Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Jun. 30, 2018	Aug. 06, 2018
Document Entity Information [Abstract]
Entity Registrant Name	PROVIDENCE SERVICE CORP
Entity Central Index Key	0001220754
Trading Symbol	prsc
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding (in shares)		12,809,314
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 29,700	$ 95,310
Accounts receivable, net of allowance of $5,811 in 2018 and $5,762 in 2017	184,313	158,926
Other receivables	5,366	5,759
Prepaid expenses and other	52,961	35,243
Restricted cash	1,868	1,091
Current assets held for sale	14,872	0
Total current assets	289,080	296,329
Property and equipment, net	47,450	50,377
Goodwill	121,138	121,668
Intangible assets, net	39,303	43,939
Equity investments	165,988	169,912
Other assets	10,296	12,028
Restricted cash, less current portion	3,260	5,205
Deferred tax asset	3,720	4,632
Total assets	680,235	704,090
Current liabilities:
Current portion of long-term obligations	1,714	2,400
Accounts payable	24,956	15,404
Accrued expenses	84,292	103,838
Accrued transportation costs	94,077	83,588
Deferred revenue	30,004	17,381
Reinsurance and related liability reserves	5,646	4,319
Current liabilities held for sale	14,872	0
Total current liabilities	255,561	226,930
Long-term obligations, less current portion	507	584
Other long-term liabilities	16,085	21,386
Deferred tax liabilities	38,722	41,627
Total liabilities	310,875	290,527
Commitments and contingencies (Note 14)
Stockholders' equity
Common stock: Authorized 40,000,000 shares; $0.001 par value; 17,775,131 and 17,473,598 issued and outstanding (including treasury shares)	18	17
Additional paid-in capital	330,009	313,955
Retained earnings	202,548	204,818
Accumulated other comprehensive loss, net of tax	(27,846)	(25,805)
Treasury shares, at cost, 4,968,758 and 4,126,132 shares	(210,802)	(154,803)
Total Providence stockholders' equity	293,927	338,182
Noncontrolling interest	(2,012)	(2,165)
Total stockholders' equity	291,915	336,017
Total liabilities, redeemable convertible preferred stock and stockholders' equity	680,235	704,090
Convertible preferred stock
Redeemable convertible preferred stock
Convertible preferred stock, net: Authorized 10,000,000 shares; $0.001 par value; 802,159 and 803,200 issued and outstanding; 5.5%/8.5% dividend rate	$ 77,445	$ 77,546

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Accounts receivable allowance	$ 5,811	$ 5,762
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued (in shares)	17,775,131	17,473,598
Common stock, shares outstanding (in shares)	17,775,131	17,473,598
Treasury shares, shares (in shares)	4,968,758	4,126,132
Convertible preferred stock
Convertible preferred stock, Shares Authorized (in shares)	10,000,000	10,000,000
Convertible preferred stock, Par Value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, Shares Issued (in shares)	802,159	803,200
Convertible preferred stock, Shares Outstanding (in shares)	802,159	803,200
Convertible preferred stock \| Cash Dividends
Convertible preferred stock, dividend rate	5.50%	5.50%
Convertible preferred stock \| Paid-in-kind Dividends
Convertible preferred stock, dividend rate	8.50%	8.50%

Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Service revenue, net	$ 411,794	$ 407,983	$ 817,840	$ 807,477
Operating expenses:
Service expense	385,071	377,036	756,306	746,446
General and administrative expense	19,278	18,048	37,691	35,076
Asset impairment charge	9,881	0	9,881	0
Depreciation and amortization	6,878	6,900	13,677	13,169
Total operating expenses	421,108	401,984	817,555	794,691
Operating income (loss)	(9,314)	5,999	285	12,786
Other expenses:
Interest expense, net	245	329	570	681
Equity in net (gain) loss of investees	147	(1,530)	2,468	530
Loss (gain) on foreign currency transactions	(6)	463	(629)	400
Income (loss) from continuing operations before income taxes	(9,700)	6,737	(2,124)	11,175
Provision for income taxes	1,654	2,879	3,496	5,402
Income (loss) from continuing operations, net of tax	(11,354)	3,858	(5,620)	5,773
Discontinued operations, net of tax	(49)	(117)	(57)	(5,984)
Net income (loss)	(11,403)	3,741	(5,677)	(211)
Net loss (income) attributable to noncontrolling interests	188	174	(108)	(200)
Net income (loss) attributable to Providence	(11,215)	3,915	(5,785)	(411)
Net income (loss) available to common stockholders (Note 12)	$ (12,321)	$ 2,434	$ (7,980)	$ (3,037)
Basic earnings (loss) per common share:
Continuing operations (in dollars per share)	$ (0.94)	$ 0.19	$ (0.61)	$ 0.22
Discontinued operations (in dollars per share)	(0.01)	(0.01)	0	(0.44)
Basic earnings (loss) per common share (in dollars per share)	(0.95)	0.18	(0.61)	(0.22)
Diluted earnings (loss) per common share:
Continuing operations (in dollars per share)	(0.94)	0.19	(0.61)	0.22
Discontinued operations (in dollars per share)	(0.01)	(0.01)	0	(0.44)
Diluted earnings (loss) per common share (in dollars per share)	$ (0.95)	$ 0.18	$ (0.61)	$ (0.22)
Weighted-average number of common shares outstanding:
Basic (in shares)	13,008,106	13,553,704	13,056,765	13,628,572
Diluted (in shares)	13,008,106	13,607,576	13,056,765	13,687,183

Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (11,403)	$ 3,741	$ (5,677)	$ (211)
Net loss (income) attributable to noncontrolling interest	188	174	(108)	(200)
Net income (loss) attributable to Providence	(11,215)	3,915	(5,785)	(411)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax	(3,967)	3,225	(2,041)	4,426
Other comprehensive income (loss)	(3,967)	3,225	(2,041)	4,426
Comprehensive income (loss)	(15,370)	6,966	(7,718)	4,215
Comprehensive loss (income) attributable to noncontrolling interest	62	264	(153)	(87)
Comprehensive income (loss) attributable to Providence	$ (15,308)	$ 7,230	$ (7,871)	$ 4,128

