Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CEB | |
Entity Registrant Name | CEB Inc. | |
Entity Central Index Key | 1,066,104 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,228,207 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 135,821 | $ 113,329 |
Accounts receivable, net | 209,845 | 285,048 |
Deferred incentive compensation | 22,044 | 23,484 |
Prepaid expenses and other current assets | 48,487 | 27,651 |
Total current assets | 416,197 | 449,512 |
Deferred income taxes, net | 1,956 | 16,491 |
Property and equipment, net | 95,678 | 102,337 |
Goodwill | 649,987 | 458,409 |
Intangible assets, net | 208,563 | 230,680 |
Other non-current assets | 95,038 | 81,123 |
Total assets | 1,467,419 | 1,338,552 |
Current liabilities | ||
Accounts payable and accrued liabilities | 80,842 | 88,407 |
Accrued incentive compensation | 45,037 | 59,947 |
Deferred revenue | 406,109 | 449,694 |
Debt – current portion | 7,869 | 4,948 |
Total current liabilities | 539,857 | 602,996 |
Deferred income taxes, net | 17,454 | 27,869 |
Other liabilities | 117,465 | 107,592 |
Debt – long term | 878,411 | 556,418 |
Total liabilities | 1,553,187 | 1,294,875 |
Stockholders’ (deficit) equity | ||
Common stock, par value $0.01; 100,000,000 shares authorized; 45,732,450 and 45,424,868 shares issued and 32,219,552 and 32,906,951 shares outstanding at September 30, 2016 and December 31, 2015, respectively | 457 | 454 |
Additional paid-in-capital | 500,913 | 484,209 |
Retained earnings | 386,030 | 406,112 |
Accumulated elements of other comprehensive loss | (113,241) | (44,956) |
Treasury stock, at cost, 13,512,898 and 12,517,917 shares at September 30, 2016 and December 31, 2015, respectively | (859,927) | (802,142) |
Total stockholders’ (deficit) equity | (85,768) | 43,677 |
Total liabilities and stockholders’ (deficit) equity | $ 1,467,419 | $ 1,338,552 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 45,732,450 | 45,424,868 |
Common stock, shares outstanding | 32,219,552 | 32,906,951 |
Treasury stock, at cost, shares | 13,512,898 | 12,517,917 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 229,844 | $ 231,936 | $ 695,645 | $ 685,499 |
Costs and expenses | ||||
Cost of services | 81,929 | 78,847 | 252,925 | 239,938 |
Member relations and marketing | 68,095 | 66,746 | 206,504 | 198,340 |
General and administrative | 29,750 | 26,826 | 87,801 | 83,924 |
Depreciation and amortization | 24,900 | 15,574 | 76,791 | 49,308 |
Business transformation costs | 6,768 | 16,316 | ||
Acquisition related costs | 840 | 505 | 5,959 | 505 |
Restructuring costs | 1,084 | 1,238 | ||
Total costs and expenses | 212,282 | 188,498 | 647,380 | 573,253 |
Operating profit | 17,562 | 43,438 | 48,265 | 112,246 |
Other (expense) income, net | ||||
Interest expense | (8,151) | (5,683) | (21,243) | (14,909) |
Debt modification costs | (1,656) | (4,775) | ||
Interest income and other | 899 | 3,163 | 4,692 | 3,529 |
Other (expense) income, net | (7,252) | (2,520) | (18,207) | (16,155) |
Income before provision for income taxes | 10,310 | 40,918 | 30,058 | 96,091 |
Provision for income taxes | 2,802 | 8,949 | 10,261 | 21,820 |
Net income | $ 7,508 | $ 31,969 | $ 19,797 | $ 74,271 |
Earnings per share | ||||
Basic | $ 0.23 | $ 0.96 | $ 0.61 | $ 2.22 |
Diluted | $ 0.23 | $ 0.95 | $ 0.61 | $ 2.20 |
Weighted average shares outstanding | ||||
Basic | 32,214 | 33,389 | 32,348 | 33,473 |
Diluted | 32,367 | 33,606 | 32,581 | 33,779 |
Dividends declared and paid per share | $ 0.4125 | $ 0.375 | $ 1.238 | $ 1.125 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income | $ 7,508 | $ 31,969 | $ 19,797 | $ 74,271 |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustment | (13,981) | (25,229) | (67,641) | (20,995) |
Comprehensive (loss) income | (6,425) | 6,105 | (48,795) | 52,527 |
Foreign Currency Hedge [Member] | ||||
Other comprehensive (loss) income | ||||
Unrealized gain (loss) on derivatives arising during period, net of tax benefit (expense) | $ 48 | (556) | $ (951) | (33) |
Interest Rate Swaps [Member] | ||||
Other comprehensive (loss) income | ||||
Unrealized gain (loss) on derivatives arising during period, net of tax benefit (expense) | $ (79) | $ (716) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Foreign Currency Hedge [Member] | ||||
Unrealized gain (loss) on derivatives arising during period, tax benefit (expense) | $ (12) | $ 272 | $ 238 | $ 10 |
Interest Rate Swaps [Member] | ||||
Unrealized gain (loss) on derivatives arising during period, tax benefit (expense) | $ 0 | $ 53 | $ 0 | $ 471 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net income | $ 19,797 | $ 74,271 |
Adjustments to reconcile net income to net cash flows provided by operating activities | ||
Debt modification costs | 1,656 | 4,775 |
Loss on other investments, net | 797 | |
Equity method investment loss | 412 | 1,005 |
Depreciation and amortization | 76,791 | 49,308 |
Amortization of credit facility issuance costs | 1,318 | 1,657 |
Deferred income taxes | (6,463) | 2,643 |
Share-based compensation | 14,117 | 13,320 |
Excess tax benefits from share-based compensation arrangements | (908) | (4,173) |
Net foreign currency remeasurement gain | (6,944) | (2,050) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 83,319 | 83,841 |
Deferred incentive compensation | 739 | 1,334 |
Prepaid expenses and other current assets | (21,185) | (26,920) |
Other non-current assets | (8,691) | (3,431) |
Accounts payable and accrued liabilities | (8,747) | (14,775) |
Accrued incentive compensation | (14,825) | (15,449) |
Deferred revenue | (47,848) | (55,009) |
Other liabilities | 8,990 | (9,142) |
Net cash flows provided by operating activities | 92,325 | 101,205 |
Cash flows from investing activities | ||
Purchases of property and equipment | (15,655) | (18,335) |
Cost method and other investments | (5,300) | (4,298) |
Acquisition of businesses, net of cash acquired | (269,222) | (14,205) |
Net cash flows used in investing activities | (290,177) | (36,838) |
Cash flows from financing activities | ||
Proceeds from issuance of senior notes | 250,000 | |
Borrowings from Senior Secured Credit Facilities | 405,000 | 45,000 |
Debt payments | (80,213) | (258,500) |
Debt issuance costs | (4,220) | (6,385) |
Proceeds from issuance of common stock under the employee stock purchase plan | 1,279 | 1,150 |
Excess tax benefits from share-based compensation arrangements | 908 | 4,173 |
Purchase of treasury shares | (53,568) | (42,691) |
Withholding of shares to satisfy minimum employee tax withholding for equity awards | (5,268) | (8,497) |
Payment of dividends | (39,923) | (37,584) |
Net cash flows provided by (used in) financing activities | 223,995 | (53,334) |
Effect of exchange rates on cash | (3,651) | (4,538) |
Net increase in cash and cash equivalents | 22,492 | 6,495 |
Cash and cash equivalents, beginning of period | 113,329 | 114,934 |
Cash and cash equivalents, end of period | $ 135,821 | $ 121,429 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Note 1. Nature of Business and Basis of Presentation CEB Inc. (“CEB” or “Company”) is a best practice insight and technology company. In partnership with leading organizations around the globe, CEB develops innovative solutions to drive corporate performance. CEB’s mission is to unlock the potential of organizations and leaders by advancing the science and practice of management. The accompanying condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and disclosures required for complete consolidated financial statements are not included. It is recommended that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and related notes in CEB’s 2015 Annual Report on Form 10-K. In management’s opinion, all adjustments, consisting of a normal recurring nature, considered necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows at the dates and in the periods presented have been included. The consolidated balance sheet at December 31, 2015 has been derived from the financial statements that were audited by CEB’s independent registered public accounting firm. The results of operations for the three and nine months ended September 30, 2016 may not be indicative of the results that may be expected in the year ended December 31, 2016 or any other period within 2016. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements Recently adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-05 , Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Not yet adopted In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606). |
Acquisitions and Other Investme
