Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'HEARTLAND PAYMENT SYSTEMS INC | ' |
Entity Central Index Key | '0001144354 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-12 | ' |
Document Fiscal Year Focus | '2012 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 36,875,088 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $67,156 | $48,440 |
Funds held for payroll customers | 111,895 | 131,405 |
Receivables, net | 195,678 | 180,448 |
Investments | 4,650 | 1,199 |
Inventory | 10,268 | 9,694 |
Prepaid expenses | 12,957 | 10,421 |
Current tax asset | 5,588 | 0 |
Current deferred tax assets, net | 10,382 | 10,475 |
Assets of Disposal Group, Including Discontinued Operation, Current | 0 | 17,044 |
Total current assets | 418,574 | 409,126 |
Capitalized customer acquisition costs, net | 57,711 | 56,425 |
Property and equipment, net | 139,160 | 125,031 |
Goodwill | 191,172 | 168,062 |
Intangible assets, net | 52,147 | 53,594 |
Deposits and other assets, net | 449 | 1,176 |
Total assets | 859,213 | 813,414 |
Current liabilities: | ' | ' |
Due to sponsor banks | 42,633 | 37,586 |
Accounts payable | 66,175 | 64,065 |
Deposits held for payroll customers | 111,895 | 131,405 |
Current portion of borrowings | 111,000 | 102,001 |
Current portion of accrued buyout liability | 13,667 | 10,478 |
Processing liabilities and loss reserves | 108,144 | 95,273 |
Accrued expenses and other liabilities | 50,280 | 47,817 |
Current Tax Liability | 0 | 4,323 |
Liabilities of Disposal Group, Including Discontinued Operation, Current | 0 | 1,672 |
Total current liabilities | 503,794 | 494,620 |
Deferred tax liabilities, net | 38,830 | 29,632 |
Reserve for unrecognized tax benefits | 4,267 | 3,069 |
Long-term portion of borrowings | 35,000 | 50,000 |
Long-term portion of accrued buyout liability | 23,195 | 24,932 |
Total liabilities | 605,086 | 602,253 |
Commitments and contingencies | ' | ' |
Equity | ' | ' |
Common Stock, $0.001 par value, 100,000,000 shares authorized, 41,110,681 and 39,626,846 shares issued at September 30, 2012 and December 31, 2011; 38,657,369 and 38,847,957 outstanding at September 30, 2012 and December 31, 2011 | 37 | 38 |
Additional paid-in capital | 236,684 | 222,705 |
Accumulated other comprehensive income | -35 | -399 |
Retained earnings | 21,141 | 7,629 |
Treasury stock, at cost (2,453,312 and 778,889 shares at September 30, 2012 and December 31, 2011) | -10,408 | -20,187 |
Total stockholders’ equity | 247,419 | 209,786 |
Noncontrolling interests | 6,708 | 1,375 |
Total equity | 254,127 | 211,161 |
Total liabilities and equity | $859,213 | $813,414 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets Parentheticals (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Equity | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 37,150,990 | 37,571,708 |
Common stock, shares outstanding | 36,853,090 | 36,855,908 |
Treasury Stock, shares | 297,900 | 715,800 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Total revenues | $557,129 | $530,677 | $1,604,992 | $1,513,471 |
Costs of services: | ' | ' | ' | ' |
Interchange | 350,734 | 336,628 | 1,003,039 | 965,318 |
Dues, assessments and fees | 53,165 | 54,121 | 152,146 | 150,494 |
Processing and servicing | 60,195 | 54,344 | 177,968 | 165,910 |
Customer acquisition costs | 10,838 | 10,647 | 31,554 | 33,346 |
Depreciation and amortization | 5,454 | 5,344 | 14,066 | 14,168 |
Total costs of services | 480,386 | 461,084 | 1,378,773 | 1,329,236 |
General and administrative | 41,871 | 36,787 | 131,242 | 99,645 |
Total expenses | 522,257 | 497,871 | 1,510,015 | 1,428,881 |
Income from operations | 34,872 | 32,806 | 94,977 | 84,590 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 29 | 31 | 95 | 169 |
Interest expense | -1,243 | -938 | -3,746 | -2,544 |
Provision for processing system intrusion costs | -13 | -290 | -252 | -528 |
Other, net | 103 | -921 | 182 | -925 |
Total other income (expense) | -1,124 | -2,118 | -3,721 | -3,828 |
Income before income taxes | 33,748 | 30,688 | 91,256 | 80,762 |
Provision for income taxes | 11,857 | 11,745 | 34,039 | 30,893 |
Net income from continuing operations | 21,891 | 18,943 | 57,217 | 49,869 |
Income from discontinued operations, net of income tax of $—, $229, $68, and $555 | 0 | 624 | 3,970 | 1,512 |
Net income | 21,891 | 19,567 | 61,187 | 51,381 |
Income (Loss) from Continuing Operations Attributable to Noncontrolling Interest | -90 | 0 | -90 | 0 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Noncontrolling Interest | 0 | 187 | 56 | 446 |
Net income from continuing operations, net of noncontrolling interests | 21,981 | 18,943 | 57,307 | 49,869 |
Net income attributable to Heartland | 21,981 | 19,380 | 61,221 | 50,935 |
Basic earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.60 | $0.49 | $1.56 | $1.28 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 | $0.11 | $0.03 |
Basic earnings per share (in dollars per share) | $0.60 | $0.50 | $1.67 | $1.31 |
Diluted earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.58 | $0.47 | $1.50 | $1.23 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 | $0.10 | $0.03 |
Diluted earnings per share (in dollars per share) | $0.58 | $0.48 | $1.60 | $1.26 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 36,857 | 38,813 | 36,752 | 38,831 |
Diluted (in shares) | 38,020 | 40,352 | 38,079 | 40,454 |
Dividends declared per share | $0.07 | $0.06 | $0.21 | $0.18 |
CPOS [Member] | ' | ' | ' | ' |
Other income (expense): | ' | ' | ' | ' |
Income from discontinued operations, net of income tax of $—, $229, $68, and $555 | 0 | 624 | 184 | 1,512 |
Income from discontinued operations, net of income tax and noncontrolling interests | $0 | $437 | $3,914 | $1,066 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income Parentheticals (Income From Discontinued Operations [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income From Discontinued Operations [Member] | ' | ' | ' | ' |
Income from discontinued operations, tax | $0 | $229 | $2,135 | $555 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital | Accumulated Other Comprehensive Gain (Loss) | (Accumulated Deficit) Retained Earnings | Treasury Stock [Member] | Noncontrolling Minority Interests |
In Thousands, except Share data, unless otherwise specified | |||||||
Stockholders' equity, begining balance at Dec. 31, 2011 | $220,052 | $39 | $207,643 | ($680) | $29,236 | ($16,828) | $642 |
Common stock, shares outstanding at Dec. 31, 2011 | ' | 38,848,000 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Issuance of Common Stock - options exercised, shares | ' | 1,400,000 | ' | ' | ' | ' | ' |
Issuance of Common Stock - options exercised, amount | 16,828 | 2 | 16,826 | ' | ' | ' | ' |
Issuance of Common Stock - RSU's Vested, shares | ' | 83,000 | ' | ' | ' | ' | ' |
Adjustment to Additional Paid-in-capital, Value, Restricted Stock Units Vested | -1,064 | ' | -1,064 | ' | ' | ' | ' |
Excess tax benefit on stock options exercised | 6,175 | ' | 6,175 | ' | ' | ' | ' |
Repurchase of common stock, shares | ' | -1,674,000 | ' | ' | ' | ' | ' |
Repurchase of common stock, amount | -49,216 | ' | ' | ' | ' | -49,216 | ' |
Stock-based compensation | 10,412 | ' | 10,412 | ' | ' | ' | ' |
Other comprehensive income (loss) | 466 | ' | ' | 327 | ' | ' | 139 |
Dividends on common stock | -7,012 | ' | ' | ' | -7,012 | ' | ' |
Net income for the period | 51,381 | ' | ' | ' | 50,935 | ' | 446 |
Stockholders' equity, ending balance at Sep. 30, 2012 | 248,022 | 41 | 239,992 | -353 | 73,159 | -66,044 | 1,227 |
Common stock, shares outstanding at Sep. 30, 2012 | ' | 38,657,000 | ' | ' | ' | ' | ' |
Stockholders' equity, begining balance at Dec. 31, 2012 | 211,161 | 38 | 222,705 | -399 | 7,629 | -20,187 | 1,375 |
Common stock, shares outstanding at Dec. 31, 2012 | 36,855,908 | 36,856,000 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Issuance of Common Stock - options exercised, shares | ' | 982,000 | ' | ' | ' | ' | ' |
Issuance of Common Stock - options exercised, amount | 10,725 | 1 | 10,724 | ' | ' | ' | ' |
Issuance of Common Stock - RSU's Vested, shares | ' | 265,000 | ' | ' | ' | ' | ' |
Adjustment to Additional Paid-in-capital, Value, Restricted Stock Units Vested | -4,866 | ' | -4,866 | ' | ' | ' | ' |
Excess tax benefit on stock options exercised | 8,382 | ' | 8,382 | ' | ' | ' | ' |
Repurchase of common stock, shares | ' | -1,250,000 | ' | ' | ' | ' | ' |
Repurchase of common stock, amount | -40,221 | ' | ' | ' | ' | -40,221 | ' |
Retirement of treasury stock | 0 | -2 | -10,024 | ' | -39,974 | 50,000 | ' |
Stock-based compensation | 9,763 | ' | 9,763 | ' | ' | ' | ' |
Changes in equity from sale of discontinued operation | -1,332 | ' | ' | 83 | ' | ' | -1,415 |
Other comprehensive income (loss) | 265 | ' | ' | 281 | ' | ' | -16 |
Noncontrolling interests in subsidiary acquired | 6,798 | ' | ' | ' | ' | ' | 6,798 |
Dividends on common stock | -7,735 | ' | ' | ' | -7,735 | ' | ' |
Net income for the period | 61,187 | ' | ' | ' | 61,221 | ' | -34 |
Stockholders' equity, ending balance at Sep. 30, 2013 | $254,127 | $37 | $236,684 | ($35) | $21,141 | ($10,408) | $6,708 |
Common stock, shares outstanding at Sep. 30, 2013 | 36,853,090 | 36,853,000 | ' | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Equity Statement of Equity Parenthetical (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Statement of Stockholders' Equity Parenthetical [Abstract] | ' | ' | ' | ' |
Dividends declared per share | $0.07 | $0.06 | $0.21 | $0.18 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flow (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities | ' | ' |
Net income | $61,187 | $51,381 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization of capitalized customer acquisition costs | 33,936 | 33,758 |
Other depreciation and amortization | 26,037 | 20,366 |
Depreciation, Depletion and Amortization | 26,070 | 20,641 |
Addition to loss reserves | 2,510 | 1,827 |
Provision for doubtful receivables | -1 | 793 |
Stock-based compensation | 9,763 | 10,412 |
Deferred taxes | 5,632 | 3,558 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | -3,786 | 0 |
Other | 386 | 964 |
Changes in operating assets and liabilities: | ' | ' |
Increase in receivables | -15,135 | -8,519 |
Decrease in inventory | -524 | 1,685 |
Payment of signing bonuses, net | -19,546 | -22,446 |
Increase in capitalized customer acquisition costs | -15,676 | -12,748 |
Decrease (increase) in prepaid expenses | -2,361 | 1,329 |
(Increase) decrease in current tax asset | -1,515 | 1,968 |
Increase in deposits and other assets | -296 | -81 |
Excess tax benefits on employee share-based compensation | -8,382 | -6,175 |
Increase in reserve for unrecognized tax benefits | 1,198 | 675 |
(Decrease) increase in due to sponsor bank | 5,048 | -10,823 |
Increase in accounts payable | -1,830 | 14,593 |
(Decrease) increase in accrued expenses and other liabilities | -1,036 | 2,423 |
Increase in processing liabilities and loss reserves | 10,310 | 10,528 |
Payouts Of Accrued Buyout Liability | -11,842 | -9,401 |
Increase in accrued buyout liability | 13,294 | 12,336 |
Accrued Buyout Liability, Increase in Settlement Obligations | 13,294 | 12,336 |
Net cash provided by operating activities | 87,404 | 98,678 |
Cash flows from investing activities | ' | ' |
Purchase of investments held to maturity | -5,241 | -5,225 |
Maturities of investments held to maturity | 1,430 | 3,396 |
(Increase) decrease in funds held for payroll customers | 19,519 | 3,344 |
Increase (decrease) in deposits held for payroll customers | -19,510 | -3,294 |
Proceeds from Divestiture of Businesses, Net of Cash Divested | 19,343 | 0 |
Acquisition of business, net of cash acquired | -15,182 | -23,682 |
Purchases of property and equipment | -36,929 | -25,029 |
Net cash used in investing activities | -36,570 | -50,490 |
Cash flows from financing activities | ' | ' |
Proceeds from borrowings | 9,000 | 26,000 |
Principal payments on borrowings | -15,000 | -37,253 |
Proceeds from exercise of stock options | 10,725 | 16,828 |
Excess tax benefits on employee share-based compensation | 8,382 | 6,175 |
Repurchases of common stock | -39,632 | -48,202 |
Dividends paid on common stock | -7,735 | -7,012 |
Net cash used in financing activities | -34,260 | -43,464 |
Net (decrease) increase in cash | 16,574 | 4,724 |
Effect of exchange rates on cash | 1 | 30 |
Cash at beginning of year | 50,581 | 40,301 |
Cash at end of period | 67,156 | 45,055 |
Supplemental cash flow information: | ' | ' |
Interest | 3,173 | 2,257 |
Income taxes | $28,917 | $25,184 |
Statements_of_Comprehensive_In
Statements of Comprehensive Income Statement (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income | $21,891 | $19,567 | $61,187 | $51,381 |
Unrealized gains on investments, net of income tax of $—, $10, $4 and $19 | 0 | 15 | 4 | 30 |
Unrealized gains (losses) on derivative financial instruments, net of tax of $25, ($12), $121 and ($20) | 152 | -19 | 315 | -28 |
Foreign currency translation adjustment | 0 | 500 | -54 | 464 |
Comprehensive income | 22,043 | 20,063 | 61,452 | 51,847 |
Less: Comprehensive (loss) income attributable to noncontrolling interests | -90 | 337 | -50 | 585 |
Comprehensive income attributable to Heartland | $22,133 | $19,726 | $61,502 | $51,262 |
Statements_of_Comprehensive_In1
Statements of Comprehensive Income Parenthetical for Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Other Comprehensive Income [Abstract] | ' | ' | ' | ' |
Unrealized (losses) gains on investments, tax | $0 | $10 | $4 | $19 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | $25 | ($12) | $121 | ($20) |
Organization_and_Operations
Organization and Operations | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Organization and Operations | ' | |
Organization and Operations | ||
Basis of Financial Statement Presentation— The accompanying condensed consolidated financial statements include those of Heartland Payment Systems, Inc. (the “Company,” “we,” “us,” or “our”) and its wholly-owned subsidiaries, Heartland Payroll Company (“HPC”), Ovation Payroll, Inc. ("Ovation"), Educational Computer Systems, Inc. ("ECSI"), Debitek, Inc. (“Debitek”) and Heartland Acquisition LLC (“Network Services”), and as of September 11, 2013, Leaf Acquisition, LLC (which holds 66.67% of the outstanding capital stock of Leaf Holdings, Inc ("Leaf")), as well as its previously 70% owned subsidiary Collective POS Solutions Ltd. (“CPOS”). The Company entered into an agreement during the fourth quarter of 2012 to sell CPOS. The transaction was settled on January 31, 2013 and the Company recorded a gain on the sale in the first quarter of 2013. The Company presents CPOS as a discontinued operation in the accompanying condensed consolidated financial statements. See Note 15, Discontinued Operations for more detail. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions with the Company's subsidiaries have been eliminated upon consolidation. | ||
The accompanying condensed consolidated financial statements are unaudited. In the opinion of the Company's management, the unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the Company's financial position at September 30, 2013, and its results of operations, changes in stockholders’ equity and cash flows for the periods ended September 30, 2013 and 2012. Results of operations reported for interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2013. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2012. The December 31, 2012 condensed consolidated balance sheet was derived from the audited 2012 consolidated financial statements. | ||
Business Description—The Company's principal business is to provide payment processing services related to bankcard transactions for merchants throughout the United States, and until January 31, 2013 in Canada (See Note 15, Discontinued Operations for more detail). In addition, the Company provides certain other card-related services, including the sale and rental of terminal equipment, sale of terminal supplies and loyalty and gift card marketing solutions ("Heartland Marketing Solutions"). The Company provides K to 12 school solutions ("Heartland School Solutions") in the United States including school nutrition and point-of-sale and payment solutions. HPC and Ovation provide payroll and related tax filing services throughout the United States. Debitek provides campus payment solutions ("Campus Solutions"), prepaid card and stored-value card payment solutions ("Prepaid Card") throughout the United States and Canada. ECSI also provides Campus Solutions, including higher education loan servicing, throughout the United States. | ||
Over 72% of the Company's revenue is derived from processing and settling Visa and MasterCard bankcard transactions for its merchant customers. Because the Company is not a ''member bank'' as defined by Visa and MasterCard, in order to process and settle these bankcard transactions for its merchants, the Company has entered into sponsorship agreements with member banks. Visa and MasterCard rules restrict the Company from performing funds settlement or accessing merchant settlement funds and require that these funds be in the possession of the member bank until the merchant is funded. A sponsorship agreement permits the Company to route Visa and MasterCard bankcard transactions under the member bank's control and identification numbers to clear credit and signature debit bankcard transactions through Visa and MasterCard. A sponsorship agreement also enables the Company to settle funds between cardholders and merchants by delivering funding files to the member bank, which in turn transfers settlement funds to the merchants' bank accounts. These restrictions place the settlement assets and obligations under the control of the member bank. | ||
The sponsorship agreements with the member banks require, among other things, that the Company abide by the bylaws and regulations of the Visa and MasterCard networks, and certain of the sponsor banks require a certificate of deposit or a cash balance in a deposit account. If the Company were to breach a sponsorship agreement and under certain circumstances, the sponsor banks may terminate the agreement and, under the terms of the agreement, the Company would have 180 days to identify an alternative sponsor bank. The Company is generally dependent on its sponsor banks, Visa and MasterCard for notification of any compliance breaches. As of September 30, 2013, the Company has not been notified of any such issues by its sponsor banks, Visa or MasterCard. | ||
At September 30, 2013, the Company is party to four bank sponsorship agreements. | ||
• | On February 8, 2012, the Company entered into a sponsorship agreement with Wells Fargo Bank, N.A. ("WFB"). The WFB sponsorship agreement will be in effect until February 8, 2016 and will automatically renew | |
for successive three year periods unless either party provides six months written notice of non-renewal to the other party. Processing for small and mid-sized merchants (referred to as "Small and Midsized Enterprises," or “SME merchants”) under the WFB sponsorship commenced in August 2012, when that activity was transferred from its previous sponsor, KeyBank, National Association. | ||
• | In November 2009, the Company entered into a sponsorship agreement with The Bancorp Bank to sponsor processing for the Company's large national and mid-tier merchants. The agreement with The Bancorp Bank expires in February 2015 and will automatically renew for successive one-year periods unless either party provides six months written notice of non-renewal to the other party. | |
• | On March 24, 2011, the Company entered into a sponsorship agreement with Barclays Bank Delaware to sponsor processing for certain of the Company's large national merchants. The agreement with Barclays Bank Delaware expires in March 2016 and will automatically renew for successive one-year periods unless either party provides six months written notice of non-renewal to the other. | |
• | In 2007, the Company entered into a sponsorship agreement with Heartland Bank, an unrelated third party, to sponsor SME merchant processing. In March 2013, the Company notified Heartland Bank of its intention to terminate the sponsorship agreement and made arrangements for continuing sponsorship with The Bancorp Bank under the terms of the November 2009 sponsorship agreement. The transfer of sponsorship and processing from Heartland Bank to The Bancorp Bank was final on October 1, 2013. | |
Following is a breakout of the Company’s total Visa and MasterCard settled bankcard processing volume for the month ending September 30, 2013 by percentage processed under its individual bank sponsorship agreements: | ||
Sponsor Bank | % of September 2013 | |
Bankcard Processing | ||
Volume | ||
Wells Fargo Bank, N.A. | 64% | |
The Bancorp Bank | 17% | |
Barclays Bank Delaware | 13% | |
Heartland Bank | 6% | |
The Company also provides card transaction processing for DFS Services, LLC ("Discover") and is designated as an acquirer by Discover. The agreement with Discover allows the Company to acquire, process and fund transactions directly through Discover's network without the need of a bank sponsor. The Company processes Discover transactions similarly to how it processes Visa and MasterCard transactions. The Company must comply with Discover acquirer operating regulations and uses its sponsor banks to assist in funding its merchants' Discover transactions. | ||
Under a sales and servicing program agreement with American Express Travel Related Services Company, Inc. ("American Express") the Company: (a) provides solicitation services by signing new-to-American Express merchants directly with American Express; (b) provides transactional support services on behalf of American Express to the Company's American Express accepting merchants; and (c) provides processing, settlement, customer support and reporting to merchants, similar to the services provided for the merchants' Visa, MasterCard and Discover transactions. | ||
Working Capital— The Company's working capital, defined as current assets less current liabilities, was negative by $85.2 million at September 30, 2013 and $85.5 million at December 31, 2012. The negative working capital primarily reflects the Company (a) borrowing $82.0 million under the Revolving Credit Facility (as defined in Note 10, Credit Facilities) which was used to fund the acquisitions of ECSI and Ovation in December 2012, as described above and in Note 3, Acquisitions, (b) using $103.4 million of operating cash to repurchase 3,634,044 shares of the Company's common stock during 2012 and (c) using $40.2 million of operating cash to repurchase 1,250,083 shares during the nine months ended September 30, 2013. See Note 10, Credit Facilities for information on the Company's Revolving Credit Facility. The Company believes that its current cash and investment balances, cash generated from operations and its agreements with its sponsor banks to fund SME merchant advances will provide sufficient liquidity to meet its anticipated needs for operating capital for at least the next twelve months. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||
Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, among other things, the accrued buyout liability, capitalized customer acquisition costs, goodwill, loss reserves, certain accounts payable and accrued expenses and certain tax assets and liabilities as well as the related valuation allowances, if any. Actual results could differ from those estimates. | ||||||||||||||||||
Cash and Cash Equivalents— At September 30, 2013, cash included approximately $39.7 million of processing-related cash in transit and collateral, compared to approximately $31.6 million of processing-related cash in transit and collateral at December 31, 2012. | ||||||||||||||||||
Receivables—Receivables are stated net of allowance for doubtful accounts. The Company estimates its allowance based on experience with its merchants, customers, and sales force and its judgment as to the likelihood of their ultimate payment. The Company also considers collection experience and makes estimates regarding collectability based on trends in the aging. Historically, the Company has not experienced significant charge offs for its merchant receivables. | ||||||||||||||||||
