to the sale to Ocwen, we provided Correspondent One certain finance, human resources, legal support, facilities, technology, vendor management and insurance risk management services under a support services agreement. For the years ended December 31, 2013 and 2012, we billed Correspondent One less than $0.1 million and $0.4 million, respectively (no comparative amount for 2014). These amounts are reflected as a component of selling, general and administrative expenses in the consolidated statements of operations. We also provided certain origination related services to Correspondent One. We earned revenue of $0.1 million and $0.3 million for the years ended December 31, 2013 and 2012, respectively, for these services (no comparative amount for 2014). | |||||||
HLSS is a publicly traded company whose primary objective is the acquisition of mortgage servicing rights and related servicing advances, loans held for investment and other residential mortgage related assets. Under a support services agreement, we provide HLSS certain finance, human resources, tax and facilities services. For the years ended December 31, 2014, 2013 and 2012, we billed HLSS $0.9 million, $0.7 million and $0.6 million, respectively. These amounts are reflected as a component of selling, general and administrative expenses in the consolidated statements of operations. | |||||||
Residential and AAMC | |||||||
Residential and AAMC were spun-off on December 21, 2012 and their equity was distributed to our shareholders on December 24, 2012 and they are each separate publicly traded companies. Residential is focused on acquiring and managing single family rental properties by acquiring sub-performing and non-performing residential mortgage loans as well as single family homes at or following the foreclosure sale throughout the United States. AAMC is an asset management company providing portfolio management and corporate governance services to Residential. | |||||||
For purposes of governing certain ongoing relationships between Altisource, Residential and AAMC, we entered into certain agreements with Residential and AAMC. We have agreements to provide Residential with renovation management, lease management and property management services. In addition, we have agreements with Residential and AAMC to provide services such as finance, human resources, facilities, technology and insurance risk management. Further, we have separate agreements for certain services related to income tax matters, trademark licenses and technology services. | |||||||
For the years ended December 31, 2014 and 2013, we billed Residential $16.0 million and $2.6 million, respectively (no comparative amount for 2012). This excludes revenue where we are retained by Ocwen to provide services to Residential’s loans serviced by Ocwen. That revenue is included in related party revenue from Ocwen. For the years ended December 31, 2014 and 2013, we billed AAMC $0.1 million and less than $0.1 million, respectively, under the services agreements (no comparative amount for 2012). These amounts are reflected in revenue in the consolidated statements of operations. In addition, for the years ended December 31, 2014 and 2013, we billed AAMC $0.9 million and $0.5 million, respectively, under the services agreements (no comparative amount for 2012). These amounts are reflected as a component of selling, general and administrative expenses in the consolidated statements of operations. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Business Combinations [Abstract] | |||||||||||||
ACQUISITIONS | ACQUISITIONS | ||||||||||||
Homeward Fee-Based Businesses | |||||||||||||
On March 29, 2013, we acquired certain fee-based businesses associated with Ocwen’s acquisition of Homeward. As part of the acquisition, Ocwen agreed not to develop similar fee-based businesses that would directly or indirectly compete with services provided by Altisource relative to the Homeward servicing portfolio. Additionally, the terms of our Service Agreements with Ocwen were amended to extend the term from 2020 to 2025 (see Note 4). We paid $75.8 million, after a working capital and pre-acquisition net income adjustment payment by Ocwen of $11.1 million, which we received in September 2013. | |||||||||||||
Since the acquisition date, management adjusted the purchase price allocation and assigned associated asset lives based upon information that has become available. In addition to the working capital adjustment, we also reduced premises and equipment by $1.2 million based on a post-acquisition detailed analysis of software licenses received and increased current liabilities by $2.0 million based on a subsequent detailed analysis of obligations payable as of the closing date, which we paid in 2014. Consequently, the Company retrospectively adjusted the fair value of the assets acquired and liabilities assumed in the consolidated balance sheet as of December 31, 2013 as well as disclosed the corresponding amount of non-cash investing and financing activities in the consolidated statement of cash flows for the year ended December 31, 2013. | |||||||||||||
The final adjusted allocation of the purchase price is as follows: | |||||||||||||
(in thousands) | |||||||||||||
Premises and equipment | $ | 1,559 | |||||||||||
Customer relationship | 75,609 | ||||||||||||
Goodwill | 2,039 | ||||||||||||
79,207 | |||||||||||||
Accounts payable and accrued expenses | (3,390 | ) | |||||||||||
Purchase price | $ | 75,817 | |||||||||||
Estimated life | |||||||||||||
(in years) | |||||||||||||
Premises and equipment | 5-Mar | ||||||||||||
Customer relationship | 7 | ||||||||||||
ResCap Fee-Based Businesses | |||||||||||||
On April 12, 2013, we entered into an agreement with Ocwen to establish additional terms related to the existing servicing arrangements between Altisource and Ocwen in connection with certain mortgage servicing platform assets of ResCap (the “ResCap Business”). The agreement provides that (i) Altisource will be a provider to Ocwen of certain services related to the ResCap Business, (ii) Ocwen will not establish similar fee-based businesses that would directly or indirectly compete with Altisource’s services as they relate to the ResCap Business and (iii) Ocwen will market and promote the utilization of Altisource’s services to their various third party relationships. Additionally, the parties agreed to use commercially reasonable best efforts to ensure that the loans associated with the ResCap Business are boarded onto Altisource’s mortgage servicing platform. We paid $128.8 million to Ocwen in connection with the ResCap fee-based businesses agreement. | |||||||||||||
We acquired no tangible assets and assumed no liabilities in connection with the ResCap transaction. However, certain employees as well as practices and processes developed to support the ResCap servicing portfolio were components of the transaction. We accounted for this transaction as a business combination in accordance with ASC Topic 805, Business Combinations. | |||||||||||||
Management prepared a final purchase price allocation and assigned associated asset lives based upon available information at the time of the agreement and until finalized as of December 31, 2013. The agreement consideration of $128.8 million was fully allocated to the customer relationship intangible asset with an estimated average useful life of 7 years. | |||||||||||||
Equator Acquisition | |||||||||||||
On November 15, 2013, we completed the acquisition of all of the outstanding limited liability company interests of Equator pursuant to a Purchase and Sale Agreement dated August 19, 2013 (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, we paid $63.4 million at closing in cash (net of closing working capital adjustments), subject to certain post-closing adjustments based on current assets and current liabilities of Equator at closing. After the acquisition date, management adjusted the purchase price allocation based upon information that has subsequently become available relating to acquisition date working capital, resulting in an obligation of the Company to pay the sellers an additional $3.7 million. Consequently, the Company retrospectively adjusted the fair value of the assets acquired and liabilities assumed in the consolidated balance sheet as of December 31, 2013 as well as disclosed the corresponding amount of non-cash investing and financing activities in the consolidated statement of cash flows for the year ended December 31, 2014. | |||||||||||||
The Purchase Agreement also provided for the payment of up to $80 million in potential additional consideration (“Equator Earn Out”). The Equator Earn Out will be determined based on Equator’s Adjusted EBITA (as defined in the Purchase Agreement) in the three consecutive 12-month periods following closing. Up to $22.5 million of the Equator Earn Out could be earned in each of the first two 12-month periods, and up to $35.0 million could be earned in the third 12-month period. Any amounts earned upon the achievement of Adjusted EBITA thresholds are payable through 2017. We may, at our discretion, pay up to 20% of each payment of any of the Equator Earn Out in shares of Company restricted stock, with the balance to be paid in cash. As of the closing date, we estimated the fair value of the Equator Earn Out to be $46.0 million, determined based on the present value of future estimated Equator Earn Out payments at such date, which has subsequently been reduced to $8.1 million, as further described below. The acquisition date fair value of the Equator Earn Out is included as a component of the purchase price of Equator. | |||||||||||||
The final adjusted allocation of the purchase price is as follows: | |||||||||||||
Initial purchase price allocation | Adjustments | Adjusted purchase price allocation | |||||||||||
(in thousands) | |||||||||||||
Accounts receivable | $ | 9,293 | $ | 3,490 | $ | 12,783 | |||||||
Prepaid expenses and other current assets | 954 | (393 | ) | 561 | |||||||||
Premises and equipment | 16,974 | — | 16,974 | ||||||||||
Customer relationships, trademarks and trade names | 43,393 | — | 43,393 | ||||||||||
Goodwill | 82,460 | — | 82,460 | ||||||||||
Other non-current assets | 242 | 78 | 320 | ||||||||||
Assets acquired | 153,316 | 3,175 | 156,491 | ||||||||||
Accounts payable and accrued expenses | (7,232 | ) | 536 | (6,696 | ) | ||||||||
Deferred revenue | (36,689 | ) | — | (36,689 | ) | ||||||||
Liabilities assumed | (43,921 | ) | 536 | (43,385 | ) | ||||||||
Purchase price | $ | 109,395 | $ | 3,711 | $ | 113,106 | |||||||
Estimated life | |||||||||||||
(in years) | |||||||||||||
Premises and equipment (excluding internally developed software) | 5-Mar | ||||||||||||
Internally developed software (included in premises and equipment) | 7 | ||||||||||||
Customer relationships (weighted average) | 15 | ||||||||||||
Trade names | 4 | ||||||||||||
In accordance with ASC Topic 805, Business Combinations, the liability for contingent consideration is reflected at fair value and adjusted each reporting period with the change in fair value recognized in earnings. During 2014, the fair value of the contingent consideration related to the Equator acquisition was reduced by $37.9 million with a corresponding increase in earnings based on management’s revised estimates that expected earnings of Equator will be lower than projected at the time of acquisition. The reduction in fair value was recorded in 2014 and is reflected as a reduction of selling, general and administrative expenses in the consolidated statements of operations. | |||||||||||||
As a result of the decline in fair value of the Equator Earn Out, management evaluated and determined that Equator goodwill should be tested for impairment. Consequently, we initiated a quantitative two-step goodwill impairment test by comparing the carrying value of the net assets of Equator to its fair value based on a discounted cash flow analysis. In 2014, based on our goodwill assessment, we determined that the fair value of Equator was less than its carrying value and goodwill was impaired. Consequently, we recorded an impairment loss of $37.5 million, which is reflected as a component of selling, general and administrative expenses in the consolidated statements of operations (see Note 18). | |||||||||||||
The following table presents the impact of the change in the fair value of the Equator Earn Out and Equator goodwill impairment for the year ended December 31, 2014, which are included in selling, general and administrative expenses in the consolidated statements of operations: | |||||||||||||
(in thousands) | |||||||||||||
Change in the fair value of Equator Earn Out | $ | (37,924 | ) | ||||||||||
Goodwill impairment | 37,473 | ||||||||||||
$ | (451 | ) | |||||||||||
The following tables present the unaudited pro forma consolidated results of operations for the years ended December 31, 2013 and 2012 as if the Homeward fee-based business, ResCap fee-based business and Equator transactions had occurred at the beginning of the periods presented. | |||||||||||||
Year ended | |||||||||||||
31-Dec-13 | |||||||||||||
(in thousands, except per share amounts) | As reported | Pro forma | |||||||||||
Revenue | $ | 768,357 | $ | 854,098 | |||||||||
Net income attributable to Altisource | 129,973 | 132,907 | |||||||||||
Earnings per share — diluted | 5.19 | 5.31 | |||||||||||
Year ended | |||||||||||||
31-Dec-12 | |||||||||||||
(in thousands, except per share amounts) | As reported | Pro forma | |||||||||||
Revenue | $ | 568,360 | $ | 781,834 | |||||||||
Net income attributable to Altisource | 110,627 | 129,229 | |||||||||||
Earnings per share — diluted | 4.43 | 5.18 | |||||||||||
The unaudited pro forma information presents the combined operating results of Altisource and the Homeward fee-based business, ResCap fee-based business and Equator. The Homeward fee-based business, ResCap fee-based business and Equator operating results were derived from their historical financial statements for the most comparable periods available. The results prior to the acquisition dates have been adjusted to include the pro forma impact of the adjustment of amortization of the acquired intangible assets based on the purchase price allocations, the adjustment of interest expense reflecting the portion of our senior secured term loan used in the Homeward fee-based business, ResCap fee-based business and Equator transactions and to reflect the impact of income taxes on the pro forma adjustments utilizing Altisource’s effective income tax rate. | |||||||||||||
The unaudited pro forma results are presented for illustrative purposes only and do not reflect additional revenue opportunities, the realization of any potential cost savings and any related integration costs. Certain revenue opportunities and cost savings may result from the transactions and the conversion to the Altisource model; however, there can be no assurance that these revenue opportunities and cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the transactions occurred as of the beginning of the period presented, nor is the pro forma data intended to be a projection of results that may be obtained in the future. | |||||||||||||
Mortgage Builder Acquisition | |||||||||||||
On September 12, 2014, we acquired certain assets and assumed certain liabilities of Mortgage Builder pursuant to a Purchase and Sale Agreement dated July 18, 2014 (the “Purchase and Sale Agreement”). Mortgage Builder is a provider of residential mortgage loan origination and servicing software systems. Pursuant to the terms of the Purchase and Sale Agreement, we paid $15.7 million at closing in cash (net of closing working capital adjustments). Additionally, the Purchase and Sale Agreement provides for the payment of up to $7.0 million in potential additional consideration (the “MB Earn Out”) based on Adjusted Revenue (as defined in the Purchase and Sale Agreement) in the three consecutive 12-month periods following closing. At closing, we estimated the fair value of the MB Earn Out to be $1.6 million, determined based on the present value of future estimated MB Earn Out payments. The Mortgage Builder acquisition is not material in relation to the Company’s results of operations or financial position. | |||||||||||||
The preliminary allocation of the purchase price is as follows: | |||||||||||||
(in thousands) | |||||||||||||
Cash | $ | 726 | |||||||||||
Accounts receivable, net | 1,120 | ||||||||||||
Prepaid expenses | 38 | ||||||||||||
Premises and equipment, net | 553 | ||||||||||||
Software | 1,509 | ||||||||||||
Trademarks and trade names | 209 | ||||||||||||
Customer relationship | 4,824 | ||||||||||||
Goodwill | 9,135 | ||||||||||||
18,114 | |||||||||||||
Accounts payable and accrued expenses | (881 | ) | |||||||||||
Purchase price | $ | 17,233 | |||||||||||
Owners.com Acquisition | |||||||||||||
On November 21, 2014, we acquired certain assets and assumed certain liabilities of Owners Advantage, LLC (“Owners.com”). Owners.com is a self-directed online real estate marketplace. We paid $19.8 million at closing in cash plus contingent consideration of up to an additional $7.0 million over two years (“Owners.com Earn Out”). At closing, we estimated the fair value of the Owners.com Earn Out to be $1.9 million determined based on the present value of future estimated Owners.com Earn Out payments. The Owners.com acquisition is not material in relation to the Company’s results of operations or financial position. | |||||||||||||
The preliminary allocation of the purchase price is as follows: | |||||||||||||
(in thousands) | |||||||||||||
Accounts receivable, net | $ | 41 | |||||||||||
Prepaid expenses | 32 | ||||||||||||
Software | 501 | ||||||||||||
Trademarks and trade names | 1,431 | ||||||||||||
Goodwill | 19,775 | ||||||||||||
21,780 | |||||||||||||
Accounts payable | (41 | ) | |||||||||||
Purchase price | $ | 21,739 | |||||||||||
FAIR_VALUE_Notes
FAIR VALUE (Notes) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE | ||||||||||||||||||||||||||||||||
Fair Value Measurements on a Recurring Basis | |||||||||||||||||||||||||||||||||
The Company had no assets carried at fair value and its liabilities carried at fair value consist of the acquisition related contingent consideration as of December 31, 2014 and 2013. The liabilities for acquisition related contingent consideration were recorded in connection with the acquisitions of Equator in 2013 and Mortgage Builder and Owners.com in 2014. The fair values of the liabilities for acquisition related contingent consideration were $11.6 million and $46.0 million as of December 31, 2014 and 2013, respectively. We measured the liabilities for acquisition related contingent consideration using Level 3 inputs as they are determined based on the present value of future estimated payments, which included sensitivities pertaining to discount rates and financial projections. | |||||||||||||||||||||||||||||||||
For the year ended December 31, 2014, the Company recorded acquisition related contingent consideration in connection with the acquisitions of Mortgage Builder and Owners.com of $1.9 million and $1.6 million, respectively (see Note 5). Additionally, the Company recorded a change in the fair value of the Equator acquisition related contingent consideration of $37.9 million (see Note 5), which is reflected as a reduction in selling, general and administrative expenses in the consolidated statements of operations. | |||||||||||||||||||||||||||||||||
For the year ended December 31, 2013, the Company recorded acquisition related contingent consideration of $46.0 million related to the acquisition of Equator. There were no gains or losses from the valuation of this contingent consideration during the year ended December 31, 2013. | |||||||||||||||||||||||||||||||||
There were no transfers in or out of the Level 3 fair value hierarchy for the years ended December 31, 2014 and 2013. There were no comparative amounts in 2012. | |||||||||||||||||||||||||||||||||
Fair Value Measurements on a Nonrecurring Basis | |||||||||||||||||||||||||||||||||
The Company recorded a $37.5 million impairment of its goodwill balance during the year ended December 31, 2014 based on a fair value measurement. The goodwill impairment charge is included in selling, general and administrative expenses in the consolidated statements of operations. This fair value measurement was based on inputs classified as Level 3 in the valuation hierarchy. See Note 5. | |||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||||||||||
The following table presents the carrying amount and estimated fair value of financial instruments held by the Company at December 31, 2014 and 2013 that are not carried at fair value. The fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP: | |||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 161,361 | $ | 161,361 | $ | — | $ | — | $ | 130,324 | $ | 130,324 | $ | — | $ | — | |||||||||||||||||
Restricted cash | 3,022 | 3,022 | — | — | 1,620 | 1,620 | — | — | |||||||||||||||||||||||||
Long-term debt | 591,543 | — | 467,319 | — | 396,503 | — | 396,503 | — | |||||||||||||||||||||||||
Our financial assets and liabilities primarily include cash and cash equivalents, restricted cash and long-term debt. Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair value due to the short-term nature of these instruments. The fair value for cash and cash equivalents and restricted cash was measured using Level 1 inputs. The fair value of our long-term debt as of December 31, 2014 is based on quoted market prices. However, we do not believe that there is an active market for our debt, based on the frequency of trading; therefore, the quoted prices are considered Level 2 inputs. Our prior year long-term debt was refinanced on December 9, 2013 (see Note 14), and therefore, represents fair value at December 31, 2013. |
ACCOUNTS_RECEIVABLE_NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
ACCOUNTS RECEIVABLE, NET | ACCOUNTS RECEIVABLE, NET | ||||||||
Accounts receivable, net consists of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Billed | |||||||||
Non-related parties | $ | 37,576 | $ | 41,011 | |||||
Ocwen | 22,831 | 11,658 | |||||||
HLSS | 86 | 83 | |||||||
AAMC | 129 | 1,347 | |||||||
Residential | 11,320 | 547 | |||||||
Other receivables | 1,590 | 1,643 | |||||||
73,532 | 56,289 | ||||||||
Unbilled | |||||||||
Non-related parties | 46,775 | 44,102 | |||||||
Ocwen | 14,551 | 10,027 | |||||||
134,858 | 110,418 | ||||||||
Less: allowance for doubtful accounts | (22,675 | ) | (5,631 | ) | |||||
Total | $ | 112,183 | $ | 104,787 | |||||
(1) December 31, 2013 accounts receivable has been revised to reflect a purchase accounting measurement period adjustment related to the Equator acquisition. See Note 5. | |||||||||
Unbilled receivables consist primarily of asset management and default management services for which we recognize revenues over the service delivery period but bill following completion of the service. We also include in unbilled receivables amounts that are earned during a month and billed in the following month. | |||||||||
Bad debt expense amounted to $16.3 million, $2.5 million and $3.0 million for years ended December 31, 2014, 2013 and 2012, respectively, and is included in selling, general and administrative expenses in the consolidated statements of operations. Bad debt expense increased during 2014 driven primarily from the default management services business. A change in our customers’ business model and fourth quarter 2014 discussions with those customers led us to believe that a portion of the accounts receivable balance is no longer collectible. |
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||||
Prepaid expenses and other current assets consist of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Maintenance agreements, current portion | $ | 6,367 | $ | 4,600 | |||||
Income taxes receivable | 5,258 | 1,645 | |||||||
Prepaid expenses | 6,989 | 3,672 | |||||||
Other current assets | 4,953 | 1,079 | |||||||
Total | $ | 23,567 | $ | 10,996 | |||||
(1) December 31, 2013 prepaid expenses and other current assets have been revised to reflect a purchase accounting measurement period adjustment related to the Equator acquisition. See Note 5. |
PREMISES_AND_EQUIPMENT_NET
PREMISES AND EQUIPMENT, NET | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
PREMISES AND EQUIPMENT, NET | PREMISES AND EQUIPMENT, NET | ||||||||
Premises and equipment, net, which include amounts recorded under capital leases, consists of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Computer hardware and software | $ | 140,799 | $ | 103,400 | |||||
Office equipment and other | 36,032 | 28,057 | |||||||
Furniture and fixtures | 12,231 | 8,391 | |||||||
Leasehold improvements | 34,069 | 17,574 | |||||||
223,131 | 157,422 | ||||||||
