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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Altisource Asset Management Corporation | AMEX:AAMC | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.0099 | -0.31% | 3.21 | 3.37 | 3.06 | 3.37 | 2,380 | 01:00:00 |
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
UNITED STATES VIRGIN ISLANDS
|
66-0783125
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
(Title of Each Class)
|
(Name of exchange on which registered)
|
Common stock, par value $0.01 per share
|
NYSE MKT
|
Large Accelerated Filer
|
¨
|
|
Accelerated Filer
|
¨
|
Non-Accelerated Filer
|
x
|
(Do not check if a smaller reporting company)
|
Smaller Reporting Company
|
¨
|
|
|
|
Emerging Growth Company
|
¨
|
•
|
our ability to implement our business strategy and the business strategy of Front Yard;
|
•
|
our ability to retain Front Yard as a client;
|
•
|
our ability to retain and maintain our strategic relationships;
|
•
|
the ability of Front Yard to generate a return on invested capital in excess of applicable hurdle rates or cash available for distribution to its stockholders under our management;
|
•
|
our ability to obtain additional asset management clients or businesses;
|
•
|
our ability to effectively compete with our competitors;
|
•
|
Front Yard's ability to complete future or pending transactions;
|
•
|
the failure of service providers to effectively perform their obligations under their agreements with us and Front Yard;
|
•
|
general economic and market conditions; and
|
•
|
governmental regulations, taxes and policies.
|
•
|
Acquisition Strategy Enables Front Yard to Build a Portfolio that we Expect will Provide Attractive Yields to its Stockholders.
Through our personnel and technical expertise, we have developed a disciplined market and asset selection approach and a valuation model for Front Yard that uses proprietary and market data to evaluate and project the performance of SFR assets. This valuation model has been built with multiple broad economic inputs as well as individual property-level inputs to determine which properties will produce attractive yields and how much to pay for these properties to best achieve optimal results. These internally-developed tools help Front Yard to evaluate the most attractive SFR properties for sale. We also leverage Front Yard's property managers' property inspection, management and rental infrastructure and related data flows to identify and acquire attractive assets in any geographical locations into which Front Yard desires to grow. We intend to continue to build this infrastructure and employ regional teams that will focus on specified geographical areas and use their developed regional experience to continually refine Front Yard's acquisition strategy and to achieve rental portfolio growth with properties marked by strong stabilized occupancy rates and optimal economic returns. We also believe that Front Yard's focus on affordable housing provides it with a potential advantage, as Front Yard is focused on homes where we expect lower tenant turnover.
|
•
|
Relationships with the Property Managers and their Nationwide Property Management Infrastructures
. With the support of its Property Managers' nationwide vendor networks, we believe that Front Yard is strategically positioned to operate SFR properties across the United States at an attractive cost structure. Front Yard's Property Managers' infrastructures provide it with cost-efficient, scalable platforms as Front Yard continues to grow its SFR portfolio.
|
•
|
Depth of Management Experience.
We believe the experience and technical expertise of our management team is one of Front Yard's key strengths. Our team has a broad and deep knowledge of the mortgage and real estate markets with decades of experience in real estate, mortgage trading, housing, financial services and asset management. Their experience in the real estate industry brings a wealth of understanding of the markets in which Front Yard operates and can help Front Yard build its portfolio in a manner that brings attractive potential returns to its stockholders. Management and its supporting teams have expertise and extensive contacts that enable us to source SFR assets through access to auctions and sellers of SFR assets and obtain financing to optimize available leverage. Due to our management team's expertise, Front Yard has been able to strategically sell non-performing and re-performing loans to sustain a strong dividend while also using the liquidity generated from these sales to increase its SFR portfolio by approximately 39% in 2017. We believe that our asset evaluation process and the experience and judgment of our executive management team in identifying, assessing, valuing and acquiring new residential rental properties and related assets will help Front Yard to appropriately value the residential rental assets at the time of purchase and to quickly and efficiently grow its portfolio.
|
•
|
Base Management Fee
. We are entitled to a quarterly base management fee equal to
1.5%
of the product of (i) Front Yard's average invested capital (as defined in the AMA) for the quarter
multiplied by
(ii)
0.25
, while it has fewer than
2,500
SFR properties actually rented (“Rental Properties”). The base management fee percentage increases to
1.75%
of average invested capital while Front Yard has between
2,500
and
4,499
Rental Properties and increases to
2.0%
of average invested capital while it has
4,500
or more Rental Properties;
|
•
|
Incentive Management Fee
. We are entitled to a quarterly incentive management fee equal to
20%
of the amount by which Front Yard's return on invested capital (based on AFFO, defined as net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all real estate assets owned by Front Yard) exceeds an annual hurdle return rate of between
7.0%
and
8.25%
(or
1.75%
and
2.06%
per quarter), depending on the
10
-year treasury rate. To the extent Front Yard has an aggregate shortfall in its return rate over the previous
seven
quarters, that aggregate return rate shortfall gets added to the normal quarterly
1.75%
return hurdle for the next quarter before we are entitled to an incentive management fee. The incentive management fee increases to
22.5%
while Front Yard has between
2,500
and
4,499
Rental Properties and increases to
25%
while it has
4,500
or more Rental Properties; and
|
•
|
Conversion Fee
. We are entitled to a quarterly conversion fee equal to
1.5%
of the market value of assets converted into leased single-family homes by Front Yard for the first time during the quarter.
|
•
|
the financial soundness of institutions with which Front Yard plans to transact business and recommendations with respect thereto;
|
•
|
Front Yard’s risk exposure limits with respect to the dollar amounts of total exposure with a given institution; and
|
•
|
investment accounts and trading accounts to be opened with banks, broker-dealers and financial institutions.
|
•
|
No investment will be made that would cause Front Yard or any of its subsidiaries to fail to qualify as a REIT for U.S. federal income tax purposes;
|
•
|
No investment will be made that would cause Front Yard to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”); and
|
•
|
Until appropriate investments can be identified, Front Yard may invest available cash in interest-bearing and short-term investments that are consistent with (a) Front Yard’s intention to qualify as a REIT and (b) Front Yard’s exemption from registration as an investment company under the Investment Company Act.
|
•
|
A number of our competitors may have greater financial, technical, marketing and other resources and more personnel than we do;
|
•
|
Our clients may not perform as well as the clients of our competitors;
|
•
|
Several of our competitors and their clients have significant amounts of capital, and many of them have similar management objectives to ours, which may create additional competition for management opportunities;
|
•
|
Some of these competitors' clients may also have a lower cost of capital and access to funding sources that are not available to our clients, which may create competitive disadvantages for us with respect to funding opportunities;
|
•
|
Some of our competitors' clients may have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to facilitate the acquisition and management by their clients of a wider variety of assets and allow them to advise their clients to bid more aggressively than our clients for assets on which we would advise our clients to bid;
|
•
|
There are relatively few barriers to entry impeding new asset management firms, and the successful efforts of new entrants into the asset management business is expected to continue to result in increased competition;
|
•
|
Some of our competitors may have better expertise or be regarded by potential clients as having better expertise with regard to specific assets; and
|
•
|
Other industry participants will from time to time seek to recruit members of our management team and other employees away from us.
