Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Jul. 19, 2019
Document and Entity Information
Entity Registrant Name	Altisource Portfolio Solutions S.A.
Entity Central Index Key	0001462418
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Smaller Reporting Company	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding (in shares)		15,998,899
Entity Shell Company	false
Entity Treasury Stock (in shares)		9,413,849
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 85,379	$ 58,294
Investment in equity securities (Note 4)	43,730	36,181
Accounts receivable, net	44,247	36,466
Short-term investments in real estate (Note 7)	414	39,873
Assets held for sale (Note 3)	35,656	0
Prepaid expenses and other current assets	23,633	30,720
Total current assets	233,059	201,534
Premises and equipment, net (Notes 1 and 8)	59,980	45,631
Goodwill	79,009	81,387
Intangible assets, net	68,616	91,653
Deferred tax assets, net	293,287	309,089
Other assets	9,920	12,406
Total assets	743,871	741,700
Current liabilities:
Accounts payable and accrued expenses	63,791	87,240
Current portion of long-term debt	6,502	0
Deferred revenue	5,590	10,108
Liabilities held for sale (Note 3)	14,850	0
Other current liabilities (Notes 1 and 11)	20,410	7,030
Total current liabilities	111,143	104,378
Long-term debt, less current portion	319,854	331,476
Other non-current liabilities (Notes 1 and 13)	27,002	9,178
Commitments, contingencies and regulatory matters (Note 23)
Equity:
Common stock ($1.00 par value; 100,000 shares authorized, 25,413 issued and 16,079 outstanding as of June 30, 2019; 16,276 outstanding as of December 31, 2018)	25,413	25,413
Additional paid-in capital	128,120	122,667
Retained earnings	574,040	590,655
Treasury stock, at cost (9,334 shares as of June 30, 2019 and 9,137 shares as of December 31, 2018)	(443,480)	(443,304)
Altisource equity	284,093	295,431
Non-controlling interests	1,779	1,237
Total equity	285,872	296,668
Total liabilities and equity	$ 743,871	$ 741,700

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 1.000	$ 1
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	25,413,000	25,413,000
Common stock, shares outstanding (in shares)	16,079,000	16,276,000
Treasury stock, shares (in shares)	9,334,000	9,137,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Sep. 30, 2018	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenue	$ 196,535		$ 218,556		$ 366,470	$ 415,994
Cost of revenue	152,641		163,206		276,745	310,400
Gross profit	43,894		55,350		89,725	105,594
Operating expenses:
Selling, general and administrative expenses	35,851		42,924		77,091	86,048
Restructuring charges (Note 22)	1,899		0		6,319	0
Income from operations	6,144		12,426		6,315	19,546
Other income (expense), net:
Interest expense	(6,550)		(7,027)		(13,299)	(12,890)
Unrealized gain (loss) on investment in equity securities (Note 4)	11,787		1,533		14,025	(5,968)
Other income (expense), net	528		(3,861)		902	(2,589)
Total other income (expense), net	5,765		(9,355)		1,628	(21,447)
Income (loss) before income taxes and non-controlling interests	11,909		3,071		7,943	(1,901)
Income tax (provision) benefit	(16,513)		(816)		(15,291)	549
Net (loss) income	(4,604)		2,255		(7,348)	(1,352)
Net income attributable to non-controlling interests	(1,240)		(687)		(1,680)	(1,212)
Net (loss) income attributable to Altisource	$ (5,844)		$ 1,568		$ (9,028)	$ (2,564)
(Loss) earnings per share:
Basic (in usd per share)	$ (0.36)		$ 0.09		$ (0.56)	$ (0.15)
Diluted (in usd per share)	$ (0.36)		$ 0.09		$ (0.56)	$ (0.15)
Weighted average shares outstanding:
Basic (in shares)	16,214		17,142		16,253	17,260
Diluted (in shares)	16,214		17,553		16,253	17,260
Comprehensive (loss) income:
Reclassification of unrealized gain on investment in equity securities, net of income tax provision of $200, to retained earnings from the cumulative effect of an accounting change		$ 0		$ 0	$ 0	$ (733)
Comprehensive (loss) income, net of tax	$ (4,604)		$ 2,255		(7,348)	(2,085)
Comprehensive income attributable to non-controlling interests	(1,240)		(687)		(1,680)	(1,212)
Comprehensive (loss) income attributable to Altisource	$ (5,844)		$ 1,568		$ (9,028)	$ (3,297)