Less: accumulated depreciation and amortization | (95,372 | ) | (70,170 | ) | |||||
Total | $ | 127,759 | $ | 87,252 | |||||
Depreciation and amortization expense, inclusive of capital leases, amounted to $29.0 million, $19.1 million and $12.8 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the consolidated statements of operations. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET | ||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||
Goodwill primarily relates to the acquisitions of Equator, Owners.com and Mortgage Builder, discussed in Note 5, Springhouse, LLC and Tracmail acquired in 2011 and MPA acquired in 2010. Changes in goodwill during the years ended December 31, 2014 and 2013 are summarized below: | |||||||||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Total | |||||||||||||||||||||||
Services | Services | Services | |||||||||||||||||||||||||
Balance, January 1, 2013 | $ | 10,919 | $ | 2,378 | $ | 1,618 | $ | 14,915 | |||||||||||||||||||
Acquisition of Equator | — | — | 82,460 | 82,460 | |||||||||||||||||||||||
Acquisition of Homeward(1) | 2,039 | — | — | 2,039 | |||||||||||||||||||||||
Balance, December 31, 2013 | 12,958 | 2,378 | 84,078 | 99,414 | |||||||||||||||||||||||
Acquisition of Mortgage Builder | — | — | 9,135 | 9,135 | |||||||||||||||||||||||
Acquisition of Owners.com | 19,775 | — | — | 19,775 | |||||||||||||||||||||||
Impairment of Equator goodwill(2) | — | — | (37,473 | ) | (37,473 | ) | |||||||||||||||||||||
Balance, December 31, 2014 | $ | 32,733 | $ | 2,378 | $ | 55,740 | $ | 90,851 | |||||||||||||||||||
(1) December 31, 2013 goodwill has been revised to reflect a purchase accounting measurement period adjustment related to the | |||||||||||||||||||||||||||
Homeward acquisition. See Note 5. | |||||||||||||||||||||||||||
(2) See Note 5 for a discussion of the Equator goodwill impairment. | |||||||||||||||||||||||||||
Intangible Assets, Net | |||||||||||||||||||||||||||
Intangible assets relate to our acquisitions of the Homeward and ResCap fee-based businesses, Equator, Mortgage Builder, Owners.com, MPA and Nationwide Credit, Inc. (“NCI”). No impairment charges were taken during the periods presented. | |||||||||||||||||||||||||||
Intangible assets, net consist of the following as of December 31, 2014 and 2013: | |||||||||||||||||||||||||||
Weighted | Gross carrying amount | Accumulated amortization | Net book value | ||||||||||||||||||||||||
average | |||||||||||||||||||||||||||
estimated | |||||||||||||||||||||||||||
(in thousands) | useful life (in years) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Definite lived intangible assets: | |||||||||||||||||||||||||||
Trademarks and trade names | 13 | $ | 13,889 | $ | 12,249 | $ | (5,016 | ) | $ | (4,534 | ) | $ | 8,873 | $ | 7,715 | ||||||||||||
Customer related intangible assets | 10 | 289,308 | 284,484 | (79,606 | ) | (44,208 | ) | 209,702 | 240,276 | ||||||||||||||||||
Operating agreement | 20 | 35,000 | 35,000 | (8,604 | ) | (6,854 | ) | 26,396 | 28,146 | ||||||||||||||||||
Non-compete agreement | 4 | — | 1,300 | — | (1,275 | ) | — | 25 | |||||||||||||||||||
Intellectual property | 10 | 300 | — | (25 | ) | — | 275 | — | |||||||||||||||||||
Total | $ | 338,497 | $ | 333,033 | $ | (93,251 | ) | $ | (56,871 | ) | $ | 245,246 | $ | 276,162 | |||||||||||||
Amortization expense for definite lived intangible assets was $37.7 million, $28.2 million and $5.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. Expected annual definite lived intangible asset amortization for 2015 through 2019 is $39.4 million, $34.2 million, $30.0 million, $26.1 million and $23.0 million, respectively. |
INVESTMENT_IN_EQUITY_AFFILIATE
INVESTMENT IN EQUITY AFFILIATE | 12 Months Ended |
Dec. 31, 2014 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN EQUITY AFFILIATE | INVESTMENT IN EQUITY AFFILIATE |
Correspondent One purchased closed conforming residential mortgages from approved mortgage bankers. Prior to the sale of our interest in Correspondent One to Ocwen on March 31, 2013 (see Note 4), we had significant influence over the general operations of Correspondent One consistent with our 49% ownership level, and therefore, accounted for our investment under the equity method. On March 31, 2013, we sold our 49% interest in Correspondent One to Ocwen for $12.6 million. | |
Our net loss on this investment using the equity method was $0.2 million and $1.2 million for the years ended December 31, 2013 and 2012, respectively (no comparative amount for 2014). |
OTHER_ASSETS
OTHER ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
OTHER ASSETS | OTHER ASSETS | ||||||||
Other assets consist of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Security deposits, net | $ | 7,277 | $ | 7,314 | |||||
Debt issuance costs, net | 8,099 | 6,687 | |||||||
Maintenance agreements, non-current portion | 3,324 | 1,465 | |||||||
Restricted cash | 3,022 | 1,620 | |||||||
Other | 545 | 572 | |||||||
Total | $ | 22,267 | $ | 17,658 | |||||
(1) December 31, 2013 security deposits, net and other assets have been revised to reflect a purchase accounting measurement period adjustment related to the Equator acquisition. See Note 5. | |||||||||
Debt issuance costs of $2.6 million and $3.2 million were capitalized for the years ended December 31, 2014 and 2013, respectively, in connection with issuing and refinancing our long-term debt (see Note 14). |
ACCOUNTS_PAYABLE_ACCRUED_EXPEN
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||||
Accounts payable and accrued expenses consist of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Accounts payable | $ | 22,880 | $ | 15,171 | |||||
Accrued expenses - general | 25,500 | 20,945 | |||||||
Accrued salaries and benefits | 44,150 | 30,011 | |||||||
Accrued expenses - Ocwen | 6,193 | — | |||||||
Income taxes payable | 7,643 | 11,211 | |||||||
Payable to Ocwen | 5,400 | 7,361 | |||||||
Payable to AAMC | — | 7 | |||||||
Total | $ | 111,766 | $ | 84,706 | |||||
(1) December 31, 2013 payables have been revised to reflect purchase accounting measurement period adjustments related to the Homeward and Equator acquisitions. See Note 5. | |||||||||
Other current liabilities consist of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Book overdrafts | $ | 4,788 | $ | 4,232 | |||||
Other | 8,439 | 5,899 | |||||||
Total | $ | 13,227 | $ | 10,131 | |||||
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
LONG-TERM DEBT | LONG-TERM DEBT | ||||||||
Long-term debt consists of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Senior secured term loan | $ | 591,543 | $ | 396,503 | |||||
Less: unamortized discount, net | (2,929 | ) | (1,247 | ) | |||||
Net long-term debt | 588,614 | 395,256 | |||||||
Less: current portion | (5,945 | ) | (3,975 | ) | |||||
Long-term debt, less current portion | $ | 582,669 | $ | 391,281 | |||||
On November 27, 2012, Altisource Solutions S.à r.l., a wholly-owned subsidiary of the Company, entered into a senior secured term loan agreement, as subsequently amended, with Bank of America, N.A., as administrative agent, and certain lenders, pursuant to which we borrowed $200.0 million. The senior secured term loan was issued with an original issue discount of $2.0 million, resulting in net proceeds of $198.0 million, with the Company and certain wholly-owned subsidiaries acting as guarantors (collectively, the “Guarantors”). | |||||||||
On May 7, 2013, we amended the senior secured term loan agreement to increase the principal amount of the senior secured term loan by $200.0 million (the “Incremental Term Loan”), which was issued with a $1.0 million original issue premium, resulting in gross proceeds to the Company of $201.0 million. Additionally, the Incremental Term Loan amended the senior secured term loan agreement to, among other changes, provide for an additional $200.0 million incremental term loan facility accordion and increase the maximum amount of Restricted Junior Payments (as defined in the senior secured term loan agreement) that may be made by us, including increasing the amount of Company share repurchases permitted. | |||||||||
On December 9, 2013, we entered into an Amendment No. 2 (“Second Amendment”) to the senior secured term loan agreement in which we incurred indebtedness in the form of Refinancing Debt (as defined in the senior secured term loan agreement), the proceeds of which were used to refinance, in full, the $397.5 million of term loans outstanding under the senior secured term loan | |||||||||
agreement immediately prior to the effectiveness of the Second Amendment. The Refinancing Debt bears interest at lower rates and has a maturity date approximately one year later than the prior term loans. The Second Amendment further modified the senior secured term loan agreement to, among other changes, increase the maximum permitted amount of Restricted Junior Payments, including share repurchases by the Company. | |||||||||
On August 1, 2014, we entered into Amendment No. 3 (“Third Amendment”) to the senior secured term loan agreement to increase the principal amount of the term loan under the senior secured term loan agreement by $200.0 million, which was issued with a $2.0 million original issue discount, resulting in gross proceeds to the Company of $198.0 million. Additionally, the Third Amendment modified the senior secured term loan agreement to, among other changes, to re-establish the $200.0 million incremental term loan facility accordion and increase the maximum amount of permitted Restricted Junior Payments, including share repurchases, by $200.0 million. | |||||||||
After giving effect to the Third Amendment, the Refinancing Debt must be repaid in equal consecutive quarterly principal installments of $1.5 million, which commenced on September 30, 2014, with the balance due at maturity. All amounts outstanding under the senior secured term loan agreement will become due on the earlier of (i) December 9, 2020, being the seventh anniversary of the closing date of the Second Amendment, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the senior secured term loan agreement) upon the occurrence of any event of default under the senior secured term loan agreement. | |||||||||
In addition to the scheduled principal payments, the Refinancing Debt is (with certain exceptions) subject to mandatory prepayment upon issuances of debt, casualty and condemnation events and sales of assets, as well as from a percentage of excess cash flow (as defined in the senior secured term loan agreement) if the leverage ratio (as defined in the senior secured term loan agreement) is greater than 3.00 to 1.00. No mandatory prepayments were owed for the year ended December 31, 2014. | |||||||||
All of the term loans outstanding under the senior secured term loan bear interest at rates based upon, at our option, the Adjusted Eurodollar Rate or the Base Rate (each as defined in the senior secured term loan agreement). Adjusted Eurodollar Rate loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Adjusted Eurodollar Rate for the applicable interest period and (y) 1.00% plus (ii) a 3.50% margin. Base Rate loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) a 2.50% margin. The interest rate at December 31, 2014 was 4.50%. | |||||||||
Payments under the senior secured term loan agreement are guaranteed by the Guarantors and are secured by a pledge of all equity interests of certain subsidiaries as well as a lien on substantially all of the assets of Altisource Solutions S.à r.l. and the Guarantors, subject to certain exceptions. | |||||||||
The senior secured term loan agreement includes covenants that restrict or limit, among other things, our ability to: create liens and encumbrances; incur additional indebtedness; sell, transfer or dispose of assets; make Restricted Junior Payments including share repurchases; change lines of business; amend material debt agreements or other material contracts; engage in certain transactions with affiliates; enter into sale/leaseback transactions; grant negative pledges or agree to such other restrictions relating to subsidiary dividends and distributions; make changes to its fiscal year and engage in mergers and consolidations. | |||||||||
The senior secured term loan agreement contains certain events of default, including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the senior secured term loan agreement within five days of becoming due, (ii) material incorrectness of representations and warranties when made, (iii) breach of covenants, (iv) failure to pay principal or interest on any other debt that equals or exceeds $40.0 million when due, (v) default on any other debt that equals or exceeds $40.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (vi) occurrence of a Change of Control (as defined in the senior secured term loan agreement), (vii) bankruptcy and insolvency events (as defined in the senior secured term loan agreement), (viii) entry by a court of one or more judgments against us (as defined in the senior secured term loan agreement) in an amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (ix) the occurrence of certain ERISA events and (x) the failure of certain Loan Documents (as defined in the senior secured term loan agreement) to be in full force and effect. If any event of default occurs and is not cured within applicable grace periods set forth in the senior secured term loan agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. | |||||||||
At December 31, 2014, debt issuance costs were $8.1 million, net of $2.2 million of accumulated amortization. At December 31, 2013, debt issuance costs were $6.7 million, net of $1.0 million of accumulated amortization. Debt issuance costs are included in other assets in the accompanying consolidated balance sheets. | |||||||||
Interest expense on the term loans, including amortization of debt issuance costs and the net debt discount, totaled $23.4 million, $20.3 million and $1.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||
Maturities of our long-term debt are as follows: | |||||||||
(in thousands) | |||||||||
2015 | $ | 5,945 | |||||||
2016 | 5,945 | ||||||||
2017 | 5,945 | ||||||||
2018 | 5,945 | ||||||||
2019 | 5,945 | ||||||||
Thereafter | 561,818 | ||||||||
$ | 591,543 | ||||||||
OTHER_NONCURRENT_LIABILITIES
OTHER NON-CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Liabilities Disclosure [Abstract] | |||||||||
OTHER NON-CURRENT LIABILITIES | OTHER NON-CURRENT LIABILITIES | ||||||||
Other non-current liabilities consist of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Acquisition related contingent consideration | $ | 11,616 | $ | 42,946 | |||||
Other non-current liabilities | 9,032 | 2,530 | |||||||
Total | $ | 20,648 | $ | 45,476 | |||||
SHAREHOLDERS_EQUITY_AND_SHAREB
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION | |||||||||||||||||||
Common Stock | ||||||||||||||||||||
At December 31, 2014, we had 25.4 million shares authorized and issued, and 20.3 million shares of common stock outstanding. As of December 31, 2013, the Board of Directors had the power to issue shares of authorized but unissued common stock without further shareholder action, subject to the requirements of applicable laws and stock exchanges, and we had 100.0 million shares authorized, 25.4 million shares issued and 22.6 million shares outstanding. In 2014, this authorization to the Board of Directors expired. The holders of shares of Altisource common stock are entitled to one vote for each share on all matters voted on by shareholders, and the holders of such shares will possess all voting power. | ||||||||||||||||||||
Equity Incentive Plan | ||||||||||||||||||||
Our 2009 Equity Incentive Plan (the “Plan”) provides for various types of equity awards, including stock options, stock appreciation rights, stock purchase rights, restricted shares and other awards, or a combination of any of the above. Under the Plan, we may grant up to 6.7 million Altisource share-based awards to officers, directors, key employees and to employees of our affiliates. As of December 31, 2014, 2.5 million share-based awards were available for future grant under the Plan. Expired and forfeited awards are available for reissuance. Vesting and exercise of share-based awards are generally contingent on continued employment. | ||||||||||||||||||||
Stock Repurchase Plan | ||||||||||||||||||||
On February 28, 2014, our shareholders approved a new stock repurchase program, which replaced the previous stock repurchase program. Under the new program, we are authorized to purchase up to 3.4 million shares of our common stock, based on a limit of 15% of the outstanding shares of common stock on the date of approval, in the open market, at a minimum price of $1.00 per share and a maximum price of $500.00 per share. This is in addition to amounts previously purchased under the prior programs. From authorization of the previous programs through December 31, 2014, we have purchased approximately 6.2 million shares of our common stock in the open market at an average price of $79.16 per share. We purchased 2.5 million shares of common stock at an average price of $103.67 per share during the year ended December 31, 2014 and 1.2 million shares at an average price of $116.99 per share during the year ended December 31, 2013. As of December 31, 2014, approximately 1.1 million shares of common stock remain available for repurchase under the new program. Our senior secured term loan limits the amount we can spend on share repurchases in any year and may prevent repurchases in certain circumstances. As of December 31, 2014, approximately $225 million was available to repurchase our common stock under our senior secured term loan. | ||||||||||||||||||||
Share-Based Compensation | ||||||||||||||||||||
We issue share-based awards in the form of stock options and certain other equity-based awards for certain employees and officers. We recorded share-based compensation expense of $2.2 million, $2.4 million and $3.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||
Outstanding share-based compensation currently consists primarily of stock option grants that are a combination of service-based and market-based options. | ||||||||||||||||||||
Service-Based Options. These options are granted at fair value on the date of grant. The options generally vest over four years with equal annual cliff-vesting and expire on the earlier of 10 years after the date of grant or following termination of service. A total of 0.8 million service-based awards were outstanding at December 31, 2014. | ||||||||||||||||||||
Market-Based Options. These option grants have two components, each of which vests only upon the achievement of certain criteria. The first component, which we refer to internally as “ordinary performance” grants, consists of two-thirds of the market-based grant and begins to vest if the stock price is at least double the exercise price, as long as the stock price realizes a compounded annual gain of at least 20% over the exercise price. The remaining third of the market-based options, which we refer to internally as “extraordinary performance” grants, begins to vest if the stock price is at least triple the exercise price, as long as the stock price realizes a compounded annual gain of at least 25% over the exercise price. The vesting schedule for all market-based awards is 25% upon achievement of the criteria and the remaining 75% in three equal annual installments. A total of 1.8 million market-based awards were outstanding at December 31, 2014. | ||||||||||||||||||||
The Company granted 0.1 million stock options (at a weighted average exercise price of $84.61 per share), less than 0.1 million stock options (at a weighted average exercise price $104.84 per share) and 0.3 million stock options (at a weighted average exercise price of $69.48 per share) during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||
The fair value of the service-based options was determined using the Black-Scholes option pricing model and a lattice (binomial) model was used to determine the fair value of the market-based options, using the following assumptions as of the grant date: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Black-Scholes | Binomial | Black-Scholes | Binomial | Black-Scholes | Binomial | |||||||||||||||
Risk-free interest rate (%) | 1.80 – 1.91 | 0.01 – 2.49 | 1.02 – 1.81 | 0.01 – 2.71 | 0.87 – 1.17 | 0.08 – 2.04 | ||||||||||||||
Expected stock price volatility (%) | 37.57 – 45.15 | 38.38 – 45.15 | 36.35 – 36.76 | 36.40 – 36.80 | 34.22 – 34.65 | 34.20 – 34.60 | ||||||||||||||
Expected dividend yield | — | — | — | — | — | — | ||||||||||||||
Expected option life | 6.25 | — | 6.25 | — | 6.25 | — | ||||||||||||||
(in years) | ||||||||||||||||||||
Contractual life (in years) | — | 14 | — | 14 | — | 14 | ||||||||||||||
Fair value | $15.54 – $41.79 | $12.66 – $33.62 | $31.33 – $49.14 | $16.12 – $41.72 | $19.25 – $29.80 | $9.98 – $22.76 | ||||||||||||||
The following table summarizes the weighted average fair value of stock options granted, the total intrinsic value of stock options exercised and the grant date fair value of stock options vested during the years ended December 31: | ||||||||||||||||||||
(in thousands, except per share amounts) | 2014 | 2013 | 2012 | |||||||||||||||||
Weighted average fair value at grant date per share | $ | 26.92 | $ | 32.59 | $ | 20.77 | ||||||||||||||
Intrinsic value of options exercised | 10,250 | 40,761 | 17,598 | |||||||||||||||||
Grant date fair value of options vested during the period | 2,641 | 3,156 | 2,790 | |||||||||||||||||
Share-based compensation expense is recorded net of estimated forfeiture rates ranging from 1% to 10%. | ||||||||||||||||||||
As of December 31, 2014, estimated unrecognized compensation costs related to share-based payments amounted to $3.4 million, which we expect to recognize over a weighted average remaining requisite service period of approximately 3.3 years. | ||||||||||||||||||||
The following table summarizes the activity related to our stock options: | ||||||||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||||||
options | average | average | intrinsic value | |||||||||||||||||
exercise | contractual | (in thousands) | ||||||||||||||||||
price | term | |||||||||||||||||||
(in years) | ||||||||||||||||||||
Outstanding at December 31, 2013 | 2,589,343 | $ | 18.33 | 5.2 | $ | 363,293 | ||||||||||||||
Granted | 137,000 | 84.61 | ||||||||||||||||||
Exercised | (108,450 | ) | 24.82 | |||||||||||||||||
Forfeited | (16,001 | ) | 73.14 | |||||||||||||||||
Outstanding at December 31, 2014 | 2,601,892 | 21.21 | 4.44 | 47,805 | ||||||||||||||||
Exercisable at December 31, 2014 | 2,279,555 | 13.82 | 3.91 | 47,430 | ||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2014: | ||||||||||||||||||||
Options outstanding | Options exercisable | |||||||||||||||||||
Exercise price range | Number | Weighted | Weighted | Number | Weighted | Weighted | ||||||||||||||
average | average | average | average | |||||||||||||||||
remaining | exercise | remaining | exercise | |||||||||||||||||
contractual | price | contractual | price | |||||||||||||||||
life | life | |||||||||||||||||||
$0.00 — $10.00(a) | 1,647,654 | 3.49 | $ | 9.14 | 1,647,654 | 3.49 | $ | 9.14 | ||||||||||||
$10.01 — $20.00(a) | 97,737 | 1.8 | 12.45 | 97,737 | 1.8 | 12.45 | ||||||||||||||
$20.01 — $30.00(a) | 477,061 | 5.31 | 23.18 | 443,624 | 5.31 | 23.19 | ||||||||||||||
$30.01 — $40.00(a) | 48,309 | 6.27 | 33.31 | 28,319 | 6.37 | 33.1 | ||||||||||||||
$40.01 — $50.00(a) | 15,000 | 9.94 | 49.06 | — | — | — | ||||||||||||||
$50.01 — $60.00(a) | 10,000 | 7.37 | 53 | 6,250 | 7.37 | 53 | ||||||||||||||
$60.01 — $70.00(a) | 122,250 | 7.19 | 60.68 | 48,001 | 7.19 | 60.7 | ||||||||||||||
$70.01 — $80.00(a) | 25,600 | 9.86 | 72.78 | — | — | — | ||||||||||||||
$80.01 — $90.00(a) | 40,000 | 9.04 | 85.63 | 4,688 | 8.12 | 83.86 | ||||||||||||||
$90.01 — $100.00(a) | 73,281 | 9.31 | 94.32 | 1,407 | 8.16 | 93.88 | ||||||||||||||
$100.01 — $110.00(a) | 15,000 | 9.37 | 105.11 | — | — | — | ||||||||||||||
$120.01 — $130.00(a) | 30,000 | 8.62 | 125.98 | 1,875 | 8.62 | 125.98 | ||||||||||||||
2,601,892 | 2,279,555 | |||||||||||||||||||
(a) These options contain market-based components as described above. All other options are time-based awards. | ||||||||||||||||||||
The following table summarizes the market prices necessary in order for the market performance options to begin to vest: | ||||||||||||||||||||
Market-based options | ||||||||||||||||||||
Vesting price | Ordinary | Extraordinary | ||||||||||||||||||
performance | performance | |||||||||||||||||||
$170.01 — $180.00 | 12,500 | — | ||||||||||||||||||
$180.01 — $190.00 | 12,500 | 40,875 | ||||||||||||||||||
Over $190.00 | 37,500 | 37,650 | ||||||||||||||||||
Total | 62,500 | 78,525 | ||||||||||||||||||
Weighted average share price | $ | 100.37 | $ | 78.56 | ||||||||||||||||
COST_OF_REVENUE
