View:
Download DOC
Download PDF
Download XLS
Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 
FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 21, 2016

 
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
(Exact name of Registrant as specified in its Charter)
 

Luxembourg
 
001-34354
 
98-0554932
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)

40, avenue Monterey
L-2163 Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive offices including zip code)

+352 2469 7900
(Registrant’s telephone number, including area code)

NOT APPLICABLE
(Former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 




Item 2.02 Results of Operations and Financial Condition.

On July 21, 2016, Altisource Portfolio Solutions S.A. (“Altisource”) issued a press release announcing financial results for its quarter ended June 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02, including the information in Exhibit 99.1, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.
 
Description
Exhibit 99.1
 
Press release issued by Altisource Portfolio Solutions S.A. dated July 21, 2016




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  July 21, 2016

 
Altisource Portfolio Solutions S.A.
 
 
 
By:
/s/ Michelle D. Esterman
 
Name:
Michelle D. Esterman
 
Title:
Chief Financial Officer



Exhibit


Exhibit 99.1
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
 
 
 
Michelle D. Esterman
 
Chief Financial Officer
 
T: +352 2469 7950
 
E: Michelle.Esterman@altisource.lu

ALTISOURCE ANNOUNCES SECOND QUARTER RESULTS; STRONG PROGRESS ON STRATEGIC INITIATIVES

Luxembourg, July 21, 2016 - Altisource Portfolio Solutions S.A. (“Altisource”) (NASDAQ: ASPS) today reported financial results for the second quarter of 2016, generating strong cash flows from operations and service revenue growth. Compared to the first quarter of 2016, service revenue growth was driven by an increase in the number of non-Ocwen and Ocwen homes sold on Hubzu® and a higher volume of property preservation referrals. Compared to the second quarter of 2015, service revenue growth was driven by a higher volume of property preservation referrals, growth in the percentage of homes sold through auction on Hubzu and growth in the number of non-Ocwen homes sold on Hubzu.

Compared to the first quarter of 2016, growth in diluted earnings per share and adjusted diluted earnings per share(1) was primarily from changes in service revenue mix and greater gains on debt repurchases, partially offset by lower technology revenue from Ocwen and transaction costs associated with the purchase of Altisource Residential Corporation (“RESI”) stock. Compared to the second quarter of 2015, the decline in diluted earnings per share and adjusted diluted earnings per share(1) was primarily from changes in service revenue mix, greater investment in our growth initiatives, lower technology revenue from Ocwen, transaction costs associated with the purchase of RESI stock and the inclusion of one-time Equator® and HLSS gains in the second quarter of 2015, partially offset by greater gains on debt repurchases.

Second Quarter 2016 Results Compared to First Quarter 2016 and Second Quarter 2015:

•
Service revenue of $241.3 million, a 3% increase compared to the first quarter 2016 and a 2% increase compared to the second quarter 2015
•
Net income attributable to Altisource of $20.0 million, an 8% increase compared to the first quarter 2016 and a 56% decrease compared to the second quarter 2015
•
Adjusted net income attributable to Altisource(1) of $31.0 million, a 5% increase compared to the first quarter 2016 and a 34% decrease compared to the second quarter 2015
•
Diluted earnings per share of $1.02, an 11% increase compared to the first quarter 2016 and a 54% decrease compared to the second quarter 2015
•
Adjusted diluted earnings per share(1) of $1.58, a 7% increase compared to the first quarter 2016 and a 31% decrease compared to the second quarter 2015
•
Cash from operations of $40.4 million, a 39% increase compared to the first quarter 2016 and a 43% decrease compared to the second quarter 2015

“I am very pleased with our performance in the second quarter of 2016 and through the first half of the year. We are executing well against our strategic initiatives and believe we are on track to achieve or exceed adjusted diluted earnings per share(1) of $6.00 per share, the midpoint of our updated scenarios(2),” said Chief Executive Officer William B. Shepro.