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating activities
Net (loss) income	$ (5,677)	$ (211)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	9,565	9,245
Amortization	4,112	3,924
Asset impairment charge	9,881	0
Provision for doubtful accounts	197	1,082
Stock-based compensation	4,278	3,021
Deferred income taxes	(2,665)	(6,733)
Amortization of deferred financing costs and debt discount	308	349
Equity in net loss of investees	2,468	530
Other non-cash charges (credits)	(605)	403
Changes in operating assets and liabilities:
Accounts receivable	(33,993)	(8,949)
Prepaid expenses and other	(10,967)	(3,485)
Reinsurance and related liability reserve	(1,294)	(4,874)
Accounts payable and accrued expenses	(4,865)	(1,716)
Accrued transportation costs	10,489	11,456
Deferred revenue	10,780	2,896
Other long-term liabilities	72	2,325
Net cash (used in) provided by operating activities	(7,916)	9,263
Investing activities
Purchase of property and equipment	(8,792)	(10,745)
Net increase from short-term investments	0	300
Loan to joint venture	0	(566)
Proceeds from note receivable	3,130	0
Net cash used in investing activities	(5,662)	(11,011)
Financing activities
Preferred stock dividends	(2,190)	(2,191)
Repurchase of common stock, for treasury	(55,999)	(18,754)
Proceeds from common stock issued pursuant to stock option exercise	12,405	1,028
Performance restricted stock surrendered for employee tax payment	(429)	(96)
Capital lease payments and other	(1,793)	(738)
Net cash used in financing activities	(48,006)	(20,751)
Effect of exchange rate changes on cash	(53)	606
Net change in cash and cash equivalents	(61,637)	(21,893)
Cash, cash equivalents and restricted cash at beginning of period	101,606	86,392
Cash, cash equivalents and restricted cash at end of period	39,969	64,499
Supplemental cash flow information:
Cash paid for interest	588	714
Cash paid for income taxes	9,462	7,736
Purchase of equipment through capital lease obligation	$ 677	$ 0

Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Description of Business

The Providence Service Corporation (“we”, the “Company” or “Providence”) owns subsidiaries and investments primarily engaged in the provision of healthcare services in the United States and workforce development services internationally. The subsidiaries and other investments in which the Company holds interests comprise the following segments:


•	Non-Emergency Transportation Services (“NET Services”) – Nationwide manager of non-emergency medical transportation (“NET”) programs for state governments and managed care organizations.


•	Workforce Development Services (“WD Services”) – Global provider of employment preparation and placement services, legal offender rehabilitation services, youth community service programs and certain health related services to eligible participants of government sponsored programs.

•

Matrix Investment – Minority interest in CCHN Group Holdings, Inc. and its subsidiaries (“Matrix”), accounted for as an equity method investment. Matrix offers a national network of community-based clinicians who deliver in-home services for members, including comprehensive health assessments (“CHAs”), and a fleet of mobile health clinics with advanced diagnostic capabilities. On February 16, 2018, Matrix acquired HealthFair.

In addition to its segments’ operations, the Corporate and Other segment includes the Company’s activities at its corporate office that include executive, accounting, finance, internal audit, tax, legal, public reporting, certain strategic and corporate development functions and the results of the Company’s captive insurance company. On April 11, 2018, the Company announced an organizational consolidation plan to integrate substantially all activities and functions performed at the corporate holding company level into its wholly-owned subsidiary, LogistiCare. See Note 8, Restructuring and Related Reorganization Costs, for further information.

Basis of Presentation

The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (“ASC”), which serves as the single source of authoritative non-SEC accounting and reporting standards to be applied by non-governmental entities. All amounts are presented in United States (“U.S.”) dollars, unless otherwise noted.

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the results of the interim periods have been included.

The Company has made estimates relating to the reporting of assets and liabilities, revenues and expenses and certain disclosures to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these unaudited condensed consolidated financial statements were filed, and considered the effect of such events in the preparation of these unaudited condensed consolidated financial statements.

The condensed consolidated balance sheet at December 31, 2017 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements contained herein should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

The Company holds investments that are accounted for using the equity method. The Company does not control the decision-making process or business management practices of these affiliates. While the Company has access to certain information and performs certain procedures to review the reasonableness of information, the Company relies on management of these affiliates to provide accurate financial information prepared in accordance with GAAP. The Company receives audit reports relating to such financial information from the affiliates’ independent auditors on an annual basis. The Company is not aware of any errors in or possible misstatements of the financial information provided by its equity affiliates that would have a material effect on the Company’s condensed consolidated financial statements.

Reclassifications

We have reclassified certain amounts relating to our prior period results to conform to our current period presentation. See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, for additional information on reclassifications.

Significant Accounting Policies and Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies and Recent Accounting Pronouncements

The Company adopted the following accounting pronouncements during the six months ended June 30, 2018:

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 introduced FASB Accounting Standards Codification Topic 606 (“ASC 606”), which replaced historical revenue recognition guidance and is intended to improve and converge with international standards the financial reporting requirements for revenue from contracts with customers. The core principle of ASC 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASC 606 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 allows for adoption either on a full retrospective basis to each prior reporting period presented or on a modified retrospective basis with the cumulative effect of initially applying the new guidance recognized at the date of initial application. The Company adopted ASU 2014-09 effective January 1, 2018 using the modified retrospective transition method for contracts that were not completed as of January 1, 2018.