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock, at cost	Non-controlling interests
Balance (in shares) at Dec. 31, 2017		25,413
Balance at Dec. 31, 2017	$ 339,985	$ 25,413	$ 112,475	$ 626,600	$ 733	$ (426,609)	$ 1,373
Increase (Decrease) in Equity
Net (loss) income	(3,607)			(4,132)			525
Distributions to non-controlling interest holders	(672)						(672)
Share-based compensation expense	2,201		2,201
Exercise of stock options and issuance of restricted share units and restricted shares	2,617			(12,500)		15,117
Repurchase of shares	(9,994)					(9,994)
Balance (in shares) at Mar. 31, 2018		25,413
Balance at Mar. 31, 2018	320,082	$ 25,413	114,676	600,253	0	(421,486)	1,226
Balance (in shares) at Dec. 31, 2017		25,413
Balance at Dec. 31, 2017	339,985	$ 25,413	112,475	626,600	733	(426,609)	1,373
Increase (Decrease) in Equity
Net (loss) income	(1,352)
Balance (in shares) at Jun. 30, 2018		25,413
Balance at Jun. 30, 2018	312,291	$ 25,413	116,586	596,268	0	(427,380)	1,404
Balance (in shares) at Mar. 31, 2018		25,413
Balance at Mar. 31, 2018	320,082	$ 25,413	114,676	600,253	0	(421,486)	1,226
Increase (Decrease) in Equity
Net (loss) income	2,255			1,568			687
Distributions to non-controlling interest holders	(509)						(509)
Share-based compensation expense	1,910		1,910
Exercise of stock options and issuance of restricted share units and restricted shares	90			(4,737)		4,827
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises	(410)			(816)		406
Repurchase of shares	(11,127)					(11,127)
Balance (in shares) at Jun. 30, 2018		25,413
Balance at Jun. 30, 2018	312,291	$ 25,413	116,586	596,268	0	(427,380)	1,404
Balance (in shares) at Dec. 31, 2018		25,413
Balance at Dec. 31, 2018	296,668	$ 25,413	122,667	590,655	0	(443,304)	1,237
Increase (Decrease) in Equity
Net (loss) income	(2,744)			(3,184)			440
Distributions to non-controlling interest holders	(620)						(620)
Share-based compensation expense	2,621		2,621
Exercise of stock options and issuance of restricted share units and restricted shares	28			(1,549)		1,577
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises	(585)			(1,163)		578
Balance (in shares) at Mar. 31, 2019		25,413
Balance at Mar. 31, 2019	295,368	$ 25,413	125,288	584,759	0	(441,149)	1,057
Balance (in shares) at Dec. 31, 2018		25,413
Balance at Dec. 31, 2018	296,668	$ 25,413	122,667	590,655	0	(443,304)	1,237
Increase (Decrease) in Equity
Net (loss) income	(7,348)
Balance (in shares) at Jun. 30, 2019		25,413
Balance at Jun. 30, 2019	285,872	$ 25,413	128,120	574,040	0	(443,480)	1,779
Balance (in shares) at Mar. 31, 2019		25,413
Balance at Mar. 31, 2019	295,368	$ 25,413	125,288	584,759	0	(441,149)	1,057
Increase (Decrease) in Equity
Net (loss) income	(4,604)			(5,844)			1,240
Distributions to non-controlling interest holders	(518)						(518)
Share-based compensation expense	2,832		2,832
Exercise of stock options and issuance of restricted share units and restricted shares	207			(3,473)		3,680
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances and stock option exercises	(713)			(1,402)		689
Repurchase of shares	(6,700)					(6,700)
Balance (in shares) at Jun. 30, 2019		25,413
Balance at Jun. 30, 2019	$ 285,872	$ 25,413	$ 128,120	$ 574,040	$ 0	$ (443,480)	$ 1,779

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net loss	$ (7,348)	$ (1,352)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	17,315	17,049
Amortization of intangible assets	12,191	14,691
Unrealized (gain) loss on investment in equity securities	(14,025)	5,968
Share-based compensation expense	5,453	4,111
Bad debt expense	131	1,503
Amortization of debt discount	327	298
Amortization of debt issuance costs	363	502
Deferred income taxes	15,846	(1,349)
Loss on disposal of fixed assets	908	558
Loss on debt refinancing (Note 12)	0	4,434
Changes in operating assets and liabilities (excludes assets and liabilities held for sale, see Note 3):
Accounts receivable	(15,789)	6,923
Short-term investments in real estate	39,459	(5,884)
Prepaid expenses and other current assets	5,239	617
Other assets	(511)	967
Accounts payable and accrued expenses	(16,587)	(17,152)
Other current and non-current liabilities	(9,816)	(8,631)
Net cash provided by operating activities	33,156	23,253
Cash flows from investing activities:
Additions to premises and equipment	(934)	(2,756)
Proceeds received from sale of equity securities	6,476	0
Other	1,087	0
Net cash provided by (used in) investing activities	6,629	(2,756)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	0	407,880
Repayments and repurchases of long-term debt	(5,810)	(421,821)
Debt issuance costs	0	(5,042)
Proceeds from stock option exercises	235	2,707
Purchase of treasury shares	(6,700)	(21,121)
Distributions to non-controlling interests	(1,138)	(1,181)
Payments of tax withholding on issuance of restricted share units and restricted shares	(1,298)	(410)
Net cash used in financing activities	(14,711)	(38,988)
Net increase (decrease) in cash, cash equivalents and restricted cash	25,074	(18,491)
Cash, cash equivalents and restricted cash at the beginning of the period	64,046	108,843
Cash, cash equivalents and restricted cash at the end of the period	89,120	90,352
Supplemental cash flow information:
Interest paid	11,279	11,540
Income taxes (received) paid, net	(27)	2,865
Non-cash investing and financing activities:
Net (decrease) increase in payables for purchases of premises and equipment	(25)	398
Acquisition of right-to-use assets with lease obligations	6,200	0
Reduction of lease obligations from lease terminations and amendments	$ (3,409)	$ 0