COST OF REVENUE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Cost of Revenue [Abstract] | |||||||||||||
COST OF REVENUE | COST OF REVENUE | ||||||||||||
Cost of revenue principally includes payroll and employee benefits associated with personnel employed in customer service and operations roles, fees paid to external providers related to the provision of services, reimbursable expenses, technology and telecommunications expenses as well as depreciation and amortization of operating assets. The components of cost of revenue were as follows for the years ended December 31: | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Compensation and benefits | $ | 255,889 | $ | 156,812 | $ | 113,145 | |||||||
Outside fees and services | 243,325 | 193,233 | 123,338 | ||||||||||
Reimbursable expenses | 137,634 | 102,478 | 96,147 | ||||||||||
Technology and telecommunications | 48,834 | 25,534 | 23,404 | ||||||||||
Depreciation and amortization | 21,498 | 14,423 | 10,167 | ||||||||||
Total | $ | 707,180 | $ | 492,480 | $ | 366,201 | |||||||
SELLING_GENERAL_AND_ADMINISTRA
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Selling, General and Administrative Expense [Abstract] | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | ||||||||||||
Selling, general and administrative expenses include payroll for personnel employed in executive, finance, legal, compliance, human resources, vendor management, risk and operational effectiveness roles. This category also includes occupancy costs, professional fees and depreciation and amortization on non-operating assets. The components of selling, general and administrative expenses were as follows for the years ended December 31: | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Compensation and benefits | $ | 45,098 | $ | 27,864 | $ | 21,166 | |||||||
Professional services | 18,598 | 8,022 | 9,864 | ||||||||||
Occupancy related costs | 38,262 | 28,424 | 24,041 | ||||||||||
Amortization of intangible assets | 37,680 | 28,176 | 5,030 | ||||||||||
Depreciation and amortization | 7,548 | 4,633 | 2,609 | ||||||||||
Change in the fair value of Equator Earn Out | (37,924 | ) | — | — | |||||||||
Goodwill impairment | 37,473 | — | — | ||||||||||
Marketing costs | 24,130 | 5,028 | 2,500 | ||||||||||
Other | 30,417 | 11,663 | 9,502 | ||||||||||
Total | $ | 201,282 | $ | 113,810 | $ | 74,712 | |||||||
OTHER_INCOME_EXPENSE_NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET | ||||||||||||
Other income (expense), net consists of the following for the years ended December 31: | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Loss in equity affiliate, including impairment loss | $ | — | $ | (176 | ) | $ | (1,741 | ) | |||||
Interest income | 103 | 899 | 222 | ||||||||||
Other, net | 71 | (166 | ) | (69 | ) | ||||||||
Total | $ | 174 | $ | 557 | $ | (1,588 | ) | ||||||
Loss in equity affiliates primarily represents our proportional share of the losses in Correspondent One and impairment loss on the investment (see Note 11). |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
INCOME TAXES | INCOME TAXES | ||||||||||||
The components of income before income taxes and non-controlling interests consist of the following for the year ended December 31: | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Domestic - Luxembourg | $ | 124,181 | $ | 122,722 | $ | 107,498 | |||||||
Foreign - U.S. | 9,575 | 11,125 | 4,915 | ||||||||||
Foreign - Non-U.S. | 13,509 | 8,486 | 12,236 | ||||||||||
Total | $ | 147,265 | $ | 142,333 | $ | 124,649 | |||||||
The income tax provision consists of the following for the years ended December 31: | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Current: | |||||||||||||
Domestic - Luxembourg | $ | 4,415 | $ | 2,516 | $ | 2,841 | |||||||
Foreign - U.S. Federal | 75 | 6 | — | ||||||||||
Foreign - U.S. State | 476 | 403 | 353 | ||||||||||
Foreign - Non-U.S. | 4,046 | 3,600 | 2,552 | ||||||||||
$ | 9,012 | $ | 6,525 | $ | 5,746 | ||||||||
Deferred: | |||||||||||||
Domestic - Luxembourg | $ | — | $ | — | $ | 388 | |||||||
Foreign - U.S. Federal | 1,756 | 2,506 | 2,419 | ||||||||||
Foreign - U.S. State | (281 | ) | 84 | (23 | ) | ||||||||
Foreign - Non-U.S. | (309 | ) | (575 | ) | 208 | ||||||||
$ | 1,166 | $ | 2,015 | $ | 2,992 | ||||||||
Total | $ | 10,178 | $ | 8,540 | $ | 8,738 | |||||||
We received a tax ruling in June 2010 regarding the treatment of certain intangibles that exist for purposes of determining the Company’s taxable income, which expires in 2019 unless extended or renewed. This ruling does not have a material impact on our deferred tax assets or liabilities. Income tax computed by applying the Luxembourg statutory income tax rate of 29.22% differs from income tax computed at the effective tax rate primarily because of the effect of the tax ruling and differing tax rates in multiple jurisdictions. | |||||||||||||
We operate under tax holidays in certain geographies in India and the Philippines. The India tax holidays are effective through 2020, and may be extended if certain additional requirements are satisfied. The Philippines tax holiday is effective through 2016, and may also be extended. The tax holidays are conditional upon our meeting certain employment and investment thresholds. The impact of these tax holidays decreased foreign taxes by $0.9 million ($0.04 per diluted share), $0.2 million ($0.01 per diluted share) and $1.5 million ($0.06 per diluted share) for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
The Company accounts for certain income and expense items differently for financial purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences. | |||||||||||||
A summary of the tax effects of the temporary differences is as follows for the years ended December 31: | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Current deferred tax assets: | |||||||||||||
Allowance for doubtful accounts and other reserves | $ | 72 | $ | 43 | |||||||||
Accrued expenses | 5,165 | 3,183 | |||||||||||
Current deferred tax liabilities: | |||||||||||||
Prepaid expenses | (250 | ) | (389 | ) | |||||||||
Current deferred tax assets, net | $ | 4,987 | $ | 2,837 | |||||||||
Non-current deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 13,940 | $ | 12,439 | |||||||||
U.S. federal and state tax credits | 1,202 | — | |||||||||||
Non-U.S. deferred tax assets | 1,780 | 1,471 | |||||||||||
Share-based compensation | 856 | 784 | |||||||||||
Other | — | 7 | |||||||||||
Non-current deferred tax liabilities: | |||||||||||||
Intangible assets | (5,302 | ) | (6,035 | ) | |||||||||
Depreciation | (11,878 | ) | (4,855 | ) | |||||||||
Other | (177 | ) | — | ||||||||||
421 | 3,811 | ||||||||||||
Valuation allowance | (3,115 | ) | (3,189 | ) | |||||||||
Non-current deferred tax assets, net | $ | — | $ | 622 | |||||||||
Non-current deferred tax liabilities, net | $ | (2,694 | ) | $ | — | ||||||||
Net deferred tax assets | $ | 2,293 | $ | 3,459 | |||||||||
Total deferred tax assets | $ | 19,900 | $ | 14,738 | |||||||||
Total deferred tax liabilities | $ | (17,607 | ) | $ | (11,279 | ) | |||||||
A valuation allowance is provided when it is deemed more likely than not that some portion or all of a deferred tax asset will not be realized. In determining whether a valuation allowance is needed, we considered estimates of future taxable income, future reversals of temporary differences, the tax character of gains and losses, and the impact of tax planning strategies that can be implemented, if warranted. The net decrease in valuation allowance of $0.1 million during 2014 relates to an increase in state and foreign losses generated in the current year and a release of prior year valuation allowance related to certain state losses the Company believes will more likely than not be realized. | |||||||||||||
We have not provided Luxembourg deferred taxes on cumulative earnings of non-Luxembourg affiliates as we have chosen to indefinitely reinvest these earnings. The earnings reinvested as of December 31, 2014 were approximately $48.0 million, which if distributed would result in additional tax due totaling approximately $9.6 million. | |||||||||||||
The Company had a deferred tax asset of $13.9 million as of December 31, 2014 relating to the U.S. federal, state and foreign net operating losses compared to $12.4 million as of December 31, 2013. Of this amount, $1.8 million as of December 31, 2014 related to state net operating losses subject to a valuation allowance compared to $1.4 million as of December 31, 2013, and $1.7 million as of December 31, 2014 related to Luxembourg net operating losses subject to a valuation allowance compared to $1.8 million as of December 31, 2013. The Company has not recognized the U.S. federal net operating loss carryforwards of $13.6 million as of December 31, 2014 related to stock options exercised compared to $9.5 million as of December 31, 2013. If realized, the benefit would be an increase to additional paid-in capital. The gross amount of net operating losses available for carryover to future years is approximately $35.7 million as of December 31, 2014 compared to $32.6 million as of December 31, 2013. Of this amount, $12.2 million as of December 31, 2014 compared to $13.5 million as of December 31, 2013 relates to NCI for periods prior to our acquisition of NCI and is subject to Section 382 of the Internal Revenue Code (the “Code”) which limits their use to approximately $1.3 million per year. These losses are scheduled to expire between the years 2022 and 2029. | |||||||||||||
In addition, the Company had a deferred tax asset of $1.2 million as of December 31, 2014 relating to the U.S. federal and state tax credits (no comparative amount for 2013). The U.S. federal credit carryforward is scheduled to expire between 2032 and 2034. The state tax credit carryforwards are scheduled to expire between 2017 and 2024. | |||||||||||||
The distribution of the Company in connection with the separation from Ocwen during 2009 was intended to be a tax-free transaction under Section 355 of the Code. To the extent Ocwen does recognize tax under Section 355 of the Code, Altisource has agreed to indemnify Ocwen. In addition, we have agreed to indemnify Ocwen should the expected tax treatments not be upheld upon review or audit to the extent related to our operating results. The Company does not anticipate a material obligation under this indemnity. | |||||||||||||
The following table reconciles the income tax provision to the Luxembourg statutory income tax rate for the years ended December 31: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory tax rate | 29.22 | % | 29.22 | % | 28.8 | % | |||||||
Permanent difference related to Luxembourg intangible assets | (22.60 | ) | (23.59 | ) | (21.99 | ) | |||||||
Change in valuation allowance | (0.05 | ) | 0.76 | 0.16 | |||||||||
State tax expense | 0.03 | 0.24 | 0.17 | ||||||||||
Tax credits | (0.71 | ) | — | — | |||||||||
Uncertain taxes | 0.88 | — | — | ||||||||||
Other | 0.14 | (0.63 | ) | (0.13 | ) | ||||||||
Effective tax rate | 6.91 | % | 6 | % | 7.01 | % | |||||||
The Company follows ASC Topic 740 which clarifies the accounting and disclosure for uncertainty in tax positions. We analyzed our tax filing positions in all of the domestic and foreign tax jurisdictions where we are required to file income tax returns as well as for all open tax years in these jurisdictions. The Company has open tax years in the United States (2011 through 2013), India (2010 through 2014) and Luxembourg (2010 through 2013). | |||||||||||||
The following table reconciles the amount of unrecognized tax benefits for the year ended December 31, 2014 (no comparative amounts for 2013): | |||||||||||||
(in thousands) | 2014 | ||||||||||||
Amount of unrecognized tax benefits as of the beginning of the year | $ | — | |||||||||||
Increases as a result of tax positions taken in a prior period | 1,153 | ||||||||||||
Amount of unrecognized tax benefit as of the end of the year | $ | 1,153 | |||||||||||
The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate is $1.3 million as of December 31, 2014 (no comparative amount for 2013). The Company recognizes interest, if any, related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2014, the Company had recorded accrued interest and penalties related to unrecognized tax benefits of $0.1 million (no comparative amount for 2013). | |||||||||||||
Due to an expected settlement within the next twelve months, an estimated $1.3 million of unrecognized tax benefits may be recognized during that twelve month period. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE | ||||||||||||
Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the assumed conversion of all dilutive securities using the treasury stock method. | |||||||||||||
Basic and diluted EPS are calculated as follows for the years ended December 31: | |||||||||||||
(in thousands, except per share data) | 2014 | 2013 | 2012 | ||||||||||
Net income attributable to Altisource | $ | 134,484 | $ | 129,973 | $ | 110,627 | |||||||
Weighted average common shares outstanding, basic | 21,625 | 23,072 | 23,358 | ||||||||||
Dilutive effect of stock options | 2,009 | 1,981 | 1,604 | ||||||||||
Weighted average common shares outstanding, diluted | 23,634 | 25,053 | 24,962 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 6.22 | $ | 5.63 | $ | 4.74 | |||||||
Diluted | $ | 5.69 | $ | 5.19 | $ | 4.43 | |||||||
For each of the years ended December 31, 2014, 2013 and 2012, less than 0.1 million options that were anti-dilutive have been excluded from the computation of diluted EPS. These options were anti-dilutive because their exercise price was greater than the average market price of our common stock. Also excluded from the computation of diluted EPS are 0.1 million, 0.1 million and 0.3 million options for the years ended December 31, 2014, 2013 and 2012, respectively, granted for shares that are issuable upon the achievement of certain market and performance criteria related to our common stock price and an annualized rate of return to investors that have not yet been met. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS | COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS | ||||
Litigation | |||||
From time to time, we are involved in legal and administrative proceedings arising in the course of our business. We record a liability for these matters if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range. | |||||
On September 8, 2014, the West Palm Beach Firefighter’s Pension Fund filed a putative securities class action suit against Altisource and certain of its officers and directors in the United States District Court for the Southern District of Florida alleging violations of the Securities Exchange Act of 1934 and Rule 10b-5 with regard to disclosures concerning pricing and transactions with related parties that allegedly inflated Altisource share prices. The court subsequently appointed the Pension Fund of the International Union of Painters and Allied Trades District Council 35 and the Annuity Fund of the International Union of Painters and Allied Trades District Council 35 as Lead Plaintiffs. On January 30, 2015, Lead Plaintiffs filed an amended class action complaint which adds Ocwen Financial Corporation as a defendant, and seeks a determination that the action may be maintained as a class action on behalf of purchasers of the Company’s securities between April 25, 2013 and December 21, 2014 and an unspecified amount of damages. Altisource intends to vigorously defend this lawsuit. Altisource is unable to predict the outcome of this lawsuit or reasonably estimate the potential loss, if any, arising from the suit, given that motions to dismiss have not yet been filed or adjudicated, discovery has not commenced and significant legal and factual issues remain to be determined. | |||||
In addition to the matter referenced above, we are involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows. | |||||
Regulatory Matters | |||||
Our business is subject to regulation and oversight by federal, state and local governmental authorities. We periodically receive subpoenas, civil investigative demands or other requests for information from regulatory agencies in connection with their regulatory or investigative authority. We are currently responding to such inquiries from federal and state agencies relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries. | |||||
Ocwen Related Matters | |||||
Ocwen is our largest customer and 60% of our 2014 revenue was related party revenue from Ocwen. Additionally, 24% of our 2014 revenue was earned on the portfolios serviced by Ocwen, but is not considered related party revenue because a party other than Ocwen selects Altisource as the service provider. Ocwen has been and is subject to a number of pending federal and state regulatory investigations, inquiries and requests for information that have or could result in adverse regulatory actions against Ocwen. For example, as a result of various regulatory actions, Ocwen is (i) subject to an independent auditor’s review of compliance with California servicing laws and has agreed not to obtain any new servicing rights in California until the regulator is satisfied with future document requests, (ii) operating under the oversight of an on-site operations monitor imposed by New York Department of Financial Services (“NYDFS”), which is assessing the adequacy and effectiveness of Ocwen’s operations, including information technology systems, (iii) required to perform benchmarking pricing studies for transactions with related parties, which are subject to periodic review by the monitor imposed by the NYDFS and (iv) subject to requirements under an agreement with the Consumer Finance Protection Bureau and various states attorneys general and agencies that imposed specific servicing guidelines and oversight by an independent national monitor, who recently reported they were investigating the reliability of information Ocwen has provided. In addition to these matters, Ocwen continues to be subject to other regulatory investigations, inquiries and requests for information and pending legal proceedings, and Ocwen may become subject to future federal and state regulatory investigations, inquiries and requests for information, any of which could also result in adverse regulatory or other actions against Ocwen. | |||||
As a result of these various difficulties faced by Ocwen, its debt and servicer ratings have been downgraded. Further, certain bondholders of Ocwen-serviced residential mortgage-backed securities (“RMBS”) alleged that Ocwen, as servicer of certain mortgage-backed securities trusts, defaulted on these servicing agreements. | |||||
Ocwen relies, in part, on HLSS to finance its operations. For a significant portion of Ocwen-serviced non-government-sponsored enterprise (“non-GSE”) loans, HLSS owns (1) the rights to receive the servicing fees that Ocwen is entitled to receive and (2) associated servicing advances. As a result of certain of the foregoing matters, HLSS has received notices of default with respect to certain of its debt financing and has received demands from a shareholder that servicing be transferred away from Ocwen. | |||||
The foregoing may have significant and varied effects on Ocwen’s business and our continuing relationships with Ocwen. For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services (including information technology services), it may be required to seek changes to its existing pricing structure with related parties or otherwise, it may lose or sell some or all of its non-GSE servicing rights or subservicing arrangements or may lose one or more of its state servicing licenses. Additional regulatory actions may impose additional restrictions on or require changes in Ocwen’s business that would require it to sell assets or change its business operations. Further, Ocwen’s ability to finance its operations and repay maturing obligations rests in large part on its ability and the ability of HLSS to continue to borrow money, which also may be affected by any or all of the circumstances described above. Any or all of these effects could result in our eventual loss of Ocwen as a customer or a reduction in the volume of services they purchase from us or the loss of other customers. | |||||
If any of the following events occurred, Altisource’s revenue would be significantly lower and our results of operations would be materially adversely affected, including from the impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable: | |||||
• | Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services they purchase from us | ||||
• | Ocwen loses or sells a significant portion or all of its non-GSE servicing rights or subservicing arrangements | ||||
• | Ocwen loses its state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio | ||||
• | The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue | ||||
Management cannot predict the outcome of the Ocwen related matters or the impact they may have on Altisource. However, in the event these Ocwen related matters materially negatively impact Altisource, we believe the impact to Altisource would occur over an extended period of time and the variable nature of our cost structure allows us to realign our cost structure in line with remaining revenue. | |||||
In this regard, we have a plan that allows us to efficiently execute on this realignment. We believe that transfers of Ocwen’s servicing rights to a successor servicer(s) would take an extended period of time because of the approval required from many parties, including regulators, rating agencies, RMBS trustees, lenders and others. During this period of time, we believe we would continue to generate revenue from the services we provide to the portfolio. Additionally, we have several growth initiatives that focus on diversifying and growing our revenue and customer base. Our major growth initiatives include: | |||||
• | Attracting new clients to our comprehensive default related businesses | ||||
• | Growing our origination services and technology businesses | ||||
• | Expanding our innovative online real estate marketplaces | ||||
• | Growing our property management and renovation services businesses | ||||
We have an established sales and marketing strategy to support each of these initiatives. | |||||
Management believes our plans, together with current liquidity and cash flows from operations will be sufficient to meet working capital, capital expenditures, debt service and other cash needs for at least the next year. However, there can be no assurance that our plans would be successful or our operations would be profitable. | |||||
Leases | |||||
We lease certain premises and equipment under various operating lease agreements. Future minimum lease payments at December 31, 2014 under non-cancelable operating leases with an original term exceeding one year are as follows: | |||||
(in thousands) | Operating lease | ||||
obligations | |||||
2015 | $ | 17,924 | |||
2016 | 15,357 | ||||
2017 | 11,841 | ||||
2018 | 7,941 | ||||
2019 | 5,060 | ||||
Thereafter | 5,355 | ||||
$ | 63,478 | ||||
Total operating lease expense, net of sublease income, was $20.1 million, $12.8 million and $10.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. The operating leases generally relate to office locations and reflect customary lease terms which range from 1 to 10 years in duration. | |||||
In connection with the acquisition of Equator (see Note 5), we executed a standby letter of credit in the amount of $1.5 million related to an office lease, secured by a restricted cash balance. In addition, we executed standby letters of credit totaling $1.8 million for three other office leases. | |||||
Escrow and Trust Balances | |||||
We hold customers’ assets in escrow and trust accounts at various financial institutions pending completion of certain real estate activities. We also hold cash in trust accounts at various financial institutions where contractual obligations mandate maintaining dedicated bank accounts for Financial Services collections. These amounts are held in escrow and trust accounts for limited periods of time and are not included in the consolidated balance sheets. Amounts held in escrow and trust accounts were $62.5 million and $71.8 million at December 31, 2014 and 2013, respectively. |
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING | ||||||||||||||||||||
Our business segments are based upon our organizational structure, which focuses primarily on the services offered, and are consistent with the internal reporting used by our Chief Executive Officer (our Chief Operating Decision Maker) to evaluate operating performance and to assess the allocation of our resources. | |||||||||||||||||||||
