Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Nov. 05, 2018
Document and Entity Information
Entity Registrant Name	Exela Technologies, Inc.
Entity Central Index Key	0001620179
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		151,648,643

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 40,692	$ 39,000
Restricted cash	8,955	42,489
Accounts receivable, net of allowance for doubtful accounts of $4,427 and $3,725, respectively	253,986	229,704
Inventories, net	16,122	11,922
Prepaid expenses and other current assets	26,933	24,596
Total current assets	346,688	347,711
Property, plant and equipment, net	131,156	132,908
Goodwill	749,762	747,325
Intangible assets, net	398,280	464,984
Deferred income tax assets	14,810	9,019
Other noncurrent assets	21,650	12,891
Total assets	1,662,346	1,714,838
Current liabilities
Accounts payable	90,673	81,263
Related party payables	10,756	14,445
Income tax payable	5,422	3,612
Accrued liabilities	41,397	49,383
Accrued compensation and benefits	54,975	46,925
Accrued interest	23,845	55,102
Customer deposits	39,419	31,656
Deferred revenue	18,084	12,709
Obligation for claim payment	52,889	42,489
Current portion of capital lease obligations	15,926	15,611
Current portion of long-term debt	20,062	20,565
Total current liabilities	373,448	373,760
Long-term debt, net of current maturities	1,307,884	1,276,094
Capital lease obligations, net of current maturities	22,945	25,958
Pension liability	30,376	25,496
Deferred income tax liabilities	2,115	5,362
Long-term income tax liability	3,470	3,470
Other long-term liabilities	15,307	14,704
Total liabilities	1,755,545	1,724,844
Commitment and Contingencies (Note 9)
Stockholders' deficit
Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 152,692,140 shares issued and 151,648,643 outstanding at September 30, 2018 and 150,578,451 shares issued and 150,529,151 outstanding at December 31, 2017	15	15
Preferred stock, par value of $0.0001 per share; 20,000,000 shares authorized; 4,569,233 shares issued and outstanding at September 30, 2018 and 6,194,233 shares issued and outstanding at December 31, 2017	1	1
Additional paid in capital	482,018	482,018
Less: common stock held in treasury, at cost; 1,043,497 shares at September 30, 2018 and 49,300 shares at December 31, 2017	(5,148)	(249)
Equity based compensation	38,601	34,085
Accumulated deficit	(594,162)	(514,628)
Accumulated other comprehensive loss:
Foreign currency translation adjustment	(3,833)	(194)
Unrealized pension actuarial losses, net of tax	(10,691)	(11,054)
Total accumulated other comprehensive loss	(14,524)	(11,248)
Total stockholders' deficit	(93,199)	(10,006)
Total liabilities and stockholders' deficit	$ 1,662,346	$ 1,714,838

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 4,427	$ 3,725
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	1,600,000,000	1,600,000,000
Common stock, shares issued	152,692,140	150,578,451
Common stock, shares outstanding	151,648,643	150,529,151
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	4,569,233	6,194,233
Preferred stock, shares outstanding	4,569,233	6,194,233
Common stock held in treasury at cost (in shares)	1,043,497	49,300

Condensed Consolidated Statement of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Consolidated Statement of Operations
Revenue	$ 383,030	$ 338,393	$ 1,186,579	$ 766,035
Cost of revenue (exclusive of depreciation and amortization)	295,936	255,116	903,682	539,242
Selling, general and administrative expenses	44,913	102,048	137,231	172,626
Depreciation and amortization	35,041	28,052	109,428	70,779
Related party expense	759	26,892	3,267	31,733
Operating income (loss)	6,381	(73,715)	32,971	(48,345)
Other expense (income), net:
Interest expense, net	38,339	37,652	114,883	91,740
Loss on extinguishment of debt	1,067	35,512	1,067	35,512
Sundry expense (income), net	(2,571)	563	(4,961)	2,960
Other income, net	(781)		(4,813)
Net loss before income taxes	(29,673)	(147,442)	(73,205)	(178,557)
Income tax benefit (expense)	733	37,002	(4,911)	32,924
Net loss	(28,940)	(110,440)	(78,116)	(145,633)
Dividend equivalent on Series A Preferred Stock related to beneficial conversion feature		(16,375)		(16,375)
Cumulative dividends for Series A Preferred Stock	(914)	(1,225)	(2,742)	(1,225)
Net loss attributable to common stockholders	$ (29,854)	$ (128,040)	$ (80,858)	$ (163,233)
Net loss per share - basic and diluted (in dollars per share)	$ (0.20)	$ (2.08)	$ (0.53)	$ (3.98)

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (28,940)	$ (110,440)	$ (78,116)	$ (145,633)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(2,492)	233	(3,639)	1,256
Unrealized pension actuarial gains (losses), net of tax	140	(536)	363	(1,500)
Comprehensive loss	$ (31,292)	$ (110,743)	$ (81,392)	$ (145,877)

Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands	Common Stock	Preferred Stock	Treasury Stock	Additional Paid-in Capital	Equity-based Compensation	Foreign Currency Translation Adjustment	Unrealized Pension Actuarial Losses, net of tax	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2016	$ 6			$ (57,395)	$ 27,342	$ (3,547)	$ (12,339)	$ (293,968)	$ (339,901)
Beginning balance (in shares) at Dec. 31, 2016	64,024,557
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss								(145,633)	(145,633)
Equity-based compensation					4,446				4,446
Foreign currency translation adjustment						1,256			1,256
Net realized pension actuarial gains, net of tax							(1,500)		(1,500)
Merger recapitalization	$ 2			20,546					20,548
Merger recapitalization (in shares)	16,575,443
Shares issued to acquire Novitex (refer to Note 3)	$ 3			244,797					244,800
Shares issued to acquire Novitex (refer to Note 3) (in shares)	30,600,000
Issuance/conversion of Quinpario shares	$ 1			22,358					22,359
Issuance/conversion of Quinpario shares (in shares)	12,093,331
Sale of common shares at July 12, 2017	$ 3			130,860					130,863
Sale of common shares at July 12, 2017 (in shares)	18,757,942
Issuance of Series A Preferred stock		$ 1		73,553					73,554
Issuance of Series A Preferred stock (in shares)		9,194,233
Shares issued for advisory services and deferred underwriting fees				28,573					28,573
Shares issued for advisory services and deferred underwriting fees (in shares)	3,609,375
Conversion of Series A Preferred stock to common shares	3,667,803	(3,000,000)
Shares issued for HandsOn Global Management contract termination fee				10,000					10,000
Shares issued for HandsOn Global Management contract termination fee ( in shares)	1,250,000
Equity issuance expenses				(7,649)					(7,649)
Adjustment for beneficial conversion feature of Series A preferred stock (refer to Note 2)				16,375				(16,375)
Ending balance at Sep. 30, 2017	$ 15	$ 1		482,018	31,788	(2,291)	(13,839)	(455,976)	41,716
Ending balance (in shares) at Sep. 30, 2017	150,578,451	6,194,233
Beginning balance at Dec. 31, 2016	$ 6			(57,395)	27,342	(3,547)	(12,339)	(293,968)	(339,901)
Beginning balance (in shares) at Dec. 31, 2016	64,024,557
Increase (Decrease) in Stockholders' Equity (Deficit)
Equity issuance expenses									(7,600)
Ending balance at Dec. 31, 2017	$ 15	$ 1	$ (249)	482,018	34,085	(194)	(11,054)	(514,628)	(10,006)
Ending balance (in shares) at Dec. 31, 2017	150,529,151	6,194,233	49,300
Increase (Decrease) in Stockholders' Equity (Deficit)
Implementation of ASU 2014-09 (Note 2)								(1,418)	(1,418)
Net loss								(78,116)	(78,116)
Equity-based compensation					4,260				4,260
Foreign currency translation adjustment						(3,639)			(3,639)
Net realized pension actuarial gains, net of tax							363		363
Stock options exercised					256				256
Stock options exercised (in shares)	126,922
Conversion of Series A Preferred Stock to common shares	1,986,767
Conversion of Series A Preferred stock to common shares		(1,625,000)
Share Repurchased			$ (4,899)						$ (4,899)
Share Repurchased (in shares)	(994,197)		994,197						(994,197)
Ending balance at Sep. 30, 2018	$ 15	$ 1	$ (5,148)	$ 482,018	$ 38,601	$ (3,833)	$ (10,691)	$ (594,162)	$ (93,199)
Ending balance (in shares) at Sep. 30, 2018	151,648,643	4,569,233	1,043,497

Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2018

Sep. 30, 2017

Cash flows from operating activities

Net loss

$ (78,116)

$ (145,633)

Adjustments to reconcile net loss

Depreciation and amortization

109,428

70,779

Fees paid in stock

23,875

HGM contract termination fee paid in stock

10,000

Original issue discount and debt issuance amortization

8,062

9,684

Provision (recovery) for doubtful accounts

2,470

451

Deferred income tax benefit

(3,689)

(37,186)

Share-based compensation expense

4,516

4,446

Foreign currency remeasurement

(2,040)

777

Gain on sale of Meridian

(588)

Loss on sale assets

1,835

508

Fair value adjustment for interest rate swap

(5,456)

Change in operating assets and liabilities, net of effect from acquisitions

Accounts receivable

(6,374)

(2,784)

Prepaid expenses and other assets

(5,770)

189

Accounts payable and accrued liabilities

^[1]

(23,457)

48,745

Related party payables

(3,689)

4,936

Net cash used in operating activities

^[1]

(2,280)

(11,801)

Cash flows from investing activities

Purchases of property, plant and equipment

(14,077)

(7,001)

Additions to internally developed software

(3,080)

(6,348)

Additions to outsourcing contracts

(5,427)

(8,574)

Proceeds from sale of Meridian

4,582

Cash acquired in Quinpario reverse merger

Cash paid in acquisition, net of cash received

(6,513)

(423,428)

Proceeds on sale of assets

1,095

Net cash used in investing activities

(28,002)

(440,667)

Cash flows from financing activities

Change in bank overdraft

(210)

Loss on extinguishment of debt

^[2]

1,067

35,512

Proceeds from issuance of stock

231,448

Repurchases of common stock

(4,899)

Proceeds from financing obligations

3,068

3,040

Contribution from shareholders

20,548

Proceeds from credit facility

30,000

1,320,500

Retirement of previous credit facilities

(1,055,736)

Cash paid for debt issuance costs and debt discounts

(1,094)

(39,837)

Cash paid for equity issue costs

(7,500)

(149)

Borrowings from revolver and swing-line loan

30,000

72,600

Repayments from revolver and swing line loan

(30,000)

(72,500)

Principal payments on long-term obligations

(21,647)

(32,647)

Net cash provided by (used in) financing activities

(1,005)

482,569

Effect of exchange rates on cash

(554)

335

Net increase (decrease) in cash and cash equivalents

^[1]

(31,842)

30,436

Cash, restricted cash, and cash equivalents

Beginning of period

^[1]

81,489

34,253

End of period

^[1]

49,647

64,689

Supplemental cash flow data:

Income tax payments, net of refunds received

5,296

2,673

Interest paid

136,396

60,347

Noncash investing and financing activities:

Assets acquired through capital lease arrangements

9,318

2,080

Leasehold improvements funded by lessor

1,565

Issuance of common stock as consideration for Novitex

244,800

Accrued capital expenditures

$ 1,994

3,512

Accretion of dividend equivalents

$ 16,375

[1]	Balances for these items differ from previously reported balances due to the adoption of ASU no. 2016-18, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230), see Note 2.
[2]	Exela reclassified ‘Loss on extinguishment of debt’ from operating to financing activities due to the adoption of ASU no. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, see Note 2.

General

9 Months Ended

Sep. 30, 2018

General

General

1. General

These condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements as of and for the year ended December 31, 2017 included in the Exela Technologies, Inc. (the "Company," "Exela," "we," "our" or "us") annual report on Form 10-K for such period.

The accompanying condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America ("GAAP") and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These accounting principles require us to use estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from our estimates.

The condensed consolidated financial statements are unaudited, but in our opinion include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

Net Loss per Share

Earnings per share ("EPS") is computed by dividing net loss available to holders of the Company's Common Stock by the weighted average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method or if-converted method in periods of earnings. The two-class method is an earnings allocation method that determines earnings per share for Common Stock and participating securities. As the Company experienced net losses for the periods presented, the impact of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) was calculated based on the if-converted method. Diluted EPS excludes all dilutive potential of shares of Common Stock if their effect is anti-dilutive.

For the three and nine months ended September 30, 2018, outstanding shares of the Series A Preferred Stock, if converted would have resulted in an additional 5,586,344 shares of Common Stock outstanding, but were not included in the computation of diluted loss per share as their effects were anti-dilutive.

The Company was originally incorporated July 12, 2017 as a special purpose acquisition Company under the name Quinpario Acquisition Corp 2 (“Quinpario”). The Company has not included the effect of 35,000,000 warrants sold in the Quinpario Initial Public Offering (“IPO”) in the calculation of net income (loss) per share. Warrants are considered anti-dilutive and excluded when the exercise price exceeds the average market value of the Company’s Common Stock price during the applicable period.