The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. Upon adoption of ASU 2014-09, the cumulative effect of the changes made to the Company’s condensed consolidated balance sheet as of January 1, 2018 were as follows:



	Balance at December 31, 2017		Adjustments due to ASU 2014-09		Balance at January 1, 2018
Assets
Prepaid expenses and other	$	35,243	$	11,182	$	46,425

Liabilities
Accrued expenses	103,838		2,330		106,168
Deferred revenue	17,381		3,112		20,493
Deferred tax liability	41,627		30		41,657

Equity
Retained earnings, net of tax	204,818		5,710		210,528

The impact of applying the new revenue recognition guidance on the Company’s condensed consolidated statements of income for the three and six months ended June 30, 2018, and balance sheet as of June 30, 2018, was as follows:



	Three months ended June 30, 2018						Six months ended June 30, 2018
Statements of Income	As Reported			Pro forma as if the previous accounting guidance was in effect			As Reported			Pro forma as if the previous accounting guidance was in effect
Service revenue, net	$	411,794		$	416,059		$	817,840		$	831,407
Service expense	385,071			389,198			756,306			766,283
Operating income (loss)	(9,314		)	(9,176		)	285			3,875
Income (loss) from continuing operations before taxes	(9,700		)	(9,562		)	(2,124		)	1,466
Net loss attributable to Providence	(11,215		)	(11,089		)	(5,785		)	(2,990		)
Diluted loss per share	$	(0.95	)	$	(0.94	)	$	(0.61	)	$	(0.40	)

	June 30, 2018
Balance Sheet	As Reported			Pro forma as if the previous accounting guidance was in effect
Prepaid expenses and other	$	52,961		$	42,042
Accrued expenses	84,292			82,717
Deferred revenue	30,004			22,917
Deferred tax liabilities	38,722			39,386
Retained earnings, net of tax	202,548			199,628

The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See further information in Note 3, Revenue Recognition.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 provides guidance for eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for financial statements issued for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU 2016-15 on January 1, 2018. The adoption did not have a significant impact on the Company's consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 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. ASU 2016-18 is effective for public entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period; however, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. ASU 2016-18 must be adopted retrospectively. The Company adopted ASU 2016-18 on January 1, 2018. As a result of the adoption of ASU 2016-18, the Company recast its condensed consolidated statement of cash flows for the six months ended June 30, 2017. The recast resulted in an increase in cash used in investing activities of $6,216. See additional information in Note 4, Cash, Cash Equivalents and Restricted Cash.

In May 2017, the FASB issued ASU No. 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides guidance about which changes to the terms of a share-based payment award should be accounted for as a modification. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. This guidance is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company adopted ASU 2017-09 on January 1, 2018. The adoption of ASU 2017-09 did not have a material impact on the Company’s consolidated financial statements.

Updates to the recent accounting pronouncements as disclosed in the Company's Form 10-K for the year ended December 31, 2017 are as follows:

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 introduced FASB Accounting Standards Codification Topic 842 (“ASC 842”), which will replace ASC 840, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842 (Leases) (“ASU 2018-10”), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. Additionally, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which is intended to reduce costs and ease implementation of the leases standard for financial statement preparers. ASU 2018-11 provides a new transition method and a practical expedient for separating components of a contract.

Under ASC 842, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

ASU 2016-02, ASU 2018-10 and ASU 2018-11 are effective for publicly held entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Lessees may apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, or the lessee may initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The modified retrospective approach does not require transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach.

The Company has not entered into significant lease agreements in which it is the lessor; however, the Company does have lease agreements in which it is the lessee. The Company is assessing the impact of adopting ASC 842. It has assembled a cross-functional project team and commenced its adoption plan, which will require modifications and enhancements to the Company's information systems and internal controls. The Company's assessment of the related financial impact is ongoing and, therefore, the Company has not yet determined whether the impact will be material to the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). The amendments in ASU 2016-13 will supersede or clarify much of the existing guidance for reporting credit losses for assets held at amortized cost basis and available for sale debt securities. The amendments in ASU 2016-13 affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements.

There were no other significant updates to the new accounting guidance not yet adopted by the Company as disclosed in its Form 10-K for the year ended December 31, 2017.

Revenue Recognition

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Under ASC 606, the Company recognizes revenue as it transfers control of promised services to its customers. The Company generates all of its revenue from contracts with customers. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these services. The Company satisfies substantially all of its performance obligations and recognizes revenue over time instead of at points in time.

Disaggregation of Revenue

The following table summarizes disaggregated revenue from contracts with customers for the three and six months ended June 30, 2018 by contract type for NET Services:



	Three months ended June 30, 2018		Six months ended June 30, 2018
State Medicaid agency contracts	$	183,459	$	360,748
Managed care organization contracts	160,278		319,685
Total NET Services revenue, net	$	343,737	$	680,433

Capitated contracts	$	286,994	$	571,395
Non-capitated contracts	56,743		109,038
Total NET Services revenue, net	$	343,737	$	680,433

The following table summarizes disaggregated revenue from contracts with customers for the three and six months ended June 30, 2018 by revenue category for WD Services:



	Three months ended June 30, 2018		Six months ended June 30, 2018
Employment preparation and placement services	$	44,372	$	86,395
Legal offender rehabilitation services	17,637		40,849
Other	6,048		10,163
Total WD Services revenue, net	$	68,057	$	137,407

The following table summarizes disaggregated revenue from contracts with customers for the three and six months ended June 30, 2018 by geographic region:



	Three months ended June 30, 2018
	United States		United Kingdom		Other Foreign		Total
NET Services	$	343,737	$	—	$	—	$	343,737
WD Services	4,629		34,364		29,064		68,057
Total	$	348,366	$	34,364	$	29,064	$	411,794

	Six months ended June 30, 2018
	United States		United Kingdom		Other Foreign		Total
NET Services	$	680,433	$	—	$	—	$	680,433
WD Services	9,041		74,450		53,916		137,407
Total	$	689,474	$	74,450	$	53,916	$	817,840

NET Services Revenue

NET Services provides non-emergency transportation services pursuant to contractual commitments over defined service delivery periods. For most contracts, NET Services arranges for transportation of members through its network of independent transportation providers, whereby it remits payment to the transportation providers. However, for certain contracts, NET Services only provides administrative management services to support the customers’ efforts to serve its clients, and the amount of revenue recognized is based upon the management fee earned.