We classify our businesses into three reportable segments. The Mortgage Services segment provides services that span the mortgage and real estate lifecycle and are typically outsourced by loan servicers, loan originators, investors and other sellers of single family homes. The Financial Services segment provides collection and customer relationship management services primarily to debt originators and servicers (e.g., credit card, auto lending, retail credit and mortgage) and the utility, insurance and hotel industries. The Technology Services segment principally consists of our REALSuite software applications, Equator’s software applications, Mortgage Builder’s software applications and our information technology infrastructure services. The REALSuite platform provides a fully integrated set of software applications and technologies that manage the end-to-end lifecycle for residential and commercial mortgage loan servicing including the automated management and payment of a distributed network of vendors. Equator’s software applications provide comprehensive, end-to-end workflow and transaction services to manage real estate and foreclosure related activities and purchase related services from vendors. Mortgage Builder provides mortgage origination and servicing software applications. In addition, Corporate Items and Eliminations include eliminations of transactions between the reportable segments, interest expense and costs related to corporate support functions including executive, finance, legal, compliance, human resources, vendor management, risk and operational effectiveness and marketing. | |||||||||||||||||||||
Financial information for our segments is as follows: | |||||||||||||||||||||
For the year ended December 31, 2014 | |||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Revenue | $ | 790,076 | $ | 98,499 | $ | 230,367 | $ | (40,026 | ) | $ | 1,078,916 | ||||||||||
Cost of revenue | 484,512 | 64,338 | 194,301 | (35,971 | ) | 707,180 | |||||||||||||||
Gross profit | 305,564 | 34,161 | 36,066 | (4,055 | ) | 371,736 | |||||||||||||||
Selling, general and administrative expenses | 94,678 | 18,791 | 31,950 | 55,863 | 201,282 | ||||||||||||||||
Income from operations | 210,886 | 15,370 | 4,116 | (59,918 | ) | 170,454 | |||||||||||||||
Other income (expense), net | 204 | 62 | (31 | ) | (23,424 | ) | (23,189 | ) | |||||||||||||
Income before income taxes and non-controlling interests | $ | 211,090 | $ | 15,432 | $ | 4,085 | $ | (83,342 | ) | $ | 147,265 | ||||||||||
For the year ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Revenue | $ | 596,152 | $ | 92,958 | $ | 103,891 | $ | (24,644 | ) | $ | 768,357 | ||||||||||
Cost of revenue | 374,713 | 55,328 | 84,538 | (22,099 | ) | 492,480 | |||||||||||||||
Gross profit | 221,439 | 37,630 | 19,353 | (2,545 | ) | 275,877 | |||||||||||||||
Selling, general and administrative expenses | 46,515 | 15,571 | 12,442 | 39,282 | 113,810 | ||||||||||||||||
Income from operations | 174,924 | 22,059 | 6,911 | (41,827 | ) | 162,067 | |||||||||||||||
Other income (expense), net | (136 | ) | (10 | ) | 7 | (19,595 | ) | (19,734 | ) | ||||||||||||
Income before income taxes and non-controlling interests | $ | 174,788 | $ | 22,049 | $ | 6,918 | $ | (61,422 | ) | $ | 142,333 | ||||||||||
For the year ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Revenue | $ | 452,796 | $ | 64,522 | $ | 74,189 | $ | (23,147 | ) | $ | 568,360 | ||||||||||
Cost of revenue | 285,586 | 46,737 | 54,634 | (20,756 | ) | 366,201 | |||||||||||||||
Gross profit | 167,210 | 17,785 | 19,555 | (2,391 | ) | 202,159 | |||||||||||||||
Selling, general and administrative expenses | 25,099 | 13,415 | 8,888 | 27,310 | 74,712 | ||||||||||||||||
Income from operations | 142,111 | 4,370 | 10,667 | (29,701 | ) | 127,447 | |||||||||||||||
Other income (expense), net | (1,713 | ) | (27 | ) | (25 | ) | (1,033 | ) | (2,798 | ) | |||||||||||
Income before income taxes and non-controlling interests | $ | 140,398 | $ | 4,343 | $ | 10,642 | $ | (30,734 | ) | $ | 124,649 | ||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Total assets: | |||||||||||||||||||||
31-Dec-14 | $ | 313,206 | $ | 56,096 | $ | 250,403 | $ | 168,516 | $ | 788,221 | |||||||||||
31-Dec-13 | 310,253 | 55,930 | 277,941 | 85,928 | 730,052 | ||||||||||||||||
Our services are provided to customers primarily located in the United States. Premises and equipment, net consist of the following, by country: | |||||||||||||||||||||
(in thousands) | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
United States | $ | 88,274 | $ | 63,615 | |||||||||||||||||
India | 27,082 | 16,404 | |||||||||||||||||||
Luxembourg | 9,059 | 3,217 | |||||||||||||||||||
Philippines | 3,344 | 4,016 | |||||||||||||||||||
Total | $ | 127,759 | $ | 87,252 | |||||||||||||||||
QUARTERLY_FINANCIAL_DATA_UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
The following tables contain selected unaudited statement of operations information for each quarter of 2014 and 2013. The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Our business is affected by seasonality. | |||||||||||||||||
2014 quarter ended (1)(2) | |||||||||||||||||
(in thousands, except per share data) | March 31, | June 30, | September 30, | December 31, | |||||||||||||
Revenue | $ | 239,269 | $ | 296,072 | $ | 287,688 | $ | 255,887 | |||||||||
Gross profit | 91,464 | 112,073 | 98,964 | 69,235 | |||||||||||||
Income (loss) before income taxes and | 43,201 | 58,225 | 45,867 | (28 | ) | ||||||||||||
non-controlling interests | |||||||||||||||||
Net income (loss) | 40,146 | 54,732 | 43,115 | (906 | ) | ||||||||||||
Net income (loss) attributable to Altisource | 39,631 | 54,101 | 42,287 | (1,535 | ) | ||||||||||||
Earnings (loss) per share: | |||||||||||||||||
Basic | $ | 1.76 | $ | 2.45 | $ | 1.96 | $ | (0.08 | ) | ||||||||
Diluted | $ | 1.61 | $ | 2.24 | $ | 1.79 | $ | (0.08 | ) | ||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 22,509 | 22,089 | 21,626 | 20,306 | |||||||||||||
Diluted | 24,662 | 24,166 | 23,640 | 20,306 | |||||||||||||
2013 quarter ended (1)(3) | |||||||||||||||||
(in thousands, except per share data) | March 31, | June 30, | September 30, | December 31, | |||||||||||||
Revenue | $ | 148,827 | $ | 186,110 | $ | 210,835 | $ | 222,585 | |||||||||
Gross profit | 51,865 | 69,138 | 76,574 | 78,300 | |||||||||||||
Income before income taxes and | 30,678 | 34,485 | 38,614 | 38,556 | |||||||||||||
non-controlling interests | |||||||||||||||||
Net income | 28,527 | 32,068 | 36,955 | 36,243 | |||||||||||||
Net income attributable to Altisource | 27,518 | 30,931 | 36,008 | 35,516 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 1.18 | $ | 1.34 | $ | 1.56 | $ | 1.56 | |||||||||
Diluted | $ | 1.1 | $ | 1.25 | $ | 1.42 | $ | 1.42 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 23,374 | 23,161 | 23,025 | 22,734 | |||||||||||||
Diluted | 25,058 | 24,823 | 25,333 | 25,005 | |||||||||||||
___________________________________________________ | |||||||||||||||||
(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)We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | |||||||||||||||||
(3)We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (Notes) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||
Schedule II Valuation and Qualifying Accounts | SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
Additions | |||||||||||||||||||||
Balance at | Charged to | ||||||||||||||||||||
Beginning of | Charged to | Other Accounts | Deductions | Balance at | |||||||||||||||||
(in thousands) | Period | Expenses | Note (a)(b) | Note (c)(d) | End of Period | ||||||||||||||||
Deductions from asset accounts: | |||||||||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||||||
Year 2014 | $ | 5,631 | $ | 16,257 | $ | 1,399 | $ | 612 | $ | 22,675 | |||||||||||
Year 2013 | 3,274 | 2,549 | — | 192 | 5,631 | ||||||||||||||||
Year 2012 | 2,047 | 3,049 | — | 1,822 | 3,274 | ||||||||||||||||
Valuation allowance for deferred tax assets: | |||||||||||||||||||||
Year 2014 | $ | 3,189 | $ | — | $ | — | $ | 74 | $ | 3,115 | |||||||||||
Year 2013 | 2,413 | — | 776 | — | 3,189 | ||||||||||||||||
Year 2012 | 2,209 | — | 204 | — | 2,413 | ||||||||||||||||
______________________________________ | |||||||||||||||||||||
(a) Allowance for doubtful accounts primarily includes amounts previously written off which were credited directly to this account when recovered. | |||||||||||||||||||||
(b)Valuation allowance for deferred tax assets includes current year increase to valuation allowance charged to equity and reclassifications from other balance sheet accounts. | |||||||||||||||||||||
(c) Amounts written off as uncollectible or transferred to other accounts or utilized. | |||||||||||||||||||||
(d) Reductions to valuation allowances related to deferred tax assets. |
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of Accounting | Basis of Accounting and Presentation - The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany and inter-segment transactions and accounts have been eliminated in consolidation. | |
Principles of Consolidation | Principles of Consolidation - The financial statements include the accounts of the Company, its wholly-owned subsidiaries and those entities in which we have a variable interest and are the primary beneficiary. | |
The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource, serves as the manager of Best Partners Mortgage Cooperative, Inc. doing business as Lenders One Mortgage Cooperative (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025. MPA acts on behalf of Lenders One and its members principally to provide its members with education and training along with revenue enhancing, cost reducing and market share expanding opportunities. For providing these services, MPA receives payments from Lenders One, and in some instances the vendors, based primarily upon the benefits achieved for the members. The management agreement provides MPA with broad powers such as recruiting members for Lenders One, collection of fees and other obligations from members of Lenders One, processing of all rebates owed to Lenders One and negotiating and executing contracts with vendors including executing contracts on behalf of Lenders One. | ||
The management agreement between MPA and Lenders One, pursuant to which MPA is the management company of Lenders One, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact Lenders One’s economic performance and the obligation to absorb losses or the right to receive benefits from Lenders One. As a result, Lenders One is presented in the accompanying consolidated financial statements on a consolidated basis with the interests of the members reflected as non-controlling interests. As of December 31, 2014, Lenders One had total assets of $7.7 million and total liabilities of $6.7 million. As of December 31, 2013, Lenders One had total assets of $4.6 million and total liabilities of $3.5 million. | ||
Use of Estimates | Use of Estimates - The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining share-based compensation, income taxes, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives of fixed assets and contingencies. Actual results could differ materially from those estimates. | |
Cash and Cash Equivalents | Cash and Cash Equivalents - We classify all highly liquid instruments with an original maturity of three months or less at the time of purchase as cash equivalents. | |
Accounts Receivable, Net | Accounts Receivable, Net - Accounts receivable are net of an allowance for doubtful accounts that represents an amount that we estimate to be uncollectible. We have estimated the allowance for doubtful accounts based on our historical write-offs, our analysis of past due accounts based on the contractual terms of the receivables and our assessment of the economic status of our customers, if known. The carrying value of accounts receivable, net, approximates fair value. | |
Premises and Equipment, Net | Premises and Equipment, Net - We report premises and equipment, net at cost or estimated fair value at acquisition and depreciate these assets over their estimated useful lives using the straight-line method as follows: | |
Furniture and fixtures | 5 years | |
Office equipment | 5 years | |
Computer hardware | 5 years | |
Computer software | 3-7 years | |
Leasehold improvements | Shorter of useful life, 10 years or the term of the lease | |
Maintenance and repair costs are expensed as incurred. We capitalize expenditures for significant improvements and new equipment and depreciate the assets over the shorter of the capitalized asset’s life or the life of the lease. | ||
We review premises and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. We measure recoverability of assets to be held and used by comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, we recognize an impairment charge for the amount that the carrying value of the asset or asset group exceeds the fair value of the asset or asset group. | ||
Computer software includes the fair value of software acquired in business combinations and purchased software. Purchased software is recorded at cost and amortized using the straight-line method over its estimated useful life. Software acquired in business combinations is recorded at its fair value and amortized using the straight-line method over its estimated useful life. | ||
Business Combinations | Business Combinations - We account for acquisitions using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using the fair values as of the acquisition date. | |
Investment in Equity Affiliates | Investment in Equity Affiliates - We utilize the equity method to account for investments in equity securities where we have the ability to exercise significant influence over operating and financial policies of the investee. We include a proportionate share of losses of equity method investees in equity losses of affiliates, net which is included in other income (expense), net in the consolidated statements of operations. We review investments in equity affiliates for an other than temporary impairment whenever events or circumstances indicate that the carrying value is greater than the fair value of the investment and the loss is other than a temporary decline. | |
Goodwill | Goodwill - Goodwill represents the excess cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative two-step goodwill impairment test. Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will we calculate the fair value of the reporting unit. We would then test goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. The discounted cash flow method is based on present value of projected cash flows. Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions. Certain estimates of discounted cash flows involve businesses with limited financial history and developing revenue models. The estimated cash flows are discounted using a rate that represents our weighted average cost of capital. | |
Because we recorded an impairment of goodwill during an interim period in 2014 (see Note 5), we elected to bypass the initial analysis of qualitative factors and perform a quantitative two-step goodwill impairment test of all of our reporting units during our annual assessment in the fourth quarter of 2014. For purposes of the annual goodwill impairment assessment, our reporting units are our reportable segments. We calculated the fair value of each of our reporting units by using a discounted cash flow analysis. As of December 31, 2014, the fair value of the Mortgage Services, Financial Services and Technology Services reporting units exceeded their carrying values by a significant margin. Consequently, we determined that no further goodwill impairment exists as of December 31, 2014. There were no goodwill impairments in 2013 or 2012. | ||
Intangible Assets, Net | Intangible Assets, Net - Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors. We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 5 to 20 years. | |
We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable. When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets consistent with models utilized for internal planning purposes. If the sum of the undiscounted expected future cash flows is less than the carrying value, we would recognize an impairment to the extent the carrying amount exceeds fair value. Based on the 2014, 2013 and 2012 cash flow analyses prepared by management for certain of the intangible assets, no impairment of intangible assets was recorded for the years ended December 31, 2014, 2013 and 2012. | ||
Debt Issuance Costs and Long-Term Debt | Debt Issuance Costs - Debt issuance costs are capitalized and amortized to interest expense through maturity of the related debt using the effective interest method. | |
Long-Term Debt - Long-term debt is reported net of applicable discount or premium. The debt discount or premium is amortized to interest expense through maturity of the related debt using the effective interest method. | ||
Fair Value Measurements | Fair Value Measurements - Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: | |
Level 1 — Quoted prices in active markets for identical assets and liabilities | ||
Level 2 — Observable inputs other than quoted prices included in Level 1 | ||
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. | ||
Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. | ||
Functional Currency | Functional Currency - The currency of the primary economic environment in which our operations are conducted is the United States dollar. Therefore, the United States dollar has been determined to be our functional and reporting currency. Non-United States dollar transactions and balances have been measured in United States dollars in accordance with ASC Topic 830, Foreign Currency Matters. All transaction gains and losses from the measurement of monetary balance sheet items denominated in non-United States dollar currencies are reflected in the statement of operations as income or expenses, as appropriate. | |
Defined Contribution 401(k) Plan | Defined Contribution 401(k) Plan - Some of our employees currently participate in a defined contribution 401(k) plan under which we may make matching contributions equal to a discretionary percentage determined by us. We recorded expense of $0.9 million, $0.4 million and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively, related to our discretionary amounts contributed. | |
Share-Based Compensation | Share-Based Compensation - Share-based compensation is accounted for under the provisions of ASC Topic 718, Compensation - Stock Compensation. Under ASC Topic 718, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based employee awards that require future service are recognized over the relevant service period. Further, as required under ASC Topic 718, we estimate forfeitures for share-based awards that are not expected to vest. | |
Earnings Per Share | Earnings Per Share - We compute earnings per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share. Basic net income per share is computed by dividing net income attributable to Altisource by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities. | |
Revenue Recognition | Revenue Recognition - We recognize revenue from the services we provide in accordance with ASC Topic 605, Revenue Recognition. ASC Topic 605 sets forth guidance as to when revenue is realized or realizable and earned, which is generally when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Generally, the contract terms for these services are relatively short in duration, and we recognize revenue as the services are performed either on a per unit or a fixed price basis. Specific policies for each of our reportable segments are as follows: | |
Mortgage Services segment: We recognize revenue for the majority of the services we provide when the services have been performed. For default processing services and certain property preservation services, we recognize revenue over the period during which we perform the related services, with full recognition upon recording the related foreclosure deed or on closing of the related real estate transaction. We record revenue associated with real estate sales on a net basis as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage. Reimbursable expenses of $137.4 million, $102.0 million and $95.6 million incurred for the years ended December 31, 2014, 2013 and 2012, respectively, are included in revenue with an equal offsetting expense included in cost of revenue primarily related to our property preservation and default processing services. These amounts are recognized on a gross basis, principally because we have complete control over selection of vendors and the vendor relationship is with us, rather than with our customers. | ||
Financial Services segment: We generally earn our fees for asset recovery management services as a percentage of the amount we collect on delinquent consumer receivables and charged-off mortgages on behalf of our clients and recognize revenue upon collection from the debtors. We also earn fees for packaging and selling charged-off mortgages and recognize revenue after the sale of the notes and once the risks and rewards of the mortgage notes are transferred to the purchasers. In addition, we provide customer relationship management services for which we earn and recognize revenue on a per-call, per-person or per-minute basis as the related services are performed. | ||
Technology Services segment: For our REALSuite platform, we charge based on the number of loans on the system or on a per-transaction basis. We record transactional revenue when the service is provided and other revenue monthly based on the number of loans processed or services provided. | ||
For Equator, LLC’s (“Equator”) software applications, we recognize revenue from arrangements with multiple deliverables in accordance with ASC Subtopic 605-25, Revenue Recognition: Multiple-Element Arrangements (“ASC 605-25”), and Securities and Exchange Commission Staff Accounting Bulletin Topic 13, Revenue Recognition (“SAB Topic 13”). ASC 605-25 and SAB Topic 13 require each deliverable within a multiple-deliverable revenue arrangement to be accounted for as a separate unit if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the seller’s control. Deliverables not meeting the criteria for accounting treatment as a separate unit are combined with a deliverable that meets that criterion. Equator derives its revenue from platform services fees, professional services fees and other services. Equator does not begin to recognize revenue for platform services fees until these fees become billable, as the services fees are not fixed and determinable until such time. Platform services fees are recognized ratably over the shorter of the term of the contract with the customer or the minimum cancellation period. Professional services fees consist primarily of configuration services related to customizing the platform for individual customers and are generally billed as the hours are worked. Due to the essential and specialized nature of the configuration services, these services do not qualify as separate units of accounting separate from the platform services as the delivered services do not have value to the customer on a standalone basis. Therefore, the related fees are recorded as deferred revenue until the project configuration is complete and then recognized ratably over the longer of the term of the agreement or the estimated expected customer life. Other services consist primarily of training, including agent certification, and consulting services. These services are generally sold separately and are recognized as revenue as the services are performed and earned. | ||
For Mortgage Builder Software, Inc. (“Mortgage Builder”) software applications, we recognize subscription revenues ratably over the contract term, beginning on the commencement date of each contract. Revenues for usage-based transactions are generally recognized as the usage occurs, as that is the point when the fee becomes fixed or determinable. Mortgage Builder generally invoices customers on a monthly basis. | ||
Income Taxes | Income Taxes - We account for certain income and expense items differently for financial purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization and loss and credit carryforwards. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740, Income Taxes (“ASC Topic 740”). | ||
Adoption/Future Adoption of New Accounting Pronouncements | Future Adoption of New Accounting Pronouncement | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This new standard will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently evaluating the impact this new guidance may have on its results of operations and financial position. |
BASIS_OF_PRESENTATION_AND_SUMM2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Schedule of estimated useful lives using the straight-line method | We report premises and equipment, net at cost or estimated fair value at acquisition and depreciate these assets over their estimated useful lives using the straight-line method as follows: | |