|
•
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We may become subject to current United States federal income taxation on our net income from sources within the United States;
|
•
|
We may be subject to United States federal income tax on a portion of our net investment income, regardless of its source;
|
•
|
We may not be entitled to deduct certain expenses that would otherwise be deductible from the income subject to United States taxation; and
|
•
|
We may be subject to United States branch profits tax on profits deemed to have been distributed out of the United States.
|
•
|
variations in actual or anticipated results of our operations, liquidity or financial condition;
|
•
|
changes in, or the failure to meet, our financial estimates or those of by securities analysts;
|
•
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actions or announcements by our competitors;
|
•
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potential conflicts of interest, or the discontinuance of our strategic relationships with Front Yard, ASPS and/or MSR;
|
•
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actual or anticipated accounting problems;
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•
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regulatory actions;
|
•
|
lack of liquidity;
|
•
|
changes in the financial condition or stock price of Front Yard;
|
•
|
changes in the market outlook for the real estate, mortgage or housing markets;
|
•
|
technology changes in our business;
|
•
|
changes in interest rates that lead purchasers of our common stock to demand a higher yield;
|
•
|
actions by our stockholders;
|
•
|
speculation in the press or investment community;
|
•
|
general market, economic and political conditions, including an economic slowdown or dislocation in the global credit markets;
|
•
|
failure to maintain the listing of our common stock on the NYSE MKT;
|
•
|
failure of Front Yard to qualify or maintain qualification as a REIT;
|
•
|
failure of Front Yard to maintain its exemption from registration under the Investment Company Act;
|
•
|
changes in accounting principles;
|
•
|
passage of legislation or other regulatory developments that adversely affect us or our industry; and
|
•
|
departure of our key personnel.
|
•
|
a tightening of credit that has made it more difficult to finance a home purchase, combined with efforts by consumers generally to reduce their exposure to credit;
|
•
|
economic and employment conditions that have increased foreclosure rates; and
|
•
|
reduced real estate values that challenged the traditional notion that homeownership is a stable investment.
|
•
|
joblessness or unemployment rates that adversely affect the local economy;
|
•
|
an oversupply of or a reduced demand for SFR properties for rent;
|
•
|
a decline in employment or lack of employment growth;
|
•
|
the inability or unwillingness of residents to pay rent increases or fulfill their lease obligations;
|
•
|
a decline in rental rate, which may be accentuated since we expect Front Yard to generally have rent terms of one to two years;
|
•
|
rent control or rent stabilization laws or other laws regulating housing that could prevent us from raising rents to offset increases in operating costs;
|
•
|
changes in interest rates and availability and terms of debt financing; and
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•
|
economic conditions that could cause an increase in Front Yard's operating expenses such as increases in property taxes, utilities and routine maintenance.
|
•
|
limitations on capital structure;
|
•
|
restrictions on specified investments;
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•
|
restrictions on leverage or senior securities;
|
•
|
restrictions on unsecured borrowings;
|
•
|
prohibitions on transactions with affiliates and
|
•
|
compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase Front Yard's operating expenses.
|
•
|
Front Yard would not be allowed a deduction for dividends paid to stockholders in computing its taxable income, thus becoming subject to federal income tax;
|
•
|
Front Yard could be subject to increased state and local taxes; and
|
•
|
Unless Front Yard is entitled to relief under certain federal income tax laws, it could not re-elect REIT status until the fifth calendar year after the year in which it failed to qualify as a REIT. In addition, if Front Yard fails to qualify as a REIT, it will no longer be required to make distributions.
|
|
|
2017
|
|
2016
|
||||||||||||
Quarter ended
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
March 31
|
|
$
|
85.90
|
|
|
$
|
53.00
|
|
|
$
|
20.01
|
|
|
$
|
11.77
|
|
June 30
|
|
92.00
|
|
|
64.00
|
|
|
24.37
|
|
|
12.20
|
|
||||
September 30
|
|
109.35
|
|
|
73.50
|
|
|
18.50
|
|
|
12.55
|
|
||||
December 31
|
|
90.00
|
|
|
71.90
|
|
|
57.75
|
|
|
21.18
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
Index
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
Altisource Asset Management Corporation
|
|
$
|
1,134.15
|
|
|
$
|
378.20
|
|
|
$
|
20.93
|
|
|
$
|
65.24
|
|
|
$
|
99.51
|
|
S&P 500
|
|
129.60
|
|
|
144.36
|
|
|
143.31
|
|
|
156.98
|
|
|
187.47
|
|
|||||
Dow Jones U.S. Asset Manager Index
|
|
143.69
|
|
|
154.86
|
|
|
136.33
|
|
|
148.06
|
|
|
187.91
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total revenue
|
$
|
18,160
|
|
|
$
|
19,991
|
|
|
$
|
248,099
|
|
|
$
|
423,298
|
|
|
$
|
72,297
|
|
Net (loss) income attributable to stockholders
|
(6,969
|
)
|
|
(4,935
|
)
|
|
(3,290
|
)
|
|
59,679
|
|
|
(5,293
|
)
|
|||||
(Loss) earnings per basic common share
|
(4.57
|
)
|
|
(2.93
|
)
|
|
(1.59
|
)
|
|
26.31
|
|
|
(2.26
|
)
|
|||||
(Loss) earnings per diluted common share
|
(4.57
|
)
|
|
(2.93
|
)
|
|
(1.59
|
)
|
|
21.07
|
|
|
(2.26
|
)
|
|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total assets
|
$
|
60,387
|
|
|
$
|
65,748
|
|
|
$
|
2,518,601
|
|
|
$
|
2,756,447
|
|
|
$
|
1,402,811
|
|
Repurchase and loan agreements
|
—
|
|
|
—
|
|
|
763,369
|
|
|
1,013,133
|
|
|
600,089
|
|
|||||
Other secured borrowings
|
—
|
|
|
—
|
|
|
502,599
|
|
|
321,698
|
|
|
—
|
|
•
|
In the first closing on March 30, 2017, Front Yard's indirect wholly owned subsidiary, HOME SFR Borrower II, LLC (“HOME Borrower II”), acquired 757 SFR properties for an aggregate purchase price of $106.5 million.
|
•
|
In the second closing on June 29, 2017, Front Yard's indirect wholly owned subsidiary, HOME SFR Borrower III, LLC (“HOME Borrower III”), acquired 751 SFR properties for an aggregate purchase price of $117.1 million.
