(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Emerging growth company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying | ||||||||
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Exhibit No. | Description | |||||||
101 | The following Historical Consolidated Financial Statements and Notes on Form 8-K of Altisource Portfolio Solutions S.A. for the year ended December 31, 2021, filed on December 9, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020; (ii) Consolidated Statements of Operations and Comprehensive Income (Loss) for each of the years in the two-year period ended December 31, 2021; (iii) Consolidated Statements of Equity for each of the years in the two-year period ended December 31, 2021; (iv) Consolidated Statements of Cash Flows for each of the years in the two-year period ended December 31, 2021; and (v) Notes to Consolidated Financial Statements. | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Altisource Portfolio Solutions S.A. | |||||||||||
By: | /s/ Michelle D. Esterman | ||||||||||
Name: | Michelle D. Esterman | ||||||||||
Title: | Chief Financial Officer |
Page | ||||||||
BUSINESS | ||||||||
United States | India | Uruguay | Luxembourg | Consolidated Altisource | ||||||||||||||||||||||||||||
Total employees | 437 | 1,516 | 63 | 8 | 2,024 |
(in thousands, except per share data) | 2021 | % Increase (decrease) | 2020 | |||||||||||||||||
Service revenue | ||||||||||||||||||||
Servicer and Real Estate | $ | 107,790 | (63) | $ | 291,589 | |||||||||||||||
Origination | 58,002 | 11 | 52,337 | |||||||||||||||||
Corporate and Others | 4,821 | 42 | 3,387 | |||||||||||||||||
Total Service revenue | 170,613 | (51) | 347,313 | |||||||||||||||||
Reimbursable expenses | 6,555 | (60) | 16,285 | |||||||||||||||||
Non-controlling interests | 1,285 | (34) | 1,949 | |||||||||||||||||
Total Revenue | 178,453 | (51) | 365,547 | |||||||||||||||||
Cost of Revenue | 171,366 | (44) | 305,194 | |||||||||||||||||
Gross profit | 7,087 | (88) | 60,353 | |||||||||||||||||
Operating expense (income): | ||||||||||||||||||||
Selling, general and administrative expenses | 67,049 | (28) | 92,736 | |||||||||||||||||
Gain on sale of businesses | (88,930) | N/M | — | |||||||||||||||||
Restructuring charges | — | (100) | 11,972 | |||||||||||||||||
Income (loss) from operations | 28,968 | 165 | (44,355) | |||||||||||||||||
Other income (expense), net: | ||||||||||||||||||||
Interest expense | (14,547) | (18) | (17,730) | |||||||||||||||||
Unrealized gain on investment in equity securities | — | (100) | 4,004 | |||||||||||||||||
Other income, net | 864 | 130 | 375 | |||||||||||||||||
Total other income (expense), net | (13,683) | (2) | (13,351) | |||||||||||||||||
Income (loss) before income taxes and non-controlling interests | 15,285 | 126 | (57,706) | |||||||||||||||||
Income tax provision | (3,232) | (62) | (8,609) | |||||||||||||||||
Net income (loss) | 12,053 | 118 | (66,315) | |||||||||||||||||
Net income attributable to non-controlling interests | (241) | (71) | (841) | |||||||||||||||||
Net income (loss) attributable to Altisource | $ | 11,812 | 118 | $ | (67,156) | |||||||||||||||
Margins: | ||||||||||||||||||||
Gross profit/service revenue | 4 | % | 17 | % | ||||||||||||||||
Income (loss) from operations/service revenue | 17 | % | (13) | % | ||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||
Basic | $ | 0.75 | 117 | $ | (4.31) | |||||||||||||||
Diluted | $ | 0.74 | 117 | $ | (4.31) | |||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 15,839 | 2 | 15,598 | |||||||||||||||||
Diluted | 16,063 | 3 | 15,598 |
(in thousands) | 2021 | % Increase (decrease) | 2020 | |||||||||||||||||
Compensation and benefits | $ | 69,990 | (26) | $ | 94,365 | |||||||||||||||
Outside fees and services | 66,386 | (55) | 146,322 | |||||||||||||||||
Technology and telecommunications | 25,273 | (30) | 35,912 | |||||||||||||||||
Reimbursable expenses | 6,555 | (60) | 16,285 | |||||||||||||||||
Depreciation and amortization | 3,162 | (74) | 12,310 | |||||||||||||||||
Total | $ | 171,366 | (44) | $ | 305,194 |
(in thousands) | 2021 | % Increase (decrease) | 2020 | |||||||||||||||||
Compensation and benefits | $ | 28,367 | (20) | $ | 35,521 | |||||||||||||||
Occupancy related costs | 9,332 | (52) | 19,363 | |||||||||||||||||
Amortization of intangible assets | 9,467 | (36) | 14,720 | |||||||||||||||||
Professional services | 10,163 | (11) | 11,444 | |||||||||||||||||
Marketing costs | 2,157 | (35) | 3,325 | |||||||||||||||||
Depreciation and amortization | 1,430 | (45) | 2,580 | |||||||||||||||||
Other | 6,133 | 6 | 5,783 | |||||||||||||||||
Selling, general and administrative expenses | $ | 67,049 | (28) | $ | 92,736 |
(in thousands) | 2021 | % Increase (decrease) | 2020 | |||||||||||||||||
Gain on sale of businesses | $ | (88,930) | N/M | $ | — | |||||||||||||||
Restructuring charges | — | (100) | 11,972 | |||||||||||||||||
Other operating (income) expenses, net | $ | (88,930) | N/M | $ | 11,972 |
For the year ended December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Service revenue | $ | 107,790 | $ | 58,002 | $ | 4,821 | $ | 170,613 | ||||||||||||||||||
Reimbursable expenses | 5,846 | 709 | — | 6,555 | ||||||||||||||||||||||
Non-controlling interests | — | 1,285 | — | 1,285 | ||||||||||||||||||||||
113,636 | 59,996 | 4,821 | 178,453 | |||||||||||||||||||||||
Cost of revenue | 87,427 | 49,012 | 34,927 | 171,366 | ||||||||||||||||||||||
Gross profit (loss) | 26,209 | 10,984 | (30,106) | 7,087 | ||||||||||||||||||||||
Gain on sale of businesses | — | — | (88,930) | (88,930) | ||||||||||||||||||||||
Restructuring charges | — | — | — | — | ||||||||||||||||||||||
Selling, general and administrative expenses | 12,557 | 5,702 | 48,790 | 67,049 | ||||||||||||||||||||||
Income from operations | 13,652 | 5,282 | 10,034 | 28,968 | ||||||||||||||||||||||
Total other income (expense), net | 8 | — | (13,691) | (13,683) | ||||||||||||||||||||||
Income before income taxes and non-controlling interests | $ | 13,660 | $ | 5,282 | $ | (3,657) | $ | 15,285 | ||||||||||||||||||
Margins: | ||||||||||||||||||||||||||
Gross profit (loss) /service revenue | 24 | % | 19 | % | N/M | 4 | % | |||||||||||||||||||
Income from operations/service revenue | 13 | % | 9 | % | 208 | % | 17 | % |
For the year ended December 31, 2020 | ||||||||||||||||||||||||||
(in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Service revenue | $ | 291,589 | $ | 52,337 | $ | 3,387 | $ | 347,313 | ||||||||||||||||||
Reimbursable expenses | 16,138 | 147 | — | 16,285 | ||||||||||||||||||||||
Non-controlling interests | — | 1,949 | — | 1,949 | ||||||||||||||||||||||
307,727 | 54,433 | 3,387 | 365,547 | |||||||||||||||||||||||
Cost of revenue | 206,501 | 42,839 | 55,854 | 305,194 | ||||||||||||||||||||||
Gross profit (loss) | 101,226 | 11,594 | (52,467) | 60,353 | ||||||||||||||||||||||
Selling, general and administrative expenses | 26,026 | 5,823 | 60,887 | 92,736 | ||||||||||||||||||||||
Gain on sale of businesses | — | — | — | — | ||||||||||||||||||||||
Restructuring charges | 1,347 | 351 | 10,274 | 11,972 | ||||||||||||||||||||||
Income (loss) from operations | 73,853 | 5,420 | (123,628) | (44,355) | ||||||||||||||||||||||
Total other income (expense), net | 8 | — | (13,359) | (13,351) | ||||||||||||||||||||||
Income (loss) before income taxes and non-controlling interests | $ | 73,861 | $ | 5,420 | $ | (136,987) | $ | (57,706) | ||||||||||||||||||
Margins: | ||||||||||||||||||||||||||
Gross profit (loss) /service revenue | 35 | % | 22 | % | N/M | 17 | % | |||||||||||||||||||
Income (loss) from operations/service revenue | 25 | % | 10 | % | N/M | (13) | % |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Service revenue: | ||||||||||||||||||||
Solutions | $ | 69,475 | $ | 205,695 | (66) | |||||||||||||||
Marketplace | 28,009 | 71,167 | (61) | |||||||||||||||||
Technology and SaaS Products | 10,306 | 14,727 | (30) | |||||||||||||||||
Total service revenue | 107,790 | 291,589 | (63) | |||||||||||||||||
Reimbursable expenses: | ||||||||||||||||||||
Solutions | 3,364 | 7,807 | (57) | |||||||||||||||||
Marketplace | 2,482 | 8,331 | (70) | |||||||||||||||||
Total reimbursable expenses | 5,846 | 16,138 | (64) | |||||||||||||||||
Total revenue | $ | 113,636 | $ | 307,727 | (63) |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Compensation and benefits | $ | 29,573 | $ | 43,719 | (32) | |||||||||||||||
Outside fees and services | 41,860 | 127,989 | (67) | |||||||||||||||||
Technology and telecommunications | 9,066 | 12,888 | (30) | |||||||||||||||||
Reimbursable expenses | 5,846 | 16,138 | (64) | |||||||||||||||||
Depreciation and amortization | 1,082 | 5,767 | (81) | |||||||||||||||||
Cost of revenue | $ | 87,427 | $ | 206,501 | (58) |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Compensation and benefits | $ | 14 | $ | 869 | (98) | |||||||||||||||
Occupancy related costs | 828 | 919 | (10) | |||||||||||||||||
Amortization of intangible assets | 7,292 | 12,324 | (41) | |||||||||||||||||
Professional services | 2,473 | 3,056 | (19) | |||||||||||||||||
Marketing costs | 697 | 1,712 | (59) | |||||||||||||||||
Depreciation and amortization | 14 | 17 | (18) | |||||||||||||||||
Other | 1,239 | 7,129 | (83) | |||||||||||||||||
Selling, general and administrative expenses | $ | 12,557 | $ | 26,026 | (52) |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Service revenue: | ||||||||||||||||||||
Solutions | $ | 32,745 | $ | 34,526 | (5) | |||||||||||||||
Lenders One | 24,492 | 17,137 | 43 | |||||||||||||||||
Technology and SaaS Products | 765 | 674 | 14 | |||||||||||||||||
Total service revenue | 58,002 | 52,337 | 11 | |||||||||||||||||
Reimbursable expenses: | ||||||||||||||||||||
Solutions | 709 | 147 | 382 | |||||||||||||||||
Total reimbursable expenses | 709 | 147 | 382 | |||||||||||||||||
Non-controlling interests | 1,285 | 1,949 | (34) | |||||||||||||||||
Total revenue | $ | 59,996 | $ | 54,433 | 10 |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Compensation and benefits | $ | 21,868 | $ | 21,697 | 1 | |||||||||||||||
Outside fees and services | 24,476 | 18,324 | 34 | |||||||||||||||||
Technology and telecommunications | 1,895 | 2,602 | (27) | |||||||||||||||||
Reimbursable expenses | 709 | 147 | 382 | |||||||||||||||||
Depreciation and amortization | 64 | 69 | (7) | |||||||||||||||||
Cost of revenue | $ | 49,012 | $ | 42,839 | 14 |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Compensation and benefits | $ | 568 | $ | 960 | (41) | |||||||||||||||
Occupancy related costs | 303 | 498 | (39) | |||||||||||||||||
Amortization of intangible assets | 2,175 | 2,396 | (9) | |||||||||||||||||
Professional services | 934 | 911 | 3 | |||||||||||||||||
Marketing costs | 617 | 241 | 156 | |||||||||||||||||
Other | 1,105 | 817 | 35 | |||||||||||||||||
Selling, general and administrative expenses | $ | 5,702 | $ | 5,823 | (2) |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Service revenue: | ||||||||||||||||||||
Pointillist | $ | 4,821 | $ | 2,243 | 115 | |||||||||||||||
Other | — | 1,144 | N/M | |||||||||||||||||
Total service revenue | 4,821 | 3,387 | 42 | |||||||||||||||||
Total revenue | $ | 4,821 | $ | 3,387 | 42 |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Compensation and benefits | $ | 18,549 | $ | 28,949 | (36) | |||||||||||||||
Outside fees and services | 50 | 9 | N/M | |||||||||||||||||
Technology and telecommunications | 14,312 | 20,422 | (30) | |||||||||||||||||
Depreciation and amortization | 2,016 | 6,474 | (69) | |||||||||||||||||
Cost of revenue | $ | 34,927 | $ | 55,854 | (37) |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Compensation and benefits | $ | 27,785 | $ | 33,692 | (18) | |||||||||||||||
Occupancy related costs | 8,201 | 17,946 | (54) | |||||||||||||||||
Professional services | 6,756 | 7,477 | (10) | |||||||||||||||||
Marketing costs | 843 | 1,372 | (39) | |||||||||||||||||
Depreciation and amortization | 1,416 | 2,563 | (45) | |||||||||||||||||
Other | 3,789 | (2,163) | 275 | |||||||||||||||||
Selling, general and administrative expenses | $ | 48,790 | $ | 60,887 | (20) |
(in thousands) | 2021 | 2020 | % Increase (decrease) | |||||||||||||||||
Gain on sale of businesses | $ | (88,930) | $ | — | N/M | |||||||||||||||
Restructuring charges | — | 10,274 | (100) | |||||||||||||||||
Other operating (income) expenses, net | $ | (88,930) | $ | 10,274 | N/M |
(in thousands) | 2021 | % Increase (decrease) | 2020 | |||||||||||||||||
Cash flows used in operating activities | $ | (60,405) | (170) | $ | (22,401) | |||||||||||||||
Cash flows provided by investing activities | 102,762 | 118 | 47,224 | |||||||||||||||||
Cash flows used in financing activities | (2,304) | 95 | (49,310) | |||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 40,053 | 264 | (24,487) | |||||||||||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | 62,096 | (28) | 86,583 | |||||||||||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 102,149 | 65 | $ | 62,096 |
Page | |||||
December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Right-of-use assets under operating leases | ||||||||||||||
Goodwill | ||||||||||||||
Intangible assets, net | ||||||||||||||
Deferred tax assets, net | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND EQUITY (DEFICIT) | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued expenses | $ | $ | ||||||||||||
Deferred revenue | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Deferred tax liabilities, net | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Commitments, contingencies and regulatory matters (Note 24) | ||||||||||||||
Equity (deficit): | ||||||||||||||
Common stock ($ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Treasury stock, at cost ( | ( | ( | ||||||||||||
Altisource deficit | ( | ( | ||||||||||||
Non-controlling interests | ||||||||||||||
Total deficit | ( | ( | ||||||||||||
Total liabilities and deficit | $ | $ |
For the years ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Revenue | $ | $ | ||||||||||||
Cost of revenue | ||||||||||||||
Gross profit | ||||||||||||||
Operating expense (income): | ||||||||||||||
Selling, general and administrative expenses | ||||||||||||||
Gain on sale of businesses | ( | |||||||||||||
Restructuring charges | ||||||||||||||
Income (loss) from operations | ( | |||||||||||||
Other income (expense), net: | ||||||||||||||
Interest expense | ( | ( | ||||||||||||
Unrealized gain on investment in equity securities | ||||||||||||||
Other income, net | ||||||||||||||
Total other income (expense), net | ( | ( | ||||||||||||
Income (loss) before income taxes and non-controlling interests | ( | |||||||||||||
Income tax provision | ( | ( | ||||||||||||
Net income (loss) | ( | |||||||||||||
Net income attributable to non-controlling interests | ( | ( | ||||||||||||
Net income (loss) attributable to Altisource | $ | $ | ( | |||||||||||
Earnings (loss) per share: | ||||||||||||||
Basic | $ | $ | ( | |||||||||||
Diluted | $ | $ | ( | |||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Comprehensive income (loss): | ||||||||||||||
Comprehensive income (loss), net of tax | ( | |||||||||||||
Comprehensive income attributable to non-controlling interests | ( | ( | ||||||||||||
Comprehensive income (loss) attributable to Altisource | $ | $ | ( |
Altisource Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Treasury stock, at cost | Non-controlling interests | Total | ||||||||||||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of restricted share units and restricted shares | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Non-controlling interests eliminated on deconsolidation (Note 2) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest holders | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of restricted share units and restricted shares | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | ( | $ | $ | ( |
For the years ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of right-of-use assets under operating leases | |||||||||||
Amortization of intangible assets | |||||||||||
Unrealized gain on investment in equity securities | ( | ||||||||||
Share-based compensation expense | |||||||||||
Bad debt expense | |||||||||||
Amortization of debt discount | |||||||||||
Amortization of debt issuance costs | |||||||||||
Deferred income taxes | ( | ||||||||||
Loss on disposal of fixed assets | |||||||||||
Gain on sale of businesses | ( | ||||||||||
Other non-cash items | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Other assets | |||||||||||
Accounts payable and accrued expenses | ( | ( | |||||||||
Current and non-current operating lease liabilities | ( | ( | |||||||||
Other current and non-current liabilities | |||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Additions to premises and equipment | ( | ( | |||||||||