	Three Months ended September 30,				Nine Months ended September 30,
	2018		2017		2018		2017
Net loss attributable to common stockholders (A)	$	(29,854)	$	(128,040)	$	(80,858)	$	(163,233)
Weighted average common shares outstanding - basic and diluted (B)		151,663,670		61,584,175		152,010,290		41,018,724
Loss Per Share:
Basic and diluted (A/B)	$	(0.20)	$	(2.08)	$	(0.53)	$	(3.98)

Recently Adopted Accounting Pronouncements	9 Months Ended
Recently Adopted Accounting Pronouncements	Sep. 30, 2018
Recently Adopted Accounting Pronouncements
Recently Adopted Accounting Pronouncements	2. Recently Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) no. 2014-09, Revenue from Contracts with Customers (ASC 606). Under ASU 2014-09, revenue is recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard using the modified retrospective approach applied to those contracts that were not completed as of January 1, 2018. The results for the reporting period beginning after January 1, 2018 are presented in accordance with the new standard, although historical information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. The adoption of ASC 606 did not have a material impact on the Company's financial position, results of operations and cash flows as of or for the period ended September 30, 2018, and we expect the impact of the adoption of the new standard will be immaterial to our results of operations on an ongoing basis. The cumulative effect of accounting change recognized was $1.4 million recorded as an increase to beginning balance of accumulated deficit, and a corresponding reduction to Accounts Receivable, net. See Note 3 for additional disclosure. Effective January 1, 2018, the Company adopted ASU no. 2016-¬15, (Topic 230): Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which adds or clarifies guidance on the presentation and classification of eight specific types of cash receipts and cash payments in the statement of cash flows such as debt prepayment or extinguishment costs, settlement of contingent consideration arising from a business combination, insurance settlement proceeds, and distributions from certain equity method investees, with the intent of reducing diversity in practice. We applied the guidance retrospectively to all periods presented. Exela reclassified a loss on extinguishment of debt from operating activities to financing activities in the third quarter of 2017 in the currently presented financial statements and the to be filed annual financial statements ended December 31, 2018. The adoption had no impact on the Company's financial position, results of operations, and cash flows for the quarter ended September 30, 2018. Effective January 1, 2018, the Company adopted ASU no. 2016-18, (Topic 230): Restricted Cash. Statement of Cash Flows: Restricted Cash. The ASU addresses diversity in practice that exists in the classification and presentation of changes in restricted cash and requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. We applied the guidance retrospectively to all periods presented. As a result of adopting the ASU no. 2016-18, restricted cash is included in the balances of restricted cash, cash and cash equivalents presented in the Statement of Cash Flows for the nine months ended September 30, 2018 and 2017. Adopting the standard increased the net change in cash and cash equivalents, which is reflected within operating cash flows, by $11.4 million for the nine months ended September 30, 2017. Total Cash and cash equivalents for the Beginning of period and End of period September 30, 2017 increased $25.9 million and $37.3 million due to the inclusion of restricted cash. Effective January 1, 2018, the Company adopted ASU no. 2017-07, (Topic 715): Compensation Retirement Benefit; Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments to this ASU require the service cost component of net periodic benefit cost be reported in the same income statement line or lines as other compensation costs for employees. The other components of net periodic benefit cost are required to be reported separately from service costs and outside a subtotal of income from operations. The new standard requires retrospective application and allows a practical expedient that permits an employer to use the amounts disclosed in its pension plan footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation. Adoption of the standard resulted in only the service cost being recorded to Cost of revenue; see Note 8 for the related impact. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU no. 2016-02, Leases (842). This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Since the issuance of the original standard, the FASB has issued a subsequent update that provides a practical expedient for land easements (ASU 2018-01). The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years and early application is permitted. The Company has a significant amount of facilities and equipment leases and is currently evaluating the impact that adopting this standard will have on the consolidated financial statements. In June 2016, the FASB issued ASU no. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to replace the incurred loss impairment methodology under current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The standard will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently in the early stages of evaluating the impact that adopting this standard will have on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other (Topic 350). Current guidance requires an entity that has not elected the private company alternative for goodwill to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. To address concerns over the cost and complexity of the two-step goodwill impairment test, the amendments in this Update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The company is currently in the early stages of evaluating the impact that adopting this standard will have on the consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this ASU addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this ASU addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently in the early stages of evaluating the impact that adopting this standard will have on the consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815); Targeted Improvements to Accounting for Hedging Activities. The amendments in this ASU better align the risk management activities and financial reporting for these hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The company is currently in the early stages of evaluating the impact that adopting this standard will have on the 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. The amendments in this Update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The company is currently in the early stages of evaluating the impact that adopting this standard will have on the consolidated financial statements.

Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Significant Accounting Policies

Significant Accounting Policies

3. Significant Accounting Policies

The information presented below supplements the Significant Accounting Policies information presented in our 2017 Form 10-K, including Revenue Recognition for the adoption of ASC 606, which became effective January 1, 2018. See our 2017 Form 10-K for a description of our significant accounting policies in effect prior to the adoption of the new accounting standard.

Revenue Recognition

We account for revenue in accordance with ASC 606. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of our material sources of revenue are derived from contracts with customers, primarily relating to the provision of business and transaction processing services within each of our segments. We do not have any significant extended payment terms, as payment is received shortly after goods are delivered or services are provided.

Nature of Services

Our primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. Our promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. We allocate the variable fees to the single performance obligation charged to the distinct service period in which we have the contractual right to bill under the contract.

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the three and nine months ended September 30, 2018, and 2017:


	Three months ended September 30,
	2018						2017
	ITPS		HS		LLPS		ITPS		HS		LLPS
United States	$	248,055	$	56,776	$	18,941	$	223,555	$	56,405	$	21,969
Europe		52,602		—		—		30,505		—		—
Other		6,656		—		—		5,959		—		—
Total	$	307,313	$	56,776	$	18,941	$	260,019	$	56,405	$	21,969


	Nine months ended September 30,
	2018						2017
	ITPS		HS		LLPS		ITPS		HS		LLPS
United States	$	782,870	$	171,722	$	65,476	$	427,675	$	173,548	$	66,930
Europe		146,242		—		—		89,736		—		—
Other		20,269		—		—		8,146		—		—
Total	$	949,381	$	171,722	$	65,476	$	525,557	$	173,548	$	66,930

Contract Balances

The following table presents contract assets and contract liabilities recognized at September 30, 2018 and December 31, 2017:


	September 30,		December 31,
	2018		2017
Accounts receivable, net	$	253,986	$	229,704
Deferred revenues		18,322		13,717
Costs to obtain and fulfill a contract		19,902		22,929
Customer deposits		39,419		31,656

Accounts receivable, net includes $37.7 million and $27.9 million as of September 30, 2018 and December 31, 2017, respectively, representing amounts not billed to customers. We have accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers.

Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where we received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. We recognized revenue of $12.1 million during the nine months ended September 30, 2018 that had been deferred as of December 31, 2017.

Costs incurred to obtain and fulfill contracts are deferred and expensed on a straight-line basis over the estimated benefit period. We recognized $7.3 million of amortization for these costs in the first nine months of 2018 within depreciation and amortization expense. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or transition activities and can be separated into two principal categories: contract commissions and transition/set-up costs. Examples of such capitalized costs include hourly labor and related fringe benefits and travel costs. Applying the practical expedient in ASC 340-40-25-4, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in Selling, general and administrative expenses. The effect of applying this practical expedient was not material.

Customer deposits consist primarily of amounts received from customers in advance for postage. The majority of the amounts recorded as of December 31, 2017 were used to pay for postage with the corresponding postage revenue being recognized during the nine months ended September 30, 2018.

Performance Obligations

At the inception of each contract, we assess the goods and services promised in our contracts and identify each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes.

Certain of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we estimate our expected costs of satisfying a performance obligation and add an appropriate margin for that distinct good or service. We also use the adjusted market approach whereby we estimate the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, we consider the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained.

When evaluating the transaction price, we analyze, on a contract-by-contract basis, all applicable variable consideration. The nature of our contracts give rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We do not anticipate significant changes to our estimates of variable consideration.

We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under ASC 606, we did not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, and (2) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of our contracts. We have certain non-cancellable contracts where we receive a fixed monthly fee in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of September 30, 2018 in each of the future periods below:


Estimated Remaining Fixed Consideration for
Unsatisfied Performance Obligations

2018	$	11,894
2019		35,726
2020		19,939
2021		11,385
2022		5,556
2023 and thereafter		2,299
Total	$	86,799

Business Combinations and Acquisitions

9 Months Ended

Sep. 30, 2018

Business Combinations and Acquisitions

Business Combinations and Acquisitions

4. Business Combinations and Acquisitions

Novitex

On July 12, 2017, the Company consummated its business combination with SourceHOV Holdings, Inc. ("SourceHOV") and Novitex Holdings, Inc. (“Novitex”, the “Novitex Business Combination”) pursuant to the Business Combination Agreement and Consent, Waiver and Amendment to the Novitex Business Combination Agreement, dated February 21, 2017 and June 15, 2017. In connection with the Novitex Business Combination, the Company acquired debt facilities and issued notes totaling $1.4 billion (refer to Note 6 – Long Term Debt and Credit Facilities). Proceeds from the acquired debt were used to refinance the existing debt of SourceHOV, settle the outstanding debt of Novitex, and pay fees and expenses incurred in connection with the Novitex Business Combination. Immediately following the Novitex Business Combination, there were 146,910,648 shares of common stock, 9,194,233 shares of Series A Preferred Stock, and 35,000,000 warrants outstanding.

Under ASC 805, Business Combinations, SourceHOV was deemed the accounting acquirer based on the following predominant factors: it has the largest portion of voting rights in the Company, the Board and Management has more individuals coming from SourceHOV than either Quinpario or Novitex, SourceHOV was the largest entity by revenue and by assets, and the headquarters was moved to the SourceHOV headquarters location. The Company acquired 100% of the equity of Novitex pursuant to the Business Combination Agreement by issuing 30,600,000 shares of common stock of Exela to Novitex Parent, L.P.; the sole stockholder of Novitex Holdings, Inc. Total value of equity for the transaction was $244.8 million. Additionally, as noted, the Company used proceeds from acquired debt to settle the outstanding debt of Novitex in the amount of $420.5 million, and pay transaction related costs and interest on behalf of Novitex in the amount of $10.3 million and $1.0 million, respectively, which was accounted for as part of consideration.

The following table summarizes the consideration paid for Novitex and the fair value of the assets acquired and liabilities assumed at the acquisition date on July 12, 2017:


Assets Acquired:
Cash and equivalents	$	8,428
Accounts receivable		87,474
Inventory		1,245
Prepaid expenses & other		13,974
Property and equipment, net		60,657
Identifiable intangible assets, net		251,060
Deferred charges and other assets		2,723
Other noncurrent assets		93
Goodwill, excess/deficient purchase price		406,060
Total identifiable assets acquired	$	831,714
Liabilities Assumed:
Accounts payable	$	(29,444)
Short-term borrowings and current portion of long term debt		(11,335)
Accrued liabilities		(30,432)
Advanced billings and customer deposits		(18,926)
Long term debt		(15,704)
Deferred taxes		(46,991)
Other liabilities		(2,226)
Total liabilities assumed	$	(155,058)
Total Consideration	$	676,656

The identifiable intangible assets include customer relationships, non-compete agreements, internally developed software, and trademarks and trade names. Customer relationships and non-compete agreements were valued using the Income Approach, specifically the Multi-Period Excess Earnings method. Trademarks and trade names were valued using the Income Approach, specifically the Relief-from-Royalty method. Internally developed software was valued based on costs incurred related to Connect Platform. All of these intangibles acquired represent a Level 3 measurement as they are based on unobservable inputs reflecting Management’s own assumptions about the inputs used in pricing the asset or liability at fair value.


	Weighted Average
	Useful Life (in years)		Fair Value
Trademark and trade name - Novitex		9.5	$	18,000
Customer relationships		16.0		230,000
Inernally developed software - Connect Platform		5.0		1,710
Non-compete agreements		1.0		1,350
			$	251,060

As of the date of the Novitex Business Combination, the weighted-average useful life of total identifiable intangible assets acquired in the Novitex Business Combination, excluding goodwill, was 15.4 years.

Through the acquisition of Novitex, we continue to pursue revenue synergies, leverage brand awareness, generate greater free cash flow, expand the existing Novitex sales channels, and increase utilization of the existing workforce. The Company also anticipates continued opportunity for growth through the ability to leverage additional future services and capabilities. Our anticipation of synergies and leveraging existing brand awareness, among other factors, contributed to a purchase price in excess of the estimated fair value of Novitex’s identifiable net assets assumed, and as a result, the Company has recorded goodwill in connection with this acquisition. Approximately $14.0 million of the goodwill recorded was tax deductible, which was carried over from the tax basis of the seller. Since the acquisition date of July 12, 2017, $292.1 million of revenue and $17.5 million of net loss were included in our consolidated revenues and net loss, respectively, for Novitex for the year ended December 31, 2017. For the three and nine months ended September 30, 2018 Exela recognized $162.6 million and $512.7 million in revenue related to Novitex in the Consolidated Statement of Operations. These results are included in the ITPS segment.

Transaction Costs

The Company incurred approximately $60.0 million in advisory, legal, accounting and management fees in conjunction with the Novitex Business Combination as of December 31, 2017, excluding contract cancellation and advising fees to HandsOn Global Management ("HGM") of $23.0 million. Additionally, $7.6 million was incurred related to equity issuance costs and $40.9 million was incurred in debt issuance costs. No transaction costs were incurred in the nine months ended September 30, 2018.