|
•
|
In the third and final closing on November 29, 2017, Front Yard's indirect wholly owned subsidiary, HOME SFR Borrower IV, LLC (“HOME Borrower IV”) acquired 1,957 SFR properties for an aggregate purchase price of $305.1 million.
|
•
|
On March 30, 2017, in connection with the first closing under the HOME Flow Transaction, Front Yard obtained approximately $79.9 million of proceeds from a seller financing arrangement (the “HOME II Loan Agreement”), representing 75% of the aggregate purchase price. Initially, the HOME II Loan Agreement had an interest rate based on one-month LIBOR plus a fixed component spread of 2.75% and an initial maturity date of October 9, 2019, which Front Yard has the option to extend for three successive one-year periods, provided, among other things, that there is no event of default under the HOME II Loan Agreement on each maturity date. On November 13, 2017, the HOME II Loan Agreement was amended and restated to (i) increase the principal amount to $83.3 million, (ii) reduce the fixed component spread of the interest rate to 2.10% and (iii) change the initial maturity date to November 9, 2019.
|
•
|
On April 6, 2017, Front Yard entered into a fixed rate, five-year credit and security agreement with an aggregate principal balance of $100.0 million (the “Term Loan Agreement”) with American Money Management Corporation, as agent, on behalf of Great American Life Insurance Company and Great American Insurance Company as initial lenders, and each other lender added from time to time as a party to the Term Loan Agreement.
|
•
|
On June 29, 2017, in connection with the second closing under the HOME Flow Transaction, Front Yard obtained approximately $87.8 million of proceeds from a seller financing arrangement (the “HOME III Loan Agreement”), representing 75% of the aggregate purchase price. Initially, the HOME III Loan Agreement had an interest rate based on one-month LIBOR plus a fixed component spread of 2.30% and an initial maturity date of October 9, 2019, which Front Yard has the option to extend for three successive one-year periods, provided, among other things, that there is no event of default under the HOME III Loan Agreement on each maturity date. On November 13, 2017, the HOME III Loan Agreement was amended and restated to (i) increase the principal amount to $89.2 million, (ii) reduce the fixed component spread of the interest rate to 2.10% and (iii) change the initial maturity date to November 9, 2019.
|
•
|
On November 29, 2017, in connection with the third and final closing under the HOME Flow Transaction, Front Yard obtained an aggregate of approximately $228.8 million of proceeds from two separate seller financing arrangements (collectively, the “HOME IV Loan Agreements”), representing 75% of the aggregate purchase price. The HOME IV Loan Agreements have a fixed interest rate of 4.00% and a maturity date of December 9, 2022.
|
•
|
Base Management Fee
. We are entitled to a quarterly base management fee equal to 1.5% of the product of (i) Front Yard's average invested capital (as defined in the AMA) for the quarter
multiplied by
(ii) 0.25, while it has fewer than 2,500 SFR properties actually rented (“Rental Properties”). The base management fee percentage increases to 1.75% of average invested capital while Front Yard has between 2,500 and 4,499 Rental Properties and increases to 2.0% of average invested capital while it has 4,500 or more Rental Properties;
|
•
|
Incentive Management Fee
. We are entitled to a quarterly incentive management fee equal to 20% of the amount by which Front Yard's return on invested capital (based on AFFO, defined as net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all real estate assets owned by Front Yard) exceeds an annual hurdle return rate of between
7.0%
and
|
•
|
Conversion Fee
. We are entitled to a quarterly conversion fee equal to 1.5% of the market value of assets converted into leased single-family homes by Front Yard for the first time during the quarter.
|
i.
|
Rental revenues.
Minimum contractual rents from leases were recognized on a straight-line basis over the terms of the leases in residential rental revenues. Therefore, actual amounts billed in accordance with the lease during any given period may have been higher or lower than the amount of rental revenue recognized for the period.
|
ii.
|
Net realized gain on mortgage loans.
Front Yard recorded net realized gains, including the reclassification of previously accumulated net unrealized gains, upon the liquidation of a loan, which may have consisted of short sale, third-party sale of the underlying property, refinancing or full debt pay-off of the loan.
|
iii.
|
Change in unrealized gains from the conversion of loans to REO.
Upon conversion of loans to REO, Front Yard marked the properties to the then-most recent market value. The difference between the carrying value of the asset at the time of conversion and the then-most recent market value, based on broker price opinions (“BPOs”), was recorded in Front Yard's statement of operations as change in unrealized gain on mortgage loans.
|
iv.
|
Change in unrealized gains from the change in fair value of loans.
After Front Yard's sub-performing and non-performing mortgage loans were acquired, the fair value of each loan was adjusted in each subsequent reporting period as the loan proceeded to a particular resolution (i.e., modification or conversion to real estate owned). As a loan approached resolution, the resolution timeline for that loan decreased and costs embedded in the discounted cash flow model for loan servicing, foreclosure costs and property insurance were incurred and removed from future expenses. The shorter resolution timelines and reduced future expenses each increased the fair value of the loan. The increase in the value of the loan was recognized in change in unrealized gain on mortgage loans in Front Yard's statements of operations.
|
v.
|
Net realized gain on real estate.
REO properties that did not meet Front Yard's investment criteria were sold out of its taxable REIT subsidiary. The realized gain or loss recognized in financial statements reflects the net amount of realized and unrealized gains on sold REOs from the time of acquisition to sale completion.