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
ORGANIZATION AND BASIS OF PRESENTATION	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	ORGANIZATION AND BASIS OF PRESENTATION 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. We are publicly traded on the NASDAQ Global Select Market under the symbol “ASPS.” We are organized under the laws of the Grand Duchy of Luxembourg. Basis of Accounting and Presentation The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the interim data includes all normal recurring adjustments considered necessary to fairly state the results for the interim periods presented. The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our interim condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Intercompany transactions and accounts have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. Effective January 1, 2019, the Company reorganized its internal reporting structure in connection with Project Catalyst, a project initiated in August 2018 to optimize our operations and reduce costs to better align our cost structure with our anticipated revenues and improve our operating margins (see Note 22). The internal reorganization included, among other changes, the replacement of segment presidents with a chief operating officer, who is responsible for products, services and operations for the Company’s Mortgage Market and Real Estate Market businesses, reporting to our Chairman and Chief Executive Officer (our chief operating decision maker) who manages our businesses, regularly reviews operating results and profitability, allocates resources and evaluates performance on a consolidated basis. Prior to January 1, 2019, the Company reported our operations through two reportable segments: Mortgage Market and Real Estate Market. In addition, we reported Other Businesses, Corporate and Eliminations separately. The prior year presentation has been reclassified to conform to the current year presentation. 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 condensed consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests. As of June 30, 2019, Lenders One had total assets of $3.2 million and total liabilities of $1.6 million. As of December 31, 2018, Lenders One had total assets of $2.7 million and total liabilities of $1.3 million. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 26, 2019. 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. Recently Adopted Accounting Pronouncement In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) and in July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (collectively “Topic 842”). Topic 842 introduces a new lessee model that brings substantially all leases on the balance sheet. This standard requires lessees to recognize lease assets and lease liabilities on their balance sheets and disclose key information about leasing arrangements in their financial statements. The Company adopted Topic 842 effective January 1, 2019 using the modified retrospective transition approach. In addition, the Company elected the practical expedients permitted under the transition guidance within the new standard, including allowing the Company to carry forward its historical lease classification, using hindsight to determine the lease term for existing leases, combining fixed lease and non-lease components and excluding short-term leases. Adoption of this new standard resulted in the recognition of $42.1 million of right-to-use assets in premises and equipment, net, $45.5 million of lease obligation liabilities ($16.7 million in other current liabilities and $28.8 million in other non-current liabilities) and reduced accrued rent and lease incentives of $3.4 million in accounts payable and accrued expenses and other non-current liabilities on the accompanying condensed consolidated balance sheets. Future Adoption of New Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step 2 by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. This standard will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period, and will be applied prospectively. Early adoption of this standard is permitted. The Company is currently evaluating the impact this guidance may have on its condensed consolidated financial statements; however, adoption of this standard as of June 30, 2019 would not have had any impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements such as the valuation processes for Level 3 fair value measurements. This standard also requires new disclosures such as the disclosure of certain assumptions used to develop significant unobservable inputs for Level 3 fair value measurements. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period. Early adoption of either the entire standard or only the provisions that eliminate or modify requirements is permitted. The Company currently does not expect the adoption of this guidance to have an impact on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). This standard aligns the requirements for capitalizing implementation costs in a hosting arrangement service contract with the existing guidance for capitalizing implementation costs incurred for an internal-use software license. This standard also requires capitalizing or expensing implementation costs based on the nature of the costs and the project stage during which they are incurred and establishes additional disclosure requirements. This standard will be effective for annual periods beginning after December 15, 2019, including interim periods within that reporting period. Early adoption of this standard is permitted. The Company currently plans to adopt the standard prospectively and is currently evaluating the impact this guidance may have on its condensed consolidated financial statements.