Proceeds received from sale of equity securities | |||||||||||
Proceeds from the sale of businesses | |||||||||||
Net cash provided by investing activities | |||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving credit facility | |||||||||||
Repayments of long-term debt and revolving credit facility | ( | ( | |||||||||
Debt issuance costs | ( | ||||||||||
Proceeds from convertible debt payable to related parties (Note 2) | |||||||||||
Distributions to non-controlling interests | ( | ( | |||||||||
Payments of tax withholding on issuance of restricted share units and restricted shares | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | |||||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid, net | |||||||||||
Acquisition of right-of-use assets with operating lease liabilities | |||||||||||
Reduction of right-of-use assets from operating lease modifications or reassessments | ( | ( | |||||||||
Non-cash investing and financing activities: | |||||||||||
Net (decrease) increase in payables for purchases of premises and equipment | $ | ( | $ |
Furniture and fixtures | |||||
Office equipment | |||||
Computer hardware | |||||
Computer software | |||||
Leasehold improvements | Shorter of useful life, |
(in thousands) | 2021 | 2020 | ||||||||||||
Billed | $ | $ | ||||||||||||
Unbilled | ||||||||||||||
Less: Allowance for credit losses | ( | ( | ||||||||||||
Total | $ | $ |
Additions | ||||||||||||||||||||||||||
(in thousands) | Balance at Beginning of Period | Charged to Expenses | Deductions Note (1) | Balance at End of Period | ||||||||||||||||||||||
Allowance for expected credit losses: | ||||||||||||||||||||||||||
Year ended December 31, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||
Year ended December 31, 2020 | ||||||||||||||||||||||||||
(in thousands) | 2021 | 2020 | ||||||||||||
Income taxes receivable | $ | $ | ||||||||||||
Prepaid expenses | ||||||||||||||
Maintenance agreements, current portion | ||||||||||||||
Other current assets | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Computer hardware and software | $ | $ | ||||||||||||
Leasehold improvements | ||||||||||||||
Furniture and fixtures | ||||||||||||||
Office equipment and other | ||||||||||||||
Less: Accumulated depreciation and amortization | ( | ( | ||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Luxembourg | $ | $ | ||||||||||||
United States | ||||||||||||||
India | ||||||||||||||
Uruguay | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Right-of-use assets under operating leases | $ | $ | ||||||||||||
Less: Accumulated amortization | ( | ( | ||||||||||||
Total | $ | $ |
(in thousands) | Total | |||||||
Balance as of January 1, 2020 and December 31, 2020 | $ | |||||||
Write-off (1) | ( | |||||||
Balance as of December 31, 2021 | $ |
Weighted average estimated useful life (in years) | Gross carrying amount | Accumulated amortization | Net book value | |||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||
Definite lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
Customer related intangible assets | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
Operating agreement | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Trademarks and trade names | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Non-compete agreements | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other intangible assets | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Restricted cash | $ | $ | ||||||||||||
Security deposits | ||||||||||||||
Other | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses - general | ||||||||||||||
Accrued salaries and benefits | ||||||||||||||
Income taxes payable | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
$ | $ | |||||||||||||
Other | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Senior secured term loans | $ | $ | ||||||||||||
Less: Debt issuance costs, net | ( | ( | ||||||||||||
Less: Unamortized discount, net | ( | ( | ||||||||||||
Total Senior secured term loans | ||||||||||||||
Credit Facility | ||||||||||||||
Less: Debt issuance costs, net | ( | |||||||||||||
Total Credit facility | ( | |||||||||||||
Total Long-term debt | $ | $ |
(in thousands) | Maturities | |||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
$ |
(in thousands) | 2021 | 2020 | ||||||||||||
Operating lease liabilities | $ | $ | ||||||||||||
Income tax liabilities | ||||||||||||||
Deferred revenue | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total | $ | $ |
December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Carrying amount | Fair value | Carrying amount | Fair value | ||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Restricted cash | ||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Senior secured term loan |
(in thousands, except per share data) | 2021 | 2020 | ||||||||||||
Grant date fair value of stock options that vested | $ | $ |
Number of options | Weighted average exercise price | Weighted average contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding as of December 31, 2020 | $ | $ | |||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Outstanding as of December 31, 2021 | |||||||||||||||||||||||
Exercisable as of December 31, 2021 |
Options outstanding | Options exercisable | |||||||||||||||||||||||||||||||||||||
Exercise price range (1) | Number | Weighted average remaining contractual life (in years) | Weighted average exercise price | Number | Weighted average remaining contractual life (in years) | Weighted average exercise price | ||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||||||||||||||
Market-based options | ||||||||||||||
Vesting price | Ordinary performance | Extraordinary performance | ||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
$ | ||||||||||||||
Over $ | ||||||||||||||
Total | ||||||||||||||
Weighted average share price | $ | $ |
Number of restricted shares and restricted share units | |||||
Outstanding as of December 31, 2020 | |||||
Granted | |||||
Issued | ( | ||||
Forfeited/canceled | ( | ||||
Outstanding as of December 31, 2021 |
2021 | 2020 | |||||||||||||||||||||||||
Monte Carlo | Binomial | Monte Carlo | Binomial | |||||||||||||||||||||||
Risk-free interest rate (%) | ||||||||||||||||||||||||||
Expected stock price volatility (%) | ||||||||||||||||||||||||||
Expected dividend yield | ||||||||||||||||||||||||||
Expected life (in years) | — | |||||||||||||||||||||||||
Fair value | $ | $ | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Service revenue | $ | $ | ||||||||||||
Reimbursable expenses | ||||||||||||||
Non-controlling interests | ||||||||||||||
Total | $ | $ |
Twelve months ended December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | Revenue recognized when services are performed or assets are sold | Revenue related to technology platforms and professional services | Reimbursable expenses revenue | Total revenue | ||||||||||||||||||||||
For the year ended December 31, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||
For the year ended December 31, 2020 |
(in thousands) | 2021 | 2020 | ||||||||||||
Compensation and benefits | $ | $ | ||||||||||||
Outside fees and services | ||||||||||||||
Technology and telecommunications | ||||||||||||||
Reimbursable expenses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Compensation and benefits | $ | $ | ||||||||||||
Professional services | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Occupancy related costs | ||||||||||||||
Marketing costs | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Other | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Interest income | $ | $ | ||||||||||||
Other, net | ||||||||||||||
Total | $ | $ |
(in thousands) | 2021 | 2020 | ||||||||||||
Domestic - Luxembourg | $ | $ | ( | |||||||||||
Foreign - U.S. | ( | ( | ||||||||||||
Foreign - non-U.S. | ( | |||||||||||||
Total | $ | $ | ( |
(in thousands) | 2021 | 2020 | ||||||||||||
Current: | ||||||||||||||
Domestic - Luxembourg | $ | $ | ( | |||||||||||
Foreign - U.S. federal | ( | |||||||||||||
Foreign - U.S. state | ( | ( | ||||||||||||
Foreign - non-U.S. | ( | ( | ||||||||||||
$ | ( | $ | ( | |||||||||||
Deferred: | ||||||||||||||
Domestic - Luxembourg | $ | ( | $ | |||||||||||
Foreign - U.S. federal | ( | |||||||||||||
Foreign - U.S. state | ( | |||||||||||||
Foreign - non-U.S. | ( | ( | ||||||||||||
$ | $ | ( | ||||||||||||
Income tax provision | $ | ( | $ | ( |
(in thousands) | 2021 | 2020 | ||||||||||||
Non-current deferred tax assets: | ||||||||||||||
Net operating loss carryforwards | $ | $ | ||||||||||||
U.S. federal and state tax credits | ||||||||||||||
Other non-U.S. deferred tax assets | ||||||||||||||
Share-based compensation | ||||||||||||||
Accrued expenses | ||||||||||||||
Unrealized losses | ||||||||||||||
Non-current deferred tax liabilities: | ||||||||||||||
Intangible assets | ( | ( | ||||||||||||
Depreciation | ( | |||||||||||||
Other non-U.S. deferred tax liability | ( | ( | ||||||||||||
Other | ( | |||||||||||||
Valuation allowance | ( | ( | ||||||||||||
Non-current deferred tax liabilities, net | $ | ( | $ | ( | ||||||||||
2021 | 2020 | |||||||||||||
Statutory tax rate | % | % | ||||||||||||
Change in valuation allowance | ( | |||||||||||||
State tax expense | ( | ( | ||||||||||||
Tax credits | ||||||||||||||
Uncertain tax positions | ( | |||||||||||||
Income tax rate change | ( | |||||||||||||
Tax rate differences on foreign earnings | ( | |||||||||||||
Tax Exempt Income | ( | |||||||||||||
Other | ( | |||||||||||||
Effective tax rate | % | ( | % |
(in thousands) | 2021 | 2020 | ||||||||||||
Amount of unrecognized tax benefits as of the beginning of the year | $ | $ | ||||||||||||
Decreases as a result of tax positions taken in a prior period | ( | ( | ||||||||||||
Increases as a result of tax positions taken in a prior period | ||||||||||||||
Increases as a result of tax positions taken in the current period | ||||||||||||||
Amount of unrecognized tax benefits as of the end of the year | $ | $ |
(in thousands, except per share data) | 2021 | 2020 | ||||||||||||
Net income (loss) attributable to Altisource | $ | $ | ( | |||||||||||
Weighted average common shares outstanding, basic | ||||||||||||||
Dilutive effect of stock options, restricted shares and restricted share units | ||||||||||||||
Weighted average common shares outstanding, diluted | ||||||||||||||
Earnings (loss) per share: | ||||||||||||||
Basic | $ | $ | ( | |||||||||||
Diluted | $ | $ | ( |
2021 | 2020 | |||||||||||||
Weighted average remaining lease term (in years) | ||||||||||||||
Weighted average discount rate | % | % |
(in thousands) | 2021 | 2020 | ||||||||||||
Operating lease costs: | ||||||||||||||
Selling, general and administrative expense | $ | $ | ||||||||||||
Cost of revenue | ||||||||||||||
Cash used in operating activities for amounts included in the measurement of lease liabilities | $ | $ | ||||||||||||
Short-term (twelve months or less) lease costs | ( |
(in thousands) | Operating lease obligations | |||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Total lease payments | ||||||||
Less: interest | ( | |||||||
Present value of lease liabilities | $ |
2021 | 2020 | |||||||||||||
Servicer and Real Estate | % | % | ||||||||||||
Origination | % | % | ||||||||||||
Corporate and Others | % | % | ||||||||||||
Consolidated revenue | % | % |
Twelve months ended December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | Revenue recognized when services are performed or assets are sold | Revenue related to technology platforms and professional services | Reimbursable expenses revenue | Total revenue | ||||||||||||||||||||||
Servicer and Real Estate | $ | $ | $ | $ | ||||||||||||||||||||||
Origination | ||||||||||||||||||||||||||
Corporate and Others | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Twelve months ended December 31, 2020 | ||||||||||||||||||||||||||
(in thousands) | Revenue recognized when services are performed or assets are sold | Revenue related to technology platforms and professional services | Reimbursable expenses revenue | Total revenue | ||||||||||||||||||||||
Servicer and Real Estate | $ | $ | $ | $ | ||||||||||||||||||||||
Origination | ||||||||||||||||||||||||||
Corporate and Others | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
For the year ended December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||
Gross profit (loss) | ( | |||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Gain on sale of businesses | ( | ( | ||||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Total other income (expense), net | ( | ( | ||||||||||||||||||||||||
Income (loss) before income taxes and non-controlling interests | $ | $ | $ | ( | $ | |||||||||||||||||||||
For the year ended December 31, 2020 | ||||||||||||||||||||||||||
(in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||
Gross profit (loss) | ( | |||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Restructuring charges | ||||||||||||||||||||||||||
Income (loss) from operations | ( | ( | ||||||||||||||||||||||||
Total other income (expense), net | ( | ( | ||||||||||||||||||||||||
Income (loss) before income taxes and non-controlling interests | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
(in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
Total assets: | ||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2020 |
(in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Total | ||||||||||||||||||||||
Balance as of January 1, 2020 and December 31, 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
Write-off (1) | ( | ( | ||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ |
Cover |
Dec. 12, 2022 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Dec. 12, 2022 |
Entity Registrant Name | ALTISOURCE PORTFOLIO SOLUTIONS S.A. |
Entity Incorporation, State or Country Code | N4 |
Entity File Number | 001-34354 |
Entity Tax Identification Number | 98-0554932 |
Entity Address, Address Line One | 33 Boulevard Prince Henri |
Entity Address, Postal Zip Code | L-1724 |
Entity Address, City or Town | Luxembourg |
Entity Address, Country | LU |
City Area Code | 352 |
Local Phone Number | 2469 7900 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $1.00 par value |
Trading Symbol | ASPS |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001462418 |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 25,413,000 | 25,413,000 |
Common stock, shares outstanding (in shares) | 15,911,000 | 15,664,000 |
Treasury stock, shares (in shares) | 9,502,000 | 9,749,000 |
ORGANIZATION |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Description of Business Altisource Portfolio Solutions S.A., together with its subsidiaries (which may be referred to as “Altisource,” the “Company,” “we,” “us” or “our”), is an integrated service provider and marketplace for the real estate and mortgage industries. Combining operational excellence with a suite of innovative services and technologies, Altisource helps solve the demands of the ever-changing markets we serve.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Presentation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany transactions and accounts have been eliminated in consolidation. Principles of Consolidation The financial statements include the accounts of the Company, its wholly-owned subsidiaries and those entities in which we have a variable interest and are the primary beneficiary. Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option). The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests. As of December 31, 2021, Lenders One had total assets of $2.2 million and total liabilities of $1.4 million. As of December 31, 2020, Lenders One had total assets of $2.3 million and total liabilities of $0.1 million. In 2019, Altisource created Pointillist, Inc. (“Pointillist”) and contributed the Pointillist® customer journey analytics business and $8.5 million to it. On May 27, 2021, Pointillist issued $1.3 million in principal of convertible notes to related parties with a maturity date of January 1, 2023. The notes bore interest at a rate of 7% per annum. The principal and unpaid accrued interest then outstanding under the notes (1) would automatically convert to Pointillist equity at the earlier of the time Pointillist receives proceeds of $5.0 million or more from the sale of its equity or January 1, 2023, or (2) are repaid in cash or converted into Pointillist common stock equity based on a $13.1 million Pointillist valuation (at the Lenders’ option) in the event of a corporate transaction or initial public offering of Pointillist. On December 1, 2021, the notes were converted to Pointillist equity and Altisource and other shareholders of Pointillist sold all of the equity interests in Pointillist (See Note 4 for additional information). Prior to the sale, Pointillist was owned by Altisource and management of Pointillist, with management of Pointillist owning a non-controlling interest representing 12.1% of the outstanding equity of Pointillist. Through December 1, 2021 Pointillist is presented in the accompanying consolidated financial statements on a consolidated basis and the portion of Pointillist owned by Pointillist management is reported as non-controlling interests as of December 31, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining share-based compensation, income taxes, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives and valuation of fixed assets and contingencies. Actual results could differ materially from those estimates. Cash and Cash Equivalents We classify all highly liquid instruments with an original maturity of three months or less at the time of purchase as cash equivalents. Accounts Receivable, Net Accounts receivable are presented net of an allowance for expected credit losses. We monitor and estimate the allowance for credit losses based on our historical write-offs, historical collections, our analysis of past due accounts based on the contractual terms of the receivables, relevant market and industry reports and our assessment of the economic status of our customers, if known. The carrying value of accounts receivable, net, approximates fair value. Premises and Equipment, Net We report premises and equipment, net at cost or estimated fair value at acquisition for premises and equipment recorded in connection with a business combination and depreciate these assets over their estimated useful lives using the straight-line method as follows:
Maintenance and repair costs are expensed as incurred. We capitalize expenditures for significant improvements and new equipment and depreciate the assets over the shorter of the capitalized asset’s life or the life of the lease. We review premises and equipment for impairment following events or changes in circumstances that indicate the carrying amount of an asset or asset group may not be recoverable. We measure recoverability of assets to be held and used by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, we recognize an impairment charge for the amount that the carrying value of the asset or asset group exceeds the fair value of the asset or asset group. Computer software includes the fair value of software acquired in business combinations, capitalized software development costs and purchased software. Capitalized software development and purchased software are recorded at cost and amortized using the straight-line method over their estimated useful lives. Software acquired in business combinations is recorded at fair value and amortized using the straight-line method over its estimated useful life. Business Combinations We account for acquisitions using the purchase method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using their fair value as of the acquisition date. Goodwill Goodwill represents the excess cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative 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 comparing the fair value of the reporting unit with its carrying amount. If the fair value is determined to be less than its carrying amount, we recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We estimate the fair value of the reporting unit using discounted cash flows and market comparisons. The discounted cash flow method is based on the present value of projected cash flows. Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions. The estimated cash flows are discounted using a rate that represents our weighted average cost of capital. The market comparisons include an analysis of revenue and earnings multiples of guideline public companies compared to the Company. Intangible Assets, Net Identified intangible assets consist primarily of customer related intangible assets, operating agreements, trademarks and trade names and other intangible assets. Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors. We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 4 to 20 years. We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable. When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets generally consistent with models utilized for internal planning purposes. If the sum of the undiscounted expected future cash flows is less than the carrying value, we recognize an impairment to the extent the carrying amount exceeds fair value. Long-Term Debt Long-term debt is reported net of applicable discount or premium and net of debt issuance costs. The debt discount or premium and debt issuance costs are amortized to interest expense through maturity of the related debt using the effective interest method. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows: Level 1 — Quoted prices in active markets for identical assets and liabilities Level 2 — Observable inputs other than quoted prices included in Level 1 Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities. Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. Functional Currency The currency of the primary economic environment in which our operations are conducted is the United States dollar. Therefore, the United States dollar has been determined to be our functional and reporting currency. Non-United States dollar transactions and balances have been measured in United States dollars in accordance with ASC Topic 830, Foreign Currency Matters. All transaction gains and losses from the measurement of monetary balance sheet items denominated in non-United States dollar currencies are reflected in the consolidated statements of operations and comprehensive income (loss) as income or expenses, as appropriate. Defined Contribution 401(k) Plan Some of our employees currently participate in a defined contribution 401(k) plan under which we may make matching contributions equal to a discretionary percentage determined by us. We recorded expenses of $0.5 million and $0.6 million for the years ended December 31, 2021 and 2020, respectively, related to our discretionary contributions. Revenue Recognition We recognize revenue when we satisfy a performance obligation by transferring control of a product or service to a customer in an amount that reflects the consideration that we expect to receive. This revenue can be recognized at a point in time or over time. We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenues are recognized. When there is a timing difference between when we invoice customers and when revenues are recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred revenue or other current liabilities), as appropriate. See note 25 for descriptions of our principal revenue generating activities. Share-Based Compensation Share-based compensation is accounted for under the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC Topic 718”). Under ASC Topic 718, the cost of services received in exchange for an award of equity instruments is generally measured based on the grant date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based awards that require future service are recognized over the relevant service period. The Company has made an accounting policy election to account for forfeitures in compensation expense as they occur. Income Taxes We record income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). We account for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our results of operations. Earnings Per Share We compute earnings per share in accordance with ASC Topic 260, Earnings Per Share. Basic net income per share is computed by dividing net income attributable to Altisource by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities using the treasury stock method. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard is part of the FASB’s initiative to reduce complexity in accounting standards by instituting several simplifying provisions and removing several exceptions pertaining to income tax accounting. This standard is effective for annual periods beginning after December 15, 2020, including interim periods within that reporting period. The Company adopted this standard effective January 1, 2021 and has applied it prospectively. Adoption of this new standard did not have any impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Topic 815). This standard simplifies the accounting for certain financial instruments with characteristics of liability and equity, particularly convertible debt instruments. This standard is effective for annual periods beginning after December 15, 2021, including interim periods within that reporting period. Early adoption is permitted for annual periods beginning after December 15, 2020. The Company early adopted this standard effective January 1, 2021 and has applied it prospectively. Adoption of this new standard did not have a material impact on the Company’s consolidated financial statements. Future Adoption of New Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. This standard applies only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. This standard provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR. This standard is effective from the period from March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a topic or an industry subtopic, the standard must be applied prospectively for all eligible contract modifications for that topic or industry subtopic. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements.
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CUSTOMER CONCENTRATION |
12 Months Ended |
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Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER CONCENTRATION | CUSTOMER CONCENTRATION Ocwen Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of MSRs owned by others. During the year ended December 31, 2021, Ocwen was our largest customer, accounting for 31% of our total revenue. Ocwen purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2030. Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things. Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements. For the years ended December 31, 2021 and 2020, we recognized revenue from Ocwen of $55.6 million and $197.8 million, respectively. Revenue from Ocwen as a percentage of consolidated revenue was 31% and 54% for the years ended December 31, 2021 and 2020, respectively. We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSR owner selects Altisource as the service provider. For the years ended December 31, 2021 and 2020, we recognized $9.5 million and $23.8 million, respectively, of such revenue. These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above. During the second quarter of 2020, Ocwen informed us that an MSR investor instructed Ocwen to use a field services provider other than Altisource on properties associated with certain MSRs. Based upon the impacted portfolios and the designated service provider, Altisource believes that Ocwen received these directions from New Residential Investment Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “NRZ”). We believe Ocwen commenced using another field services provider for these properties in July 2020 and continued to transition services during the third quarter of 2020. We believe that the transition to the replacement field service provider was largely completed as of September 30, 2020. We estimate that $0.5 million and $70.1 million of service revenue from Ocwen for the years ended December 31, 2021 and 2020, respectively, was derived from Field Services referrals from the NRZ portfolios. Ocwen also communicated to Altisource in the fourth quarter of 2020 that the same investor instructed Ocwen to use a provider for default valuations and certain default title services other than Altisource on properties associated with such certain MSRs and commenced moving these referrals to other service providers in the fourth quarter of 2020, with the bulk of such transition occurring during 2021. We anticipate that the transition of such default valuations and title services will continue during the course of 2022. We estimate that $2.9 million and $18.2 million of service revenue from Ocwen for the years ended December 31, 2021 and 2020, respectively, was derived from default valuations and title services referrals from the NRZ portfolios. To address the reduction in revenue, Altisource undertook several measures to further reduce its cost structure, strengthen its operations and generate cash. On May 5, 2021 we entered into an agreement with Ocwen (the “Agreement”) pursuant to which the terms of certain services agreements between us and Ocwen were extended from August 2025 through August 2030 and the scope of solutions we provide to Ocwen was expanded to include, among other things, the opportunity for the Company to provide first and second chance foreclosure auctions on Federal Housing Administration (“FHA”) loans and field services on Ocwen’s FHA, Veterans Affairs and United States Department of Agriculture loans (collectively, “Government Loans”), and title services on FHA and Veterans Affairs loans, subject to a process to confirm Altisource’s ability to meet reasonable performance requirements, which process is continuing. The Agreement established a framework for us to expand the foreclosure trustee solutions we provide to Ocwen in additional states, and, as mutually agreed upon by the parties, to deliver reverse mortgage related solutions to Ocwen, subject to negotiation of appropriate statements of work or other agreements, a process to confirm Altisource’s ability to meet reasonable performance requirements, and technical integrations, as may be applicable. The Agreement further resolved the contractual dispute between the parties related to Ocwen’s transfer to NRZ the rights to designate service providers other than Altisource, including mutual releases with respect to such dispute. The Agreement also addressed Ocwen’s rights in the event of certain change of control or sale of a business transactions by us on or after September 1, 2028. Since the date of the Agreement, Ocwen has transitioned over 2,300 of its foreclosure auction inventory on Government Loans to us and increased our percentage of field services referrals on its Government Loans. As of December 31, 2021, accounts receivable from Ocwen totaled $3.0 million, $2.8 million of which was billed and $0.2 million of which was unbilled. As of December 31, 2020, accounts receivable from Ocwen totaled $5.9 million, $5.1 million of which was billed and $0.8 million of which was unbilled. NRZ NRZ is a real estate investment trust that invests in and manages investments primarily related to residential real estate, including MSRs and excess MSRs. Ocwen has disclosed that NRZ is its largest client. As of December 31, 2021, approximately 21% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”) were related to NRZ MSRs or rights to MSRs. In July 2017 and January 2018, Ocwen and NRZ entered into a series of agreements pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to certain of its MSRs (the “Subject MSRs”) and under which Ocwen will subservice mortgage loans underlying the MSRs for an initial term of five years, subject to early termination rights. On August 28, 2017, Altisource, through its licensed subsidiaries, entered into a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with NRZ which extends through August 2025. Under this agreement and related amendments, Altisource remains the exclusive provider of brokerage services for REO associated with the Subject MSRs, irrespective of the subservicer, subject to certain limitations. NRZ’s brokerage subsidiary receives a cooperative brokerage commission on the sale of REO properties from these portfolios subject to certain exceptions. The Brokerage Agreement may be terminated by NRZ upon the occurrence of certain specified events. Termination events include, but are not limited to, a breach of the terms of the Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), the failure to maintain licenses which failure materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against NRZ, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control. For the years ended December 31, 2021 and 2020, we recognized revenue from NRZ of $3.1 million and $8.6 million, respectively, under the Brokerage Agreement. For the years ended December 31, 2021 and 2020, we recognized additional revenue of $13.6 million and $35.1 million, respectively, relating to the Subject MSRs when a party other than NRZ selects Altisource as the service provider.