The Company's primary receivables are from its bankcard processing merchants. In addition to receivables for transaction fees the Company charges its merchants for processing transactions, these receivables include amounts resulting from the Company's practice of advancing interchange fees to most of its SME merchants during the month and collecting those fees at the beginning of the following month. The Company does not advance interchange fees to its Network Services Merchants. Network Services Merchants are invoiced monthly, on payment terms of 30 days net from date of invoicing. Receivables from merchants also include receivables from the sale of point-of-sale terminal equipment. | ||||||||||||||||||
Historically, the Company funded interchange advances to its SME merchants first with its available cash, and when that cash had been expended, by directing its sponsor banks to fund advances, thereby incurring a payable to sponsor banks. In the fourth quarter of 2012, the Company accelerated the end-of-day presentment of transaction funding files to the bankcard networks resulting in its sponsor banks receiving settlement cash one day earlier and increasing funding obligations to its SME merchants, which are carried in processing liabilities. As a result of accelerated presentment, the Company funds these merchant interchange advances/receivables first from the accelerated settlement cash received from bankcard networks, then from the Company's available cash or by incurring a payable to its sponsor banks. At September 30, 2013, the Company used $2.4 million of its cash to fund merchant advances and at December 31, 2012, the Company used $3.8 million of its cash to fund merchant advances. The amount due to sponsor banks for funding advances was $41.7 million at September 30, 2013 and $36.3 million at December 31, 2012. The Company pays its sponsor banks the prime rate on these payables. The payable to sponsor banks is repaid at the beginning of the following month out of the fees the Company collects from its merchants. | ||||||||||||||||||
Receivables also include amounts resulting from the pre-funding of Discover and American Express transactions to the Company's merchants and are due from the related bankcard networks. These amounts are recovered the next business day following the date of processing the transaction. | ||||||||||||||||||
Receivables also include amounts resulting from the sale, installation, training and repair of payment system hardware and software for prepaid card and stored-value card payment systems, Campus Solutions, and Heartland School Solutions. These receivables are mostly invoiced on terms of 30 days net from date of invoicing. | ||||||||||||||||||
Investments and Funds Held for Customers— Investments, including those carried on the Condensed Consolidated Balance Sheets as Funds held for customers, consist primarily of equity investments, fixed income bond funds and certificates of deposit. Funds held for customers also include overnight bank deposits. The majority of investments carried in Funds held for customers are available-for-sale and recorded at fair value based on quoted market prices. Certificates of deposit are classified as held to maturity and recorded at cost. In the event of a sale, cost is determined on a specific identification basis. At September 30, 2013, Funds held for customers included cash and cash equivalents of $110.7 million and investments available for sale of $1.2 million. | ||||||||||||||||||
The asset funds held for customers and the liability customer fund deposits include: (1) amounts collected from customers prior to funding their payroll liabilities, as well as related tax and fiduciary liabilities for those customers, and (2) amounts collected by Campus Solutions in its capacity as loan servicer, which will be remitted to the customer/owner of the student loans the following month. | ||||||||||||||||||
Capitalized Customer Acquisition Costs, net— Capitalized customer acquisition costs consist of (1) up-front signing bonus payments made to Relationship Managers and sales managers (the Company's sales force, which are referred to as "salespersons") for the establishment of new merchant relationships, and (2) a deferred acquisition cost representing the estimated cost of buying out the commissions of vested salespersons. Capitalized customer acquisition costs represent incremental, direct customer acquisition costs that are recoverable through gross margins associated with merchant contracts. The capitalized customer acquisition costs are amortized using a method which approximates a proportional revenue approach over the initial 3-year term of the merchant contract. | ||||||||||||||||||
The up-front signing bonus paid for new SME bankcard, payroll and loyalty marketing accounts is based on the estimated gross margin for the first year of the merchant contract. The signing bonus, amount capitalized, and related amortization are adjusted after the first year to reflect the actual gross margin generated by the merchant contract during that year. The deferred customer acquisition cost asset is accrued over the first year of SME bankcard merchant processing, consistent with the build-up in the accrued buyout liability, as described below. Beginning in June 2012, Relationship Managers and sales managers earn portfolio equity on their newly installed payroll and loyalty marketing merchant accounts based on the residual commissions they earn on those accounts. The accrued buyout liability and deferred acquisition cost asset are developed in the same manner as the SME bankcard merchant portfolio equity. | ||||||||||||||||||
Management evaluates the capitalized customer acquisition costs for impairment on an annual basis by comparing, on a pooled basis by vintage month of origination, the expected future net cash flows from underlying merchant relationships to the carrying amount of the capitalized customer acquisition costs. If the estimated future net cash flows are lower than the recorded carrying amount, indicating an impairment of the value of the capitalized customer acquisition costs, the impairment loss will be charged to operations. The Company believes that no impairment has occurred as of September 30, 2013. | ||||||||||||||||||
Accrued Expenses and Other Liabilities— Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets includes deferred revenue of $17.0 million and $13.0 million at September 30, 2013 and December 31, 2012, respectively, which is primarily related to the Company's Heartland School Solutions and Campus Solutions businesses. | ||||||||||||||||||
Also included in accrued expenses and other liabilities at September 30, 2013 and December 31, 2012 is $4.1 million and $7.3 million, respectively, relating to the allocation of purchase price to an unfavorable processing contract associated with our September 30, 2011 acquisition of School-Link Technologies, Inc. During the nine months ended September 30, 2013 and 2012, we amortized $1.5 million and $2.2 million of this accrued liability against the cash processing costs paid under that contract. During the nine months ended September 30, 2013, we recorded an adjustment to the carrying value of this unfavorable processing contract of $1.6 million to adjust the liability to reflect the latest estimate of the expected cash processing costs to be paid over the remainder of the contract. The amortization and adjustment to the fair value were included in cost of services in our Condensed Consolidated Statements of Income. | ||||||||||||||||||
Processing Liabilities— Processing liabilities result primarily from the Company's card processing activities. Card processing liabilities primarily reflect funds in transit associated with differences arising between the amounts our sponsor banks receive from the bankcard networks and the amounts funded to the Company's merchants. Such differences arise from timing differences, interchange expense, merchant advances, merchant reserves and chargeback processing. These differences result in payables or receivables. If the settlement received from the bankcard networks precedes the funding obligation to the merchant, the Company records a processing liability. Conversely, if funding to the merchant precedes the settlement from the bankcard networks, the Company records a receivable from the bankcard network. In addition, certain bankcard networks restrict the Company from accessing merchant settlement funds and require that these funds be controlled by the Company's sponsor banks. The amounts are generally collected or paid the following business day. | ||||||||||||||||||
Chargebacks periodically arise due to disputes between a cardholder and a merchant resulting from the cardholder's dissatisfaction with merchandise quality or the merchant's service, and the disputes may not always be resolved in the merchant's favor. In some of these cases, the transaction is ''charged back'' to the merchant and the purchase price is refunded to the cardholder by the credit card-issuing institution. If the merchant is unable to fund the refund, the Company is liable for the full amount of the transaction. The Company's obligation to stand ready to perform is minimal. The Company maintains a deposit or the pledge of a letter of credit from certain merchants as an offset to potential contingent liabilities that are the responsibility of such merchants. The Company evaluates its ultimate risk and records an estimate of potential loss for chargebacks based upon an assessment of actual historical loss rates compared to recent bankcard processing volume levels. The Company believes that the liability recorded as loss reserves approximates fair value. | ||||||||||||||||||
Accrued Buyout Liability— The Company's Relationship Managers and sales managers are paid residual commissions based on the gross margin generated by monthly SME merchant processing activity. The Company has the right, but not the obligation, to buy out some or all of these commissions, and intends to do so periodically. Such purchases of the commissions are at a fixed multiple of the last twelve months' commissions. Because of the Company's intent and ability to execute purchases of the residual commissions, and the mutual understanding between the Company and the Relationship Managers and sales managers, the Company has accounted for this deferred compensation arrangement pursuant to the substantive nature of the plan. The Company therefore records the amount that it would have to pay (the ''settlement cost'') to buy out non-servicing related commissions in their entirety from vested Relationship Managers and sales managers, and an accrual, based on their progress towards vesting, for those unvested Relationship Managers and sales managers who are expected to vest in the future. As noted above, as the liability increases over the first year of a SME merchant contract, the Company also records a related deferred acquisition cost asset for currently vested Relationship Managers and sales managers. The accrued buyout liability associated with unvested Relationship Managers and sales managers is not included in the deferred acquisition cost asset since future services are required in order to vest. Subsequent changes in the estimated accrued buyout liability due to merchant attrition, same-store sales growth and changes in gross margin are included in the same income statement caption as customer acquisition costs expense. | ||||||||||||||||||
Beginning in June 2012, Relationship Managers and sales managers earn portfolio equity on their newly installed payroll and loyalty marketing merchant accounts based on the residual commissions they earn on those accounts. The accrued buyout liability and deferred acquisition cost asset are accrued in the same manner as the SME bankcard merchant portfolio equity. | ||||||||||||||||||
The accrued buyout liability is based on merchants under contract at the balance sheet date, the gross margin generated by those merchants over the prior twelve months, and the contractual buyout multiple. The liability related to a new merchant is therefore zero when the merchant is installed, and increases over the twelve months following the installation date. The same procedure is applied to unvested commissions over the expected vesting period, but is further adjusted to reflect the Company's estimate that 31% of unvested Relationship Managers and sales managers become vested, which represents the Company's historical vesting rate. | ||||||||||||||||||
The classification of the accrued buyout liability between current and non-current liabilities on the Condensed Consolidated Balance Sheets is based upon the Company's estimate of the amount of the accrued buyout liability that it reasonably expects to pay over the next twelve months. This estimate is developed by calculating the cumulative annual average percentage that total historical buyout payments represent of the accrued buyout liability. That percentage is applied to the period-end accrued buyout liability to determine the current portion. | ||||||||||||||||||
Revenue—Revenues are mainly comprised of gross processing revenue, payroll processing revenue and equipment-related revenue. Gross processing revenue primarily consists of discount fees, per-transaction fees and periodic fees (primarily monthly) from the processing of Visa, MasterCard, American Express and Discover bankcard transactions for merchants. The Company passes through to its customers any changes in interchange or network fees. Gross processing revenue also includes fees for servicing American Express accounts, customer service fees, fees for processing chargebacks, termination fees on terminated contracts, gift and loyalty card fees, fees generated by our Heartland School Solutions business, loan servicing fees and other miscellaneous revenue. Payroll processing revenue includes periodic and annual fees charged by HPC and Ovation for payroll processing services, and interest earned from investing tax impound funds held for our customers. Revenue is recorded as bankcard and other processing transactions are processed or payroll services are performed. | ||||||||||||||||||
Equipment-related revenue includes revenues from the sale, rental and deployment of bankcard terminals, and from the sale of hardware, software and associated services for prepaid card and stored-value card payment systems, and from the sale of hardware, software and associated services for Heartland School Solutions and Campus Solutions. Revenues are recorded at the time of shipment, or the provision of service. | ||||||||||||||||||
Loss Contingencies and Legal Expenses—The Company records a liability for loss contingencies when the liability is probable and the amount is reasonably estimable. Legal fees associated with loss contingencies are recorded when the legal fees are incurred. | ||||||||||||||||||
The Company records recoveries from its insurance providers when cash is received from the provider. | ||||||||||||||||||
Other Income (Expense)— Other income (expense) consists of interest income on cash and investments, the interest expense on our borrowings, the gains or losses on the disposal of property and equipment and other non-operating income or expense items. For the nine months ended September 30, 2013, other income (expense) included pre-tax income of approximately $0.2 million reflecting the first two payments relating to the sale of a group of merchant contracts within our Prepaid Card business. | ||||||||||||||||||
Other income (expense) also includes the pre-tax charges related to the provision for processing system intrusion costs. | ||||||||||||||||||
Income Taxes—The Company accounts for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and the tax basis of assets and liabilities using enacted tax rates. | ||||||||||||||||||
The provision for income taxes for the three and nine months ended September 30, 2013 and 2012 and the resulting effective tax rates were as follows: | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||||
Provision for income taxes | $ | 11,857 | $ | 11,745 | $ | 34,039 | $ | 30,893 | ||||||||||
Effective tax rate | 35.1 | % | 38.3 | % | 37.3 | % | 38.3 | % | ||||||||||
The decrease in the effective tax rate for the three and nine months ended September 30, 2013, as compared to the three and nine months ended September 30, 2012, is due to the recognition of research and development credits. On January 2, 2013, the American Taxpayer Relief Act of 2012 ("ATR Act") was enacted which included an extension of the federal research and development credit retroactively to 2012 and prospectively through 2013. The effects of the research and development credits are being recognized by the Company in the three months ended September 30, 2013 in conjunction with filing our 2012 tax return. | ||||||||||||||||||
The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if the estimated tax rate changes, it makes a cumulative adjustment in that period. | ||||||||||||||||||
The Company regularly evaluates its tax positions for additional unrecognized tax benefits and associated interest and penalties, if applicable. There are many factors that are considered when evaluating these tax positions including: interpretation of tax laws, recent tax litigation on a position, past audit or examination history, and subjective estimates and assumptions, which have been deemed reasonable by management. However, if management's estimates are not representative of actual outcomes, the Company's results could be materially impacted. The Company does not expect any material changes to unrecognized tax benefits in the next twelve months. At September 30, 2013, the reserve for unrecognized tax benefits related to uncertain tax positions was $4.3 million, of which $2.8 million would, if recognized, impact the effective tax rate. At December 31, 2012, the reserve for unrecognized tax benefits related to uncertain tax positions was $3.1 million, of which $2.0 million would, if recognized, impact the effective tax rate. | ||||||||||||||||||
The Company has received a final determination letter from the Joint Committee of Taxation for 2010 and such Committee has agreed to the “no change" findings of the IRS audit. | ||||||||||||||||||
Share–Based Compensation— In the fourth quarters of 2010, 2011, and 2012, the Compensation Committee of the Company's Board of Directors approved grants of performance-based Restricted Share Units with grant-specific vesting and performance target terms as shown in the following table: | ||||||||||||||||||
Performance Awards by Grant Date | ||||||||||||||||||
4th Quarter 2010 | 4th Quarter 2011 | 4th Quarter 2012 | ||||||||||||||||
RSU's Granted | 508,800 | 164,808 | 72,004 | |||||||||||||||
Vested during 2013 | 50% | — | — | |||||||||||||||
Vesting during 2014 | 25% | 50% | — | |||||||||||||||
Vesting during 2015 | 25% | 50% | 50% | |||||||||||||||
Vesting during 2016 | — | — | 50% | |||||||||||||||
Grant Performance Target | (a) | (b) | (c) | |||||||||||||||
(a) On March 1, 2013 50% vested since the 2012 diluted earnings per share target was achieved. The remaining Restricted Share Units would vest only if, over the term, the following pro forma diluted earnings per share targets for the years ended December 31, 2013, and 2014 are achieved: | ||||||||||||||||||
2013 | 2014 | |||||||||||||||||
Diluted Earnings Per Share | $1.74 | $2.04 | ||||||||||||||||
Management believes that achieving the performance targets is probable to occur and has recorded share-based compensation expense on these Restricted Share Units. | ||||||||||||||||||
(b) | These Restricted Share Units would vest only if the Company achieves a pro forma diluted earnings per share compound annual growth rate ("CAGR") of seventeen percent (17%) for the two-year period ending December 31, 2013. For each 1% that the CAGR actually achieved by the Company for the two-year period ending on December 31, 2013 is above the 17% target, the number of shares underlying the Restricted Share Units awarded would be increased by 3.09%; provided, however, that the maximum increase in the number of shares that may be awarded is 100%. Likewise, for each 1% that the CAGR actually achieved by the Company for the two-year period ending on December 31, 2013 is below the 17% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.13%. If the target CAGR is missed by 80% or more, then the number of shares awarded is zero. Management determined that achieving a CAGR for the two-year period ending December 31, 2013 which would result in earning the maximum 100% increase in the number of shares that may be awarded was probable to occur, and has recorded share-based compensation expense for these Restricted Share Units based on this expectation. | |||||||||||||||||
(c) | These Restricted Share Units would vest only if the Company achieves a pro forma diluted earnings per share CAGR of fifteen percent (15%) for the two-year period ending December 31, 2014. For each 1% that the CAGR actually achieved for the two year period ending on December 31, 2014 is above the 15% target, the number of shares underlying the Restricted Share Units awarded would be increased by 2.08%; provided, however, that the maximum increase in the number of shares that may be awarded is 125%. Likewise, for each 1% that the CAGR actually achieved for the two-year period ending on December 31, 2014 is below the 15% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.31%. If the target CAGR is missed by 67% or more, then the number of shares awarded is zero. The Company has recorded expense on these Restricted Share Units based on achieving the 15% target. | |||||||||||||||||
Pro forma diluted earnings per share for (a), (b) and (c) performance targets will be calculated excluding non-operating gains and losses, if any, and excluding the after-tax impact of share-based compensation expense. The closing price of the Company's common stock on the grant date equals the grant date fair value of these nonvested Restricted Share Units awards and will be recognized as compensation expense over their vesting periods. | ||||||||||||||||||
In the fourth quarter of 2012, the Compensation Committee of the Company's Board of Directors approved target grants of 72,345 Relative Total Shareholder Return Restricted Share Units (referred to as “TSRs”). These TSRs are nonvested share awards for which vesting percentages and ultimate number of units vesting will be calculated based on the total shareholder return of our common stock as compared to the total shareholder return of 86 peer companies. The payout schedule can produce vesting percentages ranging from 0% to 225%. Total shareholder return will be calculated based upon the average closing price for the 30 calendar day period ending December 9, 2015, divided by the closing price on December 10, 2012. The target number of units is based on achieving a total shareholder return equal to the 65th percentile of the peer group. The Company recorded expense on these TSRs based on achieving the target. A lattice valuation model was applied to measure the grant date fair value of these TSRs. | ||||||||||||||||||
Diluted earnings per share for the three and nine months ended September 30, 2013 and 2012 were computed based on the weighted average outstanding common shares plus equivalent shares assuming exercise of stock options and vesting of Restricted Share Units, where dilutive. | ||||||||||||||||||
Common Stock Repurchases. On each of October 21, 2011, July 27, 2012, and November 2, 2012, the Company's Board of Directors authorized the repurchase of up to $50 million worth of the Company's outstanding common stock under each authorization. Repurchases under the October 21, 2011 and July 27, 2012 authorizations were completed during the year ended December 31, 2012 and repurchases under the November 2, 2012 authorization were completed during the second quarter of 2013. Repurchases under these programs were made through the open market from time to time in accordance with applicable laws and regulations. On May 8, 2013, the Company's Board of Directors authorized the repurchase of up to $75 million worth of the Company's outstanding common stock. Repurchases under the May 8, 2013 authorization are ongoing. The Company intends to fund any repurchases with cash flow from operations, existing cash on the balance sheet, and other sources including the Company's Credit Facility and the proceeds of options exercises. The manner, timing and amount of repurchases, if any, will be determined by management and will depend on a variety of factors, including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements. The repurchase program may be modified or discontinued at any time. | ||||||||||||||||||
Repurchase Programs by Authorization Date | ||||||||||||||||||
Oct-11 | Jul-12 | Nov-12 | May-13 | Total | ||||||||||||||