CUSTOMER CONCENTRATION	6 Months Ended
CUSTOMER CONCENTRATION	Jun. 30, 2019
Risks and Uncertainties [Abstract]
CUSTOMER CONCENTRATION	CUSTOMER CONCENTRATION Ocwen Ocwen Financial Corporation (“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 three and six months ended June 30, 2019, Ocwen was our largest customer, accounting for 51% of our total revenue for the six months ended June 30, 2019 (44% of our revenue for the second quarter of 2019). Ocwen purchases certain mortgage services and technology services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2025. Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things. Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements. For the six months ended June 30, 2019 and 2018, we recognized revenue from Ocwen of $185.2 million and $210.8 million, respectively ($87.0 million and $108.8 million for the second quarter of 2019 and 2018, respectively). Revenue from Ocwen as a percentage of consolidated revenue was 51% for both the six months ended June 30, 2019 and 2018 (44% and 50% for the second quarter of 2019 and 2018, 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 six months ended June 30, 2019 and 2018, we recognized revenue of $20.3 million and $26.2 million, respectively ($9.2 million and $11.0 million for the second quarter of 2019 and 2018, respectively), related to the portfolios serviced by Ocwen when a party other than Ocwen or the MSR owner selected Altisource as the service provider. These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue above. As of June 30, 2019, accounts receivable from Ocwen totaled $28.1 million, $24.1 million of which was billed and $4.0 million of which was unbilled. As of December 31, 2018, accounts receivable from Ocwen totaled $15.2 million, $11.6 million of which was billed and $3.6 million of which was unbilled. As of February 22, 2019, Altisource and Ocwen entered into agreements that, among other things, facilitate Ocwen’s transition from REALServicing^® and related technologies to another mortgage servicing software platform, establish a process for Ocwen to review and approve the assignment of one or more of our agreements to potential buyers of Altisource’s business lines, permit Ocwen to use service providers other than Altisource for up to 10% of referrals from certain portfolios (determined on a service-by-service basis), subject to certain restrictions, and affirms Altisource’s role as a strategic service provider to Ocwen through August 2025. If Altisource fails certain performance standards for specified periods of time, then Ocwen may terminate Altisource as a provider for the applicable service(s), subject to certain limitations and Altisource’s right to cure. We do not anticipate that the servicing technology transition will materially impact the other services we provide to Ocwen. For the six months ended June 30, 2019 and 2018, service revenue from REALServicing and related technologies was $11.3 million and $17.5 million, respectively ($3.1 million and $7.9 million for the second quarter of 2019 and 2018, respectively). NRZ New Residential Investment Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “NRZ”) is a 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 March 31, 2019, NRZ owned MSRs or rights to MSRs relating to approximately 50% of loans serviced and subserviced by Ocwen (measured in unpaid principal balances (“UPB”)). In July 2017 and January 2018, Ocwen and NRZ entered into a series of agreements pursuant to which the parties agreed, among other things, to undertake certain actions to facilitate the transfer from Ocwen to NRZ of Ocwen’s legal title to 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. 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 real estate owned (“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 can, at Altisource’s discretion, be terminated by Altisource if a services agreement is not signed by Altisource and NRZ. The Brokerage Agreement may otherwise only be terminated upon the occurrence of certain specified events. Termination events include, but are not limited to, a breach of the terms of the Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), the failure to maintain licenses which failure materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against NRZ, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control. For the six months ended June 30, 2019 and 2018, we recognized revenue from NRZ of $7.0 million and $19.2 million, respectively ($3.0 million and $8.9 million for the second quarter of 2019 and 2018, respectively), under the Brokerage Agreement. For the six months ended June 30, 2019 and 2018, we recognized additional revenue of $34.1 million and $42.8 million, respectively ($16.4 million and $26.7 million for the second quarter of 2019 and 2018, respectively), relating to the Subject MSRs when a party other than NRZ selects Altisource as the service provider.

SALE OF BUSINESS AND ASSETS AND LIABILITIES HELD FOR SALE

6 Months Ended

Jun. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

SALE OF BUSINESS AND ASSETS AND LIABILITIES HELD FOR SALE

SALE OF BUSINESSES AND ASSETS AND LIABILITIES HELD FOR SALE

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. These services were historically provided under an agreement between RESI and Altisource, in which Altisource was the sole provider of rental property management services to RESI through December 2027, subject to certain exceptions. The proceeds from the transaction totaled $18.0 million, payable in two installments. The first installment of $15.0 million was received on the closing date of August 8, 2018. The second installment of $3.0 million will be received on the earlier of a RESI change of control or on August 8, 2023. The second installment was recorded as a long-term receivable in other assets in the accompanying condensed consolidated balance sheets and has a discounted value of $2.3 million and $2.2 million as of June 30, 2019 and December 31, 2018, respectively.

Financial Services Business

On March 28, 2019, Altisource entered into a definitive agreement to sell 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 and transaction costs upon closing of the sale, and an additional $4.0 million payment on the one year anniversary of the sale closing. The sale of the Financial Services Business to TSI closed on July 1, 2019 (see Note 24). In connection with the transaction, the parties also entered into a transition services agreement to provide for the management and orderly transition of certain services and technologies to TSI for periods ranging from 2 months to 13 months. These services include support for information technology systems and infrastructure, facilities management, finance, compliance and human resources functions and will be charged to TSI on a fixed fee or hourly basis.