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SALE OF BUSINESSES |
12 Months Ended |
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Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF BUSINESSES | SALE OF BUSINESSES Pointillist Business On October 6, 2021 Altisource and other shareholders of Pointillist entered into a definitive Stock Purchase Agreement (as amended, the “SPA”) to sell all of the equity interests in Pointillist to Genesys Cloud Services, Inc. (“Genesys”) for $150.0 million (the “Purchase Price”) (the “Transaction”). The Purchase Price consisted of (1) an up-front payment of $144.5 million, subject to certain adjustments, (2) $0.5 million deposited into an escrow account to be used to satisfy potential deficits between estimated closing date working capital and actual closing date working capital (the “Working Capital Escrow”), with excess amounts remaining after satisfying such deficits (if any) being paid to the sellers, and (3) $5.0 million deposited into an escrow account to satisfy certain Genesys indemnification claims that may arise on or prior to the first anniversary of the sale closing and, at Genesys’ election, any working capital deficits that exceed the Working Capital Escrow (the “Indemnification Escrow”), with the balance to be paid to the sellers thereafter. The Transaction closed on December 1, 2021. On a fully diluted basis, Altisource owned approximately 69% of the equity of Pointillist. After working capital and other applicable adjustments, Altisource received approximately $106.0 million from the sale of its Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow. The present value of the amounts in escrow is included in other current assets in the accompanying consolidated balance sheets at a discounted value of $3.6 million as of December 31, 2021 (no comparative amount as of December 31, 2020). Altisource recognized a pre-tax and after-tax gain of approximately $88.9 million from the sale. Financial Services Business On July 1, 2019, Altisource sold its Financial Services business, consisting of its post-charge-off consumer debt and mortgage charge-off collection services and customer relationship management services (the “Financial Services Business”) to Transworld Systems Inc. (“TSI”) for $44.0 million consisting of an up-front payment of $40.0 million, subject to a working capital adjustment (finalized during 2019) and transaction costs upon closing of the sale, and an additional $4.0 million payment on the one year anniversary of the sale closing. On July 1, 2020, the Company received net proceeds of $3.3 million representing TSI’s final installment payment less certain amounts owed to TSI. Rental Property Management Business In August 2018, Altisource entered into an amendment to its agreements with Front Yard Residential Corporation (“RESI”) to sell Altisource’s rental property management business to RESI and permit RESI to internalize certain services that had been provided by Altisource. The proceeds from the transaction totaled $18.0 million, payable in two installments. The first installment of $15.0 million was received in August 2018 and the second installment of $3.0 million was received in January 2021. The present value of the second installment is included in other assets in the accompanying consolidated balance sheets at a discounted value of $2.5 million as of December 31, 2020 (no comparative amount as of December 31, 2021).
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INVESTMENT IN EQUITY SECURITIES |
12 Months Ended |
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Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT IN EQUITY SECURITIES | INVESTMENT IN EQUITY SECURITIES During 2016, we purchased 4.1 million shares of RESI common stock. This investment is reflected in the accompanying consolidated balance sheets at fair value and changes in fair value are included in other income (expense), net in the accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2021 and December 31, 2020, we held no shares of RESI common stock. During the year ended December 31, 2020 we recognized an unrealized gain from the change in fair value of $4.0 million in the consolidated statements of operations and comprehensive income (loss) (no comparative amount for the year ended December 31, 2021). The unrealized gain for year ended December 31, 2020 included $4.1 million of net gains recognized on RESI shares sold during the period (no comparative amount for the year ended December 31, 2021). During the year ended December 31, 2020 we earned dividends of $0.5 million related to this investment (no comparative amount for the year ended December 31, 2021). During the year ended December 31, 2020, the Company sold all of its remaining 3.5 million shares for net proceeds of $46.6 million. As required by our senior secured term loan agreement, the Company used the net proceeds to repay a portion of its senior secured term loan.
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ACCOUNTS RECEIVABLE, NET |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE, NET | ACCOUNTS RECEIVABLE, NET Accounts receivable, net consists of the following as of December 31:
Unbilled accounts receivable consist primarily of certain real estate asset management, REO sales, title and closing services for which we generally recognize revenue when the service is provided but collect upon closing of the sale, and foreclosure trustee services, for which we generally recognize revenues over the service delivery period but bill following completion of the service. We also include amounts in unbilled accounts receivable that are earned during a month and billed in the following month. We are exposed to credit losses through our sales of products and services to our customers which are recorded as accounts receivable, net on the Company’s consolidated financial statements. We monitor and estimate the allowance for credit losses based on our historical write-offs, historical collections, our analysis of past due accounts based on the contractual terms of the receivables, relevant market and industry reports and our assessment of the economic status of our customers, if known. Estimated credit losses are written off in the period in which the financial asset is determined to be no longer collectible. There can be no assurance that actual results will not differ from estimates or that consideration of these factors in the future will not result in an increase or decrease to our allowance for credit losses. Changes in allowance for expected credit losses consist of the following:
______________________________________ (1) Amounts written off as uncollectible or transferred to other accounts or utilized.
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PREPAID EXPENSES AND OTHER CURRENT ASSETS |
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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:
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DISCONTINUATION OF LINES OF BUSINESS |
12 Months Ended |
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Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUATION OF LINES OF BUSINESS | SALE OF BUSINESSES Pointillist Business On October 6, 2021 Altisource and other shareholders of Pointillist entered into a definitive Stock Purchase Agreement (as amended, the “SPA”) to sell all of the equity interests in Pointillist to Genesys Cloud Services, Inc. (“Genesys”) for $150.0 million (the “Purchase Price”) (the “Transaction”). The Purchase Price consisted of (1) an up-front payment of $144.5 million, subject to certain adjustments, (2) $0.5 million deposited into an escrow account to be used to satisfy potential deficits between estimated closing date working capital and actual closing date working capital (the “Working Capital Escrow”), with excess amounts remaining after satisfying such deficits (if any) being paid to the sellers, and (3) $5.0 million deposited into an escrow account to satisfy certain Genesys indemnification claims that may arise on or prior to the first anniversary of the sale closing and, at Genesys’ election, any working capital deficits that exceed the Working Capital Escrow (the “Indemnification Escrow”), with the balance to be paid to the sellers thereafter. The Transaction closed on December 1, 2021. On a fully diluted basis, Altisource owned approximately 69% of the equity of Pointillist. After working capital and other applicable adjustments, Altisource received approximately $106.0 million from the sale of its Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow. The present value of the amounts in escrow is included in other current assets in the accompanying consolidated balance sheets at a discounted value of $3.6 million as of December 31, 2021 (no comparative amount as of December 31, 2020). Altisource recognized a pre-tax and after-tax gain of approximately $88.9 million from the sale. Financial Services Business On July 1, 2019, Altisource sold its Financial Services business, consisting of its post-charge-off consumer debt and mortgage charge-off collection services and customer relationship management services (the “Financial Services Business”) to Transworld Systems Inc. (“TSI”) for $44.0 million consisting of an up-front payment of $40.0 million, subject to a working capital adjustment (finalized during 2019) and transaction costs upon closing of the sale, and an additional $4.0 million payment on the one year anniversary of the sale closing. On July 1, 2020, the Company received net proceeds of $3.3 million representing TSI’s final installment payment less certain amounts owed to TSI. Rental Property Management Business In August 2018, Altisource entered into an amendment to its agreements with Front Yard Residential Corporation (“RESI”) to sell Altisource’s rental property management business to RESI and permit RESI to internalize certain services that had been provided by Altisource. The proceeds from the transaction totaled $18.0 million, payable in two installments. The first installment of $15.0 million was received in August 2018 and the second installment of $3.0 million was received in January 2021. The present value of the second installment is included in other assets in the accompanying consolidated balance sheets at a discounted value of $2.5 million as of December 31, 2020 (no comparative amount as of December 31, 2021).
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PREMISES AND EQUIPMENT, NET |
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PREMISES AND EQUIPMENT, NET | PREMISES AND EQUIPMENT, NET Premises and equipment, net consists of the following as of December 31:
Depreciation and amortization expense amounted to $4.6 million and $14.9 million for the years ended December 31, 2021 and 2020, respectively, and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the consolidated statements of operations and comprehensive income (loss).
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RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET | RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET Right-of-use assets under operating leases, net consists of the following as of December 31:
Amortization of operating leases was $7.9 million and $10.2 million for the years ended December 31, 2021 and 2020, respectively, and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the consolidated statements of operations and comprehensive income (loss).
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Changes in goodwill during the years ended December 31, 2021 and 2020 are summarized below:
______________________________________ (1) During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit. Intangible Assets, Net Intangible assets, net consist of the following as of December 31:
Amortization expense for definite lived intangible assets was $9.5 million and $14.7 million for the years ended December 31, 2021 and 2020, respectively. Forecasted annual definite lived intangible asset amortization expense for 2022 through 2026 is $5.1 million, $5.1 million, $5.1 million, $5.1 million and $4.9 million, respectively.
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OTHER ASSETS |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS | OTHER ASSETS Other assets consist of the following as of December 31:
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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
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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:
Other current liabilities consist of the following as of December 31:
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LONG-TERM DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consists of the following as of December 31:
Credit Agreement Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l. entered into a credit agreement (the “Credit Agreement”) in April 2018 with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders. Under the Credit Agreement, Altisource borrowed $412.0 million in the form of Term B Loans and obtained a $15.0 million revolving credit facility. The Term B Loans mature in April 2024. Altisource terminated the revolving credit facility on December 1, 2021. Altisource Portfolio Solutions S.A. and certain subsidiaries are guarantors of the Term B Loans (collectively, the “Guarantors”). There are no mandatory repayments of the Term B Loans except as set forth below until the April 2024 maturity when the balance is due. During 2020, the Company sold 3.5 million RESI shares for net proceeds of $46.6 million, and used the net proceeds to repay a portion of the senior secured term loan (see Note 5). This repayment was applied to contractual amortization payments in the direct order of maturity. All amounts outstanding under the Term B Loans will become due on the earlier of (i) April 3, 2024, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Credit Agreement; other capitalized terms, unless defined herein, are defined in the Credit Agreement) or as otherwise provided in the Credit Agreement upon the occurrence of any event of default. In addition to the scheduled principal payments, subject to certain exceptions, the Term B Loans are subject to mandatory prepayment upon issuances of debt, certain casualty and condemnation events and sales of assets, as well as from a percentage of Consolidated Excess Cash Flow if our leverage ratio as of each year-end computation date is greater than 3.00 to 1.00, as calculated in accordance with the provisions of the Credit Agreement (the percentage increases if our leverage ratio exceeds 3.50 to 1.00). Altisource may incur incremental indebtedness under the Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $125.0 million, subject to certain conditions set forth in the Credit Agreement, including a sublimit of $80.0 million with respect to incremental revolving credit commitments and, after giving effect to the incremental borrowing, the Company’s leverage ratio does not exceed 3.00 to 1.00. The lenders have no obligation to provide any incremental indebtedness. The Term B Loans bear interest at rates based upon, at our option, the Adjusted Eurodollar Rate or the Base Rate. Adjusted Eurodollar Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Adjusted Eurodollar Rate for a three month interest period and (y) 1.00% plus (ii) 4.00%. Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 3.00%. The interest rate as of December 31, 2021 was 5.00%. The payment of all amounts owing by Altisource under the Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l. and the Guarantors, subject to certain exceptions. The Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur indebtedness; incur liens on our assets; sell, transfer or dispose of assets; make Restricted Junior Payments including share repurchases, dividends and repayment of junior indebtedness; make investments; dispose of equity interests of any Material Subsidiaries; engage in a line of business substantially different than existing businesses and businesses reasonably related, complimentary or ancillary thereto; amend material debt agreements or other material contracts; engage in certain transactions with affiliates; enter into sale/leaseback transactions; grant negative pledges or agree to such other restrictions relating to subsidiary dividends and distributions; make changes to our fiscal year; and engage in mergers and consolidations. The Credit Agreement contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Credit Agreement within five days of becoming due, (ii) material incorrectness of representations and warranties when made, (iii) breach of certain other covenants, subject to cure periods described in the Credit Agreement, (iv) 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, (vii) bankruptcy and insolvency events, (viii) entry by a court of one or more judgments against us in an amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (ix) the occurrence of certain ERISA events and (x) the failure of certain Loan Documents to be in full force and effect. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. As of December 31, 2021, debt issuance costs were $1.6 million, net of $2.9 million of accumulated amortization. As of December 31, 2020, debt issuance costs were $2.4 million, net of $2.2 million of accumulated amortization. Interest expense on the senior secured term loans, including amortization of debt issuance costs and the net debt discount, totaled $13.9 million and $17.7 million for the years ended December 31, 2021 and 2020, respectively. Maturities of our long-term debt are as follows:
Credit Facility On June 22, 2021 Altisource S.à r.l, a subsidiary of Altisource Portfolio Solutions S.A., entered into a revolving credit facility with a related party, STS Master Fund, Ltd. (“STS”) (the “Credit Facility”). STS is an investment fund managed by Deer Park Road Management Company, LP. Deer Park Road Management Company, LP owns approximately 24% of Altisource’s common stock as of December 31, 2021 and its Chief Investment Officer and managing partner is a member of Altisource’s Board of Directors. Under the terms of the Credit Facility, STS will make loans to Altisource from time to time, in amounts requested by Altisource and Altisource may voluntarily prepay all or any portion of the outstanding loans at any time. The Credit Facility provides Altisource the ability to borrow a maximum amount of $20.0 million through June 22, 2022, $15.0 million through June 22, 2023, and $10.0 million until the end of the term. Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below. Outstanding amounts borrowed pursuant to the Credit Facility will amortize over the three-year term as follows: on June 22, 2022, the difference between the then outstanding balance above $15.0 million and $15.0 million, on June 22, 2023, the difference between the then outstanding balance above $10.0 million and $10.0 million, and on June 22, 2024, the then outstanding balance of the loan will be due and payable by Altisource. Borrowings under the Credit Facility bear interest at 9.00% per annum and are payable quarterly on the last business day of each March, June, September and December, commencing on September 30, 2021. In connection with the Credit Facility, Altisource is required to pay customary fees, including an upfront fee equal to $0.5 million at the initial extension of credit pursuant to the facility, an unused line fee of 0.5% and, an early termination fee in the event of a refinancing transaction. Altisource’s obligations under the Credit Facility are secured by a lien on all equity in Altisource’s subsidiary incorporated in India, Altisource Business Solutions Private Limited, pursuant to a pledge agreement entered into by Altisource Asia Holdings Ltd I, a wholly owned subsidiary Altisource. The Credit Facility contains additional representations, warranties, covenants, terms and conditions customary for transactions of this type, that restrict or limit, among other things, our ability to use the proceeds of credit only for general corporate purposes. The Credit Facility contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Credit Facility within business days of becoming due, (ii) failure to perform or observe any material provisions of the Credit Documents to be performed or complied with, (iii) material incorrectness of representations and warranties when made, (iv) 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, (v) entry by a court of one or more judgments against us in an amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (vi) occurrence of a Change of Control, (vii) bankruptcy and insolvency events. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Facility or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. As of December 31, 2021, there was no outstanding debt under the Credit Facility. Debt issuance costs were $0.4 million, net of $0.1 million of accumulated amortization.