Activity For the Nine Months Ended September 30, 2013 | ||||||||||||||||||
Shares repurchased | — | — | 952,183 | 297,900 | 1,250,083 | |||||||||||||
Cost of shares repurchased (in thousands) | — | — | $29,813 | $10,407 | $40,220 | |||||||||||||
Average cost per share | — | — | $31.31 | $34.93 | $32.17 | |||||||||||||
Remaining authorization (in thousands) | — | — | — | $64,593 | $64,593 | |||||||||||||
Activity For the Nine months Ended September 30, 2012 | ||||||||||||||||||
Shares repurchased | 1,157,440 | 516,983 | — | — | 1,674,423 | |||||||||||||
Cost of shares repurchased (in thousands) | $33,172 | $16,044 | — | — | $49,216 | |||||||||||||
Average cost per share | $28.66 | $31.03 | — | — | $29.39 | |||||||||||||
Activity For the Year Ended December 31, 2012 | ||||||||||||||||||
Shares repurchased | 1,157,440 | 1,760,804 | 715,800 | — | 3,634,044 | |||||||||||||
Cost of shares repurchased (in thousands) | $33,172 | $50,000 | $20,187 | — | $103,359 | |||||||||||||
Average cost per share | $28.66 | $28.40 | $28.20 | — | $28.44 | |||||||||||||
Derivative Financial Instruments—The Company utilizes derivative instruments to manage interest rate risk on certain borrowings under its Credit Agreement (as defined in Note 10 herein). The Company recognizes the fair value of derivative financial instruments in the Condensed Consolidated Balance Sheets in investments, or accrued expenses and other liabilities. Changes in fair value of derivative instruments are recognized immediately in earnings unless the derivative is designated and qualifies as a hedge of future cash flows. For derivatives that qualify as hedges of future cash flows, the effective portion of changes in fair value is recorded in other comprehensive income and reclassified into interest expense in the same periods during which the hedged item affects earnings. Any ineffectiveness of cash flow hedges would be recognized in other income (expense) in the Condensed Consolidated Statements of Income during the period of change. | ||||||||||||||||||
In January 2011, the Company entered into fixed-pay amortizing interest rate swaps having an initial notional amount of $50 million as a hedge of future cash flows on the variable rate debt outstanding under its Term Credit Facility (as defined in Note 10 herein). These interest rate swaps convert the related notional amount of variable rate debt to fixed rate. The following table summarizes the components of the interest rate swaps. | ||||||||||||||||||
September 30, 2013 | 31-Dec-12 | |||||||||||||||||
(In thousands) | ||||||||||||||||||
Remaining notional value | $ | 27,500 | $ | 35,000 | ||||||||||||||
Fair value (a) | (494 | ) | (817 | ) | ||||||||||||||
Deferred tax benefit | 192 | 313 | ||||||||||||||||
(a) Recorded as a liability in accrued expenses and other liabilities | ||||||||||||||||||
Foreign Currency—The Canadian dollar was the functional currency of CPOS, which operated in Canada. CPOS' revenues and expenses were translated at the average exchange rates prevailing during the period. The foreign currency assets and liabilities of CPOS were translated at the period-end rate of exchange. The resulting translation adjustment was allocated between the Company and CPOS' noncontrolling interests and was recorded as a component of other comprehensive income or noncontrolling interests in total equity. At September 30, 2012, the cumulative foreign currency translation reflected a gain of $0.1 million. CPOS was sold in a transaction which settled on January 31, 2013. See Note 15, Discontinued Operations for more detail. | ||||||||||||||||||
Noncontrolling Interests— Noncontrolling interests represent noncontrolling stockholders' share of the equity and after-tax net income or loss of Leaf and CPOS. | ||||||||||||||||||
Noncontrolling stockholders' share of after-tax net income or loss of Leaf is included in Net income (loss) attributable to noncontrolling interests, continuing operations in the Condensed Consolidated Statements of Income. The minority stockholders' interests included in noncontrolling interests in the September 30, 2013 Condensed Consolidated Balance Sheet is $6.7 million and reflects the original investments by these minority shareholders in Leaf, along with their proportionate share of earnings or losses of Leaf. Noncontrolling stockholders' share of after-tax net income or loss of CPOS is included in Net income (loss) attributable to noncontrolling interests, discontinued operations in the Condensed Consolidated Statements of Income. The minority stockholders' interests included in noncontrolling interests in the December 31, 2012 Condensed Consolidated Balance Sheet was $1.4 million and reflected the original investments by these minority shareholders in CPOS, along with their proportionate share of earnings or losses of CPOS. CPOS was sold in a transaction which settled on January 31, 2013. See Note 15, Discontinued Operations for more detail. | ||||||||||||||||||
Subsequent Events—The Company evaluated subsequent events with respect to the Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 2013. On October 23, 2013 the Company entered into a new credit facility. See Note 10, Credit Facilities for more detail. | ||||||||||||||||||
New Accounting Pronouncements— From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that are adopted by us as of the specified effective date. | ||||||||||||||||||
In July 2012, the FASB issued an accounting standard update on testing indefinite-lived intangible assets for impairment. This guidance will allow an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Under these amendments, an entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not the indefinite-lived intangible asset is impaired. The amendments include a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The implementation of this update did not have a material effect on the Company's Consolidated Financial Statements. | ||||||||||||||||||
In February 2013, the FASB issued an accounting standard update on improving the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update seek to attain that objective by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under generally accepted accounting principles to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. This update is effective for annual reporting periods beginning after December 15, 2012. The implementation of this update did not have a material effect on the Company's Consolidated Financial Statements. | ||||||||||||||||||
In July 2013, the FASB issued an accounting standard update which provides guidance on the risks that are permitted to be hedged in a fair value or cash flow hedge. Among those risks for financial assets and financial liabilities is the risk of changes in a hedged item's fair value or a hedged transaction's cash flows attributable to changes in the designated benchmark interest rate (referred to as interest rate risk). This update is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The implementation of this update is not expected to have a material effect on the Company's Consolidated Financial Statements. | ||||||||||||||||||
In July 2013, the FASB issued an accounting standard update which provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this update are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryfowards, similar tax losses, or tax credit carryforwards exist. The amendments in this update are effective for fiscal years and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The amendments would be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The implementation of this update is not expected to have a material effect on the Company's Consolidated Financial Statements. |
Acquisitions
Acquisitions | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Business Combinations [Abstract] | ' | |||
Acquisitions | ' | |||
Acquisitions | ||||
Leaf Holdings, Inc. | ||||
On September 11, 2013, the Company purchased 66.67% of the outstanding capital stock of Leaf for a $14.5 million cash payment. The cash purchase price was financed from operating cash flows. | ||||
The transaction was accounted for under the purchase method of accounting. Beginning on September 11, 2013, Leaf's results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $20.6 million to goodwill, $6.9 million to intangible assets, $6.2 million to net tangible liabilities and $6.8 million to noncontrolling interest. Pro forma results of operations have not been presented because the effect of this acquisition was not material. Goodwill is not expected to be deductible for income tax reporting. | ||||
The weighted average amortization life for the 2013 acquired finite lived intangible assets related to acquisition of Leaf is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Software | 7 | |||
Patents | 5 | |||
Overall | 6.9 | |||
Acquisition transactions in 2012 included: | ||||
Lunch Byte Systems, Inc. | ||||
On June 29, 2012, the Company expanded its Heartland School Solutions business through its acquisition of the net assets of Lunch Byte Systems, Inc. ("Nutrikids"). The $26.0 million cash payment made on June 29, 2012 for the purchase price was funded through our Revolving Credit Facility and subsequently repaid with cash on hand in July 2012. Beginning July 1, 2012, Nutrikids' results of operations are included in the Company's results of operations. The transaction was accounted for under the purchase method of accounting. The allocation of the total purchase price was as follows: $16.1 million to goodwill, $7.0 million to intangible assets and $2.9 million to net tangible assets. Pro forma results of operations have not been presented because the effect of this acquisition was not material. The entire amount of goodwill is expected to be deductible for income tax reporting. | ||||
The weighted average amortization life for the 2012 acquired finite lived intangible assets related to acquisition of Nutrikids is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Customer relationships | 6 | |||
Software | 3.3 | |||
Non-compete agreements | 5 | |||
Overall | 5.9 | |||
Educational Computer Systems, Inc. | ||||
On December 14, 2012, the Company purchased for a $37.6 million cash payment, the stock of Educational Computer Systems, Inc. ("ECSI") and net assets of related entities. The cash purchase price was financed under the Company's Revolving Credit Facility. The acquisition expands the Company's Campus Solutions division. ECSI supports the entire life cycle of higher education and post-graduation school/student services, including student loan payment processing, default solutions, refund services, tuition payment plans, electronic billing and payment, tax document services, and business outsourcing to more than 1,800 colleges and universities nationwide. With this acquisition, the Company's Campus Solutions business gained ECSI’s client portfolio, increasing the number of higher education clients to more than 2,000 colleges and universities throughout North America. | ||||
The transaction was accounted for under the purchase method of accounting. Beginning December 15, 2012, ECSI results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $32.3 million to goodwill, $10.5 million to intangible assets and $5.2 million to net tangible liabilities. Pro forma results of operations have not been presented because the effect of this acquisition was not material. Only a portion of the goodwill is expected to be deductible for income tax reporting. | ||||
The weighted average amortization life for the 2012 acquired finite lived intangible assets related to acquisition of ECSI is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Customer relationships | 12 | |||
Software | 5 | |||
Non-compete agreements | 5 | |||
Overall | 9.2 | |||
Ovation Payroll, Inc. | ||||
On December 31, 2012, the Company purchased for a $44.2 million cash payment, the stock of Ovation Payroll, Inc. ("Ovation"). The cash purchase price was financed under the Company's Revolving Credit Facility. The acquisition expands the Company's existing payroll processing business. Ovation serves over 10,000 clients in 48 states providing payroll processing, payroll tax preparation, Internet payroll reporting, and direct deposit. | ||||
The transaction was accounted for under the purchase method of accounting. Beginning January 1, 2013, Ovation's results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $31.3 million to goodwill, $6.6 million to intangible assets and $6.3 million to net tangible assets. Pro forma results of operations have not been presented because the effect of this acquisition was not material. Goodwill is not expected to be deductible for income tax reporting. | ||||
The weighted average amortization life for the 2012 acquired finite lived intangible assets related to acquisition of Ovation is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Customer relationships | 6.7 | |||
Software | 1.5 | |||
Non-compete agreements | 5 | |||
Overall | 5.9 |
Receivables
Receivables | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Receivables [Abstract] | ' | |||||||||||||||
Receivables | ' | |||||||||||||||
Receivables | ||||||||||||||||
A summary of receivables by major class was as follows at September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Accounts receivable from merchants | $ | 170,879 | $ | 160,702 | ||||||||||||
Accounts receivable from bankcard networks | 23,548 | 19,588 | ||||||||||||||
Accounts receivable from others | 2,218 | 1,596 | ||||||||||||||
196,645 | 181,886 | |||||||||||||||
Less allowance for doubtful accounts | (967 | ) | (1,438 | ) | ||||||||||||
Total receivables, net | $ | 195,678 | $ | 180,448 | ||||||||||||
Included in accounts receivable from others are amounts due from employees which are $1.0 million and $0.4 million at September 30, 2013 and December 31, 2012, respectively. Accounts receivable from bankcard networks at September 30, 2013 and December 31, 2012 include amounts which were pre-funded to merchants for processing Discover and American Express bankcard transactions. | ||||||||||||||||
A summary of the activity in the allowance for doubtful accounts for the three and nine months ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||
September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 915 | $ | 1,395 | $ | 1,438 | $ | 1,407 | ||||||||
Additions (reductions) to allowance | 186 | 318 | (16 | ) | 628 | |||||||||||
Charges against allowance | (134 | ) | (176 | ) | (455 | ) | (498 | ) | ||||||||
Ending balance | $ | 967 | $ | 1,537 | $ | 967 | $ | 1,537 | ||||||||
Funds_Held_for_Payroll_Custome
Funds Held for Payroll Customers and Investments | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Funds Held for Payroll Customers and Investments [Abstract] | ' | |||||||||||||||
Funds Held for Payroll Customers and Investments | ' | |||||||||||||||
5. Funds Held for Customers and Investments | ||||||||||||||||
A summary of funds held for customers and investments, including the cost, gross unrealized gains (losses) and estimated fair value by major security type and class of security were as follows at September 30, 2013 and December 31, 2012: | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2013 | ||||||||||||||||
Funds held for customers | ||||||||||||||||
Fixed income bond fund - available for sale | $ | 968 | $ | 253 | $ | — | $ | 1,221 | ||||||||
Cash held for payroll customers | 94,391 | — | — | 94,391 | ||||||||||||
Cash held for Campus Solutions customers | $ | 16,283 | $ | — | $ | — | $ | 16,283 | ||||||||
Total funds held for customers | $ | 111,642 | $ | 253 | $ | — | $ | 111,895 | ||||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit (a) | $ | 585 | $ | — | $ | — | $ | 585 | ||||||||
Other investments, at cost | 4,065 | — | — | 4,065 | ||||||||||||
Total Investments | $ | 4,650 | $ | — | $ | — | $ | 4,650 | ||||||||
(a) Certificates of deposit have remaining terms ranging from 1 month to 11 months. | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2012 | ||||||||||||||||
Funds held for customers | ||||||||||||||||
Fixed income bond fund - available for sale | $ | 968 | $ | 244 | $ | — | $ | 1,212 | ||||||||
Cash held for payroll customers | 110,334 | — | — | 110,334 | ||||||||||||
Cash held for Campus Solutions customers | 19,859 | — | — | 19,859 | ||||||||||||
Total funds held for customers | $ | 131,161 | $ | 244 | $ | — | $ | 131,405 | ||||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit | $ | 1,199 | $ | — | $ | — | $ | 1,199 | ||||||||
Total Investments | $ | 1,199 | $ | — | $ | — | $ | 1,199 | ||||||||
Other investments, at cost, as of September 30, 2013 includes a $4.0 million investment in the equity of ATX Innovation, Inc. ("Tabbedout"). | ||||||||||||||||
During the nine months ended September 30, 2013 and during the twelve months ended December 31, 2012, the Company did not experience any other-than-temporary losses on its investments. | ||||||||||||||||
The maturity schedule of all available-for-sale debt securities and held to maturity investments along with amortized cost and estimated fair value as of September 30, 2013 is as follows: | ||||||||||||||||
Amortized | Estimated | |||||||||||||||
Cost | Fair Value | |||||||||||||||
(In thousands) | ||||||||||||||||
Due in one year or less | $ | 5,618 | $ | 5,871 | ||||||||||||
Due after one year through five years | — | — | ||||||||||||||
$ | 5,618 | $ | 5,871 | |||||||||||||
Capitalized_Customer_Acquisiti
Capitalized Customer Acquisition Costs, Net | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Capitalized Customer Acquisition Costs, Net [Abstract] | ' | |||||||||||||||
Capitalized Customer Acquisition Costs, Net | ' | |||||||||||||||
Capitalized Customer Acquisition Costs, Net | ||||||||||||||||
A summary of net capitalized customer acquisition costs as of September 30, 2013 and December 31, 2012 was as follows: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Capitalized signing bonuses | $ | 85,127 | $ | 84,728 | ||||||||||||
Less accumulated amortization | (44,541 | ) | (42,941 | ) | ||||||||||||
40,586 | 41,787 | |||||||||||||||
Capitalized customer deferred acquisition costs | 43,524 | 37,736 | ||||||||||||||
Less accumulated amortization | (26,399 | ) | (23,098 | ) | ||||||||||||
17,125 | 14,638 | |||||||||||||||
Capitalized customer acquisition costs, net | $ | 57,711 | $ | 56,425 | ||||||||||||
A summary of the activity in capitalized customer acquisition costs, net for the three and nine month periods ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 56,148 | $ | 56,223 | $ | 56,425 | $ | 55,014 | ||||||||
Plus additions to: | ||||||||||||||||
Capitalized signing bonuses, net | 7,466 | 6,985 | 19,546 | 22,446 | ||||||||||||
Capitalized customer deferred acquisition costs | 5,555 | 4,491 | 15,676 | 12,748 | ||||||||||||
13,021 | 11,476 | 35,222 | 35,194 | |||||||||||||
Less amortization expense on: | ||||||||||||||||
Capitalized signing bonuses, net | (6,852 | ) | (7,364 | ) | (20,747 | ) | (22,017 | ) | ||||||||
Capitalized customer deferred acquisition costs | (4,606 | ) | (3,885 | ) | (13,189 | ) | (11,741 | ) | ||||||||
(11,458 | ) | (11,249 | ) | (33,936 | ) | (33,758 | ) | |||||||||
Balance at end of period | $ | 57,711 | $ | 56,450 | $ | 57,711 | $ | 56,450 | ||||||||
Net signing bonus adjustments from estimated amounts to actual were $(1.0) million and $(0.9) million, respectively, for the three months ended September 30, 2013 and 2012, and $(2.9) million and $(2.3) million, respectively, for the nine months ended September 30, 2013 and 2012. Net signing bonus adjustments are netted against additions in the table above. Negative signing bonus adjustments occur when the actual gross margin generated by the merchant contract during the first year is less than the estimated gross margin for that year, resulting in the overpayment of the up-front signing bonus and would be recovered from the relevant salesperson. Positive signing bonus adjustments result from the prior underpayment of signing bonuses and would be paid to the relevant salesperson. | ||||||||||||||||
Fully amortized signing bonuses of $6.4 million and $7.7 million were written off during the three month periods ended September 30, 2013 and 2012, respectively, and $19.1 million and $24.2 million respectively, were written off during the nine month periods ended September 30, 2013 and 2012. In addition, fully amortized customer deferred acquisition costs of $3.3 million and $4.2 million, respectively, were written off during the three months ended September 30, 2013 and 2012, and $9.9 million and $12.2 million, respectively, were written off during the nine months ended September 30, 2013 and 2012. | ||||||||||||||||
The Company believes that no impairment of capitalized customer acquisition costs has occurred as of September 30, 2013 and December 31, 2012. |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Intangible Assets and Goodwill | ' | ||||||||||||||||||||||||
Intangible Assets and Goodwill | |||||||||||||||||||||||||
Intangible Assets — Intangible assets consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||||||||||||||||||
September 30, 2013 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 49,814 | $ | 12,715 | $ | 37,099 | 3 to 18 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 4,095 | 2,614 | 1,481 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 20,750 | 10,348 | 10,402 | 1 to 7 years—straight line | |||||||||||||||||||||
Non-compete agreements | 4,488 | 1,675 | 2,813 | 3 to 5 years—straight line | |||||||||||||||||||||
Other | 385 | 33 | 352 | 2 to 9 years—straight line | |||||||||||||||||||||
$ | 79,532 | $ | 27,385 | $ | 52,147 | ||||||||||||||||||||
December 31, 2012 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 52,125 | $ | 8,318 | $ | 43,807 | 3 to 18 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 3,345 | 2,316 | 1,029 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 14,150 | 9,016 | 5,134 | 2 to 5 years—straight line | |||||||||||||||||||||
Non-compete agreements | 4,590 | 1,030 | 3,560 | 3 to 5 years—straight line | |||||||||||||||||||||
Other | 85 | 21 | 64 | 2 to 9 years—straight line | |||||||||||||||||||||
$ | 74,295 | $ | 20,701 | $ | 53,594 | ||||||||||||||||||||
On August 31, 2013, the Company purchased a merchant bankcard transaction processing portfolio for $750,000 . This asset is being amortized for the next 83 months in proportion to estimated future cash flows. | |||||||||||||||||||||||||
Amortization expense related to the intangible assets was $2.2 million and $1.5 million, respectively, for the three months ended September 30, 2013 and 2012 and $6.7 million and $3.6 million for the nine months ended September 30, 2013 and 2012, respectively. The estimated remaining amortization expense related to intangible assets in twelve month increments is as follows: | |||||||||||||||||||||||||
For the Twelve Months Ending September 30, | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
2014 | $ | 8,741 | |||||||||||||||||||||||
2015 | 8,080 | ||||||||||||||||||||||||
2016 | 7,228 | ||||||||||||||||||||||||
2017 | 5,976 | ||||||||||||||||||||||||
2018 | 4,688 | ||||||||||||||||||||||||
Thereafter | 17,434 | ||||||||||||||||||||||||
$ | 52,147 | ||||||||||||||||||||||||
Goodwill — The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
Card | Payroll | Heartland School Solutions | Campus Solutions | Other | Total | ||||||||||||||||||||
Balance at January 1, 2012 | $ | 43,701 | $ | — | $ | 40,732 | $ | 3,321 | $ | 6,501 | $ | 94,255 | |||||||||||||
Goodwill acquired during the period | — | — | 15,231 | — | — | 15,231 | |||||||||||||||||||
Other (a) | — | — | (3,035 | ) | — | — | (3,035 | ) | |||||||||||||||||
Balance at September 30, 2012 | 43,701 | — | 52,928 | 3,321 | 6,501 | 106,451 | |||||||||||||||||||
Balance at January 1, 2013 | 43,701 | 30,831 | 53,350 | 33,679 | 6,501 | 168,062 | |||||||||||||||||||
Goodwill acquired during the period | 20,619 | — | — | — | — | 20,619 | |||||||||||||||||||
Other (a) | — | 524 | — | 1,967 | — | 2,491 | |||||||||||||||||||
Balance at September 30, 2013 | $ | 64,320 | $ | 31,355 | $ | 53,350 | $ | 35,646 | $ | 6,501 | $ | 191,172 | |||||||||||||
(a) Reflects adjustments to allocations of purchase price. | |||||||||||||||||||||||||
Percentage of total reportable segments' assets that were goodwill as of September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||||||
Percent of Goodwill to Reportable Segments' Total Assets | |||||||||||||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||||||||||||
Card | 11.90% | 9.40% | |||||||||||||||||||||||