|
|
Front Yard (GAAP)
|
|
NewSource Stand-alone (Non-GAAP)
|
|
AAMC Stand-alone
(Non-GAAP)
|
|
Consolidating Entries
|
|
AAMC Consolidated (GAAP)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental revenues
|
$
|
13,233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,233
|
|
Change in unrealized gain on mortgage loans
|
88,829
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,829
|
|
|||||
Net realized gain on mortgage loans
|
94,493
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94,493
|
|
|||||
Net realized gain on real estate
|
50,932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,932
|
|
|||||
Interest income
|
611
|
|
|
564
|
|
|
—
|
|
|
(563
|
)
|
|
612
|
|
|||||
Conversion fee
|
—
|
|
|
—
|
|
|
1,037
|
|
|
(1,037
|
)
|
|
—
|
|
|||||
Base management fee
|
—
|
|
|
—
|
|
|
14,565
|
|
|
(14,565
|
)
|
|
—
|
|
|||||
Incentive management fee
|
—
|
|
|
—
|
|
|
7,994
|
|
|
(7,994
|
)
|
|
—
|
|
|||||
Expense reimbursements
|
—
|
|
|
—
|
|
|
750
|
|
|
(750
|
)
|
|
—
|
|
|||||
Total revenues
|
248,098
|
|
|
564
|
|
|
24,346
|
|
|
(24,909
|
)
|
|
248,099
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and employee benefits
|
—
|
|
|
—
|
|
|
16,294
|
|
|
—
|
|
|
16,294
|
|
|||||
Legal and professional fees
|
6,480
|
|
|
199
|
|
|
6,632
|
|
|
(2,000
|
)
|
|
11,311
|
|
|||||
Residential property operating expenses
|
66,266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,266
|
|
|||||
Real estate depreciation and amortization
|
7,472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,472
|
|
|||||
Selling costs and impairment
|
72,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,230
|
|
|||||
Mortgage loan servicing costs
|
62,346
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,346
|
|
|||||
Interest expense
|
53,694
|
|
|
—
|
|
|
—
|
|
|
(563
|
)
|
|
53,131
|
|
|||||
General and administrative
|
6,101
|
|
|
—
|
|
|
2,232
|
|
|
(750
|
)
|
|
7,583
|
|
|||||
Management fees
|
22,966
|
|
|
630
|
|
|
—
|
|
|
(23,596
|
)
|
|
—
|
|
|||||
Total expenses
|
297,555
|
|
|
829
|
|
|
25,158
|
|
|
(26,909
|
)
|
|
296,633
|
|
|||||
Other income:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividend income
|
1,518
|
|
|
—
|
|
|
211
|
|
|
(1,729
|
)
|
|
—
|
|
|||||
Other income
|
2,000
|
|
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
|||||
Total other income
|
3,518
|
|
|
—
|
|
|
211
|
|
|
(3,729
|
)
|
|
—
|
|
|||||
Loss before income taxes
|
(45,939
|
)
|
|
(265
|
)
|
|
(601
|
)
|
|
(1,729
|
)
|
|
(48,534
|
)
|
|||||
Income tax expense
|
66
|
|
|
—
|
|
|
288
|
|
|
—
|
|
|
354
|
|
|||||
Net loss
|
(46,005
|
)
|
|
(265
|
)
|
|
(889
|
)
|
|
(1,729
|
)
|
|
(48,888
|
)
|
|||||
Net loss attributable to non-controlling interest in consolidated affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
45,598
|
|
|
45,598
|
|
|||||
Net loss attributable to stockholders
|
(46,005
|
)
|
|
(265
|
)
|
|
(889
|
)
|
|
43,869
|
|
|
(3,290
|
)
|
|||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
(206
|
)
|
|||||
Net loss attributable to common stockholders
|
(46,005
|
)
|
|
(265
|
)
|
|
(1,095
|
)
|
|
43,869
|
|
|
(3,496
|
)
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Net cash provided by (used in) operating activities
|
$
|
365
|
|
|
$
|
(192
|
)
|
|
$
|
(183,237
|
)
|
Net cash (used in) provided by investing activities (1)
|
(1,841
|
)
|
|
(152,856
|
)
|
|
466,941
|
|
|||
Net cash used in financing activities
|
(5,759
|
)
|
|
(11,478
|
)
|
|
(208,658
|
)
|
|||
Total cash flows
|
$
|
(7,235
|
)
|
|
$
|
(164,526
|
)
|
|
$
|
75,046
|
|
(1)
|
Upon deconsolidation of Front Yard effective January 1, 2016, we recognized a reduction in cash, cash equivalents and restricted cash of $137.3 million, which represented the cash, cash equivalents and restricted cash attributable to Front Yard within our consolidated balance sheet as of December 31, 2015.
|
|
|
|
Amounts Due during the Years ending December 31,
|
|
|
||||||||||||||
|
Total
|
|
2018
|
|
2019 - 2020
|
|
2021 - 2022
|
|
Thereafter
|
||||||||||
Operating leases (1)
|
$
|
709
|
|
|
$
|
175
|
|
|
$
|
347
|
|
|
$
|
187
|
|
|
$
|
—
|
|
|
$
|
709
|
|
|
$
|
175
|
|
|
$
|
347
|
|
|
$
|
187
|
|
|
$
|
—
|
|
(1)
|
Lease denominated in Indian rupees estimated at the exchange rate as of
December 31, 2017
.
|
Exhibit Number
|
|
Description
|
|
Separation Agreement, dated as of December 21, 2012, between Altisource Asset Management Corporation and Altisource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the Commission on December 28, 2012).
|
|
|
Amended and Restated Articles of Incorporation of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the Commission on January 5, 2017).
|
|
|
First Amended and Restated Bylaws of Altisource Asset Management Corporation (incorporated by reference to Exhibit 3.2 of the Registrant's Registration Statement on Form 10 filed with the Commission on December 5, 2012).
|
|
|
Certificate of Designations establishing the Company’s Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on March 19, 2014).
|
|
|
Asset Management Agreement, dated March 31, 2015, among Front Yard Residential Corporation (f/k/a Altisource Residential Corporation), Front Yard Residential L.P. (f/k/a Altisource Residential, L.P.) and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 2, 2015).
|
|
|
Amendment to Asset Management Agreement, dated April 7, 2015, among Front Yard Residential Corporation (f/k/a Altisource Residential Corporation), Front Yard Residential L.P. (f/k/a Altisource Residential, L.P.) and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 13, 2015).
|
|
|
Commercial Lease, dated April 16, 2015 by and between St. Croix Financial Center, Inc. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 22, 2015).
|
|
10.4
†
|
|
Altisource Asset Management Corporation 2016 Preferred Stock Plan (incorporated by reference to Exhibit 10.22 of the Registrant's Annual Report on Form 10-K filed with the Commission on March 1, 2017).
|
10.5
†
|
|
Form of Preferred Stock Agreement under 2016 Employee Preferred Stock Plan (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on January 5, 2017).
|
21
*
|
|
Schedule of Subsidiaries
|
23.1
*
|
|
Consent of Ernst & Young LLP
|
23.2
*
|
|
Consent of Deloitte & Touche LLP
|
24
*
|
|
Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)
|
31.1
*
|
|
Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
31.2
*
|
|
Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
32.1
*
|
|
Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
32.2
*
|
|
Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Extension Labels Linkbase
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
Altisource Asset Management Corporation
|
Date:
|
March 1, 2018
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
March 1, 2018
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ George G. Ellison
|
|
Chairman of the Board of Directors and
Chief Executive Officer (Principal Executive Officer)
|
|
March 1, 2018
|
George G. Ellison
|
|
|
|
|
/s/ Ricardo C. Byrd
|
|
Director
|
|
March 1, 2018
|
Ricardo C. Byrd
|
|
|
|
|
/s/ Dale Kurland
|
|
Director
|
|
March 1, 2018
|
Dale Kurland
|
|
|
|
|
/s/ Nathaniel Redleaf
|
|
Director
|
|
March 1, 2018
|
Nathaniel Redleaf
|
|
|
|
|
/s/ John P. de Jongh, Jr.
|
|
Director
|
|
March 1, 2018
|
John P. de Jongh, Jr.