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OTHER NON-CURRENT LIABILITIES |
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Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER NON-CURRENT LIABILITIES | OTHER NON-CURRENT LIABILITIES Other non-current liabilities consist of the following as of December 31:
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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS The following table presents the carrying amount and estimated fair value of financial instruments and certain liabilities measured at fair value as of December 31, 2021 and 2020. The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:
Fair Value Measurements on a Recurring Basis Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair values due to the highly liquid nature of these instruments and were measured using Level 1 inputs. The fair value of our senior secured term loan is based on quoted market prices. Based on the frequency of trading, we do not believe that there is an active market for our debt. Therefore, the quoted prices are considered Level 2 inputs. In connection with the sale of Pointillist in December 1, 2021, Altisource is to receive $3.5 million on the first anniversary of the sale closing and $0.3 million following the confirmation of closing date working capital (See Note 4 for additional information). We measure short-term receivables without a stated interest rate based on the present value of the future payments. In connection with the sale of the rental property management business in August 2018, Altisource was to receive $3.0 million on the earlier of a RESI change of control or on August 8, 2023. On October 19, 2020, RESI announced that it had entered into a definitive merger agreement to sell RESI. The merger closed on January 11, 2021 and the Company subsequently received the $3.0 million payment (See Note 4 for additional information). We measure long-term receivables without a stated interest rate based on the present value of the future payments. There were no transfers between different levels during the periods presented. Concentrations of Credit Risk Financial instruments that subject us to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. Our policy is to deposit our cash and cash equivalents with larger, highly rated financial institutions. The Company derived 31% of its revenue from Ocwen for the year ended December 31, 2021 (see Note 3 for additional information on Ocwen revenues and accounts receivable balance). The Company strives to mitigate its concentrations of credit risk with respect to accounts receivable by actively monitoring past due accounts and the economic status of larger customers, if known.
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SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION | SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION Common Stock As of December 31, 2021, we had 100.0 million shares authorized, 25.4 million issued and 15.9 million shares of common stock outstanding. As of December 31, 2020, we had 100.0 million shares authorized, 25.4 million shares issued and 15.7 million shares of common stock outstanding. The holders of shares of Altisource common stock generally are entitled to one vote for each share on all matters voted on by shareholders, and the holders of such shares generally will possess all voting power. Equity Incentive Plan Our 2009 Equity Incentive Plan (the “Plan”) provides for various types of equity awards, including stock options, stock appreciation rights, stock purchase rights, restricted shares, restricted share units and other awards, or a combination of any of the above. Under the Plan, we may grant up to 6.7 million Altisource share-based awards to officers, directors, employees and to employees of our affiliates. As of December 31, 2021, 1.2 million share-based awards were available for future grant under the Plan. Expired and forfeited awards are available for reissuance. Share Repurchase Program On May 15, 2018, our shareholders approved the renewal and replacement of the share repurchase program previously approved by the shareholders on May 17, 2017. Under the program, we are authorized to purchase up to 4.3 million shares of our common stock, based on a limit of 25% of the outstanding shares of common stock on the date of approval, at a minimum price of $1.00 per share and a maximum price of $500.00 per share, for a period of five years from the date of approval. As of December 31, 2021, approximately 2.4 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the years ended December 31, 2021 and 2020. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of December 31, 2021, we can repurchase up to approximately $80 million of our common stock under Luxembourg law. Our Credit Agreement also limits the amount we can spend on share repurchases, which limit was approximately $437 million as of December 31, 2021, and may prevent repurchases in certain circumstances, including if our leverage ratio exceeds 3.50 to 1.00. Share-Based Compensation We issue share-based awards in the form of stock options, restricted shares and restricted share units for certain employees, officers and directors. We recognized share-based compensation expense of $2.8 million and $7.8 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, estimated unrecognized compensation costs related to share-based awards amounted to $2.4 million, which we expect to recognize over a weighted average remaining requisite service period of approximately 1.29 years. Stock Options Stock option grants are composed of a combination of service-based, market-based and performance-based options. Service-Based Options. These options generally vest over or years with equal annual vesting and generally expire on the earlier of years after the date of grant or following termination of service. A total of 181 thousand service-based options were outstanding as of December 31, 2021. Market-Based Options. These option grants generally have two components, each of which vests only upon the achievement of certain criteria. The first component, which we refer to as “ordinary performance” grants, generally consists of two-thirds of the market-based grant and begins to vest if the stock price is at least double the exercise price, as long as the stock price realizes a compounded annual gain of at least 20% over the exercise price. The remaining third of the market-based options, which we refer to as “extraordinary performance” grants, generally begins to vest if the stock price is at least triple the exercise price, as long as the stock price realizes a compounded annual gain of at least 25% over the exercise price. Market-based options vest in or four year installments with the first installment vesting upon the achievement of the criteria and the remaining installments vesting thereafter in equal annual installments. Market-based options generally expire on the earlier of years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service or in the final years of the option term, in which case vesting will generally continue in accordance with the provisions of the award agreement. A total of 140 thousand market-based options were outstanding as of December 31, 2021. Performance-Based Options. These option grants generally will vest if certain specific financial measures are achieved; typically with one-fourth vesting on each anniversary of the grant date. The award of performance-based options is adjusted based on the level of achievement specified in the award agreements. If the performance criteria achieved is above threshold performance levels, participants have the opportunity to vest in 50% to 200% of the option grants, depending upon performance achieved. If the performance criteria achieved is below a certain threshold, the options are canceled. The options generally expire on the earlier of years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service in which case vesting will generally continue in accordance with the provisions of the award agreement. There were 366 thousand performance-based options outstanding as of December 31, 2021. There were no stock options granted during 2021 and 2020. The fair values of the service-based options and performance-based options are determined using the Black-Scholes option pricing model and the fair values of the market-based options were determined using a lattice (binomial) model. We determined the expected option life of all service-based stock option grants using the simplified method, determined based on the graded vesting term plus the contractual term of the options, divided by two. We use the simplified method because we believe that our historical data does not provide a reasonable basis upon which to estimate expected option life. The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31:
The following table summarizes the activity related to our stock options:
The following table summarizes information about stock options outstanding and exercisable as of December 31, 2021:
______________________________________ (1) These options contain market-based and performance-based components as described above. The following table summarizes the market prices necessary in order for the market-based options to begin to vest:
Other Share-Based Awards The Company’s other share-based and similar types of awards are comprised of restricted shares and restricted share units. The restricted shares and restricted share units are comprised of a combination of service-based awards, performance-based awards and market-based awards. Service-Based Awards. These awards generally vest over to four year periods with vesting in equal annual installments. A total of 249 thousand service-based awards were outstanding as of December 31, 2021. Performance-Based Awards. These awards generally vest if certain specific financial measures are achieved; generally one-third vests on each anniversary of the grant date or cliff-vest on the third anniversary of the grant date. The number of performance-based restricted shares and restricted share units that may vest is based on the level of achievement, as specified in the award agreements. If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 150% of the restricted share unit award for certain awards. If the performance criteria achieved is below certain thresholds, the award is canceled. A total of 187 thousand performance-based awards were outstanding as of December 31, 2021. Market-Based Awards. 50% of these awards generally vest if certain specific market conditions are achieved over a 30-day period and the remaining 50% of these awards generally vest on the one year anniversary of the initial vesting. The Company estimates the grant date fair value of these awards using a lattice (binomial) model. A total of 112 thousand market-based awards were outstanding as of December 31, 2021. Performance-Based and Market-Based Awards. These awards generally vest if certain specific financial measures are achieved and if certain specific market conditions are achieved. If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 300% of the restricted share unit award for certain awards. If the performance criteria or the market criteria is below certain thresholds, the award is canceled. The Company estimates the grant date fair value of these awards using a Monte Carlo simulation model. A total of 77 thousand performance-based and market-based awards were outstanding as of December 31, 2021. The Company granted 368 thousand restricted share units (at a weighted average grant date fair value of $9.57 per share) during the year ended December 31, 2021. These grants include 29 thousand performance-based awards that include both a performance condition and a market condition, and 89 thousand performance-based awards for the year ended December 31, 2021. The following table summarizes the activity related to our restricted shares and restricted share units:
The following assumptions were used to determine the fair values for the performance-based awards that include both a performance condition and a market condition, and fair values for market-based awards as of the grant date for the years ended December 31:
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REVENUE |
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REVENUE | REVENUE We classify revenue in three categories: service revenue, revenue from reimbursable expenses and non-controlling interests. Service revenue consists of amounts attributable to our fee-based services. Reimbursable expenses and non-controlling interests are pass-through items for which we earn no margin. Reimbursable expenses consist of amounts we incur on behalf of our customers in performing our fee-based services that we pass directly on to our customers without a markup. Non-controlling interests represent the earnings of Lenders One, a consolidated entity that is a mortgage cooperative managed, but not owned, by Altisource. The Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource (see Note 2). Our services are provided to customers located in the United States. The components of revenue were as follows for the years ended December 31:
Disaggregation of Revenue Disaggregation of total revenues by major source is as follows:
Contract Balances Our contract assets consist of unbilled accounts receivable (see Note 6). Our contract liabilities consist of current deferred revenue and other non-current liabilities as reported on the accompanying consolidated balance sheets. Revenue recognized that was included in the contract liability at the beginning of the period was $5.5 million and $4.8 million for the years ended December 31, 2021 and 2020, respectively.