Payroll | 21.00% | — | |||||||||||||||||||||||
Heartland School Solutions | 65.40% | 67.30% | |||||||||||||||||||||||
Campus Solutions | 49.40% | 40.90% | |||||||||||||||||||||||
Other | 39.70% | 36.00% |
Processing_Liabilities_and_Los
Processing Liabilities and Loss Reserves | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Processing Liabilities and Loss Reserves [Abstract] | ' | |||||||||||||||
Processing Liabilities and Loss Reserves | ' | |||||||||||||||
Processing Liabilities | ||||||||||||||||
Processing liabilities result primarily from the Company's card processing activities and include merchant deposits maintained to offset potential liabilities from merchant chargeback processing. A summary of processing liabilities and loss reserves was as follows at September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Merchant bankcard processing | $ | 99,383 | $ | 86,882 | ||||||||||||
Merchant deposits | 6,806 | 6,436 | ||||||||||||||
Loss reserves | 1,955 | 1,955 | ||||||||||||||
$ | 108,144 | $ | 95,273 | |||||||||||||
In addition to the merchant deposits listed above, the Company held letters of credit related to merchant bankcard processing totaling $10,000 at September 30, 2013 and $100,000 at December 31, 2012. | ||||||||||||||||
The Company's merchants have the liability for any charges properly reversed by the cardholder through a mechanism known as a chargeback. If the merchant is unable to pay this amount, the Company will be liable to the card brand networks for the reversed charges. The Company has determined that the fair value of its obligation to stand ready to perform is minimal. The Company requires personal guarantees and merchant deposits from certain merchants to minimize its obligation. | ||||||||||||||||
The card networks generally allow chargebacks up to four months after the later of (1) the date the transaction is processed, or (2) the delivery of the product or service to the cardholder. As the majority of the Company's SME merchant transactions involve the delivery of the product or service at the time of the transaction, a reasonable basis for determining an estimate of the Company's exposure to chargebacks is the last four months' processing volume on the SME portfolio, which was $26.0 billion and $23.5 billion for the four months ended September 30, 2013 and December 31, 2012, respectively. However, for the four months ended September 30, 2013 and December 31, 2012, the Company was presented with $11.9 million and $11.8 million, respectively, in chargebacks by issuing banks. In the nine months ended September 30, 2013 and 2012, the Company incurred merchant credit losses of $2.4 million and $1.4 million, respectively, on total SME bankcard dollar volumes processed of $56.2 billion and $54.1 billion, respectively. These credit losses are included in processing and servicing costs in the Company's Condensed Consolidated Statements of Income and Other Comprehensive Income. | ||||||||||||||||
The loss recorded by the Company for chargebacks associated with any individual merchant is typically small, due both to the relatively small size and the processing profile of the Company's SME merchants. However, from time to time the Company will encounter instances of merchant fraud, and the resulting chargeback losses may be considerably more significant to the Company. The Company has established a contingent reserve for estimated currently existing credit and fraud losses on its Condensed Consolidated Balance Sheets, amounting to $2.0 million at September 30, 2013 and at December 31, 2012. This reserve is determined by performing an analysis of the Company's historical loss experience applied to current processing volume and exposures. | ||||||||||||||||
A summary of the activity in the loss reserve for the three and nine months ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 1,955 | $ | 1,957 | $ | 1,955 | $ | 1,957 | ||||||||
Additions to reserve | 1,228 | 512 | 2,461 | 1,479 | ||||||||||||
Charges against reserve (a) | (1,228 | ) | (512 | ) | (2,461 | ) | (1,479 | ) | ||||||||
Ending balance | $ | 1,955 | $ | 1,957 | $ | 1,955 | $ | 1,957 | ||||||||
(a)Included in these amounts are payroll segment losses of $13,000 and $29,000, respectively, for the three months ended September 30, 2013 and 2012, and $88,000 and $77,000, respectively, for the nine months ended September 30, 2013 and 2012. |
Accrued_Buyout_Liability
Accrued Buyout Liability | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Accrued Buyout Liability [Abstract] | ' | |||||||||||||||
Accrued Buyout Liability | ' | |||||||||||||||
Accrued Buyout Liability | ||||||||||||||||
A summary of the accrued buyout liability was as follows as of September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Vested Relationship Managers and sales managers | $ | 35,655 | $ | 33,926 | ||||||||||||
Unvested Relationship Managers and sales managers | 1,207 | 1,484 | ||||||||||||||
Total accrued buyout liability | 36,862 | 35,410 | ||||||||||||||
Less current portion | (13,667 | ) | (10,478 | ) | ||||||||||||
Long-term portion of accrued buyout liability | $ | 23,195 | $ | 24,932 | ||||||||||||
In calculating the accrued buyout liability for unvested Relationship Managers and sales managers, the Company has assumed that 31% of the unvested Relationship Managers and sales managers will vest in the future, which represents the Company’s historical vesting rate. A 5% increase to 36% in the expected vesting rate would have increased the accrued buyout liability for unvested Relationship Managers and sales managers by $0.1 million at September 30, 2013 and December 31, 2012. | ||||||||||||||||
A summary of the activity in the accrued buyout liability for the three and nine months ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 33,319 | $ | 33,450 | $ | 35,410 | $ | 31,658 | ||||||||
Increase in settlement obligation, net | 4,935 | 3,889 | 13,294 | 12,336 | ||||||||||||
Buyouts | (1,392 | ) | (2,746 | ) | (11,842 | ) | (9,401 | ) | ||||||||
Ending balance | $ | 36,862 | $ | 34,593 | $ | 36,862 | $ | 34,593 | ||||||||
Credit_Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2013 | |
Debt Disclosure [Abstract] | ' |
Credit Facilities | ' |
Credit Facilities | |
On October 23, 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and certain lenders who are a party to the Credit Agreement. This Credit Agreement replaces the Company's November 2010 Second Amended and Restated Credit Agreement (the "Prior Credit Agreement”). Credit extended under the Credit Agreement is guaranteed by the Company's subsidiaries and is secured by substantially all of the Company's assets and the assets of the Company's subsidiaries. | |
The Credit Agreement provides for a revolving credit facility in the aggregate amount of up to $350 million (the “Revolving Credit Facility” and together with the Credit Agreement, the "Credit Facilities"), of which up to $35 million may be used for the issuance of letters of credit and up to $35 million is available for swing line loans. The Revolving Credit Facility also provides for, upon the prior approval of the administrative agent, an increase to the total revolving commitments of $150 million for a total commitment under the Revolving Credit Facility of $500 million. The Revolving Credit Facility is available to the Company on a revolving basis until October 23, 2018. All principal and interest not previously paid on the Revolving Credit Facility will mature and be due and payable on October 23, 2018. | |
The Credit Agreement and the Prior Credit Agreement contain covenants which include: maintenance of certain leverage and fixed charge coverage ratios; limitations on our indebtedness, liens on our properties and assets, investments in, and loans to other business units, our ability to enter into business combinations and asset sales; and certain other financial and non-financial covenants. These covenants also apply to certain of our subsidiaries. The Company was in compliance with these covenants as of September 30, 2013 and December 31, 2012. | |
The Prior Credit Agreement provided a term credit facility (the “Term Credit Facility”). The Term Credit Facility required amortization payments in the amount of $5.0 million for each fiscal quarter during the fiscal years ended December 31, 2013 and 2014, and $7.5 million for each fiscal quarter during the period commencing on January 1, 2015 through the Term Credit Facility maturity date on November 24, 2015. All principal and interest not previously paid on the Term Credit Facility was to mature and become due and payable on November 24, 2015. | |
At September 30, 2013, there was $55.0 million outstanding under the Term Credit Facility and $91.0 million outstanding under the Prior Credit Agreement's revolving credit facility (the "Prior Revolving Credit Facility"). These outstanding balances were repaid on October 23, 2013 using new borrowings under the Credit Agreement. At December 31, 2012, the Company had $70.0 million outstanding under the Term Credit Facility and $82.0 million outstanding under the Prior Revolving Credit Facility. | |
Under the terms of the Credit Agreement, the Company may borrow, at its option, at interest rates equal to one, two, three or six month adjusted LIBOR rates, or equal to the greater of the prime rate, the federal funds rate plus 0.50% and the adjusted LIBOR rate plus 1%, in each case plus a margin determined by the Company's current leverage ratio. | |
The weighted average interest rate at September 30, 2013 was 2.2%. Total fees and direct costs paid for the Prior Credit Agreement through September 30, 2013 were $2.4 million. These costs are being amortized to interest expense over the life of the Prior Credit Agreement. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||
Litigation—The Company is involved in ordinary course legal proceedings, which include all claims, lawsuits, investigations and proceedings, including unasserted claims, which are probable of being asserted, arising in the ordinary course of business and otherwise not described below. The Company has considered all such ordinary course legal proceedings in formulating its disclosures and assessments. In the opinion of the Company, based on consultations with outside counsel, material losses in addition to amounts previously accrued are not considered reasonably possible in connection with these ordinary course legal proceedings. | |||||||||||||||||||||
The Company has also been subject to lawsuits, claims, and investigations which resulted from the criminal breach of | |||||||||||||||||||||
its payment systems environment (the "Processing System Intrusion"). See Contingencies below for a description of the Processing System Intrusion. | |||||||||||||||||||||
Contingencies—The Company collects and stores sensitive data about its merchant customers and bankcard holders. If the Company’s network security is breached or sensitive merchant or cardholder data is misappropriated, the Company could be exposed to assessments, fines or litigation costs. | |||||||||||||||||||||
On January 20, 2009, the Company publicly announced the Processing System Intrusion. The Processing System Intrusion involved malicious software that appears to have been used to collect in-transit, unencrypted payment card data while it was being processed by the Company during the transaction authorization process. The Company believes the breach did not extend beyond 2008. | |||||||||||||||||||||
Leases—The Company leases various office spaces and certain equipment under operating leases with remaining terms ranging up to 10 years. The majority of the office space lease agreements contain renewal options and generally require the Company to pay certain operating expenses. | |||||||||||||||||||||
Future minimum lease payments for all non-cancelable leases as of September 30, 2013 were as follows: | |||||||||||||||||||||
For the Twelve Months Ending September 30, | Operating Leases (a) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
2014 | $ | 10,813 | |||||||||||||||||||
2015 | 7,854 | ||||||||||||||||||||
2016 | 5,776 | ||||||||||||||||||||
2017 | 3,334 | ||||||||||||||||||||
2018 | 3,300 | ||||||||||||||||||||
Thereafter | 8,272 | ||||||||||||||||||||
Total future minimum lease payments | $ | 39,349 | |||||||||||||||||||
(a) There were no material capital leases at September 30, 2013 | |||||||||||||||||||||
Rent expense for leased facilities and equipment was $2.7 million and $2.1 million, respectively, for the three months ended September 30, 2013 and 2012, and $7.5 million and $5.9 million, respectively, for the nine months ended September 30, 2013 and 2012. | |||||||||||||||||||||
Commitments—Certain officers of the Company have entered into employee confidential information and non-competition agreements under which they are entitled to severance pay equal to their base salary and medical benefits for six months, one year or two years depending on the officer and a pro-rated bonus in the event they are terminated by the Company other than for cause. There were no payouts under these agreements in the nine months ended September 30, 2013 and 2012. | |||||||||||||||||||||
The following table reflects the Company’s other significant contractual obligations, including leases from above, as of September 30, 2013: | |||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||
Contractual Obligations | Total | Less than | 1 to 3 | 3 to 5 | More | ||||||||||||||||
1 year | Years | years | than 5 | ||||||||||||||||||
years | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Processing providers (a) | $ | 14,800 | $ | 7,071 | $ | 7,729 | $ | — | $ | — | |||||||||||
Telecommunications providers | 15,534 | 5,287 | 6,751 | 3,496 | — | ||||||||||||||||
Facility and equipment leases | 39,349 | 10,813 | 13,630 | 6,634 | 8,272 | ||||||||||||||||
Term Credit Facility (b) | 55,000 | 20,000 | 35,000 | — | — | ||||||||||||||||
$ | 124,683 | $ | 43,171 | $ | 63,110 | $ | 10,130 | $ | 8,272 | ||||||||||||
(a) | The Company has agreements with several third-party processors to provide to us on a non-exclusive basis payment processing and transmittal, transaction authorization and data capture services, and access to various reporting tools. The Company's agreements with third-party processors require it to submit a minimum monthly number of transactions or volume for processing. If the Company submits a number of transactions or volume that is lower than the minimum, it is required to pay the third-party processors the fees that they would have received if the Company had submitted the required minimum number or volume of transactions. | ||||||||||||||||||||
(b) | Interest rates on the Term Credit Facility are variable in nature; however, in January 2011 the Company entered into fixed-pay amortizing interest rate swaps having a remaining notional amount of $27.5 million. If interest rates were to remain at the September 30, 2013 level, the Company would make interest payments of $1.6 million in the next 1 year and $0.8 million in the next 1 to 3 years or a total of $2.4 million including net settlements on the fixed-pay amortizing interest rate swaps. In addition, the Company had $91.0 million borrowings outstanding under our Prior Revolving Credit Facility at September 30, 2013. |
Segments
Segments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segments | ' | ||||||||||||||||
Segments | |||||||||||||||||
The Company bases its business segments on how it monitors and manages the performance of its operations as determined by the Company's chief operating decision maker or decision making group. The Company's operating segments are strategic business units that offer different products and services. They are managed separately because each business requires different marketing strategies, personnel skill sets and technology. | |||||||||||||||||
The Company has the following five reportable segments: (1) Card, which provides bankcard payment processing and related services to our SME merchants and Network Services Merchants, (2) Payroll, which provides payroll processing and related tax filing services, (3) Heartland School Solutions, which provides school nutrition and point-of-sale solutions, (4) Campus Solutions, which provides open- and closed-loop payment solutions and, with the December 2012 acquisition of ECSI, provides higher education loan services, and (5) Other. The Other segment consists of Prepaid Card, which provides prepaid card, stored-value card and loyalty and gift card marketing solutions and other miscellaneous income. The components of the Other segment do not meet the defined thresholds for being an individually reportable segment. | |||||||||||||||||
SME merchants and Network Services Merchants are aggregated for financial reporting purposes in the Card Segment, as they both provide processing services related to bankcard transactions, exhibit similar economic characteristics, and share the same systems to provide services. | |||||||||||||||||
During the fourth quarter of 2012, the Company revised the presentation of reportable segments as a result of the acquisitions of Nutrikids, Ovation and ECSI. This change increased the Company's reportable segments to five. Additionally, the presentation of the Card segment was revised to classify CPOS as a discontinued operation. The prior period segments were revised to conform to the current period presentation. | |||||||||||||||||
The Company allocates revenues, expenses, assets and liabilities to segments only where directly attributable. The unallocated corporate administration amounts consist primarily of costs attributed to finance, corporate administration, human resources and corporate services. Reconciling items include eliminations of intercompany investments and receivables. | |||||||||||||||||
The accounting policies of the operating segments are the same as described in the summary of significant accounting policies. The Company believes the terms and conditions of transactions between the segments are comparable to those which could have been obtained in transactions with unaffiliated parties. | |||||||||||||||||
At September 30, 2013 and 2012, 64% and 81%, respectively, of the Payroll segment's total assets were funds that the Company holds as a fiduciary in its Payroll services activities for payment to taxing authorities. At September 30, 2013, 23% of the Campus Solutions segment's total assets represent funds held for our loan servicing customers related to payment processing services provided for federal student loan billing and processing that are payable to higher education institutions and other businesses. See Note 7, Intangible Assets and Goodwill for goodwill as a percentage of the reportable segments' total assets. | |||||||||||||||||
A summary of the Company’s segments for the three and nine months ended September 30, 2013 and 2012 was as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | (In thousands) | ||||||||||||||||
Card | $ | 521,601 | $ | 505,031 | $ | 1,491,623 | $ | 1,446,155 | |||||||||
Payroll | 10,578 | 5,130 | 33,651 | 16,499 | |||||||||||||
Heartland School Solutions | 12,150 | 12,116 | 36,628 | 25,109 | |||||||||||||
Campus Solutions | 7,753 | 1,970 | 27,049 | 5,369 | |||||||||||||
Other | 5,105 | 6,507 | 16,102 | 20,559 | |||||||||||||
Reconciling Items | (58 | ) | (77 | ) | (61 | ) | (220 | ) | |||||||||
Total revenues | $ | 557,129 | $ | 530,677 | $ | 1,604,992 | $ | 1,513,471 | |||||||||
Depreciation and amortization | |||||||||||||||||
Card | $ | 6,918 | $ | 4,299 | $ | 20,015 | $ | 16,067 | |||||||||
Payroll | 959 | 305 | 2,634 | 836 | |||||||||||||
Heartland School Solutions | 785 | 674 | 1,854 | 1,878 | |||||||||||||
Campus Solutions | 674 | 83 | 1,696 | 248 | |||||||||||||
Other | 433 | 387 | 1,259 | 1,148 | |||||||||||||
Unallocated corporate administration amounts | 35 | 78 | (1,421 | ) | 189 | ||||||||||||
Total depreciation and amortization | $ | 9,804 | $ | 5,826 | $ | 26,037 | $ | 20,366 | |||||||||
Interest Income | |||||||||||||||||
Card | $ | 28 | $ | 31 | $ | 92 | $ | 169 | |||||||||
Campus Solutions | 1 | — | 3 | — | |||||||||||||
Total interest income | $ | 29 | $ | 31 | $ | 95 | $ | 169 | |||||||||
Interest Expense | |||||||||||||||||
Card | $ | 1,242 | $ | 1,014 | $ | 3,744 | $ | 2,759 | |||||||||
Campus Solutions | — | 1 | — | 5 | |||||||||||||
Other | 1 | — | 5 | — | |||||||||||||
Reconciling | — | (77 | ) | (3 | ) | (220 | ) | ||||||||||
Total interest expense | $ | 1,243 | $ | 938 | $ | 3,746 | $ | 2,544 | |||||||||
Net income from continuing operations | |||||||||||||||||
Card | $ | 20,279 | $ | 22,527 | $ | 57,824 | $ | 57,660 | |||||||||
Payroll | 357 | 279 | 1,904 | 1,393 | |||||||||||||
Heartland School Solutions | 1,775 | 1,165 | 6,650 | 3,344 | |||||||||||||
Campus Solutions | 544 | 14 | 2,069 | (177 | ) | ||||||||||||
Other | 200 | (71 | ) | (45 | ) | 737 | |||||||||||
Unallocated corporate administration amounts | (1,264 | ) | (4,971 | ) | (11,185 | ) | (13,088 | ) | |||||||||
Total net income from continuing operations | $ | 21,891 | $ | 18,943 | $ | 57,217 | $ | 49,869 | |||||||||
Assets | 30-Sep-13 | September 30, 2012 | |||||||||||||||
Card | $ | 540,098 | $ | 463,366 | |||||||||||||
Payroll | 149,008 | 48,342 | |||||||||||||||
Heartland School Solutions | 81,547 | 78,634 | |||||||||||||||
Campus Solutions | 72,197 | 8,115 | |||||||||||||||
Other | 16,363 | 18,071 | |||||||||||||||
Total assets | $ | 859,213 | $ | 616,528 | |||||||||||||
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
The Company presents earnings per share data following the established standards for the computation and presentation of basic and diluted earnings per share data. Under these standards, the dilutive effect of stock options and restricted share units is excluded from the calculation of basic earnings per share but included in diluted earnings per share. The following is a reconciliation of the amounts used to calculate basic and diluted earnings per share: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands, except per share) | |||||||||||||||||
Numerator: | |||||||||||||||||
Income from continuing operations attributable to Heartland | $ | 21,981 | $ | 18,943 | $ | 57,307 | $ | 49,869 | |||||||||
Income from discontinued operations attributable to Heartland | — | 437 | 3,914 | 1,066 | |||||||||||||
Net income attributable to Heartland | $ | 21,981 | $ | 19,380 | $ | 61,221 | $ | 50,935 | |||||||||
Denominator: | |||||||||||||||||
Basic weighted average shares outstanding | 36,857 | 38,813 | 36,752 | 38,831 | |||||||||||||
Effect of dilutive instruments: | |||||||||||||||||
Stock options and restricted stock units | 1,163 | 1,539 | 1,327 | 1,623 | |||||||||||||
Diluted weighted average shares outstanding | 38,020 | 40,352 | 38,079 | 40,454 | |||||||||||||
Basic earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.6 | $ | 0.49 | $ | 1.56 | $ | 1.28 | |||||||||
Income from discontinued operations | — | 0.01 | 0.11 | 0.03 | |||||||||||||
Basic earnings per share | $ | 0.6 | $ | 0.5 | $ | 1.67 | $ | 1.31 | |||||||||
Diluted earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.58 | $ | 0.47 | $ | 1.5 | $ | 1.23 | |||||||||
Income from discontinued operations | — | 0.01 | 0.1 | 0.03 | |||||||||||||
Diluted earnings per share | $ | 0.58 | $ | 0.48 | $ | 1.6 | $ | 1.26 | |||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ' | |||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
The Company applies a fair value framework in order to measure and disclose its financial assets and liabilities which include fixed income equity securities, interest swap derivatives and certain other financial instruments. The Company determines fair value based on quoted prices when available or through the use of alternative approaches when market quotes are not readily accessible or available. | ||||||||||||||||
The Company’s framework for measuring fair value provides a three-level hierarchy, which prioritizes the factors (inputs) used to calculate the fair value of assets and liabilities as follows: | ||||||||||||||||
• | Level 1 inputs are unadjusted quoted prices, such as a New York Stock Exchange closing price, in active markets for identical assets. Level 1 is the highest priority in the hierarchy. | |||||||||||||||
• | Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as other significant inputs that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates, and yield curves. | |||||||||||||||
• | Level 3 inputs are unobservable and are based on the Company's assumptions due to little, if any, observable market information. Level 3 is the lowest priority in the hierarchy. | |||||||||||||||