Acquisitions and Other Investments | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Other Investments | Note 3. Acquisitions and Other Investments From time to time, the Company evaluates potential acquisitions that either strategically fit with or expand existing product offerings. Evanta On April 29, 2016, the Company completed the acquisition of 100% of the outstanding capital stock of CXO Acquisition Co. and Sports Leadership Acquisition Co. (collectively referred to as “Evanta”). Evanta focuses on C-suite executive development and collaboration solutions for peer-to-peer engagement, networking, and leadership training between information technology and security, human resources, and finance. Evanta primarily generates revenue from sponsorship fees for its events, and that revenue is recognized on the date the event occurs. As such, revenue generated from sponsorship fees is seasonal in nature, with a majority recognized in the second and the fourth quarters. The transaction was accounted for as a business combination and the results of operations of Evanta have been included in the CEB segment since the date of acquisition. Total consideration was $269.2 million, net of $17.6 million cash acquired. A portion of the purchase price was deposited in an escrow account to secure the indemnification obligations of the seller. The Company amended its senior secured credit agreement to allow for additional term loan and revolving credit borrowings in order to fund the acquisition. The following table summarizes the preliminary purchase price allocation based on the estimated fair value of the acquired assets and assumed liabilities as of the acquisition date (in thousands): Cash and cash equivalents $ 17,619 Net working capital 11,291 Property and equipment, net 1,613 Deferred income tax liabilities, net (12,821 ) Deferred revenue (19,012 ) Other liabilities, net (310 ) Intangible assets, net 51,200 Goodwill 237,261 Total purchase price allocation $ 286,841 Deferred revenue at the acquisition date was recorded at fair value, which was estimated based on the cost to provide the related services plus a reasonable profit margin on such costs. The Company preliminarily allocated $51.2 million to amortizable intangible assets with a weighted average amortization period of 6.4 years. The intangible assets consist of $27.7 million of customer relationships, $16.4 million of software, and $7.1 million of intellectual property with a weighted average amortization period of 7.0, 6.1, and 5.0 years, respectively. The estimated aggregate amortization expense for each of the succeeding five years ended December 31, 2016 through 2020 is $5.6 million, $8.4 million, $8.4 million, $7.6 million, and $7.2 million, respectively, and $14.0 million thereafter. There was $24.5 million of tax deductible intangible assets, which are expected to be tax deductible through 2027. The remaining intangible assets are not deductible for tax purposes. As a result, the Company recorded a deferred tax liability of approximately $10.8 million related to the difference in book and tax basis of identifiable intangible assets. The Company allocated $237.3 million to goodwill, of which $48.1 million is expected to be tax deductible through 2027. The goodwill balance primarily represents the Company’s expected ability to generate future cash flows, drive revenue growth, and lower customer acquisition costs across both Evanta and CEB by leveraging existing The Company is still evaluating the fair value of acquired assets and liabilities and therefore, the final allocation of the purchase price has not been completed. The allocation of the purchase price will be finalized upon the receipt of final valuations for the underlying assets and liabilities and the necessary management reviews thereof. The amounts of revenue and net loss of Evanta since the acquisition date included in the consolidated statements of operations was $1.1 million and $4.1 million, respectively, in the three months ended September 30, 2016 and $12.6 million and $2.6 million, respectively, in the nine months ended September 30, 2016. Pro Forma Financial Information The following unaudited pro forma financial information summarizes the Company’s results of operations as if the Evanta acquisition had been completed on January 1, 2015. The pro forma financial information presented includes the impact of the fair value adjustment for deferred revenue, amortization expense from acquired intangible assets, interest expense, and related tax effects. The following unaudited pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred on January 1, 2015 and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Pro forma revenue $ 230,637 $ 232,980 $ 707,530 $ 700,035 Pro forma net income $ 7,675 $ 27,233 $ 23,297 $ 62,089 Pro forma revenue was reduced by $0.9 million and $8.9 million related to the deferred revenue fair value adjustment in the three and nine months ended September 30, 2015. Pro forma net income reflects material, nonrecurring adjustments of $0.6 million and $5.4 million related to the deferred revenue fair value adjustment in the three and nine months ended September 30, 2015, respectively, and $1.0 million of debt modification costs directly attributable to the acquisition in the nine months ended September 30, 2015. Other Investments The Company held a total of eleven and nine investments in private entities with an aggregate carrying amount of $27.7 million and $23.3 million at September 30, 2016 and December 31, 2015, respectively, for which the cost method was used. These investments are carried at their original cost and evaluated each reporting period as to whether an event or change in circumstances has occurred in the period that may have an adverse effect on the net realizable value of the assets. Because the investee entities are private companies without exchange traded securities, the fair value of the underlying investment is not practical to estimate. The Company also has an equity ownership in one private entity for which the equity method is used. The aggregate carrying amount was $5.7 million and $6.1 million at September 30, 2016 and December 31, 2015, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4. Fair Value Measurements Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. The Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the tables below (in thousands): September 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 135,821 $ — $ — $ 113,329 $ — $ — Investments held through variable insurance products in a Rabbi Trust — 22,967 — — 20,234 — Available-for-sale securities — — 3,924 — — 3,463 Financial liabilities Forward currency contracts $ — $ 1,200 $ — $ — $ 179 $ — Investments held through variable insurance products in a Rabbi Trust consist of mutual funds available only to institutional investors. The fair value of these investments is based on the fair value of the underlying investments held by the mutual funds allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments held by the mutual funds is based on observable inputs. The fair value of foreign currency exchange contracts and interest rate swaps are based on bank quotations for similar instruments using models with market-based inputs. Available-for-sale securities primarily represent the Company’s investments in promissory notes of private entities. The Company utilized various unobservable inputs, including the estimate of the fair value of the stock of the underlying company, interest rate trends, and probability of future conversions, to determine the fair value. The fair value of the Company’s Senior Secured Credit Facilities and senior notes are based on Level 2 inputs using quoted market prices for similar issuances after considering observable market-based inputs such as quality, interest rates, and other characteristics. The carrying value of the Company’s Term A-3 Loans and Revolving Credit Facility approximate their fair value as the terms and interest rate approximate market rates. The carrying value of the senior notes approximates their fair value based on a review of recent market trading activity. Changes to the fair values classified within Level 3 were as follows (in thousands): Nine Months Ended September 30, 2016 Beginning of period $ 3,463 Available-for-sale securities acquired 1,800 Available-for-sale securities converted/disposed (1,588 ) Total gains recognized 249 End of period $ 3,924 |
Accounts Receivable, net
Accounts Receivable, net | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Accounts Receivable, net | Note 5. Accounts Receivable, net Accounts receivable, net consisted of the following (in thousands): September 30, 2016 December 31, 2015 Billed $ 119,008 $ 191,089 Unbilled 92,503 96,696 211,511 287,785 Allowance for uncollectible revenue (1,666 ) (2,737 ) Total accounts receivable, net $ 209,845 $ 285,048 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 6. Goodwill Changes in the carrying amount of goodwill were as follows (in thousands): Nine Months Ended September 30, 2016 Year Ended December 31, 2015 CEB CEB Talent Assessment Total CEB CEB Talent Assessment Total Gross goodwill, beginning of period $ 170,886 $ 329,023 $ 499,909 $ 134,723 $ 347,984 $ 482,707 Goodwill acquired 237,142 — 237,142 40,130 — 40,130 Purchase accounting adjustments (1,729 ) — (1,729 ) (1,499 ) — (1,499 ) Impact of foreign currency (1,178 ) (42,657 ) (43,835 ) (2,468 ) (18,961 ) (21,429 ) Gross goodwill, end of period 405,121 286,366 691,487 170,886 329,023 499,909 Accumulated impairment loss, beginning of period (41,500 ) — (41,500 ) (41,500 ) — (41,500 ) Impairment loss — — — — — — Accumulated impairment loss, end of period (41,500 ) — (41,500 ) (41,500 ) — (41,500 ) Net goodwill, end of period $ 363,621 $ 286,366 $ 649,987 $ 129,386 $ 329,023 $ 458,409 |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Note 7. Intangible Assets, Net Intangible