Shepro further commented, “We continue to make strong progress in growing our sales pipeline and developing a compelling suite of real estate and mortgage marketplace services. We have grown adjusted service revenue unrelated to Ocwen(1) by more

1


than 40% in each of the last two years and anticipate the growth to exceed this in 2016. We believe this positions us to transform Altisource into a larger, more profitable company with a diversified and growing revenue base.”
Second Quarter 2016 highlights include:

Initiatives
•
Began providing property inspection and preservation services for a top four bank
•
Received approval from a top ten bank client to also provide it with short sale services
•
Executed a contract with a mortgage insurance company to manage its REO(3)
•
Selected by a top ten bank to provide Equator software to manage its short sales; this bank is evaluating Altisource for additional services
•
Grew second quarter 2016 service revenue in the Origination Solutions businesses by 20% over the first quarter of 2016

Capital Allocation
•
Repurchased $51.0 million of our senior secured term loan at a weighted average discount of 13.2%, recognizing a net gain of $5.5 million on the early extinguishment of debt
•
Repurchased $8.1 million of our common stock (0.3 million shares at an average price of $26.74 per share)
•
Purchased 1.6 million shares of RESI’s common stock for $18.8 million

__________________________
(1)
This is a non-GAAP measure that is defined and reconciled to the corresponding GAAP measure herein.
(2)
The 2016 scenarios have been adjusted to reflect our results for the first half of the year and anticipated performance for the balance of the year. The mid-point of the scenarios for adjusted diluted earnings per share remains the same as previously communicated.
(3)
Executed in July 2016


Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include all statements that are not historical fact, including statements about management’s beliefs and expectations. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe,” “potential” and similar expressions. Forward-looking statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to the future and are not statements of historical fact, actual results may differ materially from what is contemplated by the forward-looking statements. Altisource undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, Altisource’s ability to integrate acquired businesses, retain key executives or employees, retain existing customers and attract new customers, general economic and market conditions, behavior of customers, suppliers and/or competitors, technological developments, governmental regulations, taxes and policies, availability of adequate and timely sources of liquidity and other risks and uncertainties detailed in the “Forward-Looking Statements,” “Risk Factors” and other sections of Altisource’s Form 10-K and other filings with the Securities and Exchange Commission.

Webcast

Altisource will host a webcast at 11:00 a.m. EDT today to discuss our second quarter results. A link to the live audio webcast will be available on Altisource’s website in the Investor Relations section. Those who want to listen to the call should go to the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days.

2


About Altisource

Altisource Portfolio Solutions S.A. is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries. Altisource’s proprietary business processes, vendor and electronic payment management software and behavioral science-based analytics improve outcomes for marketplace participants. Additional information is available at www.Altisource.com.



3


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
(unaudited) 
 
 
Three months ended 
 June 30,
 
Six months ended 
 June 30,
 
 
 
 
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
Service revenue
 
 
 
 
 
 
 
 
Mortgage Services
 
$
194,110

 
$
165,674

 
$
377,272

 
$
310,055

Financial Services
 
19,734

 
23,350

 
39,810

 
45,663

Technology Services
 
38,100

 
55,992

 
78,747

 
107,962

Eliminations
 
(10,620
)
 
(8,421
)
 
(20,225
)
 
(19,269
)
 Total service revenue
 
241,324

 
236,595

 
475,604

 
444,411

Reimbursable expenses
 
13,783

 
30,830

 
29,237

 
62,786

Non-controlling interests
 
692

 
896

 
1,090

 
1,606

Total revenue
 
255,799

 
268,321

 
505,931

 
508,803

Cost of revenue
 
160,588

 
137,329

 
313,997

 
278,199

Reimbursable expenses
 
13,783

 
30,830

 
29,237

 
62,786

Gross profit
 
81,428

 
100,162

 
162,697

 
167,818

Selling, general and administrative expenses
 
54,207

 
51,566

 
107,823

 
103,972

Change in the fair value of Equator Earn Out
 
—

 
(7,591
)
 