|
|
|
|
|
/s/ Robin N. Lowe
|
|
Chief Financial Officer (Principal Financial Officer and
Principal Accounting Officer)
|
|
March 1, 2018
|
Robin N. Lowe
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
33,349
|
|
|
$
|
40,584
|
|
Short-term investments
|
625
|
|
|
—
|
|
||
Available-for-sale securities (Front Yard common stock)
|
19,266
|
|
|
17,934
|
|
||
Receivable from Front Yard
|
4,151
|
|
|
5,266
|
|
||
Prepaid expenses and other assets
|
1,022
|
|
|
1,964
|
|
||
Total current assets
|
58,413
|
|
|
65,748
|
|
||
Other non-current assets
|
1,974
|
|
|
—
|
|
||
Total assets
|
$
|
60,387
|
|
|
$
|
65,748
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accrued salaries and employee benefits
|
$
|
5,651
|
|
|
$
|
4,100
|
|
Accounts payable and accrued liabilities
|
2,085
|
|
|
4,587
|
|
||
Total liabilities
|
7,736
|
|
|
8,687
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 4)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Redeemable preferred stock:
|
|
|
|
||||
Series A preferred stock, $0.01 par value, 250,000 shares issued and outstanding as of December 31, 2017 and 2016; redemption value $250,000
|
249,546
|
|
|
249,340
|
|
||
|
|
|
|
||||
Stockholders' deficit:
|
|
|
|
||||
Common stock, $.01 par value, 5,000,000 authorized shares; 2,815,122 and 1,599,210 shares issued and outstanding, respectively, as of December 31, 2017 and 2,637,629 and 1,513,912 shares issued and outstanding, respectively, as of December 31, 2016
|
28
|
|
|
26
|
|
||
Additional paid-in capital
|
37,765
|
|
|
30,696
|
|
||
Retained earnings
|
38,970
|
|
|
46,145
|
|
||
Accumulated other comprehensive loss
|
(1,330
|
)
|
|
(2,662
|
)
|
||
Treasury stock, at cost, 1,215,912 and 1,123,717 shares as of December 31, 2017 and 2016, respectively
|
(272,328
|
)
|
|
(266,484
|
)
|
||
Total stockholders' deficit
|
(196,895
|
)
|
|
(192,279
|
)
|
||
Total liabilities and equity
|
$
|
60,387
|
|
|
$
|
65,748
|
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Management fees from Front Yard
|
$
|
16,010
|
|
|
$
|
17,334
|
|
|
$
|
—
|
|
Conversion fees from Front Yard
|
1,291
|
|
|
1,841
|
|
|
—
|
|
|||
Expense reimbursements from Front Yard
|
859
|
|
|
816
|
|
|
—
|
|
|||
Rental revenues
|
—
|
|
|
—
|
|
|
13,233
|
|
|||
Change in unrealized gain on mortgage loans
|
—
|
|
|
—
|
|
|
88,829
|
|
|||
Net realized gain on sales of mortgage loans
|
—
|
|
|
—
|
|
|
94,493
|
|
|||
Net realized gain on sales of real estate
|
—
|
|
|
—
|
|
|
50,932
|
|
|||
Interest income
|
—
|
|
|
—
|
|
|
612
|
|
|||
Total revenues
|
18,160
|
|
|
19,991
|
|
|
248,099
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Salaries and employee benefits
|
19,393
|
|
|
17,369
|
|
|
16,294
|
|
|||
Legal and professional fees
|
2,794
|
|
|
2,173
|
|
|
11,311
|
|
|||
Residential property operating expenses
|
—
|
|
|
—
|
|
|
66,266
|
|
|||
Real estate depreciation and amortization
|
—
|
|
|
—
|
|
|
7,472
|
|
|||
Selling costs and impairment
|
—
|
|
|
—
|
|
|
72,230
|
|
|||
Mortgage loan servicing costs
|
—
|
|
|
—
|
|
|
62,346
|
|
|||
Interest expense
|
—
|
|
|
—
|
|
|
53,131
|
|
|||
General and administrative
|
3,320
|
|
|
4,772
|
|
|
7,583
|
|
|||
Total expenses
|
25,507
|
|
|
24,314
|
|
|
296,633
|
|
|||
Other income:
|
|
|
|
|
|
||||||
Dividend income on Front Yard common stock
|
975
|
|
|
1,023
|
|
|
—
|
|
|||
Other income
|
111
|
|
|
71
|
|
|
—
|
|
|||
Total other income
|
1,086
|
|
|
1,094
|
|
|
—
|
|
|||
Loss before income taxes
|
(6,261
|
)
|
|
(3,229
|
)
|
|
(48,534
|
)
|
|||
Income tax expense
|
708
|
|
|
1,706
|
|
|
354
|
|
|||
Net loss
|
(6,969
|
)
|
|
(4,935
|
)
|
|
(48,888
|
)
|
|||
Net loss attributable to non-controlling interest in consolidated affiliate
|
—
|
|
|
—
|
|
|
45,598
|
|
|||
Net loss attributable to stockholders
|
(6,969
|
)
|
|
(4,935
|
)
|
|
(3,290
|
)
|
|||
Amortization of preferred stock issuance costs
|
(206
|
)
|
|
(207
|
)
|
|
(206
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(7,175
|
)
|
|
$
|
(5,142
|
)
|
|
$
|
(3,496
|
)
|
|
|
|
|
|
|
||||||
Loss per share of common stock – basic:
|
|
|
|
|
|
||||||
Loss per basic share
|
$
|
(4.57
|
)
|
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
Weighted average common stock outstanding – basic
|
1,570,428
|
|
|
1,752,302
|
|
|
2,202,815
|
|
|||
|
|
|
|
|
|
||||||
Loss per share of common stock – diluted:
|
|
|
|
|
|
||||||
Loss per diluted share
|
$
|
(4.57
|
)
|
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
Weighted average common stock outstanding – diluted
|
1,570,428
|
|
|
1,752,302
|
|
|
2,202,815
|
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Net loss attributable to stockholders
|
$
|
(6,969
|
)
|
|
$
|
(4,935
|
)
|
|
$
|
(3,290
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Change in unrealized loss on available-for-sale securities (Front Yard common stock)
|
1,332
|
|
|
(1,681
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss)
|
1,332
|
|
|
(1,681
|
)
|
|
—
|
|
|||
Comprehensive loss
|
$
|
(5,637
|
)
|
|
$
|
(6,616
|
)
|
|
$
|
(3,290
|
)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Non-controlling Interest in Consolidated Affiliate
|
|
Total Equity (Deficit)
|
|||||||||||||||||
|
Number of Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
December 31, 2014
|
2,452,101
|
|
|
$
|
25
|
|
|
$
|
14,152
|
|
|
$
|
54,174
|
|
|
$
|
—
|
|
|
$
|
(245,468
|
)
|
|
$
|
1,326,911
|
|
|
$
|
1,149,794
|
|
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
104,727
|
|
|
1
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||||
Treasury shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,516
|
)
|
|
—
|
|
|
(9,516
|
)
|
|||||||
Capital contribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111
|
|
|
111
|
|
|||||||
Distribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103,649
|
)
|
|
(103,649
|
)
|
|||||||
Repurchase of non-controlling interest in subsidiaries by affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,983
|
)
|
|
(24,983
|
)
|
|||||||
Acquisition of non-controlling interest in affiliate
|
—
|
|
|
—
|
|
|
2,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,337
|
)
|
|
(5,007