assets, net at September 30, 2016 consisted of the following (in thousands): Gross Carrying Amount Accumulated Impairment Loss Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period (in Years) Customer relationships $ 221,557 $ 20,800 $ 68,103 $ 132,654 8.5 Acquired intellectual property 92,805 — 43,348 49,457 9.4 Trade names 52,718 — 45,021 7,697 0.2 Software 34,442 — 15,687 18,755 5.7 Total $ 401,522 $ 20,800 $ 172,159 $ 208,563 8.1 Amortization expense was $17.1 million and $8.7 million in the three months ended September 30, 2016 and 2015 and $52.4 million and $26.5 million in the nine months ended September 30, 2016 and 2015, respectively. In the fourth quarter of 2015, the estimated useful life of the SHL trade name was changed to December 31, 2016 thereby increasing amortization in 2016. Future expected amortization of intangible assets at September 30, 2016, calculated using foreign currency exchange rates in effect at the balance sheet date, was as follows for the remainder of 2016 and for future years ended December 31 (in thousands): 2016 (remaining) $ 16,728 2017 34,532 2018 33,598 2019 25,328 2020 20,197 Thereafter 78,180 Total $ 208,563 |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 8. Other Liabilities Other liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Deferred compensation $ 22,444 $ 17,553 Lease incentives 35,675 37,239 Deferred rent benefit 38,410 37,833 Deferred revenue – long term 5,310 4,396 Other 15,626 10,571 Total other liabilities $ 117,465 $ 107,592 Included in Other at September 30, 2016 was $3.0 million related to a non-compete obligation through 2020 with the Company’s CEO in connection with his decision to step down as Chairman and CEO. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Note 9. Debt Debt consisted of the following (in thousands): September 30, 2016 December 31, 2015 Senior Secured Credit Facilities Term loans, due April 2021, rate of 2.27% and 1.92% $ 392,288 $ 247,500 Revolving Credit Facility, due April 2021, average rate of 2.27% and 1.83% 250,000 70,000 Notes, due June 2023, rate of 5.625% 250,000 250,000 Total principal outstanding 892,288 567,500 Less: unamortized debt issuance costs Term loans 2,757 2,593 Notes 3,251 3,541 Total unamortized debt issuance costs 6,008 6,134 Principal less unamortized debt issuance costs 886,280 561,366 Less: current portion 7,869 4,948 Debt – long term $ 878,411 $ 556,418 Future minimum payments of debt outstanding at September 30, 2016 were as follows for the years ended December 31 (in thousands): 2016 (remaining) $ 1,981 2017 7,925 2018 13,869 2019 15,850 2020 15,850 Thereafter 836,813 Total principal payments $ 892,288 Senior Secured Credit Facilities Amendment On April 29, 2016, in connection with the closing of the Evanta acquisition, the Company, together with certain of its subsidiaries acting as guarantors, entered into Amendment No. 5 (“Amendment No. 5”) to the Company’s senior secured credit agreement (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”). Amendment No. 5 (i) increased the size of the Company’s existing term A-2 facility (“Term A-2 Facility”) by $150.0 million (such increase, the “Additional Term A Loans”) and (ii) increased its revolving credit facility by $100.0 million for a total available amount of $350.0 million (“Revolving Credit Facility” and, together with the Term A-2 Facility, the “Senior Secured Credit Facilities”). Amendment No. 5 also refinanced all term loans outstanding under the Senior Secured Credit Facilities (“Term A-2 Term Loans”) and Additional Term A Loans into a single tranche (the existing Term A-2 Term Loans plus the Additional Term A Loans, together as refinanced, “Term A-3 Loans”) and extended the maturity date of the Senior Secured Credit Facilities from June 9, 2020 to April 29, 2021. The principal amount of the Term A-3 Loans amortizes in quarterly installments equal to (i) for the first two years commencing on June 30, 2016, 2% of the original principal amount of the Term A-3 Loans and (ii) for the next three years thereafter, 4% of the original principal amount of the Term A-3 Loans with the balance payable at maturity. Borrowings under the Senior Secured Credit Facilities bear interest at rates based on the ratio of the Company’s and its subsidiaries’ consolidated indebtedness to the Company’s and its subsidiaries’ consolidated EBITDA (as defined in the Credit Agreement) for applicable periods specified in the Senior Secured Credit Facilities. The interest rate per annum applicable to the loans under the Senior Secured Credit Facilities will be based on a fluctuating rate of interest equal to the sum of an applicable margin and, at the Company’s election from time to time, of either (1) a base rate determined by reference to the highest of (a) the rate as publicly announced from time to time by Bank of America as its “prime rate”, (b) the federal funds effective rate plus 0.50%, and (c) the one-month LIBOR plus 1.00%, or (2) a Eurocurrency rate determined by reference to LIBOR with a term, as selected by the Company, of one, two, three, or six months (or twelve months if consented to by all the lenders under the applicable loan). Borrowings under the Senior Secured Credit Facilities will be subject to a “zero percent” floor in the case of LIBOR loans. The Senior Secured Credit Facilities are secured by certain collateral, subject to certain exceptions and thresholds, including (a) a perfected first priority security interests in substantially all tangible and intangible personal property and fee-owned real property of the Company and each of the Company’s wholly-owned material domestic subsidiaries, including the newly acquired Evanta entities and their subsidiaries and (b) a perfected first priority pledge of (i) the equity interests of each direct domestic restricted subsidiary of the Company and each of the Company’s wholly-owned material subsidiaries, including the newly acquired Evanta entities and their subsidiaries and (ii) 65% of the stock of each material first-tier foreign restricted subsidiary of the Company. On April 29, 2016, the Company and the newly acquired Evanta entities and their subsidiaries entered into the applicable security documents, and certain collateral was pledged thereunder. The Company evaluated each investor of the Term A-2 Loans that reinvested in the Term A-3 Loans. The change in the present value of the future cash flows between the investments was less than 10% and, thus, the debt refinancing was accounted for as a debt modification for which the Company expensed $1.7 million of debt issuance costs paid to third parties and capitalized debt issuance costs paid to the creditors as a reduction to debt. The Company determined a new effective interest rate to amortize the capitalized debt issuance costs. In addition, debt issuance costs related to the revolving commitments under the Revolving Credit Facility were deferred and amortized over the extended term since the borrowing capacity of the new arrangement was greater than the borrowing capacity of the old arrangement. In June 2015, the Company used the proceeds from the offering of the senior notes, together with borrowings under the Term A-2 Loans and cash on hand, to prepay and terminate the Company’s then existing Term A-1 Loans and to pay related fees and expenses. Accordingly, the Company recognized debt modification costs based on its evaluation of the refinanced borrowings for each investor. The Company expensed $4.8 million in debt modification costs related to these debt transactions. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Note 10. Derivative Instruments and Hedging Activities The Company’s international operations are subject to risks related to currency exchange fluctuations. The Company uses forward currency contracts, designated as cash flow hedging instruments, to protect against foreign currency exchange rate risks inherent with revenue and cost reimbursement transactions. A forward currency contract obligates the Company to exchange a predetermined amount of one currency to make equivalent payments in another currency equal to the value of such exchange. The Company has entered into forward currency contracts to sell Australian dollars (“AUD”) and Euros (“EUR”) and buy British pound sterling (“GBP”), which will settle at various times through December 31, 2016. These contracts have been designated as cash flow hedges of anticipated revenue to be recognized in the local currency and are expected to have no or an immaterial amount of ineffectiveness. The contracts provide a natural offset to GBP costs. The notional amount of outstanding forward currency contracts at September 30, 2016 was AUD 6.2 million and EUR 10.7 million. In October 2016, the Company entered into additional forward currency contracts to sell AUD 5.4 million and EUR 4.4 million. The fair value of derivative instruments in the condensed consolidated balance sheets was as follows (in thousands): Balance Sheet Location September 30, 2016 December 31, 2015 Derivatives designated as hedging instruments: Liability derivatives Accounts payable and accrued liabilities (foreign currency contracts) $ 1,200 $ 179 The pre-tax derivative instrument gains and losses recognized in OCI were as follows (in thousands): Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Three Months Ended September 30, Nine Months Ended September 30, Derivatives in Cash Flow Hedging Relationships 2016 2015 2016 2015 Forward currency contracts $ (744 ) $ 318 $ (2,563 ) $ 2,080 Interest rate swap arrangements — (355 ) — (2,958 ) The pre-tax effect of derivative instruments in the condensed consolidated statements of operations was as follows (in thousands): Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended September 30, Nine Months Ended September 30, Location of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective portion) 2016 2015 2016 2015 Revenue $ (793 ) $ 1,077 $ (1,401 ) $ 1,953 Cost of services — 33 — 26 Member relations and marketing — 32 — 26 General and administrative — 10 — 8 Interest expense (169 ) (223 ) (503 ) (1,771 ) Other income, net — (6 ) — 90 $ (962 ) $ 923 $ (1,904 ) $ 332 |
