Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 06, 2017 | Jun. 30, 2016 | |
Entity Information [Line Items] | |||
Entity Registrant Name | INSPERITY, INC. | ||
Entity Central Index Key | 1,000,753 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,350,000,000 | ||
Entity Common Stock, Shares Outstanding | 21,001,016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 286,034,000 | $ 269,538,000 |
Restricted cash | 42,637,000 | 37,418,000 |
Marketable securities | 1,851,000 | 9,875,000 |
Accounts receivable, net: | ||
Trade | 13,107,000 | 7,691,000 |
Unbilled | 254,999,000 | 190,715,000 |
Other | 2,178,000 | 2,259,000 |
Prepaid insurance | 15,041,000 | 7,417,000 |
Other current assets | 19,526,000 | 17,135,000 |
Income Taxes Receivable, Current | 4,949,000 | 0 |
Total current assets | 640,322,000 | 542,048,000 |
Property and equipment: | ||
Land | 5,214,000 | 5,214,000 |
Buildings and improvements | 90,151,000 | 70,273,000 |
Computer hardware and software | 97,311,000 | 90,654,000 |
Software development costs | 51,956,000 | 45,762,000 |
Furniture, fixtures and other | 38,483,000 | 39,919,000 |
Total property and equipment, gross | 283,115,000 | 251,822,000 |
Accumulated depreciation and amortization | (202,854,000) | (190,063,000) |
Total property and equipment, net | 80,261,000 | 61,759,000 |
Other assets: | ||
Prepaid health insurance | 9,000,000 | 9,000,000 |
Deposits – health insurance | 4,700,000 | 3,700,000 |
Deposits – workers’ compensation | 143,938,000 | 136,462,000 |
Goodwill and other intangible assets, net | 13,088,000 | 13,588,000 |
Deferred income taxes, net | 14,025,000 | 16,976,000 |
Other assets | 1,840,000 | 1,379,000 |
Total other assets | 186,591,000 | 181,105,000 |
Total assets | 907,174,000 | 784,912,000 |
Current liabilities: | ||
Accounts payable | 4,189,000 | 5,381,000 |
Payroll taxes and other payroll deductions payable | 247,766,000 | 205,393,000 |
Accrued worksite employee payroll cost | 215,214,000 | 161,917,000 |
Accrued health insurance costs | 26,360,000 | 13,643,000 |
Accrued workers’ compensation costs | 44,231,000 | 39,053,000 |
Accrued corporate payroll and commissions | 40,761,000 | 39,103,000 |
Other accrued liabilities | 22,437,000 | 20,250,000 |
Income tax payable | 0 | 2,971,000 |
Total current liabilities | 600,958,000 | 487,711,000 |
Noncurrent liabilities: | ||
Accrued workers’ compensation costs | 141,291,000 | 124,746,000 |
Long-term debt | 104,400,000 | 0 |
Total noncurrent liabilities | 245,691,000 | 124,746,000 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.01 per share: Shares authorized - 20,000 Shares issued and outstanding - none | 0 | 0 |
Common stock, par value $0.01 per share: Shares authorized - 60,000 Shares issued - 27,744 and 30,758 at December 31, 2016 and December 31, 2015, respectively | 277,000 | 308,000 |
Additional paid-in capital | 9,240,000 | 144,701,000 |
Treasury stock, at cost – 6,719 and 6,493 at December 31, 2016 and 2015, respectively | (227,152,000) | (205,325,000) |
Accumulated other comprehensive income, net of tax | (3,000) | 0 |
Retained earnings | 278,163,000 | 232,771,000 |
Total stockholders’ equity | 60,525,000 | 172,455,000 |
Total liabilities and stockholders’ equity | $ 907,174,000 | $ 784,912,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 20,000 | 20,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 60,000 | 60,000 |
Common stock, issued (in shares) | 27,744 | 30,758 |
Treasury stock, shares (in shares) | 6,719 | 6,493 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenues (gross billings of $17.933 billion, $15.806 billion and $14.187 billion, less worksite employee payroll cost of $14.992 billion, $13.202 billion and $11.829 billion, respectively) | $ 2,941,347 | $ 2,603,614 | $ 2,357,788 |
Direct costs: | |||
Payroll taxes, benefits and workers’ compensation costs | 2,449,737 | 2,165,747 | 1,953,983 |
Gross profit | 491,610 | 437,867 | 403,805 |
Operating expenses: | |||
Salaries, wages and payroll taxes | 229,589 | 211,060 | 200,118 |
Stock-based compensation | 16,643 | 13,345 | 11,053 |
Commissions | 19,288 | 18,479 | 15,285 |
Advertising | 16,447 | 15,980 | 20,084 |
General and administrative expenses | 86,693 | 84,259 | 84,717 |
Impairment charges and other | 0 | 10,480 | 3,687 |
Depreciation and amortization | 16,644 | 18,565 | 21,387 |
Total operating expenses | 385,304 | 372,168 | 356,331 |
Operating income | 106,306 | 65,699 | 47,474 |
Other income (expense): | |||
Interest Income, Other | 1,267 | 379 | 523 |
Interest Expense | (2,396) | (459) | (370) |
Income before income tax expense | 105,177 | 65,619 | 47,627 |
Income tax expense | 39,186 | 26,229 | 19,623 |
Net income | 65,991 | 39,390 | 28,004 |
Less distributed and undistributed earnings allocated to participating securities | 1,496 | 981 | 2,002 |
Net income allocated to common shares | $ 64,495 | $ 38,409 | $ 26,002 |
Basic net income per share of common stock (in dollars per share) | $ 3.10 | $ 1.58 | $ 1.05 |
Diluted net income per share of common stock (in dollars per share) | $ 3.09 | $ 1.58 | $ 1.05 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Gross billings | $ 17,933 | $ 15,806 | $ 14,187 |
Worksite employee payroll costs | $ 14,992 | $ 13,202 | $ 11,829 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 65,991 | $ 39,390 | $ 28,004 |
Other comprehensive income: | |||
Unrealized loss on available-for-sale securities, net of tax | (3) | (3) | (26) |
Comprehensive income | $ 65,988 | $ 39,387 | $ 27,978 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2013 | $ 253,272,000 | $ 308,000 | $ 135,653,000 | $ (138,688,000) | $ 29,000 | $ 255,970,000 |
Balance (shares) at Dec. 31, 2013 | 30,758 | |||||
Purchase of treasury stock, at cost | (20,769,000) | $ 0 | 0 | (20,769,000) | 0 | 0 |
Exercise of stock options | 279,000 | 0 | (180,000) | 459,000 | 0 | 0 |
Income tax benefit from stock-based compensation, net | 488,000 | 0 | 488,000 | 0 | 0 | 0 |
Stock-based compensation expense | 11,053,000 | 0 | 1,592,000 | 9,461,000 | 0 | 0 |
Other | 1,288,000 | 0 | 216,000 | 1,072,000 | 0 | 0 |
Dividends paid | (69,493,000) | 0 | 0 | 0 | 0 | (69,493,000) |
Unrealized gain (loss) on marketable securities, net of tax | (26,000) | 0 | 0 | 0 | (26,000) | 0 |
Net income | 28,004,000 | 0 | 0 | 0 | 0 | 28,004,000 |
Balance at Dec. 31, 2014 | 204,096,000 | $ 308,000 | 137,769,000 | (148,465,000) | 3,000 | 214,481,000 |
Balance (shares) at Dec. 31, 2014 | 30,758 | |||||
Purchase of treasury stock, at cost | (67,113,000) | $ 0 | 0 | (67,113,000) | 0 | 0 |
Exercise of stock options | 374,000 | 0 | (3,000) | 377,000 | 0 | 0 |
Income tax benefit from stock-based compensation, net | 2,216,000 | 0 | 2,216,000 | 0 | 0 | 0 |
Stock-based compensation expense | 13,345,000 | 0 | 4,239,000 | 9,053,000 | 0 | 53,000 |
Other | 1,303,000 | 0 | 480,000 | 823,000 | 0 | 0 |
Dividends paid | (21,153,000) | 0 | 0 | 0 | 0 | (21,153,000) |
Unrealized gain (loss) on marketable securities, net of tax | (3,000) | 0 | 0 | 0 | (3,000) | 0 |
Net income | 39,390,000 | 0 | 0 | 0 | 0 | 39,390,000 |
Balance at Dec. 31, 2015 | 172,455,000 | $ 308,000 | 144,701,000 | (205,325,000) | 0 | 232,771,000 |
Balance (shares) at Dec. 31, 2015 | 30,758 | |||||
Purchase of treasury stock, at cost | (31,669,000) | $ 0 | 0 | (31,669,000) | 0 | 0 |
Repurchse of common stock | (144,263,000) | $ (31,000) | (144,232,000) | 0 | 0 | 0 |
Stock Repurchased and Retired During Period, Shares | (3,014) | |||||
Exercise of stock options | 598,000 | $ 0 | (27,000) | 625,000 | 0 | 0 |
Stock-based compensation expense | 16,643,000 | 0 | 8,156,000 | 8,487,000 | 0 | 0 |
Other | 1,372,000 | 0 | 642,000 | 730,000 | 0 | 0 |
Dividends paid | (20,599,000) | 0 | 0 | 0 | 0 | (20,599,000) |
Unrealized gain (loss) on marketable securities, net of tax | (3,000) | 0 | 0 | 0 | (3,000) | 0 |
Net income | 65,991,000 | 0 | 0 | 0 | 0 | 65,991,000 |
Balance at Dec. 31, 2016 | $ 60,525,000 | $ 277,000 | $ 9,240,000 | $ (227,152,000) | $ (3,000) | $ 278,163,000 |
Balance (shares) at Dec. 31, 2016 | 27,744 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 65,991 | $ 39,390 | $ 28,004 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 16,644 | 18,565 | 21,387 |
Impairment charges and other | 0 | 10,480 | 3,687 |
Amortization of marketable securities | 90 | 836 | 1,891 |
Stock-based compensation | 16,643 | 13,345 | 11,053 |
Deferred income taxes | 2,951 | (14,733) | (1,733) |
Changes in operating assets and liabilities: | |||
Restricted cash | (5,219) | 6,622 | 7,888 |
Accounts receivable | (69,619) | (25,549) | 34,893 |
Prepaid insurance | (7,624) | 13,884 | (10,663) |
Other current assets | (2,391) | 514 | (5,596) |
Other assets | (8,941) | (22,069) | (32,013) |
Accounts payable | (1,192) | 707 | 1,996 |
Payroll taxes and other payroll deductions payable | 42,373 | 29,052 | 10,737 |
Accrued worksite employee payroll expense | 53,297 | (30,479) | 18,595 |
Accrued health insurance costs | 12,717 | (4,686) | 13,226 |
Accrued workers’ compensation costs | 21,723 | 26,159 | 15,805 |
Accrued corporate payroll, commissions and other accrued liabilities | 3,150 | 4,105 | 18,517 |
Income taxes payable/receivable | (7,920) | (1,060) | 4,039 |
Total adjustments | 66,682 | 25,693 | 113,709 |
Net cash provided by operating activities | 132,673 | 65,083 | 141,713 |
Marketable securities: | |||
Purchases | (1,049) | (10,558) | (69,578) |
Proceeds from maturities | 1,715 | 10,593 | 28,494 |
Proceeds from dispositions | 7,268 | 17,869 | 56,880 |
Property and equipment: | |||
Purchases | (33,994) | (17,844) | (19,124) |
Proceeds from sale of aircraft | 0 | 12,159 | 0 |
Proceeds from dispositions | 43 | 153 | 122 |
Net cash provided by (used in) investing activities | (26,017) | 12,372 | (3,206) |
Cash flows from financing activities: | |||
Purchase of treasury stock | (31,669) | (67,113) | (20,769) |
Repurchase of common stock | 144,263 | 0 | 0 |
Dividends paid | (20,599) | (21,153) | (69,493) |
Borrowings under long-term debt agreement | 124,400 | 0 | 0 |
Principal repayments | (20,000) | 0 | 0 |
Proceeds from the exercise of stock options | 598 | 374 | 279 |
Income tax benefit from stock-based compensation | 0 | 2,216 | 889 |
Other | 1,373 | 1,303 | 1,288 |
Net cash used in financing activities | (90,160) | (84,373) | (87,806) |
Net increase (decrease) in cash and cash equivalents | 16,496 | (6,918) | 50,701 |
Cash and cash equivalents at beginning of year | 269,538 | 276,456 | 225,755 |
Cash and cash equivalents at end of year | 286,034 | 269,538 | 276,456 |
Supplemental disclosures of cash flow information: | |||
Income taxes, net | 44,148 | 39,806 | 16,429 |
Interest expense | $ 2,396 | $ 459 | $ 370 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Accounting Policies | 1. Accounting Policies Description of Business Insperity, Inc. (“Insperity” or “we”, “our”, and “us”) provides an array of human resources (“HR”) and business solutions designed to help improve business performance. Since our formation in 1986, we have evolved from being solely a professional employer organization (“PEO”), an industry we pioneered, to our current position as a comprehensive business performance solutions provider. We were organized as a corporation in 1986 and have provided PEO services since inception. Our most comprehensive HR services offerings are provided through our Workforce Optimization ® and Workforce Synchronization TM solutions (together, our “PEO HR Outsourcing solutions”), which encompass a broad range of human resources functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services, along with our cloud-based human capital management platform, the Employee Service Center SM (“ESC”). In addition to our PEO HR Outsourcing solutions, we offer a number of other business performance solutions, including Human Capital Management, Payroll Services, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening and Expense Management Services, Retirement Services and Insurance Services, many of which are offered via desktop applications and cloud-based delivery models. These other products and services are offered separately, along with our PEO HR Outsourcing solutions or as a bundle, such as our new Workforce Administration TM solution that provides a comprehensive human capital management and payroll services solution. We provide our PEO HR Outsourcing solutions by entering into a co-employment relationship with our clients, under which Insperity and its clients each take responsibility for certain portions of the employer-employee relationship. Insperity and its clients designate each party’s responsibilities through its Client Service Agreement (“CSA”), under which Insperity becomes the employer of the employees who work at the client’s location (“worksite employees”) for most administrative and regulatory purposes. As a co-employer of its worksite employees, we assume many of the rights and obligations associated with being an employer. We enter into an employment agreement with each worksite employee, thereby maintaining a variety of employer rights, including the right to hire or terminate employees, the right to evaluate employee qualifications or performance, and the right to establish employee compensation levels. Typically, Insperity only exercises these rights in consultation with its clients or when necessary to ensure regulatory compliance. The responsibilities associated with our role as employer include the following obligations with regard to our worksite employees: (i) to compensate its worksite employees through wages and salaries; (ii) to pay the employer portion of payroll-related taxes; (iii) to withhold and remit (where applicable) the employee portion of payroll-related taxes; (iv) to provide employee benefit programs; and (v) to provide workers’ compensation insurance coverage. In addition to our assumption of employer status for our worksite employees, our PEO HR Outsourcing solutions also include other human resources functions for our clients to support the effective and efficient use of personnel in their business operations. To provide these functions, we maintain a significant staff of professionals trained in a wide variety of human resources functions, including employee training, employee recruiting, employee performance management, employee compensation and employer liability management. These professionals interact and consult with clients on a daily basis to help identify each client’s service requirements and to ensure that we are providing appropriate and timely personnel management services. Revenue and Direct Cost Recognition We account for our PEO HR Outsourcing solutions revenues in accordance with Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition, Principal Agent Considerations. Our PEO HR Outsourcing solutions revenues are primarily derived from our gross billings, which are based on (i) the payroll cost of its worksite employees; and (ii) a markup computed as a percentage of the payroll cost. The gross billings are invoiced concurrently with each periodic payroll of its worksite employees. Revenues, which exclude the payroll cost component of gross billings and therefore consist solely of markup, are recognized ratably over the payroll period as worksite employees perform their service at the client worksite. Revenues that have been recognized but not invoiced are included in unbilled accounts receivable on our Consolidated Balance Sheets. In determining the pricing of the markup component of our gross billings, we take into consideration our estimates of the costs directly associated with our worksite employees, including payroll taxes, benefits and workers’ compensation costs, plus an acceptable gross profit margin. As a result, our operating results are significantly impacted by our ability to accurately estimate, control and manage our direct costs relative to the revenues derived from the markup component of our gross billings. Consistent with our revenue recognition policy, our direct costs do not include the payroll cost of our worksite employees. Our direct costs associated with our revenue generating activities are primarily comprised of all other costs