Restructuring Charges

In February 2017, Management performed a strategic review of human resources at Novitex for the purpose of assessing the business need for their employment and for the purpose of quantifying the synergies resulting from the acquisition. As a result, in June 2017, representatives of SourceHOV and HGM Group communicated the termination of certain executives and non-executive Novitex employees. There were no restructuring charges incurred in the nine months ended September 30, 2018 and $4.7 million were incurred during the nine months ended September 30, 2017.

The Company determined that costs associated with termination benefits should be accounted for separately from the acquisition, as a post combination expense of the combined entity because the expense was incurred for the benefit of the combined entity. In connection with the closing of the Novitex Business Combination in the third quarter of 2017 the Company recorded severance expense in the amount of $5.3 million related to the impacted executives and $0.1 million related to other terminations in the statement of operations. Severance expense was $0.4 million for the nine months ended September 30, 2018.

Asterion

On April 10, 2018, Exela completed the acquisition of Asterion International Group (“Asterion,” the “Asterion Business Combination”), a well-established provider of technology driven business process outsourcing, document management and business process automation across Europe. The purchase price was approximately $19.5 million. The acquisition comes with minimal customer overlap and is strategic to expanding Exela’s European business.

The acquired assets and assumed liabilities of Asterion were recorded at their estimated fair values. The purchase price allocation for Asterion is preliminary for estimates for items such as income taxes and subject to change within the respective measurement period, which will not extend beyond one year from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined.

The following table summarizes the consideration paid for Asterion and the preliminary fair value of the assets acquired and liabilities assumed at the acquisition date on April 10, 2018:


Assets Acquired:
Cash and cash equivalents	$	15,323
Accounts receivable		18,123
Other current assets		2,282
Inventories, net		1,137
Property, plant, and equipment, net		4,747
Deferred income tax assets		6,317
Other noncurrent assets		522
Intangible assets, net		3,525
Goodwill		1,493
Total identifiable assets acquired	$	53,469
Liabilities Assumed:
Accounts payable	$	(6,583)
Income tax payable		(5)
Accrued liabilities		(7,718)
Accrued compensation and benefits		(7,079)
Deferred revenue		(880)
Current portion of long term debt		(664)
Current capital lease obligations		(331)
Customer deposits		(462)
Pension liability		(7,134)
Other long-term liabilities		(1,324)
Deferred income tax liabilities		(1,171)
Capital lease obligations, net of current maturities		(650)
Total liabilities assumed	$	(34,001)
Total Consideration	$	19,468

The majority of identifiable intangible assets consisted of customer relationships. Customer relationships were valued using the Income Approach, specifically the Multi-Period Excess Earnings method. This intangible acquired represents a Level 3 measurement as it is based on unobservable inputs reflecting Management’s own assumptions about the inputs used in pricing the asset at fair value.

Through the acquisition of Asterion, we expect to leverage brand awareness, strengthen margins, and expand the existing Asterion sales channels. These factors, among others, contributed to a purchase price in excess of the estimated fair value of Asterion’s identifiable net assets assumed, and as a result, the Company has recorded goodwill in connection with this acquisition. For the three and nine months ended September 30, 2018 Exela recognized $18.9 million and $39.8 million in revenue related to Asterion in the Consolidated Statement of Operations.

Intangibles Assets and Goodwill

9 Months Ended

Sep. 30, 2018

Intangibles Assets and Goodwill

Intangibles Assets and Goodwill

5. Intangibles Assets and Goodwill

Intangibles

Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consists of the following:


	September 30, 2018
	Gross Carrying		Accumulated		Intangible
	Amount (a)		Amortization		Assets, Net
Customer relationships	$	507,950	$	(176,967)	$	330,983
Developed technology		89,053		(85,096)		3,957
Trade names		13,100		(2,326)		10,774
Costs to obtain and fulfill a contract		44,406		(24,504)		19,902
Internally developed software		32,518		(5,343)		27,175
Trademarks		23,379		(17,890)		5,489
Non compete agreements		1,350		(1,350)		—
Intangibles, net	$	711,756	$	(313,476)	$	398,280


	December 31, 2017
	Gross Carrying		Accumulated		Intangible
	Amount (a)		Amortization		Assets, Net
Customer relationships	$	504,643	$	(135,962)	$	368,681
Developed technology		89,076		(77,103)		11,973
Trade names (b)		13,100		—		13,100
Costs to obtain and fulfill a contract		40,456		(17,526)		22,930
Internally developed software		28,254		(2,597)		25,657
Trademarks		23,370		(1,446)		21,924
Non compete agreements		1,350		(631)		719
Intangibles, net	$	700,249	$	(235,265)	$	464,984

(a)

Amounts include intangible assets acquired in business combinations

(b)

The carrying amount of trade names is net of accumulated impairment losses of $39.3 million recognized in 2017.

Goodwill

Goodwill by reporting segment consists of the following:


									Currency
									translation
	Goodwill		Additions			Reductions			adjustments		Goodwill (a)
ITPS	$	159,394	$	406,522	(b)		—		$	299	$	566,215
HC		86,786		—			—			—		86,786
LLPS		127,111		—			(32,787)	(c)		—		94,324
Balance as of December 31, 2017	$	373,291	$	406,522		$	(32,787)		$	299	$	747,325
ITPS		566,215	$	2,541	(d)		—		$	(104)		568,652
HC		86,786		—			—			—		86,786
LLPS		94,324		—			—			—		94,324
Balance as of September 30, 2018	$	747,325	$	2,541		$	—		$	(104)	$	749,762

(a)

The goodwill amount for all periods presented is net of accumulated impairment losses of $137.9 million.

(b)

Addition to goodwill is due to the Novitex Business Combination. Refer to Note 4.

(c)

The reduction in goodwill is due to $30.1 million for impairment recorded in the fourth quarter of 2017 and $2.7 million for the sale of Meridian Consulting Group, LLC in the first quarter of 2017.

(d)

Addition to goodwill due to the Asterion Business Combination (Refer to Note 4) and an immaterial acquisition in the third quarter.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Long-Term Debt and Credit Facilities

9 Months Ended

Sep. 30, 2018

Long-Term Debt and Credit Facilities

Long-Term Debt and Credit Facilities

6. Long-Term Debt and Credit Facilities

Senior Secured Notes

On July 12, 2017, the Company issued $1.0 billion in aggregate principal amount of 10.0% First Priority Senior Secured Notes due 2023 with an original issue discount (“OID”) of $22.5 million (the “Notes”). The Notes are guaranteed by certain subsidiaries of the Company. The Notes bear interest at a rate of 10.0% per year. The Company pays interest on the Notes on January 15 and July 15 of each year, commencing on January 15, 2018. The Notes will mature on July 15, 2023.

Debt Refinancing

Upon the closing of the Novitex Business Combination on July 12, 2017, the $1,050.7 million outstanding balance of SourceHOV related debt facilities and the $420.5 million outstanding balance of Novitex debt facilities were paid off using proceeds from the Credit Agreement and issuance of the Notes.

In accordance with ASC 470 – Debt – Modifications and Extinguishments, as a result of certain lenders that participated in SourceHOV’s debt structure prior to the refinancing and the Company’s debt structure after the refinancing, it was determined that a portion of the refinancing of SourceHOV’s First lien secured term loan and Second lien secured term loan (“Original Term Loans”) would be accounted for as a debt modification, and the remaining would be accounted for as an extinguishment. The Company incurred $28.9 million in debt issuance costs related to the new secured term loan, of which $2.8 million was third party costs. The Company expensed $1.1 million of costs related to the modified debt and capitalized the remaining $27.8 million in the third quarter of 2017. The Company wrote off $30.5 million of the unamortized issuance costs and discounts associated with the retirement of SourceHOV’s credit facilities during the third quarter of 2017. The Company has approximately $3.3 million and $3.5 million of remaining unamortized debt issuance costs and debt discounts, respectively, associated with the modified portion of the Original Term Loans that will be amortized over the term of the new term loan, which are presented on the balance sheet as a contra-debt liability. The Company incurred a $5.0 million prepayment penalty related the Company’s Original Term Loans that was recorded as a loss on extinguishment of debt in the third quarter of 2017.

The proceeds of the new debt financing were also used to pay fees and expenses incurred in connection with the Novitex Business Combination and for general corporate purposes.

Senior Credit Facilities

On July 12, 2017, the Company entered into a First Lien Credit Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, Natixis, New York Branch and KKR Corporate Lending LLC (the “Credit Agreement”) providing Exela Intermediate LLC, a wholly owned subsidiary of the Company, upon the terms and subject to the conditions set forth in the Credit Agreement, a (i) $350.0 million senior secured term loan maturing July 12, 2023 with an OID of $7.0 million, and (ii) a $100.0 million senior secured revolving facility maturing July 12, 2022, none of which is currently drawn. As of September 30, 2018 and December 31, 2017, the Company had outstanding irrevocable letters of credit totaling approximately $20.6 million and $20.9 million, respectively, under the senior secured revolving facility.

The Credit Agreement provides for the following interest rates for borrowings under the senior secured term facility and senior secured revolving facility: at the Company’s option, either (1) an adjusted LIBOR, subject to a 1.0% floor in the case of term loans, or (2) a base rate, in each case plus an applicable margin. The initial applicable margin for the senior secured term facility is 7.5% with respect to LIBOR borrowings and 6.5% with respect to base rate borrowings. The initial applicable margin for the senior secured revolving facility is 7.0% with respect to LIBOR borrowings and 6.0% with respect to base rate borrowings. The applicable margin for borrowings under the senior secured revolving facility is subject to step-downs based on leverage ratios. The senior secured term loan is subject to amortization payments, commencing on the last day of the first full fiscal quarter of the Company following the closing date, of 0.6% of the aggregate principal amount for each of the first eight payments and 1.3% of the aggregate principal amount for payments thereafter, with any balance due at maturity.

Term Loan Repricing

On July 13, 2018, Exela successfully repriced the $343.4 million of term loans outstanding under its senior secured credit facilities (the “Repricing”). The Repricing was accomplished pursuant to a First Amendment to First Lien Credit Agreement (the “First Amendment”), dated as of July 13, 2018, by and among the Company’s subsidiaries Exela Intermediate Holdings LLC, Exela Intermediate, LLC, each “Subsidiary Loan Party” listed on the signature pages thereto, Royal Bank of Canada, as administrative agent, and each of the lenders party thereto, whereby the Company borrowed $343.4 million of refinancing term loans (the “Repricing Term Loans”) to refinance the Company’s existing senior secured term loans.

In accordance with ASC 470 -- Debt -- Modifications and Extinguishments, as a result of certain lenders that participated in Exela's debt structure prior to the Term Loan Repricing and the Company's debt structure after the refinancing, it was determined that a portion of the refinancing of Exela's senior secured credit facilities would be accounted for as a debt modification, and the remaining would be accounted for as an extinguishment. The company incurred $1.0 million in new debt issuance costs related to the refinancing, of which $1.0 million was expensed pursuant to modification accounting. The proportion of debt that was extinguished resulted in a write off of previously recognized debt issue costs of $0.1 million. Additionally, for the new lenders who exceeded the 10% test, less than $0.1 million was recorded as additional debt issue costs. All unamortized costs and discounts will be amortized over the life of the new term loan using the effective interest rate of the term loan.

The Repricing Term Loans will bear interest at a rate per annum of, at the Company’s option, either (a) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate and (iii) the one-month adjusted LIBOR plus 1.00%, in each case plus an applicable margin of 6.50% for LIBOR loans and 5.50% for base rate loans. The interest rates applicable to the Repricing Term Loans are 100 basis points lower than the interest rates applicable to the existing senior secured term loans that were incurred on July 12, 2017 pursuant to the Credit Agreement. The Repricing Term Loans will mature on July 12, 2023, the same maturity date as the existing senior secured term loans.

Incremental Term Loan

On July 13, 2018, the Company successfully borrowed an additional $30.0 million pursuant to incremental term loans (the “Incremental Term Loans”) under the First Amendment. The proceeds of the Incremental Term Loans may be used by the Company for general corporate purposes and to pay fees and expenses in connection with the First Amendment. The interest rates applicable to the Incremental Term Loans are the same as those for the Repricing Term Loans.

The Company may voluntarily repay the Repricing Term Loans and the Incremental Term Loans (collectively, the “Term Loans”) at any time, without prepayment premium or penalty, except in connection with a repricing event as described in the following sentence, subject to customary “breakage” costs with respect to LIBOR rate loans. Any refinancing of the Term Loans through the issuance of certain debt or any repricing amendment, in either case, that constitutes a “repricing event” applicable to the Term Loans resulting in a lower yield occurring at any time during the first six months after July 13, 2018 will be accompanied by a 1.00% prepayment premium or fee, as applicable.

Other than as described above, the terms, conditions and covenants applicable to the Repricing Term Loans and the Incremental Term Loans are consistent with the terms, conditions and covenants that were applicable to the Existing Term Loans under the First Lien Credit. The Repricing and issuance of the Incremental Term Loans resulted in a partial debt extinguishment, for which Exela recognized $1.1 million in debt extinguishment costs in the third quarter of 2018.