These contracts typically include single performance obligations under which NET Services stands ready to deliver management, fulfillment and record-keeping related to non-emergency transportation services. Transportation management services include, but are not limited to, fraud, waste, and abuse and utilization review programs as well as compliance controls. NET Services’ performance obligations consist of a series of distinct services that are substantially the same and which are transferred to the customer in the same manner. In most cases, NET Services is the principal in its arrangements because it controls the services before transferring those services to the customer.

NET Services primarily uses the ‘as invoiced’ practical expedient to recognize revenue because it typically has the right to consideration from customers in an amount that corresponds directly with the value of its performance to date. This is consistent with NET Services’ historical revenue recognition policy. NET Services recognizes revenue for some of its contracts that include variable consideration using a time-elapsed measure when the fees earned relate directly to services performed in the period. Because most contracts include termination for convenience clauses with required notice periods of less than one year, most NET Services contracts are deemed to be short-term in nature.

Some of NET Services’ contracts include provisions whereby it must provide certain levels of service or face potential penalties or be required to refund fees paid by the customer. For those contracts, NET Services’ records a provision to reduce revenue to reflect the amount to which it expects it will ultimately be entitled.

The only financial impact for NET Services of adopting ASU 2014-09 was the determination it is the agent under one of its contracts based on the new guidance, whereas it previously considered itself the principal in the arrangement. Consequently, NET Services now recognizes revenue under the specific contract on a net basis, which resulted in reduced revenue and service expense of $3,464 and $7,401 during the three and six months ended June 30, 2018, respectively.

During the three and six months ended June 30, 2018, NET Services recognized negative $1,007 and positive $5,685, respectively, from performance obligations satisfied in previous periods due to the resolution of contractual adjustments agreed with the customer.

WD Services Revenue

WD Services provides workforce development and offender rehabilitation services, which include employment preparation and placement, as well as apprenticeship and training, youth community service programs and certain health related services to clients on behalf of governmental and private entities pursuant to contractual commitments over defined service delivery periods. While the specific terms vary by contract, WD Services often receives four types of revenue streams under contracts with government entities: referral/attachment fees, job placement/job outcome fees, sustainment fees and incentive fees (collectively, “outcome fees”).

Most of WD Services’ contracts include a single promise to stand ready to deliver pre-defined services. WD Services concluded its performance obligations comprise a series of distinct monthly services that are substantially the same and which are transferred to the customer in the same manner. Accordingly, the monthly promise to stand ready is accounted for as a single performance obligation. Substantially all of WD Services’ contracts include variable consideration, whereby it earns revenues if certain contractually-defined outcomes occur in the future. As the related performance obligations are satisfied, WD Services recognizes revenue for those outcomes in proportion to the amount of the related fees it estimates have been earned. The amount of revenue is based upon WD Services’ estimate of the final amount of outcome fees to be earned. WD Services evaluates probability generally using the expected value method because the likelihood it will be entitled to variable fees is binary in nature. These estimates consider i) contractual rates, ii) assumed success rates and iii) assumed participant life on program. Generally, each of these estimates is based upon historical results, although for new contracts, other factors may be considered. At each reporting period, WD Services updates its estimate of variable consideration based on actual results or other relevant information and records an adjustment to revenue based upon services performed to date. For some of WD Services’ contracts, it recognizes revenue as it invoices customers because the amount to which it is entitled to invoice approximates the fair value of the services transferred.

WD Services constrains its estimates of variable consideration by reducing those estimates to amounts it believes with sufficient confidence will not later result in a significant reversal of revenue. When determining if variable consideration should be constrained, management considers whether there are factors outside WD Services’ control that could result in a significant reversal of revenue. In making these assessments, WD Services considers the likelihood and magnitude of a potential reversal of revenue.

For some of WD Services’ contracts, WD Services accrues for potential penalties it could incur as a result of not meeting certain performance targets. These penalties are estimated based on expectations from historical results. During the three months ended June 30, 2018, our subsidiary, The Reducing Reoffending Partnership Limited (“RRP”), along with other providers of probation services, obtained further clarity on the recommendations resulting from the UK probation services review, including the measurement of frequency and binary recidivism measures and the related income and penalties. Although the final agreement has not been signed, as a result of this clarification, RRP was able to calculate a reasonable estimate of its liability, recording a reduction of revenue of $1,928 during the three months ended June 30, 2018. In addition, based upon current performance trends, the Company estimates it will incur additional penalties over the remainder of the contract through 2020, and such amounts will be recorded as an offset to revenue earned over such periods, based upon ASC 606. The Company believes it will have the opportunity to earn additional income based upon the final amendment, but such amounts will be recorded in the future as services are provided.

Under the new standard, for certain contracts in which WD Services receives up-front fees or fixed monthly fees, WD Services may recognize revenue over a different period than under historical guidance, which may include a longer period of time. In addition, WD Services may recognize revenue for outcome fees earlier than under historical guidance, as WD Services previously recognized those revenues only upon final resolution of the outcome, at which point the related invoice was issued. Thus, the new standard results in a greater degree of estimation for outcome-based fees, and to a lesser extent, fixed fees.

During the three and six months ended June 30, 2018, WD Services recognized $3,833 and $4,342, respectively, from performance obligations satisfied in previous periods, based upon final resolution of amounts with the customer.