—

 
(7,591
)
Income from operations
 
27,221

 
56,187

 
54,874

 
71,437

Other income (expense), net:
 
 
 
 
 
 
 
 
Interest expense
 
(5,988
)
 
(7,195
)
 
(12,529
)
 
(14,355
)
Gain (loss) on HLSS equity securities and dividends received
 
—

 
1,431

 
—

 
(1,854
)
Other income (expense), net
 
2,744

 
821

 
2,717

 
824

Total other income (expense), net
 
(3,244
)
 
(4,943
)
 
(9,812
)
 
(15,385
)
 
 
 
 
 
 
 
 
 
Income before income taxes and non-controlling interests
 
23,977

 
51,244

 
45,062

 
56,052

Income tax provision
 
(3,291
)
 
(4,398
)
 
(5,484
)
 
(4,798
)
 
 
 
 
 
 
 
 
 
Net income
 
20,686

 
46,846

 
39,578

 
51,254

Net income attributable to non-controlling interests
 
(692
)
 
(896
)
 
(1,090
)
 
(1,606
)
 
 
 
 
 
 
 
 
 
Net income attributable to Altisource
 
$
19,994

 
$
45,950

 
$
38,488

 
$
49,648

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
Basic
 
$
1.08

 
$
2.35

 
$
2.06

 
$
2.50

Diluted
 
$
1.02

 
$
2.22

 
$
1.94

 
$
2.38

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
18,437

 
19,571

 
18,646

 
19,870

Diluted
 
19,604

 
20,669

 
19,822

 
20,830

 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
Net income
 
$
20,686

 
$
46,846

 
$
39,578

 
$
51,254

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
Unrealized loss on securities, net of income tax benefit of $3,249, $0, $2,960, $0
 
(7,871
)
 
—

 
(7,172
)
 
—

 
 
 
 
 
 
 
 
 
Comprehensive income, net of tax
 
12,815

 
46,846

 
32,406

 
51,254

Comprehensive income attributable to non-controlling interests
 
(692
)
 
(896
)
 
(1,090
)
 
(1,606
)
 
 
 
 
 
 
 
 
 
Comprehensive income attributable to Altisource
 
$
12,123

 
$
45,950

 
$
31,316

 
$
49,648


4


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
SEGMENT FINANCIAL INFORMATION
(in thousands)
(unaudited) 

 
 
Three months ended June 30, 2016
 
 
Mortgage
Services
 
Financial
Services
 
Technology
Services
 
Corporate
Items and
Eliminations
 
Consolidated
Altisource
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 

 
 

 
 

 
 

Service revenue
 
$
194,110

 
$
19,734

 
$
38,100

 
$
(10,620
)
 
$
241,324

Reimbursable expenses
 
13,759

 
24

 
—

 
—

 
13,783

Non-controlling interests
 
692

 
—

 
—

 
—

 
692

 
 
208,561

 
19,758

 
38,100

 
(10,620
)
 
255,799

Cost of revenue
 
127,626

 
14,149

 
42,424

 
(9,828
)
 
174,371

Gross profit (loss)
 
80,935

 
5,609

 
(4,324
)
 
(792
)
 
81,428

Selling, general and administrative expenses
 
28,607

 
4,204

 
7,440

 
13,956

 
54,207

Income (loss) from operations
 
52,328

 
1,405

 
(11,764
)
 
(14,748
)
 
27,221

Total other income (expense), net
 
35

 
22

 
93

 
(3,394
)
 
(3,244
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and
non-controlling interests
 
$
52,363

 
$
1,427

 
$
(11,671
)
 
$
(18,142
)
 
$
23,977


 
 