Long-Term Debt Outstanding

As of September 30, 2018 and December 31, 2017, the following long-term debt instruments were outstanding:


	September 30,		December 31,
	2018		2017
Other (a)	$	17,906	$	17,534
First lien credit agreement (b)		336,684		308,825
Senior secured notes (c)		973,356		970,300
Total debt		1,327,946		1,296,659
Less: Current portion of long-term debt		(20,062)		(20,565)
Long-term debt, net of current maturities	$	1,307,884	$	1,276,094

(a)

Other debt represents the Company’s outstanding loan balances associated with various hardware and software purchases along with loans entered into by subsidiaries of the Company.

(b)

Net of unamortized original issue discount and debt issuance costs of $8.7 million and $25.7 million as of September 30, 2018 and $9.9 million and $29.1 million as of December 31, 2017.

(c)

Net of unamortized debt discount and debt issuance costs of $19.0 million and $7.6 million as of September 30, 2018 and $21.2 million and $8.5 million as of December 31, 2017.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2018
Income Taxes
Income Taxes	7. Income Taxes The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision for interim periods, as required under U.S. GAAP. The Company recorded an income tax benefit of $0.7 million and $37.0 million for the three months ended September 30, 2018 and 2017, respectively. The Company recorded an income tax expense of $4.9 million and an income tax benefit of $32.9 million for the nine months ended September 30, 2018 and 2017, respectively. The Company's ETR of 2.5% and (6.7%) for the three and nine months ended September 30, 2018, respectively, differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by permanent tax adjustments, state and local current expense, foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s deferred tax assets on U.S. disallowed interest expense carryforward’s created by the provisions of The Tax Cuts and Jobs Act (“TCJA”). The Company's ETR of 25.1% and 18.4% for the three and nine months ended September 30, 2017, respectively, differed from the U.S. statutory tax rate of 35.0%, and was primarily impacted by permanent tax adjustments (primarily transaction costs), Meridian goodwill impairment, foreign operations, Indian prior year tax expense true-up, and a valuation allowance against certain domestic deferred tax assets that are not more-likely-than-not to be realized. The TCJA subjects a US shareholder to tax on Global Intangible Low-taxed Income ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Our accounting policy election with respect to the new GILTI Tax rules will depend, in part, on analyzing our global income to determine whether we can reasonably estimate the tax impact. We are interpreting the provisions included in the recently proposed GILTI regulations issued by the U.S. Treasury Department which may impact our GILTI calculation. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. At September 30, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI related to current-year operations only in our annual effective ETR and have not provided additional GILTI on deferred items. Additionally, on August 1, 2018, the U.S. Treasury Department released proposed regulations covering the one-time transition tax on undistributed foreign earnings, which was enacted as part of the TCJA. We evaluated the issuance of the new guidance to our provisional amounts related to the transition tax that were initially recorded in our overall tax provision for the year ended December 31, 2017 and determined there are no changes to our prior estimates of the one-time transition tax as a result of the proposed regulations. We will continue to refine our provisional estimates for our computations as information is made available. As of September 30, 2018, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2017. The Company's valuation allowances have increased by approximately $18.5 million from December 31, 2017 to September 30, 2018 due largely to effects of TCJA relating to interest expense. During the fourth quarter the Company filed its 2017 U.S. federal income tax return for the year ended December 31, 2017. The impact of the 2017 tax return to provision adjustments included changes in estimates to our previously recognized one-time transition tax on undistributed foreign earnings that resulted in a reduction of our US federal net operating loss carryforwards by $6.7 million ($1.4 million tax effected at the newly enacted US federal rate of 21%) and also decreased our federal valuation allowance by the same amount resulting in no net effect to tax provision. As of September 30, 2018, the Company has not finalized it accounting for the income tax effects of the TCJA and will continue to analyze the impact of proposed regulations covering the one-time transition tax during the SAB 118 measurement period.

Employee Benefit Plans

9 Months Ended

Sep. 30, 2018

Employee Benefit Plans

Employee Benefit Plans

8. Employee Benefit Plans

German Pension Plan

The Company’s subsidiary in Germany provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets.

U.K. Pension Plan

The Company’s subsidiary in the United Kingdom provides pension benefits to certain retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan.

Tax Effect on Accumulated Other Comprehensive Loss

As of September 30, 2018 and December 31, 2017, the Company recorded actuarial losses of $10.7 million and $11.1 million in accumulated other comprehensive loss on the condensed consolidated balance sheets, respectively, which is net of a deferred tax benefit of $2.0 million.

Pension Expense

The components of the net periodic benefit cost are as follows:


	Three Months ended September 30,				Nine Months ended September 30,
	2018		2017		2018		2017
Service cost	$	27	$	2	$	58	$	6
Interest cost		569		585		1,684		1,708
Expected return on plan assets		(701)		(610)		(2,076)		(1,782)
Amortization:
Amortization of prior service cost		(34)		(34)		(102)		(99)
Amortization of net (gain) loss		433		529		1,323		1,546
Net periodic benefit cost	$	294	$	472	$	887	$	1,379

Upon adopting ASU no. 2017-07 as described in Note 2, the Company now records pension interest cost within Interest expense, net. Expected return on plan assets, amortization of prior service costs, and amortization of net losses are recorded within Other income, net. Service cost is recorded within Cost of revenue.

Employer Contributions

The Company’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $2.3 million to its pension plans during the nine months ended September 30, 2018 and 2017. The Company has funded the pension plans with the required contributions for 2018 based on current plan provisions.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	9. Commitments and Contingencies Appraisal Demand On September 21, 2017, former stockholders of SourceHOV, who allege combined ownership of 10,304 shares of SourceHOV common stock, filed a petition for appraisal pursuant to 8 Del. C. § 262 in the Delaware Court of Chancery, captioned Manichaean Capital, LLC, et al. v. SourceHOV Holdings, Inc., C.A. No. 2017-0673-JRS (the “Appraisal Action”). The Appraisal Action arises out of the Novitex Business Combination, which gave rise to appraisal rights pursuant to 8 Del. C. § 262. In the Appraisal Action, the petitioners seek, among other things, a determination of the fair value of their shares at the time of the Novitex Business Combination; an order that SourceHOV pay that value to the petitioners, together with interest at the statutory rate; and an award of costs, attorneys’ fees, and other expenses. On October 12, 2017, SourceHOV filed its answer to the petition and a verified list pursuant to 8 Del. C. § 262(f). The parties have commenced discovery. Trial is currently scheduled for June 2019. At this stage of the litigation, the Company is unable to predict the outcome of the Appraisal Action or estimate any loss or range of loss that may arise from the Appraisal Action. Pursuant to the terms of the Novitex Business Combination Agreement, if such appraisal rights are perfected, a corresponding portion of shares of our Common Stock issued to Ex-Sigma 2 LLC, our principal stockholder, will be forfeited at such time as the PIPE Financing (as defined in the Consent, Waiver and Amendment dated June 15, 2017) is repaid. The Company intends to vigorously defend against the Appraisal Action.

Fair Value Measurement

9 Months Ended

Sep. 30, 2018

Fair Value Measurement

Fair Value Measurement

10. Fair Value Measurement

Assets and Liabilities Measured at Fair Value

The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable and accounts payable approximated their fair value as of September 30, 2018 and December 31, 2017 due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan and secured notes at approximately 101.5% and 106.4% respectively, of the respective principal balance outstanding as of September 30, 2018. The carrying value approximates the fair value for the long-term debt. Other debt represents the Company's outstanding loan balances associated with various hardware and software purchases along with loans entered into by subsidiaries of the Company and as such, the cost incurred would approximate fair value. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value.

The Company determined the fair value of its long-term debt using Level 2 inputs including the recent issue of the debt, the Company’s credit rating, and the current risk-free rate. The Company’s contingent liabilities related to prior acquisitions are re-measured each period and represent a Level 2 measurement as it is based on using an earn out method based on the agreement terms.

The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of September 30, 2018 and December 31, 2017:


	Carrying		Fair		Fair Value Measurements
As of September 30, 2018	Amount		Value		Level 1		Level 2		Level 3
Recurring and nonrecurring assets and liabilities:
Acquisition contingent liability	$	721		721		—		—		721
Long-term debt		1,307,884		1,438,469				1,438,469
Interest rate swap asset	$	6,753		6,753		—		6,753		—


	Carrying		Fair		Fair Value measurements
As of December 31, 2017	Amount		Value		Level 1		Level 2		Level 3
Recurring and nonrecurring assets and liabilities:
Acquisition contingent liability	$	721		721		—		—		721
Long-term debt		1,276,094		1,308,478				1,308,478
Interest rate swap asset	$	1,297		1,297		—		1,297

The significant unobservable inputs used in the fair value of the Company’s acquisition contingent liability are the discount rate, growth assumptions, and revenue thresholds. Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement. For all significant unobservable inputs used in the fair value measurement of the Level 3 liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the other based on the current level of billings.

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3 for which a reconciliation is required:


	September 30,		December 31,
	2018		2017
Balance as of Beginning of Period	$	721	$	721
Payments/Reductions		—		—
Balance as of End of Period	$	721	$	721

- 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

Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation

Stock-Based Compensation

11. Stock-Based Compensation

At closing, of the Novitex Business Combination, SourceHOV had 24,535 restricted stock units (“RSUs”) outstanding under its 2013 Long Term Incentive Plan ("2013 Plan"). Simultaneous with the closing of the Novitex Business Combination, the 2013 Plan, as well as all vested and unvested RSUs under the 2013 Plan were assumed by Ex-Sigma, LLC (“ExSigma”), an entity formed by the former SourceHOV equity holders, which is also the Company's principal stockholder. In accordance with U.S. GAAP, the Company continues to incur compensation expense related to the 9,880 unvested RSUs as of July 12, 2017 on a straight-line basis until fully vested, as the recipients of the RSUs are employees of the Company. Subject to continuous employment and other terms of the 2013 Plan, all remaining unvested RSUs with an initial vesting period of 3 or 4 years will vest in April 2019. As of September 30, 2018 there are 2,675 nonvested shares related to the 2013 Plan with a weighted average remaining contractual life of .58 years and a weighted average aggregate intrinsic value per share of $1,633.

Exela 2018 Stock Incentive Plan

On January 17, 2018, Exela’s 2018 Stock Incentive Plan (the “2018 Plan”) became effective. The 2018 Plan provides for the grant of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, and other stock-based compensation to eligible participants. Under the 2018 Plan, stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying stock at the grant date. The vesting period for each option award is established on the grant date, and the options generally expire 10 years from the grant date. The Company is authorized to issue up to 8,323,764 shares of Common Stock under the 2018 plan.

Restricted Stock Unit Grants

Restricted stock awards generally vest ratably over a one to two year period. Shares of restricted stock granted under the 2018 plan are considered issued and outstanding at the date of grant and have the same voting rights as other outstanding common stock. Restricted stock units are subject to forfeiture if employment terminates prior to vesting and are expensed ratably over the vesting period.

A summary of the status of restricted stock units related to the 2018 Plan as of September 30, 2018 is presented as follows:


		Weighted		Average Remaining
	Number of	Average Grant		Contractual Life	Aggregate
	Shares	Date Fair Value		(Years)	Intrinsic Value ($)
Shares granted	1,020,220	$	283.1
Shares forfeited	—
Shares vested	(126,923)
Nonvested at September 30, 2018	893,297	$	283.1	1.00	$	4,598

Options

Options are granted at not less than fair market value on the date of grant and expire no later than ten years after the date of grant. Options granted under the 2018 Plan generally require no less than a two or four year ratable vesting period. Stock option activity in the first nine months of 2018 is summarized in the following table:


		Weighted		Average Remaining
		Average		Contractual Life	Aggregate
	Outstanding	Exercise Price		(Years)	Intrinsic Value ($)
Granted	3,570,300	$	6.06
Exercised	—
Canceled	—
Expired
Balance at September 30, 2018	3,570,300	$	6.06	3.14	$	9,590

As of September 30, 2018, there was approximately $17.0 million of total unrecognized compensation expense related to non-vested awards for the 2013 Plan and 2018 Plan, which will be recognized over the respective service period.

Stock-based compensation expense is recorded within Selling, general, and administrative expenses. The Company incurred total compensation expense of $4.5 million and $1.6 million related to the 2013 Plan and 2018 Plan awards for the three and nine months ended September 30, 2018.