Stockholders' Equity and Share-
Stockholders' Equity and Share-based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stockholders' Equity and Share-based Compensation | Note 11. Stockholders’ Equity and Share-Based Compensation Share-Based Compensation The Company has restricted stock units (“RSUs”), stock appreciation rights (“SARs”), and performance share awards (“PSAs”) outstanding that were granted to employees and directors. Share-based compensation expense is recognized on a straight-line basis, net of an estimated forfeiture rate, for those shares expected to vest over the requisite service period of the award, which is generally the vesting term of four years. The Company recognized share-based compensation costs of $4.9 million and $4.3 million in the three months ended September 30, 2016 and 2015 and $14.1 million and $13.3 million in the nine months ended September 30, 2016 and 2015, respectively. These amounts are allocated to Cost of services, Member relations and marketing, and General and administrative expenses in the condensed consolidated statements of operations. The total income tax benefit for share-based compensation arrangements was $2.0 million and $1.7 million in the three months ended September 30, 2016 and 2015 and $5.6 million and $5.3 million in the nine months ended September 30, 2016 and 2015, respectively. At September 30, 2016, $36.1 million of total estimated unrecognized share-based compensation cost is expected to be recognized over a weighted-average period of approximately 3 years. In the nine months ended September 30, 2016, the Company granted 452,788 RSUs and 46,597 PSAs with a weighted-average grant date fair value of $59.61 and $58.74, respectively. Additionally, 249,951 RSUs vested in the nine months ended September 30, 2016 with a weighted-average grant date fair value of $61.96. Share Repurchases In February 2016, the Company’s Board of Directors approved a $150 million stock repurchase program, which is authorized through December 31, 2017. Repurchases may be made through open market purchases or privately negotiated transactions. The timing of repurchases and the exact number of shares of common stock to be repurchased will be determined by the Company’s management, in its discretion, and will depend upon market conditions and other factors. The Company repurchased 0.9 million shares of its common stock at a total cost of $52.5 million pursuant to publicly announced plans in the nine months ended September 30, 2016 (no repurchases were made in the three months ended September 30, 2016). Other repurchase activity was related to common stock surrendered by employees to satisfy federal and state tax withholding obligations. Dividends The Company funds its dividend payments with cash on hand and cash generated from operations. The Company declared and paid a quarterly cash dividend of $0.4125 per share in each of the first three quarters of 2016. In November 2016, the Board of Directors declared a fourth quarter 2016 cash dividend of $0.4125 per share. The dividend is payable on December 30, 2016 to stockholders of record at the close of business on December 15, 2016. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Costs | Note 12. Restructuring Costs In the fourth quarter of 2015, the Company committed to a workforce reduction plan (“2015 Plan”) as it identified areas for change in the market structure, initiated other actions to streamline operations, and rebalanced the management mix in certain areas. Total pre-tax restructuring charges related to the 2015 Plan were $6.2 million, consisting primarily of severance and related termination benefits. Of this amount, $5.1 million and $1.1 million was recognized in the fourth quarter of 2015 and in the first half of 2016, respectively, as Restructuring costs in the consolidated statements of operations. Substantially all of the cash was paid in 2016. The Company does not expect to incur any additional costs associated with the 2015 Plan. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13. Income Taxes The Company computes the provision for income taxes by applying the estimated annual effective tax rate to income from operations and adjusting the provision for discrete tax items. US income taxes are not provided for certain undistributed earnings of foreign subsidiaries, as such earnings are deemed to be permanently reinvested locally. The effective tax rate was 27.2% and 34.1% in the three and nine months ended September 30, 2016 and 21.9% and 22.7% in the three and nine months ended September 30, 2015, respectively. The Company’s effective tax rate in the three and nine months ended September 30, 2016 differed from the federal statutory rate of 35% primarily due to the benefits of a UK financing transaction, the overall impact of earnings within and outside the US, state income taxes, and US government incentives, such as research tax credits and deductions related to domestic production activities. In addition, the Company recognized a discrete tax benefit of $1.6 million and $1.1 million in the three and nine months ended September 30, 2016, respectively. The discrete tax benefit in the three months ended September 30, 2016 primarily related to a $1.2 million benefit associated with amending 2012-2013 tax returns. The discrete tax benefit in the nine months ended September 30, 2016 was primarily related to a $1.2 million benefit associated with amending 2012-2013 tax returns offset by discrete tax expense of $0.4 million from changes in tax planning strategies. The Company’s effective tax rate in the three and nine months ended September 30, 2015 differed from the federal statutory rate due to discrete items, foreign tax credits, government provided tax incentives, and the benefits of a UK financing transaction, which were partially offset by state income taxes. The Company recognized a discrete tax benefit of $4.4 million and $11.5 million in the three and nine months ended September 30, 2015, respectively. The discrete tax benefit in the three and nine months ended September 30, 2015 was primarily related to amending certain US returns resulting in the recognition of $0.3 million and $2.2 million of tax benefits for US foreign tax credits that were previously taken as deductions, and $1.7 million and $6.2 million in tax benefits for US government provided incentives for domestic productions activities and research and development credits and $2.2 million and $2.2 million related to other tax planning strategies, respectively. The Company made income tax payments of $2.4 million and $4.1 million in the three months ended September 30, 2016 and 2015, and $19.4 million and $49.6 million in the nine months ended September 30, 2016 and 2015, respectively. The Company had net prepaid income taxes of $14.5 million at September 30, 2016 included in Prepaid expenses and other current assets. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 14. Earnings per Share A reconciliation of basic to diluted weighted average common shares outstanding was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Basic weighted average common shares outstanding 32,214 33,389 32,348 33,473 Effect of dilutive common shares outstanding 153 217 233 306 Diluted weighted average common shares outstanding 32,367 33,606 32,581 33,779 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15. Commitments and Contingencies Contingencies From time to time, the Company is subject to litigation related to normal business operations. The Company vigorously defends itself in litigation and is not currently a party to, and the Company’s property is not subject to, any legal proceedings likely to materially affect its financial results. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive (Loss) Income | Note 16. Changes in Accumulated Other Comprehensive (Loss) Income Accumulated elements of other comprehensive (loss) income (“AOCI”) is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in each component of AOCI in the three and nine months ended September 30, 2016 were as follows (in thousands): Cash Flow Hedges, Net of Tax Foreign Currency Translation Adjustments Total Balance, June 30, 2016 $ (2,042 ) $ (97,369 ) $ (99,411 ) Net unrealized losses (587 ) — (587 ) Reclassification of losses into earnings 738 — 738 Translation of net investments in foreign operations — (13,981 ) (13,981 ) Net change in Accumulated other comprehensive loss 151 (13,981 ) (13,830 ) Balance, September 30, 2016 $ (1,891 ) $ (111,350 ) $ (113,241 ) Cash Flow Hedges, Net of Tax Foreign Currency Translation Adjustments Total Balance, December 31, 2015 $ (1,247 ) $ (43,709 ) $ (44,956 ) Net unrealized losses (2,072 ) — (2,072 ) Reclassification of losses into earnings 1,428 — 1,428 Translation of net investments in foreign operations — (67,641 ) (67,641 ) Net change in Accumulated other comprehensive loss (644 ) (67,641 ) (68,285 ) Balance, September 30, 2016 $ (1,891 ) $ (111,350 ) $ (113,241 ) |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Note 17. Segment Information Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision maker of an enterprise. The Company has two reportable segments, CEB and CEB Talent Assessment. The CEB segment includes the legacy CEB business, PDRI and Evanta. The CEB Talent Assessment Segment includes the legacy SHL business. The Company’s segment profit measure is Adjusted EBITDA. Information for the Company’s reportable segments was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue CEB segment $ 183,697 $ 184,419 $ 553,869 $ 539,086 CEB Talent Assessment segment 46,147 47,517 141,776 146,413 $ 229,844 $ 231,936 $ 695,645 $ 685,499 Adjusted revenue CEB segment $ 184,803 $ 184,653 $ 564,293 $ 539,374 CEB Talent Assessment segment 46,147 47,753 141,776 147,703 $ 230,950 $ 232,406 $ 706,069 $ 687,077 Adjusted EBITDA CEB segment $ 48,567 $ 53,451 $ 147,154 $ 147,596 CEB Talent Assessment segment 11,102 8,902 29,988 28,252 $ 59,669 $ 62,353 $ 177,142 $ 175,848 Adjusted EBITDA margin 25.8 % 26.8 % 25.1 % 25.6 % CEB segment 26.3 % 28.9 % 26.1 % 27.4 % CEB Talent Assessment segment 24.1 % 18.6 % 21.2 % 19.1 % Depreciation and amortization CEB segment $ 11,261 $ 7,850 $ 33,219 $ 25,483 CEB Talent Assessment segment 13,639 7,724 43,572 23,825 $ 24,900 $ 15,574 $ 76,791 $ 49,308 The table below reconciles revenue to Adjusted revenue (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue $ 229,844 $ 231,936 $ 695,645 $ 685,499 Impact of the deferred revenue fair value adjustment 1,106 470 10,424 1,578 Adjusted revenue $ 230,950 $ 232,406 $ 706,069 $ 687,077 The table below reconciles net income to Adjusted EBITDA (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income $ 7,508 $ 31,969 $ 19,797 $ 74,271 Provision for income taxes 2,802 8,949 10,261 21,820 Interest expense, net 7,920 5,574 20,680 14,611 Debt modification costs — — 1,656 4,775 Net non-operating foreign currency loss (gain) (146 ) (5,112 ) (4,152 ) (6,583 ) Loss on other investments, net — — 797 — Equity method investment loss 78 107 412 1,005 Depreciation and amortization 24,900 15,574 76,791 49,308 Business transformation costs 6,768 — 16,316 — Impact of the deferred revenue fair value adjustment 1,106 470 10,424 1,578 Acquisition related costs 840 505 5,959 505 CEO non-competition obligation 3,000 — 3,000 — Restructuring costs — — 1,084 1,238 Share-based compensation 4,893 4,317 14,117 13,320 Adjusted EBITDA $ 59,669 $ 62,353 $ 177,142 $ 175,848 |
Recent Accounting Pronounceme25
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements Recently adopted and Not yet adopted | Recently adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-05 , Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Not yet adopted In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606). |
Acquisitions and Other Invest26
Acquisitions and Other Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Summary of Preliminary Purchase Price Allocation Based on Estimated Fair Value of Acquired Assets and Assumed Liabilities | The following table summarizes the preliminary purchase price allocation based on the estimated fair value of the acquired assets and assumed liabilities as of the acquisition date (in thousands): Cash and cash equivalents $ 17,619 Net working capital 11,291 Property and equipment, net 1,613 Deferred income tax liabilities, net (12,821 ) Deferred revenue (19,012 ) Other liabilities, net (310 ) Intangible assets, net 51,200 Goodwill 237,261 Total purchase price allocation $ 286,841 |
Summary of Pro Forma Financial Information | The following unaudited pro forma financial information summarizes the Company’s results of operations as if the Evanta acquisition had been completed on January 1, 2015. The pro forma financial information presented includes the impact of the fair value adjustment for deferred revenue, amortization expense from acquired intangible assets, interest expense, and related tax effects. The following unaudited pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred on January 1, 2015 and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Pro forma revenue $ 230,637 $ 232,980 $ 707,530 $ 700,035 Pro forma net income $ 7,675 $ 27,233 $ 23,297 $ 62,089 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Measurement of Financial Assets and Liabilities at Fair Value on Recurring Basis | The Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the tables below (in thousands): September 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 135,821 $ — $ — $ 113,329 $ — $ — Investments held through variable insurance products in a Rabbi Trust — 22,967 — — 20,234 — Available-for-sale securities — — 3,924 — — 3,463 Financial liabilities Forward currency contracts $ — $ 1,200 $ — $ — $ 179 $ — |
Schedule of Changes to Fair Values Classified within Level 3 | Changes to the fair values classified within Level 3 were as follows (in thousands): Nine Months Ended September 30, 2016 Beginning of period $ 3,463 Available-for-sale securities acquired 1,800 Available-for-sale securities converted/disposed (1,588 ) Total gains recognized 249 End of period $ 3,924 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Summary of Accounts Receivable, Net | Accounts receivable, net consisted of the following (in thousands): September 30, 2016 December 31, 2015 Billed $ 119,008 $ 191,089 Unbilled 92,503 96,696 211,511 287,785 Allowance for uncollectible revenue (1,666 ) (2,737 ) Total accounts receivable, net $ 209,845 $ 285,048 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows (in thousands): Nine Months Ended September 30, 2016 Year Ended December 31, 2015 CEB CEB Talent Assessment Total CEB CEB Talent Assessment Total Gross goodwill, beginning of period $ 170,886 $ 329,023 $ 499,909 $ 134,723 $ 347,984 $ 482,707 Goodwill acquired 237,142 — 237,142 40,130 — 40,130 Purchase accounting adjustments (1,729 ) — (1,729 ) (1,499 ) — (1,499 ) Impact of foreign currency (1,178 ) (42,657 ) (43,835 ) (2,468 ) (18,961 ) (21,429 ) Gross goodwill, end of period 405,121 286,366 691,487 170,886 329,023 499,909 Accumulated impairment loss, beginning of period (41,500 ) — (41,500 ) (41,500 ) — (41,500 ) Impairment loss — — — — — — Accumulated impairment loss, end of period (41,500 ) — (41,500 ) (41,500 ) — (41,500 ) Net goodwill, end of period $ 363,621 $ 286,366 $ 649,987 $ 129,386 $ 329,023 $ 458,409 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets by Major Class | Intangible assets, net at September 30, 2016 consisted of the following (in thousands): Gross Carrying Amount Accumulated Impairment Loss Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period (in Years) Customer relationships $ 221,557 $ 20,800 $ 68,103 $ 132,654 8.5 Acquired intellectual property 92,805 — 43,348 49,457 9.4 Trade names 52,718 — 45,021 7,697 0.2 Software 34,442 — 15,687 18,755 5.7 Total $ 401,522 $ 20,800 $ 172,159 $ 208,563 8.1 |
Intangible Assets Expected Future Amortization Expense | Future expected amortization of intangible assets at September 30, 2016, calculated using foreign currency exchange rates in effect at the balance sheet date, was as follows for the remainder of 2016 and for future years ended December 31 (in thousands): 2016 (remaining) $ 16,728 2017 34,532 2018 33,598 2019 25,328 2020 20,197 Thereafter 78,180 Total $ 208,563 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Deferred compensation $ 22,444 $ 17,553 Lease incentives 35,675 37,239 Deferred rent benefit 38,410 37,833 Deferred revenue – long term 5,310 4,396 Other 15,626 10,571 Total other liabilities $ 117,465 $ 107,592 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following (in thousands): September 30, 2016 December 31, 2015 Senior Secured Credit Facilities Term loans, due April 2021, rate of 2.27% and 1.92% $ 392,288 $ 247,500 Revolving Credit Facility, due April 2021, average rate of 2.27% and 1.83% 250,000 70,000 Notes, due June 2023, rate of 5.625% 250,000 250,000 Total principal outstanding 892,288 567,500 Less: unamortized debt issuance costs Term loans 2,757 2,593 Notes 3,251 3,541 Total unamortized debt issuance costs 6,008 6,134 Principal less unamortized debt issuance costs 886,280 561,366 Less: current portion 7,869 4,948 Debt – long term $ 878,411 $ 556,418 |
Future Minimum Payments for Senior Secured Credit Facility and Notes | Future minimum payments of debt outstanding at September 30, 2016 were as follows for the years ended December 31 (in thousands): 2016 (remaining) $ 1,981 2017 7,925 2018 13,869 2019 15,850 2020 15,850 Thereafter 836,813 Total principal payments $ 892,288 |