Three months ended June 30, 2015
 
 
Mortgage
Services
 
Financial
Services
 
Technology
Services
 
Corporate
Items and
Eliminations
 
Consolidated
Altisource
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 

 
 

 
 

 
 

 
 

Service revenue
 
$
165,674

 
$
23,350

 
$
55,992

 
$
(8,421
)
 
$
236,595

Reimbursable expenses
 
30,791

 
39

 
—

 
—

 
30,830

Non-controlling interests
 
896

 
—

 
—

 
—

 
896

 
 
197,361

 
23,389

 
55,992

 
(8,421
)
 
268,321

Cost of revenue
 
112,710

 
15,537

 
47,423

 
(7,511
)
 
168,159

Gross profit (loss)
 
84,651

 
7,852

 
8,569

 
(910
)
 
100,162

Selling, general and administrative expenses
 
25,228

 
4,588

 
7,246

 
14,504

 
51,566

Change in the fair value of Equator Earn Out
 
—

 
—

 
(7,591
)
 
—

 
(7,591
)
Income (loss) from operations
 
59,423

 
3,264

 
8,914

 
(15,414
)
 
56,187

Total other income (expense), net
 
23

 
2

 
(18
)
 
(4,950
)
 
(4,943
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and
non-controlling interests
 
$
59,446

 
$
3,266

 
$
8,896

 
$
(20,364
)
 
$
51,244















5


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
SEGMENT FINANCIAL INFORMATION
(in thousands)
(unaudited) 


 
 
Six months ended June 30, 2016
 
 
Mortgage
Services
 
Financial
Services
 
Technology
Services
 
Corporate
Items and
Eliminations
 
Consolidated
Altisource
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
Service revenue
 
$
377,272

 
$
39,810

 
$
78,747

 
$
(20,225
)
 
$
475,604

Reimbursable expenses
 
29,185

 
52

 
—

 
—

 
29,237

Non-controlling interests
 
1,090

 
—

 
—

 
—

 
1,090

 
 
407,547

 
39,862

 
78,747

 
(20,225
)
 
505,931

Cost of revenue
 
249,144

 
28,407

 
84,317

 
(18,634
)
 
343,234

Gross profit (loss)
 
158,403

 
11,455

 
(5,570
)
 
(1,591
)
 
162,697

Selling, general and administrative expenses
 
55,576

 
8,513

 
13,998

 
29,736

 
107,823

Income (loss) from operations
 
102,827

 
2,942

 
(19,568
)
 
(31,327
)
 
54,874

Total other income (expense), net
 
49

 
35

 
100

 
(9,996
)
 
(9,812
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and
non-controlling interests
 
$
102,876

 
$
2,977

 
$
(19,468
)
 
$
(41,323
)
 
$
45,062




 
 
Six months ended June 30, 2015
 
 
Mortgage
Services
 
Financial
Services
 
Technology
Services
 
Corporate
Items and
Eliminations
 
Consolidated
Altisource
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 

 
 

 
 

 
 

 
 

Service revenue
 
$
310,055

 
$
45,663

 
$
107,962

 
$
(19,269
)
 
$
444,411

Reimbursable expenses
 
62,706

 
80

 
—

 
—

 
62,786

Non-controlling interests
 
1,606

 
—

 
—

 
—

 
1,606

 
 
374,367

 
45,743

 
107,962

 
(19,269
)
 
508,803

Cost of revenue
 
227,514

 
30,640

 
100,146

 
(17,315
)
 
340,985

Gross profit (loss)
 
146,853

 
15,103

 
7,816

 
(1,954
)
 
167,818

Selling, general and administrative expenses
 
45,789

 
9,303

 
14,561

 
34,319

 
103,972

Change in the fair value of Equator Earn Out
 
—

 
—

 
(7,591
)
 
—

 
(7,591
)
Income (loss) from operations
 
101,064

 
5,800

 
846

 
(36,273
)
 
71,437

Total other income (expense), net
 
19

 
(10
)
 