Furniture and fixtures | 5 years | |
Office equipment | 5 years | |
Computer hardware | 5 years | |
Computer software | 3-7 years | |
Leasehold improvements | Shorter of useful life, 10 years or the term of the lease |
SEPARATION_OF_RESIDENTIAL_ASSE1
SEPARATION OF RESIDENTIAL ASSET BUSINESSES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SEPARATION OF RESIDENTIAL ASSET BUSINESSES | |||||||||||||
Schedule of carrying value of the net assets transferred | The carrying value of the net assets transferred by Altisource was as follows: | ||||||||||||
(in thousands) | Residential | AAMC | Total | ||||||||||
Cash | $ | 100,000 | $ | 5,000 | $ | 105,000 | |||||||
Reduction in Altisource retained earnings | $ | 100,000 | $ | 5,000 | $ | 105,000 | |||||||
TRANSACTIONS_WITH_RELATED_PART1
TRANSACTIONS WITH RELATED PARTIES (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Related Party Transactions [Abstract] | |||||||
Schedule of related party revenue as a percentage of segment and consolidated revenue | Related party revenue from Ocwen as a percentage of segment and consolidated revenue was as follows for the years ended December 31: | ||||||
2014 | 2013 | 2012 | |||||
Mortgage Services | 67% | 71% | 68% | ||||
Financial Services | 27% | 30% | <1% | ||||
Technology Services | 41% | 49% | 42% | ||||
Consolidated revenue | 60% | 65% | 59% |
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Acquisitions | |||||||||||||
Business Acquisition, Pro Forma Information | The following tables present the unaudited pro forma consolidated results of operations for the years ended December 31, 2013 and 2012 as if the Homeward fee-based business, ResCap fee-based business and Equator transactions had occurred at the beginning of the periods presented. | ||||||||||||
Year ended | |||||||||||||
31-Dec-13 | |||||||||||||
(in thousands, except per share amounts) | As reported | Pro forma | |||||||||||
Revenue | $ | 768,357 | $ | 854,098 | |||||||||
Net income attributable to Altisource | 129,973 | 132,907 | |||||||||||
Earnings per share — diluted | 5.19 | 5.31 | |||||||||||
Year ended | |||||||||||||
31-Dec-12 | |||||||||||||
(in thousands, except per share amounts) | As reported | Pro forma | |||||||||||
Revenue | $ | 568,360 | $ | 781,834 | |||||||||
Net income attributable to Altisource | 110,627 | 129,229 | |||||||||||
Earnings per share — diluted | 4.43 | 5.18 | |||||||||||
Homeward servicing portfolio | |||||||||||||
Acquisitions | |||||||||||||
Schedule of the adjusted allocation of the purchase price | The final adjusted allocation of the purchase price is as follows: | ||||||||||||
(in thousands) | |||||||||||||
Premises and equipment | $ | 1,559 | |||||||||||
Customer relationship | 75,609 | ||||||||||||
Goodwill | 2,039 | ||||||||||||
79,207 | |||||||||||||
Accounts payable and accrued expenses | (3,390 | ) | |||||||||||
Purchase price | $ | 75,817 | |||||||||||
Schedule of estimated life of identified assets acquired | |||||||||||||
Estimated life | |||||||||||||
(in years) | |||||||||||||
Premises and equipment | 5-Mar | ||||||||||||
Customer relationship | 7 | ||||||||||||
Equator | |||||||||||||
Acquisitions | |||||||||||||
Schedule of the adjusted allocation of the purchase price | The final adjusted allocation of the purchase price is as follows: | ||||||||||||
Initial purchase price allocation | Adjustments | Adjusted purchase price allocation | |||||||||||
(in thousands) | |||||||||||||
Accounts receivable | $ | 9,293 | $ | 3,490 | $ | 12,783 | |||||||
Prepaid expenses and other current assets | 954 | (393 | ) | 561 | |||||||||
Premises and equipment | 16,974 | — | 16,974 | ||||||||||
Customer relationships, trademarks and trade names | 43,393 | — | 43,393 | ||||||||||
Goodwill | 82,460 | — | 82,460 | ||||||||||
Other non-current assets | 242 | 78 | 320 | ||||||||||
Assets acquired | 153,316 | 3,175 | 156,491 | ||||||||||
Accounts payable and accrued expenses | (7,232 | ) | 536 | (6,696 | ) | ||||||||
Deferred revenue | (36,689 | ) | — | (36,689 | ) | ||||||||
Liabilities assumed | (43,921 | ) | 536 | (43,385 | ) | ||||||||
Purchase price | $ | 109,395 | $ | 3,711 | $ | 113,106 | |||||||
Schedule of estimated life of identified assets acquired | |||||||||||||
Estimated life | |||||||||||||
(in years) | |||||||||||||
Premises and equipment (excluding internally developed software) | 5-Mar | ||||||||||||
Internally developed software (included in premises and equipment) | 7 | ||||||||||||
Customer relationships (weighted average) | 15 | ||||||||||||
Trade names | 4 | ||||||||||||
Schedule of Business Acquisitions by Acquisition Change in Contingent Consideration and Goodwill Impairment | The following table presents the impact of the change in the fair value of the Equator Earn Out and Equator goodwill impairment for the year ended December 31, 2014, which are included in selling, general and administrative expenses in the consolidated statements of operations: | ||||||||||||
(in thousands) | |||||||||||||
Change in the fair value of Equator Earn Out | $ | (37,924 | ) | ||||||||||
Goodwill impairment | 37,473 | ||||||||||||
$ | (451 | ) | |||||||||||
Mortgage Builder | |||||||||||||
Acquisitions | |||||||||||||
Schedule of the adjusted allocation of the purchase price | The preliminary allocation of the purchase price is as follows: | ||||||||||||
(in thousands) | |||||||||||||
Cash | $ | 726 | |||||||||||
Accounts receivable, net | 1,120 | ||||||||||||
Prepaid expenses | 38 | ||||||||||||
Premises and equipment, net | 553 | ||||||||||||
Software | 1,509 | ||||||||||||
Trademarks and trade names | 209 | ||||||||||||
Customer relationship | 4,824 | ||||||||||||
Goodwill | 9,135 | ||||||||||||
18,114 | |||||||||||||
Accounts payable and accrued expenses | (881 | ) | |||||||||||
Purchase price | $ | 17,233 | |||||||||||
Owners.com | |||||||||||||
Acquisitions | |||||||||||||
Schedule of the adjusted allocation of the purchase price | The preliminary allocation of the purchase price is as follows: | ||||||||||||
(in thousands) | |||||||||||||
Accounts receivable, net | $ | 41 | |||||||||||
Prepaid expenses | 32 | ||||||||||||
Software | 501 | ||||||||||||
Trademarks and trade names | 1,431 | ||||||||||||
Goodwill | 19,775 | ||||||||||||
21,780 | |||||||||||||
Accounts payable | (41 | ) | |||||||||||
Purchase price | $ | 21,739 | |||||||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
Fair value methodologies | The fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP: | ||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 161,361 | $ | 161,361 | $ | — | $ | — | $ | 130,324 | $ | 130,324 | $ | — | $ | — | |||||||||||||||||
Restricted cash | 3,022 | 3,022 | — | — | 1,620 | 1,620 | — | — | |||||||||||||||||||||||||
Long-term debt | 591,543 | — | 467,319 | — | 396,503 | — | 396,503 | — | |||||||||||||||||||||||||
ACCOUNTS_RECEIVABLE_NET_Tables
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Schedule of accounts receivable, net | Accounts receivable, net consists of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Billed | |||||||||
Non-related parties | $ | 37,576 | $ | 41,011 | |||||
Ocwen | 22,831 | 11,658 | |||||||
HLSS | 86 | 83 | |||||||
AAMC | 129 | 1,347 | |||||||
Residential | 11,320 | 547 | |||||||
Other receivables | 1,590 | 1,643 | |||||||
73,532 | 56,289 | ||||||||
Unbilled | |||||||||
Non-related parties | 46,775 | 44,102 | |||||||
Ocwen | 14,551 | 10,027 | |||||||
134,858 | 110,418 | ||||||||
Less: allowance for doubtful accounts | (22,675 | ) | (5,631 | ) | |||||
Total | $ | 112,183 | $ | 104,787 | |||||
(1) December 31, 2013 accounts receivable has been revised to reflect a purchase accounting measurement period adjustment related to the Equator acquisition. See Note 5. |
PREPAID_EXPENSES_AND_OTHER_CUR1
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Maintenance agreements, current portion | $ | 6,367 | $ | 4,600 | |||||
Income taxes receivable | 5,258 | 1,645 | |||||||
Prepaid expenses | 6,989 | 3,672 | |||||||
Other current assets | 4,953 | 1,079 | |||||||
Total | $ | 23,567 | $ | 10,996 | |||||
(1) December 31, 2013 prepaid expenses and other current assets have been revised to reflect a purchase accounting measurement period adjustment related to the Equator acquisition. See Note 5. |
PREMISES_AND_EQUIPMENT_NET_Tab
PREMISES AND EQUIPMENT, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of premises and equipment, net | Premises and equipment, net, which include amounts recorded under capital leases, consists of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Computer hardware and software | $ | 140,799 | $ | 103,400 | |||||
Office equipment and other | 36,032 | 28,057 | |||||||
Furniture and fixtures | 12,231 | 8,391 | |||||||
Leasehold improvements | 34,069 | 17,574 | |||||||
223,131 | 157,422 | ||||||||
Less: accumulated depreciation and amortization | (95,372 | ) | (70,170 | ) | |||||
Total | $ | 127,759 | $ | 87,252 | |||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||
Summary of changes in goodwill | |||||||||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Total | |||||||||||||||||||||||
Services | Services | Services | |||||||||||||||||||||||||
Balance, January 1, 2013 | $ | 10,919 | $ | 2,378 | $ | 1,618 | $ | 14,915 | |||||||||||||||||||
Acquisition of Equator | — | — | 82,460 | 82,460 | |||||||||||||||||||||||
Acquisition of Homeward(1) | 2,039 | — | — | 2,039 | |||||||||||||||||||||||
Balance, December 31, 2013 | 12,958 | 2,378 | 84,078 | 99,414 | |||||||||||||||||||||||
Acquisition of Mortgage Builder | — | — | 9,135 | 9,135 | |||||||||||||||||||||||
Acquisition of Owners.com | 19,775 | — | — | 19,775 | |||||||||||||||||||||||
Impairment of Equator goodwill(2) | — | — | (37,473 | ) | (37,473 | ) | |||||||||||||||||||||
Balance, December 31, 2014 | $ | 32,733 | $ | 2,378 | $ | 55,740 | $ | 90,851 | |||||||||||||||||||
(1) December 31, 2013 goodwill has been revised to reflect a purchase accounting measurement period adjustment related to the | |||||||||||||||||||||||||||
Homeward acquisition. See Note 5. | |||||||||||||||||||||||||||
(2) See Note 5 for a discussion of the Equator goodwill impairment. | |||||||||||||||||||||||||||
Schedule of intangible assets, net | |||||||||||||||||||||||||||
Weighted | Gross carrying amount | Accumulated amortization | Net book value | ||||||||||||||||||||||||
average | |||||||||||||||||||||||||||
estimated | |||||||||||||||||||||||||||
(in thousands) | useful life (in years) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Definite lived intangible assets: | |||||||||||||||||||||||||||
Trademarks and trade names | 13 | $ | 13,889 | $ | 12,249 | $ | (5,016 | ) | $ | (4,534 | ) | $ | 8,873 | $ | 7,715 | ||||||||||||
Customer related intangible assets | 10 | 289,308 | 284,484 | (79,606 | ) | (44,208 | ) | 209,702 | 240,276 | ||||||||||||||||||
Operating agreement | 20 | 35,000 | 35,000 | (8,604 | ) | (6,854 | ) | 26,396 | 28,146 | ||||||||||||||||||
Non-compete agreement | 4 | — | 1,300 | — | (1,275 | ) | — | 25 | |||||||||||||||||||
Intellectual property | 10 | 300 | — | (25 | ) | — | 275 | — | |||||||||||||||||||
Total | $ | 338,497 | $ | 333,033 | $ | (93,251 | ) | $ | (56,871 | ) | $ | 245,246 | $ | 276,162 | |||||||||||||
OTHER_ASSETS_Tables
OTHER ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Schedule of other assets | Other assets consist of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Security deposits, net | $ | 7,277 | $ | 7,314 | |||||
Debt issuance costs, net | 8,099 | 6,687 | |||||||
Maintenance agreements, non-current portion | 3,324 | 1,465 | |||||||
Restricted cash | 3,022 | 1,620 | |||||||
Other | 545 | 572 | |||||||
Total | $ | 22,267 | $ | 17,658 | |||||
(1) December 31, 2013 security deposits, net and other assets have been revised to reflect a purchase accounting measurement period adjustment related to the Equator acquisition. See Note 5. |
ACCOUNTS_PAYABLE_ACCRUED_EXPEN1
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 (1) | |||||||
Accounts payable | $ | 22,880 | $ | 15,171 | |||||
Accrued expenses - general | 25,500 | 20,945 | |||||||
Accrued salaries and benefits | 44,150 | 30,011 | |||||||
Accrued expenses - Ocwen | 6,193 | — | |||||||
Income taxes payable | 7,643 | 11,211 | |||||||
Payable to Ocwen | 5,400 | 7,361 | |||||||
Payable to AAMC | — | 7 | |||||||
Total | $ | 111,766 | $ | 84,706 | |||||
(1) December 31, 2013 payables have been revised to reflect purchase accounting measurement period adjustments related to the Homeward and Equator acquisitions. See Note 5. | |||||||||
Schedule of other current liabilities | Other current liabilities consist of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Book overdrafts | $ | 4,788 | $ | 4,232 | |||||
Other | 8,439 | 5,899 | |||||||
Total | $ | 13,227 | $ | 10,131 | |||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of long-term debt | Maturities of our long-term debt are as follows: | ||||||||
(in thousands) | |||||||||
2015 | $ | 5,945 | |||||||
2016 | 5,945 | ||||||||
2017 | 5,945 | ||||||||
2018 | 5,945 | ||||||||
2019 | 5,945 | ||||||||
Thereafter | 561,818 | ||||||||
$ | 591,543 | ||||||||
Long-term debt consists of the following as of December 31: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Senior secured term loan | $ | 591,543 | $ | 396,503 | |||||
Less: unamortized discount, net | (2,929 | ) | (1,247 | ) | |||||
Net long-term debt | 588,614 | 395,256 | |||||||
Less: current portion | (5,945 | ) | (3,975 | ) | |||||
Long-term debt, less current portion | $ | 582,669 | $ | 391,281 | |||||
OTHER_NONCURRENT_LIABILITIES_T
OTHER NON-CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Liabilities Disclosure [Abstract] | |||||||||
Schedule of other non current liabilities | Other non-current liabilities consist of the following as of December 31: | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Acquisition related contingent consideration | $ | 11,616 | $ | 42,946 | |||||
Other non-current liabilities | 9,032 | 2,530 | |||||||
Total | $ | 20,648 | $ | 45,476 | |||||
SHAREHOLDERS_EQUITY_AND_SHAREB1
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||
Schedule of assumptions used to determine the fair value of options as of the grant date | The fair value of the service-based options was determined using the Black-Scholes option pricing model and a lattice (binomial) model was used to determine the fair value of the market-based options, using the following assumptions as of the grant date: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Black-Scholes | Binomial | Black-Scholes | Binomial | Black-Scholes | Binomial | |||||||||||||||
Risk-free interest rate (%) | 1.80 – 1.91 | 0.01 – 2.49 | 1.02 – 1.81 | 0.01 – 2.71 | 0.87 – 1.17 | 0.08 – 2.04 | ||||||||||||||
Expected stock price volatility (%) | 37.57 – 45.15 | 38.38 – 45.15 | 36.35 – 36.76 | 36.40 – 36.80 | 34.22 – 34.65 | 34.20 – 34.60 | ||||||||||||||
Expected dividend yield | — | — | — | — | — | — | ||||||||||||||
Expected option life | 6.25 | — | 6.25 | — | 6.25 | — | ||||||||||||||
(in years) | ||||||||||||||||||||
Contractual life (in years) | — | 14 | — | 14 | — | 14 | ||||||||||||||
Fair value | $15.54 – $41.79 | $12.66 – $33.62 | $31.33 – $49.14 | $16.12 – $41.72 | $19.25 – $29.80 | $9.98 – $22.76 | ||||||||||||||
Summary of the weighted average fair value of stock options granted, the total intrinsic value of stock options exercised and the fair value of options vested | The following table summarizes the weighted average fair value of stock options granted, the total intrinsic value of stock options exercised and the grant date fair value of stock options vested during the years ended December 31: | |||||||||||||||||||
(in thousands, except per share amounts) | 2014 | 2013 | 2012 | |||||||||||||||||
Weighted average fair value at grant date per share | $ | 26.92 | $ | 32.59 | $ | 20.77 | ||||||||||||||
Intrinsic value of options exercised | 10,250 | 40,761 | 17,598 | |||||||||||||||||
Grant date fair value of options vested during the period | 2,641 | 3,156 | 2,790 | |||||||||||||||||
Summary of the activity of the entity's stock options | The following table summarizes the activity related to our stock options: | |||||||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||||||||
options | average | average | intrinsic value | |||||||||||||||||
exercise | contractual | (in thousands) | ||||||||||||||||||
price | term | |||||||||||||||||||
(in years) | ||||||||||||||||||||
Outstanding at December 31, 2013 | 2,589,343 | $ | 18.33 | 5.2 | $ | 363,293 | ||||||||||||||
Granted | 137,000 | 84.61 | ||||||||||||||||||
Exercised | (108,450 | ) | 24.82 | |||||||||||||||||
Forfeited | (16,001 | ) | 73.14 | |||||||||||||||||
Outstanding at December 31, 2014 | 2,601,892 | 21.21 | 4.44 | 47,805 | ||||||||||||||||
Exercisable at December 31, 2014 | 2,279,555 | 13.82 | 3.91 | 47,430 | ||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The following table summarizes information about stock options outstanding and exercisable at December 31, 2014: | |||||||||||||||||||
Options outstanding | Options exercisable | |||||||||||||||||||
Exercise price range | Number | Weighted | Weighted | Number | Weighted | Weighted | ||||||||||||||
average | average | average | average | |||||||||||||||||
remaining | exercise | remaining | exercise | |||||||||||||||||
contractual | price | contractual | price | |||||||||||||||||
life | life | |||||||||||||||||||
$0.00 — $10.00(a) | 1,647,654 | 3.49 | $ | 9.14 | 1,647,654 | 3.49 | $ | 9.14 | ||||||||||||
$10.01 — $20.00(a) | 97,737 | 1.8 | 12.45 | 97,737 | 1.8 | 12.45 | ||||||||||||||
$20.01 — $30.00(a) | 477,061 | 5.31 | 23.18 | 443,624 | 5.31 | 23.19 | ||||||||||||||
$30.01 — $40.00(a) | 48,309 | 6.27 | 33.31 | 28,319 | 6.37 | 33.1 | ||||||||||||||
$40.01 — $50.00(a) | 15,000 | 9.94 | 49.06 | — | — | — | ||||||||||||||
$50.01 — $60.00(a) | 10,000 | 7.37 | 53 | 6,250 | 7.37 | 53 | ||||||||||||||
$60.01 — $70.00(a) | 122,250 | 7.19 | 60.68 | 48,001 | 7.19 | 60.7 | ||||||||||||||
$70.01 — $80.00(a) | 25,600 | 9.86 | 72.78 | — | — | — | ||||||||||||||
$80.01 — $90.00(a) | 40,000 | 9.04 | 85.63 | 4,688 | 8.12 | 83.86 | ||||||||||||||
$90.01 — $100.00(a) | 73,281 | 9.31 | 94.32 | 1,407 | 8.16 | 93.88 | ||||||||||||||
$100.01 — $110.00(a) | 15,000 | 9.37 | 105.11 | — | — | — | ||||||||||||||
$120.01 — $130.00(a) | 30,000 | 8.62 | 125.98 | 1,875 | 8.62 | 125.98 | ||||||||||||||
2,601,892 | 2,279,555 | |||||||||||||||||||
(a) These options contain market-based components as described above. All other options are time-based awards. | ||||||||||||||||||||
Schedule of Share Based Compensation Shares Authorized under Stock Option Plans by Vesting Price Range [Table Text Block] | The following table summarizes the market prices necessary in order for the market performance options to begin to vest: | |||||||||||||||||||
Market-based options | ||||||||||||||||||||
Vesting price | Ordinary | Extraordinary | ||||||||||||||||||
performance | performance | |||||||||||||||||||
$170.01 — $180.00 | 12,500 | — | ||||||||||||||||||
$180.01 — $190.00 | 12,500 | 40,875 | ||||||||||||||||||
Over $190.00 | 37,500 | 37,650 | ||||||||||||||||||
Total | 62,500 | 78,525 | ||||||||||||||||||
Weighted average share price | $ | 100.37 | $ | 78.56 | ||||||||||||||||
COST_OF_REVENUE_Tables
COST OF REVENUE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Cost of Revenue [Abstract] | |||||||||||||
Schedule of components of cost of revenue | The components of cost of revenue were as follows for the years ended December 31: | ||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Compensation and benefits | $ | 255,889 | $ | 156,812 | $ | 113,145 | |||||||
Outside fees and services | 243,325 | 193,233 | 123,338 | ||||||||||
Reimbursable expenses | 137,634 | 102,478 | 96,147 | ||||||||||
Technology and telecommunications | 48,834 | 25,534 | 23,404 | ||||||||||
Depreciation and amortization | 21,498 | 14,423 | 10,167 | ||||||||||
Total | $ | 707,180 | $ | 492,480 | $ | 366,201 | |||||||
SELLING_GENERAL_AND_ADMINISTRA1
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Selling, General and Administrative Expense [Abstract] | |||||||||||||
Schedule of the components of selling, general and administrative expenses | The components of selling, general and administrative expenses were as follows for the years ended December 31: | ||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Compensation and benefits | $ | 45,098 | $ | 27,864 | $ | 21,166 | |||||||
Professional services | 18,598 | 8,022 | 9,864 | ||||||||||
Occupancy related costs | 38,262 | 28,424 | 24,041 | ||||||||||
Amortization of intangible assets | 37,680 | 28,176 | 5,030 | ||||||||||
Depreciation and amortization | 7,548 | 4,633 | 2,609 | ||||||||||
Change in the fair value of Equator Earn Out | (37,924 | ) | — | — | |||||||||
Goodwill impairment | 37,473 | — | — | ||||||||||
Marketing costs | 24,130 | 5,028 | 2,500 | ||||||||||
Other | 30,417 | 11,663 | 9,502 | ||||||||||
Total | $ | 201,282 | $ | 113,810 | $ | 74,712 | |||||||
OTHER_INCOME_EXPENSE_NET_Table
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||
Schedule of other income (expense), net | Other income (expense), net consists of the following for the years ended December 31: | ||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Loss in equity affiliate, including impairment loss | $ | — | $ | (176 | ) | $ | (1,741 | ) | |||||
Interest income | 103 | 899 | 222 | ||||||||||
Other, net | 71 | (166 | ) | (69 | ) | ||||||||
Total | $ | 174 | $ | 557 | $ | (1,588 | ) | ||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | The components of income before income taxes and non-controlling interests consist of the following for the year ended December 31: | ||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Domestic - Luxembourg | $ | 124,181 | $ | 122,722 | $ | 107,498 | |||||||
Foreign - U.S. | 9,575 | 11,125 | 4,915 | ||||||||||
Foreign - Non-U.S. | 13,509 | 8,486 | 12,236 | ||||||||||
Total | $ | 147,265 | $ | 142,333 | $ | 124,649 | |||||||
Schedule of income tax provision | The income tax provision consists of the following for the years ended December 31: | ||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Current: | |||||||||||||
Domestic - Luxembourg | $ | 4,415 | $ | 2,516 | $ | 2,841 | |||||||
Foreign - U.S. Federal | 75 | 6 | — | ||||||||||
Foreign - U.S. State | 476 | 403 | 353 | ||||||||||
Foreign - Non-U.S. | 4,046 | 3,600 | 2,552 | ||||||||||
$ | 9,012 | $ | 6,525 | $ | 5,746 | ||||||||
Deferred: | |||||||||||||
Domestic - Luxembourg | $ | — | $ | — | $ | 388 | |||||||
Foreign - U.S. Federal | 1,756 | 2,506 | 2,419 | ||||||||||
Foreign - U.S. State | (281 | ) | 84 | (23 | ) | ||||||||
Foreign - Non-U.S. | (309 | ) | (575 | ) | 208 | ||||||||
$ | 1,166 | $ | 2,015 | $ | 2,992 | ||||||||
Total | $ | 10,178 | $ | 8,540 | $ | 8,738 | |||||||
Summary of tax effects of the temporary differences | A summary of the tax effects of the temporary differences is as follows for the years ended December 31: | ||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Current deferred tax assets: | |||||||||||||
Allowance for doubtful accounts and other reserves | $ | 72 | $ | 43 | |||||||||
Accrued expenses | 5,165 | 3,183 | |||||||||||
Current deferred tax liabilities: | |||||||||||||
Prepaid expenses | (250 | ) | (389 | ) | |||||||||
Current deferred tax assets, net | $ | 4,987 | $ | 2,837 | |||||||||
Non-current deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 13,940 | $ | 12,439 | |||||||||
U.S. federal and state tax credits | 1,202 | — | |||||||||||
Non-U.S. deferred tax assets | 1,780 | 1,471 | |||||||||||
Share-based compensation | 856 | 784 | |||||||||||
Other | — | 7 | |||||||||||
Non-current deferred tax liabilities: | |||||||||||||
Intangible assets | (5,302 | ) | (6,035 | ) | |||||||||
Depreciation | (11,878 | ) | (4,855 | ) | |||||||||
Other | (177 | ) | — | ||||||||||
421 | 3,811 | ||||||||||||
Valuation allowance | (3,115 | ) | (3,189 | ) | |||||||||
Non-current deferred tax assets, net | $ | — | $ | 622 | |||||||||
Non-current deferred tax liabilities, net | $ | (2,694 | ) | $ | — | ||||||||
Net deferred tax assets | $ | 2,293 | $ | 3,459 | |||||||||
Total deferred tax assets | $ | 19,900 | $ | 14,738 | |||||||||
Total deferred tax liabilities | $ | (17,607 | ) | $ | (11,279 | ) | |||||||
Schedule of the reconciliation of income tax provision to the Luxembourg statutory income tax rate | The following table reconciles the income tax provision to the Luxembourg statutory income tax rate for the years ended December 31: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Statutory tax rate | 29.22 | % | 29.22 | % | 28.8 | % | |||||||
Permanent difference related to Luxembourg intangible assets | (22.60 | ) | (23.59 | ) | (21.99 | ) | |||||||
Change in valuation allowance | (0.05 | ) | 0.76 | 0.16 | |||||||||