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COST OF REVENUE | COST OF REVENUE Cost of revenue principally includes payroll and employee benefits associated with personnel employed in customer service, operations and technology roles, fees paid to external providers related to the provision of services, reimbursable expenses, technology and telecommunications costs as well as depreciation and amortization of operating assets. The components of cost of revenue were as follows for the years ended December 31:
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses include payroll and employee benefits associated with personnel employed in executive, sales and marketing, finance, technology, law, compliance, human resources, vendor management, facilities and risk management roles. This category also includes professional services fees, occupancy costs, marketing costs, depreciation and amortization of non-operating assets and other expenses. The components of selling, general and administrative expenses were as follows for the years ended December 31:
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OTHER INCOME (EXPENSE), NET |
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OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET Other income (expense), net consists of the following for the years ended December 31:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income before income taxes and non-controlling interests consist of the following for the years ended December 31:
The income tax provision consists of the following for the years ended December 31:
We operate in a Uruguay free trade zone that provides an indefinite future tax benefit. The tax holiday is conditioned upon our meeting certain employment and investment thresholds. The impact of these tax holidays decreased foreign taxes by $0.1 million ($0.01 per diluted share) and $0.1 million ($0.01 per diluted share) for the years ended December 31, 2021 and 2020, respectively. The Company accounts for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences. A summary of the tax effects of the temporary differences is as follows for the years ended December 31:
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 requires an extensive analysis of positive and negative evidence regarding realization of the deferred tax assets and, inherent in that, an assessment of the likelihood of sufficient future taxable income. When there is a cumulative pretax loss for financial reporting for the current and two preceding years (i.e., a three year cumulative loss), this is a significant element of negative evidence that would be difficult to overcome on a more likely than not or any other basis. Therefore, the Company’s valuation allowance was $389.1 million and $372.2 million for the year ending December 31, 2021 and 2020, respectively. Prior to 2020, the Company did not recognize deferred taxes on cumulative earnings of subsidiaries other than Luxembourg and the Philippines because the Company intended for those earnings to be indefinitely reinvested. In 2020, the Company recognized income tax expense on $68 million of accumulated earnings in India that had previously been considered indefinitely reinvested and began recognizing income tax expense on earnings in India. In 2021, the Company recognized income tax expense on a $15 million dividend from the Company’s India subsidiary to its parent. The Company continues to remain indefinitely reinvested in all other non-Luxembourg earnings not previously discussed. The other non-Luxembourg earnings reinvested as of December 31, 2021 were approximately $3.7 million, which if distributed would result in no additional tax due. The Company had a deferred tax asset of $368.8 million as of December 31, 2021 relating to Luxembourg, U.S. federal, state and foreign net operating losses compared to $353.4 million as of December 31, 2020. As of December 31, 2021 and 2020, a valuation allowance of $367.8 million and $349.8 million, respectively, has been established related to Luxembourg net operating loss (“NOL”). As of December 31, 2020 a valuation allowance of $0.8 million has been established related to state NOLs and a valuation allowance of $2.4 million has been established related to U.S. federal NOLs (no comparative amounts for the year ended December 31, 2021). The gross amount of net operating losses available for carryover to future years is approximately $1,476.8 million as of December 31, 2021 and approximately $1,415.9 million as of December 31, 2020. These losses are scheduled to expire between the years 2023 and 2041. In addition, the Company had a deferred tax asset of $0.8 million and $0.9 million as of December 31, 2021 and 2020, respectively, relating to state tax credits. Some of the state tax credit carryforwards have an indefinite carryforward period. The Company is taking advantage of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act signed into law on March 27, 2020 by utilizing a five year carryback of the full $14.8 million net operating loss generated in the U.S. in 2020. The effective tax rate differs from the Luxembourg statutory tax rate due to tax rate differences on foreign earnings, increases in uncertain tax positions, state taxes, remeasurement of deferred tax assets related to tax rate changes, a decrease in unrecognized tax benefits, tax exempt income primarily from the sale of Pointillist (see Note 4) and a valuation allowance against deferred tax assets the Company believes it is more likely than not will not be realized The following table reconciles the Luxembourg statutory tax rate to our effective tax rate for the years ended December 31:
The Company follows ASC Topic 740 which clarifies the accounting and disclosure for uncertainty in tax positions. We analyzed our tax filing positions in the domestic and foreign tax jurisdictions where we are required to file income tax returns as well as for all open tax years subject to audit in these jurisdictions. The Company has open tax years in the United States (2015 through 2020), India (2011 through 2021) and Luxembourg (2015 through 2019). The following table summarizes changes in unrecognized tax benefits during the years ended December 31:
The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate is $14.9 million and $13.2 million as of December 31, 2021 and 2020, respectively. The Company recognizes interest, if any, related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2021 and 2020, the Company had recorded accrued interest and penalties related to unrecognized tax benefits of $5.8 million and $4.6 million, respectively.
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EARNINGS PER SHARE |
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EARNINGS PER SHARE | EARNINGS PER SHAREBasic earnings (loss) per share is computed by dividing earnings (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the assumed conversion of all dilutive securities using the treasury stock method. Diluted net earnings (loss) per share excludes all dilutive securities because their impact would be anti-dilutive, as described below. Basic and diluted earnings (loss) per share are calculated as follows for the years ended December 31:
For the years ended December 31, 2021 and, 2020, 1.2 million and 1.6 million, respectively, stock options, restricted shares and restricted share units were excluded from the computation of earnings (loss) per share, as a result of the following: •For the year ended December 31, 2020, 0.2 million stock options, restricted shares and restricted share units were anti-dilutive and have been excluded from the computation of diluted earnings (loss) per share as a result of the net loss attributable to Altisource for the year ended December 31, 2020. •For the years ended December 31, 2021 and 2020, 0.3 million and 0.5 million, respectively, stock options were anti-dilutive and have been excluded from the computation of diluted earnings (loss) per share because their exercise price was greater than the average market price of our common stock •For the years ended December 31, 2021 and 2020, 0.9 million and 0.9 million, respectively, stock options, restricted shares and restricted share units, which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and a total shareholder return compared to the market benchmark that have not yet been met in each period have been excluded from the computation of diluted earnings (loss) per share.
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RESTRUCTURING CHARGES |
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Restructuring Charges [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In August 2018, Altisource initiated Project Catalyst, a project intended to optimize its operations and reduce costs to better align its cost structure with its anticipated revenues and improve its operating margins (finalized in 2020). During the year ended December 31, 2020 Altisource incurred $12.0 million of severance costs, professional services fees, facility consolidation costs, technology costs and business wind down costs related to the plan (no comparative amount for the year ended December 31, 2021). |
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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS | COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS We record a liability for contingencies if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range. Litigation We are currently involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows. Regulatory Matters Periodically, we are subject to audits, examinations and investigations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries. Sales Taxes On June 21, 2018, the United States Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair, Inc., holding that a state may require a remote seller with no physical presence in the state to collect and remit sales tax on goods and services provided to purchasers in the state, overturning existing court precedent. During the year ended December 31, 2019, the Company completed the analysis of its services for potential exposure to sales tax in various jurisdictions in the United States. The Company recognized a $(2.7) million net loss reimbursement for the year ended December 31, 2020 (no comparative amount for the year ended December 31, 2021), in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income (loss). The Company began invoicing, collecting and remitting sales tax in applicable jurisdictions in 2019. Future changes in our estimated sales tax exposure could result in a material adjustment to our consolidated financial statements, which would impact our financial condition and results of operations. Ocwen Related Matters As discussed in Note 3, during the year ended December 31, 2021, Ocwen was our largest customer, accounting for 31% of our total revenue. Additionally, 5% of our revenue for the year ended December 31, 2021 was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the MSRs owner selected Altisource as the service provider. Ocwen has disclosed that it is subject to a number of ongoing federal and state regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Ocwen for substantial monetary damages. Previous regulatory actions against Ocwen have subjected Ocwen to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights. Existing or future similar matters could result in adverse regulatory or other actions against Ocwen. In addition to the above, Ocwen may become subject to future adverse regulatory or other actions. Ocwen has disclosed that NRZ is its largest client. As of December 31, 2021, approximately 21% of loans serviced and subserviced by Ocwen (measured in UPB) were related to NRZ MSRs or rights to MSRs. In July 2017 and January 2018, Ocwen and NRZ entered into a series of agreements pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to the Subject MSRs and under which Ocwen will subservice mortgage loans underlying the MSRs for an initial term of five years. NRZ can terminate its sub-servicing agreement with Ocwen in exchange for the payment of a termination fee. The existence or outcome of Ocwen regulatory matters or the termination of the NRZ sub-servicing agreement with Ocwen may have significant adverse effects on Ocwen’s business and/or our continuing relationship with Ocwen. For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-government-sponsored enterprise (“GSE”) servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Ocwen’s business that could require it to sell assets or change its business operations. Any or all of these effects and others could result in our eventual loss of Ocwen as a customer or a reduction in the number and/or volume of services they purchase from us or the loss of other customers. During the second quarter of 2020, Ocwen informed us that an MSR investor instructed Ocwen to use a field services provider other than Altisource on properties associated with certain MSRs. Based upon the impacted portfolios and the designated service provider, Altisource believes that Ocwen received these directions from NRZ. We believe Ocwen commenced using another field services provider for these properties in July 2020 and continued to transition services during the third quarter of 2020. We believe that the transition to the replacement field service provider was largely completed as of September 30, 2020. We estimate that $0.5 million and $70.1 million of service revenue from Ocwen for the years ended December 31, 2021 and 2020, respectively, was derived from Field Services referrals from the NRZ portfolios. Ocwen also communicated to Altisource in the fourth quarter of 2020 that the same investor instructed Ocwen to use a provider for default valuations and certain default title services other than Altisource on properties associated with such certain MSRs and commenced moving these referrals to other service providers in the fourth quarter of 2020, , with the bulk of such transition occurring during 2021. We anticipate that the transition of such default valuations and title services will continue during the course of 2022. We estimate that $2.9 million and $18.2 million of service revenue from Ocwen for the years ended December 31, 2021 and 2020, respectively, was derived from default valuations and title services referrals from the NRZ portfolios. To address the reduction in revenue, Altisource undertook several measures to further reduce its cost structure, strengthen its operations and generate cash. On May 5, 2021 we entered into an Agreement with Ocwen pursuant to which the terms of certain services agreements between us and Ocwen were extended from August 2025 through August 2030 and the scope of solutions we provide to Ocwen was expanded to include, among other things, the opportunity for the Company to provide first and second chance foreclosure auctions on Government Loans, and title services on FHA and Veterans Affairs loans, subject to a process to confirm Altisource’s ability to meet reasonable performance requirements, which process is continuing. The Agreement established a framework for us to expand the foreclosure trustee solutions we provide to Ocwen in additional states, and, as mutually agreed upon by the parties, to deliver reverse mortgage related solutions to Ocwen, subject to negotiation of appropriate statements of work or other agreements, a process to confirm Altisource’s ability to meet reasonable performance requirements, and technical integrations, as may be applicable. The Agreement further resolved the contractual dispute between the parties related to Ocwen’s transfer to NRZ the rights to designate service providers other than Altisource, including mutual releases with respect to such dispute. The Agreement also addressed Ocwen’s rights in the event of certain change of control or sale of a business transactions by us on or after September 1, 2028. Since the date of the Agreement, Ocwen has transitioned over 2,300 of its foreclosure auction inventory on Government Loans to us and increased our percentage of field services referrals on its Government Loans. In addition to expected reductions in our revenue from the transition of referrals for default related services previously identified, if any of the following events occurred, Altisource’s revenue could be further significantly reduced and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable: •Altisource loses Ocwen as a customer or there is an additional significant reduction in the volume of services they purchase from us •Ocwen loses, sells or transfers a significant portion of its GSE or FHA servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider •The contractual relationship between Ocwen and NRZ changes significantly, including Ocwen’s sub-servicing arrangement with NRZ expiring without renewal, and this change results in a change in our status as a provider of services related to the Subject MSRs •Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio •The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue •Altisource otherwise fails to be retained as a service provider Management cannot predict whether any of these events will occur or the amount of any impact they may have on Altisource. However, we are focused on diversifying and growing our revenue and customer base and we have a sales and marketing strategy to support these efforts. Moreover, in the event one or more of these events materially negatively impact Altisource, we believe the variable nature of our cost structure would allow us to realign our cost structure to address some of the impact to revenue and that current liquidity would be sufficient to meet our working capital, capital expenditures, debt service and other cash needs. There can be no assurance that our plans will be successful or our operations will be profitable. Leases We lease certain premises and equipment, primarily consisting of office space and information technology equipment. Certain of our leases include options to renew at our discretion or terminate leases early, and these options are considered in our determination of the expected lease term. Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We sublease certain office space to third parties. Sublease income was $1.0 million and $1.4 million for the years ended December 31, 2021 and 2020, respectively. The amortization periods of right-of-use assets are generally limited by the expected lease term. Our leases generally have expected lease terms at adoption of to six years. Information about our lease terms and our discount rate assumption is as follows as of December 31:
Our lease activity was as follows for the years ended December 31:
Maturities of our lease liabilities as of December 31, 2021 are as follows:
We have executed two standby letters of credit totaling $0.6 million related to two office leases that are secured by restricted cash balances. Escrow Balances We hold customers’ assets in escrow accounts at various financial institutions pending completion of certain real estate activities. These amounts are held in escrow accounts for limited periods of time and are not included in the consolidated balance sheets. Amounts held in escrow accounts were $27.5 million and $20.0 million as of December 31, 2021 and 2020, respectively.
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING Overview Effective January 1, 2022, our reportable segments changed as a result of a change in the way our Chief Executive Officer (our chief operating decision maker) manages our businesses, allocates resources and evaluates performance, and the related changes in our internal organization. We now report our operations through two new reportable segments: Servicer and Real Estate and Origination. In addition, we report Corporate and Others separately. Prior to the January 1, 2022 change in reportable segments, the Company operated with one reportable segment (total Company). 2021 and 2020 periods segment disclosures have been restated to conform to the 2022 presentation. See Note 25 for a description of our business segments. 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. The Servicer and Real Estate segment provides loan servicers and real estate investors with solutions and technologies that span the mortgage and real estate lifecycle. The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle. Corporate and Others includes Pointillist (sold on December 1, 2021), interest expense and costs related to corporate functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, vendor management, facilities, risk management, as well as eliminations between reportable segments. Revenue Descriptions of our principal revenue generating activities are as follows: Servicer and Real Estate •For property preservation and inspection services and payment management technologies, we recognize transactional revenue when the service is provided. •For vendor management transactions, we recognize revenue over the period during which we perform the services. •For loan disbursement processing services, we recognize revenue over the period during which we perform the processing services with full recognition upon completion of the disbursements. For foreclosure trustee services, we recognize revenue over the period during which we perform the related services, with full recognition upon completion and/or recording the related foreclosure deed. We use judgment to determine the period over which we recognize revenue for certain of these services. •For the real estate auction platform, real estate auction and real estate brokerage services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount. •For SaaS based technology to manage real estate owned (“REO”), we recognize revenue over the estimated average number of months the REO are on the platform. We generally recognize revenue for professional services over the contract period. •For loan servicing technologies, we recognized revenue based on the number of loans on the system. We generally recognized revenue from professional services over the contract period. •Reimbursable expenses revenue related to our property preservation and inspection services, our real estate sales and our title and foreclosure trustee services is included in revenue with an equal amount recognized in cost of revenue. These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers. Origination •For the majority of the services we provide, we recognize transactional revenue when the service is provided. •For vendor management oversight software-as-a-service (“SaaS”) platform, we recognize revenue over the period during which we perform the services. Corporate and Others •For our customer journey analytics platform (sold on December 1, 2021), we recognized revenue primarily based on subscription fees. We recognized revenue associated with implementation services and maintenance services ratably over the contract term. During the year ended December 31, 2021, Ocwen was our largest customer. Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:
Disaggregation of Revenue Disaggregation of total revenues by segment and major source is as follows:
Financial Information Financial information for our segments is as follows:
Total Assets Total assets for our segments are as follows:
Goodwill Changes in goodwill during the years ended December 31, 2021 and 2020 are summarized below:
______________________________________ (1) During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit.
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SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2021 and 2020:
______________________________________ (1) For allowance for credit losses, amounts written off as uncollectible or transferred to other accounts or utilized.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Basis of Accounting and Presentation | Basis of Accounting and Presentation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany transactions and accounts have been eliminated in consolidation.