As a result of entering into a definitive agreement to sell the Financial Services Business, the assets and liabilities of the Financial Services Business are reported as assets held for sale and liabilities held for sale in the accompanying condensed consolidated balance sheets as of June 30, 2019, and consist of the following:



(in thousands)	June 30, 2019

Accounts receivable, net	$	7,404
Prepaid expenses and other current assets	1,581
Premises and equipment, net	12,506
Goodwill	2,378
Intangible assets, net	10,846
Other assets	941

Total assets held for sale	$	35,656

Accounts payable and accrued expenses	$	4,792
Other current liabilities	2,632
Other non-current liabilities	7,426

Total liabilities held for sale	$	14,850

DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS

On November 26, 2018, the Company announced its plans to sell its short-term investments in real estate (“BRS Inventory”) and discontinue the Company’s Buy-Renovate-Lease-Sell (“BRS”) business. Altisource’s BRS business focused on buying, renovating, leasing and selling single-family homes to real estate investors. The BRS business is not material in relation to the Company’s results of operations or financial position. In anticipation of receiving the majority of the proceeds from the sale of the BRS Inventory in 2019, the Company repaid $49.9 million of its senior secured term loan in the fourth quarter of 2018.

On June 28, 2019, the Company sold the majority of the BRS Inventory to Lafayette Real Estate for $38.9 million. Following this and previous sales, only two homes with a value of $0.4 million remain to be sold. In connection with the sale of the majority of the BRS Inventory, the Company incurred a $1.8 million loss including closing costs.

INVESTMENT IN EQUITY SECURITIES	6 Months Ended
INVESTMENT IN EQUITY SECURITIES	Jun. 30, 2019
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 condensed consolidated balance sheets at fair value and changes in fair value are included in other income (expense), net in the accompanying condensed consolidated statements of operations and comprehensive income (loss). As of June 30, 2019 and December 31, 2018, we held 3.6 million and 4.1 million shares, respectively, of RESI common stock. As of June 30, 2019 and December 31, 2018, the fair value of our investment was $43.7 million and $36.2 million, respectively. During the six months ended June 30, 2019 and 2018, we recognized an unrealized gain (loss) from the change in fair value of $14.0 million and $(6.0) million, respectively ($11.8 million and $1.5 million for the second quarter of 2019 and 2018, respectively). The unrealized gains for the three and six months ended June 30, 2019 included $1.2 million and $1.5 million, respectively, of net gains recognized on RESI shares sold during the second quarter of 2019. During the six months ended June 30, 2019 and 2018, we earned dividends of $1.2 million, in each period ($0.5 million and $0.6 million for the second quarter of 2019 and 2018, respectively), related to this investment. Pursuant to the agreement between Altisource and RESI to sell the rental property management business to RESI (see Note 3 for additional information), Altisource was subject to a lock-up period with respect to the sale or transfer of the shares of common stock of RESI owned by Altisource (the “Shares”) through December 31, 2018. In addition, during each quarter of 2019, Altisource is permitted to sell or transfer no more than 25% of the Shares, provided that any Shares not sold in the applicable quarter will increase the amount that may be sold in the subsequent quarters by 50% of the unsold permitted amount. Thereafter, all transfer restrictions will expire and any remaining Shares will be freely transferable. Notwithstanding these restrictions, Altisource retains the right to sell or transfer the Shares at any time: (i) where Altisource has a good faith belief that its or its affiliates’ liquidity should be increased and the sale is necessary to achieve such an increase; (ii) where the proceeds of sales will be used to finance a strategic acquisition transaction; (iii) in privately negotiated block transactions with unrelated third parties or a similar transaction; or (iv) where RESI is the subject of a tender offer that is reasonably likely to result in a change of control or where RESI undergoes a change of control. In May 2019, the Company began selling its investment in RESI common stock. During the three and six months ended June 30, 2019, the Company sold 0.6 million shares for net proceeds of $6.5 million. As required by the senior secured term loan agreement, the Company is using the net proceeds to repay a portion of its senior secured term loan.

ACCOUNTS RECEIVABLE, NET

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following:



(in thousands)	June 30, 2019			December 31, 2018

Billed	$	39,130		$	35,590
Unbilled	14,382			11,759
	53,512			47,349
Less: Allowance for doubtful accounts	(9,265		)	(10,883		)

Total	$	44,247		$	36,466

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.

DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS

6 Months Ended

Jun. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS

SALE OF BUSINESSES AND ASSETS AND LIABILITIES HELD FOR SALE

Rental Property Management Business

Financial Services Business



(in thousands)	June 30, 2019

Accounts receivable, net	$	7,404
Prepaid expenses and other current assets	1,581
Premises and equipment, net	12,506
Goodwill	2,378
Intangible assets, net	10,846
Other assets	941

Total assets held for sale	$	35,656

Accounts payable and accrued expenses	$	4,792
Other current liabilities	2,632
Other non-current liabilities	7,426

Total liabilities held for sale	$	14,850

DISCONTINUATION OF THE BUY-RENOVATE-LEASE-SELL BUSINESS

PREMISES AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

PREMISES AND EQUIPMENT, NET

Premises and equipment, net consists of the following:



(in thousands)	June 30, 2019			December 31, 2018

Computer hardware and software	$	169,684		$	182,215
Office equipment and other	4,006			7,384
Furniture and fixtures	9,710			13,313
Leasehold improvements	24,178			29,781
	207,578			232,693
Less: Accumulated depreciation and amortization	(175,861		)	(187,062		)
Net	31,717			45,631

Right-to-use assets under operating leases	34,503			—
Less: Accumulated depreciation and amortization	(6,240		)	—
Net right-to-use assets	28,263			—

Total premises and equipment, net	$	59,980		$	45,631

Depreciation and amortization expense totaled $17.3 million and $17.0 million for the six months ended June 30, 2019 and 2018, respectively ($7.9 million and $8.3 million for the second quarter of 2019 and 2018, respectively), and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Premises and equipment, net consist of the following, by country:



(in thousands)	June 30, 2019		December 31, 2018

United States	$	27,879	$	25,693
India	16,269		3,154
Luxembourg	14,503		14,975
Philippines	1,094		1,754
Other	235		55

Total	$	59,980	$	45,631

GOODWILL AND INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The change in goodwill during the six months ended June 30, 2019 is as follows:



(in thousands)	Total

Balance as of December 31, 2018	$	81,387
Reclassification to assets held for sale (Note 3)	(2,378		)

Balance as of June 30, 2019	$	79,009

Intangible Assets, net

Intangible assets, net consist of the following:



	Weighted average estimated useful life (in years)	Gross carrying amount				Accumulated amortization						Net book value
(in thousands)	Weighted average estimated useful life (in years)	June 30, 2019		December 31, 2018		June 30, 2019			December 31, 2018			June 30, 2019		December 31, 2018

Definite lived intangible assets:
Customer related intangible assets	9	$	214,973	$	273,172	$	(170,756	)	$	(207,639	)	$	44,217	$	65,533
Operating agreement	20	35,000		35,000		(16,501		)	(15,632		)	18,499		19,368
Trademarks and trade names	15	11,140		11,349		(6,342		)	(6,244		)	4,798		5,105
Non-compete agreements	4	1,230		1,230		(1,180		)	(1,026		)	50		204
Intellectual property	10	300		300		(160		)	(145		)	140		155
Other intangible assets	5	3,745		3,745		(2,833		)	(2,457		)	912		1,288

Total		$	266,388	$	324,796	$	(197,772	)	$	(233,143	)	$	68,616	$	91,653

Amortization expense for definite lived intangible assets was $12.2 million and $14.7 million for six months ended June 30, 2019 and 2018, respectively ($3.5 million and $7.5 million for the second quarter of 2019 and 2018, respectively). Expected annual definite lived intangible asset amortization expense for 2019 through 2023 is $19.4 million, $13.3 million, $10.8 million, $5.3 million and $5.3 million, respectively.

LONG-TERM DEBT

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

LONG-TERM DEBT

Long-term debt consists of the following:



(in thousands)	June 30, 2019			December 31, 2018

Senior secured term loans	$	333,012		$	338,822
Less: Debt issuance costs, net	(3,492		)	(3,855		)
Less: Unamortized discount, net	(3,164		)	(3,491		)
Net long-term debt	326,356			331,476
Less: Current portion	(6,502		)	—

Long-term debt, less current portion	$	319,854		$	331,476

On April 3, 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l. entered into a credit agreement (the “Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders. Under the Credit Agreement, Altisource borrowed $412.0 million in the form of Term B Loans and obtained a $15.0 million revolving credit facility. The Term B Loans mature in April 2024 and the revolving credit facility matures in April 2023. Altisource Portfolio Solutions S.A. and certain subsidiaries are guarantors of the term loan and the revolving credit facility (collectively, the “Guarantors”).

Proceeds from the Term B Loans were used to repay the Company’s prior senior secured term loan, which had an outstanding balance of $412.1 million as of April 3, 2018. In connection with the refinancing, we recognized a loss of $4.4 million from the write-off of unamortized debt issuance costs and debt discount in the second quarter of 2018.

There are no mandatory repayments of the Term B Loans due until March 2020, when $3.4 million is due to be repaid. Thereafter, the Term B Loans must be repaid in consecutive quarterly principal installments of $3.1 million, with the balance due at 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 the leverage ratio is greater than 3.00 to 1.00, as calculated in accordance with the provisions of the Credit Agreement (the percentage increases if the leverage ratio exceeds 3.50 to 1.00). Certain mandatory prepayments reduce future contractual amortization payments in direct order of maturity by an amount equal to the mandatory prepayment.

On July 1, 2019, Altisource closed the sale of the Financial Services Business to TSI and received a $40.0 million up-front payment less adjustments for working capital and transaction costs (see Note 24). On July 17, 2019, Altisource used $37.0 million to repay a portion of the senior secured term loan.

Altisource may incur incremental indebtedness under the Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $125.0 million, subject to certain conditions set forth in the Credit Agreement, including a sublimit of $80.0 million with respect to incremental revolving credit commitments. The lenders have no obligation to provide any incremental indebtedness.