State tax expense | 0.03 | 0.24 | 0.17 | ||||||||||
Tax credits | (0.71 | ) | — | — | |||||||||
Uncertain taxes | 0.88 | — | — | ||||||||||
Other | 0.14 | (0.63 | ) | (0.13 | ) | ||||||||
Effective tax rate | 6.91 | % | 6 | % | 7.01 | % | |||||||
Summary of Income Tax Contingencies | The following table reconciles the amount of unrecognized tax benefits for the year ended December 31, 2014 (no comparative amounts for 2013): | ||||||||||||
(in thousands) | 2014 | ||||||||||||
Amount of unrecognized tax benefits as of the beginning of the year | $ | — | |||||||||||
Increases as a result of tax positions taken in a prior period | 1,153 | ||||||||||||
Amount of unrecognized tax benefit as of the end of the year | $ | 1,153 | |||||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Schedule of basic and diluted EPS calculation | Basic and diluted EPS are calculated as follows for the years ended December 31: | ||||||||||||
(in thousands, except per share data) | 2014 | 2013 | 2012 | ||||||||||
Net income attributable to Altisource | $ | 134,484 | $ | 129,973 | $ | 110,627 | |||||||
Weighted average common shares outstanding, basic | 21,625 | 23,072 | 23,358 | ||||||||||
Dilutive effect of stock options | 2,009 | 1,981 | 1,604 | ||||||||||
Weighted average common shares outstanding, diluted | 23,634 | 25,053 | 24,962 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 6.22 | $ | 5.63 | $ | 4.74 | |||||||
Diluted | $ | 5.69 | $ | 5.19 | $ | 4.43 | |||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of future minimum lease payments under non-cancelable capital and operating leases with an original term exceeding one year | We lease certain premises and equipment under various operating lease agreements. Future minimum lease payments at December 31, 2014 under non-cancelable operating leases with an original term exceeding one year are as follows: | ||||
(in thousands) | Operating lease | ||||
obligations | |||||
2015 | $ | 17,924 | |||
2016 | 15,357 | ||||
2017 | 11,841 | ||||
2018 | 7,941 | ||||
2019 | 5,060 | ||||
Thereafter | 5,355 | ||||
$ | 63,478 | ||||
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Schedule of financial information of segments | Financial information for our segments is as follows: | ||||||||||||||||||||
For the year ended December 31, 2014 | |||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Revenue | $ | 790,076 | $ | 98,499 | $ | 230,367 | $ | (40,026 | ) | $ | 1,078,916 | ||||||||||
Cost of revenue | 484,512 | 64,338 | 194,301 | (35,971 | ) | 707,180 | |||||||||||||||
Gross profit | 305,564 | 34,161 | 36,066 | (4,055 | ) | 371,736 | |||||||||||||||
Selling, general and administrative expenses | 94,678 | 18,791 | 31,950 | 55,863 | 201,282 | ||||||||||||||||
Income from operations | 210,886 | 15,370 | 4,116 | (59,918 | ) | 170,454 | |||||||||||||||
Other income (expense), net | 204 | 62 | (31 | ) | (23,424 | ) | (23,189 | ) | |||||||||||||
Income before income taxes and non-controlling interests | $ | 211,090 | $ | 15,432 | $ | 4,085 | $ | (83,342 | ) | $ | 147,265 | ||||||||||
For the year ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Revenue | $ | 596,152 | $ | 92,958 | $ | 103,891 | $ | (24,644 | ) | $ | 768,357 | ||||||||||
Cost of revenue | 374,713 | 55,328 | 84,538 | (22,099 | ) | 492,480 | |||||||||||||||
Gross profit | 221,439 | 37,630 | 19,353 | (2,545 | ) | 275,877 | |||||||||||||||
Selling, general and administrative expenses | 46,515 | 15,571 | 12,442 | 39,282 | 113,810 | ||||||||||||||||
Income from operations | 174,924 | 22,059 | 6,911 | (41,827 | ) | 162,067 | |||||||||||||||
Other income (expense), net | (136 | ) | (10 | ) | 7 | (19,595 | ) | (19,734 | ) | ||||||||||||
Income before income taxes and non-controlling interests | $ | 174,788 | $ | 22,049 | $ | 6,918 | $ | (61,422 | ) | $ | 142,333 | ||||||||||
For the year ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Revenue | $ | 452,796 | $ | 64,522 | $ | 74,189 | $ | (23,147 | ) | $ | 568,360 | ||||||||||
Cost of revenue | 285,586 | 46,737 | 54,634 | (20,756 | ) | 366,201 | |||||||||||||||
Gross profit | 167,210 | 17,785 | 19,555 | (2,391 | ) | 202,159 | |||||||||||||||
Selling, general and administrative expenses | 25,099 | 13,415 | 8,888 | 27,310 | 74,712 | ||||||||||||||||
Income from operations | 142,111 | 4,370 | 10,667 | (29,701 | ) | 127,447 | |||||||||||||||
Other income (expense), net | (1,713 | ) | (27 | ) | (25 | ) | (1,033 | ) | (2,798 | ) | |||||||||||
Income before income taxes and non-controlling interests | $ | 140,398 | $ | 4,343 | $ | 10,642 | $ | (30,734 | ) | $ | 124,649 | ||||||||||
(in thousands) | Mortgage | Financial | Technology | Corporate | Consolidated | ||||||||||||||||
Services | Services | Services | Items and | Altisource | |||||||||||||||||
Eliminations | |||||||||||||||||||||
Total assets: | |||||||||||||||||||||
31-Dec-14 | $ | 313,206 | $ | 56,096 | $ | 250,403 | $ | 168,516 | $ | 788,221 | |||||||||||
31-Dec-13 | 310,253 | 55,930 | 277,941 | 85,928 | 730,052 | ||||||||||||||||
Schedule of premises and equipment, net by country | Our services are provided to customers primarily located in the United States. Premises and equipment, net consist of the following, by country: | ||||||||||||||||||||
(in thousands) | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
United States | $ | 88,274 | $ | 63,615 | |||||||||||||||||
India | 27,082 | 16,404 | |||||||||||||||||||
Luxembourg | 9,059 | 3,217 | |||||||||||||||||||
Philippines | 3,344 | 4,016 | |||||||||||||||||||
Total | $ | 127,759 | $ | 87,252 | |||||||||||||||||
QUARTERLY_FINANCIAL_DATA_UNAUD1
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Schedule of unaudited quarterly results | The following tables contain selected unaudited statement of operations information for each quarter of 2014 and 2013. The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Our business is affected by seasonality. | ||||||||||||||||
2014 quarter ended (1)(2) | |||||||||||||||||
(in thousands, except per share data) | March 31, | June 30, | September 30, | December 31, | |||||||||||||
Revenue | $ | 239,269 | $ | 296,072 | $ | 287,688 | $ | 255,887 | |||||||||
Gross profit | 91,464 | 112,073 | 98,964 | 69,235 | |||||||||||||
Income (loss) before income taxes and | 43,201 | 58,225 | 45,867 | (28 | ) | ||||||||||||
non-controlling interests | |||||||||||||||||
Net income (loss) | 40,146 | 54,732 | 43,115 | (906 | ) | ||||||||||||
Net income (loss) attributable to Altisource | 39,631 | 54,101 | 42,287 | (1,535 | ) | ||||||||||||
Earnings (loss) per share: | |||||||||||||||||
Basic | $ | 1.76 | $ | 2.45 | $ | 1.96 | $ | (0.08 | ) | ||||||||
Diluted | $ | 1.61 | $ | 2.24 | $ | 1.79 | $ | (0.08 | ) | ||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 22,509 | 22,089 | 21,626 | 20,306 | |||||||||||||
Diluted | 24,662 | 24,166 | 23,640 | 20,306 | |||||||||||||
2013 quarter ended (1)(3) | |||||||||||||||||
(in thousands, except per share data) | March 31, | June 30, | September 30, | December 31, | |||||||||||||
Revenue | $ | 148,827 | $ | 186,110 | $ | 210,835 | $ | 222,585 | |||||||||
Gross profit | 51,865 | 69,138 | 76,574 | 78,300 | |||||||||||||
Income before income taxes and | 30,678 | 34,485 | 38,614 | 38,556 | |||||||||||||
non-controlling interests | |||||||||||||||||
Net income | 28,527 | 32,068 | 36,955 | 36,243 | |||||||||||||
Net income attributable to Altisource | 27,518 | 30,931 | 36,008 | 35,516 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 1.18 | $ | 1.34 | $ | 1.56 | $ | 1.56 | |||||||||
Diluted | $ | 1.1 | $ | 1.25 | $ | 1.42 | $ | 1.42 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 23,374 | 23,161 | 23,025 | 22,734 | |||||||||||||
Diluted | 25,058 | 24,823 | 25,333 | 25,005 | |||||||||||||
___________________________________________________ | |||||||||||||||||
(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)We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | |||||||||||||||||
(3)We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
ORGANIZATION_Details
ORGANIZATION (Details) | 12 Months Ended |
Dec. 31, 2014 | |
segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reporting segments | 3 |
BASIS_OF_PRESENTATION_AND_SUMM3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 15, 2013 | |
period | ||||
Goodwill | ||||
Goodwill impairment | $0 | |||
Intangible Assets, Net | ||||
Impairment of intangible assets | 0 | 0 | 0 | |
Defined Contribution 401(k) Plan | ||||
Expense recorded for discretionary amounts contributed | 900,000 | 400,000 | 200,000 | |
Revenue Recognition | ||||
Reimbursable expenses | 137,634,000 | 102,478,000 | 96,147,000 | |
Related Party Transaction Cost Of Revenue | 38,610,000 | 19,983,000 | 13,469,000 | |
Selling, general and administrative expenses | -268,000 | 569,000 | -542,000 | |
Mortgage Services | ||||
Revenue Recognition | ||||
Reimbursable expenses | 137,400,000 | 102,000,000 | 95,600,000 | |
Minimum | ||||
Intangible Assets, Net | ||||
Useful lives of intangible assets | 5 years | |||
Maximum | ||||
Intangible Assets, Net | ||||
Useful lives of intangible assets | 20 years | |||
Furniture and fixtures | ||||
Premises and Equipment, Net | ||||
Estimated useful lives | 5 years | |||
Office equipment | ||||
Premises and Equipment, Net | ||||
Estimated useful lives | 5 years | |||
Computer hardware | ||||
Premises and Equipment, Net | ||||
Estimated useful lives | 5 years | |||
Computer software | Minimum | ||||
Premises and Equipment, Net | ||||
Estimated useful lives | 3 years | |||
Computer software | Maximum | ||||
Premises and Equipment, Net | ||||
Estimated useful lives | 7 years | |||
Leasehold improvements | Maximum | ||||
Premises and Equipment, Net | ||||
Estimated useful lives | 10 years | |||
MPA | Lenders One | ||||
Principles of Consolidation | ||||
Total assets | 7,700,000 | 4,600,000 | ||
Total liabilities | 6,700,000 | 3,500,000 | ||
Equator | ||||
Intangible Assets, Net | ||||
Number of consecutive 12-month periods for meeting targeted levels of adjusted EBITA | 3 | |||
Number of months for each consecutive period for meeting targeted levels of adjusted EBITA | 12 months | |||
Amount of contingent consideration payment to be made | 8,100,000 | 46,000,000 | ||
Equator | Maximum | ||||
Intangible Assets, Net | ||||
Additional consideration | 80,000,000 | |||
Adjustments For Related Party Expenses | Restatement Adjustment | ||||
Revenue Recognition | ||||
Related Party Transaction Cost Of Revenue | 20,000,000 | 13,500,000 | ||
Selling, general and administrative expenses | -2,400,000 | -3,000,000 | ||
Ocwen | Adjustments For Related Party Expenses | Restatement Adjustment | ||||
Principles of Consolidation | ||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | 1,700,000 | 700,000 | ||
Selling, general and administrative expenses billed to related party | -100,000 | |||
Revenue Recognition | ||||
Related Party Transaction Cost Of Revenue | 20,000,000 | 13,500,000 | ||
Ocwen | Adjustments For Related Party Expenses | Restatement Adjustment | Maximum | ||||
Principles of Consolidation | ||||
Selling, general and administrative expenses billed to related party | -100,000 | |||
AAMC | Adjustments For Related Party Expenses | Restatement Adjustment | ||||
Principles of Consolidation | ||||
Selling, general and administrative expenses billed to related party | ($500,000) | $0 |
SEPARATION_OF_RESIDENTIAL_ASSE2
SEPARATION OF RESIDENTIAL ASSET BUSINESSES (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Dec. 21, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
subsidiary | ||||
Separation of residential asset businesses | ||||
Number of wholly-owned subsidiaries included in spin-off | 2 | |||
Carrying value of the net assets transferred | ||||
Cash | $105,000,000 | $0 | $0 | $105,000,000 |
Amount of expenses incurred in connection with the separation | 2,700,000 | |||
Residential | ||||
Carrying value of the net assets transferred | ||||
Cash | 100,000,000 | |||
AAMC | ||||
Carrying value of the net assets transferred | ||||
Cash | $5,000,000 |
TRANSACTIONS_WITH_RELATED_PART2
TRANSACTIONS WITH RELATED PARTIES (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Dec. 27, 2012 | |
TRANSACTIONS WITH RELATED PARTIES | |||||
Other portfolio servicing revenue | $256,000,000 | $161,900,000 | $125,400,000 | ||
Cost of revenue | 38,610,000 | 19,983,000 | 13,469,000 | ||
Revenue earned from related party | 666,800,000 | 502,087,000 | 338,227,000 | ||
Exercisable at the end of the period (in shares) | 2,279,555 | ||||
Ocwen | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Related party revenue from Ocwen as a percentage of consolidated revenue | 60.00% | 65.00% | 59.00% | ||
Ocwen | Correspondent One | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Percentage of equity interest sold to the related party | 49.00% | ||||
Proceeds from sale of equity interest | 12,600,000 | ||||
Ocwen | Senior unsecured term loan | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Amount of loan provided to related party | 75,000,000 | ||||
Interest income | 0 | 800,000 | 100,000 | ||
Ocwen | Senior unsecured term loan | Eurodollar Rate | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Reference rate | Eurodollar Rate | ||||
Interest rate margin (as a percent) | 6.75% | ||||
Interest rate, variable interest rate floor (as a percent) | 1.50% | ||||
Ocwen | Data Access and Services Agreement | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Prior written notice period for cancellation of agreement | 90 days | ||||
Cost of revenue | 38,600,000 | 20,000,000 | 13,500,000 | ||
Ocwen | Support Services Agreement | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Service agreement renewals period | 1 year | ||||
Selling, general and administrative expenses billed to related party | 4,500,000 | 2,800,000 | 2,700,000 | ||
Selling, general and administrative expenses billed by related party | 6,100,000 | 4,600,000 | 3,200,000 | ||
Ocwen | Mortgage Services | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Related party revenue from Ocwen as a percentage of segment revenue | 67.00% | 71.00% | 68.00% | ||
Ocwen | Financial Services | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Related party revenue from Ocwen as a percentage of segment revenue | 27.00% | 30.00% | 1.00% | ||
Ocwen | Technology Services | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Related party revenue from Ocwen as a percentage of segment revenue | 41.00% | 49.00% | 42.00% | ||
Ocwen Mortgage Servicing, Inc. | Support Services Agreement | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Service agreement renewals period | 1 year | ||||
Correspondent One | Support Services Agreement | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Selling, general and administrative expenses billed to related party | 0 | 100,000 | 400,000 | ||
Revenue earned from related party | 0 | 100,000 | 300,000 | ||
HLSS | Support Services Agreement | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Selling, general and administrative expenses billed to related party | 900,000 | 700,000 | 600,000 | ||
Residential | Management, Support and Other Services Agreements | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Revenue earned from related party | 16,000,000 | 2,600,000 | 0 | ||
AAMC | Support Services Agreement | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Selling, general and administrative expenses billed to related party | 900,000 | 500,000 | 0 | ||
AAMC | Support and Other Services Agreements | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
Revenue earned from related party | $100,000 | $100,000 | $0 | ||
Board of Directors Chairman | Altisource Portfolio Solutions | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
William C. Erbey ownership percentage | 29.00% | ||||
Exercisable at the end of the period (in shares) | 873,501 | ||||
Board of Directors Chairman | Ocwen | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
William C. Erbey ownership percentage | 14.00% | ||||
Options held by related parties | 3,620,498 | ||||
Exercisable at the end of the period (in shares) | 3,370,498 | ||||
Board of Directors Chairman | HLSS | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
William C. Erbey ownership percentage | 1.00% | ||||
Board of Directors Chairman | Residential | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
William C. Erbey ownership percentage | 4.00% | ||||
Board of Directors Chairman | AAMC | |||||
TRANSACTIONS WITH RELATED PARTIES | |||||
William C. Erbey ownership percentage | 28.00% | ||||
Exercisable at the end of the period (in shares) | 87,350 |
ACQUISITIONS_Homeward_FeeBased
ACQUISITIONS Homeward Fee-Based (Details) (USD $) | 0 Months Ended | 21 Months Ended | ||
Mar. 29, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Preliminary adjusted allocation of the purchase price | ||||
Goodwill | $90,851,000 | $99,414,000 | $14,915,000 | |
Homeward servicing portfolio | Ocwen | ||||
Acquisitions | ||||
Amount paid | 75,800,000 | |||
Working capital and net income adjustment | 11,100,000 | |||
Reduction in premises and equipment | 1,200,000 | |||
Increase in current liabilities | 2,000,000 | |||
Preliminary adjusted allocation of the purchase price | ||||
Premises and equipment, net | 1,559,000 | |||
Customer relationship | 75,609,000 | |||
Goodwill | 2,039,000 | |||
Assets acquired | 79,207,000 | |||
Accounts payable and accrued expenses | -3,390,000 | |||
Purchase price | $75,817,000 | |||
Estimated life | ||||
Customer relationship | 7 years | |||
Homeward servicing portfolio | Ocwen | Minimum | ||||
Estimated life | ||||
Premises and equipment | 3 years | |||
Homeward servicing portfolio | Ocwen | Maximum | ||||
Estimated life | ||||
Premises and equipment | 5 years |
ACQUISITIONS_ResCap_FeeBased_D
ACQUISITIONS ResCap Fee-Based (Details 2) (USD $) | 0 Months Ended | ||
Apr. 12, 2013 | Nov. 15, 2013 | Dec. 31, 2014 | |
ResCap | Ocwen | |||
Acquisitions | |||
Amount paid | $128,800,000 | ||
Acquired tangible assets | 0 | ||
Assumed liabilities in connection with the acquisition | 0 | ||
Final allocation of the purchase price | |||
Customer relationship | 128,800,000 | ||
Estimated life | |||
Customer relationship | 7 years | ||
Equator | |||
Acquisitions | |||
Amount paid | 63,400,000 | ||
Assumed liabilities in connection with the acquisition | 43,921,000 | 43,385,000 | |
Final allocation of the purchase price | |||
Customer relationship | $43,393,000 | $43,393,000 |
ACQUISITIONS_Equator_Acquisiti
ACQUISITIONS Equator Acquisition (Details 3) (USD $) | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 15, 2013 | ||
period | |||||
Preliminary adjusted allocation of the purchase price | |||||
Goodwill | $90,851,000 | $99,414,000 | $14,915,000 | ||
Estimated life | |||||
Change in the fair value of Equator Earn Out | -37,924,000 | 0 | 0 | ||
Goodwill impairment | 37,473,000 | [1] | 0 | 0 | |
Equator | |||||
Acquisitions | |||||
Amount paid | 63,400,000 | ||||
Business Combination, Contingent Consideration, Asset, Current | 3,700,000 | ||||
Number of consecutive 12-month periods for meeting targeted levels of adjusted EBITA | 3 | ||||
Number of months for each consecutive period for meeting targeted levels of adjusted EBITA | 12 months | ||||
Present value of future earn outs payments | 8,100,000 | 46,000,000 | |||
Preliminary adjusted allocation of the purchase price | |||||
Accounts receivable, net | 12,783,000 | 9,293,000 | |||
Accounts receivable - Adjustment | 3,490,000 | ||||
Prepaid expenses | 561,000 | 954,000 | |||
Prepaid expenses and other current assets - Adjustment | -393,000 | ||||
Premises and equipment, net | 16,974,000 | 16,974,000 | |||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Property, Plant, and Equipment | 0 | ||||
Customer relationships and trade names | 43,393,000 | 43,393,000 | |||
Business Combination, Provisional Information Initial Accounting Incomplete Adjustment, Intangible Assets, Other than Goodwill | 0 | ||||
Goodwill | 82,460,000 | ||||
Business Combination, Provisional Information Initial Accounting Incomplete Adjustment, Good will Excluding Estimated Impairment | 0 | ||||
Goodwill excluding estimated impairment | 82,460,000 | ||||
Other non-current assets | 320,000 | 242,000 | |||
Other non-current assets - Adjustment | 78,000 | ||||
Assets acquired | 156,491,000 | 153,316,000 | |||
Assets acquired - Adjustment | 3,175,000 | ||||
Accounts payable and accrued expenses | -6,696,000 | -7,232,000 | |||
Accounts payable and accrued expenses - Adjustment | 536,000 | ||||
Deferred revenue | -36,689,000 | -36,689,000 | |||
Business Combination, Provisional Information Initial Accounting Incomplete Adjustment, Current Liabilities, Deferred Revenue | 0 | ||||
Liabilities assumed | -43,385,000 | -43,921,000 | |||
Liabilities assumed - Adjustment | 536,000 | ||||
Purchase price | 113,106,000 | 109,395,000 | |||
Purchase price - Adjustment | 3,711,000 | ||||
Estimated life | |||||
Change in the fair value of Equator Earn Out | -37,924,000 | ||||
Total | -451,000 | ||||
Equator | Maximum | |||||
Acquisitions | |||||
Additional consideration | 80,000,000 | ||||
Earn Out consideration that can be earned in each of the first two 12-month periods | 22,500,000 | ||||
Earn Out consideration that can be earned in the third 12-month period | $35,000,000 | ||||
Additional consideration that can be paid in restricted stock shares (as a percent) | 20.00% | ||||
Premises and Equipment Excluding Internally Developed Software | Equator | Maximum | |||||
Estimated life | |||||
Estimated useful lives | 5 years | ||||
Premises and Equipment Excluding Internally Developed Software | Equator | Minimum | |||||
Estimated life | |||||
Estimated useful lives | 3 years | ||||
Software Development | Equator | |||||
Estimated life | |||||
Estimated useful lives | 7 years | ||||
Customer Relationships | Equator | |||||
Estimated life | |||||
Customer relationship | 15 years | ||||
Trade Names | Equator | |||||
Estimated life | |||||
Customer relationship | 4 years | ||||
[1] | See Note 5 for a discussion of the Equator goodwill impairment. |
ACQUISITIONS_Pro_Forma_Results
ACQUISITIONS Pro Forma Results (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Pro forma consolidated results of operations | |||||||||||||||||||
Revenue, As reported | $1,078,916 | $768,357 | $568,360 | ||||||||||||||||
Revenue, Pro forma | 854,098 | 781,834 | |||||||||||||||||
Net income attributable to Altisource, As reported | -1,535 | [1],[2] | 42,287 | [1],[2] | 54,101 | [1],[2] | 39,631 | [1],[2] | 35,516 | [1],[3] | 36,008 | [1],[3] | 30,931 | [1],[3] | 27,518 | [1],[3] | 134,484 | 129,973 | 110,627 |
Net income attributable to Altisource, Pro forma | $132,907 | $129,229 | |||||||||||||||||
Earnings per share - Diluted (in dollars per share), As reported | ($0.08) | [1],[2] | $1.79 | [1],[2] | $2.24 | [1],[2] | $1.61 | [1],[2] | $1.42 | [1],[3] | $1.42 | [1],[3] | $1.25 | [1],[3] | $1.10 | [1],[3] | $5.69 | $5.19 | $4.43 |
Earnings per share - Diluted (in dollars per share), Pro forma | $5.31 | $5.18 | |||||||||||||||||
[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] | We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | ||||||||||||||||||
[3] | We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
ACQUISITIONS_Mortgage_Builder_
ACQUISITIONS Mortgage Builder Acquisition (Details 5) (USD $) | 0 Months Ended | |||
Sep. 12, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Goodwill | $90,851,000 | $99,414,000 | $14,915,000 | |
Mortgage Builder | ||||
Acquisitions | ||||
Amount paid | 15,700,000 | |||
Additional consideration | 7,000,000 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Cash | 726,000 | |||
Accounts receivable, net | 1,120,000 | |||
Prepaid expenses | 38,000 | |||
Premises and equipment, net | 553,000 | |||
Software | 1,509,000 | |||
Trademarks and trade names | 209,000 | |||
Customer relationship | 4,824,000 | |||
Goodwill | 9,135,000 | |||
Assets acquired | 18,114,000 | |||
Accounts payable and accrued expenses | -881,000 | |||
Purchase price | $17,233,000 |
ACQUISITIONS_ACQUISITIONS_Owne
ACQUISITIONS ACQUISITIONS Owners.com Acquisition (Details 6) (USD $) | 0 Months Ended | |||
Nov. 21, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Goodwill | $90,851,000 | $99,414,000 | $14,915,000 | |
Owners.com | ||||
Acquisitions | ||||
Amount paid | 19,800,000 | |||
Additional consideration | 7,000,000 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Accounts receivable, net | 41,000 | |||
Prepaid expenses | 32,000 | |||
Software | 501,000 | |||
Trademarks and trade names | 1,431,000 | |||
Goodwill | 19,775,000 | |||
Assets acquired | 21,780,000 | |||
Accounts payable | -41,000 | |||
Purchase price | $21,739,000 |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 15, 2013 | ||
Acquisitions | ||||||
Change in the fair value of Equator Earn Out | ($37,924,000) | $0 | $0 | |||
Goodwill impairment | 37,473,000 | [1] | 0 | 0 | ||