|
)
|
|||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
6,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|
7,049
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,290
|
)
|
|
—
|
|
|
—
|
|
|
(45,598
|
)
|
|
(48,888
|
)
|
|||||||
December 31, 2015
|
2,556,828
|
|
|
26
|
|
|
23,419
|
|
|
50,678
|
|
|
—
|
|
|
(254,984
|
)
|
|
1,145,639
|
|
|
964,778
|
|
|||||||
Cumulative effect of adoption of ASU 2015-02 (Note 1)
|
—
|
|
|
—
|
|
|
(2,330
|
)
|
|
609
|
|
|
(981
|
)
|
|
—
|
|
|
(1,145,639
|
)
|
|
(1,148,341
|
)
|
|||||||
January 1, 2016
|
2,556,828
|
|
|
26
|
|
|
21,089
|
|
|
51,287
|
|
|
(981
|
)
|
|
(254,984
|
)
|
|
—
|
|
|
(183,563
|
)
|
|||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
80,801
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||||
Treasury shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,500
|
)
|
|
—
|
|
|
(11,500
|
)
|
|||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
9,585
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,585
|
|
|||||||
Change in unrealized loss on available-for-sale securities (Front Yard common stock)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,681
|
)
|
|
—
|
|
|
—
|
|
|
(1,681
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,935
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,935
|
)
|
|||||||
December 31, 2016
|
2,637,629
|
|
|
26
|
|
|
30,696
|
|
|
46,145
|
|
|
(2,662
|
)
|
|
(266,484
|
)
|
|
—
|
|
|
(192,279
|
)
|
|||||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes
|
177,493
|
|
|
2
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|||||||
Treasury shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,844
|
)
|
|
—
|
|
|
(5,844
|
)
|
|||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
6,986
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,986
|
|
|||||||
Change in unrealized loss on available-for-sale securities (Front Yard common stock)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,332
|
|
|
—
|
|
|
—
|
|
|
1,332
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,969
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,969
|
)
|
|||||||
December 31, 2017
|
2,815,122
|
|
|
$
|
28
|
|
|
$
|
37,765
|
|
|
$
|
38,970
|
|
|
$
|
(1,330
|
)
|
|
$
|
(272,328
|
)
|
|
$
|
—
|
|
|
$
|
(196,895
|
)
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net loss attributable to stockholders
|
$
|
(6,969
|
)
|
|
$
|
(4,935
|
)
|
|
$
|
(48,888
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Change in unrealized gain on mortgage loans
|
—
|
|
|
—
|
|
|
(88,829
|
)
|
|||
Net realized gain on sales of mortgage loans
|
—
|
|
|
—
|
|
|
(94,493
|
)
|
|||
Net realized gain on sales of real estate
|
—
|
|
|
—
|
|
|
(50,932
|
)
|
|||
Depreciation and amortization
|
302
|
|
|
—
|
|
|
7,472
|
|
|||
Selling costs and impairment
|
—
|
|
|
—
|
|
|
72,230
|
|
|||
Accretion of interest on re-performing mortgage loans
|
—
|
|
|
—
|
|
|
(551
|
)
|
|||
Share-based compensation
|
6,986
|
|
|
9,585
|
|
|
6,865
|
|
|||
Amortization of deferred financing costs
|
—
|
|
|
—
|
|
|
7,348
|
|
|||
Loss on retirement of leasehold improvements
|
—
|
|
|
—
|
|
|
212
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
—
|
|
|
123
|
|
|
(21,919
|
)
|
|||
Related party receivables
|
1,115
|
|
|
(5,266
|
)
|
|
17,491
|
|
|||
Prepaid expenses and other assets
|
942
|
|
|
68
|
|
|
(1,023
|
)
|
|||
Deferred leasing costs
|
—
|
|
|
—
|
|
|
(88
|
)
|
|||
Other non-current assets
|
(1,060
|
)
|
|
—
|
|
|
—
|
|
|||
Accrued salaries and employee benefits
|
1,551
|
|
|
94
|
|
|
2,754
|
|
|||
Accounts payable and accrued liabilities
|
(2,502
|
)
|
|
2,319
|
|
|
15,283
|
|
|||
Related party payables
|
—
|
|
|
(2,180
|
)
|
|
(6,169
|
)
|
|||
Net cash provided by (used in) operating activities
|
365
|
|
|
(192
|
)
|
|
(183,237
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Decrease in cash, cash equivalents and restricted cash due to deconsolidation of Front Yard (Note 1)
|
—
|
|
|
(137,268
|
)
|
|
—
|
|
|||
Purchases of Front Yard common stock
|
—
|
|
|
(15,588
|
)
|
|
—
|
|
|||
Investment in short-term investments
|
(625
|
)
|
|
—
|
|
|
—
|
|
|||
Investment in property, plant and equipment
|
(1,216
|
)
|
|
—
|
|
|
—
|
|
|||
Investment in real estate
|
—
|
|
|
—
|
|
|
(119,977
|
)
|
|||
Investment in renovations
|
—
|
|
|
—
|
|
|
(27,410
|
)
|
|||
Investment in affiliate
|
—
|
|
|
—
|
|
|
(5,007
|
)
|
|||
Real estate tax advances
|
—
|
|
|
—
|
|
|
(29,862
|
)
|
|||
Mortgage loan dispositions
|
—
|
|
|
—
|
|
|
468,111
|
|
|||
Mortgage loan payments
|
—
|
|
|
—
|
|
|
26,206
|
|
|||
Disposition of real estate
|
—
|
|
|
—
|
|
|
154,880
|
|
|||
Net cash (used in) provided by investing activities
|
(1,841
|
)
|
|
(152,856
|
)
|
|
466,941
|
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Altisource Asset Management Corporation
Consolidated Statements of Cash Flows (continued)
(In thousands)
|
|||||||||||
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Financing activities:
|
|
|
|
|
|
||||||
Issuance of common stock, including stock option exercises
|
650
|
|
|
593
|
|
|
833
|
|
|||
Repurchase of common stock
|
(5,844
|
)
|
|
(11,500
|
)
|
|
(9,516
|
)
|
|||
Payment of tax withholdings on exercise of stock options
|
(565
|
)
|
|
(571
|
)
|
|
(760
|
)
|
|||
Capital contribution from non-controlling interest
|
—
|
|
|
—
|
|
|
111
|
|
|||
Distribution to non-controlling interest
|
—
|
|
|
—
|
|
|
(98,123
|
)
|
|||
Repurchase of non-controlling interest in subsidiaries by affiliate
|
—
|
|
|
—
|
|
|
(24,983
|
)
|
|||
Proceeds from issuance of other secured borrowings
|
—
|
|
|
—
|
|
|
220,931
|
|
|||
Repayments of other secured borrowings
|
—
|
|
|
—
|
|
|
(39,832
|
)
|
|||
Proceeds from repurchase and loan agreements
|
—
|
|
|
—
|
|
|
347,077
|
|
|||
Repayments of repurchase and loan agreements
|
—
|
|
|
—
|
|
|
(594,564
|
)
|
|||
Payment of deferred financing costs
|
—
|
|
|
—
|
|
|
(9,832
|
)
|
|||
Net cash used in financing activities
|
(5,759
|
)
|
|
(11,478
|
)
|
|
(208,658
|
)
|
|||
Net change in cash, cash equivalents and restricted cash
|
(7,235
|
)
|
|
(164,526
|
)
|
|
75,046
|
|
|||