Derivative Instruments and He33
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The fair value of derivative instruments in the condensed consolidated balance sheets was as follows (in thousands): Balance Sheet Location September 30, 2016 December 31, 2015 Derivatives designated as hedging instruments: Liability derivatives Accounts payable and accrued liabilities (foreign currency contracts) $ 1,200 $ 179 |
Pre-Tax Effect of Derivative Instruments | The pre-tax derivative instrument gains and losses recognized in OCI were as follows (in thousands): Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Three Months Ended September 30, Nine Months Ended September 30, Derivatives in Cash Flow Hedging Relationships 2016 2015 2016 2015 Forward currency contracts $ (744 ) $ 318 $ (2,563 ) $ 2,080 Interest rate swap arrangements — (355 ) — (2,958 ) The pre-tax effect of derivative instruments in the condensed consolidated statements of operations was as follows (in thousands): Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended September 30, Nine Months Ended September 30, Location of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective portion) 2016 2015 2016 2015 Revenue $ (793 ) $ 1,077 $ (1,401 ) $ 1,953 Cost of services — 33 — 26 Member relations and marketing — 32 — 26 General and administrative — 10 — 8 Interest expense (169 ) (223 ) (503 ) (1,771 ) Other income, net — (6 ) — 90 $ (962 ) $ 923 $ (1,904 ) $ 332 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding | A reconciliation of basic to diluted weighted average common shares outstanding was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Basic weighted average common shares outstanding 32,214 33,389 32,348 33,473 Effect of dilutive common shares outstanding 153 217 233 306 Diluted weighted average common shares outstanding 32,367 33,606 32,581 33,779 |
Changes in Accumulated Other 35
Changes in Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Balances of Each Component of Other Comprehensive Income | Changes in each component of AOCI in the three and nine months ended September 30, 2016 were as follows (in thousands): Cash Flow Hedges, Net of Tax Foreign Currency Translation Adjustments Total Balance, June 30, 2016 $ (2,042 ) $ (97,369 ) $ (99,411 ) Net unrealized losses (587 ) — (587 ) Reclassification of losses into earnings 738 — 738 Translation of net investments in foreign operations — (13,981 ) (13,981 ) Net change in Accumulated other comprehensive loss 151 (13,981 ) (13,830 ) Balance, September 30, 2016 $ (1,891 ) $ (111,350 ) $ (113,241 ) Cash Flow Hedges, Net of Tax Foreign Currency Translation Adjustments Total Balance, December 31, 2015 $ (1,247 ) $ (43,709 ) $ (44,956 ) Net unrealized losses (2,072 ) — (2,072 ) Reclassification of losses into earnings 1,428 — 1,428 Translation of net investments in foreign operations — (67,641 ) (67,641 ) Net change in Accumulated other comprehensive loss (644 ) (67,641 ) (68,285 ) Balance, September 30, 2016 $ (1,891 ) $ (111,350 ) $ (113,241 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Company's Reportable Segments | Information for the Company’s reportable segments was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue CEB segment $ 183,697 $ 184,419 $ 553,869 $ 539,086 CEB Talent Assessment segment 46,147 47,517 141,776 146,413 $ 229,844 $ 231,936 $ 695,645 $ 685,499 Adjusted revenue CEB segment $ 184,803 $ 184,653 $ 564,293 $ 539,374 CEB Talent Assessment segment 46,147 47,753 141,776 147,703 $ 230,950 $ 232,406 $ 706,069 $ 687,077 Adjusted EBITDA CEB segment $ 48,567 $ 53,451 $ 147,154 $ 147,596 CEB Talent Assessment segment 11,102 8,902 29,988 28,252 $ 59,669 $ 62,353 $ 177,142 $ 175,848 Adjusted EBITDA margin 25.8 % 26.8 % 25.1 % 25.6 % CEB segment 26.3 % 28.9 % 26.1 % 27.4 % CEB Talent Assessment segment 24.1 % 18.6 % 21.2 % 19.1 % Depreciation and amortization CEB segment $ 11,261 $ 7,850 $ 33,219 $ 25,483 CEB Talent Assessment segment 13,639 7,724 43,572 23,825 $ 24,900 $ 15,574 $ 76,791 $ 49,308 |
Reconciliation of Revenue to Adjusted Revenue | The table below reconciles revenue to Adjusted revenue (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue $ 229,844 $ 231,936 $ 695,645 $ 685,499 Impact of the deferred revenue fair value adjustment 1,106 470 10,424 1,578 Adjusted revenue $ 230,950 $ 232,406 $ 706,069 $ 687,077 |
Reconciliation of Net Income to Adjusted EBITDA | The table below reconciles net income to Adjusted EBITDA (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income $ 7,508 $ 31,969 $ 19,797 $ 74,271 Provision for income taxes 2,802 8,949 10,261 21,820 Interest expense, net 7,920 5,574 20,680 14,611 Debt modification costs — — 1,656 4,775 Net non-operating foreign currency loss (gain) (146 ) (5,112 ) (4,152 ) (6,583 ) Loss on other investments, net — — 797 — Equity method investment loss 78 107 412 1,005 Depreciation and amortization 24,900 15,574 76,791 49,308 Business transformation costs 6,768 — 16,316 — Impact of the deferred revenue fair value adjustment 1,106 470 10,424 1,578 Acquisition related costs 840 505 5,959 505 CEO non-competition obligation 3,000 — 3,000 — Restructuring costs — — 1,084 1,238 Share-based compensation 4,893 4,317 14,117 13,320 Adjusted EBITDA $ 59,669 $ 62,353 $ 177,142 $ 175,848 |
Recent Accounting Pronounceme37
Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2017 | Sep. 30, 2016 |
Forecast [Member] | Maximum [Member] | ASU 2016-09 [Member] | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Expected adjustment to retained earnings on adoption | $ 1 | |
Other Non-current Assets [Member] | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Deferred income tax effects | $ 2.4 |
Acquisitions and Other Invest38
Acquisitions and Other Investments - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)InvestmentEntity | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)InvestmentEntity | Apr. 29, 2016USD ($) | |
Business Acquisition [Line Items] | ||||||
Business consideration, net of cash acquired | $ 269,222 | $ 14,205 | ||||
Amortization expense, 2016 | $ 16,728 | 16,728 | ||||
Amortization expense, 2017 | 34,532 | 34,532 | ||||
Amortization expense, 2018 | 33,598 | 33,598 | ||||
Amortization expense, 2019 | 25,328 | 25,328 | ||||
Amortization expense, 2020 | 20,197 | 20,197 | ||||
Amortization expense, thereafter | 78,180 | 78,180 | ||||
Goodwill | 649,987 | 649,987 | $ 458,409 | $ 237,261 | ||
Revenue | 229,844 | $ 231,936 | 695,645 | 685,499 | ||
Net loss | (7,508) | (31,969) | (19,797) | (74,271) | ||
Pro forma revenue reduced | (230,637) | (232,980) | (707,530) | (700,035) | ||
Pro forma net income | (7,675) | (27,233) | $ (23,297) | (62,089) | ||
Number of investment | Investment | 11 | 9 | ||||
Carrying value of company's investment | 27,700 | $ 27,700 | $ 23,300 | |||
Equity Method [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of private entity investments | Entity | 1 | 1 | ||||
Carrying value of company's investment | 5,700 | $ 5,700 | $ 6,100 | |||
Deferred Revenue Fair Value Adjustment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Pro forma revenue reduced | 900 | 8,900 | ||||
Pro forma net income | $ 600 | 5,400 | ||||
Debt Modification Costs [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Pro forma net income | $ 1,000 | |||||
CXO Acquisition Co and Sports Leadership Acquisition Co | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, percentage of voting interests acquired | 100.00% | |||||
Business consideration, net of cash acquired | 269,200 | |||||
Business acquisitions, cash paid | 17,600 | |||||
Intangible assets acquired | 51,200 | $ 51,200 | ||||
Amortization period | 6 years 4 months 24 days | |||||
Amortization expense, 2016 | 5,600 | $ 5,600 | ||||
Amortization expense, 2017 | 8,400 | 8,400 | ||||
Amortization expense, 2018 | 8,400 | 8,400 | ||||
Amortization expense, 2019 | 7,600 | 7,600 | ||||
Amortization expense, 2020 | 7,200 | 7,200 | ||||
Amortization expense, thereafter | 14,000 | 14,000 | ||||
Tax deductible intangible assets | 24,500 | 24,500 | ||||
Deferred tax liability | 10,800 | 10,800 | ||||
Goodwill | 237,300 | 237,300 | ||||
Expected tax deductible goodwill | 48,100 | 48,100 | ||||
Revenue | 1,100 | 12,600 | ||||
Net loss | 4,100 | 2,600 | ||||
CXO Acquisition Co and Sports Leadership Acquisition Co | Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | 27,700 | $ 27,700 | ||||
Amortization period | 7 years | |||||
CXO Acquisition Co and Sports Leadership Acquisition Co | Software [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | 16,400 | $ 16,400 | ||||
Amortization period | 6 years 1 month 6 days | |||||
CXO Acquisition Co and Sports Leadership Acquisition Co | Intellectual Property [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 7,100 | $ 7,100 | ||||
Amortization period | 5 years |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Purchase Price Allocation Based on Estimated Fair Value of Acquired Assets and Assumed Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Apr. 29, 2016 | Dec. 31, 2015 |
Business Combinations [Abstract] | |||
Cash and cash equivalents | $ 17,619 | ||
Net working capital | 11,291 | ||
Property and equipment, net | 1,613 | ||
Deferred income tax liabilities, net | (12,821) | ||
Deferred revenue | (19,012) | ||