(17
)
 
(15,377
)
 
(15,385
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and
non-controlling interests
 
$
101,083

 
$
5,790

 
$
829

 
$
(51,650
)
 
$
56,052




6


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited) 
 
 
June 30,
 
December 31,
 
 
2016
 
2015
ASSETS
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
120,486

 
$
179,327

Available for sale securities
 
38,087

 
—

Accounts receivable, net
 
100,165

 
105,023

Prepaid expenses and other current assets
 
27,747

 
21,751

Total current assets
 
286,485

 
306,101

 
 
 
 
 
Premises and equipment, net
 
114,576

 
119,121

Goodwill
 
81,406

 
82,801

Intangible assets, net
 
173,406

 
197,003

Deferred tax assets, net
 
6,917

 
3,619

Other assets
 
12,686

 
13,153

 
 
 
 
 
Total assets
 
$
675,476

 
$
721,798

 
 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 
 
 
 
Accounts payable and accrued expenses
 
$
88,748

 
$
91,871

Current portion of long-term debt
 
5,945

 
5,945

Deferred revenue
 
11,717

 
15,060

Other current liabilities
 
14,309

 
16,266

Total current liabilities
 
120,719

 
129,142

 
 
 
 
 
Long-term debt, less current portion
 
469,776

 
522,233

Other non-current liabilities
 
16,561

 
18,153

 
 
 
 
 
Equity:
 
 
 
 
Common stock ($1.00 par value; 25,413 shares authorized and issued and 18,350 outstanding as of June 30, 2016; 25,413 shares authorized and issued and 19,021 outstanding as of December 31, 2015)
 
25,413

 
25,413

Additional paid-in capital
 
99,890

 
96,321

Retained earnings
 
403,460

 
369,270

Accumulated other comprehensive loss
 
(7,172
)
 
—

Treasury stock, at cost (7,063 shares as of June 30, 2016 and 6,392 shares as of December 31, 2015)
 
(454,488
)
 
(440,026
)
Altisource equity
 
67,103

 
50,978

 
 
 
 
 
Non-controlling interests
 
1,317

 
1,292

Total equity
 
68,420

 
52,270

 
 
 
 
 
Total liabilities and equity
 
$
675,476

 
$
721,798



7


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) 
 
Six months ended June 30,
 
2016
 
2015
Cash flows from operating activities:
 

 
 

Net income
$
39,578

 
$
51,254

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
18,346

 
18,432

Amortization of intangible assets
24,967

 
17,877

Loss on HLSS equity securities and dividends received, net
—

 
1,854

Change in the fair value of acquisition related contingent consideration
193

 
(7,346
)
Share-based compensation expense
3,569

 
1,315

Bad debt expense
1,041

 
2,143

Gain on early extinguishment of debt
(5,464
)
 
(1,114
)
Amortization of debt discount
201

 
255

Amortization of debt issuance costs
557

 
585

Deferred income taxes
18

 
5

Loss on disposal of fixed assets
9

 
20

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
3,407

 
(6,726
)
Prepaid expenses and other current assets
(6,012
)
 
4,480

Other assets
447

 
1,338

Accounts payable and accrued expenses
(4,454
)
 
(28,557
)
Other current and non-current liabilities
(6,998
)
 
(1,008
)
Net cash provided by operating activities
69,405

 
54,807

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions to premises and equipment
(12,441
)
 
(21,421
)
Purchase of available for sale securities
(48,219
)
 
(29,966
)
Proceeds received from sale of and dividends from HLSS equity securities
—

 
28,112

Other investing activities
(10
)
 
(4
)
Net cash used in investing activities
(60,670
)
 
(23,279
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Repayment and repurchases of long-term debt
(47,751
)
 
(17,701
)
Proceeds from stock option exercises
986

 
203

Purchase of treasury stock
(19,746
)
 
(43,965
)
Distributions to non-controlling interests
(1,065
)
 