related to our worksite employees, such as the employer portion of payroll-related taxes, employee benefit plan premiums and workers’ compensation insurance costs. Segment Reporting We operate one reportable segment under ASC 280, Segment Reporting . Principles of Consolidation The Consolidated Financial Statements include the accounts of Insperity, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Concentrations of Credit Risk Financial instruments that could potentially subject us to concentration of credit risk include accounts receivable and marketable securities. Cash, Cash Equivalents and Marketable Securities We invest our excess cash in federal government and municipal-based money market funds and debt instruments of U.S. municipalities. All highly liquid investments with stated maturities of three months or less from date of purchase are classified as cash equivalents. Liquid investments with stated maturities of greater than three months are classified as marketable securities in current assets. We account for marketable securities in accordance with ASC 320, Investments – Debt and Equity Securities . We determine the appropriate classification of all marketable securities as held-to-maturity, available-for-sale or trading at the time of purchase, and re-evaluate such classification as of each balance sheet date. At December 31, 2016 and 2015 , all of our investments in marketable securities were classified as available-for-sale, and as a result, were reported at fair value. Unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts from the date of purchase to maturity. Such amortization is included in interest income as an addition to or deduction from the coupon interest earned on the investments. We use the specific identification method of determining the cost basis in computing realized gains and losses on the sale of our available-for-sale securities. Realized gains and losses are included in other income. Property and Equipment Property and equipment are recorded at cost and are depreciated over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives of property and equipment for purposes of computing depreciation are as follows: Buildings and improvements 5-30 years Computer hardware and software 2-5 years Software development costs 3-5 years Furniture, fixtures and other 5-7 years Software development costs relate primarily to software coding, system interfaces and testing of our proprietary professional employer information systems and are accounted for in accordance with ASC 350-40, Internal Use Software . Capitalized software development costs are amortized using the straight-line method over the estimated useful lives of the software, generally three years. We recognized $3.0 million , $3.3 million and $4.1 million in amortization of capitalized computer software costs in 2016 , 2015 and 2014 , respectively. Unamortized software development costs were $10.4 million and $7.1 million in 2016 and 2015 , respectively. We account for our software products in accordance with ASC 985-20, Costs of Software to be Sold . This Topic establishes standards of financial accounting and reporting for the costs of computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process, whether internally developed and produced or purchased. We periodically evaluate our long-lived assets for impairment in accordance with ASC 360-10, Property, Plant, and Equipment. ASC 360-10 requires that an impairment loss be recognized for assets to be disposed of or held-for-use when the carrying amount of an asset is deemed to not be recoverable. If events or circumstances were to indicate that any of our long-lived assets might be impaired, we would assess recoverability based on the estimated undiscounted future cash flows to be generated from the applicable asset. In addition, we may record an impairment loss to the extent that the carrying value of the asset exceeded the fair value of the asset. Fair value is generally determined using an estimate of discounted future net cash flows from operating activities or upon disposal of the asset. Due to a change in office consolidation plans, we recorded a $1.2 million non-cash charge related to office design fees in 2014. Goodwill and Other Intangible Assets Our purchased intangible assets are carried at cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, ranging from three to 10 years . Our goodwill and intangible assets are subject to the provisions of ASC 350, Intangibles – Goodwill and Other. Accordingly, we perform our annual goodwill impairment testing as of December 31st of each calendar year or earlier if indicators of impairment exist on an interim basis. Step one of the impairment testing involves a comparison of the estimated fair value of a reporting unit to the related carrying value. Fair value is estimated using a discounted cash flow model. If the estimated fair value is less than its related carrying value, step two of the goodwill impairment test is completed, which involves allocating the estimated fair value of the reporting unit to individual assets and liabilities. If the carrying value of goodwill is greater than the estimated fair value, an impairment exists, which results in a write-down of the goodwill to the estimated fair value. Furthermore, ASC 350 requires purchased intangible assets other than goodwill to be amortized over their useful lives unless these lives are determined to be indefinite. Please read Note 6 , “ Goodwill and Other Intangible Assets ,” for additional information. Health Insurance Costs We provide group health insurance coverage to our worksite employees through a national network of carriers including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield and Tufts, all of which provide fully insured policies or service contracts. The policy with United provides the majority of our health insurance coverage. As a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model. Accordingly, we record the cost of the United portion of the plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Plan Costs”) as benefits expense, a component of direct costs, in the Consolidated Statements of Operations. The estimated incurred claims are based upon: (i) the level of claims processed during each quarter; (ii) estimated completion rates based upon recent claim development patterns under the plan; and (iii) the number of participants in the plan, including both active and COBRA enrollees. Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics and other factors are incorporated into the benefits costs. Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter. If the Plan Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets. On the other hand, if the Plan Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets. The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $9.0 million , which is reported as long-term prepaid insurance. In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $4.5 million as of December 31, 2016 , and is reported as a long-term asset. As of December 31, 2016 , Plan Costs were less than the net premiums paid and owed to United by $15.0 million . As this amount is in excess of the agreed-upon $9.0 million surplus maintenance level, the $6.0 million difference is included in prepaid health insurance costs, a current asset, in our Consolidated Balance Sheets. In addition, the premiums owed to United at December 31, 2016 , were $22.6 million , which is included in accrued health insurance costs, a current liability in our Consolidated Balance Sheets. Our benefits costs incurred in 2016 included costs of $5.1 million for changes in estimated run-off related to prior periods. Workers’ Compensation Costs Our workers’ compensation coverage has been provided through an arrangement with the Chubb Group of Insurance Companies (“the Chubb Program”) since 2007. The Chubb Program is a fully insured policy whereby Chubb has the responsibility to pay all claims incurred under the policy regardless of whether we satisfy our responsibilities. Under the Chubb Program, we bear the economic burden for the first $1 million layer of claims per occurrence, and effective October 1, 2010, we also bear the economic burden for a maximum aggregate amount of $5 million per policy year for claim amounts that exceed the first $1 million . Chubb bears the economic burden for all claims in excess of these levels. Because we bear the economic burden for claims up to the levels noted above, such claims, which are the primary component of our workers’ compensation costs, are recorded in the period incurred. Workers’ compensation insurance includes ongoing health care and indemnity coverage whereby claims are paid over numerous years following the date of injury. Accordingly, the accrual of related incurred costs in each reporting period includes estimates, which take into account the ongoing development of claims and therefore requires a significant level of judgment. We employ a third party actuary to estimate our loss development rate, which is primarily based upon the nature of worksite employees’ job responsibilities, the location of worksite employees, the historical frequency and severity of workers compensation claims, and an estimate of future cost trends. Each reporting period, changes in the actuarial assumptions resulting from changes in actual claims experience and other trends are incorporated into our workers’ compensation claims cost estimates. During the years ended December 31, 2016 and 2015 , we reduced accrued workers’ compensation costs by $10.9 million and $1.3 million , respectively, for changes in estimated losses related to prior reporting periods. Workers’ compensation cost estimates are discounted to present value at a rate based upon the U.S. Treasury rates that correspond with the weighted average estimated claim payout period (the average discount rate was 1.1% in 2016 and 1.0% in 2015 ), are accreted over the estimated claim payment period and are included as a component of direct costs in our Consolidated Statements of Operations. The following table provides the activity and balances related to incurred but not reported workers’ compensation claims: Year ended December 31, 2016 2015 (in thousands) Beginning balance $ 162,184 $ 136,088 Accrued claims 65,069 67,559 Present value discount (2,628 ) (3,095 ) Paid claims (40,697 ) (38,368 ) Ending balance $ 183,928 $ 162,184 Current portion of accrued claims $ 42,637 $ 37,438 Long-term portion of accrued claims 141,291 124,746 $ 183,928 $ 162,184 The current portion of accrued workers’ compensation costs at December 31, 2016 and 2015 includes $1.6 million of workers’ compensation administrative fees in both periods. As of December 31, the undiscounted accrued workers’ compensation costs were $194.2 million in 2016 and $172.3 million in 2015 . At the beginning of each policy period, the insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). The level of claim funds is primarily based upon anticipated worksite employee payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier. Monies funded into the program for incurred claims expected to be paid within one year are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits, a long-term asset in our Consolidated Balance Sheets. In 2016 , we received $12.8 million for the return of excess claim funds related to the workers’ compensation program, which decreased deposits. As of December 31, 2016 , we had restricted cash of $42.6 million and deposits of $143.9 million . Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year are included in long-term liabilities on our Consolidated Balance Sheets. Stock-Based Compensation At December 31, 2016 , we have one stock-based employee compensation plan under which we may issue awards. We account for this plan under the recognition and measurement principles of ASC 718, Compensation – Stock Compensation , which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. We generally make annual grants of restricted and unrestricted stock under our stock-based incentive compensation plan to our non-employee directors, officers and other management. Restricted stock grants to officers and other management generally vest over a period of three years from the date of grant. Restricted stock grants issued to non-employee directors upon their initial appointment to the board are one-third vested on each anniversary of the grant date. Annual stock grants issued to non-employee directors are 100% vested on the grant date. Shares of restricted stock are based on fair value on date of grant and the associated expense, net of estimated forfeitures, is recognized over the vesting period. In 2015, we adopted the Insperity Long-Term Incentive Program (the “LTIP”). The LTIP provides for performance based long-term compensation awards in the form of performance units to certain employees based on the achievement of pre-established performance goals. Each performance unit represents the right to receive one common share at a future date based on our performance against certain targets. Performance units have a vesting schedule of three years for performance based awards. Market-based performance awards vest at the end of a three -year period assuming continued employment and achievement of market-based performance goals.. The fair value of each performance unit is the market price of our common stock on the date of grant. The fair value of each market-based performance unit was determined through use of the Monte Carlo simulation method. The compensation expense for such awards is recognized on a straight line basis over the vesting term. Over the performance period the number of shares expected to be issued is adjusted upward or downward based on the probability of achievement of the performance target. Company-Sponsored 401(k) Retirement Plans Under our 401(k) retirement plan for corporate employees (the “Corporate Plan”), we matched 100% of eligible corporate employees’ contributions, up to 6% of the employees’ eligible compensation in 2016 , and 50% of eligible corporate employees’ contributions, up to 6% of the employees’ eligible compensation in 2015 and 2014 . Matching contributions under the Corporate Plan are immediately vested. During 2016 , 2015 and 2014 , we made matching contributions on behalf of corporate employees to the Corporate Plan of $8.0 million , $3.4 million and $3.1 million , respectively, and is included in salaries, wages and payroll taxes in our Consolidated Statements of Operations. Under our separate 401(k) retirement plan for worksite employees (the “Worksite Employee Plan”), the match percentage for worksite employees ranges from 0% to 6% , as determined by each client company. Matching contributions under the Worksite Employee Plan are immediately vested. During 2016 , 2015 and 2014 , we made matching contributions on behalf of worksite employees to the Worksite Employee Plan of $108.3 million , $95.3 million and $78.4 million , respectively. Advertising We expense all advertising costs as incurred. Income Taxes We use the liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax carrying amounts of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. Reclassifications Certain prior year amounts have been reclassified to conform to the 2016 presentation. New Accounting Pronouncements We believe that we have implemented the accounting pronouncements with a material impact on our financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based compensation payments, including (i) permitting the election of estimated or actual forfeitures for share grants, (ii) allowing excess tax benefits for share-based payments to be recorded as a reduction of income taxes reflected in operating cash flows in place of excess tax benefits currently recorded in equity and as financing activity in the cash flow statement, and (iii) providing for statutory withholding requirements. This guidance is effective for annual and interim reporting periods for public entities beginning after December 15, 2016; however, it can be elected early in any interim or annual period. We have elected to prospectively adopt this pronouncement for calendar year 2016. During 2016, we recognized an income tax benefit of $1.5 million , or $0.07 per diluted share related to excess tax benefits from the vesting of restricted stock awards and exercise of non-qualified stock options. Prior to the adoption of this pronouncement excess tax benefits were required to be reported as an increase in additional paid in capital. Prior periods have not been adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard requires recognition of lease assets and lease liabilities for leases previously classified as operating leases. The guidance is effective for fiscal years beginning after December 15, 2018. We are currently reviewing the guidance and assessing the impact on our consolidated financial statements. In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU No. 2014-09 outlines a single comprehensive revenue recognition model for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods ending after December 15, 2017, and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU No. 2014-09. While we are currently evaluating the guidance and have not yet determined the impact this standard may have on our Consolidated Financial Statements, we expect to apply the modified retrospective method upon adoption. |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | 12 Months Ended |