The Term B Loans bear interest at rates based upon, at our option, the Adjusted Eurodollar Rate or the Base Rate. Adjusted Eurodollar Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Adjusted Eurodollar Rate for a three month interest period and (y) 1.00% plus (ii) 4.00%. Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 3.00%. The interest rate as of June 30, 2019 was 6.33%.

Loans under the revolving credit facility bear interest at rates based upon, at our option, the Adjusted Eurodollar Rate or the Base Rate. Adjusted Eurodollar Rate revolving loans bear interest at a rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate for a three month interest period plus (ii) 4.00%. Base Rate revolving loans bear interest at a rate per annum equal to the sum of (i) the Base Rate plus (ii) 3.00%. The unused commitment fee is 0.50%. There were no borrowings outstanding under the revolving credit facility as of June 30, 2019.

The payment of all amounts owing by Altisource under the Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l. and the Guarantors, subject to certain exceptions.

The Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur indebtedness; incur liens on our assets; sell, transfer or dispose of assets; make Restricted Junior Payments including share repurchases, dividends and repayment of junior indebtedness; make investments; dispose of equity interests of any Material Subsidiaries; engage in a line of business substantially different than existing businesses and businesses reasonably related, complimentary or ancillary thereto; amend material debt agreements or other material contracts; engage in certain transactions with affiliates; enter into sale/leaseback transactions; grant negative pledges or agree to such other restrictions relating to subsidiary dividends and distributions; make changes to our fiscal year; and engage in mergers and consolidations; and to the extent any Revolving Credit Loans are outstanding on the last day of a fiscal quarter, permit the Total Leverage Ratio to be greater than 3.50:1.00 as of the last day of such fiscal quarter, subject to a customary cure provision (the “Revolving Financial Covenant”).

The Credit Agreement contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Credit Agreement within five days of becoming due, (ii) material incorrectness of representations and warranties when made, (iii) breach of certain other covenants, subject to cure periods described in the Credit Agreement, (iv) a breach of the Revolving Financial Covenant, subject to a customary cure provision and not an Event of Default with respect to the Term Loans unless and until the Required Revolving Lenders accelerate the Revolving Credit Loans, (v) failure to pay principal or interest on any other debt that equals or exceeds $40.0 million when due, (vi) default on any other debt that equals or exceeds $40.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (vii) occurrence of a Change of Control, (viii) bankruptcy and insolvency events, (ix) entry by a court of one or more judgments against us in an amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (x) the occurrence of certain ERISA events and (xi) the failure of certain Loan Documents to be in full force and effect. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated.

As of June 30, 2019, debt issuance costs were $3.5 million, net of $1.1 million of accumulated amortization. As of December 31, 2018, debt issuance costs were $3.9 million, net of $0.7 million of accumulated amortization.

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

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 June 30, 2019 and December 31, 2018. The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:



	June 30, 2019								December 31, 2018
(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	$	85,379	$	85,379	$	—	$	—	$	58,294	$	58,294	$	—	$	—
Restricted cash	3,741		3,741		—		—		5,752		5,752		—		—
Investment in equity securities	43,730		43,730		—		—		36,181		36,181		—		—
Long-term receivable (Note 3)	2,295		—		—		2,295		2,221		—		—		2,221

Liabilities:
Senior secured term loan	333,012		—		328,433		—		338,822		—		330,351		—

Fair Value Measurements on a Recurring Basis

Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair values due to the highly liquid nature of these instruments and were measured using Level 1 inputs.

Investment in equity securities is carried at fair value and consists of 3.6 million and 4.1 million shares of RESI common stock as of June 30, 2019 and December 31, 2018, respectively. The investment in equity securities is measured using Level 1 inputs as these securities have quoted prices in active markets.

The fair value of our senior secured term loan is based on quoted market prices. Based on the frequency of trading, we do not believe that there is an active market for our debt. Therefore, the quoted prices are considered Level 2 inputs.

In connection with the sale of the rental property management business in August 2018, Altisource will receive $3.0 million on the earlier of a RESI change of control or on August 8, 2023 (see Note 3 for additional information). We measure long-term receivables without a stated interest rate based on the present value of the future payments.

There were no transfers between different levels during the periods presented.

Concentrations of Credit Risk

Financial instruments that subject us to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. Our policy is to deposit our cash and cash equivalents with larger, highly rated financial institutions. The Company derives over 50% of its revenues from Ocwen (see Note 2 for additional information on Ocwen revenues and accounts receivable balance). The Company mitigates its concentrations of credit risk with respect to accounts receivable by actively monitoring past due accounts and the economic status of larger customers, if known.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

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 June 30, 2019, approximately 3.1 million shares of common stock remain available for repurchase under the program. We purchased 0.3 million shares of common stock at an average price of $21.89 per share during the six months ended June 30, 2019 and 0.8 million shares at an average price of $27.39 per share during the six months ended June 30, 2018 (0.3 million shares at an average price of $21.89 per share for the second quarter of 2019 and 0.4 million shares at an average price of $27.14 per share for the second quarter of 2018). 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 June 30, 2019, we can repurchase up to approximately $105 million of our common stock under Luxembourg law. Our Credit Agreement also limits the amount we can spend on share repurchases, which was approximately $467 million as of June 30, 2019, and may prevent repurchases in certain circumstances.