Other liabilities, net | (310) | ||
Intangible assets, net | 51,200 | ||
Goodwill | $ 649,987 | 237,261 | $ 458,409 |
Total purchase price allocation | $ 286,841 |
Acquisitions and Other Invest40
Acquisitions and Other Investments - Summary of Pro Forma Financial Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combinations [Abstract] | ||||
Pro forma revenue | $ 230,637 | $ 232,980 | $ 707,530 | $ 700,035 |
Pro forma net income | $ 7,675 | $ 27,233 | $ 23,297 | $ 62,089 |
Fair Value Measurements - Measu
Fair Value Measurements - Measurement of Financial Assets and Liabilities at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Level 1 [Member] | ||
Financial assets | ||
Cash and cash equivalents | $ 135,821 | $ 113,329 |
Level 2 [Member] | ||
Financial assets | ||
Investments held through variable insurance products in a Rabbi Trust | 22,967 | 20,234 |
Level 2 [Member] | Forward Currency Contracts [Member] | ||
Financial liabilities | ||
Fair value of derivative liability | 1,200 | 179 |
Level 3 [Member] | ||
Financial assets | ||
Available-for-sale securities | $ 3,924 | $ 3,463 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Changes to Fair Values Classified within Level 3 (Detail) - Level 3 [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning of period | $ 3,463 |
Total gains recognized | 249 |
End of period | 3,924 |
Available-for-sale Securities [Member] | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Available-for-sale securities acquired | 1,800 |
Available-for-sale securities converted/disposed | $ (1,588) |
Accounts Receivable, net - Summ
Accounts Receivable, net - Summary of Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | $ 211,511 | $ 287,785 |
Allowance for uncollectible revenue | (1,666) | (2,737) |
Total accounts receivable, net | 209,845 | 285,048 |
Billed [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | 119,008 | 191,089 |
Unbilled [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | $ 92,503 | $ 96,696 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Apr. 29, 2016 | |
Goodwill [Line Items] | |||
Gross goodwill, beginning of period | $ 499,909 | $ 482,707 | |
Goodwill acquired | 237,142 | 40,130 | |
Purchase accounting adjustments | (1,729) | (1,499) | |
Impact of foreign currency | (43,835) | (21,429) | |
Gross goodwill, end of period | 691,487 | 499,909 | |
Accumulated impairment loss, beginning of period | (41,500) | (41,500) | |
Accumulated impairment loss, end of period | (41,500) | (41,500) | |
Net goodwill, end of period | 649,987 | 458,409 | $ 237,261 |
CEB [Member] | |||
Goodwill [Line Items] | |||
Gross goodwill, beginning of period | 170,886 | 134,723 | |
Goodwill acquired | 237,142 | 40,130 | |
Purchase accounting adjustments | (1,729) | (1,499) | |
Impact of foreign currency | (1,178) | (2,468) | |
Gross goodwill, end of period | 405,121 | 170,886 | |
Accumulated impairment loss, beginning of period | (41,500) | (41,500) | |
Accumulated impairment loss, end of period | (41,500) | (41,500) | |
Net goodwill, end of period | 363,621 | 129,386 | |
CEB Talent Assessment [Member] | |||
Goodwill [Line Items] | |||
Gross goodwill, beginning of period | 329,023 | 347,984 | |
Impact of foreign currency | (42,657) | (18,961) | |
Gross goodwill, end of period | 286,366 | 329,023 | |
Net goodwill, end of period | $ 286,366 | $ 329,023 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets by Major Class (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 401,522 | |
Accumulated Impairment Loss | 20,800 | |
Accumulated Amortization | 172,159 | |
Net Carrying Amount | $ 208,563 | $ 230,680 |
Weighted Average Amortization Period (in Years) | 8 years 1 month 6 days | |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 221,557 | |
Accumulated Impairment Loss | 20,800 | |
Accumulated Amortization | 68,103 | |
Net Carrying Amount | $ 132,654 | |
Weighted Average Amortization Period (in Years) | 8 years 6 months | |
Acquired Intellectual Property [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 92,805 | |
Accumulated Amortization | 43,348 | |
Net Carrying Amount | $ 49,457 | |
Weighted Average Amortization Period (in Years) | 9 years 4 months 24 days | |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 52,718 | |
Accumulated Amortization | 45,021 | |
Net Carrying Amount | $ 7,697 | |
Weighted Average Amortization Period (in Years) | 2 months 12 days | |
Software [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 34,442 | |
Accumulated Amortization | 15,687 | |
Net Carrying Amount | $ 18,755 | |
Weighted Average Amortization Period (in Years) | 5 years 8 months 12 days |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 17.1 | $ 8.7 | $ 52.4 | $ 26.5 |
Intangible Assets, Net - Intang
Intangible Assets, Net - Intangible Assets Expected Future Amortization Expense (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2016 (remaining) | $ 16,728 | |
2,017 | 34,532 | |
2,018 | 33,598 | |
2,019 | 25,328 | |
2,020 | 20,197 | |
Thereafter | 78,180 | |
Total | $ 208,563 | $ 230,680 |
Other Liabilities - Other Liabi
Other Liabilities - Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation | $ 22,444 | $ 17,553 |
Lease incentives | 35,675 | 37,239 |
Deferred rent benefit | 38,410 | 37,833 |
Deferred revenue – long term | 5,310 | 4,396 |
Other | 15,626 | 10,571 |
Total other liabilities | $ 117,465 | $ 107,592 |
Other Liabilities - Additional
Other Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
CEO [Member] | ||
Other Liabilities [Line Items] | ||
CEO non-competition obligation | $ 3,000 | $ 3,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 892,288 | $ 567,500 |
Total unamortized debt issuance costs | 6,008 | 6,134 |
Principal less unamortized debt issuance costs | 886,280 | 561,366 |
Less: current portion | 7,869 | 4,948 |
Debt – long term | 878,411 | 556,418 |
Senior Secured Credit Facility [Member] | Term loan [Member] | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | 392,288 | 247,500 |
Total unamortized debt issuance costs | 2,757 | 2,593 |
Senior Secured Credit Facility [Member] | Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | 892,288 | |
Senior Secured Credit Facility [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | 250,000 | 70,000 |
Senior Notes [Member] | Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | 250,000 | 250,000 |
Total unamortized debt issuance costs | $ 3,251 | $ 3,541 |
Debt - Schedule of Debt (Deta51
Debt - Schedule of Debt (Detail) - Parenthetical (Detail) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Senior Secured Credit Facility [Member] | Term loan [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, annual interest rate | 2.27% | 1.92% |
Maturity date | Apr. 29, 2021 | |
Senior Secured Credit Facility [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, annual interest rate | 2.27% | 1.83% |
Maturity date | Apr. 29, 2021 | |
Senior Notes [Member] | Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, annual interest rate | 5.625% | 5.625% |
Maturity date | Jun. 15, 2023 |
Debt - Future Minimum Payments
Debt - Future Minimum Payments for Senior Secured Credit Facility and Notes (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total principal payments | $ 892,288 | $ 567,500 |
Senior Secured Credit Facility [Member] | Notes [Member] | ||
Debt Instrument [Line Items] | ||
2016 (remaining) | 1,981 | |
2,017 | 7,925 | |
2,018 | 13,869 | |
2,019 | 15,850 | |
2,020 | 15,850 | |
Thereafter | 836,813 | |
Total principal payments | $ 892,288 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Apr. 29, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Debt Instrument [Line Items] | ||||
Debt modification costs | $ 4,800,000 | $ 1,656,000 | $ 4,775,000 | |
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage change in present value of future cash flows between investment | 10.00% | |||
Senior Secured Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility total available amount | $ 350,000,000 | |||
Installment payment as a percentage of principal, first two years | 2.00% | |||
Installment payment as a percentage of principal, next three years | 4.00% | |||
Percentage of ownership in foreign subsidiary | 65.00% | |||
Senior Secured Credit Facility [Member] | Federal Funds Effective Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread percentage | 0.50% | |||
Senior Secured Credit Facility [Member] | One Month LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread percentage | 1.00% | |||
Senior Secured Credit Facility [Member] | Term A-2 Loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Increase in line of credit | $ 150,000,000 | |||
Senior Secured Credit Facility [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Increase in line of credit | $ 100,000,000 |
Derivative Instruments and He54
Derivative Instruments and Hedging Activities - Additional Information (Detail) - Derivatives Designated as Hedging Instruments [Member] - Foreign Currency Hedge [Member] | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Oct. 31, 2016AUD | Oct. 31, 2016EUR (€) | Sep. 30, 2016AUD | Sep. 30, 2016EUR (€) | |
Derivative [Line Items] | |||||
Derivative, Maturity Date | Dec. 31, 2016 | ||||
Cash flow hedge ineffectiveness | $ 0 | ||||