Dec. 31, 2016 | |
Cash, Cash Equivalents and Marketable Securities [Abstract] | |
Cash, Cash Equivalents and Marketable Securities | 2. Cash, Cash Equivalents and Marketable Securities The following table summarizes our investments in cash equivalents and marketable securities held by investment managers and overnight investments: December 31, 2016 2015 (in thousands) Overnight holdings: Money market funds (cash equivalents) $ 255,091 $ 247,720 Investment holdings: Money market funds (cash equivalents) 28,231 26,048 Marketable securities 1,851 9,875 285,173 283,643 Cash held in demand accounts 25,758 19,377 Outstanding checks (23,046 ) (23,607 ) Total cash, cash equivalents and marketable securities $ 287,885 $ 279,413 Cash and cash equivalents $ 286,034 $ 269,538 Marketable securities 1,851 9,875 $ 287,885 $ 279,413 Our cash and overnight holdings fluctuate based on the timing of the client’s payroll processing cycle. Included in the cash balance as of December 31, 2016 and December 31, 2015 , are $221.7 million and $185.7 million , respectively, in withholdings associated with federal and state income taxes, employment taxes and other payroll deductions, as well as $21.3 million and $17.0 million , respectively, in client prepayments. |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | 3. Fair Value Measurements We account for our financial assets in accordance with ASC 820, Fair Value Measurement . This standard defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The fair value measurement disclosures are grouped into three levels based on valuation factors: • Level 1 - quoted prices in active markets using identical assets • Level 2 - significant other observable inputs, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other observable inputs • Level 3 - significant unobservable inputs Fair Value of Instruments Measured and Recognized at Fair Value The following tables summarize the levels of fair value measurements of our financial assets: Fair Value Measurements (in thousands) December 31, Level 1 Level 2 Level 3 Money market funds $ 283,322 $ 283,322 $ — $ — Municipal bonds 1,851 — 1,851 — Total $ 285,173 $ 283,322 $ 1,851 $ — Fair Value Measurements (in thousands) December 31, Level 1 Level 2 Level 3 Money market funds $ 273,768 $ 273,768 $ — $ — Municipal bonds 9,875 — 9,875 — Total $ 283,643 $ 273,768 $ 9,875 $ — The municipal bond securities valued as Level 2 investments are primarily pre-refunded municipal bonds that are secured by escrow funds containing U.S. Government securities. Our valuation techniques used to measure fair value for these securities during the period consisted primarily of third party pricing services that utilized actual market data such as trades of comparable bond issues, broker/dealer quotations for the same or similar investments in active markets and other observable inputs. The following is a summary of our available-for-sale marketable securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) December 31, 2016 Municipal bonds $ 1,854 $ — $ (3 ) $ 1,851 December 31, 2015 Municipal bonds $ 9,875 $ 3 $ (3 ) $ 9,875 As of December 31, 2016 , the contractual maturities of our marketable securities were as follows: Amortized Cost Estimated Fair Value (in thousands) Less than one year $ 1,299 $ 1,299 One to five years 555 552 Total $ 1,854 $ 1,851 Fair Value of Other Financial Instruments The carrying amounts of cash, cash equivalents, restricted cash, accounts receivable, deposits and accounts payable approximate their fair values due to the short-term maturities of these instruments. At December 31, 2016 , the carrying value of our borrowings under our revolving credit facility approximates fair value and was classified as Level 2 in the fair value hierarchy. Please read Note 8 , " Long-Term Debt ," for additional information. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Accounts Receivable | 4. Accounts Receivable Our accounts receivable is primarily composed of trade receivables and unbilled receivables. Our trade receivables, which represent outstanding gross billings to clients, are reported net of allowance for doubtful accounts of $0.7 million and $1.1 million as of December 31, 2016 and 2015 , respectively. We establish an allowance for doubtful accounts based on management’s assessment of the collectability of specific accounts and by making a general provision for other potentially uncollectible amounts. We make an accrual at the end of each accounting period for our obligations associated with the earned but unpaid wages of our worksite employees and for the accrued gross billings associated with such wages. These accruals are included in accrued worksite employee payroll cost and unbilled accounts receivable; however, these amounts are presented net in the Consolidated Statements of Operations. We generally require clients to pay invoices for service fees no later than one day prior to the applicable payroll date. As such, we generally do not require collateral. Client prepayments directly attributable to unbilled accounts receivable have been netted against such receivables as the gross billings have been earned and the payroll cost has been incurred, thus we have the legal right of offset for these amounts. Unbilled accounts receivable consisted of the following: December 31, 2016 2015 (in thousands) Accrued worksite employee payroll cost $ 215,214 $ 161,917 Unbilled revenues 61,041 45,835 Customer prepayments (21,256 ) (17,037 ) Unbilled accounts receivable $ 254,999 $ 190,715 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2016 | |
Deposits [Abstract] | |
Deposits | 5. Deposits The contractual arrangement with United for health insurance coverage requires us to maintain an accumulated cash surplus in the plan of $9.0 million , which is reported as long-term prepaid health insurance. Please read Note 1 , “ Accounting Policies ,” for a discussion of our accounting policies for health insurance costs. As of December 31, 2016 , we had $4.7 million in health insurance long-term deposits. Please read Note 1 , “ Accounting Policies ,” for a discussion of our accounting policies for health insurance costs. As of December 31, 2016 , we had $143.9 million in workers’ compensation long-term deposits. Please read Note 1 , “ Accounting Policies ,” for a discussion of our accounting policies for workers’ compensation costs. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 6. Goodwill and Other Intangible Assets We perform our annual asset impairment test as of December 31, the end of our fiscal year. During the fourth quarters of 2016 , 2015 and 2014 , we performed step one of the annual impairment test for each of our reporting units. Additionally, any time impairment indicators are identified, we perform an interim impairment test. During the second quarter of 2014, impairment indicators were identified in our Employment Screening business, due to changes in management, the reporting unit’s financial results and the loss of certain customers. The declines in the estimated fair values of Employment Screening resulted primarily from lower projected revenue growth rates and profitability levels. Upon completion of step two of the goodwill impairment tests, we recognized goodwill and other intangible asset impairments of $2.5 million in 2014 related to our Employment Screening business unit. The fair values of the reporting units were estimated using a discounted cash flow model. The material assumptions used in the model included the weighted average cost of capital and long-term growth rates. We consider this a Level 3 fair value measure. The following table presents the gross carrying amount and accumulated amortization for each class of intangible assets and the gross carrying amount and accumulated impairment for goodwill: December 31, 2015 Twelve Months Ended December 31, 2016 Balance Impairment Amortization Expense Balance (in thousands) Gross carrying amount: Trademarks $ 220 $ — $ — $ 220 Customer relationships 6,392 — — 6,392 Aggregate goodwill acquired: Goodwill 21,156 — — 21,156 Total $ 27,768 $ — $ — $ 27,768 Accumulated amortization: Trademarks $ (101 ) $ — $ (39 ) $ (140 ) Customer relationships (5,609 ) — (461 ) (6,070 ) Accumulated impairment: Goodwill (8,470 ) — — (8,470 ) Total $ (14,180 ) $ — $ (500 ) $ (14,680 ) Net carrying amount: Trademarks $ 119 $ — $ (39 ) $ 80 Customer relationships 783 — (461 ) 322 Goodwill 12,686 — — 12,686 Total goodwill and other intangible assets $ 13,588 $ — $ (500 ) $ 13,088 Our amortization expense related to purchased intangible assets other than goodwill was $0.5 million in 2016 , $0.9 million in 2015 and $1.5 million in 2014 , and is estimated to be $0.3 million in 2017 , $36,000 in 2018 , $12,000 in 2019 and $7,000 in 2020 . |
Other Asset Impairments Other A
Other Asset Impairments Other Asset Impairments (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Asset Impairment Charges [Abstract] | |
Asset Impairment Charges [Text Block] | 7. Impairment Charges and Other In the first quarter of 2015, we entered into a plan to sell our two aircraft, and as a result, we recorded impairment and other charges of $9.8 million , representing the difference between the carrying value and the estimated fair value of the assets as well as a provision for potential settlement of a Texas sales and use tax assessment. In July 2015, we received proceeds, net of selling costs, of $12.2 million for both aircraft and recorded an additional $1.3 million impairment charge in the second quarter of 2015. In the fourth quarter of 2015, we reduced our use tax accrual by $0.6 million due to a pending $0.2 million settlement of the Texas sales and use tax assessment. These net charges of $10.5 million are included in impairment charges and other on our Consolidated Statement of Operations. In the first quarter of 2016, we settled the Texas sales and use tax assessment. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 8. Long-Term Debt We have a $200 million revolving credit facility (the “Facility”). The Facility was increased from $125 million to $200 million in the first quarter of 2016. The Facility may be further increased to $250 million based on the terms and subject to the conditions set forth in the agreement relating to the Facility (the “Credit Agreement”). The Facility is available for working capital and general corporate purposes, including acquisitions, stock repurchases and issuances of letters of credit. Our obligations under the Facility are secured by 65% of the stock of our captive insurance subsidiary and are guaranteed by all of our domestic subsidiaries. In January 2016, we had net borrowings of $104.4 million to fund a portion of the purchase price of our modified Dutch auction tender offer. In addition, as of December 31, 2016 , we had an outstanding $1.0 million letter of credit issued under the Facility. As of December 31, 2016 , our outstanding balance on the Facility was $104.4 million . The Facility matures on February 6, 2020 . Borrowings under the Facility bear interest at an alternate base rate or LIBOR , at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin varies (i) in the case of LIBOR loans, from 2.00% to 2.75% and (ii) in the case of alternate base rate loans, from 0.00% to 0.75% . The alternate base rate is the highest of (i) the prime rate most recently published in The Wall Street Journal, (ii) the federal funds rate plus 0.50% and (iii) the 30-day LIBOR rate plus 2.00% . We also pay an unused commitment fee on the average daily unused portion of the Facility at a rate of 0.25% . The average interest rate during 2016 was 2.33% . Interest expense and unused commitment fees are recorded in other income (expense). The Facility contains both affirmative and negative covenants that we believe are customary for arrangements of this nature. Covenants include, but are not limited to, limitations on our ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business, make investments and pay dividends. In addition, the Credit Agreement requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio and maximum leverage ratio. In December 2014, the Credit Agreement was amended to modify the interest coverage ratio covenant to exclude the impact of special dividends paid of $50.7 million . We were in compliance with all financial covenants under the Credit Agreement at December 31, 2016 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. Significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the Consolidated Balance Sheets are as follows: December 31, 2016 2015 (in thousands) Deferred tax liabilities: Prepaid assets $ (7,133 ) $ (3,952 ) Depreciation (936 ) (1,741 ) Software development costs (3,960 ) (2,699 ) Total deferred tax liabilities (12,029 ) (8,392 ) Deferred tax assets: Accrued incentive compensation 8,590 8,818 Net operating loss carryforward 1,300 1,463 Workers’ compensation accruals 7,891 7,586 Accrued rent 1,092 1,229 Stock-based compensation 6,217 4,553 Intangibles 618 1,159 Minority investment impairment 1,021 1,016 Other 349 564 Total deferred tax assets 27,078 26,388 Valuation allowance (1,024 ) (1,020 ) Total net deferred tax assets 26,054 25,368 Net deferred tax assets $ 14,025 $ 16,976 The components of income tax expense are as follows: Year ended December 31, 2016 2015 2014 (in thousands) Current income tax expense: Federal $ 31,045 $ 35,221 $ 18,034 State 5,190 5,741 3,322 Total current income tax expense 36,235 40,962 21,356 Deferred income tax (benefit) expense: Federal 2,641 (13,632 ) (1,764 ) State 310 (1,101 ) 31 Total deferred income tax (benefit) expense 2,951 (14,733 ) (1,733 ) Total income tax expense $ 39,186 $ 26,229 $ 19,623 In the first quarter of 2016, we prospectively adopted ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting for calendar year 2016. In 2016, we recognized an income tax benefit of $1.5 million , or $0.07 per diluted related to excess tax benefits from the vesting of restricted stock awards and non-qualified stock options. Prior to the adoption of this pronouncement we recognized excess tax benefit as an increase in additional paid in capital of $2.2 million in 2015 and $0.5 million in 2014 . Prior periods have not been adjusted, consistent with the provisions of the ASU. The reconciliation of income tax expense computed at U.S. federal statutory tax rates to the reported income tax expense from continuing operations is as follows: Year ended December 31, 2016 2015 2014 (in thousands) Expected income tax expense at 35% $ 36,812 $ 22,967 $ 16,670 State income taxes, net of federal benefit 3,684 2,696 2,204 Nondeductible expenses 1,669 1,669 1,939 Section 199 benefits (686 ) (627 ) (592 ) Equity compensation (1,338 ) — — Research and development credit (751 ) (530 ) (455 ) Other, net (204 ) 54 (143 ) Reported total income tax expense $ 39,186 $ 26,229 $ 19,623 At December 31, 2016 , we have net operating loss carryforwards totaling approximately $3.4 million that expire from 2022 to 2030 related to our acquisition of ExpensAble. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2016 , 2015 and 2014 , we made no provisions for interest or penalties related to uncertain tax positions. The tax years 2013 through 2015 remain open to examination by the Internal Revenue Service of the United States. The tax years 2012 through 2015 remain open to examination by various state tax authorities. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Repurchase Program Our Board of Directors (the “Board”) has authorized a program to repurchase shares of our outstanding common stock (“Repurchase Program”). The purchases are to be made from time to time in the open market or directly from stockholders at prevailing market prices based on market conditions or other factors. During 2015 , we repurchased 1,244,433 shares under the Repurchase Program and 114,523 shares were withheld to satisfy minimum tax withholding obligations for the vesting of restricted stock awards. In 2016, the Board authorized an increase of one million shares that may be repurchased under the Repurchase Program. We repurchased 388,063 shares under the Repurchase Program during 2016 . In addition, 101,335 shares were withheld during 2016 to satisfy minimum tax withholding obligations for the vesting of restricted stock awards, which are not subject to the Repurchase Program. At December 31, 2016 , we were authorized to repurchase an additional 1,136,269 shares under the Repurchase Program. Shares repurchased under the Repurchase Program and shares withheld to satisfy minimum tax withholding obligations for the vesting of restricted stock awards are recorded in treasury. Tender Offer for Common Stock In December 2015, we commenced a modified Dutch auction tender offer to purchase up to $125 million in value of our common stock at a price not less than $43.50 per share and not more than $50.00 per share. In January 2016, we exercised our right to increase the size of the tender offer by up to 2.0% of our outstanding common stock. The tender offer period expired on January 7, 2016 and on January 13, 2016, we purchased 3,013,531 shares of our common stock at a per share price of $47.50 and an aggregate price of $143.1 million , excluding $1.1 million of transaction costs. The shares were immediately canceled and retired. The tender offer was funded through borrowings of $104.4 million under the Facility and the remainder with cash on hand. Dividends The Board declared quarterly dividends in 2016 and 2015 as follows: 2016 2015 (amounts per share) First quarter $ 0.22 $ 0.19 Second quarter 0.25 0.22 Third quarter 0.25 0.22 Fourth quarter 0.25 0.22 During 2016 and 2015 , we paid a total of $20.6 million and $21.2 million , respectively in dividends. Preferred Stock At December 31, 2016 , 20 million shares of preferred stock were authorized, of which 600,000 shares were designated as Series A Junior Participating Preferred Stock that is reserved for issuance on exercise of preferred stock purchase rights under our Share Purchase Rights Plan (the “Rights Plan”). Each issued share of our common stock has one preferred stock purchase right attached to it. No preferred shares have been issued and the rights are not currently exercisable. The Rights Plan expires on November 13, 2017. |
Incentive Plans
Incentive Plans | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |
Incentive Plans | 11. Incentive Plans The Insperity, Inc. 2001 Incentive Plan, as amended, and the 2012 Incentive Plan, as amended, (collectively, the “Incentive Plans”) provide for options and other stock-based awards that have been and may be granted to eligible employees and non-employee directors of Insperity or its subsidiaries. The 2012 Incentive Plan is currently the only plan under which new stock-based awards may be granted. The Incentive Plans are administered by the Compensation Committee of the Board of Directors (the “Committee”). The Committee has the power to determine which eligible employees will receive awards, the timing and manner of the grant of such awards, the exercise price of stock options (which may not be less than market value on the date of grant), the number of shares and all of the terms of the awards. The Board may at any time amend or terminate the Incentive Plans. However, no amendment that would impair the rights of any participant, with respect to outstanding grants, can be made without the participant’s prior consent. Stockholder approval of amendments to the Incentive Plans is necessary only when required by applicable law or stock exchange rules. At December 31, 2016 , 749,265 shares of common stock were available for future grants under the 2012 Incentive Plan. The Incentive Plans permit stock options, including nonqualified stock options and options intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code, stock awards, phantom stock awards, stock appreciation rights, performance units, and other stock-based awards and cash awards, all of which may or may not be subject to the achievement of one or more performance objectives. The purposes of the Incentive Plans generally are to retain and attract persons of training, experience and ability to serve as employees of Insperity and its subsidiaries and to serve as non-employee directors of Insperity, to encourage the sense of proprietorship of such persons and to stimulate the active interest of such persons in the development and financial success of Insperity and its subsidiaries. On March 30, 2015, we adopted the Insperity, Inc. Long-Term Incentive Program (“LTIP”) under the Insperity, Inc. 2012 Incentive Plan. The LTIP provides for performance-based long-term compensation awards in the form of performance units to certain employees based on the achievement of pre-established performance goals. We granted performance units under the LTIP to our named executive officers and certain other officers in 2015 and 2016. We recognized $16.6 million , $13.3 million and $11.1 million of compensation expense associated with the restricted stock and the LTIP awards in 2016 , 2015 and 2014 , respectively. We recognized $7.7 million , $5.3 million and $4.6 million of tax benefits associated with stock-based compensation in 2016 , 2015 and 2014 , respectively. Stock Option Awards The following is a summary of stock option award activity for 2016 : Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Outstanding - December 31, 2015 28 $ 29.56 Granted — — Exercised (20 ) 29.17 Canceled — — Outstanding - December 31, 2016 8 $ 30.59 4.5 $ 315 Exercisable - December 31, 2016 8 $ 30.59 4.5 $ 315 The intrinsic value of options exercised during the year was $0.8 million in 2016 , $0.3 million in 2015 and $0.3 million in 2014 . Restricted Stock Awards Restricted common shares, under equity plan accounting, are generally measured at fair value on the date of grant based on the number of shares granted, estimated forfeitures and the quoted price of the common stock. Such value is recognized as compensation expense over the corresponding vesting period, three to five years for our shares currently outstanding. The total fair value of shares vested during the years ended December 31, 2016 , 2015 , and 2014 was $16.2 million , $18.6 million and $10.8 million , respectively. The weighted average grant date fair value of restricted stock awards granted during the years ended December 31, 2016 , 2015 and 2014 was $52.66 , $51.54 and $28.22 , respectively. As of December 31, 2016 , unrecognized compensation expense associated with the unvested shares outstanding was $14.6 million and is expected to be recognized over a weighted average period of 21 months . The following is a summary of restricted stock award activity for 2016 : Shares Weighted Average Grant Date Fair Value (in thousands) Non-vested - December 31, 2015 618 $ 37.98 Granted 236 52.66 Vested (333 ) 35.66 Canceled/Forfeited (18 ) 44.66 Non-vested - December 31, 2016 503 $ 46.17 Long-Term Incentive Program Awards Each performance unit represents the right to receive one common share at a future date based on our performance against specified targets. Performance units have a vesting schedule of three years for performance based awards. Market-based performance awards vest at the end of a three-year period assuming continued employment and achievement of market-based performance goals. The fair value of each performance unit is the market price of one common share on the date of grant. The fair value of each market-based performance unit was determined through the use of the Monte Carlo simulation method. The compensation expense for the LTIP awards is recognized on a straight-line basis over the vesting terms. Over the performance period, the number of shares expected to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets. The following is a summary of LTIP award activity for 2016 : Number of Performance Units at Target Weighted Average Grant Date Fair Value Maximum Shares Eligible to Receive Unvested at December 31, 2015 100,900 $ 52.80 201,800 Granted 133,380 58.42 224,861 Vested — — — Canceled (2,550 ) 52.80 (4,636 ) Unvested at December 31, 2016 231,730 $ 56.04 422,025 Expected to vest 302,059 As of December 31, 2016 , we estimate that 178,770 shares and 123,289 shares will vest with $3.8 million and $4.7 million in unamortized compensation expense related to the 2015 and 2016 grants, respectively. Employee Stock Purchase Plan Our employee stock purchase plan (the “ESPP”) enables employees to purchase shares of Insperity stock at a 5% discount. The ESPP is a non-compensatory plan under generally accepted accounting principles of stock-based compensation. As a result, no compensation expense is recognized in conjunction with this plan. Approximately 17,000 , 24,000 and 37,000 shares were issued from treasury under the ESPP during fiscal years 2016 , 2015 and 2014 , respectively. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 12. Net Income Per Share We utilize the two-class method to compute net income per share. The two-class method allocates a portion of net income to participating securities, which includes unvested awards of share-based payments with non-forfeitable rights to receive dividends. Net income allocated to unvested share-based payments is excluded from net income allocated to common shares. Any undistributed losses resulting from dividends exceeding net income are not allocated to participating securities. We declared a special dividend of $2.00 per share in 2014. As a result, dividends exceeded earnings, which resulted in decreased earnings per share of $0.05 per share in 2014. Basic net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options. The following table summarizes the net income allocated to common shares and the basic and diluted shares used in the net income per share computations: Year ended December 31, 2016 2015 2014 (in thousands) Net income $ 65,991 $ 39,390 $ 28,004 Less distributed and undistributed earnings allocated to participating securities (1,496 ) (981 ) (2,002 ) Net income allocated to common shares $ 64,495 $ 38,409 $ 26,002 Weighted average common shares outstanding 20,834 24,308 24,708 Incremental shares from assumed conversions of common stock options and LTIP awards 47 7 4 Adjusted weighted average common shares outstanding 20,881 24,315 24,712 Potentially dilutive securities not included in weighted average share — — 4 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | 13. Leases We lease various office facilities, equipment and vehicles under operating lease arrangements, some of which contain rent escalation clauses. Most of the leases contain purchase and/or renewal options at fair market and fair rental value, respectively. Rental expense relating to all operating leases was $15.0 million , $13.6 million and $13.4 million in 2016 , 2015 and 2014 , respectively. At December 31, 2016 , future minimum rental payments under noncancelable operating leases are as follows: Operating Leases (in thousands) 2017 $ 14,888 2018 13,132 2019 9,561 2020 7,008 2021 4,506 Thereafter 5,155 Total minimum lease payments $ 54,250 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies We enter into fixed purchase and service obligations in the ordinary course of business. These arrangements primarily consist of, construction contract for the new facility, advertising commitments and service contracts. At December 31, 2016 , future purchase and service obligations greater than $100,000 and one year were as follows (in thousands): 2017 $ 12,630 (1) 2018 8,799 2019 3,876 2020 2,549 2021 800 Thereafter 400 Total obligations $ 29,054 ____________________________________ (1) Includes $4.9 million related to the construction of a new facility on our corporate campus. Worksite Employee 401(k) Retirement Plan Class Action Litigation In December 2015, a lawsuit was filed seeking class action status on behalf of participants in the Insperity 401(k) retirement plan that is available to eligible worksite employees (the “Plan”). The suit was filed against us and the third-party discretionary trustee of the Plan in the United States District Court for the Northern District of Georgia, Atlanta Division. It generally alleges that the third-party discretionary trustee of the Plan and Insperity breached their fiduciary duties to plan participants by selecting an Insperity subsidiary to serve as the recordkeeper for the Plan, by causing participants in the Plan to pay excessive recordkeeping fees to the Insperity subsidiary, by failing to monitor other fiduciaries, and by making imprudent investment choices. We believe we have meritorious defenses, and we intend to vigorously defend this litigation. The matter is at an early state and involves unresolved questions of fact and law. As a result of this uncertainty, no provision has been made in the accompanying consolidated financial statements. Other Litigation We are a defendant in various other lawsuits and claims arising in the normal course of business. Management believes it has valid defenses in these cases and is defending them vigorously. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on our financial position or results of operations. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 15. Quarterly Financial Data (Unaudited) Quarter ended March 31 June 30 Sept. 30 Dec. 31 (in thousands, except per share amounts) 2016 Revenues $ 802,408 $ 707,332 $ 702,538 $ 729,069 Gross profit 150,016 113,259 117,796 110,539 Operating income 53,043 16,023 22,773 14,467 Net income 32,693 9,713 14,065 9,520 Basic net income per share 1.53 0.45 0.66 0.45 Diluted net income per share 1.53 0.45 0.66 0.45 2015 Revenues $ 699,479 $ 627,838 $ 626,286 $ 650,011 Gross profit 129,860 104,219 106,743 97,045 Operating income 23,520 (1) 12,217 (2) 19,936 10,026 (3) Net income 13,787 7,314 11,950 6,339 Basic net income per share 0.54 0.29 0.48 0.26 Diluted net income per share 0.54 0.29 0.48 0.26 ____________________________________ (1) Includes non-cash impairment and other charges in the first quarter of 2015 of $9.8 million . Please read Note 7 , “ Impairment Charges and Other ,” for additional information. (2) Includes non-cash impairment and other charges in the second quarter of 2015 of $1.3 million . Please read Note 7 , “ Impairment Charges and Other ,” for additional information. (3) Includes a reduction to non-cash impairment and other charges in the fourth quarter of 2015 of $0.6 million . Please read Note 7 , “ Impairment Charges and Other ,” for additional information. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Insperity, Inc. (“Insperity” or “we”, “our”, and “us”) provides an array of human resources (“HR”) and business solutions designed to help improve business performance. Since our formation in 1986, we have evolved from being solely a professional employer organization (“PEO”), an industry we pioneered, to our current position as a comprehensive business performance solutions provider. We were organized as a corporation in 1986 and have provided PEO services since inception. Our most comprehensive HR services offerings are provided through our Workforce Optimization ® and Workforce Synchronization TM solutions (together, our “PEO HR Outsourcing solutions”), which encompass a broad range of human resources functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services, along with our cloud-based human capital management platform, the Employee Service Center SM (“ESC”). In addition to our PEO HR Outsourcing solutions, we offer a number of other business performance solutions, including Human Capital Management, Payroll Services, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening and Expense Management Services, Retirement Services and Insurance Services, many of which are offered via desktop applications and cloud-based delivery models. These other products and services are offered separately, along with our PEO HR Outsourcing solutions or as a bundle, such as our new Workforce Administration TM solution that provides a comprehensive human capital management and payroll services solution. We provide our PEO HR Outsourcing solutions by entering into a co-employment relationship with our clients, under which Insperity and its clients each take responsibility for certain portions of the employer-employee relationship. Insperity and its clients designate each party’s responsibilities through its Client Service Agreement (“CSA”), under which Insperity becomes the employer of the employees who work at the client’s location (“worksite employees”) for most administrative and regulatory purposes. As a co-employer of its worksite employees, we assume many of the rights and obligations associated with being an employer. We enter into an employment agreement with each worksite employee, thereby maintaining a variety of employer rights, including the right to hire or terminate employees, the right to evaluate employee qualifications or performance, and the right to establish employee compensation levels. Typically, Insperity only exercises these rights in consultation with its clients or when necessary to ensure regulatory compliance. The responsibilities associated with our role as employer include the following obligations with regard to our worksite employees: (i) to compensate its worksite employees through wages and salaries; (ii) to pay the employer portion of payroll-related taxes; (iii) to withhold and remit (where applicable) the employee portion of payroll-related taxes; (iv) to provide employee benefit programs; and (v) to provide workers’ compensation insurance coverage. In addition to our assumption of employer status for our worksite employees, our PEO HR Outsourcing solutions also include other human resources functions for our clients to support the effective and efficient use of personnel in their business operations. To provide these functions, we maintain a significant staff of professionals trained in a wide variety of human resources functions, including employee training, employee recruiting, employee performance management, employee compensation and employer liability management. These professionals interact and consult with clients on a daily basis to help identify each client’s service requirements and to ensure that we are providing appropriate and timely personnel management services. |
Revenue and Direct Cost Recognition | Revenue and Direct Cost Recognition We account for our PEO HR Outsourcing solutions revenues in accordance with Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition, Principal Agent Considerations. Our PEO HR Outsourcing solutions revenues are primarily derived from our gross billings, which are based on (i) the payroll cost of its worksite employees; and (ii) a markup computed as a percentage of the payroll cost. The gross billings are invoiced concurrently with each periodic payroll of its worksite employees. Revenues, which exclude the payroll cost component of gross billings and therefore consist solely of markup, are recognized ratably over the payroll period as worksite employees perform their service at the client worksite. Revenues that have been recognized but not invoiced are included in unbilled accounts receivable on our Consolidated Balance Sheets. In determining the pricing of the markup component of our gross billings, we take into consideration our estimates of the costs directly associated with our worksite employees, including payroll taxes, benefits and workers’ compensation costs, plus an acceptable gross profit margin. As a result, our operating results are significantly impacted by our ability to accurately estimate, control and manage our direct costs relative to the revenues derived from the markup component of our gross billings. Consistent with our revenue recognition policy, our direct costs do not include the payroll cost of our worksite employees. Our direct costs associated with our revenue generating activities are primarily comprised of all other costs related to our worksite employees, such as the employer portion of payroll-related taxes, employee benefit plan premiums and workers’ compensation insurance costs. |
Segment Reporting | Segment Reporting We operate one reportable segment under ASC 280, Segment Reporting . |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of Insperity, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that could potentially subject us to concentration of credit risk include accounts receivable and marketable securities. |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities We invest our excess cash in federal government and municipal-based money market funds and debt instruments of U.S. municipalities. All highly liquid investments with stated maturities of three months or less from date of purchase are classified as cash equivalents. Liquid investments with stated maturities of greater than three months are classified as marketable securities in current assets. We account for marketable securities in accordance with ASC 320, Investments – Debt and Equity Securities . We determine the appropriate classification of all marketable securities as held-to-maturity, available-for-sale or trading at the time of purchase, and re-evaluate such classification as of each balance sheet date. At December 31, 2016 and 2015 , all of our investments in marketable securities were classified as available-for-sale, and as a result, were reported at fair value. Unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts from the date of purchase to maturity. Such amortization is included in interest income as an addition to or deduction from the coupon interest earned on the investments. We use the specific identification method of determining the cost basis in computing realized gains and losses on the sale of our available-for-sale securities. Realized gains and losses are included in other income. |
Fair Value of Financial Instruments | Fair Value of Other Financial Instruments The carrying amounts of cash, cash equivalents, restricted cash, accounts receivable, deposits and accounts payable approximate their fair values due to the short-term maturities of these instruments. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives of property and equipment for purposes of computing depreciation are as follows: Buildings and improvements 5-30 years Computer hardware and software 2-5 years Software development costs 3-5 years Furniture, fixtures and other 5-7 years Software development costs relate primarily to software coding, system interfaces and testing of our proprietary professional employer information systems and are accounted for in accordance with ASC 350-40, Internal Use Software . Capitalized software development costs are amortized using the straight-line method over the estimated useful lives of the software, generally three years. We recognized $3.0 million , $3.3 million and $4.1 million in amortization of capitalized computer software costs in 2016 , 2015 and 2014 , respectively. Unamortized software development costs were $10.4 million and $7.1 million in 2016 and 2015 , respectively. We account for our software products in accordance with ASC 985-20, Costs of Software to be Sold . This Topic establishes standards of financial accounting and reporting for the costs of computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process, whether internally developed and produced or purchased. We periodically evaluate our long-lived assets for impairment in accordance with ASC 360-10, Property, Plant, and Equipment. ASC 360-10 requires that an impairment loss be recognized for assets to be disposed of or held-for-use when the carrying amount of an asset is deemed to not be recoverable. If events or circumstances were to indicate that any of our long-lived assets might be impaired, we would assess recoverability based on the estimated undiscounted future cash flows to be generated from the applicable asset. In addition, we may record an impairment loss to the extent that the carrying value of the asset exceeded the fair value of the asset. Fair value is generally determined using an estimate of discounted future net cash flows from operating activities or upon disposal of the asset. Due to a change in office consolidation plans, we recorded a $1.2 million non-cash charge related to office design fees in 2014. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Our purchased intangible assets are carried at cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, ranging from three to 10 years . Our goodwill and intangible assets are subject to the provisions of ASC 350, Intangibles – Goodwill and Other. Accordingly, we perform our annual goodwill impairment testing as of December 31st of each calendar year or earlier if indicators of impairment exist on an interim basis. Step one of the impairment testing involves a comparison of the estimated fair value of a reporting unit to the related carrying value. Fair value is estimated using a discounted cash flow model. If the estimated fair value is less than its related carrying value, step two of the goodwill impairment test is completed, which involves allocating the estimated fair value of the reporting unit to individual assets and liabilities. If the carrying value of goodwill is greater than the estimated fair value, an impairment exists, which results in a write-down of the goodwill to the estimated fair value. Furthermore, ASC 350 requires purchased intangible assets other than goodwill to be amortized over their useful lives unless these lives are determined to be indefinite. Please read Note 6 , “ Goodwill and Other Intangible Assets ,” for additional information. |
Health Insurance Costs | Health Insurance Costs We provide group health insurance coverage to our worksite employees through a national network of carriers including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield and Tufts, all of which provide fully insured policies or service contracts. The policy with United provides the majority of our health insurance coverage. As a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model. Accordingly, we record the cost of the United portion of the plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Plan Costs”) as benefits expense, a component of direct costs, in the Consolidated Statements of Operations. The estimated incurred claims are based upon: (i) the level of claims processed during each quarter; (ii) estimated completion rates based upon recent claim development patterns under the plan; and (iii) the number of participants in the plan, including both active and COBRA enrollees. Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics and other factors are incorporated into the benefits costs. Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter. If the Plan Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets. On the other hand, if the Plan Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets. The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $9.0 million , which is reported as long-term prepaid insurance. In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $4.5 million as of December 31, 2016 , and is reported as a long-term asset. As of December 31, 2016 , Plan Costs were less than the net premiums paid and owed to United by $15.0 million . As this amount is in excess of the agreed-upon $9.0 million surplus maintenance level, the $6.0 million difference is included in prepaid health insurance costs, a current asset, in our Consolidated Balance Sheets. In addition, the premiums owed to United at December 31, 2016 , were $22.6 million , which is included in accrued health insurance costs, a current liability in our Consolidated Balance Sheets. Our benefits costs incurred in 2016 included costs of $5.1 million for changes in estimated run-off related to prior periods. |
Workers' Compensation Costs | Workers’ Compensation Costs Our workers’ compensation coverage has been provided through an arrangement with the Chubb Group of Insurance Companies (“the Chubb Program”) since 2007. The Chubb Program is a fully insured policy whereby Chubb has the responsibility to pay all claims incurred under the policy regardless of whether we satisfy our responsibilities. Under the Chubb Program, we bear the economic burden for the first $1 million layer of claims per occurrence, and effective October 1, 2010, we also bear the economic burden for a maximum aggregate amount of $5 million per policy year for claim amounts that exceed the first $1 million . Chubb bears the economic burden for all claims in excess of these levels. Because we bear the economic burden for claims up to the levels noted above, such claims, which are the primary component of our workers’ compensation costs, are recorded in the period incurred. Workers’ compensation insurance includes ongoing health care and indemnity coverage whereby claims are paid over numerous years following the date of injury. Accordingly, the accrual of related incurred costs in each reporting period includes estimates, which take into account the ongoing development of claims and therefore requires a significant level of judgment. We employ a third party actuary to estimate our loss development rate, which is primarily based upon the nature of worksite employees’ job responsibilities, the location of worksite employees, the historical frequency and severity of workers compensation claims, and an estimate of future cost trends. Each reporting period, changes in the actuarial assumptions resulting from changes in actual claims experience and other trends are incorporated into our workers’ compensation claims cost estimates. During the years ended December 31, 2016 and 2015 , we reduced accrued workers’ compensation costs by $10.9 million and $1.3 million , respectively, for changes in estimated losses related to prior reporting periods. Workers’ compensation cost estimates are discounted to present value at a rate based upon the U.S. Treasury rates that correspond with the weighted average estimated claim payout period (the average discount rate was 1.1% in 2016 and 1.0% in 2015 ), are accreted over the estimated claim payment period and are included as a component of direct costs in our Consolidated Statements of Operations. The following table provides the activity and balances related to incurred but not reported workers’ compensation claims: Year ended December 31, 2016 2015 (in thousands) Beginning balance $ 162,184 $ 136,088 Accrued claims 65,069 67,559 Present value discount (2,628 ) (3,095 ) Paid claims (40,697 ) (38,368 ) Ending balance $ 183,928 $ 162,184 Current portion of accrued claims $ 42,637 $ 37,438 Long-term portion of accrued claims 141,291 124,746 $ 183,928 $ 162,184 The current portion of accrued workers’ compensation costs at December 31, 2016 and 2015 includes $1.6 million of workers’ compensation administrative fees in both periods. As of December 31, the undiscounted accrued workers’ compensation costs were $194.2 million in 2016 and $172.3 million in 2015 . At the beginning of each policy period, the insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). The level of claim funds is primarily based upon anticipated worksite employee payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier. Monies funded into the program for incurred claims expected to be paid within one year are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits, a long-term asset in our Consolidated Balance Sheets. In 2016 , we received $12.8 million for the return of excess claim funds related to the workers’ compensation program, which decreased deposits. As of December 31, 2016 , we had restricted cash of $42.6 million and deposits of $143.9 million . Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year are included in long-term liabilities on our Consolidated Balance Sheets. |