Related Balance Sheet Accounts

Accounts receivable, net - The Company records accounts receivable amounts at the contractual amount, less an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts at an amount it estimates to be sufficient to cover the risk that an account will not be collected. The Company regularly evaluates its accounts receivable, especially receivables that are past due, and reassesses its allowance for doubtful accounts based on identified customer collection issues. In circumstances where the Company is aware of a customer’s inability to meet its financial obligation, the Company records a specific allowance for doubtful accounts to reduce its net recognized receivable to an amount the Company reasonably expects to collect. Under certain contracts of NET Services, final payment is based on a reconciliation of actual utilization and cost, and the final reconciliation may require a considerable period of time. In addition, certain government entities which WD Services serves remit payment substantially beyond the payment terms. For example, under WD Services’ employability contract in Saudi Arabia, certain receivable balances are significantly past due. The Company monitors these amounts due to the aging of receivables, taking into account discussions with the customer and other considerations, and generally believes the balances are collectible. However, factors within those government entities could change and there can be no assurance that such changes would not result in an inability to collect the receivables.

The following table provides information about accounts receivable, net as of June 30, 2018 and December 31, 2017:



	June 30, 2018			December 31, 2017
Accounts receivable	$	138,441		$	122,634
NET Services' reconciliation contract receivable	51,683			42,054
Allowance for doubtful accounts	(5,811		)	(5,762		)
	$	184,313		$	158,926

Contract assets - Primarily reflects estimated revenue expected to be billed, as the Company does not have the unconditional right to invoice these amounts. We receive payments from customers based on the terms established in our contracts. The balance of $7,986 is included in Prepaid expenses and other in the condensed consolidated balance sheet at June 30, 2018.

NET Services accrued contract payments - Includes liabilities related to certain contracts of NET Services for which final payment is based on a reconciliation of actual utilization and cost, and the final reconciliation may require a considerable period of time. The balance is included in Accrued liabilities in the condensed consolidated balance sheet. The balance at June 30, 2018 and December 31, 2017 totaled $13,619 and $17,487, respectively.

Deferred Revenue - Includes funds received for certain services in advance of services being rendered. The balance at June 30, 2018 and December 31, 2017 totaled $30,004 and $17,381, respectively. The increase in the deferred revenue balance from December 31, 2017 to June 30, 2018 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, including the impact of the adoption of the revenue recognition standard, as revenue under the WD Services youth services contract is now fully deferred until the courses are offered in the summer and fall. During the six months ended June 30, 2018, $7,432 of revenue deferred as of December 31, 2017 was recognized.

Costs to Obtain and Fulfill a Contract

The Company capitalizes costs incurred to fulfill its contracts that i) relate directly to the contract; ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract; and iii) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed to service expense as the Company satisfies its performance obligations. These costs, which are classified in "Prepaid expenses and other" on the condensed consolidated balance sheets, principally relate to costs deferred for work performed by sub-contractors under WD Services’ contracts that will be used in satisfying future performance obligations. These deferred costs totaled $12,606 and $2,543 at June 30, 2018 and December 31, 2017, respectively.

Practical Expedients, Exemptions and Other Matters

We do not incur significant sales commissions expenses. Any amounts are expensed as incurred. These costs are recorded within service expense in the condensed consolidated statements of income.

The Company generally expects the period of time from when it transfers a promised service to a customer and when the customer pays for the service to be one year or less, and thus we do not have a significant financing component for our contracts with customers.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed; or (iii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation, and the terms of the variable consideration relate specifically to our efforts to transfer the distinct service or to a specific outcome from transferring the distinct service.

Cash, Cash Equivalents and Restricted Cash

6 Months Ended

Jun. 30, 2018

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:



	June 30, 2018		June 30, 2017
Cash and cash equivalents	$	29,700	$	56,583
Restricted cash, current	1,868		1,461
Current assets held for sale (cash)	5,141		—
Restricted cash, less current portion	3,260		6,455
Cash, cash equivalents and restricted cash	$	39,969	$	64,499

Restricted cash primarily relates to amounts held in trusts for reinsurance claims losses under the Company’s Captive insurance operation for historical workers’ compensation, general and professional liability and auto liability reinsurance programs, as well as amounts restricted for withdrawal under our self-insured medical and benefits plans. Cash recorded as an asset held for sale relates to the sale of our Ingeus France business. See Note 17, Assets Held for Sale, for additional information.

Equity Investment

6 Months Ended

Jun. 30, 2018

Equity Method Investment, Summarized Financial Information [Abstract]

Equity Investment

Matrix

As of June 30, 2018 and December 31, 2017, the Company owned a 43.6% and 46.6% noncontrolling interest in Matrix, respectively. The Company's ownership decreased as a result of the rollover of certain equity interests in HealthFair, which Matrix acquired on February 16, 2018. Pursuant to a Shareholder’s Agreement, affiliates of Frazier Healthcare Partners hold rights necessary to control the fundamental operations of Matrix. The Company accounts for this investment in Matrix under the equity method of accounting and the Company’s share of Matrix’s income or losses are recorded as “Equity in net (gain) loss of investees” in the accompanying condensed consolidated statements of income.

The carrying amount of the assets included in the Company’s condensed consolidated balance sheet and the maximum loss exposure related to the Company’s interest in Matrix as of June 30, 2018 and December 31, 2017 totaled $165,731 and $169,699, respectively.

