Note 1 - Organization and Basis of Presentation
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]
1.
Organization and Basis of Presentation
 
Description of Business
 
The Providence Service Corporation (“we”, the “Company” or “Providence”) is a holding company, which owns interests in subsidiaries and other companies that are primarily engaged in the provision of healthcare and workforce development services for public and private sector entities seeking to control costs and promote positive outcomes. The subsidiaries and other companies in which the Company holds interests comprise the following segments:
 
 
 
●
Non-Emergency Transportation Services (“NET Services”) – Nationwide provider of non-emergency medical transportation programs for state governments and managed care organizations.
 
●
Workforce Development Services (“WD Services”) – Global provider of employment preparation and placement and legal offender rehabilitation services to eligible participants of government sponsored programs.
 
●
Matrix Investment – Minority interest in nationwide provider of in-home care optimization and management solutions, including comprehensive health assessments (“CHAs”), to members of managed care organizations, accounted for as an equity method investment.
 
Ingeus UK Holdings Limited and its wholly and partly-owned subsidiaries and associates (collectively, “Ingeus”), which make up the majority of WD Services, were acquired on
May
30,
2014.
On
November
1,
2015,
the Company completed the sale of its Human Services segment, which is accounted for as a discontinued operation.
 
Matrix Investment is comprised of Mercury Parent, LLC, a newly formed parent of CCHN Group Holdings, Inc. CCHN Group Holdings, Inc. and its subsidiaries are referred to as “Matrix”. Matrix was acquired by the Company on
October
 
23,
2014.
On
October
19,
2016,
affiliates of Frazier Healthcare Partners purchased a
53.2%
equity interest in Matrix with Providence retaining a
46.8%
equity interest (the “Matrix Transaction”). Prior to the closing of the Matrix Transaction, the financial results of Matrix were included in the Company’s Health Assessment Services (“HA Services”) segment. The Company now owns a noncontrolling interest in Matrix. The Company’s proportionate share of Matrix’s net assets and financial results for the period following the closing of the Matrix Transaction are presented under the equity method. Its assets, liabilities and financial results for the period prior to the closing of the Matrix Transaction are presented within discontinued operations.  For additional information regarding the Matrix Transaction, see Note
21,
Discontinued Operations
.
 
As of
December
31,
2016,
the Company’s consolidated subsidiaries operated in
40
states and the District of Columbia in the United States (“U.S.”), and in
9
countries outside of the U.S.
 
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 a single source of authoritative non-SEC accounting and reporting standards to be applied by non-governmental entities. All amounts are presented in U.S. dollars, unless otherwise noted.
 
The Company holds investments that are accounted for using the equity method. The Company does not control the decision making process nor business management practices of these affiliates. Accordingly, 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 consolidated financial statements.
 
Reclassifications
 
The Company has reclassified certain amounts relating to its prior period results to conform to its current period presentation. Effective
January
1,
2016,
the Company adopted Accounting Standards Update (“ASU”) No.
2015
-
03,
Interest - Imputation of Interest (Subtopic
835
-
30):
Simplifying the Presentation of Debt Issuance Costs
(“ASU
2015
-
03”)
and reclassified debt issuance costs to a contra-liability account in the consolidated balance sheet as of
December
31,
2015.
 
During the quarter ended
September
30,
2016,
Matrix, which comprised the HA Services segment, met the criteria for held for sale classification due to the execution on
August
28,
2016
of a stock subscription agreement by the Company pursuant to which a
third
-party subscribed for a controlling equity interest in Matrix. The transaction was effective
October
19,
2016
and resulted in a gain, net of tax, of
$109,403.
The HA Services segment is presented as a discontinued operation in accordance with GAAP. The assets and liabilities of the HA Services segment are classified as held for sale in the consolidated balance sheet for the year ended
December
31,
2015.
Additionally, the operating results of this segment, along with the Human Services segment sold on
November
1,
2015,
are reported as discontinued operations, net of tax, in the consolidated statements of income for all periods presented. See Note
21,
Discontinued Operations.