Stock-Based Compensation | Stock-Based Compensation At December 31, 2016 , we have one stock-based employee compensation plan under which we may issue awards. We account for this plan under the recognition and measurement principles of ASC 718, Compensation – Stock Compensation , which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. We generally make annual grants of restricted and unrestricted stock under our stock-based incentive compensation plan to our non-employee directors, officers and other management. Restricted stock grants to officers and other management generally vest over a period of three years from the date of grant. Restricted stock grants issued to non-employee directors upon their initial appointment to the board are one-third vested on each anniversary of the grant date. Annual stock grants issued to non-employee directors are 100% vested on the grant date. Shares of restricted stock are based on fair value on date of grant and the associated expense, net of estimated forfeitures, is recognized over the vesting period. In 2015, we adopted the Insperity Long-Term Incentive Program (the “LTIP”). The LTIP provides for performance based long-term compensation awards in the form of performance units to certain employees based on the achievement of pre-established performance goals. Each performance unit represents the right to receive one common share at a future date based on our performance against certain targets. Performance units have a vesting schedule of three years for performance based awards. Market-based performance awards vest at the end of a three -year period assuming continued employment and achievement of market-based performance goals.. The fair value of each performance unit is the market price of our common stock on the date of grant. The fair value of each market-based performance unit was determined through use of the Monte Carlo simulation method. The compensation expense for such awards is recognized on a straight line basis over the vesting term. Over the performance period the number of shares expected to be issued is adjusted upward or downward based on the probability of achievement of the performance target. |
Company-Sponsored 401(k) Plans | Company-Sponsored 401(k) Retirement Plans Under our 401(k) retirement plan for corporate employees (the “Corporate Plan”), we matched 100% of eligible corporate employees’ contributions, up to 6% of the employees’ eligible compensation in 2016 , and 50% of eligible corporate employees’ contributions, up to 6% of the employees’ eligible compensation in 2015 and 2014 . Matching contributions under the Corporate Plan are immediately vested. During 2016 , 2015 and 2014 , we made matching contributions on behalf of corporate employees to the Corporate Plan of $8.0 million , $3.4 million and $3.1 million , respectively, and is included in salaries, wages and payroll taxes in our Consolidated Statements of Operations. Under our separate 401(k) retirement plan for worksite employees (the “Worksite Employee Plan”), the match percentage for worksite employees ranges from 0% to 6% , as determined by each client company. Matching contributions under the Worksite Employee Plan are immediately vested. During 2016 , 2015 and 2014 , we made matching contributions on behalf of worksite employees to the Worksite Employee Plan of $108.3 million , $95.3 million and $78.4 million , respectively. |
Advertising | Advertising We expense all advertising costs as incurred. |
Income Taxes | Income Taxes We use the liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax carrying amounts of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. |
Reclassification, Policy | Reclassifications Certain prior year amounts have been reclassified to conform to the 2016 presentation. |
New Accounting Pronouncements | New Accounting Pronouncements We believe that we have implemented the accounting pronouncements with a material impact on our financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based compensation payments, including (i) permitting the election of estimated or actual forfeitures for share grants, (ii) allowing excess tax benefits for share-based payments to be recorded as a reduction of income taxes reflected in operating cash flows in place of excess tax benefits currently recorded in equity and as financing activity in the cash flow statement, and (iii) providing for statutory withholding requirements. This guidance is effective for annual and interim reporting periods for public entities beginning after December 15, 2016; however, it can be elected early in any interim or annual period. We have elected to prospectively adopt this pronouncement for calendar year 2016. During 2016, we recognized an income tax benefit of $1.5 million , or $0.07 per diluted share related to excess tax benefits from the vesting of restricted stock awards and exercise of non-qualified stock options. Prior to the adoption of this pronouncement excess tax benefits were required to be reported as an increase in additional paid in capital. Prior periods have not been adjusted. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard requires recognition of lease assets and lease liabilities for leases previously classified as operating leases. The guidance is effective for fiscal years beginning after December 15, 2018. We are currently reviewing the guidance and assessing the impact on our consolidated financial statements. In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU No. 2014-09 outlines a single comprehensive revenue recognition model for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods ending after December 15, 2017, and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU No. 2014-09. While we are currently evaluating the guidance and have not yet determined the impact this standard may have on our Consolidated Financial Statements, we expect to apply the modified retrospective method upon adoption. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives of property and equipment for purposes of computing depreciation are as follows: Buildings and improvements 5-30 years Computer hardware and software 2-5 years Software development costs 3-5 years Furniture, fixtures and other 5-7 years |
Activity and Balances Related to Incurred But Not Paid Worker's Compensation Claims | The following table provides the activity and balances related to incurred but not reported workers’ compensation claims: Year ended December 31, 2016 2015 (in thousands) Beginning balance $ 162,184 $ 136,088 Accrued claims 65,069 67,559 Present value discount (2,628 ) (3,095 ) Paid claims (40,697 ) (38,368 ) Ending balance $ 183,928 $ 162,184 Current portion of accrued claims $ 42,637 $ 37,438 Long-term portion of accrued claims 141,291 124,746 $ 183,928 $ 162,184 |
Cash, Cash Equivalents and Ma26
Cash, Cash Equivalents and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash, Cash Equivalents and Marketable Securities [Abstract] | |
Summary of investments in cash, cash equivalents and marketable securities | The following table summarizes our investments in cash equivalents and marketable securities held by investment managers and overnight investments: December 31, 2016 2015 (in thousands) Overnight holdings: Money market funds (cash equivalents) $ 255,091 $ 247,720 Investment holdings: Money market funds (cash equivalents) 28,231 26,048 Marketable securities 1,851 9,875 285,173 283,643 Cash held in demand accounts 25,758 19,377 Outstanding checks (23,046 ) (23,607 ) Total cash, cash equivalents and marketable securities $ 287,885 $ 279,413 Cash and cash equivalents $ 286,034 $ 269,538 Marketable securities 1,851 9,875 $ 287,885 $ 279,413 Our cash and overnight holdings fluctuate based on the timing of the client’s payroll processing cycle. Included in the cash balance as of December 31, 2016 and December 31, 2015 , are $221.7 million and $185.7 million , respectively, in withholdings associated with federal and state income taxes, employment taxes and other payroll deductions, as well as $21.3 million and $17.0 million , respectively, in client prepayments. |
Fair Value Measurements Fair 27
Fair Value Measurements Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value [Abstract] | |
Available-for-sale Securities [Table Text Block] | The following is a summary of our available-for-sale marketable securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) December 31, 2016 Municipal bonds $ 1,854 $ — $ (3 ) $ 1,851 December 31, 2015 Municipal bonds $ 9,875 $ 3 $ (3 ) $ 9,875 |
Marketable Securities [Table Text Block] | The following tables summarize the levels of fair value measurements of our financial assets: Fair Value Measurements (in thousands) December 31, Level 1 Level 2 Level 3 Money market funds $ 283,322 $ 283,322 $ — $ — Municipal bonds 1,851 — 1,851 — Total $ 285,173 $ 283,322 $ 1,851 $ — Fair Value Measurements (in thousands) December 31, Level 1 Level 2 Level 3 Money market funds $ 273,768 $ 273,768 $ — $ — Municipal bonds 9,875 — 9,875 — Total $ 283,643 $ 273,768 $ 9,875 $ — |
Investments Classified by Contractual Maturity Date [Table Text Block] | As of December 31, 2016 , the contractual maturities of our marketable securities were as follows: Amortized Cost Estimated Fair Value (in thousands) Less than one year $ 1,299 $ 1,299 One to five years 555 552 Total $ 1,854 $ 1,851 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Unbilled accounts receivable | We make an accrual at the end of each accounting period for our obligations associated with the earned but unpaid wages of our worksite employees and for the accrued gross billings associated with such wages. These accruals are included in accrued worksite employee payroll cost and unbilled accounts receivable; however, these amounts are presented net in the Consolidated Statements of Operations. We generally require clients to pay invoices for service fees no later than one day prior to the applicable payroll date. As such, we generally do not require collateral. Client prepayments directly attributable to unbilled accounts receivable have been netted against such receivables as the gross billings have been earned and the payroll cost has been incurred, thus we have the legal right of offset for these amounts. Unbilled accounts receivable consisted of the following: December 31, 2016 2015 (in thousands) Accrued worksite employee payroll cost $ 215,214 $ 161,917 Unbilled revenues 61,041 45,835 Customer prepayments (21,256 ) (17,037 ) Unbilled accounts receivable $ 254,999 $ 190,715 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | The following table presents the gross carrying amount and accumulated amortization for each class of intangible assets and the gross carrying amount and accumulated impairment for goodwill: December 31, 2015 Twelve Months Ended December 31, 2016 Balance Impairment Amortization Expense Balance (in thousands) Gross carrying amount: Trademarks $ 220 $ — $ — $ 220 Customer relationships 6,392 — — 6,392 Aggregate goodwill acquired: Goodwill 21,156 — — 21,156 Total $ 27,768 $ — $ — $ 27,768 Accumulated amortization: Trademarks $ (101 ) $ — $ (39 ) $ (140 ) Customer relationships (5,609 ) — (461 ) (6,070 ) Accumulated impairment: Goodwill (8,470 ) — — (8,470 ) Total $ (14,180 ) $ — $ (500 ) $ (14,680 ) Net carrying amount: Trademarks $ 119 $ — $ (39 ) $ 80 Customer relationships 783 — (461 ) 322 Goodwill 12,686 — — 12,686 Total goodwill and other intangible assets $ 13,588 $ — $ (500 ) $ 13,088 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Significant components of net deferred tax assets and net deferred tax liabilities | Significant components of the net deferred tax assets and net deferred tax liabilities as reflected on the Consolidated Balance Sheets are as follows: December 31, 2016 2015 (in thousands) Deferred tax liabilities: Prepaid assets $ (7,133 ) $ (3,952 ) Depreciation (936 ) (1,741 ) Software development costs (3,960 ) (2,699 ) Total deferred tax liabilities (12,029 ) (8,392 ) Deferred tax assets: Accrued incentive compensation 8,590 8,818 Net operating loss carryforward 1,300 1,463 Workers’ compensation accruals 7,891 7,586 Accrued rent 1,092 1,229 Stock-based compensation 6,217 4,553 Intangibles 618 1,159 Minority investment impairment 1,021 1,016 Other 349 564 Total deferred tax assets 27,078 26,388 Valuation allowance (1,024 ) (1,020 ) Total net deferred tax assets 26,054 25,368 Net deferred tax assets $ 14,025 $ 16,976 |
Components of income tax expense | The components of income tax expense are as follows: Year ended December 31, 2016 2015 2014 (in thousands) Current income tax expense: Federal $ 31,045 $ 35,221 $ 18,034 State 5,190 5,741 3,322 Total current income tax expense 36,235 40,962 21,356 Deferred income tax (benefit) expense: Federal 2,641 (13,632 ) (1,764 ) State 310 (1,101 ) 31 Total deferred income tax (benefit) expense 2,951 (14,733 ) (1,733 ) Total income tax expense $ 39,186 $ 26,229 $ 19,623 |
Reconciliation of income tax expense | The reconciliation of income tax expense computed at U.S. federal statutory tax rates to the reported income tax expense from continuing operations is as follows: Year ended December 31, 2016 2015 2014 (in thousands) Expected income tax expense at 35% $ 36,812 $ 22,967 $ 16,670 State income taxes, net of federal benefit 3,684 2,696 2,204 Nondeductible expenses 1,669 1,669 1,939 Section 199 benefits (686 ) (627 ) (592 ) Equity compensation (1,338 ) — — Research and development credit (751 ) (530 ) (455 ) Other, net (204 ) 54 (143 ) Reported total income tax expense $ 39,186 $ 26,229 $ 19,623 |
Stockholders' Equity Stockholde
Stockholders' Equity Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
QuarterlydividendsdeclaredTableTextBlock [Table Text Block] | Dividends The Board declared quarterly dividends in 2016 and 2015 as follows: 2016 2015 (amounts per share) First quarter $ 0.22 $ 0.19 Second quarter 0.25 0.22 Third quarter 0.25 0.22 Fourth quarter 0.25 0.22 |
Incentive Plans (Tables)
Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of stock option award activity | The following is a summary of stock option award activity for 2016 : Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Outstanding - December 31, 2015 28 $ 29.56 Granted — — Exercised (20 ) 29.17 Canceled — — Outstanding - December 31, 2016 8 $ 30.59 4.5 $ 315 Exercisable - December 31, 2016 8 $ 30.59 4.5 $ 315 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock awards activity | The following is a summary of restricted stock award activity for 2016 : Shares Weighted Average Grant Date Fair Value (in thousands) Non-vested - December 31, 2015 618 $ 37.98 Granted 236 52.66 Vested (333 ) 35.66 Canceled/Forfeited (18 ) 44.66 Non-vested - December 31, 2016 503 $ 46.17 |