Share-Based Compensation

We issue share-based awards in the form of stock options, restricted shares and restricted share units for certain employees, officers and directors. We recognized share-based compensation expense of $5.5 million and $4.1 million for the six months ended June 30, 2019 and 2018, respectively ($2.8 million and $1.9 million for the second quarter of 2019 and 2018, respectively). As of June 30, 2019, estimated unrecognized compensation costs related to share-based awards amounted to $14.6 million, which we expect to recognize over a weighted average remaining requisite service period of approximately 1.72 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 three or four years with equal annual vesting and expire on the earlier of ten years after the date of grant or following termination of service. A total of 460 thousand service-based options were outstanding as of June 30, 2019.

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 three or four year installments with the first installment vesting upon the achievement of the criteria and the remaining installments vesting thereafter in equal annual installments. Market-based options generally expire on the earlier of ten years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service or in the final three years of the option term, in which case vesting will generally continue in accordance with the provisions of the award agreement. A total of 600 thousand market-based options were outstanding as of June 30, 2019.

Performance-Based Options. These option grants generally begin to vest upon the achievement of certain specific financial measures. Generally, the options begin vesting if the performance criteria are achieved; one-fourth vests on each anniversary of the grant date. For certain other financial measures, options cliff-vest upon the achievement of the specific performance during the period from 2019 through 2021. The award of performance-based options is adjusted based on the level of achievement specified in the award agreements. If the performance criteria achieved is above threshold performance levels, participants have the opportunity to vest in 50% to 200% of the option grants, depending upon performance achieved. If the performance criteria achieved is below a certain threshold, the options are canceled. The options expire on the earlier of ten years after the date of grant or following termination of service. There were 503 thousand performance-based options outstanding as of June 30, 2019.

There were no stock option grants during the six months ended June 30, 2019. Outstanding stock options increased by 228 thousand in February 2019 in connection with the determination of the level of achievement for certain performance-based options granted in 2018. During the six months ended June 30, 2018, 272 thousand stock options (at a weighted average exercise price of $25.06 per share) were granted.

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. The following assumptions were used to determine the fair values as of the grant date:



	Six months ended June 30, 2018
	Black-Scholes	Binomial

Risk-free interest rate (%)	2.66 – 2.98	1.64 – 2.83
Expected stock price volatility (%)	70.31 – 71.86	71.81 – 71.86
Expected dividend yield	—	—
Expected option life (in years)	6.00 – 6.25	2.56 – 4.32
Fair value	$16.17 – $19.06	$14.67 – $18.28

We determined the expected option life of all service-based stock option grants using the simplified method. We use the simplified method because we believe that our historical data does not provide a reasonable basis upon which to estimate expected option life.

The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the periods presented:



	Six months ended June 30,
(in thousands, except per share amounts)	2019		2018

Weighted average grant date fair value of stock options granted per share	$	—	$	16.27
Intrinsic value of options exercised	34		4,393
Grant date fair value of stock options that vested	2,752		1,334

The following table summarizes the activity related to our stock options:



	Number of options		Weighted average exercise price		Weighted average contractual term (in years)	Aggregate intrinsic value (in thousands)

Outstanding as of December 31, 2018	1,440,566		$	30.78	5.04	$	945
Performance criteria achieved	227,849		24.98
Exercised	(12,500	)	18.79
Forfeited	(93,210	)	46.27

Outstanding as of June 30, 2019	1,562,705		29.11		4.93	172

Exercisable as of June 30, 2019	990,130		26.51		3.30	166

Other Share-Based Awards

The Company’s other share-based and similar types of awards are composed of restricted shares and, beginning in 2018, restricted share units. The restricted shares and restricted share units are composed of a combination of service-based awards and performance-based awards.

Service-Based Awards. These awards generally vest over two to four year periods with (a) vesting in equal annual installments, or (b) vesting of all of the restricted shares and restricted share units at the end of the vesting period. In addition, certain awards begin to vest after two years of service. A total of 546 thousand service-based awards were outstanding as of June 30, 2019.

Performance-Based Awards. These awards generally begin to vest upon the achievement of certain specific financial measures. Generally, the awards begin vesting if the performance criteria are achieved; one-third 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 will be 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 225% of the restricted share unit award for certain awards, depending on performance achieved. If the performance criteria achieved is below a certain threshold, the award is canceled. A total of 150 thousand performance-based awards were outstanding as of June 30, 2019.

The Company granted 393 thousand restricted share units (at a weighted average grant date fair value of $24.86 per share) during the six months ended June 30, 2019.

The following table summarizes the activity related to our restricted shares and restricted share units:



	Number of restricted shares and restricted share units

Outstanding as of December 31, 2018	485,806
Granted	392,579