For the nine months ended September 30, 2013, there have been no transfers between the measurement categories. The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2013 and at December 31, 2012: | ||||||||||||||||
September 30, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Fixed income bond fund (a) | $ | 1,221 | $ | 1,221 | $ | — | $ | — | ||||||||
Total assets | $ | 1,221 | $ | 1,221 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 494 | $ | — | $ | 494 | $ | — | ||||||||
Total liabilities | $ | 494 | $ | — | $ | 494 | $ | — | ||||||||
December 31, 2012 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Fixed income bond fund (a) | $ | 1,212 | $ | 1,212 | $ | — | $ | — | ||||||||
Total assets | $ | 1,212 | $ | 1,212 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 817 | $ | — | $ | 817 | $ | — | ||||||||
Total liabilities | $ | 817 | $ | — | $ | 817 | $ | — | ||||||||
(a) amounts included in Funds held for customers on the Consolidated Balance Sheet | ||||||||||||||||
The following tables provide the assets and liabilities carried at fair value measured on a non-recurring basis as of September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 585 | $ | — | $ | 585 | $ | — | ||||||||
Other investments, at cost | 4,065 | — | 65 | 4,000 | ||||||||||||
Total assets | $ | 4,650 | $ | — | $ | 650 | $ | 4,000 | ||||||||
Liabilities: | ||||||||||||||||
Term Credit Facility | $ | 55,000 | $ | — | $ | 55,000 | $ | — | ||||||||
Prior Revolving Credit Facility | 91,000 | — | 91,000 | — | ||||||||||||
Total liabilities | $ | 146,000 | $ | — | $ | 146,000 | $ | — | ||||||||
December 31, 2012 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 1,199 | $ | — | $ | 1,199 | $ | — | ||||||||
Total assets | $ | 1,199 | $ | — | $ | 1,199 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Term Credit Facility | $ | 70,000 | $ | — | $ | 70,000 | $ | — | ||||||||
Prior Revolving Credit Facility | 82,000 | — | 82,000 | — | ||||||||||||
Total liabilities | $ | 152,000 | $ | — | $ | 152,000 | $ | — | ||||||||
The Company's liabilities include interest rate swaps that are measured at fair value using observable market inputs including the Company's credit risk and its counterparties' credit risks. Based on these inputs, the interest rate swaps are classified within Level 2 of the valuation hierarchy. Based on the Company's continued ability to enter into these swaps, the Company considers the markets for its fair value instruments to be active. The Company's liabilities also include the term loan credit facility and the revolving credit facility and the carrying value of these liabilities approximates fair value. | ||||||||||||||||
The Company's financial instruments also include cash and cash equivalents and cash held for customers and their carrying values approximate fair value as of September 30, 2013 and December 31, 2012, because they bear interest at market rates and have maturities of less than 90 days at the time of purchase. The carrying amount of the Company's accounts receivable, accounts payable, and accrued expenses approximates fair value as of September 30, 2013 and December 31, 2012, because of the relatively short timeframe to realization. |
Discontinued_Operations_Notes
Discontinued Operations (Notes) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | ||||||||||||||||
Discontinued Operations | |||||||||||||||||
In the fourth quarter of 2012, the Company along with the 30% noncontrolling shareholders of CPOS entered into an agreement to sell CPOS to a third party. CPOS was not a significant subsidiary and the Company will have no continuing | |||||||||||||||||
involvement in its operations. After receiving regulatory approval, the transaction settled on January 31, 2013. The total sales price was $30.3 million cash including net working capital, of which the Company received $20.9 million for its 70% ownership in CPOS. The total gain recorded on the sale was $3.8 million, net of income taxes of $2.1 million. The following table shows the results of operations of CPOS for the three and nine months ended September 30, 2013 and 2012 which are included in the earnings from discontinued operations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Revenues | $ | — | $ | 3,475 | $ | 1,117 | $ | 9,687 | |||||||||
Expenses | — | 2,636 | 870 | 7,656 | |||||||||||||
Income from operations | — | 839 | 247 | 2,031 | |||||||||||||
Income from discontinued operations, net of income tax of | — | 624 | 184 | 1,512 | |||||||||||||
$—, $229, $68, and $555 | |||||||||||||||||
Gain on sale of discontinued operations, net of income tax of $2,067 | — | — | 3,786 | — | |||||||||||||
Net income from discontinued operations attributable to noncontrolling interests | — | 187 | 56 | 446 | |||||||||||||
Net income from discontinued operations attributable to Heartland | — | 437 | 3,914 | 1,066 | |||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, among other things, the accrued buyout liability, capitalized customer acquisition costs, goodwill, loss reserves, certain accounts payable and accrued expenses and certain tax assets and liabilities as well as the related valuation allowances, if any. Actual results could differ from those estimates. | |
Receivables | ' |
Receivables—Receivables are stated net of allowance for doubtful accounts. The Company estimates its allowance based on experience with its merchants, customers, and sales force and its judgment as to the likelihood of their ultimate payment. The Company also considers collection experience and makes estimates regarding collectability based on trends in the aging. Historically, the Company has not experienced significant charge offs for its merchant receivables. | |
The Company's primary receivables are from its bankcard processing merchants. In addition to receivables for transaction fees the Company charges its merchants for processing transactions, these receivables include amounts resulting from the Company's practice of advancing interchange fees to most of its SME merchants during the month and collecting those fees at the beginning of the following month. The Company does not advance interchange fees to its Network Services Merchants. Network Services Merchants are invoiced monthly, on payment terms of 30 days net from date of invoicing. Receivables from merchants also include receivables from the sale of point-of-sale terminal equipment. | |
Historically, the Company funded interchange advances to its SME merchants first with its available cash, and when that cash had been expended, by directing its sponsor banks to fund advances, thereby incurring a payable to sponsor banks. In the fourth quarter of 2012, the Company accelerated the end-of-day presentment of transaction funding files to the bankcard networks resulting in its sponsor banks receiving settlement cash one day earlier and increasing funding obligations to its SME merchants, which are carried in processing liabilities. As a result of accelerated presentment, the Company funds these merchant interchange advances/receivables first from the accelerated settlement cash received from bankcard networks, then from the Company's available cash or by incurring a payable to its sponsor banks. At September 30, 2013, the Company used $2.4 million of its cash to fund merchant advances and at December 31, 2012, the Company used $3.8 million of its cash to fund merchant advances. The amount due to sponsor banks for funding advances was $41.7 million at September 30, 2013 and $36.3 million at December 31, 2012. The Company pays its sponsor banks the prime rate on these payables. The payable to sponsor banks is repaid at the beginning of the following month out of the fees the Company collects from its merchants. | |
Receivables also include amounts resulting from the pre-funding of Discover and American Express transactions to the Company's merchants and are due from the related bankcard networks. These amounts are recovered the next business day following the date of processing the transaction. | |
Receivables also include amounts resulting from the sale, installation, training and repair of payment system hardware and software for prepaid card and stored-value card payment systems, Campus Solutions, and Heartland School Solutions. These receivables are mostly invoiced on terms of 30 days net from date of invoicing. | |
Investments and Funds Held for Payroll Customers | ' |
Investments and Funds Held for Customers— Investments, including those carried on the Condensed Consolidated Balance Sheets as Funds held for customers, consist primarily of equity investments, fixed income bond funds and certificates of deposit. Funds held for customers also include overnight bank deposits. The majority of investments carried in Funds held for customers are available-for-sale and recorded at fair value based on quoted market prices. Certificates of deposit are classified as held to maturity and recorded at cost. In the event of a sale, cost is determined on a specific identification basis. | |
Capitalized Customer Acquisition Costs, net | ' |
Capitalized Customer Acquisition Costs, net— Capitalized customer acquisition costs consist of (1) up-front signing bonus payments made to Relationship Managers and sales managers (the Company's sales force, which are referred to as "salespersons") for the establishment of new merchant relationships, and (2) a deferred acquisition cost representing the estimated cost of buying out the commissions of vested salespersons. Capitalized customer acquisition costs represent incremental, direct customer acquisition costs that are recoverable through gross margins associated with merchant contracts. The capitalized customer acquisition costs are amortized using a method which approximates a proportional revenue approach over the initial 3-year term of the merchant contract. | |
The up-front signing bonus paid for new SME bankcard, payroll and loyalty marketing accounts is based on the estimated gross margin for the first year of the merchant contract. The signing bonus, amount capitalized, and related amortization are adjusted after the first year to reflect the actual gross margin generated by the merchant contract during that year. The deferred customer acquisition cost asset is accrued over the first year of SME bankcard merchant processing, consistent with the build-up in the accrued buyout liability, as described below. Beginning in June 2012, Relationship Managers and sales managers earn portfolio equity on their newly installed payroll and loyalty marketing merchant accounts based on the residual commissions they earn on those accounts. The accrued buyout liability and deferred acquisition cost asset are developed in the same manner as the SME bankcard merchant portfolio equity. | |
Management evaluates the capitalized customer acquisition costs for impairment on an annual basis by comparing, on a pooled basis by vintage month of origination, the expected future net cash flows from underlying merchant relationships to the carrying amount of the capitalized customer acquisition costs. If the estimated future net cash flows are lower than the recorded carrying amount, indicating an impairment of the value of the capitalized customer acquisition costs, the impairment loss will be charged to operations. | |
Processing Liabilities And Loss Reserves | ' |
the cardholder's dissatisfaction with merchandise quality or the merchant's service, and the disputes may not always be resolved in the merchant's favor. In some of these cases, the transaction is ''charged back'' to the merchant and the purchase price is refunded to the cardholder by the credit card-issuing institution. If the merchant is unable to fund the refund, the Company is liable for the full amount of the transaction. The Company's obligation to stand ready to perform is minimal. The Company maintains a deposit or the pledge of a letter of credit from certain merchants as an offset to potential contingent liabilities that are the responsibility of such merchants. The Company evaluates its ultimate risk and records an estimate of potential loss for chargebacks based upon an assessment of actual historical loss rates compared to recent bankcard processing volume levels. The Company believes that the liability recorded as loss reserves approximates fair value. | |
Accrued Buyout Liability | ' |
Accrued Buyout Liability— The Company's Relationship Managers and sales managers are paid residual commissions based on the gross margin generated by monthly SME merchant processing activity. The Company has the right, but not the obligation, to buy out some or all of these commissions, and intends to do so periodically. Such purchases of the commissions are at a fixed multiple of the last twelve months' commissions. Because of the Company's intent and ability to execute purchases of the residual commissions, and the mutual understanding between the Company and the Relationship Managers and sales managers, the Company has accounted for this deferred compensation arrangement pursuant to the substantive nature of the plan. The Company therefore records the amount that it would have to pay (the ''settlement cost'') to buy out non-servicing related commissions in their entirety from vested Relationship Managers and sales managers, and an accrual, based on their progress towards vesting, for those unvested Relationship Managers and sales managers who are expected to vest in the future. As noted above, as the liability increases over the first year of a SME merchant contract, the Company also records a related deferred acquisition cost asset for currently vested Relationship Managers and sales managers. The accrued buyout liability associated with unvested Relationship Managers and sales managers is not included in the deferred acquisition cost asset since future services are required in order to vest. Subsequent changes in the estimated accrued buyout liability due to merchant attrition, same-store sales growth and changes in gross margin are included in the same income statement caption as customer acquisition costs expense. | |
Beginning in June 2012, Relationship Managers and sales managers earn portfolio equity on their newly installed payroll and loyalty marketing merchant accounts based on the residual commissions they earn on those accounts. The accrued buyout liability and deferred acquisition cost asset are accrued in the same manner as the SME bankcard merchant portfolio equity. | |
The accrued buyout liability is based on merchants under contract at the balance sheet date, the gross margin generated by those merchants over the prior twelve months, and the contractual buyout multiple. The liability related to a new merchant is therefore zero when the merchant is installed, and increases over the twelve months following the installation date. The same procedure is applied to unvested commissions over the expected vesting period, but is further adjusted to reflect the Company's estimate that 31% of unvested Relationship Managers and sales managers become vested, which represents the Company's historical vesting rate. | |
The classification of the accrued buyout liability between current and non-current liabilities on the Condensed Consolidated Balance Sheets is based upon the Company's estimate of the amount of the accrued buyout liability that it reasonably expects to pay over the next twelve months. This estimate is developed by calculating the cumulative annual average percentage that total historical buyout payments represent of the accrued buyout liability. That percentage is applied to the period-end accrued buyout liability to determine the current portion. | |
Revenue | ' |
Revenue—Revenues are mainly comprised of gross processing revenue, payroll processing revenue and equipment-related revenue. Gross processing revenue primarily consists of discount fees, per-transaction fees and periodic fees (primarily monthly) from the processing of Visa, MasterCard, American Express and Discover bankcard transactions for merchants. The Company passes through to its customers any changes in interchange or network fees. Gross processing revenue also includes fees for servicing American Express accounts, customer service fees, fees for processing chargebacks, termination fees on terminated contracts, gift and loyalty card fees, fees generated by our Heartland School Solutions business, loan servicing fees and other miscellaneous revenue. Payroll processing revenue includes periodic and annual fees charged by HPC and Ovation for payroll processing services, and interest earned from investing tax impound funds held for our customers. Revenue is recorded as bankcard and other processing transactions are processed or payroll services are performed. | |
Loss Contingencies and Legal Expenses | ' |
Loss Contingencies and Legal Expenses—The Company records a liability for loss contingencies when the liability is probable and the amount is reasonably estimable. Legal fees associated with loss contingencies are recorded when the legal fees are incurred. | |
The Company records recoveries from its insurance providers when cash is received from the provider. | |
Other Income (Expense) | ' |
Other Income (Expense)— Other income (expense) consists of interest income on cash and investments, the interest expense on our borrowings, the gains or losses on the disposal of property and equipment and other non-operating income or expense items. | |
Income Taxes | ' |
Income Taxes—The Company accounts for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and the tax basis of assets and liabilities using enacted tax rates. | |
The Company regularly evaluates its tax positions for additional unrecognized tax benefits and associated interest and penalties, if applicable. There are many factors that are considered when evaluating these tax positions including: interpretation of tax laws, recent tax litigation on a position, past audit or examination history, and subjective estimates and assumptions, which have been deemed reasonable by management. However, if management's estimates are not representative of actual outcomes, the Company's results could be materially impacted. | |
Derivative Financial Instruments | ' |
Derivative Financial Instruments—The Company utilizes derivative instruments to manage interest rate risk on certain borrowings under its Credit Agreement (as defined in Note 10 herein). The Company recognizes the fair value of derivative financial instruments in the Condensed Consolidated Balance Sheets in investments, or accrued expenses and other liabilities. Changes in fair value of derivative instruments are recognized immediately in earnings unless the derivative is designated and qualifies as a hedge of future cash flows. For derivatives that qualify as hedges of future cash flows, the effective portion of changes in fair value is recorded in other comprehensive income and reclassified into interest expense in the same periods during which the hedged item affects earnings. Any ineffectiveness of cash flow hedges would be recognized in other income (expense) in the Condensed Consolidated Statements of Income during the period of change. | |
Foreign Currency | ' |
Foreign Currency—The Canadian dollar was the functional currency of CPOS, which operated in Canada. CPOS' revenues and expenses were translated at the average exchange rates prevailing during the period. The foreign currency assets and liabilities of CPOS were translated at the period-end rate of exchange. The resulting translation adjustment was allocated between the Company and CPOS' noncontrolling interests and was recorded as a component of other comprehensive income or noncontrolling interests in total equity. At September 30, 2012, | |
Noncontrolling Interests | ' |
Noncontrolling Interests— Noncontrolling interests represent noncontrolling stockholders' share of the equity and after-tax net income or loss of Leaf and CPOS. | |
Noncontrolling stockholders' share of after-tax net income or loss of Leaf is included in Net income (loss) attributable to noncontrolling interests, continuing operations in the Condensed Consolidated Statements of Income. The minority stockholders' interests included in noncontrolling interests in the September 30, 2013 Condensed Consolidated Balance Sheet is $6.7 million and reflects the original investments by these minority shareholders in Leaf, along with their proportionate share of earnings or losses of Leaf. Noncontrolling stockholders' share of after-tax net income or loss of CPOS is included in Net income (loss) attributable to noncontrolling interests, discontinued operations in the Condensed Consolidated Statements of Income. The minority stockholders' interests included in noncontrolling interests in the December 31, 2012 Condensed Consolidated Balance Sheet was $1.4 million and reflected the original investments by these minority shareholders in CPOS, along with their proportionate share of earnings or losses of CPOS | |
Subsequent Events | ' |
Subsequent Events—The Company evaluated subsequent events with respect to the Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 2013 | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements— From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that are adopted by us as of the specified effective date. | |
In July 2012, the FASB issued an accounting standard update on testing indefinite-lived intangible assets for impairment. This guidance will allow an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Under these amendments, an entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not the indefinite-lived intangible asset is impaired. The amendments include a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The update is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The implementation of this update did not have a material effect on the Company's Consolidated Financial Statements. | |
In February 2013, the FASB issued an accounting standard update on improving the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update seek to attain that objective by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under generally accepted accounting principles to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. This update is effective for annual reporting periods beginning after December 15, 2012. The implementation of this update did not have a material effect on the Company's Consolidated Financial Statements. | |
In July 2013, the FASB issued an accounting standard update which provides guidance on the risks that are permitted to be hedged in a fair value or cash flow hedge. Among those risks for financial assets and financial liabilities is the risk of changes in a hedged item's fair value or a hedged transaction's cash flows attributable to changes in the designated benchmark interest rate (referred to as interest rate risk). This update is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The implementation of this update is not expected to have a material effect on the Company's Consolidated Financial Statements. | |
In July 2013, the FASB issued an accounting standard update which provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this update are expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryfowards, similar tax losses, or tax credit carryforwards exist. The amendments in this update are effective for fiscal years and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The amendments would be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The implementation of this update is not expected to have a material effect on the Company's Consolidated Financial Statements. |
Organization_and_Operations_Ta
Organization and Operations (Tables) (Visa And MasterCard [Member]) | 1 Months Ended | |
Sep. 30, 2013 | ||
Visa And MasterCard [Member] | ' | |
Bankcard Processing Volume [Line Items] | ' | |
Bankcard Processing Volume | ' | |
Following is a breakout of the Company’s total Visa and MasterCard settled bankcard processing volume for the month ending September 30, 2013 by percentage processed under its individual bank sponsorship agreements: | ||
Sponsor Bank | % of September 2013 | |
Bankcard Processing | ||
Volume | ||
Wells Fargo Bank, N.A. | 64% | |
The Bancorp Bank | 17% | |
Barclays Bank Delaware | 13% | |
Heartland Bank | 6% |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||
Schedule of Effective Income Tax Rate | ' | |||||||||||||||||
The provision for income taxes for the three and nine months ended September 30, 2013 and 2012 and the resulting effective tax rates were as follows: | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||||