(1,347
)
Net cash used in financing activities
(67,576
)
 
(62,810
)
 
 
 
 
Net decrease in cash and cash equivalents
(58,841
)
 
(31,282
)
Cash and cash equivalents at the beginning of the period
179,327

 
161,361

 
 
 
 
Cash and cash equivalents at the end of the period
$
120,486

 
$
130,079

 
 
 
 
Supplemental cash flow information:
 
 
 
Interest paid
$
11,694

 
$
13,345

Income taxes paid, net
5,618

 
3,490

 
 
 
 
Non-cash investing and financing activities:
 
 
 
Increase (decrease) in payables for purchases of premises and equipment
$
1,369

 
$
(4,091
)

8


ALTISOURCE PORTFOLIO SOLUTIONS S.A.
NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited) 

Adjusted net income attributable to Altisource, adjusted diluted earnings per share and adjusted service revenue unrelated to Ocwen are non-GAAP measures used by management, existing shareholders and potential shareholders to measure Altisource’s performance. Adjusted net income attributable to Altisource is calculated by adding intangible asset amortization expense (net of tax) and deducting the gain associated with the reduction of the Equator earn out liability (net of tax) to GAAP net income attributable to Altisource. Adjusted diluted earnings per share is calculated by dividing net income attributable to Altisource plus intangible asset amortization expense (net of tax) less the gain associated with the reduction of the Equator earn out liability (net of tax) by the weighted average number of diluted shares. Adjusted service revenue unrelated to Ocwen is calculated by reducing the amortization of deferred revenue recorded in connection with the 2013 Equator acquisition from the applicable GAAP service revenue amount. Reconciliations of the non-GAAP measures to the corresponding GAAP measures are as follows:
 
Three months ended 
 June 30,
 
Six months ended 
 June 30,
 
 
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Net income attributable to Altisource
$
19,994

 
$
45,950

 
$
38,488

 
$
49,648

 
 
 
 
 
 
 
 
Amortization of intangible assets
12,756

 
8,986

 
24,967

 
17,877

Tax benefit on amortization of intangible assets
(1,751
)
 
(771
)
 
(3,038
)
 
(1,530
)
Amortization of intangible assets, net of tax
11,005

 
8,215

 
21,929

 
16,347

 
 
 
 
 
 
 
 
Gain on Equator earn out liability
—

 
(7,591
)
 
—

 
(7,591
)
Tax provision from the gain on Equator earn out liability
—

 
651

 
—

 
651

Gain on Equator earn out liability, net of tax
—

 
(6,940
)
 
—

 
(6,940
)
 
 
 
 
 
 
 
 
Adjusted net income attributable to Altisource
$
30,999

 
$
47,225

 
$
60,417

 
$
59,055

 
 
 
 
 
 
 
 
Diluted earnings per share
$
1.02

 
$
2.22

 
$
1.94

 
$
2.38

 
 
 
 
 
 
 
 
Amortization of intangible assets, net of tax, per diluted share
0.56

 
0.40

 
1.11

 
0.78

Gain on Equator earn out liability, net of tax, per diluted share
—

 
(0.34
)
 
—

 
(0.33
)
 
 
 
 
 
 
 
 
Adjusted diluted earnings per share
$
1.58

 
$
2.28

 
$
3.05

 
$
2.84

 
 
 
 
 
 
 
 
Weighted average shares outstanding - diluted
19,604

 
20,669

 
19,822

 
20,830



 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
Service revenue unrelated to Ocwen
 
$
193,430

 
$
167,342

 
$
100,236

Less: Amortization of Equator acquisition deferred revenue
 
—

 
(32,109
)
 
(4,587
)
 
 
 
 
 
 
 
Adjusted service revenue unrelated to Ocwen
 
$
193,430

 
$
135,233

 
$
95,649


__________________________
Note: Amounts may not add to the total due to rounding.



9