Long-Term Incentive Program Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock awards activity | The following is a summary of LTIP award activity for 2016 : Number of Performance Units at Target Weighted Average Grant Date Fair Value Maximum Shares Eligible to Receive Unvested at December 31, 2015 100,900 $ 52.80 201,800 Granted 133,380 58.42 224,861 Vested — — — Canceled (2,550 ) 52.80 (4,636 ) Unvested at December 31, 2016 231,730 $ 56.04 422,025 Expected to vest 302,059 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Summary of the net income allocated to common shares and the basic and diluted shares used in the net income per share computations | The following table summarizes the net income allocated to common shares and the basic and diluted shares used in the net income per share computations: Year ended December 31, 2016 2015 2014 (in thousands) Net income $ 65,991 $ 39,390 $ 28,004 Less distributed and undistributed earnings allocated to participating securities (1,496 ) (981 ) (2,002 ) Net income allocated to common shares $ 64,495 $ 38,409 $ 26,002 Weighted average common shares outstanding 20,834 24,308 24,708 Incremental shares from assumed conversions of common stock options and LTIP awards 47 7 4 Adjusted weighted average common shares outstanding 20,881 24,315 24,712 Potentially dilutive securities not included in weighted average share — — 4 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Future minimum rental payments under non cancelable operating leases | We lease various office facilities, equipment and vehicles under operating lease arrangements, some of which contain rent escalation clauses. Most of the leases contain purchase and/or renewal options at fair market and fair rental value, respectively. Rental expense relating to all operating leases was $15.0 million , $13.6 million and $13.4 million in 2016 , 2015 and 2014 , respectively. At December 31, 2016 , future minimum rental payments under noncancelable operating leases are as follows: Operating Leases (in thousands) 2017 $ 14,888 2018 13,132 2019 9,561 2020 7,008 2021 4,506 Thereafter 5,155 Total minimum lease payments $ 54,250 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future non-cancelable purchase and service obligations | We enter into fixed purchase and service obligations in the ordinary course of business. These arrangements primarily consist of, construction contract for the new facility, advertising commitments and service contracts. At December 31, 2016 , future purchase and service obligations greater than $100,000 and one year were as follows (in thousands): 2017 $ 12,630 (1) 2018 8,799 2019 3,876 2020 2,549 2021 800 Thereafter 400 Total obligations $ 29,054 |
Quarterly Financial Data (Una36
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarter ended March 31 June 30 Sept. 30 Dec. 31 (in thousands, except per share amounts) 2016 Revenues $ 802,408 $ 707,332 $ 702,538 $ 729,069 Gross profit 150,016 113,259 117,796 110,539 Operating income 53,043 16,023 22,773 14,467 Net income 32,693 9,713 14,065 9,520 Basic net income per share 1.53 0.45 0.66 0.45 Diluted net income per share 1.53 0.45 0.66 0.45 2015 Revenues $ 699,479 $ 627,838 $ 626,286 $ 650,011 Gross profit 129,860 104,219 106,743 97,045 Operating income 23,520 (1) 12,217 (2) 19,936 10,026 (3) Net income 13,787 7,314 11,950 6,339 Basic net income per share 0.54 0.29 0.48 0.26 Diluted net income per share 0.54 0.29 0.48 0.26 ____________________________________ (1) Includes non-cash impairment and other charges in the first quarter of 2015 of $9.8 million . Please read Note 7 , “ Impairment Charges and Other ,” for additional information. (2) Includes non-cash impairment and other charges in the second quarter of 2015 of $1.3 million . Please read Note 7 , “ Impairment Charges and Other ,” for additional information. (3) Includes a reduction to non-cash impairment and other charges in the fourth quarter of 2015 of $0.6 million . Please read Note 7 , “ Impairment Charges and Other ,” for additional information. |
Accounting Policies (Details)
Accounting Policies (Details) | 12 Months Ended | ||||||
Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 01, 2010USD ($) | Sep. 30, 2010USD ($) | |
Segment Reporting [Abstract] | |||||||
Number of reportable segments (integer) | 1 | ||||||
Property, Plant and Equipment [Line Items] | |||||||
Amortization of capitalized computer software costs | $ 3,000,000 | $ 3,300,000 | $ 4,100,000 | ||||
Unamortized computer software costs | $ 10,400,000 | $ 7,100,000 | |||||
Asset impairment charge due to change in office consolidation plans | 1,200,000 | ||||||
Health Insurance Costs [Abstract] | |||||||
Number of days cash in advance of beginning of reporting quarter United establishes cash funding rates | 90 days | ||||||
Prepaid health insurance | 9,000,000 | 9,000,000 | |||||
Required deposit for health care costs | 4,500,000 | ||||||
Amount which Plan Costs were less than the net premiums paid and owed | 15,000,000 | ||||||
Portion of insurance costs that is less than the agreed upon surplus included in accrued health insurance costs a cnt liab | 6,000,000 | ||||||
Premiums owed to United | (22,600,000) | ||||||
Benefits Costs Incurred Related to Run-off | 5,100,000 | ||||||
Workers' Compensation Costs [Abstract] | |||||||
Company's maximum economic burden for the first layer of claims per occurrence | $ 1,000,000 | ||||||
Company's maximum aggregate economic burden for claims in excess of $1 million per policy year | $ 5,000,000 | ||||||
Reduction in accrued workers' compensation costs for changes in estimated losses | $ 10,900,000 | $ 1,300,000 | |||||
U.S. Treasury rates that correspond with the weighted average estimated claim payout period (in hundredths) | 1.10% | 1.00% | |||||
Incurred but not paid workers' compensation liabilities | |||||||
Beginning balance | $ 162,184,000 | $ 136,088,000 | |||||
Accrued claims | 65,069,000 | 67,559,000 | |||||
Present value discount | (2,628,000) | (3,095,000) | |||||
Paid claims | (40,697,000) | (38,368,000) | |||||
Ending balance | 183,928,000 | 162,184,000 | 136,088,000 | ||||
Current portion of accrued claims | 42,637,000 | 37,438,000 | |||||
Long-term portion of accrued claims | 141,291,000 | 124,746,000 | |||||
Ending Balance | 162,184,000 | 136,088,000 | 136,088,000 | 183,928,000 | 162,184,000 | ||
Current portion of workers' compensation administrative fees accrued | 1,600,000 | 1,615,000 | |||||
Undiscounted accrued workers' compensation costs | $ 194,200,000 | $ 172,300,000 | |||||
Time period incurred claims expected to be paid recorded as restricted cash | 1 year | ||||||
Time period incurred claims expected to be paid, included in deposits, a long-term asset | Greater than 1 year | ||||||
Return Of Excess Claim Funds | $ 12,800,000 | ||||||
Restricted Cash and Cash Equivalents, Current | 42,637,000 | 37,418,000 | |||||
Deposits - workers' compensation | $ 143,938,000 | $ 136,462,000 | |||||
Time period estimate of incurred claim costs to be paid included in short term liabilities | 1 year | ||||||
Time period incurred claims expected to be paid, included in long-term liabilities | Greater than 1 year | ||||||
Stock-Based Compensation [Abstract] | |||||||
Number of stock-based employee compensation plans | 1 | ||||||
Vesting period for Initial grants to new members of the Board of Directors | 3 years | ||||||
Vesting period for officers and other management to be eligible for restricted stock grants, minimum | 3 years | ||||||
Percentage of annual grants issued to directors that are vested (in hundredths) | 100.00% | ||||||
New Accounting Pronouncements [Abstract] | |||||||
Income tax benefit recognized related to Equity Compensation after adoption of ASU 2016-09, per share | $ / shares | $ 0.07 | ||||||
Income tax benefit recognized related to Equity Compensation after adoption of ASU 2016-09, Quantification | $ 1,500,000 | ||||||
Minimum [Member] | |||||||
Other Intangible Assets [Line Items] | |||||||
Other Intangible Assets, useful life | 3 years | ||||||
Maximum [Member] | |||||||
Other Intangible Assets [Line Items] | |||||||
Other Intangible Assets, useful life | 10 years | ||||||
Corporate Employees [Member] | |||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||||||
Percentage the entity matches of eligible corporate employees' contributions | 100.00% | 50.00% | |||||
Percentage of eligible compensation matched, Minimum | 0.00% | ||||||
Percentage of eligible compensation matched, maximum | 6.00% | 6.00% | |||||
Matching contributions to the plan | $ 8,000,000 | $ 3,400,000 | 3,100,000 | ||||
Worksite Employees [Member] | |||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||||||
Percentage of eligible compensation matched, Minimum | 0.00% | ||||||
Percentage of eligible compensation matched, maximum | 6.00% | ||||||
Matching contributions to the plan | $ 108,300,000 | $ 95,300,000 | $ 78,400,000 | ||||
Buildings and Improvements [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 5 years | ||||||
Buildings and Improvements [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 30 years | ||||||
Computer Hardware and Software and Acquired Technologies [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 2 years | ||||||
Computer Hardware and Software and Acquired Technologies [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 5 years | ||||||
Software Development Costs [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 3 years | ||||||
Software Development Costs [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 5 years | ||||||
Furniture, Fixtures and Other [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 5 years | ||||||
Furniture, Fixtures and Other [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 7 years | ||||||
Aircraft [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 15 years | ||||||
Aircraft [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Estimated useful lives of property and equipment | 20 years |
Cash, Cash Equivalents and Mare
Cash, Cash Equivalents and Marektable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Overnight holdings: | ||||
Money market funds (cash equivalents) | $ 255,091 | $ 247,720 | ||
Investment holdings: | ||||
Money market funds (cash equivalents) | 28,231 | 26,048 | ||
Marketable securities | 1,851 | 9,875 | ||
Total cash equivalents and marketable securities | 285,173 | 283,643 | ||
Cash held in demand accounts | 25,758 | 19,377 | ||
Outstanding checks | (23,046) | (23,607) | ||
Total cash, cash equivalents and marketable securities | 287,885 | 279,413 | ||
Cash and cash equivalents | 286,034 | 269,538 | $ 276,456 | $ 225,755 |
Marketable securities | 1,851 | 9,875 | ||
Withholding associated with federal and state income taxes, employment taxes and other payroll deductions included in cash balance | 221,700 | 185,700 | ||
Customer prepayments included in cash balance | $ 21,256 | $ 17,037 |
Fair Value Measurements Fair 39
Fair Value Measurements Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Assets, Fair Value Disclosure [Abstract] | ||
Money Market Funds | $ 283,322 | $ 273,768 |
Municipal bonds | 1,851 | 9,875 |
Total | 285,173 | 283,643 |
Available-for-sale Securities [Abstract] | ||
Available-for-sale Securities, Amortized Cost Basis | 1,854 | 9,875 |
Available-for-sale Securities, Gross Unrealized Gain | 0 | 3 |
Available-for-sale Securities, Gross Unrealized Loss | (3) | (3) |
Fair Value | 1,851 | 9,875 |
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract] | ||
Less than one year | 1,299 | |
One to five years | 552 | |
Fair Value | 1,851 | 9,875 |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | ||
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Amortized Cost Basis | 1,299 | |
Available-for-sale Securities, Debt Maturities, Year Two Through Five, Amortized Cost Basis | 555 | |
Amortized cost | 1,854 | |
Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Money Market Funds | 283,322 | 273,768 |
Municipal bonds | 0 | 0 |
Total | 283,322 | 273,768 |
Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Money Market Funds | 0 | 0 |
Municipal bonds | 1,851 | 9,875 |
Total | 1,851 | 9,875 |
Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Money Market Funds | 0 | 0 |
Municipal bonds | 0 | 0 |
Total | $ 0 | $ 0 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable Additional Disclosures [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 700 | $ 1,100 |
Accounts receivable, due date prior to applicable payroll date | 1 day | |
Unbilled accounts receivable [Abstract] | ||
Accrued worksite employee payroll cost | $ 215,214 | 161,917 |
Unbilled revenues | 61,041 | 45,835 |
Customer prepayments | (21,256) | (17,037) |
Unbilled accounts receivable | $ 254,999 | $ 190,715 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deposits [Abstract] | ||
Prepaid health insurance | $ 9,000 | $ 9,000 |
Deposits – health insurance | 4,700 | 3,700 |
Deposits – workers’ compensation | $ 143,938 | $ 136,462 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Schedule of Goodwill and Other Intangible Assets [Line Items] | ||||
Goodwill and Intangible Asset Impairment | $ 2,500,000 | |||
Gross Carrying Amount [Roll Forward] | ||||
Goodwill and Other Intangibles Impairment, gross | $ 0 | |||
Total gross carrying amount and aggregate goodwill acquired [Abstract] | ||||
Beg Bal Total gross carrying amount and aggregate goodwill acquired | 27,768,000 | |||
Goodwill and Other Intangibles Impairment, gross | 0 | |||
End Bal Total gross carrying amount and aggregate goodwill acquired | 27,768,000 | $ 27,768,000 | ||
Accumulated amortization [Abstract] | ||||
Adj to accumulated amortization and accumulated impairment for goodwill and other intangibles | 0 | |||
Amortization Expense | (500,000) | (900,000) | (1,500,000) | |
Total accumulated amortization and accumulated impairment [Abstract] | ||||
Beg Bal Total accumulated amortization and accumulated impairment | (14,180,000) | |||
Adj to accumulated amortization and accumulated impairment for goodwill and other intangibles | 0 | |||
Amortization Expense | (500,000) | (900,000) | (1,500,000) | |
End Bal Total accumulated amortization and accumulated impairment | (14,680,000) | (14,180,000) | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||||
Amortization Expense | (500,000) | (900,000) | (1,500,000) | |
Beg Bal Goodwill and other intangible assets, net | 13,588,000 | |||
Goodwill and Other Intangibles Impairment | 0 | |||
End Bal Goodwill and other intangible assets, net | 13,588,000 | 13,588,000 | $ 13,088,000 | |
Amortization [Abstract] | ||||
Amortization Expense | (500,000) | (900,000) | $ (1,500,000) | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 300,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 36,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 12,000 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 7,000 | |||
Trademarks [Member] | ||||
Gross Carrying Amount [Roll Forward] | ||||
Beg Bal Finite-Lived Intangible Assets, Gross | 220,000 | |||
Goodwill and Other Intangibles Impairment, gross | 0 | |||
End Bal Finite-Lived Intangible Assets, Gross | 220,000 | 220,000 | ||
Total gross carrying amount and aggregate goodwill acquired [Abstract] | ||||
Goodwill and Other Intangibles Impairment, gross | 0 | |||
Accumulated amortization [Abstract] | ||||
Beg Bal Finite-Lived Intangible Assets, Accumulated Amortization | (101,000) | |||
Adj to accumulated amortization and accumulated impairment for goodwill and other intangibles | 0 | |||
Amortization Expense | (39,000) | |||
End Bal Finite-Lived Intangible Assets, Accumulated Amortization | (140,000) | (101,000) | ||
Total accumulated amortization and accumulated impairment [Abstract] | ||||
Adj to accumulated amortization and accumulated impairment for goodwill and other intangibles | 0 | |||
Amortization Expense | (39,000) | |||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||||
Beg Bal Intangible Assets, Net (Excluding Goodwill) | 119,000 | |||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | |||
Amortization Expense | (39,000) | |||
End Bal Intangible Assets, Net (Excluding Goodwill) | 119,000 | 119,000 | 80,000 | |
Amortization [Abstract] | ||||
Amortization Expense | (39,000) | |||
Customer Relationships [Member] | ||||
Gross Carrying Amount [Roll Forward] | ||||
Beg Bal Finite-Lived Intangible Assets, Gross | 6,392,000 | |||
Goodwill and Other Intangibles Impairment, gross | 0 | |||
End Bal Finite-Lived Intangible Assets, Gross | 6,392,000 | 6,392,000 | ||
Total gross carrying amount and aggregate goodwill acquired [Abstract] | ||||
Goodwill and Other Intangibles Impairment, gross | 0 | |||