Cash and cash equivalents | 161,361,000 | 130,324,000 | 105,502,000 | 32,125,000 | ||
Equator | ||||||
Acquisitions | ||||||
Company recorded acquisition-related contingent consideration in connection with the acquisitions | 8,100,000 | 46,000,000 | ||||
Change in the fair value of Equator Earn Out | -37,924,000 | |||||
Fair value measurements | ||||||
Acquisitions | ||||||
Fair values of the liabilities for acquisition-related contingent consideration | 11,600,000 | |||||
Fair value measurements | Owners.com | ||||||
Acquisitions | ||||||
Company recorded acquisition-related contingent consideration in connection with the acquisitions | 1,900,000 | |||||
Fair value measurements | Mortgage Builder | ||||||
Acquisitions | ||||||
Company recorded acquisition-related contingent consideration in connection with the acquisitions | 1,600,000 | |||||
Fair value measurements | Equator | ||||||
Acquisitions | ||||||
Fair values of the liabilities for acquisition-related contingent consideration | 46,000,000 | |||||
Change in the fair value of Equator Earn Out | -38,000,000 | |||||
Estimate of Fair Value Measurement | Fair value measurements | ||||||
Acquisitions | ||||||
Cash and cash equivalents | 161,361,000 | 130,324,000 | ||||
Restricted cash | 3,022,000 | 1,620,000 | ||||
Long-term debt | 591,543,000 | 396,503,000 | ||||
Changes Measurement | Equator | ||||||
Acquisitions | ||||||
Goodwill impairment | 37,473,000 | |||||
Fair Value, Inputs, Level 2 [Member] | Fair value measurements | ||||||
Acquisitions | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Restricted cash | 0 | 0 | ||||
Long-term debt | 467,319,000 | 396,503,000 | ||||
Fair Value, Inputs, Level 1 [Member] | Fair value measurements | ||||||
Acquisitions | ||||||
Cash and cash equivalents | 161,361,000 | 130,324,000 | ||||
Restricted cash | 3,022,000 | 1,620,000 | ||||
Long-term debt | 0 | 0 | ||||
Fair Value, Inputs, Level 3 [Member] | Fair value measurements | ||||||
Acquisitions | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Restricted cash | 0 | 0 | ||||
Long-term debt | $0 | $0 | ||||
[1] | See Note 5 for a discussion of the Equator goodwill impairment. |
ACCOUNTS_RECEIVABLE_NET_Detail
ACCOUNTS RECEIVABLE, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts receivable, net | |||
Accounts receivable, gross | $134,858 | $110,418 | |
Less: allowance for doubtful accounts | -22,675 | -5,631 | |
Total | 112,183 | 104,787 | |
Bad debt expense | 16,257 | 2,549 | 3,049 |
Billed | |||
Accounts receivable, net | |||
Non-related party, Accounts receivable | 37,576 | 41,011 | |
Other receivables | 1,590 | 1,643 | |
Accounts receivable, gross | 73,532 | 56,289 | |
Billed | Ocwen | |||
Accounts receivable, net | |||
Receivable from related party | 22,831 | 11,658 | |
Billed | HLSS | |||
Accounts receivable, net | |||
Receivable from related party | 86 | 83 | |
Billed | AAMC | |||
Accounts receivable, net | |||
Receivable from related party | 129 | 1,347 | |
Billed | Residential | |||
Accounts receivable, net | |||
Receivable from related party | 11,320 | 547 | |
Unbilled | |||
Accounts receivable, net | |||
Non-related party, Accounts receivable | 46,775 | 44,102 | |
Unbilled | Ocwen | |||
Accounts receivable, net | |||
Receivable from related party | $14,551 | $10,027 |
PREPAID_EXPENSES_AND_OTHER_CUR2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Maintenance agreements, current portion | $6,367 | $4,600 |
Income taxes receivable | 5,258 | 1,645 |
Prepaid expenses | 6,989 | 3,672 |
Other current assets | 4,953 | 1,079 |
Total | $23,567 | $10,996 |
PREMISES_AND_EQUIPMENT_NET_Det
PREMISES AND EQUIPMENT, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | $223,131 | $157,422 | |
Less: accumulated depreciation and amortization | -95,372 | -70,170 | |
Total | 127,759 | 87,252 | |
Depreciation and amortization expense, inclusive of capital leases | 29,046 | 19,056 | 12,776 |
Computer hardware and software | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | 140,799 | 103,400 | |
Office equipment and other | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | 36,032 | 28,057 | |
Furniture and fixtures | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | 12,231 | 8,391 | |
Leasehold improvements | |||
PREMISES AND EQUIPMENT, NET | |||
Premises and equipment, gross | $34,069 | $17,574 |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS, NET (Details) (USD $) | 12 Months Ended | |||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 15, 2013 | Sep. 12, 2014 | Nov. 21, 2014 | ||
Changes in goodwill | ||||||||
Balance at the beginning of the period | $99,414 | $14,915 | ||||||
Impairment of Equator goodwill | -37,473 | [1] | 0 | 0 | ||||
Balance at the end of the period | 90,851 | 99,414 | 14,915 | |||||
Mortgage Services | ||||||||
Changes in goodwill | ||||||||
Balance at the beginning of the period | 12,958 | |||||||
Impairment of Equator goodwill | 0 | [1] | ||||||
Balance at the end of the period | 32,733 | 10,919 | ||||||
Financial Services | ||||||||
Changes in goodwill | ||||||||
Balance at the beginning of the period | 2,378 | |||||||
Impairment of Equator goodwill | 0 | [1] | ||||||
Balance at the end of the period | 2,378 | 2,378 | ||||||
Technology Services | ||||||||
Changes in goodwill | ||||||||
Balance at the beginning of the period | 84,078 | |||||||
Impairment of Equator goodwill | -37,473 | [1] | ||||||
Balance at the end of the period | 55,740 | 1,618 | ||||||
Equator | ||||||||
Changes in goodwill | ||||||||
Balance at the beginning of the period | 82,460 | |||||||
Acquisition of Mortgage Builder | 82,460 | |||||||
Balance at the end of the period | 82,460 | |||||||
Equator | Mortgage Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | |||||||
Equator | Financial Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | |||||||
Equator | Technology Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 82,460 | |||||||
Homeward servicing portfolio | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 2,039 | [2] | ||||||
Homeward servicing portfolio | Mortgage Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 2,039 | [2] | ||||||
Homeward servicing portfolio | Financial Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | [2] | ||||||
Homeward servicing portfolio | Technology Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | [2] | ||||||
Mortgage Builder | ||||||||
Changes in goodwill | ||||||||
Balance at the beginning of the period | 9,135 | |||||||
Acquisition of Mortgage Builder | 9,135 | |||||||
Balance at the end of the period | 9,135 | |||||||
Mortgage Builder | Mortgage Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | |||||||
Mortgage Builder | Financial Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | |||||||
Mortgage Builder | Technology Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 9,135 | |||||||
Owners.com | ||||||||
Changes in goodwill | ||||||||
Balance at the beginning of the period | 19,775 | |||||||
Acquisition of Mortgage Builder | 19,775 | |||||||
Balance at the end of the period | 19,775 | |||||||
Owners.com | Mortgage Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 19,775 | |||||||
Owners.com | Financial Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | 0 | |||||||
Owners.com | Technology Services | ||||||||
Changes in goodwill | ||||||||
Acquisition of Mortgage Builder | $0 | |||||||
[1] | See Note 5 for a discussion of the Equator goodwill impairment. | |||||||
[2] | DecemberB 31, 2013 goodwill has been revised to reflect a purchase accounting measurement period adjustment related to the Homeward acquisition. See Note 5. |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS, NET (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Assets, Net | |||
Impairment of intangible assets | $0 | $0 | $0 |
Gross carrying amount | 338,497,000 | 333,033,000 | |
Accumulated amortization | -93,251,000 | -56,871,000 | |
Net book value | 245,246,000 | 276,162,000 | |
Amortization expense for definite lived intangible assets | 37,680,000 | 28,176,000 | 5,030,000 |
2015 | 39,400,000 | ||
2016 | 34,200,000 | ||
2017 | 30,000,000 | ||
2018 | 26,100,000 | ||
2019 | 23,000,000 | ||
Trademarks | |||
Intangible Assets, Net | |||
Gross carrying amount | 13,889,000 | 12,249,000 | |
Accumulated amortization | -5,016,000 | -4,534,000 | |
Net book value | 8,873,000 | 7,715,000 | |
Trademarks | Weighted average | |||
Intangible Assets, Net | |||
Customer relationship | 13 years | ||
Customer-related intangible assets | |||
Intangible Assets, Net | |||
Gross carrying amount | 289,308,000 | 284,484,000 | |
Accumulated amortization | -79,606,000 | -44,208,000 | |
Net book value | 209,702,000 | 240,276,000 | |
Customer-related intangible assets | Weighted average | |||
Intangible Assets, Net | |||
Customer relationship | 10 years | ||
Operating agreement | |||
Intangible Assets, Net | |||
Gross carrying amount | 35,000,000 | 35,000,000 | |
Accumulated amortization | -8,604,000 | -6,854,000 | |
Net book value | 26,396,000 | 28,146,000 | |
Operating agreement | Weighted average | |||
Intangible Assets, Net | |||
Customer relationship | 20 years | ||
Non-compete agreement | |||
Intangible Assets, Net | |||
Gross carrying amount | 0 | 1,300,000 | |
Accumulated amortization | 0 | -1,275,000 | |
Net book value | 0 | 25,000 | |
Non-compete agreement | Weighted average | |||
Intangible Assets, Net | |||
Customer relationship | 4 years | ||
Intellectual property | |||
Intangible Assets, Net | |||
Gross carrying amount | 300,000 | 0 | |
Accumulated amortization | -25,000 | 0 | |
Net book value | $275,000 | $0 | |
Intellectual property | Weighted average | |||
Intangible Assets, Net | |||
Customer relationship | 10 years |
INVESTMENT_IN_EQUITY_AFFILIATE1
INVESTMENT IN EQUITY AFFILIATE (Details) (Correspondent One, USD $) | 12 Months Ended | 0 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Mar. 29, 2013 |
Investment in equity affiliates | |||||
Ownership percentage | 49.00% | ||||
Net gain (loss) on investment using the equity method | $0 | $0.20 | $1.20 | ||
Ocwen | |||||
Investment in equity affiliates | |||||
Percentage of equity interest sold to the related party | 49.00% | ||||
Proceeds from sale of equity interest | $12.60 |
OTHER_ASSETS_Details
OTHER ASSETS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Security deposits, net | $7,277 | $7,314 | |
Debt issuance costs, net | 8,099 | 6,687 | |
Maintenance agreements, non-current portion | 3,324 | 1,465 | |
Restricted cash | 3,022 | 1,620 | |
Other | 545 | 572 | |
Total | 22,267 | 17,658 | |
Debt issuance costs | $2,608 | $3,200 | $4,317 |
ACCOUNTS_PAYABLE_ACCRUED_EXPEN2
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Accounts payable and accrued expenses | |||
Accounts payable | $22,880 | $15,171 | [1] |
Accrued expenses | 25,500 | 20,945 | [1] |
Accrued salaries and benefits | 44,150 | 30,011 | [1] |
Income taxes payable | 7,643 | 11,211 | [1] |
Total | 111,766 | 84,706 | [1] |
Ocwen | |||
Accounts payable and accrued expenses | |||
Accrued expenses | 6,193 | 0 | [1] |
Payable to related party | 5,400 | 7,361 | [1] |
AAMC | |||
Accounts payable and accrued expenses | |||
Payable to related party | $7 | [1] | |
[1] | December 31, 2013 payables have been revised to reflect purchase accounting measurement period adjustments related to the Homeward and Equator acquisitions. See Note 5. |
ACCOUNTS_PAYABLE_ACCRUED_EXPEN3
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other current liabilities | ||
Book overdrafts | $4,788 | $4,232 |
Other | 8,439 | 5,899 |
Total | $13,227 | $10,131 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||||||
Aug. 01, 2014 | Dec. 09, 2013 | 7-May-13 | Nov. 27, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 01, 2014 | |
Debt | ||||||||
Senior secured term loan | $591,543,000 | $396,503,000 | ||||||
Less: unamortized discount, net | -2,929,000 | -1,247,000 | ||||||
Net long-term debt | 588,614,000 | 395,256,000 | ||||||
Less: current portion | -5,945,000 | -3,975,000 | ||||||
Long-term debt, less current portion | 582,669,000 | 391,281,000 | ||||||
Proceeds from issuance of long-term debt | 198,000,000 | 200,502,000 | 198,000,000 | |||||
Debt issuance costs, net | 8,099,000 | 6,687,000 | ||||||
Interest on long-term debt | 23,363,000 | 20,291,000 | 1,210,000 | |||||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 5,945,000 | |||||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 5,945,000 | |||||||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 5,945,000 | |||||||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 5,945,000 | |||||||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 5,945,000 | |||||||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 561,818,000 | |||||||
Debt Instrument Carrying Amount, Noncurrent | 591,543,000 | |||||||
Senior secured term loan | ||||||||
Debt | ||||||||
Less: unamortized discount, net | -2,000,000 | -2,000,000 | -2,000,000 | |||||
Amount borrowed | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Proceeds from issuance of long-term debt | 198,000,000 | 201,000,000 | 198,000,000 | |||||
Original issue premium | 1,000,000 | |||||||
Additional increase in debt | 200,000,000 | 200,000,000 | 200,000,000 | |||||
Amount of long-term debt refinanced | 397,500,000 | |||||||
Debt Instrument, Maturity Period from Prior Term Loans Maturity Date | 1 year | |||||||
Maximum restricted junior payments | 200,000,000 | 200,000,000 | ||||||
Aggregate amount of each consecutive quarterly scheduled principal installment | 1,500,000 | |||||||
Term of senior secured loan agreement | 7 years | |||||||
Mandatory prepayments owed | 0 | |||||||
Interest rate at the end of the period (as a percent) | 4.50% | |||||||
Debt issuance costs, net | 8,100,000 | 6,700,000 | ||||||
Accumulated amortization | 2,200,000 | 1,000,000 | ||||||
Interest on long-term debt | 23,400,000 | 20,300,000 | 1,200,000 | |||||
Senior secured term loan | Maximum | ||||||||
Debt | ||||||||
Leverage ratio to be maintained under the credit facility covenants | 3 | |||||||
Number of days within which the entity fails to pay principal when due or interest or any other amount owing on any other obligation under the credit agreement, is considered as event of default | 5 days | |||||||
Amount of principal or interest if failed to pay considered as event of default | 40,000,000 | |||||||
Amount of debt which results in acceleration of debt if failed to pay considered as event of default | 40,000,000 | |||||||
Amount of unbonded, undischarged or unstayed debt under entry by court of one or more judgments for certain period to determine as event of default | $40,000,000 | |||||||
Senior secured term loan | Adjusted Eurodollar Rate | ||||||||
Debt | ||||||||
Reference rate | Adjusted Eurodollar Rate | |||||||
Fixed interest rate base (as a percent) | 1.00% | |||||||
Interest rate margin (as a percent) | 3.50% | |||||||
Senior secured term loan | Base Rate | ||||||||
Debt | ||||||||
Reference rate | Base Rate | |||||||
Fixed interest rate base (as a percent) | 2.00% | |||||||
Interest rate margin (as a percent) | 2.50% |
OTHER_NONCURRENT_LIABILITIES_D
OTHER NON-CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities Disclosure [Abstract] | ||
Acquisition related contingent consideration | $11,616 | $42,946 |
Other non-current liabilities | 9,032 | 2,530 |
Total | $20,648 | $45,476 |
SHAREHOLDERS_EQUITY_AND_SHAREB2
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Details) (USD $) | 12 Months Ended | 56 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Feb. 28, 2014 | |
right | |||||
Common Stock [Abstract] | |||||
Common stock, shares authorized | 25,413,000 | 100,000,000 | 25,413,000 | ||
Common stock, shares issued | 25,413,000 | 25,413,000 | 25,413,000 | ||
Common stock, shares outstanding | 20,279,000 | 22,629,000 | 20,279,000 | ||
Common Stock Voting Rights Per Share | 1 | ||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||
Maximum number of Altisource share-based awards that can be granted under the Plan (in shares) | 6,700,000 | 6,700,000 | |||
Share-based awards available for future grants under the Plan (in shares) | 2,500,000 | 2,500,000 | |||
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | |||||
Share-based compensation expense (in dollars) | $2,200,000 | $2,400,000 | $3,600,000 | ||
Outstanding (in shares) | 2,601,892 | 2,589,343 | 2,601,892 | ||
Stock options granted, approximate (in shares) | 137,000 | 100,000 | 300,000 | ||
Weighted average exercise price of stock options granted (in dollars per share) | $84.61 | $104.84 | $69.48 | ||
Assumptions used to determine the fair value of options as of the grant date | |||||
Fair value (in dollars per share) | $26.92 | $32.59 | $20.77 | ||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Weighted average fair value at grant date per share (in dollars per share) | $26.92 | $32.59 | $20.77 | ||
Intrinsic value of options exercised (in dollars) | 10,250,000 | 40,761,000 | 17,598,000 | ||
Grant date fair value of options vested during the period (in dollars) | 2,641,000 | 3,156,000 | 2,790,000 | ||
Estimated unrecognized compensation costs (in dollars) | 3,400,000 | 3,400,000 | |||
Weighted average remaining requisite service period for stock options over which unrecognized compensation costs would be recognized | 3 years 3 months 0 days | ||||
Minimum | |||||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Estimated forfeiture rate (as a percent) | 1.00% | 1.00% | |||
Maximum | |||||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Estimated forfeiture rate (as a percent) | 10.00% | 10.00% | |||
Black-Scholes | |||||
Assumptions used to determine the fair value of options as of the grant date | |||||
Risk-free interest rate, minimum (as a percent) | 1.80% | 1.02% | 0.87% | ||
Risk-free interest rate, maximum (as a percent) | 1.91% | 1.81% | 1.17% | ||
Expected stock price volatility, minimum (as a percent) | 37.57% | 36.35% | 34.22% | ||
Expected stock price volatility, maximum (as a percent) | 45.15% | 36.76% | 34.65% | ||
Expected option life | 6 years 3 months | 6 years 3 months | 6 years 3 months | ||
Black-Scholes | Minimum | |||||
Assumptions used to determine the fair value of options as of the grant date | |||||
Fair value (in dollars per share) | $15.54 | $31.33 | $19.25 | ||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Weighted average fair value at grant date per share (in dollars per share) | $15.54 | $31.33 | $19.25 | ||
Black-Scholes | Maximum | |||||
Assumptions used to determine the fair value of options as of the grant date | |||||
Fair value (in dollars per share) | $41.79 | $49.14 | $29.80 | ||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Weighted average fair value at grant date per share (in dollars per share) | $41.79 | $49.14 | $29.80 | ||
Binomial | |||||
Assumptions used to determine the fair value of options as of the grant date | |||||
Risk-free interest rate, minimum (as a percent) | 0.01% | 0.01% | 0.08% | ||
Risk-free interest rate, maximum (as a percent) | 2.49% | 2.71% | 2.04% | ||
Expected stock price volatility, minimum (as a percent) | 38.38% | 36.40% | 34.20% | ||
Expected stock price volatility, maximum (as a percent) | 45.15% | 36.80% | 34.60% | ||
Contractual life | 14 years | 14 years | 14 years | ||
Binomial | Minimum | |||||
Assumptions used to determine the fair value of options as of the grant date | |||||
Fair value (in dollars per share) | $12.66 | $16.12 | $9.98 | ||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Weighted average fair value at grant date per share (in dollars per share) | $12.66 | $16.12 | $9.98 | ||
Binomial | Maximum | |||||
Assumptions used to determine the fair value of options as of the grant date | |||||
Fair value (in dollars per share) | $33.62 | $41.72 | $22.76 | ||
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | |||||
Weighted average fair value at grant date per share (in dollars per share) | $33.62 | $41.72 | $22.76 | ||
Options | Service-Based | |||||
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | |||||
Vesting period | 4 years | ||||
Outstanding (in shares) | 800,000 | 800,000 | |||
Options | Service-Based | Maximum | |||||
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | |||||
Expiration term | 10 years | ||||
Options | Market-Based | |||||
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | |||||
Outstanding (in shares) | 1,800,000 | 1,800,000 | |||
Number of components of an award | 2 | ||||
Vesting percentage for awards that vest upon achievement of certain criteria | 25.00% | ||||
Cumulative vesting percentage for awards that vest in equal annual installments | 75.00% | ||||
Number of equal annual installments for vesting of award | 3 | ||||
Options | Market-Based, ordinary performance | Minimum | |||||
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | |||||
Percentage of compounded annual gain of stock price over exercise price required for the award to vest | 20.00% | ||||
Options | Market-Based, extraordinary performance | Minimum | |||||
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | |||||
Percentage of compounded annual gain of stock price over exercise price required for the award to vest | 25.00% | ||||
Stock Repurchase Programs | |||||
Stock Repurchase Plan | |||||
Number of shares of common stock purchased | 2,500,000 | 1,200,000 | 6,200,000 | ||
Average purchase price per share (in dollars per share) | $103.67 | $116.99 | $79.16 | ||
Remaining number of shares available for repurchase under the plan | 1,100,000 | 1,100,000 | |||
Capacity available to repurchase common stock under senior secured term loan (in dollars) | $225,000,000 | $225,000,000 | |||
2014 Stock Repurchase Program | |||||
Stock Repurchase Plan | |||||
Number of shares of common stock authorized to be purchased | 3,400,000 | ||||
Percentage of outstanding shares authorized to be repurchased | 15.00% | ||||
Minimum purchase price authorized (in dollars per share) | $1 | ||||
Maximum purchase price authorized (in dollars per share) | $500 |
SHAREHOLDERS_EQUITY_AND_SHAREB3
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Number of Options | |||
Outstanding at the beginning of the period (in shares) | 2,589,343 | ||
Granted (in shares) | 137,000 | 100,000 | 300,000 |
Exercised (in shares) | -108,450 | ||
Forfeited (in shares) | -16,001 | ||
Outstanding at the end of the period (in shares) | 2,601,892 | 2,589,343 | |
Exercisable at the end of the period (in shares) | 2,279,555 | ||
Weighted average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $18.33 | ||
Granted (in dollars per share) | $84.61 | $104.84 | $69.48 |
Exercised (in dollars per share) | $24.82 | ||
Forfeited (in dollars per share) | $73.14 | ||
Outstanding at the end of the period (in dollars per share) | $21.21 | $18.33 | |
Exercisable at the end of the period (in dollars per share) | $13.82 | ||
Weighted average contractual term | |||
Weighted average contractual term | 4 years 5 months 8 days | 5 years 2 months 12 days | |
Exercisable at the end of the period | 3 years 10 months 29 days | ||
Aggregate intrinsic value | |||
Aggregate intrinsic value (in dollars) | $47,805 | $363,293 | |
Exercisable at the end of the period (in dollars) | $47,430 |
SHAREHOLDERS_EQUITY_AND_SHAREB4
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Details 3) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Options outstanding | |
Number (in shares) | 2,601,892 |
Options exercisable | |
Number (in shares) | 2,279,555 |
$0.00 - $10.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $0 |
Exercise price, high end of range (in dollars per share) | $10 |
Options outstanding | |
Number (in shares) | 1,647,654 |
Weighted average remaining contractual life | 3 years 5 months 27 days |
Weighted average exercise price (in dollars per share) | $9.14 |
Options exercisable | |
Number (in shares) | 1,647,654 |
Weighted average remaining contractual life | 3 years 5 months 27 days |
Weighted average exercise price (in dollars per share) | $9.14 |
$10.01 - $20.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $10.01 |
Exercise price, high end of range (in dollars per share) | $20 |
Options outstanding | |
Number (in shares) | 97,737 |
Weighted average remaining contractual life | 1 year 9 months 18 days |
Weighted average exercise price (in dollars per share) | $12.45 |
Options exercisable | |
Number (in shares) | 97,737 |
Weighted average remaining contractual life | 1 year 9 months 18 days |
Weighted average exercise price (in dollars per share) | $12.45 |
$20.01 - $30.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $20.01 |
Exercise price, high end of range (in dollars per share) | $30 |
Options outstanding | |
Number (in shares) | 477,061 |
Weighted average remaining contractual life | 5 years 3 months 22 days |
Weighted average exercise price (in dollars per share) | $23.18 |
Options exercisable | |
Number (in shares) | 443,624 |
Weighted average remaining contractual life | 5 years 3 months 22 days |