Stockholders' Equity	9 Months Ended
Stockholders' Equity	Sep. 30, 2018
Stockholders' Equity
Stockholders' Equity	12. Stockholders’ Equity The following description summarizes the material terms and provisions of the securities that the Company has authorized. Common Stock The Company is authorized to issue 1,600,000,000 shares of common stock, par value $0.0001 per share. At September 30, 2018 the Company had 151,648,643 shares of common stock outstanding. Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of Exela Common Stock possess all voting power for the election of Exela's directors and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of Exela stockholders. Holders of Exela Common Stock are entitled to one vote per share on matters to be voted on by stockholders. Holders of Exela Common Stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the board of directors in its discretion out of funds legally available therefor and shall share equally on a per share basis in such dividends and distributions. The holders of the common stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock. Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. At September 30, 2018, the Company had 4,569,233 shares of Series A Preferred Stock outstanding. The par value of Series A Preferred Stock is $0.0001 per share. Each share of Series A Convertible Preferred Stock will be convertible at the holder's option, at any time after the six-month anniversary and prior to the third anniversary of the issue date, initially into 1.2226 shares of Exela Common Stock. Holders of the Series A Preferred Stock will be entitled to receive cumulative dividends at a rate per annum of 10% of the Liquidation Preference per share of Series A Preferred Stock, paid or accrued quarterly in arrears. From the issue date until the third anniversary of the issue date, the amount of all accrued but unpaid dividends on the Series A Preferred Stock will be added to the Liquidation Preference without any action by the Company’s board of directors. For the three and nine months ended September 30, 2018 this amount was $0.9 million and $2.7 million, respectively, as reflected on the Consolidated Statement of Operations. The cumulative accrued but unpaid dividends of the Series A Preferred Stock since their inception on July 12, 2017 is $5.2 million. The per share average of cumulative preferred dividends is 0.6 dollars. Following the third anniversary of the issue date, dividends on the Series A Preferred Stock will be accrued by adding to the Liquidation Preference or paid in cash, or a combination thereof. In addition, holders of the Series A Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series A Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution. Treasury Stock On November 8, 2017, the Company's board of directors authorized a share buyback program (the "Share Buyback Program"), pursuant to which the Company may, from time to time, purchase up to 5,000,000 shares of its Common Stock. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or otherwise. The decision as to whether to purchase any shares and the timing of purchases, if any, will be based on the price of the Company's Common Stock, general business and market conditions and other investment considerations and factors. The Share Buyback Program does not obligate the Company to purchase any shares and expires in 24 months. The Share Buyback Program may be terminated or amended by the Company's board of directors in its discretion at any time. We purchased 994,197 shares during the nine months ended September 30, 2018 under the Share Buyback Program at an average share price of $4.81. Warrants At September 30, 2018, there were 34,988,302 warrants outstanding. As part of its IPO, Quinpario had issued 35,000,000 units including one share of common stock and one warrant of which 34,988,302 have been separated from the original unit and 11,698 warrants remain an unseparated part of the originally issued units. The warrants are traded on the OTC Bulletin Board as of September 30, 2018. Each warrant entitles the holder to purchase one-half of one share of common stock at a price of $5.75 per half share ($11.50 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. Each warrant is currently exercisable and will expire July 12, 2022 ( five years after the completion of the Novitex Business Combination), or earlier upon redemption. The Company may call the warrants for redemption at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if, and only if, the last sales price of our shares of common stock equals or exceeds $24.00 per share for any 20 trading days within a 30 trading day period (the “30-day trading period”) ending three business days before we send the notice of redemption, and if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption.

Related-Party Transactions

9 Months Ended

Sep. 30, 2018

Related-Party Transactions

Related-Party Transactions

13. Related-Party Transactions

Leasing Transactions

Certain operating companies lease their operating facilities from HOV RE, LLC and HOV Services Limited, which are affiliates through common interest held by Ex-Sigma 2 LLC, our largest stockholder. The rental expense for these operating leases was $0.2 million for the three months ended September 30, 2018 and 2017, and $0.5 million for the nine months ended September 30, 2018 and 2017.

Consulting Agreement

The Company receives services from Oakana Holdings, Inc. The Company and Oakana Holdings, Inc. are related through a family relationship between certain shareholders and the president of Oakana Holdings, Inc. The expense recognized for these services was $0.1 million for the three months ended September 30, 2018. The expense recognized for these services was $0.1 million for the nine months ended September 30, 2018.

The Company received consulting services from Shadow Pond, LLC. Shadow Pond, LLC is wholly owned and controlled by Vik Negi, our Executive Vice President Treasury and Business Affairs. The consulting arrangement was established to compensate Mr. Negi for his services to the Company prior to becoming an employee. The expense recognized for these services was $0.1 million and $0.4 million for the nine months ended September 30, 2018 and 2017, respectively. This consulting arrangement with Shadow Pond, LLC terminated on April 1, 2018 and Mr. Negi continues to provide services as an employee of the Company. As such, there were no additional expenses for the three months ended September 30, 2018.

Relationship with HandsOn Global Management

The Company incurred management fees to HGM, SourceHOV’s former owner, of $3.0 million and $6.0 million for the three and nine month periods ended September 30, 2017. The management agreement terminated in 2017 and there were no such fees for the three and nine months ended September 30, 2018.

The Company incurred reimbursable travel expenses to HGM of $0.1 million for the three months ended September 30, 2018, and $0.2 million and $0.5 million for the nine months ended September 30, 2018 and 2017.

Pursuant to a master agreement dated January 1, 2015 between Rule 14, LLC and SourceHOV, the Company incurs marketing fees to Rule 14, LLC, a portfolio company of HGM. Similarly, SourceHOV is party to ten master agreements with entities affiliated with HGM's managed funds, each of which were entered into during 2015 and 2016. Each master agreement provides SourceHOV with free use of technology and includes a reseller arrangement pursuant to which SourceHOV is entitled to sell these services to third parties. Any revenue earned by SourceHOV in such third-party sale is shared 75%/25% with each of HGM's venture affiliates in favor of SourceHOV. The brands Zuma, Athena, Peri, BancMate, Spring, Jet, Teletype, CourtQ and Rewardio are part of the HGM managed funds. SourceHOV has the license to use and resell such brands, as described therein. We incurred relating to these agreements of $0.2 million and $0.1 million for the three months ended September 30, 2018 and 2017. We incurred fees relating to these agreements of $0.6 million and $0.3 million for the nine months ended September 30, 2018 and 2017, respectively.

Relationship with HOV Services, Ltd.

HOV Services, Ltd. provides the Company data capture and technology services. HOV Services, Ltd is an indirect equity holder of Ex-Sigma LLC. The expense recognized for these services was $0.4 million for the three months ended September 30, 2018 and 2017, and $1.2 million and $1.3 million for the nine months ended September 30, 2018 and 2017, respectively. These expenses are included in cost of revenue in the consolidated statements of operations.

Relationship with Apollo Global Management, LLC

The Company provides services to and receives services from certain Apollo affiliated companies. Funds managed by Apollo Global Management, LLC have the right to designate two of the Company’s directors. On November 18, 2014, the Company's subsidiary, Exela Enterprises Solutions, Inc. (“Novitex Solutions”), entered into a master services agreement with Management Holdings, an indirect wholly owned subsidiary of Apollo. Pursuant to this master services agreement, Novitex Solutions provides Management Holdings printer supplies and maintenance services, including toner maintenance, training, quarterly business review and printer procurement. We recognized revenue of $0.1 million and $0.2 million in our consolidated statements of operations from Apollo affiliated companies under this agreement for the three months ended September 30, 2018 and 2017. We recognized revenue of $0.5 million and $0.2 million for the nine months ended September 30, 2018 and 2017 in our consolidated statements of operations from Apollo affiliated companies under this agreement.

On January 18, 2017, Novitex Solutions entered into a master purchase and professional services agreement with Caesars Enterprise Services, LLC ("Caesars"). Caesars is controlled by investment funds affiliated with Apollo. Pursuant to this master purchase and professional services agreement, Novitex Solutions provides managed print services to Caesars, including general equipment operation, supply management, support services and technical support. We recognized revenue of approximately $1.1 million and 0.4 million in our consolidated statements of operations from Caesars under this master purchase and professional services agreement for the three months ended September 30, 2018 and 2017. We recognized revenue of $3.1 million and $0.4 million for the nine months ended September 30, 2018 and 2017 in our consolidated statements of operations from Caesars under this master purchase and professional services agreement.

On May 5, 2017, Novitex Solutions entered into a master services agreement with ADT LLC. ADT LLC is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, Novitex Solutions provides ADT LLC with mailroom and onsite mail delivery services at an ADT LLC office location and managed print services, including supply management, equipment maintenance and technical support services. We recognized revenue of $0.2 million and $0.4 million in our consolidated statements of operations from ADT LLC under this master services agreement for the three and nine months ended September 30, 2018.

On July 20, 2017, Novitex Solutions entered into a master services agreement with Diamond Resorts Centralized Services Company. Diamond Resorts Centralized Services Company is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, Novitex Solutions provides commercial print and promotional product procurement services to Diamond Resorts Centralized Services Company, including sourcing, inventory management and fulfillment services. The Company recognized revenue of $0.7 million and $4.9 million for the three and nine months ended September 30, 2018 and cost of revenue of $0.1 million for the nine months ended September 30, 2018 from Diamond Resorts Centralized Services Company under this master services agreement. No cost of revenue was recognized for the three months ended September 30, 2018 under this agreement.

In April 2016, Novitex Solutions entered into a master services agreement with Presidio Networked Solutions Group, LLC ("Presidio Group"), a wholly owned subsidiary of Presidio, Inc., a portion of which is owned by affiliates of Apollo and with a common Apollo designated director. Pursuant to this master services agreement, Presidio Group provides Novitex Solutions with employees, subcontractors, and/or goods and services. For the three and nine months ended September 30, 2018 there were related party expenses of $0.2 million and $0.5 million, respectively, for this service. For the three and nine months ended September 30, 2017 there were related party expenses of $0.2 million for this service.

Payable Balances with Affiliates

Payable balances with affiliates as of September 30, 2018 and December 31, 2017 are as follows:


	September 30,		December 31,
	2018		2017
HOV Services, Ltd	$	411	$	286
Rule 14		123		158
HGM		10,080		13,689
Apollo affiliated company		142		312
	$	10,756	$	14,445

Segment Information

9 Months Ended

Sep. 30, 2018

Segment Information

Segment Information

14. Segment Information

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approach the markets and interacts with its clients. The Company is organized into three segments: ITPS, HS, and LLPS.

ITPS: Our ITPS segment provides a wide range of solutions and services designed to aid businesses in information capture, processing, decisioning and distribution to customers primarily in the financial services, commercial, public sector and legal industries.

HS: Our HS segment operates and maintains a consulting and outsourcing business specializing in both the healthcare provider and payer markets.

LLPS: Our LLPS segment provides a broad and active array of legal services in connection with class action, bankruptcy labor, claims adjudication and employment and other legal matters.

The chief operating decision maker reviews operating segment revenue and gross profit. The Company does not allocate selling, general, and administrative expenses, depreciation and amortization, interest expense and sundry, net. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented.


	Three months ended September 30, 2018
	ITPS		HS		LLPS		Total
Revenue	$	307,313	$	56,776	$	18,941	$	383,030
Cost of revenue (exclusive of depreciation and amortization)		246,492		36,919		12,525		295,936
Selling, general and administrative expenses								44,913
Depreciation and amortization								35,041
Related party expense								759
Interest expense, net								38,339
Loss on extinguishment of debt								1,067
Sundry expense, net								(2,571)
Other income, net								(781)
Net loss before income taxes							$	(29,673)


	Three months ended September 30, 2017
	ITPS		HS		LLPS		Total
Revenue	$	260,019	$	56,405	$	21,969	$	338,393
Cost of revenue (exclusive of depreciation and amortization)		204,602		37,451		13,063		255,116
Selling, general and administrative expenses								102,048
Depreciation and amortization								28,052
Related party expense								26,892
Interest expense, net								37,652
Sundry expense, net								563
Loss on extinguishment of debt								35,512
Net loss before income taxes							$	(147,442)


	Nine months ended September 30, 2018
	ITPS		HS		LLPS		Total
Revenue	$	949,381	$	171,722	$	65,476	$	1,186,579
Cost of revenue (exclusive of depreciation and amortization)		752,796		111,135		39,751		903,682
Selling, general and administrative expenses								137,231
Depreciation and amortization								109,428
Related party expense								3,267
Interest expense, net								114,883
Loss on extinguishment of debt								1,067
Sundry expense, net								(4,961)
Other income, net								(4,813)
Net loss before income taxes							$	(73,205)


	Nine months ended September 30, 2017
	ITPS		HS		LLPS		Total
Revenue	$	525,557	$	173,548	$	66,930	$	766,035
Cost of revenue (exclusive of depreciation and amortization)		385,447		113,152		40,643		539,242
Selling, general and administrative expenses								172,626
Depreciation and amortization								70,779
Related party expense								31,733
Interest expense, net								91,740
Sundry expense, net								2,960
Loss on extinguishment of debt								35,512
Net loss before income taxes							$	(178,557)

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2018
Subsequent Events
Subsequent Events	15. Subsequent Events On October 31, 2018 Exela entered into a definitive agreement to acquire Drescher Group (“Drescher”), a well-established business process outsourcing “(BPO)” company focusing on integrated communications with a large presence in Europe’s largest economy, Germany. The purchase price was approximately $5.1 million on a cash free, debt free basis. The acquisition is subject to customary and closing conditions, including regulatory approval

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Significant Accounting Policies

Revenue Recognition

Nature of Services

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the three and nine months ended September 30, 2018, and 2017:


	Three months ended September 30,
	2018						2017
	ITPS		HS		LLPS		ITPS		HS		LLPS
United States	$	248,055	$	56,776	$	18,941	$	223,555	$	56,405	$	21,969
Europe		52,602		—		—		30,505		—		—
Other		6,656		—		—		5,959		—		—
Total	$	307,313	$	56,776	$	18,941	$	260,019	$	56,405	$	21,969


	Nine months ended September 30,
	2018						2017
	ITPS		HS		LLPS		ITPS		HS		LLPS
United States	$	782,870	$	171,722	$	65,476	$	427,675	$	173,548	$	66,930
Europe		146,242		—		—		89,736		—		—
Other		20,269		—		—		8,146		—		—
Total	$	949,381	$	171,722	$	65,476	$	525,557	$	173,548	$	66,930

Contract Balances

The following table presents contract assets and contract liabilities recognized at September 30, 2018 and December 31, 2017:


	September 30,		December 31,
	2018		2017
Accounts receivable, net	$	253,986	$	229,704
Deferred revenues		18,322		13,717
Costs to obtain and fulfill a contract		19,902		22,929
Customer deposits		39,419		31,656

Performance Obligations

We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations


Estimated Remaining Fixed Consideration for
Unsatisfied Performance Obligations

2018	$	11,894
2019		35,726
2020		19,939
2021		11,385
2022		5,556
2023 and thereafter		2,299
Total	$	86,799

General (Tables)

9 Months Ended

Sep. 30, 2018

General

Schedule of components of basic and diluted EPS


	Three Months ended September 30,				Nine Months ended September 30,
	2018		2017		2018		2017
Net loss attributable to common stockholders (A)	$	(29,854)	$	(128,040)	$	(80,858)	$	(163,233)
Weighted average common shares outstanding - basic and diluted (B)		151,663,670		61,584,175		152,010,290		41,018,724
Loss Per Share:
Basic and diluted (A/B)	$	(0.20)	$	(2.08)	$	(0.53)	$	(3.98)

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Significant Accounting Policies

Schedule of disaggregates revenue from contracts by geographic region and by segment


	Three months ended September 30,
	2018						2017
	ITPS		HS		LLPS		ITPS		HS		LLPS
United States	$	248,055	$	56,776	$	18,941	$	223,555	$	56,405	$	21,969
Europe		52,602		—		—		30,505		—		—
Other		6,656		—		—		5,959		—		—
Total	$	307,313	$	56,776	$	18,941	$	260,019	$	56,405	$	21,969


	Nine months ended September 30,
	2018						2017
	ITPS		HS		LLPS		ITPS		HS		LLPS
United States	$	782,870	$	171,722	$	65,476	$	427,675	$	173,548	$	66,930
Europe		146,242		—		—		89,736		—		—
Other		20,269		—		—		8,146		—		—
Total	$	949,381	$	171,722	$	65,476	$	525,557	$	173,548	$	66,930

Schedule of contract balances


	September 30,		December 31,
	2018		2017
Accounts receivable, net	$	253,986	$	229,704
Deferred revenues		18,322		13,717
Costs to obtain and fulfill a contract		19,902		22,929
Customer deposits		39,419		31,656

Schedule of estimated remaining fixed consideration for unsatisfied performance obligations


Estimated Remaining Fixed Consideration for
Unsatisfied Performance Obligations

2018	$	11,894
2019		35,726
2020		19,939
2021		11,385
2022		5,556
2023 and thereafter		2,299
Total	$	86,799

Business Combinations and Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

Novitex Business Combination

Business Combinations and Acquisitions

Schedule of identifiable intangible assets


	Weighted Average
	Useful Life (in years)		Fair Value
Trademark and trade name - Novitex		9.5	$	18,000
Customer relationships		16.0		230,000
Inernally developed software - Connect Platform		5.0		1,710
Non-compete agreements		1.0		1,350
			$	251,060

Novitex

Business Combinations and Acquisitions

Schedule of consideration paid and the preliminary fair value of the assets acquired and liabilities assumed


Assets Acquired:
Cash and equivalents	$	8,428
Accounts receivable		87,474
Inventory		1,245
Prepaid expenses & other		13,974
Property and equipment, net		60,657
Identifiable intangible assets, net		251,060
Deferred charges and other assets		2,723
Other noncurrent assets		93
Goodwill, excess/deficient purchase price		406,060
Total identifiable assets acquired	$	831,714
Liabilities Assumed:
Accounts payable	$	(29,444)
Short-term borrowings and current portion of long term debt		(11,335)
Accrued liabilities		(30,432)
Advanced billings and customer deposits		(18,926)
Long term debt		(15,704)
Deferred taxes		(46,991)
Other liabilities		(2,226)
Total liabilities assumed	$	(155,058)
Total Consideration	$	676,656

Asterion

Business Combinations and Acquisitions

Schedule of consideration paid and the preliminary fair value of the assets acquired and liabilities assumed


Assets Acquired:
Cash and cash equivalents	$	15,323
Accounts receivable		18,123
Other current assets		2,282
Inventories, net		1,137
Property, plant, and equipment, net		4,747
Deferred income tax assets		6,317
Other noncurrent assets		522
Intangible assets, net		3,525
Goodwill		1,493
Total identifiable assets acquired	$	53,469
Liabilities Assumed:
Accounts payable	$	(6,583)
Income tax payable		(5)
Accrued liabilities		(7,718)
Accrued compensation and benefits		(7,079)
Deferred revenue		(880)
Current portion of long term debt		(664)
Current capital lease obligations		(331)
Customer deposits		(462)
Pension liability		(7,134)
Other long-term liabilities		(1,324)
Deferred income tax liabilities		(1,171)
Capital lease obligations, net of current maturities		(650)
Total liabilities assumed	$	(34,001)
Total Consideration	$	19,468

Schedule of identifiable intangible assets

Intangibles Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2018

Intangibles Assets and Goodwill

Schedule of intangible assets


	September 30, 2018
	Gross Carrying		Accumulated		Intangible
	Amount (a)		Amortization		Assets, Net
Customer relationships	$	507,950	$	(176,967)	$	330,983
Developed technology		89,053		(85,096)		3,957
Trade names		13,100		(2,326)		10,774
Costs to obtain and fulfill a contract		44,406		(24,504)		19,902
Internally developed software		32,518		(5,343)		27,175
Trademarks		23,379		(17,890)		5,489
Non compete agreements		1,350		(1,350)		—
Intangibles, net	$	711,756	$	(313,476)	$	398,280


	December 31, 2017
	Gross Carrying		Accumulated		Intangible
	Amount (a)		Amortization		Assets, Net
Customer relationships	$	504,643	$	(135,962)	$	368,681
Developed technology		89,076		(77,103)		11,973
Trade names (b)		13,100		—		13,100
Costs to obtain and fulfill a contract		40,456		(17,526)		22,930
Internally developed software		28,254		(2,597)		25,657
Trademarks		23,370		(1,446)		21,924
Non compete agreements		1,350		(631)		719
Intangibles, net	$	700,249	$	(235,265)	$	464,984

(a)

Amounts include intangible assets acquired in business combinations

(b)

The carrying amount of trade names is net of accumulated impairment losses of $39.3 million recognized in 2017.

Schedule of goodwill by reporting segment


									Currency
									translation
	Goodwill		Additions			Reductions			adjustments		Goodwill (a)
ITPS	$	159,394	$	406,522	(b)		—		$	299	$	566,215
HC		86,786		—			—			—		86,786
LLPS		127,111		—			(32,787)	(c)		—		94,324
Balance as of December 31, 2017	$	373,291	$	406,522		$	(32,787)		$	299	$	747,325
ITPS		566,215	$	2,541	(d)		—		$	(104)		568,652
HC		86,786		—			—			—		86,786
LLPS		94,324		—			—			—		94,324
Balance as of September 30, 2018	$	747,325	$	2,541		$	—		$	(104)	$	749,762

(a)

The goodwill amount for all periods presented is net of accumulated impairment losses of $137.9 million.

(b)

Addition to goodwill is due to the Novitex Business Combination. Refer to Note 4.

(c)

The reduction in goodwill is due to $30.1 million for impairment recorded in the fourth quarter of 2017 and $2.7 million for the sale of Meridian Consulting Group, LLC in the first quarter of 2017.

(d)

Addition to goodwill due to the Asterion Business Combination (Refer to Note 4) and an immaterial acquisition in the third quarter.

Long-Term Debt and Credit Facilities (Tables)

9 Months Ended

Sep. 30, 2018

Long-Term Debt and Credit Facilities

Schedule of outstanding long-term debt instruments


	September 30,		December 31,
	2018		2017
Other (a)	$	17,906	$	17,534
First lien credit agreement (b)		336,684		308,825
Senior secured notes (c)		973,356		970,300
Total debt		1,327,946		1,296,659
Less: Current portion of long-term debt		(20,062)		(20,565)
Long-term debt, net of current maturities	$	1,307,884	$	1,276,094

(a)

Other debt represents the Company’s outstanding loan balances associated with various hardware and software purchases along with loans entered into by subsidiaries of the Company.

(b)

Net of unamortized original issue discount and debt issuance costs of $8.7 million and $25.7 million as of September 30, 2018 and $9.9 million and $29.1 million as of December 31, 2017.

(c)

Net of unamortized debt discount and debt issuance costs of $19.0 million and $7.6 million as of September 30, 2018 and $21.2 million and $8.5 million as of December 31, 2017.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2018

Employee Benefit Plans

Schedule of components of the net periodic benefit cost


	Three Months ended September 30,				Nine Months ended September 30,
	2018		2017		2018		2017
Service cost	$	27	$	2	$	58	$	6
Interest cost		569		585		1,684		1,708
Expected return on plan assets		(701)		(610)		(2,076)		(1,782)
Amortization:
Amortization of prior service cost		(34)		(34)		(102)		(99)
Amortization of net (gain) loss		433		529		1,323		1,546
Net periodic benefit cost	$	294	$	472	$	887	$	1,379

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Measurement

Schedule of fair value of financial instruments


	Carrying		Fair		Fair Value Measurements
As of September 30, 2018	Amount		Value		Level 1		Level 2		Level 3
Recurring and nonrecurring assets and liabilities:
Acquisition contingent liability	$	721		721		—		—		721
Long-term debt		1,307,884		1,438,469				1,438,469
Interest rate swap asset	$	6,753		6,753		—		6,753		—


	Carrying		Fair		Fair Value measurements
As of December 31, 2017	Amount		Value		Level 1		Level 2		Level 3
Recurring and nonrecurring assets and liabilities:
Acquisition contingent liability	$	721		721		—		—		721
Long-term debt		1,276,094		1,308,478				1,308,478
Interest rate swap asset	$	1,297		1,297		—		1,297

Schedule of net assets and liabilities classified as Level 3 for reconciliation


	September 30,		December 31,
	2018		2017
Balance as of Beginning of Period	$	721	$	721
Payments/Reductions		—		—
Balance as of End of Period	$	721	$	721

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation

Summary of the status of restricted stock units


		Weighted		Average Remaining
	Number of	Average Grant		Contractual Life	Aggregate
	Shares	Date Fair Value		(Years)	Intrinsic Value ($)
Shares granted	1,020,220	$	283.1
Shares forfeited	—
Shares vested	(126,923)
Nonvested at September 30, 2018	893,297	$	283.1	1.00	$	4,598

Schedule of stock option activity


		Weighted		Average Remaining
		Average		Contractual Life	Aggregate
	Outstanding	Exercise Price		(Years)	Intrinsic Value ($)
Granted	3,570,300	$	6.06
Exercised	—
Canceled	—
Expired
Balance at September 30, 2018	3,570,300	$	6.06	3.14	$	9,590

Related-Party Transactions (Tables)

9 Months Ended

Sep. 30, 2018

Related-Party Transactions

Schedule of payable balances with affiliates


	September 30,		December 31,
	2018		2017
HOV Services, Ltd	$	411	$	286
Rule 14		123		158
HGM		10,080		13,689
Apollo affiliated company		142		312
	$	10,756	$	14,445

Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Information

Schedule of revenue by segment information


	Three months ended September 30, 2018
	ITPS		HS		LLPS		Total
Revenue	$	307,313	$	56,776	$	18,941	$	383,030
Cost of revenue (exclusive of depreciation and amortization)		246,492		36,919		12,525		295,936
Selling, general and administrative expenses								44,913
Depreciation and amortization								35,041
Related party expense								759
Interest expense, net								38,339
Loss on extinguishment of debt								1,067
Sundry expense, net								(2,571)
Other income, net								(781)
Net loss before income taxes							$	(29,673)


	Three months ended September 30, 2017
	ITPS		HS		LLPS		Total
Revenue	$	260,019	$	56,405	$	21,969	$	338,393
Cost of revenue (exclusive of depreciation and amortization)		204,602		37,451		13,063		255,116
Selling, general and administrative expenses								102,048
Depreciation and amortization								28,052
Related party expense								26,892
Interest expense, net								37,652
Sundry expense, net								563
Loss on extinguishment of debt								35,512
Net loss before income taxes							$	(147,442)


	Nine months ended September 30, 2018
	ITPS		HS		LLPS		Total
Revenue	$	949,381	$	171,722	$	65,476	$	1,186,579
Cost of revenue (exclusive of depreciation and amortization)		752,796		111,135		39,751		903,682
Selling, general and administrative expenses								137,231
Depreciation and amortization								109,428
Related party expense								3,267
Interest expense, net								114,883
Loss on extinguishment of debt								1,067
Sundry expense, net								(4,961)
Other income, net								(4,813)
Net loss before income taxes							$	(73,205)


	Nine months ended September 30, 2017
	ITPS		HS		LLPS		Total
Revenue	$	525,557	$	173,548	$	66,930	$	766,035
Cost of revenue (exclusive of depreciation and amortization)		385,447		113,152		40,643		539,242
Selling, general and administrative expenses								172,626
Depreciation and amortization								70,779
Related party expense								31,733
Interest expense, net								91,740
Sundry expense, net								2,960
Loss on extinguishment of debt								35,512
Net loss before income taxes							$	(178,557)

General - Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 12, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net loss per share
Net loss attributable to common stockholders		$ (29,854)	$ (128,040)	$ (80,858)	$ (163,233)
Weighted average common shares outstanding - basic and diluted		151,663,670	61,584,175	152,010,290	41,018,724
Loss per share - Basic and diluted		$ (0.20)	$ (2.08)	$ (0.53)	$ (3.98)
Series A Preferred Stock
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share		5,586,344		5,586,344
Warrants
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share	35,000,000

Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2016
ASU 2014-09
Recently Adopted Accounting Pronouncements
Cumulative effect on accumulated deficit	$ 1.4
ASU 2016-18
Recently Adopted Accounting Pronouncements
Net change in cash and cash equivalents reflected in operating cash flows		$ 11.4
Increase in cash and cash equivalents due to inclusion of restricted cash		$ 37.3	$ 25.9

Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
ITPS
Disaggregation of Revenues
Revenues	$ 307,313	$ 260,019	$ 949,381	$ 525,557
ITPS \| United States
Disaggregation of Revenues
Revenues	248,055	223,555	782,870	427,675
ITPS \| Europe
Disaggregation of Revenues
Revenues	52,602	30,505	146,242	89,736
ITPS \| Other
Disaggregation of Revenues
Revenues	6,656	5,959	20,269	8,146
HS
Disaggregation of Revenues
Revenues	56,776	56,405	171,722	173,548
HS \| United States
Disaggregation of Revenues
Revenues	56,776	56,405	171,722	173,548
LLPS
Disaggregation of Revenues
Revenues	18,941	21,969	65,476	66,930
LLPS \| United States
Disaggregation of Revenues
Revenues	$ 18,941	$ 21,969	$ 65,476	$ 66,930

Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Significant Accounting Policies
Accounts receivable, net	$ 253,986	$ 229,704
Deferred revenues	18,322	13,717
Costs to obtain and fulfill a contract	19,902	22,929
Customer deposits	39,419	31,656
Unbilled receivables, net	37,700	$ 27,900
Revenue recognized from deferred revenue	12,100
Amortization of contract costs	$ 7,300
Incremental costs of obtaining contracts	true

Significant Accounting Policies - Performance Obligations (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Significant Accounting Policies
Contracts with an original expected length	true
2018	$ 11,894
2019	35,726
2020	19,939
2021	11,385
2022	5,556
2023 and thereafter	2,299
Total	$ 86,799

Business Combinations and Acquisitions - Novitex (Details) - USD ($) $ in Thousands	Jul. 12, 2017	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Business Combinations and Acquisitions
Common stock, shares outstanding		151,648,643	150,529,151
Preferred stock, shares outstanding		4,569,233	6,194,233
Transaction costs		$ 0
Assets acquired:
Goodwill, excess/deficient purchase price		$ 749,762	$ 747,325	$ 373,291
Warrants
Business Combinations and Acquisitions
Warrants, shares outstanding		34,988,302
Novitex Business Combination
Business Combinations and Acquisitions
Common stock, shares outstanding	146,910,648
Preferred stock, shares outstanding	9,194,233
Acquired debt	$ 1,400,000
Transaction costs			$ 60,000
Novitex Business Combination \| Warrants
Business Combinations and Acquisitions
Warrants, shares outstanding	35,000,000
Novitex
Business Combinations and Acquisitions
Ownership percentage acquired	100.00%
Shares issued in business combination (in shares)	30,600,000
Amount of equity transactions	$ 244,800
Acquired debt	420,500
Transaction costs	10,300
Business acquisition, interest expense paid	1,000
Assets acquired:
Cash and equivalents	8,428
Accounts receivable	87,474
Inventory	1,245
Prepaid expenses & other	13,974
Property and equipment, net	60,657
Identifiable intangible assets, net	251,060
Deferred charges and other assets	2,723
Other noncurrent assets	93
Goodwill, excess/deficient purchase price	406,060
Total identifiable assets acquired	831,714
Liabilities assumed:
Accounts payable	(29,444)
Short-term borrowings and current portion of long term debt	(11,335)
Accrued liabilities	(30,432)
Advanced billings and customer deposits	(18,926)
Long term debt	(15,704)
Deferred taxes	(46,991)
Other liabilities	(2,226)
Total liabilities assumed	(155,058)
Total Consideration	$ 676,656

Business Combinations and Acquisitions - Intangible Assets - Novitex (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 12, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Intangible Assets
Revenue		$ 383,030	$ 338,393	$ 1,186,579	$ 766,035
Net loss		(29,673)	(147,442)	(73,205)	(178,557)
ITPS
Intangible Assets
Revenue		307,313	$ 260,019	949,381	$ 525,557
Novitex Business Combination
Intangible Assets
Weighted Average Useful Life (in years)	15 years 4 months 24 days
Fair value	$ 251,060
Novitex Business Combination \| Trademark and trade name
Intangible Assets
Weighted Average Useful Life (in years)	9 years 6 months
Fair value	$ 18,000
Novitex Business Combination \| Customer relationships
Intangible Assets
Weighted Average Useful Life (in years)	16 years
Fair value	$ 230,000
Novitex Business Combination \| Internally developed software-Connect Platform
Intangible Assets
Weighted Average Useful Life (in years)	5 years
Fair value	$ 1,710
Novitex Business Combination \| Non compete agreements
Intangible Assets
Weighted Average Useful Life (in years)	1 year
Fair value	$ 1,350
Novitex \| ITPS
Intangible Assets
Amount of goodwill recorded with tax deductible	14,000
Revenue	292,100	$ 162,600		$ 512,700
Net loss	$ 17,500

Business Combinations and Acquisitions - Transaction Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jul. 12, 2017
Transaction Costs
Transaction costs	$ 0		$ 0
Equity issuance costs				$ 7,649	$ 7,600
Debt issuance costs					40,900	$ 3,300
HGM
Transaction Costs
Related party management fees	$ 0	$ 3,000	$ 0	$ 6,000	23,000
Novitex Business Combination
Transaction Costs
Transaction costs					$ 60,000

Business Combinations and Acquisitions - Restructuring Charges (Details) - Novitex Business Combination - USD ($) $ in Thousands		9 Months Ended
	Jul. 12, 2017	Sep. 30, 2018	Sep. 30, 2017
Restructuring Charges
Restructuring charges		$ 0	$ 4,700
Severance expense		$ 400
Executives
Restructuring Charges
Severance expense	$ 5,300
Other terminations
Restructuring Charges
Severance expense	$ 100

Business Combinations and Acquisitions - Asterion (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Apr. 10, 2018	Dec. 31, 2017	Dec. 31, 2016
Assets acquired:
Goodwill	$ 749,762		$ 747,325	$ 373,291
Asterion
Assets acquired:
Cash and equivalents		$ 15,323
Accounts receivable		18,123
Other current assets		2,282
Inventories, net		1,137
Property, plant and equipment, net		4,747
Deferred income tax assets		6,317
Other noncurrent assets		522
Intangible assets, net		3,525
Goodwill		1,493
Total identifiable assets acquired		53,469
Liabilities assumed:
Accounts payable		(6,583)
Income tax payable		(5)
Accrued liabilities		(7,718)
Accrued compensation and benefits		(7,079)
Deferred revenue		(880)
Current portion of long term debt		(664)
Current capital lease obligations		(331)
Customer deposits		(462)
Pension liability		(7,134)
Other long-term liabilities		(1,324)
Deferred income tax liabilities		(1,171)
Capital lease obligations, net of current maturities		(650)
Total liabilities assumed		(34,001)
Total Consideration		$ 19,468

Business Combinations and Acquisitions - Intangible Assets - Asteriorn (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 10, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Intangible Assets
Revenue		$ 383,030	$ 338,393	$ 1,186,579	$ 766,035
Asterion
Intangible Assets
Revenue		$ 18,900		$ 39,800
Asterion \| Customer relationships
Intangible Assets
Weighted Average Useful Life (in years)	9 years 6 months
Fair value	$ 3,516

Intangibles Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Intangibles
Gross Carrying Amount	$ 711,756	$ 700,249
Accumulated Amortization	(313,476)	(235,265)
Intangible Asset, net	398,280	464,984
Customer relationships
Intangibles
Gross Carrying Amount	507,950	504,643
Accumulated Amortization	(176,967)	(135,962)
Intangible Asset, net	330,983	368,681
Developed technology
Intangibles
Gross Carrying Amount	89,053	89,076
Accumulated Amortization	(85,096)	(77,103)
Intangible Asset, net	3,957	11,973
Trade names
Intangibles
Gross Carrying Amount	13,100	13,100
Accumulated Amortization	(2,326)
Intangible Asset, net	10,774	13,100
Accumulated impairment losses		39,300
Costs to obtain and fulfill a contract
Intangibles
Gross Carrying Amount	44,406	40,456
Accumulated Amortization	(24,504)	(17,526)
Intangible Asset, net	19,902	22,930
Internally developed software-Connect Platform
Intangibles
Gross Carrying Amount	32,518	28,254
Accumulated Amortization	(5,343)	(2,597)
Intangible Asset, net	27,175	25,657
Trademarks
Intangibles
Gross Carrying Amount	23,379	23,370
Accumulated Amortization	(17,890)	(1,446)
Intangible Asset, net	5,489	21,924
Non compete agreements
Intangibles
Gross Carrying Amount	1,350	1,350
Accumulated Amortization	$ (1,350)	(631)
Intangible Asset, net		$ 719

Intangibles Assets and Goodwill - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Dec. 31, 2017	Mar. 31, 2017	Sep. 30, 2018	Dec. 31, 2017
Goodwill
Goodwill, beginning of the period		$ 373,291	$ 747,325	$ 373,291
Additions			2,541	406,522
Reductions				(32,787)
Currency translation adjustments			(104)	299
Goodwill, end of the period	$ 747,325		749,762	747,325
Accumulated impairment losses			137,900
Impairment of goodwill	30,100
ITPS
Goodwill
Goodwill, beginning of the period		159,394	566,215	159,394
Additions			2,541	406,522
Currency translation adjustments			(104)	299
Goodwill, end of the period	566,215		568,652	566,215
HS
Goodwill
Goodwill, beginning of the period		86,786	86,786	86,786
Goodwill, end of the period	86,786		86,786	86,786
LLPS
Goodwill
Goodwill, beginning of the period		127,111	94,324	127,111
Reductions				(32,787)
Goodwill, end of the period	$ 94,324		$ 94,324	$ 94,324
Sale of Meridian Consulting Group, LLC		$ 2,700

Long-Term Debt and Credit Facilities - Senior Secured Notes (Details) - Senior secured notes $ in Millions	Jul. 12, 2017 USD ($)
Debt instruments
Debt instrument face amount	$ 1,000.0
Interest rate (in percent)	10.00%
Debt unamortized discount	$ 22.5

Long-Term Debt and Credit Facilities - Debt Refinancing (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jul. 12, 2017	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Debt instruments
Repayment of debt				$ 1,055,736
Payments to acquire businesses, Net of cash acquired			$ 6,513	423,428
Debt issuance costs	$ 3,300				$ 40,900
Write off of unamortized issuance costs and discount costs		$ 30,500		$ 30,500
Debt discount	3,500
Prepayment penalty on extinguishment of original term loan		5,000
SourceHOV
Debt instruments
Repayment of debt	1,050,700
Novitex
Debt instruments
Repayment of debt	420,500
Senior secured term loan
Debt instruments
Debt issuance costs	28,900
Third party debt issuance costs	$ 2,800
Expensed debt issuance costs		1,100
Capitalized debt issuance costs		$ 27,800

Long-Term Debt and Credit Facilities - Senior Credit Facilities (Details) - First lien credit agreement - USD ($) $ in Millions	Jul. 12, 2017	Sep. 30, 2018	Dec. 31, 2017
Debt instruments
Debt unamortized discount		$ 8.7	$ 9.9
Senior secured term loan
Debt instruments
Debt instrument face amount	$ 350.0
Debt unamortized discount	$ 7.0
Principal percentage of each of first eight payments (as a percent)	0.60%
Principal percentage of each payment thereafter (as a percent)	1.30%
Senior secured revolving facility
Debt instruments
Maximum borrowing capacity	$ 100.0
Current borrowings outstanding		0.0
Outstanding credit facility		$ 20.6	$ 20.9
LIBOR \| Senior secured term loan
Debt instruments
Interest rate (as a percent)	1.00%
Applicable margin (as a percent)	7.50%
LIBOR \| Senior secured revolving facility
Debt instruments
Applicable margin (as a percent)	7.00%
Base rate \| Senior secured term loan
Debt instruments
Interest rate (as a percent)	6.50%
Base rate \| Senior secured revolving facility
Debt instruments
Applicable margin (as a percent)	6.00%

Long-Term Debt and Credit Facilities - Term Loan Repricing (Details) - USD ($) $ in Thousands	Jul. 13, 2018	Sep. 30, 2018	Dec. 31, 2017	Jul. 12, 2017
Debt instruments
Outstanding amount of term loans	$ 343,400	$ 1,327,946	$ 1,296,659
Debt issuance costs			$ 40,900	$ 3,300
First Amendment
Debt instruments
Proceeds from refinancing term loans	$ 343,400
Reduction in interest rate (in percentage)	1.00%
First Amendment \| Eurodollar
Debt instruments
Variable interest rate (as a percent)	1.00%
First Amendment \| Federal funds rate
Debt instruments
Variable interest rate (as a percent)	0.50%
First Amendment \| LIBOR
Debt instruments
Variable interest rate (as a percent)	1.00%
Interest rate (in percent)	6.50%
First Amendment \| Base rate
Debt instruments
Interest rate (in percent)	5.50%
Senior secured revolving facility \| First Amendment
Debt instruments
Debt issuance costs	$ 1,000
Write off of previously recognized debt issuance costs	100
Maximum debt issuance costs for new lenders exceeded 10% test	$ 100