Provision for income taxes | $ | 11,857 | $ | 11,745 | $ | 34,039 | $ | 30,893 | ||||||||||
Effective tax rate | 35.1 | % | 38.3 | % | 37.3 | % | 38.3 | % | ||||||||||
Schedule of Activity in Repurchase Programs | ' | |||||||||||||||||
Repurchase Programs by Authorization Date | ||||||||||||||||||
Oct-11 | Jul-12 | Nov-12 | May-13 | Total | ||||||||||||||
Activity For the Nine Months Ended September 30, 2013 | ||||||||||||||||||
Shares repurchased | — | — | 952,183 | 297,900 | 1,250,083 | |||||||||||||
Cost of shares repurchased (in thousands) | — | — | $29,813 | $10,407 | $40,220 | |||||||||||||
Average cost per share | — | — | $31.31 | $34.93 | $32.17 | |||||||||||||
Remaining authorization (in thousands) | — | — | — | $64,593 | $64,593 | |||||||||||||
Activity For the Nine months Ended September 30, 2012 | ||||||||||||||||||
Shares repurchased | 1,157,440 | 516,983 | — | — | 1,674,423 | |||||||||||||
Cost of shares repurchased (in thousands) | $33,172 | $16,044 | — | — | $49,216 | |||||||||||||
Average cost per share | $28.66 | $31.03 | — | — | $29.39 | |||||||||||||
Activity For the Year Ended December 31, 2012 | ||||||||||||||||||
Shares repurchased | 1,157,440 | 1,760,804 | 715,800 | — | 3,634,044 | |||||||||||||
Cost of shares repurchased (in thousands) | $33,172 | $50,000 | $20,187 | — | $103,359 | |||||||||||||
Average cost per share | $28.66 | $28.40 | $28.20 | — | $28.44 | |||||||||||||
Acquisitions_Acquisitions_Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Leaf Acquisition, LLC [Member] | ' | |||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | |||
Schedule of Finite-Lived Intangible Assets, Weighted Average Amortization Life | ' | |||
The weighted average amortization life for the 2013 acquired finite lived intangible assets related to acquisition of Leaf is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Software | 7 | |||
Patents | 5 | |||
Overall | 6.9 | |||
Lunch Byte Systems [Member] | ' | |||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | |||
Schedule of Finite-Lived Intangible Assets, Weighted Average Amortization Life | ' | |||
Weighted-average amortization life | ||||
(In years) | ||||
Customer relationships | 6 | |||
Software | 3.3 | |||
Non-compete agreements | 5 | |||
Overall | 5.9 | |||
Educational Computer Systems, Inc. [Member] | ' | |||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | |||
Schedule of Finite-Lived Intangible Assets, Weighted Average Amortization Life | ' | |||
The weighted average amortization life for the 2012 acquired finite lived intangible assets related to acquisition of ECSI is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Customer relationships | 12 | |||
Software | 5 | |||
Non-compete agreements | 5 | |||
Overall | 9.2 | |||
Ovation Payroll, Inc. [Member] | ' | |||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | |||
Schedule of Finite-Lived Intangible Assets, Weighted Average Amortization Life | ' | |||
The weighted average amortization life for the 2012 acquired finite lived intangible assets related to acquisition of Ovation is as follows: | ||||
Weighted-average amortization life | ||||
(In years) | ||||
Customer relationships | 6.7 | |||
Software | 1.5 | |||
Non-compete agreements | 5 | |||
Overall | 5.9 |
Receivables_Tables
Receivables (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Receivables [Abstract] | ' | |||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | ' | |||||||||||||||
A summary of receivables by major class was as follows at September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Accounts receivable from merchants | $ | 170,879 | $ | 160,702 | ||||||||||||
Accounts receivable from bankcard networks | 23,548 | 19,588 | ||||||||||||||
Accounts receivable from others | 2,218 | 1,596 | ||||||||||||||
196,645 | 181,886 | |||||||||||||||
Less allowance for doubtful accounts | (967 | ) | (1,438 | ) | ||||||||||||
Total receivables, net | $ | 195,678 | $ | 180,448 | ||||||||||||
Summary of Allowance for Doubtful Accounts Receivables | ' | |||||||||||||||
A summary of the activity in the allowance for doubtful accounts for the three and nine months ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||
September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 915 | $ | 1,395 | $ | 1,438 | $ | 1,407 | ||||||||
Additions (reductions) to allowance | 186 | 318 | (16 | ) | 628 | |||||||||||
Charges against allowance | (134 | ) | (176 | ) | (455 | ) | (498 | ) | ||||||||
Ending balance | $ | 967 | $ | 1,537 | $ | 967 | $ | 1,537 | ||||||||
Funds_Held_for_Payroll_Custome1
Funds Held for Payroll Customers and Investments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Funds Held for Payroll Customers and Investments [Abstract] | ' | |||||||||||||||
Funds Held for Payroll Customers and Investments | ' | |||||||||||||||
A summary of funds held for customers and investments, including the cost, gross unrealized gains (losses) and estimated fair value by major security type and class of security were as follows at September 30, 2013 and December 31, 2012: | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2013 | ||||||||||||||||
Funds held for customers | ||||||||||||||||
Fixed income bond fund - available for sale | $ | 968 | $ | 253 | $ | — | $ | 1,221 | ||||||||
Cash held for payroll customers | 94,391 | — | — | 94,391 | ||||||||||||
Cash held for Campus Solutions customers | $ | 16,283 | $ | — | $ | — | $ | 16,283 | ||||||||
Total funds held for customers | $ | 111,642 | $ | 253 | $ | — | $ | 111,895 | ||||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit (a) | $ | 585 | $ | — | $ | — | $ | 585 | ||||||||
Other investments, at cost | 4,065 | — | — | 4,065 | ||||||||||||
Total Investments | $ | 4,650 | $ | — | $ | — | $ | 4,650 | ||||||||
(a) Certificates of deposit have remaining terms ranging from 1 month to 11 months. | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2012 | ||||||||||||||||
Funds held for customers | ||||||||||||||||
Fixed income bond fund - available for sale | $ | 968 | $ | 244 | $ | — | $ | 1,212 | ||||||||
Cash held for payroll customers | 110,334 | — | — | 110,334 | ||||||||||||
Cash held for Campus Solutions customers | 19,859 | — | — | 19,859 | ||||||||||||
Total funds held for customers | $ | 131,161 | $ | 244 | $ | — | $ | 131,405 | ||||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit | $ | 1,199 | $ | — | $ | — | $ | 1,199 | ||||||||
Total Investments | $ | 1,199 | $ | — | $ | — | $ | 1,199 | ||||||||
Investments Classified by Contractual Maturity Date | ' | |||||||||||||||
The maturity schedule of all available-for-sale debt securities and held to maturity investments along with amortized cost and estimated fair value as of September 30, 2013 is as follows: | ||||||||||||||||
Amortized | Estimated | |||||||||||||||
Cost | Fair Value | |||||||||||||||
(In thousands) | ||||||||||||||||
Due in one year or less | $ | 5,618 | $ | 5,871 | ||||||||||||
Due after one year through five years | — | — | ||||||||||||||
$ | 5,618 | $ | 5,871 | |||||||||||||
Capitalized_Customer_Acquisiti1
Capitalized Customer Acquisition Costs, Net (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Capitalized Customer Acquisition Costs, Net [Abstract] | ' | |||||||||||||||
Capitalized Customer Acquisition Costs Net | ' | |||||||||||||||
A summary of net capitalized customer acquisition costs as of September 30, 2013 and December 31, 2012 was as follows: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Capitalized signing bonuses | $ | 85,127 | $ | 84,728 | ||||||||||||
Less accumulated amortization | (44,541 | ) | (42,941 | ) | ||||||||||||
40,586 | 41,787 | |||||||||||||||
Capitalized customer deferred acquisition costs | 43,524 | 37,736 | ||||||||||||||
Less accumulated amortization | (26,399 | ) | (23,098 | ) | ||||||||||||
17,125 | 14,638 | |||||||||||||||
Capitalized customer acquisition costs, net | $ | 57,711 | $ | 56,425 | ||||||||||||
Capitalized Customer Acquisition Activity | ' | |||||||||||||||
A summary of the activity in capitalized customer acquisition costs, net for the three and nine month periods ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 56,148 | $ | 56,223 | $ | 56,425 | $ | 55,014 | ||||||||
Plus additions to: | ||||||||||||||||
Capitalized signing bonuses, net | 7,466 | 6,985 | 19,546 | 22,446 | ||||||||||||
Capitalized customer deferred acquisition costs | 5,555 | 4,491 | 15,676 | 12,748 | ||||||||||||
13,021 | 11,476 | 35,222 | 35,194 | |||||||||||||
Less amortization expense on: | ||||||||||||||||
Capitalized signing bonuses, net | (6,852 | ) | (7,364 | ) | (20,747 | ) | (22,017 | ) | ||||||||
Capitalized customer deferred acquisition costs | (4,606 | ) | (3,885 | ) | (13,189 | ) | (11,741 | ) | ||||||||
(11,458 | ) | (11,249 | ) | (33,936 | ) | (33,758 | ) | |||||||||
Balance at end of period | $ | 57,711 | $ | 56,450 | $ | 57,711 | $ | 56,450 | ||||||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets by Major Class | ' | ||||||||||||||||||||||||
Intangible Assets — Intangible assets consisted of the following as of September 30, 2013 and December 31, 2012: | |||||||||||||||||||||||||
September 30, 2013 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 49,814 | $ | 12,715 | $ | 37,099 | 3 to 18 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 4,095 | 2,614 | 1,481 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 20,750 | 10,348 | 10,402 | 1 to 7 years—straight line | |||||||||||||||||||||
Non-compete agreements | 4,488 | 1,675 | 2,813 | 3 to 5 years—straight line | |||||||||||||||||||||
Other | 385 | 33 | 352 | 2 to 9 years—straight line | |||||||||||||||||||||
$ | 79,532 | $ | 27,385 | $ | 52,147 | ||||||||||||||||||||
December 31, 2012 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 52,125 | $ | 8,318 | $ | 43,807 | 3 to 18 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 3,345 | 2,316 | 1,029 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 14,150 | 9,016 | 5,134 | 2 to 5 years—straight line | |||||||||||||||||||||
Non-compete agreements | 4,590 | 1,030 | 3,560 | 3 to 5 years—straight line | |||||||||||||||||||||
Other | 85 | 21 | 64 | 2 to 9 years—straight line | |||||||||||||||||||||
$ | 74,295 | $ | 20,701 | $ | 53,594 | ||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ' | ||||||||||||||||||||||||
The estimated remaining amortization expense related to intangible assets in twelve month increments is as follows: | |||||||||||||||||||||||||
For the Twelve Months Ending September 30, | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
2014 | $ | 8,741 | |||||||||||||||||||||||
2015 | 8,080 | ||||||||||||||||||||||||
2016 | 7,228 | ||||||||||||||||||||||||
2017 | 5,976 | ||||||||||||||||||||||||
2018 | 4,688 | ||||||||||||||||||||||||
Thereafter | 17,434 | ||||||||||||||||||||||||
$ | 52,147 | ||||||||||||||||||||||||
Schedule of Goodwill | ' | ||||||||||||||||||||||||
Goodwill — The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
Card | Payroll | Heartland School Solutions | Campus Solutions | Other | Total | ||||||||||||||||||||
Balance at January 1, 2012 | $ | 43,701 | $ | — | $ | 40,732 | $ | 3,321 | $ | 6,501 | $ | 94,255 | |||||||||||||
Goodwill acquired during the period | — | — | 15,231 | — | — | 15,231 | |||||||||||||||||||
Other (a) | — | — | (3,035 | ) | — | — | (3,035 | ) | |||||||||||||||||
Balance at September 30, 2012 | 43,701 | — | 52,928 | 3,321 | 6,501 | 106,451 | |||||||||||||||||||
Balance at January 1, 2013 | 43,701 | 30,831 | 53,350 | 33,679 | 6,501 | 168,062 | |||||||||||||||||||
Goodwill acquired during the period | 20,619 | — | — | — | — | 20,619 | |||||||||||||||||||
Other (a) | — | 524 | — | 1,967 | — | 2,491 | |||||||||||||||||||
Balance at September 30, 2013 | $ | 64,320 | $ | 31,355 | $ | 53,350 | $ | 35,646 | $ | 6,501 | $ | 191,172 | |||||||||||||
(a) Reflects adjustments to allocations of purchase price. | |||||||||||||||||||||||||
Schedule of Segment Reporting Information, Goodwill [Table Text Block] | ' | ||||||||||||||||||||||||
Percentage of total reportable segments' assets that were goodwill as of September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||||||
Percent of Goodwill to Reportable Segments' Total Assets | |||||||||||||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||||||||||||
Card | 11.90% | 9.40% | |||||||||||||||||||||||
Payroll | 21.00% | — | |||||||||||||||||||||||
Heartland School Solutions | 65.40% | 67.30% | |||||||||||||||||||||||
Campus Solutions | 49.40% | 40.90% | |||||||||||||||||||||||
Other | 39.70% | 36.00% |
Processing_Liabilities_and_Los1
Processing Liabilities and Loss Reserves (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Processing Liabilities and Loss Reserves [Abstract] | ' | |||||||||||||||
Summary Of Processing Liabilities And Loss Reserves | ' | |||||||||||||||
A summary of processing liabilities and loss reserves was as follows at September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Merchant bankcard processing | $ | 99,383 | $ | 86,882 | ||||||||||||
Merchant deposits | 6,806 | 6,436 | ||||||||||||||
Loss reserves | 1,955 | 1,955 | ||||||||||||||
$ | 108,144 | $ | 95,273 | |||||||||||||
Schedule Of Credit And Fraud Loss Reserve | ' | |||||||||||||||
A summary of the activity in the loss reserve for the three and nine months ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 1,955 | $ | 1,957 | $ | 1,955 | $ | 1,957 | ||||||||
Additions to reserve | 1,228 | 512 | 2,461 | 1,479 | ||||||||||||
Charges against reserve (a) | (1,228 | ) | (512 | ) | (2,461 | ) | (1,479 | ) | ||||||||
Ending balance | $ | 1,955 | $ | 1,957 | $ | 1,955 | $ | 1,957 | ||||||||
(a)Included in these amounts are payroll segment losses of $13,000 and $29,000, respectively, for the three months ended September 30, 2013 and 2012, and $88,000 and $77,000, respectively, for the nine months ended September 30, 2013 and 2012. |
Accrued_Buyout_Liability_Table
Accrued Buyout Liability (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Accrued Buyout Liability [Abstract] | ' | |||||||||||||||
Summary of Accrued Buyout Liability | ' | |||||||||||||||
A summary of the accrued buyout liability was as follows as of September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2013 | 2012 | |||||||||||||||
(In thousands) | ||||||||||||||||
Vested Relationship Managers and sales managers | $ | 35,655 | $ | 33,926 | ||||||||||||
Unvested Relationship Managers and sales managers | 1,207 | 1,484 | ||||||||||||||
Total accrued buyout liability | 36,862 | 35,410 | ||||||||||||||
Less current portion | (13,667 | ) | (10,478 | ) | ||||||||||||
Long-term portion of accrued buyout liability | $ | 23,195 | $ | 24,932 | ||||||||||||
Summary of Activity in Accrued Buyout Liability | ' | |||||||||||||||
A summary of the activity in the accrued buyout liability for the three and nine months ended September 30, 2013 and 2012 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 33,319 | $ | 33,450 | $ | 35,410 | $ | 31,658 | ||||||||
Increase in settlement obligation, net | 4,935 | 3,889 | 13,294 | 12,336 | ||||||||||||
Buyouts | (1,392 | ) | (2,746 | ) | (11,842 | ) | (9,401 | ) | ||||||||
Ending balance | $ | 36,862 | $ | 34,593 | $ | 36,862 | $ | 34,593 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | ' | ||||||||||||||||||||
enses. | |||||||||||||||||||||
Future minimum lease payments for all non-cancelable leases as of September 30, 2013 were as follows: | |||||||||||||||||||||
For the Twelve Months Ending September 30, | Operating Leases (a) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
2014 | $ | 10,813 | |||||||||||||||||||
2015 | 7,854 | ||||||||||||||||||||
2016 | 5,776 | ||||||||||||||||||||
2017 | 3,334 | ||||||||||||||||||||
2018 | 3,300 | ||||||||||||||||||||
Thereafter | 8,272 | ||||||||||||||||||||
Total future minimum lease payments | $ | 39,349 | |||||||||||||||||||
(a) There were no material capital leases at September 30, 2013 | |||||||||||||||||||||
Rent expens | |||||||||||||||||||||
Schedule Of Contractual Obligations | ' | ||||||||||||||||||||
The following table reflects the Company’s other significant contractual obligations, including leases from above, as of September 30, 2013: | |||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||
Contractual Obligations | Total | Less than | 1 to 3 | 3 to 5 | More | ||||||||||||||||
1 year | Years | years | than 5 | ||||||||||||||||||
years | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Processing providers (a) | $ | 14,800 | $ | 7,071 | $ | 7,729 | $ | — | $ | — | |||||||||||
Telecommunications providers | 15,534 | 5,287 | 6,751 | 3,496 | — | ||||||||||||||||
Facility and equipment leases | 39,349 | 10,813 | 13,630 | 6,634 | 8,272 | ||||||||||||||||
Term Credit Facility (b) | 55,000 | 20,000 | 35,000 | — | — | ||||||||||||||||
$ | 124,683 | $ | 43,171 | $ | 63,110 | $ | 10,130 | $ | 8,272 | ||||||||||||
(a) | The Company has agreements with several third-party processors to provide to us on a non-exclusive basis payment processing and transmittal, transaction authorization and data capture services, and access to various reporting tools. The Company's agreements with third-party processors require it to submit a minimum monthly number of transactions or volume for processing. If the Company submits a number of transactions or volume that is lower than the minimum, it is required to pay the third-party processors the fees that they would have received if the Company had submitted the required minimum number or volume of transactions. | ||||||||||||||||||||
(b) | Interest rates on the Term Credit Facility are variable in nature; however, in January 2011 the Company entered into fixed-pay amortizing interest rate swaps having a remaining notional amount of $27.5 million. If interest rates were to remain at the September 30, 2013 level, the Company would make interest payments of $1.6 million in the next 1 year and $0.8 million in the next 1 to 3 years or a total of $2.4 million including net settlements on the fixed-pay amortizing interest rate swaps. In addition, the Company had $91.0 million borrowings outstanding under our Prior Revolving Credit Facility at September 30, 2013. |
Segments_Tables
Segments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||||||
A summary of the Company’s segments for the three and nine months ended September 30, 2013 and 2012 was as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | (In thousands) | ||||||||||||||||
Card | $ | 521,601 | $ | 505,031 | $ | 1,491,623 | $ | 1,446,155 | |||||||||
Payroll | 10,578 | 5,130 | 33,651 | 16,499 | |||||||||||||
Heartland School Solutions | 12,150 | 12,116 | 36,628 | 25,109 | |||||||||||||
Campus Solutions | 7,753 | 1,970 | 27,049 | 5,369 | |||||||||||||
Other | 5,105 | 6,507 | 16,102 | 20,559 | |||||||||||||
Reconciling Items | (58 | ) | (77 | ) | (61 | ) | (220 | ) | |||||||||
Total revenues | $ | 557,129 | $ | 530,677 | $ | 1,604,992 | $ | 1,513,471 | |||||||||
Depreciation and amortization | |||||||||||||||||
Card | $ | 6,918 | $ | 4,299 | $ | 20,015 | $ | 16,067 | |||||||||
Payroll | 959 | 305 | 2,634 | 836 | |||||||||||||
Heartland School Solutions | 785 | 674 | 1,854 | 1,878 | |||||||||||||
Campus Solutions | 674 | 83 | 1,696 | 248 | |||||||||||||
Other | 433 | 387 | 1,259 | 1,148 | |||||||||||||
Unallocated corporate administration amounts | 35 | 78 | (1,421 | ) | 189 | ||||||||||||
Total depreciation and amortization | $ | 9,804 | $ | 5,826 | $ | 26,037 | $ | 20,366 | |||||||||
Interest Income | |||||||||||||||||
Card | $ | 28 | $ | 31 | $ | 92 | $ | 169 | |||||||||
Campus Solutions | 1 | — | 3 | — | |||||||||||||
Total interest income | $ | 29 | $ | 31 | $ | 95 | $ | 169 | |||||||||
Interest Expense | |||||||||||||||||
Card | $ | 1,242 | $ | 1,014 | $ | 3,744 | $ | 2,759 | |||||||||
Campus Solutions | — | 1 | — | 5 | |||||||||||||
Other | 1 | — | 5 | — | |||||||||||||
Reconciling | — | (77 | ) | (3 | ) | (220 | ) | ||||||||||
Total interest expense | $ | 1,243 | $ | 938 | $ | 3,746 | $ | 2,544 | |||||||||
Net income from continuing operations | |||||||||||||||||
Card | $ | 20,279 | $ | 22,527 | $ | 57,824 | $ | 57,660 | |||||||||
Payroll | 357 | 279 | 1,904 | 1,393 | |||||||||||||
Heartland School Solutions | 1,775 | 1,165 | 6,650 | 3,344 | |||||||||||||
Campus Solutions | 544 | 14 | 2,069 | (177 | ) | ||||||||||||
Other | 200 | (71 | ) | (45 | ) | 737 | |||||||||||
Unallocated corporate administration amounts | (1,264 | ) | (4,971 | ) | (11,185 | ) | (13,088 | ) | |||||||||
Total net income from continuing operations | $ | 21,891 | $ | 18,943 | $ | 57,217 | $ | 49,869 | |||||||||
Assets | 30-Sep-13 | September 30, 2012 | |||||||||||||||
Card | $ | 540,098 | $ | 463,366 | |||||||||||||
Payroll | 149,008 | 48,342 | |||||||||||||||
Heartland School Solutions | 81,547 | 78,634 | |||||||||||||||
Campus Solutions | 72,197 | 8,115 | |||||||||||||||
Other | 16,363 | 18,071 | |||||||||||||||
Total assets | $ | 859,213 | $ | 616,528 | |||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | ||||||||||||||||
The following is a reconciliation of the amounts used to calculate basic and diluted earnings per share: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands, except per share) | |||||||||||||||||
Numerator: | |||||||||||||||||
Income from continuing operations attributable to Heartland | $ | 21,981 | $ | 18,943 | $ | 57,307 | $ | 49,869 | |||||||||
Income from discontinued operations attributable to Heartland | — | 437 | 3,914 | 1,066 | |||||||||||||
Net income attributable to Heartland | $ | 21,981 | $ | 19,380 | $ | 61,221 | $ | 50,935 | |||||||||
Denominator: | |||||||||||||||||
Basic weighted average shares outstanding | 36,857 | 38,813 | 36,752 | 38,831 | |||||||||||||
Effect of dilutive instruments: | |||||||||||||||||
Stock options and restricted stock units | 1,163 | 1,539 | 1,327 | 1,623 | |||||||||||||
Diluted weighted average shares outstanding | 38,020 | 40,352 | 38,079 | 40,454 | |||||||||||||
Basic earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.6 | $ | 0.49 | $ | 1.56 | $ | 1.28 | |||||||||
Income from discontinued operations | — | 0.01 | 0.11 | 0.03 | |||||||||||||
Basic earnings per share | $ | 0.6 | $ | 0.5 | $ | 1.67 | $ | 1.31 | |||||||||
Diluted earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.58 | $ | 0.47 | $ | 1.5 | $ | 1.23 | |||||||||
Income from discontinued operations | — | 0.01 | 0.1 | 0.03 | |||||||||||||
Diluted earnings per share | $ | 0.58 | $ | 0.48 | $ | 1.6 | $ | 1.26 | |||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ' | |||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | |||||||||||||||
The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2013 and at December 31, 2012: | ||||||||||||||||
September 30, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Fixed income bond fund (a) | $ | 1,221 | $ | 1,221 | $ | — | $ | — | ||||||||
Total assets | $ | 1,221 | $ | 1,221 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 494 | $ | — | $ | 494 | $ | — | ||||||||
Total liabilities | $ | 494 | $ | — | $ | 494 | $ | — | ||||||||
December 31, 2012 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Fixed income bond fund (a) | $ | 1,212 | $ | 1,212 | $ | — | $ | — | ||||||||
Total assets | $ | 1,212 | $ | 1,212 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 817 | $ | — | $ | 817 | $ | — | ||||||||
Total liabilities | $ | 817 | $ | — | $ | 817 | $ | — | ||||||||
(a) amounts included in Funds held for customers on the Consolidated Balance Sheet | ||||||||||||||||
The following tables provide the assets and liabilities carried at fair value measured on a non-recurring basis as of September 30, 2013 and December 31, 2012: | ||||||||||||||||
September 30, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 585 | $ | — | $ | 585 | $ | — | ||||||||
Other investments, at cost | 4,065 | — | 65 | 4,000 | ||||||||||||
Total assets | $ | 4,650 | $ | — | $ | 650 | $ | 4,000 | ||||||||
Liabilities: | ||||||||||||||||
Term Credit Facility | $ | 55,000 | $ | — | $ | 55,000 | $ | — | ||||||||
Prior Revolving Credit Facility | 91,000 | — | 91,000 | — | ||||||||||||
Total liabilities | $ | 146,000 | $ | — | $ | 146,000 | $ | — | ||||||||
December 31, 2012 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 1,199 | $ | — | $ | 1,199 | $ | — | ||||||||
Total assets | $ | 1,199 | $ | — | $ | 1,199 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Term Credit Facility | $ | 70,000 | $ | — | $ | 70,000 | $ | — | ||||||||
Prior Revolving Credit Facility | 82,000 | — | 82,000 | — | ||||||||||||
Total liabilities | $ | 152,000 | $ | — | $ | 152,000 | $ | — | ||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands) | |||||||||||||||||