Cash, cash equivalents and restricted cash, beginning of the period
|
40,584
|
|
|
205,110
|
|
|
130,064
|
|
|||
Cash, cash equivalents and restricted cash, end of the period
|
$
|
33,349
|
|
|
$
|
40,584
|
|
|
$
|
205,110
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,559
|
|
Income taxes paid
|
820
|
|
|
132
|
|
|
265
|
|
|||
Transfer of mortgage loans to real estate owned, net
|
—
|
|
|
—
|
|
|
470,221
|
|
|||
Change in accrued capital expenditures
|
—
|
|
|
—
|
|
|
(1,388
|
)
|
|||
Changes in receivables from mortgage loan dispositions, payments and real estate tax advances, net
|
—
|
|
|
—
|
|
|
(592
|
)
|
|||
Changes in receivables from real estate owned dispositions
|
—
|
|
|
—
|
|
|
15,252
|
|
|||
Unpaid distribution to non-controlling interest
|
—
|
|
|
—
|
|
|
5,526
|
|
|||
Decrease in noncontrolling interest due to deconsolidation of Front Yard (Note 1)
|
—
|
|
|
(1,145,639
|
)
|
|
—
|
|
|||
Decrease in repurchase and loan agreements and other secured borrowings due to deconsolidation of Front Yard (Note 1)
|
—
|
|
|
(1,265,968
|
)
|
|
—
|
|
|||
Decrease in real estate assets and mortgage loans due to deconsolidation of Front Yard (Note 1)
|
—
|
|
|
2,264,296
|
|
|
—
|
|
•
|
Level 1 -
Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 -
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
|
•
|
Level 3 -
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Carrying Amount
|
|
Quoted Prices in Active Markets
|
|
Observable Inputs Other Than Level 1 Prices
|
|
Unobservable Inputs
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities: Front Yard common stock
|
$
|
19,266
|
|
|
$
|
19,266
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities: Front Yard common stock
|
$
|
17,934
|
|
|
$
|
17,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities: Front Yard common stock
|
$
|
20,596
|
|
|
$
|
—
|
|
|
$
|
1,330
|
|
|
$
|
19,266
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities: Front Yard common stock
|
$
|
20,596
|
|
|
$
|
—
|
|
|
$
|
2,662
|
|
|
$
|
17,934
|
|
2018
|
|
$
|
175
|
|
2019
|
|
175
|
|
|
2020
|
|
172
|
|
|
2021
|
|
120
|
|
|
2022 and thereafter
|
|
67
|
|
|
|
|
$
|
709
|
|
•
|
Base Management Fee
. We are entitled to a quarterly base management fee equal to
1.5%
of the product of (i) Front Yard's average invested capital (as defined in the AMA) for the quarter
multiplied by
(ii)
0.25
, while it has fewer than
2,500
SFR properties actually rented (“Rental Properties”). The base management fee percentage increases to
1.75%
of average invested capital while Front Yard has between
2,500
and
4,499
Rental Properties and increases to
2.0%
of average invested capital while it has
4,500
or more Rental Properties;
|
•
|
Incentive Management Fee
. We are entitled to a quarterly incentive management fee equal to
20%
of the amount by which Front Yard's return on invested capital (based on AFFO, defined as net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all real estate assets owned by Front Yard) exceeds an annual hurdle return rate of between
7.0%
and
8.25%
(or
1.75%
and
2.06%
per quarter), depending on the
10
-year treasury rate. To the extent Front Yard has an aggregate shortfall in its return rate over the previous
seven
quarters, that aggregate return rate shortfall gets added to the normal quarterly
1.75%
return hurdle for the next quarter before we are entitled to an incentive management fee. The incentive management fee increases to
22.5%
while Front Yard has between
2,500
and
4,499
Rental Properties and increases to
25%
while it has
4,500
or more Rental Properties; and
|
•
|
Conversion Fee
. We are entitled to a quarterly conversion fee equal to
1.5%
of the market value of assets converted into leased single-family homes by Front Yard for the first time during the quarter.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Base management fees (1)
|
$
|
16,010
|
|
|
$
|
17,334
|
|
|
$
|
13,935
|
|
Conversion fees (1)
|
1,291
|
|
|
1,841
|
|
|
1,037
|
|
|||
Expense reimbursements (1)
|
859
|
|
|
816
|
|
|
750
|
|
|||
Incentive management fees (1)
|
—
|
|
|
—
|
|
|
7,994
|
|
|||
Professional fee sharing for negotiation of the AMA (1)
|
—
|
|
|
—
|
|
|
2,000
|
|
(1)
|
Prior to January 1, 2016, we eliminated these transactions upon consolidation (see
Note 1
).
|
|
|
December 31, 2017
|
|
Stock options outstanding
|
|
29,450
|
|
Possible future issuances under equity incentive plan
|
|
81,862
|
|
|
|
111,312
|
|
|
|
Number of Options
|
|
Weighted Average Exercise Price per Share
|
|||
December 31, 2014
|
|
239,060
|
|
|
$
|
1.10
|
|
Exercised
|
|
(54,261
|
)
|
|
1.35
|
|
|
Forfeited or canceled
|
|
(3,097
|
)
|
|
4.14
|
|
|
December 31, 2015
|
|
181,702
|
|
|
0.98
|
|
|
Exercised
|
|
(39,396
|
)
|
|
0.80
|
|
|
Forfeited or canceled
|
|
(939
|
)
|
|
3.67
|
|
|
December 31, 2016
|
|
141,367
|
|
|
1.01
|
|
|
Exercised
|
|
(111,917
|
)
|
|
0.75
|
|
|
December 31, 2017
|
|
29,450
|
|
|
$
|
2.01
|
|
•
|
Twenty-five percent (
25%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of our stock meets both of the following conditions: (i) the market value has realized a compounded annual gain of at least twenty percent (
20%
) over the market value on the date of the grant and (ii) the market value is at least double the market value on the date of the grant;
|
•
|
Fifty percent (
50%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of our stock meets both of the following conditions: (i) the market value has realized a compounded annual gain of at least twenty-two and a half percent (
22.5%
) over the market value on the date of the grant and (ii) the market value is at least triple the market value on the date of the grant and
|
•
|
Twenty-five percent (
25%
) of the grant will vest in accordance with the vesting schedule set forth below if the market value of Company stock meets both of the following conditions: (i) the market value has realized a compounded annual gain of at least twenty-five percent (
25%
) over the market value on the date of the grant and (ii) the market value is at least quadruple the market value on the date of the grant.