Accumulated amortization [Abstract] | ||||
Beg Bal Finite-Lived Intangible Assets, Accumulated Amortization | (5,609,000) | |||
Adj to accumulated amortization and accumulated impairment for goodwill and other intangibles | 0 | |||
Amortization Expense | (461,000) | |||
End Bal Finite-Lived Intangible Assets, Accumulated Amortization | (6,070,000) | (5,609,000) | ||
Total accumulated amortization and accumulated impairment [Abstract] | ||||
Adj to accumulated amortization and accumulated impairment for goodwill and other intangibles | 0 | |||
Amortization Expense | (461,000) | |||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||||
Beg Bal Intangible Assets, Net (Excluding Goodwill) | 783,000 | |||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | |||
Amortization Expense | (461,000) | |||
End Bal Intangible Assets, Net (Excluding Goodwill) | 783,000 | 783,000 | 322,000 | |
Amortization [Abstract] | ||||
Amortization Expense | (461,000) | |||
Goodwill [Member] | ||||
Aggregrate goodwill acquired [Roll Forward] | ||||
Beg Bal Goodwill, Gross | 21,156,000 | |||
End Bal Goodwill, Gross | 21,156,000 | 21,156,000 | ||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||
Beg Bal Goodwill, Impaired, Accumulated Impairment Loss | (8,470,000) | |||
Goodwill, Impairment Loss | 0 | |||
End Bal Goodwill, Impaired, Accumulated Impairment Loss | (8,470,000) | (8,470,000) | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||||
Beg Bal Goodwill, net balance | 12,686,000 | |||
Goodwill, Impairment Loss | 0 | |||
End Bal Goodwill, net balance | $ 12,686,000 | $ 12,686,000 | $ 12,686,000 |
Other Asset Impairments Other43
Other Asset Impairments Other Asset Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Asset Impairment Charges [Abstract] | ||||||
Impairment charges and other | $ (600) | $ 1,300 | $ 9,800 | $ 0 | $ 10,480 | $ 3,687 |
Texas Sales and Use Tax Assessment Settlement Amount | $ 200 | 200 | ||||
Proceeds from sale of aircraft | $ 0 | $ 12,159 | $ 0 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2014USD ($) | Jan. 07, 2016USD ($) | Dec. 31, 2015USD ($) | |
Line of Credit Facility [Line Items] | ||||
Line of credit facility | $ 200,000 | $ 125,000 | ||
Maximum borrowing capacity | $ 250,000 | |||
Percentage of subsidiary stock securing debt (in hundredths) | 0.65 | |||
Unused commitment fee on the average daily unused portion (in hundredths) | 0.25% | |||
Average interest rate for the year | 2.33% | |||
Letters of Credit Outstanding, Amount | $ 1,000 | |||
Long-term debt | $ 104,400 | $ 104,400 | $ 0 | |
Special dividend | $ 50,700 | |||
Alternate base rates, applicable margins [Abstract] | ||||
Applicable margin, federal funds rate (in hundredths) | 0.50% | |||
Applicable margin, 30-day LIBOR (in hundredths) | 2.00% | |||
LIBOR Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Description of basis for variable rate | LIBOR | |||
Applicable margin on variable rate on borrowings, minimum (in hundredths) | 2.00% | |||
Applicable margin on variable rate on borrowings, maximum (in hundredths) | 2.75% | |||
Alternate Base Rate Borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Description of basis for variable rate | alternate base rate | |||
Applicable margin on variable rate on borrowings, minimum (in hundredths) | 0.00% | |||
Applicable margin on variable rate on borrowings, maximum (in hundredths) | 0.75% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred tax liabilities: | |||
Prepaid assets | $ (7,133,000) | $ (3,952,000) | |
Depreciation | (936,000) | (1,741,000) | |
Software development costs | (3,960,000) | (2,699,000) | |
Total deferred tax liabilities | (12,029,000) | (8,392,000) | |
Deferred tax assets: | |||
Accrued incentive compensation | 8,590,000 | 8,818,000 | |
Net operating loss carryforward | 1,300,000 | 1,463,000 | |
Workers’ compensation accruals | 7,891,000 | 7,586,000 | |
Accrued rent | 1,092,000 | 1,229,000 | |
Stock-based compensation | 6,217,000 | 4,553,000 | |
Intangibles | 618,000 | 1,159,000 | |
Minority investment impairment | 1,021,000 | 1,016,000 | |
Other | 349,000 | 564,000 | |
Total deferred tax assets | 27,078,000 | 26,388,000 | |
Valuation allowance | (1,024,000) | (1,020,000) | |
Total net deferred tax assets | 26,054,000 | 25,368,000 | |
Net deferred tax assets | 14,025,000 | 16,976,000 | |
Current income tax expense: | |||
Federal | 31,045,000 | 35,221,000 | $ 18,034,000 |
State | 5,190,000 | 5,741,000 | 3,322,000 |
Total current income tax expense | 36,235,000 | 40,962,000 | 21,356,000 |
Deferred income tax (benefit) expense: | |||
Federal | 2,641,000 | (13,632,000) | (1,764,000) |
State | 310,000 | (1,101,000) | 31,000 |
Total deferred income tax (benefit) expense | 2,951,000 | (14,733,000) | (1,733,000) |
Total income tax expense | 39,186,000 | 26,229,000 | 19,623,000 |
Income tax benefit recognized related to Equity Compensation after adoption of ASU 2016-09, Quantification | $ 1,500,000 | ||
Income tax benefit recognized related to Equity Compensation after adoption of ASU 2016-09, per share | $ 0.07 | ||
Net income tax expense (benefit) on nonqualified stock option exercises | 2,216,000 | 488,000 | |
Reconciliation of income tax expense [Abstract] | |||
Assumed income tax rate (in hundredths) | 35.00% | ||
Expected income tax expense at 35% | $ 36,812,000 | 22,967,000 | 16,670,000 |
State income taxes, net of federal benefit | 3,684,000 | 2,696,000 | 2,204,000 |
Nondeductible expenses | 1,669,000 | 1,669,000 | 1,939,000 |
Section 199 benefits | (686,000) | (627,000) | (592,000) |
Equity compensation | (1,338,000) | 0 | 0 |
Research and development credit | (751,000) | (530,000) | (455,000) |
Other, net | (204,000) | 54,000 | (143,000) |
Total income tax expense | 39,186,000 | 26,229,000 | 19,623,000 |
Business Acquisition [Line Items] | |||
Liability for Uncertain Tax Positions, Current | 0 | $ 0 | $ 0 |
ExpensAble [Member] | |||
Business Acquisition [Line Items] | |||
Operating Loss Carryforwards | $ 3,400,000 | ||
Minimum [Member] | ExpensAble [Member] | |||
Business Acquisition [Line Items] | |||
Net operating loss carryforwards, expiration date | Jan. 1, 2022 | ||
Maximum [Member] | ExpensAble [Member] | |||
Business Acquisition [Line Items] | |||
Net operating loss carryforwards, expiration date | Jan. 1, 2030 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 07, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 23, 2016 | |
Stockholders' Equity Note [Abstract] | |||||||||||||
Repurchase of treasury stock (in shares) | 388,063 | 1,244,433 | |||||||||||
Shares withheld for tax withholding obligations for the vesting of restricted stock awards (in shares) | 101,335 | 114,523 | |||||||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 1,000,000 | ||||||||||||
Remaining number of shares authorized to be repurchased (in shares) | 1,136,269 | 1,136,269 | |||||||||||
MaxAmountOfTenderOfferForRepurchaseOfShares | $ 125,000,000 | ||||||||||||
Share Price | $ 47.50 | ||||||||||||
Stock Repurchased and Retired During Period, Shares | 3,013,531 | ||||||||||||
Repurchase of common stock | $ 143,100,000 | $ (144,263,000) | |||||||||||
Transaction Costs Related to Tender Offer | 1,100,000 | ||||||||||||
Long-term debt | $ 104,400,000 | $ 104,400,000 | $ 0 | 104,400,000 | $ 0 | ||||||||
Payments of Dividends [Abstract] | |||||||||||||
Dividends declared per share of common stock (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.22 | $ 0.19 | |||||
Dividends paid | $ 20,599,000 | $ 21,153,000 | $ 69,493,000 | ||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, authorized (in shares) | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Common stock purchase right per preferred stock share (in shares) | 1 | ||||||||||||
Preferred Stock, Value, Issued | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||
Series A Junior Participating Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, authorized (in shares) | 600,000 | 600,000 |
Incentive Plans (Details)
Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation [Abstract] | |||
Number of common shares available for grant under the incentive plan (in shares) | 749,265 | ||
Share-based compensation | $ 16,643 | $ 13,345 | $ 11,053 |
Tax benefits (expense) associated with stock-based compensation | $ 7,700 | $ 5,300 | 4,600 |
Stock option activity [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 28,000 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (20,000) | ||
Canceled (in shares) | 0 | ||
Outstanding, ending balance (in shares) | 8,000 | 28,000 | |
Exercisable, ending balance (in shares) | 8,000 | ||
Weighted average exercise price [Abstract] | |||
Outstanding, beginning balance (in dollars per share) | $ 29.56 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 29.17 | ||
Canceled (in dollars per share) | 0 | ||
Outstanding, ending balance (in dollars per share) | 30.59 | $ 29.56 | |
Exercisable, ending balance (in dollars per share) | $ 30.59 | ||
Weighted average remaining contractual life, stock option awards outstanding at end of year (in years) | 4 years 6 months | ||
Weighted average remaining contractual life, stock option awards exercisable at end of year (in years) | 4 years 6 months | ||
Aggregate intrinsic value of options outstanding, ending balance | $ 315 | ||
Aggregate intrinsic value of options exercisable ending balance | 315 | ||
Intrinsic value of options exercised during the year | $ 800 | $ 300 | $ 300 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards vesting period | 3 years | ||
Employee Stock Purchase Plan (ESPP) [Abstract] | |||
ESPP Stock Issued During Period (in shares) | 17,000 | 24,000 | 37,000 |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of shares vested during the year | $ 16,200 | $ 18,600 | $ 10,800 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 14,600 | ||
Unrecognized compensation expense, period for recognition (in months) | 21 months | ||
Equity Instruments Other than Options, Nonvested, Number of Shares[Roll Forward] | |||
Balance at 12/31/2015 (in shares) | 618,000 | ||
Granted (in shares) | 236,000 | ||
Vested (in shares) | (333,000) | ||
Canceled (in shares) | (18,000) | ||
Balance at 12/31/2016 (in shares) | 503,000 | 618,000 | |
Weighted Average Grant Date Fair Value, Equity Instruments Other than Options [Abstract] | |||
Balance at 12/31/2015 (in dollars per share) | $ 37.98 | ||
Granted (in dollars per share) | 52.66 | $ 51.54 | $ 28.22 |
Vested (in dollars per share) | 35.66 | ||
Canceled (in dollars per share) | 44.66 | ||
Balance at 12/31/2016 (in dollars per share) | $ 46.17 | 37.98 | |
Restricted Stock [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards vesting period | 3 years | ||
Restricted Stock [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards vesting period | 5 years | ||
Long-Term Incentive Program Awards [Member] | |||
Weighted Average Grant Date Fair Value, Equity Instruments Other than Options [Abstract] | |||
Balance at 12/31/2015 (in dollars per share) | $ 52.80 | ||
Granted (in dollars per share) | 58.42 | ||
Vested (in dollars per share) | 0 | ||
Canceled (in dollars per share) | 52.80 | ||
Balance at 12/31/2016 (in dollars per share) | $ 56.04 | $ 52.80 | |
Long-Term Incentive Program Awards [Member] | Minimum [Member] | |||
Equity Instruments Other than Options, Nonvested, Number of Shares[Roll Forward] | |||
Balance at 12/31/2015 (in shares) | 100,900 | ||
Granted (in shares) | 133,380 | ||
Vested (in shares) | 0 | ||
Canceled (in shares) | (2,550) | ||
Balance at 12/31/2016 (in shares) | 231,730 | 100,900 | |
NumberofShareExpectedtoVestBasedOnCurrentEstimatesofPerformanceAchievment | 302,059 | ||
Long-Term Incentive Program Awards [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards vesting period | 3 years | ||
Equity Instruments Other than Options, Nonvested, Number of Shares[Roll Forward] | |||
Balance at 12/31/2015 (in shares) | 201,800 | ||
Granted (in shares) | 224,861 | ||
Vested (in shares) | 0 | ||
Canceled (in shares) | (4,636) | ||
Balance at 12/31/2016 (in shares) | 422,025 | 201,800 | |
2015LTIPAward [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 3,800 | ||
Equity Instruments Other than Options, Nonvested, Number of Shares[Roll Forward] | |||
NumberofShareExpectedtoVestBasedOnCurrentEstimatesofPerformanceAchievment | 178,770 | ||
2016LTIPAwards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 4,700 | ||
Equity Instruments Other than Options, Nonvested, Number of Shares[Roll Forward] | |||
NumberofShareExpectedtoVestBasedOnCurrentEstimatesofPerformanceAchievment | 123,289 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 9,520 | $ 14,065 | $ 9,713 | $ 32,693 | $ 6,339 | $ 11,950 | $ 7,314 | $ 13,787 | $ 65,991 | $ 39,390 | $ 28,004 |
Less distributed and undistributed earnings allocated to participating securities | 1,496 | 981 | 2,002 | ||||||||
Net income allocated to common shares | $ 64,495 | $ 38,409 | $ 26,002 | ||||||||
Weighted average common shares outstanding | 20,834 | 24,308 | 24,708 | ||||||||
Incremental shares from assumed conversions of common stock options and LTIP awards | 47 | 7 | 4 | ||||||||
Adjusted weighted average common shares outstanding | 20,881 | 24,315 | 24,712 | ||||||||
Potentially dilutive securities not included in weighted average share calculation due to anti-dilutive effect | 0 | 0 | 4 | ||||||||
Special dividend, per share | $ 2 | ||||||||||
EPS impact under two class method of dividends exceeding earnings | $ 0.05 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases [Abstract] | |||
Rental expense | $ 15,000 | $ 13,600 | $ 13,400 |
Operating leases minimum payments due [Abstract] | |||
2,017 | 14,888 | ||
2,018 | 13,132 | ||
2,019 | 9,561 | ||
2,020 | 7,008 | ||
2,021 | 4,506 | ||
Thereafter | 5,155 | ||
Total minimum lease payments | $ 54,250 |
Commitments and Contingencies50
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Disclosure threshold for future non-cancelable purchase and service obligations | greater than $100,000 and one year | |
Non-cancelable purchase and service obligations [Abstract] | ||
2,017 | $ 12,630 | [1] |
2,018 | 8,799 | |
2,019 | 3,876 | |
2,020 | 2,549 | |
2,021 | 800 | |
Thereafter | 400 | |
Total obligations | $ 29,054 | |
[1] | (1) Includes $4.9 million related to the construction of a new facility on our corporate campus. |
Quarterly Financial Data (Una51
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Impairment charges and other | $ (600) | $ 1,300 | $ 9,800 | $ 0 | $ 10,480 | $ 3,687 | ||||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||
Revenues | $ 729,069 | $ 702,538 | $ 707,332 | $ 802,408 | 650,011 | $ 626,286 | 627,838 | 699,479 | 2,941,347 | 2,603,614 | 2,357,788 | |||
Gross profit | 110,539 | 117,796 | 113,259 | 150,016 | 97,045 | 106,743 | 104,219 | 129,860 | 491,610 | 437,867 | 403,805 | |||
Operating income | 14,467 | 22,773 | 16,023 | 53,043 | 10,026 | [1] | 19,936 | 12,217 | [2] | 23,520 | [3] | 106,306 | 65,699 | 47,474 |
Net income | $ 9,520 | $ 14,065 | $ 9,713 | $ 32,693 | $ 6,339 | $ 11,950 | $ 7,314 | $ 13,787 | $ 65,991 | $ 39,390 | $ 28,004 | |||
Basic net income per share of common stock (in dollars per share) | $ 0.45 | $ 0.66 | $ 0.45 | $ 1.53 | $ 0.26 | $ 0.48 | $ 0.29 | $ 0.54 | $ 3.10 | $ 1.58 | $ 1.05 | |||
Diluted net income per share (in dollars per share) | $ 0.45 | $ 0.66 | $ 0.45 | $ 1.53 | $ 0.26 | $ 0.48 | $ 0.29 | $ 0.54 | $ 3.09 | $ 1.58 | $ 1.05 | |||
Goodwill and Intangible Asset Impairment | $ 2,500 | |||||||||||||
Asset impairment charge due to change in office consolidation plans | $ 1,200 | |||||||||||||
[1] | Includes a reduction to non-cash impairment and other charges in the fourth quarter of 2015 of $0.6 million. Please read Note 7, “Impairment Charges and Other,” for additional information. | |||||||||||||
[2] | Includes non-cash impairment and other charges in the second quarter of 2015 of $1.3 million. Please read Note 7, “Impairment Charges and Other,” for additional information. | |||||||||||||
[3] | Includes non-cash impairment and other charges in the first quarter of 2015 of $9.8 million. Please read Note 7, “Impairment Charges and Other,” for additional information. |