Weighted average exercise price (in dollars per share) | $23.19 |
$30.01 - $40.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $30.01 |
Exercise price, high end of range (in dollars per share) | $40 |
Options outstanding | |
Number (in shares) | 48,309 |
Weighted average remaining contractual life | 6 years 3 months 7 days |
Weighted average exercise price (in dollars per share) | $33.31 |
Options exercisable | |
Number (in shares) | 28,319 |
Weighted average remaining contractual life | 6 years 4 months 13 days |
Weighted average exercise price (in dollars per share) | $33.10 |
$40.01 - $50.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $40.01 |
Exercise price, high end of range (in dollars per share) | $50 |
Options outstanding | |
Number (in shares) | 15,000 |
Weighted average remaining contractual life | 9 years 11 months 9 days |
Weighted average exercise price (in dollars per share) | $49.06 |
Options exercisable | |
Number (in shares) | 0 |
Weighted average remaining contractual life | 0 days |
Weighted average exercise price (in dollars per share) | $0 |
$50.01 - $60.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $50.01 |
Exercise price, high end of range (in dollars per share) | $60 |
Options outstanding | |
Number (in shares) | 10,000 |
Weighted average remaining contractual life | 7 years 4 months 13 days |
Weighted average exercise price (in dollars per share) | $53 |
Options exercisable | |
Number (in shares) | 6,250 |
Weighted average remaining contractual life | 7 years 4 months 13 days |
Weighted average exercise price (in dollars per share) | $53 |
$60.01 - $70.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $60.01 |
Exercise price, high end of range (in dollars per share) | $70 |
Options outstanding | |
Number (in shares) | 122,250 |
Weighted average remaining contractual life | 7 years 2 months 9 days |
Weighted average exercise price (in dollars per share) | $60.68 |
Options exercisable | |
Number (in shares) | 48,001 |
Weighted average remaining contractual life | 7 years 2 months 9 days |
Weighted average exercise price (in dollars per share) | $60.70 |
$70.01 - $80.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $70.01 |
Exercise price, high end of range (in dollars per share) | $80 |
Options outstanding | |
Number (in shares) | 25,600 |
Weighted average remaining contractual life | 9 years 10 months 10 days |
Weighted average exercise price (in dollars per share) | $72.78 |
Options exercisable | |
Number (in shares) | 0 |
Weighted average remaining contractual life | 0 days |
Weighted average exercise price (in dollars per share) | $0 |
$80.01 - $90.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $80.01 |
Exercise price, high end of range (in dollars per share) | $90 |
Options outstanding | |
Number (in shares) | 40,000 |
Weighted average remaining contractual life | 9 years 15 days |
Weighted average exercise price (in dollars per share) | $85.63 |
Options exercisable | |
Number (in shares) | 4,688 |
Weighted average remaining contractual life | 8 years 1 month 13 days |
Weighted average exercise price (in dollars per share) | $83.86 |
$90.01 - $100.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $90.01 |
Exercise price, high end of range (in dollars per share) | $100 |
Options outstanding | |
Number (in shares) | 73,281 |
Weighted average remaining contractual life | 9 years 3 months 22 days |
Weighted average exercise price (in dollars per share) | $94.32 |
Options exercisable | |
Number (in shares) | 1,407 |
Weighted average remaining contractual life | 8 years 1 month 28 days |
Weighted average exercise price (in dollars per share) | $93.88 |
$100.01 - $110.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $101 |
Exercise price, high end of range (in dollars per share) | $110 |
Options outstanding | |
Number (in shares) | 15,000 |
Weighted average remaining contractual life | 9 years 4 months 13 days |
Weighted average exercise price (in dollars per share) | $105.11 |
Options exercisable | |
Number (in shares) | 0 |
Weighted average remaining contractual life | 0 days |
Weighted average exercise price (in dollars per share) | $0 |
$120.01 - $130.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (in dollars per share) | $120.01 |
Exercise price, high end of range (in dollars per share) | $130 |
Options outstanding | |
Number (in shares) | 30,000 |
Weighted average remaining contractual life | 8 years 7 months 13 days |
Weighted average exercise price (in dollars per share) | $125.98 |
Options exercisable | |
Number (in shares) | 1,875 |
Weighted average remaining contractual life | 8 years 7 months 13 days |
Weighted average exercise price (in dollars per share) | $125.98 |
SHAREHOLDERS_EQUITY_AND_SHAREB5
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Details 4) (USD $) | Dec. 31, 2014 |
Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 62,500 |
Market-based options, Weighted average share price (in dollars per share) | $100.37 |
Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 78,525 |
Market-based options, Weighted average share price (in dollars per share) | $78.56 |
$170.01 - $180.00 | |
Market prices for market performance options to vest | |
Market-based options, Vesting price, low end of range (in dollars per share) | $170.01 |
Market-based options, Vesting price, high end of range (in dollars per share) | $180 |
$170.01 - $180.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 12,500 |
$170.01 - $180.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 0 |
$180.01 - $190.00 | |
Market prices for market performance options to vest | |
Market-based options, Vesting price, low end of range (in dollars per share) | $180.01 |
Market-based options, Vesting price, high end of range (in dollars per share) | $190 |
$180.01 - $190.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 12,500 |
$180.01 - $190.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 40,875 |
Over $190.00 | |
Market prices for market performance options to vest | |
Market-based options, Vesting price, low end of range (in dollars per share) | $190 |
Over $190.00 | Ordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 37,500 |
Over $190.00 | Extraordinary performance grants | |
Market prices for market performance options to vest | |
Market-based options, options expected to vest (in shares) | 37,650 |
COST_OF_REVENUE_Details
COST OF REVENUE (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cost of Revenue [Abstract] | |||
Compensation and benefits | $255,889 | $156,812 | $113,145 |
Outside fees and services | 243,325 | 193,233 | 123,338 |
Reimbursable expenses | 137,634 | 102,478 | 96,147 |
Technology and telecommunications | 48,834 | 25,534 | 23,404 |
Depreciation and amortization | 21,498 | 14,423 | 10,167 |
Total | $707,180 | $492,480 | $366,201 |
SELLING_GENERAL_AND_ADMINISTRA2
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Selling, General and Administrative Expense [Abstract] | ||||
Compensation and benefits | $45,098 | $27,864 | $21,166 | |
Professional services | 18,598 | 8,022 | 9,864 | |
Occupancy related costs | 38,262 | 28,424 | 24,041 | |
Amortization of intangible assets | 37,680 | 28,176 | 5,030 | |
Depreciation and amortization | 7,548 | 4,633 | 2,609 | |
Change in the fair value of Equator Earn Out | -37,924 | 0 | 0 | |
Goodwill impairment | 37,473 | [1] | 0 | 0 |
Marketing costs | 24,130 | 5,028 | 2,500 | |
Other | 30,417 | 11,663 | 9,502 | |
Total | $201,282 | $113,810 | $74,712 | |
[1] | See Note 5 for a discussion of the Equator goodwill impairment. |
OTHER_INCOME_EXPENSE_NET_Detai
OTHER INCOME (EXPENSE), NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Income and Expenses [Abstract] | |||
Loss in equity affiliate, including impairment loss | ($176) | ($1,741) | |
Interest income | 103 | 899 | 222 |
Other, net | 71 | -166 | -69 |
Total | $174 | $557 | ($1,588) |
INCOME_TAXES_INCOME_TAXES_Deta
INCOME TAXES INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Income before income taxes and non-controlling interests [Line Items] | |||||||||||||||||||
Domestic - Luxembourg | $124,181 | $122,722 | $107,498 | ||||||||||||||||
Total | -28 | [1],[2] | 45,867 | [1],[2] | 58,225 | [1],[2] | 43,201 | [1],[2] | 38,556 | [1],[3] | 38,614 | [1],[3] | 34,485 | [1],[3] | 30,678 | [1],[3] | 147,265 | 142,333 | 124,649 |
U.S. Federal | |||||||||||||||||||
Income before income taxes and non-controlling interests [Line Items] | |||||||||||||||||||
Foreign - U.S. and Non-U.S. | 9,575 | 11,125 | 4,915 | ||||||||||||||||
Non U.S. | |||||||||||||||||||
Income before income taxes and non-controlling interests [Line Items] | |||||||||||||||||||
Foreign - U.S. and Non-U.S. | $13,509 | $8,486 | $12,236 | ||||||||||||||||
[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] | We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | ||||||||||||||||||
[3] | We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current: | |||
Domestic - Luxembourg | $4,415,000 | $2,516,000 | $2,841,000 |
Current income tax provision | 9,012,000 | 6,525,000 | 5,746,000 |
Deferred: | |||
Domestic - Luxembourg | 0 | 0 | 388,000 |
Deferred income tax provision | 1,166,000 | 2,015,000 | 2,992,000 |
Total | 10,178,000 | 8,540,000 | 8,738,000 |
Decrease in foreign taxes due to tax holidays | 900,000 | 200,000 | 1,500,000 |
Effect on diluted per share due to decrease in foreign tax holiday (in dollars per share) | $0.04 | $0.01 | $0.06 |
Statutory tax rate | 29.22% | 29.22% | 28.80% |
U.S. Federal | |||
Current: | |||
Foreign | 75,000 | 6,000 | 0 |
Deferred: | |||
Foreign | 1,756,000 | 2,506,000 | 2,419,000 |
U.S. State | |||
Current: | |||
Foreign | 476,000 | 403,000 | 353,000 |
Deferred: | |||
Foreign | -281,000 | 84,000 | -23,000 |
Non U.S. | |||
Current: | |||
Foreign | 4,046,000 | 3,600,000 | 2,552,000 |
Deferred: | |||
Foreign | ($309,000) | ($575,000) | $208,000 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Current deferred tax assets: | ||
Allowance for doubtful accounts and other reserves | $72,000 | $43,000 |
Accrued expenses | 5,165,000 | 3,183,000 |
Current deferred tax liabilities: | ||
Prepaid expenses | -250,000 | -389,000 |
Current deferred tax assets, net | 4,987,000 | 2,837,000 |
Non-current deferred tax assets: | ||
Net operating loss carryforwards | 13,940,000 | 12,439,000 |
U.S. federal and state tax credits | 1,202,000 | 0 |
Non-U.S. deferred tax assets | 1,780,000 | 1,471,000 |
Share-based compensation | 856,000 | 784,000 |
Other | 0 | 7,000 |
Non-current deferred tax liabilities: | ||
Intangible assets | -5,302,000 | -6,035,000 |
Depreciation | -11,878,000 | -4,855,000 |
Deferred Tax Liabilities, Other | -177,000 | 0 |
Deferred tax assets net of deferred tax liabilities | 421,000 | 3,811,000 |
Valuation allowance | -3,115,000 | -3,189,000 |
Non-current deferred tax assets, net | 0 | 622,000 |
Non-current deferred tax liabilities, net | 2,694,000 | 0 |
Net deferred tax assets | 2,293,000 | 3,459,000 |
Income Taxes | ||
Increase in valuation allowance related to state and foreign losses | 100,000 | |
Gross amount of net operating losses available for carryover to future years | 35,700,000 | 32,600,000 |
Undistributed earnings | 48,000,000 | |
Deferred tax liability that would be recognized if earnings were distributed | 9,600,000 | |
Total deferred tax assets | 19,900,000 | 14,738,000 |
Total deferred tax liabilities | -17,607,000 | -11,279,000 |
U.S. State | ||
Non-current deferred tax assets: | ||
Net operating loss carryforwards | 1,800,000 | 1,400,000 |
Luxembourg | ||
Non-current deferred tax assets: | ||
Net operating loss carryforwards | 1,700,000 | 1,800,000 |
U.S. Federal | ||
Income Taxes | ||
Net operating loss carryforwards related to stock options exercised, not recognized | 13,600,000 | 9,500,000 |
U.S. State and U.S. Federal | ||
Non-current deferred tax assets: | ||
Net operating loss carryforwards | 1,200,000 | 0 |
NCI | ||
Income Taxes | ||
Gross amount of net operating losses available for carryover to future years | 12,200,000 | 13,500,000 |
Annual limit on use of operating loss carryforward | $1,300,000 |
INCOME_TAXES_Details_4
INCOME TAXES (Details 4) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of Income Tax Provision to the Luxembourg income tax rate | |||
Statutory tax rate | 29.22% | 29.22% | 28.80% |
Permanent difference related to Luxembourg intangible assets | -22.60% | -23.59% | -21.99% |
Change in valuation allowance | -0.05% | 0.76% | 0.16% |
State tax expense | 0.03% | 0.24% | 0.17% |
Tax credits | -0.71% | 0.00% | 0.00% |
Uncertain taxes | 0.88% | 0.00% | 0.00% |
Other | 0.14% | -0.63% | -0.13% |
Effective tax rate | 6.91% | 6.00% | 7.01% |
Recovered_Sheet1
INCOME TAXES Income Taxes (Details 5) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Amount of unrecognized tax benefits as of the beginning of the year | $1,153,000 | $0 |
Increases as a result of tax positions taken in a prior period | 1,153,000 | |
Amount of unrecognized tax benefit as of the end of the year | 1,153,000 | 0 |
Unrecognized tax benefits that would affect the effective tax rate | 1,300,000 | 0 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 100,000 | 0 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $1,300,000 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||
Net income attributable to Altisource | ($1,535) | [1],[2] | $42,287 | [1],[2] | $54,101 | [1],[2] | $39,631 | [1],[2] | $35,516 | [1],[3] | $36,008 | [1],[3] | $30,931 | [1],[3] | $27,518 | [1],[3] | $134,484 | $129,973 | $110,627 |
Weighted average common shares outstanding, basic | 20,306,000 | [1],[2] | 21,626,000 | [1],[2] | 22,089,000 | [1],[2] | 22,509,000 | [1],[2] | 22,734,000 | [1],[3] | 23,025,000 | [1],[3] | 23,161,000 | [1],[3] | 23,374,000 | [1],[3] | 21,625,000 | 23,072,000 | 23,358,000 |
Dilutive effect of stock options | 2,009,000 | 1,981,000 | 1,604,000 | ||||||||||||||||
Weighted average common shares outstanding, diluted | 20,306,000 | [1],[2] | 23,640,000 | [1],[2] | 24,166,000 | [1],[2] | 24,662,000 | [1],[2] | 25,005,000 | [1],[3] | 25,333,000 | [1],[3] | 24,823,000 | [1],[3] | 25,058,000 | [1],[3] | 23,634,000 | 25,053,000 | 24,962,000 |
Earnings per share: | |||||||||||||||||||
Basic (in dollars per share) | ($0.08) | [1],[2] | $1.96 | [1],[2] | $2.45 | [1],[2] | $1.76 | [1],[2] | $1.56 | [1],[3] | $1.56 | [1],[3] | $1.34 | [1],[3] | $1.18 | [1],[3] | $6.22 | $5.63 | $4.74 |
Diluted (in dollars per share) | ($0.08) | [1],[2] | $1.79 | [1],[2] | $2.24 | [1],[2] | $1.61 | [1],[2] | $1.42 | [1],[3] | $1.42 | [1],[3] | $1.25 | [1],[3] | $1.10 | [1],[3] | $5.69 | $5.19 | $4.43 |
Options | |||||||||||||||||||
Anti-dilutive securities | |||||||||||||||||||
Options excluded from the computation of diluted EPS, approximate (in shares) | 100,000 | 100,000 | 100,000 | ||||||||||||||||
Options for shares issuable upon achievement of market and performance criteria | |||||||||||||||||||
Anti-dilutive securities | |||||||||||||||||||
Options excluded from the computation of diluted EPS, approximate (in shares) | 100,000 | 100,000 | 300,000 | ||||||||||||||||
[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] | We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | ||||||||||||||||||
[3] | We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Nov. 15, 2013 | |
Operating Lease Obligations | ||
Additional revenue earned on portfolios serviced by Ocwen | 24.00% | |
Operating lease obligations | ||
2015 | $17,924,000 | |
2016 | 15,357,000 | |
2017 | 11,841,000 | |
2018 | 7,941,000 | |
2019 | 5,060,000 | |
Thereafter | 5,355,000 | |
Operating lease obligations | 63,478,000 | |
Financial Standby Letter of Credit | ||
Operating Lease Obligations | ||
standby letter of credit | 1,800,000 | |
Financial Standby Letter of Credit | Equator | ||
Operating Lease Obligations | ||
standby letter of credit | $1,500,000 | |
Ocwen | Sales Revenue, Services, Net [Member] | ||
Operating Lease Obligations | ||
Related party revenue percentage | 60.00% |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Lease Obligations | |||
Total operating lease expense, net of sublease income | $20.10 | $12.80 | $10.90 |
Escrow and Trust Balances | |||
Amounts held in escrow and trust accounts | $62.50 | $71.80 | |
Minimum | |||
Operating Lease Obligations | |||
Customary lease term | 1 year | ||
Maximum | |||
Operating Lease Obligations | |||
Customary lease term | 10 years |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
segment | |||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||
Number of reporting segments | 3 | ||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||
Revenue | $1,078,916 | $768,357 | $568,360 | ||||||||||||||||
Cost of revenue | 707,180 | 492,480 | 366,201 | ||||||||||||||||
Gross profit | 69,235 | [1],[2] | 98,964 | [1],[2] | 112,073 | [1],[2] | 91,464 | [1],[2] | 78,300 | [1],[3] | 76,574 | [1],[3] | 69,138 | [1],[3] | 51,865 | [1],[3] | 371,736 | 275,877 | 202,159 |
Selling, general and administrative expenses | 201,282 | 113,810 | 74,712 | ||||||||||||||||
Income from operations | 170,454 | 162,067 | 127,447 | ||||||||||||||||
Other income (expense), net | -23,189 | -19,734 | -2,798 | ||||||||||||||||
Income before income taxes and non-controlling interests | 147,265 | 142,333 | 124,649 | ||||||||||||||||
Total Assets: | |||||||||||||||||||
Total Assets | 788,221 | 730,052 | 788,221 | 730,052 | |||||||||||||||
Operating Segment | Mortgage Services | |||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||
Revenue | 790,076 | 596,152 | 452,796 | ||||||||||||||||
Cost of revenue | 484,512 | 374,713 | 285,586 | ||||||||||||||||
Gross profit | 305,564 | 221,439 | 167,210 | ||||||||||||||||
Selling, general and administrative expenses | 94,678 | 46,515 | 25,099 | ||||||||||||||||
Income from operations | 210,886 | 174,924 | 142,111 | ||||||||||||||||
Other income (expense), net | 204 | -136 | -1,713 | ||||||||||||||||
Income before income taxes and non-controlling interests | 211,090 | 174,788 | 140,398 | ||||||||||||||||
Total Assets: | |||||||||||||||||||
Total Assets | 313,206 | 310,253 | 313,206 | 310,253 | |||||||||||||||
Operating Segment | Financial Services | |||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||
Revenue | 98,499 | 92,958 | 64,522 | ||||||||||||||||
Cost of revenue | 64,338 | 55,328 | 46,737 | ||||||||||||||||
Gross profit | 34,161 | 37,630 | 17,785 | ||||||||||||||||
Selling, general and administrative expenses | 18,791 | 15,571 | 13,415 | ||||||||||||||||
Income from operations | 15,370 | 22,059 | 4,370 | ||||||||||||||||
Other income (expense), net | 62 | -10 | -27 | ||||||||||||||||
Income before income taxes and non-controlling interests | 15,432 | 22,049 | 4,343 | ||||||||||||||||
Total Assets: | |||||||||||||||||||
Total Assets | 56,096 | 55,930 | 56,096 | 55,930 | |||||||||||||||
Operating Segment | Technology Services | |||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||
Revenue | 230,367 | 103,891 | 74,189 | ||||||||||||||||
Cost of revenue | 194,301 | 84,538 | 54,634 | ||||||||||||||||
Gross profit | 36,066 | 19,353 | 19,555 | ||||||||||||||||
Selling, general and administrative expenses | 31,950 | 12,442 | 8,888 | ||||||||||||||||
Income from operations | 4,116 | 6,911 | 10,667 | ||||||||||||||||
Other income (expense), net | -31 | 7 | -25 | ||||||||||||||||
Income before income taxes and non-controlling interests | 4,085 | 6,918 | 10,642 | ||||||||||||||||
Total Assets: | |||||||||||||||||||
Total Assets | 250,403 | 277,941 | 250,403 | 277,941 | |||||||||||||||
Corporate Items and Eliminations | |||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||
Revenue | -40,026 | -24,644 | -23,147 | ||||||||||||||||
Cost of revenue | -35,971 | -22,099 | -20,756 | ||||||||||||||||
Gross profit | -4,055 | -2,545 | -2,391 | ||||||||||||||||
Selling, general and administrative expenses | 55,863 | 39,282 | 27,310 | ||||||||||||||||
Income from operations | -59,918 | -41,827 | -29,701 | ||||||||||||||||
Other income (expense), net | -23,424 | -19,595 | -1,033 | ||||||||||||||||
Income before income taxes and non-controlling interests | -83,342 | -61,422 | -30,734 | ||||||||||||||||
Total Assets: | |||||||||||||||||||
Total Assets | $168,516 | $85,928 | $168,516 | $85,928 | |||||||||||||||
[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] | We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | ||||||||||||||||||
[3] | We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
SEGMENT_REPORTING_Details_2
SEGMENT REPORTING (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Premises & equipment, net | ||
Premises and equipment, net | $127,759 | $87,252 |
United States | ||
Premises & equipment, net | ||
Premises and equipment, net | 88,274 | 63,615 |
India | ||
Premises & equipment, net | ||
Premises and equipment, net | 27,082 | 16,404 |
Luxembourg | ||
Premises & equipment, net | ||
Premises and equipment, net | 9,059 | 3,217 |
Philippines | ||
Premises & equipment, net | ||
Premises and equipment, net | $3,344 | $4,016 |
QUARTERLY_FINANCIAL_DATA_UNAUD2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||
Revenue | $255,887 | [1],[2] | $287,688 | [1],[2] | $296,072 | [1],[2] | $239,269 | [1],[2] | $222,585 | [1],[3] | $210,835 | [1],[3] | $186,110 | [1],[3] | $148,827 | [1],[3] | |||
Gross profit | 69,235 | [1],[2] | 98,964 | [1],[2] | 112,073 | [1],[2] | 91,464 | [1],[2] | 78,300 | [1],[3] | 76,574 | [1],[3] | 69,138 | [1],[3] | 51,865 | [1],[3] | 371,736 | 275,877 | 202,159 |
Income (loss) before income taxes and non-controlling interests | -28 | [1],[2] | 45,867 | [1],[2] | 58,225 | [1],[2] | 43,201 | [1],[2] | 38,556 | [1],[3] | 38,614 | [1],[3] | 34,485 | [1],[3] | 30,678 | [1],[3] | 147,265 | 142,333 | 124,649 |
Net income | -906 | [1],[2] | 43,115 | [1],[2] | 54,732 | [1],[2] | 40,146 | [1],[2] | 36,243 | [1],[3] | 36,955 | [1],[3] | 32,068 | [1],[3] | 28,527 | [1],[3] | 137,087 | 133,793 | 115,911 |
Net income (loss) attributable to Altisource | ($1,535) | [1],[2] | $42,287 | [1],[2] | $54,101 | [1],[2] | $39,631 | [1],[2] | $35,516 | [1],[3] | $36,008 | [1],[3] | $30,931 | [1],[3] | $27,518 | [1],[3] | $134,484 | $129,973 | $110,627 |
Earnings per share: | |||||||||||||||||||
Basic (in dollars per share) | ($0.08) | [1],[2] | $1.96 | [1],[2] | $2.45 | [1],[2] | $1.76 | [1],[2] | $1.56 | [1],[3] | $1.56 | [1],[3] | $1.34 | [1],[3] | $1.18 | [1],[3] | $6.22 | $5.63 | $4.74 |
Diluted (in dollars per share) | ($0.08) | [1],[2] | $1.79 | [1],[2] | $2.24 | [1],[2] | $1.61 | [1],[2] | $1.42 | [1],[3] | $1.42 | [1],[3] | $1.25 | [1],[3] | $1.10 | [1],[3] | $5.69 | $5.19 | $4.43 |
Weighted average shares outstanding: | |||||||||||||||||||
Basic (in shares) | 20,306 | [1],[2] | 21,626 | [1],[2] | 22,089 | [1],[2] | 22,509 | [1],[2] | 22,734 | [1],[3] | 23,025 | [1],[3] | 23,161 | [1],[3] | 23,374 | [1],[3] | 21,625 | 23,072 | 23,358 |
Diluted (in shares) | 20,306 | [1],[2] | 23,640 | [1],[2] | 24,166 | [1],[2] | 24,662 | [1],[2] | 25,005 | [1],[3] | 25,333 | [1],[3] | 24,823 | [1],[3] | 25,058 | [1],[3] | 23,634 | 25,053 | 24,962 |
[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] | We acquired Mortgage Builder on September 12, 2014 and acquired Owners.com on November 21, 2014 (see Note 5). | ||||||||||||||||||
[3] | We acquired the Homeward fee-based businesses on March 29, 2013, completed the ResCap fee-based business transaction on April 12, 2013 and acquired Equator on November 15, 2013 (see Note 5). |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Allowance for Doubtful Accounts | ||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Valuation allowances, beginning balance | $5,631 | $3,274 | $2,047 | |||
Valuation allowances, Charged to Expenses | 16,257 | 2,549 | 3,049 | |||
Valuation allowances, Charged to Other Accounts | 1,399 | [1],[2] | 0 | [1],[2] | 0 | [1],[2] |
Valuation allowances, Deductions | 612 | [3],[4] | 192 | [3],[4] | 1,822 | [3],[4] |
Valuation allowances, ending balance | 22,675 | 5,631 | 3,274 | |||
Valuation Allowance of Deferred Tax Assets | ||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Valuation allowances, beginning balance | 3,189 | 2,413 | 2,209 | |||
Valuation allowances, Charged to Expenses | 0 | 0 | 0 | |||
Valuation allowances, Charged to Other Accounts | 0 | [1],[2] | 776 | [1],[2] | 204 | [1],[2] |
Valuation allowances, Deductions | 74 | [3],[4] | 0 | [3],[4] | 0 | [3],[4] |
Valuation allowances, ending balance | $3,115 | $3,189 | $2,413 | |||
[1] | Allowance for doubtful accounts primarily includes amounts previously written off which were credited directly to this account when recovered. | |||||
[2] | Valuation allowance for deferred tax assets includes current year increase to valuation allowance charged to equity and reclassifications from other balance sheet accounts. | |||||
[3] | Reductions to valuation allowances related to deferred tax assets. | |||||
[4] | Amounts written off as uncollectible or transferred to other accounts or utilized. |