Long-Term Debt and Credit Facilities - Incremental Term Loan (Details) - USD ($) $ in Millions		3 Months Ended
	Jul. 13, 2018	Sep. 30, 2018	Sep. 30, 2017
Debt instruments
Debt extinguishment costs			$ 5.0
Incremental Term Loan
Debt instruments
Proceeds from refinancing term loans	$ 30.0
Percent of prepayment premium or fee	1.00%
Repricing and incremental of term loan
Debt instruments
Debt extinguishment costs		$ 1.1
First Amendment
Debt instruments
Proceeds from refinancing term loans	$ 343.4

Long-Term Debt and Credit Facilities - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jul. 13, 2018	Dec. 31, 2017
Debt instruments
Total debt	$ 1,327,946	$ 343,400	$ 1,296,659
Less: Current portion of long-term debt	(20,062)		(20,565)
Long-term debt, net of current maturities	1,307,884		1,276,094
Other
Debt instruments
Total debt	17,906		17,534
First lien credit agreement
Debt instruments
Total debt	336,684		308,825
Debt discount	8,700		9,900
Unamortized debt issuance costs	25,700		29,100
Senior secured notes
Debt instruments
Total debt	973,356		970,300
Debt discount	19,000		21,200
Unamortized debt issuance costs	$ 7,600		$ 8,500

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Income Taxes
Income tax (expense) benefit	$ 733	$ 37,002	$ (4,911)	$ 32,924
Actual effective tax rate	2.50%	25.10%	(6.70%)	18.40%
Statutory tax rate			21.00%	35.00%
Increase valuation allowance			$ 18,500
US federal net operating loss carryforward					$ 6,700
US Federal Net Operating Loss Carryforward at new tax rate					$ 1,400

Employee Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Employee Benefit Plans
Unrealized pension actuarial losses, net of tax	$ (10,691)		$ (10,691)		$ (11,054)
Deferred tax benefit	2,000		2,000
Net periodic benefit cost
Service cost	27	$ 2	58	$ 6
Interest cost	569	585	1,684	1,708
Expected return on plan assets	(701)	(610)	(2,076)	(1,782)
Amortization of prior service cost	(34)	(34)	(102)	(99)
Amortization of net (gain) loss	433	529	1,323	1,546
Net periodic benefit cost	294	$ 472	887	1,379
Change in Plan Assets:
Employer contributions			$ 2,300	$ 2,300
German Pension Plan
Employee Benefit Plans
Qualifying period			10 years
Plan assets	$ 0		$ 0
UK Pension Plan
Employee Benefit Plans
Minimum required years prior to retirement for eligibility			3 years

Commitments and Contingencies (Details)	Sep. 21, 2017 shares
Fair value guarantee \| Common Stock \| SourceHOV
Commitments and Contingencies
Number of shares owned	10,304

Fair Value Measurement (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
Fair Value Measurement (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Senior secured term loan
Assets and liabilities measured at fair value
Fair value percentage	101.50%
Senior secured notes
Assets and liabilities measured at fair value
Fair value percentage	106.40%
Level 3
Reconciliation of net assets and liabilities
Balance as of Beginning of Period	$ 721	$ 721
Payments/Reductions
Balance as of End of Period	721	721
Carrying Amount
Carrying amounts and estimated fair values of financial instruments
Acquisition contingent liability	721	721
Long-term debt	1,307,884	1,276,094
Interest rate swap asset	6,753	1,297
Fair Value
Carrying amounts and estimated fair values of financial instruments
Acquisition contingent liability	721	721
Long-term debt	1,438,469	1,308,478
Interest rate swap asset	6,753	1,297
Fair Value \| Level 2
Carrying amounts and estimated fair values of financial instruments
Long-term debt	1,438,469	1,308,478
Interest rate swap asset	6,753	1,297
Fair Value \| Level 3
Carrying amounts and estimated fair values of financial instruments
Acquisition contingent liability	$ 721	$ 721

Stock-Based Compensation (Details) - USD ($)		3 Months Ended	9 Months Ended
Stock-Based Compensation (Details) - USD ($)	Jan. 17, 2018	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jul. 12, 2017
Stock-Based Compensation
Share-based compensation expense			$ 4,516,000	$ 4,446,000
Common stock, shares authorized		1,600,000,000	1,600,000,000		1,600,000,000
Weighted Average Exercise Price
Unrecognized compensation expense		$ 17,000,000	$ 17,000,000
Total compensation expense		$ 4,500,000	$ 1,600,000
2018 Plan
Stock-Based Compensation
Unvested RSU's		893,297	893,297
Maximum percentage of fair market value per share granted	100.00%
Expiration of stock options	10 years
Common stock, shares authorized	8,323,764
Summary of the status of restricted stock units
Shares granted			1,020,220
Shares vested			(126,923)
Nonvested at the end of the period (in shares)		893,297	893,297
Shares granted			$ 283,100
Nonvested at the end of the period		$ 283,100	$ 283,100
Weighted average remaining contractual life (in years)			1 year
Aggregate Intrinsic Value (per share)		$ 4,598,000	$ 4,598,000
Outstanding
Granted			3,570,300
Balance at the end of period (in shares)		3,570,300	3,570,300
Weighted Average Exercise Price
Granted			$ 6.06
Balance at the end of period		$ 6.06	$ 6.06
Average Remaining Contractural Life (Years)			3 years 1 month 21 days
Aggregate Intrinsic Value		$ 9,590,000	$ 9,590,000
RSU's \| 2013 Plan
Stock-Based Compensation
Restricted stock units outstanding						24,535
Unvested RSU's		2,675	2,675			9,880
Summary of the status of restricted stock units
Nonvested at the end of the period (in shares)		2,675	2,675			9,880
Weighted average remaining contractual life (in years)			6 months 29 days
Aggregate Intrinsic Value (per share)		$ 1,633,000	$ 1,633,000
RSU's \| 2013 Plan \| Minimum
Stock-Based Compensation
Vesting period of remaining RSU's which will vest by 2019			3 years
RSU's \| 2013 Plan \| Maximum
Stock-Based Compensation
Vesting period of remaining RSU's which will vest by 2019			4 years

Stockholders' Equity - Common Stock (Details)	9 Months Ended
Stockholders' Equity - Common Stock (Details)	Sep. 30, 2018 Vote $ / shares shares	Dec. 31, 2017 $ / shares shares
Common Stock
Common Stock, shares authorized	1,600,000,000	1,600,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Common Stock, shares, outstanding	151,648,643	150,529,151
Number of voting rights entitled for each share of Common Stock held \| Vote	1

Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jul. 12, 2017
Preferred Stock
Preferred stock, shares authorized	20,000,000		20,000,000		20,000,000
Preferred stock, shares issued	4,569,233		4,569,233		6,194,233
Preferred Stock, par value (in dollars per share)	$ 0.0001		$ 0.0001		$ 0.0001
Conversion ratio to Common Stock	1.2226		1.2226
Preferred Stock, cumulative dividends rate (in percentage)			10.00%
Cumulative dividends for Series A Preferred Stock	$ 914	$ 1,225	$ 2,742	$ 1,225
Cumulative accrued but unpaid dividends						$ 5,200
Cumulative preferred dividends (in dollars per share)			$ 0.6

Stockholders' Equity - Treasury Stock (Details) - $ / shares		9 Months Ended
	Nov. 08, 2017	Sep. 30, 2018
Stockholders' Equity
Treasury stock, shares authorized	5,000,000
Term of share buyback program	24 months
Treasury stock, shares repurchased		994,197
Treasury stock, average share price		$ 4.81

Stockholders' Equity - Warrants (Details)	9 Months Ended
Stockholders' Equity - Warrants (Details)	Sep. 30, 2018 item $ / shares shares
Warrants
Number of Common Stock each warrant may purchase	0.5
Exercise price of warrant per half of Common Stock \| $ / shares	$ 5.75
Exercise price of warrant per one Common Stock (in US$ per share) \| $ / shares	$ 11.5
Expiration of warrants from business acquisition date	5 years
Warrant redemption price (in US$ per share) \| $ / shares	$ 0.01
Minimum written notice period of redemption	30 days
Minimum common stock sales price for exercise of redemption right (in US$ per share) \| $ / shares	$ 24.00
Minimum trading days within 30-day period at $24 per share for exercise of redemption right \| item	20
Trading day period for exercise of redemption right	30 days
Period of the 30-day period prior to notice of redemption	3 days
Period of current registration effectivity prior to 30-day trading period	5 days
Warrants
Warrants
Warrants outstanding	34,988,302
Number of warrants separated from the original unit	34,988,302
Number of warrants not separated from the original unit	11,698
Warrants \| IPO
Warrants
Units issued	35,000,000
Common stock included in units	1
Warrants included in units	1

Related-Party Transactions - Leasing Transactions (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Affiliate of largest stockholder
Related-Party Transactions
Rental expense for operating leases	$ 0.2	$ 0.2	$ 0.5	$ 0.5

Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related-Party Transactions
Related party expense	$ 759	$ 26,892	$ 3,267	$ 31,733
Family Relationship
Related-Party Transactions
Related party expense	100		100
Executive Vice President Treasury and Business Affairs
Related-Party Transactions
Related party expense	$ 0		$ 100	$ 400

Related-Party Transactions - Relationship with HandsOn Global Management (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 agreement	Dec. 31, 2015 agreement
Related-Party Transactions
Revenue share percentage			75.00%
HGM
Related-Party Transactions
Related party management fees	$ 0.0	$ 3.0	$ 0.0	$ 6.0	$ 23.0
Reimbursable travel expenses	0.1		$ 0.2	0.5
Number of master agreements \| agreement						10	10
Revenue share percentage			25.00%
Rule 14
Related-Party Transactions
Related party management fees	$ 0.2	$ 0.1	$ 0.6	$ 0.3

Related-Party Transactions - Relationship with HOV Services, Ltd (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related-Party Transactions
Related party expense	$ 759	$ 26,892	$ 3,267	$ 31,733
HOV Services, Ltd \| Cost of revenue
Related-Party Transactions
Related party expense	$ 400	$ 400	$ 1,200	$ 1,300

Related Party Transactions - Relationship with Apollo Global Management, LLC (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) director	Sep. 30, 2017 USD ($)
Related-Party Transactions
Related party expense	$ 759	$ 26,892	$ 3,267	$ 31,733
Apollo
Related-Party Transactions
Revenue from related party	100		$ 500
Number of directors right to designate \| director			2
Caesars
Related-Party Transactions
Revenue from related party	1,100	400	$ 3,100	400
ADT LLC
Related-Party Transactions
Revenue from related party	200		400
Dimond Resorts Centralized Services
Related-Party Transactions
Revenue from related party	700		4,900
Related party expense			100
Presidio Group
Related-Party Transactions
Related party expense	$ 200	$ 200	$ 500	$ 200

Related-Party Transactions - Payable Balance with Affiliates (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Receivable and Payable Balances with Affiliates
Payable balances with affiliates	$ 10,756	$ 14,445
HOV Services, Ltd
Receivable and Payable Balances with Affiliates
Payable balances with affiliates	411	286
Rule 14
Receivable and Payable Balances with Affiliates
Payable balances with affiliates	123	158
HGM
Receivable and Payable Balances with Affiliates
Payable balances with affiliates	10,080	13,689
Apollo
Receivable and Payable Balances with Affiliates
Payable balances with affiliates	$ 142	$ 312

Segment Information - Revenue by segment information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) segment	Sep. 30, 2017 USD ($)
Segment information
Number of segments \| segment			3
Revenue	$ 383,030	$ 338,393	$ 1,186,579	$ 766,035
Cost of revenue (exclusive of depreciation and amortization)	295,936	255,116	903,682	539,242
Selling, general and administrative expenses	44,913	102,048	137,231	172,626
Depreciation and amortization	35,041	28,052	109,428	70,779
Related party expense	759	26,892	3,267	31,733
Interest expense, net	38,339	37,652	114,883	91,740
Loss on extinguishment of debt	1,067	35,512	1,067	35,512
Sundry expense, net	(2,571)	563	(4,961)	2,960
Other income, net	(781)		(4,813)
Net loss before income taxes	(29,673)	(147,442)	(73,205)	(178,557)
ITPS
Segment information
Revenue	307,313	260,019	949,381	525,557
Cost of revenue (exclusive of depreciation and amortization)	246,492	204,602	752,796	385,447
HS
Segment information
Revenue	56,776	56,405	171,722	173,548
Cost of revenue (exclusive of depreciation and amortization)	36,919	37,451	111,135	113,152
LLPS
Segment information
Revenue	18,941	21,969	65,476	66,930
Cost of revenue (exclusive of depreciation and amortization)	$ 12,525	$ 13,063	$ 39,751	$ 40,643

Subsequent Events (Details) $ in Millions	1 Months Ended
Subsequent Events (Details) $ in Millions	Oct. 31, 2018 USD ($)
Subsequent Events \| Drescher Group
Subsequent Events
Purchase price	$ 5.1

Weighed Average

Useful Life (in years)

Fair Value

Customer Relationships