Summary financial information for Matrix on a standalone basis is as follows:



	June 30, 2018		December 31, 2017
Current assets	$	61,053	$	37,563
Long-term assets	740,387		597,613
Current liabilities	34,121		27,718
Long-term liabilities	371,847		240,513



	Three months ended June 30, 2018			Three months ended June 30, 2017
Revenue	$	78,409		$	60,852
Operating income	4,627			5,942
Net (loss) income	(869		)	1,619

	Six months ended June 30, 2018			Six months ended June 30, 2017
Revenue	145,839			116,707
Operating income	3,838			6,950
Net loss	(9,387		)	(238		)

Included in Matrix’s standalone net loss for the three months ended June 30, 2018 are depreciation and amortization of $9,359, interest expense of $5,940, equity compensation of $863, management fees paid to certain of Matrix’s shareholders of $697, merger and acquisition related diligence costs of $77, integration costs of $1,097, and an income tax benefit of $444. Included in Matrix’s standalone net loss for the six months ended June 30, 2018 are depreciation and amortization of $18,411, interest expense of $16,283, including $6,288 related to the amortization of deferred financing costs primarily resulting from the refinancing of Matrix debt facility, equity compensation of $1,600, management fees paid to certain of Matrix’s shareholders of $3,754, merger and acquisition related diligence costs of $2,246 primarily related to the first quarter acquisition of HealthFair, integration costs of $1,532, and an income tax benefit of $3,058.

Included in Matrix’s standalone net loss for the three months ended June 30, 2017 were transaction bonuses and other transaction related costs of $523, equity compensation of $620, depreciation and amortization of $8,127, interest expense of $3,658 and an income tax expense of $665. Included in Matrix’s standalone net loss for the six months ended June 30, 2017 were transaction bonuses and other transaction related costs of $3,518, equity compensation of $1,262, depreciation and amortization of $16,160, interest expense of $7,264 and an income tax benefit of $76.

Prepaid Expenses and Other

6 Months Ended

Jun. 30, 2018

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other

Prepaid expenses and other were comprised of the following:



	June 30, 2018		December 31, 2017
Prepaid income taxes	$	2,659	$	1,106
Escrow funds	10,000		10,000
Contract asset	7,986		—
Prepaid insurance	1,714		2,121
Prepaid taxes and licenses	2,566		906
Note receivable	—		3,224
Prepaid rent	2,034		2,268
Deposits held for leased premises and bonds	2,119		2,849
Costs to fulfill a contract	12,606		2,543
Other	11,277		10,226
Total prepaid expenses and other	$	52,961	$	35,243

Escrow funds represent amounts related to indemnification claims from the sale of the Human Services segment, which was completed on November 1, 2015. The Company has accrued $15,000 as a contingent liability for the settlement of indemnification claims, which is included in “Accrued expenses” in the condensed consolidated balance sheet as of June 30, 2018 and December 31, 2017. The escrow funds will be used to satisfy a portion of this settlement. See Note 14, Commitments and Contingencies, for further information. “Contract asset” and “Costs to fulfill a contract” in the table above relate to the adoption of ASC 606, as described in Note 3, Revenue Recognition.

Accrued Expenses

6 Months Ended

Jun. 30, 2018

Accrued Liabilities, Current [Abstract]

Accrued Expenses

Accrued expenses consisted of the following:



	June 30, 2018		December 31, 2017
Accrued compensation	$	11,319	$	29,715
NET Services accrued contract payments	13,619		17,487
Accrued settlement	15,000		15,000
Accrued cash settled stock-based compensation	7,328		3,938
Income taxes payable	410		3,723
Other	36,616		33,975
Total accrued expenses	$	84,292	$	103,838

Restructuring and Related Reorganization Costs

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Related Organization Costs

Restructuring and Related Reorganization Costs

Corporate and Other

On April 11, 2018, the Company announced an organizational consolidation plan to integrate substantially all activities and functions performed at the corporate holding company level into its wholly-owned subsidiary, LogistiCare. As part of the organizational consolidation process, the Company’s Stamford, CT headquarters and Tucson, AZ satellite office will be closed. The Company adopted an employee retention plan designed to incentivize current holding company level employees to remain employed with the Company during the transition. The employee retention plan became effective on April 9, 2018 and covers the holding company level employees and provides for certain payments and benefits to be provided to the employees if they remain employed with the Company through a retention date established for each individual, subject to a fully executed retention letter. The organizational consolidation is expected to be completed by the middle of 2019.

As of June 30, 2018, the Company estimates that it will incur aggregate pre-tax restructuring charges of approximately $8,400 through June 30, 2019 in connection with the organizational consolidation discussed above. These charges include approximately $4,400 related to retention and personnel costs, $2,000 related to acceleration of stock-based compensation, $600 related to accelerated depreciation and $1,400 related to other costs, including lease termination and recruiting costs. A total of $2,634 restructuring and related costs have been incurred during the three months ended June 30, 2018 related to the organizational consolidation. These costs include $708 of retention costs, $1,450 of accelerated stock-based compensation expense, including the immediate expensing of $1,273 related to the forfeiture of awards by the CEO, $146 of accelerated depreciation and $330 of other costs, primarily related to recruiting. A total of $3,082 restructuring and related costs have been incurred during the six months ended June 30, 2018 related to the organizational consolidation. These costs include $708 of retention costs, $1,450 of accelerated stock-based compensation expense, $146 of accelerated depreciation and $778 of other costs. These costs are recorded as “General and administrative expense” and “Depreciation and amortization” in the accompanying condensed consolidated statements of income.

Summary of Liability for Corporate and Other Restructuring and Related Charges



	January 1, 2018		Costs Incurred		Cash Payments			June 30, 2018

Retention liability	$	—	$	708	$	—		$	708
Other liability	—		778		(578		)	200
Total	$	—	$	1,486	$	(578	)	$	908

The total restructuring liability at June 30, 2018 includes $903 classified as “Accrued expenses” and $5 classified as “Accounts payable” in the condensed consolidated balance sheet.