|
•
|
After the performance hurdles have been achieved,
25%
of the restricted stock will vest on the first anniversary of the date that the performance hurdle for that tranche was met. The remaining
75%
of that tranche will either vest (i) on the
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
December 31, 2014
|
|
175,489
|
|
|
$
|
90.51
|
|
Granted
|
|
53,531
|
|
|
174.34
|
|
|
Vested (1)
|
|
(51,305
|
)
|
|
11.53
|
|
|
Forfeited or canceled
|
|
(23,389
|
)
|
|
6.65
|
|
|
December 31, 2015
|
|
154,326
|
|
|
158.84
|
|
|
Granted
|
|
11,119
|
|
|
19.31
|
|
|
Vested (1)
|
|
(40,566
|
)
|
|
13.34
|
|
|
December 31, 2016
|
|
124,879
|
|
|
193.17
|
|
|
Granted
|
|
22,206
|
|
|
79.60
|
|
|
Vested (1)
|
|
(65,576
|
)
|
|
79.45
|
|
|
December 31, 2017
|
|
81,509
|
|
|
$
|
253.72
|
|
(1)
|
The vesting date fair value of restricted stock that vested during the years ended
December 31, 2017
,
2016
and
2015
was
$5.1 million
,
$0.6 million
and
$11.6 million
, respectively.
|
|
|
Year ended December 31, 2015
|
Risk free interest rate (1)
|
|
2.89% to 3.27%
|
Common stock dividend yield (2)
|
|
0%
|
Expected volatility (3)
|
|
92.04% to 96.46%
|
(1)
|
Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the restricted stock grants.
|
(2)
|
At the date of grant, we had no history of dividend payments.
|
(3)
|
Based on the historical volatility of comparable companies, adjusted for our expected additional cash flow volatility.
|
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
U.S. Virgin Islands
|
|
$
|
(7,259
|
)
|
|
$
|
(3,721
|
)
|
|
$
|
(1,249
|
)
|
Other
|
|
998
|
|
|
492
|
|
|
(1,687
|
)
|
|||
Loss before income taxes
|
|
$
|
(6,261
|
)
|
|
$
|
(3,229
|
)
|
|
$
|
(2,936
|
)
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Stock compensation
|
|
$
|
374
|
|
|
$
|
880
|
|
Accrued expenses
|
|
550
|
|
|
475
|
|
||
Available-for-sale securities
|
|
307
|
|
|
1,027
|
|
||
Net operating losses
|
|
114
|
|
|
—
|
|
||
Other
|
|
29
|
|
|
21
|
|
||
|
|
1,374
|
|
|
2,403
|
|
||
Deferred tax liability:
|
|
|
|
|
||||
Depreciation
|
|
14
|
|
|
5
|
|
||
|
|
1,360
|
|
|
2,398
|
|
||
Valuation allowance
|
|
(828
|
)
|
|
(2,377
|
)
|
||
Deferred tax asset, net
|
|
$
|
532
|
|
|
$
|
21
|
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net loss attributable to stockholders
|
$
|
(6,969
|
)
|
|
$
|
(4,935
|
)
|
|
$
|
(3,290
|
)
|
Amortization of preferred stock issuance costs
|
(206
|
)
|
|
(207
|
)
|
|
(206
|
)
|
|||
Numerator for basic and diluted EPS - loss attributable to common stockholders
|
$
|
(7,175
|
)
|
|
$
|
(5,142
|
)
|
|
$
|
(3,496
|
)
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average common stock outstanding – basic
|
1,570,428
|
|
|
1,752,302
|
|
|
2,202,815
|
|
|||
Weighted average common stock outstanding – diluted
|
1,570,428
|
|
|
1,752,302
|
|
|
2,202,815
|
|
|||
|
|
|
|
|
|
||||||
Loss per basic share
|
$
|
(4.57
|
)
|
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
Loss per diluted share
|
$
|
(4.57
|
)
|
|
$
|
(2.93
|
)
|
|
$
|
(1.59
|
)
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||||
Numerator
|
|
|
|
|
|
||||||
Amortization of preferred stock issuance costs
|
$
|
206
|
|
|
$
|
207
|
|
|
$
|
206
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Stock options
|
57,488
|
|
|
165,983
|
|
|
222,566
|
|
|||
Restricted stock
|
38,424
|
|
|
40,476
|
|
|
85,121
|
|
|||
Preferred stock, if converted
|
200,000
|
|
|
200,000
|
|
|
200,000
|
|
|
2017
|
||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
Total revenues
|
$
|
5,011
|
|
|
$
|
4,643
|
|
|
$
|
4,429
|
|
|
$
|
4,077
|
|
|
$
|
18,160
|
|
Net loss attributable to stockholders
|
(1,318
|
)
|
|
(1,742
|
)
|
|
(2,125
|
)
|
|
(1,784
|
)
|
|
(6,969
|
)
|
|||||
Loss per share of common stock – basic
|
(0.89
|
)
|
|
(1.15
|
)
|
|
(1.38
|
)
|
|
(1.15
|
)
|
|
(4.57
|
)
|
|||||
Loss per share of common stock – diluted
|
(0.89
|
)
|
|
(1.15
|
)
|
|
(1.38
|
)
|
|
(1.15
|
)
|
|
(4.57
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2016
|
||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
Total revenues
|
$
|
4,526
|
|
|
$
|
5,407
|
|
|
$
|
4,854
|
|
|
$
|
5,204
|
|
|
$
|
19,991
|
|
Net loss attributable to stockholders
|
(940
|
)
|
|
(1,261
|
)
|
|
(1,071
|
)
|
|
(1,663
|
)
|
|
(4,935
|
)
|
|||||
Loss per share of common stock – basic
|
(0.50
|
)
|
|
(0.74
|
)
|
|
(0.67
|
)
|
|
(1.09
|
)
|
|
(2.93
|
)
|
|||||
Loss per share of common stock – diluted
|
(0.50
|
)
|
|
(0.74
|
)
|
|
(0.67
|
)
|
|
(1.09
|
)
|
|
(2.93
|
)
|
1 Year Altisource Asset Managem... Chart |
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