Derivatives notional amount | AUD 6,200,000 | € 10,700,000 | |||
Subsequent Event [Member] | |||||
Derivative [Line Items] | |||||
Derivatives notional amount | AUD 5,400,000 | € 4,400,000 |
Derivative Instruments and He55
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Derivatives Designated as Hedging Instruments [Member] | Accounts Payable and Accrued Liabilities [Member] | Foreign Currency Hedge [Member] | ||
Liability derivatives | ||
Fair value of derivative liability | $ 1,200 | $ 179 |
Derivative Instruments and He56
Derivative Instruments and Hedging Activities - Pre-Tax Effect of Derivative Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | $ (962) | $ 923 | $ (1,904) | $ 332 |
Revenue [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | (793) | 1,077 | (1,401) | 1,953 |
Cost of Services [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | 33 | 26 | ||
Member Relations and Marketing [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | 32 | 26 | ||
General and Administrative [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | 10 | 8 | ||
Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | (169) | (223) | (503) | (1,771) |
Other Income, Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | (6) | 90 | ||
Forward Currency Exchange Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (744) | 318 | $ (2,563) | 2,080 |
Interest Rate Swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (355) | $ (2,958) |
Stockholders' Equity and Shar57
Stockholders' Equity and Share-Based Compensation - Additional Information (Detail) - USD ($) | Nov. 07, 2016 | Feb. 29, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Recognized share-based compensation costs | $ 4,900,000 | $ 4,300,000 | $ 14,100,000 | $ 13,300,000 | ||||
Authorization of common stock repurchase | $ 150,000,000 | |||||||
Stock repurchase program expiration date | Dec. 31, 2017 | |||||||
Dividends declared and paid per share | $ 0.4125 | $ 0.4125 | $ 0.4125 | $ 0.375 | $ 1.238 | $ 1.125 | ||
Subsequent Event [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Cash dividend declared per share | $ 0.4125 | |||||||
Dividend date of record | Dec. 15, 2016 | |||||||
Dividend date of declared | 2016-11 | |||||||
Dividend payment date | Dec. 30, 2016 | |||||||
Share Repurchased Publicly Announced Plans [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares repurchased | 0 | 900,000 | ||||||
Cost of shares repurchased | $ 0 | $ 52,500,000 | ||||||
Share-Based Compensation [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period for share-based compensation awards | 4 years | |||||||
Share-based compensation arrangements, income tax benefit | 2,000,000 | $ 1,700,000 | $ 5,600,000 | $ 5,300,000 | ||||
Total unrecognized share-based compensation cost which is expected to be recognized | $ 36,100,000 | $ 36,100,000 | ||||||
Total compensation cost not yet recognized, period for recognition | 3 years | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of performance based stock awards, granted | 452,788 | |||||||
Weighted average grant date fair value, granted | $ 59.61 | |||||||
Number of restricted stock units, vested | 249,951 | |||||||
Weighted average grant date fair value, vested | $ 61.96 | |||||||
Performance Based Stock Awards (PSAs) [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of performance based stock awards, granted | 46,597 | |||||||
Weighted average grant date fair value, granted | $ 58.74 |
Restructuring Costs - Additiona
Restructuring Costs - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring costs | $ 1,084 | $ 1,238 | ||
2015 Plan [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Pre-tax restructuring charges | $ 6,200 | |||
Restructuring costs | $ 5,100 | $ 1,100 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax [Line Items] | ||||
Effective income tax rate | 27.20% | 21.90% | 34.10% | 22.70% |
Statutory US federal income tax rate | 35.00% | 35.00% | ||
Recognized discrete tax Expense (Benefit) | $ (1.6) | $ (4.4) | $ (1.1) | $ (11.5) |
Income tax payments | 2.4 | 4.1 | 19.4 | 49.6 |
Prepaid income taxes | 14.5 | 14.5 | ||
US [Member] | ||||
Income Tax [Line Items] | ||||
Government provided tax incentives | 1.7 | 6.2 | ||
Foreign tax credit, amount | 0.3 | 2.2 | ||
Amounts related to other tax planning strategies | $ 2.2 | $ 2.2 | ||
Tax Planning Strategies [Member] | ||||
Income Tax [Line Items] | ||||
Recognized discrete tax Expense (Benefit) | 0.4 | |||
Amending 2012-2013 Tax Returns [Member] | ||||
Income Tax [Line Items] | ||||
Recognized discrete tax Expense (Benefit) | $ (1.2) | $ (1.2) |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding | 32,214 | 33,389 | 32,348 | 33,473 |
Effect of dilutive common shares outstanding | 153 | 217 | 233 | 306 |
Diluted weighted average common shares outstanding | 32,367 | 33,606 | 32,581 | 33,779 |
Changes in Accumulated Other 61
Changes in Accumulated Other Comprehensive (Loss) Income - Schedule of Changes in Accumulated Balances of Each Component of Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 43,677 | |||
Net unrealized losses | $ (587) | (2,072) | ||
Reclassification of losses into earnings | 738 | 1,428 | ||
Translation of net investments in foreign operations | (13,981) | $ (25,229) | (67,641) | $ (20,995) |
Net change in Accumulated other comprehensive loss | (13,830) | (68,285) | ||
Ending balance | (85,768) | (85,768) | ||
Cash Flow Hedge, Net of Tax [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (2,042) | (1,247) | ||
Net unrealized losses | (587) | (2,072) | ||
Reclassification of losses into earnings | 738 | 1,428 | ||
Net change in Accumulated other comprehensive loss | 151 | (644) | ||
Ending balance | (1,891) | (1,891) | ||
Foreign Currency Translation Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (97,369) | (43,709) | ||
Translation of net investments in foreign operations | (13,981) | (67,641) | ||
Net change in Accumulated other comprehensive loss | (13,981) | (67,641) | ||
Ending balance | (111,350) | (111,350) | ||
Accumulated Other Comprehensive (Loss) Income [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (99,411) | (44,956) | ||
Ending balance | $ (113,241) | $ (113,241) |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Company's Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue | ||||
Total revenue | $ 229,844 | $ 231,936 | $ 695,645 | $ 685,499 |
Adjusted revenue | ||||
Total Adjusted revenue | 230,950 | 232,406 | 706,069 | 687,077 |
Adjusted EBITDA | ||||
Total Adjusted EBITDA | $ 59,669 | $ 62,353 | $ 177,142 | $ 175,848 |
Adjusted EBITDA margin | ||||
Total Adjusted EBITDA margin | 25.80% | 26.80% | 25.10% | 25.60% |
Depreciation and amortization | ||||
Total depreciation and amortization | $ 24,900 | $ 15,574 | $ 76,791 | $ 49,308 |
CEB Segment [Member] | ||||
Revenue | ||||
Total revenue | 183,697 | 184,419 | 553,869 | 539,086 |
Adjusted revenue | ||||
Total Adjusted revenue | 184,803 | 184,653 | 564,293 | 539,374 |
Adjusted EBITDA | ||||
Total Adjusted EBITDA | $ 48,567 | $ 53,451 | $ 147,154 | $ 147,596 |
Adjusted EBITDA margin | ||||
Total Adjusted EBITDA margin | 26.30% | 28.90% | 26.10% | 27.40% |
Depreciation and amortization | ||||
Total depreciation and amortization | $ 11,261 | $ 7,850 | $ 33,219 | $ 25,483 |
CEB Talent Assessment Segment [Member] | ||||
Revenue | ||||
Total revenue | 46,147 | 47,517 | 141,776 | 146,413 |
Adjusted revenue | ||||
Total Adjusted revenue | 46,147 | 47,753 | 141,776 | 147,703 |
Adjusted EBITDA | ||||
Total Adjusted EBITDA | $ 11,102 | $ 8,902 | $ 29,988 | $ 28,252 |
Adjusted EBITDA margin | ||||
Total Adjusted EBITDA margin | 24.10% | 18.60% | 21.20% | 19.10% |
Depreciation and amortization | ||||
Total depreciation and amortization | $ 13,639 | $ 7,724 | $ 43,572 | $ 23,825 |
Segment Information - Reconcili
Segment Information - Reconciliation of Revenue to Adjusted Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Revenue | $ 229,844 | $ 231,936 | $ 695,645 | $ 685,499 |
Impact of the deferred revenue fair value adjustment | 1,106 | 470 | 10,424 | 1,578 |
Adjusted revenue | $ 230,950 | $ 232,406 | $ 706,069 | $ 687,077 |
Segment Information - Reconci65
Segment Information - Reconciliation of Net Income to Adjusted EBITDA (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||||
Net income | $ 7,508 | $ 31,969 | $ 19,797 | $ 74,271 | |
Provision for income taxes | 2,802 | 8,949 | 10,261 | 21,820 | |
Interest expense, net | 7,920 | 5,574 | 20,680 | 14,611 | |
Debt modification costs | $ 4,800 | 1,656 | 4,775 | ||
Net non-operating foreign currency loss (gain) | (146) | (5,112) | (4,152) | (6,583) | |
Loss on other investments, net | 797 | ||||
Equity method investment loss | 78 | 107 | 412 | 1,005 | |
Depreciation and amortization | 24,900 | 15,574 | 76,791 | 49,308 | |
Business transformation costs | 6,768 | 16,316 | |||
Impact of the deferred revenue fair value adjustment | 1,106 | 470 | 10,424 | 1,578 | |
Acquisition related costs | 840 | 505 | 5,959 | 505 | |
Restructuring costs | 1,084 | 1,238 | |||
Share-based compensation | 4,893 | 4,317 | 14,117 | 13,320 | |
Adjusted EBITDA | 59,669 | $ 62,353 | 177,142 | $ 175,848 | |
CEO [Member] | |||||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||||
CEO non-competition obligation | $ 3,000 | $ 3,000 |