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Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of the Company, its wholly-owned subsidiaries and those entities in which we have a variable interest and are the primary beneficiary. Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option). The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining share-based compensation, income taxes, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives and valuation of fixed assets and contingencies. Actual results could differ materially from those estimates.
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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.
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Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable are presented net of an allowance for expected credit losses. We monitor and estimate the allowance for credit losses based on our historical write-offs, historical collections, our analysis of past due accounts based on the contractual terms of the receivables, relevant market and industry reports and our assessment of the economic status of our customers, if known. The carrying value of accounts receivable, net, approximates fair value.
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Premises and Equipment, Net | Premises and Equipment, Net We report premises and equipment, net at cost or estimated fair value at acquisition for premises and equipment recorded in connection with a business combination and depreciate these assets over their estimated useful lives using the straight-line method as follows:
Maintenance and repair costs are expensed as incurred. We capitalize expenditures for significant improvements and new equipment and depreciate the assets over the shorter of the capitalized asset’s life or the life of the lease. We review premises and equipment for impairment following events or changes in circumstances that indicate the carrying amount of an asset or asset group may not be recoverable. We measure recoverability of assets to be held and used by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, we recognize an impairment charge for the amount that the carrying value of the asset or asset group exceeds the fair value of the asset or asset group. Computer software includes the fair value of software acquired in business combinations, capitalized software development costs and purchased software. Capitalized software development and purchased software are recorded at cost and amortized using the straight-line method over their estimated useful lives. Software acquired in business combinations is recorded at fair value and amortized using the straight-line method over its estimated useful life.
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Business Combinations | Business Combinations We account for acquisitions using the purchase method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The purchase price of an acquisition is allocated to the assets acquired and liabilities assumed using their fair value as of the acquisition date.
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Goodwill | Goodwill Goodwill represents the excess cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative 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 comparing the fair value of the reporting unit with its carrying amount. If the fair value is determined to be less than its carrying amount, we recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We estimate the fair value of the reporting unit using discounted cash flows and market comparisons. The discounted cash flow method is based on the present value of projected cash flows. Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions. The estimated cash flows are discounted using a rate that represents our weighted average cost of capital. The market comparisons include an analysis of revenue and earnings multiples of guideline public companies compared to the Company.
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Intangible Assets, Net | Intangible Assets, Net Identified intangible assets consist primarily of customer related intangible assets, operating agreements, trademarks and trade names and other intangible assets. Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors. We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 4 to 20 years. We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable. When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets generally consistent with models utilized for internal planning purposes. If the sum of the undiscounted expected future cash flows is less than the carrying value, we recognize an impairment to the extent the carrying amount exceeds fair value.
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Long-Term Debt | Long-Term Debt Long-term debt is reported net of applicable discount or premium and net of debt issuance costs. The debt discount or premium and debt issuance costs are amortized to interest expense through maturity of the related debt using the effective interest method.
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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.
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Functional Currency | Functional Currency The currency of the primary economic environment in which our operations are conducted is the United States dollar. Therefore, the United States dollar has been determined to be our functional and reporting currency. Non-United States dollar transactions and balances have been measured in United States dollars in accordance with ASC Topic 830, Foreign Currency Matters. All transaction gains and losses from the measurement of monetary balance sheet items denominated in non-United States dollar currencies are reflected in the consolidated statements of operations and comprehensive income (loss) as income or expenses, as appropriate.
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Defined Contribution 401(k) Plan | Defined Contribution 401(k) PlanSome of our employees currently participate in a defined contribution 401(k) plan under which we may make matching contributions equal to a discretionary percentage determined by us. | ||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition We recognize revenue when we satisfy a performance obligation by transferring control of a product or service to a customer in an amount that reflects the consideration that we expect to receive. This revenue can be recognized at a point in time or over time. We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenues are recognized. When there is a timing difference between when we invoice customers and when revenues are recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred revenue or other current liabilities), as appropriate. See note 25 for descriptions of our principal revenue generating activities.
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Share-Based Compensation | Share-Based Compensation Share-based compensation is accounted for under the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC Topic 718”). Under ASC Topic 718, the cost of services received in exchange for an award of equity instruments is generally measured based on the grant date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based awards that require future service are recognized over the relevant service period. The Company has made an accounting policy election to account for forfeitures in compensation expense as they occur.
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Income Taxes | Income Taxes We record income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). We account for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our results of operations.
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Earnings Per Share | Earnings Per Share We compute earnings per share in accordance with ASC Topic 260, Earnings Per Share. Basic net income per share is computed by dividing net income attributable to Altisource by the weighted average number of shares of common stock outstanding for the period. Diluted net income per share reflects the assumed conversion of all dilutive securities using the treasury stock method.
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Recently Adopted Accounting Pronouncements and Future Adoption of New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard is part of the FASB’s initiative to reduce complexity in accounting standards by instituting several simplifying provisions and removing several exceptions pertaining to income tax accounting. This standard is effective for annual periods beginning after December 15, 2020, including interim periods within that reporting period. The Company adopted this standard effective January 1, 2021 and has applied it prospectively. Adoption of this new standard did not have any impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Topic 815). This standard simplifies the accounting for certain financial instruments with characteristics of liability and equity, particularly convertible debt instruments. This standard is effective for annual periods beginning after December 15, 2021, including interim periods within that reporting period. Early adoption is permitted for annual periods beginning after December 15, 2020. The Company early adopted this standard effective January 1, 2021 and has applied it prospectively. Adoption of this new standard did not have a material impact on the Company’s consolidated financial statements. Future Adoption of New Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. This standard applies only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. This standard provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR. This standard is effective from the period from March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a topic or an industry subtopic, the standard must be applied prospectively for all eligible contract modifications for that topic or industry subtopic. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of estimated useful lives using the straight-line method | We report premises and equipment, net at cost or estimated fair value at acquisition for premises and equipment recorded in connection with a business combination and depreciate these assets over their estimated useful lives using the straight-line method as follows:
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ACCOUNTS RECEIVABLE, NET (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts receivable, net | Accounts receivable, net consists of the following as of December 31:
Changes in allowance for expected credit losses consist of the following:
______________________________________ (1) Amounts written off as uncollectible or transferred to other accounts or utilized.
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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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PREMISES AND EQUIPMENT, NET (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of premises and equipment, net | Premises and equipment, net consists of the following as of December 31:
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RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Right-of-Use Assets Under Operating Leases | Right-of-use assets under operating leases, net consists of the following as of December 31:
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in goodwill | Changes in goodwill during the years ended December 31, 2021 and 2020 are summarized below:
______________________________________ (1) During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit. Changes in goodwill during the years ended December 31, 2021 and 2020 are summarized below:
______________________________________ (1) During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit.
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Schedule of intangible assets, net | Intangible assets, net consist of the following as of December 31:
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OTHER ASSETS (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other assets | Other assets consist of the following as of December 31:
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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following as of December 31:
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Schedule of other current liabilities | Other current liabilities consist of the following as of December 31:
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LONG-TERM DEBT (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Long-term debt consists of the following as of December 31:
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Schedule of maturities of long-term debt | Maturities of our long-term debt are as follows:
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OTHER NON-CURRENT LIABILITIES (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other non-current liabilities | Other non-current liabilities consist of the following as of December 31:
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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements, recurring and nonrecurring | The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:
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SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the weighted average fair value of stock options granted, the total intrinsic value of stock options exercised and the fair value of options vested | The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31:
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Summary of the activity of the entity's stock options | The following table summarizes the activity related to our stock options:
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Shares authorized under stock option plans, by exercise price range | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2021:
______________________________________ (1) These options contain market-based and performance-based components as described above.
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Shares authorized under stock option plans by vesting price range | The following table summarizes the market prices necessary in order for the market-based options to begin to vest:
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Restricted shares and restricted share units activity | The following table summarizes the activity related to our restricted shares and restricted share units:
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Fair Value of Performance-based Awards | The following assumptions were used to determine the fair values for the performance-based awards that include both a performance condition and a market condition, and fair values for market-based awards as of the grant date for the years ended December 31:
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REVENUE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue | The components of revenue were as follows for the years ended December 31:
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Disaggregation of revenue | Disaggregation of total revenues by segment and major source is as follows:
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COST OF REVENUE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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OTHER INCOME (EXPENSE), NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income before income tax, domestic and foreign | The components of income before income taxes and non-controlling interests consist of the following for the years ended December 31:
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Schedule of income tax provision (benefit) | The income tax provision consists of the following for the years ended December 31:
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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:
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Schedule of the reconciliation of income tax provision to the Luxembourg statutory income tax rate | The following table reconciles the Luxembourg statutory tax rate to our effective tax rate for the years ended December 31:
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Summary of income tax contingencies | The following table summarizes changes in unrecognized tax benefits during the years ended December 31:
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EARNINGS PER SHARE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted EPS calculation | Basic and diluted earnings (loss) per share are calculated as follows for the years ended December 31:
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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease term and assumption | Information about our lease terms and our discount rate assumption is as follows as of December 31:
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Lease activity during period | Our lease activity was as follows for the years ended December 31:
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Maturities of operating lease liabilities | Maturities of our lease liabilities as of December 31, 2021 are as follows:
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SEGMENT REPORTING (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments | During the year ended December 31, 2021, Ocwen was our largest customer. Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:
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Disaggregation of revenue | Disaggregation of total revenues by segment and major source is as follows:
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Schedule of financial information of segments | Financial information for our segments is as follows:
Total Assets Total assets for our segments are as follows:
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Summary of changes in goodwill | Changes in goodwill during the years ended December 31, 2021 and 2020 are summarized below:
______________________________________ (1) During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit. Changes in goodwill during the years ended December 31, 2021 and 2020 are summarized below:
______________________________________ (1) During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit.
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ORGANIZATION (Details) |
12 Months Ended |
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Dec. 31, 2021
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PP&E Useful Life (Details) |
12 Months Ended |
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Dec. 31, 2021 | |
Furniture and fixtures | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 5 years |
Office equipment | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 5 years |
Computer hardware | Minimum | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 3 years |
Computer hardware | Maximum | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 5 years |
Computer software | Minimum | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 3 years |
Computer software | Maximum | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 7 years |
Leasehold improvements | |
Summary of significant accounting policies | |
Property, plant and equipment, useful life | 10 years |
INVESTMENT IN EQUITY SECURITIES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2016 |
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Marketable Securities [Line Items] | |||
Proceeds received from sale of equity securities | $ 0 | $ 46,622 | |
Altisource Residential Corporation | |||
Marketable Securities [Line Items] | |||
Number of available for sale shares acquired (in shares) | 4,100,000 | ||
Number of securities outstanding (in shares) | 0 | ||
Unrealized gain (loss) on investment in equity securities | 0 | $ 4,000 | |
Unrealized gain (loss) from sale | 0 | 4,100 | |
Investment income, dividend | $ 0 | $ 500 | |
Number of shares disposed (in shares) | 3,500,000 | ||
Proceeds received from sale of equity securities | $ 46,600 |
ACCOUNTS RECEIVABLE, NET - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Accounts receivable, net | |||
Accounts receivable, gross | $ 23,305 | $ 27,994 | |
Less: Allowance for credit losses | (5,297) | (5,581) | $ (4,472) |
Total | 18,008 | 22,413 | |
Charged to Expenses | 1,354 | 2,229 | |
Billed | |||
Accounts receivable, net | |||
Accounts receivable, gross | 17,907 | 19,703 | |
Unbilled | |||
Accounts receivable, net | |||
Accounts receivable, gross | $ 5,398 | $ 8,291 |
ACCOUNTS RECEIVABLE, NET - Schedule of Allowance for Doubtful Accounts and Expected Credit Losses (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
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Allowance for expected credit losses: | ||
Balance at Beginning of Period | $ 5,581 | $ 4,472 |
Charged to Expenses | 1,354 | 2,229 |
Deductions Note | 1,638 | 1,120 |
Balance at End of Period | $ 5,297 | $ 5,581 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Income taxes receivable | $ 8,403 | $ 7,053 |
Prepaid expenses | 2,865 | 4,812 |
Maintenance agreements, current portion | 1,717 | 2,513 |
Other current assets | 8,879 | 5,101 |
Total | $ 21,864 | $ 19,479 |
PREMISES AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
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Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 4,592 | $ 14,890 |
PREMISES AND EQUIPMENT, NET - Summary of Premise and Equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
PREMISES AND EQUIPMENT, NET | ||
Premises and equipment, gross | $ 61,631 | $ 75,328 |
Less: Accumulated depreciation and amortization | (54,758) | (63,434) |
Total | 6,873 | 11,894 |
Computer hardware and software | ||
PREMISES AND EQUIPMENT, NET | ||
Premises and equipment, gross | 50,452 | 52,837 |
Leasehold improvements | ||
PREMISES AND EQUIPMENT, NET | ||
Premises and equipment, gross | 5,927 | 14,792 |
Furniture and fixtures | ||
PREMISES AND EQUIPMENT, NET | ||
Premises and equipment, gross | 4,441 | 5,882 |
Office equipment and other | ||
PREMISES AND EQUIPMENT, NET | ||
Premises and equipment, gross | $ 811 | $ 1,817 |
PREMISES AND EQUIPMENT, NET - Summary by Country (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Premises and equipment | $ 6,873 | $ 11,894 |
Luxembourg | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment | 3,883 | 5,451 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment | 1,932 | 5,530 |
India | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment | 999 | 822 |
Uruguay | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment | $ 59 | $ 91 |
RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET - Summary of Right-of-Use Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Right-of-use assets under operating leases | $ 19,595 | $ 31,932 |
Less: Accumulated amortization | (12,001) | (13,719) |
Total | $ 7,594 | $ 18,213 |
RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Leases [Abstract] | ||
Amortization of right-of-use assets under operating leases | $ 7,935 | $ 10,245 |
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | $ 73,849 |
Write-off | |
Balance at the end of the period | 55,960 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Owners.com | |
Goodwill [Roll Forward] | |
Write-off | $ 17,889 |
GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for definite lived intangible assets | $ 9,467 | $ 14,720 |
Amortization expense, 2022 | 5,100 | |
Amortization expense, 2023 | 5,100 | |
Amortization expense, 2024 | 5,100 | |
Amortization expense, 2025 | 5,100 | |
Amortization expense, 2026 | $ 4,900 |
OTHER ASSETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Restricted cash | $ 4,017 | $ 3,833 |
Security deposits | 1,043 | 2,416 |
Other | 1,072 | 3,601 |
Total | $ 6,132 | $ 9,850 |
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 15,978 | $ 16,797 |
Accrued expenses - general | 13,653 | 24,422 |
Accrued salaries and benefits | 12,254 | 11,226 |
Income taxes payable | 4,650 | 4,334 |
Total | $ 46,535 | $ 56,779 |
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details 2) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Operating lease liabilities | $ 2,893 | $ 7,609 |
Other | 977 | 1,696 |
Total | $ 3,870 | $ 9,305 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total | Total |
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Gross, long-term debt | $ 247,204 | |
Less: Debt issuance costs, net | (1,600) | $ (2,400) |
Total Long-term debt | (243,637) | (242,656) |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Gross, long-term debt | 0 | 0 |
Less: Debt issuance costs, net | (400) | |
Less: Debt issuance costs, net | 441 | 0 |
Total Long-term debt | (441) | 0 |
Senior secured term loans | ||
Debt Instrument [Line Items] | ||
Gross, long-term debt | 247,204 | 247,204 |
Less: Debt issuance costs, net | (1,632) | (2,389) |
Less: Unamortized discount, net | (1,494) | (2,159) |
Total Long-term debt | $ (244,078) | $ (242,656) |
LONG-TERM DEBT - Schedule of Maturities of Long-Term Debt (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2022 | $ 0 |
2023 | 0 |
2024 | 247,204 |
Total | $ 247,204 |
OTHER NON-CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Operating lease liabilities | $ 5,029 | $ 12,281 |
Income tax liabilities | 14,156 | 12,414 |
Deferred revenue | 0 | 504 |
Other non-current liabilities | 81 | 40 |
Total | $ 19,266 | $ 25,239 |
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Weighted Average Fair Value of Stock Options Granted and Total Intrinsic Value of Stock Options (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Weighted average fair value of stock options granted and total intrinsic value of stock options exercised | ||
Grant date fair value of stock options that vested | $ 1,203 | $ 2,730 |
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Restricted stock awards (Details) - Restricted Shares and Restricted Share Units |
12 Months Ended |
---|---|
Dec. 31, 2021
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | 878,521 |
Granted (in shares) | 368,412 |
Issued (in shares) | (246,382) |
Forfeited/canceled (in shares) | (374,913) |
Outstanding, end of period (in shares) | 625,638 |
SHAREHOLDERS' EQUITY AND SHARE-BASED COMPENSATION - Assumptions Used to Determine the Fair Values for Performance-Based Awards (Details) - Restricted Shares and Restricted Share Units - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Monte Carlo | ||
Equity And Share-Based Compensation | ||
Risk-free interest rate (%) | 0.16% | 2.47% |
Expected stock price volatility (%) | 39.54% | 17.72% |
Expected dividend yield | 0.00% | 0.00% |
Expected life (in years) | 3 years | 3 years |
Fair value (in usd per share) | $ 10.16 | $ 0 |
Binomial | ||
Equity And Share-Based Compensation | ||
Risk-free interest rate (%), minimum | 0.00% | |
Expected stock price volatility (%) | 0.00% | 80.36% |
Expected dividend yield | 0.00% | 0.00% |
Expected life (in years) | 2 years | |
Fair value (in usd per share) | $ 0 | $ 12.58 |
Binomial | Maximum | ||
Equity And Share-Based Compensation | ||
Risk-free interest rate (%) | 0.27% | |
Binomial | Minimum | ||
Equity And Share-Based Compensation | ||
Risk-free interest rate (%) | 0.09% |
REVENUE - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenues [Abstract] | ||
Revenue recognized that was included in the contract liability at the beginning of the period | $ 5.5 | $ 4.8 |
REVENUE - Schedule of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 178,453 | $ 365,547 |
Service revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 170,613 | 347,313 |
Reimbursable expenses | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 6,555 | 16,285 |
Non-controlling interests | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,285 | $ 1,949 |
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 178,453 | $ 365,547 |
Revenue recognized when services are performed or assets are sold | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 157,855 | 332,084 |
Revenue related to technology platforms and professional services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 14,043 | 17,178 |
Reimbursable expenses revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 6,555 | $ 16,285 |
COST OF REVENUE (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Cost of Revenue [Abstract] | ||
Compensation and benefits | $ 69,990 | $ 94,365 |
Outside fees and services | 66,386 | 146,322 |
Technology and telecommunications | 25,273 | 35,912 |
Reimbursable expenses | 6,555 | 16,285 |
Depreciation and amortization | 3,162 | 12,310 |
Total | $ 171,366 | $ 305,194 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Selling, General and Administrative Expense [Abstract] | ||
Compensation and benefits | $ 28,367 | $ 35,521 |
Professional services | 10,163 | 11,444 |
Amortization of intangible assets | 9,467 | 14,720 |
Occupancy related costs | 9,332 | 19,363 |
Marketing costs | 2,157 | 3,325 |
Depreciation and amortization | 1,430 | 2,580 |
Other | 6,133 | 5,783 |
Total | $ 67,049 | $ 92,736 |
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Other Income and Expenses [Abstract] | ||
Interest income | $ 4 | $ 114 |
Other, net | 860 | 261 |
Total | $ 864 | $ 375 |
INCOME TAXES - Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income before income taxes and non-controlling interests [Line Items] | ||
Domestic - Luxembourg | $ 25,490 | $ (50,822) |
Income (loss) before income taxes and non-controlling interests | 15,285 | (57,706) |
Foreign - U.S. | ||
Income before income taxes and non-controlling interests [Line Items] | ||
Foreign - U.S. and Non-U.S. | (9,536) | (13,243) |
Foreign - non-U.S. | ||
Income before income taxes and non-controlling interests [Line Items] | ||
Foreign - U.S. and Non-U.S. | $ (669) | $ 6,359 |
INCOME TAXES - Income Tax (Provision) Benefit (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current: | ||
Domestic - Luxembourg | $ (3,937) | $ (3,576) |
Deferred: | ||
Domestic - Luxembourg | 705 | (5,033) |
Income tax provision | (3,232) | (8,609) |
Domestic - Luxembourg | ||
Current: | ||
Domestic - Luxembourg | 0 | (2,158) |
Deferred: | ||
Domestic - Luxembourg | (140) | 224 |
Foreign - U.S. federal | ||
Current: | ||
Foreign | (432) | 4,992 |
Deferred: | ||
Foreign | 519 | (2,808) |
Foreign - U.S. state | ||
Current: | ||
Foreign | (308) | (322) |
Deferred: | ||
Foreign | 836 | (465) |
Foreign - non-U.S. | ||
Current: | ||
Foreign | (3,197) | (6,088) |
Deferred: | ||
Foreign | $ (510) | $ (1,984) |
INCOME TAXES - Summary of Tax Effects of Temporary Differences (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Non-current deferred tax assets: | ||
Net operating loss carryforwards | $ 368,824 | $ 353,358 |
U.S. federal and state tax credits | 194 | 242 |
Other non-U.S. deferred tax assets | 13,326 | 11,327 |
Share-based compensation | 1,220 | 1,658 |
Accrued expenses | 962 | 1,205 |
Unrealized losses | 10,397 | 10,351 |
Non-current deferred tax liabilities: | ||
Intangible assets | (8,290) | (8,133) |
Depreciation | 61 | (441) |
Other non-U.S. deferred tax liability | (523) | (7) |
Other | 334 | (736) |
Deferred tax assets net of deferred tax liabilities | 386,505 | 368,824 |
Valuation allowance | (389,147) | (372,227) |
Non-current deferred tax liabilities, net | $ (2,642) | $ (3,403) |
INCOME TAXES - Reconciliation of Luxembourg Statutory Tax Rate to Effective Tax Rate (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Income Tax Provision to the Luxembourg income tax rate | ||
Statutory tax rate | 24.94% | 24.94% |
Change in valuation allowance | 130.03% | (29.79%) |
State tax expense | (3.87%) | (1.25%) |
Tax credits | 0.36% | 0.10% |
Uncertain tax positions | 11.82% | (2.94%) |
Income tax rate change | 0.00% | (2.40%) |
Tax rate differences on foreign earnings | 6.46% | (6.62%) |
Tax Exempt Income | (145.91%) | 0.00% |
Other | (2.70%) | 3.04% |
Effective tax rate | 21.14% | (14.92%) |
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Amount of unrecognized tax benefits as of the beginning of the year | $ 8,541 | $ 9,767 |
Decreases as a result of tax positions taken in a prior period | (1,648) | (2,591) |
Increases as a result of tax positions taken in a prior period | 2,130 | 767 |
Increases as a result of tax positions taken in the current period | 0 | 598 |
Amount of unrecognized tax benefits as of the end of the year | $ 9,023 | $ 8,541 |
EARNINGS PER SHARE - Summary of Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Altisource | $ 11,812 | $ (67,156) |
Weighted average common shares outstanding, basic (in shares) | 15,839 | 15,598 |
Dilutive effect of stock options, restricted shares and restricted share units (in shares) | 224 | 0 |
Weighted average common shares outstanding, diluted (in shares) | 16,063 | 15,598 |
Earnings (loss) per share: | ||
Basic (in USD per share) | $ 0.75 | $ (4.31) |
Diluted (in USD per share) | $ 0.74 | $ (4.31) |
RESTRUCTURING CHARGES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Charges [Abstract] | ||
Restructuring charges | $ 0 | $ 11,972 |
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Lease Term and Assumption (Details) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted average remaining lease term (in years) | 3 years 3 months 18 days | 3 years 2 months 4 days |
Weighted average discount rate | 5.84% | 7.01% |
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Lease Activity (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Lessee, Lease, Description [Line Items] | ||
Cash used in operating activities for amounts included in the measurement of lease liabilities | $ 9,072 | $ 13,113 |
Short-term (twelve months or less) lease costs | (1,017) | 3,797 |
Selling, general and administrative expense | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs: | 6,026 | 9,712 |
Cost of revenue | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs: | $ 2,294 | $ 1,919 |
COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Maturities of Operating Lease Liabilities (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 3,090 |
2023 | 2,145 |
2024 | 1,576 |
2025 | 1,109 |
2026 | 563 |
Total lease payments | 8,483 |
Less: interest | (561) |
Present value of lease liabilities | $ 7,922 |
SEGMENT REPORTING - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT REPORTING - Revenue From Ocwen (Details) - Ocwen - Revenue - Customer Concentration Risk |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Concentration Risk [Line Items] | ||
Concentration risk | 31.00% | 54.00% |
Operating Segment | Servicer and Real Estate | ||
Concentration Risk [Line Items] | ||
Concentration risk | 49.00% | 64.00% |
Operating Segment | Origination | ||
Concentration Risk [Line Items] | ||
Concentration risk | 0.00% | 0.00% |
Corporate And Eliminations | ||
Concentration Risk [Line Items] | ||
Concentration risk | 0.00% | 32.00% |
SEGMENT REPORTING - Total Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
SEGMENT REPORTING | ||
Total assets | $ 257,808 | $ 265,685 |
Operating Segment | Servicer and Real Estate | ||
SEGMENT REPORTING | ||
Total assets | 61,832 | 77,478 |
Operating Segment | Origination | ||
SEGMENT REPORTING | ||
Total assets | 59,741 | 64,124 |
Corporate And Eliminations | ||
SEGMENT REPORTING | ||
Total assets | $ 136,235 | $ 124,083 |
SEGMENT REPORTING - Premises and Equipment, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Premises & equipment, net | ||
Premises and equipment, net | $ 6,873 | $ 11,894 |
Luxembourg | ||
Premises & equipment, net | ||
Premises and equipment, net | 3,883 | 5,451 |
United States | ||
Premises & equipment, net | ||
Premises and equipment, net | 1,932 | 5,530 |
India | ||
Premises & equipment, net | ||
Premises and equipment, net | 999 | 822 |
Uruguay | ||
Premises & equipment, net | ||
Premises and equipment, net | $ 59 | $ 91 |
SEGMENT REPORTING - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Goodwill | |||
Goodwill | $ 55,960 | $ 73,849 | $ 73,849 |
Disposition/Write-off | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Owners.com | |||
Goodwill | |||
Disposition/Write-off | (17,889) | ||
Operating Segment | Origination | |||
Goodwill | |||
Goodwill | 25,279 | 25,279 | 25,279 |
Disposition/Write-off | 0 | ||
Operating Segment | Servicer and Real Estate | |||
Goodwill | |||
Goodwill | 30,681 | 30,681 | 30,681 |
Disposition/Write-off | 0 | ||
Corporate And Eliminations | |||
Goodwill | |||
Goodwill | 0 | $ 17,889 | $ 17,889 |
Disposition/Write-off | $ (17,889) |
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|||
Allowance for expected credit losses: | ||||
Deductions from asset accounts: | ||||
Balance at Beginning of Period | $ 5,581 | $ 4,472 | ||
Additions, Charged to Expenses | 1,354 | 2,229 | ||
Deductions Note | [1] | 1,638 | 1,120 | |
Balance at End of Period | 5,297 | 5,581 | ||
Valuation allowance for deferred tax assets: | ||||
Deductions from asset accounts: | ||||
Balance at Beginning of Period | 372,227 | 355,559 | ||
Additions, Charged to Expenses | 16,921 | 16,668 | ||
Deductions Note | 0 | 0 | ||
Balance at End of Period | $ 389,148 | $ 372,227 | ||
|
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