WD Services

WD Services has two active redundancy programs at June 30, 2018. During the year ended December 31, 2017, WD Services had four redundancy programs. Of these four redundancy plans, two redundancy plans were approved in 2015: a plan related to the termination of employees delivering services under an offender rehabilitation program (“Offender Rehabilitation Program”), which has been completed, and a plan related to the termination of employees delivering services under the Company’s employability and skills training programs and certain other employees in the United Kingdom (“UK Restructuring Program”). In addition, a redundancy plan related to the termination of employees as part of a value enhancement project (“Ingeus Futures Program”) to better align costs at Ingeus with revenue and to improve overall operating performance was approved in 2016 and began a second phase during the three months ended March 31, 2018. Further, a redundancy program to align costs with revenue for offender rehabilitation services (“Delivery First Program”) was approved in the fourth quarter of 2017, and a second phase of this program began in the second quarter of 2018. The Company recorded severance and related charges of $2,400 and $859 during the six months ended June 30, 2018 and 2017, respectively, relating to the termination benefits for employee groups and specifically identified employees impacted by these plans. The severance charges incurred are recorded as “Service expense” in the accompanying condensed consolidated statements of income.

The initial estimate of severance and related charges for the plans was based upon the employee groups impacted, average salary and benefits, and redundancy benefits pursuant to the existing policies. Additional charges above the initial estimates, or additional phases of the plan, were incurred for the redundancy plans during the six months ended June 30, 2018 and 2017 related to the actualization of termination benefits for specifically identified employees impacted under these plans, as well as an increase in the number of individuals impacted by these plans. The final identification of the employees impacted by each program is subject to customary consultation procedures. In addition, additional phases of value enhancement projects may be undertaken in the future, if costs and revenue are not aligned.

Summary of Liability for WD Services Severance and Related Charges



	January 1, 2018		Costs Incurred		Cash Payments			Foreign Exchange Rate Adjustments			June 30, 2018

Ingeus Futures Program	$	482	$	1,226	$	(1,463	)	$	(30	)	$	215
Delivery First Program	1,287		1,174		(1,297		)	14			1,178
Total	$	1,769	$	2,400	$	(2,760	)	$	(16	)	$	1,393



	January 1, 2017		Costs Incurred			Cash Payments			Foreign Exchange Rate Adjustments		June 30, 2017

Ingeus Futures Program	$	2,486	$	836		$	(2,341	)	$	130	$	1,111
Offender Rehabilitation Program	1,380		52			(1,295		)	18		155
UK Restructuring Program	50		(29		)	—			2		23
Total	$	3,916	$	859		$	(3,636	)	$	150	$	1,289

The total of accrued severance and related costs of $1,393 is reflected in “Accrued expenses” in the condensed consolidated balance sheet at June 30, 2018. The amount accrued as of June 30, 2018 is expected to be settled principally by the end of 2018. Additionally, in conjunction with the second phase of the Ingeus Futures Program, the Company incurred $295 of expense during the six months ended June 30, 2018 primarily related to property and equipment costs.

Debt	6 Months Ended
Debt	Jun. 30, 2018
Debt Disclosure [Abstract]
Debt	Debt On June 7, 2018, the Company and certain of its subsidiaries entered into the Fifth Amendment to the Amended and Restated Credit and Guaranty Agreement (the “Amendment”), amending the Amended and Restated Credit and Guaranty Agreement dated as of August 2, 2013 (as amended to date, the “Credit Agreement”), by and among the Company, the guarantors from time to time party thereto, the lenders from time to time party thereto and Bank of America, N.A. as administrative agent. The Amendment extends the maturity date of the Credit Agreement to August 2, 2019. The Amendment also amends certain covenants under the Credit Agreement to provide for greater operational, financial and strategic flexibility, including the implementation of the Company’s organizational consolidation plan. The Company had no amounts outstanding under the Credit Agreement on June 30, 2018.

Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

The following table reflects changes in common stock, additional paid-in capital, retained earnings, accumulated other comprehensive loss, treasury stock and noncontrolling interest for the six months ended June 30, 2018:



	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock				Non-controlling Interest			Total
	Shares	Amount		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Shares	Amount			Non-controlling Interest			Total
Balance at December 31, 2017	17,473,598	$	17	$	313,955		$	204,818		$	(25,805	)	4,126,132	$	(154,803	)	$	(2,165	)	$	336,017
Stock-based compensation	—	—		4,439			—			—			—	—			—			4,439
Exercise of employee stock options	265,793	1		11,661			—			—			—	—			—			11,662
Restricted stock issued	26,989	—		(320		)	—			—			3,907	(246		)	—			(566		)
Performance restricted stock issued	3,110	—		(109		)	—			—			—	—			—			(109		)
Shares issued for bonus settlement and director stipend	3,033			150						—			—	—			—			150
Stock repurchase plan	—	—		—			—			—			838,719	(55,753		)	—			(55,753		)
Conversion of convertible preferred stock to common stock	2,608	—		105			(5		)	—			—	—			—			100
Foreign currency translation adjustments, net of tax	—	—		—			—			(2,041		)	—	—			45			(1,996		)
Convertible preferred stock dividends	—	—		—			(2,190		)	—			—	—			—			(2,190		)
Noncontrolling interests	—	—		—			—			—			—	—			108			108
Other	—	—		128			—			—			—	—			—			128
Net income attributable to Providence	—	—		—			(5,785		)	—			—	—			—			(5,785		)
Cumulative effect adjustment from change in accounting principle	—	—		—			5,710			—			—	—			—			5,710
Balance at June 30, 2018	17,775,131	$	18	$	330,009		$	202,548		$	(27,846	)	4,968,758	$	(210,802	)	$	(2,012	)	$	291,915

Share Repurchases

On March 29, 2018, the Board of Directors (“Board”) authorized an increase in the amount available for stock repurchases under the Company’s existing stock repurchase program by $77,794, and extended the existing stock repurchase program through June 30, 2019 (as amended and extended, the “Stock Repurchase Program”). As of June 30, 2018, approximately $81,177 remains for additional repurchases by the Company under the Stock Repurchase Program, excluding commission payments. The share repurchases may be made from time-to-time through a combination of open market repurchases (including Rule 10b5-1 plans), privately negotiated transactions, accelerated share repurchase transactions and other derivative transactions. The timing, number and amount of any shares repurchased will be determined by the Company’s officers at their discretion, and as permitted by securities laws, covenants under existing bank agreements and other legal requirements, and will be based on a number of factors, including an evaluation of general market and economic conditions and the trading price of the common stock. The Stock Repurchase Program may be suspended or discontinued at any time without prior notice.