Revenues | $ | — | $ | 3,475 | $ | 1,117 | $ | 9,687 | |||||||||
Expenses | — | 2,636 | 870 | 7,656 | |||||||||||||
Income from operations | — | 839 | 247 | 2,031 | |||||||||||||
Income from discontinued operations, net of income tax of | — | 624 | 184 | 1,512 | |||||||||||||
$—, $229, $68, and $555 | |||||||||||||||||
Gain on sale of discontinued operations, net of income tax of $2,067 | — | — | 3,786 | — | |||||||||||||
Net income from discontinued operations attributable to noncontrolling interests | — | 187 | 56 | 446 | |||||||||||||
Net income from discontinued operations attributable to Heartland | — | 437 | 3,914 | 1,066 | |||||||||||||
Organization_and_Operations_Ba
Organization and Operations (Bankcard Processing Volume) (Details) (USD $) | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 11, 2013 | |
Bank_Sponsorship_Agreements | Wells Fargo Bank [Member] | The Bancorp Bank [Member] | Barclays Bank Delaware [Member] | Visa And MasterCard [Member] | Visa And MasterCard [Member] | Visa And MasterCard [Member] | Visa And MasterCard [Member] | Merchant Bankcard Processing [Member] | CPOS [Member] | Leaf Acquisition, LLC [Member] | |||
Wells Fargo Bank [Member] | The Bancorp Bank [Member] | Barclays Bank Delaware [Member] | Heartland Bank [Member] | Visa And MasterCard [Member] | |||||||||
Bankcard Processing Volume [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working Capital | $85,200,000 | ' | $85,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for Repurchase of Common Stock | $39,632,000 | $48,202,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Organization and Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Parent's ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70.00% | 66.67% |
Sales revenue, minimum percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 72.00% | ' | ' |
Days to Identify Alternative Bank Sponsor Following Terminated Agreement | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of bank sponsorship agreements | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Automatic Renewal Period, Sponsor Bank Agreement | ' | ' | ' | '3 years | '1 year | '1 year | ' | ' | ' | ' | ' | ' | ' |
Written Notice of Non-renewal | ' | ' | ' | '6 months | '6 months | '6 months | ' | ' | ' | ' | ' | ' | ' |
Sponsor banks, bankcard processing volume percentage | ' | ' | ' | ' | ' | ' | 64.00% | 17.00% | 13.00% | 6.00% | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 21, 2011 | Jul. 27, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2010 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | |||||||
Funding advances [Member] | Funding advances [Member] | Two Year Period Ending December 31 2013 [Member] | Two Year Period Ending December 31 2013 [Member] | Cash held for payroll customers [Member] | October 21, 2011 Program [Member] | July 27, 2012 Program [Member] | Available-for-sale securities [Member] | Available-for-sale securities [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Accrued Liabilities and Other Liabilities [Member] | Accrued Liabilities and Other Liabilities [Member] | 4th Quarter 2010 [Member] | 4th Quarter 2010 [Member] | 4th Quarter 2012 [Member] | 4th Quarter 2012 [Member] | 4th Quarter 2011 [Member] | 4th Quarter 2011 [Member] | Leaf Acquisition, LLC [Member] | Disposal Groups, Including Discontinued Operations, Name [Domain] | ||||||||||||||
Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Restricted Stock Units Performance Based [Member] | Restricted Stock Units Performance Based [Member] | Restricted Stock Units Performance Based [Member] | Restricted Stock Units Performance Based [Member] | Restricted Stock Units Performance Based [Member] | Restricted Stock Units Performance Based [Member] | |||||||||||||||||||||||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Other Income related to Sale of merchant Contracts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,000 | ||||||
Noncontrolling interests in subsidiary acquired | ' | ' | ' | 6,798,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,700,000 | ' | ||||||
Unfavorable Processing Contract | 4,100,000 | ' | ' | 4,100,000 | ' | 7,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Cash Used To Fund Merchant Advances | 2,400,000 | ' | ' | 2,400,000 | ' | 3,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Processing-related cash in transit and collateral | 39,700,000 | ' | ' | 39,700,000 | ' | 31,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Due to sponsor banks | 42,633,000 | ' | ' | 42,633,000 | ' | 37,586,000 | ' | 41,700,000 | 36,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Funds held for payroll customers | 111,895,000 | ' | ' | 111,895,000 | ' | 131,405,000 | ' | ' | ' | ' | ' | 110,700,000 | ' | ' | 1,221,000 | 1,212,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Estimated vesting percentage, Relationship Managers and sales managers | 31.00% | ' | ' | 31.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Other income (expense) | 103,000 | -921,000 | ' | 182,000 | -925,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Reserve for unrecognized tax benefits | 4,267,000 | ' | ' | 4,267,000 | ' | 3,069,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Unrecognized tax benefits that would impact effective tax rate | 2,800,000 | ' | ' | 2,800,000 | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Number of performance-based Restricted Share Units authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 508,800 | [1] | ' | 72,004 | [2] | ' | 164,808 | [3] | ' | ' | |||
Restricted share units, vesting percent rate in 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | [1] | ' | ' | ' | 50.00% | [3] | ' | ' | ' | ||||
Restricted share units, vesting percent rate in 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | [1] | ' | 50.00% | [2] | ' | 50.00% | [3] | ' | ' | ' | |||
Restricted share units, vesting percent rate in 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | [2] | ' | ' | ' | ' | ' | |||||
Compound annual growth rate, diluted earnings per share, target | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Compound annual growth rate, increase over target | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Restricted share units, increase for exceeding CAGR target | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.09% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Restricted share units, maximum number of shares authorized to award | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Compound annual growth rate, decrease below target | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Restricted share units, decrease for falling below CAGR target | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.13% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Compound annual growth rate, percentage of target required to award shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Restricted share units, awards if CAGR target missed by 80% or more | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stock repurchase program, authorized purchase amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stock repurchase program, remaining authorized repurchase amount | ' | ' | ' | 64,593,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Notional amount of interest rate derivatives | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Cumulative foreign currency translation gain (loss) | ' | -100,000 | ' | ' | -100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stockholders' equity attributable to noncontrolling interest | 6,708,000 | ' | ' | 6,708,000 | ' | 1,375,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Invoicing terms | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Amortization of capitalized customer acquisition costs, period | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Deferred Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,000,000 | 13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Buy out of Relationship Managers and sales managers commissions, fixed multiple period | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Determination of Accrued Buyout Liability, Gross Margin for Prior Period | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
New SME merchant accrued buyout liability | 0 | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Period accrued buyout liability increases for new SME merchants | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Diluted earnings per share compound annual growth rate, period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Other investments, at cost | 4,065,000 | ' | ' | 4,065,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,221,000 | 1,212,000 | 1,221,000 | 1,212,000 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Amortization of Unfavorable Contract Intangible | ' | ' | ' | 1,500,000 | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Unfavorable Processing Contract, Fair Value Adjustment | ' | ' | ' | $1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Share-based Payment Award, Equity Instrument Other Than Options, Vesting Rate In Current Year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | [1] | ' | ' | ' | ' | ' | ' | ' | |||||
Classification of Current Accrued Buyout Liability, Period | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
[1] | 50% vested since the 2012 diluted earnings per share target was achieved. The remaining Restricted Share Units would vest only if, over the term, the following pro forma diluted earnings per share targets for the years ended December 31, 2013, and 2014 are achieved: 20132014 Diluted Earnings Per Share $1.74$2.04Management believes that achieving the performance targets is probable to occur and has recorded share-based compensation expense on these Restricted Share Units. | |||||||||||||||||||||||||||||||||||||
[2] | These Restricted Share Units would vest only if the Company achieves a pro forma diluted earnings per share CAGR of fifteen percent (15%) for the two-year period ending December 31, 2014. For each 1% that the CAGR actually achieved for the two year period ending on December 31, 2014 is above the 15% target, the number of shares underlying the Restricted Share Units awarded would be increased by 2.08%; provided, however, that the maximum increase in the number of shares that may be awarded is 125%. Likewise, for each 1% that the CAGR actually achieved for the two-year period ending on December 31, 2014 is below the 15% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.31%. If the target CAGR is missed by 67% or more, then the number of shares awarded is zero. The Company has recorded expense on these Restricted Share Units based on achieving the 15% target. Pro forma diluted earnings per share for (a), (b) and (c) performance targets will be calculated excluding non-operating gains and losses, if any, and excluding the after-tax impact of share-based compensation expense. The closing price of the Company's common stock on the grant date equals the grant date fair value of these nonvested Restricted Share Units awards and will be recognized as compensation expense over their vesting periods. | |||||||||||||||||||||||||||||||||||||
[3] | These Restricted Share Units would vest only if the Company achieves a pro forma diluted earnings per share compound annual growth rate ("CAGR") of seventeen percent (17%) for the two-year period ending December 31, 2013. For each 1% that the CAGR actually achieved by the Company for the two-year period ending on December 31, 2013 is above the 17% target, the number of shares underlying the Restricted Share Units awarded would be increased by 3.09%; provided, however, that the maximum increase in the number of shares that may be awarded is 100%. Likewise, for each 1% that the CAGR actually achieved by the Company for the two-year period ending on December 31, 2013 is below the 17% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.13%. If the target CAGR is missed by 80% or more, then the number of shares awarded is zero. Management determined that achieving a CAGR for the two-year period ending December 31, 2013 which would result in earning the maximum 100% increase in the number of shares that may be awarded was probable to occur, and has recorded share-based compensation expense for these Restricted Share Units based on this expectation. |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Effective Income Tax Rate) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accounting Policies [Abstract] | ' | ' | ' | ' |
Provision for income taxes | $11,857 | $11,745 | $34,039 | $30,893 |
Effective tax rate | 35.14% | 38.30% | 37.30% | 38.30% |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Diluted Earnings Per Share) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | |
Goodwill [Line Items] | ' | ' | ' |
Restricted Share Units, Awards if CAGR Target Missed by 67% or More | 0 | ' | ' |
Restricted share units, awards if CAGR target missed by 80% or more | ' | 0 | ' |
Diluted earnings per share, restricted units, benchmark one year | ' | ' | $1.74 |
Diluted earnings per share, restricted units, benchmark year two | ' | ' | $2.04 |
Two Year Period Ending December 31 2013 [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Compound annual growth rate, diluted earnings per share, target | ' | 17.00% | ' |
Diluted earnings per share compound annual growth rate, period | ' | ' | '2 years |
Compound annual growth rate, increase over target | ' | 1.00% | ' |
Restricted share units, increase for exceeding CAGR target | ' | 3.09% | ' |
Restricted share units, maximum number of shares authorized to award | ' | 100.00% | ' |
Compound annual growth rate, decrease below target | ' | 1.00% | ' |
Restricted share units, decrease for falling below CAGR target | ' | 1.13% | ' |
Compound annual growth rate, percentage of target required to award shares | ' | 80.00% | ' |
Two Year Period Ending December 31 2014 [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Compound annual growth rate, diluted earnings per share, target | 15.00% | ' | ' |
Diluted earnings per share compound annual growth rate, period | ' | ' | '2 years |
Compound annual growth rate, increase over target | 1.00% | ' | ' |
Restricted share units, increase for exceeding CAGR target | 2.08% | ' | ' |
Restricted share units, maximum number of shares authorized to award | 125.00% | ' | ' |
Compound annual growth rate, decrease below target | 1.00% | ' | ' |
Restricted share units, decrease for falling below CAGR target | 1.31% | ' | ' |
Compound annual growth rate, percentage of target required to award shares | 67.00% | ' | ' |
Relative Total Shareholder Return Restricted Share Units (TSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 72,345 | ' | ' |
Number of Peers | 86 | ' | ' |
Common Stock, Average Closing Price, Term | ' | ' | '30 days |
Share-based Compensation Arrangement by Share-based Payment Award, Shareholder Return, Peer Group Percentile | ' | ' | 65 |
Minimum [Member] | Relative Total Shareholder Return Restricted Share Units (TSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Percentage | 0.00% | ' | ' |
Maximum [Member] | Relative Total Shareholder Return Restricted Share Units (TSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Percentage | 225.00% | ' | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Stock Repurchases (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 21, 2011 | Jul. 27, 2013 | Nov. 03, 2012 | 8-May-13 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
October 21, 2011 Program [Member] | July 27, 2012 Program [Member] | November 2, 2012 Program [Member] | May 8, 2013 Program [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||
October 21, 2011 Program [Member] | October 21, 2011 Program [Member] | July 27, 2012 Program [Member] | July 27, 2012 Program [Member] | November 2, 2012 Program [Member] | November 2, 2012 Program [Member] | May 8, 2013 Program [Member] | ||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchased during period, shares | ' | ' | ' | ' | ' | ' | 1,250,083 | 1,674,423 | 3,634,044 | 1,157,440 | 1,157,440 | 516,983 | 1,760,804 | 952,183 | 715,800 | 297,900 |
Payments for Repurchase of Common Stock | $39,632 | $48,202 | ' | ' | ' | ' | $40,220 | $49,216 | $103,359 | $33,172 | $33,172 | $16,044 | $50,000 | $29,813 | $20,187 | $10,407 |
Stock repurchase program, authorized purchase amount | ' | ' | 50,000 | 50,000 | 50,000 | 75,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury stock acquired, average cost per share | ' | ' | ' | ' | ' | ' | $32.17 | $29.39 | $28.44 | $28.66 | $28.66 | $31.03 | $28.40 | $31.31 | $28.20 | $34.93 |
Stock repurchase program, remaining authorized repurchase amount | $64,593 | ' | ' | ' | ' | ' | $64,593 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Derivative Instruments (Details) (USD $) | Jan. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | ||||
Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | ||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Notional amount of interest rate derivatives | $50,000,000 | $27,500,000 | $35,000,000 | ' | ' | ' | ' |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | ' | ' | ' | 494,000 | 817,000 | 494,000 | 817,000 |
Interest rate swap liabilities, at fair value | ' | ' | ' | ' | ' | 494,000 | 817,000 |
Deferred Tax Assets, Derivative Instruments | ' | $192,000 | $313,000 | ' | ' | ' | ' |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Sep. 11, 2013 | Jun. 29, 2012 | Dec. 14, 2012 | Dec. 31, 2012 | Dec. 14, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Dec. 14, 2012 |
Leaf Acquisition, LLC [Member] | Lunch Byte Systems | Educational Computer Systems, Inc. [Member] | Ovation Payroll, Inc. [Member] | Minimum [Member] | Minimum [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | |||||
State | Educational Computer Systems, Inc. [Member] | Ovation Payroll, Inc. [Member] | Minimum [Member] | ||||||||||||
Colleges_and_Universities | Client | Colleges_and_Universities | |||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Parent's ownership percentage | ' | ' | ' | ' | 66.67% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of acquired entity, cash payment | ' | ' | ' | ' | $14,500,000 | $26,000,000 | $37,600,000 | $44,200,000 | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 191,172,000 | 168,062,000 | 106,451,000 | 94,255,000 | 20,600,000 | ' | ' | ' | ' | ' | 35,646,000 | 33,679,000 | 3,321,000 | 3,321,000 | ' |
Intangible assets acquired | ' | ' | ' | ' | -6,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling interest resulting from acquisiiton of less than 100 percent of enetity | ' | ' | ' | ' | 6,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Purchase Price Allocation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | ' | ' | ' | ' | ' | 16,100,000 | 32,300,000 | 31,300,000 | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | 6,900,000 | 7,000,000 | 10,500,000 | 6,600,000 | ' | ' | ' | ' | ' | ' | ' |
Number of colleges and universities | ' | ' | ' | ' | ' | ' | ' | ' | 1,800 | ' | ' | ' | ' | ' | 2,000 |
Number of clients | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' |
Number of states in which Company operates | ' | ' | ' | ' | ' | ' | ' | 48 | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Purchase Price Allocation, Net Tangible Assets | ' | ' | ' | ' | ' | $2,900,000 | ($5,200,000) | $6,300,000 | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_Acquisitions_Weig
Acquisitions Acquisitions (Weighted Average Amortization Lives) (Details) | 2 Months Ended | 0 Months Ended | |||||||||||||
Nov. 12, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Jun. 29, 2012 | Jun. 29, 2012 | Jun. 29, 2012 | Jun. 29, 2012 | Dec. 14, 2012 | Dec. 14, 2012 | Dec. 14, 2012 | Dec. 14, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
Leaf Acquisition, LLC [Member] | Leaf Acquisition, LLC [Member] | Leaf Acquisition, LLC [Member] | Lunch Byte Systems [Member] | Lunch Byte Systems [Member] | Lunch Byte Systems [Member] | Lunch Byte Systems [Member] | Educational Computer Systems, Inc. [Member] | Educational Computer Systems, Inc. [Member] | Educational Computer Systems, Inc. [Member] | Educational Computer Systems, Inc. [Member] | Ovation Payroll, Inc. [Member] | Ovation Payroll, Inc. [Member] | Ovation Payroll, Inc. [Member] | Ovation Payroll, Inc. [Member] | |
Software | Patents | Customer relationships | Software | Non-compete agreements | Customer relationships | Software | Non-compete agreements | Customer relationships | Software | Non-compete agreements | |||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-lived intangible assets, weighted-average useful life | '6 years 10 months 24 days | '7 years | '5 years | '5 years 10 months 28 days | '6 years | '3 years 3 months 19 days | '5 years | '9 years 2 months 13 days | '12 years | '5 years | '5 years | '5 years 10 months 23 days | '6 years 8 months 15 days | '1 year 6 months 2 days | '5 years |
Receivables_Schedule_of_Accoun
Receivables (Schedule of Accounts, Notes, Loans and Financing Receivable) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | $196,645,000 | $181,886,000 |
Less allowance for doubtful accounts | -967,000 | -1,438,000 |
Receivables, Net, Current | 195,678,000 | 180,448,000 |
Due from employees | 1,000,000 | 400,000 |
Accounts receivable from merchants [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | 170,879,000 | 160,702,000 |
Receivables from bankcard networks [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | 23,548,000 | 19,588,000 |
Accounts receivable from others [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | $2,218,000 | $1,596,000 |
Receivables_Summary_of_Allowan
Receivables (Summary of Allowance for Doubtful Accounts Receivables) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | ' |
Additions to allowance | ' | ' | ($1,000) | $793,000 |
Allowance for Doubtful Accounts [Member] | ' | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | ' |
Beginning balance | 915,000 | 1,395,000 | 1,438,000 | 1,407,000 |
Additions to allowance | 186,000 | 318,000 | -16,000 | 628,000 |
Charges against allowance | -134,000 | -176,000 | -455,000 | -498,000 |
Ending balance | $967,000 | $1,537,000 | $967,000 | $1,537,000 |
Funds_Held_for_Payroll_Custome2
Funds Held for Payroll Customers and Investments (Funds Held for Payroll Customers and Investments) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Investment Holdings [Line Items] | ' | ' |
Certificates of Deposit, Term, Minimum | '1 month | ' |
Certificates of Deposit, Term, Maximum | '11 months | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | $111,642 | $131,161 |
Gross Unrealized Gains | 253 | 244 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 111,895 | 131,405 |
Investments: | ' | ' |
Cost | 585 | 1,199 |
Estimated Fair Value | 585 | 1,199 |
Available-for-sale Securities, Current | 4,065 | ' |
Other investments, at cost | 4,065 | ' |
Investments | 4,650 | 1,199 |
Investments, Fair Value Disclosure | 4,650 | 1,199 |
Equity Securities [Member] | ' | ' |
Investments: | ' | ' |
Available-for-sale Securities, Current | 4,000 | ' |
Fixed income bond fund | Available-for-sale securities [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 968 | 968 |
Gross Unrealized Gains | 253 | 244 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 1,221 | 1,212 |
Cash held for payroll customers [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Gross Unrealized Gains | ' | 0 |
Gross Unrealized Losses | ' | 0 |
Estimated Fair Value | 110,700 | ' |
Cash held for payroll Customers [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 94,391 | 110,334 |
Estimated Fair Value | 94,391 | 110,334 |
Cash Held for ECSI Customers [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 16,283 | 19,859 |
Estimated Fair Value | $16,283 | $19,859 |
Funds_Held_for_Payroll_Custome3
Funds Held for Payroll Customers and Investments (Investment Maturities) (Details) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Amortized Cost [Abstract] | ' |
Marketable securities maturities within one year, amortized cost | $5,618 |
Marketable securities maturities, after one through five years, amortized cost | 0 |
Marketable securities, amortized cost | 5,618 |
Estimated Fair Value | ' |
Marketable securities maturities within one year, fair value | 5,871 |
Marketable securities maturities, after one through five years, fair value | 0 |
Marketable securities, fair value | $5,871 |
Capitalized_Customer_Acquisiti2
Capitalized Customer Acquisition Costs, Net (Capitalized Customer Acquisition Costs Net) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2011 | |