Stock-Based Compensation and Similar Arrangements

6 Months Ended

Jun. 30, 2018

Share-based Compensation [Abstract]

Stock-Based Compensation and Similar Arrangements

The Company provides stock-based compensation to employees and non-employee directors under the Company’s 2006 Long-Term Incentive Plan (“2006 Plan”). Typical awards issued under this plan include stock option awards, restricted stock awards (“RSAs”) and performance based restricted stock units (“PRSUs”).

The following table reflects the amount of stock-based compensation, for share settled awards, recorded in each financial statement line item for the three and six months ended June 30, 2018 and 2017:



	Three months ended June 30,				Six months ended June 30,
	2018		2017		2018		2017
Service expense	$	39	$	110	$	94	$	234
General and administrative expense	3,302		1,445		4,184		2,787
Equity in net loss of investees	102		13		161		40
Total stock-based compensation	$	3,443	$	1,568	$	4,439	$	3,061

At June 30, 2018, the Company had 635,995 stock options outstanding with a weighted-average exercise price of $61.81. The Company also had 53,958 shares of unvested RSAs outstanding at June 30, 2018 with a weighted-average grant date fair value, as modified, of $54.58.

Awards Granted and Modified in Conjunction with the Organizational Consolidation

In connection with the organizational consolidation plan, the Company entered into an agreement with R. Carter Pate for his continued employment as the Company’s Interim CEO through June 30, 2019. The agreement also provides for a grant of unvested options to purchase up to 394,000 shares of the Company's common stock, at a price of $71.67 per share, which was the closing price of the Company’s common stock on the grant date. The options are subject to vesting as follows: (i) 50% of the options will become vested if Mr. Pate remains employed by the Company through June 30, 2019 (the “Time-Vesting Options”), (ii) 25% of the options will become vested on March 31, 2019 if the Company has achieved its budget for its 2018 fiscal year, subject to certain adjustments, and Mr. Pate is then employed, and (iii) 25% of the options will become vested on March 31, 2019 subject to Mr. Pate’s achievement of other performance metrics if Mr. Pate is then employed. In addition, the Time-Vesting Options will become fully vested upon a “change in control” (as defined in the 2006 Plan) or a termination of Mr. Pate’s employment by the Company without “cause” (as defined in the Company’s 2015 Holding Company LTI Program) or for “good reason” (as defined in the Option Agreement). Once vested, the options will remain exercisable until April 8, 2021, unless terminated earlier due to a termination of Mr. Pate’s employment for “cause”. In recognition of certain holding company employees’ essential contributions to the success of the Company, and to encourage further alignment with the Company’s long-term interests through the ownership of equity, Mr. Pate voluntarily set aside 98,500 of the options granted to him, representing 25% of his total award. The value of the awards of $1,273 was fully expensed in the three months ended June 30, 2018. The Compensation Committee of the Board expects to grant at a later date restricted stock awards equivalent in value to the options voluntarily set aside by Mr. Pate, to employees based upon their performance throughout the organizational consolidation process.

Also in connection with the organizational consolidation plan and his appointment as Interim CFO, on April 9, 2018, William Severance received an option to purchase 13,710 shares of common stock at a price of $71.67 per share, which was the closing price of the Company’s common stock on the grant date. The options will become fully exercisable on May 10, 2019, subject to Mr. Severance’s continued employment with the Company, and if not exercised will expire on December 31, 2020.

In addition, as part of the Company’s retention plan associated with the organizational consolidation plan, the Company provided that unvested share based awards to employees subject to the retention plan will vest in full upon their termination dates so long as those employees fulfill their service obligation to the Company under the retention plan. As such, the vesting terms of 9,966 restricted stock awards and 11,035 stock options were modified. Additionally, the exercise terms of the respective unvested stock options were modified to allow for exercise through December 31, 2020. As a result of the modifications, the Company revalued the awards as of April 9, 2018, and is expensing the unrecognized stock-based compensation cost, based on the new fair value, through the termination date of each relevant employee. Additional expense incurred during the three and six months ended June 30, 2018, as a result of the modification, totaled $177. See Note 8, Restructuring and Related Reorganization Costs, for additional information.

Cash Settled Awards

The Company also grants stock equivalent unit awards (“SEUs”) and stock option equivalent units that are cash settled awards and are not included as part of the 2006 Plan. During the three and six months ended June 30, 2018, respectively, the Company recorded $1,795 and $3,626 of stock-based compensation expense for cash settled awards. During the three and six months ended June 30, 2017, respectively, the Company recorded $564 and $1,231 of stock-based compensation expense for cash settled awards. The expense for cash settled awards is included as “General and administrative expense” in the accompanying condensed consolidated statements of income. As the instruments are accounted for as liability awards, the expense recorded for the three and six months ended June 30, 2018 and 2017 is almost entirely attributable to the Company’s increase in stock price from the previous reporting period. The liability for unexercised cash settled share-based payment awards of $7,328 and $3,938 at June 30, 2018 and December 31, 2017, respectively, are reflected in “Accrued expenses” in the condensed consolidated balance sheets. At June 30, 2018, the Company had 5,202 SEUs and 200,000 stock option equivalent units outstanding.

Vertical Long-Term Incentive Plans

The Company also provides cash settled long-term incentive plans for executive management and key employees of its operating segments. For the three and six months ended June 30, 2018, expenses of $57 and $114, respectively, are included as “Service expense” in the condensed consolidated statements of income related to an ongoing long-term incentive plan for NET Services. For the three and six