Capitalized Customer Acquisition Costs, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Signing bonus adjustments from estimated amounts to actual | ($1,000,000) | ($900,000) | ($2,900,000) | ($2,300,000) | ' | ' | ' | ' |
Capitalized signing bonuses | 85,127,000 | ' | 85,127,000 | ' | ' | 84,728,000 | ' | ' |
Less accumulated amortization | -44,541,000 | ' | -44,541,000 | ' | ' | -42,941,000 | ' | ' |
Capitalized signing bonuses, net | 40,586,000 | ' | 40,586,000 | ' | ' | 41,787,000 | ' | ' |
Capitalized customer deferred acquisition costs | 43,524,000 | ' | 43,524,000 | ' | ' | 37,736,000 | ' | ' |
Less accumulated amortization | -26,399,000 | ' | -26,399,000 | ' | ' | -23,098,000 | ' | ' |
Capitalized customer deferred acquisition costs, net | 17,125,000 | ' | 17,125,000 | ' | ' | 14,638,000 | ' | ' |
Capitalized customer acquisition costs, net | $57,711,000 | $56,450,000 | $57,711,000 | $56,450,000 | $56,148,000 | $56,425,000 | $56,223,000 | $55,014,000 |
Capitalized_Customer_Acquisiti3
Capitalized Customer Acquisition Costs, Net (Capitalized Customer Acquisition Activity) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Capitalized Customer Acquisition Costs, Net [Roll Forward] | ' | ' | ' | ' |
Balance at beginning of period | $56,148,000 | $56,223,000 | $56,425,000 | $55,014,000 |
Capitalized signing bonuses, net | 7,466,000 | 6,985,000 | 19,546,000 | 22,446,000 |
Capitalized customer deferred acquisition costs | 5,555,000 | 4,491,000 | 15,676,000 | 12,748,000 |
Capitalized customer acquisition costs, additions | 13,021,000 | 11,476,000 | 35,222,000 | 35,194,000 |
Capitalized signing bonuses, net | -6,852,000 | -7,364,000 | -20,747,000 | -22,017,000 |
Capitalized customer deferred acquisition costs | -4,606,000 | -3,885,000 | -13,189,000 | -11,741,000 |
Capitalized customer acquisition costs, amortization expense | -11,458,000 | -11,249,000 | -33,936,000 | -33,758,000 |
Balance at end of period | 57,711,000 | 56,450,000 | 57,711,000 | 56,450,000 |
Signing bonus adjustments from estimated amounts to actual | -1,000,000 | -900,000 | -2,900,000 | -2,300,000 |
Write-off of fully amortized signing bonuses | 6,400,000 | 7,700,000 | 19,100,000 | 24,200,000 |
Write-off of fully amortized customer deferred acquisition costs | $3,300,000 | $4,200,000 | ($9,900,000) | $12,200,000 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill (Schedule of Finite-Lived Intangible Assets by Major Class) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Customer relationships | Customer relationships | Merchant portfolio | Merchant portfolio | Software | Software | Non-compete agreements | Non-compete agreements | Other | Other | Merchant bankcard processing portfolio | Merchant bankcard processing portfolio | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | ||||||
Customer relationships | Customer relationships | Software | Software | Non-compete agreements | Non-compete agreements | Other | Other | Customer relationships | Customer relationships | Software | Software | Non-compete agreements | Non-compete agreements | Other | Other | ||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired Finite-lived Intangible Asset, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Assets | 79,532,000 | ' | 79,532,000 | ' | 74,295,000 | 49,814,000 | 52,125,000 | 4,095,000 | 3,345,000 | 20,750,000 | 14,150,000 | 4,488,000 | 4,590,000 | 385,000 | 85,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated Amortization | 27,385,000 | ' | 27,385,000 | ' | 20,701,000 | 12,715,000 | 8,318,000 | 2,614,000 | 2,316,000 | 10,348,000 | 9,016,000 | 1,675,000 | 1,030,000 | 33,000 | 21,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 52,147,000 | ' | 52,147,000 | ' | 53,594,000 | 37,099,000 | 43,807,000 | 1,481,000 | 1,029,000 | 10,402,000 | 5,134,000 | 2,813,000 | 3,560,000 | 352,000 | 64,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization life and method, useful life, minimum (in years) | ' | ' | ' | ' | ' | ' | ' | '7 years | '7 years | ' | ' | ' | ' | ' | ' | '83 months | ' | '3 years | '3 years | '1 year | '2 years | '3 years | '3 years | '2 years | '2 years | '18 years | '18 years | '7 years | '5 years | '5 years | '5 years | '9 years | '9 years |
Finite-Lived intangible assets, amortization expense | $2,200,000 | $1,500,000 | $6,700,000 | $3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible_Assets_and_Goodwill3
Intangible Assets and Goodwill (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ' | ' |
2013 | $8,741 | ' |
2014 | 8,080 | ' |
2015 | 7,228 | ' |
2016 | 5,976 | ' |
2017 | 4,688 | ' |
Thereafter | 17,434 | ' |
Total | $52,147 | $53,594 |
Intangible_Assets_and_Goodwill4
Intangible Assets and Goodwill (Schedule of Goodwill) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | $168,062 | $94,255 |
Goodwill acquired during the period | 20,619 | 15,231 |
Other | 2,491 | -3,035 |
Ending balance | 191,172 | 106,451 |
Card Segment [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 11.90% | 9.40% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 43,701 | 43,701 |
Goodwill acquired during the period | 20,619 | 0 |
Other | 0 | 0 |
Ending balance | 64,320 | 43,701 |
Payroll Segment [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 21.00% | 0.00% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 30,831 | 0 |
Goodwill acquired during the period | 0 | 0 |
Other | 524 | 0 |
Ending balance | 31,355 | 0 |
Heartland School Solutions [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 65.40% | 67.30% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 53,350 | 40,732 |
Goodwill acquired during the period | 0 | 15,231 |
Other | 0 | -3,035 |
Ending balance | 53,350 | 52,928 |
Campus Solutions Segment [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 49.40% | 40.90% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 33,679 | 3,321 |
Goodwill acquired during the period | 0 | 0 |
Other | 1,967 | 0 |
Ending balance | 35,646 | 3,321 |
All Other Segments [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 39.70% | 36.00% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 6,501 | 6,501 |
Goodwill acquired during the period | 0 | 0 |
Other | 0 | 0 |
Ending balance | $6,501 | $6,501 |
Processing_Liabilities_and_Los2
Processing Liabilities and Loss Reserves (Details) (USD $) | 4 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing liabilities and loss reserves | $108,144,000 | $95,273,000 | $108,144,000 | ' |
Chargebacks, card brand networks, period | ' | ' | '4 months | ' |
Bank chargebacks | 11,900,000 | 11,800,000 | ' | ' |
Merchant credit losses | ' | ' | ' | 1,400,000 |
Merchant bankcard processing portfolio | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Letter of Credit Held to Offset Potential Processing Liabilities | 10,000 | 100,000 | 10,000 | ' |
Processing liabilities and loss reserves | 99,383,000 | 86,882,000 | 99,383,000 | ' |
Merchant deposits | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing liabilities and loss reserves | 6,806,000 | 6,436,000 | 6,806,000 | ' |
Loss reserves | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing liabilities and loss reserves | 1,955,000 | 1,955,000 | 1,955,000 | ' |
SME [Member] | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing volume | 26,000,000,000 | 23,500,000,000 | 56,200,000,000 | 54,100,000,000 |
Merchant credit losses | ' | ' | $2,400,000 | ' |
Processing_Liabilities_and_Los3
Processing Liabilities and Loss Reserves (Schedule Of Credit And Fraud Loss Reserve) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2011 | |||
Loss reserves | Loss reserves | Loss reserves | Loss reserves | Payroll [Member] | Payroll [Member] | Payroll [Member] | Payroll [Member] | ||||||||
Loss reserves | Loss reserves | Loss reserves | Loss reserves | ||||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Accrued Buyout Liability, Increase in Settlement Obligations | $4,935,000 | $3,889,000 | $13,294,000 | $12,336,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Payouts Of Accrued Buyout Liability | 1,392,000 | -2,746,000 | -11,842,000 | -9,401,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Estimated Increase to Accrued Buyout Liability | 100,000 | ' | 100,000 | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Beginning balance | ' | ' | ' | ' | ' | 1,955,000 | 1,957,000 | 1,955,000 | 1,957,000 | ' | ' | ' | ' | ||
Additions to reserve | ' | ' | ' | ' | ' | 1,228,000 | 512,000 | 2,461,000 | 1,479,000 | ' | ' | ' | ' | ||
Charges against reserve | ' | ' | ' | ' | ' | -1,228,000 | [1] | -512,000 | [1] | -2,461,000 | 1,479,000 | -13,000 | -29,000 | -88,000 | -77,000 |
Ending balance | ' | ' | ' | ' | ' | $1,955,000 | $1,957,000 | $1,955,000 | $1,957,000 | ' | ' | ' | ' | ||
[1] | Included in these amounts are payroll segment losses of $13,000 and $29,000, respectively, for the three months ended September 30, 2013 and 2012, and $88,000 and $77,000, respectively, for the nine months ended September 30, 2013 and 2012. |
Accrued_Buyout_Liability_Summa
Accrued Buyout Liability (Summary of Accrued Buyout Liability) (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | $36,862,000 | $33,319,000 | $35,410,000 | $34,593,000 | $33,450,000 | $31,658,000 |
Less current portion | -13,667,000 | ' | -10,478,000 | ' | ' | ' |
Long-term portion of accrued buyout liability | 23,195,000 | ' | 24,932,000 | ' | ' | ' |
Estimated vesting percentage, Relationship Managers and sales managers | 31.00% | ' | ' | ' | ' | ' |
Hypothetical increase to vesting percentage, Relationship Managers and sales managers | 5.00% | ' | ' | ' | ' | ' |
Hypothetical vesting percentage, Relationship Managers and sales managers | 36.00% | ' | ' | ' | ' | ' |
Hypothetical increase to accrued buyout liability | 100,000 | ' | 100,000 | ' | ' | ' |
Accrued Buyout Liability [Member] | Vested Relationship Managers and sales managers [Member] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | 35,655,000 | ' | 33,926,000 | ' | ' | ' |
Accrued Buyout Liability [Member] | Unvested Relationship Managers and sales managers [Member] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | $1,207,000 | ' | $1,484,000 | ' | ' | ' |
Accrued_Buyout_Liability_Summa1
Accrued Buyout Liability (Summary of Activity in Accrued Buyout Liability) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accrued Buyout Liability [Abstract] | ' | ' | ' | ' |
Beginning balance | $33,319 | $33,450 | $35,410 | $31,658 |
Increase in settlement obligations, net | 4,935 | 3,889 | 13,294 | 12,336 |
Buyouts | -1,392 | 2,746 | 11,842 | 9,401 |
Ending balance | $36,862 | $34,593 | $36,862 | $34,593 |
Credit_Facilities_Schedule_of_
Credit Facilities (Schedule of Maturities of Long-term Debt) (Details) (USD $) | 9 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 23, 2013 | Oct. 23, 2013 | Oct. 23, 2013 | Oct. 23, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Federal Funds Rate [Member] | LIBOR [Member] | Term Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Term Credit Facility [Member] | Term Credit Facility [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||||||
Subsequent To Administrative Agent Approval [Member] | Letter of Credit [Member] | Swing Line Loans [Member] | Term Credit Facility [Member] | Term Credit Facility [Member] | ||||||||||
Line of Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | $350,000,000 | $500,000,000 | $35,000,000 | $35,000,000 | ' | ' | ' | ' |
Commitment Increase Agreement, additional borrowings | ' | ' | ' | ' | ' | ' | ' | 150,000,000 | ' | ' | ' | ' | ' | ' |
Quarterly repayments of principal, for fiscal years ended 2013 and 2014 | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly repayments of principal, for fiscal years ending 2015 and beyond | ' | ' | ' | 7,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit agreement, amount outstanding | ' | ' | ' | ' | 91,000,000 | 82,000,000 | ' | ' | ' | ' | 55,000,000 | 70,000,000 | 55,000,000 | 70,000,000 |
Credit agreement, description of variable rate periods | 'interest rates equal to one, two, three or six month adjusted LIBOR rates | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit agreement, basis spread on variable rate | ' | 0.50% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit agreement, weighted average interest rate | 2.20% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit agreement, fees and direct costs | $2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | ' | ' | ' | ||
2013 | $10,813,000 | ' | $10,813,000 | ' | ||
2014 | 7,854,000 | ' | 7,854,000 | ' | ||
2015 | 5,776,000 | ' | 5,776,000 | ' | ||
2016 | 3,334,000 | ' | 3,334,000 | ' | ||
2017 | 3,300,000 | ' | 3,300,000 | ' | ||
Thereafter | 8,272,000 | ' | 8,272,000 | ' | ||
Total future minimum lease payments | 39,349,000 | [1] | ' | 39,349,000 | [1] | ' |
Leases, Operating [Abstract] | ' | ' | ' | ' | ||
Rent expense, leased facilities and expense | $2,700,000 | $2,100,000 | $7,500,000 | $5,900,000 | ||
Maximum [Member] | ' | ' | ' | ' | ||
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ||
Operating Lease, Term of Lease Agreement | ' | ' | '10 years | ' | ||
[1] | (a) There were no material capital leases at September 30, 2013Rent expens |
Commitments_and_Contingencies_2
Commitments and Contingencies (Schedule of Contractual Obligations) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |||
Processing providers [Member] | Telecommunications providers [Member] | Office and equipment leases [Member] | Term Credit Facility [Member] | Interest Payments Including Net Settlements On Interest Rate Swaps [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | ||||||||
Term Credit Facility [Member] | ||||||||||||||
Contractual Obligation Commitments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Operating Leases, Rent Expense, Net | $2,700,000 | $2,100,000 | $7,500,000 | $5,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total | 124,683,000 | ' | 124,683,000 | ' | ' | 14,800,000 | 15,534,000 | 39,349,000 | ' | 2,400,000 | ' | ' | ||
Less than 1 year | 43,171,000 | ' | 43,171,000 | ' | ' | 7,071,000 | 5,287,000 | 10,813,000 | 20,000,000 | 1,600,000 | ' | ' | ||
1 to 3 years | 63,110,000 | ' | 63,110,000 | ' | ' | 7,729,000 | 6,751,000 | 13,630,000 | 35,000,000 | 800,000 | ' | ' | ||
3 to 5 years | 10,130,000 | ' | 10,130,000 | ' | ' | 0 | 3,496,000 | 6,634,000 | 0 | [1] | ' | ' | ' | |
More than 5 years | 8,272,000 | ' | 8,272,000 | ' | ' | 0 | [2] | 0 | 8,272,000 | 0 | [1] | ' | ' | ' |
Notional amount of fixed-pay amortizing interest rate swaps | ' | ' | ' | ' | $50,000,000 | ' | ' | ' | ' | ' | $27,500,000 | $35,000,000 | ||
[1] | Interest rates on the Term Credit Facility are variable in nature; however, in January 2011 the Company entered into fixed-pay amortizing interest rate swaps having a remaining notional amount of $27.5 million. If interest rates were to remain at the September 30, 2013 level, the Company would make interest payments of $1.6 million in the next 1 year and $0.8 million in the next 1 to 3 years or a total of $2.4 million including net settlements on the fixed-pay amortizing interest rate swaps. In addition, the Company had $91.0 million borrowings outstanding under our Prior Revolving Credit Facility at September 30, 2013. | |||||||||||||
[2] | The Company has agreements with several third-party processors to provide to us on a non-exclusive basis payment processing and transmittal, transaction authorization and data capture services, and access to various reporting tools. The Company's agreements with third-party processors require it to submit a minimum monthly number of transactions or volume for processing. If the Company submits a number of transactions or volume that is lower than the minimum, it is required to pay the third-party processors the fees that they would have received if the Company had submitted the required minimum number or volume of transactions. |
Segments_Schedule_of_Segment_R
Segments (Schedule of Segment Reporting Information, by Segment) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Segment | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | $21,891 | $18,943 | $57,217 | $49,869 | ' |
Number of Reportable Segments | ' | ' | 5 | ' | ' |
Total revenues | 557,129 | 530,677 | 1,604,992 | 1,513,471 | ' |
Depreciation and amortization | 9,804 | 5,826 | 26,037 | 20,366 | ' |
Interest income | 29 | 31 | 95 | 169 | ' |
Interest expense | 1,243 | 938 | 3,746 | 2,544 | ' |
Net income (loss) attributable to Heartland | 21,981 | 19,380 | 61,221 | 50,935 | ' |
Total assets | 859,213 | 616,528 | 859,213 | 616,528 | 813,414 |
Card Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 20,279 | 22,527 | 57,824 | 57,660 | ' |
Total revenues | 521,601 | 505,031 | 1,491,623 | 1,446,155 | ' |
Depreciation and amortization | 6,918 | 4,299 | 20,015 | 16,067 | ' |
Interest income | 28 | 31 | 92 | 169 | ' |
Interest expense | 1,242 | 1,014 | 3,744 | 2,759 | ' |
Total assets | 540,098 | 463,366 | 540,098 | 463,366 | ' |
Other Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 200 | -71 | -45 | 737 | ' |
Total revenues | 5,105 | 6,507 | 16,102 | 20,559 | ' |
Depreciation and amortization | 433 | 387 | 1,259 | 1,148 | ' |
Interest expense | 1 | 0 | 5 | 0 | ' |
Total assets | 16,363 | 18,071 | 16,363 | 18,071 | ' |
Unallocated Corporate Administration Amounts [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | -1,264 | -4,971 | -11,185 | -13,088 | ' |
Depreciation and amortization | 35 | 78 | -1,421 | 189 | ' |
Reconciling Items [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total revenues | -58 | -77 | -61 | -220 | ' |
Interest expense | 0 | -77 | -3 | -220 | ' |
Payroll Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 357 | 279 | 1,904 | 1,393 | ' |
Total revenues | 10,578 | 5,130 | 33,651 | 16,499 | ' |
Depreciation and amortization | 959 | 305 | 2,634 | 836 | ' |
Total assets | 149,008 | 48,342 | 149,008 | 48,342 | ' |
Restricted Cash and Cash Equivalents, Percent of Assets | 64.00% | 81.00% | 64.00% | 81.00% | ' |
Heartland School Solutions [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 1,775 | 1,165 | 6,650 | 3,344 | ' |
Total revenues | 12,150 | 12,116 | 36,628 | 25,109 | ' |
Depreciation and amortization | 785 | 674 | 1,854 | 1,878 | ' |
Total assets | 81,547 | 78,634 | 81,547 | 78,634 | ' |
Campus Solutions Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 544 | 14 | 2,069 | -177 | ' |
Total revenues | 7,753 | 1,970 | 27,049 | 5,369 | ' |
Depreciation and amortization | 674 | 83 | 1,696 | 248 | ' |
Interest income | 1 | 0 | 3 | 0 | ' |
Interest expense | 0 | 1 | 0 | 5 | ' |
Total assets | $72,197 | $8,115 | $72,197 | $8,115 | ' |
Restricted Cash and Cash Equivalents, Percent of Assets | 23.00% | ' | 23.00% | ' | ' |
Earnings_Per_Share_Schedule_of
Earnings Per Share (Schedule of Calculation of Numerator and Denominator in Earnings Per Share) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Income from continuing operations attributable to Heartland | $21,981 | $18,943 | $57,307 | $49,869 |
Net income attributable to Heartland | $21,981 | $19,380 | $61,221 | $50,935 |
Denominator: | ' | ' | ' | ' |
Basic weighted average shares outstanding | 36,857 | 38,813 | 36,752 | 38,831 |
Stock options and restricted share units | 1,163 | 1,539 | 1,327 | 1,623 |
Diluted weighted average shares outstanding | 38,020 | 40,352 | 38,079 | 40,454 |
Basic earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.60 | $0.49 | $1.56 | $1.28 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 | $0.11 | $0.03 |
Basic earnings per share (in dollars per share) | $0.60 | $0.50 | $1.67 | $1.31 |
Diluted earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.58 | $0.47 | $1.50 | $1.23 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 | $0.10 | $0.03 |
Diluted earnings per share (in dollars per share) | $0.58 | $0.48 | $1.60 | $1.26 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) (USD $) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fixed Income Funds [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | ||||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value, Amounts of Transfers Between Valuation Method Categories, Net | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investments available for sale | 4,065,000 | ' | ' | ' | ' | ' | ' | 1,221,000 | 1,212,000 | 1,221,000 | 1,212,000 | 0 | 0 | ' | ' | ' | ' | ' | ' |
Total Assets | ' | 1,221,000 | 1,212,000 | 1,221,000 | 1,212,000 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate swaps | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 494,000 | 817,000 | 0 | 0 | 494,000 | 817,000 |
Total Liabilities | ' | $494,000 | $817,000 | $0 | $0 | $494,000 | $817,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments Fair Value of Financial Instruments (Schedule of Fair Value, Assets and Liabilities Measured on Nonrecurring Basis) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets: | ' | ' |
Certificates of deposit | $585 | $1,199 |
Other investments, at cost | 4,065 | ' |
Revolving Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 82,000 | ' |
Fair Value, Measurements, Nonrecurring [Member] | ' | ' |
Assets: | ' | ' |
Other investments, at cost | 4,065 | ' |
Total Assets | 4,650 | 1,199 |
Liabilities: | ' | ' |
Total Liabilities | 146,000 | 152,000 |
Fair Value, Measurements, Nonrecurring [Member] | Certificates of Deposit [Member] | ' | ' |
Assets: | ' | ' |
Certificates of deposit | 585 | 1,199 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Assets: | ' | ' |
Other investments, at cost | 0 | ' |
Total Assets | 0 | 0 |
Liabilities: | ' | ' |
Total Liabilities | 0 | 0 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member] | Certificates of Deposit [Member] | ' | ' |
Assets: | ' | ' |
Certificates of deposit | 0 | 0 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Assets: | ' | ' |
Other investments, at cost | 65 | ' |
Total Assets | 650 | 1,199 |
Liabilities: | ' | ' |
Total Liabilities | 146,000 | 152,000 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member] | Certificates of Deposit [Member] | ' | ' |
Assets: | ' | ' |
Certificates of deposit | 585 | 1,199 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Assets: | ' | ' |
Other investments, at cost | 4,000 | ' |
Total Assets | 4,000 | ' |
Fair Value, Measurements, Nonrecurring [Member] | Term Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 55,000 | 70,000 |
Fair Value, Measurements, Nonrecurring [Member] | Term Credit Facility [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 0 | 0 |
Fair Value, Measurements, Nonrecurring [Member] | Term Credit Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 55,000 | 70,000 |
Fair Value, Measurements, Nonrecurring [Member] | Revolving Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 91,000 | 82,000 |
Fair Value, Measurements, Nonrecurring [Member] | Revolving Credit Facility [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 0 | 0 |
Fair Value, Measurements, Nonrecurring [Member] | Revolving Credit Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | $91,000 | $82,000 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2013 | Dec. 31, 2012 | |
Results of Discontinued Operations: | ' | ' | ' | ' | ' | ' |
Income from discontinued operations, net of income tax of $—, $229, $68, and $555 | $0 | $624,000 | $3,970,000 | $1,512,000 | ' | ' |
Gain on sale of discontinued operations, net of income tax of $2,067 | ' | ' | 3,786,000 | 0 | ' | ' |
CPOS [Member] | ' | ' | ' | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | 30.00% |
Sale of Subsidiary, Including Amount Attributable to Noncontrolling Interest | ' | ' | ' | ' | 30,300,000 | ' |
Sale of Subsidiary, Portion Attributable to Parent | ' | ' | ' | ' | 20,900,000 | ' |
Parent's ownership percentage | 70.00% | ' | 70.00% | ' | ' | ' |
Results of Discontinued Operations: | ' | ' | ' | ' | ' | ' |
Revenues | 0 | 3,475,000 | 1,117,000 | 9,687,000 | ' | ' |
Expenses | 0 | 2,636,000 | 870,000 | 7,656,000 | ' | ' |
Income from operations | 0 | 839,000 | 247,000 | 2,031,000 | ' | ' |
Income from discontinued operations, net of income tax of $—, $229, $68, and $555 | 0 | 624,000 | 184,000 | 1,512,000 | ' | ' |
Income from discontinued operations, tax | 0 | 229,000 | 68,000 | 555,000 | ' | ' |
Gain on sale of discontinued operations, net of income tax of $2,067 | 0 | 0 | 3,786,000 | 0 | ' | ' |
Gain on sale of discontinued operations, tax | 0 | 0 | 2,067,000 | 0 | ' | ' |
Net income from discontinued operations attributable to noncontrolling interests | 0 | 187,000 | 56,000 | 446,000 | ' | ' |
Net income from discontinued operations attributable to Heartland | $0 | $437,000 | $3,914,000 | $1,066,000 | ' | ' |